La. Revenue and Taxation § 47:1676

Current with changes from the 2024 Legislative Session

Section 47:1676 - Debt recovery

(1) It shall be the public policy of this state to aggressively pursue the collection of accounts or claims due and payable to the state of Louisiana through all reasonable means. The office of debt recovery, within the Department of Revenue and the attorney general's office shall jointly serve as debt-collecting entities for any agency of the state and in that capacity shall collect delinquent debts on behalf of all agencies which refer delinquent debts to the office for collection. All debts owed to the state shall be referred to either the attorney general's office or to the office of debt recovery for collection. However, all agencies which do not have a contract with the attorney general's office for debt collection on or before January 1, 2014, shall refer all delinquent debts to the office for collection when the debt has been final for sixty days.

(2) Each agency shall refer non-final delinquent debts requiring legal action or legal proceedings, other than administrative proceedings within such agency, to the attorney general's office for collection when the debt has been delinquent for sixty days, or other time period as provided pursuant to the referral guidelines established by the attorney general which are incorporated into agreements between the attorney general and any such agency or pursuant to rules promulgated by the attorney general pursuant to the Administrative Procedure Act.

B. For purposes of this Section, the following words shall have the following meanings unless the context clearly indicates otherwise:

(1) "Agency" means any state office, department, board, commission, institution, division officer or other person, or functional group, existing or created, that is authorized to exercise, or that does exercise, any function of state government in the executive branch. For purposes of this Section, "agency" shall also mean the court only for the collection of unpaid monetary obligations as set forth in Code of Criminal Procedure Article 894.4.

(1.1) "Agency" shall also mean any municipality, parish, or any other unit of local government, authorized by law to perform governmental functions, including school boards and special districts. Notwithstanding any provision of this Section to the contrary, local government subdivisions shall be permitted but not required to refer their delinquent debt to the office of debt recovery for collection.

(2) "Authenticated" means that the referring agency has certified the amount of the delinquent debt, the debtor's liability, the debtor's name, address, telephone number, social security number, and the federal or state taxpayer identification number.

(3) "Debt" means any legally collectible liquidated sum due and owing an agency, or due and owing a person and collectible by any agency, or a judgment, order of the court, or bond forfeiture that is properly certified by the clerk and that orders the payment of a fine or other court-ordered penalty. The legally collectible and liquidated sum due includes principal and accruing interest, fees, and penalties, if appropriate. "Debt" shall not include any legally collectible liquidated sum due and owing to an agency or an individual pursuant to the following federal programs: Title IV-A, Title IV-B, Title IV-D, Title IV-E, or Title XX of the federal Social Security Act, 7 U.S.C. 2011 et seq., 42 U.S.C. 9858 et seq., 42 U.S.C. 5101 et seq., 42 U.S.C. 5116 et seq., 42 U.S.C. 10401 et seq.; or, any sums due on account of overpaid unemployment compensation benefits or unpaid contributions or reimbursements pursuant to the Louisiana Employment Security Law under R.S. 23:1471 et seq. "Debt" shall not include any amount due for unpaid public elementary or secondary school student fees or for unpaid elementary or secondary school student fees for students enrolled in the Student Scholarships for Educational Excellence Program.

(4) "Delinquent debt" means a final debt that is sixty days or more past due.

(5) "Department" means the Department of Revenue.

(6) "Final" means the amount due is no longer negotiable and that the debtor has no further right of administrative and judicial review.

(7) "Non-final delinquent debt" means any debt that an agency has notified a debtor is owed but the debt remains unpaid, due, or negotiable for a period of sixty days or more and such debt is not final and the debtor has further administrative or judicial review rights to challenge the validity of the debt or the amount owed.

(8) "Office" means the office of debt recovery within the Department of Revenue.

(9) "Secretary" means the secretary of the Department of Revenue.

(1) Notwithstanding any other provision of law to the contrary, in addition to any duties, powers, or responsibilities otherwise conferred, the secretary of the Department of Revenue, through the office of debt recovery, shall collect and enforce certain delinquent debts due to agencies according to rules promulgated by the department.

(2)

(a)

(i) Agencies that do not have collection contracts with the attorney general's office for the collection of delinquent debts shall refer all delinquent debts to the office as provided by rule. Such referrals shall include data and information in the required format necessary as provided for in Item (ii) of this Subparagraph to institute collection procedures. All delinquent debts shall be authenticated by the agency or officer prior to being referred to the office. Once the debt becomes final, and prior to referral to the office, the agency shall notify the debtor that failure to pay the debt in full within sixty days shall subject the debt to an additional collection fee as provided for in this Section. All agencies shall refer nonfinal delinquent debts to the attorney general's office for collection when the debt has been delinquent for sixty days pursuant to the referral guidelines established by the attorney general as incorporated into agreements between the attorney general and other agencies or pursuant to the rules promulgated by the attorney general pursuant to the Administrative Procedure Act. Such nonfinal delinquent debts shall be authenticated by the agency prior to their referral to the attorney general.

(ii) Unless otherwise prohibited by federal or state law, any agency that refers delinquent debt to the office of debt recovery shall provide the following information on the delinquent debt:

(aa) A description of the original obligation or offense which is the subject of the delinquent debt.

(bb) The amount of any fine, fee, penalty, or charges assessed against the original obligation or offense by the originating agency.

(cc) The amount of any fine, fee, penalty, or charges added from previous collection attempts by a third-party collector and included in the debt balance placed with the office of debt recovery.

(dd) The total amount paid and the date of last payment made by the debtor on the delinquent debt.

(ee) Any additional information requested by the office of debt recovery.

(b) After transferring the debt to the office for collection, the referring agency shall terminate all collection activities with respect to that debt except to provide assistance to the office as may be requested. The department shall notify the debtor by letter, within fifteen days of receiving the referral, that such debt has been referred to the office for collection. Upon receipt of the debt referral, the office shall assume all liability for its actions without recourse to the agency and shall comply with all applicable state and federal laws governing the collection of the debt. For purposes of this Section, the office shall not be considered a collection agency as defined in R.S. 9:3534.1.

(3) At the discretion of the secretary, the department may contract with the attorney general's office or a third-party collection contractor for the collection of delinquent debt on behalf of the office. However, any contract entered into by the secretary for the collection of delinquent debt on behalf of the state shall be subject to review by the Cash Management Review Board. Additionally, the legislative auditor shall have authority to conduct audits of such contracts in accordance with the law.

(4) If, in the course of collecting delinquent debt, the secretary determines that the office requires the additional assistance of legal counsel, the secretary shall first seek assistance from the office of the attorney general. If the office of the attorney general is unable to or declines to offer legal counsel, the secretary is authorized to contract with a third party for such services. Additionally, the legislative auditor shall have authority to conduct audits of such contracts in accordance with the law.

(1) Notwithstanding any other provision of law to the contrary, the secretary of the Department of Revenue may treat a delinquent debt referral in the same manner as an assessment that has become final without restriction or delay. The secretary, through the office, may use any collection remedy provided by state law to facilitate the collection of taxes to collect the delinquent debt; however, the financial institution data match shall be used only in accordance with the provisions of R.S. 47:1677. The office may use a participating agency's statutory collection authority to collect the participating agency's delinquent debts owed to or being collected by the state. The office may also use authority granted in R.S. 47:299.3 regarding offset from income tax refunds or other accounts payable by the state for any delinquent debt transferred by agencies. The secretary has the discretion to determine which method or combination thereof is most suitable to collect the delinquent debt.

(2) The department and the office may establish and use an electronic financial institution data match system as authorized in R.S. 47:1677 for comparison of certain account information held by financial institutions with the department and office's databases of state tax and state nontax debtors against whom an assessment or judgment for debt owed to the state has become final.

(3)

(a) The office shall be granted and may exercise the authority granted in R.S. 47:296.2 and 296.3.

(b)

(i) The office may also submit a request for the suspension, revocation or denial of any type of professional or other license, permit, or certification to a Louisiana entity or body that governs, regulates, or issues such licenses, permits or certifications for the exercise or practice of certain professions, trades, or any other kind of work being performed in Louisiana.

(ii) In exercising the authority provided for in this Paragraph or in R.S. 47:296.2 or 296.3, the office may assume the obligation for the payment of such services in order to collect delinquent debt.

(c) The legislature hereby recognizes the judicial power vested in the state supreme court pursuant to Article V, Section I of the Constitution of Louisiana to regulate the practice of law and accordingly, and requests that the supreme court consider rules and regulations relative to attorneys licensed to practice law consistent with the provisions of this Chapter.

(4)

(a)

(i) The office shall be authorized to withhold, offset, levy, garnish, or seize payments of progressive slot machine annuities and cash gaming winnings in the same manner set forth in R.S. 27:24 and payments of lottery prizes in the same manner as set forth in R.S. 47:9026 and may assume the obligation for payment of such services in order to collect delinquent debt. However, the withholding, offset, levy, garnishment, or seizure of progressive slot machine annuities, cash gaming winnings, and payments of lottery prizes pursuant to the provisions of this Paragraph shall not be conducted until a single-point inquiry system which allows for searches of one or more real-time databases containing debt information pursuant to this Subsection and R.S. 46:236.15 is available to entities licensed or permitted under Chapters 1, 4, 5, or 7 of Title 27 of the Louisiana Revised Statutes of 1950.

(ii) The office is authorized to enter into a memorandum of understanding with the Louisiana Casino Association on behalf of its member casinos to facilitate the development and implementation of a single-point inquiry system.

(iii) The provisions of this Paragraph shall not be construed to prohibit the withholding, offset, levy, garnishment, or seizure of progressive slot machine annuities, cash gaming winnings, and payments of lottery prizes currently conducted pursuant to the provisions of R.S. 46:236.15 from continuing until the single-point inquiry system is created.

(b) Any entity licensed or permitted under Chapters 1, 4, 5, or 7 of Title 27 of the Louisiana Revised Statutes of 1950 may deduct an administrative fee from each payment of a progressive slot machine annuity or cash gaming winnings in accordance with R.S. 27:24(A)(5)(d) pursuant to a request by the office of debt recovery to such annuities or winnings in the collection of a delinquent debt; however, the licensed or permitted entity shall not withhold more than one administrative fee on such annuities or winnings.

(c) The Louisiana Gaming Control Board or any entity licensed or permitted under Chapters 1, 4, 5, or 7 of Title 27 of the Louisiana Revised Statutes of 1950 shall be immune from civil or criminal liability for the disclosure of certain information or from any claims for damages arising from withholding or failing to withhold any progressive slot machine annuities or cash winnings in accordance with R.S. 27:24(A)(5)(b) when the disclosure of such information or the withholding of such annuities or winnings is done pursuant to a request by the office of debt recovery.

(d) The authorization provided for in this Paragraph shall not prime the claim of the Department of Children and Family Services under the provisions of R.S. 46:236.15(D) or R.S. 47:9026 to any payments of progressive slot machine annuities or cash gaming winnings.

E. The office shall charge the debtor a fee not to exceed twenty-five percent of the total liability of debt which has become final after the initial effective date of this Section. The amount of the fee shall be established by rule promulgated by the department and shall be uniformly applied to all debts. Fees collected under this Subsection shall be retained by the office after the debt is collected and shall be divided in accordance with an agreement between the office and the office of the attorney general after payment of costs set forth in the agreement. Monies collected by the office pursuant to the provisions of this Section shall be transferred to the referring agency within thirty days after the end of the month in which the monies were collected and shall be used, subject to an annual appropriation, by the referring agency as they would have been had they been timely collected. However, any monies collected for delinquent debt as a result of nonpayment of tax liabilities pursuant to Title 47 of the Louisiana Revised Statutes of 1950, as amended, after deposit into the state general fund, the first five million dollars shall be appropriated by the legislature beginning in Fiscal Year 2013-2014, and for four consecutive fiscal years thereafter, to the office of state police for a training academy class.

(2), (3) Repealed by Acts 2016, 1^stEx. Sess., No. 11, §3, eff. March 9, 2016.

(1) Notwithstanding any law to the contrary, agencies shall be authorized to transmit data to the office of debt recovery deemed necessary by the secretary to aid in the collection efforts of the office. The secretary shall establish a centralized electronic debt registry to compile the information provided by agencies and shall maintain all information provided from all sources within the state concerning addresses, financial records, and any other information useful in assisting the office in collection services of the centralized registry. The data compiled in the registry from the department, referring agencies, and the office shall be available for cross-referencing and for the identification of debtors necessary for the collection of delinquent debt.

(2) All data, records, and files utilized for debt collection as provided herein shall be deemed confidential and privileged, and no person shall divulge or disclose any information obtained from such records and files except in the administration and enforcement of these provisions. Compilation of tax data in the electronic registry by the department shall not be a violation of R.S. 47:1508, and any information or data gathered by the department and the office in accordance with the law may be used for purposes of collecting tax and nontax debt. Except as provided for in R.S. 47:1508 et seq., or in any other applicable provision of law, information concerning the identity of a debtor, the amount of the debt owed, and the amount of any collections or settlements shall be a public record subject to disclosure under the Public Records Law, R.S. 44:1 et seq.

(3) The attorney general shall have access to all data and information compiled which is needed for further debt collection and accounting pursuant to this Section.

G. Agencies may exercise the following procedures, in combination with its own statutes or as a standalone procedure, to make any debt owed to the agency a final delinquent debt that is collectible by the office.

(1) Once an agency determines a debt is owed, it shall send the debtor an initial notice of the debt which requests payment, outlines any additional information necessary to identify the nature of the debt and the amount due, and notifies the debtor that failure to pay the debt in full within sixty days shall subject the debt to be transferred to the office for collection of the maximum amount owed with an additional collection fee added to the debt.

(2) If, after thirty days from the date of the initial notification, the debtor has failed to pay the debt owed, the agency shall send a second notice to the debtor with the same information required in Paragraph (1) of this Subsection.

(3) If the debt remains unpaid sixty days after the date of the initial notice, the debt shall be considered a final delinquent debt and shall be owed to the state and collectible by the office.

(4) If an agency utilizes the procedures above and transfers the final delinquent debt to the office for collection, in lieu of any other notice, the office shall send the debtor a notice informing the debtor of the debt's transfer to its office for collection and of the additional collection fee that shall be added to the debt.

H. The secretary shall promulgate rules and regulations in accordance with the Administrative Procedure Act to implement the provisions of this Section, including rules authorizing any reasonable procedure or requirement for agencies referring delinquent debt to the department for collection, requirements regarding information necessary to collect the debt and the formatting of that information, and the priority or ranking of debt payments against multiple agency debts. Any rule promulgated by the department shall be construed in favor of the secretary.

I. The secretary may enter into one or more reciprocal collection and offset of indebtedness agreements with the federal government, pursuant to which the state shall agree to offset from state tax refunds and payments otherwise due to vendors and contractors providing goods or services to agencies, non-tax debt owed to the federal government, and the federal government shall agree to offset from federal payments to vendors, contractors, and taxpayers debt owed to the state. The secretary shall include all eligible collection accounts placed with the attorney general's office for all available offsets.

J. After the office exercises and employs its collection methods and tools, it shall evaluate and recommend any uncollectible debt for sale or securitization in accordance with the provisions of R.S. 39:88.2 and 88.3.

K. The operations of the office shall be subject to annual review by the Cash Management Review Board.

(1) The terms "delinquent debt" and "final debt" as defined in this Section shall not apply to "debt" defined by R.S. 32:8(A). For purposes of this Section, the terms "delinquent debt" and "final debt" as defined in R.S. 32:8 shall apply to "debt" defined by R.S. 32:8(A)(1).

(2) Debt, whether defined by R.S. 32:8(A) or this Section, owed to the Department of Public Safety and Corrections, office of motor vehicles, which becomes delinquent debt, final debt, or final delinquent debt after June 8, 2016, and for which a debtor enters into an installment agreement with the office of motor vehicles to pay shall not be referred to the office of debt recovery or the office of the attorney general during the term of any such installment agreement.

La. Revenue and Taxation § 47:1676

Acts 2013, No. 399, §3, eff. June 17, 2013; Acts 2014, No. 646, §4, eff. July 1, 2014; Acts 2014, No. 816, §1; Acts 2015, No. 121, §4, eff. July 1, 2015; Acts 2015, No. 414, §3; Acts 2016, 1st Ex. Sess., No. 11, §§2, 3, eff. March 9, 2016; Acts 2016, No. 397, §2, eff. June 8, 2016; Acts 2017, No. 260, §2, eff. Aug. 1, 2018; Acts 2018, No. 668, §4, eff. Aug. 1, 2018; Acts 2019, No. 183, §1; Acts 2019, No. 253, §2; Acts 2021, No. 313, §3A; Acts 2023, No. 87, §1, eff. Jan. 1, 2024.