Introduced Version






HOUSE BILL No. 1119

_____


DIGEST OF INTRODUCED BILL



Citations Affected: IC 6-8.1-9-14; IC 31-14-12-2.5; IC 31-16-12.5-9; IC 31-25-4-17.

Synopsis: Tax refund intercepts for past due child support. Prohibits a fee from being charged to a custodial parent for seeking an offset of a federal or state income tax refund for past due child support payments.

Effective: July 1, 2007.





Cheney




    January 8, 2007, read first time and referred to Committee on Ways and Means.







Introduced

First Regular Session 115th General Assembly (2007)


PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts between statutes enacted by the 2006 Regular Session of the General Assembly.

HOUSE BILL No. 1119



    A BILL FOR AN ACT to amend the Indiana Code concerning family law and juvenile law.

Be it enacted by the General Assembly of the State of Indiana:

SOURCE: IC 6-8.1-9-14; (07)IN1119.1.1. -->     SECTION 1. IC 6-8.1-9-14 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 14. (a) Except as provided in subsection (n), the department shall establish, administer, and make available a centralized debt collection program for use by state agencies to collect delinquent accounts, charges, fees, loans, taxes, or other indebtedness owed to or being collected by state agencies. The department's collection facilities shall be available for use by other state agencies only when resources are available to the department.
    (b) The commissioner shall prescribe the appropriate form and manner in which collection information is to be submitted to the department.
    (c) The debt must be delinquent and not subject to litigation, claim, appeal, or review under the appropriate remedies of a state agency.
    (d) The department has the authority to collect for the state or claimant agency (as defined in IC 6-8.1-9.5-1) delinquent accounts, charges, fees, loans, taxes, or other indebtedness due the state or

claimant agency that has a formal agreement with the department for central debt collection.
    (e) The formal agreement must provide that the information provided to the department be sufficient to establish the obligation in court and to render the agreement as a legal judgment on behalf of the state. After transferring a file for collection to the department for collection, the claimant agency shall terminate all collection procedures and be available to provide assistance to the department. Upon receipt of a file for collection, the department shall comply with all applicable state and federal laws governing collection of the debt.
    (f) The department may use a claimant agency's statutory authority to collect the claimant agency's delinquent accounts, charges, fees, loans, taxes, or other indebtedness owed to the claimant agency.
    (g) The department's right to credit against taxes due may not be impaired by any right granted the department or other state agency under this section.
    (h) The department of state revenue may charge the claimant agency a fee not to exceed fifteen percent (15%) of any funds the department collects for a claimant agency. Notwithstanding any law concerning delinquent accounts, charges, fees, loans, taxes, or other indebtedness, the fifteen percent (15%) fee shall be added to the amount due to the state or claimant agency when the collection is made.
    (i) Fees collected under subsection (h) shall be retained by the department after the debt is collected for the claimant agency and are appropriated to the department for use by the department in administering this section.
    (j) The department shall transfer any funds collected from a debtor to the claimant agency within thirty (30) days after the end of the month in which the funds were collected.
    (k) When a claimant agency requests collection by the department, the claimant agency shall provide the department with:
        (1) the full name;
        (2) the Social Security number or federal identification number, or both;
        (3) the last known mailing address; and
        (4) additional information that the department may request;
concerning the debtor.
    (l) The department shall establish a minimum amount that the department will attempt to collect for the claimant agency.
    (m) The commissioner shall report, not later than March 1 for the previous calendar year, to the governor, the budget director, and the legislative council concerning the implementation of the centralized

debt collection program, the number of debts, the dollar amounts of debts collected, and an estimate of the future costs and benefits that may be associated with the collection program. A report to the legislative council under this subsection must be in an electronic format under IC 5-14-6.
     (n) The department may not assess a fee to a state agency or a custodial parent for seeking a setoff to a state or federal income tax refund for past due child support.

SOURCE: IC 31-14-12-2.5; (07)IN1119.1.2. -->     SECTION 2. IC 31-14-12-2.5 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 2.5. (a) This section does not apply to a support order entered in a Title IV-D case.
    (b) A custodial parent may, under IC 31-16-12.5, seek a setoff of the state income tax refund of a child support obligor against whom a child support order was entered under IC 31-14-11.
     (c) A custodial parent may not be charged a fee to seek a setoff of a state income tax refund as described in subsection (b).
SOURCE: IC 31-16-12.5-9; (07)IN1119.1.3. -->     SECTION 3. IC 31-16-12.5-9 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 9. A custodial parent may not be charged a fee to seek a setoff of a state income tax refund.
SOURCE: IC 31-25-4-17; (07)IN1119.1.4. -->     SECTION 4. IC 31-25-4-17, AS ADDED BY P.L.145-2006, SECTION 271, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 17. (a) The bureau shall do the following:
        (1) Collect support payments when the payments have been assigned to the state by the application for assistance under Title IV-A.
        (2) Assist in obtaining a support order, including an order for health insurance coverage under:
            (A) IC 27-8-23;
            (B) IC 31-14-11-3; or
            (C) IC 31-16-6-4;
        when there is no existing order and assistance is sought.
        (3) Assist mothers of children born out of wedlock in establishing paternity and obtaining a support order, including an order for health insurance coverage under IC 27-8-23, when the mother has applied for assistance.
        (4) Implement income withholding in any Title IV-D case:
            (A) with an arrearage; and
            (B) without an order issued by a court or an administrative agency.
        (5) Enforce intrastate and interstate support orders using high

volume automated enforcement features.
        (6) Use a simplified procedure for the review and adjustment of support orders as set forth in 42 U.S.C. 666(a)(10).
    (b) Whenever the bureau collects support payments on behalf of an individual who is no longer a member of a household that receives Title IV-A cash payments, the collected support payments (except collections made through a federal tax refund offset) shall be promptly distributed in the following order:
        (1) Payment to the recipient of the court ordered support obligation for the month that the support payment is received.
        (2) Payment to the recipient of the support payment arrearages that have accrued during any period when the recipient was not a member of a household receiving Title IV-A assistance.
        (3) Payment to the state in an amount not to exceed the lesser of:
            (A) the total amount of past public assistance paid to the recipient's family; or
            (B) the amount assigned to the state by the recipient under IC 12-14-7-1.
        (4) Payment of support payment arrearages owed to the recipient.
        (5) Payment of any other support payments payable to the recipient.
    (c) Whenever the bureau receives a payment through a federal tax refund offset on behalf of an individual who has received or is receiving Title IV-A assistance, the child support payment shall be distributed as follows:
        (1) To the state, an amount not to exceed the lesser of:
            (A) the total amount of past public assistance paid to the individual's family; or
            (B) the amount assigned to the state by the individual under IC 12-14-7-1.
        (2) To the individual, any amounts remaining after the distribution under subdivision (1).
    (d) Whenever the bureau collects a child support payment from any source on behalf of an individual who has never received Title IV-A assistance, the bureau shall forward all money collected to the individual.
    (e) Whenever the bureau receives a child support payment on behalf of an individual who currently receives a Title IV-A cash payment or an individual whose cash payment was recouped, the child support payment shall be distributed as follows:
        (1) To the state, an amount not to exceed the lesser of:
            (A) the total amount of past public assistance paid to the

individual's family; or
            (B) the amount assigned to the state by the individual under IC 12-14-7-1.
        (2) To the individual, any amounts remaining after the distribution under subdivision (1).
    (f) Unless otherwise required by federal law, not more than seventy-five (75) days after a written request by a recipient, the bureau shall provide an accounting report to the recipient that identifies the bureau's claim to a child support payment or arrearage.
     (g) The bureau, the department of child services, and the department of state revenue may not charge a custodial parent a fee to seek or receive a payment through a federal tax refund offset as described in subsection (c).