SB 47

Under existing law, the Land Commissioner, with the approval of the Governor, may sell lands that have been sold for taxes and bought in for the State of Alabama and not redeemed for five years

This bill would require the Land Commissioner to contract with a qualified auction company to sell at public auction lands sold for taxes and bought in for the State of Alabama which have not been redeemed at public auction within five years from the date the land was sold

This bill would exempt property located in certain municipalities which have formed local land bank authorities from the auction process

This bill would also exempt property located in Class 2 or Class 4 municipalities which have not formed local land bank authorities from the auction process

To amend Section 40-10-134, Code of Alabama 1975, relating to the sale of land sold for taxes and bought in for the State of Alabama; to provide further for the sale of land that is not redeemed; to exempt property located in certain municipalities which have formed local land bank authorities from the auction process; and to exempt property located in Class 2 or Class 4 municipalities which have not formed local land bank authorities from the auction process.

Section 1

Section 40-10-134 of the Code of Alabama 1975, is amended to read as follows:

§40-10-134.

(a) Subject to subsections (b) to (g), inclusive, when When lands have been sold for taxes and bought in for the State of Alabama and have not been redeemed or sold by the state and a period of five years has elapsed from the date of sale to the state, the Land Commissioner, with the approval of the Governor, may sell the same at private sale to any purchaser for cash at the best price obtainable, irrespective of the amount of taxes due, after giving notice as provided for in Section 40-10-133; provided that the holder of a tax lien certificate related to such land shall be given the option to purchase such land for an amount equal to the best price offered by any purchaser at a private sale.

(b) Commencing January 1, 2020, the sale of lands under this section, excluding the sale of lands located in municipalities which have formed local land bank authorities or Class 2 or Class 4 municipalities which have not formed local land bank authorities, pursuant to Section 24-9-10 on or before January 1, 2017, shall be by public auction pursuant to subsections (c) to (g), inclusive.

(c) By December 31, 2019, and no later than at least every fifth year thereafter, the Land Commissioner shall contract with a qualified auction company to sell at public auction the state's tax lien interest on any lands sold for nonpayment of taxes and bought in for the State of Alabama which have not been redeemed by the property owner or sold by the State of Alabama within the five years from the date the land was initially sold for nonpayment of taxes and bought in for the State of Alabama or upon which there is not an active price quote. The term active price quote shall mean the amount provided to an applicant which is necessary to purchase the state's tax lien interest on land bid in by the state for nonpayment of taxes and includes accrued ad valorem taxes and interest, fees, and costs associated with the sales of the land. The quote shall remain active for 20 calendar days from the date of the original quote. The contract shall provide that the fee to the auction company shall be a contingency fee with all expenses borne by the company and shall be deducted before the distribution of the net proceeds. The contingency fee shall not exceed 15 percent of the total amount of each successful bid at auction and shall be added as a premium to the total amount of each successful bid at auction. These expenses shall include, but not be limited to, the costs of advertising as provided in subsection (e).

(d) When the Land Commissioner contracts with a qualified auction company for the purposes set forth in subsection (c), he or she shall notify the owners, or persons having interest in such lands, that the state's tax lien interest on their properties will be sold at auction and the date upon which this will occur. This shall be achieved by means of publication on the website of the Department of Revenue for a period of not less than 30 days before the auction. The publication shall include the date and time of the auction and a listing of properties that will be auctioned. Due to certain factors including, but not limited to, sales, redemptions, cancellations, open price quotes, or the addition of newly eligible properties occurring between the time of initial publication and the time of auction, the list may be updated as necessary throughout the publication period. Updating the list for these reasons shall not require the 30-day publication period to restart, nor does it invalidate the actions of the Land Commissioner in complying with this section.

(e) The auction company, as part of its contracted responsibilities, shall advertise the auction. In its advertisement, the auction company shall make a disclaiming statement that purchasers will not receive clear title to any land sold at the auction, and further, that they are bidding on the tax lien interest on lands held by the state for nonpayment of taxes upon which additional liens may exist.

(f) Notwithstanding any other laws to the contrary, the Department of Revenue shall distribute the funds derived from this section as follows:

(1) For properties in which the current assessment includes state, county, and municipal millages, the total amount received shall be divided into three equal shares. One share shall be disbursed to the State General Fund, one share disbursed to the county general fund, and one share disbursed to the municipality.

(2) For properties in which the current assessment does not include a municipal millage and only includes state and county millages, the total amount received shall be divided into two equal shares. One share shall be disbursed to the State General Fund and one share disbursed to the county general fund.

(g) The Department of Revenue shall promulgate and issue any rules necessary to implement and administer this section. The rules shall be adopted pursuant to the Alabama Administrative Procedure Act.

(h) Any provision of subsection (a) to the contrary notwithstanding, subsections (b) to (g), inclusive, do not apply to property located in municipalities which have formed a local land bank authority pursuant to Section 24-9-10 on or before January 1, 2017, and to property located in Class 2 or Class 4 municipalities which have not formed a local land bank authority pursuant to Section 24-9-10 on or before January 1, 2017."

Section 2

This act shall not apply to any lands held by the state located in a jurisdiction which has adopted an expedited quiet title procedure authorized by law.

Section 3

This act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming law.