Tax Sales and Surplus Funds

Thank you, Virginia Madden, for pointing out that I never posted the final version of the amended surplus funds statute. I could have sworn I engaged in extensive posting/commenting on this subject, but maybe it was an off-blog email correspondence.

Here is the final version of the law. It says whoever redeems is entitled to the surplus funds.  It is silent about who gets the funds if nobody redeems.  In that case, they will lie unclaimed for the full 13 years, and then revert to the county.

§ 40-10-28.  Excess funds after sale.

On and after the effective date of the act adding this amendatory language, the excess arising from the sale of any real estate remaining after paying the amount of the decree of sale, including costs and expenses subsequently accruing, shall be paid over to a person or entity who has redeemed the property as authorized in Section 40-10-120 or any other provisions of Alabama law authorizing redemption from a tax sale, provided proof that the person or entity requesting payment of the excess has properly redeemed the property is presented to the county commission within three years after the tax sale has occurred. Until and unless the property is redeemed, the excess funds from the tax sale shall be held in a separate account in the county treasury during the three-year period. If at the end of the three-year period there has been no proper request for the excess funds, those funds and any interest earned on those funds shall be deposited to the credit of the general fund of the county and shall thereafter be treated as part of the general fund of the county. At any time within 10 years after the tax sale has occurred, the county commission shall on proof made by any person or entity that the property has been properly redeemed by the person or entity under the general laws of the state, the county commission shall order the payment of the excess funds to such person or entity and retain any interest earned on those funds, but if not so ordered and paid within such time, the same shall become the property of the county. Following redemption, any excess funds including interest paid as required by this chapter, may be remitted to the tax sale purchaser pursuant to the procedures set forth in this chapter.

The new statute became effective on August 1, 2013.  I heard there was an attorney general’s opinion clarifying the effective date as meaning it applied to tax sales after August 1, 2013, but I can’t find it.