By Heflin H.B. No. 3307 75R402 JD-D A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to tax liens imposed on personal property. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Subchapter E, Chapter 9, Business & Commerce 1-5 Code, is amended by adding Section 9.5035 to read as follows: 1-6 Sec. 9.5035. SECURED PARTY'S DUTY TO PAY CURRENT AD VALOREM 1-7 TAXES IMPOSED ON COLLATERAL. (a) A secured party that takes 1-8 possession of collateral after default under Section 9.503 shall: 1-9 (1) notify in writing the chief appraiser of the 1-10 appraisal district established for the county in which the 1-11 collateral is located that: 1-12 (A) the debtor has defaulted; and 1-13 (B) the secured party has taken possession of 1-14 the collateral; and 1-15 (2) if ad valorem taxes have been assessed on the 1-16 collateral and are unpaid, whether or not delinquent: 1-17 (A) send a copy of the notice required by 1-18 Subdivision (1) to the collector for the county in which the 1-19 collateral is located; and 1-20 (B) remit to that collector an amount equal to 1-21 those unpaid taxes. 1-22 (b) Each notice and any required remittance under Subsection 1-23 (a) must be sent before the 21st day after the date the secured 1-24 party takes possession of the collateral. 2-1 (c) If a secured party fails or refuses to comply with 2-2 Subsection (a): 2-3 (1) the secured party is personally liable for all 2-4 unpaid ad valorem taxes on the collateral that were imposed by a 2-5 taxing unit on or before the date the secured party takes 2-6 possession of the collateral plus any penalties and interest owed 2-7 on delinquent taxes relating to the collateral; and 2-8 (2) a taxing unit may enforce an ad valorem tax lien 2-9 attached to the collateral in favor of the taxing unit against: 2-10 (A) the collateral while in the possession of 2-11 the secured party; 2-12 (B) any proceeds in the possession of the 2-13 secured party from the disposition of the collateral; and 2-14 (C) any cash assets of the secured party. 2-15 (d) This section does not relieve a debtor from an 2-16 obligation for the payment of ad valorem taxes, delinquent taxes, 2-17 penalties, or interest on the collateral that is imposed on the 2-18 debtor by the Tax Code. 2-19 (e) In this section, "collector" and "taxing unit" have the 2-20 meanings assigned those terms by Section 1.04, Tax Code. 2-21 SECTION 2. Section 9.506, Business & Commerce Code, is 2-22 amended to read as follows: 2-23 Sec. 9.506. DEBTOR'S RIGHT TO REDEEM COLLATERAL. At any 2-24 time before the secured party has disposed of collateral or entered 2-25 into a contract for its disposition under Section 9.504 or before 2-26 the obligation has been discharged under Section 9.505(b) the 2-27 debtor or any other secured party may unless otherwise agreed in 3-1 writing after default redeem the collateral by tendering: 3-2 (1) fulfillment of all obligations secured by the 3-3 collateral as well as the expenses reasonably incurred by the 3-4 secured party in retaking, holding and preparing the collateral for 3-5 disposition, in arranging for the sale, and to the extent provided 3-6 in the agreement and not prohibited by law, his reasonable 3-7 attorneys' fees and legal expenses; and 3-8 (2) any amount related to the collateral that the 3-9 secured party remitted to a tax collector as required by Section 3-10 9.5035. 3-11 SECTION 3. Chapter 31, Tax Code, is amended by adding 3-12 Section 31.13 to read as follows: 3-13 Sec. 31.13. REMITTANCE TO TAXING UNITS OF AMOUNTS COLLECTED 3-14 FROM CERTAIN SECURED CREDITORS. (a) The collector for a county 3-15 who receives money from a secured creditor under Section 9.5035, 3-16 Business & Commerce Code, for the payment of ad valorem taxes 3-17 imposed on collateral shall, before the 91st day after the date the 3-18 money is received, distribute the money to each appropriate taxing 3-19 unit in proportion to the amount of taxes, penalties, and interest 3-20 imposed on the collateral by that taxing unit. 3-21 (b) To defray the cost of administering this section, a 3-22 collector is entitled to retain any interest that is earned on 3-23 money received from a secured creditor under Section 9.5035, 3-24 Business & Commerce Code. 3-25 SECTION 4. (a) This Act takes effect January 1, 1998. 3-26 (b) The changes in law made by Sections 1 and 2 of this Act 3-27 apply only to a secured creditor who takes possession of collateral 4-1 after default under Section 9.503, Business & Commerce Code, on or 4-2 after January 1, 1998. A secured creditor who took possession of 4-3 collateral under that section of that code before January 1, 1998, 4-4 is covered by the law in effect when the creditor took possession 4-5 of the collateral, and the former law is continued in effect for 4-6 that purpose. 4-7 SECTION 5. The importance of this legislation and the 4-8 crowded condition of the calendars in both houses create an 4-9 emergency and an imperative public necessity that the 4-10 constitutional rule requiring bills to be read on three several 4-11 days in each house be suspended, and this rule is hereby suspended.