Oklahoma 2023 Regular Session

Oklahoma House Bill HB2038 Compare Versions

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3-ENGR. H. B. NO. 2038 Page 1 1
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28-ENGROSSED HOUSE
29-BILL NO. 2038 By: Nichols and Hefner of the
30-House
29+HOUSE OF REPRESENTATIVES - FLOOR VERSION
3130
32- and
31+STATE OF OKLAHOMA
3332
34- Matthews of the Senate
33+1st Session of the 59th Legislature (2023)
34+
35+HOUSE BILL 2038 By: Nichols
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41+AS INTRODUCED
3942
4043 An Act relating to cities and towns; enacting the
4144 Municipal Code Lien Enforcement Act of 202 3; defining
4245 terms; providing applicability to all municipalities;
4346 providing that the provisions do not apply to owner -
4447 occupied property; providing that any fees,
4548 penalties, and abatement costs imposed against
4649 property for violations of a municipality 's housing
4750 and building codes may be enforced in rem as a lien;
4851 providing that municipalities may proceed with
4952 judicial in rem foreclosures of municipal code liens
5053 by an enactment of an ordinance or resolution of the
5154 governing authority of the municipality in whic h the
5255 real property is located; providing requirements for
5356 a municipal ordinance or resolution authorizing liens
5457 and foreclosures pursuant to this act; providing this
5558 act does not constitute an action for personal
5659 liability for the municipal code liens aga inst the
5760 owner or owners of the real prop erty; providing that
5861 the rights and remedies set forth in this act are
5962 available solely to the governmental entities
6063 authorized by law to enforce municipal ordinances;
6164 providing that a municipality that seeks to enf orce a
6265 municipal code lien through the sa le of real property
6366 shall utilize the judicial in rem proceedings of this
6467 act as the sole remedy; providing that enforcement
6568 proceedings may be initiated only by the
6669 municipality; providing timeframe for filing a
6770 petition for judicial in rem foreclosure fo r a
6871 municipal code lien; providing requirements for
6972 filing a petition for judicial in rem foreclosure
7073 when the property is subject to unpaid taxes;
7174 providing notice requirements needed prior to a
72-judicial in rem foreclosure; providing for
73-codification; and providing an effective date.
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102+judicial in rem foreclosure; providing for
103+codification; and providing an effective date.
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103108 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
104109 SECTION 1. NEW LAW A new section of law to be codified
105110 in the Oklahoma Statutes as Section 22-140 of Title 11, unless there
106111 is created a duplication in numbering, reads as follows:
107112 This act shall be known and may be cited as the "Municipal Code
108113 Lien Enforcement Act of 202 3".
109114 SECTION 2. NEW LAW A new section of law to be codifi ed
110115 in the Oklahoma Statutes as Section 22 -141 of Title 11, unless there
111116 is created a duplication in numbering, reads as follows:
112117 As used in this act:
113118 1. "Code enforcement director" means an employee of a
114119 municipality who is tasked by the municipal governi ng body with the
115120 enforcement of state law or local ordinances related to the
116121 condition of real property within the jurisdiction of the
117122 municipality;
118123 2. "Interested party" means:
119124 a. the person who last appe ars as owner of the real
120125 property in the county re cords,
121126 b. the current mortgagee of record of the property or
122127 assignee of record of the mortgagee,
123-c. the current holder of a beneficial interest in a deed
124-of trust recorded against the real property,
125-d. a tax certificate holder, or
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155+c. the current holder of a beneficial interest in a deed
156+of trust recorded against the real property,
157+d. a tax certificate holder, or
152158 e. any party having an i nterest in the real property, or
153159 in any part thereof, legal or equitable, in severalty
154160 or as tenant in common, whose identity and address are
155161 reasonably ascertainable from the records of the
156162 municipality or records maintained in the county
157163 records or as revealed by a full title search,
158164 consisting of fifty (50) years or more.
159165 An interested party shall not include the holder of the benefit
160166 of an easement which burdens the real property, the holder of the
161167 benefit or burden of a real covenant which burdens the real
162168 property, or the holder of the benef it of a utility easement which
163169 burdens the real property;
164170 3. "Minimum bid price" means the price that equals the
165171 redemption amount;
166172 4. "Municipal code lien" means any lien that has been levied
167173 against real propert y by a municipality that is the result of the
168174 nonpayment of any fine, penalty, abatement cost , or enforcement cost
169175 incurred by a municipality related to the enforcement of state or
170176 local housing and build ing codes. Such lien shall include only
171177 those liens which arise out of a failure to comply w ith any law of
172-the State of Oklahoma, or from the failure to comply with a
173-municipality's ordinances or resolut ions.
174-A municipal code lien shall not include any li en that has
175-previously been certified to the tax col lector of the county for
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205+the State of Oklahoma, or from the failure to comply with a
206+municipality's ordinances or resolut ions.
207+A municipal code lien shall not include any li en that has
208+previously been certified to the tax col lector of the county for
202209 inclusion on the property tax bill associated with the real
203210 property;
204211 5. "Municipal code lien payoff " means the principal amou nt of a
205212 municipal code lien, interest accrued at the rate of seven and one-
206213 half percent (7.5%) per annum from the date the municipal code lien
207214 was filed in the office of the county clerk, any fees or costs
208215 incurred in the collection of such a lien under th is act including,
209216 without limitations, the cost of t itle examinations and publication
210217 of notices, and any other penalties allowable under either the laws
211218 of the State of Oklahoma or under an ordinance or resolution enacted
212219 by the municipality;
213220 6. "Owner-occupied" means real property that is lawfully
214221 occupied as a principal residence that is any of the follo wing:
215222 a. a homestead as described in Sect ion 2888 of Title 68
216223 of the Oklahoma Statutes,
217224 b. exempt from ad valorem taxation under Sections 2904
218225 through 2911 of Title 68 of the Oklahoma Statutes, and
219226 c. eligible for the designations listed in subparagraph a
220227 or b or this paragraph, but which has not yet been
221-granted such designation and which is lawfully
222-occupied by the family of a deceased individual;
223-7. "Redemption amount" means the sum of:
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255+granted such designation and which is lawfully
256+occupied by the family of a deceased individual;
257+7. "Redemption amount" means the sum of:
250258 a. the full amount of the municipal code lien payoff for
251259 each municipal code lien on which the municipality is
252260 seeking to foreclose under this act, and
253261 b. any tax payoff that may be applicable to the property
254262 on which the municipality is seeking to foreclose
255263 under this act;
256264 8. "Taxes" means those taxes assessed aga inst real property by
257265 either the State of Oklahoma, the county in which the real property
258266 is situated, or the municipality that are delinquent as of the date
259267 a proceeding under this act is commenced or at any time before final
260268 resolution of the same, and shall a lso include any taxes assessed
261269 against real property that are unpaid from any previous year and any
262270 amounts required for redemption. As provided in Se ction 3103 of
263271 Title 68 of the Oklahoma Statutes, a lien for taxes shall be
264272 superior to all other liens, i ncluding municipal code liens;
265273 9. "Tax certificate holder" means any of the following:
266274 a. a tax sale purchaser who holds a certificate of
267275 purchase,
268276 b. the state, where it has accepted and recorded a
269277 certificate of purchase obtained at a tax sale,
270-c. any party to which a certificate of purchase obtained
271-at a tax sale has been assigned, or
272-d. the purchaser or assignee of a tax lien certificate;
273-and
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305+c. any party to which a certificate of purchase obtained
306+at a tax sale has been assigned, or
307+d. the purchaser or assignee of a tax lien certificate;
308+and
300309 10. "Tax payoff" means all amounts necessary to satisfy any
301310 claims for delinquent taxes assessed against the real property on
302311 which the municipality i s seeking foreclosure under this act. Those
303312 amounts shall include:
304313 a. if the taxes associated with the prope rty are
305314 delinquent, but the property has not yet bee n sold for
306315 taxes, the full amount of delinquent taxes, costs,
307316 fees, and charges due to the coun ty tax collector,
308317 b. if the property has been sold for taxes to either the
309318 state or to a party other than the state, those
310319 amounts required for redemption, excep t for when a
311320 municipality is the prevailing bidder, th e tax payoff
312321 amount shall be the lesser o f these amounts, and
313322 c. if a tax lien has been sold by a county, the amount
314323 required for redemption.
315324 SECTION 3. NEW LAW A new section of law to be codified
316325 in the Oklahoma Statutes as Section 22-142 of Title 11, unless there
317326 is created a duplication in numbering, reads as follows:
318327 A. The provisions of this act shall apply to any municipal
319328 governing body that adopts the provisions of this a ct, and are
320-applicable to the collection of municipal code liens as to real
321-property, other than owner-occupied property, in the municipality.
322-B. The provisions of this act shall not apply to owner -occupied
323-property.
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356+applicable to the collection of municipal code liens as to real
357+property, other than owner-occupied property, in the municipality.
358+B. The provisions of this act shall not apply to owner -occupied
359+property.
350360 SECTION 4. NEW LAW A new section of law to be codified
351361 in the Oklahoma Statutes as Section 22-143 of Title 11, unless there
352362 is created a duplication in numbering, reads as follows:
353363 Notwithstanding any law to the contrary, any fees, penalties,
354364 and abatement costs imposed ag ainst property other than owner -
355365 occupied real property for violations of a municipality 's housing
356366 and building codes adopted pursuant to the statutes of the State of
357367 Oklahoma may be enforced in rem as a lie n in accordance with this
358368 act.
359369 Every municipal code lien, as defined in this act, shall be
360370 superior to all other liens, except those liens for taxes described
361371 or referenced in Section 3103 of Title 68 of the Oklahoma Statutes.
362372 SECTION 5. NEW LAW A new section of law to be codified
363373 in the Oklahoma Statutes as Section 22 -144 of Title 11, unless there
364374 is created a duplicatio n in numbering, reads as follows:
365375 A. Any municipality to which this act applies may proceed with
366376 judicial in rem foreclosures of municipal code liens in accordance
367377 with the provisions of this act by enactment of an ordinance or
368378 resolution of the governing authority of the municipality in which
369379 the real property is located , which ordinance or resolution shall be
370-sufficient authority for use of this act by the municipa lity to
371-enforce its municipal code liens.
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407+sufficient authority for use of this act by the municipa lity to
408+enforce its municipal code liens.
398409 B. The ordinance or resolution of a municipality authorizing
399410 and approving the use of this act shall include all of the
400411 following:
401412 1. The initial effective date for app lication of these
402413 procedures;
403414 2. The explicit exclusion of owner-occupied properties from the
404415 application of the judicial in rem forec losure procedures authorized
405416 in this act;
406417 3. The nature and extent of notices, support services, and
407418 referrals to be provided to the owners and occupants of owner -
408419 occupied properties; and
409420 4. Any other matters the municipality specifies to be addressed
410421 through administrative regulations and policies.
411422 C. Proceedings in accordance with this act are to solely
412423 enforce the municipal code lien for real property subj ect to the
413424 municipal code lien and shall not constitute an action for personal
414425 liability for the municipal code liens against the owner or owners
415426 of the real property.
416427 D. The rights and remedies set forth in this act are available
417428 solely to the government al entities authorized by law to enforce
418429 municipal ordinances and shall not extend to any nongove rnmental
419430 transferee of municipal code liens.
420-E. A municipality that has adopted the provisions of this act
421-and that seeks to enforce a municipal code lien thr ough the sale of
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458+E. A municipality that has adopted the provisions of this act
459+and that seeks to enforce a municipal code lien thr ough the sale of
448460 real property shall utilize the judicia l in rem proceedings of this
449461 act as the sole remedy for the enforcement through the sale of real
450462 property.
451463 F. The enforcement proceedings authorized by this act may be
452464 initiated only by the municipal ity.
453465 SECTION 6. NEW LAW A new se ction of law to be codified
454466 in the Oklahoma Statutes as Section 22-145 of Title 11, unless there
455467 is created a duplication in numbering, reads as follo ws:
456468 A. After a municipal code lien has been recor ded with the
457469 office of the county clerk of the county in which the real property
458470 is located, the code enforcement director may identify those
459471 properties on which to commence a judicial in rem foreclosure in
460472 accordance with this act, except that those properties the code
461473 enforcement director identifies as owner -occupied shall not be
462474 subject to judicial in rem foreclosure under this act. The code
463475 enforcement director shall not file a petition for judicial in rem
464476 foreclosure in accordance with this act for a period of six (6)
465477 months following the date upon which t he municipal code lien is
466478 recorded in the office of the county clerk. A petition for judicial
467479 in rem foreclosure may include any other municipal code lien that
468480 has been filed prior to the date the petition is filed. After
469481 enforcement proceedings have com menced in accordance with this act,
470-the enforcement proceedings may be amended to include any
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509+the enforcement proceedings may be amended to include any
497510 subsequently arising municipal code liens and, if applicable, any
498511 and all taxes as defined in this act.
499512 B. If the property on which the municipality is seeking t o
500513 foreclose under this act is subject to taxes as defined in this act,
501514 then, at least sixty (60) days prior to the filing of the petition,
502515 the code enforcement director shall notify all other taxing agencies
503516 within the jurisdiction of the municipality and the State of
504517 Oklahoma of the code enforce ment director's intention to file a
505518 petition for judicial in rem foreclosure of the real property on
506519 which a municipal code lien exists.
507520 C. In the name of the municipalit y, the code enforcement
508521 director shall, in the appropriate lis pendens record in the office
509522 of the county clerk of the county in which the real property is
510523 located, file a notice of his or her intent t o file a judicial in
511524 rem foreclosure action. The notice shall include a legal
512525 description of the p roperty, street address of the property i f
513526 available, a statement that the property is subject to judicial in
514527 rem foreclosure proceedings under this act, and a statement that
515528 those proceedings may extinguish any le gal interests in the
516529 property.
517530 D. Simultaneous with the filing of his or her notic e of intent
518531 to file a judicial in rem foreclosure action, the code enforcement
519532 director, in the name of the municipa lity, shall file a petition
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546560 with the clerk of the district court for the district in which the
547561 real property is located.
548562 E. The petition shall be filed against the real property
549563 against which the municipal code lien has been recorded and shall
550564 provide all of the following:
551565 1. The identity of the municipality and the name and address of
552566 the code enforcement director;
553567 2. The real property add ress;
554568 3. A description of the real property;
555569 4. The tax identification number of the real property;
556570 5. The municipal code lien which is being foreclosed;
557571 6. The principal amount of the municipal code lien togeth er
558572 with applicable interest and penalties ;
559573 7. The principal amount of any additional municipal code liens
560574 together with applicable interest and penalties in accordance with
561575 this section, if any;
562576 8. The year or years for which the taxes are delinquent, if
563577 any;
564578 9. The principal amount of the tax es together with interest and
565579 penalties, if any;
566580 10. A statement that upon final sale in accordance with this
567581 act and payment of the amount due for taxes, if applicable, an
568582 interested party's rights of redemption s hall be extinguished; and
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595610 11. The names and addresses of all interested parties to whom
596611 copies of the petition are to be sent in accordance with subs ection
597612 F of this section.
598613 F. The municipality shall mail copies of the petition by both
599614 certified mail, return receipt requested, and by regular m ail to all
600615 interested parties whose identities and addresses are reasonably
601616 ascertainable. Copies of the pet ition shall also be mailed by
602617 first-class mail to the real property address to the attention of
603618 the occupants of the property, if any. In addition , notice shall be
604619 physically posted on the real property and shall include the
605620 following statement: "THIS PROPERTY IS SUBJECT TO A JUDICIAL IN REM
606621 FORECLOSURE ACTION AND MAY BE TRANSFERRED TO [NAME OF MUNICIPALITY]
607622 OR ANOTHER PARTY. PERSONS WITH INFORMAT ION REGARDING THE CURRENT
608623 OWNER OF THE PROPERTY ARE REQUESTED TO CONTACT [NAME OF
609624 MUNICIPALITY]."
610625 G. Within thirty (30) days of the filing of the petition, the
611626 municipality shall cause a notice of the filing of the petition to
612627 be published once each week for three (3) consecutive weeks in a
613628 newspaper of general circulation in the county in which the property
614629 is located. Such notice shall specify:
615630 1. The name and address of the code enforcement director;
616631 2. The real property address;
617632 3. A description of the real property;
618633 4. The tax identification number of the real property;
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645661 5. Any applicable municipal code lien which is being foreclosed
646662 upon;
647663 6. The principal amount of any municipal code lien together
648664 with interest and penalties;
649665 7. The applicable period of tax delinquency, if any;
650666 8. The principal amount of taxes, if any;
651667 9. That upon deposit with the appro priate parties by the court
652668 of the tax payoff amo unt, if any, any and all rights of redemption
653669 accorded to interested parties are extinguished ; and
654670 10. The date and place of the filing of the petition .
655671 SECTION 7. This act shall become eff ective November 1, 2023.
656-Passed the House of Representatives the 23rd day of March, 2023.
657672
658-
659-
660-
661- Presiding Officer of the House
662- of Representatives
663-
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666-Passed the Senate the ___ day of __________, 2023.
667-
668-
669-
670-
671- Presiding Officer of the Senate
672-
673-
673+COMMITTEE REPORT BY: COMMITTEE ON COUNTY AND MUNICIPAL GOVERNMENT,
674+dated 02/20/2023 - DO PASS.