House Bill 404

This act is the Alabama Community Land Trust Act of 2026. This act: (1) authorizes Class 1 municipalities to create by ordinance nonprofit community land trusts to promote affordable housing and productive land use; (2) provides for trusts' formation, governance, and board of director's composition, duties, and authorities; (3) requires trusts to be annually audited by the Department of Examiners of Public Accounts; (4) prohibits trusts from engaging in related political activity; (5) grants trusts certain powers to effectuate their duties, including acquiring, leasing, and constructing affordable housing properties; (6) requires trusts to publish tenant selection criteria and an annual report providing certain information regarding its activities, including funding sources, employees, owned property, contracts entered into, and other information determined by the Alabama Housing Finance Authority; (7) provides requirements for ground leases entered into by trusts, including a lease must grant the trust and then the organizing municipality a right to purchase all improvements thereon and that leases may not exceed 99 years; and (8) exempts trust-owned affordable housing property from ad valorem taxes for three years, subject to conditions, and trust leased affordable housing property from 20 percent of ad valorem taxes for 20 years.