A BILL TO BE ENTITLED
AN ACT to (i) update the mailing method of notice to a judgment debtor of an execution sale of real property, (ii) CLARIFY THE EFFECTS OF A DEFAULT BID IN PRIVATE JUDICIAL SALES AND PUBLIC OR PRIVATE PARTITION SALES, and (iii) provide that in a tax foreclosure action a commissioner's fee shall not be included in the amount necessary to redeem the real property during the period between the date of sale and the judgment confirming the sale and make technical changes, as recommended by the general statutes commission.
The General Assembly of North Carolina enacts:

PART I. UPDATE MAILING METHOD OF NOTICE IN EXECUTION SALES
SECTION 1.(a)  G.S. 1‑339.54 reads as rewritten:
"§ 1‑339.54.  Notice to judgment debtor of sale of real property.
In addition to complying with G.S. 1‑339.52, relating to posting and publishing the notice of sale, the sheriff shall, at least ten days before the sale of real property, take the following action:
(1)	If the judgment debtor is found in the county, serve a copy of the notice of sale on the judgment debtor personally.
(2)	If the judgment debtor is not found in the county, send and serve notice as follows:
a.	Send a copy of the notice of sale by registered or certified mail, return receipt requested, to the judgment debtor at the judgment debtor's last address known to the sheriff.
b.	Serve a copy of the notice of sale on the judgment debtor's agent, if there is in the county a person known to the sheriff to be an agent who has custody or management of, or who exercises control over, any property in the county belonging to the judgment debtor."
SECTION 1.(b)  This section becomes effective October 1, 2021, and applies to executions issued on or after that date.

PART II. CLARIFY EFFECTS OF DEFAULT BIDS IN PRIVATE JUDICIAL SALES AND PUBLIC OR PRIVATE PARTITION SALES
SECTION 2.(a)  G.S. 1‑339.36 reads as rewritten:
"§ 1‑339.36.  Private sale; upset bid; subsequent procedure; defaulting bidder.
(a)	Every private sale of real or personal property, except a sale of personal property as provided by G.S. 1‑339.34, is subject to an upset bid on the same conditions and in the same manner as is provided by G.S. 1‑339.25.
(b)	When an upset bid is made for property sold at private sale, subsequent procedure with respect to the upset bid is the same as for upset bids submitted in connection with real property sold at public sale, except that the notice of any resale of personal property held pursuant to an order granted under G.S. 1‑339.27A need not be published in a newspaper but shall be posted as provided by G.S. 1‑339.17.
(c)	Subsections (e) and (f) of G.S. 1‑339.30 apply to a defaulting bidder in a private sale."
SECTION 2.(b)  Part 3 of Article 2 of Chapter 46A of the General Statutes is amended by adding a new section to read:
"§ 46A‑84.5.  Petition for revocation based on default bid.
If a purchaser in a partition sale defaults on the purchaser's bid, any party to the partition proceeding or the officer or person designated to make the sale may at any time petition the court to revoke its order confirming the partition sale. The petitioner for revocation shall serve all parties required to be served under G.S. 1A‑1, Rule 5, and, if the purchaser is not a party, serve the purchaser under G.S. 1A‑1, Rule 4(j). If the court finds that the purchaser defaulted on the purchaser's bid and is unable to cure the default, the court shall revoke its order of confirmation and order a resale."
SECTION 2.(c)  G.S. 46A‑83 reads as rewritten:
"§ 46A‑83.  Petition for revocation of confirmation order.
(a)	Grounds for Revocation. – Notwithstanding G.S. 46A‑76 or any other provision of law, within 15 days of entry of the order confirming the partition sale of real property, the purchaser or any party to the partition proceeding may petition the court to revoke its order of confirmation and to order the withdrawal of the purchaser's offer to purchase the property upon the following grounds:
(1)	In the case of a purchaser, a lien remains unsatisfied on the property to be conveyed.
(2)	In the case of any party to the partition proceeding, any of the following:
a.	Notice of the partition was not served on the petitioner for revocation as required by G.S. 1A‑1, Rule 4.
b.	Notice of the sale was not mailed to the petitioner for revocation as required by G.S. 46A‑76(d).
c.	The amount bid or price offered is inadequate and inequitable and will result in irreparable damage to the owners of the real property.
In no event shall the confirmation order become final during the pendency of a petition under this section. No upset bid shall be permitted after the entry of the confirmation order.
…
(c)	Service; Notice of Hearing. – The party petitioning for revocation shall serve all parties required to be served under G.S. 1A‑1, Rule 5, and shall serve the officer or person designated to make the sale under G.S. 1A‑1, Rule 4(j). The court shall schedule a hearing on the petition within a reasonable time and shall cause a notice of the hearing to be served on the petitioner, the officer or person designated to make the sale, and all parties required to be served under G.S. 1A‑1, Rule 5.
…."
SECTION 2.(d)  This section is effective when it becomes law and applies to actions or proceedings pending on or commenced on or after that date.

PART III. AMENDMENTS REGARDING COMMISSIONER'S FEES IN TAX FORECLOSURE ACTIONS AND REMOVAL OF OBSOLETE LANGUAGE
SECTION 3.(a)  G.S. 105‑374 reads as rewritten:
"§ 105‑374.  Foreclosure of tax lien by action in nature of action to foreclose a mortgage.
(a)	General Nature of Action. – The foreclosure action authorized by this section is in the nature of an action to foreclose a mortgage and shall be instituted in the appropriate division of the General Court of Justice in the county in which the real property is situated.
(b)	Tax Lien. – Taxing units may proceed under this section on the tax lien created by G.S. 105‑355(a).
(c)	Parties; Summons. – Each of the following persons shall be made parties and shall be served with a summons in the manner provided by G.S. 1A‑1, Rule 4:
(1)	The owner of record and the owner's spouse, if any.
(2)	All other taxing units having tax liens.
(3)	All other lienholders of record.
(4)	All persons that would be entitled to be made parties to a court action to foreclose a mortgage on the property in which no deficiency judgment is sought.
The fact that the owner of record or any other defendant is a minor, is incompetent, or is under any other disability shall not prevent or delay the foreclosure of the tax lien; and each of these persons shall be made parties and shall be served with a summons in the same manner as in other civil actions.
Persons that cannot be located, persons whose names and whereabouts are unknown, and all possible heirs or assignees of these persons may be served by publication; and these persons, their heirs, and assignees may be designated by general description or by fictitious names in the action.
(c1)	Lienholders Separately Designated. – The word "lienholder" shall appear immediately after the name of each lienholder (including trustees and beneficiaries in deeds of trust, and holders of judgment liens) whose name appears in the caption of any action instituted under this section. This designation is intended to make clear to the public the capacity of these persons that necessitated their having been made parties to the action. Failure to add this designation to captions does not constitute grounds for attacking the validity of an action brought under this section or the title to real property derived from the action.
(d)	Complaint as Lis Pendens. – The complaint in an action brought under this section shall, from the time it is filed in the office of the clerk of superior court, serve as notice of the pendency of the foreclosure action, and every person whose interest in the real property is subsequently acquired or whose interest in the property is subsequently registered or recorded shall be bound by all proceedings taken in the foreclosure action after the filing of the complaint in the same manner as if those persons had been made parties to the action. It is not necessary to have the complaint cross‑indexed as a notice of action pending to have the effect prescribed by this subsection.
(e)	Subsequent Taxes. – The complaint in a tax foreclosure action brought under this section by a taxing unit shall, in addition to alleging the tax lien on which the action is based, include a general allegation of subsequent taxes that are or may become a lien on the same real property in favor of the plaintiff unit. Thereafter it shall not be necessary to amend the complaint to incorporate the subsequent taxes by specific allegation. In case of redemption before confirmation of the foreclosure sale, the person redeeming shall be required to pay, before the foreclosure action is discontinued, at least all taxes on the real property that have at the time of discontinuance become due to the plaintiff unit, plus penalties, interest, and costs. Immediately prior to judgment ordering sale in a foreclosure action, if there has been no redemption prior to that time, the tax collector or the attorney for the plaintiff unit shall file in the action a certificate setting forth all taxes that are a lien on the real property in favor of the plaintiff unit, other than taxes the amount of which has not been definitely determined.
(e1)	Taxes Paid by Plaintiff. – Any plaintiff in a tax foreclosure action, other than a taxing unit, may include in the complaint, originally or by amendment, all other taxes and special assessments paid by the plaintiff that were liens on the same real property.
(f)	Joinder of Parcels. – All real property within the taxing unit subject to liens for taxes levied against the same taxpayer for the first year involved in the foreclosure action may be joined in one action. However, if real property is transferred by the listing taxpayer subsequent to the first year involved in the foreclosure action, all subsequent taxes, penalties, interest, and costs for which the property is ordered sold under this Subchapter shall be prorated to the property in the same manner as if payments were being made to release the property from the tax lien under G.S. 105‑356(b).
(g)	Special Benefit Assessments. – A cause of action for the foreclosure of the lien of any special benefit assessments may be included in any complaint filed under this section.
(h)	Joint Foreclosure by Two or More Taxing Units. – Liens of different taxing units on the same parcel of real property, representing taxes in the hands of the same tax collector, shall be foreclosed in one action. Liens of different taxing units on the same parcel of real property, representing taxes in the hands of different tax collectors, may be foreclosed in one action in the discretion of the governing bodies of the taxing units.
The lien of any taxing unit made a party defendant in any foreclosure action shall be alleged in an answer filed by the taxing unit, and the tax collector of each answering unit shall, prior to judgment ordering sale, file a certificate of subsequent taxes similar to that filed by the tax collector of the plaintiff unit, and the taxes of each answering unit shall be of equal dignity with the taxes of the plaintiff unit. Any answering unit may, in case of payment of the plaintiff unit's taxes, continue the foreclosure action until all taxes due to it have been paid, and it is not necessary for any answering unit to file a separate foreclosure action or to proceed under G.S. 105‑375 with respect to the taxes.
If a taxing unit properly served as a party defendant in a foreclosure action fails to answer and file the certificate of subsequent taxes provided for in this subsection, all of its taxes shall be barred by the judgment of sale except to the extent that the purchase price at the foreclosure sale, after payment of costs and of the liens of all taxing units whose liens are properly alleged by complaint or answer and certificates, is sufficient to pay the taxes. However, if a defendant taxing unit is plaintiff in another foreclosure action pending against the same property, or if it has begun a proceeding under G.S. 105‑375, its answer may allege that fact in lieu of alleging its liens, and the court, in its discretion, may order consolidation of the actions or such other disposition of the actions, including disposition of the costs, as it deems advisable. The order may be made by the clerk of the superior court, subject to appeal as provided in G.S. 1‑301.1.
(i)	Costs. – Except as modified by this subsection, costs may be taxed in any foreclosure action brought under this section in the same manner as in other civil actions. When costs are collected, either by payment prior to the sale or upon payment of the purchase price at the foreclosure sale, the fees allowed officers shall be paid to those entitled to receive them. In foreclosure actions in which the plaintiff is a taxing unit, no prosecution bond shall be required.
The word "costs," as used in this subsection, includes a reasonable attorney's fee for the plaintiff in such amount as the court shall, in its discretion, determine and allow. When a taxing unit is made a party defendant in a tax foreclosure action and files an answer, the court may include in the costs an attorney's fee for the defendant unit in an amount that the court, in its discretion, determines and allows. The governing body of any taxing unit may, in its discretion, pay a smaller or greater sum than that allowed as costs to its attorney as a suit fee, and the governing body may allow a reasonable commission to its attorney on taxes collected by the attorney. Alternatively, the governing body may arrange with its attorney for the handling of tax foreclosure suits on a salary basis or may make any other reasonable agreement with its attorney. Any arrangement made between a taxing unit and its attorney may provide that attorneys' fees collected as costs in foreclosure actions shall be collected for the use of the taxing unit.
In any foreclosure action in which the court enters a judgment confirming the sale of real property, costs shall include a commissioner's fee to be fixed by the court, not exceeding five percent (5%) of the purchase price. In case of redemption prior to the judgment of confirmation, a commissioner's fee shall not be added to the amount otherwise necessary for redemption. In case more than one sale is made of the same property in any action, the commissioner's fee may be based on the highest amount bid, but the commissioner shall not be allowed a separate fee for each such sale. The governing body of any plaintiff unit may request the court to appoint as commissioner a salaried official, attorney, or employee of the unit and, when the requested appointment is made, may require that the commissioner's fees, when collected, be paid to the plaintiff unit for its use.
(j)	Contested Actions. – Any action brought under this section in which an answer raising an issue requiring trial is filed within the time allowed by law is entitled to a preference as to time of trial over all other civil actions.
(k)	Judgment of Sale. – Any judgment in favor of the plaintiff or any defendant taxing unit in an action brought under this section shall order the sale of the real property or as much as may be necessary for the satisfaction of all of the following:
(1)	Taxes adjudged to be liens in favor of the plaintiff, other than taxes the amount of which has not been definitely determined, together with penalties, interest, and costs.
(2)	Taxes adjudged to be liens in favor of other taxing units, other than taxes the amount of which has not yet been definitely determined, if those taxes have been alleged in answers filed by the other taxing units, together with penalties, interest, and costs.
The judgment shall appoint a commissioner to conduct the sale and shall order that the property be sold in fee simple, free and clear of all interests, rights, claims, and liens whatever, except that the sale shall be subject to (i) taxes the amount of which cannot be definitely determined at the time of the judgment, (ii) taxes and special assessments of taxing units which are not parties to the action, and (iii) in the discretion of the court, taxes alleged in other tax foreclosure actions or proceedings pending against the same real property.
In all cases in which no answer is filed within the time allowed by law, and in cases in which answers filed do not seek to prevent sale of the property, the clerk of the superior court may enter the judgment, subject to appeal as provided in G.S. 1‑301.1.
(l)	Advertisement of Sale. – The sale and all necessary resales shall be advertised in the manner provided by Article 29A of Chapter 1 of the General Statutes.
(m)	Sale. – The sale shall be by public auction to the highest bidder and shall, in accordance with the judgment, be held at the courthouse door on any day of the week except a Sunday or legal holiday when the courthouse is closed for transactions. In actions brought by a municipality that is not a county seat, the court may, in its discretion, direct that the sale be held at the city or town hall door.
(m1)	Deposit from Bidder. – The commissioner conducting the sale may, in the commissioner's discretion, require from any successful bidder a deposit equal to not more than twenty percent (20%) of the bid. In the event that the bidder refuses to take title and a resale becomes necessary, the deposit shall be applied to pay the costs of sale and any loss resulting. Nothing in this subsection deprives the commissioner of the commissioner's right to sue for specific performance of the contract. No deposit shall be required of a taxing unit that has made the highest bid at the foreclosure sale.
(n)	Report of Sale. – Within three days following the foreclosure sale, the commissioner shall report the sale to the court giving full particulars of the sale.
(o)	Exceptions and Increased Bids. – At any time within 10 days after the commissioner files the report of the foreclosure sale, any person having an interest in the real property may file exceptions to the report, and at any time within that 10‑day period, an increased bid may be filed in the amount specified by and subject to the provisions of Article 29A of Chapter 1 of the General Statutes, except as otherwise provided by this section. In the absence of exceptions or increased bids, the court may, whenever it deems it necessary for the best interests of the parties, order resale of the property.
(p)	Judgment of Confirmation. – At any time after the expiration of 10 days from the time the commissioner files the report, if no exception or increased bid has been filed, the commissioner may apply for judgment of confirmation, and in like manner the commissioner may apply for a judgment of confirmation after the court has passed upon exceptions filed, or after any necessary resales have been held and reported and 10 days have elapsed. The judgment of confirmation shall direct the commissioner to deliver the deed upon payment of the purchase price. This judgment may be entered by the clerk of superior court subject to appeal as provided in G.S. 1‑301.1.
(q)	Application of Proceeds; Commissioner's Final Report. – After delivery of the deed and collection of the purchase price, the commissioner shall apply the proceeds as follows:
(1)	First, to payment of all costs of the action, including the commissioner's fee and the attorney's fee. The costs shall be paid to the officials or funds entitled to them.
(2)	Then to the payment of taxes, penalties, and interest for which the real property was ordered to be sold, and in case the funds remaining are insufficient for this purpose, they shall be distributed pro rata to the various taxing units for whose taxes the property was ordered sold.
(3)	Then pro rata to the payment of any special benefit assessments for which the property was ordered sold, together with interest and costs.
(4)	Then pro rata to payment of taxes, penalties, interest, and costs of taxing units that were parties to the foreclosure action but that filed no answers in the action.
(5)	Then pro rata to payment of special benefit assessments of taxing units that were parties to the foreclosure action but that filed no answers in the action, together with interest and costs.
(6)	And any balance then remaining shall be paid in accordance with any directions given by the court and, in the absence of directions, shall be paid into court for the benefit of the persons entitled to it. If the clerk is in doubt as to which person is entitled to the surplus or if any adverse claims are asserted to the surplus, the clerk shall hold the surplus until rights to it are established in a special proceeding pursuant to G.S. 1‑339.71.
Within five days after delivering the deed, the commissioner shall make a full report to the court showing delivery of the deed, receipt of the purchase price, and the disbursement of the proceeds, accompanied by receipts evidencing all the disbursements.
(r)	Purchase and Resale by Taxing Unit. – The rights of a taxing unit to purchase real property at a foreclosure sale and resell it are governed by G.S. 105‑376."
SECTION 3.(b)  G.S. 105‑373 reads as rewritten:
"§ 105‑373.  Settlements.
(a)	Annual Settlement of Tax Collector. –
(1)	Preliminary Report. – After July 1 and before a tax collector is charged with taxes for the current fiscal year, the tax collector shall make a sworn report to the governing body of the taxing unit showing all of the following:
a.	A list of the persons owning real property whose taxes for the preceding fiscal year remain unpaid and the principal amount owed by each person.
b.	A list of the persons not owning real property whose personal property taxes for the preceding fiscal year remain unpaid and the principal amount owed by each person. To this list the tax collector shall append a statement under oath that the tax collector has made diligent efforts to collect the taxes due from the persons listed out of their personal property and by other means available for collection, and the tax collector shall report any other information concerning these taxpayers that may be of interest to or required by the governing body, including a report of the tax collector's efforts to make collection outside the taxing unit under G.S. 105‑364. The governing body of the taxing unit may publish this list in any newspaper in the taxing unit. The cost of publishing this list shall be paid by the taxing unit.
(2)	Insolvents. – Upon receiving the report required by subdivision (a)(1) of this section, the governing body of the taxing unit shall enter upon its minutes the names of persons owing taxes, but that listed no real property, that it finds to be insolvent, and it shall by resolution designate the list entered in its minutes as the insolvent list to be credited to the tax collector in the tax collector's settlement.
(3)	Settlement for Current Taxes. – After July 1 and before a tax collector is charged with taxes for the current fiscal year, the tax collector shall make full settlement with the governing body of the taxing unit for all taxes in the tax collector's hands for collection for the preceding fiscal year. The following charges and credits apply:
a.	In the settlement the tax collector shall be charged with all of the following:
1.	The total amount of all taxes in the tax collector's hands for collection for the year, including amounts originally charged to the tax collector and all amounts subsequently charged on account of discoveries.
2.	All penalties, interest, and costs collected by the tax collector in connection with taxes for the current year.
3.	All other sums collected by the tax collector.
b.	The tax collector shall be credited with all of the following:
1.	All sums representing taxes for the year deposited by the tax collector to the credit of the taxing unit or receipted for by a proper official of the unit.
2.	Releases duly allowed by the governing body.
3.	The principal amount of taxes constituting liens on real property.
4.	The principal amount of taxes included in the insolvent list determined in accordance with subdivision (a)(2) of this section.
5.	Discounts allowed by law.
6.	Commissions, if any, lawfully payable to the tax collector as compensation.
7.	The principal amount of taxes for any assessment appealed to the Property Tax Commission when the appeal has not been finally adjudicated.
The tax collector shall be liable on the tax collector's bond for both honesty and faithful performance of duty; for any deficiencies; and, in addition, for all criminal penalties provided by law.
The settlement, together with the action of the governing body with respect to it, shall be entered in full upon the minutes of the governing body.
(4)	Disposition of Tax Receipts after Settlement. – Uncollected taxes allowed as credits in the settlement prescribed in subdivision (a)(3) of this section, whether represented by tax liens held by the taxing unit or included in the list of insolvents, shall, for purposes of collection, be recharged to the tax collector or charged to some other person designated by the governing body of the taxing unit under statutory authority. The person charged with uncollected taxes shall take the following actions:
a.	Give bond satisfactory to the governing body.
b.	Receive the tax receipts and tax records representing the uncollected taxes.
c.	Have and exercise all powers and duties conferred or imposed by law upon tax collectors.
d.	Receive compensation as determined by the governing body.
(b)	Settlements for Delinquent Taxes. – Annually, at the time prescribed for the settlement provided in subdivision (a)(3) of this section, all persons having in their hands for collection any taxes for years prior to the year involved in the settlement shall settle with the governing body of the taxing unit for collections made on each prior year's taxes. The settlement for the taxes for prior years shall be made in whatever form is satisfactory to the chief accounting officer and the governing body of the taxing unit, and it shall be entered in full upon the minutes of the governing body.
(c)	Settlement at End of Term. – At the end of a tax collector's last term of office, the tax collector shall, on the last business day of the term, make full and complete settlement for all taxes, current or delinquent, in the tax collector's hands and deliver the tax records, tax receipts, and accounts to the successor in office. The settlement shall be made in whatever form is satisfactory to the chief accounting officer and the governing body of the taxing unit, and it shall be entered in full upon the minutes of the governing body.
(d)	Settlement upon Vacancy during Term. – When a tax collector voluntarily resigns, the tax collector shall, upon the last day in office, make full settlement in the manner provided in subsection (c) of this section for all taxes in the tax collector's hands for collection. In default of a settlement, or in case of a vacancy occurring during a term for any reason, it shall be the duty of the chief accounting officer or, in the discretion of the governing body, of some other qualified person appointed by it immediately to prepare and submit to the governing body a report in the nature of a settlement made on behalf of the former tax collector. The report, together with the governing body's action with respect to it, shall be entered in full upon the minutes of the governing body. Whenever a settlement is made on behalf of a former tax collector, the governing body may deliver the tax receipts and tax records to a successor collector immediately upon the occurrence of the vacancy, or it may make whatever temporary arrangements for the collection of taxes as may be expedient, but in no event shall any person be permitted to collect taxes until the person has given bond satisfactory to the governing body.
(e)	Effect of Approval of Settlement. – Approval of any settlement by the governing body does not relieve the tax collector or the tax collector's bondsmen of liability for any shortage actually existing at the time of the settlement and thereafter discovered; nor does it relieve the collector of any criminal liability.
(f)	Penalties. – In addition to any other civil or criminal penalties provided by law, any member of a governing body of a taxing unit, tax collector, or chief accounting officer who fails to perform any duty imposed upon that person by this section is guilty of a Class 1 misdemeanor.
(g)	Relief from Collecting Insolvents. – The governing body of any taxing unit may, in its discretion, relieve the tax collector of the charge of taxes owed by persons on the insolvent list that are five or more years past due when it appears to the governing body that the taxes are uncollectible.
(h)	Relief from Collecting Taxes on Classified Motor Vehicles. – The board of county commissioners may, in its discretion, relieve the tax collector of the charge of taxes on classified motor vehicles listed pursuant to G.S. 105‑330.3(a) that are one year or more past due when it appears to the board that the taxes are uncollectible. This relief, when granted, shall include municipal and special district taxes charged to the collector."
SECTION 3.(c)  G.S. 105‑378 reads as rewritten:
"§ 105‑378.  Limitation on use of remedies.
(a)	Use of Remedies Barred. – No county or municipality shall maintain an action or procedure to enforce any remedy provided by law for the collection of taxes or the enforcement of any tax liens, whether the taxes or tax liens are evidenced by tax receipts or otherwise, unless the action or procedure is instituted within 10 years from the date the taxes became due.
(b)	Not Applicable to Special Assessments. – Subsection (a) of this section does not apply to the lien of special assessments.
(c)	Repealed by Session Laws 1998‑98, s. 26, effective August 14, 1998.
(d)	Enforcement and Collection Delayed Pending Appeal. – When the board of county commissioners or municipal governing body delivers a tax receipt to a tax collector for any assessment that has been or is subsequently appealed to the county board of equalization and review or the Property Tax Commission, the tax collector shall not seek collection of taxes or enforcement of a tax lien resulting from the assessment until the appeal has been finally adjudicated. The tax collector, however, may send an initial bill or notice to the taxpayer."
SECTION 3.(d)  This section becomes effective October 1, 2021. Subsection (a) of this section applies to tax foreclosure actions commenced on or after that date.

PART IV. EFFECTIVE DATE
SECTION 4.  Except as otherwise provided, this act is effective when it becomes law.