MIS Background & History
In 2014 the Alabama State Legislature enacted an amendment allowing municipalities and counties to attempt to collect delinquent debts owed to them by collecting this debt from an individual's State tax refund. This is a process that has been in force for many years for several State agencies but until 2014, was not possible for municipalities or counties. As part of this amendment, the Alabama Department of Revenue agreed to process these debts through only two clearinghouse entities: the Alabama League of Municipalities (ALM) for municipal entities and the Association of County Commissions of Alabama (ACCA) for county entities. In 2015 the Alabama League of Municipalities formed Municipal Intercept Services, LLC (MIS) as its clearinghouse entity to act as a conduit between participating Alabama municipalities and the Alabama Department of Revenue (ADOR). See the Statute HERE.
How the Process Works
All traditional forms of debt collection should be attempted by the municipality before using Municipal Intercept Services (MIS).
The MIS system is only a conduit between participating municipalities and the Alabama Department of Revenue (ADOR). It is not a debt collection service or agency. 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 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.
For a more detailed explanation of this process and the MIS system, please visit the FAQ section and the Video Tutorial section of this website. We also strongly encourage potential participants to attend one of the free training seminars. The dates and locations of upcoming seminars can be found in the User Training Seminars section of this website.