Commissioner of State Lands

State of Arkansas

Laws Governing the Redemption and Sale of

Tax Delinquent Land...

 

§26-37-101.  Transfer of tax-delinquent lands.

 

(a)  (1)  All lands upon which the taxes have not been paid for one (1) year following the date the taxes were due, October 10, shall be forfeited to the State of Arkansas and transmitted by certification to the Commissioner of State Lands for collection or sale.

        (2)  No tax-delinquent lands shall be sold at the county level.

(b) The county collector shall hold all tax delinquent lands in the county for one  (1) year after the date of delinquency, and if not redeemed by the certification date, which shall be no later than July 1 of the following year, the collector shall transmit it to the state after notice as provided in this chapter indicating all taxes, penalties, interest, and costs due and the name and last known address of the owner of record of the tax-delinquent land.

(c)  Upon receipt of the certification, title to the tax delinquent lands shall vest in the State of Arkansas in care of the Commissioner of State Lands.

 

§26-37-102.  Publication of notice - Fee.

 

(a)  The county collector in each county shall, not less than thirty (30) days nor more than forty (40) days prior to the certification of the land, cause to be published in a newspaper of general circulation in the county:

        (1)  A list of real property not previously redeemed;

        (2)  The names of the owners of record;

        (3)  The amount of the taxes, penalties, interest, and cost necessary to be paid to redeem the property;

        (4) The date upon which such period of redemption expires; and

        (5)  Notice that unless the property is redeemed prior to the expiration of the period of redemption, the lands will be forfeited to the state.

(b) Fees for the publication shall be the same as set forth in § 26-37-108.

 

§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 record of the tax-delinquent land; and

        (3)  Determine whether the tax-delinquent land exists;

(b) If the land is found to be nonexistent, the county assessor shall remove the delinquent entry from the assessment rolls.

(c)  No tax-delinquent lands shall be certified to the Commissioner of State Lands without the assessor’s verification.

 

§26-37-104.  Cost of notices.

 

(a)  All costs of notice shall be added to the costs to be collected from the purchaser or redeemer.

(b) Costs of notice shall include, but not be limited to, certified mail costs, newspaper and catalog costs, and title work.

 

§26-37-105.  Collection fee.

 

The Commissioner shall charge a twenty-five dollar ($25.00) collection fee against each parcel of tax delinquent land which has been certified to his office.

§ 26-37-110.  No duty to maintain premises.

 

With respect to tax-delinquent real property certified to the state, the Commissioner of State Lands:

(1)  Has no duty to preserve or maintain the premises;

(2)  Is not liable for any costs incurred to correct, remove, or abate a condition concerning the tax-delinquent real property; and

(3)  Is immune from liability for any claim for damages, costs, fees, or other relief or remedy based upon the condition of the tax-delinquent real property.

 

§26-37-201.  Publication of notice - Fee.

 

(a)  (1)  The Commissioner of State Lands shall publish a notice of sale of land upon which the ad valorem property taxes have not been paid in a newspaper having general circulation in the county wherein the land is located.

        (2)  The publication fee for the notice shall be the same as set forth in § 26-37-107.

(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;

        (3)  (A) Contain the name of the owner, the legal description, and parcel number of the land.

                (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) Contain a list of all interested parties; and

        (5)  Indicate that the land will be sold to the highest bidder if the bid is equal to at least the amount of delinquent taxes, penalties, interest, and the costs of the sale.

(c)  The successful bidder shall pay all taxes, interest, penalties, and other costs.

(d) (1)  Failure of the notice to contain the information required in subsection (b) of this section does no invalidate an auction sale of the land unless an owner or interested party did not receive notice in substantial compliance with §26-27-301.

        (2)  Only an owner or interested party that fails to receive notice in substantial compliance with §26-37-301 may challenge the validity of the publication notice.

(e)  As used in this subchapter, “owner” and “interested party” mean the same as defined in §26-37-301.

 

§26-37-202.  Procedure to sell.

 

(a)  (1)  Bidders may bid at the sale or mail their bid to the office of the Commissioner of State Lands.

        (2)  Bids shall be delivered at the appropriate place before the deadline established in the notice of sale.

(b) (1)  If at the scheduled public sale a person or entity does not bid at least the amount of delinquent taxes, penalties, interest, and the costs of the sale, the Commissioner of State Lands may negotiate a private sale.

        (2)  (A)  Except as provided in subdivision (b)(2)(B) of this section, a negotiated private sale shall be approved by the Attorney General before conveyance of the land by the Commissioner of State Lands.

                (B)  A negotiated private sale that occurs later than two (2) years after the scheduled public sale does not require approval by the Attorney General.

(c)  (1)  Except as provided in subdivision (c)(2) of this section, the Commissioner of State Lands shall conduct tax-delinquent sales in the county wherein the land is located

        (2)  If the Commissioner of State Lands determines that sufficent parcels of land located in one (1) county do not exist to justify a single sale in one (1) county, the Commissioner of State Lands may hold a tax-delinquent land sale in one (1) location and sell land located in more than one (1) county if the counties are adjoining counties.

(d) The sales shall be conducted on the dates specified in the notices required by this subchapter.

(e)  (1)  After a sale of the land by the Commissioner of State Lands, including a negotiated sale, the Commissioner of State Lands shall notify the owner and all interested parties of the right to redeem the land within ten (10) days, excluding Saturdays, Sundays, and legal holidays, after the date of the sale by paying all taxes, penalties, interest, and costs due, including the cost of notice.

        (2)  The notice under subdivision (e)(1) of this section shall be sent by regular mail to the last known address of the owner and all interested parties.

        (3)  If the land is not redeemed, a limited warranty deed shall be issued by the Commissioner of State Lands to the purchaser.

(f)  As used in this section, “interested party” has the same meaning as in §26-37-301.

 

§26-37-203.  Conveyance to purchaser - Contest.

 

(a)  If the tax-delinquent land is sold, the Commissioner of State Lands shall convey the tax-delinquent land by issuing a limited warranty deed to the land.

(b) (1)  Except as provided in subdivision (b)(2) of this section, an action to contest the validity of a conveyance under this section or a negotiated sale under § 26-37-101 is barred if not commenced within ninety (90) days after the date of the conveyance.

        (2)  A cause of action by a person suffering a mental incapacity, a minor, or a person serving in the United States Armed Forces during time of war during the ninety-day period under subdivision (b)(1) of this section is barred if not commenced within two (2) years after the disability is removed, the minor reaches majority, or the person is released from active duty with the United States Armed Forces during time of war.

(c)  A deed issued after January 1, 1987, by the Commissioner of State Lands is not void or voidable on the ground that the county did not strictly comply with the laws governing tax-delinquent land.

(d) This section does not prevent a taxpayer from contesting the validity of a deed issued by the Commissioner of State Lands on the ground that taxes have actually been paid.

 

§26-37-204.  Sales set aside.

 

(a)  In the event the sale is set aside by legal action or if the land is proven to be nonexistent or double assessed, the purchaser shall be entitled to reimbursement of moneys paid.

(b) The Commissioner of State Lands shall have the authority to set aside any sale. In the event the Commissioner of State Lands determines that a sale shall be set aside, the purchaser may be entitled to reimbursement of moneys paid to the Commissioner of State Lands.

(c)  In cases where sales may be set aside by the Commissioner of State Lands or by legal action by the record owner or the heirs or assigns of the record owner, the record owner or the heirs or assigns of the record owner shall pay all back taxes, penalties, interest, and costs charged against the land.

(d) If the Commissioner of State Lands determines that the owner and all interested parties did not receive the required notice of sale and right to redeem, the Commissioner of State Lands shall:

        (1)  Set aside the sale; or

        (2)  Notify the owner and interested parties of the reasons why the Commissioner of State Lands does not believe the sale should be set aside.

(e)  As used in this section, “interested party” means the same as in § 26-37-301.

(f)  The Commissioner of State Lands shall not be liable for any monetary damages to any owner, interested party, or purchaser of tax-delinquent land for any action taken or any omission of action related to the sale of tax-delinquent land.

(g)  An owner or interested party shall tender cash or certified funds, including without limitation a money order, cashier’s check, or certified bank check equal to the amount of all taxes, penalties, interest, and costs charged against the tax-delinquent land:

        (1)  Into the registry of the court before filing a complaint, counterclaim, cross-claim, third-party complaint, or any other pleading to set aside a sale of the tax-delinquent land; or

        (2)  With the Commissioner of State Lands upon request by the Commissioner of State Lands before asking the Commissioner of State Lands to set aside a sale of the tax-delinquent land.

 

§26-37-205.  Distribution of funds.

 

(a)  All moneys collected by the Commissioner of State Lands from the sale or redemption of tax delinquent lands 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 shall include, but not be limited to, fees for title work;

        (2)  Second, an amount to each county equal to the taxes due plus interest and costs to the county as certified by the county tax collector, which amount shall be held in an escrow fund administered by the Commissioner of State Lands and remitted to the counties within one (1) calendar year of their receipt by the Commissioner of State Lands; and

        (3)  Third, the remainder, if any, shall be placed in another escrow fund administered by the Commissioner of State Lands.

(b) If no actions are brought within the time limits prescribed under this subchapter,  the remaining funds, if any, shall be distributed by the Commissioner of State Lands as follows:

        (1)  Ten percent (10%) of the remaining funds up to a maximum amount of five hundred dollars ($500) shall be paid to the Commissioner of State Lands for the administration of the distribution of the funds;

        (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.

                (B) (i)   “Former owner” means a person, partnership, corporation, or other legal entity capable of owning real property in the State of Arkansas and that held record title to the real property on the date of sale by the Commissioner of State Lands.

                        (ii) “Former owner” does not include heirs or relations beyond the first degree of consanguinity.

                (C) (i)   A former owner must file an application with the Commissioner of State Lands requesting the release of the funds.

                        (ii) The application shall be provided by the Commissioner of State Lands and shall require proof of ownership of the tax delinquent land as well as proof of authority to act on behalf of the   owner.

                        (iii)  The application may require other information the Commissioner of State Lands deems necessary before the release of the funds.

                (D) (i)   The former owner shall release and relinquish all rights, title, and interests in and to the tax delinquent lands.

                        (ii) The Commissioner of State Lands shall provide a release deed to the former owner to execute.

                (E) In the event of any dispute, claim, or multiple claims of ownership or controversy regarding the release of the funds, the Commissioner of State Lands may require the party or parties to provide a court order to resolve the issues and to establish the party or parties entitled to the remaining funds.

                (F) An agreement by a former owner, the primary purpose of which is to locate, deliver, recover, or assist in the recovery of remaining funds, is enforceable only if the agreement:

                        (i)  Is in writing;

                        (ii) Clearly sets forth the nature of the property and the services to be rendered;

                        (iii)  Provides a fee of not more than ten percent (10%) of the recovery;

                        (iv)  Is signed by the former owner; and

                        (v)  States the value of the remaining funds before and after the fee or other compensation has been deducted.

                (G) (i)   An agreement covered by subdivision (b)(2)(F) of this section that provides for compensation that is unconscionable is unenforceable except by the former owner.

                        (ii) A former owner who has agreed to pay compensation that is unconscionable may maintain an action to reduce the compensation to a conscionable amount.

                        (iii)  The court may award reasonable attorney’s fees to a former owner that prevails in the action.

             (H)  Subdivision (b)(2)(G) of this section does not preclude a former owner from asserting that an agreement covered by subdivision (b)(2)(F) of this section is invalid on grounds other than unconscionable compensation.

                (I)(i)  The Commissioner of State Lands shall make all funds payable to the former owner.

                        (ii) No funds shall be made payable to any other person or entity other than the former owner without a court order directing the payment to the other person or entity.

                        (iii)  No interest shall be paid to the former owner on the funds.

                (J)  (i)   Anyone filing a claim or assisting with the filing of a claim that results in the erroneous payment of a claim is responsible for the repayment of all funds paid.

                        (ii) Any claim filed fraudulently is punishable as a Class D felony; and

        (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 to the county in which the property is located.

                (B) Any funds placed in escrow on and after July 1, 2005, 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 to the county in which the property is located.

(c)  All funds distributed to each county by the Commissioner of State Lands from the redemption or sale of tax-delinquent lands, including any interest and costs, are to be distributed to the applicable taxing units where the delinquent land 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) All funds received by a county from the redemption of tax-delinquent land at the county level, including any penalty, interest, and costs, are to be distributed to the applicable taxing units where the delinquent land 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)  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.

 

§26-37-209. Compensation for improvements.

 

(a)  (1)  A purchaser under this chapter of any land or town or city lot or another person claiming under the purchaser shall not be entitled to any compensation for any improvement that the purchaser shall make on the land or town or city lot within the time frame established in §26-37-203, except for:

                (A)  The cost of repairs necessary to prevent deterioration of any improvements on the land or town lot or city lot; or

                (B)  The cost necessary to comply with any state, county, or city code requirements.

        (2)  The compensation allowed under subdivision (a)(1) of this section shall be a charge upon the land.

(b) For an improvement made after the expiration of the time frame established in §26-37-203, the purchaser under this chapter shall be allowed the full cash value of the improvement, and the allowance shall be a charge upon the land.

 

§26-37-212.   Dedication of land as public park.

 

(a)  If an owner of land dedicates the land to the city where the land is located for park purposes by a filed and recorded plat and bill of assurance, the city approves the dedication, and there are any delinquent general taxes of the state or a political subdivision of the state against the land, upon a showing that title to the land is dedicated to the city as a public park and the city has approved the dedication, the Commissioner of State Lands and the proper county officials of the county where the land lies shall cancel any delinquent general taxes.

(b) If the city fails or refuses to approve a dedication of land for park purposes within one (1) year of receiving notice of the dedication, the land shall revert to the owner of the land or the owner’s heirs, successors, and assigns.

 

§26-37-214.  Limitation on liability.

 

(a)  (1)  Except as provided in § 26-37-204(a) and (b), the Commissioner of State Lands and the county from which tax-delinquent real property is certified shall be immune from liability for damages, costs, fees, or compensation for improvements made to the tax-delinquent real property.

        (2)  Subdivision (a)(1) of this section applies whether or not the sale is found to be invalid or void as a result of error by the Commissioner of State Lands or the county.

(b) The Commissioner of State Lands is immune from liability for damages, costs, fees, and compensation arising from work undertaken by a town or city to correct, remove, or abate a condition concerning tax-delinquent real property certified to the Commissioner of State Lands that violates local codes or ordinances.

 

§26-37-301.  Notice to owner.

 

(a)  (1)  After receiving tax-delinquent land, the Commissioner of State Lands shall notify the owner, at the owner’s last known address as certified by the county, by certified mail, of the owner’s right to redeem by paying all taxes, penalties, interest, and costs, including the cost of the notice.

        (2)  All interested parties shall receive notice of the sale from the Commissioner of State Lands in the same manner.

        (3)  If the notice by certified mail is returned unclaimed, the Commissioner of State Lands shall mail the notice to the owner or interested party by regular mail.

        (4) If the notice by certified mail is returned undelivered for any other reason, the Commissioner of State Lands shall send a second notice to the owner or interested party at any additional address reasonably identifiable through the examination of the real property records properly filed and recorded in the office of the county recorder where the tax-delinquent land is located as follows:

                (A) The address shown on the deed to the owner;

                (B) The address shown on the deed, mortgage, assignment, or other filed and recorded document to the interested party; or

                (C) Any other corrected or forwarding address on file with the county collector or county assessor.

(b) The notice to the owner or interested party shall also:

        (1)  Contain a partial or abbreviated legal description and the parcel number;

        (2)  State that the tax-delinquent land will be sold if not redeemed prior to the date of sale; and

        (3)  (A) Provide the sale date.

                (B) The sale date shall be no earlier than one (1) year after the tax-delinquent land is certified to the Commissioner of State Lands.

(c)  As used in this section, “owner” and “interested party” mean any person, firm, corporation, or partnership holding title to or an interest in the tax-delinquent land by virtue of a bona fide recorded instrument at the time of certification to the Commissioner of State Lands.

(d) The Commissioner of State Lands shall not be required to notify by certified mail or by any other means a person, firm, corporation, or partnership whose title to or interest in the tax-delinquent land is:

        (1)  Obtained after certification to the Commissioner of State Lands; or

        (2)  Expired or barred or was released or otherwise terminated before the date of sale regardless of whether a bona fide recorded instrument reflects the termination of the title or interest.

(e)  (1)  If the Commissioner of State Lands fails to receive proof that the notice sent by certified mail under this section was received by the owner of a homestead that is tax-delinquent land, then the Commissioner of State Lands or his or her designee shall provide actual notice to the owner of a homestead by personal service of process at least sixty (60) days before the date of sale.

        (2)  As used in this subsection:

                (A) “Homestead” means a parcel of tax-delinquent land certified to the Commissioner of State Lands that is identified by the county assessor as a homestead eligible for a homestead credit under § 26-26-1118; and

                (B) “Owner of a homestead” means:

                        (i)   Every owner if the homestead is owned by joint tenants; and

                        (ii) Either the husband or the wife if the homestead is owned by tenants by the entirety.

        (3)  The owner of a homestead that is tax-delinquent land shall pay for the additional cost of the notice by personal service of process under this subsection.

(f)  The validity of a notice under this section may be challenged only by an owner or interested party of tax-delinquent land that did not receive notice in substantial compliance with this section.

 

§26-37-302.  Payment required.

 

(a)  To redeem tax-delinquent land with the county collector or the Commissioner of State Lands and to purchase tax-delinquent land at the Commissioner’s sale the redeemer/purchaser of tax-delinquent land shall pay all delinquent taxes, plus:

        (1)  Ten percent (10%) simple interest for each year of delinquency;

        (2)  A ten percent (10%) penalty for each year of the delinquency; and

        (3)  The costs incurred by the county and the Commissioner of State Lands.

(b) The penalties and interest shall accrue beginning on October 15 in the year of delinquency.

(c)  Payment to redeem tax-delinquent land under this section shall be made by cash or certified funds, including without limitation a money order, cashier’s check, or certified bank check if the redemption occurs:

        (1)  Within sixty (60) days before the date of the scheduled sale; or

        (2)  During the redemption period following the sale.

 

§26-37-303.  Redemption deed.

 

(a)  If the owner redeems the tax-delinquent land, the Commissioner of State Lands shall issue a redemption deed and record it in the county wherein the land is located.

(b) The fee for the redemption deed and the fee for recording the deed shall be borne by the owner.

 

§26-37-305.  Rights of persons under a mental incapacity, minors, and members of the United States Armed Forces.

 

Land owned by a person under a mental incapacity, a minor, or a member of the United States Armed Forces during time of war that is sold for taxes may be redeemed within two (2) years after the mental incapacity is removed, the minor reaches majority, or the person is released from active duty with the United States Armed Forces during time of war.

 

§26-37-314.  Sale of tax delinquent severed mineral interests prohibited

 

(a)  (1)  When severed mineral interests are forfeited to the state and conveyed by certification to the Commissioner of State Lands for nonpayment of property taxes, title to the severed mineral interests shall vest in the State of Arkansas in the care of the Commissioner of State Lands.

        (2)  The Commissioner of State Lands shall so notify the owner of record by certified mail at his or her last known address.

        (3)  (A) Except as provided in subsection (b) of this section, the Commissioner of State Lands shall not sell the severed mineral interests but shall retain the interests indefinitely for redemption.

                (B) However, the severed mineral interests may be leased by the Commissioner of State Lands if he or she determines that a lease is in the best interest of the state.

                (C) All benefits, including royalty and leasehold payments, accruing after title vests in the state and before redemption shall be payable to the Commissioner of State Lands.

                (D)         Upon receipt of any such benefits, the Commissioner of State Lands shall deposit the funds into financial institutions in this state.

        (4) (A) The tax-delinquent severed mineral interests may be redeemed at any time in the manner prescribed for the redemption of tax-delinquent real property.

                (B) However, upon redemption the owner shall not be entitled to any payments received by the Commissioner of State Lands before redemption.

        (5) All funds derived from redemption shall be held   in escrow by the Commissioner of State Lands for one (1) year, at which time they shall be distributed the same as funds derived from the redemption of real property.

(b) (1)  After the expiration of the redemption period prescribed by §26-37-301 et seq., the Commissioner of State Lands shall sell the severed mineral interests to the surface owners if the surface owners opt to purchase the tax-delinquent severed mineral interest.

        (2)          The surface owner purchasing mineral interests under subdivision (b)(1) of this section shall be allowed to purchase the mineral interests for an amount equal to the delinquent taxes and shall not be required to pay any interest or penalties if the surface owner was not the owner of the mineral interests at the time the taxes became delinquent.

(c)  All benefits, including royalty and leasehold payments, payable to the Commissioner of State Lands pursuant to this section are not subject to the provisions of §18-28-201 et seq. and §18-28-401 et seq.

(d) The provisions of this section shall be applicable to all tax-delinquent severed mineral interests currently forfeited to the state and certified to the Commissioner of State Lands as well as to all tax-delinquent severed mineral interests forfeited to the state hereafter.

(e)  (1)  No deed issued under this section shall be void or voidable on the ground that the assessment of the property taxes on the severed mineral interest was not subjoined to the assessment of the property taxes on the surface realty.

        (2)  This subsection shall be retroactive to all certifications of delinquent mineral interests in the records of the office of the Commissioner of State Lands.

 

§26-37-315.  Redemption of homestead by taxpayer.

 

(a) As used in this section, “homestead” means a parcel of tax-delinquent land certified to the Commissioner of State Lands that is identified by the county assessor as a homestead eligible for a homestead credit under § 26-26-1118.

(b) If an owner of a homestead did not receive actual notice of the sale of his or her homestead by the Commissioner of State Lands or his or her designee by personal service of process at least sixty (60) days before the date of the sale, then the owner of a homestead may redeem the tax-delinquent land by tendering all taxes, penalties, interests, and costs within ten (10) days, excluding Saturdays, Sundays, and legal holidays, after the date of the sale.

 

§26-37-316.  Notice requirement.

 

(a)  As used in this section, “homestead” means a parcel of tax-delinquent land certified to the Commissioner of State Lands that is identified by the county assessor as a homestead eligible for a homestead credit under § 26-26-1118.

(b) When a homestead is certified to the Commissioner of State Lands, the county collector shall provide notice to the Commissioner of State Lands that the tax-delinquent land is a homestead.

 

22-6-501.  Transfer to state institutions.

 

(a)  (1) The Commissioner of State Lands is authorized upon application of the director of any state department or agency, the management or the board of trustees of any state institution, or the chief executive of any county, city, or school district of this state to issue to the applying governmental unit a deed for land listed on the Commissioner of State Lands’ records as having been forfeited for the nonpayment of taxes.

        (2) The application shall include the following:

                (A) The proposed use of the land;

                (B) The proposed duration for the stated use; and

                (C) The division or department designated for the maintenance and operation of the property once deeded. Moreover, the Commissioner of State Lands is authorized to accept the application as submitted or recommend modifications to the application. The Commissioner of State Lands is further empowered to disallow any application determined by the Commissioner of State Lands to be contrary to the best interests of the health and general welfare of the state and its citizens.

(b) (1) The deed issued by the Commissioner of State Lands to a state department or agency, state institution, city, county, or school district may contain restrictive covenants or reservations stating that should the governmental unit no longer desire to use the land for the proposed use stated in the application, said governmental unit shall submit a subsequent letter of application to the Commissioner of State Lands to request change in the use of the property, and the Commissioner of State Lands shall accept, modify, or disallow the request.

        (2) Moreover, should the governmental unit determine that the property can no longer be utilized, the property shall revert to the state, be held by the Commissioner of State Lands, and be treated as tax-forfeited land subject to the powers and authority of the Commissioner of State Lands.

        (3) Because this section applies to the disposition of tax-forfeited land, § 22-6-601 shall not apply herewith.

(c) No consideration shall be required for the transfer except the fee of one dollar ($1.00) as required by law.

(d) (1) All deeds granted by the Commissioner of State Lands prior to the passage of this section are confirmed, and the title of all purchases under the deeds from the Commissioner of State Lands are quieted, established, and confirmed.

        (2) Collection of any outstanding ad valorem property tax indebtedness shall be stayed by the Commissioner of State Lands while title to the property remains with the governmental unit.

        (3) Should the property revert to the state pursuant to subsection (b) of this section, the property may be sold as prescribed by the Commissioner of State Lands.

(e) (1) Land donated by the Commissioner of State Lands under this section may be used for any lawful purpose or transferred pursuant to any lawful authority of the city or town.

        (2) Owners of property donated to a city or town under this section shall not have any right to retain any of the appraised value of the property.

(f) Prior to conveyance of property, the Commissioner of State Lands may give consideration to the following issues:

        (1) Whether the prospective purchaser has a pattern or practice of not paying fines resulting from a citation for violation of state laws or regulations or local codes and ordinances;

        (2) Whether the prospective purchaser has a pattern or practice of not timely paying property taxes; and

        (3) Whether the prospective purchaser was the prior owner of real property that was transferred to the Commissioner of State Lands as a result of tax delinquency during the preceding three (3) years.

 

20-80-401.  Title.

 

This subchapter shall be known as the “Commissioner of State Lands Urban Homestead Act”.

 

20-80-402.  Purpose.

 

(a) This subchapter shall apply only to urban property and shall be established to prevent waste of valuable real property already offered for public sale and not disposed of which has been certified to the office of the Commissioner of State Lands for nonpayment of ad valorem real property taxes.

(b) The further intent of this section is to provide cities, incorporated towns, legal entities that intend to apply for an award of low-income housing tax credits under Section 42 of the Internal Revenue Code, and community organizations the ability to better serve any eligible person in need of a homestead and to provide the eligible person the opportunity to hold and maintain a private residence, and to contribute to the taxing structure of the applicable taxing units.

 

20-80-403.  Definitions.

 

As used in this subchapter, unless the context otherwise requires:

        (1) “Applicant” means any city, incorporated town, legal entity that intends to apply for an award of low-income housing tax credits under Section 42 of the Internal Revenue Code, or community organization applying to the Commissioner of State Lands for donation of tax-forfeited land;

        (2)  (A) “Community organization” means a recreational, educational, social, or benevolent organization dedicated to improving the mental or physical health and welfare of its members and of the public.

              (B) A community organization may be established for community betterment or beautification, environmental protection, establishment of housing, and other purposes beneficial to the community and may be a division of the federal, state, county, or local government or may be a private nonprofit corporation;

        (3) “Eligible person” means an individual person or family unit meeting eligibility criteria for the sale, lease, or grant of a homestead. A corporation, partnership, association, or similar organization shall not be an eligible person;

        (4) “Homestead” means the home and accompanying or adjoining land of the primary residence of a person; and

        (5) “Urban” means land found within the city limits of any city or incorporated town in the state.

 

20-80-404.  Commissioner of State Lands’ Duties.

 

(a) All land subject to donation under this subchapter must have been offered for sale to the highest bidder by the Commissioner of State Lands pursuant to § 26-37-101 et seq.

(b) After the Commissioner of State Lands has met the requirements of § 26-37-101 et seq., the Commissioner of State Lands may accept applications for donation of remaining tax-forfeited urban property.

(c) The Commissioner of State Lands shall prescribe the requisite contracts, forms, or applications.

 

20-80-405.  Applications for donations.

 

(a) (1) Applications for donation may be made by the following persons or community organizations:

                (A) Agents of cities and incorporated towns that also have one (1) of the community organizations listed in subdivisions (a)(1)(B)(i)-(iv) of this section; or

                (B) The chair of the board or executive director of one (1) of the following community organizations:

                        (i) A housing authority;

                        (ii) A community development agency;

                        (iii) A community development corporation; or

                        (iv) A local initiative support corporation.

        (2) Other community organizations may apply for donation of the land so long as that organization is a nonprofit corporation that qualifies as an Internal Revenue Service Section 501(c)(3) tax-exempt organization.

        (3) A legal entity that intends to apply for an award of federal low-income housing tax credits under Section 42 of the Internal Revenue Code may apply for donation of land under this subchapter only if the legal entity is a qualified nonprofit organization pursuant to Section 42 of the Internal Revenue Code and accompanying regulations and guidance of the Internal Revenue Service.

(b) Any applicant must have legal authority to accept and convey title to properties for homesteading purposes.

 

20-80-406.  Disposition of applications -- Prior municipal approval.

 

(a) The Commissioner of State Lands may accept, modify, or deny any application.

(b) Before the Commissioner of State Lands may donate any parcel to any applicant, other than agents of a city or incorporated town, the city or town shall grant express approval of the donation, thereby avoiding possible conflicts in planning or development projects overseen by the cities or towns of this state.

 

20-80-407.  Contracts or deeds.

 

(a)  (1) Accepted applications will result in a contract or limited warranty donation deed between the Commissioner of State Lands and applicant for donation of tax-forfeited lands.

        (2) The contract or deed, to be provided by the Commissioner of State Lands, shall provide that the applicant will have primary responsibility for the development of the donated parcel.

        (3) The contract or deed shall also set out the eligibility criteria for determining an eligible person with respect to a sale, lease, or grant of a homestead from the donated parcel and shall require the applicant to follow the illegibility criteria in making sales, leases, or grants from the donated parcel.

(b) Upon execution of a donation deed to the applicant, the Commissioner of State Lands may no longer be an immediate party to the construction or maintenance of the parcel, except that the contract or donation deed may contain a possibility of reverter to the Commissioner of State Lands should the proposed homestead, for any reason, not develop pursuant to specifications.

(c) In addition, the contract or deed may provide the time period within which the property may be developed.

 

20-80-408.  Taxes -- Liens -- Encumbrances.

 

(a) With execution of the donation deed, the Commissioner of State Lands may waive outstanding taxes, penalties, and interest within the authority of the office of the State Lands Commissioner.

(b) Other liens or encumbrances attached to the property not within the Commissioner’s authority pursuant to § 26-37-101 et seq. will be considered a matter to be resolved between the applicant and the lienholder.

 

20-80-409.  Title transfer -- Consideration -- Costs.

 

(a) No consideration shall be required for the transfer of title between the Commissioner of State Lands and the applicant, except one dollar ($1.00).

(b) Additional, actual costs associated with the conveyance, including, but not limited to, abstracting, researching, confirmation of title, and the filing of documents with the county, may be charged to the applicant by the Commissioner of State Lands.

 

20-80-410.  Development.

 

(a)  (1) Development of the donated parcel shall be strictly for the construction or maintenance of a homestead for eligible persons.

        (2) Upon completion of the construction of the home, the city, incorporated town, or community organization may sell, lease, or grant the home to any eligible person.

(b) (1) The homestead is to be used strictly for the private residence of the eligible person.

        (2) The sale, lease, or grant of the home shall be a transaction between the applicant and the eligible person.

 

20-80-411.  Restrictions -- Taxes.

 

(a) The applicant is responsible for transferring the donated parcel to an eligible person.

(b) The eligibility criteria for the sale, lease, or grant of a homestead shall be established by the Commissioner of State Lands and shall take into account the income of the person or family unit, which shall not exceed the median family income, as determined by the United States Department of Housing and Urban Development, for the area in which the applicant is located.

(c) Upon transferring the land to the eligible person, the homestead will be treated as any other private residence and subject to all laws and regulations of the government, including the payment of real property taxes.

 

 

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