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Senate panel approves adding Insurance Department to state tax‑intercept claimant list
Summary
House Bill 12 41 would add the Arkansas Insurance Department and the governmental bonding board to the statutory list of claimant agencies eligible to request state tax refund intercepts for liquidated debts; questions focused on whether the program applies only to individuals, priority among claimants, and the $200,000 statutory threshold.
House Bill 12 41, presented to the Insurance & Commerce Committee, would add the Arkansas Insurance Department and the governmental bonding board to the statutory list of "claimant agencies" eligible to request interception of state tax refunds to satisfy liquidated debts owed to a claimant agency.
The sponsor said the department needs the authority because many claims against the governmental bonding board arise when employees of public entities commit theft or fraud; in many cases courts have ordered restitution that is paid in small installments and additional enforcement tools could help collect funds. Jim Bridal explained the tax‑intercept program is administered by the Department of Finance and Administration (DF&A) and requires claimant agencies to give due process notice before interception.
Senators questioned whether the intercept applies to LLCs or corporations (department counsel said the provision applies to individuals, not organizations), how claimant priority would be resolved if multiple agencies claim the same refund, and why statute uses a $200,000 threshold for adding claimant agencies (department counsel said the threshold dates to 2003 and is intended to exclude trivial claims). Senator Hickey asked whether the statutory phrasing gives advantage over court‑ordered liens; Bridal said the statute does not confer priority over court orders and that claimant agencies would be paid in line with their statutory class.
After questions and no audience opposition, the committee moved the bill forward by voice vote. The committee did not record a roll call during this hearing; proponents said DF&A provided a green fiscal impact sheet indicating no state budget impact from the change.
