BILL ANALYSIS S.B. 1567 By: Ellis Jurisprudence 5-3-95 Committee Report (Unamended) BACKGROUND In the event of foreclosure of real property by a taxing district resulting from nonpayment of ad valorem property taxes, the Property Tax Code provides a three-year period following the tax sale in which the procedural methodology of the foreclosure can be contested. For example, an unknown heir may claim that he or she has a legal interest in the property, and was not properly notified of the pending foreclosure action. This claim creates a cloud on the redevelopment of the property until the three-year limitations period relapses. This restricts redevelopment on these properties, particularly in older inner-city neighborhoods where abandoned properties abound. PURPOSE As proposed, S.B. 1567 sets forth the statute of limitations applicable to real property sold for taxes and prohibits a person challenging the validity of a tax sale from commencing unless the person deposits all taxes and costs on the property with the court. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 33.54, Property Tax Code, as follows: Sec. 33.54. LIMITATION ON ACTIONS RELATING TO PROPERTY SOLD FOR TAXES. (a)-(c) Prohibit a cause of action relating to the title to property from being maintained against the purchaser of the property at a tax sale unless that action commences within two years if the property sold was the residence homestead of the owner on was land designated for agricultural use when the suit to collect the tax was filed or within one year for any other property. Make conforming changes. (d) Prohibits a person challenging the validity of a tax sale from commencing an action unless such person deposits into the registry of the court an amount equal to all taxes, penalties, interest, and costs on the property. SECTION 2. Emergency clause. Effective date: upon passage.