Senate revives, passes bill on withholding tax refunds

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The Senate proved again Thursday that the old adage still holds true — a bill isn’t dead until it’s “dead, dead, dead.”

On Wednesday, the Senate voted down a bill that would allow the state to withhold income tax refunds from Mississippians who owe debt to private hospitals and community colleges.

But on Thursday, a supermajority of the Senate revived the measure, House Bill 687, and passed it.

Under the bill, those who owe debts greater than $100 to public or nonprofit hospitals and $25 to community colleges could have their state tax income refunds withheld.

The practice is already used for uncollected four-year university and child support debts.

If the bill passes the Legislature, nonprofit hospitals would be the first private entities able to draw state assistance to collect outstanding debts in this manner.

The bill, which failed Wednesday by a close 24-23 vote, was revived on a motion to reconsider and ultimately passed by a 32-16 vote on Thursday morning.

Nine senators voted differently Thursday than they did on Wednesday, either flipping from “no” to “yes” or abstaining from the final vote.

Gil Ford Photography

Sen. Sally Doty, R-Brookhaven

“Our hospitals are subject to federal guidelines, and laws that requires them to take in certain patients,” said Sen. Sally Doty, R-Brookhaven, who defended the bill on the Senate floor Wednesday. “I think they deserve some different treatment than just a retailer. They’re in a separate class.”

The bill originally included provisions only for community colleges to collect outstanding debt through the tax refund offsets.

But Doty added the hospitals provision to the bill after a similar bill she sponsored dealing with hospitals died in committee in late January. Doty said on the floor last week that she has worked on this provision for six years.

Much of the debate the past two weeks on the bill has been whether the state should assist private entities in collecting owed debt.

Gil Ford PHotography

Sen. Angela Hill, R-Picayune

“I want to be able to help community colleges and public hospitals collect their debt,” said Sen. Angela Hill, R-Picayune. “But bringing the Department of Revenue in as a collection agency puts a poison in this bill.”

“Why not just let private nursing homes and clinics get in line to get garnishment from DOR?” Hill asked. “Where does it end? Let’s don’t use a state agency as a collection agency for a private entity.”

Gil Ford Photography

Sen. Michael Watson, R-Pascagoula

Sen. Michael Watson, R-Pascagoula, introduced several measures to kill the bill this week. On Thursday, he entered a legal question about whether the bill should be considered a revenue bill, which requires a three-fifths vote to pass.

Lt. Gov. Tate Reeves, after speaking with Senate attorneys, ruled Watson’s question was valid.

The 32 yes votes on Thursday was the minimum threshold required for the bill to pass.

Sen. Briggs Hopson, R-Vicksburg, successfully introduced an amendment on Wednesday that would prioritize public hospitals’ ability to collect debt before private hospitals. That amendment was included in the final version passed Thursday.

Mississippians owe community colleges around $98 million in debt, according to Kell Smith, spokesman for the Mississippi Community College Board.

“We think it’d be a good tool for community colleges to collect some of the debt that’s owed to them,” Smith said last week.

The bill in its current form treats the community colleges differently than the hospitals.

Existing law gives four-year universities the authority to work with the Department of Revenue to determine outstanding debt, and the revenue department then withholds tax refunds when necessary. An appeals process is available for those who wish to dispute those offsets after the fact.

But the section of the bill dealing with hospitals would first require a judgment from a county’s Justice Court judge, who after a hearing could authorize the Department of Revenue to withhold an individual’s refund.

Two senators on Thursday spoke against the bill on the floor.

“We’re using government to collect for private corporations,” Watson said. “That is a bad precedent to set.”