Committee holds public hearing on HB311 to allow residential improvement districts; no vote

The committee held a public hearing on HB311, a bill that would authorize residential improvement districts and permit collection of assessments on property tax bills. The sponsor, Representative Wilcox, presented the measure but no committee vote was taken; she said she would return with the bill at a later date.

Speakers representing developers and homebuilders said the change would lower the cost of financing public infrastructure in new neighborhoods and large mixed-use projects. Phil Hunt, who described himself as working with developers in the Southeast, told the committee that “every other state in the Southeast, moving Florida to Texas, Mississippi, Louisiana, Tennessee, the Carolinas…has a version of this assessment bill on the books.” Hunt said institutional investors prefer collection on the tax bill rather than the current Alabama Chapter 99A mortgage-like foreclosure process, which he described as an arcane 10-day notice with no right of redemption.

Jeff Tsubota, identified as a senior vice president at a national home builder, said his company is “supportive of HB311,” arguing that tax-bill collection stabilizes financing from the securities market, lowers capital costs and can reduce overall house prices when assessments are amortized over decades.

County finance officials raised procedural and fairness concerns. Sonny Grasswell, speaking for county revenue commissioners, said the county is “very concerned about putting the revenue commissioners in a position of enforcing these assessments and being placed in the position of either auctioning off a tax lien against the property or selling the property on the courthouse steps,” and asked that the committee hold the bill while stakeholders work to resolve enforcement and local-control issues.

Other points from the hearing: - In current Alabama practice under Chapter 99A, witnesses described a mortgage-style foreclosure process with a short notice period and no statutory right of redemption; proponents argued moving collection to the property tax process would substitute the longer tax-certificate process (described in testimony as a three-year certificate/redemption structure). - Witnesses said Florida had 66 similar financings in the prior year and that institutional use in Alabama has been limited; one example cited in testimony was a project in MidCity Huntsville. - Developers said assessments typically are amortized over 30–40 years; a 2% county or tax-collection fee (cited as the norm in Florida) was discussed as a potential administrative charge to reimburse tax offices for collection work.

No committee action or vote was recorded on HB311 in the provided transcript; the sponsor said she will return with the bill. The committee asked stakeholders to continue discussions on collection mechanics, notice/foreclosure protections and the degree of mandatory application by county.

Why it matters: The bill would change the mechanism for collecting improvement-district assessments and therefore the foreclosure and redemption timeline that attaches to unpaid assessments; that can materially affect property owners, local revenue offices and the financing terms developers obtain for infrastructure bonds.