CHAPTER 402

FORMERLY

SENATE BILL NO. 368

AS AMENDED BY SENATE AMENDMENT NO. 1

AN ACT TO AMEND TITLE 30 OF THE DELAWARE CODE RELATING TO THE COLLECTION OF DEBTS OWED TO STATE AGENCIES.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend §545, Title 30 of the Delaware Code by striking

subsection (a) of said section in its entirety and substituting in lieu thereof a new subsection (a) to read as follows:

"(a) General. Upon receiving notice from any claimant agency that a

taxpayer owes a debt to such agency, the Director shall:

(1) Reduce the amount of any overpayment of tax payable to the taxpayer, during a period not to exceed twelve months from the date of the receipt of said notice, by the amount of such debt or unpaid portion thereof;

(2) Notify the taxpayer that such overpayment has been reduced by the amount of such reduction;

(3) Pay the amount by which such overpayment is reduced under paragraph (1) of this subsection to such agency in an order of priority as determined by the Director of Revenue;

(4) Pay to the taxpayer the remainder of such overpayment, if any; and

(5) Notify the Director of the Lottery to pay to the Director of Revenue any prize payable where prizes exceed a threshold established by the Director of the Lottery to a taxpayer who is also a lottery winner, and the Director of the Lottery shall:

a. Reduce the prize payable to the winner by the amount of such debt or unpaid portion thereof;

a. Notify the winner that such prize has been reduced by the
amount of such reduction;

a. Pay the amount by which such prize is reduced under
subparagraph a. of this paragraph to the claimant agency; and

b. Pay to the winner the remainder of such prize, if any."

Section 2. Amend §545, Title 30 of the Delaware Code by striking

subsection (b) of said section in its entirety and substituting in lieu thereof a new subsection (b) to read as follows:

"(b) Definitions. For purposes of this section:

(1) 'Claimant agency' means:

a. Any department or agency of the State of Delaware, including Delaware State University and Delaware Technical and Community College, but not school districts of this State, with respect to any debt owed to it; and

b. Any court, office of the court clerk, Prothonotary, or Register in Chancery of this State with respect to fines, court costs, assessments and/or restitution.

(2) 'Debt' means any liquidated sum which is past due, is legally enforceable, and has accrued through contract, subrogation, tort, court assessment, or operation of law, whether or not there is an outstanding judgement of such sum, plus, if so agreed between the Director and the claimant agency, the amount of the reimbursement provided in subparagraph (c)(1)e of this section.

(3) 'Taxpayer' means any person or entity identified by a claimant agency for action by the Director of Revenue under this section.

(4) 'Lottery winner' means any person who is entitled to a payment on account of winning a prize in a lottery conducted pursuant to the provisions of Chapter 48, Title 29 of the Delaware Code."

Section 3. Amend §545, Title 30 of the Delaware Code by adding a new subsection (g) to read as follows:

"(g) Director of Lottery. When the Director of Revenue shall notify the Director of Lottery pursuant to the provisions of subsection (a) of a debt owed by a taxpayer, and said taxpayer is also a lottery winner, the Director of Lottery shall pay over to the Director of Revenue any prize then payable or becoming payable to said taxpayer, until such time as the Director of Revenue notifies the Director of Lottery that the debt of said taxpayer has been discharged. The Director of Lottery shall maintain a current log of the names and other identification provided to him by the Director of Revenue of persons owing a debt to a claimant agency."

Section 4. Amend §545(c), Title 30 of the Delaware Code by striking the phrase "subsection (a)(2)" as it appears in subparagraph e. of paragraph (1) of said subsection and substituting in lieu thereof the phrase "subsection (a)".

Section 5. Amend §552(a) Title 30 of the Delaware Code by inserting, in the first sentence of said subsection, between the second place the phrase "Title 4" appears in said subsection and the word "if", the following:

"including setoff of such amount as a debt owed to a claimant agency pursuant to §545(a) of this Title,".

Section 6. If any provision of this Act or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of the Act which can be given effect without the invalid provision or application, and to that end the provisions of this Act are declared to be severable.

Section 7. This Act shall be effective for claims for refunds made by

original or amended returns or otherwise filed after December 31, 1994, refunds initiated by the Division of Revenue after December 31, 1994, and for payments to lottery winners after December 31, 1994.

Approved July 13, 1994.