HB125 Alabama 2019 Session

Summary

Primary Sponsor

Wes AllenSecretary

Republican

Session

Regular Session 2019

Title

Revenue Dept, income tax refunds, set off debt collection, sums collected on behalf of claimant agency by other authorized entities are considered debts, Sec. 40-18-100 am'd.

Summary

HB 125 would clarify that money collected on behalf of certain claimant agencies by other authorized collectors can be treated as debts eligible for income tax refund set-off.

What This Bill Does

The bill amends Section 40-18-100 to explicitly treat sums collected on behalf of a claimant agency by entities authorized by law to collect those sums as debts for set-off. It expands and clarifies who qualifies as a claimant agency, naming several state agencies and local entities (including higher education programs, various state departments, the Unified Judicial System, counties/municipalities, and housing authorities). It defines key terms like claimant agency, debtor, debt, department, and refund to make the rules clear. Practically, this means income tax refunds could be offset to collect debts owed to these claimant agencies, including amounts collected by their authorized collectors on behalf of the agencies.

Who It Affects

• Debtors: individuals who owe money to the claimant agencies listed in the bill; their Alabama income tax refunds could be offset to pay those debts.
• Claimant agencies and their authorized collectors: the listed agencies (e.g., Alabama Commission on Higher Education, Department of Human Resources, Medicaid Agency, Department of Labor, Unified Judicial System, counties/municipalities, housing authorities) will have clarified authority to treat collected sums as debts eligible for set-off.

Key Provisions

• Amends Section 40-18-100 to clarify that sums collected on behalf of a claimant agency by entities authorized by law to collect those sums are debts for set-off purposes.
• Defines 'Claimant Agency' to include: (a) Alabama Commission on Higher Education for the Student Grant Program and Guaranteed Student Loan Program; (b) Alabama Department of Human Resources for public assistance and Title IV-D programs; (c) Alabama Medicaid Agency for programs it administers; (d) Alabama Department of Labor for unemployment benefit overpayments; (e) Unified Judicial System for fines and court costs; (f) Counties and municipalities via Section 40-18-103; (g) Housing authority under Chapter 1, Title 24.
• Defines 'Debt', 'Debtor', 'Department', and 'Refund' as used in the article, including debts collected by contract, subrogation, tort, or operation of law and child/spousal support where applicable.
• Effective date: becomes law immediately after passage and the governor's approval.

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

Subjects

Taxation