HB78 Alabama 2016 Session

Summary

Primary Sponsor

Chris PringleRepresentative

Republican

Session

Regular Session 2016

Title

Cooperatives, formation of registration as nonprofit corp. required, governing documents, assessments, liens, homestead exemption, Cooperative Housing Corporation Act of 2016, Secs. 35-8C-1 to 35-8C-11, inclusive, 40-9-19.2 added

Summary

HB78 would create a new Alabama Cooperative Housing Corporation Act to regulate cooperatives, require new cooperatives to organize as nonprofit corporations, file governing documents, and allow liens, transfers, a per-unit homestead exemption, and a right of first refusal.

What This Bill Does

It establishes the Alabama Cooperative Housing Corporation Act of 2016 (Chapter 8C) with defined terms for cooperatives. It requires cooperative housing corporations formed after January 1, 2017 to organize under the Alabama Nonprofit Corporation Act and file key documents with the Secretary of State, who would maintain a public searchable database of filings. It sets rules for governing documents, share transfers (including a right of first refusal), and liens for unpaid assessments. It also adds a homestead exemption option for cooperative property and outlines how tax relief would be allocated among unit owners, with annual updates for eligibility.

Who It Affects

• Cooperatives formed after January 1, 2017 must organize as nonprofit corporations and file the master declaration and other required documents with the Secretary of State, becoming subject to nonprofit corporate duties and public filing requirements.
• Unit owners and occupants in cooperatives may be affected by liens for unpaid assessments, transfer and ownership rules (including a right of first refusal), and potential eligibility for a cooperative-based homestead exemption with per-unit tax relief and annual eligibility updates.

Key Provisions

• Creates Chapter 8C, the Alabama Cooperative Housing Corporation Act of 2016, adding definitions for terms like cooperative, master declaration, unit, common elements, and master register.
• Requires cooperatives formed after 1/1/2017 to organize under the Alabama Nonprofit Corporation Act and file the master declaration and related documents with the Secretary of State; Secretary must maintain a public electronic database searchable by cooperative name.
• Outlines required master declaration contents (legal description, dedication, cooperative name, deed, bylaws, master register, plans, financing liens, restrictions, and amendment methods) and authorizes bylaws to govern elections, voting, ballots, representation, redemption, eligibility, net savings, and right of first refusal.
• Mandates the master register include unit identifiers, ownership percentages, and names/addresses of owners and occupants.
• Allows the association to place liens for unpaid assessments with priority over most other liens, and requires lien recording and notice procedures, plus enforcement options.
• Permits transfer of cooperative shares only with proper transfer documents and cooperative board consent, including required disclosures and statements of consideration.
• Authorizes a right of first refusal by the association in certain transfer situations.
• Allows exemption of cooperative property from this chapter by a deed of revocation agreed by all unit lessees/owners and lien holders, with possible future re-subjection.
• Adds Section 40-9-19.2 to permit a homestead exemption for cooperative property, requiring annual owner lists, calculating the exemption per occupied unit, and apportioning the tax relief per unit, with handling of supplemental assessments for ineligibility.
• Effective date set for January 1, 2017.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Property, Real and Personal