BILL ANALYSIS C.S.H.B. 2596 By: Harris, Jack May 2, 1995 Committee Report (Substituted) BACKGROUND Section 15, Article VIII, Texas Constitution establishes that property of a delinquent taxpayer is liable to seizure and sale for the payment of all the taxes and penalties due, under such regulations as the Legislature may provide. Chapter 34, Tax Code, provides the procedures for tax sales. PURPOSE This bill would extinguish a taxpayer's liability for delinquent taxes, penalties, and interest upon sale of the property at a tax lien sale, regardless of whether the proceeds are sufficient to satisfy the judgement. The accompanying HJR 106, proposes a constitutional amendment that would have to be approved by the voters in order for this bill to go into effect. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 34.01 (Sale of Property), Tax Code, by adding Subsection (e) which allows if a property is sold under Subsection (a), the delinquent taxpayer's liability for taxes, penalties, interest and costs is extinguished regardless of whether the proceeds are sufficient to satisfy the judgment. SECTION 2. Amends Section 34.05 (Resale by Taxing Unit), Tax Code, by adding Subsection (g) which allows if a property is resold by a taxing unit, the delinquent taxpayer's liability for taxes, penalties, interests and costs is extinguished regardless of whether the proceeds are sufficient to satisfy the judgment. SECTION 3. This Act applies only to a tax sale held on or after the effective date of this Act. A tax sale held prior to the effective date of this Act is governed by the former law. SECTION 4. Effective Date: subject to the approval of the constitutional amendment proposed by HJR 106. SECTION 5. Emergency Clause. COMPARISON OF ORIGINAL TO SUBSTITUTE H.B. 2596 would force taxing units to choose whether to file suit for personal liability or lien foreclosure, but not both. C.S.H.B. 2596 does not contain this provision. SUMMARY OF COMMITTEE ACTION Public notice was posted in accordance with the rules, and a public hearing was held on April 11, 1995. Representative Harris explained the bill. Without objection, H.B. 2596 was left pending before the committee. On April 24, 1995, the committee met in a formal meeting, and H.B. 2596 was laid out on pending business. The committee considered a complete substitute by Representative Craddick. Without objection, the committee adopted C.S.H.B. 2596. By a record vote of 7 ayes, 0 nays, 0 present not voting and 4 absent, the committee voted to report H.B. 2596 to the House as substituted with the recommendation that it do pass. Testimony received in favor of the bill (4/11/95): Ray M. Cornett, representing the Tax Assessor/Collector Assn. of Texas Roy C. Powers, representing himself Testimony received against the bill (4/11/95): Jeanine Cadena, representing the Texas Municipal League