Capitol News and Notes: Week 3 - Strengthen Alabama Homes Bill, AREC Sunset Review, & More
February 8, 2022
The Legislature was hard at work during week three of the regular session. Three legislative days were used, leaving 24 remaining. The Senate filed 69 bills and the House filed 100 bills during that time, making for totals of 189 and 274 bills in their respective chambers. The Legislature seems content to work with three-day weeks in the hope of adjourning early in time for primary elections in May. Here are the highlights from week three.
Strengthen Alabama Homes Bill Passes House
A REALTOR®-supported bill affecting the Strengthen Alabama Homes program, run through the Alabama Department of Insurance, received a favorable report in committee and passed the House of Representatives 98-0. Sponsored by Representative Chip Brown (R-Mobile), HB 39 will provide additional funding to the program, including a one-time sum for 2022 and future transfers at the Commissioner’s discretion. The statewide program gives grants of up to $10,000 to Alabama homeowners for wind mitigation on owner-occupied, single-family homes. According to Rep. Brown and Department staff, the funding will go a long way in clearing the backlog of applications in the program. Applications for the program can be found here.
Sunset Review – AREC
The Alabama Real Estate Commission (AREC) is up before the Legislature on sunset review this year. Most licensing agencies or departments are subject to the Sunset Review Act, requiring renewal by the Legislature once every four years or the agency or department will sunset or expire. This year, AREC is up for a one-year renewal under Senate Bill 98, sponsored by Senator Will Barfoot (R-Montgomery). On Wednesday, the bill was approved by a Senate committee and approved by the full Senate on Thursday. SB 98 will now move to the House of Representatives for consideration.
Bill Prohibiting Foreign Ownership of Agricultural Land Carried Over
SB 14, sponsored by Senator Tim Melson (R-Florence) would prohibit ownership of Alabama agricultural land by non-U.S. citizens or resident aliens. REALTORS® joined other groups in opposition to the bill. In a public hearing, Alabama REALTORS® shared three primary concerns with the legislation – one, restricting an owner’s private property rights in limiting who an owner may choose to sell his or her land; two, the bill openly discriminates against a federally and state-protected class in violation of the Fair Housing Act and Equal Rights Act; and three, the bill would have a chilling effect on economic development in the state at a time when Alabama is growing and attracting investment from across the country and the world. Alabama REALTORS® is grateful to Senator Melson for carrying this legislation over this session and for his efforts to work with stakeholders on the legislation over the next year.
Bill Making Substantive Changes to Tax Lien Process and Effect on Homeowners
HB 108, sponsored by Rep. Corley Ellis (R-Columbiana), would make extensive modifications to the process for selling tax liens on a property with delinquent property taxes. Sen. Jack Williams (R-Wilmer) is sponsoring the companion bill in the Senate. The Alabama Tax Assessors Association is the proponent of the legislation. The Alabama REALTORS®, Alabama Farmers Federation, and Department of Revenue opposed the legislation as written. Alabama REALTORS® traditionally advocates for consistency in state laws affecting real property and against legislation that makes it easier for someone to lose their property.
As with mortgages, failure of a property owner to pay his or her annual property taxes may result in the property owner’s tax deed being sold on the courthouse steps to an investor under the traditional method, called a tax sale. Alabama REALTORS® supported legislation in 2018 reducing the interest rate on tax sales from 12% to 8%, thereby making it easier for a property owner who falls behind on their taxes to have the ability to catch up and keep their land. Alabama REALTORS® has consistently advocated for a maximum 8% interest rate on tax sales and tax delinquency issues affecting real property.
In 2018, an alternative process was introduced called a tax lien process in which a property owner’s taxes are auctioned to investors in a reverse auction starting at 12% and bid down to 0% in some cases. At present, approximately 31 of 67 counties are utilizing the tax lien process. The remaining 36 counties are utilizing the traditional tax sale process.
The situation has created a convoluted county-by-county determination for property owners and real estate professionals. Alabama REALTORS® has requested a uniform tax process that applies to all 67 counties, that the maximum interest rate charged to homeowners not exceed 8%, that the redemption period not be reduced, and other technical changes to the legislation. The bill sponsors carried over the legislation in Committee on Wednesday and will be working on legislation to address the concerns of some of the stakeholders. Please be on the lookout for further news and information on this important legislation affecting property owners.
U.S. Supreme Court Allows Alabama to Move Forward with Congressional Elections
The United States Supreme Court on Monday issued an order to stay and injunctive relief which will allow Alabama’s congressional elections to proceed using the maps drawn and approved by the Alabama Legislature. The Supreme Court’s order overruled an Alabama Federal Court ruling which required Alabama to immediately redraw its congressional maps prior to the 2022 Primary and General Elections. The order will only apply to the 2022 elections and will allow the lower court time to have a trial on the merits of the underlying litigation before considering future revisions to Alabama’s congressional maps.
This week looks to be another three-day week, with committees primarily meeting on Wednesday. The House and Senate convened at 1:00 and 2:30 pm respectively today.