3. a. A federal official may:

   (1)   Certify to the State Treasurer the existence of a person's delinquent non-tax liability owed by the person to the federal government; and

   (2)   Request that the State Treasurer withhold any refund and vendor payment to which the person is entitled.

   b.   A federal official may certify and request the State Treasurer to withhold a refund or vendor payment only if the laws of the United States:

   (1)   Allow the State Treasurer, on behalf of the State, to enter into a reciprocal agreement with the United States, pursuant to which the federal official would be authorized to offset federal payments to collect delinquent tax and non-tax debts owed to the State; and

   (2)   Provide for the payment of the amount withheld to the State.

   c.   The Department of the Treasury may retain a portion of the proceeds of any collection setoff as provided under agreement with the federal official.

   L.2006,c.32,s.3.