§ 105A-5. Local agency notice, hearing, and decision. - North Carolina Statutes

§ 105A‑5.  Local agencynotice, hearing, and decision.

(a)        Prerequisite. – Alocal agency may not submit a debt for collection under this Chapter until ithas given the notice required by this section and the claim has been finallydetermined as provided in this section.

(b)        Notice. – A localagency must send written notice to a debtor that the agency intends to submitthe debt owed by the debtor for collection by setoff. The notice must explainthe basis for the agency's claim to the debt, that the agency intends to applythe debtor's refund against the debt, and that a collection assistance fee offifteen dollars ($15.00) will be added to the debt if it is submitted forsetoff. The notice must also inform the debtor that the debtor has the right tocontest the matter by filing a request for a hearing with the local agency,must state the time limits and procedure for requesting the hearing, and muststate that failure to request a hearing within the required time will result insetoff of the debt.

(c)        AdministrativeReview. – A debtor who decides to contest a proposed setoff must file a writtenrequest for a hearing with the local agency within 30 days after the date thelocal agency mails a notice of the proposed action to the debtor. A request fora hearing is considered to be filed when it is delivered for mailing withpostage prepaid and properly addressed. The governing body of the local agencyor a person designated by the governing body must hold the hearing.

If the debtor disagrees withthe decision of the governing body or the person designated by the governingbody, the debtor may file a petition for a contested case under Article 3 ofChapter 150B of the General Statutes. The petition must be filed within 30 daysafter the debtor receives a copy of the local decision. Notwithstanding theprovisions of G.S. 105‑241.21, a local agency is considered an agency forpurposes of contested cases and appeals under this Chapter.

In a hearing under thissection, an issue that has previously been litigated in a court proceedingcannot be considered.

(d)        Decision. – Adecision made after a hearing under this section must determine whether a debtis owed to the local agency and the amount of the debt.

(e)        Return of AmountSet Off. – If a local agency submits a debt for collection under this Chapterwithout sending the notice required by subsection (b) of this section, theagency must send the taxpayer the entire amount set off plus the collectionassistance fees provided in G.S. 105A‑13. Similarly, if a local agencysubmits a debt for collection under this Chapter after sending the requirednotice but before final determination of the debt and a decision finds that thelocal agency is not entitled to any part of the amount set off, the agency mustsend the taxpayer the entire amount set off plus the collection assistance feesprovided in G.S. 105A‑13. That portion of the amount returned thatreflects the collection assistance fees must be paid from the local agency'sfunds.

If a local agency submits adebt for collection under this Chapter after sending the required notice andthe net proceeds collected that are credited to the local agency for the debtexceed the amount of the debt, the local agency must send the balance to thedebtor. No part of the collection assistance fees provided in G.S. 105A‑13may be returned when a notice was sent and a debt is owed but the debt is lessthan 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 local agency that returns a refund to a taxpayer underthis subsection must pay from the local 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; 1997‑490, s. 1; 2002‑156, s. 5(b); 2007‑491,s. 44(1)c.)