Local Government Hanceville joins state program to collect debts from Alabama tax refunds | CullmanSense

Local Government

Hanceville joins state program to collect debts from Alabama tax refunds

HANCEVILLE - On Thursday evening, the Hanceville City Council voted to enact an ordinance that creates a mechanism to collect debts, whether those who owe those debts like it or not.  The measure will allow the Alabama League of Municipalities’ Municipal Intercept Service (MIS) to deduct owed money plus fees from the state tax refunds of citizens with outstanding debts, before the refunds are mailed out.  The debt collection can cover outstanding fees, taxes, utilities and other debts.

According to the MIS website (http://alintercept.org), the program works as follows:

Participating municipalities submit a set of debts to MIS by inputting their delinquent debt information into the MIS web-based system thereby certifying that the debt data is correct, the debts are delinquent and the debts are final. The MIS system does not have any ability to validate this data and it is solely the responsibility of participating members to ensure their submitted data is correct.

The data submitted to the MIS system is then formatted to the Alabama Department of Revenue’s (ADOR’s) specifications and submitted to ADOR for processing. ADOR will then attempt to find a matching Alabama State tax refund for the debtor based on the debtor’s Social Security Number. NOTE: If the debtor is not eligible for an Alabama state tax refund, no money can be collected. The process of matching and collecting a debt from a refund is what ADOR calls an "intercept."

Once ADOR successfully secures an intercept, the amount of the debt plus a $25 MIS processing fee is subtracted from the debtor’s tax refund and any remaining refund is sent out directly to the individual by ADOR as normal. The amount intercepted from that tax refund is then sent to MIS from the Alabama State Comptroller's Office and, once the MIS fee has been assessed, the MIS system then makes a direct deposit disbursement for the amount of the debt directly to the municipality's bank account.

City Attorney Dan Willingham said, “If somebody owes the City a debt right now, there’s not much you can do about it except try to sue and get a judgment, or collect on it by other traditional means.”

In addition to the $25 fee collected by MIS, the City of Hanceville will charge $50 to cover administrative costs. 

Revenue Officer John Wayne Fore, who has been working on the ordinance, explained to the council, “That’s the fee for creating and monitoring, and data processing, the man hours to start the program that we add on top of that fee before we turn it in to the MIS and the Alabama Department of Revenue.  And it is also paid by the taxpayer.”

Willingham was concerned that the City might not be allowed to add extra fees, but Fore assured him that the League of Municipalities had told him, “If the council approved that fee to be added onto it, that it was up to the City.”

According to the final form of the ordinance, taxpayers whose refunds are intercepted will be notified, and will have a certain amount of time to appeal the charge to the mayor.  Should the mayor and taxpayer not be able to resolve the appeal, the matter can then go to circuit court.

The council could not, under normal procedure, vote on the ordinance on the day of its introduction, but, after lengthy discussion, the members agreed by vote to suspend the rules and put the matter to an immediate vote.  The motion passed unanimously.

In other council business

Fire Chief Rodger Green reported that the fire department needs to purchase a heavy-duty truck with a towing package to replace a nearly worn-out automobile currently in use, and give the department more capability to tow trailers and equipment.  The matter was not an agenda item, and no action was taken.

Mayor Kenneth Nail acknowledged during his comments that he had received numerous reports about feral cats creating nuisances in city neighborhoods and around area businesses.  The council discussed informally what might be done, with no official action taken.

Nail also introduced the council to the proposed legislation presented to the Cullman County Mayors and Commissioners Association on Wednesday, to place before county voters a measure to increase gasoline taxes to 4 cents and create a diesel fuel tax of 4 cents to help fund road and bridge repairs within the county. The association voted to support the legislation.

The Hanceville City Council’s next meeting will be Thursday, Jan. 11 at 6:30 p.m. in the Hanceville City Hall auditorium, with a work session at 6.  The public is invited to attend.

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