2003 Legislation
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HOUSE BILL NO. 338 – Courts, debts owed, tax refund used

HOUSE BILL NO. 338

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Daily Data Tracking History



H0338.....................................................by WAYS AND MEANS
COURTS - DEBTS OWED - Adds to existing law to provide for the set-off of
certain state tax refunds and credits to be applied toward the payment of
designated delinquent debts owed to the courts; to provide a procedure; to
provide for priority of certain claims; to provide for a suspense account
for the payment of amounts set off in error or for the refund of balances
remaining after a debt to the court is satisfied; to provide for objections
relating to joint returns; and to authorize rulemaking and agreements.
                                                                        
03/06    House intro - 1st rdg - to printing
03/07    Rpt prt - to Jud
03/19    Rpt out - rec d/p - to 2nd rdg
03/20    2nd rdg - to 3rd rdg
03/26    3rd rdg - PASSED - 58-9-3
      AYES -- Andersen, Barraclough, Bauer, Bedke, Bell, Bieter(Bieter),
      Black, Block, Boe, Bolz, Bradford, Campbell, Cannon, Clark, Collins,
      Cuddy, Deal, Denney, Douglas, Edmunson, Ellsworth, Eskridge,
      Field(23), Gagner, Garrett, Harwood, Henbest(Bray), Jaquet, Jones,
      Lake, Langford, Langhorst, Martinez, Meyer, Miller, Mitchell, Moyle,
      Naccarato, Nielsen, Raybould, Ridinger, Ringo, Robison, Rydalch,
      Sayler, Schaefer, Shepherd, Shirley, Skippen, Smith(30), Smith(24),
      Smylie, Snodgrass, Stevenson, Tilman, Trail, Wills, Mr. Speaker
      NAYS -- Barrett, Crow, Kellogg, Kulczyk, McGeachin, McKague, Roberts,
      Sali, Wood
      Absent and excused -- Eberle, Field(18), Ring
    Floor Sponsor - Shirley
    Title apvd - to Senate
03/27    Senate intro - 1st rdg - to Jud
04/01    Rpt out - rec d/p - to 2nd rdg
04/02    2nd rdg - to 3rd rdg
04/03    3rd rdg - PASSED - 31-3-1
      AYES -- Andreason, Bailey, Brandt, Bunderson, Burtenshaw, Cameron,
      Compton, Darrington, Davis, Gannon, Geddes, Goedde, Hill, Ingram,
      Kennedy, Little, Lodge, Malepeai, Marley, McKenzie, Noble, Noh,
      Pearce, Richardson, Schroeder, Sorensen, Stegner, Stennett, Sweet,
      Werk, Williams
      NAYS -- Burkett, Calabretta, Keough
      Absent and excused -- McWilliams
    Floor Sponsor - Richardson
    Title apvd - to House
04/04    To enrol
04/07    Rpt enrol - Sp signed - Pres signed
04/08    To Governor
04/14    Governor signed
         Session Law Chapter 288
         Effective: 07/01/03

Bill Text


                                                                        
                                                                        
  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-seventh Legislature                 First Regular Session - 2003
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 338
                                                                        
                                BY WAYS AND MEANS COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO DEBTS OWED TO THE COURTS; AMENDING  CHAPTER  16,  TITLE  1,  IDAHO
  3        CODE,  BY THE ADDITION OF A NEW SECTION 1-1624, IDAHO CODE, TO PROVIDE FOR
  4        THE SET-OFF OF CERTAIN STATE TAX REFUNDS AND CREDITS TO BE APPLIED  TOWARD
  5        THE  PAYMENT OF DESIGNATED DELINQUENT DEBTS OWED TO THE COURTS, TO PROVIDE
  6        A PROCEDURE, TO PROVIDE FOR PRIORITY OF CERTAIN CLAIMS, TO PROVIDE CERTAIN
  7        CONDITIONS, TO PROVIDE FOR ADMINISTRATIVE WAIVERS OF SET-OFFS, TO  PROVIDE
  8        FOR  REIMBURSEMENT  OF REFUNDS SET-OFF IN ERROR, TO PROVIDE FOR A SUSPENSE
  9        ACCOUNT FOR THE PAYMENT OF AMOUNTS SET-OFF IN ERROR OR FOR THE  REFUND  OF
 10        BALANCES REMAINING AFTER A DEBT TO THE COURTS IS SATISFIED, TO PROVIDE FOR
 11        WAIVERS  OF  THE  RIGHT  TO  CONTEST  A SET-OFF, TO PROVIDE FOR OBJECTIONS
 12        RELATING TO JOINT RETURNS, TO PROVIDE FOR DEBTS THAT ARE NOT SATISFIED  BY
 13        REFUND  SET-OFFS, TO PROVIDE FOR THE APPLICATION OF PROCEEDS FROM SET-OFFS
 14        AND TO AUTHORIZE CERTAIN RULEMAKING AND AGREEMENTS.
                                                                        
 15    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 16        SECTION 1.  That Chapter 16, Title 1, Idaho Code,  be,  and  the  same  is
 17    hereby  amended by the addition thereto of a NEW SECTION, to be known and des-
 18    ignated as Section 1-1624, Idaho Code, and to read as follows:
                                                                        
 19        1-1624.  SET-OFF PROCEDURE FOR DELINQUENT DEBTS OWED TO  THE  COURTS.  (1)
 20    The  purpose  of this legislation is to enable the Idaho supreme court, as the
 21    supervisor of the unified and integrated judicial system  of  this  state,  to
 22    apply  for  a  set-off of state tax refunds and credits owing to a taxpayer in
 23    payment of a delinquent debt owed by the taxpayer to the courts of this state.
 24    It is the intent of the legislature that this set-off remedy be in addition to
 25    and not in substitution of any other remedy or action provided for by law  for
 26    the collection of these amounts.
 27        (2)  The state tax commission shall withhold and set-off any income tax or
 28    tax  credit  refund  of any taxpayer, upon notification from the Idaho supreme
 29    court, to collect any debt owed to the courts by the taxpayer which is  delin-
 30    quent.  A remittance by the state tax commission to the court pursuant to this
 31    section shall be deemed to be, to the extent of the remittance,  a  refund  to
 32    the  taxpayer  and  any  other  person who has a claim to such refund, and the
 33    state tax commission shall not be liable to any person  because  of  a  refund
 34    that has been remitted under this section.
 35        (3)  A  "debt  owed  to  the  courts" means any assessment of fines, court
 36    costs, surcharges, penalties, fees, restitution, moneys expended in  providing
 37    counsel  and  other  defense services to indigent defendants, or other charges
 38    which a court judgment has ordered to be paid to the court or  which  a  party
 39    has agreed to pay in criminal or civil cases and includes any interest or pen-
 40    alty  on such unpaid amounts as provided for in the judgment or by law, except
 41    this section does not apply to a debt owed to the courts which does not exceed
 42    the sum of fifty dollars ($50.00). A debt owed to  the  courts  is  delinquent
 43    when  it  is  not  paid according to the terms of the judgment or order or any
                                                                        
                                           2
                                                                        
  1    agreement entered into between the court and  the  taxpayer  for  the  payment
  2    thereof.
  3        (4)  Any claims for current or past-due child support presented under sec-
  4    tion  56-203D, Idaho Code, or claims for set-off of income tax refunds against
  5    any tax liability or overpayment of benefits owed to the state  department  of
  6    labor  pursuant  to section 63-3077A, Idaho Code, shall take priority over any
  7    claim for delinquent debt owed to the courts under this section.
  8        (5)  The set-off or withholding of a refund due a taxpayer shall be remit-
  9    ted  only after the following conditions have been met:
 10        (a)  A debt owed to the courts is delinquent. This section  shall  not  be
 11        used  to  satisfy any amount ordered by the court until the order or judg-
 12        ment is final and the time for appealing the judgment or order has elapsed
 13        without any further right on the part of the person owing  the  amount  to
 14        judicial review.
 15        (b)  All  outstanding tax liabilities collectible by the state tax commis-
 16        sion are satisfied.
 17        (c)  The supreme court shall forward to the state tax commission the  full
 18        name  and social security number of the taxpayer. The tax commission shall
 19        notify the supreme court of the amount of refund due the taxpayer and  the
 20        taxpayer's address on the income tax return.
 21        (d)  Upon remittance of any set-off or part thereof, the court shall cause
 22        a written notice to be sent to the taxpayer whose refund is subject to the
 23        set-off.  Notice of the set-off shall be sent by United States mail to the
 24        taxpayer at the address listed on the income tax return. Within twenty-one
 25        (21) days after such notice has been mailed (not counting Saturday, Sunday
 26        or a state holiday as the twenty-first day), the taxpayer may file a writ-
 27        ten request for an administrative waiver of the set-off in accordance with
 28        procedures established by the supreme court, which may  impose  reasonable
 29        requirements  concerning  the information necessary to process the request
 30        for an administrative waiver. No issues or claims previously decided in  a
 31        court  order  or judgment, or admitted or agreed to by the taxpayer, shall
 32        be considered in connection with a request for an  administrative  waiver.
 33        In  the  case of a refund that is set-off in error under this section, the
 34        court shall reimburse the taxpayer.
 35        (6)  The supreme court shall create a suspense account to pay amounts that
 36    are found to be set-off in error under the provisions of subsection (5)(d)  of
 37    this  section  or  to  refund  any  balance that remains after the debt to the
 38    courts is satisfied. If no written request for an administrative waiver of the
 39    set-off is made within twenty-one (21) days, such failure shall  be  deemed  a
 40    waiver of the right to contest the set-off and the amount of the set-off shall
 41    be  removed  from the suspense account and shall be credited to the taxpayer's
 42    debt to the courts. The court may waive the twenty-one (21) day time limit  in
 43    appropriate circumstances.
 44        (7)  When  set-off  is attempted on a joint return under the provisions of
 45    this section, the taxpayer not specified to be the obligor in the judgment  or
 46    agreement  creating  the  debt  owed to the court may file a written objection
 47    within the time limits specified in subsection (5)(d) of this section and  the
 48    set-off will be limited to one-half (1/2) of the joint refund.
 49        (8)  If  the refund is insufficient to satisfy the entire debt owed to the
 50    courts, the remainder of the debt may be collected as provided by law or  sub-
 51    mitted for set-off against subsequent refunds.
 52        (9)  The  proceeds from the set-off shall be credited to the debt owing to
 53    the courts and shall be distributed as provided by law.
 54        (10) The state tax commission and  the  supreme  court  independently  may
 55    adopt rules governing its administration of this section and are authorized to
                                                                        
                                           3
                                                                        
  1    enter  into  a written agreement to implement and facilitate the provisions of
  2    this section, including the method of making remittances of the  amount  which
  3    has been set-off pursuant to this section.

Statement of Purpose / Fiscal Impact



                       STATEMENT OF PURPOSE
                             RS 13118
Court records show that millions of dollars in fines, fees,
surcharges and restitution are owed by those who have been
convicted of or admitted to a state or local offense.

In an effort to improve the collection of unpaid fines, fees,
costs, restitution, and other amounts ordered by a court, other
states, such as Arizona, have enacted a debt set-off program by
which the courts notify the tax authority of any court ordered
arrearages which are then satisfied from any tax refund due to
the debtor, according to a priority set by statute.  Idaho has a
similar statutory procedure where the income tax refunds are
applied to the taxpayer's child support obligation.  (See Section
56-203D, Idaho Code).

This bill authorizes the Idaho State Tax Commission upon
application of the Supreme Court to apply any income tax refund
owing to a taxpayer who is delinquent in the payment of fines,
fees, court costs, victim restitution, and other amounts ordered
by a court to satisfy the unpaid court obligation.  The
requirements for a set-off include the establishment of a
procedure which allows a taxpayer to contest the set-off and
receive a refund of amounts which have been diverted in error. 
Claims submitted by the Supreme Court for a set-off are secondary
to claims against refunds for unpaid child support and claims
presented to the State Tax Commission by the Department of Labor
for employment taxes or overpayment of benefits.
                          FISCAL IMPACT
This bill is expected to measurably increase revenues that are
apportioned to various state, county, or local funds.  However,
the amount of increased collections cannot accurately be
estimated at this time.


Contact
Name:     Rep. Mack Shirley
Phone:    (208) 332-1000



STATEMENT OF PURPOSE/FISCAL NOTE               H 338