S.B. No. 1387
AN ACT
1-1 relating to the transfer and enforcement of ad valorem tax liens.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. Chapter 32, Tax Code, is amended by amending
1-4 Section 32.06 and adding Section 32.065 to read as follows:
1-5 Sec. 32.06. Transfer of Tax Lien. (a) A person may
1-6 authorize another person to pay the taxes imposed by a taxing unit
1-7 on the person's <his> real property by filing with the collector
1-8 for the unit a sworn document stating the authorization, naming the
1-9 other person authorized to pay the taxes, and describing the
1-10 property.
1-11 (b) If a person authorized to pay another's taxes pursuant
1-12 to Subsection (a) <of this section> pays the taxes and any
1-13 penalties and interest imposed, the collector shall issue a tax
1-14 receipt to the person paying the taxes. In addition, the collector
1-15 shall certify on the sworn document that payment of the taxes and
1-16 any penalties and interest on the described property has been made
1-17 by a person other than the person liable for the taxes when imposed
1-18 and that the taxing unit's tax lien is transferred to the person
1-19 paying the taxes. The collector shall attach to the document the
1-20 collector's <his> seal of office and deliver the document to the
1-21 person paying the taxes. The collector shall keep a record of all
1-22 tax liens transferred as provided by this section.
1-23 (c) Except as otherwise provided by this section, the
2-1 transferee of a tax lien and any successor in interest is entitled
2-2 to foreclose the lien:
2-3 (1) in the manner provided by law for foreclosure of
2-4 tax liens; or
2-5 (2) in the manner specified in Section 51.002,
2-6 Property Code.
2-7 (d) To be enforceable, a tax lien transferred as provided by
2-8 this section must be recorded in the deed records of each county in
2-9 which the property encumbered by the lien is located.
2-10 (e) A person holding a tax lien transferred as provided by
2-11 this section may not charge a greater rate of interest than 18 <10>
2-12 percent a year on the taxes, penalties, interest, and recording
2-13 expenses paid to acquire and record the lien.
2-14 (f) The holder of a preexisting lien on property encumbered
2-15 by a tax lien transferred as provided by this section is entitled,
2-16 within six months after the date on which the tax lien is recorded
2-17 in all counties in which the property is located, to pay the holder
2-18 of the tax lien the amount paid for the lien, plus interest accrued
2-19 at the rate provided by Subsection (e) and recording expenses, and
2-20 becomes subrogated to all rights in the lien.
2-21 (g) A suit to foreclose a tax lien transferred as provided
2-22 by this section may not be instituted within one year from the date
2-23 on which the lien is recorded in all counties in which the property
2-24 is located, unless the contract between the owner of the property
2-25 and the transferee provides otherwise.
3-1 (h) After one year from the date on which a tax lien
3-2 transferred as provided by this section is recorded in all counties
3-3 in which the property is located, the holder of the lien may file
3-4 suit to foreclose the lien unless a contract between the holder of
3-5 the lien and the owner of the property encumbered by the lien
3-6 provides otherwise. If the suit results in foreclosure of the
3-7 lien, the person filing suit is entitled to recover attorney's fees
3-8 in an amount not to exceed 10 percent of the judgment. The
3-9 proceeds of a sale following foreclosure as provided by this
3-10 subsection shall be applied first to the payment of court costs,
3-11 then to payment of the judgment, including accrued interest, and
3-12 then to the payment of any attorney's fees fixed in the judgment.
3-13 Any remaining proceeds shall be paid to other holders of liens on
3-14 the property in the order of their priority and then to the person
3-15 whose property was sold at the tax sale.
3-16 (i) The person whose property is sold as provided by this
3-17 section or any person holding a first lien against the property is
3-18 entitled, within one year after the date the property is sold, to
3-19 redeem the property from the purchaser at the tax sale by paying
3-20 that purchaser <him> the tax sale purchase price, plus costs, and
3-21 interest accrued on the judgment to the date of redemption or 118
3-22 <110> percent of the amount of the judgment, whichever is less. If
3-23 a person redeems the property as provided by this subsection, the
3-24 purchaser at the tax sale shall deliver a deed to the property to
3-25 the person redeeming the property. If the person who owned the
4-1 property at the time of foreclosure redeems the property, all liens
4-2 existing on the property at the time of the tax sale remain in
4-3 effect to the extent not paid from the sale proceeds.
4-4 Sec. 32.065. CONTRACT FOR FORECLOSURE OF TAX LIEN.
4-5 (a) Section 32.06 <(j) This section> does not abridge the right
4-6 of an owner of real property to enter into a contract for the
4-7 payment of taxes with the holder of a lien on the property,
4-8 including a transferee under Section 32.06 or this section, or
4-9 affect a contract between the owner and holder of a lien for the
4-10 payment of taxes on the property.
4-11 (b) A contract entered into under Subsection (a) may provide
4-12 for:
4-13 (1) an event of default; and
4-14 (2) notice of acceleration.
4-15 (c) Notwithstanding any other provision of this code, a
4-16 transferee of a tax lien is subrogated to and is entitled to
4-17 exercise any right or remedy possessed by the transferring taxing
4-18 unit, including or related to foreclosure or judicial sale.
4-19 (d) Chapters 5 and 15 and Sections 1.07(d)(1) and (f), Title
4-20 79, Revised Statutes (Article 5069-1.01 et seq., Vernon's Texas
4-21 Civil Statutes), do not apply to a transaction covered by this
4-22 section. The transferee of a tax lien under this section is not
4-23 required to obtain a license under Title 79, Revised Statutes
4-24 (Article 5069-1.01 et seq., Vernon's Texas Civil Statutes).
4-25 (e) If in a contract under this section a person contracts
5-1 for, charges, or receives a rate or amount of interest that exceeds
5-2 the rate or amount allowed by this section, the amount of the
5-3 penalty for which the person is obligated is determined in the
5-4 manner provided by Chapter 8, Title 79, Revised Statutes (Article
5-5 5069-8.01 et seq., Vernon's Texas Civil Statutes).
5-6 (f) The first written communication by the lender to its
5-7 prospective borrower shall disclose the types of possible
5-8 additional charges or fees that may be incurred by the borrower in
5-9 connection with the loan or contract under this section.
5-10 SECTION 2. Section 34.02, Tax Code, is amended by adding
5-11 Subsection (e) to read as follows:
5-12 (e) In this section, "taxes" includes a charge, fee, or
5-13 expense that is expressly authorized by Section 32.06 or 32.065.
5-14 SECTION 3. This Act takes effect September 1, 1995. The
5-15 change in law made by this Act applies only to the transfer of a
5-16 tax lien on or after that date. The transfer of a tax lien before
5-17 the effective date of this Act or a tax lien transferred before the
5-18 effective date is covered by the law in effect when the tax lien
5-19 was transferred, and the former law is continued in effect for that
5-20 purpose.
5-21 SECTION 4. The importance of this legislation and the
5-22 crowded condition of the calendars in both houses create an
5-23 emergency and an imperative public necessity that the
5-24 constitutional rule requiring bills to be read on three several
5-25 days in each house be suspended, and this rule is hereby suspended.