GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1993

S	1 

SENATE BILL 941

Short Title:  Property Tax Liens Priority.	(Public)
─────────────────────────────────────── 
Sponsors: Senators Warren; Hoyle, Ballance, Edwards, Sherron, and Carpenter.
─────────────────────────────────────── 
Referred to:  Finance.
─────────────────────────────────────── 

April 21, 1993

A BILL TO BE ENTITLED
AN ACT TO CLARIFY THE LAW REGARDING TAX LIENS TO PROVIDE THAT LOCAL GOVERNMENT PROPERTY TAX LIENS HAVE PRIORITY OVER STATE TAX LIENS.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 105-356(a) reads as rewritten:
"(a)	On Real Property. – The lien of taxes imposed on real and personal property shall attach to real property at the time prescribed in G.S. 105-355(a). The priority of that lien shall be determined in accordance with the following rules:
(1)	The lien of taxes imposed under the provisions of this Subchapter shall be superior to all other liens, assessments, charges, rights, and claims of any and every kind in and to the real property to which the lien for taxes attaches regardless of the claimant and regardless of whether acquired prior or subsequent to the attachment of the lien for taxes.
(2)	The liens of taxes of all taxing units shall be of equal dignity.
(3)	The priority of the lien for taxes shall not be affected by transfer of title to the real property after the lien has attached, nor shall it be affected by the death, receivership, or bankruptcy of the owner of the real property to which the lien attaches."
Sec. 2.  G.S. 105-241 reads as rewritten:
"§ 105-241.  Taxes payable in national currency; for what period, and when a lien; priorities.
The taxes herein designated and levied shall be payable in the existing national currency.  State, county, and municipal taxes levied for any and all purposes pursuant to this Subchapter shall be for the fiscal year of the State in which they become due, except as otherwise provided, and the lien of such taxes shall attach annually to all real estate of the taxpayer within the State on the date that such taxes are due and payable, and said lien shall continue until such taxes, with any interest, penalty, and costs which shall accrue thereon, shall have been paid; in the settlement of the estate of any  decedent where, by any order of court or other proceeding, the real estate of the decedent has been sold to make assets to pay debts, such sale shall not have the effect of extinguishing the lien upon the land so sold for State taxes, nor shall the same be postponed in any manner to the payment of any other claim or debt against the estate, save funeral expenses and cost of administration.
A State tax lien on real property is inferior to a local ad valorem tax lien on real property as provided in G.S. 105-356(a).  A State tax lien is not enforceable as against bona fide purchasers for value, and as against duly recorded mortgages, deeds of trust and other recorded specific liens, as to real estate, except upon docketing of a certificate of tax liability or a judgment in the office of the clerk of the superior court of the county wherein the real estate is situated, and as to personality, except upon a levy upon such property under an execution or a tax warrant, and the priority of the State's tax lien against property in the hands of bona fide purchasers for value, and as against duly recorded mortgages, deeds of trust and other recorded specific liens, shall be determined by reference to the date and time  of docketing of judgment or certificate of tax liability or the levy under execution or tax warrant. Provided further, that in the event any taxpayer shall execute an assignment for the benefit of creditors, or if receivership, a creditor's bill or other insolvency proceedings are instituted against any taxpayer indebted in the State on account of any taxes levied by the State, the lien of State taxes shall attach to any and all property of such taxpayer or of such insolvent's estate as of the date and time of the execution of the assignment for the benefit of creditors or of the institution of proceedings herein mentioned and shall be subject only to prior recorded specific liens and reasonable costs of administration. Notwithstanding the provisions of this paragraph, the provisions contained in G.S. 105-164.38 shall remain in full force and effect with respect to the lien of sales taxes.
The provisions of this section shall not have the effect of releasing any lien for State taxes imposed by other law, nor shall they have the effect of postponing the payment of the said State taxes or depriving the said State taxes of any priority in order of payment  provided in any other statute under which payment of the said taxes may be required."
Sec. 3.  This act is effective upon ratification.