SWB C.S.H.B. 2587 75(R)BILL ANALYSIS WAYS & MEANS C.S.H.B. 2587 By: Horn 4-22-97 Committee Report (Substituted) BACKGROUND Periodically, provisions of the Tax Code become outdated, develop conflicts because of changes in other laws, or simply fail to function efficiently; therefore, minor changes are needed in the property tax laws to insure an efficient system which serves the public as well as possible. PURPOSE This bill makes changes in the Property Tax Code to, among other things, expedite the sale of tax foreclosed property, make more efficient the judicial process of foreclosing for delinquent taxes, and simplify the calculation of post-judgement interest on delinquent taxes. 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.Section 31.061(b), Tax Code (Payment of Taxes Assessed Against Real Property by Conveyance to Taxing Unit of Property), is amended to allow property deeded to a taxing unit in lieu of delinquent taxes to be sold by any means currently authorized for the sale of delinquent tax foreclosed property. SECTION 2. Section 33.41, Tax Code (Suit to Collect Delinquent Tax), is amended by adding Subsection (d): (d) Specifies that a suit brought against the personal representative or guardian of an estate is not required to be filed in the court of which the probate or guardianship proceeding is pending. Provides that the suit may be filed in a court in the county in which the property has taxable situs. Specifies that the provisions of the Texas Probate Code requiring that a claim be presented to the court in which the proceeding is pending as a prerequisite for judgement do not apply to a claim by a taxing unit for delinquent taxes. SECTION 3. Section 33.51, Tax Code (Writ of Possession), is amended to allow a person who buys property at a tax sale to obtain a writ of possession within twenty days after recording the deed. SECTION 4. Section 33.52, Tax Code (Judgement for Current Taxes), is amended to require a motion from the taxing unit to recover the current year's taxes (or if the taxes haven't been determined, then the amount of taxes based upon the preceding year) from the proceeds of a sale of real property to satisfy a tax lien. (c) Establishes that if the taxes for the current year are not included in the judgement, the tax sale does not effect: 1) the lien securing the taxes for the current year; 2) the personal liability of the owner of the property for the taxes for the current year. SECTION 5. Amends Subchapter C, Chapter 33, Tax Code (Delinquent Tax Suits), by adding Section 33.55, EFFECT OF JUDGEMENT ON ACCRUAL OF PENALTIES AND INTEREST, providing that a judgement for delinquent taxes does not affect the accrual after the date of the judgement of penalties and interest under this chapter on taxes included in the judgement. SECTION 6. Section 34.05(a), Tax Code (Resale by Taxing Unit), is amended to clarify existing law so that property taken into trust by a taxing unit pursuant to a tax foreclosure may be sold by public or private sale. Provides that the sale is subject to any right of redemption of the former owner and the redemption period begins on the date the deed to the taxing unit is filed for record. SECTION 7.Section 34.21(e), Tax Code (Right of Redemption), is amended to define "agricultural use," "costs," "purchaser," and "residence homestead." SECTION 8. Amends Section 4, Article 1.05, Title 79, Revised Statutes to state that this article does not apply to a judgement in favor of a taxing unit in a delinquent tax suit under Subchapter C, Chapter 33, Tax Code (Delinquent Tax Suits), or a judgement that earns interest under Title 2, Tax Code (State Taxation). SECTION 9.Sections 31.061(g), 34.05(g) and 34.21(f) are repealed in order to remove: 1) the population cap for jurisdictions receiving a deed to property in lieu of taxes; 2) the population floor regarding exemption from bidding requirements for resale of delinquent tax foreclosed property; and 3) the definition of "agricultural use" which is moved to 34.21(e) as provided by Section 8 of this Act. SECTION 10.Establishes that the changes in calculations of interest in Sections 5 and 9 of this Act apply only to the accrual of interest on or after the effective date of this Act. SECTION 11. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE Section 2 of C.S.H.B. 2587 adds locations that a suit to collect delinquent taxes may be filed, and specifies that portions of the probate code do not apply to a suit by a taxing unit for delinquent taxes. Section 4 of C.S.H.B. 2587 specifies that if taxes for the current year are not included in the judgement, tax sales do not affect the lien securing the taxes for the current year, or the personal liability of the owner of the property for the taxes for the current year. Section 5 of C.S.H.B. 2587 changes the language relating to the interest and penalties on delinquent taxes, and the accrual date. Section 6 of C.S.H.B. 2587 is amended to clarify what procedure may be used to sell property and specifies right of redemption procedures.