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Senate substitutes account-collection bill to protect ‘injured spouse’ and carve out HIPAA-covered providers
Summary
First Substitute Senate Bill 120 was substituted on the floor to clarify tax-refund intercepts, provide more due-process protections for joint filers and exempt HIPAA-covered health providers from joint-notice requirements; the substitute was adopted and the bill read for a third time.
Senator Hilliard moved a substitute to Senate Bill 120, which clarifies the state's authority to intercept income tax refunds for collection of debts while protecting the rights of an 'injured' or 'innocent' spouse on joint returns. The floor discussion focused on due process for taxpayers, the mechanics when a return is filed jointly but only one party owes debt, and a carve-out for HIPAA-covered health providers who cannot lawfully provide patient medical information to a spouse.
Sponsor explanation: the original statute lacked protections for innocent spouses and did not account for HIPAA restrictions on health providers communicating medical billing information; the amendment exempted HIPAA-covered providers from requirements to send joint notices that would conflict with federal law. Senator Hilliard said the substitute clarifies the statute, adds contest/due-process time, and makes the departmental rulemaking authority explicit.
Procedure and votes: the Senate adopted the substitute and then, by recorded vote, ordered the first substitute read for a third time; the transcript records that the substitute was read for a third time with recorded support (25 yay, 0 nay, 4 absent).
Next steps: The bill will proceed under the usual order for third-reading bills; administrative implementation will require rule changes for departments that carry out refund interception and guidance for taxpayers on contest procedures.
