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HB 1273

TO PROVIDE THAT A LIEN CREATED BY THE ENTRY OF CERTIFICATE OF INDEBTEDNESS ISSUED BY THE SECRETARY OF THE DEPARTMENT OF FINANCE AND ADMINISTRATION IS NOT SUPERIOR TO A PURCHASE MONEY MORTGAGE.

2025 Regular Session Introduced by Clint Penzo and 1 co-sponsor

HB 1273 ensures purchase money mortgages take priority over state tax liens, protecting property buyers' interests and clarifying Arkansas law.

Notification that HB1273 is now Act 29
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Bill Summary · HB 1273

Summary of House Bill 1273 (HB 1273)

Purpose and Intent

House Bill 1273 (HB 1273) aims to clarify the legal standing of liens created by the Arkansas Department of Finance and Administration (DFA) in relation to purchase money mortgages. The bill establishes that a lien resulting from a certificate of indebtedness issued by the DFA is not superior to a purchase money mortgage, regardless of the order in which these liens were filed.

Key Provisions

  • Amendment to Existing Law: HB 1273 amends Arkansas Code § 26-18-701 to specify that:

    • A certificate of indebtedness (state tax lien) filed by the DFA will not take priority over a purchase money mortgage.
    • This amendment codifies the precedent set by the Arkansas Supreme Court in the case of Garrett Tire Center, Inc. v. Herbaugh (1987).

  • Definition of Purchase Money Mortgage: A purchase money mortgage is defined as a mortgage executed by the buyer of a property as part of the transaction for that property.

Impact

  • Who is Affected:

    • Property Buyers: Individuals or entities obtaining a purchase money mortgage will benefit from the assurance that their mortgage will take precedence over state tax liens.
    • Department of Finance and Administration: The DFA will need to adjust its practices regarding the filing and enforcement of tax liens in relation to purchase money mortgages.

  • Fiscal Impact: The bill has no anticipated fiscal impact on state finances or taxpayers, as stated in the fiscal impact statement.

Procedural Timeline

  • Introduced: January 27, 2025
  • Passed: The bill was read and passed in both the House and Senate on February 5, 2025.
  • Enacted: HB 1273 was signed into law and is now known as Act 29 as of February 11, 2025.

Conclusion

HB 1273 serves to protect the interests of property buyers by ensuring that their purchase money mortgages are prioritized over state tax liens. This legislative change aligns Arkansas law with established judicial precedent and clarifies the rights of property purchasers in the state.

Compiled from official sources — confirm details with the bill’s official record.

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