Enrolled Bill Summary

House Bill 2491	House Author:  Puente et al.
Effective:  9-1-05	Senate Sponsor:  Armbrister

            House Bill 2491 amends the Tax Code to update and clarify numerous provisions relating to the administration and collection of property taxes.  The bill:

• clarifies that a change of address and a request that notices, tax bills, and other communications be sent to a property owner's fiduciary must be filed with the appraisal district and that a revocation of the request described above must be made in writing by the taxpayer.
• requires the application form for a homestead exemption to include a space for the applicant's date of birth and eliminates the need for an elderly homeowner to apply for the additional exemptions to which the homeowner is entitled upon reaching the age of 65 if that information is shown in the appraisal district's records.
• clarifies the duties of an appraisal district's chief appraiser and the assessor and collector for each taxing unit participating in the district with regard to the imposition, collection, and allocation of a penalty for a delinquent rendition statement or property report.
• requires a chief appraiser, when appraising land included in a habitat preserve and subject to a conservation easement, to consider the effect of such restrictions on the land's value.  It also requires a chief appraiser, when appraising agricultural land, to determine the categories into which land in the appraisal district is classified, to distinguish among various types of land use in classifying land according to categories, and to further divide each category according to certain factors that influence productive capacity of land in that category.
• provides for the attachment of a tax lien to property to secure payment by a property owner of a late-correction penalty assessed as a result of a change in an appraisal roll.
• provides that payment of taxes that have been prorated because of the property's acquisition by a governmental entity absolves a taxing unit of liability for a tax refund for the year in which the property is transferred.
• clarifies provisions relating to the application of certain discounts adopted by a taxing unit and to the collection of discounted taxes when one taxing unit collects taxes for another taxing unit that has adopted such discounts.
• gives a tax lien priority over any lien held by an association of property owners, homeowners, condominium unit owners, or similar group under a restrictive covenant, condominium declaration, master deed, or other instrument that secures maintenance fees, dues, interest, fines, costs, attorney's fees, or other charges against property.  The bill provides that, in an action to enforce collection of delinquent property taxes, such an association is not a necessary party to the action unless certain conditions apply, and that a tax sale of the property extinguishes the association's lien.  It also provides that a restrictive covenant, declaration, or master deed that provides for such lien does not by itself constitute notice to a taxing unit of the lien.
• substantially revises provisions that allow a property owner to contract with a third party to pay delinquent property taxes on the owner's behalf and that result in the transfer of a corresponding tax lien from a taxing unit to that party on payment of the delinquent property taxes.  The bill clarifies procedures and requirements for the transfer of such liens and the rights and obligations of various parties involved in or affected by the transfer, including the property owner, the transferee, the collector, and any mortgage servicer of a preexisting lien.  In the event of a foreclosure, the bill entitles the person whose property is sold or the mortgage servicer to redeem the property from the buyer by paying the buyer 125 percent of the purchase price within the first year of the redemption period or 150 percent of the purchase price during the second year of the redemption period, except that the redemption period for property other than a homestead, agricultural land, or mineral interest is only 180 days rather than two years.  The bill also requires a contract for foreclosure of a tax lien to provide for power of sale and foreclosure and to include provisions for recording of certain documents and service of notice of foreclosure and notice of sale.  The bill allows a mortgage servicer, upon a default and notice of acceleration, to obtain a release of the transferred tax lien by paying the amount owed by the property owner to the transferee or lienholder.
• makes a waiver of penalties and interest on delinquent taxes on property acquired by a religious organization contingent on the payment of the taxes due, qualification of the property for the appropriate exemption within one year of the acquisition, and timely submission of a written waiver request.
• entitles a collector to recovery of attorney fees incurred in a seizure of property under a tax warrant.
• requires a tax bill or other notice that specifically threatens a lawsuit to collect delinquent taxes to include an advisory that an elderly or disabled homeowner may be entitled to an abatement or postponement in the payment of those taxes.
• allows a taxing unit or appraisal district, under certain conditions, to impose an additional penalty before July 1 to defray the cost of collecting taxes on personal property that become delinquent after February 1 but, if the unit or district imposes that early penalty, it is prohibited from also recovering attorney's fees in a suit to collect those taxes or another penalty.
• provides requirements and a method for the execution of a writ of possession following foreclosure of a tax lien and subsequent sale of real property.  The bill also provides an alternate streamlined procedure for foreclosure by one or more taxing units on property when the total amount of delinquent taxes, penalties, interest, and attorney's fees owed exceeds the property's appraised value or when there are 10 or more years' worth of delinquent taxes.  These provisions allow the filing of a single petition by one or more taxing units in a foreclosure suit involving multiple parcels of property and multiple property owners.
• provides that, in a judicial review, each party to an appeal is considered a party seeking affirmative relief for discovery purposes regarding expert witnesses if, within 120 days after the date the appeal is filed, the property owner makes a written settlement offer, requests alternative dispute resolution, and designates which cause of action is the basis for the appeal.

            The bill also amends the Property Code to prohibit withdrawal of money deposited by an entity with eminent domain authority as a prerequisite to taking possession of condemned property pending litigation unless the petitioner for the money shows that there are no delinquent property taxes, penalties, interests, or costs owing on the property and that, in the case of a whole taking after the date the tax bill for the property is sent, all taxes on the property have been paid. The bill also amends the Civil Practice and Remedies Code to make the secretary of state an agent for service of process in a property tax collection suit for a non-resident defendant holding a lien against property in the state subject to suit.