Reciprocal Treasury Offset Program; Agreement for Collection of Debts Owed to the Commonwealth From Federal Payments

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Section 19. (a) As used in this section the following words shall have the following meanings, unless the context clearly requires otherwise:

''Debt'', a delinquent state tax or nontax debt certified by the treasurer and receiver general or a federal nontax debt certified by a federal official including, but not limited to, fines, fees, penalties and other nontax assessments imposed by or payable to the commonwealth or federal government that are finally determined to be due and owing.

''Federal official'', a unit or official of the federal government charged with the collection of nontax liabilities payable to the federal government and with the authority to enter into the offset agreement.

''Offset agreement'', the agreement between the comptroller and the Secretary of the Treasury authorized by this section.

''Person'', an individual, vendor, contractor, partnership, society, association, joint stock company, limited liability company, corporation, estate, receiver, trustee, assignee and any other person acting in a fiduciary or representative capacity whether appointed by a court or otherwise, or any combination of the foregoing.

''Refund'', an overpayment of any tax that is returned or credited to the taxpayer pursuant to sections 30, 31A, 36, 36A, 37 or 39 of chapter 62C, sections 27 or 27A of chapter 65, section 6 of chapter 65A or any other general or special law that authorizes such a return or credit.

''State payments'', refunds and any vendor or contractor payments made by the commonwealth to any person, including expense reimbursements to an employee of the commonwealth; provided, however, that ''state payments'' shall not include salary, wages, pension and any other type, class or amount of payment that the comptroller determines to impact health or welfare benefits of the citizens of the commonwealth.

(b) Notwithstanding any other general or special law to the contrary, the comptroller may enter into an offset agreement with the Secretary of the Treasury to participate in a reciprocal Treasury Offset Program pursuant to 31 U.S.C. section 3716 for the collection of any debts owed to the commonwealth or to state agencies from federal payments to vendors, contractors and taxpayers. The offset agreement may provide for the United States to submit nontax debts owed to federal agencies for offset against state payments otherwise due and owing to taxpayers, vendors and contractors providing goods or services to the commonwealth, its departments, agencies or institutions.

(c) Pursuant to the offset agreement, a federal official may: (1) provide certification to the comptroller the existence of a person's delinquent, nontax debt owed by the person to the federal government by providing: (i) the full name and address of the person and any other names known to be used by the person; (ii) the social security number or federal tax identification number of that person; (iii) the amount of the federal nontax debt; (iv) a statement certifying that the debt is past due, that due process has been provided and that the debt is legally enforceable in the amount certified, which may be provided in procedures for certifying payments in the offset agreement; and (v) any other information pursuant to the agreement; (2) request the comptroller to withhold any state payment to which the person is entitled; and (3) retain a portion of the proceeds of any federal administrative setoff authorized by the federal offset program.

(d) As required or permitted by state law, federal law or the offset agreement, the comptroller shall: (1) determine if a person for whom a certification is received is due a state payment; (2) withhold a state payment that is due a person whose name has been certified by a federal official; (3) notify the person of the amount withheld in satisfaction of a debt certified by a federal official; (4) pay to the federal official the lesser of the entire state payment or the amount certified and pay any refund or state payment in excess of the certified amount to the person less any fee pursuant to subsection (f).

(e) The comptroller may certify to a federal official a person's delinquent debt owed to the commonwealth by providing the federal official: (i) the full name and address of the person and any other names known to be used by the person; (ii) the social security number or federal tax identification number of that person; (iii) the amount of the liability; (iv) a statement certifying that the debt is past due, that due process has been provided and that the debt is legally enforceable in the amount certified, which may be provided in procedures for certifying payments in the offset agreement; and (v) any other information required by state statute or regulation applicable to the collection of the debt by offset of federal payments.

(f) The comptroller may request that the federal official withhold any federal vendor or other federal payment pursuant to the offset agreement to which the person is entitled the entire federal payment or the amount certified and pay any refund or federal payment in excess of the certified amount to the person less any fee pursuant to subsection (g).

(g) The comptroller shall establish a reasonable administrative fee to be charged to the person for the provision of the state offset of a federal debt or the federal offset of a state debt. The fee shall be a separate debt and may be withheld from any refund, reimbursement or other monies held for the person. The comptroller may charge the person who is the subject of federal offset of a state debt, a fee equal to the fee authorized in this subsection. Any state administrative fees may be retained by the comptroller, without further appropriation, for the costs of the offset program, including reporting, and for costs associated with other revenue generation and cost savings initiatives as determined by the comptroller.

(h) The comptroller may enter into interagency agreements with other state agencies for the purpose of protecting a person's return information pursuant to chapter 62C and regulations promulgated thereunder and collecting debts, fees and penalties due to the commonwealth, its departments, agencies or institutions.

(i) If an individual filed a joint income tax return and the debt certified by a federal official is not the liability of both parties to the joint income tax return, the comptroller may not withhold or pay to the federal official that portion of the income tax refund attributable to the individual not owing the debt. The comptroller and the commissioner of revenue shall adopt procedures notifying parties to a joint income tax return of a proposed offset of a state income tax refund for a debt certified by a federal official and shall allow the parties to such return 60 days to assert in writing that a portion of the income tax refund is attributable to the individual not owing the debt. If no such assertion by a party to the joint return is made within 60 days of notice, all of the income tax refund shall be deemed attributable to the individual owing the debt.


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