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Senate of Pennsylvania
Session of 2021 - 2022 Regular Session


Posted: January 6, 2022 10:45 AM
From: Senator Patrick M. Browne
To: All Senate members
Subject: Delinquent Debt Intercept Program
In the near future, I plan to re-introduce Senate Bill 177 of the 2019-20 session, creating the Delinquent Debt Intercept Program.  This legislation will reduce the growing strain on Pennsylvania taxpayers and local governments caused by outstanding and delinquent taxes and debts, which leaves Pennsylvanians who have paid their taxes paying an increasing bill for essential services through a growing tax burden. My plan to address this growing burden is to create an independent authority to offset government payments against outstanding taxes and debts owed to the Commonwealth or local governments.

The Delinquent Debt Intercept Program will be structured similarly to the United States Treasury’s Offset Program (TOP), which is an agreement between the states and the Federal government to collect outstanding money owed in delinquent taxes and debt. The Delinquent Debt Intercept Program will provide the Commonwealth, its agencies, political subdivisions and municipal authorities with a clearinghouse for collecting all delinquent taxes and debts with no cost to the governmental entity. This will lower the cost for the Commonwealth and local governments in trying to acquire outstanding payments owed to them. The authority, working in conjunction with the Governor’s Office and the United States Treasury Department, will collect outstanding payments from the Federal tax returns and vendor payments as well as Commonwealth vendor payments and income tax returns of those with delinquent and outstanding taxes and debts.

Through this collection, the Delinquent Debt Intercept Program will restore approximately $75 million to the General Fund. In addition, municipalities such as Philadelphia can expect to see $125 million restored to their budget by the authority collecting outstanding taxes and debts owed to the City. Consequently, by collecting these delinquent taxes and debts, the authority assists local governments as they see their revenue grow without placing an increased burden on Pennsylvanians who followed the law and pay their taxes. Finally, the authority, by levying a surcharge on those who have outstanding taxes and debts, allows the Commonwealth and local governments to receive the full amount of the delinquent revenues, without needing to finance the authority from our Commonwealth budget.

The impact of this self-funding authority is to restore funds to the Commonwealth and local governments, to reduce costs on delinquent tax collections for local governments and reducing the growing tax burden on law abiding Pennsylvanians. The authority, acting as an efficient clearing house for outstanding tax collections and debts, restores tax revenue to the General Fund and the budgets of local governments.

Introduced as SB1170