Section 171-F. Certain overpayments credited against outstanding debts owed to a state agency

(1) For the purposes  of  this  section,  (a)  "state  agency"  shall  mean  any  state  department,  board,  bureau, division,
  commission, committee, public  authority,  public  benefit  corporation,
  council,  office, or other governmental entity performing a governmental
  or proprietary function for the state, or, solely for purposes  of  this
  section,  a  local social services district; (b) "taxpayer" shall mean a
  corporation,   association,   company,   partnership,   estate,   trust,
  liquidator,  fiduciary  or  other  entity  or individual who or which is
  liable for any tax or other imposition imposed by or pursuant to article
  nine, nine-A, twenty-two, thirty,  thirty-A,  thirty-B,  thirty-two,  or
  thirty-three  of  this chapter or article two-E of the general city law,
  which tax or other imposition is administered  by  the  commissioner  of
  taxation  and finance, or who or which is under a duty to perform an act
  under or pursuant to such tax or imposition, excluding a state agency, a
  municipal corporation or a district corporation; and  (c)  "overpayment"
  shall  mean  an overpayment which has been requested or determined to be
  refunded, a refund or a reimbursement, of  a  tax  or  other  imposition
  imposed  by  or  pursuant  to  article nine, nine-A, twenty-two, thirty,
  thirty-A, thirty-B, thirty-two,  or  thirty-three  of  this  chapter  or
  article  two-E  of  the  general  city law, which is administered by the
  commissioner of taxation and finance.
    (2) The commissioner of taxation and finance, upon agreement with  the
  state  comptroller  and  acting  as  an agent for the state comptroller,
  shall set forth the  procedures  for  crediting  any  overpayment  by  a
  taxpayer  of  any tax or other imposition imposed by or authorized to be
  imposed pursuant to article nine, nine-A, twenty-two, thirty,  thirty-A,
  thirty-B,  thirty-two,  or thirty-three of this chapter or article two-E
  of the general city law, which is administered by  the  commissioner  of
  taxation and finance, and the interest on any such overpayments, against
  the  amount of a past-due legally enforceable debt owed by such taxpayer
  to a state agency. An implementation plan  shall  be  developed  by  the
  division  of the budget and the department of taxation and finance which
  shall  provide,  but  not  be  limited  to,  guidance  with  respect  to
  coordination of debt collection pursuant to this section and subdivision
  twenty-seventh  of section one hundred seventy-one of this article. This
  section shall not be deemed to abrogate or limit in any way  the  powers
  and  authority  of the state comptroller to set off debts owed the state
  against payments from the state, under the constitution of the state  or
  any other law.
    (3)  For  purposes of this section a past-due legally enforceable debt
  against which an overpayment and interest thereon may be credited  shall
  include any applicable interest or late payment charge and is a debt:
    (a)  as  to which the state has (i) obtained a judgment and (ii) given
  such notice as is required in subdivision (d) of section  five  thousand
  two hundred twenty-two of the civil practice law and rules; or
    (b)  as  to  which  a state agency has (i) made a final administrative
  determination where the taxpayer had the opportunity for an adjudicatory
  proceeding to which article three of the state administrative  procedure
  act  is  applicable, or the taxpayer had an opportunity for a proceeding
  which substantially complies with the requirements of such article three
  where such article three is not applicable, or the taxpayer was afforded
  such notice and  opportunity  to  be  heard  as  satisfies  due  process
  requirements  applicable  to  such state agency and to such debt, except
  that if, pursuant to law or regulation,  the  debt  is  not  collectible
  unless  the  state  agency obtains a judgment, then the debt will not be
  considered a past-due legally enforceable  debt  for  purposes  of  this
  section  until such state agency has obtained a final judgment no longer

  subject to judicial  review  and  (ii)  which  cannot  be  collected  by
  administrative  offset  by  the  referring  state agency against amounts
  payable to the taxpayer by the referring department; and
    (c)  with  respect  to which the state agency or the department of law
  has notified the taxpayer in writing, or has made a  reasonable  attempt
  to  so  notify the taxpayer at the taxpayer's last address known to such
  state agency (i) that the debt, which is clearly identified as to amount
  and nature, is past-due and unless paid within thirty  days  thereafter,
  would be referred to the department of taxation and finance to be offset
  against  an  overpayment;  (ii)  that  state  law  permits the offset of
  certain overpayments against such debts; (iii)  that  the  taxpayer  may
  request  a  review of the proposed referral for offset by contacting the
  state agency at a telephone  number  or  an  address  disclosed  in  the
  notice;  and  (iv)  that  the taxpayer may present, to the state agency,
  written evidence and arguments in support of his defense to the proposed
  referral or may appear at a scheduled conference with the  state  agency
  to  present  oral  arguments and written and oral evidence in support of
  such defense; provided, however, that nothing herein shall be deemed  to
  afford  the  taxpayer the opportunity to reargue any issue which was, or
  could have been, adjudicated in the proceeding  described  in  paragraph
  (a) or (b) of this subdivision; and
    (d)  which the state agency which is the creditor or the department of
  law, as the case may be, certifies to the commissioner of  taxation  and
  finance is past-due and legally enforceable.
    (4)  The  procedures  set  forth  by  the commissioner of taxation and
  finance for crediting any overpayments, and the  interest  on  any  such
  overpayments,  against  a  past-due legally enforceable debt pursuant to
  this section shall include but shall not be limited to:
    (a) the procedure under which the creditor state agency  shall  notify
  the   commissioner  of  taxation  and  finance  of  a  past-due  legally
  enforceable debt due from a taxpayer,  specifying  when  the  department
  will  be  notified, the information to be contained in such notification
  and the form and format to be used for such notification;
    (b) the minimum amount of a past-due legally enforceable debt  against
  which   the  commissioner  of  taxation  and  finance  shall  credit  an
  overpayment of tax;
    (c)  a  provision  providing  that  information   furnished   to   the
  commissioner  of  taxation  and  finance and the comptroller pursuant to
  such procedures shall  be  considered  confidential  and  shall  not  be
  disclosed, except as otherwise allowed in this chapter;
    (d)   a   provision   providing  that  information  furnished  by  the
  commissioner of taxation and finance pursuant to such  procedures  shall
  be considered confidential and shall not be disclosed, except the amount
  of  the  overpayment and interest thereon which has been credited may be
  disclosed  to  the  taxpayer,  and  the  amount  so  credited  and   the
  information necessary to properly identify the taxpayer may be disclosed
  to the creditor state agency; and
    (e)  the procedure for reimbursement of the comptroller by the revenue
  arrearage account, pursuant to section ninety-one-a of the state finance
  law, for any overpayment and interest thereon which  has  been  credited
  against  the past-due legally enforceable debt owed by a taxpayer filing
  a joint return, but which has been refunded by the comptroller, pursuant
  to paragraph six of subsection (b) of section six hundred  fifty-one  of
  this  chapter,  to  a  spouse  not  liable  for the amount of a past-due
  legally enforceable debt owed by such taxpayer.
    (5)(a) In calculating  the  amount  of  an  overpayment  and  interest
  thereon which shall be credited against the amount of a past-due legally
  enforceable debt owed by a taxpayer which is certified to the department

  of  taxation  and  finance  for collection pursuant to this section, the
  department of taxation and finance shall first  credit  the  overpayment
  and interest thereon against any:
    (i)  liability  of  such  taxpayer  in  respect  of  any  tax or other
  imposition imposed by this chapter and administered by the  commissioner
  of taxation and finance;
    (ii)  liability  of  such  taxpayer  for  any  tax or other imposition
  imposed pursuant to the authority of this chapter or any  other  law  if
  such tax is administered by the commissioner of taxation and finance;
    (iii)  estimated  tax for the succeeding taxable year if such taxpayer
  claims such overpayment  or  a  portion  thereof  as  a  credit  against
  estimated  tax  for  such succeeding taxable year pursuant to subsection
  (e) of section six hundred eighty-six or subsection (b) of  section  one
  thousand  eighty-six  of  this  chapter  or  subdivision  (e) of section
  11-1786 of the administrative code of the city of New York  or  for  any
  tax  imposed  pursuant to the authority of this chapter or any other law
  if such tax is administered by the commissioner of taxation and finance;
    (iv) past-due support owed by the taxpayer  pursuant  to  section  one
  hundred seventy-one-c of this article;
    (v)  unreimbursed medical assistance paid on behalf of a child payable
  pursuant to section three hundred sixty-seven-a of the  social  services
  law;
    (vi)  the  amount  of  a default in repayment of a state university or
  city university loan pursuant to section one  hundred  seventy-one-e  of
  this article.
    (b) Only the balance remaining, after the overpayment and the interest
  thereon  has  been  credited  as  described  in  paragraph  (a)  of this
  subdivision, shall be certified to the  comptroller  as  an  overpayment
  plus  any  interest  to be credited, in accordance with paragraph (g) of
  subdivision three of section one hundred seventy-one-l of this  article,
  against  a  past-due legally enforceable debt that has been certified to
  the commissioner of taxation and finance for collection pursuant to this
  section, and/or a city of New York tax warrant judgment  debt  that  has
  been   certified  to  the  commissioner  of  taxation  and  finance  for
  collection  pursuant  to  section  one  hundred  seventy-one-l  of  this
  article,  with  the  remainder  to  be  refunded to the taxpayer if such
  remainder is not  required  to  satisfy  the  amount  of  a  default  in
  repayment  of  a guaranteed student loan pursuant to section one hundred
  seventy-one-d of this article.  If  a  taxpayer  owes  past-due  legally
  enforceable debt that has been certified to the commissioner of taxation
  and finance for collection pursuant to this section and city of New York
  tax warrant judgment debt that has been certified to the commissioner of
  taxation  and  finance  for  collection  pursuant to section one hundred
  seventy-one-l of this article, then the overpayment and interest thereon
  shall be credited against the debts in the  order  in  which  the  debts
  accrued.
    (b-1)  No taxpayer who has applied for, and is eligible for, an earned
  income tax credit under subsection (d) of section  six  hundred  six  of
  this  chapter  shall  have  more than ten percent of any tax overpayment
  credited against a past due legally enforceable debt owed to the  office
  of  temporary  and  disability  assistance  for an overpayment of public
  assistance unless such debt  was  incurred  as  a  result  of  false  or
  misleading  statements or other grounds set forth in section one hundred
  forty-five-c of the social services law, which led to a  sanction  under
  such section.
    (c) If a taxpayer owes more than one past-due legally enforceable debt
  which  is  certified  to  the  commissioner  of taxation and finance for
  collection pursuant  to  this  section,  the  overpayment  and  interest

  thereon  shall  be  credited against the debts in the order in which the
  debts accrued. A debt shall be considered to have accrued at the time at
  which the debt became past-due.
    (6)  The  commissioner shall (a) certify to the comptroller the amount
  of each overpayment and the interest  on  such  amount  to  be  credited
  against each past-due legally enforceable debt pursuant to this section,
  the  total amount of each such overpayment and the interest on each such
  overpayment, and the balance, if  any,  of  each  such  overpayment  and
  interest  thereon  to be refunded to the taxpayer, and (b) shall certify
  to  the  comptroller,  with  regard  to  each  such  past  due   legally
  enforceable  debt, the amount of liability underlying such debt which is
  creditable to unemployment insurance tax, federal funds,  federal  trust
  funds  or  fiduciary funds, or to the office of temporary and disability
  assistance or a local social services district relating  to  overpayment
  of  grants  and  allowances of public assistance or to the department of
  health  relating  to  overpayments  of  medical   assistance   made   to
  individuals  who  are or have been enrolled as providers in the New York
  state medical assistance program as established under  title  eleven  of
  article five of the social services law.
    (7)  The  commissioner  of  taxation  and  finance  shall  notify each
  taxpayer who makes an overpayment, in writing, of  the  amount  of  such
  overpayment  and the interest thereon certified to the comptroller as an
  amount to be credited against a past-due legally enforceable debt  which
  has  been certified to the commissioner of taxation and finance pursuant
  to this section and of the name of the state agency which certified  the
  amount  to  the  commissioner of taxation and finance. Such notice shall
  include notification to any other person who  may  have  filed  a  joint
  return  with  the  taxpayer  of  the steps such other person may take in
  order to secure his or her proper share of the refund.
    (8) From the time the commissioner of taxation and finance is notified
  by a creditor state agency of a past-due legally  enforceable  debt  due
  from  a  taxpayer,  the  commissioner  of  taxation and finance shall be
  relieved from all liability to such taxpayer or its assigns, successors,
  heirs or representatives for the amount of an overpayment  and  interest
  on  such amount certified to the comptroller, to be credited against the
  amount of a past-due legally enforceable debt to be  collected  pursuant
  to  this  section,  and  such taxpayer shall have no right to commence a
  court action or proceeding or to any other legal  recourse  against  the
  commissioner  of taxation and finance to recover such overpayment or any
  interest thereon certified to the comptroller to be credited against the
  amount of  a  past-due  legally  enforceable  debt.  Provided,  however,
  nothing  herein  shall be construed to preclude any legal, equitable, or
  administrative action by such  taxpayer  against  the  certifying  state
  agency  to  which the amount of overpayment and any interest thereon was
  credited, with reference to the amount thereof which is greater than the
  amount of such past-due legally enforceable debt owed by  such  taxpayer
  on the date of such certification.