House Bill 401 Alabama 2026 Session

Summary

Primary Sponsor

Kelvin DatcherRepresentative

Democrat

Session

2026 Regular Session

Title

Relating to Alabama Housing Trust Fund; mortgage recording fee increase

Summary

HB401 would raise and restructure mortgage recording taxes to fund the Alabama Housing Trust Fund, starting Oct 1, 2026.

What This Bill Does

It increases the fee charged to record mortgages, deeds of trust, contracts of conditional sale, and similar instruments securing debt that conveys property. It changes how the mortgage record tax is calculated and distributed to provide dedicated revenue for the Alabama Housing Trust Fund. The revenue would be divided among probate judges, the Alabama Housing Trust Fund, county treasuries, and the State Treasury in specified shares. It introduces optional lender certification of indebtedness, sets bonding and auditing requirements, and imposes penalties for noncompliance, along with minor updates to the code language.

Who It Affects

• Property owners and borrowers who use mortgage-related instruments would face higher recording taxes and new calculation rules.
• The Alabama Housing Trust Fund and government entities (probate judges, county treasuries, and the State Treasury) would receive dedicated funding and new administrative requirements, and banks/lenders may participate in the lender-certification pathway.

Key Provisions

• Increases the mortgage record tax fees for recording mortgages, deeds of trust, and similar instruments securing debt.
• Modifies the rate and distribution of the mortgage record tax to provide dedicated revenue for the Alabama Housing Trust Fund, with specified shares: 25% to the Fund, 5% to probate judges, 33% to county treasuries, and 37% to the State Treasury.
• Introduces an optional system for banks and other financial institutions to certify indebtedness for recording, with bonding, reporting, and auditing requirements.
• Imposes penalties on probate judges who fail to collect or certify the tax and sets fines for noncompliance.
• Dates and implementation: the act becomes effective October 1, 2026, and includes nonsubstantive language updates to current code style.

AI-generated summary using openai/gpt-5-nano on Feb 12, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation & Revenue