BWH C.S.S.B. 141 75(R)BILL ANALYSIS COUNTY AFFAIRS C.S.S.B. 141 By: Cain (Giddings, Oakley) 5-8-97 Committee Report (Substituted) BACKGROUND Currently, Texas law does not authorize a county to seize and sell abandoned real property for delinquent ad valorem taxes. These properties often pose a health or safety threat but Texas counties lack the authority to seize the property and sell it. In addition, granting counties the authority to seize and sell abandoned property would reduce government expenditures on these properties and provide an increased tax base. This bill will grant a county the power to seize and sell abandoned real property for delinquent ad valorem taxes. PURPOSE This legislation grants power to a county to seize and sell abandoned real property for delinquent ad valorem 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. Amends Chapter 33E, Tax Code, SEIZURE OF REAL PROPERTY, by adding language to Section 33.91, 33.92, 33.93 and 33.94 and by adding Sections 33.911 and 33.912 as follows: Sec. 33.91. Amends heading to read: PROPERTY SUBJECT TO SEIZURE BY MUNICIPALITY. (a) Allows a municipality to seize real property for the payment of delinquent ad valorem taxes after notice and a determination by the tax assessor collector that a seizure would be in the best interest of the municipality and other taxing units if the property is (1) in a municipality, (2) less than one acre and (3) abandoned, unused and vacant for at least one year provided that the taxes are delinquent for the five preceding years or for the three preceding years if there is also a health or safety related lien on the property. Provides that the seizure or sale may not be set aside or voided because of any error in determination. Sec. 33.911. PROPERTY SUBJECT TO SEIZURE BY COUNTY. Allows a county to seize real property for the payment of delinquent ad valorem taxes after notice and a determination by the tax assessor collector that a seizure would be in the best interest of the county and other taxing units if the property is (1) in a county, (2) not in a municipality (3) abandoned, unused and vacant for at least one year provided that the taxes are delinquent for the five preceding years. Provides that the seizure or sale may not be set aside or voided because of any error in determination. Sec. 33.912. Defines notice as follows: Notice as required by Sections 33.91 and 33.911, Tax Code, is satisfied if the notices required by Section 31.01, Tax Code, have been sent in each of the preceding five years or the preceding three years if there is a health or safety related lien that taxes are delinquent. 33.92. INSTITUTION OF SEIZURE. Provides steps that a municipality or county must take to institute a seizure action. Provides that the market value of the property is as stated on the most recent appraisal roll. Sec. 33.93. TAX WARRANT. Provides for the sheriff or constable and the tax assessor collector for the municipality or county to seize the property pursuant to a tax warrant. Provides that no bond may be required or court costs charged for issuance of the warrant. Provides that the collector shall take possession of the property pending sale. Sec. 33.94. NOTICE OF TAX SALE. Provides that a municipality or county shall make reasonable effort to give notice of pending sale to persons who have an interest in the property, and provide the time and place of sale. Sec. 33.95. PURCHASER. Purchaser for value at or subsequent to the sale may presume the validity of the sale subject to Section 16.002(b), Civil Practice and Remedies code, and applicable rights of redemption. SECTION 2. Amends Section 34.01, Tax Code, by adding subsection (f) as follows: (f) Provides that property sold pursuant to a seizure may not be sold for less than (1) market value of the property or (2) the total amount of taxes due on the property. SECTION 3. Amends Section 34.06(b), Tax Code, by adding language as follows: (b) Provides that a taxing unit to which property is bid in may, upon resale of the property, recover from the sale price the costs of sale, resale, preservation and maintenance of the property before remitting any excess proceeds to the persons entitled thereto. SECTION 4. Amends Sections 34.21(a) and (b), Tax Code, by adding language as follows: Sec. 34.21. (a) Adds language to change the point at which property is characterized as homestead for redemption purposes to the time a judgment is rendered or a tax warrant is issued. (b) Provides that an owner who redeems property must pay the greater of the seizure or judgment amount, or the purchase price, to redeem property. Further, if the purchaser receives more than the purchase price through a redemption, the purchaser must remit the overage to the taxing authorities. SECTION 5. Amends Section 33.50(b), Tax Code, by adding language as follows: (b) Clarifies Section 33.50(b) to state that any purchaser at a tax sale may purchase property for the lesser of market value or the judgment amount as long as the purchaser is not (1) a person owning an interest in the property or (2) a party to the suit other than the taxing jurisdiction. SECTION 6. Amends Section 33.51, Tax Code, by adding language as follows: 33.51. WRIT OF POSSESSION. Provides that the writ of possession shall issue 20 days after the purchaser's deed is filed of record, not after the redemption period expires. SECTION 7. Effective date: September 1, 1997. SECTION 8. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute makes the following changes to the original: 1) Amends Sections 33.91(a) and 33.911(a) of SECTION 1 by adding a provision for notice to be provided to the owner; 2) Adds a new Section 33.912 to SECTION 1 which provides for additional notice provisions for seizures; 3) Adds a new Subsection (c) to Section 33.92 of SECTION 1 which provides a method for the sheriff to determine market value when selling seized property at a tax sale; 4) Adds a new SECTION 2 which adds subsection (f) to allow seized property to be sold for the lesser of market value or taxes due; 5) Adds a new SECTION 3 which amends Section 34.06(b) to allow taxing jurisdictions to recoup the costs of maintenance and preservation of the property from the proceeds of the resale of tax foreclosed or seized property; 6) Adds a new SECTION 4 amends Section 34.21(a) and (b) which changes the point at which property is characterized as homestead for redemption purposes from the time that a suit is filed to the time that a judgment is rendered or that a tax warrant is issued; 7) Adds a new SECTION 5 amends Section 33.50(b) which clarifies which purchasers may purchase property at a tax sale for the lesser of the market value or the judgment amount; 8) Adds a new SECTION 6 amends Section 33.51 which provides that the writ of possession shall issue 20 days after the purchaser's deed is filed of record, not after the redemption period expires; and 9) Renumbers the following SECTIONS accordingly.