1-1 By: Heflin (Senate Sponsor - Wentworth) H.B. No. 3306
1-2 (In the Senate - Received from the House May 8, 1997;
1-3 May 9, 1997, read first time and referred to Committee on State
1-4 Affairs; May 16, 1997, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 13, Nays 0; May 16, 1997,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR H.B. No. 3306 By: Carona
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to penalties and interest, writs, suits, judgment amounts,
1-11 right of redemption, and distribution of proceeds in ad valorem tax
1-12 matters.
1-13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-14 SECTION 1. Section 31.01(a), Tax Code, is amended to read as
1-15 follows:
1-16 (a) Except as provided by Subsection (f) of this section,
1-17 the assessor for each taxing unit shall prepare and mail a tax bill
1-18 to each person in whose name the property is listed on the tax roll
1-19 or to his authorized agent. The assessor shall mail tax bills by
1-20 October 1 or as soon thereafter as practicable. The assessor shall
1-21 mail to the state agency or institution the tax bill for any
1-22 taxable property owned by the agency or institution. The agency or
1-23 institution shall pay the taxes from funds appropriated for payment
1-24 of the taxes or, if there are none, from funds appropriated for the
1-25 administration of the agency or institution. The exterior
1-26 [outside] of the [envelope in which a] tax bill [is sent] must show
1-27 the return address of the taxing unit and must contain, in all
1-28 capital letters, the words "ADDRESS CORRECTION REQUESTED".
1-29 SECTION 2. Section 32.07, Tax Code, is amended by adding
1-30 Subsections (d) through (g) to read as follows:
1-31 (d) Any person who receives or collects an ad valorem tax or
1-32 any money represented to be a tax from another person holds the
1-33 amount so collected in trust for the benefit of the taxing unit and
1-34 is liable to the taxing unit for the full amount collected plus any
1-35 accrued penalties and interest on the amount collected.
1-36 (e) With respect to an ad valorem tax or other money subject
1-37 to the provisions of Subsection (d), an individual who controls or
1-38 supervises the collection of tax or money from another person, or
1-39 an individual who controls or supervises the accounting for and
1-40 paying over of the tax or money, and who wilfully fails to pay or
1-41 cause to be paid the tax or money is liable as a responsible
1-42 individual for an amount equal to the tax or money not paid or
1-43 caused to be paid. The liability imposed by this subsection is in
1-44 addition to any other penalty provided by law. The dissolution of
1-45 a corporation, association, limited liability company, or
1-46 partnership does not affect a responsible individual's liability
1-47 under this subsection.
1-48 (f) Venue for suits arising under this section shall be
1-49 governed by Section 33.41(a).
1-50 (g) In this section:
1-51 (1) "Responsible individual" includes an officer,
1-52 manager, director, or employee or a corporation, association, or
1-53 limited liability company or a member of a partnership who, as an
1-54 officer, manager, director, employee, or member, is under a duty to
1-55 perform an act with respect to the collection, accounting, or
1-56 payment of a tax or money subject to the provisions of Subsection
1-57 (d).
1-58 (2) "Tax" includes any ad valorem tax or money subject
1-59 to the provisions of Subsection (d), including the penalty and
1-60 interest computed by reference to the amount of the tax or money.
1-61 SECTION 3. Sections 33.01(a) and (c), Tax Code, are amended
1-62 to read as follows:
1-63 (a) A delinquent tax incurs a penalty of six percent of the
1-64 amount of the tax for the first calendar month it is delinquent
2-1 plus one percent for each additional month or portion of a month
2-2 the tax remains unpaid prior to July 1 of the year in which it
2-3 becomes delinquent. However, a tax delinquent on July 1 incurs a
2-4 total penalty of twelve percent of the amount of the delinquent tax
2-5 without regard to the number of months the tax has been delinquent.
2-6 A delinquent tax continues to incur the penalty provided by this
2-7 subsection as long as the tax remains unpaid, regardless of whether
2-8 a judgment for the delinquent tax has been rendered.
2-9 (c) A delinquent tax accrues interest at a rate of one
2-10 percent for each month or portion of a month the tax remains
2-11 unpaid. Interest payable under this section is to compensate the
2-12 taxing unit for revenue lost because of the delinquency. A
2-13 delinquent tax continues to accrue interest under this subsection
2-14 as long as the tax remains unpaid, regardless of whether a judgment
2-15 for the delinquent tax has been rendered.
2-16 SECTION 4. Section 4, Article 1.05, Title 79, Revised
2-17 Statutes (Article 5069-1.05, Vernon's Texas Civil Statutes), is
2-18 amended to read as follows:
2-19 Sec. 4. This article does not apply to a judgment:
2-20 (1) in favor of a taxing unit in a suit to collect a
2-21 delinquent tax under Subchapter C, Chapter 33, Tax Code; or
2-22 (2) that earns interest that is set by Title 2, Tax
2-23 Code.
2-24 SECTION 5. Section 33.02(b), Tax Code, is amended to read as
2-25 follows:
2-26 (b) Interest and a penalty accrue [accrues] as provided by
2-27 Subsections (a) and [Subsection] (c) of Section 33.01 [of this
2-28 code] on the unpaid balance during the period of the agreement.
2-29 SECTION 6. (A) Section 33.48(a), Tax Code, is amended to
2-30 read as follows:
2-31 (a) In addition to other costs authorized by law, a taxing
2-32 unit is entitled to recover the following costs and expenses in a
2-33 suit to collect a delinquent tax:
2-34 (1) all usual court costs, including the cost of
2-35 serving process;
2-36 (2) costs of filing for record a notice of lis pendes
2-37 against property;
2-38 (3) expenses of foreclosure sale;
2-39 (4) reasonable expenses[, subject to approval by the
2-40 court,] that are incurred by the taxing unit in determining the
2-41 name, identity, and location of necessary parties and in procuring
2-42 necessary legal descriptions of the property on which a delinquent
2-43 tax is due; and
2-44 (5) [reasonable] attorney's fees [approved by the
2-45 court and not exceeding] in the amount of 15 percent of the total
2-46 amount of taxes, penalties, and interest due the unit.
2-47 (B) The change in law made to Section 33.48(a),
2-48 Tax Code by this Act applies only to a suit to collect a delinquent
2-49 ad valorem tax pending on or after the effective date of this Act.
2-50 SECTION 7. Section 33.51, Tax Code, is amended to read as
2-51 follows:
2-52 Sec. 33.51. WRIT OF POSSESSION. If the court orders the
2-53 foreclosure of a tax lien and the sale of real property, the
2-54 judgment shall provide for the issuance by the clerk of said court
2-55 of a writ of possession to the purchaser at the sale or to the
2-56 purchaser's [his] assigns no sooner than 20 days following the date
2-57 on which the purchaser's deed from the sheriff or constable is
2-58 filed of record [within 20 days after the period of redemption
2-59 expires].
2-60 SECTION 8. Section 33.52, Tax Code, is amended to read as
2-61 follows:
2-62 Sec. 33.52. JUDGMENT FOR CURRENT TAXES. (a) If the court
2-63 orders the foreclosure of a tax lien and the sale of real property,
2-64 the judgment may include foreclosure on any unpaid tax on the
2-65 property for the current year [shall order that the taxing unit
2-66 recover from the proceeds of the sale the amount of tax on the
2-67 property for the current tax year prorated to the day of the
2-68 judgment].
2-69 (b) If the amount of tax for the current tax year has not
3-1 been determined on the date of judgment, the court may [shall]
3-2 order recovery of and foreclosure on the amount of tax imposed on
3-3 the property for the preceding tax year [prorated to the date of
3-4 judgment].
3-5 (c) If the judgment does not provide for recovery of taxes
3-6 imposed for the current tax year, or for recovery of estimated
3-7 taxes that cannot then be calculated for the current year, the real
3-8 property is subject to the taxes for the current tax year and to
3-9 the lien that secures those taxes, and any subsequent purchaser
3-10 takes the property subject to those taxes and the tax lien.
3-11 SECTION 9. Sections 34.05(a) and (g), Tax Code, are amended
3-12 to read as follows:
3-13 (a) If property is sold to a taxing unit that is a party to
3-14 the judgment, the taxing unit may sell the property at any time and
3-15 in any manner, except as otherwise required by this section. All
3-16 such resales shall be [,] subject to any right of redemption
3-17 existing at the time of the sale.
3-18 (g) Sections 263.001 and 272.001(a), Local Government Code,
3-19 do not apply to property sold by a taxing unit [in a municipality
3-20 with a population of 1.5 million or more] under this section. A
3-21 taxing unit may, however, elect to follow the Local Government Code
3-22 provisions in reselling such property.
3-23 SECTION 10. Section 34.06(b), Tax Code, is amended to read
3-24 as follows:
3-25 (b) The purchasing taxing unit shall pay all costs and
3-26 expenses of court and sale and shall distribute the remainder of
3-27 the proceeds to each taxing unit participating in the sale in an
3-28 amount equal to the proportion each participant's taxes, penalties,
3-29 and interest bear to the total amount of taxes, penalties, and
3-30 interest due all participants in the sale, less any amounts
3-31 previously paid as costs on the property as defined under Section
3-32 34.21(i) [as provided by Section 34.02 of this code for
3-33 distribution of proceeds after payment of costs].
3-34 SECTION 11. Section 34.21, Tax Code, is amended to read as
3-35 follows:
3-36 Sec. 34.21. RIGHT OF REDEMPTION. (a) The owner of real
3-37 property sold at a tax sale to a purchaser other than a taxing unit
3-38 and that was the residence homestead of the owner or that was land
3-39 designated for agricultural use when the suit to collect the tax
3-40 was filed may redeem the property within two years after the date
3-41 on which the purchaser's deed is filed for record by paying the
3-42 purchaser the amount the purchaser bid for the property, the amount
3-43 of the deed recording fee, and the amount paid by the purchaser as
3-44 taxes, penalties, interest, and costs on the property, plus a
3-45 redemption premium of 25 percent of the aggregate total if the
3-46 property is redeemed during the first year of the redemption period
3-47 or 50 percent of the aggregate total if the property is redeemed
3-48 during the second year of the redemption period.
3-49 (b) If property that was the owner's residence homestead or
3-50 was land designated for agricultural use when the suit to collect
3-51 the tax was filed is bid off to a taxing unit under Section
3-52 34.01(c) and has not been resold by the taxing unit, the owner
3-53 having a right of redemption may redeem the property within two
3-54 years after the date on which the deed of the taxing unit is filed
3-55 for record by paying the taxing unit the amount of the judgment
3-56 against the property or the market value of the property as
3-57 specified in that judgment, whichever is less, plus the amount of
3-58 the fee for filing the taxing unit's deed and the amount expended
3-59 by the taxing unit as costs on the property.
3-60 (c) If real property that was the owner's residence
3-61 homestead or was land designated for agricultural use when the suit
3-62 to collect the tax was filed has been resold by the taxing unit
3-63 under Section 34.05, the owner of the property having a right of
3-64 redemption may redeem the property within two years after the date
3-65 on which the taxing unit files for record the deed from the sheriff
3-66 or constable by paying the person who purchased the property from
3-67 the taxing unit the amount the purchaser paid for the property, the
3-68 amount of the fee for filing the purchaser's deed for record, the
3-69 amount paid by the purchaser as taxes, penalties, interest, and
4-1 costs on the property, plus a redemption premium of 25 percent of
4-2 the aggregate total if the property is redeemed in the first year
4-3 of the redemption period or 50 percent of the aggregate total if
4-4 the property is redeemed in the second year of the redemption
4-5 period.
4-6 (d) The owner of real property sold at a tax sale other than
4-7 property that was the residence homestead of the owner or that was
4-8 land designated for agricultural use when the suit to collect the
4-9 tax was filed [covered by Subsection (a)] may redeem the property
4-10 in the same manner and by paying the same amounts as prescribed by
4-11 Subsection (a), (b), or (c), as applicable, except that:
4-12 (1) the owner's right of redemption may be exercised
4-13 no later than 180 days following [within six months after] the date
4-14 on which the purchaser's or taxing unit's deed is filed for record;
4-15 and
4-16 (2) the redemption premium payable by the owner to a
4-17 purchaser other than a taxing unit shall not exceed 25 percent.
4-18 [by paying the purchaser the amount the purchaser bid for the
4-19 property, the amount of the deed recording fee, and the amount paid
4-20 by the purchaser as taxes, penalties, interest, and costs on the
4-21 property, plus 25 percent of the aggregate total.]
4-22 (e) [(c)] If the owner of the real property makes an
4-23 affidavit that the owner [he] has made diligent search in the
4-24 county in which the property is located for the purchaser at the
4-25 tax sale or for the purchaser at resale, and has failed to find the
4-26 purchaser [him], that the purchaser [at the sale] is not a resident
4-27 of the county in which the property is located, that the owner [he]
4-28 and the purchaser cannot agree on the amount of redemption money
4-29 due, or that the purchaser refuses to give the owner [him] a
4-30 quitclaim deed to the property, the owner may redeem the land
4-31 [property] by paying the required amount as prescribed by this
4-32 section [Subsection (a) or (b), as applicable,] to the
4-33 assessor-collector for the county in which the property described
4-34 has been redeemed [is located]. The assessor-collector receiving
4-35 the payment shall give the owner a signed receipt witnessed by two
4-36 persons. The receipt, when recorded, is notice to all persons that
4-37 the property described has been redeemed. The assessor-collector
4-38 shall on demand pay the money received by the assessor-collector
4-39 [him] to the purchaser [at the tax sale].
4-40 (f) [(d)] The right of redemption does not grant or reserve
4-41 in the former owner of the real property the right to the use or
4-42 possession of the property, or to receive rents, income, or other
4-43 benefits from the property while the right of redemption exists.
4-44 (g) [(e)] In this section, "residence homestead" has the
4-45 meaning assigned by Section 11.13.
4-46 (h) [(f)] In this section, "agricultural use" has the
4-47 meaning assigned by Section 23.51.
4-48 (i) In this section, "costs" is defined to include all those
4-49 amounts reasonably expended by a purchaser or taxing unit in the
4-50 maintenance, preservation, and safekeeping of the property,
4-51 including but not limited to:
4-52 (1) insurance against fire, flood, and other hazards;
4-53 (2) repairs and improvements required by local
4-54 ordinance, building code, or by the terms of any existing lease of
4-55 the property, whether written or oral;
4-56 (3) discharge of mowing, cleaning, or demolition liens
4-57 against the property that secure expenses incurred by a
4-58 municipality;
4-59 (4) dues, assessments for maintenance, or liens
4-60 provided by recorded restrictive covenants affecting the property
4-61 and payable to a property owner's association; and
4-62 (5) standby fees payable to a water district, fresh
4-63 water supply district, or other municipality as authorized by law.
4-64 SECTION 12. Section 34.23(b), Tax Code, is amended to read
4-65 as follows:
4-66 (b) Except as provided by Section 34.21(e), the owner of
4-67 property sold for taxes to a taxing unit may not redeem the
4-68 property from the taxing unit after the property has been resold.
4-69 [If the owner of property sold for taxes redeems the property from
5-1 the taxing unit after the property has been resold, the taxing unit
5-2 shall pay the purchaser at the resale the amount he paid for the
5-3 property, plus 25 percent of that amount if the redemption occurs
5-4 within one year after the date the property is resold or 50 percent
5-5 of that amount if the redemption occurs more than one year after
5-6 the date the property is resold. The taxing unit shall distribute
5-7 the redemption proceeds remaining after payment of the amount due
5-8 the purchaser at resale to the taxing units adjudged to have tax
5-9 liens against the property in the proportion the amount of each
5-10 unit's lien bears to the total amount of all liens established in
5-11 foreclosure suit.]
5-12 SECTION 13. Section 41.11(a), Tax Code, is amended to read
5-13 as follows:
5-14 (a) Not later than the [15th day before the] date the
5-15 appraisal review board approves the appraisal records as provided
5-16 by Section 41.12 [of this code], the secretary of the board shall
5-17 deliver written notice to a property owner of any change in the
5-18 records that is ordered by the board as provided by this subchapter
5-19 and that will result in an increase in the tax liability of the
5-20 property owner. An owner who receives a notice as provided by this
5-21 section shall be entitled to protest such action as provided by
5-22 Section 41.44(a)(2).
5-23 SECTION 14. This Act takes effect January 1, 1998.
5-24 SECTION 15. The importance of this legislation and the
5-25 crowded condition of the calendars in both houses create an
5-26 emergency and an imperative public necessity that the
5-27 constitutional rule requiring bills to be read on three several
5-28 days in each house be suspended, and this rule is hereby suspended.
5-29 * * * * *