Alabama Administrative Code
Title 80 - ALABAMA DEPARTMENT OF AGRICULTURE AND INDUSTRIES
MARKETING
Chapter 80-10-17 - RULES CONCERNING THE COLLECTION OF ASSESSMENTS AND PENALTIES UNDER CODE OF ALA. 1975, Sections2-19-120, ET SEQ., RELATING TO THE ERADICATION OF BOLL WEEVILS IN COTTON
Section 80-10-17-.05 - Lien For Assessment Under Code of Ala. 1975, Sections2-19-120 et seq.-Validity And Priority Against Certain Persons
Universal Citation: AL Admin Code R 80-10-17-.05
Current through Register Vol. 42, No. 11, August 30, 2024
(1) Purchasers, holders of security interests, mechanic's lienors, and judgment lien creditors. The lien imposed by Section 2 of these regulations shall not be valid as against any purchaser, holder of a security interest, mechanic's lienor, or judgment lien creditor until notice thereof which meets the requirements of subsection (6) has been filed by the Commissioner or his delegate, and shall not be perfected as against any purchaser, holder of a security interest, mechanic's lienor, or judgment lien creditor until the date such notice is filed.
(2) Protection for certain interest even though notice filed. Even though notice of a lien imposed by Section 2 of these regulations has been filed, such lien shall not be valid:
(a) SECURITIES. With respect to a security
(as defined in subsection (5)(d)):
1. As
against a purchaser of such security who at the time of purchase did not have
actual notice or knowledge of the existence of such lien; and
2. As against a holder of a security interest
in such security who, at the time such interest came into existence, did not
have actual notice or knowledge of the existence of such lien.
(b) MOTOR VEHICLES. With respect
to a motor vehicle (as defined in subsection (5)(c)), as against a purchaser of
such motor vehicle, if:
1. At the time of the
purchase such purchaser did not have actual notice or knowledge of the
existence of such lien; and
2.
Before the purchaser obtains such notice or knowledge, he has acquired
possession of such motor vehicle and has not thereafter relinquished possession
of such motor vehicle to the seller or his agent.
(c) PERSONAL PROPERTY PURCHASED AT RETAIL.
With respect to tangible personal property purchased at retail, as against a
purchaser in the ordinary course of the seller's trade or business, unless at
the time of such purchase such purchaser intends such purchase to (or knows
such purchase will) hinder, evade, or defeat the collection of any assessment
under this title. The purchase of cotton crops is not tangible personal
property purchased at retail.
(d)
PERSONAL PROPERTY PURCHASED IN CASUAL SALE. With respect to household goods,
personal effects, or other tangible personal property (excluding cotton crops)
purchased (not for resale) in a casual sale for less than $250, as against the
purchaser, but only if such purchaser does not have actual notice or knowledge
(A) of the existence of such lien, or (B) that this sale is one of a series of
sales.
(e) PERSONAL PROPERTY
SUBJECT TO POSSESSORY LIEN. With respect to tangible personal property subject
to a lien securing the reasonable price of the repair or improvement of such
property, as against a holder of such a lien, if such holder is, and has been,
continuously in possession of such property from the time such lien
arose.
(f) REAL PROPERTY TAX. With
respect to real property, as against a holder of a lien upon such property, if
such lien is entitled to priority over security interests in such property
which are prior in time, and such lien secures payment of ad valorem
tax.
(g) REAL PROPERTY SUBJECT TO A
MECHANIC'S LIEN FOR CERTAIN REPAIRS AND IMPROVEMENTS. With respect to real
property subject to a lien for repair or improvement as against a mechanic's
lienor but not to exceed $5,000
(h)
CERTAIN INSURANCE CONTRACTS. With respect to a life insurance, endowment, or
annuity contract, as against the organization which is the insurer under such
contract, at any time:
1. Before such
organization had actual notice or knowledge of the existence of such lien;
or
2. After such organization had
such notice or knowledge, with respect to advances required to be made
automatically to maintain such contract in force under an agreement entered
into before such organization had such notice or knowledge.
(3) Priority of interest and expenses. If the lien imposed by Section 2 of these regulations is not valid as against a lien or security interest, the priority of such lien or security interest shall extend to:
(a) Any
interest or carrying charges upon the obligation secured;
(b) The reasonable charges and expenses of an
indenture trustee or agent holding the security interest for the benefit of the
holder of the security interest;
(c) The reasonable expenses, including
reasonable compensation for attorneys, actually incurred in collecting or
enforcing the obligation secured;
(d) The reasonable costs of insuring,
preserving, or repairing the property to which the lien or security interest
relates;
(e) The reasonable costs
of insuring payment of the obligation secured; and
(f) Amounts paid to satisfy any lien on the
property to which the lien or security interest relates, but only if the lien
so satisfied is entitled to priority over the lien imposed by Section 4 of
these regulations, to the extent that any such item has the same priority as
the lien or security interest to which it relates.
(4) Place for filing; form.
(a) PLACE FOR FILING. The notice referred to
in subsection (1) shall be filed:
(b) REAL PROPERTY. In the case of real
property, in the probate office of the county in which the property subject to
the lien is situated; and
(c)
PERSONAL PROPERTY. In the case of personal property, including, but not limited
to cotton crops, whether tangible or intangible, in the office (i) in which a
financing statement would be filed to perfect a security interest with respect
to such property pursuant to the Alabama Uniform Commercial Code, or (ii) of
the Secretary of State, if a financing statement would not be required to be
filed to perfect a security interest with respect to such property; provided,
however, if the property is a motor vehicle (as defined under subdivision
(5)(c) of this section), the assessment lien shall be perfected in the same
manner as a security interest is required to be perfected with respect to such
motor vehicle.
(d) FORM. The form
and content of the notice referred to in subsection (a) shall be prescribed by
the Commissioner or his delegate. Such notice shall be valid notwithstanding
any other provision of law regarding the form or content of a notice of
lien.
(5) Definitions. For purposes of this section, the following terms shall have the following meanings, respectively, unless the context clearly indicates otherwise:
(a) SECURITY INTEREST. Any interest in
property acquired by contract for the purpose of securing payment or
performance of an obligation or indemnifying against loss or liability. A
security interest exists at any time (A) if, at such time, the property is in
existence and the interest has become protected against a subsequent judgment
lien arising out of an unsecured obligation, and (B) to the extent that, at
such time, the holder has parted with money or money's worth.
(b) MECHANIC'S LIENOR. Any person who has a
lien on real property (or on the proceeds of a contract relating to real
property) for services, labor, or materials furnished in connection with the
construction or improvement of such property. For purposes of the preceding
sentence, a person has a lien on the earliest date such lien becomes valid
against subsequent purchasers without actual notice, but not before he begins
to furnish the services, labor, or materials.
(c) MOTOR VEHICLE. A self-propelled vehicle
which is registered for highway use under the laws of any state or foreign
country.
(d) SECURITY. Any bond,
debenture, note, or certificate or other evidence of indebtedness, issued by a
corporation or a government or political subdivision thereof, with interest
coupons or in registered form, share of stock, voting trust certificate, or any
certificate of interest or participation in, certificate of deposit or receipt
for, temporary or interim certificate for, or warrant or right to subscribe to
or purchase, any of the foregoing; negotiable instrument; or money.
(e) ASSESSMENT LIEN FILING. The filing of
notice (referred to in subsection (1)) of the lien imposed by Section 2 of
these regulations.
(f) PURCHASER. A
person who, for adequate and full consideration in money or money's worth,
acquires an interest (other than a lien or security interest) in property which
is valid against subsequent purchasers without actual notice. In applying the
preceding sentence for purposes of subsection (1) of this section:
1. A lease of property;
2. A written executory contract to purchase
or lease property;
3. An option to
purchase or lease property or any interest therein; or
4. An option to renew or extend a lease of
property, which is not a lien or security interest shall be treated as an
interest in property.
(6) Special rules.
(a) ACTUAL NOTICE OR KNOWLEDGE. For purposes
of this article, an organization shall be deemed for purposes of a particular
transaction to have actual notice or knowledge of any fact from the time such
fact is brought to the attention of the individual conducting such transaction,
and in any event for the time such fact would have been brought to such
individual's attention if the organization had exercised due diligence. An
organization exercises due diligence if it maintains reasonable routines for
communicating significant information to the person conducting the transaction
and there is reasonable compliance with the routine. Due diligence does not
require an individual acting for the organization to communicate information
unless such communication is part of his regular duties or unless he has reason
to know of the transaction and that the transaction would be materially
affected by the information.
(b)
SUBROGATION. Where one person is subrogated to the rights of another with
respect to a lien or interest, such person shall be subrogated to such rights
for purposes of any lien imposed by Section 2 of these regulations.
(c) DISCLOSURE OF AMOUNT OF OUTSTANDING LIEN.
If a notice of lien has been filed pursuant to subsection (4), the commissioner
or his delegate is authorized to provide by regulations the extent to which,
and the conditions under which, information as to the amount of the outstanding
obligation secured by the lien may be disclosed.
Author: Robert J. Russell
Statutory Authority: Code of Ala. 1975, §§ 2-2-8; 2-19-128; 2-18-135(c); Title 2, Chapter 19, Article 6.
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