Excess Funding Claims From Tax Sales

POLICY #46

Excess Funds Claims From Tax Sales

DATE ADOPTED: 9‑26‑11 MINUTE BOOK: 38 Page 17

POLICY

To establish a policy and authorization for the handling of claims and demands made against the County for excess funds after the sale of lands for the payment of unpaid taxes assessed on the lands, or against the owners of the lands for same as authorized by Chapter 10, Sale of Land, Title 40 of the Code of Alabama 1975, as amended; and to comply with the legal requirements set forth in Chapter 12, Claims and Demands Against County, Article 11 of the Code of Alabama 1975, as amended, for the inspection, review, auditing, and the corresponding payment and registration or rejection of said claims and demands.

PROCEDURE

1. Claim for excess funds made within three years of the date of the tax sale requires action by either the CAO or the Chairman.

When a claim is made for excess funds within three (3) years after the date of the tax sale, the following procedures apply:

a. The Chief Administrative Officer (“CAO”) or the Chairman of the County Commission (“Chairman”) shall:

1. Inspect, review, and audit each claim to ensure it is valid and legally payable.

2. Examine the Certificate of Land Sold for Taxes.

3. Identify the person or entity assessed the taxes at the date/time of the tax sale.

4. Request and review identification (e.g., driver’s license) to confirm the claimant is the “original owner.”

5. If a third party files the claim, they must provide:

   • A verified claim signed by the original owner

   • A valid power of attorney authorizing them to act

6. Consult with the county attorney if necessary.

7. If satisfied the claim is valid, the CAO is authorized to issue a warrant/check payable to the original owner or their agent/legal representative.

2. Claim for excess funds made after three (3) years but within thirteen (13) years requires action by BOTH the CAO and the Chairman.

a. The CAO and the Chairman shall:

1. Inspect, review, and audit each claim — all such claims must be verified.

2. Examine the Certificate of Land Sold for Taxes.

3. Identify the person/entity assessed the taxes at the time of sale.

4. Request and review identification to confirm the claimant is the original owner.

5. If a third party files the claim, they must provide:

   • A verified claim signed by the original owner

   • A valid power of attorney

6. Consult with the county attorney if necessary.

7. If both certify in writing that the claim is valid, they shall register the claim as allowable and issue a warrant/check payable to the original owner or their representative.

3. Additional Documentation or Legal Actions

If, after review and consultation with the county attorney, the CAO or Chairman determines that additional documentation or legal actions are necessary to avoid liability or adverse consequences, the Chairman is authorized to:

• Impose additional requirements (e.g., indemnity agreements)

• Take additional actions to protect the County (e.g., filing declaratory judgment or interpleader actions)

• Execute all documentation necessary to assert, settle, compromise, or resolve any such actions

LEGAL AUTHORITY

ALA. CODE § 11‑12‑4 — Audit, Registration, Payment

County commission must audit all claims; allowed claims must be registered, and the Chairman must issue a warrant for payment.

ALA. CODE § 11‑12‑5 — Itemization

No claim may be allowed unless itemized by the claimant or someone with personal knowledge.

ALA. CODE § 11‑12‑10 — Review

The Chairman must independently inspect and determine whether payment is legally authorized.

ALA. CODE § 11‑12‑11 — Investigation; Rejection

If the Chairman determines a claim cannot lawfully be paid, he must refuse to sign or issue a warrant.

ALA. CODE § 11‑12‑12 — Liability for Unauthorized Claims

If the Chairman approves an unlawful claim, he is jointly liable with the County Commission for the unauthorized expenditure.

ALA. CODE § 40‑10‑28 — Excess Funds After Sale

• Excess funds from a tax sale must be paid to the owner, agent, or legal representative.

• If unclaimed for 3 years, funds are transferred to the County’s general fund.

• For 10 years after transfer, the County may order payment to the rightful owner upon proof.

• After 10 years, funds become County property.

ALA. CODE § 6‑5‑20 — Claims Against Counties

a. A claim must be presented to the county commission before suit may be filed. b. Failure to act for 90 days constitutes disallowance. c. Proof of presentation may be made by parole evidence.

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