SB6INTRODUCED
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U94MDG-1
By Senator Coleman-Madison
RFD: County and Municipal Government
First Read: 07-Mar-23
PFD: 30-Jan-23
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5 U94MDG-1 11/28/2022 SLU (L) cr 2022-5079
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SYNOPSIS:
Under existing law, the acquisition of real
property by local land bank authorities is subject to
certain restrictions on the procedure, geographic
location, and costs.
This bill would provide a shortened redemption
period for a tax delinquent property that is not
acquired by an open market bidder at a tax sale
auction, would authorize a local government or a local
land bank authority to purchase property at public
auction by tendering the minimum bid in the absence of
open market bids, and would limit the geographical
boundaries of local land bank authority acquisitions.
This bill would also provide for the creation of
multijurisdictional local land bank authorities by
intergovernmental agreements and a property tax
exemption for a property owned by a local land bank
authority.
This bill would further provide for the
authorization of local governments to allocate a
portion of local property tax revenues to local land
bank authorities, a local land bank authority to convey
properties to state and local governments for
floodplain management and storm water drainage, and for
the Governor to create a local land bank authority by
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executive order following a declaration of a state of
emergency.
A BILL
TO BE ENTITLED
AN ACT
Relating to land bank authorities; to amend Sections
24-9-4, 24-9-6, 24-9-10, 40-1-3, 40-10-1, 40-10-18, 40-10-29,
40-10-120, 40-10-184, and to add Sections 29-4-11 and 29-4-12
to the Code of Alabama 1975; to provide for the creation of
multijurisdictional local land bank authorities; further
authorize the acquisition of tax delinquent property and tax
liens by local land bank authorities; further provide for the
exemption of land bank authority property from taxes and fees;
provide for the allocation of a portion of the ad valorem
taxes on property conveyed by a land bank authority to the
authority; further provide for the conveyance of land bank
authority property; and authorize the Governor to create a
local land bank authority in the event of a state of
emergency.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Sections 24-9-4, 24-9-6, and 24-9-10, Code
of Alabama 1975, are amended to read as follows:
"§24-9-4
When used in the chapter, the following words shall
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have the following meanings:
(1) AGREEMENT. The intergovernmental cooperation
agreement entered into between an authority and a local
authority by the parties pursuant to this chapter.
(2) AUTHORITY. The Alabama Land Bank Authority.
(3) BOARD. The Alabama Land Bank Authority Board.
(4) LOCAL LAND BANK AUTHORITY. A local land bank
authority created by a county or municipality as provided in
Section 24-9-10.
(5) PROPERTY. Real property, including any improvements
thereon.
(6) TAX-DELINQUENT PROPERTY. Any property on which the
taxes levied and assessed by any party remain in whole or in
part unpaid on the date due and payable."
"§24-9-6
(a) The authority, at such times as it deems to be
appropriate, may submit a written request to the Land
Commissioner of the Alabama Department of Revenue for the
transfer of the state's interest in certain properties to the
authority. Upon receipt of such request, the Land Commissioner
shall issue a tax deed conveying the state's interest in the
property to the authority. The authority shall not be required
to pay the amount deemed to have been bid to cover delinquent
taxes or any other amount in order to obtain the tax deed.
(b)(1) Delinquent property that may be transferred by
the Land Commissioner to the authority shall be limited to
parcels that have been bid in for the state pursuant to
Chapter 10 of Title 40 for at least three years and the
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state's interest in real property acquired pursuant to Chapter
29 of Title 40 for delinquent taxes administered by the state
and held for at least three years. The three-year period shall
not apply to properties encumbered by one or more housing or
building code liens transmitted to the tax collecting official
in accordance with Title 11.
(2) The Land Commissioner or his or her agents or
assistants may adopt rules necessary to transfer such
properties to the authority.
(c) The authority shall administer properties acquired
by it as follows:
(1) All property acquired by the authority shall be
inventoried and the inventory shall be maintained as a public
record.
(2) The authority shall have the power to manage,
maintain, protect, rent, lease, repair, insure, alter, sell,
trade, exchange, or otherwise dispose of any property acquired
pursuant to subsection (b)(1), on terms and conditions
determined in the sole discretion of the authority.
(d) Nothing contained in Act 2013-249 shall be
construed to grant any power of eminent domain to the
authority or any local authority."
"§24-9-10
(a) If the number of tax delinquent properties in a
municipality exceeds 100, then the governing body of a
municipality may adopt a resolution declaring that it is wise,
expedient, and necessary that a local land bank authority be
formed by the municipality by the filing for record of a
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certificate of incorporation in accordance with the provisions
of subsection (c)(d).
(b) If the number of tax delinquent properties in a
municipality exceeds 100, then the governing body of a county
may adopt a resolution declaring that it is wise, expedient,
and necessary that a local land bank authority be formed by
the county by the filing for record of a certificate of
incorporation in accordance with the provisions of subsection
(c)(d).
(c) A county and a municipality located within that
county may create a single land bank authority by an
intergovernmental agreement, so long as both the county and
the municipality each meet the criteria of subsections (a) and
(b). The intergovernmental agreement shall comply with all
provisions of subsections (d) and (e).
(c)(d) Upon the adoption of the authorizing resolution,
the municipality or county, as the case may be, shall proceed
to incorporate the local land bank authority by filing for
record in the office of the judge of probate of the county a
certificate of incorporation which shall comply in form and
substance with the requirements of this section and which
shall be in the form and executed in the manner herein
provided. The certificate of incorporation of the local land
bank authority shall state all of the following:
(1) The name of the local unit of government forming
the local land bank authority.
(2) The name of the local land bank authority.
(3) The size of the initial governing body of the local
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land bank authority, which shall be composed of an odd number
of members, but not less than five.
(4) The qualifications, method of selection, and terms
of office of the initial board members.
(5) A method for the adoption of bylaws by the
governing body of the local land bank authority.
(6) A method for the distribution of proceeds from the
activities of the local land bank authority.
(7) A method for the dissolution of the local land bank
authority.
(8) Any other matters considered advisable by the local
unit of government, consistent with Act 2013-249.
(d)(e) Following incorporation, a local authority may
enter into an intergovernmental agreement with the authority
providing for the transfer to the local authority of any
property held by the authority which is located within the
corporate limits of the municipality or the boundary of the
county which created the land bank.
(e)(f) A local land bank authority shall have all of
the powers of the authority as set forth in this chapter. In
addition, a local land bank authority shall have the following
powers:
(1) Without the approval of a local unit of government
in which property held by the local land bank authority is
located, control, hold, manage, maintain, operate, repair,
lease as lessor, secure, prevent the waste or deterioration
of, demolish, and take all other actions necessary to preserve
the value of the property it holds or owns. AnA local land
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bank authority may take or perform the following actions with
respect to property held or owned by the local land bank
authority:
a. Grant or acquire a license, easement, or option with
respect to property as the authority determines is reasonably
necessary to achieve the purposes of this chapter.
b. Fix, charge, and collect rents, fees, and charges
for use of property under the control of the local land bank
authority or for services provided by the authority.
c. Pay any tax or special assessment due on property
acquired or owned by the local land bank authority.
d. Take any action, provide any notice, or institute
any proceeding required to clear or quiet title to property
held by the local land bank authority in order to establish
ownership by and vest title to property in the authority,
including, but not limited to, a quiet title and foreclosure
action pursuant to Section 24-9-8.
e. Remediate environmental contamination on any
property held by the local land bank authority.
(2) Enter into an intergovernmental agreement with a
municipality or county , or another local land bank authority,
providing for one or more of the following:
a. The conveyance to the authority of tax delinquent
property held by the municipality or county for title
clearance, including, but not limited to, a quiet title and
foreclosure action under Section 24-9-8.
b. The acquisition and title clearance of property by
the authority of property to be conveyed by the local land
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bank authority to the municipality or county or another entity
pursuant to the agreement between the authority and the
municipality or county.
c. The performance of operational and administrative
services to be provided to another local land bank authority.
(3) Acquire real property at a sale conducted in
accordance with Section 40-10-18 by tendering a bid equal to
the minimum amount specified in the decree of sale and the
costs and expenses subsequently accruing, which shall be
accepted by the judge of probate and the local land bank
authority shall be the purchaser at the sale. The tender of
the minimum bid in accordance with this subsection shall be
for cash, with a credit for any and all components of the
minimum bid already due and payable to the governmental entity
that created the local land bank authority. After 90 days from
the date of sale, the judge of probate shall execute and
deliver to the governmental entity a deed to each lot or
parcel of real estate sold to the local land bank authority.
The deed shall convey to, and vest in, the grantee all right,
title, interest, and estate of any and all persons having an
interest in the property as of the date of the sale.
(4) Acquire a tax lien at an auction conducted in
accordance with Section 40-10-184 by tendering a cash bid at
an interest rate of zero percent, which shall be accepted as
the successful bid. The bid shall be tendered for cash subject
to a credit for any and all amounts already due and payable to
the governmental entity that created the local land bank
authority.
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(f)(g) A local unit of government and any agency or
department of such local unit of government may do one or more
of the following:
(1) Anything necessary or convenient to aid a local
land bank authority in fulfilling its purposes under Act
2013-249.
(2) Lend, grant, transfer, appropriate, or contribute
funds to a local land bank authority in furtherance of its
purposes.
(3) Lend, grant, transfer, or convey funds to a local
land bank authority that are received from the federal
government or this state or from any nongovernmental entity in
aid of the purposes of Act 2013-249.
(g)(h)A local land bank authority created by a county
or a municipality may acquire real property only within the
geographical boundaries of the county or municipality, and
only in those portions of the county or municipality In the
event a county creates a local authority, the local authority
may acquire real property that has been tax delinquent for
three or more years only in those portions of the county
located outside of the geographical boundaries of any other
local land bank authority created by any municipality located
partially or entirely within the county. The Land Bank
Authority may acquire real property that has been tax
delinquent for three or more years only in those portions of
the state located outside of the geographical boundaries of
any local authority created by any municipality or county .
(h)(i) Any local land bank authority formed by a
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municipality or county pursuant to this section shall continue
to exist in accordance with its articles of incorporation and
this section in the event that the number of tax delinquent
properties in the local jurisdiction forming the authority
subsequently decreases to 100 or less.
(i)(j) Any local land bank authority formed by a
municipality or county pursuant to this section shall permit
the Alabama Department of Examiners of Public Accounts to
perform an audit upon request by the department. The
department shall assess the cost of the audit against the
local land bank authority.
(k) As public property used for public purposes, the
real property of a local land bank authority, including, but
not limited to, real property held by a local land bank
authority pursuant to a long-term lease contract with
community land trusts, and its income are exempt from all
license fees, recording fees, and all other taxes imposed by
the state or by any of its political subdivisions.
(l) Up to 75 percent of the ad valorem taxes collected
on real property, except any state or school district ad
valorem tax, conveyed by a local land bank authority shall be
remitted to the local land bank authority. The specific
percentage of the taxes to be remitted shall be set forth in
the local law, ordinance, resolution, or intergovernmental
contract of the local land bank authority. The allocation of
property tax revenues shall commence with the first taxable
year following the date of conveyance and shall continue for a
period of five consecutive tax years. The funds shall be
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remitted to the local land bank authority in accordance with
the administrative procedures established by the tax
commissioner or tax collecting official of the county in which
the local land bank authority is located. The allocation of
property tax revenues shall not occur if the taxes have been
previously allocated to a tax allocation district, or
allocated to secure a debt of the local government, unless the
tax allocation district or local government enters into an
agreement with the local land bank authority for the
remittance of the funds to the local land bank authority. "
Section 2. Sections 24-9-11 and 24-9-12 are added to
the Code of Alabama 1975, to read as follows:
§24-9-11
(a) A local land bank authority may convey ownership
of, or interest in, real property to a state or local
governmental entity for purposes of floodplain management or
storm water drainage in the event of all of the following:
(1) Floodplain management or storm water retention or
drainage is the highest and best use of the real property.
(2) As a result of housing and building code
restrictions, floodplain elevations, and other local, state,
or federal law or public and private agreements, conditions,
and limitations, the real property is no longer suitable for
development or redevelopment.
(b)(1) A local land bank authority may convey ownership
of, or interest in, real property under this section by grant,
deed lease, or other form of conveyance, and may include
additional limitations, restrictions, and conditions to be
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determined by the local land bank authority.
(2) Consideration for the conveyance may be any of the
following not otherwise prohibited by law:
a. A nominal monetary payment.
b. A contractual obligation in favor of the party to
which the real property is being conveyed.
c. An exchange of real property.
d. Other consideration determined by the local land
bank authority and the party to whom the real property is to
be conveyed.
§24-9-12
(a) Upon declaring a state of emergency caused by a
natural disaster that causes widespread damage to, and
destruction of, real property and improvements and dislocation
of residents, the Governor may create a local land bank
authority in accordance with this section.
(1) The Governor may issue an executive order providing
for the immediate creation of a local land bank authority of
and for local governments of the geographic areas subject to
the declaration of the state of emergency.
(2) The executive order shall provide for incorporation
and certification of the local land bank authority as required
under this chapter.
(b) Any local land bank authority created pursuant to
this section shall have all powers of a local land bank
authority created pursuant to Section 24-9-10.
(c) Upon the necessary and appropriate action of the
local governments having jurisdiction over the geographic
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areas subject to the declaration of the state of emergency, a
local land bank authority created pursuant to this section may
be converted into a local land bank authority created pursuant
to Section 24-9-10, at which time, the local land bank
authority shall be the successor in interest and at law to the
local authority created pursuant to this section.
(d) In the event that a local land bank authority
created pursuant to this section is not converted pursuant to
subsection (c), 12 months following the date of the Governor's
executive order, the local land bank authority created by the
executive order shall be dissolved in accordance with the
provisions of the Governor's executive order.
Section 3. Sections 40-1-3, 40-10-1, 40-10-18,
40-10-29, 40-10-120, and 40-10-184, Code of Alabama 1975, are
amended to read as follows:
"§40-1-3
From and after October 1 of each year, when property
becomes assessable the state shall have a lien upon each and
every piece or parcel of property owned by any taxpayer for
the payment of all taxes which may be assessed against him or
her and upon each piece and parcel of property real or
personal assessed to owner unknown, which lien shall continue
until such taxes are paid, and the county shall have a like
lien thereon for the payment of the taxes which may be
assessed by it; and, if such property is within the limits of
a municipal corporation, such municipal corporation shall have
a like lien thereon for the payment of the taxes which may be
assessed by it. These liens shall be superior to all other
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liens and shall exist in the order named, and each of such
liens may be enforced and foreclosed by sale for taxes as
provided in this title, or as other liens upon property are
enforced, except as otherwise provided by lawslaw. These taxes
and liens shall include any and all liens transmitted to the
tax collecting official by counties and municipal corporations
in accordance with Sections 11-40-35, 11-53B-16, and
11-67-66."
"§40-10-1
(a) The probate court of each county may order the sale
of lands therein for the payment of taxes assessed on the
lands, or against the owners of the lands, when the tax
collector shall report to the court that he or she or the
holder of a tax lien issued pursuant to Acts 1995, No. 95-408
was unable to collect the taxes assessed against the land, or
any mineral, timber or water right or special right, or
easement therein, or the owner thereof, without a sale of the
land.
(b) For purposes of any enforcement proceedings under
this chapter, the taxes due shall include any and all liens of
a municipality for housing and building code violations and
enforcement actions which liens are transmitted to the tax
collecting official in accordance with Title 11. "
"§40-10-18
(a) If no person shall bid for any real estate offered
at such sale an amount sufficient to pay the sum greater than
the minnimum bid specified in the decree of sale, and the
costs and expenses subsequently accruing, and no minimum bid
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is tendered by a local government or a local land bank
authority, the judge of probate shall bid in such real estate
for the state at a price not exceeding the sum specified in
such decree and such subsequently accruing cost and
expensesthe minimum bid. In no event shall the judge of
probate bid in for the state less than the entire amount of
real estate included in any assessment.
(b) If no person shall bid for any real estate offered
at such sale, an amount greater than the minimum bid specified
in the degree of sale, and the costs and expenses subsequently
accruing, a local government or local land bank authority in
which the real estate is located may tender a bid for the
minimum amount which bid shall be accepted by the judge of
probate, and the successful bidder shall be the purchaser at
the sale. The tender of the minimum bid in accordance with
this subsection shall be for cash, with a credit for any and
all amount already due and owing the local governmental entity
submitting the bid. "
"§40-10-29
(a) After the expiration of three years from the date
of the sale of any real estate for taxes, the judge of probate
then in office must execute and deliver to the purchaser,
other than the state, or person to whom the certificate of
purchase has been assigned, upon the return of the
certificate, proof that all ad valorem taxes have been paid,
and payment of a fee of five dollars ($5) to the judge of
probate, a deed to each lot or parcel of real estate sold to
the purchaser and remaining unredeemed, including therein, if
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desired by the purchaser, any number of parcels, or lots
purchased by him or her at such sale; and such deed shall
convey to and vest in the grantee all the right, title,
interest, and estate of the person whose duty it was to pay
the taxes on such real estate and the lien and claim of the
state and county thereto, but it shall not convey the right,
title, or interest of any reversioner or remainderman therein.
(b) After the expiration of 90 days from the sale for
the minimum bid to a local government or local land bank
authority, the judge of probate then in office shall execute
and deliver to the entity a deed to the real estate sold to
the entity and the deed shall convey to and vest in the
grantee all of the right, title, and interest of any and all
persons having an interest in the property as of the date of
the sale."
"§40-10-120
(a) Except as otherwise provided in this subsection,
real Real estate which hereafter may be sold for taxes and
purchased by the state may be redeemed at any time before the
title passes out of the state or, if purchased by any other
purchaser, may be redeemed at any time within three years from
the date of the sale by the owner, his or her heirs, or
personal representatives, or by any mortgagee or purchaser of
such lands, or any part thereof, or by any person having an
interest therein, or in any part thereof, legal or equitable,
in severalty or as tenant in common, including a judgment
creditor or other creditor having a lien thereon, or on any
part thereof; and an infant or insane person entitled to
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redeem at any time before the expiration of three years from
the sale may redeem at any time within one year after the
removal of the disability; and such redemption may be of any
part of the lands so sold, which includes the whole of the
interest of the redemptioner. If the mortgage or other
instrument creating a lien under which a party seeks to redeem
is duly recorded at the time of the tax sale, the party shall,
in addition to the time herein specified, have the right to
redeem the real estate sold, or any portion thereof covered by
his or her mortgage or lien, at any time within one year from
the date of written notice from the purchaser of his or her
purchase of the lands at tax sale served upon such party, and
notice served upon either the original mortgagees or
lienholders or their transferee of record, or their heirs,
personal representatives, or assigns shall be sufficient
notice.
(1) When any real property is sold for taxes and has
also been sold in one or more prior sales for taxes without
redemption from such prior tax sales, the three-year period
for redemption shall be measured from the date of the earliest
sale of the real property for taxes.
(2) When any real property is sold for taxes and the
minimum bid specified in the decree of sale, and the costs and
expenses subsequently accruing includes amounts attributable
to one or more housing and building code liens or nuisance
abatement liens and the property is not lawfully occupied as a
residence, the period for redemption shall be one year from
the date of the sale.
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(3) When any real property is sold to a local
government or local land bank in accordance with Section
40-10-18 for the minimum bid specified in the decree of sale
and the costs and expenses subsequently accruing, the period
for redemption shall be one year from the date of the sale.
(b) If any real property has been sold for taxes and is
subject to redemption from the sale as set forth in subsection
(a) and has also been sold in one or more subsequent sales for
taxes, then any party entitled to redeem such sale for taxes
may redeem such sale if the redemptioner simultaneously
redeems his or her sale and all subsequent sales. In the event
of a redemption of successive sales, the redemption amount
shall be ascertained by applying the provisions of Sections
40-10-121 and 40-10-122. Redemption amounts computed pursuant
to Section 40-10-121 shall be paid as stated therein.
Redemption amounts computed pursuant to Section 40-10-122
shall be paid as stated therein if the purchaser had the right
to redeem pursuant to subsection (a) or was the owner of the
then current tax certificate or tax title. Otherwise, those
funds shall be disposed of as set forth in Section 40-10-28
and paid to such purchaser or his or her assignee only as set
forth in Section 40-10-28, with the time limits for such
application computed utilizing the sale date when the
purchaser's interest was sold for taxes."
"§40-10-184
(a) On the day and time designated for a tax lien
auction, the tax collecting official shall proceed to auction
all tax liens described in the tax lien auction list compiled
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as provided in Section 40-10-183, except those for which the
taxes, penalties, interest, fees, and costs thereon have been
paid. Any tax lien unsold after a tax lien auction shall be
retained by the county for future auction or sale as provided
in this article.
(b) A tax lien shall be sold at auction pursuant to
this article to the person who pays all taxes, 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 fee, and who, in
addition, bids the lowest interest rate on the amount required
to be paid to redeem the property from the sale. The beginning
interest rate bid shall not exceed a rate of 12 percent and
additional bids may be made at a rate less than the
immediately preceding bid. If the interest rate bid for the
property reaches 0.00zero percent and a bid is submitted by
the local government or local land bank authority in which the
property is located, the bid shall be accepted as the
successful bid. The tender of the bid shall be for cash, with
a credit for any and all amounts already due and payable to
the local governmental entity submitting the bid. If no bid is
submitted and more than one bidder remains, the tax collecting
official shall draw lots to determine the winning bidder for
the property.
(c) The sale of a tax lien does not extinguish any deed
restriction, deed covenant, or easement on or appurtenant to
the parcel. A tax lien offered for auction or sale shall be
identified by a uniform parcel number and a legal
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description."
Section 4. This act shall become effective immediately
following its passage and approval by the Governor, or its
otherwise becoming law.
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