2023 -- H 5979

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LC001711

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2023

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A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- DEPARTMENT OF REVENUE

     Introduced By: Representative Scott Slater

     Date Introduced: March 01, 2023

     Referred To: House Finance

     (Dept. of Revenue)

It is enacted by the General Assembly as follows:

     SECTION 1. Sections 42-142-1, 42-142-2 and 42-142-8 of the General Laws in Chapter

42-142 entitled "Department of Revenue" are hereby amended to read as follows:

     42-142-1. Department of revenue.

     (a) There is hereby established within the executive branch of state government a

department of revenue.

     (b) The head of the department shall be the director of revenue, who shall be appointed by

the governor, with the advice and consent of the senate, and shall serve at the pleasure of the

governor.

     (c) The department shall contain the division of taxation (chapter 1 of title 44), the division

of motor vehicles (chapter 2 of title 31), the division of state lottery (chapter 61 of title 42), the

office of revenue analysis (chapter 142 of title 42), the division of municipal finance (chapter 142

of title 42), and a collection central collections unit (chapter 142 of title 42). Any reference to the

division of property valuation, division of property valuation and municipal finance, or office of

municipal affairs in the Rhode Island general laws shall mean the division of municipal finance.

     42-142-2. Powers and duties of the department.

     The department of revenue shall have the following powers and duties:

     (a) To operate a division of taxation;

     (b) To operate a division of motor vehicles;

     (c) To operate a division of state lottery;

     (d) To operate an office of revenue analysis;

     (e) To operate a division of property valuation; and

     (f) To operate a collection central collections unit.

     42-142-8. Collection unit Central collections unit.

     (a) The director of the department of revenue is authorized to establish within the

department of revenue a collection central collections unit (the "CCU") for the purpose of assisting

state agencies, departments, boards, commissions, corporations, authorities, quasi-state agencies,

councils, the judicial branch, and other political subdivisions (referred to herein individually as a

"state agency" and collectively as "state agencies") in the collection of debts owed to the state. The

director of the department of revenue may enter into an agreement or memorandum of

understanding with any state agency(ies) agency to collect any delinquent debt owed to the state.

     (b) The director of the department of revenue shall initially implement a pilot program to

assist the agency(ies) with the collection of delinquent debts owed to the state.

     (c) The agency(ies) participating in the pilot program State agencies who enter into an

agreement or memorandum of understanding with the CCU shall refer to the collection unit within

the department of revenue, debts owed by delinquent debtors where the nature and amount of the

debt owed has been determined and reconciled by the state agency and the debt is: (i) The subject

of a written settlement agreement and/or written waiver agreement and the delinquent debtor has

failed to timely make payments under the agreement and/or waiver and is therefore in violation of

the terms of the agreement and/or waiver; (ii) The subject of a final administrative order, or

decision, invoice or statement and the debtor has exhausted or waived any available administrative

hearing process and has not timely appealed the order, or decision, invoice or statement; (iii) The

subject of final order, judgment, or decision of a court of competent jurisdiction and the debtor has

not timely appealed the order, judgment, or decision. The collection unit CCU shall not accept a

referral of any delinquent debt unless it satisfies subsection (c)(i), (ii) or (iii) of this section.

     (d) Any agency(ies) state agency entering into an agreement with the department of

revenue to allow the collection unit of the department CCU to collect a delinquent debt owed to the

state shall indemnify the department of revenue against injuries, actions, liabilities, or proceedings

arising from the collection, or attempted collection, by the collection unit CCU of the debt owed to

the state.

     (e) Before referring a delinquent debt to the collection unit CCU, the agency(ies) state

agency must notify the debtor of its intention to submit refer the debt to the collection unit CCU

for collection and of the debtor’s right to appeal that decision not less than thirty (30) twenty (20)

days before the debt is submitted formally referred to the collection unit CCU.

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     (f) At such time as the agency(ies) state agency refers a delinquent debt to the collection

unit CCU, the state agency shall: (i) Represent in writing to the collection unit CCU, upon the

referral form prescribed by the CCU, that it has complied with all applicable state and federal laws

and regulations relating to the collection of the debt, including, but not limited to, the requirement

to provide the debtor with the notice of referral to the collection unit CCU under subsection (e) of

this section; and (ii) Provide the collection unit CCU personnel with all relevant supporting

documentation including, but not limited to, notices, invoices, ledgers, correspondence, emails,

agreements, waivers, decisions, orders, and judgments necessary for the collection unit CCU to

attempt to collect the delinquent debt.

     (g) The referring agency(ies) state agency shall assist the collection unit CCU by providing

any and all information, expertise, and resources deemed necessary by the collection unit CCU to

collect the delinquent debts referred to the collection unit CCU.

     (h) Upon receipt of a referral of a delinquent debt from an agency(ies) a state agency, the

amount of the delinquent debt shall accrue interest at the annual rate of interest established by law

for the referring state agency or at an annual rate of 13%, whichever percentage rate is greater.

     (i) Upon receipt of a referral of a delinquent debt from the agency(ies) a state agency, the

collection unit CCU shall provide the delinquent debtor with a “Notice of Referral” advising the

debtor that:

     (1) The delinquent debt has been referred to the collection unit CCU for collection; and

     (2) The collection unit CCU has the authority to initiate, in its names name, any action that

is available under state law for the collection of the delinquent debt, including, but not limited to,

referring the debt to a third party to initiate said action.

     (j) Upon receipt of a referral of a delinquent debt from an agency(ies) a state agency, the

director of the department of revenue, or designee, within the CCU shall have the authority to

institute, in its name, any action(s) that are available under state law for collection of the delinquent

debt and interest, penalties, and/or fees thereon and to, with or without suit, settle the delinquent

debt.

     (k) In exercising its authority under this section, the collection unit CCU shall comply with

all state and federal laws and regulations related to the collection of debts to the extent that they are

applicable and the CCU is not otherwise exempt from their application.

     (l) Upon the receipt of payment from a delinquent debtor, whether a full or partial payment,

the collection unit CCU shall disburse/deposit the proceeds of the payment in the following order:

     (1) To the appropriate federal account to reimburse the federal government funds owed to

them by the state from funds recovered; and

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     (2) The balance of the amount collected to the referring state agency.

     (m) Notwithstanding the above, the establishment of a collection unit within the department

of revenue the CCU shall be contingent upon an annual appropriation by the general assembly of

amounts necessary and sufficient to cover the costs and expenses to establish, maintain, and operate

the collection unit CCU including, but not limited to, computer hardware and software,

maintenance of the computer system to manage the system, and personnel to perform work within

the collection unit CCU.

     (n) In addition to the implementation of any pilot program, the collection unit The CCU

shall comply with the provisions of this section in the collection of all delinquent debts under this

section.

     (o) The department of revenue is authorized to promulgate rules and regulations as it deems

appropriate with respect to the collection unit CCU.

     (p) By September 1, 2020, and each year thereafter, the department of revenue shall

specifically assess the performance, effectiveness, and revenue impact of the collections associated

with this section, including, but not limited to, the total amounts referred and collected by each

referring state agency during the previous state fiscal year to the governor, the speaker of the house

of representatives, the president of the senate, the chairpersons of the house and senate finance

committees, and the house and senate fiscal advisors. The report shall include the net revenue

impact to the state of the collection unit CCU.

     (q) No operations of a collection unit CCU pursuant to this chapter shall be authorized after

June 30, 2033.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- DEPARTMENT OF REVENUE

***

     This act would make statutory amendments throughout several sections of the general laws

relating to the department of revenue changing the references of "collection unit" to "central

collections unit" (CCU).

     This act would take effect upon passage.

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