2022 -- H 7864

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LC005228

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2022

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A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - DEPARTMENT OF REVENUE

     

     Introduced By: Representative Jacquelyn M. Baginski

     Date Introduced: March 04, 2022

     Referred To: House Finance

     (Dept. of Revenue)

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 42-142-8 of the General Laws in Chapter 42-142 entitled

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"Department of Revenue" is hereby amended to read as follows:

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     42-142-8. Collection unit.

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

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department of revenue a collection unit for the purpose of assisting state agencies in the collection

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of debts owed to the state. The director of the department of revenue may enter into an agreement

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

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

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

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     (c) The agency(ies) participating in the pilot program shall refer to the collection unit

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

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

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

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

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

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and the debtor has not timely appealed the order or decision; (iii) The subject of final order,

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judgment, or decision of a court of competent jurisdiction and the debtor has not timely appealed

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the order, judgment, or decision. The collection unit shall not accept a referral of any delinquent

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

 

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     (d) Any agency(ies) entering into an agreement with the department of revenue to allow

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the collection unit of the department to collect a delinquent debt owed to the state shall indemnify

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the department of revenue against injuries, actions, liabilities, or proceedings arising from the

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collection, or attempted collection, by the collection unit of the debt owed to the state.

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     (e) Before referring a delinquent debt to the collection unit, the agency(ies) must notify the

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debtor of its intention to submit the debt to the collection unit for collection and of the debtor's right

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to appeal that decision not less than thirty (30) days before the debt is submitted to the collection

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unit.

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

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shall: (i) Represent in writing to the collection unit that it has complied with all applicable state and

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

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requirement to provide the debtor with the notice of referral to the collection unit under subsection

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

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

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

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to collect the delinquent debt.

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     (g) The referring agency(ies) shall assist the collection unit by providing any and all

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information, expertise, and resources deemed necessary by the collection unit to collect the

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delinquent debts referred to the collection unit.

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

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

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agency or at an annual rate of 13%, whichever percentage rate is greater.

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

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shall provide the delinquent debtor with a "Notice of Referral" advising the debtor that:

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

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     (2) The collection unit will initiate, in its names, any action that is available under state law

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for the collection of the delinquent debt, including, but not limited to, referring the debt to a third

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party to initiate said action.

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

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department of revenue shall have the authority to institute, in its name, any action(s) that are

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available under state law for collection of the delinquent debt and interest, penalties, and/or fees

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thereon and to, with or without suit, settle the delinquent debt.

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

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state and federal laws and regulations related to the collection of debts.

 

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

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

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

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them by the state from funds recovered; and

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

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

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

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

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

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computer system to manage the system, and personnel to perform work within the collection unit.

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     (n) In addition to the implementation of any pilot program, the collection unit shall comply

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

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

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appropriate with respect to the collection unit.

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

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

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

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

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

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

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impact to the state of the collection unit.

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

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30, 2023.

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     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

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     This act would remove the collection unit sunset provision of June 30, 2023.

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     This act would take effect upon passage.

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LC005228

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