HB82 Alabama 2014 Session

Summary

Primary Sponsor

Steve ClouseRepresentative

Republican

Session

Regular Session 2014

Title

Income tax, counties and municipalities authorized to collect debt from income tax refunds, Secs. 40-18-100, 40-18-103 am'd.

Summary

HB82 lets counties and municipalities in Alabama take money from income tax refunds to collect certain debts, under defined agencies and procedures.

What This Bill Does

It authorizes setoffs of individual income tax refunds to collect debts owed to specified claimant agencies, including state agencies, the Unified Judicial System, and local governments. It sets a minimum debt of $25 and establishes approved channels for submitting debts, along with a fee structure for third-party providers. It requires the Department of Revenue to transfer from the refund an amount equal to the debt (up to the debt amount), notify the taxpayer, and hold funds in escrow pending a final debt determination, while also providing a 30-day window to contest the setoff, especially for joint refunds.

Who It Affects

• Debtors: individuals who have debts owed to claimant agencies and may see a portion of their income tax refund offset to pay those debts; they are notified of the transfer and may contest within 30 days.
• Claimant agencies and local governments (including counties and municipalities) and third-party submitting providers: may submit debts for setoff, receive funds from offsets, and may charge a fee (25 dollars minimum up to 5% of the debt) related to submitting the debt.

Key Provisions

• Defines claimant agencies eligible to request a setoff, including the Alabama Commission on Higher Education (student grants and guaranteed student loans), Department of Human Resources (public assistance, Title IV-D programs), Alabama Medicaid Agency, Department of Industrial Relations (unemployment overpayments), Unified Judicial System (fines and court costs), and counties/municipalities via approved third-party providers.
• Requires debts to be at least $25 and permits submission through approved channels: a third-party provider, the Association of County Commissions of Alabama, or the Alabama League of Municipalities.
• Allows third-party providers to charge a fee of at least $25 and up to 5% of the debt, payable by the debtor and collected as the first deduction from the refund; providers are not liable beyond the collected fee.
• Requires department to transfer from the refund an amount equal to the debt, not exceeding the claimed debt, and to send any excess refund to the debtor; mandates detailed notice to the taxpayer about the transfer and the setoff, with a 30-day hearing window.
• Imposes an escrow hold on transferred funds until a final determination of the debt’s validity; effective date is the first day of the third month after governor approval (July 1, 2014).

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Debts