AL SB169

Amends Alabama law to allow counties and municipalities to collect debts owed to them by intercepting state income tax refunds, similar to existing authority granted to certain state agencies.

Counties and municipalities must submit debts of at least $25 through approved third-party providers (representing 20+ counties or 50+ municipalities), the Association of County Commissions of Alabama, or the Alabama League of Municipalities.

Third-party providers may assess reasonable fees against debtors, collected as the first amount set off against tax refunds, with liability limited to the fee amount.

Taxpayers must receive notice of setoffs and have 30 days to contest in writing; failure to contest within 30 days constitutes a waiver of the right to challenge the setoff.

Collected funds must be deposited in escrow accounts until final determination of debt validity; excess refund amounts are returned to the debtor.