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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
|||| 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
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