Can a Mississippi county hire its Planning and Development District to handle tax-refund setoff collections for it under the 2019 Local Government Debt Collection Setoff Act?
Plain-English summary
Mississippi's 2019 Local Government Debt Collection Setoff Act, codified at Sections 27-7-801 et seq., let counties and municipalities collect debts owed to them by intercepting the debtor's state tax refund. The Act required a debt to flow through a "member organization" (the Mississippi Association of Supervisors for counties, or the Mississippi Municipal League for cities) and required notice and an opportunity to be heard before the setoff could happen.
Pontotoc County's attorney asked the AG whether the county could outsource three different pieces of the work to its local Planning & Development District: (1) being the county's point of contact with the Mississippi Association of Supervisors, (2) sending the required pre-setoff notice to the debtor, and (3) holding the debtor's hearing.
The AG drew a sharp line. On the first two functions, the answer was no. The Act expressly assigned those tasks to the local government or to its member organization, and the AG read that assignment as exclusive. The county could not appoint an outside entity, including a Planning & Development District, to be its agent for member-organization contact or for notice. There was a nuance: a "member organization" could itself contract with third parties to facilitate debt collection, so the county's P&D District could lawfully end up doing some of the work, but only as a contractor of the Mississippi Association of Supervisors, not as an agent of the county.
On the hearing function, the answer was yes. Section 27-7-811(3) explicitly allowed the local government's governing body to designate "a person" to hold the hearing. The AG read that as authority for the Board of Supervisors to appoint a hearing officer, who could conduct the hearing and recommend a decision back to the board.
The AG declined to answer whether due process required the hearing to be held physically in the debtor's county of residence, calling that a question for a court of competent jurisdiction. The AG noted that under McGowan v. Mississippi State Oil and Gas Bd., 604 So.2d 312, due process in administrative hearings requires notice and an opportunity to be heard, but how those rights interact with venue across counties was beyond what an AG opinion can resolve.
Currency note
This opinion was issued in 2020. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
Common questions
What is "setoff" debt collection?
It is a form of refund interception. A government that is owed money certifies the debt to a member organization, which forwards it to the Department of Revenue. When the debtor files a state income tax return showing a refund, the Department applies the refund (and a 25% collection assistance fee) against the certified debt instead of paying it out.
Why couldn't the county just hire a P&D District to be its day-to-day contact?
The Act lists who can do what. The "local government" and the "member organization" are the only entities the statute speaks to for the contact and notice steps. The AG read silence about other agents as exclusion. A P&D District could still be in the workflow, but only by way of a contract with the Mississippi Association of Supervisors as the member organization, which the statute expressly contemplates.
Where in the Act is the hearing-officer permission?
Section 27-7-811(3): "The governing body of the local government or a person designated by the governing body shall hold the hearing." The AG read that as authority to name a hearing officer. The hearing officer would conduct the hearing and forward a recommendation; the Board would make the final decision.
Does the hearing have to happen in the debtor's home county?
The AG would not answer. The opinion flagged the constitutional question (notice and opportunity to be heard, citing McGowan) but said venue across county lines is for a court to decide.
Is there a deadline for a debtor to contest a setoff?
Yes. Section 27-7-811(3) requires the debtor to file a written request for a hearing within 30 days after the local government mails the notice. The request is filed when properly addressed and delivered for mailing with postage prepaid.
Background and statutory framework
The Local Government Debt Collection Setoff Act, House Bill 991 (Laws of 2019, Regular Session), is codified at Miss. Code Ann. Sections 27-7-801 et seq. It defines "local government" as a county or municipality (Section 27-7-805(e)) and "member organization" as the Mississippi Association of Supervisors for counties or "entities established through or contracted by these member organizations . . . for the purpose of facilitating debt collection" (Section 27-7-805(f)).
Section 27-7-807(2) tells local governments how to participate:
A local government may submit a debt owed to it for collection under this article. A local government that decides to submit a debt owed to it for collection under this article shall establish the debt by following the procedures set forth in Section 27-7-811 and shall submit the debt through a member organization.
Section 27-7-811 sets out the notice-and-hearing structure. Subsection (2) requires the local government, "or its member organization on its behalf," to send the debtor a written notice with the basis for the claim, the intent to setoff, the 25% collection assistance fee, the right to a hearing, and the deadline. Subsection (3) gives the debtor 30 days from the mailing date to request a hearing in writing, and provides that "the governing body of the local government or a person designated by the governing body shall hold the hearing." Subsection (5) routes appeals to the circuit court of the debtor's county of residence.
The AG's reading of these pieces is straightforward textualism. Where the statute names actors expressly (local government, member organization), only those actors may carry out the task. Where the statute opens the door to delegation by saying "or a person designated," that opens the door. The AG also relied on Section 7-5-25's standing limit (AG opinions are limited to prospective state-law questions for officials) to refuse the cross-county venue question.
The opinion is signed by Special Assistant Attorney General Beebe Garrard on behalf of Attorney General Jim Hood.
Citations
- Miss. Code Ann. Sections 27-7-801 et seq. (Local Government Debt Collection Setoff Act)
- Miss. Code Ann. Section 27-7-805(e) (definition of "local government")
- Miss. Code Ann. Section 27-7-805(f) (definition of "member organization")
- Miss. Code Ann. Section 27-7-807(2) (submission of debt through member organization)
- Miss. Code Ann. Section 27-7-811 (notice, hearing, appeal procedure)
- Miss. Code Ann. Section 7-5-25 (limits on AG opinions)
- McGowan v. Mississippi State Oil and Gas Bd., 604 So.2d 312
Source
- Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
- Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2020/07/P.Tutor_January-8-2020-Local-Government-Debt-Collection-Setoff-Act.pdf
Original opinion text
Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.
STATE OF MISSISSIPPI
JIM HOOD
ATTORNEY GENERAL
OPINIONS DIVISION
January 8, 2020
Phillip L. Tutor, Esquire
Attorney, Pontotoc County Board of Supervisors
304 Turtle Creek Drive
Pontotoc, Mississippi 38863
Re: Local Government Debt Collection Setoff Act
OFFICIAL OPINION
Attorney General Jim Hood is in receipt of your opinion request and has assigned it to me for research and reply.
Issues Presented
In your request, you ask three questions regarding the Local Government Debt Collection Setoff Act, House Bill No. 991 (Laws of 2019, Regular Session), which was codified at Sections 27-7-801 et seq. of the Mississippi Code:
1) In Section 3(f), "Member Organization" is defined as ... The Mississippi Association of Supervisors for counties. May the County appoint or employ an entity, not a county employee, as its point of contact with the Mississippi Association of Supervisors, i.e., the local Planning & Development District?
2) In Section 6(2), may the County appoint or employ an entity, not a county employee, as its agent to provide written notice to a debtor that the ... County... intends to submit the debt owed by the debtor for collection by setoff, i.e., the local Planning & Development District?
3) In Section 6(3), may the County designate an entity to hold the hearing, i.e., the local Planning & Development District? Secondly, must the hearing be physically held in the County of the debtor's residence, or may it be held in the County of the hearing entity (or person), i.e., the local Planning & Development District?
Responses
Response 1) No. The Local Government Debt Collection Setoff Act ("the Act") does not authorize the County to delegate its statutory duties assigned under the Act except to the member organization and as specifically described in the Act and further discussed in response to Question 3.
Response 2) The Act does not authorize the County to appoint an agent to provide written notice to the debtor.
Response 3) The Act specifically authorizes the governing body of the local government to designate a hearing officer to conduct the hearing.
Applicable Law and Discussion
As you note in your request, "'member organization' means the Mississippi Association of Supervisors for counties, or entities established through or contracted by these member organizations for the purpose of facilitating debt collection under the Act." Miss. Code Ann. Section 27-7-805(f). "Local government" means a county or municipality. Miss. Code Ann. Section 27-7-805(e). Section 27-7-807(2) specifically states that:
A local government may submit a debt owed to it for collection under this article. A local government that decides to submit a debt owed to it for collection under this article shall establish the debt by following the procedures set forth in Section 27-7-811 and shall submit the debt through a member organization.
Thus, while the County has the discretion on whether to submit a debt under the Act, if it chooses to do so, it must do so in accordance with Section 27-7-811, which provides:
(1) A local government may not submit a debt for collection under this article until it has given the notice required by this section and the claim has been finally determined as provided in this section.
(2) A local government, or its member organization on its behalf, shall send written notice to a debtor that the local government intends to submit the debt owed by the debtor for collection by setoff. The notice shall explain the basis for the local government's claim to the debt, that the local government intends to apply the debtor's refund against the debt, and that a total collection assistance fee of twenty-five percent (25%) shall be added to the debt if it is submitted for setoff. The notice shall also inform the debtor that the debtor has the right to contest the matter by filing a request for a hearing with the local government, shall state the time limits and procedures for requesting a hearing and shall state that the failure to request a hearing within the required time will result in setoff of the debt.
(3) A debtor who decides to contest a proposed setoff shall file a written request for a hearing with the local government within thirty (30) days after the date the local government mails a notice of the proposed action to the debtor. A request for a hearing is considered to be filed when it is delivered for mailing with postage prepaid and properly addressed as required in the notice provided by the local government. The governing body of the local government or a person designated by the governing body shall hold the hearing. In a hearing under this section, any civil or criminal issue that has been litigated in a court proceeding cannot be reconsidered.
(4) A decision made after a hearing under this article shall determine whether a debt is owed to the local government and the amount of the debt.
(5) Appeals from hearings held under this article shall be made to the circuit court of the county in which the debtor resides and shall be reviewed on the administrative record made at the hearing before the local government. The standard of review of such decisions shall be that established by Mississippi law pertaining to the review of all other administrative decisions made by political subdivisions.
Subsection (2) specifically states that the local government, or its member organization, is required to send notice to the debtor. It is the opinion of this office that the County cannot appoint a planning and development district to be a point of contact with the Mississippi Association of Supervisors. Nor can the County appoint a planning and development district as its agent to provide written notice to a debtor that the county intends to submit the debt owed by the debtor for collection by setoff.
With respect to your third question, Section 27-7-811(3) states:
A debtor who decides to contest a proposed setoff shall file a written request for a hearing with the local government within thirty (30) days after the date the local government mails a notice of the proposed action to the debtor. A request for a hearing is considered to be filed when it is delivered for mailing with postage prepaid and properly addressed as required in the notice provided by the local government. The governing body of the local government or a person designated by the governing body shall hold the hearing. In a hearing under this section, any civil or criminal issue that has been litigated in a court proceeding cannot be reconsidered.
(Emphasis added). Thus, it is the opinion of this office that the county board of supervisors has the authority to designate someone to conduct the hearing and make a recommendation to the board for a final determination.
You also ask whether the hearing must be held in the county of the debtor's residence or whether it can be held in the county where the hearing entity is located. The Mississippi Supreme Court has held that due process in an administrative hearing must include notice and an opportunity to be heard. McGowan v. Mississippi State Oil and Gas Bd., 604 So.2d 312. Whether an individual's due process rights would be violated by holding an administrative hearing on a county matter outside the individual's county of residence is for a court of competent jurisdiction to determine.
OFFICIAL OPINION
Very truly yours,
JIM HOOD, ATTORNEY GENERAL
By: Beebe Garrard
Special Assistant Attorney General
[Footnote: Our office is statutorily limited by Section 7-5-25 to providing official opinions to public entities regarding prospective questions of law pertaining to their respective offices. By definition, a "member organization" includes "entities established through or contracted by these member organizations (Mississippi Association of Supervisors or Mississippi Municipal League) for the purpose of facilitating debt collection under this article." Thus, a member organization may contract with third parties, which includes planning and development districts, for debt collection.]