Bill Summary – FastDemocracy

Stricken language would be deleted from and underlined language would be added to present law.
                                           Act 172 of the Regular Session
 State of Arkansas              As Engrossed:       H1/26/23 H2/6/23
 94th General Assembly                        A Bill
 Regular Session, 2023                                                             HOUSE BILL 1191
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 By: Representative Richmond
 By: Senator G. Stubblefield
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                                   For An Act To Be Entitled
                AN ACT TO AMEND THE LAW CONCERNING MANAGEMENT AND
                SALE OF TAX DELINQUENT LANDS BY THE COMMISSIONER OF
                STATE LANDS; TO STANDARDIZE THE USE OF THE TERM
                "PARCEL"; AND FOR OTHER PURPOSES.
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                                               Subtitle
                         TO AMEND THE LAW CONCERNING MANAGEMENT
                         AND SALE OF TAX DELINQUENT LANDS BY THE
                         COMMISSIONER OF STATE LANDS; AND TO
                         STANDARDIZE THE USE OF THE TERM "PARCEL".
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 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
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        SECTION 1.        Arkansas Code § 21-6-203(c), concerning the Commissioner of
 State Lands and definitions, is amended to read as follows:
        (c)    All funds, including proceeds, rates, fees, and charges collected
 by the Commissioner of State Lands, shall be deposited into a financial
 institution in the state of Arkansas or United State Treasury Securities.
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        SECTION 2.        Arkansas Code § 26-37-103 is amended to read as follows:
        26-37-103. Verification by county assessor.
        (a)    Prior to certification to the Commissioner of State Lands, the
 county assessor shall:
                (1)      Verify the assessment to establish value on all parcels to
 be certified;
                (2)      Verify the name and last known address of the owner of
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     As Engrossed:       H1/26/23 H2/6/23                                            HB1191
 record of the tax-delinquent land parcel; and
               (3)    Determine whether the tax-delinquent land parcel exists.
      (b)   If the land parcel is found to be nonexistent, the county assessor
 shall remove the delinquent entry from the assessment rolls.
      (c)   No tax-delinquent land shall be certified A tax delinquent parcel
 shall not be transmitted by certification to the Commissioner of State Lands
 without the county assessor's verification.
      (d)   In the event the Commissioner of State Lands determines the tax-
 delinquent parcel is incorrectly certified for failure to meet the
 requirements of this section, the Commissioner of State Lands shall return
 the tax-delinquent parcel with the invalid certification to the county.
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      SECTION 3.        Arkansas Code § 26-37-201(a)(1), concerning the publication
 of notice and fee by the Commissioner of State Lands, is amended to read as
 follows:
      (a)(1)     The Commissioner of State Lands shall publish a notice of sale
 of land a parcel upon which the ad valorem property taxes have not been paid
 in a newspaper having general circulation in the county where the land parcel
 is located.
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      SECTION 4.        Arkansas Code § 26-37-201(b), concerning the publication of
 notice and fee by the Commissioner of State Lands, is amended to read as
 follows:
      (b)   The notice shall:
               (1)    Contain the assessed value of the land;
               (2)    Contain the amount of taxes, interest, penalties, and other
 costs due on the land parcel;
               (3)(A)(2)(A)      Contain the name of the owner, the legal
 description, and parcel number of the land parcel.
                        (B)   A part or abbreviated legal description shall be
 sufficient in the notice if the name of the owner and parcel number are
 listed;
               (4)(3)     Contain a list of all interested parties; and
               (5)(4)     Indicate that the land parcel will be sold to the highest
 successful bidder if the bid is equal to at least the amount of delinquent
 taxes, penalties, interest, and the costs of the sale.
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     As Engrossed:         H1/26/23 H2/6/23                                            HB1191
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        SECTION 5.        Arkansas Code § 26-37-201(d), concerning the publication of
 notice and fee by the Commissioner of State Lands, is amended to read as
 follows:
        (d)(1)     Failure of the notice to contain the information required in
 subsection (b) of this section does not invalidate an auction sale of the
 land parcel unless an owner or interested party did not receive notice in
 substantial compliance with § 26-37-301.
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        SECTION 6.        Arkansas Code § 26-37-205(a), concerning the distribution
 of funds by the Commissioner of State Lands, is amended to read as follows:
        (a)   All moneys collected by the Commissioner of State Lands from the
 sale or redemption of tax-delinquent lands parcels shall be distributed as
 follows:
                 (1)(A)     First, to the Commissioner of State Lands, the penalties,
 the collection fees, the sale costs, and the other costs as prescribed by
 law.
                          (B)   The sale costs include without limitation fees for
 title work;
                 (2)    Second, to each county an amount equal to the taxes due plus
 interest and costs to the county as certified by the county collector, which
 amount shall be held in an escrow fund administered by and remitted to the
 county within one (1) calendar year of the receipt of the moneys by the
 Commissioner of State Lands;
                 (3)(A)     Third, to each county an amount equal to the delinquent
 personal property taxes, plus penalty, of the owner or owners of the tax-
 delinquent land parcel as certified by the county collector, which amount
 shall be held in an escrow fund administered by and remitted to the county
 after one (1) calendar year of the receipt of the moneys by the Commissioner
 of State Lands.
                          (B)   The Commissioner of State Lands shall review the
 information provided by the county collector and any other interested party
 to ascertain:
                                 (i)   Whether the personal property tax and penalty
 qualifies to be withheld from the tax-delinquent land parcel sale proceeds;
 and
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                            (ii)   The amount of personal property tax and penalty
 that qualifies under this subdivision (a)(3) to be withheld.
                     (C)   If the Commissioner of State Lands is required to make
 a refund of the personal property taxes withheld under subdivision (a)(3)(A)
 of this section to a purchaser of tax-delinquent lands parcels for any
 reason, the amount of the refund shall be recovered by the Commissioner of
 State Lands from the county or counties that originally received the proceeds
 under this subdivision (a)(3) of the tax-delinquent land parcel sale.
                     (D)   The Commissioner of State Lands shall promulgate rules
 and forms needed to administer this subdivision (a)(3).
                     (E)   This section does not require the Commissioner of
 State Lands to search county records to determine whether an owner of the
 tax-delinquent land parcel owes delinquent personal property taxes.
                     (F)   This section does not grant a county a right to a lien
 against real property for the payment of delinquent personal property tax;
            (4)(A)     Fourth, to the Department of Finance and Administration
 an amount equal to the delinquent tax, penalty, and interest owed to the
 department and for which certificates of indebtedness have been filed against
 the owner or owners of the tax-delinquent land parcel as certified by the
 department, which amount shall be held in an escrow fund administered by and
 remitted to the department within one (1) calendar year after the receipt of
 the moneys by the Commissioner of State Lands.
                     (B)   If the Commissioner of State Lands is required to make
 a refund of the taxes withheld under subdivision (a)(4)(A) of this section to
 a purchaser of tax-delinquent lands parcels for any reason, the amount of the
 refund shall be recovered by the Commissioner of State Lands from the
 department from the proceeds originally received under this subdivision
 (a)(4).
                     (C)   The Commissioner of State Lands shall promulgate rules
 and forms needed to administer this subdivision (a)(4);
            (5)(A)     Fifth, to each county an amount equal to the delinquent
 solid waste assessments, plus penalty and interest, of the owner or owners of
 the tax-delinquent land parcel as certified by the county collector, which
 amount shall be held in an escrow fund administered by and remitted to the
 county after one (1) calendar year of the receipt of the moneys by the
 Commissioner of State Lands.
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                       (B)   The Commissioner of State Lands shall review the
 information provided by the county collector and any other interested party
 to ascertain:
                              (i)    Whether the amount of delinquent solid waste
 assessment and penalty and interest qualifies to be withheld from the tax-
 delinquent land parcel sale proceeds; and
                              (ii)   The amount of delinquent solid waste assessment
 and penalty and interest that qualifies under this subdivision (a)(5) to be
 withheld.
                       (C)   If the Commissioner of State Lands is required to make
 a refund of the delinquent solid waste assessment withheld under subdivision
 (a)(5)(A) of this section to a purchaser of tax-delinquent lands parcels for
 any reason, the amount of the refund shall be recovered by the Commissioner
 of State Lands from the county or counties that originally received the
 proceeds under this subdivision (a)(5) of the tax-delinquent land parcel
 sale.
                       (D)   The Commissioner of State Lands shall promulgate rules
 and forms needed to administer this subdivision (a)(5).
                       (E)   This section does not require the Commissioner of
 State Lands to search county records to determine whether an owner of the
 tax-delinquent land parcel owes delinquent solid waste assessments.
                       (F)   This section does not grant a county a right to a lien
 against real property for the payment of delinquent solid waste assessment;
 and
              (6)     Sixth, to be placed in another escrow fund administered by
 the Commissioner of State Lands, the remainder, if any.
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         SECTION 7.    Arkansas Code § 26-37-205(b)(2)(A), concerning the
 distribution of remaining funds to former owners of tax-delinquent land, is
 amended to read as follows:
              (2)(A)     After payment is made to the Commissioner of State Lands
 pursuant to subdivision (b)(1) of this section, the amount left in the
 remaining funds shall be paid to the former owners of the tax-delinquent land
 parcel.
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         SECTION 8.    Arkansas Code § 26-37-205(b)(2)(C)(ii), concerning the
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     As Engrossed:      H1/26/23 H2/6/23                                                HB1191
 application process to establish prior ownership of tax-delinquent land, is
 amended to read as follows:
                                  (ii)   The application shall be provided by the
 Commissioner of State Lands and shall require proof of ownership of the tax-
 delinquent land parcel as well as proof of authority to act on behalf of the
 owner.
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          SECTION 9.     Arkansas Code § 26-37-205(b)(2)(D)(i), concerning the
 requirements to obtain payment of excess funds by a prior owner of tax-
 delinquent lands, is amended to read as follows:
                         (D)(i)     The former owner shall release and relinquish all
 rights, title, and interests in and to the tax-delinquent land parcel.
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          SECTION 10.     Arkansas Code § 26-37-205(b)(3), concerning the obsolete
 provisions of the law regarding escrow funds for excess funds, is repealed.
                (3)(A)     Any funds placed in escrow prior to July 1, 2005, shall
 be held in escrow for five (5) years and at the end of the five-year period,
 if the funds have not been distributed, the escrow funds shall escheat by
 operation of law to the county in which the property is located.
                         (B)   Any funds placed in escrow on and after July 1, 2005,
 but before July 1, 2018, shall be held for three (3) years, and at the end of
 the three-year period, if the funds have not been distributed, the escrow
 funds shall escheat by operation of law to the county in which the property
 is located.
                         (C)   Any funds placed in escrow on and after July 1, 2018,
 shall be held for two (2) years, and at the end of the two-year period, if
 the funds have not been distributed, the escrow funds shall escheat by
 operation of law to the county in which the property is located.
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          SECTION 11.     Arkansas Code § 26-37-205(c)-(e), concerning the
 distribution of proceeds from the redemption or sale of tax-delinquent lands
 to municipal taxing units, is amended to read as follows:
          (c)   Any funds placed in escrow shall be held by the Commissioner of
 State Lands for two (2) years from the date the funds are placed in escrow,
 and if at the conclusion of that time the funds have not been distributed,
 the escrow funds shall escheat by operation of law to the county in which the
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     As Engrossed:       H1/26/23 H2/6/23                                          HB1191
 parcel is located.
      (d)    All funds distributed to each county by the Commissioner of State
 Lands from the redemption or sale of tax-delinquent lands parcels, including
 any interest and costs, are to be distributed to the applicable taxing units
 where the delinquent land parcel is located within the county in the manner
 and proportion that the taxes would have been distributed if they had been
 collected in the year due.
      (d)(e)     All funds received by a county from the redemption of tax-
 delinquent land parcels at the county level, including any penalty, interest,
 and costs, are to be distributed to the applicable taxing units where the
 delinquent land parcel is located within the county in the manner and
 proportion that the taxes would have been distributed if they had been
 collected in the year due.
      (e)(f)     This section shall be severable, and if any phrase, clause,
 sentence, or provision of this section is declared to be contrary to the laws
 of this state, the validity of the remainder of this section shall not be
 affected.
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      SECTION 12.       Arkansas Code § 26-37-303(a), concerning redemption deeds
 issued by the Commissioner of State Lands, is amended to read as follows:
      (a)    If the owner or redeemer redeems the tax-delinquent land parcel,
 the Commissioner of State Lands shall issue:
               (1)    a A redemption deed in the name of the owner or redeemer and
 record it in the county wherein the land parcel is located; and
               (2)    A redemption receipt to the redeemer.
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      SECTION 13.       Arkansas Code § 26-37-303(b)(2), concerning specific
 attributes of redemption deeds issued by the Commissioner of State Lands, is
 amended to read as follows:
               (2)    Not convey or change the legal ownership to the property
 parcel redeemed.
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      SECTION 14.       Arkansas Code § 26-37-310 is amended to read as follows:
      26-37-310. Procedure for redeeming land parcels certified to state —
 Definition.
      (a)    All land parcels forfeited to the state for nonpayment of taxes
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     As Engrossed:       H1/26/23 H2/6/23                                          HB1191
 may, until disposed of by the state, be redeemed under this section.
      (b)   To request redemption under subsection (a) of this section, a
 person shall submit the following to the Commissioner of State Lands:
               (1)(A)     An executed petition with a verified signature to redeem
 the property parcel in a form prescribed by the Commissioner of State Lands.
                        (B)   The Commissioner of State Lands shall make the
 petition form available upon request;
               (2)    Payment in an amount equal to the total of outstanding
 taxes, penalties, interest, fees, and costs owed at the time the petition is
 rece