SB281 Alabama 2014 Session

Summary

Primary Sponsor

Arthur OrrSenator

Republican

Co-Sponsor

Paul Bussman

Session

Regular Session 2014

Title

Revenue Dept., Office of Debt Recovery created, collection of debt of political subdivisions, electronic debt registry, Debt Recovery Fund created

Summary

This bill creates the Office of Debt Recovery in the Department of Revenue to collect state debts, establishes an electronic debt registry and a Debt Recovery Fund, and expands debt collection tools and oversight.

What This Bill Does

It establishes the Office of Debt Recovery within the Department of Revenue to collect delinquent debts owed to the state and, under certain circumstances, debts owed to political subdivisions. It requires state agencies to refer all delinquent debts after 60 days to the Office and allows the Office to use methods like tax refund offsets, data matching with financial institutions, and contracts with the Attorney General or third-party collectors. It also creates a centralized electronic debt registry and a Debt Recovery Fund to finance operations, sets data confidentiality rules, and provides for penalties to be waived in certain situations. It enables data matching with financial institutions, imposes fees for data match services, and requires periodic reporting and oversight.

Who It Affects

• State agencies and non-statewide political subdivisions: must refer delinquent debts to the Office for collection and may have debts collected on their behalf.
• Debtors (individuals and businesses with delinquent debts): debts may be collected using various remedies, may be listed in the electronic registry, and penalties may be waived under certain circumstances.
• Financial institutions and their processors: must participate in the data match program to provide identifying information and account data; receive a participation fee to cover data-match costs; data is confidential.
• Contractors and legal services providers (including the Attorney General’s Office or third-party collectors): may be contracted to assist with collections and are subject to contract review and audits.

Key Provisions

• Establishes the Office of Debt Recovery within the Department of Revenue, authorized to collect delinquent debts owed to the state and, under certain conditions, debts for other state agencies or political subdivisions; begins referrals of debts after 60 days delinquent (effective January 1, 2015).
• Creates the Debt Recovery Fund as a special treasury fund to finance the Office’s operations, with rules on deposits, use, investments, and unobligated balances; allows general fund appropriations if needed and requires budgeting under state law.
• Authorizes a centralized electronic debt registry and a financial-institution data match system to compile debtor information from state agencies and political subdivisions; allows data sharing, requires confidentiality, and sets requirements for FDIC-insured institutions to receive data-match payments; includes data format and cost-recovery provisions.
• Allows the Office to charge a recovery fee not exceeding 25% of the total debt and requires the collected fees to be distributed to the referring agency and used to satisfy federal reimbursement requirements if applicable; outlines reporting and cost-tracking obligations.
• Permits reciprocal collection and offset agreements with the federal government, enabling offsets from state tax refunds and vendor payments, and from federal payments to vendors and taxpayers.
• Provides for rules and regulations to implement the act, penalties waivers in certain cases, annual review of Office operations, and severability and effective date provisions.

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

Subjects

Office of Debt Recovery