HB311INTRODUCED
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HB311
GFQHCC6-1
By Representative Wilcox
RFD: Economic Development and Tourism
First Read: 20-Feb-25
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5 GFQHCC6-1 02/17/2025 TRP (L)bm 2025-671
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First Read: 20-Feb-25
SYNOPSIS:
Under existing law, an improvement district is
authorized to levy an assessment on property within the
district to fund a public infrastructure improvement
project. If a property owner fails to pay the
assessment, the board of the improvement district may
commence an action to foreclose on the property.
This bill would provide for county revenue
commissioners collecting reasonable compensation for
preparing an assessment roll and facilitating
collection.
This bill would treat the failure to pay an
assessment by an improvement district in the same
manner as a tax lien to be collected and enforced by
the county revenue commissioner.
This bill would also repeal the provision
authorizing an improvement district to bring a judicial
proceeding to foreclose on a property when the owner
fails to pay the assessment levied by an improvement
district.
A BILL
TO BE ENTITLED
AN ACT
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AN ACT
Relating to Alabama Improvement Districts; to amend
Section 11-99A-14, Code of Alabama 1975, to provide further
for enforcing and collecting assessments levied by improvement
districts; to authorize county revenue commissioners to
collect reasonable compensation; and to repeal Section
11-99A-21, Code of Alabama 1975, authorizing foreclosures for
failure to pay assessments in certain circumstances.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Section 11-99A-14, Code of Alabama 1975, is
amended to read as follows:
"ยง11-99A-14
(a) Each assessment shall constitute a lien on the
property assessed in the amount of the assessment with respect
to that parcel of land, as provided in the final assessment ,
forecloseable as provided in this chapter . The assessment
shall be enforced with the same priority, procedures, and
remedies as state, county, and municipal taxes, including tax
lien sales and foreclosure proceedings, and shall be levied,
collected, and enforced in the same manner as ad valorem
taxes. The assessment shall be payable either within 30 days
after the final assessment or over such term as may be
determined by the board. If the assessment is to be paid over
a term, the assessment shall accrue interest and be payable
periodically, monthly, quarterly, semiannually, annually, or
as otherwise provided by the board, with interest at a rate as
may be considered reasonable by the board. In particular, the
assessment may bear interest at the same rate or yield borne
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assessment may bear interest at the same rate or yield borne
by the bonds issued to obtain funds to acquire, construct, or
install the improvements, but interest may be at a higher rate
in the discretion of the board. Once the amount of a final
assessment allocated with respect to a tract is paid in full,
with all interest and penalties and costs of collection, if
any, such tract shall be released from the lien of the
assessment.
(b) The proceedings by which an assessment is levied
may provide for an increased interest rate with respect to any
interest accruing on any payment after the due date thereof.
(c) In its proceedings, the board may specify that
assessments may be prepaid at any time or circumstance. The
board may specify that assessments be prepaid upon the sale of
the tract of land, or a portion thereof, being assessed. If
the obligation to pay is accelerated, the assessment shall
include all principal of the assessment then unpaid, plus
interest until the next date provided for the payment of
principal on any bonds secured by a pledge of the assessments,
unless otherwise provided in the proceedings pursuant to which
the bonds are issued.
(d) Unless otherwise provided in the proceedings of the
board with respect to the assessment, any assessment may be
voluntarily prepaid by the owner of the land assessed. In that
case, the amount prepaid shall be applied first to interest
until the first following date on which principal may be paid
under the bond, and then to principal. However, if provided in
the proceedings of the board with respect to the assessment,
prepayments, whether voluntary or mandatory, the amount
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prepayments, whether voluntary or mandatory, the amount
prepaid may be applied only to interest accrued to the date of
the prepayment, and then to principal.
(e) Alternatively, the proceedings of the board with
respect to the assessment may provide that prepayment shall be
applied first to accrued interest, and then to the difference
between: (1)(i) interest that will accrue from the date of
prepayment until the next principal payment on the bonds ,; and
(2)(ii) the rate of interest at which the principal paid may
be invested by the board to earn interest from the date of
prepayment until the principal payment date, with any
remaining balance to be applied to principal.
(f) The proceedings of the board with respect to the
assessment may provide that any mandatory prepayment may be
waived by the board on the terms as may be provided in a
proceeding.
(g) If bonds are issued with respect to the final
assessment, the assessments shall either :(1)(i) total the
principal amount of the bonds to be issued with respect to the
assessments; or (2)(ii) total such principal amount multiplied
by a coverage ratio (e.g., 1.2 to 1) providing debt service
coverage for the bonds in the ratio desired by the board.
(h) The respective county revenue commissioner shall
charge a reasonable fee for the collection of an improvement
district assessment. "
Section 2. Section 11-99A-21, Code of Alabama 1975,
authorizing the board of an improvement district to bring a
cause of action to foreclose on a property whose owner fails
to pay an assessment for costs of improvements, is repealed.
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to pay an assessment for costs of improvements, is repealed.
Section 3. This act shall become effective on October
1, 2025.
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