PAYMENTS TO DEBTORS OR DELINQUENTS PROHIBITED.

(a) Except as provided by this section, a state agency, as a ministerial duty, may not use funds in or outside of the state treasury to pay a person if Section 403.055 prohibits the comptroller from issuing a warrant or initiating an electronic funds transfer to the person.

(b) Except as provided by this section, a state agency may refuse to use funds in or outside of the state treasury to pay a person if the person is indebted to the state or has a tax delinquency and the agency is responsible for collecting that indebtedness or delinquency. This subsection applies only if Section 403.055 does not prohibit the comptroller from issuing a warrant or initiating an electronic funds transfer to the person.

(c) A state agency may not pay the assignee of a person that the agency may not pay under Subsection (a) if Section 403.055 prohibits the comptroller from issuing a warrant or initiating an electronic funds transfer to the assignee. The agency may refuse to pay the assignee of a person that the agency may refuse to pay under Subsection (b) if the assignment became effective after the person became indebted to the state or incurred a tax delinquency.

(d) A state agency that Subsection (a) prohibits from making a payment to a person also is prohibited from paying any part of that payment to:

(1) the person's estate;

(2) the distributees of the person's estate; or

(3) the person's surviving spouse.

(e) A state agency that may refuse to make a payment to a person under Subsection (b) also may refuse to make any part of that payment to:

(1) the person's estate;

(2) the distributees of the person's estate; or

(3) the person's surviving spouse.

(f) This section neither prohibits a state agency from paying nor authorizes a state agency to refuse to pay a person or the person's assignee if the agency determines that the person is complying with an installment payment agreement or similar agreement between the agency and that person to pay or eliminate the debt or delinquency.

(g) The comptroller may not reimburse a state agency for a payment that the comptroller determines was made in violation of Subsection (a).

(h) Subsection (b) does not authorize a state agency to refuse to pay:

(1) the compensation of a state officer or employee; or

(2) the remuneration of an individual if the remuneration is being paid by a private person through the agency.

(i) Subsection (b) does not authorize a state agency to refuse to make a payment if:

(1) the payment would be made in whole or in part with money paid to the state by the United States; and

(2) the agency determines that federal law:

(A) requires the payment to be made; or

(B) conditions the state's receipt of the money on the payment being made.

(j) A state agency may not refuse to make a payment under Subsection (b) before the agency has provided the person with an opportunity to exercise any due process or other constitutional or statutory protection that must be accommodated before the agency or the state may begin a collection action or procedure.

(k) Subsection (a) does not prohibit a state agency from making a payment if each state agency that properly reported the person to the comptroller under Section 403.055(f) consents to the payment.

(l) This section does not apply to the extent that Section 57.482, Education Code, applies.

(m) This section applies to a payment only if the comptroller is not responsible under Section 404.046, 404.069, or 2103.003 for issuing a warrant or initiating an electronic funds transfer to make the payment.

(n) In this section:

(1) "Compensation," "state officer or employee," and "tax delinquency" have the meanings assigned by Section 403.055.

(2) "State agency" has the meaning assigned by Section 403.055, notwithstanding Section 2107.001.