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Jefferson to return milllions for land auctioned for taxes

BIRMINGHAM (AP) — Jefferson County officials have agreed to return millions of dollars to people whose property sold at auction to pay county ad valorem taxes and brought more than the amount owed to the county.

Hundreds of people whose property was sold by the county from 1992 to 2005 are eligible for county paybacks, according to court documents.

U.S. District Judge David Proctor has been asked by lawyers to approve the preliminary settlement. Proctor’s written order is expected later.

The county has a pool of $32.5 million from which to make payments, documents show.

Any payment is limited to the excess bid on the person’s property, said county attorney Charlie Wagner.

In the 1990s, Jefferson County’s delinquent tax sales started drawing out-of-state investors who paid thousands of dollars above the actual amount of tax owed. This was the case especially on property in upscale areas.

The high bids came even though investors knew they would have to wait three years to give the original owners time to redeem their property. The settlement is only for owners who have not redeemed their property.

The proposed settlement stems from a 2005 federal lawsuit that named the county, county tax collector J.T. Smallwood and county treasurer Barry Stephenson as defendants.

‘Improper practices’

The suit claimed the defendants were “engaging in improper practices” relating to notices given before tax sales, and in the methods in which the county conducted the tax sales.

A settlement administrator will be appointed by the court to determine how funds will be paid to people who make up the settlement class.

The excess has been held in trust by the county at a bank, earning interest.

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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