§ 105A-8. State agency notice, hearing, decision, and refund of setoff.
§ 105A‑8. State agencynotice, hearing, decision, and refund of setoff.
(a) Notice. Within 10days after a State agency receives a refund of a debtor, the agency must sendthe debtor written notice that the agency has received the debtor's refund. Thenotice must explain the debt that is the basis for the agency's claim to thedebtor's refund and that the agency intends to apply the refund against thedebt. The notice must also inform the debtor that the debtor has the right tocontest the matter by filing a request for a hearing, must state the timelimits and procedure for requesting the hearing, and must state that failure torequest a hearing within the required time will result in setoff of the debt. AState agency that does not send a debtor a notice within the time required bythis subsection must refund the amount set off plus the collection assistancefee, in accordance with subsection (d) of this section.
(b) Hearing. Ahearing on a contested claim of a State agency, except a constituent institutionof The University of North Carolina or the Employment Security Commission, mustbe conducted in accordance with Article 3 of Chapter 150B of the GeneralStatutes. A hearing on a contested claim of a constituent institution of TheUniversity of North Carolina must be conducted in accordance withadministrative procedures approved by the Attorney General. A hearing on acontested claim of the Employment Security Commission must be conducted inaccordance with rules adopted by that Commission. A request for a hearing on acontested claim of any State agency must be filed within 30 days after theState agency mails the debtor notice of the proposed setoff. A request for ahearing is considered to be filed when it is delivered for mailing with postageprepaid and properly addressed. In a hearing under this section, an issue thathas previously been litigated in a court proceeding cannot be considered.
(c) Decision. Adecision made after a hearing under this section must determine whether a debtis owed to the State agency and the amount of the debt.
(d) Return of AmountSet Off. If a State agency fails to send the notice required by subsection(a) of this section within the required time or a decision finds that a Stateagency is not entitled to any part of an amount set off, the agency must sendthe taxpayer the entire amount set off plus the collection assistance feeretained by the Department. That portion of the amount returned that reflectsthe collection assistance fee must be paid from the State agency's funds.
If a debtor owes a debt to aState agency and the net proceeds credited to the State agency for the debtexceed the amount of the debt, the State agency must send the balance to thedebtor. No part of the collection assistance fee retained by the Department maybe returned when a debt is owed but it is less than the amount set off.
Interest accrues on the amountof a refund returned to a taxpayer under this subsection in accordance withG.S. 105‑241.21. A State agency that returns a refund to a taxpayer underthis subsection must pay from the State agency's funds any interest that hasaccrued since the fifth day after the Department mailed the notice of setoff tothe taxpayer. (1979,c. 801, s. 94; 1983, c. 419; 1987, c. 827, s. 16; 1989, c. 539, s. 2; 1997‑490,s. 1; 2005‑435, s. 42; 2007‑491, s. 44(1)c.)