SB 260 — Tax lien auctions and sales; auctions and fees further provided for; tax lien redemptions; tax lien price further provided for; redemption of tax lien further provided for; prohibit entry on land; penalties established

SB260 INTRODUCEDENGROSSED SB260 DI4LTTN-1DI4LTTN-2 By Senator Chambliss RFD:

02-Apr-24 Page 0 DI4LTTN-1SB260 03/22/2024Engrossed CNB2 (L)bm4 2024-938A 2BILL 4TO SYNOPSIS:BE ENTITLED AN ACT 9 Relating to tax lien auctions and sales;

Under existing law, all tax liens representing unpaid and delinquent taxes on real property are subject to a tax lien auction or a tax lien sale.

This bill would require a public auction to take place between 8:30 a.m.

and 4:00 p.m.

Under existing law, a person who purchases a tax lien at auction is subject to three separate fees.

This bill would consolidate the three separate fees into one fee, with the total amount remaining consistent.

Under existing law, the holder of a tax lien certificate has the first right to purchase a tax lien relating to a subsequent delinquency.

This bill would provide that if a holder of a tax lien certificate fails to exercise the first right to purchase, the cost of the redemption price of the tax lien shall be added to the purchase price at the tax lien sale or auction and would provide for the transfer of the tax lien certificate and included rights.

This bill would further provide for who may redeem a tax lien that has been auctioned or sold.

This bill would prohibit a holder of a tax lien certificate from entering upon or possessing any Page 1 SB260 INTRODUCED property until a deed is received from the circuit clerk.

This bill would prevent a holder of a tax lien certificate from being criminally or civilly liable for violations in certain circumstances.

This bill would also establish that certain books and records are prima facie evidence of an auction, sale, or redemption of a tax lien certificate.

A BILL TO BE ENTITLED AN ACT Relating to tax lien auctions and sales;

Page 2 SB260 INTRODUCED to prohibit a holder of a tax lien certificate from entering upon or possessing any property until a deed is received;

Sections 40-10-182, 40-10-183, 40-10-184, Page 1 SB260 Engrossed 40-10-186, 40-10-187, 40-10-191, 40-10-193, 40-10-198, 40-10-199, and 40-10-200, Code of Alabama 1975, are amended to read as follows:

Advertising on an online website controlled by the Page 3 SB260 INTRODUCED tax collecting official and accessible from the tax collecting official's website.

(c) The tax collecting official may auction or sell tax Page 2 SB260 Engrossed liens representing delinquent taxes for any year taxes are delinquent and unpaid." 95 "§40-10-183 At least 30 days prior to any tax lien auction, the tax collecting official shall prepare and maintain a list of all unsold tax liens.

(4) The principal amount of the delinquent taxes and the amount of accrued and accruing interest thereon and penalties, fees, and administration costs pursuant to Section 40-10-184(b) relating to each year of assessment." "§40-10-184 (a) On the day and time designated for a tax lien Page 4 SB260 INTRODUCED auction, the tax collecting official shall proceed to auction all tax liens described in the tax lien auction list compiled as provided in Section 40-10-183, except those for which the taxes, penalties, interest, fees, and costs thereon have been paid.

Interest shall continue to accrue on unsold tax liens at the rate Page 3 SB260 Engrossed imposed on delinquent real property taxes.

(b)(1) A tax lien shall be sold at auction pursuant to this article to the person who:(i) pays all taxes due, including unpaid taxes for previous years, interest, penalties, fees, and costs due on the property, including an origination cost of twenty dollars ($20) as of the date of auction and a twenty dollar ($20) auction (ii) pays an administrative fee, and who, in addition, of forty-five dollars ($45), effective upon the preparation of the tax lien auction list, plus the amount to be paid to the holder of a 95 tax lien certificate who has not exercised his or her first right to purchase as provided in Section 40-10-191;

(3) If the interest rate bid for the property reaches 0.00 percent and more than one bidder remains, an in-person auction ends in a tie and the winner cannot be determined, the Page 5 SB260 INTRODUCED tax collecting official shall draw lots to determine the winning bidder for the property.

A tax lien offered for auction or sale shall be identified by a uniform parcel number and a legal Page 4 SB260 Engrossed description." "§40-10-186 (a) The purchase price for a tax lien shall be the amount of delinquent taxes plus any interest, penalties, fees, and costs accrued as of the date of the auction or saleas required in Section 40-10-184.

(c) The purchase price for a tax lien received by the tax collecting official shall be credited to the tax collecting official for purposes of calculating commissions, if any, on taxes collected by the tax collecting official pursuant to Section 40-5-4." "§40-10-187 (a) The tax collecting official, upon receipt of the purchase price, shall make, execute, and deliver a tax lien Page 6 SB260 INTRODUCED certificate to each purchaser at a tax lien sale or auction or to each assignee thereafter and shall collect from the purchaser or assignee a fee of five dollars ($5) for each tax lien certificate.

(b) A tax lien certificate shall evidence the auction Page 5 SB260 Engrossed or sale or assignment to the holder of the tax lien certificate of the delinquent and unpaid taxes, penalties, interest, fees, and costs set forth therein and represented by the tax lien.

(4) Recite the amount of all taxes, penalties, Page 7 SB260 INTRODUCED interest, fees, and costs due on the property, which relate to the year of assessment described in subdivision (3), as of the date specified in subdivision (2).

(e) The purchaser of a tax lien certificate may Page 6 SB260 Engrossed transfer and assign the certificate to any person, and the transferee of a tax lien certificate may subsequently transfer the certificate to any other person.

(g) Within 30 days of a completed tax lien auction or Page 8 SB260 INTRODUCED sale, the tax collecting official shall send notice to the property owner for whom the property was assessed informing the property owner that the tax lien has been auctioned or sold.

The notice shall include the date of auction or sale and the name of the purchaser and shall be made by first class mail to the address listed in the assessment." "§40-10-191 (a) The holder of a tax lien certificate shall have the Page 7 SB260 Engrossed first right to purchase the tax lien relating to a subsequent delinquency on the property described in the tax lien certificate of the holder.

(b)(1) If the holder of a tax lien certificate fails to exercise the first right to purchase a subsequent tax lien, an amount equal to the redemption price of the tax lien shall be added to the purchase price at the subsequent tax lien sale or Page 9 SB260 INTRODUCED auction and the tax lien certificate shall be transferred to the purchaser of the subsequent tax lien.

(3) The amount paid from the transfer shall be Page 8 SB260 Engrossed distributed to the previous holder of the tax lien certificate, along with a notice of cancellation of the previous tax lien certificate, within 30 days of the receipt of the purchase price.

Page 10 SB260 INTRODUCED b.

Page 9 SB260 Engrossed (2) Property may be redeemed under subdivision (1) by payment to the tax collecting official of the amount specified on the tax lien certificate as the total amount of delinquent tax, interest, penalties, fees excluding lost certificate fees provided in Section 40-10-190, and costs paid to purchase the tax lien and to obtain a title report for use in a forclosure and quiet title action under Section 40-10-197, plus interest at the rate specified in the tax lien certificate, plus any due and owing taxes, interest, penalties, fees, and costs due.

(b) Statutory fees paid by the holder of the tax lien certificate in connection with the tax lien certificate shall be added to the amount payable on redemption and shall also bear interest at the rate of interest specified in the tax lien certificate." "§40-10-198 (a) Each holder of a tax lien certificate shall be entitled to the same rights and remedies with respect to the Page 11 SB260 INTRODUCED collection of the amounts due on such the tax lien certificate as are available to the tax collecting official with respect to the collection of delinquent taxes, including, but not limited to, the right to institute garnishment proceedings against the taxpayer for the payment of taxes.

(b) The holder of a tax lien certificate shall not be entitled to charge the taxpayer for the release or satisfaction of the tax lien any amount more than what would Page 10 SB260 Engrossed otherwise have been available to the tax collecting official with respect to the collection of the delinquent tax.

The holder of a tax lien certificate shall not be held criminally or civilly liable for any code violation on the property occurring prior to obtaining a clerk's deed."deed unless the holder of the tax lien certificate has otherwise violated this subsection." "§40-10-199 (a) Tax liens that are not sold at the tax lien auction conducted by the tax collecting official shall be separated in the tax lien auction list as prescribed by Section 40-10-183 and the county shall retain the lien shall continue pursuant to Section 40-1-3.

The tax collecting official, within 45 days at any time after the tax lien auction date, may sell at Page 12 SB260 INTRODUCED private sale an unsold tax lien for no less than all taxes, interest, penalties, costs, and fees, plus the amount to be paid to the holder of a tax lien certificate who has not exercised his or her first right to purchase as provided in Section 40-10-191.

The purchaser at private sale shall be entitled to interest on the amount paid at a rate agreed to by Page 11 SB260 Engrossed the tax collecting official, not to exceed 12 percent.

(2) This section does not apply to an attorney Page 13 SB260 INTRODUCED representing a party in the purchase of a tax lien sold for delinquent taxes or an employee of the attorney.

(b) A violation of this section shall be is a Class C misdemeanor and the sureties on his or her official bond shall be liable for a penalty not to exceed five hundred dollars ($500) and to be fixed by the circuit judge with jurisdiction Page 12 SB260 Engrossed in the county.