49.85 Certification of certain public assistance overpayments, payment recoveries, and delinquent loan repayments.

(1) Department notification requirement. If a county department under s. 46.215, 46.22, or 46.23 or a governing body of a federally recognized American Indian tribe or band determines that the department of health services may recover an amount under s. 49.497, 49.793, or 49.847, or that the department of children and families may recover an amount under s. 49.138 (5), 49.161, or 49.195 (3) or collect an amount under s. 49.147 (6) (cm), the county department or governing body shall notify the affected department of the determination. If a Wisconsin Works agency determines that the department of children and families may recover an amount under s. 49.138 (5), 49.161, or 49.195 (3), or collect an amount under s. 49.147 (6) (cm), the Wisconsin Works agency shall notify the department of children and families of the determination.

(2) Department certification.

(a) At least annually, the department of health services shall certify to the department of revenue the amounts that, based on the notifications received under sub. (1) and on other information received by the department of health services, the department of health services has determined that it may recover under s. 49.45 (2) (a) 10., 49.497, 49.793, 49.847, or 49.849, except that the department of health services may not certify an amount under this subsection unless all of the following apply:

1. The department has met the notice requirements under sub. (3).

2. The department's determination has either not been appealed or is no longer under appeal.

3. If the determination relates to recovery of an amount under s. 49.497, the determination was rendered to a judgment under s. 49.497 (1m) (b).

4. If the determination relates to recovery of an amount under s. 49.849, the determination was rendered to a judgment under s. 49.849 (5r) (b).

(b) At least annually, the department of children and families shall certify to the department of revenue the amounts that, based on the notifications received under sub. (1) and on other information received by the department of children and families, the department of children and families has determined that it may recover under ss. 49.138 (5), 49.161, and 49.195 (3) and collect under s. 49.147 (6) (cm), except that the department of children and families may not certify an amount under this subsection unless it has met the notice requirements under sub. (3) and unless its determination has either not been appealed or is no longer under appeal.

(3) Notice requirements.

(a) At least 30 days before certification of an amount, the department of health services shall send a notice to the last-known address of the person from whom that department intends to recover the amount. The notice shall do all of the following:

1. Inform the person that the department of health services intends to certify to the department of revenue an amount that the department of health services has determined to be due under s. 49.45 (2) (a) 10., 49.497, 49.793, 49.847, or 49.849, for setoff from any state tax refund that may be due the person.

2. Inform the person that he or she may appeal the determination of the department of health services to certify the amount by requesting a hearing under sub. (4) within 30 days after the date of the letter and inform the person of the manner in which he or she may request a hearing.

3. Inform the person that, if the determination of the department of health services is appealed, that department will not certify the amount to the department of revenue while the determination of the department of health services is under appeal.

4. Inform the person that, unless a contested case hearing is requested to appeal the determination of the department of health services, the person may be precluded from challenging any subsequent setoff of the certified amount by the department of revenue, except on the grounds that the certified amount has been partially or fully paid or otherwise discharged, since the date of the notice.

5. Request that the person inform the department of health services if a bankruptcy stay is in effect with respect to the person or if the claim has been discharged in bankruptcy.

6. Inform the person that the person may need to contact the department of revenue in order to protect the refunds of spouses who are not liable for the claim.

(b) At least 30 days before certification of an amount, the department of children and families shall send a notice to the last-known address of the person from whom that department intends to recover or collect the amount. The notice shall do all of the following:

1. Inform the person that the department of children and families intends to certify to the department of revenue an amount that the department of children and families has determined to be due under s. 49.138 (5), 49.161, or 49.195 (3) or to be delinquent under a repayment agreement for a loan under s. 49.147 (6), for setoff from any state tax refund that may be due the person.

2. Inform the person that he or she may appeal the determination of the department of children and families to certify the amount by requesting a hearing under sub. (4) within 30 days after the date of the letter and inform the person of the manner in which he or she may request a hearing.

3. Inform the person that, if the determination of the department of children and families is appealed, that department will not certify the amount to the department of revenue while the determination of the department of children and families is under appeal.

4. Inform the person that, unless a contested case hearing is requested to appeal the determination of the department of children and families, the person may be precluded from challenging any subsequent setoff of the certified amount by the department of revenue, except on the grounds that the certified amount has been partially or fully paid or otherwise discharged, since the date of the notice.

5. Request that the person inform the department of children and families if a bankruptcy stay is in effect with respect to the person or if the claim has been discharged in bankruptcy.

6. Inform the person that the person may need to contact the department of revenue in order to protect the refunds of spouses who are not liable for the claim.

(4) Hearings.

(a) If a person has requested a hearing under this subsection, the department of health services shall hold a contested case hearing under s. 227.44, except that the department of health services may limit the scope of the hearing to exclude issues that were presented at a prior hearing or that could have been presented at a prior opportunity for hearing.

(b) If a person has requested a hearing under this subsection, the department of children and families shall hold a contested case hearing under s. 227.44, except that the department of children and families may limit the scope of the hearing to exclude issues that were presented at a prior hearing or that could have been presented at a prior opportunity for hearing.

(5) Effect of certification. Receipt of a certification by the department of revenue shall constitute a lien, equal to the amount certified, on any state tax refunds or credits owed to the obligor. The lien shall be foreclosed by the department of revenue as a setoff under s. 71.93. Certification of an amount under this section does not prohibit the department of health services or the department of children and families from attempting to recover or collect the amount through other legal means. The department of health services or the department of children and families shall promptly notify the department of revenue upon recovery or collection of any amount previously certified under this section.

History: 1993 a. 437; 1995 a. 27 ss. 2143 to 2157, 3212, 9126 (19), 9130 (4); Stats. 1995 s. 49.85; 1995 a. 289; 1997 a. 3; 2001 a. 16; 2003 a. 33; 2005 a. 25; 2007 a. 20 ss. 1685 to 1694, 9121 (6) (a); 2013 a. 20; 2013 a. 173 s. 33; 2015 a. 55.