SLC H.B. 1463 75(R)BILL ANALYSIS


LAND & RESOURCE MANAGEMENT
H.B. 1463
By: Bosse
3-14-97
Committee Report (Unamended)



BACKGROUND 

 Prior to 1978, property which had been foreclosed for non-payment of
local taxes was offered for sale by the sheriff of the county in which the
property was located. Proceeds from the sale of the property were used to
satisfy the unpaid tax debt. Lots that were not sold at county tax
foreclosure sales became the property of the state. The General Land
Office is designated  as the agency responsible for the sale of these
properties. The General Land Office sells tax foreclosure lots when a
potential purchaser makes an offer on the property. Proceeds from these
sales are deposited to the Capital Trust Fund. 

While the sale of these properties has been relatively routine, The Land
Office has encountered problems with the sale of properties sold in Bexar
County. Bexar County officials contend that a liability for unpaid taxes
does not end when the property reverts to state ownership. In fact,
purchasers of tax foreclosure property in Bexar County have received
sizeable tax bills immediately after transactions are closed. Discussions
with officials of Bexar County have been unsuccessful in resolving this
issue. 

PURPOSE

The purpose of HB 1463 is to amend the Natural Resources Code to clarify
that the purchaser of a tax foreclosure property has clear title to the
property, free of any previous tax debt. 

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 32.112, Natural Resources Code, SALE OF TAX
FORECLOSURE PROPERTY in the following subsections: 

 Subsection (a) states that property placed in the name of the state due
to a foreclosure of a tax lien, whether the property was sold, bid off, or
otherwise transferred to the state may be sold or leased by the board.
The property's sale or lease is free of taxes imposed on the property,
penalties, or interest that are due to any taxing unit which was a party
to the judgement in the delinquent tax suit. 

 Subsection (b) states that the sale of property by the board under this
section gives the purchaser of the property a good and perfect title to
the interest in the property. The purchaser is also given the right to the
use and possession of the property, subject only to the right of
redemption belonging to the person liable for delinquent taxes, a recorded
restrictive covenant attached to the land, and a valid easement of record
as of the date the property was placed in the name of the state. However,
the covenant or the easement must be recorded before January 1 of the year
in which the tax lien attached to the property. 

 Subsection (c) states that the board can recover costs incurred from the
sale or lease of the property.  The balance of the proceeds from the sale
or lease shall be deposited in the State  Treasury to the credit of the
Texas Capital Trust Fund.  The board is not required to pay any portion of
taxes imposed on the property, penalties, or interest that are due to any
taxing unit which was a party to the judgement in the delinquent tax suit. 

SECTION 2. Emergency clause.  Effective date.