Bill Summary for H 549 (2025-2026)
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View NCGA Bill Details(link is external) | 2025-2026 Session |
AN ACT TO CLARIFY THE POWERS OF THE STATE AUDITOR, TO MAKE OTHER CHANGES RELATED TO THE STATE AUDITOR, AND TO ALLOW THE DEPARTMENT OF REVENUE TO FORCE COLLECT DEBTS OWED TO STATE AGENCIES THROUGH LEVY AND SALE AND ATTACHMENT AND GARNISHMENT.Intro. by B. Jones, Setzer, Torbett, Kidwell.
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Bill summary
Senate committee substitute to the 4th edition makes the following changes. Makes organizational changes. Makes conforming changes to act’s long title.
Part I.
Removes reference to “continuous and unrestricted view” in describing the Auditor’s access to those records under its authority in GS 147-64.7.
Part II.
Removes provisions: (1) exempting officers and employees of the Auditor from all of GS Chapter 126 (NC Human Resources Act), except for Articles 6 and 7 (Equal Employment and Compensation Opportunities and Privacy of State Personnel Records, respectively) and (2) amending GS 126-1.1(c) to provide procedures for the described employees of the Office of State Auditor to elect to waive that status and become exempt under GS 126-5(c1)(41), and for the described probationary employees to elect to continue to earn career status or become exempt under GS 126-5(c1)(41).
Removes subdivision (25) to the amendments of GS 147-64.6(c), which permitted the auditor to engage in audits or investigations of any publicly funded entity, limited to the state or federal funds received or otherwise handled by the entity. Requires the Auditor to also submit a detailed report of its findings concerning fraud or misrepresentation by private persons as detailed in GS 147-64.6(c)(21) to the Department of Revenue (Department) (currently, just to the appropriate official or State Purchasing Officer).
Adds the following new content.
Part III.
Amends the title of GS Chapter 105A so that it is now the Setoff Debt Collection and Forced Debt Collection Act (currently, Setoff Debt Collection Act-Act). Includes the Office of the State Auditor (Auditor) as one of the agencies that are subject to the policy under GS 105A-1 (purpose of the Act). Expands the scope of the procedures covered by the Act to include force collecting debts owed to State agencies. Adds forced collection to the Act’s definitions. Amends the definition of net proceeds collected so that, for forced collection actions, it means gross proceeds collected through forced collection minus the forced collection assistance fee provided in GS 105A-13(a1). Prevents a local agency from submitting a debt owed to it for forced collection under the Act in GS 105A-3. Makes conforming changes. Requires that every State agency must report the amount of setoff debts annually to the Controller (was, just debts). Makes conforming changes, including to the statute's title.
Applies the Act to a forced collection debt for which the Department determines the cost to the State in collecting the debt is less than the amount of the debt collectible in GS 105A-4. Clarifies that the $50 minimum applies to setoff collection debt. Makes conforming changes, including to the statute's title. Makes organizational changes. Replaces references to “collection” with “setoff collection” in GS 105A-5 (local agency notice, hearing, and decision).
Enacts GS 105A-6A establishing a procedure for forced collecting and the debts eligible for forced collection. Specifies that only those debts that are discovered through an audit or investigation undertaken by the Auditor are eligible for forced collection under the Act. First, requires the Auditor to notify the Department in writing of the debt and supply any information necessary to identify the debtor against whom forced collection may be sought. Then requires the Department to provide written notice to the debtor of its intention to collect the Debt, as specified. Authorizes the Department to force collection of a debt owed to a State agency that is not a collectible tax by levy and sale, as described, in new GS 105A-6B. Authorizes the Department, in new GS 105A-6C, to force collection by attachment and garnishment in the manner prescribed by State law for garnishment of intangible personal property for the nonpayment of tax if the debtor does not pay a debt or enter into an installment payment agreement (authorized in new GS 105A-6D) within 60 days of the notice of debt. Makes clarifying changes to GS 105A-8’s title so that it applies to setoff collections.
Enacts GS 105A-8A, preventing the Auditor from submitting notice of final determination of a debt to the Department for forced collection until the Auditor has finally determined the debt. Defines finally determined as a debt that (1) meets the requirements of GS 105A-6A(c), (2) for which the Auditor has given the specified notice, and (3) for which the debtor did not file a timely request for hearing, or, for which the debtor did file a timely request for hearing but a decision made after hearing determined that a debtor owed a debt, in a sum certain, to a State agency, and all appellate relief afforded the debtor for purposes of finally determining the debt under this section has been exhausted. Provides the contested case provisions of the APA apply to hearings on contested debt claims. Provides for filing deadlines. Requires that decisions made after a hearing at least determine: (1) whether a debt is owed to a State agency, (2) by whom and (3) the amount of the debt (if any).
Sets venue for appeals from hearing under the act for nonresident debtors in the Superior Court of Wake County in GS 105A-9.
Authorizes, in GS 105A-13, the Department to enforce a 3% collection assistance fee for each debt collected through forced collection. Specifies that the collection assistance fee must not be added to child support debts or collected as part of child support debts. Clarifies that the other provisions of GS 105A-13 pertain to setoff collections. Makes clarifying changes and specifies that GS 105A-14 (accountings to claimant agencies) applies to setoff collection. Makes conforming changes, including to the statute's title. Enacts GS 105A-14A, directing that the net proceeds collected through forced collection under the Act be credited to the General Fund by the Department within 60 days of collection.
Applies to collection of debts on or after December 1, 2025.
Expands the Department’s duties under GS 143B-218 to include performing other non-tax related functions as enacted by the General Assembly.
Part IV.
Specifies that GS 147-64.6(c)(21), as amended by the act, is effective December 1, 2025. Makes conforming changes to the act’s general effective date.