HB82 Summary

• Amends Alabama Code Sections 40-18-100 and 40-18-103 to allow counties and municipalities to collect debts from income tax refunds through setoff procedures.

• Counties and municipalities may submit debts of at least $25 owed to them for collection, but must submit through either the Association of County Commissions of Alabama, the Alabama League of Municipalities, or an approved third-party provider representing more than 20 counties or 50 municipalities.

• Third-party providers and organizations may assess a reasonable fee of no less than $25 and no more than 5% of the debt submitted, with the fee collected as the first amount set off against the tax refund.

• When a debtor is entitled to a refund of at least $25, the Department of Revenue transfers an amount equal to the refund (not exceeding the claimed debt) to the claimant agency, with any excess sent to the debtor within a reasonable time.

• Taxpayers must receive written notice of the setoff and have 30 days to request a hearing to contest the debt; failure to request a hearing within 30 days constitutes a waiver, and all transferred funds must be held in escrow until the debt validity is finally determined.