SB130 • 2026

Taxation and Revenue; Homestead ad valorum taxes of certain veterans prohibited from inclusion in debt-to-income ratio under certain circumstances

Taxes

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Elliott
Last action: 2026-04-07
Official status: Indefinitely Postponed in House of Origin
Effective date: Not listed

Plain English Breakdown

The bill text indicates the legislation passed both chambers but metadata notes it was indefinitely postponed on April 7, 2026. The effective date of October 1, 2026, is listed in the text despite this status.

SB130: Property Tax Debt-to-Income Exclusion for Disabled Veterans

This bill allows veterans with a 100% disability rating to get a temporary certificate before buying a home, which stops lenders from counting property taxes in their debt calculations.

What This Bill Does

Requires tax officials to issue a tentative certificate of permanent and total disability to eligible veterans who submit specific forms and documents.
Allows the Department of Revenue to create an affidavit form for veterans to declare they will live in the home as their main residence.
Sets a rule that tax officials must send out the temporary certificate within 20 days of receiving all required papers.
Treats this tentative certificate as proof of permanent and total disability once the veteran buys the home.
Prohibits settlement agents and loan closing officers from including property taxes when calculating debt-to-income ratios for these veterans.

Who It Names or Affects

Veterans with a 100 percent disability rating from the U.S. Department of Veterans Affairs
Local tax assessing officials who issue certificates
Settlement agents and loan closing officers handling home purchases

Terms To Know

Homestead ad valorem taxes: Property taxes paid on a person's main home based on its value.
Debt-to-income ratio: A number lenders use to compare how much money someone owes each month against their monthly income.
Tentative certificate of permanent and total disability: A temporary document that proves a veteran qualifies for tax exemptions before the final process is complete.

Limits and Unknowns

The bill only applies to veterans with exactly a 100 percent disability rating.
Veterans must provide an affidavit, a purchase agreement, and official VA documentation to get the certificate.
This law takes effect on October 1, 2026.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

FKVWFC5-1

Finance and Taxation General Fund

Finance and Taxation General Fund 1st Amendment

Plain English: This amendment clarifies that the bill only applies to veterans who have a permanent and total disability rating of exactly 100 percent.

The text now specifies that eligible veterans must have a 'permanent, and total' disability rated at 100 percent.
It adds language stating these disabled veterans are exempt from property taxes on their home under specific Alabama laws.

Bill History

2026-04-07 Senate
Currently Indefinitely Postponed
2026-03-05 Senate
Read for the Second Time and placed on the Calendar
2026-03-04 Senate
Reported Out of Committee House of Origin
2026-03-04 Senate
Finance and Taxation General Fund 1st Amendment
2026-01-13 Senate
Pending Committee Action in House of Origin
2026-01-13 Senate
Read for the first time and referred to the Senate Committee on Finance and Taxation General Fund

Official Summary Text

Taxation and Revenue; Homestead ad valorum taxes of certain veterans prohibited from inclusion in debt-to-income ratio under certain circumstances

Current Bill Text

Read the full stored bill text

SB130 INTRODUCED
Page 0
SB130
G3UALCC-1
By Senators Elliott, Jones, Kelley, Bell
RFD: Finance and Taxation General Fund
First Read: 13-Jan-26
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G3UALCC-1 10/10/2025 ZAK (L)ZAK 2025-2740
Page 1
First Read: 13-Jan-26
SYNOPSIS:
Under existing law, the homesteads of residents
of this state who are over 65 years of age or who are
retired due to permanent and total disability,
including disabled veterans with a permanent and total
disability, are exempt from state ad valorem taxes.
Also under existing law, these disabled
individuals are granted a certificate of permanent and
total disability by the Commissioner of Revenue as
evidence of this exemption.
This bill would require a tax assessing official
to issue a tentative certificate of permanent and total
disability to a disabled veteran with a 100 percent
disability rating upon the submission of certain
information.
This bill would also prohibit settlement agents
and loan closing officers from considering ad valorem
taxes for homesteads when calculating these veterans'
debt-to-income ratio upon receiving a tentative
certificate.
A BILL
TO BE ENTITLED
AN ACT
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SB130 INTRODUCED
Page 2
AN ACT
Relating to the Department of Revenue; to provide for
certain disabled veterans to be issued tenative certificates
of exemption from homestead ad valorem taxes upon submitting
certain information ; and to prohibit settlement agents and
loan closing officers from considering homestead ad valorem
taxes when calculating the debt-to-income ratio of these
veterans upon receiving a certificate .
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. (a) This act shall be known and may be cited
as the Disabled Veterans Property Tax Debt-To-Income Ratio
Exemption Act.
(b) A tax assessing official shall issue a veteran who
has received a 100 percent disability rating from the United
States Department of Veterans Affairs and who may claim an
exemption under Section 40-9-19 or 40-9-21, Code of Alabama
1975, for permanent and total disability, a tentative
certificate of permanent and total disability prior to
purchasing a homestead upon receiving all of the following:
(1) An affidavit, on a form supplied by the Department
of Revenue, that includes all of the following information:
a. The name of the disabled veteran and the name of his
or her spouse, if applicable.
b. Whether the homestead will be jointly owned by the
disabled veteran and his or her spouse, if applicable.
c. An attestation by the veteran that the homestead is
to be occupied as the veteran's principal place of residence.
(2) The purchase agreement for the homestead.
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SB130 INTRODUCED
Page 3
(2) The purchase agreement for the homestead.
(3) Documentation from the United States Department of
Veterans Affairs, or its successor agency, indicating that the
veteran has a 100 percent disability rating.
(c) A tax assessing official shall issue a tentative
certificate of permanent and total disability within 20 days
of receiving all of the information required pursuant to
subsection (b).
(d) A tentative certificate of permanent and total
disability shall be considered a valid certificate of
permanent and total disability pursuant to Sections 40-9-19
and 40-9-21, Code of Alabama 1975, upon the purchase of a
homestead by a veteran.
(e) A settlement agent or loan closing officer may not
consider ad valorem taxes for a homestead when calculating the
debt-to-income ratio of a potential borrower who has provided
a tentative certificate of permanent and total disability to
the agent or officer .
(f) The Department of Revenue shall establish the form
of the tentative certificate of permanent and total disability
which shall include the amount of ad valorem taxes from which
a veteran is exempt.
Section 2. This act shall become effective on October
1, 2026.
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