SB293 Alabama 2020 Session

In Committee
Session
Regular Session 2020
Title
Land Bank Authority, local land bank authorities, municipalities, and counties, tax delinquent properties, Secs. 24-9-6, 24-9-7, 24-9-8, 24-9-10 am'd.
Description

Under existing law, a tax delinquent property may be transferred by the Land Commissioner of the Alabama Department of Revenue to the Alabama Land Bank Authority if the property has been bid in for the state for at least five years and the state's interest in property acquired for delinquent taxes has been held for at least five years

This bill would provide that a tax delinquent property may be transferred by the Land Commissioner of the Alabama Department of Revenue to the Alabama Land Bank Authority if the property has been bid in for the state for at least three years and the state's interest in property acquired for delinquent taxes has been held for at least three years

This bill would remove the distribution requirements for proceeds derived from the sale of property under the land bank program

Under existing law, a municipality having over 1,000 tax delinquent properties in a municipality, or a county in which a municipality has over 1,000 tax delinquent properties, may form a local land bank authority

This bill would allow municipalities or counties having over 100 delinquent properties within a municipality to form a local land bank authority

This bill would also grant additional powers to local land bank authorities

Relating to tax delinquent properties; to amend Sections 24-9-6, 24-9-7, 24-9-8, and 24-9-10, Code of Alabama 1975; to provide that a tax delinquent property may be transferred by the Land Commissioner of the Alabama Department of Revenue to the Alabama Land Bank Authority if the property has been bid in for the state for at least three years and the state's interest in property acquired for delinquent taxes has been held for at least three years; to remove the distribution requirements for proceeds derived from the sale of property under the land bank program; to allow municipalities or counties having over 100 delinquent properties within a municipality to form a local land bank authority; and to grant additional powers to local land bank authorities.

Subjects
Land Bank Authorities
Note: Bills that change current law do not show the amended text correctly below. Please view Original PDF to see amended sections: SB293 Alabama 2020 Session - Introduced - PDF

Under existing law, a tax delinquent property may be transferred by the Land Commissioner of the Alabama Department of Revenue to the Alabama Land Bank Authority if the property has been bid in for the state for at least five years and the state's interest in property acquired for delinquent taxes has been held for at least five years

This bill would provide that a tax delinquent property may be transferred by the Land Commissioner of the Alabama Department of Revenue to the Alabama Land Bank Authority if the property has been bid in for the state for at least three years and the state's interest in property acquired for delinquent taxes has been held for at least three years

This bill would remove the distribution requirements for proceeds derived from the sale of property under the land bank program

Under existing law, a municipality having over 1,000 tax delinquent properties in a municipality, or a county in which a municipality has over 1,000 tax delinquent properties, may form a local land bank authority

This bill would allow municipalities or counties having over 100 delinquent properties within a municipality to form a local land bank authority

This bill would also grant additional powers to local land bank authorities

Relating to tax delinquent properties; to amend Sections 24-9-6, 24-9-7, 24-9-8, and 24-9-10, Code of Alabama 1975; to provide that a tax delinquent property may be transferred by the Land Commissioner of the Alabama Department of Revenue to the Alabama Land Bank Authority if the property has been bid in for the state for at least three years and the state's interest in property acquired for delinquent taxes has been held for at least three years; to remove the distribution requirements for proceeds derived from the sale of property under the land bank program; to allow municipalities or counties having over 100 delinquent properties within a municipality to form a local land bank authority; and to grant additional powers to local land bank authorities.

Section 1

Sections 24-9-6, 24-9-7, 24-9-8, and 24-9-10, Code of Alabama 1975, are amended to read as follows:

§24-9-6.

(a) The authority, at such times as it deems to be appropriate, may submit a written request to the Land Commissioner of the Alabama Department of Revenue for the transfer of the state's interest in certain properties to the authority. Upon receipt of such request, the Land Commissioner shall issue a tax deed conveying the state's interest in the property to the authority. The authority shall not be required to pay the amount deemed to have been bid to cover delinquent taxes or any other amount in order to obtain the tax deed.

(b) (1) Delinquent property which may be transferred by the Land Commissioner to the authority shall be limited to parcels which have been bid in for the state pursuant to Chapter 10 of Title 40 for at least five three years and the state's interest in real property acquired pursuant to Chapter 29 of Title 40 for delinquent taxes administered by the state and held for at least five three years.

(2) The Land Commissioner or his or her agents or assistants may adopt rules necessary to transfer such properties to the authority.

(c) The authority shall administer properties acquired by it as follows:

(1) All property acquired by the authority shall be inventoried and the inventory shall be maintained as a public record.

(2) The authority shall have the power to manage, maintain, protect, rent, lease, repair, insure, alter, sell, trade, exchange, or otherwise dispose of any property acquired pursuant to subsection (b)(1), on terms and conditions determined in the sole discretion of the authority.

(d) Nothing contained in Act 2013-249 shall be construed to grant any power of eminent domain to the authority or any local authority.

§24-9-7.

(a) The authority shall adopt rules and regulations for the disposition of property in which the authority holds a legal interest, which rules and regulations shall address the conditions set forth in this section.

(b) The authority may manage, maintain, protect, rent, repair, insure, alter, convey, sell, transfer, exchange, lease as lessor, or otherwise dispose of property or rights or interests in property in which the authority holds a legal interest to any public or private person for value determined by the authority on terms and conditions, and in a manner and for an amount of consideration the authority considers proper, fair, and valuable, including for no monetary consideration. The transfer and use of property under this section and the exercise by the authority of powers and duties under Act 2013-249 shall be considered a necessary public purpose and for the benefit of the public.

(c) Before the authority may sell, lease, exchange, trade, or otherwise dispose of any property, it shall either:

(1) Establish a purchase price and conditions for sale purposes.

(2) Establish a price and conditions for rent or lease purposes.

(3) Establish the conditions for trade, exchange, or other disposal of the property.

The conditions made pursuant to this subsection may include a requirement that the transferee must provide a development plan or execute a development agreement with the authority specifying the transferee's commitments regarding the development of the property and the time frame within which the development must occur, the range of permitted uses for the property, and any restrictions on its subsequent resale or transfer.

(d) The disposition of property by the authority shall not be governed by any laws or regulations otherwise applicable to the disposition of property by a state or local agency. Provided, however, that, prior to the disposition of property, the authority shall give notice of its intent to dispose of any property for which notice was not previously advertised by the Commissioner of Revenue, or his or her designee, or by a local official in a manner as prescribed by the authority and shall include in the notice the date, time, and place at which persons objecting to the intended action must appear. If no objection is made within 30 days from the date of the notice, the authority may proceed with the disposition of the property as noticed without a public auction.

(e) No property shall be sold, traded, exchanged, or otherwise disposed of by the authority to any entity for investment purposes only and with no intent to use the property other than to transfer the property at a future date for monetary gain.

(f) The authority shall not sell, trade, exchange, or otherwise dispose of any property held by the authority to any party who had an interest in the property at the time it was tax delinquent or to any party who transferred the party's interest in the property to the authority by sale, trade, exchange, or otherwise, unless the person pays all the taxes, interest, municipal liens, penalties, fees, and any other charges due and owing under Chapter 10 and Chapter 29 of Title 40, including the amount to the Land Commissioner had the property not been transferred to the authority.

(g) At the time that the authority sells or otherwise disposes of property as part of its land bank program, the proceeds of the sale shall be distributed equally as follows:

(1) One-third to the operations of the authority.

(2) One-third to the recovery of authority expenses.

(3) If the property was initially bid in for the state for delinquent ad valorem taxes, one-third to the recipients of ad valorem taxes within the jurisdiction of the tax delinquent property, including the appropriate school districts, in proportion to and to the extent of their respective tax bills and costs. Otherwise, the remaining one-third of the proceeds shall be remitted to the state Comptroller to be distributed to the statutorily designated recipient or recipients of the delinquent tax for which the property was seized.

(h)(g) Except as otherwise provided in this section, the authority shall have full discretion in determining the sale price of the property. No purchaser from the authority shall be responsible for the proper disposition of the proceeds paid to the authority for the purchase of property.

§24-9-8.

(a) The authority may initiate a quiet title action under this section to quiet title to real property held by the authority or interests in tax delinquent property held by the authority by recording undertaking the examination of title as required in subsection (b) and thereafter filing the petition as provided in subsection (c). Following the filing of the petition, the authority shall record with the office of the judge of probate in the county in which the property subject to quiet title action is located a notice of pending quiet title action. The notice shall include the name of the taxpayer whose interest was affected by the tax sale; the name of any other party as revealed by a search and examination of the title to the property who may claim an interest in the property; a legal description of the property; the street address of the property if available; the name, address, and telephone number of the authority; a statement that the property is subject to the quiet title proceedings under Act 2013-249; and a statement that any legal interests in the property may be extinguished by a circuit court order vesting title to the property in the authority; and the date, time, and place of the hearing on the petition to quiet title. Notwithstanding anything in this chapter to the contrary, no quiet title action and nothing in this chapter shall affect any right, title, or interest, whether recorded or unrecorded, in the subject property which was held at the time of the tax sale by any person or entity engaged in the generation, transmission, or distribution of electric power, natural gas, or telecommunications.

(b) After the notice required under subsection (a) has been recorded, the record title to the property shall be examined and an opinion of title rendered by an attorney at law, who is licensed to practice law in this state, or a certificate of title shall be prepared by a title agent or title insurer duly licensed under the Alabama Title Insurance Act as set out in Section 27-25-1, et seq., for the benefit of the authority in order to identify all owners of an interest in the property.

(c) Once the authority has identified the owners of interest in the property, the authority shall file a single petition with the clerk of the circuit court for the judicial district in which the property subject to foreclosure under this section is located listing all property subject to foreclosure by the authority and for which the authority seeks to quiet title. No such action shall be subject to the payment of filing fees. The list of properties shall include a legal description of, a tax parcel identification number for, and the street address of each parcel or property. The petition shall seek a judgment in favor of the authority against each property listed and shall include a date, within 90 days, on which the authority requests a hearing on the petition. The petition shall request that a judgment be entered vesting absolute title in the authority, without right of redemption for each parcel of property listed, as provided in this section. At any time during the pendency of this action, the authority may file a motion to release or dismiss a certain parcel or parcels of land from the petition, which release will not affect the remaining parcels of land subject to the petition.

(d) The case shall be docketed in the circuit court by the clerk, and shall be a preferred case therein. The circuit court in which a petition is filed under subsection (c) shall immediately set the date, time, and place for a hearing on the petition for quiet title. In no event may the clerk schedule the hearing later than 90 days after the filing of a petition by the authority under subsection (c). The court, on the request of a party or as needed to allow completion of service of process on all interested persons, and to allow those persons 30 days after service of process to file an answer or other responsive pleadings to the petition, may extend the 90-day period for good cause shown.

(e) The authority shall serve all persons having record title or interest in or lien upon the property with a notice of the hearing on the petition to quiet title. Such service shall be attempted by personal service and by certified mail; provided if service is perfected by either method, the service will be sufficient to provide service of process upon all persons having record title or interest in or lien upon the property. If the persons entitled to service are located outside the county, they may be served by certified mail.

(f) The notice required under subsection (e) shall include:

(1) The date on which the authority recorded, under subsection (a), the notice of the pending quiet title and foreclosure action.

(2) A statement that a person with a property interest in the property may lose such interest, if any, as a result of the quiet title and foreclosure hearing.

(3) A legal description, tax parcel identification number of the property, and the street address of the property.

(4) The date and time of the hearing on the petition for quiet title and a statement that the judgment of the court may result in title to the property vesting in the authority.

(5) An explanation of any rights of redemption and notice that the judgment of the court may extinguish any ownership interest in or right to redeem the property.

(6) The name, address, and telephone number of the authority.

(g) In the event the sheriff is unable to perfect service or certified mail attempts are returned unclaimed, the authority shall conduct a search for the person with an interest in the property conveyed to the authority.

(1) The search, at a minimum, shall include the following:

a. An examination of the addresses given on the face of the instrument vesting interest or the addresses given to the clerk of the probate court by the transfer declaration form.

b. A search of the current telephone directory for the municipality and the county in which the property is located.

c. A letter of inquiry to the person who sold the property to the owner whose interest was sold in the tax sale at the address shown in the transfer tax declaration or in the telephone directory.

d. A letter of inquiry to the attorney handling the closing prior to the tax sale if such information is provided on the deed forms.

(2) A sign being no less than four feet by four feet shall be erected on the property and maintained by the authority for a minimum of 30 days reading as follows:

"THIS PROPERTY HAS BEEN CONVEYED TO THE ________ LAND BANK AUTHORITY AND IS SUBJECT TO A QUIET TITLE ACTION. PERSONS WITH INFORMATION REGARDING THE PRIOR OWNERSHIP OF OR INTEREST IN THE PROPERTY ARE REQUESTED TO CONTACT THE LAND BANK AUTHORITY AT _________."

(3) Any additional parties who are identified as having an interest in the property shall be provided notice in accordance with this section.

(h) If the interested party is an individual, the authority shall examine voter registration lists, available municipal archives for records of deaths, and the probate court records of estates opened in the county in which the property is located.

(i) If the interested party is a business entity, the authority shall search the records of the Secretary of State for the name and address of a registered agent.

(j) If an interested party appears at the hearing and asserts a right to redeem the property, that party may redeem in accordance with Chapter 10 and Chapter 29 of Title 40.

(k)(1) If the authority has made the search as required by this section and been unable to locate those persons required to be served under subsection (e), and has located additional addresses of those persons through the search and attempted without success to serve those persons in either manner provided by subsection (e), the authority shall provide notice by publication. Prior to the hearing, a notice shall be published once each week for three successive weeks in a newspaper of general circulation in the county in which the property is located. If no paper is published in that county, publication shall be made in a newspaper of general circulation in an adjoining county. This publication shall substitute for notice under this subsection or subsection (g). The published notice shall include the information required in subsection (f). Should the identity of some or all of the persons who may have an interest in the property be unknown, or should such persons be infants or persons of unsound mind, the court shall appoint a guardian ad litem to represent and defend the interests of such unknown, infant, or incompetent parties in the action.

(2) A person claiming an interest in a parcel of property set forth in the quiet title action who desires to contest that petition shall file an answer containing written objections with the clerk of the circuit court and serve those objections on the authority before the date of the hearing. The circuit court may appoint and utilize as the court considers necessary a special master for assistance with the resolution of any objections to the quiet title action or questions regarding the title to property subject thereto. Within 30 days following the hearing, the circuit court shall enter judgment on a petition to quiet title. The circuit court's judgment shall specify all of the following:

a. The legal description, tax parcel identification number, and, if known, the street address of the subject property.

b. That fee simple title to the property by the judgment is vested absolutely in the authority, except as otherwise provided in paragraph e., without any further rights of redemption.

c. That all liens against the property, including any lien for unpaid taxes or special assessments, are extinguished.

d. That, except as otherwise provided in paragraph e., the authority has good and marketable fee simple title to the property.

e. That all existing recorded and unrecorded interests in the property are extinguished, except a recorded easement or right-of-way, restrictive covenant, prior reservation or severance of all mineral, mining, oil and gas rights within and underlying the property, such state of facts as shown on recorded plats, or restrictions or covenants imposed under the Alabama Land Recycling and Economic Development Act or any other environmental law in effect in the state, severed oil, gas, and mineral rights and mineral leases and agreements are excepted from Act 2013-249 and any quiet title action authorized herein.

f. A finding that all persons entitled to notice and an opportunity to be heard have been provided that notice and opportunity and that the authority provided notice to all interested parties or that the authority complied with the notice procedures in subdivision (1), which compliance shall create a rebuttable presumption that all interested parties received notice and an opportunity to be heard.

(l) Except as otherwise provided in paragraph e. of subdivision (2) of subsection (k), fee simple title to property set forth in a petition for quiet title filed under subsection (c) shall vest absolutely in the authority upon the effective date of the judgment by the circuit court and the authority shall have absolute title to the property. The authority's title is not subject to any recorded or unrecorded lien, except as provided in paragraph e. of subdivision (2) of subsection (k) and shall not be stayed except as provided in subsection (m). A judgment entered under this section is a final order with respect to the property affected by the judgment.

(m) The authority or a person claiming to have an interest in property under this section may within 42 days following the effective date of the judgment under subsection (k) appeal the circuit court's judgment quieting title to the property to the court of appeals. An appeal under this subsection is limited to the record of the proceedings in the circuit court under this section. In the event of a timely appeal, the circuit court's judgment quieting title to the property shall be stayed until the court of appeals has reversed, modified, or affirmed that judgment. If an appeal under this subsection stays the circuit court's judgment, the circuit court's judgment is stayed only as to the property that is the subject of that appeal and the circuit court's judgment quieting title to other property that is not the subject of that appeal is not stayed.

(n) The authority shall record an order of judgment for each parcel of property in the office of the judge of probate for the county in which the subject property is located.

(o) Notwithstanding the requirements for adverse possession under Section 40-10-82, or any other law, the authority may initiate a quiet title action under this section at any time after acquiring an interest in the property which is subject to the action. A final decree of an action properly filed in compliance with this section shall extinguish all outstanding rights of redemption.

§24-9-10.

(a) If the number of tax delinquent properties in a municipality exceeds 1,000 100, then the governing body of a municipality may adopt a resolution declaring that it is wise, expedient, and necessary that a local authority be formed by the municipality by the filing for record of a certificate of incorporation in accordance with the provisions of subsection (c).

(b) If the number of tax delinquent properties in a municipality exceeds 1,000 100, then the governing body of a county may adopt a resolution declaring that it is wise, expedient, and necessary that a local authority be formed by the county by the filing for record of a certificate of incorporation in accordance with the provisions of subsection (c).

(c) Upon the adoption of the authorizing resolution, the municipality or county, as the case may be, shall proceed to incorporate the local authority by filing for record in the office of the judge of probate of the county a certificate of incorporation which shall comply in form and substance with the requirements of this section and which shall be in the form and executed in the manner herein provided. The certificate of incorporation of the local authority shall state all of the following:

(1) The name of the local unit of government forming the local authority.

(2) The name of the local authority.

(3) The size of the initial governing body of the local authority, which shall be composed of an odd number of members, but not less than five.

(4) The qualifications, method of selection, and terms of office of the initial board members.

(5) A method for the adoption of bylaws by the governing body of the local authority.

(6) A method for the distribution of proceeds from the activities of the local authority.

(7) A method for the dissolution of the local authority.

(8) Any other matters considered advisable by the local unit of government, consistent with Act 2013-249.

(d) Following incorporation, a local authority may enter into an intergovernmental agreement with the authority providing for the transfer to the local authority of any property held by the authority which is located within the corporate limits of the municipality or the boundary of the county which created the land bank.

(e) A local authority shall have all of the powers of the authority as set forth in this chapter. In addition, a local authority shall have the following powers:

(1) Without the approval of a local unit of government in which property held by the authority is located, control, hold, manage, maintain, operate, repair, lease as lessor, secure, prevent the waste or deterioration of, demolish, and take all other actions necessary to preserve the value of the property it holds or owns. An authority may take or perform the following actions with respect to property held or owned by the authority:

a. Grant or acquire a license, easement, or option with respect to property as the authority determines is reasonably necessary to achieve the purposes of this chapter.

b. Fix, charge, and collect rents, fees, and charges for use of property under the control of the authority or for services provided by the authority.

c. Pay any tax or special assessment due on property acquired or owned by the authority.

d. Take any action, provide any notice, or institute any proceeding required to clear or quiet title to property held by the authority in order to establish ownership by and vest title to property in the authority, including, but not limited to, a quiet title and foreclosure action pursuant to Section 24-9-8.

e. Remediate environmental contamination on any property held by the authority.

(2) Enter into an intergovernmental agreement with a municipality or county providing for one or more of the following:

a. The conveyance to the authority of tax delinquent property held by the municipality or county for title clearance, including, but not limited to, a quiet title and foreclosure action under Section 24-9-8.

b. The acquisition and title clearance of property by the authority of property to be conveyed by the authority to the municipality or county or another entity pursuant to the agreement between the authority and the municipality or county.

(f) A local unit of government and any agency or department of such local unit of government may do one or more of the following:

(1) Anything necessary or convenient to aid a local authority in fulfilling its purposes under Act 2013-249.

(2) Lend, grant, transfer, appropriate, or contribute funds to a local authority in furtherance of its purposes.

(3) Lend, grant, transfer, or convey funds to a local authority that are received from the federal government or this state or from any nongovernmental entity in aid of the purposes of Act 2013-249.

(g) In the event a county creates a local authority, the local authority shall have the power to acquire real property that has been tax delinquent for three or more years only in those portions of the county located outside of the geographical boundaries of any other local authority created by any municipality located partially or entirely within the county. The Land Bank Authority shall have the power to acquire real property that has been tax delinquent for three or more years only in those portions of the state located outside of the geographical boundaries of any local authority created by any municipality or county.

(h) Any local authority formed by a municipality or county pursuant to this section shall continue to exist in accordance with its articles of incorporation and this section in the event that the number of tax delinquent properties in the local jurisdiction forming the authority subsequently decreases to 100 or less."

Section 2

This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.

Action DateChamberAction
March 10, 2020SRead for the first time and referred to the Senate committee on Finance and Taxation General Fund

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