Alabama 2024 Regular Session

Alabama Senate Bill SB233 Compare Versions

Only one version of the bill is available at this time.

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1	1	SB233INTRODUCED
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3	3	SB233
4	4	ID716WZ-1
5	5	By Senators Coleman-Madison, Smitherman, Elliott
6	6	RFD: County and Municipal Government
7	7	First Read: 19-Mar-24
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12	12	5 ID716WZ-1 03/06/2024 TEW (F)TEW 2024-1069
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14	14	First Read: 19-Mar-24
15	15	SYNOPSIS:
16	16	Under existing law, a fee is required to record
17	17	certain mortgages, deeds of trust, contracts of
18	18	conditional sale, or other instruments of like
19	19	character which is given to secure the payment of any
20	20	debt which conveys any real or personal property.
21	21	This bill would increase the fee for recording
22	22	of certain mortgages, deeds of trust, contracts of
23	23	conditional sale, or other instruments of like
24	24	character which is given to secure the payment of any
25	25	debt which conveys any real or personal property.
26	26	This bill would modify the rate and distribution
27	27	of the mortgage record tax in order to provide a
28	28	dedicated revenue for the Alabama Housing Trust Fund.
29	29	This bill would also make nonsubstantive,
30	30	technical revisions to update the existing code
31	31	language to current style.
32	32	A BILL
33	33	TO BE ENTITLED
34	34	AN ACT
35	35	To amend Section 40-22-2, Code of Alabama 1975; to
36	36	increase the fee for recording of certain mortgages, deeds of
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66	66	increase the fee for recording of certain mortgages, deeds of
67	67	trust, contracts of conditional sale, or other instruments of
68	68	like character which is given to secure the payment of any
69	69	debt which conveys any real or personal property; and to
70	70	modify the rate and distribution of the mortgage record tax in
71	71	order to provide a dedicated revenue for the Alabama Housing
72	72	Trust Fund.
73	73	BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
74	74	Section 1. Section 40-22-2, Code of Alabama 1975, is
75	75	amended to read as follows:
76	76	"§40-22-2
77	77	No mortgage, deed of trust, contract of conditional
78	78	sale, or other instrument of like character which is given to
79	79	secure the payment of any debt which conveys any real or
80	80	personal property situated within this state or any interest
81	81	therein or any security agreement or financing statement
82	82	provided for by the Uniform Commercial Code, except a security
83	83	agreement or a financing statement relating solely to security
84	84	interests in accounts, contract rights, or general
85	85	intangibles, as thesesuch terms are defined in the Uniform
86	86	Commercial Code, and except for the re-recordation of
87	87	corrected mortgages, deeds, or instruments executed for the
88	88	purpose of perfecting the title to real or personal property,
89	89	specifically, but not limited to, corrections of maturity
90	90	dates thereof, shall be received for record or for filing in
91	91	the office of any probate judge of this state unless the
92	92	following privilege or license taxes shall have been paid upon
93	93	such instrument before the same shall be received for record
94	94	or for filing:
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124	124	or for filing:
125	125	(1)a. Upon all such instruments which are executed to
126	126	secure or to evidence the securing of an initial indebtedness
127	127	which shall not exceed one hundred dollars ( $100), there shall
128	128	be paid the sum of $.15thirty cents ($.30) , and upon all
129	129	instruments which shall be executed to secure or to evidence
130	130	the securing of an initial indebtedness of more than one
131	131	hundred dollars ( $100), there shall be paid the sum of
132	132	$.15thirty cents ($.30) for each one hundred dollars ( $100) of
133	133	such initial indebtedness or fraction thereof.
134	134	b. Upon all such instruments which are executed to
135	135	secure or to evidence the securing of an open end or revolving
136	136	indebtedness with any interest in property, at the option of
137	137	the person offering the instrument for record or for filing,
138	138	(i) there shall be paid the sum of $.15thirty cents ($.30) for
139	139	each one hundred dollars ( $100) of such initial indebtedness
140	140	or fraction thereof and the procedures set forth in paragraphs
141	141	a, b, and ca., b.,and c. of subdivision (2) of this section
142	142	shall be applicable; or, in lieu thereof, (ii) there shall be
143	143	paid the sum of $.15thirty cents ($.30) for each one hundred
144	144	dollars ($100) of maximum principal indebtedness, or fraction
145	145	thereof, to be secured by such instrument at any one time as
146	146	stated in the instrument or any amendment thereto. In any
147	147	event, the privilege or license tax to be paid upon such
148	148	instruments securing or evidencing the securing of open end or
149	149	revolving indebtedness with any interest in property shall not
150	150	exceed the amount of $.15thirty cents ($.30) for each one
151	151	hundred dollars ( $100) of maximum principal indebtedness, or
152	152	fraction thereof, to be secured by such instrument at any one
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182	182	fraction thereof, to be secured by such instrument at any one
183	183	time as stated in the instrument or any amendment thereto,
184	184	irrespective of the cumulative amount advanced from time to
185	185	time thereunder.
186	186	(2)a. If subdivision (1)b.(i) applies and any part of
187	187	the indebtedness which the mortgagor or debtor in any
188	188	instrument conveying any real property situated within this
189	189	state, or any interest therein, other than fixtures under the
190	190	Uniform Commercial Code, is authorized to incur under the
191	191	terms of the instrument has not been or will not be presently
192	192	incurred at the time thesuch instrument is offered for record,
193	193	the tax shall be paid on the amount of indebtedness presently
194	194	incurred, and the Department of Revenue, upon the petition of
195	195	the owner of any such instrument or upon the petition of the
196	196	agent or attorney of thesuch owner, shall ascertain to its own
197	197	satisfaction the amount then taxable and the amount to be
198	198	incurred thereafter and determine the amount upon which the
199	199	tax shall be paid at the time thesuch instrument is offered
200	200	and shall endorse its findings on thesuch instrument. Upon the
201	201	presentation of thesuch instrument with thesuch endorsement
202	202	thereon, the probate judge of any county in which the
203	203	instrument is offered, upon the payment of the tax upon the
204	204	amount so ascertained by the Department of Revenue and the
205	205	recording fees of the probate judge, shall accept the same for
206	206	record. The Department of Revenue shall also require the owner
207	207	of thesuch instrument to execute a bond in an amount
208	208	sufficient to secure to the state the privilege tax to become
209	209	due and payable under this section upon the amount of the
210	210	indebtedness to be incurred thereafter, such bond to be
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240	240	indebtedness to be incurred thereafter, such bond to be
241	241	approved by the Department of Revenue and payable to the State
242	242	of Alabama and conditioned that the owner of thesuch
243	243	instrument will promptly report to thesaid Department of
244	244	Revenue and to the probate judge of the county where thesaid
245	245	instrument is first filed for record, whenever thesuch owner
246	246	or his successor in interest incurs any additional
247	247	indebtedness thereunder, and the amount so incurred; and that
248	248	the said owner of thesuch instrument will pay or cause to be
249	249	paid to the probate judge of the county in which said
250	250	instrument is first filed the privilege or license tax
251	251	required under this section upon the accrual of any additional
252	252	indebtedness, and the said owner of such instrument will
253	253	report to the said probate judge and the Department of Revenue
254	254	during the month of September of each year the amount of all
255	255	indebtedness and all bonds, debentures, notes or other forms
256	256	of indebtedness incurred or certified and delivered under said
257	257	instrument to such date, and the amount so certified and
258	258	delivered during the preceding 12 months, and the aggregate of
259	259	all such evidence of indebtedness certified and delivered
260	260	under such instrument prior to such year. The bond executed to
261	261	secure payment of the tax herein required shall cover a term
262	262	of five years; and, after the expiration of thesaid term of
263	263	five years, the owner of the instrument offered for record
264	264	shall execute such further bond as may be required by the
265	265	Department of Revenue covering the succeeding term of five
266	266	years, and thereafter every term of five years, in the same
267	267	manner so long as any of the indebtedness authorized to be
268	268	incurred by thesuch instrument has not been incurred with like
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298	298	incurred by thesuch instrument has not been incurred with like
299	299	condition and in thesuch sum as the said department may
300	300	prescribe.
301	301	b. Notwithstanding the provisions of paragraph a. of
302	302	this subdivision , any bank, savings and loan association,
303	303	insurance company, or other financial institution organized
304	304	and established under the laws of the State of Alabama or the
305	305	United States which is the owner of thesuch instrument, in
306	306	lieu of the foregoing procedures, may certify the amount of
307	307	indebtedness presently incurred, and the probate judge of any
308	308	county in which the instrument is offered, upon payment of the
309	309	tax upon the amount so certified and the recording fees of the
310	310	probate judge, shall accept the instrument for record. During
311	311	the month of September of each year, any such bank, savings
312	312	and loan association, insurance company, or other financial
313	313	institution which has recorded such instruments as described
314	314	hereinabove shall report to the appropriate probate judge the
315	315	amount of additional indebtedness incurred under the
316	316	instrument and pay any tax required upon the additional
317	317	indebtedness.
318	318	c. Each probate judge will forward to the State Banking
319	319	Department by the end of October a statement showing the
320	320	amounts certified to him or her by each forenamed
321	321	organization. The State Banking Department will then have the
322	322	authority to make unannounced audits on any organization
323	323	electing to use this system of reporting indebtedness. Any
324	324	organization which is found to have willfully certified less
325	325	than the true amount it should have certified shall be
326	326	required to pay a fine equal to three times the amount of tax
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356	356	required to pay a fine equal to three times the amount of tax
357	357	due on the amount of indebtedness not certified to the probate
358	358	judge. This fine shall be paid into the State General Fund of
359	359	Alabama. In addition, any organization so fined must pay an
360	360	auditing fee in accordance with established Banking Department
361	361	audit fees into the funds of the State Banking Department.
362	362	(3) When any deed is filed for record which recites
363	363	that part of the purchase money is unpaid, such deed to the
364	364	extent of such unpaid balance shall be held and treated as a
365	365	mortgage, and the mortgage tax shall be collected by the
366	366	probate judge in addition to the tax for recording the
367	367	instrument as a deed before recording the same, unless the
368	368	balance of purchase money shall be secured by mortgage or deed
369	369	of trust which has already been filed for record, and the tax
370	370	thereon paid, and the fact of such prior payment shall be
371	371	endorsed on the deed. When any such deed is recorded and the
372	372	tax thereon is paid, and thereafter a mortgage securing the
373	373	debt is filed for record, the same shall be admitted to record
374	374	without the payment of the mortgage tax and the fact of
375	375	thesuch prior payment shall be endorsed on the deed.
376	376	(4) The privilege taxes herein imposed shall not be
377	377	required on or for the filing of any such instrument,
378	378	providing additional or substitute security for any
379	379	indebtedness secured by, or the securing of which is evidenced
380	380	by, an instrument previously filed, upon the filing of which
381	381	the taxes provided by law have been paid or which was filed at
382	382	a time when no such privilege taxes were required by law;
383	383	provided, that the secured indebtedness remains unchanged in
384	384	amount and in time of maturity.
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414	414	amount and in time of maturity.
415	415	(5) Upon the filing for record of such instrument and
416	416	upon the payment of the tax thereon, the probate judge or his
417	417	or her clerk shall certify on the instrument the fact that the
418	418	said tax has been paid, and when so certified by the probate
419	419	judge or his or her clerk, thesuch instrument shall be
420	420	admitted to record in any county wherein any of the property
421	421	mentioned in the instrument is situated without the payment of
422	422	any further tax thereon, except the fee to the probate judge
423	423	for recording thesuch instrument, and thesuch certificate of
424	424	the probate judge shall be recorded by such probate judge when
425	425	such instrument is recorded. Upon the filing for record of any
426	426	instrument which has been exempted by law from the payment of
427	427	the tax provided for in this section, the probate judge shall
428	428	certify thereon that no tax has been paid and shall stamp in
429	429	bold letters on the face of thesaid instrument "No Tax
430	430	Collected," and the certificate shall be recorded with and as
431	431	a part of such instrument, and thereafter thesuch instrument
432	432	shall be received for record in any county in this state
433	433	without the payment of any further tax thereon, when submitted
434	434	by a tax-exempt institution, but if submitted by or
435	435	transferred to an institution or person not exempt from the
436	436	payment of the tax levied under this section, the probate
437	437	judge shall collect the tax levied by this section upon the
438	438	then unpaid balance of the secured debt together with the fee
439	439	of the probate judge for recording such instrument before it
440	440	will be admitted to record. The tax herein provided for shall
441	441	be paid upon all contracts for the sale of real or personal
442	442	property, whether the same are in the nature of a conditional
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472	472	property, whether the same are in the nature of a conditional
473	473	sale or a bond for title, and no such contract shall be
474	474	received for record until such tax shall have been paid.
475	475	(6) When the time for the payment of the indebtedness
476	476	secured by, or the securing of which is evidenced by, any such
477	477	instrument is extended or renewed, and the extension or
478	478	renewal contract is offered for filing or for record, the tax
479	479	required in this section shall be paid on the amount of
480	480	indebtedness so extended or renewed; and the same shall be
481	481	governed in all respects by the provisions of this article. No
482	482	state, county, or municipal ad valorem tax shall be payable on
483	483	any such instrument upon which the tax prescribed by this
484	484	section shall have been paid, on the debt secured or evidenced
485	485	thereby or on the security agreement evidenced thereby.
486	486	(7) Of the taxes collected by the probate judge under
487	487	this section there shall be paid to the county treasurer of
488	488	the county in which such taxes are collected one-third of the
489	489	amount collected, to be accounted for by the judge of probate,
490	490	and the remaining two-thirds of the amount collected to the
491	491	State Treasury. The probate judge shall receive five percent
492	492	of the amount collected as compensation for services in
493	493	collecting the money and certifying the instrument, the five
494	494	percent to be retained by the judge of probate out of the
495	495	money collected under this section; but when the property
496	496	described in the instrument is situated within different
497	497	counties within this state, then the probate judge who
498	498	collects the taxes shall pay over to the county treasurer of
499	499	each of the different counties in which the property is
500	500	situated an amount of the taxes that would be in proportion to
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530	530	situated an amount of the taxes that would be in proportion to
531	531	the value of the property therein as compared to the whole
532	532	property within this state described in the
533	533	instrument.Revenues from the mortgage record tax shall be
534	534	divided between four recipients: The judges of probate, the
535	535	Alabama Housing Trust Fund, county treasuries, and the State
536	536	Treasury. Five percent of all mortgage record taxes collected
537	537	shall be distributed to the judges of probate, 25 percent of
538	538	all mortgage record taxes collected shall be distributed to
539	539	the Alabama Housing Trust Fund, 33 percent of all mortgage
540	540	record taxes collected shall be distributed to the county
541	541	treasurer in the county in which the tax is collected, and 37
542	542	percent of all mortgage record taxes collected shall be
543	543	distributed to the State Treasury. If the property described
544	544	in the instrument is situated within different counties within
545	545	this state, then the judge of probate who collects the taxes
546	546	shall pay over to the county treasurer of each of the
547	547	different counties in which the property is situated an amount
548	548	of the taxes that would be in proportion to the value of the
549	549	property therein as compared to the whole property within this
550	550	state described in the instrument.
551	551	(8) If any part of the property embraced or described
552	552	in any instrument which is required under this section to pay
553	553	a record privilege tax is located without this state, the
554	554	indebtedness upon which the tax shall be paid for the
555	555	privilege of recording such instrument shall be that
556	556	proportion of the indebtedness secured by the instrument which
557	557	the value of the property located in this state bears to the
558	558	whole property described in the instrument. The Department of
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588	588	whole property described in the instrument. The Department of
589	589	Revenue may ascertain the value of the whole property and of
590	590	that part of it which is located within this state for the
591	591	purpose of ascertaining the amount of the indebtedness upon
592	592	which the tax shall be paid, and the value of that part of the
593	593	property located within this state and the amount of the
594	594	indebtedness upon which such tax shall be paid shall be
595	595	ascertained in the following manner: First, the owner of any
596	596	such instrument or his or her agent or attorney may petition
597	597	the Department of Revenue to ascertain the value of the whole
598	598	property and of that part of which is located within this
599	599	state and the amount of the indebtedness upon which such tax
600	600	shall be paid, and the Department of Revenue, after hearing
601	601	such evidence as may be offered or as may be before it, shall
602	602	fix and determine the value of that part of the property
603	603	located within this state and the amount of the indebtedness
604	604	upon which the tax shall be paid and shall endorse its
605	605	findings on such instrument, and upon the presentation of the
606	606	instrument, with such endorsements to the probate judge of the
607	607	county in which any part of the property is located, such
608	608	instrument shall be accepted for record upon the payment of
609	609	the tax upon the amount of such indebtedness as so ascertained
610	610	by the Department of Revenue and of the recording fees of the
611	611	probate judge; or, second, the owner of any such instrument or
612	612	his or her agent or attorney may have such instrument recorded
613	613	by paying to the probate judge of the county in which the
614	614	instrument is offered for record the privilege tax on the
615	615	entire amount of the indebtedness secured by such instrument,
616	616	and may thereupon present a petition to the Department of
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646	646	and may thereupon present a petition to the Department of
647	647	Revenue within 30 days after such instrument is recorded, and
648	648	it shall be the duty of the Department of Revenue to ascertain
649	649	the value of the whole property and of that part of it located
650	650	within this state, and to fix and determine the amount of the
651	651	indebtedness upon which the tax shall be paid, and the
652	652	department shall thereupon ascertain such valuation and fix
653	653	and determine such indebtedness and shall order the probate
654	654	judge to refund the excess of privilege tax collected , and
655	655	the probate judge shall comply with such order; and the tax
656	656	paid upon the entire amount of such indebtedness shall be held
657	657	by the probate judge until the Department of Revenue
658	658	determines the amount of the indebtedness upon which such tax
659	659	shall be paid.
660	660	(9) Any probate judge who shall file for record or
661	661	shall receive any such instrument for record or for filing,
662	662	without collecting the recording or registration tax provided
663	663	for the filing, recording, or registration of such instrument,
664	664	or who shall fail to certify the fact that such tax has been
665	665	paid before filing such instrument shall be guilty of a
666	666	misdemeanor and, upon conviction, shall be fined not less than
667	667	ten dollars ($10) nor more than one thousand dollars ( $1,000).
668	668	(10) Every petition filed with the Department of
669	669	Revenue to ascertain the amount of the mortgage tax due to be
670	670	paid under this section shall, when the property conveyed in
671	671	the instrument offered for record is located in more than one
672	672	county of the state, show the value of the property conveyed
673	673	in each county in which the instrument is to be recorded.
674	674	(11) Any probate judge who fails to keep the abstract
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678	678	312
679	679	313
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681	681	315
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685	685	319
686	686	320
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688	688	322
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702	702	336 SB233 INTRODUCED
703	703	Page 13
704	704	(11) Any probate judge who fails to keep the abstract
705	705	of mortgages or other instruments intended to secure the
706	706	payment of moniesmoneys which are filed in his or her office
707	707	for filing or for record, as he or she is required by law to
708	708	keep, shall be guilty of a misdemeanor and, upon conviction,
709	709	shall be fined not less than ten dollars ($10) nor more than
710	710	five hundred dollars ( $500)."
711	711	Section 2. This act shall become effective on October
712	712	1, 2024.
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714	714	338
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716	716	340
717	717	341
718	718	342
719	719	343
720	720	344