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House Revenue and Tax Committee
February 2, 2023
Rep Eaves: All right. Good morning, everybody. Glad to see y’all here. We have three bills we’re going to run today. And without objection, we’re going to take House Bill 1224 out of order and let Representative Bentley run hers first, so she can get to another meeting. So, Representative Bentley, you’re recognized to present your bill.
Rep Bentley: Chairman, Committee, thank you. If it’s okay, I’d like to have Kelly Boyd come join me at the table from Secretary of State.
Rep Eaves: You bet.
Rep Bentley: Commissioner of Lands. Sorry, I’m always doing that, calling him secretary.
Rep Eaves: You just introduce yourself for the record. You can go and get started.
Boyd (CSL): Kelly Boyd, Deputy Commissioner of State Lands.
Rep Bentley: Thank you, Chairman and Committee. Two years ago we passed some great legislation to make the Commissioner of State Lands office jump into the 21st century with their land auction. So they could do things online and have it be more efficient and effective for our counties and efficient, effective for them as well.
One thing we’ve run into in the past two years is that we’ve had a number of bounced checks. In the past two years, they’ve had 74 non, stop payments or bounced checks in the total of $1.6 million. So it’s caused a lot of havoc for the Commissioner of Lands, also for our counties. So when that happens all of a sudden the deeds stop, the whole process is stopped. So it’s a real headache for them, also for our counties and our county clerks. And they really had no way to stop it. There was no penalty there was nothing for them to do to slow this down.
So what we’re doing today is a very simple thing which is already in code with DFA. And anybody that has a business has a process as well to stop– for a penalty for a bounced check. So what this does is adds a 10% penalty or $20, whichever one is greater when someone does a bounced check. Allows them to stop the deed so they can go back in the process of getting that deed sold, and help the counties get these things cleared up.
So, four simple things that this will do, it’ll allow the Secretary of Land as I said to cancel deeds, gives them rules to reflect these changes, to provide multiple notices at each layer along the way. So on the website, people will know what’s happening. They’ll know if they do a check, if that check bounces this is going to be your penalty. So there’s going to be not any– nobody in suspense to know that there’s a penalty, there’s a reason because we need to slow this down is the whole purpose of the bill that we’re doing here.
So they have times when someone – I want you guys to understand as well – as he’s going through this, when someone is delinquent on their taxes, they have up to– it’s four years before that land’s going to go up for auction. So they have a long time to get that cleared up and to be taken care of. But people at the very last day, the end of the four years, will write a check that they know is going to bounce and it throws the whole thing in havoc. So this is going to make them realize if they do that it’s going to be a penalty to pay. So we can stop it a little bit and help our Commissioner do a better job and help our counties as well. So with that being said, I’ll take any questions the Committee has on this bill.
Rep Eaves: All right. Thank you, Representative. Members, any questions on this one? Representative Cavenaugh, you’re recognized
Rep Cavenaugh: Thank you, Mr. Chair. My question is we’re talking about order of payment of checks, debit cards, transfers. Are we accepting credit cards at all?
Boyd (CSL): Yes, Representative Cavenaugh, we do accept credit cards, debit cards. You can pay us with a cashier’s check. You can pay us with personal check.
Rep Cavenaugh: Follow-up. So how many of the credit cards do you say that they come back and actually say go to the creditor and say I didn’t do that charge? I’m just saying from somebody who accepts them it does happen. Is that addressed in this also?
Boyd (CSL): We don’t provide penalties on our credit card transactions. This is solely for checks but we do have a significant number of those on our online auction. We’ve probably had on the order of 800 or 900 since we went live July of year before last.
Rep Cavenaugh: And you have no recourse if they decide that they don’t want to pay it and they dispute it with their credit card provider, you have no recourse on these people?
Boyd (CSL): We try but typically we find the credit card company sides on the side of the person that wants to dispute the transaction. We haven’t been very successful in recouping our monies there. We tend to just lose it. Most often those are $100 amounts. The way our auction works, as soon as the auction closes, a $100 charge is debited to your account, and that’s generally which one fails. So that the dollar amount of that is significantly less. But the auctions, the example that I’m telling Representative Bentley, we had a place– a sale in Saline County last year, buyer from Minnesota came down, paid us $63,000 for a parcel, then drove out, inspected the parcel, decided they didn’t want it, and stopped their check.
The problems I have there, a stopped check is in this instance, the same as an NSF. Also it’s very difficult to collect it out of state. So that’s why we’re asking for this. We think it’ll be a deterrent and we’re going to spend all kind of effort making sure every single person knows before they write us a check that this is a penalty that will be enforced if they write us a hot check.
Rep Cavenaugh: Follow up, Mr. Chair?
Rep Eaves: You don’t have to ask for one, go ahead.
Rep Cavenaugh: So if I come and I write a check for $63,000 for a parcel, I go inspect it and it’s no good. I just go ahead and call my bank. I want to stop payment on that. You’re left with a person not paying for a parcel they have. We have bought parcels when it used to be on the auction but we had to provide certified funds. How come we’re not requesting certified funds from these people?
Boyd (CSL): We do request it. We do require it. If you’re redeeming your property, if you’re the owner of the property in the last 30 days, you do have to pay it at that point in certified funds. Because the problem happens if you redeem it and then give us a hot check, your property rolls on. The counties are still not going to collect their money from property taxes. So we do require that but as far as a person coming in and selling, we accept personal checks.
Rep Cavenaugh: Okay. From a business standpoint, when I’m dealing with large funds and I’m buying property for our investment or whatever, we have to provide certified funds. I don’t know why as a state we wouldn’t require these buyers to have certified funds also.
Boyd (CSL): There is actually a section in the code that requires the State to accept personal checks.
Rep Cavenaugh: Okay, that’s something to think about. Thank you.
Rep Eaves: Thank you, Representative. Representative Beaty, you’re recognized.
Rep Beaty: I guess my question deals more with when you accept these checks, do you have the process to convert these checks into electronic payments so they’re processed through ACH, where you write the check, they process through immediately, and the timing for clearing is much quicker than a normal process. Do you have that capability, have you explored that?
Boyd (CSL): I’m glad you asked that question. We will have this starting this summer. We start sales back up in July of this summer, and we are right now implementing that. Prior to this, no sir, we did not.
Rep Beaty: A follow up. How many of these transactions where you’ve had returned checks, how many you’ve had in the last year?
Rep Bentley: Had 74 the past two years.
Boyd (CSL): I believe we had 52 last year and that would have been the last fiscal year. In this fiscal year, we’ve had 22 thus far.
Rep Beaty: 22?
Boyd (CSL): Yes, sir.
Rep Eaves: All right. Representative Rye, you’re recognized.
Rep Rye: Yes, sir. Can I ask you this, in a situation where the check is no good, can you put a lien up against that property until that’s paid?
Boyd (CSL): Representative Rye, what we do is turn it over to the prosecutor.
Rep Eaves: All right. Representative Brown, you’re recognized.
Rep Brown: Thank you, Mr. Chair. If I understood you correctly when you said that person who pays with a credit card, you immediately charge that credit card $100, is that correct?
Boyd (CSL): Online, yes, ma’am.
Rep Brown: Okay. But the bill or the amount they owe may be considerably more, correct?
Boyd (CSL): Yes, ma’am.
Rep Brown: Okay, so how quickly do you find out that that $100 debit does not clear, how quickly?
Boyd (CSL): Immediately.
Rep Brown: Immediately? So then you know that this property has not sold. You don’t transfer title or anything like that?
Boyd (CSL): That’s correct, ma’am.
Rep Brown: Thank you.
Rep Eaves: All right. Thank you, Representative Brown. Any other questions, members? Representative McGrew, you’re recognized.
Rep McGrew: If one of these falters, what is the cost to put it on the next sale and sell it again, do you have that cost determined?
Boyd (CSL): The biggest cost is the fact it’s another year before we’re allowed to sell it. So it’s another year that the taxes are not recouped.
Rep McGrew: Thank you.
Rep Eaves: All right. Any other questions, members? All right, seeing none. Is there anyone in the audience that would like to speak for or against this bill? All right, seeing none. Representative Bentley, would you like to close for your bill?
Rep Bentley: Chairman, Committee, thank you for hearing this. I think it’s a necessary step for us to help the Commissioner for State Lands to stop people fraudulently up front writing a check they know they’re not going to use or coming out and decide they don’t want the property afterwards. We’re just helping people to do their due diligence beforehand to make sure this property that they want to invest in and to help them stop this fraudulent activity going on. So with that, I’d appreciate a good vote.
Rep Eaves: All right, members, you’ve heard the presentation. What are the wishes of the Committee? We have a motion do pass and a second. All those in favor signify by saying aye. Opposed? All right, the ayes have it. Congratulations, you passed your bill.
All right, members, we have Representative Richmond, and he does have an amendment. We’re going to go to House Bill 1191 first.
Members, I’ll give you a second or two to read the amendment and then we’ll need a motion to adopt the amendment in Committee on his bill.
All right, members, can we get a motion to adopt this amendment? We have a motion to adopt and a second. All those in favor say aye. Opposed? All right, your amendment is adopted. So, Representative Richmond, you can present House Bill 1191 as amended.
Rep Richmond: Thank you, Mr. Chair. Mr. Chair, with your permission, I’d like to ask for Mr. Kelly Boyd to join me at the table.
Rep Eaves: Welcome back.
Rep Richmond: Thank you, Chair. Thank you, Committee. 1191 is again a Commissioner of Land Bill and 95% of the bill that you have in front of you is technical corrections dealing with obsolete language but I’ll go over the different sections as well just to be sure that there’s clarification of what we’re trying to get accomplished because there’s a couple of things that we are going to change to try to make legislation, make the law a little better.
In section 1, it basically eliminates mail-in bids on parcels at tax delinquent auctions. In various places standardizes words with parcel, land, property, et cetera. Changes notification period from starting when the parcel sells at a tax delinquent auction to 30 days prior to the date of the sale. Sets the deadline to redeem the online auction parcel at 4 PM Central Time the last business day before the date of sale. That’s one of the major changes on this is that the day before the sale is when they have the opportunity, the actual landowner has the opportunity to come in and pay the delinquent taxes.
Now up to this point, it was 10 days after the sale and that’s going to be changed in 1263. I’m sorry, got the wrong one. I’m sorry. I apologize for that, that’s the wrong one. Anyway, Section 1 gives the Commissioner of State Land the option to invest in T-bills, saving bonds, and events and interest rates that are higher than CDs. Basically gives them flexibility of where to take this money and actually invest it.
Section 2 will help clean up a problem with the Commissioner of State Lands, does not have the ability to return back to the county a single incorrectly certified parcel. When parcels are certified to the Commissioner, the county sends them in a batch. If we find a parcel with a problem, non-existent, incorrect name, incorrect legal description, the CoSL – the Commissioner of State Lands has to either keep the parcel and sell it dealing with the fallout after the sale or return the entire certification back to the county. This would allow them to be able to reach in and if there’s a problem with that parcel they can pick out that parcel instead of having to go back and start all over again.
Sections 3, 5, 6, 7, 8, 9, and 13, and 14, are all simply replacing the word land and the word property, with the word parcel. Section 4 removes the requirement to publish the assessed value of the parcel with notification of the sale is made. Assessed value has played no role in selling delinquent parcels since 2013.
Section 10 deletes obsolete language referring to changes in the code made in 2005 and 2018. Section 11 clarifies how long excess proceeds shall remain in escrow. There has been some misunderstanding regarding how long the period is and this language clarifies that.
Section 12 specifies that when someone who is not the owner redeemed someone else’s tax delinquent parcel the redemption deed goes to the owner and the redeemer receives a redemption receipt. If the owner is the redeemer, the owner would receive both the deed and the receipt. Right now there’s still this– even though they have taken on the website and have put numerous notices on there to anyone that’s looking to buy property, you can’t go in and just simply pay the taxes and take possession of the property and people are still doing that. So this is additional effort to clarify that so people do not think that when they go in and you pay the taxes on a property that is delinquent that suddenly you own that property and that’s the purpose of that change.
Section 15 repeals obsolete language since assessment values are no longer part of the processing the tax delinquent parcel at the CoSL, Commissioner of State Land. And that sums up the different changes.
Rep Eaves: All right. Members, any questions? Representative Rye, you’re recognized.
Rep Rye: Yes, sir. Thank you, Mr. Chairman. You know, Representative, Marcus, most of the time when this happens it’s in the rural portion of a county that you have more than one abstractor and another surveyor that might be bleeding over from one to another. And I believe that’s kind of what we’re looking at, isn’t it, sir? That maybe there’s a parcel out there that’s really not there because it’s already been taken into another parcel.
Rep Richmond: Representative Rye, having never ever been involved in an auction of this type, I will defer to Mr. Kelly Boyd.
Boyd (CSL): Representative Rye, that’s a good question. There are a lot of reasons. Some of these parcels are very old. Some of them divide across two counties just as you talk about. There are a wide variety of reasons and we’re just wanting to clear it up so we can send one back instead of having to decertify the entire county.
Rep Rye: Thank you. Thank you, Mr. Chairman.
Rep Eaves: Thank you, Representative. Kelly, is this something that just became a problem or is it something we just failed to address in past sessions? What brought it to your attention at this time?
Boyd (CSL): This is part of an ongoing thing that we’re doing at the CoSL. We started in 2019 changing the core way that the CoSL does business. We couldn’t do some of the things we’re doing here until we finished what we did in 2019. So we are addressing things as they come up but this is also part of a longer-term plan. We’ll be back in 2025, we hope with more changes just like this.
Rep Eaves: All right. Thank you, members. Any other questions? Representative Wooten, you’re recognized.
Rep Wooten: I think Representative Rye may have touched on it, what makes a property become non-existent?
Boyd (CSL): That’s a good question.
Rep Wooten: I mean is it an overlap in a survey or how do you determine that?
Boyd (CSL): There are as many reasons as there probably are delinquent parcels. A parcel might become delinquent because the highway built through and took part of it and they left off a sliver, and that stayed with the right-of-way so a parcel is still listed. There are times when the river makes a bend and swallows up a parcel. We’ve got many of those, especially in southeast Arkansas that you can’t locate. Some of them are double assessed, some of them are double recorded. Some of them just changing a letter or a number in the name of the parcel can cause that problem. So you’re right in what you said but there are many more reasons as well.
Rep Wooten: All right. Thank you, Mr. Chairman.
Rep Eaves: Thank you, Representative. Members, any other questions? All right, seeing none. Is there anyone in the audience that would like to speak for or against the bill? All right, seeing none. Representative Richmond would you like to close for your bill?
Rep Richmond: Thank you, Mr. Chair. I am closed and I’d appreciate a good vote.
Rep Eaves: Members, you heard the presentation of the bill, what are the wishes of the Committee? As amended? Okay, we have a motion do pass as amended. All those in favor signify by saying aye. Opposed? The ayes have it. Congratulations, you passed your bill. And that takes us to House Bill 1273.
Rep Richmond: 1263.
Rep Eaves: Sorry. Thank you, 1263. And you’re recognized to present that bill.
Rep Richmond: Okay first of all, thank you very much for the positive vote on the last bill. 1263 is again in the same line as 1191 as far as trying to make technical corrections. Again it’s a bill that the majority of it is just technical corrections and deleting obsolete language but there are a couple of significant things to talk about. In section 1, it amends the code to delete sections that accepting bids on property by mail, time and place of delivery, and location of tax delinquent auctions. Makes a variety of deletions of property and inserting parcels provided, all this is that is offered at tax delinquent auctions. Notices must go out by regular mail 30 days prior to the date of the sale that the redemption period ends at 4 PM Central Standard Time.
The last business day prior to that date of the sale eliminates language referring to any 10-day redemption period. That’s what we started to talk about a little bit earlier, you have almost four and a half years, maybe up to five years to go in and pay your taxes on your property before it goes up for bid. And having that 10-day period creates a couple of problems that they’ve experienced here. And that’s why they’ve changed this to say that you have till 4 PM of the day before the auction. And then when it goes on auction, if it sells, it is sold.
Now the problem, one of them is that you would go in and buy some property – you as somebody that’s buying property, you’d buy that and now the state has your money and with that money, it’s tied up and suddenly, the owners decide that they’re going to pay the taxes. If somebody hadn’t bought that property they’d have probably just kept being delinquent but the fact that finally somebody bought it they thought well, I better go pay my taxes now. So they go pay their taxes and whoever bought that property, their money is tied up for a month, a couple of months, and they’re taken out of the auction business as far as buying other property.
The other thing is that the possibility of that 10-day period creates a situation where it is possible to launder dirty money. I come in, I buy, I pay cash for this land. And this land now I also help whoever has the land to redeem it. The State took your dirty money, they’ve got it. And what you get back is a nice clean check from the State of Arkansas. So getting rid of that also helps mitigate the potential of that problem. And you can ask some questions but I know that these things happen that I guess it’s no requirement for IRS reporting or anything. So it’s a pretty good way to launder money. And I hope there’s not a lot of people listening because maybe they’ll run out and do it right quick but maybe not. But that’s another reason why they’re changing this.
Section 2 amends Arkansas code to delete the word land and parcel and property and makes it consistent. Section 3 amends the Arkansas code to delete the word land and parcel as well. The bill does include an emergency clause on this because they want it to go into effect as quickly as possible. But that’s the high points, that’s the biggest things that are going on with this particular bill. I may have missed something but if you have a question then we’ll try to answer that. I’m ready for questions.
Rep Eaves: All right. Thank you, Representative Richmond. Kelly, is the 4 PM deadline, are you already doing that, the 4 PM deadline before it goes to auction, and then they currently have 10 days to redeem or to pay it?
Boyd (CSL): Currently, Mr. Chairman. There we go. Currently, the way it works, we don’t have a deadline for tax delinquent auctions. A tax delinquent auction is defined as the ones we do physically in the counties where the land’s located. We do have a deadline for the online auction that’s 8 PM. If a parcel goes under the bid right now, 30 days from today at 8 PM that auction closes, so we do have it for that.
What we’re trying to do here is standardize so that both the online auction and the tax delinquent auction, the deadline is 4 PM the day before the sale. Then when we go to the sale, if it sells that day, it’s sold. So you still have the four years. All we’re cutting out is the 10 days after the sale because that’s where all of our problems are associated with that.
Rep Eaves: The reason I ask that I had a constituent that failed to pay property tax and, of course, somehow I get involved in it, and was told that she had to come down to Little Rock, pay her property taxes by 4 PM on a certain date or it was going to auction the next day, and that’s what happened. She didn’t get down here and pay it, and it went to auction the next day. So are you saying that’s currently how it is?
Boyd (CSL): No, sir. We have now started this, was one of the first things.
Rep Eaves: This was about a year ago.
Boyd (CSL): They don’t have to come in person to pay. What she had to do in that instance, she didn’t have a means to pay it online. You can pay online but she didn’t have a means to pay it online, she was going to have to pay in cash. So she had to come here to make that payment. And yes, the reason we said 4 PM that day because that’s when our front desk closes over in our Reyno facility. So that deadline does exist.
Rep Eaves: But currently she would have still had 10 days to pay the taxes and the property would have still been hers if she had the money.
Boyd (CSL): If it sold the next morning at sale, she would still have the 10-day window to redeem the property.
Rep Eaves: Okay. Thank you for that clarification. Representative Cavenaugh, you’re recognized.
Rep Cavenaugh: Thank you. Thank you.
Rep Richmond: Nobody wants you to ask a question, Representative.
Rep Eaves: Kelly, could you? Hey, Richard, turn yours off. Mr., Representative McGrew, turn yours off just a second. All right.
Rep Cavenaugh: Thank you. In the car business when we take $10,000 in cash or over we have to report it by 8300, do y’all actually do those reporting of cash transactions?
Boyd (CSL): Representative Cavenaugh, no ma’am. And nor do we have a mechanism to.
Rep Cavenaugh: Well we didn’t either but we were required to do it. So we had to develop it because that’s a way that to be quite honest, that’s one way that people did try to launder money was to come into car dealerships with cash, buy a car. And so the IRS code specifically says that if we take over $10,000 cash in a 12-month period – and it’s a rolling 12-month period, it’s not calendar to calendar – we have to report that to them so that they know that there was it. But we don’t do any type of reporting to the IRS or anything, record-keeping if someone pays us with large amounts of cash?
Boyd (CSL): No, ma’am, we do not. To address your question more specifically, we had a sale in Sebastian County last year where one person came in and paid us $200,000 in $100 bills and that creates a variety of problems. We have to count it, we have to count it correctly, we have to get it back here. We have a safe in the van but a laundry bag full of $200,000 in bundles of $100s doesn’t fit very well. And all you’ve got to do at that point is go to your buddy – I’m not saying that happened here at all – but you go to your buddy and pay his taxes off and then the CoSL turns around and writes you a check right back for $200,000.
Rep Cavenaugh: Right. And well for me, I’m looking at money laundering coming from drug cartels. I’m not looking for money coming laundering from other Arkansans, I’m looking at illegal organizations that are laundering money because they have so much money they’re trying to find ways to launder that money and make it clean as possible. Land purchases – and for full disclosure horse purchases are a big issue with that also. But I was just curious why we didn’t have to do any type of reporting if it was over $10,000. Thank you.
Rep Eaves: Thank you, Representative. Representative McGrew, you’re recognized.
Rep McGrew: Thank you, Chairman. Question with this negotiated price sale, is that– two questions, is that something you currently do? And I’m thinking of a bid where you’re competing for a bid so it’s a negotiated sale price, can you explain that to me?
Boyd (CSL): Absolutely. That’s a great question too. That’s actually what our process is. We have three different types of parcels that we sell. We have an S1, it’s what we call internally an S1. This is a parcel that’s never before been offered for sale. It has to be offered at a physical auction first. We have to take it out and present it in front of the people and give them a chance to buy it and bid on there.
If it does not sell at the physical auction, it becomes what we call an S2. An S2 stays on our books. And for the first two years that we hold that parcel, it has to sell for the taxes, fees, penalties, whatever that are owed in it. That’s the minimum bid that can be offered and that’s offered on our online auction.
If after two years that parcel has not sold, then it becomes what we call a negotiated price parcel. We establish the bid at a minimum of $50. And that’s what you have to bid minimum to purchase that on our online auction website. We right now have about 600 of those in inventory. We have about 8,500 of the S2s and because we’re just getting them in from the counties, we have about 18,000 that will be what we call the S1s.
Rep Eaves: All right. Thank you, Representative. Representative Rye, you’re recognized.
Rep Rye: Yes, sir. Thank you, Mr. Chairman. Sir, no matter what, let’s just say that you have an auction in Craighead County or Newton County, if the person that’s delinquent if they show up at that sale, can they not redeem that at that point?
Boyd (CSL): Today yes.
Rep Rye: Yes?
Boyd (CSL): If this bill passes, starting in July they can redeem it up until 4 PM the day before.
Rep Rye: Day before? Thank you very much, Mr. Chairman.
Rep Eaves: Thank you, Representative. Vice-Chair Beaty, you’re recognized.
Rep Beaty: Mr. Boyd, similar question to what I asked before. You said this is where you have all the trouble and problems. Out of the sales that your office has conducted, how many parcels have been redeemed within that 10-day period by Arkansans that want to obtain their property back?
Boyd (CSL): I can’t tell you how many redeem it within that 10-day period. I can tell you we average about 55% of our parcels are redeemed at any point between the time that we have certified it and it goes up available for redemption, and the date that it either sells or– well, the date that it sells, 10 days after that.
Rep Beaty: I’m just asking that because of your statement that that’s where you have the problem are these 10 days. And you don’t have an answer for that to tell me how many or a percentage of those that are redeemed after the sale during that 10-day period. And that’s what we’re taking away from Arkansans and their right to. Maybe they’ve sat around they didn’t get notice, maybe they’re out of state, maybe it’s heir property, someone’s passed away and they get notice. Once that sale goes out, folks start talking, say hey, they sold your grandma’s place. And then folks come into your office to try to see what they can do to secure that property back.
I have a little concern on the 10-day period. I understand they had four years but sometimes you don’t act until you have to act. So I’ve got a little concern there. Then the concern over cash payments and your office accepting cash payments. I’ve got grave concern on that too, that maybe we need to address that for large sum cash transactions in your office dealing with those.
I don’t really buy into that there’s widespread issue of money laundering coming through the Commissioner of State Lands in the state of Arkansas, I don’t buy into that assertion. But I would like information regardless of how this goes on the vote, of the number of properties that were redeemed within the 10-day period and I’d like that by next week, Tuesday at the latest before this bill comes to the floor.
Boyd (CSL): Representative, we’ll have that to you this afternoon.
Rep Beaty: Thank you, sir. I would like to hold the bill until I get that information.
Rep Eaves: Representative Fortner, you’re recognized.
Rep Fortner: I can bring some information on those types of sales. I have a neighbor who habitually doesn’t pay his taxes. And I got tired of it and I bid on that property once. I paid the money. And then he came and paid his taxes. And right now his taxes are delinquent again. And I will bid on it again. And he will pay it again but the county has not got their resources because of him. And I don’t know how many of those go on but it does go on. Thank you.
Rep Richmond: Mr. Chair?
Rep Eaves: Yes, sir?
Rep Richmond: With your permission, I don’t know how you want to do this but Mr. Boyd can step out and get that information right now if you need to take a moment recess or something like that we can get this thing resolved.
Rep Eaves: All right. Mr. Boyd, how long would it take you to get that information?
Boyd (CSL): Probably less than five minutes.
Rep Eaves: Okay let’s just recess for five minutes. We’ve only got about 25 until we go into session. So we’ll give you about five minutes. And if you need more time, we may have to just hold this bill and come back but we’ll give you a shot at it right now. So just recess for five minutes.
[Recess]
Rep Eaves:Take your seats. We’re going to go back and talk some more about this bill. Representative Beaty, you’re recognized.
Rep Beaty: Mr. Boyd, you said you had information?
Boyd (CSL): Yes, sir. I just talked with our folks in our real estate division and between one-third and probably 42%– 33% to 42%, it depends on the year, it depends on the number of parcels we’re offering, obviously. But I believe a good number of the 55% of parcels that are redeemed at the CoSL, about 36% to 42% of those would be redeemed within the 10-day window. And that’s all sales, that’s online auction, and tax delinquent auction.
Rep Beaty: So we have about a third of Arkansans that once that property’s sold, they come in and take care of their obligation at that point and pay their bill?
Boyd (CSL): Correct.
Rep Beaty: Thank you.
Rep Eaves: Representative Wooten, you’re recognized.
Rep Wooten: So you’re telling me they have four years to redeem that property and then in a 10-day period they can come in and pay it out? That’s ludicrous. They ought to only have two years. I mean, there’s thousands of taxpayers in this state that pay on October the 17th. Is that what you’re saying, is that you want to do away with that 10 days? And I agree with you, I agree with Representative Fortner.
Boyd (CSL): Representative Wooten, that’s exactly what I’m saying. Not all of those people do this but there is a good number of those people that won’t pay their taxes until that property sells because as long as that property does not sell they get to keep it without paying taxes on it.
Rep Wooten: When I was a kid we called that Indian giving. You sell it, and then you turn around and take it back from them. That’s not right. I don’t care about taxpayers that don’t pay their taxes, that’s the least of my worries. But the guy that comes in and honestly bids and then it gets stripped away from him, that’s not right. Thank you, Mr. Chairman.
Rep Eaves: Representative Cavenaugh, you’re recognized.
Rep Cavenaugh: Thank you, Mr. Chair. Of those that come in and redeem in those 10 days, do you have any idea how many of those again become delinquent, and we do the process again?
Boyd (CSL): Not offhand, ma’am. We do get that but not offhand.
Rep Cavenaugh: But it does happen more than occasionally?
Boyd (CSL): Yes, ma’am.
Rep Cavenaugh: All right. Thank you.
Rep Eaves: Thank you, Representative. Representative McGrew, you’re recognized.
Rep McGrew: Thank you, Chairman. I would say I’ve experienced where I bought a piece of property and I can understand where a family member or someone does not know, they don’t get that notice. It was mailed to the last address but they didn’t get it. And they don’t know it’s happening until the sale happening. Had that happened to me and the family redeemed it. The family still has the property. There was obviously some financial problems, stuff that went on and they got it resolved. So I’m a little reluctant to take that 10 day away since what we’ve been doing. And sometimes they do not know, even though we’ve sent them a notice, doesn’t mean they’ve actually received the notice. And they don’t know until it’s happening. So I’m a little reluctant on that 10 days. Thank you.
Rep Eaves: Representative Rye, you’re recognized.
Rep Rye: Yes, sir. Thank you again, Mr. Chairman. You know, Representative– Richard, what he’s speaking about, in a lot of cases, is like a mother and dad that own a piece of property and they die and the kids are dispersed all over the United States in some cases, isn’t that right? And sometimes, I will say that they honestly try to do the right thing but they don’t know. But it’s still a big old window there isn’t it?
Boyd (CSL): Representative Rye, there is indeed. To address what seems to be a concern for the Committee. We send out certified mail to every person that has a tax delinquent property with us. Today they won’t get another notice from us. Let me back up for a step. Also if it’s a homestead parcel, they get due process server– they’ll have a process server go out to their house and take the notice to them. So homesteads we pretty well know if they got service or not.
If it’s a certified mail and we get it back, if we go ahead and sell that property and then that person comes to us and says I did not get notice, we’ll cancel the sale. We do that. I don’t want to say we do it all the time but we do it regularly enough that I know from where I’m speaking, there, we have done that. And under the new legislation that’s proposed here, we will serve notice again to every person that has a parcel coming up for sale 30 days prior to that parcel going for sale.
Today, a tax delinquent auction is held on – they get a notice – we’re sending out notices right now, that property will sell in July. Then when it sells they’ll get a regular mail notice – it’s specified in code regular mail – that goes out at that point. I think we all know about how well the mail is getting out in 10 days right now. So we’re giving them a better notice at this point. They will get 30 days prior to the date that that parcel goes up for sale they’ll get another notice from us. So we’re actually trying to resolve the issue you’re raising by giving them additional notice.
Rep Eaves: Thank you, Representative Rye. If you would, go and turn your mic off. Thank you. Representative Beaty, you’re recognized.
Rep Beaty: Just another question about. What percentage of your certified mail that you send out to delinquent taxpayers, what comes back in return mail to your office?
Boyd (CSL): It’s not bad. I’m not going to quote you a number right now I will tell you during the pandemic, we had a bunch of it come back but the majority of the certified mail that goes out right now we receive notice that it has been received, it has been signed for. When I say the majority I’m going to say in the 90% range.
Rep Beaty: Wow, I find that shocking, but thank you.
Boyd (CSL): Yes, sir.
Rep Eaves: Thank you, Representative. Members, any other questions? All right, seeing none, is there anyone in the audience that would like to speak for or against this bill? Okay, seeing none. Representative Richmond would you like to close for your bill?
Rep Richmond: Thank you, Mr. Chair. Members, appreciate the questions. I would say that it’s hard for me to believe that you can go four to five years and not have any knowledge or understanding that you’re not paying your taxes on the property. I don’t know of any bank, I don’t know of any credit union, I don’t know of any car loan organization that would allow somebody to go the four to five years without payment. And so while I do understand the concern and I appreciate the concern, I think that this is another example where we have people that are taking advantage of the system. When they’re forced to pay their taxes they’ll go in and pay their taxes and then I don’t know what the percentage is but I guarantee you knowing human nature, they go right back and start being delinquent again.
And so they’re taking advantage of the goodwill. And I think losing the 10-day period and having it 4 PM before is going to help solve some of the problems that they’re having for everybody involved, including the counties and local government. So I would ask for a do pass and a good vote. Thank you.
Rep Eaves: Members, you’ve heard the presentation of the bill. What are the wishes of the Committee?
Rep Wooten: Motion do pass.
Rep Eaves: We have a motion do pass by Representative Wooten. All those in favor signify by saying aye. Opposed? The ayes have it. Congratulations, you passed your bill.
Rep Richmond: Thank you, Mr. Chair. Thank you, Committee.
Rep Eaves: All right, members, that is all we have on our agenda. Just keep your eye on the website and I’ll also be sending texts for our next meeting. Thank you for your time, we’re adjourned.