SB189 Alabama 2019 Session

Summary

Primary Sponsor

Linda Coleman-MadisonSenator

Democrat

Session

Regular Session 2019

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 189 would raise the mortgage recording tax and dedicate part of the revenue to the Alabama Housing Trust Fund.

What This Bill Does

It increases the fee charged to record mortgages, deeds of trust, contracts of conditional sale, and similar security instruments. It changes how the tax is calculated for different kinds of indebtedness, including initial indebtedness and open-end revolving debt, with a per-$100 rate around 20 cents. It designates a portion of the tax revenue to the Alabama Housing Trust Fund to support housing programs, while the remaining funds go to county treasuries and the State General Fund, and it includes enforcement and reporting rules to ensure proper collection. The act would take effect on October 1, 2019.

Who It Affects

• Mortgage lenders and owners of secured debt: would pay higher recording taxes when securing real or personal property and may face new calculation rules for open-end or revolving indebtedness.
• Property owners and borrowers: would encounter higher recording costs for mortgages and related financing instruments.
• Probates judges and county governments: responsible for collecting, certifying payment of the tax, and distributing funds to counties and the state, with added duties and penalties for noncompliance.
• Alabama Housing Trust Fund: would receive a dedicated portion of the mortgage tax revenue to fund housing-related programs.

Key Provisions

• Amends Section 40-22-2 to increase the recording privilege tax for mortgages, deeds of trust, contracts of conditional sale, and similar instruments; sets new rate structures for initial indebtedness and for open-end indebtedness, with a per-$100 amount around 20 cents under specified methods.
• For open-end indebtedness, provides two options: tax calculated on initial indebtedness or on maximum principal indebtedness, with the tax not exceeding 20 cents per $100 of maximum indebtedness; clarifies calculation methodology when indebtedness changes over time or spans multiple counties.
• Allocates a portion of the tax revenue to the Alabama Housing Trust Fund (2 cents per instrument, among other distribution rules) to support housing-related programs; remaining funds are distributed to county treasuries and the State General Fund; probate judges receive a set compensation for collecting and certifying taxes.
• Adds enforcement mechanisms including Department of Revenue audits, bonds to secure tax payments, penalties for willful underreporting, and conditions for recording instruments that have unpaid taxes; includes provisions for multi-county property values and reporting requirements to the Department of Revenue.
• Effective date stated as October 1, 2019.

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