The following definitions apply to terms found in this subchapter:

(1) "Collection methods" means any action taken in an attempt to collect on a debt, including but not limited to making a demand for payment, issuing collection notices, obtaining a judgment, and levying wages and bank accounts.

(2) "Criteria for uncollectibility" means an agency's written standards stating the collection methods that must occur in order for the agency to determine that the debt is uncollectible.

(3) "Form CB-1" means the department's Request for Informal Review form, which is available at the department's website at www.mtrevenue.gov, for use by a person to file a written objection with the department concerning the transfer of a debt to the department or the department's collection of a debt.

(4) "Form CB-2" means the department's Notice of Referral to the Office of Dispute Resolution form, which is available at the department's website at www.mtrevenue.gov, for use by a person to appeal an informal review determination to the department's Office of Dispute Resolution (ODR).

(5) "Unliquidated debt" means a debt where the amount is unassessed, unsettled, or disputed.

(6) "Write off" means to remove the debt from accounts receivable.

(1) Prior to submitting any debt to the department for collection services, the agency shall:

(a) enter into a memorandum of understanding with the department addressing debt collection services; and

(b) establish criteria for uncollectibility and provide that criteria to the department.

(2) The agency shall not submit to the department any unliquidated debts.

(3) The agency must have followed its internal policies and procedures regarding debtor notification and dispute resolution on any debts it submits to the department.

(4) To submit a debt to the department, the agency shall certify the amount of the debt and that the debt is uncollectible in accordance with the agency's criteria for uncollectibility.

(1) The department will only accept a debt for collection services if the department determines that the submitting agency has met its criteria for uncollectibility, unless the agency is exempted from this requirement under 17-4-105, MCA. The department will notify the agency of its acceptance or rejection of the debt for collection services.

(2) If the department determines that a submitting agency has not met its criteria for uncollectibility, the department may return the debt to that agency.

(3) Upon the department's request, the submitting agency shall submit all relevant evidence regarding a debt, including but not limited to documentation of the collection methods undertaken by the agency and any information that substantiates the debt.

(1) Upon the department's acceptance of a debt for collection services, the debt is transferred to the department.

(2) Once a debt has been transferred to the department, the submitting agency shall:

(a) write off the debt;

(b) cease all collection activities on the debt;

(c) forward to the department any payment received by the agency; and

(d) update the department with any information received relating to the debt, including notification that the debtor filed for bankruptcy or has new contact information.

(3) If the submitting agency receives payment on a debt that has been collected in full, the agency shall refund the overpayment to the debtor.

(1) The department shall notify a debtor that another agency has transferred a debt to the department for collection services. The notice of transfer shall identify the debt and provide:

(a) a statement that the department intends to undertake collection activities;

(b) payment information;

(c) the department's contact information, including phone number and mailing address; and

(d) the debtor's appeal rights as set forth in (2) through (4).

(2) To object to the transfer of the debt from the agency to the department, the debtor must submit a written request stating the basis of the debtor's objection within 30 days of the date on the notice of transfer. Written objections may be submitted on Form CB-1, by letter sent through U.S. mail or other generally accepted delivery service, or as electronic mail to the department's email address provided on the notice of transfer. The objection must be postmarked or electronically date stamped within 30 days of the date on the notice of transfer. Failure to timely submit a written objection shall be deemed an admission that the debtor agrees that the debt stated in the notice of transfer is due and owing. 

(3) The department shall review the objection and shall mail written notice to the debtor advising the debtor of the department's determination within 30 days after receipt of the objection. If the department concurs with the debtor's objection, the department will return the debt to the submitting agency. If the department disagrees with the debtor, the department shall explain the reasons for the disagreement, notify the debtor that the department's determination may be appealed to the Office of Dispute Resolution, and provide a copy of Form CB-2. The department shall also notify the debtor that the debtor must submit a Form CB-2 or other written objection to the department within 30 days of the date on the department's determination, and that the debtor will forfeit the right to a hearing if the debtor fails to submit Form CB-2 or other written objection within the 30-day period.

(4) If the debtor disagrees with the department's determination, the debtor must submit a Form CB-2 or other written objection within 30 days of the date on the department's determination to request a hearing before the Office of Dispute Resolution. Objections should be mailed to the Department of Revenue, Office of Dispute Resolution, P.O. Box 5805, Helena, Montana 59604 or e-mailed to dordisputeresolution@mt.gov. The objection must be postmarked or electronically date stamped within 30 days of the date on the department's determination. Failure of the debtor to file a timely appeal shall be deemed an admission that the debtor agrees that the debt stated in the notice of transfer is due and owing. 

(5) Deadlines may be extended if both parties agree. 

(6) Hearings conducted pursuant to this rule are limited to whether the transfer of the debt from the agency to the department was valid. The department shall not make any determination regarding the validity of the underlying debt. If the debtor's objection to the debt transfer includes a challenge to the validity of the underlying debt, the department may return the debt to the submitting agency. The debtor is not entitled to a hearing on the validity of the debt if the debt has been the subject matter of any proceeding to determine the validity of the debt and a decision made as a result of that proceeding has become final.

(1) The department shall notify the debtor when it identifies funds that may be subject to offset. The notice of offset shall identify the debt and funds held and inform the debtor that the department will hold the funds for 30 days pending receipt of an objection. The notice shall also provide the department's contact information, including phone number and mailing address, and the debtor's appeal rights, as provided in (2) through (4).

(2) To object to the potential offset of funds held, the debtor must submit a written request stating the basis of their objection within 30 days of the date on the notice of transfer. Written objections may be submitted on Form CB-1, by letter sent through U.S. mail or other generally accepted delivery service, or as electronic mail to the department's email address provided on the notice of transfer. The objection must be postmarked or electronically date stamped within 30 days of the date on the notice of offset. If the debtor fails to timely submit a written objection, the department will apply the held funds to the debt. 

(3) The department shall review the objection and shall mail written notice to the debtor advising them of the department's determination within 30 days after receipt of the objection. If the department concurs with the debtor's objection, the department will release the held funds to the debtor. If the department disagrees with the debtor, the department shall explain the reasons for the disagreement, notify the debtor that the department's determination may be appealed to the Office of Dispute Resolution, and provide a copy of Form CB-2. The department shall also notify the debtor that the debtor must submit a Form CB-2 or other written objection to the department within 30 days of the date on the department's determination, and that the debtor will forfeit the right to a hearing if the debtor fails to submit Form CB-2 or other written objection within the 30-day period.

(4) If the debtor disagrees with the department's determination, the debtor must submit a Form CB-2 or other written objection within 30 days of the date on the department's determination to request a hearing before the Office of Dispute Resolution.  Objections should be mailed to the Department of Revenue, Office of Dispute Resolution, P.O. Box 5805, Helena, Montana 59604 or e-mailed to dordisputeresolution@mt.gov. The objection must be postmarked or electronically date stamped within 30 days of the date on the department's determination. If the debtor fails to timely submit a written objection, the department will apply the held funds to the debt. 

(5) Deadlines may be extended if both parties agree. 

(1) Hearings on debts owed to an agency other than the Department of Public Health and Human Services will be conducted by the department. Such hearings will be conducted pursuant to 15-1-211, MCA, and ARM 42.2.613 through 42.2.621.

(2) Hearings on debts owed to the Department of Public Health and Human Services will be conducted by that agency.

(1) Upon determining that a transferred debt is uncollectible or that the cost of continued collection activities would exceed the amount of debt, the department shall write off the debt and cease collection activities.

(1) The department shall collect a service fee for the cost of collections. Any payment the department receives will first be applied to the collections service fee and then to the transferred debt. Any payment the submitting agency receives on a transferred debt is also subject to the collections service fee.