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HB649 INTRODUCED
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HB649
JPLDLYF-1
By Representative Datcher (N & P)
RFD: Jefferson County Legislation
First Read: 31-Mar-26
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JPLDLYF-1 03/16/2026 VSM (L)ma 2026-1366
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First Read: 31-Mar-26
SYNOPSIS:
Under existing law, the Alabama Affordable
Housing Trust Fund, created by the Alabama Affordable
Housing Act, does not authorize a Class 1 municipality
to create its own housing trust fund.
This bill would authorize a Class 1 municipality
to create and administer a housing trust fund and
provides for the creation of an advisory board to
oversee the administration of the trust fund. This bill
would authorize the types of funds the housing trust
fund may accept and specifes the types of allowable
uses of the funds received.
A BILL
TO BE ENTITLED
AN ACT
Relating to Class 1 municipalities; to authorize a
Class 1 municipality to create a housing trust fund; to
promote the development of affordable housing; to specify how
the housing trust may be funded; to establish an advisory
board for the housing trust; and to authorize allowable uses
for the housing trust funds.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
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BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. The provisions of this act shall apply only
to a Class 1 municipality that adopts, by ordinance or
resolution, provisions creating a housing trust fund in the
municipality.
Section 2. The Legislature finds and declares that:
(a) There is a shortage of adequate shelter for
residents of a Class 1 municipality, including the
availability of affordable residences or permanent homes with
sufficient privacy, space, physical accessibility, security,
structural stability, and durability, as well as proper
electrical, plumbing, and heating systems.
(b) The lack of affordable housing in a Class 1
municipality harms the community's ability to develop and
maintain a strong and stable economy. Additionally,
displacement of families and individuals from affordable
housing, as well as the lack of access to it, leads to
increased public spending on crime prevention, public health,
safety, fire, accident prevention, and other services and
facilities.
(c) The public's health, safety, and economic interests
are best served by providing permanent affordable housing
because such housing, among other things, allows residents of
a Class 1 municipality to keep jobs, helps children do well in
school, and promotes economic growth and prosperity in the
community.
(d) The establishment of a housing trust fund in a
Class 1 municipality is intended to:
(1) Provide funding to address the affordable housing
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(1) Provide funding to address the affordable housing
needs of a Class 1 municipality.
(2) Help families attain economic stability.
(3) Revitalize blighted and distressed neighborhoods by
creating safe, decent, and affordable housing.
(4) Contribute to economic growth through increased
housing production, employment, and tax revenue, thereby
benefiting all residents of a Class 1 municipality.
(5) Address shortages in providing safe and affordable
housing for residents earning at or below one hundred twenty
percent of the median family income, many of whom are
individuals with disabilities, elderly, victims of domestic
violence, veterans, homeless or at risk of homelessness, and
living with chronic conditions.
(e) Establishing a housing trust fund in a Class 1
municipality under this act is essential for the public
interest and serves a public purpose for which public funds
can be used and private property can be acquired.
(f) The purpose of this act is to authorize a Class 1
municipality to create and operate a local housing trust fund
to promote the development of affordable housing, as defined
in this chapter, and to promote fair housing in neighborhoods
throughout the Class 1 municipality.
Section 3. As used in this act, the following words and
phrases have the following meanings:
(1) AFFORDABLE HOUSING. Residential housing for rent or
sale that is appropriately priced for rent or sale to a person
or family whose income does not exceed one hundred twenty
percent of the median income for the local area, with
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percent of the median income for the local area, with
adjustments for household size, according to the latest
figures available from the United States Department of Housing
and Urban Development.
(2) HOUSING TRUST FUND. A trust fund which is
established by the governing body of a Class 1 municipality
for the collection and distribution of designated funds for
the purpose of increasing the production of housing units,
rehabilitating existing housing units, and maintaining such
housing so that it can be made affordable to individuals and
families whose incomes are at or below 120 percent of the
median family income.
Section 4. A Class 1 municipality is hereby authorized
to create and operate a housing trust fund, by ordinance or
resolution, for the purposes stated in this act.
Section 5. (a) A Class 1 municipality may fund its
housing trust fund with any money available to the Class 1
municipality, unless expressly prohibited by state law.
Sources of these funds include, but are not limited to:
(1) Donations;
(2) Bond proceeds;
(3) Grants and loans from a state, federal, or private
source;
(4) Appropriations by a Class 1 municipality to the
trust fund;
(5) Investment earnings of the trust fund;
(6) Appropriations from a state housing trust fund; and
(7) Dedicated funding sources authorized by the
legislature.
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legislature.
(b) This act does not create, grant, or confer a new or
additional tax or revenue authority to a Class 1 municipality
unless otherwise provided by the law of this state.
Section 6. A Class 1 municipality that creates a
housing trust fund pursuant to this act shall require an
annual independent audit of the housing trust fund to be
conducted. The results of the audit will be provided to the
mayor and the governing body of the Class 1 municipality
Section 7. (a) The governing body of a Class 1
municipality creating a housing trust fund shall create a
housing trust fund advisory committee for the purpose of
advising the Class 1 municipality regarding the operation and
administration of the housing trust fund. The housing trust
fund advisory committee shall consist of seven members. The
members shall be appointed by the governing body of the Class
1 municipality. The membership of the housing trust fund
advisory committee shall as follows:
(1) One member shall be a professional in the finance
or banking industry with experience in lending, finance or tax
credits for residential and commercial properties and
experience in community development and affordable housing
finance.
(2) One member shall have experience in the fields of
housing, community development, municipal planning, social
services, or public health.
(3) One member shall be a resident of a Class 1
municipality who either: (i) rents his or her home and lives
in a household that is below 120 percent area median income;
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in a household that is below 120 percent area median income;
or (2) has received rental assistance, or assistance through
an affordable homeownership program.
(4) Two members shall be low-income housing or fair
housing advocates, social service providers, or nonprofit
affordable housing developers.
(5) One member shall be from a land bank authority
incorporated by the Class 1 municipality pursuant to Chapter 9
of Title 24, Code of Alabama 1975.
(6) One member shall be appointed by the mayor of the
Class 1 municipality.
(b) Members of the board shall serve without
compensation but shall be allowed travel and per diem expenses
at the same rate paid to state employees. These expenses shall
to be paid from the funds collected for the administration of
this act, subject to the availability of funds. No member
shall be an officer or employee of the Class 1 municipality.
Members shall be appointed by the governing body of the Class
1 municipality.
(c) The members of the board shall be appointed for
staggered initial terms and subsequent terms shall be for a
minimum of four years or until his or her successor has been
appointed. No member of the board shall serve more than two
consecutive full terms. Vacancies on the board for any reason
shall be filled by the original appointing authority for the
unexpired term of office. A member originally appointed for
less than a full term may serve two consecutive full terms
thereafter. A former member may be reappointed after a lapse
of one year.
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of one year.
(d) All appointing authorities shall coordinate their
appointments so that diversity of gender, race, and
geographical areas is reflective of the makeup of the
municipality.
(e) A majority of the membership of the board shall
constitute a quorum at any meeting of the board. Members may
participate by telephone, video conference, or by similar
communications equipment so that all individuals participating
in the meeting may hear each other at the same time.
Participating by such means shall constitute presence in
person at a meeting for all purposes.
Section 8. (a) The housing trust fund advisory committee
shall have the following responsibilities:
(1) Review and advise staff of the Class 1 municipality
on all policies and procedures for operation of the housing
trust fund including, but not limited to:
(2) Development of a process for making awards from the
housing trust fund.
(3) Development of policies and rules for operating the
housing trust fund including priorities for making awards and
criteria for evaluating applications, and all compliance and
reporting responsibilities of fund recipients.
(4) Review and advise staff of the Class 1 municipality
on collecting and presenting data on the use and impact of the
housing trust fund, along with preparing an annual performance
report. This report shall be provided to the mayor and the
governing body of the Class 1 municipality, detailing how the
housing trust fund monies are used, including, but not limited
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housing trust fund monies are used, including, but not limited
to, the fund's success in meeting its intended purposes. The
Class 1 municipality shall post this report on its public
website and make it available to the public upon request.
(5) Pursue additional sources of funding for the
housing trust fund in addition to those sources detailed by
this act.
(6) Ensure that the resources help address the
affordable housing crisis in a Class 1 municipality by
assisting individuals and families with incomes at or below 60
percent of the median family income.
(7) Collaborate with the staff of the Class 1
municipality to prepare an annual review of the rules,
compliance responsibilities, set-asides, funding priorities,
policies, funding recommendations, and decisions, including
any suggested changes to the operation of the housing trust
fund.
(b) The advisory committee shall elect a chair, vice
chair, and secretary from among its members. The committee
shall adopt rules to govern its proceedings. A majority of the
appointed members shall constitute a quorum for all meetings.
(c) The advisory committee shall meet no later than 30
days after a majority of its initial members is appointed and
shall hold regular meetings thereafter. Members may
participate by telephone, video conference, or by similar
communications equipment so that all individuals participating
in the meeting may hear each other at the same time.
Participating by such means shall constitute presence in
person at a meeting for all purposesNotice of board meetings
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person at a meeting for all purposesNotice of board meetings
and the conduct of meetings shall comply with the Alabama Open
Meetings Act. Minutes of each meeting, noting the members
present and the business conducted, shall be signed and kept
by the secretary or an assistant secretary appointed by the
committee, who may be a staff member of the Class 1
municipality.
Section 9. Money in a housing trust fund created under
this act may be used for the following purposes:
(1) To provide assistance, by loan, grant, rental
subsidy, or otherwise, for the development, rehabilitation, or
financing of affordable housing, including inclusionary
housing.
(2) Predevelopment activities for the acquisition,
development, new construction, rehabilitation, or restoration
of affordable housing including, but not limited to, fees and
expenses for architectural services, engineering services,
attorney fees, appraisals, title reports and housing
counseling.
(3) On-site construction activities involving the
building, altering, repairing, improving, or demolishing of
any structure or building on real property.
(4) Matching other funds from federal, state, or
private resources for affordable housing projects.
(5) To provide down payment assistance, rental
assistance, and home-buyer counseling services to individuals
and families whose incomes are at or below one hundred twenty
percent of the median family income.
(6) Provide technical assistance to nonprofit
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(6) Provide technical assistance to nonprofit
developers of affordable housing.
(7) Provide funding for existing housing programs which
have been established to assist low income households.
(8) Offer capital and operating assistance for the
creation of community land trusts that will develop, own, or
operate permanently affordable rental housing and help
low-income residents achieve homeownership.
(9) Offer affordable and fair housing-related services
to low-income households to help them find and stay in stable
housing, provided that such uses do not exceed 30 percent of
the funds allocated to the housing trust fund in a given
fiscal year.
(10) Cover administrative and planning costs for the
operation of the housing trust fund, with such costs not
exceeding five percent of the funds allocated in a given
fiscal year.
(11) Fund development projects that produce or preserve
affordable housing units.
(12) Providing grants to nonprofit corporations that
provide housing assistance such as homeless outreach,
re-housing services, case management, and critical home
repair.
Section 10. This act shall become effective June 1,
2026.
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