SB123 Alabama 2019 Session

Summary

Primary Sponsor

Tim MelsonSenator

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

SB 123 clarifies that amounts collected on behalf of claimant agencies by other legally authorized collectors are treated as debts eligible for set-off against Alabama income tax refunds.

What This Bill Does

It amends Section 40-18-100 to define who counts as a claimant agency and what counts as a debt and a debtor for set-off purposes. It explicitly states that sums collected on behalf of a claimant agency by entities authorized by law to collect those sums are considered debts. It expands the list of claimant agencies to include several state agencies, the Unified Judicial System, counties/municipalities through certain organizations, and housing authorities. The act takes effect immediately after passage and approval.

Who It Affects

• Claimant agencies and their authorized collectors (e.g., Alabama Commission on Higher Education, Alabama Department of Human Resources, Alabama Medicaid Agency, Alabama Department of Labor, Unified Judicial System, counties/municipalities, housing authorities): their debts collected by authorized entities are recognized as debts for set-off purposes.
• Debtors (individuals who owe money to claimant agencies): their obligations can be pursued via set-off to recover delinquent amounts, including sums collected on their behalf by authorized collectors.

Key Provisions

• Defines CLAIMANT AGENCY to include specific state agencies, local entities, and housing authorities as listed in the bill.
• Defines DEBTOR as an individual owing money to a claimant agency that has not been adjudicated or discharged.
• Defines DEBT as any liquidated sum owed to a claimant agency, arising from contract, subrogation, tort, or operation of law, including child or spousal support in relevant programs.
• Clarifies that sums collected on behalf of claimant agencies by entities authorized by law to collect those sums are considered debts for set-off purposes.
• States that an agreement between a claimant agency and a public entity or non-profit does not limit the claimant agency's ability to collect the debt.
• Defines DEPARTMENT as the Department of Revenue and notes the relevant tax refund involved.

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