Subdivision 1. Authorization.
Unless prohibited by other law, the state agency utilizes a
more specific setoff statute, or the state payments are subject to a more specific setoff statute,
the commissioner or a state agency may automatically deduct the amount of a debt owed to the
state from any state payment due to the debtor. Tax refunds, earned income tax credit, child care
credit, funds exempt under section
, or funds owed to an individual who is receiving
assistance under the provisions of chapter 256 are not subject to setoff under this section. If a
debtor has entered into a written payment plan with respect to payment of a specified debt, the
right of setoff may not be used to satisfy that debt. Notwithstanding section
, the state
may deduct from the wages due or earned by a state employee to collect a debt, subject to the
limitations in section
Subd. 2. Notice and hearing.
Before setoff, the commissioner or state agency shall mail
written notice by certified mail to the debtor, addressed to the debtor's last known address, that
the commissioner or state agency intends to set off a debt owed to the state by the debtor against
future payments due the debtor from the state. For debts owed to the state that have not been
reduced to judgment, if no administrative appeal process or a hearing by an impartial decision
maker on the validity or accuracy of the debt has yet been made available to the debtor, before
setoff for a prejudgment debt, the notice to the debtor must advise that the debtor has a right to
make a written request for a contested case hearing on the validity of the debt or the right to setoff.
The debtor has 30 days from the date of that notice to make a written request for a contested case
hearing to contest the validity of the debt or the right to setoff. The debtor's request must state the
debtor's reasons for contesting the debt or the right to setoff. If the commissioner or state agency
desires to pursue the right to setoff following receipt of the debtor's request for a hearing, the
commissioner or state agency shall schedule a contested case hearing within 30 days of the receipt
of the request for the hearing. If the commissioner or state agency decides not to pursue the right
to setoff, the debtor must be notified of that decision.
History: 1995 c 254 art 5 s 14; 1998 c 366 s 39