Bill S567-2011

Authorizes the denial of renewal of professional, business or trade licenses where a taxpayer has outstanding tax debt which the taxpayer has failed to settle

Authorizes the denial of the renewal of a license, permit, certificate, registration or admission to practice a profession, business or trade where a taxpayer has outstanding tax debt which the taxpayer has failed to enter into a settlement agreement for the payment thereof; requires each taxpayer renewing a license to practice a profession, business or trade to attest to the licensing agency that he or she does not have an unsettled outstanding tax debt.

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  • Jan 4, 2012: REFERRED TO FINANCE
  • Jan 5, 2011: REFERRED TO FINANCE

Memo

BILL NUMBER:S567                REVISED 02/15/12

TITLE OF BILL: An act to amend the executive law, the state administrative procedure act and the judiciary law, in relation to the denial of the renewal of professional licenses when the applicant has outstanding avoidance of state tax debt

PURPOSE: This bill provided the State of New York with additional tools to collect outstanding tax debt.

SUMMARY OF PROVISIONS: Section 1: Amends Executive law section 32 to empower state agencies to deny the renewal of professional licenses to individuals unable to provide proof that they do not owe tax debt.

Section 2: Amends State Administrative Procedure Act section 401 to state that an individual must submit a self-certification, under penalty of perjury, that they do not have a tax debt when seeking to renew a license, and states that agencies may deny the renewal of a license to individuals that owe tax debt.

Section 3: Amends Judiciary Law section 53 to state that an individual must submit a self-certification, under penalty of perjury, that they do not have a tax debt when seeking to renew their license as an attorney or counselor at law.

Section 4: One year after it shall have become law.

EXISTING LAW: Existing law does not give state agencies the authority to deny the renewal of licenses based on a licensee owing tax debt to New York State.

STATEMENT IN SUPPORT: The ability to effectively collect taxes is crucial for the functioning of State government. While the Department of Tax and Finance has various powers and tools at its disposal to try to collect tax debt, according to the department there was an outstanding collectable tax debt of $2.5 billion as of April 30, 2009.

In several other states, such as Illinois, Massachusetts, Minnesota, Missouri, Rhode Island, and wisconsin, revenue departments have the power to suspend or deny the renewal of professional licenses, and other licenses, if an individual owes a tax debt to the state. These programs have proven successful, and have been expanded and improved over the last few years. In Illinois, an improvement in their ability to match tax debt records with those of licensing agencies brought an additional $4 million in revenue collected between February 2009 and the end of June, 2009. Massachusetts granted the power to suspend or deny the renewal of professional and driver's licenses to their Department of Revenue starting in 2008, and from September 2008 to July 2009 this program collected an additional $9 million in revenue.

This legislation would allow the State to deny renewal of professional or business licenses if an entity was found to owe taxes to the state, which is defined as having a tax warrant issued against them. All state agencies that license professionals would add as part of the license renewal application a form in which individuals would, under penalty of perjury, affirm that they did not owe a tax debt, or had entered into an agreement with the Department of Tax and Finance to payoff the tax debt. This is similar to the system which state agencies use to check compliance with an individual's child support obligations. If any agency was informed, or found out during any audits that an individual owed tax debt at the time of the affirmation, they would be able to take action against an individual, including revoking their license as a penalty for lying on their renewal application.

PRIOR LEGISLATIVE HISTORY: 2010 - S.6161 - Referred to Finance

BUDGET IMPLICATIONS: There will be costs associated with the creation of new self-affirmation forms as part of the license renewal process. This bill shall also lead to increased collections of outstanding tax debt, which would off set any costs, as these programs have in all other states that implement them.

EFFECTIVE DATE: This act shall take effect on one year after it shall have become a law.


Text

STATE OF NEW YORK ________________________________________________________________________ 567 2011-2012 Regular Sessions IN SENATE (PREFILED) January 5, 2011 ___________
Introduced by Sen. KLEIN -- read twice and ordered printed, and when printed to be committed to the Committee on Finance AN ACT to amend the executive law, the state administrative procedure act and the judiciary law, in relation to the denial of the renewal of professional licenses when the applicant has outstanding avoidance of state tax debt THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 32 of the executive law, as added by chapter 55 of the laws of 1992, is amended to read as follows: S 32. Authority not to renew. 1. For the purposes of this section[, "state]: (A) "STATE agency" shall mean any state department, board, bureau, division, commission, committee, public authority, public bene- fit corporation, council, office, or other governmental entity perform- ing a governmental or proprietary function for the state, AND SHALL INCLUDE THE EDUCATION DEPARTMENT. (B) "TAX DEBT" SHALL MEAN ALL LIABILITIES, INCLUDING UNPAID TAXES, INTEREST AND PENALTIES, THAT THE COMMISSIONER OF TAXATION AND FINANCE IS REQUIRED BY LAW TO COLLECT, AND THAT HAVE BEEN REDUCED TO JUDGMENT BY THE DOCKETING OF A NEW YORK STATE TAX WARRANT WITH A COUNTY CLERK OR BY THE FILING OF A COPY THEREOF WITH THE DEPARTMENT OF STATE, AND THE TAXPAYER DEBTOR HAS FAILED TO PAY SUCH LIABILITIES OR FAILED TO ENTER INTO A WRITTEN AGREEMENT WITH THE DEPARTMENT OF TAXATION AND FINANCE TO SETTLE SUCH LIABILITIES. 2. Notwithstanding any other provision of law, when a state agency levies fees or assesses civil fines or penalties for licensing or regu- latory matters, such state agency shall, following consultation with the [state] department of law and after such appropriate due process as required by the provisions of law applicable to such state agency and to such licensing or regulatory matters, not be required to renew any
license, permit, or certificate of qualification, authority[,] or opera- tion, of any business, individual[,] or other entity, which is not a state agency, municipal corporation or district corporation, if such business, individual or other entity has failed to pay or enter into a written agreement to settle outstanding fees, civil penalties or fines assessed by such state agency. 3. (A) IT SHALL BE A CONDITION FOR THE RENEWAL OF ANY LICENSE, PERMIT, CERTIFICATE OR REGISTRATION WHICH SPECIFICALLY AUTHORIZES ANY PERSON OR ENTITY TO CONDUCT ANY PROFESSION, BUSINESS OR TRADE THAT THE APPLICANT FOR RENEWAL ATTEST, UNDER THE PENALTY OF PERJURY, TO THE STATE AGENCY RENEWING THE LICENSE, PERMIT, CERTIFICATE OR REGISTRATION THAT THE APPLICANT DOES NOT HAVE A TAX DEBT. (B) NOTWITHSTANDING ANY OTHER PROVISION OF LAW, EVERY STATE AGENCY WHICH ISSUES A LICENSE, PERMIT, CERTIFICATE OR REGISTRATION WHICH SPECIFICALLY AUTHORIZES ANY PERSON OR ENTITY TO CONDUCT ANY PROFESSION, BUSINESS OR TRADE MAY DENY THE APPLICATION FOR THE RENEWAL OF ANY SUCH LICENSE, PERMIT, CERTIFICATE OR REGISTRATION TO ANY PERSON OR ENTITY WHICH HAS A TAX DEBT. (C) EVERY APPLICATION FOR THE RENEWAL OF A LICENSE, PERMIT, CERTIF- ICATE OR REGISTRATION WHICH SPECIFICALLY AUTHORIZES ANY PERSON OR ENTITY TO CONDUCT A PROFESSION, BUSINESS OR TRADE SHALL PROVIDE NOTICE TO THE APPLICANT OF THE REQUIREMENTS OF THIS SUBDIVISION. S 2. Section 401 of the state administrative procedure act, as amended by chapter 935 of the laws of 1976, subdivision 1 as amended by chapter 469 of the laws of 1985, subdivision 4 as added by chapter 236 of the laws of 1987, is amended to read as follows: S 401. Licenses. 1. FOR THE PURPOSES OF THIS ARTICLE: (A) "AGENCY" SHALL MEAN AND INCLUDE THE STATE JUDICIAL BRANCH, THE UNIFIED COURT SYSTEM, THE OFFICE OF COURT ADMINISTRATION AND THE MEANING ASCRIBED TO SUCH TERM BY SUBDIVISION ONE OF SECTION ONE HUNDRED TWO OF THIS ACT. (B) "TAX DEBT" SHALL MEAN ALL LIABILITIES, INCLUDING UNPAID TAXES, INTEREST AND PENALTIES, THAT THE COMMISSIONER OF TAXATION AND FINANCE IS REQUIRED BY LAW TO COLLECT, AND THAT HAVE BEEN REDUCED TO JUDGMENT BY THE DOCKETING OF A NEW YORK STATE TAX WARRANT WITH A COUNTY CLERK OR BY THE FILING OF A COPY THEREOF WITH THE DEPARTMENT OF STATE, AND THE TAXPAYER DEBTOR HAS FAILED TO PAY SUCH LIABILITIES OR FAILED TO ENTER INTO A WRITTEN AGREEMENT WITH THE DEPARTMENT OF TAXATION AND FINANCE TO SETTLE SUCH LIABILITIES. 2. When licensing is required by law to be preceded by notice and opportunity for hearing, the provisions of this chapter concerning adju- dicatory proceedings apply. For purposes of this act, statutes providing an opportunity for hearing shall be deemed to include statutes providing an opportunity to be heard. [2.] 3. (A) IT SHALL BE A CONDITION FOR THE RENEWAL OF ANY LICENSE, PERMIT, CERTIFICATE OR REGISTRATION WHICH SPECIFICALLY AUTHORIZES ANY PERSON OR ENTITY TO CONDUCT ANY PROFESSION, BUSINESS OR TRADE THAT THE APPLICANT FOR RENEWAL ATTEST, UNDER THE PENALTY OF PERJURY, TO THE AGEN- CY RENEWING THE LICENSE, PERMIT, CERTIFICATE OR REGISTRATION THAT THE APPLICANT DOES NOT HAVE A TAX DEBT. (B) NOTWITHSTANDING ANY OTHER PROVISION OF LAW, EVERY AGENCY WHICH ISSUES A LICENSE, PERMIT, CERTIFICATE OR REGISTRATION WHICH SPECIFICALLY AUTHORIZES ANY PERSON OR ENTITY TO CONDUCT ANY PROFESSION, BUSINESS OR TRADE MAY DENY THE APPLICATION FOR THE RENEWAL OF ANY SUCH LICENSE, PERMIT, CERTIFICATE OR REGISTRATION TO ANY PERSON OR ENTITY WHICH HAS A TAX DEBT.
(C) EVERY APPLICATION FOR THE RENEWAL OF A LICENSE, PERMIT, CERTIF- ICATE OR REGISTRATION WHICH SPECIFICALLY AUTHORIZES ANY PERSON OR ENTITY TO CONDUCT A PROFESSION, BUSINESS OR TRADE SHALL PROVIDE NOTICE TO THE APPLICANT OF THE REQUIREMENTS OF THIS SUBDIVISION. 4. When a licensee has made timely and sufficient application for the renewal of a license or a new license with reference to any activity of a continuing nature, the existing license does not expire until the application has been finally determined by the agency, and, in case the application is denied or the terms of the new license limited, until the last day for seeking review of the agency order or a later date fixed by order of the reviewing court, provided that this subdivision shall not affect any valid agency action then in effect summarily suspending such license. [3.] 5. If the agency finds that public health, safety, or welfare imperatively requires emergency action, and incorporates a finding to that effect in its order, summary suspension of a license may be ordered, effective on the date specified in such order or upon service of a certified copy of such order on the licensee, whichever shall be later, pending proceedings for revocation or other action. These proceedings shall be promptly instituted and determined. [4.] 6. When the hearing seeks the revocation of a license or permit previously granted by the agency, either party shall, upon demand and at least seven days prior to the hearing, disclose the evidence that the party intends to introduce at the hearing, including documentary evidence and identification of witnesses, provided, however, the provisions of this subdivision shall not be deemed to require the disclosure of information or material otherwise protected by law from disclosure, including information and material protected because of privilege or confidentiality. If, after such disclosure, a party deter- mines to rely upon other witnesses or information, the party shall, as soon as practicable, supplement its disclosure by providing the names of such witnesses or the additional documents. S 3. Section 53 of the judiciary law is amended by adding a new subdi- vision 7 to read as follows: 7. (A) FOR THE PURPOSES OF THIS SUBDIVISION, "TAX DEBT" SHALL MEAN ALL LIABILITIES, INCLUDING UNPAID TAXES, INTEREST AND PENALTIES, THAT THE COMMISSIONER OF TAXATION AND FINANCE IS REQUIRED BY LAW TO COLLECT, AND THAT HAVE BEEN REDUCED TO JUDGMENT BY THE DOCKETING OF A NEW YORK STATE TAX WARRANT WITH A CLERK OR BY THE FILING OF A COPY THEREOF WITH THE DEPARTMENT OF STATE, AND THE TAXPAYER DEBTOR HAS FAILED TO PAY SUCH LIABILITIES OR FAILED TO ENTER INTO A WRITTEN AGREEMENT WITH THE DEPART- MENT OF TAXATION AND FINANCE TO SETTLE SUCH LIABILITIES. (B)(I) EVERY APPELLATE DIVISION MAY DENY THE APPLICATION FOR RENEWAL OF ADMISSION TO PRACTICE AS AN ATTORNEY AND COUNSELLOR AT LAW OF ANY PERSON WHO HAS A TAX DEBT. (II) THE COURT OF APPEALS SHALL ADOPT RULES ESTABLISHING THAT IT SHALL BE A CONDITION FOR THE RENEWAL OF ADMISSION TO PRACTICE AS AN ATTORNEY AND COUNSELLOR AT LAW THAT THE APPLICANT ATTEST, UNDER THE PENALTY OF PERJURY, TO THE APPELLATE DIVISION THAT THE APPLICANT DOES NOT HAVE A TAX DEBT. (III) EVERY APPLICATION FOR RENEWAL OF ADMISSION TO PRACTICE AS AN ATTORNEY AND COUNSELLOR AT LAW SHALL PROVIDE NOTICE TO THE APPLICANT OF THE REQUIREMENTS OF THIS PARAGRAPH. S 4. This act shall take effect one year after it shall have become a law.

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