(a) Except as provided by Subsections (b) and (d), the comptroller may deduct the amount of a person's indebtedness to the state or tax delinquency from any amount the state owes the person or the person's successor. The comptroller shall issue a warrant or initiate an electronic funds transfer to the person or successor for any remaining amount.
(b) Subsection (a) applies to a person or the person's successor only if:
(1) the comptroller has provided notice to the person or successor that complies with Subsection (c);
(c) The comptroller shall provide notice to a person or the person's successor before deducting the amount of the person's indebtedness to the state or tax delinquency under Subsection (a). The notice must:
(1) be given in a manner reasonably calculated to give actual notice to the person or successor;
(2) state the:
(A) amount of the indebtedness or the amount of the tax, penalties, interest, and costs due, as applicable; and
(B) name of the indebted or delinquent person;
(3) specify the deadline for paying the amount due; and
(4) inform the person or successor that unless the amount due is paid before the deadline, the comptroller will deduct the amount of the indebtedness or delinquency from the amount the state owes the person or successor.
(d) This section does not authorize the comptroller to deduct the amount of a state employee's indebtedness to a state agency from any amount of compensation owed by the agency to the employee, the employee's successor, or the assignee of the employee or successor. In this subsection, “compensation” has the meaning assigned by Section 403.055 and “indebtedness,” “state agency,” “state employee,” and “successor” have the meanings assigned by Section 666.001 .
(e) The comptroller shall credit the appropriate fund or account for any amount deducted under this section if the comptroller is the custodian or trustee of that fund or account. The comptroller shall remit any amount deducted under this section to the custodian or trustee of the appropriate fund or account if the comptroller is not its custodian or trustee.
(f) The comptroller may determine the order that a person's multiple types of indebtedness to the state or tax delinquencies are deducted from the amount the state owes the person or the person's successor.
(g) The assignee of a person or the person's successor is considered to be a successor of the person for the purposes of this section, except that a deduction under this section from the amount owed to the assignee of a person or the person's successor may not be made if the assignment became effective before the person became indebted to the state or incurred the tax delinquency.
(h) The comptroller may adopt rules and establish procedures to administer this section.
(i) Except as provided by Subsection (d), in this section, “successor” means a person's estate and the distributees of that estate.
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