Read the full stored bill text
HB163 ENROLLED
Page 0
HB163
TBKY895-3
By Representative Stubbs
RFD: County and Municipal Government
First Read: 13-Jan-26
1
2
3
4
5
HB163 Enrolled
Page 1
First Read: 13-Jan-26
Enrolled, An Act,
Relating to counties and municipalities; to amend
Sections 11-81-240, 11-81-241, 11-81-242, 11-81-243,
11-81-244, 11-81-245, 11-81-246, and 11-81-249, Code of
Alabama 1975, to change the name of the Property Insurance and
Energy Reduction Act of Alabama to the Property Insurance
Reduction and Capital Expenditure Act of Alabama; to enable
local governments to allow private financing of qualified
energy projects; to allow local governments to assess the
qualifying properties with a lien to secure repayment of the
private financing; to allow assignment of the repayment to the
private financier; to revise the application process for
qualifying projects; to add Sections 11-81-251 and 11-81-252
to the Code of Alabama 1975, to provide that imposition of the
local assessment is voluntary; to provide that the local
government shall not guarantee the repayment of the financing;
to repeal Sections 11-81-247 and 11-81-248, Code of Alabama
1975, relating to provisions for a loss reserve fund and
regulatory jurisdiction by the state; to limit liability of a
local government for actions undertaken pursuant to the act;
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. Sections 11-81-240, 11-81-241, 11-81-242,
11-81-243, 11-81-244, 11-81-245, 11-81-246, and 11-81-249,
Code of Alabama 1975, are amended to read as follows:
"§11-81-240
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
HB163 Enrolled
Page 2
"§11-81-240
This article shall be known and may be cited as the
Property Insurance Reduction and Energy Reduction Capital
Expenditure Act of Alabama."
"§11-81-241
For the purposes of this article, the following words
shall have the following meanings:
(1) ASSESSMENT AGREEMENT. The agreement between a local
government and a property owner in which the property owner
voluntarily agrees to have the local government place an
assessment and lien on the benefited property to secure
repayment of Property Insurance Reduction and Capital
Expenditure financing to a capital provider.
(2) CAPITAL PROVIDER. The private third-party entity or
entities, including their designee, successor, and assigns,
that provide private financing for Property Insurance and
Capital Expenditure financing and refinancing under this
article.
(3) CONSENT AGREEMENT. The written agreement or
agreements between the owner of the qualifying property and
all mortgagees or other secured lienholders in which all
parties, individually or collectively, consent to the
execution of the assessment agreement and imposition of the
assessment and acknowledge that the liens of the mortgagees or
other lienholders shall be subordinated to the assessment lien
established under this article.
(1) COSTS OF A QUALIFIED PROJECT. All costs including,
but not limited to, the following:
a. All costs of acquisition, by purchase or otherwise,
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
HB163 Enrolled
Page 3
a. All costs of acquisition, by purchase or otherwise,
construction, assembly, installation, modification,
renovation, or rehabilitation incurred in connection with any
qualified project or any part of any qualified project.
b. All costs of real property, fixtures, or personal
property used in or in connection with or necessary for any
qualified project or for any facilities related thereto,
including, but not limited to, the following:
1. The cost of all land, estates for years, easements,
rights, improvements, water rights, connections for utility
services, fees, franchises, permits, approvals, licenses, and
certificates.
2. The cost of securing any franchises, permits,
approvals, licenses, or certificates.
3. The cost of preparation of any application therefor
and the cost of all fixtures, machinery, equipment, furniture,
and other property used in or in connection with or necessary
for any qualified project.
c. All financing charges and fees and all interest on
revenue bonds, notes, or other obligations of a local
government which accrues or is paid prior to and during the
period of construction of a project and during any additional
period as the local government may reasonably determine to be
necessary to place the qualified project in operation.
d. All costs of engineering, surveying, and
architectural and legal services and all expenses incurred by
engineers, surveyors, architects, and attorneys in connection
with any qualified project.
e. All expenses for inspection of any qualified
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
HB163 Enrolled
Page 4
e. All expenses for inspection of any qualified
project.
f. All fees of fiscal agents, paying agents, and
trustees for bondholders under any trust agreement, indenture
of trust, or similar instrument or agreement; all expenses
incurred by any fiscal agents, paying agents, and trustees and
all other costs and expenses incurred relative to the issuance
of any revenue bonds, notes, or other obligations for any
qualified project.
g. All fees of any type charged by a local government
in connection with any qualified project.
h. All expenses incurred in determining the feasibility
or practicability of any qualified project.
i. All costs of plans and specifications for any
qualified project.
j. All costs of title insurance and examinations of
title with respect to any qualified project.
k. Repayment of any assessments made for the advance
payment of any part of any of the costs provided in this
subdivision, including interest thereon and any other expenses
of the assessments.
l. Administrative expenses of the local government and
other expenses as may be necessary or incidental to any
qualified project or the financing thereof or the placing of
any project in operation.
m. The establishment of a fund or funds for the
creation of a debt service reserve, a renewal and replacement
reserve, or other funds or reserves as the local government
may approve with respect to the financing and operation of any
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
HB163 Enrolled
Page 5
may approve with respect to the financing and operation of any
project and as may be authorized by any bond resolution, trust
agreement, indenture of trust, or similar instrument or
agreement pursuant to the provisions of which the issuance of
any revenue bonds, notes, or other obligations of the local
government may be authorized.
(2)(4) DESIGNATED REGION. An area approved by a local
government for qualified projects pursuant to Section
11-81-242.
(5)FINANCING AGREEMENT. The contract between a property
owner and a capital provider in which the property owner
agrees to repay the capital provider for the financing of
qualifying improvements. The term includes, but is not limited
to, details of financing charges, fees, debt servicing,
interest and penalties, terms related to prepayment and
partial payments, billing, collection, and enforcement of the
repayment of the financing.
(3)(6) LOCAL GOVERNMENT. Any incorporated municipality,
county, or improvement district in this state.
(4)(7) PROGRAM. A program for property insurance
reduction and capital expenditure authorized and
created designated by a local government under this article.
(8) PROGRAM ADMINISTRATOR. The department or individual
within a local government designated to administer the
program, or a private independent third party designated by
the local government, provided that the administrative
procedures used conform to this article.
(9) PROGRAM GUIDEBOOK. A comprehensive document that
outlines the applicable program and establishes appropriate
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
HB163 Enrolled
Page 6
outlines the applicable program and establishes appropriate
guidelines, specifications, underwriting, and approval
criteria, along with standard application forms consistent
with the administration of the program and not detailed in
this article, including the following:
a. A program application with an attestation by the
property owner that he or she has reviewed the contents of the
application and all attachments and verified that they are, to
the best of their ability, true and correct.
b. An assessment agreement form between the local
government and the property owner, specifying the terms of
assessment under the program, terms of the financing provided
by a third party, and remedies for default or foreclosure.
c. A local government Notice of Assessment and Property
Insurance Reduction and Capital Expenditure lien form.
d. A Notice of Assignment of Assessment and Property
Insurance Reduction and Capital Expenditure lien form between
a local government and a capital provider.
e. A consent agreement form for use between the owner
of a qualifying property and the mortgagee or other secured
lienholder or lienholders that specifies the consent to the
execution of the assessment agreement, the imposition of the
assessment, and the subordination of the liens to the
assessment.
(5)(10) QUALIFIED PROJECT or PROJECT . The installation
or modification of a qualifying improvement on real property
in a designated region under a program adopted by a local
government. A property that has at least one qualifying
improvement installed. The term includes a new construction,
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166
167
168
HB163 Enrolled
Page 7
improvement installed. The term includes a new construction,
the adaptive reuse of eligible property with the improvement,
or a property where the qualifying improvement has been
installed and is operational before the application date.
(6)(11) QUALIFYING IMPROVEMENT. An improvement fixed to
or used upon by an existing building or, facility , or new
construction that is part of the real qualified property and
intended to increase energy and water efficiency , lower energy
cost, and community increase building resilience , and harden
or upgrade a property to withstand to storm-related events ,
such as high winds and flooding , including, . The term
includes, but is not limited to , any of the following :
a. Resiliency improvements, including:
1. Wind resistant resistance improvements or programs
that qualify the structure for insurance discounts , including ,
but not limited to, the FORTIFIED Program ;
2. or improvements Improvements that increase the life
safety of occupants occupant safety during tornados ,
including, but not limited to, safe rooms that comply with the
International Code Congress (ICC-500) as mandated by the
Alabama Building Commission , or are manufactured or site built
under the supervision of a professional or producer member of
the National Storm Shelter Association ; and
3. Battery or generator storage, electric vehicle
charging infrastructure, or other resilience measures as
deemed acceptable by a local government to provide
strengthening or resilience of a structure against natural
disasters or pandemics .
b. Flood mitigation, including:
169
170
171
172
173
174
175
176
177
178
179
180
181
182
183
184
185
186
187
188
189
190
191
192
193
194
195
196
HB163 Enrolled
Page 8
b. Flood mitigation, including:
1. Raising a structure above the base flood elevations
to eliminate flood damage;
2. Installation of a flood diversion apparatus;
3. Electrical, mechanical, plumbing, or other system
improvements that reduce flood damage;
4. Improvements to mitigate or eliminate the potential
for microbial growth or reduce flood insurance premiums; and
5. Any other improvement that reduces repetitive loss
and is recognized by the National Flood Insurance Program,
Community Rating System, or the Federal Emergency Management
Agency (FEMA).
b.c. Energy conservation and efficiency improvement,
which is a measure improvements installed on the qualifying
property to reduce consumption through conservation or a more
efficient use of by conserving or using electricity, natural
gas, propane, or other forms of energy sources more
efficiently on the real property , including, but not limited
to, any of the following:
1. Air sealing.
2. Installation of insulation.
3. Installation of energy-efficient heating, cooling,
or ventilation systems.
4. Building modifications to increase the use of
daylight.
5. Replacement of windows.
6. Installation of energy controls or energy efficient
lighting systems.
7. Installation of electric vehicle charging equipment.
197
198
199
200
201
202
203
204
205
206
207
208
209
210
211
212
213
214
215
216
217
218
219
220
221
222
223
224
HB163 Enrolled
Page 9
7. Installation of electric vehicle charging equipment.
8. Installation of efficient lighting equipment.
9. Other improvements that are intended to lead to
demonstrable energy savings.
c. Flood mitigation, including, but not limited to, any
of the following:
1. The raising of a structure above the base flood
elevation to eliminate flood damage.
2. Installation of a flood diversion apparatus.
3. Electrical, mechanical, plumbing, or other system
improvements that reduce flood damage.
4. Improvements to mitigate or eliminate the potential
for microbial growth, or reduce flood insurance premiums.
5. Any other improvement that reduces repetitive loss
that is recognized by the National Flood Insurance Program,
Community Rating System, or the Federal Emergency Management
Agency (FEMA).
d. Water conservation, efficiency, and water quality
improvements.
(7)(12) REAL QUALIFYING PROPERTY. Real property that
includes commercial, industrial, agricultural, and multifamily
buildings. The term excludes residential property consisting
of fewer than five units and individual residential units of
condominiums or cooperatives and limited common elements and
common elements attached to or related to the condominium or
cooperative units ."
"§11-81-242
(a)(1) The governing body of a local government may
designate an area of the local government or may designate the
225
226
227
228
229
230
231
232
233
234
235
236
237
238
239
240
241
242
243
244
245
246
247
248
249
250
251
252
HB163 Enrolled
Page 10
designate an area of the local government or may designate the
entire area of the local government, including the
unincorporated and incorporated area of the local government
if applicable, as a region within in which the local
government may provide make available a property insurance
reduction and capital expenditure financing program to the
record owners of real property owner of any qualifying
property who voluntarily agrees to have and impose assessments
and a lien imposed on the owner's property for the repayment
of costs of a qualified project the funds advanced for
qualified projects .
(2) For the purpose of this article, the costs of a
qualifying project shall include, but are not limited to, all
of the following:
a. All costs of acquisition, by purchase or otherwise,
construction, assembly, installation, modification,
renovation, rehabilitation, or new construction incurred in
connection with any qualified project or any part of any
qualified project.
b. All costs associated with the qualifying property,
fixtures, or personal property used by, connected with, or
necessary for any qualified project or for any related
facilities, including, but not limited to, the following:
1. The cost of all land, estates for years, easements,
rights, improvements, water rights, connections for utility
services, fees, franchises, permits, approvals, licenses, and
certificates.
2. The costs associated with securing any franchises,
permits, approvals, licenses, or certificates.
253
254
255
256
257
258
259
260
261
262
263
264
265
266
267
268
269
270
271
272
273
274
275
276
277
278
279
280
HB163 Enrolled
Page 11
permits, approvals, licenses, or certificates.
3. The cost of preparing any application and the cost
of all fixtures, machinery, equipment, furniture, and other
property used by, connected with, or necessary for any
qualified project.
c. All financing charges, fees, and all interest on
financing provided by a capital provider under this article.
d. All costs of engineering, surveying, and
architectural and legal services, and all expenses incurred by
engineers, surveyors, architects, and attorneys in connection
with any qualified project.
e. All expenses for inspection of any qualified
project.
f. All fees of fiscal agents, paying agents, and
trustees for bondholders under any trust agreement, indenture
of trust, or similar instrument or agreement; all expenses
incurred by any fiscal agents, paying agents, and trustees;
and all other costs and expenses related to the issuance of
any revenue bonds, notes, or other obligations for any
qualified project.
g. All fees of any type charged by a local government
related to any qualified project.
h. All expenses incurred in determining the feasibility
or practicability of any qualified project.
i. All costs of plans and specifications for any
qualified project.
j. All costs of title insurance and examinations of
title related to any qualified project.
k. Repayment of any assessments made for the advance
281
282
283
284
285
286
287
288
289
290
291
292
293
294
295
296
297
298
299
300
301
302
303
304
305
306
307
308
HB163 Enrolled
Page 12
k. Repayment of any assessments made for the advance
payment of any part of the costs provided specified in this
section, including interest thereon and any other expenses of
the assessments.
l. Administrative expenses of the local government and
other expenses as may be necessary or incidental to any
qualified project, its financing, or placing the project in
operation.
(2)(3)a. A local government participating under this
act shall impose a lien, consistent with the consent agreement
and assessment agreement, when qualified property owners
secure private may issue bonds or notes or use other financing
from qualified capital providers to finance qualified projects
under this article.
b. Bonds or notes Notes and other financial instruments
issued under this section are not general obligations of the
local government , but are solely payable from any of the
following: assessments on qualifying properties benefited by
the improvement.
1. Payments of assessments on benefited real property
in one or more designated regions under this article.
2. Reserves established by the local government from
grants, bonds, or net proceeds or other lawfully available
funds.
3. Municipal bond insurance, lines of credit, public or
private guaranties, standby bond purchase agreements,
collateral assignments, mortgages, or any other available
means of providing credit support or liquidity.
(b) An area designated as a region by the governing
309
310
311
312
313
314
315
316
317
318
319
320
321
322
323
324
325
326
327
328
329
330
331
332
333
334
335
336
HB163 Enrolled
Page 13
(b) An area designated as a region by the governing
body of a local government under this section:
(1) May include the entire area of the local
government.
(2) Must be located wholly within the local
government's jurisdiction.
(c) A local government may designate more than one
region. If multiple regions are designated, the regions may be
separate, overlapping, or coterminous.
(b) After execution of the consent agreement or
agreements and the assessment agreement, the participating
local government shall assign the assessment or the right to
payments from the assessment of a property owner with a
qualified project to the capital provider that finances the
qualifying improvements.
(d)(c) This article does not apply to residential
property consisting of fewer than five units or individual
residential units of condominiums or cooperatives or limited
common elements and common elements attached to or related to
the condominium or cooperative units ."
"§11-81-243
(a) To establish a program under this article, the
governing body of a local government must take the following
actions in the following order:
(1) Adopt a resolution of intent that includes all of
the following:
a. A finding that financing qualified projects through
assessments is a valid public purpose.
b. A statement that the local government intends to
337
338
339
340
341
342
343
344
345
346
347
348
349
350
351
352
353
354
355
356
357
358
359
360
361
362
363
364
HB163 Enrolled
Page 14
b. A statement that the local government intends to
make assessments according to the assessment agreement, the
consent agreement, and the financing agreement to repay
financing for qualified projects available to real voluntary
and willing qualifying property owners.
c. A description of the types of qualified projects
eligible for the program.
d. A description of the boundaries of the designated
region.
e. A statement of the time and place for a public
hearing on the proposed program.
(2) Hold a public hearing at which the public may
comment on the proposed program.
(3) Following the public hearing Adopt, adopt a
resolution establishing the program and the terms of the
program, including a description of each aspect of the program
that may be amended only after another public hearing is held.
(b) Subject to the terms of the resolution establishing
the program, the governing body of a local government may
amend a program by resolution and may allow the program
administrator to amend the program guidebook without approval
of the local government .
(c) A local government may do both of the following :
(1) Hire and set the compensation of a program
administrator and program staff .; and
(2) Contract for professional services necessary to
administer a program.
(d) A local government may impose fees to offset the
costs of administering a program in an amount equal to the
365
366
367
368
369
370
371
372
373
374
375
376
377
378
379
380
381
382
383
384
385
386
387
388
389
390
391
392
HB163 Enrolled
Page 15
costs of administering a program in an amount equal to the
lesser of one percent of the principal amount financed or
fifty thousand dollars ($50,000) . The fees authorized by this
subsection may be assessed as any of the following:
(1) A program application fee paid by the real property
owner requesting to participate in a program.
(2) A component of the interest rate on the assessment
in the written contract between the local government and the
real property owner.
(3) A combination of subdivisions (1) and (2).
(e) For the purposes of this section, the governing
body of a local government is not required to review, approve,
or ratify any individual application by a property owner. "
"§11-81-244
(a) A real qualifying property owner and a capital
provider in a designated region may apply to a local
government under a this program for funding to finance a
qualified project and enter into a written consent contract
agreement with the local government. Costs of the project
incurred by the real property owner or the local government
for such purposes may be collected as an assessment, as
authorized in Section 11-81-242 in which the property owner
consents to the local government imposing an assessment and
lien on the qualifying property to repay the financing .
(b) A local government may enter into a partnership
with one or more other local governments for the purpose of
providing and financing qualified projects carrying out the
purposes of this article .
(c) A qualified program may be administered by a
393
394
395
396
397
398
399
400
401
402
403
404
405
406
407
408
409
410
411
412
413
414
415
416
417
418
419
420
HB163 Enrolled
Page 16
(c) A qualified program may be administered by a
for-profit for profit or nonprofit organization on behalf of
and at the discretion of the local government.
(d) A local government may incur debt for the purpose
of providing the improvements, payable from revenues received
from the improved real property, or any other available
revenue source authorized by law.
(e)(d) A local government may only enter into a
contract an assessment agreement only with the record owner of
the affected real qualifying property in a designated region.
A contract An assessment agreement entered into pursuant to
this section or a summary memorandum of the contract must be
recorded in the public records of the court of probate in the
county in which the real qualifying property is located by the
sponsoring unit of local government within five days after the
execution of the contract . The recorded agreement must shall
provide:
(1) provide constructive Constructive notice that the
assessment to be levied on the real qualifying property
constitutes a lien as described in Section 11-81-246 ;. The
recorded agreement also must
(2) provide a A legal description of the real
qualifying property covered by the lien ;
(3), the The amount secured by the lien ;
(4), the The maturity date for payment of all amounts
secured by the lien ;
(5), the The names and addresses of the current owners
of the real qualifying property subject to the assessment ;
(6), the The person or entity owed the assessment ;
421
422
423
424
425
426
427
428
429
430
431
432
433
434
435
436
437
438
439
440
441
442
443
444
445
446
447
448
HB163 Enrolled
Page 17
(6), the The person or entity owed the assessment ;
(7), the The person or entity filing the notice ; and
(8), and a A reference to the statutory assessment lien
provided under this article.
(9) A copy of the executed consent agreement.
(f)(e) Prior to entering into a contract an assessment
agreement , the local government owner of a qualified property
and the capital provider shall reasonably determine warrant
all of the following to the local government in the
application :
(1) That all property taxes and any other assessments
levied on the same bill as property taxes are paid and have
not been delinquent for the preceding three years or the real
property owner's period of ownership, whichever is less .
(2) That there are no involuntary liens, including, but
not limited to, construction liens on the real qualifying
property , which will not be expunged as a consequence of the
financing .
(3) That no notices of default or other evidence of
property-based-debt delinquency have been recorded during the
preceding three years or the real property owner's period of
ownership, whichever is less.
(4)(3) That the real qualifying property owner is
current on all mortgage debt on the property.
(5) That the improvements are not in excess of the
increased value of the real property by reason of special
benefits derived from the qualifying improvements.
(g)(f) A qualifying improvement shall be affixed to an
existing building or facility that is part of the real
449
450
451
452
453
454
455
456
457
458
459
460
461
462
463
464
465
466
467
468
469
470
471
472
473
474
475
476
HB163 Enrolled
Page 18
existing building or facility that is part of the real
qualifying property and shall constitute be considered an
improvement to the building or facility or, a fixture attached
to the building or facility , or part of a new construction of
a building or facility .
(h)(g) An installation of a qualifying improvement
requiring a license or certification of work under applicable
law or building code must be performed by a contractor or
evaluator properly certified, licensed, or registered in this
state.
(i)(1) (h) The total amount of any assessment for real
property under this section may not exceed 20 percent of the
just value of the real property as determined by the county
property appraiser Prior to the execution of the assessment
agreement, an applicant must provide the following documents
to demonstrate that the project intends to benefit the public
through energy or water resource conservation, lowering public
health costs or risks, or reducing public emergency response
costs or risks: .
(1) For an existing building where energy or water
usage improvements are proposed:
a. An energy analysis from a licensed engineering firm,
engineer, or other qualified professional listed in the
program guidebook; and
b. A statement by the author of the analysis that the
proposed qualifying improvements are intended to enhance
energy or water efficiency or conservation or to incorporate
renewable resources.
(2) For resilience improvements, certification from a
477
478
479
480
481
482
483
484
485
486
487
488
489
490
491
492
493
494
495
496
497
498
499
500
501
502
503
504
HB163 Enrolled
Page 19
(2) For resilience improvements, certification from a
licensed professional engineer or another qualified
professional listed in the program guidebook stating that the
qualifying improvements are intended to result in improved
resilience.
(3) For a new construction, a certified study from a
licensed professional engineer, engineering firm, or other
qualified professional stating that the proposed qualifying
improvements are intended to enable the project to exceed the
current building code requirements for: (i) energy efficiency;
(ii) water efficiency; or (iii) utilizing renewable energy or
renewable water; or that the proposed improvements are
intended to meet or exceed resilience standards of the local
government's building codes or if none are available, comply
with nationally recognized resiliency standards.
(2) Notwithstanding subdivision (1), an assessment for
a qualifying improvement that is supported by an energy, wind
or flood mitigation audit is not subject to the limits in this
subsection if the audit demonstrates that the annual energy or
insurance savings from the qualified improvement equals or
exceeds the annual repayment amount of the non-ad valorem
assessment. For residential structures, the energy audit shall
be conducted by a professional with one or more of the
following qualifications or certifications: Residential Energy
Services Network Home Energy Rating Systems (HERS), Building
Performance Institute Building Analyst (BPI), AEE Residential
Energy Auditor (REA), or Professional Engineer with specific
experience in energy efficiency. For commercial and industrial
facilities, the energy audit shall be conducted by a
505
506
507
508
509
510
511
512
513
514
515
516
517
518
519
520
521
522
523
524
525
526
527
528
529
530
531
532
HB163 Enrolled
Page 20
facilities, the energy audit shall be conducted by a
professional with one or more of the following qualifications
or certifications: AEE Certified Energy Manager (CEM), AEE
Certified Energy Auditor (CEA), or Professional Engineer with
specific experience in energy efficiency.
(i)(1) The execution of the assessment agreement by the
local government shall be based solely on the application, the
information required under this article, the program
guidelines, and the consent agreement. The assessment
agreement shall include the following statement: "Nothing in
the acceptance of the application, execution of this
agreement, or the placement of the assessment and lien shall
constitute an endorsement by the local government, explicit or
implicit, that the materials provided in the application are
true and correct, nor is the acceptance of the application a
warranty, guarantee, validation, or endorsement of the
information, findings, or conclusions, if any, in the
application. The local government is not liable for the
failure of the performance of any of the improvements
associated with the application, nor does the local government
warrant that any of the improvements are eligible for funding
under this article."
(2) The assessment agreement shall also include a
statement that the local government shall not be involved in
decisions to enforce or foreclose on the assessment and lien,
and that such authority rests with the capital provider. "
"§11-81-245
(a)(1) Before entering into a written contract
assessment agreement with a local government, the real
533
534
535
536
537
538
539
540
541
542
543
544
545
546
547
548
549
550
551
552
553
554
555
556
557
558
559
560
HB163 Enrolled
Page 21
assessment agreement with a local government, the real
qualifying property owner shall provide, or the local
government shall obtain, a verified recordable copy of a
written consent and subordination agreement signed by the
holder of each existing mortgage or other lien on the relevant
real qualifying property stating that the mortgagee or other
lienholder consents to the imposition of the assessment and
understands that the priority of the mortgage or other lien is
subordinated to the assessment lien . in a The form and
substance of the consent agreement shall acceptable to each
mortgagee and other lienholder. comply with the guidebook and
this article. The consent and subordination agreement must be
in a form that may be recorded in the appropriate recording
office in of the county or counties where the real qualifying
property is located ., and the The consent and subordination
agreement with the qualifying property owner's assessment
contract agreement shall be recorded in that office.
(2) This subsection does not limit in any way the
rights or authority of any mortgagee or other lienholder under
any agreement or applicable law , except that a provision of a
deed of trust, mortgage, or other agreement between a
lienholder and a qualifying property owner which provides for
the acceleration of any payment solely as a result of entering
into an agreement to finance an assessment pursuant to this
article is unenforceable if the mortgagee or lienholder
executes a consent agreement pursuant to subdivision (1) .
(b) At or before the time a purchaser executes a
contract for the sale and purchase of any real qualifying
property for which a non-ad valorem assessment has been levied
561
562
563
564
565
566
567
568
569
570
571
572
573
574
575
576
577
578
579
580
581
582
583
584
585
586
587
588
HB163 Enrolled
Page 22
property for which a non-ad valorem assessment has been levied
under this article and has an unpaid balance due, the seller
shall give the prospective purchaser a written disclosure
statement in the following form, which shall be set forth in
the contract or in a separate writing:
"QUALIFYING IMPROVEMENTS FOR ENERGY AND WATER
EFFICIENCY , RENEWABLE ENERGY, AND RESILIENCY TO STORM-RELATED
EVENTS . This real qualifying property being purchased is
located within the jurisdiction of a local government that has
placed established an assessment on the real qualifying
property pursuant to Section 11-81-242 of the Code of Alabama
1975. The assessment is for a qualifying improvement to the
real property relating to energy and water efficiency ,
renewable energy, or and community resilience to storm-related
events, such as high winds and flooding and is not based on
the value of the real qualifying property. You are encouraged
to contact the county property appraiser's office to learn
more about this and other assessments that may be provided by
law."
"§11-81-246
(a) An assessment under this article and, including any
interest or penalties on the assessment , shall constitute a
lien on the qualifying property for the principal amount of
the financing, subject to the requirement in Section 11-81-245
to obtain a signed consent agreement from all lienholders.
This lien :
(1) Is Shall be a lien against the real qualifying
property on which the assessment is imposed effective from the
earliest of: (i) the date of the assessment agreement; (ii)
589
590
591
592
593
594
595
596
597
598
599
600
601
602
603
604
605
606
607
608
609
610
611
612
613
614
615
616
HB163 Enrolled
Page 23
earliest of: (i) the date of the assessment agreement; (ii)
the summary memorandum date; or (iii) the date on which the
notice of contractual assessment is recorded .;
(2) Subject to the requirement in Section
11-81-245(a)(1) to obtain and record in the proper recording
office an executed consent and subordination agreement from
existing mortgagees and other lienholders, has Shall have the
same priority status as a lien for any other ad valorem tax,
or non-ad valorem tax , or a special assessment imposed by a
local government .; and
(3) Is a lien that runs Shall run with the real
qualifying property ., and the The portion of the assessment
under the assessment contract that has not yet become due
shall not be included in any enforcement action and is not
accelerated or eliminated by foreclosure of a property tax
lien or any other foreclosure, public or private .
(4) Shall not be enforced or collected through the
process used to collect and enforce ad valorem taxes under
Alabama law.
(b) The assessment lien may be enforced by the local
government in the same manner that an ad valorem or non-ad
valorem tax lien against real property may be enforced by the
local government with all redemption rights provided by
Section 40-10-1 et seq. or other applicable law to remain in
effect The billing, collection, and enforcement of the
assessment lien shall be the sole responsibility of the
capital provider or its assigns. The capital provider's rights
and remedies related to any contractual default by the
qualifying property owner shall be governed by the terms of
617
618
619
620
621
622
623
624
625
626
627
628
629
630
631
632
633
634
635
636
637
638
639
640
641
642
643
644
HB163 Enrolled
Page 24
qualifying property owner shall be governed by the terms of
the financing agreement and state law. Assessments under this
article shall be considered a statutory assessment and shall
be superior to all other liens except tax liens and any lien
for a special assessment imposed by a local government .
(c) Delinquent installments of the assessments incur
interest and penalties in the same manner as delinquent ad
valorem taxes as specified in the financing agreement .
(d) A local government may recover costs and expenses,
including attorney's fees, in a suit to collect a delinquent
installment of an assessment Delinquent interest and penalties
incurred as specified in the financing agreement shall be
included in any enforcement action .
(e) Provided, however, that in In any action to enforce
an assessment lien, the person or entity enforcing the
assessment lien must serve the holders of all mortgages and
other liens with notice about of the enforcement action at
least 60 days before any hearing or other action is taken with
respect to the enforcement action. Service upon a domestic or
foreign corporation or other entity shall be made by serving
the registered agent of the entity if a registered agent has
been appointed .; otherwise If no registered agent has been
appointed, service shall be in accordance with Rule 4 of the
Alabama Rules of Civil Procedure."
"§11-81-249
The imposition of an assessment pursuant to this
article is to be made solely at the request of the owner of
record of real the qualifying property within a designated
region. A local government shall not compel a person who owns
645
646
647
648
649
650
651
652
653
654
655
656
657
658
659
660
661
662
663
664
665
666
667
668
669
670
671
672
HB163 Enrolled
Page 25
region. A local government shall not compel a person who owns
real qualifying property in a designated region to enter into
a contract an assessment agreement to repay the financing of
any cost or assessment through assessments under this
article."
Section 2. Sections 11-81-251 and 11-81-252 are added
to the Code of Alabama 1975, to read as follows:
§11-81-251
Public funds from the state or any local government
shall not be used to fund or repay a loan between a capital
provider and a qualifying property owner. A state or local
government shall not pledge, offer, or encumber its full faith
and credit for a lien amount through a property insurance
reduction and capital expenditure program.
§11-81-252
The members of the governing body of a local government
as well as employees and officials of the local government are
not liable, in their official capacity, for any decision,
exercise of discretion, or exercise of any rights or
responsibilities granted under this chapter.
Section 3. Sections 11-81-247 and 11-81-248, Code of
Alabama 1975, providing for a loss reserve fund and regulatory
jurisdiction by the state, are repealed.
Section 4. This act shall become effective on June 1,
2026.
673
674
675
676
677
678
679
680
681
682
683
684
685
686
687
688
689
690
691
692
693
694
695
696
HB163 Enrolled
Page 26
2026.
________________________________________________
Speaker of the House of Representatives
________________________________________________
President and Presiding Officer of the Senate
House of Representatives
I hereby certify that the within Act originated in and
was passed by the House 26-Feb-26.
John Treadwell
Clerk
Senate 05-Mar-26 Passed
697
698
699
700
701
702
703
704
705
706
707
708
709
710
711
712
713
714
715
716
717
718
719
720
721
722
723
724
725
726
727
728
729
730
731