By Horn H.B. No. 2868
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the transfer and enforceability of tax liens.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subsections (e), (f), (g), (i), and (j), Section
1-5 32.06, Tax Code, are amended to read as follows:
1-6 (c) Except as otherwise provided by this section, the
1-7 transferee of a tax lien and any successor in interest is entitled
1-8 to foreclose the lien in the manner provided by law for foreclosure
1-9 of tax liens or to foreclose the lien in any manner set forth in
1-10 any contract between the owner of the property and the transferee
1-11 of the tax lien, including but not limited to foreclosure conducted
1-12 pursuant to the provisions of Section 51.002.
1-13 (e) Except as otherwise provided in Subsection (l), a <A>
1-14 person holding a tax lien transferred as provided by this section
1-15 may not charge a greater rate of interest than 18 <10> percent a
1-16 year on the taxes, penalties, interest, <and> recording expenses
1-17 paid to acquire and record the lien, and any authorized charges set
1-18 forth in Subsection (j).
1-19 (f) The holder of a preexisting lien on property encumbered
1-20 by a tax lien transferred as provided by this section is entitled,
1-21 within six months after the date on which the tax lien is recorded
1-22 in all counties in which the property is located, to pay the holder
1-23 of the tax lien the amount paid for the lien and the authorized
2-1 charges, plus interest accrued at the rate set forth in Subsection
2-2 (e) and recording and transfer expenses, and becomes subrogated to
2-3 all rights in the lien.
2-4 (g) A suit to foreclose a tax lien transferred as provided
2-5 by this section may not be instituted within one year from the date
2-6 on which the lien is recorded in all counties in which the property
2-7 is located; provided, however, that a contractual foreclosure can
2-8 be conducted by the transferee of the tax lien as provided in the
2-9 contract between the transferee and the owner of the real property,
2-10 and provided further that the transferee shall be entitled to
2-11 contract for events of default, notice of acceleration, and such
2-12 other matters as are customarily contracted for by lenders who make
2-13 loans secured by real property.
2-14 (i) The person whose property is sold as provided by this
2-15 section or any person holding a first lien against the property is
2-16 entitled, within one year after the date the property is sold, to
2-17 redeem the property from the purchaser at the tax sale by paying
2-18 him the tax sale purchase price, plus all authorized charges,
2-19 costs, and interest accrued on the judgment to the date of
2-20 redemption or 118 <110> percent of the amount of the outstanding
2-21 tax lien obligation <judgment>, whichever is less. If a person
2-22 redeems the property as provided by this subsection, the purchaser
2-23 at the tax sale shall deliver a deed to the property to the person
2-24 redeeming the property. If the person who owned the property at
2-25 the time of foreclosure redeems the property, all liens existing on
3-1 the property at the time of the tax sale remain in effect to the
3-2 extent not paid from the sale proceeds.
3-3 (j) This section does not abridge the right of an owner of
3-4 real property to enter into a contract for the payment of taxes
3-5 with the holder of a lien on the property, including a transferee
3-6 under this section, or affect a contract between the owner and
3-7 holder of a lien for the payment of taxes on the property. This
3-8 section does not abridge the right of an owner of real property to
3-9 agree in such contract to any one or more of the following
3-10 provisions:
3-11 (1) a default charge equal to five cents for each $1
3-12 of any scheduled installment due under the tax lien obligation when
3-13 any portion of the installment continues unpaid for 10 days or more
3-14 following the date the payment is due;
3-15 (2) a prepayment penalty in the event of prepayment of
3-16 the tax lien obligation in full or in part prior to maturity;
3-17 (3) reasonable fees for title examination or premiums
3-18 or fees for title insurance or a title search for the benefit of
3-19 the transferee;
3-20 (4) reasonable fees charged to the transferee by an
3-21 attorney, provided the attorney is not a salaried employee of the
3-22 transferee, for preparation of the loan documents in connection
3-23 with the tax lien obligation;
3-24 (5) charges prescribed by law that are or will be paid
3-25 to public officials for determining the existence of and for
4-1 perfecting, releasing, and satisfying any lien or security
4-2 interest;
4-3 (6) reasonable fees for an appraisal of real property
4-4 offered as security for the loan prepared by a certified appraiser
4-5 who is not an employee of the lender;
4-6 (7) reasonable costs of any credit report;
4-7 (8) reasonable fees for a survey of real property
4-8 offered as security for the tax lien obligation prepared by a
4-9 registered surveyor who is not a salaried employee of the
4-10 transferee;
4-11 (9) premiums paid or received in connection with the
4-12 sale of credit life insurance, credit accident and health
4-13 insurance, and mortgage guaranty insurance, the benefits of which
4-14 go in whole or in part to reduce or extinguish the tax lien
4-15 obligation, and the transferee shall be entitled to request or
4-16 require any such insurance from the owner of the real property;
4-17 (10) reasonable fees or charges for collection of the
4-18 tax lien obligation, including attorney's fees, trustee's fees, and
4-19 other normal fees incurred by a lender that makes loans secured by
4-20 real property; or
4-21 (11) a fee of $25 or less for the return by a
4-22 depository institution of a dishonored check, negotiated order of
4-23 withdrawal, or share draft offered in full or partial payment of a
4-24 tax lien obligation.
4-25 SECTION 2. Section 32.06, Tax Code, is amended by adding
5-1 Subsections (k), (l), (m), and (n) to read as follows:
5-2 (k) Notwithstanding any other provisions to the contrary in
5-3 this code, it is expressly provided that a transferee of a tax lien
5-4 shall be subrogated to and be fully entitled to exercise any and
5-5 all rights and remedies of the transferring taxing authority
5-6 including any rights and remedies associated with foreclosures,
5-7 judicial sales, the ability to purchase property, and other related
5-8 matters directly or indirectly to any such rights and remedies.
5-9 (l) Notwithstanding Subsection (e), the interest rate on any
5-10 tax lien obligation shall be limited to 10 percent a year by any
5-11 transferees which do not advance at least $500,000 in tax lien
5-12 obligations under this section in any successive 12 calendar months
5-13 at anytime after the effective date of this subsection; provided,
5-14 however, that in the event any transferee in good faith believes it
5-15 will exceed the $500,000 amount but fails to do so, the only
5-16 penalty shall be the credit, rebate, or refund of any interest
5-17 charged in excess of 10 percent a year.
5-18 (m) The provisions of Chapter 5, Chapter 15, and Sections
5-19 1.07(d)(1) and (f), Title 79, Revised Statutes (Article 5069-1.01
5-20 et seq., Vernon's Texas Civil Statutes), shall not apply to any
5-21 transactions covered by this section. In addition, any transferee
5-22 of a tax lien under this section does not need to obtain a license
5-23 that otherwise might be required under Title 79, Revised Statutes
5-24 (Article 5069-1.01 et seq., Vernon's Texas Civil Statutes).
5-25 (n) If in any contract governed by this section, any person
6-1 contracts for, charges, or receives a rate or amount of interest
6-2 that exceeds the rate allowed in this section, except as provided
6-3 in Subsection (l), the amount of the penalty for that overcharge
6-4 shall be determined under Chapter 8, Title 79, Revised Statutes
6-5 (Article 5069-8.01 et seq., Vernon's Texas Civil Statutes).
6-6 SECTION 3. Section 34.02, Tax Code, is amended by adding
6-7 Subsection (e) to read as follows:
6-8 (e) The term "taxes" as used in this section shall include
6-9 any and all charges, fees, and expenses expressly authorized under
6-10 the provisions of Section 32.06, dealing with transferees of tax
6-11 liens.
6-12 SECTION 4. This Act takes effect September 1, 1995.
6-13 SECTION 5. The importance of this legislation and the
6-14 crowded condition of the calendars in both houses create an
6-15 emergency and an imperative public necessity that the
6-16 constitutional rule requiring bills to be read on three several
6-17 days in each house be suspended, and this rule is hereby suspended.