North Carolina § 105A-8 - State agency notice, hearing, decision, and refund of setoff.

§ 105A-8. State agency notice, hearing, decision, and refund of setoff.

Notice. - Within 10 days after a State agency receives a refund of a debtor, the agency must send the debtor written notice that the agency has received the debtor's refund. The notice must explain the debt that is the basis for the agency's claim to the debtor's refund and that the agency intends to apply the refund against the debt. The notice must also inform the debtor that the debtor has the right to contest the matter by filing a request for a hearing, must state the time limits and procedure for requesting the hearing, and must state that failure to request a hearing within the required time will result in setoff of the debt. A State agency that does not send a debtor a notice within the time required by this subsection must refund the amount set off plus the collection assistance fee, in accordance with subsection (d) of this section. Hearing. - A hearing on a contested claim of a State agency, except the Judicial Branch or a constituent institution of The University of North Carolina or the Division of Employment Security, must be conducted in accordance with Article 3 of Chapter 150B of the General Statutes. A hearing on a contested claim of a unit of the Judicial Branch must be conducted in accordance with the administrative procedures approved by the Director of the North Carolina Administrative Office of the Courts and the Director of Indigent Defense Services. The clerk of superior court in any county where a judgment has been docketed shall have original jurisdiction to hear a contested claim and the matter may not be transferred to the district or superior court. The Director of the North Carolina Administrative Office of the Courts or the Director's designee shall have original jurisdiction to hear a contested claim of the Judicial Branch not arising out of docketed judgment. A hearing on a contested claim of a constituent institution of The University of North Carolina must be conducted in accordance with administrative procedures approved by the Attorney General. A hearing on a contested claim of the Division of Employment Security must be conducted in accordance with rules adopted by that Division. A request for a hearing on a contested claim of any State agency must be filed within 30 days after the State agency mails the debtor notice of the proposed setoff. A request for a hearing is considered to be filed when it is delivered for mailing with postage prepaid and properly addressed. In a hearing under this section, an issue that has previously been litigated in a court proceeding cannot be considered. Decision. - A decision made after a hearing under this section must determine whether a debt is owed to the State agency and the amount of the debt. Return of Amount Set 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 State agency is not entitled to any part of an amount set off, the agency must send the taxpayer the entire amount set off plus the collection assistance fee retained by the Department. That portion of the amount returned that reflects the collection assistance fee must be paid from the State agency's funds. If a debtor owes a debt to a State agency and the net proceeds credited to the State agency for the debt exceed the amount of the debt, the State agency must send the balance to the debtor. No part of the collection assistance fee retained by the Department may be returned when a debt is owed but it is less than the amount set off. Interest accrues on the amount of a refund returned to a taxpayer under this subsection in accordance with G.S. 105-241.21. A State agency that returns a refund to a taxpayer under this subsection must pay from the State agency's funds any interest that has accrued since the fifth day after the Department mailed the notice of setoff to the taxpayer. History (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; 2011-401, s. 3.10; 2019-243, s. 10(a).) Editor's Note. - Session Laws 2007-491, s. 47, provides: "G.S. 105-241.10, as enacted by Section 1 of this act, and Sections 6, 15, 16, 17, and 22 are effective for taxable years beginning on or after January 1, 2007. Section 14 is effective for taxable years beginning on or after January 1, 2008. Sections 45, 46, and 47 are effective when they become law. The remainder of this act becomes effective January 1, 2008. The procedures for review of disputed tax matters enacted by this act apply to assessments of tax that are not final as of the effective date of this act and to claims for refund pending on or filed on or after the effective date of this act. This act does not affect matters for which a petition for review was filed with the Tax Review Board under G.S. 105-241.2 before the effective date of this act. The repeal of G.S. 105-122(c) and G.S. 105-130.4(t) and Sections 11 and 12 apply to requests for alternative apportionment formulas filed on or after the effective date of this act. A petition filed with the Tax Review Board for an apportionment formula before the effective date of this act is considered a request under G.S. 105-122(c1) or G.S. 105-130.4(t1), as appropriate." Session Laws 2019-243, s. 10(d), made the amendment to subsection (b) of this section by Session Laws 2019-243, s. 10(a), effective July 1, 2020, and applicable to notices issued on or after that date. Effect of Amendments. - Session Laws 2005-435, s. 42(1)(c), effective September 27, 2005, substituted "(d)" for "(c)" in the last sentence of subsection (a). Session Laws 2007-491, s. 44(1)c, effective January 1, 2008, substituted "G.S. 105-241.21" for "G.S. 105-266" at the end of the first sentence of the last undesignated paragraph of subsection (d). For applicability, see Editor's note. Session Laws 2011-401, s. 3.10, effective November 1, 2011, in the first paragraph of subsection (b), twice substituted "Division of Employment Security" for "Employment Security Commission" and substituted "Division" for "Commission." Session Laws 2019-243, s. 10(a), in subsection (b), inserted "the Judicial Branch or" in the first sentence, and added the present second, third and fourth sentences. For effective date and applicability, see editor's note.