Alabama Improvement Districts; to limit interest charged on assessments, county tax, and judges of probate to aid in the collection of assessments
HB150 revises Alabama’s improvement district assessment collection rules. Under current law, improvement districts can levy assessments on benefited property to finance public infrastructure projects, set interest on those assessments at a rate the board considers reasonable, and enforce collection through foreclosure. This bill would remove the board’s discretion to charge an assessment interest rate higher than the interest rate on the bonds used to fund the project, tying assessment interest more closely to the district’s financing costs.
The bill also creates a new optional collection and enforcement process that a district may request from the county commission. If approved, the county tax assessor, tax collector, and judge of probate would handle the assessment much like delinquent ad valorem taxes: the assessments would be placed on property tax bills, collected through the county’s normal tax collection process, and enforced through tax sale or tax lien procedures if delinquent. The tax collector would be allowed to retain a 3% collection fee, and the district would be responsible for certifying the assessment information and reimbursing and indemnifying county officials for disputes or liabilities arising from the process. The bill also makes technical and stylistic updates to the code and would take effect October 1, 2026.
In terms of legal impact, HB150 would amend Section 11-99A-14 and add a new Section 11-99A-14.1 to the Code of Alabama 1975. It would change how improvement district assessments may be structured, limit interest charges, and create a county-administered alternative enforcement mechanism that shifts collection duties from the district to county tax officials when a county commission approves the district’s petition. It would also eliminate the district’s ability to use the existing Section 11-99A-21 remedies after opting into the new county-based process.
The overall sentiment reflected in the available record appears neutral to favorable toward administrative efficiency and taxpayer protection, but the bill is still pending committee action and there are no recorded votes or public committee transcripts in the provided materials. The structure of the bill suggests an effort to standardize and strengthen collection while reducing the district’s discretion over interest rates.
The main points of contention likely involve the shift of collection authority to county officials, the mandatory county commission approval process, the 3% fee, and the indemnification provisions that place responsibility and legal risk on the district rather than the county. Another possible issue is the loss of the district’s existing foreclosure/remedy options once it elects the new procedure, which may concern districts that prefer direct control over enforcement.
HB150 would amend Alabama’s improvement district statutes by limiting the interest rate that may be charged on assessments to no more than the interest rate on the bonds financing the project, and by authorizing an optional county-based collection system for assessments. If adopted by a county commission, assessments could be collected and enforced like delinquent ad valorem taxes through county tax officials and the judge of probate, with a 3% collection fee and district indemnification of county officials. This would alter the roles of improvement districts, county tax officials, and property owners subject to assessment liens, and would supersede the district’s existing enforcement remedies once the alternative process is approved.
The available record shows no committee discussion or votes, so there is no documented opposition or support from members in the materials provided. Based on the bill’s structure, the measure appears aimed at improving collection efficiency and aligning assessment interest with bond costs, which suggests a generally practical or administrative purpose rather than a controversial policy change. However, because it shifts collection responsibilities and legal risk, it may draw mixed reactions from districts and county officials once considered in committee.
Likely areas of contention include whether counties should be required to approve a district’s petition, whether county tax officials should be asked to collect private district assessments, and whether the 3% fee adequately compensates the county for the added work. Districts may also object to the loss of flexibility under Section 11-99A-21 after opting into the new system, while counties may be concerned about liability exposure despite the indemnification language. Property owners could focus on the tax-sale style enforcement process and the continued use of liens for assessment collection.