SB242 Alabama 2018 Session

Summary

Primary Sponsor

Linda Coleman-MadisonSenator

Democrat

Session

Regular Session 2018

Title

Mortgages, fee increase for recording of mortgages, deeds of trust, distribution of proceeds to Alabama Housing Trust Fund, Sec. 40-22-2 am'd.

Summary

SB 242 would raise recording fees for mortgages and similar instruments and dedicate mortgage tax revenue to the Alabama Housing Trust Fund.

What This Bill Does

It increases the recording fee for mortgages, deeds of trust, contracts of conditional sale, and similar instruments. It changes the mortgage record tax rate and how the revenue is divided to provide funding for the Alabama Housing Trust Fund. It sets how the tax revenue is shared among probate judges, the Housing Trust Fund, county treasuries, and the State Treasury, and adds reporting, bonding, and auditing requirements related to indebtedness. It becomes effective on the first day of the third month after the bill is enacted.

Who It Affects

• Property buyers and lenders who record mortgages and related instruments, who would pay higher recording fees and mortgage taxes.
• Alabama Housing Trust Fund, which would receive dedicated revenue from the mortgage record tax (25% of taxes collected).
• Probate judges and county treasuries, which would receive a share of the recorded taxes (5% to probate judges and 33% to county treasuries, with distributions proportioned across counties as needed).
• Banks, savings and loan associations, insurance companies, and other financial institutions that may use the reporting/bonding provisions and could be subject to audits and penalties for underreporting.

Key Provisions

• Amends Section 40-22-2 to increase the fee for recording certain mortgages, deeds of trust, contracts of conditional sale, or other instruments securing debts on real or personal property.
• Modifies the mortgage record tax rate and its distribution to dedicate revenue to the Alabama Housing Trust Fund, with 5% to probate judges, 25% to the Housing Trust Fund, 33% to county treasuries, and 37% to the State Treasury.
• Establishes procedures for reporting indebtedness, including bond requirements and potential audits by the State Banking Department for organizations that certify indebtedness; imposes penalties for willful underreporting.
• Specifies that the act becomes effective on the first day of the third month after passage and governor 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