HB159 Alabama 2017 Session

Summary

Primary Sponsor

Patricia Todd

Democrat

Session

Regular Session 2017

Title

Mortgages, recording fee increased, distrib. to the Alabama Housing Trust Fund and the Alabama Homebuyer's Initiative, Sec. 40-22-2 am'd.

Summary

HB159 would raise the mortgage-recording fee and dedicate the extra revenue to Alabama housing programs, with specific distribution to state and local entities.

What This Bill Does

It amends the mortgage recording tax (Section 40-22-2) to increase the fee on recording mortgages and similar instruments. The rate per $100 would rise to 0.30 for initial indebtedness (and applicable open-end indebtedness). The extra revenue would be distributed to the Alabama Housing Trust Fund (23%), the Alabama Homebuyer’s Initiative (23%), the State Treasury (35%), the county treasurer (16%), and the probate judge (3%), with proportional adjustments for multi-county properties. The bill also adds reporting, bonding, auditing, and enforcement provisions for the tax, including penalties for under-reporting and for judges who fail to certify taxes, and it becomes effective three months after passage.

Who It Affects

• Homebuyers and mortgage lenders would face higher upfront recording costs for mortgages and related documents.
• Probate judges, county treasurers, banks/financial institutions, and housing programs (Alabama Housing Trust Fund and Alabama Homebuyer’s Initiative) would gain new duties, reporting requirements, auditing responsibilities, and funding flows tied to the increased revenue.

Key Provisions

• Increase the mortgage recording privilege tax per $100 from 0.15 to 0.30 for initial indebtedness, and apply a similar rate for open-end indebtedness as applicable under the instrument.
• Distribute the increased revenue as follows: 23% to the Alabama Housing Trust Fund, 23% to the Alabama Homebuyer’s Initiative, 35% to the State Treasury, 16% to the county treasurer, and 3% to the judge of probate for collecting and certifying the instrument; allocations are proportional if property spans multiple counties.
• Add administrative and enforcement provisions, including allowing banks/financial institutions to certify indebtedness, Department of Revenue oversight, bonding requirements, annual reporting, unannounced audits, and penalties for under-reporting (three times the tax due).
• Provide special handling for properties located outside Alabama or across multiple counties, including valuation-based allocation and refund procedures to determine the correct tax for the portion in Alabama.
• Effective date: the act becomes effective on the first day of the third month following passage and approval.

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

Subjects

Mortgages