(a) Annually, on or before a date specified by the Department, a claimant agency shall supply the Department with information necessary to identify each debtor whose refund is sought to be set off and shall certify in writing the amount of each debt submitted to the Department for collection through setoff.

(b) If a debtor identified by a claimant agency is entitled to a refund, the Department shall transfer to the claimant agency an amount equal to the refund owed or the amount of the debt certified by the claimant agency, whichever is less.

(c) Prior to requesting the Department to reduce a taxpayer's refund by the amount of certified debt in accord with this subchapter, the claimant agency shall notify the debtor at the debtor's last known address. The notice shall state that the agency intends to request a setoff and shall advise the debtor of the procedure; the amount and basis for the alleged debt; and that the debtor may contest the validity and amount of the debt sought to be collected through setoff by applying in writing for a hearing before the claimant agency within 30 days of the date of mailing of the notice. The notice shall also include the name and mailing address of the claimant agency to which the application for a hearing must be sent, and shall advise the taxpayer that failure to apply in writing for a hearing within the 30-day period will be deemed a waiver of the opportunity to contest the setoff. (Added 1981, No. 228 (Adj. Sess.), § 1, eff. May 4, 1982; amended 1997, No. 156 (Adj. Sess.), § 9, eff. April 29, 1998.)