1-1 AN ACT
1-2 relating to penalties and interest, writs, suits, judgment amounts,
1-3 right of redemption, and distribution of proceeds in ad valorem tax
1-4 matters.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 31.01(a), Tax Code, is amended to read as
1-7 follows:
1-8 (a) Except as provided by Subsection (f) of this section,
1-9 the assessor for each taxing unit shall prepare and mail a tax bill
1-10 to each person in whose name the property is listed on the tax roll
1-11 or to his authorized agent. The assessor shall mail tax bills by
1-12 October 1 or as soon thereafter as practicable. The assessor shall
1-13 mail to the state agency or institution the tax bill for any
1-14 taxable property owned by the agency or institution. The agency or
1-15 institution shall pay the taxes from funds appropriated for payment
1-16 of the taxes or, if there are none, from funds appropriated for the
1-17 administration of the agency or institution. The exterior
1-18 [outside] of the [envelope in which a] tax bill [is sent] must show
1-19 the return address of the taxing unit and must contain, in all
1-20 capital letters, the words "ADDRESS CORRECTION REQUESTED".
1-21 SECTION 2. Section 32.07, Tax Code, is amended by adding
1-22 Subsections (d) through (g) to read as follows:
1-23 (d) Any person who receives or collects an ad valorem tax or
1-24 any money represented to be a tax from another person holds the
2-1 amount so collected in trust for the benefit of the taxing unit and
2-2 is liable to the taxing unit for the full amount collected plus any
2-3 accrued penalties and interest on the amount collected.
2-4 (e) With respect to an ad valorem tax or other money subject
2-5 to the provisions of Subsection (d), an individual who controls or
2-6 supervises the collection of tax or money from another person, or
2-7 an individual who controls or supervises the accounting for and
2-8 paying over of the tax or money, and who wilfully fails to pay or
2-9 cause to be paid the tax or money is liable as a responsible
2-10 individual for an amount equal to the tax or money not paid or
2-11 caused to be paid. The liability imposed by this subsection is in
2-12 addition to any other penalty provided by law. The dissolution of
2-13 a corporation, association, limited liability company, or
2-14 partnership does not affect a responsible individual's liability
2-15 under this subsection.
2-16 (f) Venue for suits arising under this section shall be
2-17 governed by Section 33.41(a).
2-18 (g) In this section:
2-19 (1) "Responsible individual" includes an officer,
2-20 manager, director, or employee or a corporation, association, or
2-21 limited liability company or a member of a partnership who, as an
2-22 officer, manager, director, employee, or member, is under a duty to
2-23 perform an act with respect to the collection, accounting, or
2-24 payment of a tax or money subject to the provisions of Subsection
2-25 (d).
2-26 (2) "Tax" includes any ad valorem tax or money subject
2-27 to the provisions of Subsection (d), including the penalty and
3-1 interest computed by reference to the amount of the tax or money.
3-2 SECTION 3. Sections 33.01(a) and (c), Tax Code, are amended
3-3 to read as follows:
3-4 (a) A delinquent tax incurs a penalty of six percent of the
3-5 amount of the tax for the first calendar month it is delinquent
3-6 plus one percent for each additional month or portion of a month
3-7 the tax remains unpaid prior to July 1 of the year in which it
3-8 becomes delinquent. However, a tax delinquent on July 1 incurs a
3-9 total penalty of twelve percent of the amount of the delinquent tax
3-10 without regard to the number of months the tax has been delinquent.
3-11 A delinquent tax continues to incur the penalty provided by this
3-12 subsection as long as the tax remains unpaid, regardless of whether
3-13 a judgment for the delinquent tax has been rendered.
3-14 (c) A delinquent tax accrues interest at a rate of one
3-15 percent for each month or portion of a month the tax remains
3-16 unpaid. Interest payable under this section is to compensate the
3-17 taxing unit for revenue lost because of the delinquency. A
3-18 delinquent tax continues to accrue interest under this subsection
3-19 as long as the tax remains unpaid, regardless of whether a judgment
3-20 for the delinquent tax has been rendered.
3-21 SECTION 4. Section 4, Article 1.05, Title 79, Revised
3-22 Statutes (Article 5069-1.05, Vernon's Texas Civil Statutes), is
3-23 amended to read as follows:
3-24 Sec. 4. This article does not apply to a judgment:
3-25 (1) in favor of a taxing unit in a suit to collect a
3-26 delinquent tax under Subchapter C, Chapter 33, Tax Code; or
3-27 (2) that earns interest that is set by Title 2, Tax
4-1 Code.
4-2 SECTION 5. Section 33.02(b), Tax Code, is amended to read as
4-3 follows:
4-4 (b) Interest and a penalty accrue [accrues] as provided by
4-5 Subsections (a) and [Subsection] (c) of Section 33.01 [of this
4-6 code] on the unpaid balance during the period of the agreement.
4-7 SECTION 6. (a) Section 33.48(a), Tax Code, is amended to
4-8 read as follows:
4-9 (a) In addition to other costs authorized by law, a taxing
4-10 unit is entitled to recover the following costs and expenses in a
4-11 suit to collect a delinquent tax:
4-12 (1) all usual court costs, including the cost of
4-13 serving process;
4-14 (2) costs of filing for record a notice of lis pendens
4-15 against property;
4-16 (3) expenses of foreclosure sale;
4-17 (4) reasonable expenses[, subject to approval by the
4-18 court,] that are incurred by the taxing unit in determining the
4-19 name, identity, and location of necessary parties and in procuring
4-20 necessary legal descriptions of the property on which a delinquent
4-21 tax is due; and
4-22 (5) [reasonable] attorney's fees in the amount of
4-23 [approved by the court and not exceeding] 15 percent of the total
4-24 amount of taxes, penalties, and interest due the unit.
4-25 (b) The change in law made to Section 33.48(a), Tax Code, by
4-26 this Act applies only to a suit to collect a delinquent ad valorem
4-27 tax pending on or after the effective date of this Act.
5-1 SECTION 7. Section 33.51, Tax Code, is amended to read as
5-2 follows:
5-3 Sec. 33.51. WRIT OF POSSESSION. If the court orders the
5-4 foreclosure of a tax lien and the sale of real property, the
5-5 judgment shall provide for the issuance by the clerk of said court
5-6 of a writ of possession to the purchaser at the sale or to the
5-7 purchaser's [his] assigns no sooner than 20 days following the date
5-8 on which the purchaser's deed from the sheriff or constable is
5-9 filed of record [within 20 days after the period of redemption
5-10 expires].
5-11 SECTION 8. Section 33.52, Tax Code, is amended to read as
5-12 follows:
5-13 Sec. 33.52. JUDGMENT FOR CURRENT TAXES. (a) If the court
5-14 orders the foreclosure of a tax lien and the sale of real property,
5-15 the judgment may include foreclosure on any unpaid tax on the
5-16 property for the current year [shall order that the taxing unit
5-17 recover from the proceeds of the sale the amount of tax on the
5-18 property for the current tax year prorated to the day of judgment].
5-19 (b) If the amount of tax for the current tax year has not
5-20 been determined on the date of judgment, the court may [shall]
5-21 order recovery of and foreclosure on the amount of tax imposed on
5-22 the property for the preceding tax year[, prorated to the date of
5-23 judgment].
5-24 (c) If the judgment does not provide for recovery of taxes
5-25 imposed for the current tax year, or for recovery of estimated
5-26 taxes that cannot then be calculated for the current year, the real
5-27 property is subject to the taxes for the current tax year and to
6-1 the lien that secures those taxes, and any subsequent purchaser
6-2 takes the property subject to those taxes and the tax lien.
6-3 SECTION 9. Sections 34.05(a) and (g), Tax Code, are amended
6-4 to read as follows:
6-5 (a) If property is sold to a taxing unit that is a party to
6-6 the judgment, the taxing unit may sell the property at any time and
6-7 in any manner, except as otherwise required by this section. All
6-8 such resales shall be [,] subject to any right of redemption
6-9 existing at the time of the sale.
6-10 (g) Sections 263.001 and 272.001(a), Local Government Code,
6-11 do not apply to property sold by a taxing unit [in a municipality
6-12 with a population of 1.5 million or more] under this section. A
6-13 taxing unit may, however, elect to follow the Local Government Code
6-14 provisions in reselling such property.
6-15 SECTION 10. Section 34.06(b), Tax Code, is amended to read
6-16 as follows:
6-17 (b) The purchasing taxing unit shall pay all costs and
6-18 expenses of court and sale and shall distribute the remainder of
6-19 the proceeds to each taxing unit participating in the sale in an
6-20 amount equal to the proportion each participant's taxes, penalties,
6-21 and interest bear to the total amount of taxes, penalties, and
6-22 interest due all participants in the sale, less any amounts
6-23 previously paid as costs on the property as defined under Section
6-24 34.21(i) [as provided by Section 34.02 of this code for
6-25 distribution of proceeds after payment of costs].
6-26 SECTION 11. Section 34.21, Tax Code, is amended to read as
6-27 follows:
7-1 Sec. 34.21. RIGHT OF REDEMPTION. (a) The owner of real
7-2 property sold at a tax sale to a purchaser other than a taxing unit
7-3 and that was the residence homestead of the owner or that was land
7-4 designated for agricultural use when the suit to collect the tax
7-5 was filed may redeem the property within two years after the date
7-6 on which the purchaser's deed is filed for record by paying the
7-7 purchaser the amount the purchaser bid for the property, the amount
7-8 of the deed recording fee, and the amount paid by the purchaser as
7-9 taxes, penalties, interest, and costs on the property, plus a
7-10 redemption premium of 25 percent of the aggregate total if the
7-11 property is redeemed during the first year of the redemption period
7-12 or 50 percent of the aggregate total if the property is redeemed
7-13 during the second year of the redemption period.
7-14 (b) If property that was the owner's residence homestead or
7-15 was land designated for agricultural use when the suit to collect
7-16 the tax was filed is bid off to a taxing unit under Section
7-17 34.01(c) and has not been resold by the taxing unit, the owner
7-18 having a right of redemption may redeem the property within two
7-19 years after the date on which the deed of the taxing unit is filed
7-20 for record by paying the taxing unit the amount of the judgment
7-21 against the property or the market value of the property as
7-22 specified in that judgment, whichever is less, plus the amount of
7-23 the fee for filing the taxing unit's deed and the amount expended
7-24 by the taxing unit as costs on the property.
7-25 (c) If real property that was the owner's residence
7-26 homestead or was land designated for agricultural use when the suit
7-27 to collect the tax was filed has been resold by the taxing unit
8-1 under Section 34.05, the owner of the property having a right of
8-2 redemption may redeem the property within two years after the date
8-3 on which the taxing unit files for record the deed from the sheriff
8-4 or constable by paying the person who purchased the property from
8-5 the taxing unit the amount the purchaser paid for the property, the
8-6 amount of the fee for filing the purchaser's deed for record, the
8-7 amount paid by the purchaser as taxes, penalties, interest, and
8-8 costs on the property, plus a redemption premium of 25 percent of
8-9 the aggregate total if the property is redeemed in the first year
8-10 of the redemption period or 50 percent of the aggregate total if
8-11 the property is redeemed in the second year of the redemption
8-12 period.
8-13 (d) The owner of real property sold at a tax sale other than
8-14 property that was the residence homestead of the owner or that was
8-15 land designated for agricultural use when the suit to collect the
8-16 tax was filed [covered by Subsection (a)] may redeem the property
8-17 in the same manner and by paying the same amounts as prescribed by
8-18 Subsection (a), (b), or (c), as applicable, except that:
8-19 (1) the owner's right of redemption may be exercised
8-20 no later than 180 days following [within six months after] the date
8-21 on which the purchaser's or taxing unit's deed is filed for record;
8-22 and
8-23 (2) the redemption premium payable by the owner to a
8-24 purchaser other than a taxing unit shall not exceed 25 percent.
8-25 [by paying the purchaser the amount the purchaser bid for the
8-26 property, the amount of the deed recording fee, and the amount paid
8-27 by the purchaser as taxes, penalties, interest, and costs on the
9-1 property, plus 25 percent of the aggregate total.]
9-2 (e) [(c)] If the owner of the real property makes an
9-3 affidavit that the owner [he] has made diligent search in the
9-4 county in which the property is located for the purchaser at the
9-5 tax sale or for the purchaser at resale, and has failed to find the
9-6 purchaser [him], that the purchaser [at the sale] is not a resident
9-7 of the county in which the property is located, that the owner [he]
9-8 and the purchaser cannot agree on the amount of redemption money
9-9 due, or that the purchaser refuses to give the owner [him] a
9-10 quitclaim deed to the property, the owner may redeem the land
9-11 [property] by paying the required amount as prescribed by this
9-12 section [Subsection (a) or (b), as applicable,] to the
9-13 assessor-collector for the county in which the property described
9-14 has been redeemed [is located]. The assessor-collector receiving
9-15 the payment shall give the owner a signed receipt witnessed by two
9-16 persons. The receipt, when recorded, is notice to all persons that
9-17 the property described has been redeemed. The assessor-collector
9-18 shall on demand pay the money received by the assessor-collector
9-19 [him] to the purchaser [at the tax sale].
9-20 (f) [(d)] The right of redemption does not grant or reserve
9-21 in the former owner of the real property the right to the use or
9-22 possession of the property, or to receive rents, income, or other
9-23 benefits from the property while the right of redemption exists.
9-24 (g) [(e)] In this section, "residence homestead" has the
9-25 meaning assigned by Section 11.13.
9-26 (h) [(f)] In this section, "agricultural use" has the
9-27 meaning assigned by Section 23.51.
10-1 (i) In this section, "costs" is defined to include all those
10-2 amounts reasonably expended by a purchaser or taxing unit in the
10-3 maintenance, preservation, and safekeeping of the property,
10-4 including but not limited to:
10-5 (1) insurance against fire, flood, and other hazards;
10-6 (2) repairs and improvements required by local
10-7 ordinance, building code, or by the terms of any existing lease of
10-8 the property, whether written or oral;
10-9 (3) discharge of mowing, cleaning, or demolition liens
10-10 against the property that secure expenses incurred by a
10-11 municipality;
10-12 (4) dues, assessments for maintenance, or liens
10-13 provided by recorded restrictive covenants affecting the property
10-14 and payable to a property owner's association; and
10-15 (5) standby fees payable to a water district, fresh
10-16 water supply district, or other municipality as authorized by law.
10-17 SECTION 12. Section 34.23(b), Tax Code, is amended to read
10-18 as follows:
10-19 (b) Except as provided by Section 34.21(e), the owner of
10-20 property sold for taxes to a taxing unit may not redeem the
10-21 property from the taxing unit after the property has been resold.
10-22 [If the owner of property sold for taxes redeems the property from
10-23 the taxing unit after the property has been resold, the taxing unit
10-24 shall pay the purchaser at the resale the amount he paid for the
10-25 property, plus 25 percent of that amount if the redemption occurs
10-26 within one year after the date the property is resold or 50 percent
10-27 of that amount if the redemption occurs more than one year after
11-1 the date the property is resold. The taxing unit shall distribute
11-2 the redemption proceeds remaining after payment of the amount due
11-3 the purchaser at resale to the taxing units adjudged to have tax
11-4 liens against the property in the proportion the amount of each
11-5 unit's lien bears to the total amount of all liens established in
11-6 foreclosure suit.]
11-7 SECTION 13. Section 41.11(a), Tax Code, is amended to read
11-8 as follows:
11-9 (a) Not later than the [15th day before the] date the
11-10 appraisal review board approves the appraisal records as provided
11-11 by Section 41.12 [of this code], the secretary of the board shall
11-12 deliver written notice to a property owner of any change in the
11-13 records that is ordered by the board as provided by this subchapter
11-14 and that will result in an increase in the tax liability of the
11-15 property owner. An owner who receives a notice as provided by this
11-16 section shall be entitled to protest such action as provided by
11-17 Section 41.44(a)(2).
11-18 SECTION 14. This Act takes effect January 1, 1998.
11-19 SECTION 15. The importance of this legislation and the
11-20 crowded condition of the calendars in both houses create an
11-21 emergency and an imperative public necessity that the
11-22 constitutional rule requiring bills to be read on three several
11-23 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 3306 was passed by the House on May
7, 1997, by a non-record vote; and that the House concurred in
Senate amendments to H.B. No. 3306 on May 25, 1997, by a non-record
vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 3306 was passed by the Senate, with
amendments, on May 23, 1997, by a viva-voce vote.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor