SB261 Alabama 2018 Session

Summary

Primary Sponsor

Gerald O. Dial

Republican

Session

Regular Session 2018

Title

Taxation, sale of tax liens, tax liens authorized to be sold at auction to the bidder with the lowest interest rate, Secs. 40-10-199, 40-10-200 added; Secs. 40-10-180 to 40-10-198, inclusive, am'd.

Summary

SB 261 overhauls Alabama's tax lien sales by requiring auctions to award liens to the lowest interest rate bidder and expanding the rules for issuing, redeeming, and foreclosing tax liens.

What This Bill Does

The bill authorizes counties to conduct tax lien auctions and to award each lien to the bidder offering the lowest interest rate (with an initial bid cap around 12%). It creates detailed procedures for notices, certificates, redemption, transfer of lien certificates, and foreclosure of the right to redeem, including record-keeping and distribution of proceeds. It also allows private sale of unsold liens after auctions (for no less than the total due) and adds penalties if a public official has an interest in a lien, making such sales void and subject to penalties. It establishes new sections governing unsold liens and outlines the effective date of the act.

Who It Affects

• County tax collecting officials and counties, who must run auctions, prepare lien lists, issue certificates, maintain records, and distribute funds according to the new rules.
• Property owners and taxpayers, who receive notices of auctions, have redemption rights and must pay the amounts specified to redeem a lien.
• Tax lien purchasers and assignees (investors), who obtain tax lien certificates, can transfer certificates, may redeem subsequent delinquencies, and may foreclose if liens are not redeemed within the statutory window.
• Mortgagees and other lien holders, who may be involved in redemption or in notices related to foreclosures.

Key Provisions

• Requires tax liens to be sold at auction to the bidder with the lowest interest rate, with a starting bid rate not exceeding 12% per year, and specifies the process for conducting the auction and advertising the sale.
• Defines the purchase price for a tax lien as the delinquent taxes plus accrued interest, penalties, fees, and costs; requires payment in cash or immediately available funds and credits this amount to the tax collector for commissions where applicable.
• Mandates the issuance of a tax lien certificate to purchasers, including a 12% annual interest rate on the amount due, and allows transfer and assignment of certificates along with record-keeping and notices to owners.
• Outlines redemption procedures: who may redeem, how much must be paid (total due plus interest and current taxes), and adds statutory redemption fees and interest; provides a foreclose-the-right-to-redeem process with court action, notices, and deed issuance if the lien is not redeemed within the allowed period (3 to 10 years).
• Creates private sale of unsold liens after auctions (Section 40-10-199), allowing private sale at no less than total due with interest up to 12%, and requires unsold liens to remain in future auctions until sold.
• Imposes penalties if a public official has a direct or indirect interest in a tax lien sale, making the sale void and subject to penalties up to $500.
• Adds Sections 40-10-199 and 40-10-200 to authorize private sales of unsold liens, ensure inclusion of unsold liens in future auctions, and set penalties for conflicts of interest.

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

Subjects

Taxation