LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: SB 505 SLS 24RS 1877
Bill Text Version: ENROLLED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.: SB 393
Date: May 31, 2024 12:58 PM Author: MILLER, G.
Dept./Agy.: Local ad valorem taxing jurisdictions
Subject: Changes to ad valorem tax sale, enforcement and notice Analyst: Deborah Vivien
TAX/AD VALOREM EN SEE FISC NOTE LF RV See Note Page 1 of 1
Provides relative to the assessment, payment, and allocation of ad valorem taxes. (See Act)
Current law provides for provisions regarding sales of property to satisfy delinquent ad valorem tax debt, including interest, penalties,
liens, titles, notifications, enforcement, among other issues.
Proposed law maintains current interest and penalty rates but contains numerous amendments and repeals to the language regarding ad
valorem tax sales, including but not limited to securing tax auctions with a lien in the amount of statutory impositions instead of property
title with foreclosure to recoup (minimum bid of 2/3 of market value for liens held by political subdivisions), allowing bidding down of
interest (minimum of 0.7%/mo but back to 1%/mo if judicial sale occurs), declaring appraised unclaimed excess proceeds as unclaimed
property of the debtor, allowing tax bill to remain in the name of the debtor and prohibits automated (bot) bidding. The bill applies to tax
periods that begin on or after January 1, 2026. The tax lien prescribes after 7 years but filing suit halts prescription (prescription is
suspended if political subdivision holds lien). Mandatory notice required 6 months prior to filing enforcement action. Recoverable attorney
fees are capped at the greater of 25% of claim or $2,500. Effective upon voter approval of a constitutional amendment authorizing tax lien
sales before 12/7/24 or SB119 of 24RS on 12/7/24.
EXPENDITURES 2024-25 2025-26 2026-27 2027-28 2028-29 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds SEE BELOW SEE BELOW SEE BELOW SEE BELOW SEE BELOW
Annual Total
REVENUES 2024-25 2025-26 2026-27 2027-28 2028-29 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds SEE BELOW SEE BELOW SEE BELOW SEE BELOW SEE BELOW
Annual Total
EXPENDITURE EXPLANATION
The expenditure impact to local taxing jurisdictions in regard to this bill is indeterminate. The bill appears to allow local jurisdictions to
enact ordinances maintaining a system similar to current practice. It is assumed that local taxing jurisdictions can incorporate the changes
in the bill as per notifications, party location efforts, nomenclature and tax sale (auction) procedures without the need for significant
resources. It is possible that system adjustments with employee training, printing/publication and advertising expenses may be incurred.
Should unforeseen expenditures be necessary, additional resources may be requested, presumably as a local appropriation.
REVENUE EXPLANATION
The revenue impact to local taxing jurisdictions in regard to this bill is indeterminate. The LFO has been in communication
with multiple associations and agencies representing local governmental entities, though specific impacts have not yet been
submitted as a fiscal note response.
It is not clear if changing the tax sale security from title to lien with foreclosure requirements with certain bid minimums
established in law would shift marketability, and thus local collections, though a more direct path to a clear title may be a
consideration. The bill appears to shift the tax sale process toward more sophisticated purchasers willing to undergo
foreclosure proceedings with possibly a higher cash flow availability than is necessary under current law. Comparison with
the existing tax sale appears to rely on leverage during foreclosure and possibly forfeited claims of excess proceeds to match
appreciation of or excess property value under the existing system, though the bill does mandate an appraisal to help the
transactional consideration of fair market value.
The bill imposes a minimum interest rate bid of 0.7%/mo (8.4% per annum) and a minimum bid at judicial sale of 2/3 of
market value as established by the assessor for properties with liens held by the political subdivision.
Should property not be redeemed during the redemptive period, which remains at 3 years, the tax auction purchaser would
have 7 years to begin foreclosure proceedings, in which the court shall find for seizure and sale of the property. Any equity
proceeds from the sale, which are sale proceeds in excess of that owed, are to be deposited to the registry of the court and,
if not claimed by the debtor within 12 months, remanded to the state as unclaimed property of the debtor. Currently, these
funds remain within the registry of the court indefinitely unless the court specifically orders a transfer to the state treasury
as unclaimed property.
LFO makes no determination whether any component of the law will lead to a change in redemption patterns, and thus local
collections, beyond those currently experienced. However, any recipient of ad valorem taxes including those with direct
millages or those with dedicated funds initiated from ad valorem taxes may be impacted positively or negatively by portions
of the bill.
Senate Dual Referral Rules House
13.5.1 >= $100,000 Annual Fiscal Cost {S & H} 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
Alan M. Boxberger
13.5.2 >= $500,000 Annual Tax or Fee 6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} Legislative Fiscal Officer
or a Net Fee Decrease {S}


Statutes affected:
SB505 Original: 47:2202(A)
SB505 Engrossed: 47:2202(A)
SB505 Reengrossed: 47:2202(A)
SB505 Enrolled: 47:2202(A)
SB505 Act : 47:2202(A)