Chapter 318
2009 -- H 6206
Enacted 11/13/09
A N A C T
RELATING TO
TAXATION - SETOFF OF REFUND OF PERSONAL INCOME TAX
Introduced
By: Representatives San Bento, Malik,
Date Introduced: May 21, 2009
It is enacted by the
General Assembly as follows:
SECTION 1. Sections 44-30.1-1, 44-30.1-3 and 44-30.1-5 of
the General Laws in
Chapter 44-30.1 entitled
"Setoff of Refund of Personal Income Tax" are
hereby amended to read
as follows:
44-30.1-1.
Definitions. -- (a) "Benefit overpayments and
interest owed" means any
amount in excess of five hundred dollars ($500) determined
to be recoverable under the
provisions of chapters 39 -- 44 of title 28.
(b) "Cash
assistance benefit overpayments" means any amount of cash assistance
benefits which constitutes an overpayment of benefits under
the provisions of the Family
Independence Act, chapter 5.1 of title 40, and/or the
predecessor family assistance program,
formerly known as the Aid to Families With Dependent Children
program, as previously
established by section 40-6-4, which overpayment amount has been
established by court order, by
administrative hearing conducted by the department of human
services, or by written agreement
between the department of human services and the individual.
(c) "Claimant
agency" means either:
(1) The department of
human services, with respect (1) to past-due support which has
been assigned to the department of human services by
public assistance and medical assistance
recipients or by the department for children, youth and
families, (2) past-due support which it is
attempting to collect on behalf of any individual not eligible
as a public assistance recipient, and
(3) cash assistance benefit overpayments,
as defined herein; or
(2) (i) The Rhode Island higher
education assistance authority (RIHEAA), with respect
to obligations owed to that agency or to the state of
pay student loans, health professions contract advances
or scholarships or grant over-awards, or
(ii) The
for the United States Department of Education or other
student loan guarantee agencies in other
states which have negotiated a reciprocal arrangement with
the RIHEAA for the setoff of refunds
of personal income taxes against defaulted loan
obligations.
(3) The
restitution owed; or
(4) The department of
labor and training with respect to benefit overpayments and
interest owed in excess of five hundred dollars ($500).
(d) "Court costs
owed" means any fines, fees, and/or court costs which have been
assessed pursuant to a criminal disposition by a judge of the
district, family and superior courts,
including, but not limited to, those amounts assessed pursuant
to chapters 20 and 25 of title 12
and those amounts assessed pursuant to title 31, including
also those fines, fees, and/or court costs
assessed by the traffic tribunal or municipal court associated
with motor vehicle violations which
have not been paid and which have been declared delinquent
by the administrative judge of the
court making the assessment.
(e) "Debtor"
means:
(1) Any individual who
owes past-due support which has been assigned to the
department of human services by public assistance and medical
assistance recipients or by the
department of children, youth and families, or owes past due
support to any individual not
eligible as a public assistance recipient;
(2) Any individual who
has obligations owed to RIHEAA or the state of
the United States Department of Education or other states
and agencies that have negotiated
reciprocal agreements with RIHEAA;
(3) Any individual who
owes fines, fees, and/or court costs to the superior, family,
district courts and the traffic tribunal and municipal court
associated with motor vehicle
violations;
(4) Any individual who
owes restitution to any victim of any offense which has been
ordered by a judge of the district, family and superior
courts pursuant to a disposition in a
criminal case and which has been made payable through the administrative
office of state courts
pursuant to section 12-19-34 except that obligations
discharged in bankruptcy shall not be
included;
(5) Any individual who
owes any sum in excess of five hundred dollars ($500) for
benefit overpayments and interest to the department of labor
and training determined to be
recoverable under the provisions of chapters 39-44 of title 28.
(6) Any individual who
owes any sum of cash assistance benefit overpayments to the
department of human services.
(7) Any individual
who has obligations owed to the
(RISLA), or other states and
agencies that have negotiated reciprocal agreements with RISLA.
(f)
"Division" means the department of revenue, division of taxation.
(g) "Fines
owed" means any fines, fees, and/or court costs which have been ordered
paid
as a penalty in a criminal case by a judge of the
district, family and superior courts and those
fines, fees, and/or court costs ordered paid by the traffic
tribunal or municipal court for motor
vehicle violations as described in section 31-41.1-4 which
have not been paid and which have
been declared delinquent by the administrative judge of
the court making the assessment.
(h) "Obligation
owed" means the total amount owed by any individual on:
(1) Any guaranteed
student loan or parent loan for undergraduate students for which
RIHEAA has had to pay the guarantee, or for which
RIHEAA is acting as agent on behalf of the
United States Department of Education or other state
cooperating agencies which have had to pay
a guarantee,
(2) Any contract fee
advanced by either RIHEAA or the state of
of any individual participating in a health professions
educational program for which payment has
not been made according to the terms of the contract, and
(3) Any amount of
scholarship or grant funds which constitutes an over-award, whether
due to error or to the submission of false information,
and for which repayment has been
demanded by the agency, but which has not been paid.
(4) Any education
loan held by the
guaranteed by RIHEAA or other guarantor.
(i)
"Past-due support" means the amount of court-ordered child support or
maintenance,
child medical support or a spousal support order for a
custodial parent having custody of a minor
child, which is overdue or otherwise in arrears, regardless
of whether there is an outstanding
judgment for that amount, and whether the order for the
support or maintenance has been
established by a court or by an administrative process authorized
under the laws of any state.
(j) "Refund"
means the
determines to be due to a taxpayer.
(k) "Restitution
owed" means any amount which has been ordered paid pursuant to a
criminal case disposition by a judge of the district, family
and superior courts pursuant to chapter
19 of title 12, which has not been paid and which has
been declared delinquent by the
administrative judge of the court making the assessment.
44-30.1-3.
Collection of debts by setoff. -- Within a time
frame established by the
division of taxation, the claimant agency shall supply the
information necessary relative to each
debtor owing the state money, and further, shall certify the
amount of debt or debts owed to the
state by each debtor. Upon receiving notice from the
claimant agency that a named debtor owes
past-due support, delinquent court costs, fines, or
restitution or benefit overpayments and interest
owed, has obligations owed as described in section
44-30.1-1(g), or cash assistance benefit
overpayments, the division of taxation shall determine whether any
amount, as a refund of taxes
paid, is payable to the debtor, regardless of whether the
debtor filed an income tax return as a
married or unmarried individual. If the division of taxation
determines that any refund is payable,
the division of taxation shall set off the past-due support,
delinquent court costs, fines or
restitution or benefit overpayments and interest owed, the
obligation owed, or cash assistance
benefit overpayments against the debtor's refund and shall
reduce the debtor's refund by the
amount so determined. The division of taxation shall
transfer the amount of past-due support,
delinquent court costs, fines or restitution, or benefit
overpayments and interest owed, obligation
owed, or cash assistance benefit overpayments set off against
the debtor's refund to the claimant
agency or in the case of the United States Department of
Education or other out-of-state agencies,
to ., and in the case of
education loans held by the
for another out-of-state education loan agency and which
education loans are not guaranteed by
RIHEAA or another guarantor, to RISLA. The pendency of judicial proceedings to contest the
setoff shall not stay nor delay the setoff and transfer of
refunds to the claimant agency. If the
amount of the debtor's refund exceeds the amount of the
past-due support, delinquent court costs,
fines, or restitution or benefit overpayments and interest
owed, obligation owed, or cash
assistance benefit overpayments, the division of taxation shall
refund the excess amount to the
debtor. If in any instance with regard to the debtor the
division of taxation has received notice
from more than one claimant agency, the claim by the
bureau of child support shall receive first
priority, the obligations owed shall have second priority, and
the delinquent court costs, fines or
restitution shall have third priority, the benefit overpayments
and interest owed the fourth priority
and the cash assistance benefit overpayments the fifth
priority.
44-30.1-5.
Hearing procedures. -- (a) If
the claimant agency receives written application
pursuant to section 44-30.1-4(b) contesting the setoff or the
delinquent court costs, fines or
restitution or the past-due support or benefit overpayments and
interest owed or the obligation
owed upon which the setoff is based, it shall grant a
hearing to the applicant in accordance with
chapter 35 of title 42, "Administrative Procedure".
(b) Appeals from the
administrative decisions made by the claimant agency shall be in
accordance with chapter 35 of title 42, "Administrative
Procedures". Appeals contesting the setoff
of past due support shall be to the family court of
(c) In those cases
where Rhode Island higher education assistance authority (RIHEAA)
acts as agent for the United States Department of
Education or other out-of-state agencies,
RIHEAA must obtain appropriate documentation of the
obligation owed such as promissory
notes, evidence of guarantees paid and any other items that
may be necessary to conduct a fair
hearing. RIHEAA as agent for other states shall negotiate
appropriate reciprocal agreements with
those states for purposes of transferring funds and setting
charges for cost of services.
(d) In those cases
where the
claimant either for itself or as agent for another
out-of-state education loan agency, RISLA must
obtain appropriate documentation of the obligation owed such
as promissory notes, and any other
items that may be necessary to conduct a fair hearing.
RISLA as agent for other states or agencies
shall negotiate appropriate reciprocal agreements with
those states and agencies for purposes of
transferring funds and setting charges for cost of services.
SECTION 2. This act shall take effect upon passage.
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LC02585
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