Local Government Delinquent Debt Setoff Program

What is the Debt Setoff Clearinghouse?
The North Carolina Association of County Commissioners (NCACC) and the North Carolina League of Municipalities (NCLM) sponsor a debt setoff joint clearinghouse through which local governments may submit any outstanding delinquent debt (totaling $50 or more) through the clearinghouse to the NC Department of Revenue to attempt to offset delinquent debts against individual income tax refunds.

DoR allows individual local governments to combine debts less than $50 under the same debtor's social security number to meet the $50 minimum.

2002 legislation allows charging the debtor the $15 local collection assistance fee. 2003 and 2004 legislation allow water and sewer authorities (created under N.C.G.S. Chapter 162A, Article 1) and any interlocal authorities (created under N.C.G.S. Chapter 160A, Article 20) to participate in the debt setoff clearinghouse. Statutory authorization and requirements are detailed in N.C.G.S. Chapter 105A.

Who runs the clearinghouse?
The NCACC and NCLM contract with Five Star Computing, Inc., of Columbia, S.C., to administer the program.

When will the 2011 training sessions be held?
Sept. 13 – Historic Henderson County Courthouse (1 Historic Courthouse Square, Hendersonville)
Sept. 14 – Hickory Council Chambers (76 N. Center St.)
Sept. 15 – Albemarle Council Chambers (144 N. 2nd St.)
Sept. 20 – Quorum Center, Raleigh
Sept. 21 – Mad Boar, 111 River Village Place, Wallace
Sept. 22 – Beaufort County Community College, Washington (Bldg. 10/Law Enforcement Bldg., Multi Purpose Room)

More information and online registration is available online at www.ncsetoff.org/Training.htm.

How can my county participate?
Counties, cities and authorities wishing to join the clearinghouse must execute the Memorandum of Understanding and Agreement and file all applicable implementation forms to participate. All participants must complete a participation form each year. Visit www.ncsetoff.org/forms.htm to access the letters and forms.

Who do I contact for more information?
Contact NCACC Outreach Coordinator Lisa Nolen at (919) 715-4362 or lisa.nolen@ncacc.org, or visit the local government debt setoff clearinghouse website, established by Five Star Computing, at www.ncsetoff.org.

Debt setoff information archive

Program helps counties collect unpaid debts (January 2011)
Counties and county entities participating in the North Carolina Debt Setoff Program realized another banner year in 2010, matching almost $18.86 million in debts owed – an increase of more than $2.6 million from 2009.

Lottery pays off for counties trying to collect delinquent debts (October 2009)
Several winners of the North Carolina Education Lottery in September received a bit of a surprise when they got their checks from the state – some of the money was missing. No, the state is not assessing a tax on lottery winnings in an effort to generate more revenues because of the economy. Instead, more than $20,000 of lottery winnings for that month was diverted to cities and counties to settle past debts as part of the N.C. Local Government Debt Setoff program.

Debt Setoff Program participants enjoy another banner year in '08 (January 2009)
Counties and county entities participating in the N.C. Debt Setoff Program in 2008 helped realize a more than 50 percent gain over debts collected by those participating in the 2007 calendar year.

Debt Setoff returns $7.8M to counties in ‘06 (February 2007)
Local governments participating in the N.C. Debt Setoff Clearinghouse realized another banner year in 2006. The program set a new record, returning to local governments more than $10.5 million, over $7.8 million of which went to 83 counties.

Debt Setoff Program off to a great start in 2006 (February 2006)
The Debt Setoff Clearinghouse is ready for the new tax year, and if early returns are any indication, 2006 promises to be the biggest year yet for the program.