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HB150 INTRODUCED
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HB150
MS5BM1H-1
By Representative Wilcox
RFD: Boards, Agencies and Commissions
First Read: 13-Jan-26
PFD: 12-Jan-26
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MS5BM1H-1 01/12/2026 VSM (L)ma 2025-3127
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PFD: 12-Jan-26
SYNOPSIS:
Under existing law, an improvement district can
petition the government that appointed it to levy an
assessment and lien on property within the district to
finance public infrastructure improvement projects. The
assessment accrues interest at a rate that the board of
directors of a district deems reasonable and may exceed
the interest rate on the bonds issued to finance the
improvement projects. Existing law also authorizes the
board to foreclose on property under state foreclosure
statutes if there is a default in payment of the
assessment.
This bill would remove the board's option to
charge a rate higher than the interest rate on the
bonds issued to finance the public infrastructure
improvement projects.
This bill would create an alternative
enforcement mechanism for collection and enforcement of
assessments, subject to approval by the county
commission, and allow a district to engage the county
tax assessor, the county tax collector, and the county
judge of probate to assist in the collection and
enforcement of assessments in the same manner as
delinquent ad valorem tax liens. This bill would allow
the tax collecting official to collect a fee of three
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the tax collecting official to collect a fee of three
percent of the total assessment collected.
This bill would also make nonsubstantive,
technical revisions to update the existing code
language to current style.
A BILL
TO BE ENTITLED
AN ACT
Relating to Alabama Improvement Districts; to amend
Section 11-99A-14, Code of Alabama 1975, to remove the board's
discretion to charge a higher interest rate on the assessment
than interest on the bond issued to fund the project; to add
Section 11-99A-14.1, Code of Alabama 1975, to provide that
improvement districts may petition the county commission to
use alternate means of collection and enforcement of
assessments; to provide that improvement districts may use
county tax officials and judges of probate to collect and
enforce assessment liens; to provide that an assessment would
be collected in the same manner as delinquent ad valorem
taxes; to allow the county tax collector to charge a fee for
collection; and to make nonsubstantive, technical revisions to
update the existing code language to current style.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Section 11-99A-14, Code of Alabama 1975, is
amended to read as follows:
"§11-99A-14
(a) Each assessment shall constitute a lien on the
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(a) Each assessment shall constitute a lien on the
property assessed property in for the amount of the assessment
with respect related to that parcel of land, as provided
specified in the final assessment, forecloseable and be
subject to foreclosure as provided in this chapter. The
assessment shall be payable either within no later than 30
days after the final assessment or over such term as may be
determined by the board. If the assessment is to be paid over
a term, the assessment shall accrue interest and be payable
periodically, monthly, quarterly, semiannually, annually, or
as otherwise provided by the board, with interest at a rate as
may be considered reasonable by the board. In particular, the
assessment may bear interest at the same rate or yield borne
by the bonds issued to obtain funds to acquire, construct, or
install the improvements , but interest may be at a higher rate
in the discretion of the board . Once the full amount of a
final assessment allocated with respect to for a tract is paid
in full, including with all interest and, penalties , and
collection costs of collection , if any, suchthe tract shall be
released from the lien of the assessment.
(b) The proceedings by which an assessment is levied
may provide for an increased interest rate with respect to any
interest accruing on any payment after the due date thereof .
(c) In its proceedings, the board may specify that
assessments may be prepaid at any time or circumstance. The
board may specify that assessments must be prepaid upon the
sale of the tract of land, or a portion thereof, being
assessed when selling the tract of land or any part of it . If
the obligation to pay is accelerated, the assessment shall
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the obligation to pay is accelerated, the assessment shall
include all unpaid principal of the assessment then unpaid,
plus interest until the next date provided for the payment of
principal principal payment date on any bonds secured by a
pledge of the assessments, unless otherwise provided in the
proceedings pursuant to under which the bonds are issued.
(d) Unless otherwise provided in the proceedings of the
board with respect to regarding the assessment, any assessment
may be voluntarily prepaid by the owner of the land assessed.
In that case such cases , the amount prepaid prepayment amount
shall be applied first to interest until the first following
date on which the next date when principal may be paid under
the bond, and then to principal. However, if provided in the
proceedings of the board with respect to if the board's
proceedings specify otherwise regarding the assessment,
prepayments, whether voluntary or mandatory, the amount
prepaid may be applied only to interest accrued up to the date
of the prepayment, and then to principal.
(e) Alternatively, the proceedings of the board with
respect to regarding the assessment may provide that
prepayment shall be applied first to accrued interest, and
then to the difference between: (1)(i) the interest that will
accrue from the date of prepayment until the next principal
payment on the bonds ,; and (2)(ii) the rate of interest at
which the principal paid may be invested by the board to earn
interest from the date of prepayment until the principal
payment date, with any remaining balance to be applied to
principal.
(f) The proceedings of the board with respect to The
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(f) The proceedings of the board with respect to The
board's procedures regarding the assessment may provide
specify that any mandatory prepayment may be waived by the
board on the terms as may be provided in a proceeding.
(g) If bonds are issued with respect to the final
assessment, the assessments shall either : (1)(i) total the
principal amount of the bonds to be issued with respect to the
assessments ; or (2)(ii) total such principal amount multiplied
by a coverage ratio (e.g., 1.2 to 1) providing debt service
coverage for the bonds in the ratio desired by the board."
Section 2. Section 11-99A-14.1 is added to the Code of
Alabama 1975, to read as follows:
§11-99A-14.1
(a) In addition to the collection and enforcement
procedures for assessments provided in this chapter,
including, without limitation, Section 11-99A-21, a district
may petition the county commission of a county within the
district to use the procedures specified in this section for
collecting and enforcing assessments made against the land.
(b) The district shall file its petition with the
county commission of the county where the district is located.
The petition shall be accompanied by all of the following:
(1) Certified copies of the proceedings from the
appointing government, which may be the county commission
responsible for assessments within the district, including all
petitions, attachments, consent agreements, and other
documentation submitted to the appointing government for the
assessments, as well as evidence of the assessment validation
by a court of competent jurisdiction, from which no further
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by a court of competent jurisdiction, from which no further
appeal is possible by law.
(2) Certification that the landowners within the
district who are, or would be, subject to the assessments,
along with any other individual or entity with an enforceable
interest in the lands such as mortgagees and lenders of
record, have been notified in writing of the district's
intention to request the county commission to use the
procedures pursuant to subsection (f) for collecting and
enforcing assessments within the district.
(3) All certifications, documentation, information, and
insurance policies required by this section.
(c) A district may file a petition for enforcement
pursuant to this section at any time. The district may specify
in its petition a specific period in which the procedures of
this section shall be effective. The district shall be solely
responsible for the accuracy of the information and all
supporting documentation set forth in the petition.
(d) The county commission shall approve a petition
submitted in accordance with this section.
(e) Upon approval of a petition, the county commission
shall give written notice to the district, the tax assessing
official of the county, the tax collecting official of the
county, and the judge of probate of the county.
(f)(1) Upon the county commission approving the
district's petition to use the alternative collection and
enforcement procedures listed in this section, the following
officials have the following duties:
a. The tax assessing official shall include the current
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a. The tax assessing official shall include the current
outstanding assessments certified by the district in the book
of assessments of local ad valorem taxes, which is delivered
by the official to the tax collecting official of the county.
b. The tax collecting official shall collect the
assessments in the same manner and through the same procedures
used for collecting local ad valorem taxes. Immediately upon
receipt, the tax collecting official shall segregate and
account for the proceeds of the assessments and deliver the
proceeds to the district or, at the written direction of the
district, promptly report in writing to both the district and
the judge of probate the assessments that have been paid,
partially paid, or collected.
c. The judge of probate of the county shall timely
enforce the payment of a delinquent or unpaid assessment as
provided in Chapter 10 of Title 40.
(2) No later than March 1 of each year, a district that
has opted in to tax collection on the property tax bills shall
certify in writing to the county's tax assessing and tax
collecting officials, using the form and content required by
those officials, the assessments that are due and payable,
along with all necessary information for billing, collection,
and enforcement of the assessments, as may be required by law.
(3) The tax assessing official of the county and tax
collecting official of the county, upon receiving the
certified list of assessments from the district, shall include
the amounts of the assessments in the next regular bill for ad
valorem taxes levied against the lands in the district that
are subject to the assessments.
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are subject to the assessments.
(4) If a tax bill that includes an assessment becomes
delinquent, the remedy and procedures for collection of the
delinquent assessment shall be by the same methods and
procedures as a tax sale or tax lien auction used by the
county in accordance with Chapter 10 of Title 40.
(g) The tax collecting official shall recover the cost
of collection and enforcement of payment of assessments,
amounting to three percent of the total assessments collected.
This fee shall be deposited into a segregated account of the
tax collecting official's office for use in carrying out their
official duties.
(h)(1) The district shall be entirely responsible for
the accuracy of the information, including, but not limited
to, the assessment amounts and the land assessed, as certified
to the county officials as provided in this section. The
commission, the tax assessing official, the tax collecting
official, and the judge of probate shall have no duty or
obligation to investigate, review, or verify the initial or
continuing accuracy of the information in compliance with this
chapter.
(2) The district shall be the proper party in any
litigation arising from the operation of this section. The
county, the tax assessing official of the county, the tax
collecting official of the county, and the judge of probate of
the county shall not be made parties to any litigation and
shall not be liable for damages for any challenge to any
assessment included in any ad valorem tax bill under Chapter 7
of Title 40, or in a tax lien sale conducted in accordance
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of Title 40, or in a tax lien sale conducted in accordance
with this section.
(3) The district for which a certified assessment is
made, subject to collection in accordance with this section,
shall reimburse, indemnify, and hold harmless the county, the
county tax assessing official, the county tax collecting
official, and the judge of probate of the county for any
costs, including reasonable attorney fees, costs of defense,
judgment expenses, and settlements incurred due to or related
to any dispute or matter arising from the operation of this
section.
(i) The district and its board may, at any time prior
to the county commission approving a petition to proceed under
this section, exercise the rights and remedies outlined in
Section 11-99A-21. Following a district obtaining approval by
the county commission to proceed under this section, neither
the district nor its board may have or exercise those rights
and remedies under Section 11-99A-21.
(j) The Alabama Department of Revenue may adopt rules
to implement and administer this section with advice and input
from the Alabama Association of Tax Administrators.
Section 3. This act shall become effective on October
1, 2026.
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