Senate committee approves penalty for dishonored payment instruments at tax-delinquent auctions

House Bill 1224, presented by Representative Marcus Richmond, passed the Senate Revenue & Tax Committee by voice vote after testimony from the Commission of State Lands. The bill adds an enforcement mechanism for dishonored instruments tendered in connection with tax-delinquent parcel sales.

Representative Richmond told the committee that in the last four years 154 instruments were submitted and dishonored and that in the last two years 74 instruments were submitted and dishonored, creating recurring administrative issues. Kelly Boyd, deputy commissioner of state lands, told senators the problematic payments have been checks: "They were all checks," Boyd said, adding that substantial numbers are stop payments rather than routine insufficient-fund errors.

The statutory penalty in the bill mirrors existing Department of Finance and Administration language and sets the charge at 10% of the purchase price or $20, whichever is greater. Boyd said staff will notify payers by phone and offer an opportunity to cure the dishonored instrument before enforcement steps proceed. Committee members asked whether criminal prosecution is pursued in intentional cases; Boyd replied prosecutions may be pursued but many payers are out of state, complicating enforcement.

Senators also asked whether parcels that cancel at auction because of a dishonored payment can be relisted sooner or offered to a next-highest bidder; Boyd said state law requires parcels to wait until the next annual tax-delinquent auction, so the earliest relisting is typically a year later.

Senator Payton moved and Senator Caldwell seconded passage; the committee approved HB1224 by voice vote. The committee recorded the bill as passed out of committee.

Next steps: HB1224 advances per the legislative calendar; the committee record includes discussion of enforcement, notification requirements, and constraints on earlier relisting.