SB107 Alabama 2023 Session

Summary

Primary Sponsor

Linda Coleman-MadisonSenator

Democrat

Session

Regular Session 2023

Title

To amend Section 40-22-2, Code of Alabama 1975; to increase the fee for recording of certain mortgages, deeds of trust, contracts of conditional sale, or other instruments of like character which is given to secure the payment of any debt which conveys any real or personal property; and to modify the rate and distribution of the mortgage record tax in order to provide a dedicated revenue for the Alabama Housing Trust Fund.

Summary

SB107 would raise recording fees for mortgages and related instruments and redesign the mortgage record tax to fund the Alabama Housing Trust Fund, with new distribution and oversight rules.

What This Bill Does

It increases the recording fee for mortgages, deeds of trust, contracts of conditional sale, and similar security instruments securing debt on real or personal property. It changes how the mortgage record tax is collected and split among four recipients: 25% to the Alabama Housing Trust Fund, 5% to probate judges, 33% to county treasuries, and 37% to the State Treasury. It creates new collection and oversight mechanisms, including optional certification of indebtedness by banks and annual reporting with audits by the State Banking Department, plus penalties for underreporting. It specifies how the tax is calculated for different kinds of indebtedness (initial, revolving/open-end) and provides rules for multi-county properties and certain exemptions.

Who It Affects

• Mortgage borrowers and lenders: face higher recording fees and new or adjusted tax payments when securing debt using real or personal property.
• Probate judges, county treasuries, the State Treasury, the Alabama Housing Trust Fund, and financial institutions: gain new revenue roles and face reporting, bonding, auditing requirements, and penalties for misreporting.

Key Provisions

• Increases the fee for recording mortgages, deeds of trust, contracts of conditional sale, and similar instruments used to secure debt on property.
• Modifies the mortgage record tax rate and directs revenue to four recipients: 25% to the Alabama Housing Trust Fund, 5% to probate judges, 33% to county treasuries, and 37% to the State Treasury.
• Allows banks and other financial institutions to certify the amount of indebtedness instead of the probate judge, with annual reporting to the probate judge and Department of Revenue and audits by the State Banking Department.
• Imposes penalties for underreporting or improper certification, including fines and auditing fees.
• Requires tax amounts to be apportioned based on property value located in Alabama if the property spans multiple counties; Department of Revenue determines value and indebtedness for tax purposes.
• Includes exemptions and special rules for certain exempt instruments and for situations where taxes have already been paid or where security is substituted without changing indebtedness.
• Effective date: the act takes effect on the first day of the third month after passage.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Mortgages, fee increase for recording of mortgages, deeds of trust, distribution of proceeds to Alabama housing trust fund.