AN ACT
1-1 relating to the sale of property for delinquent ad valorem taxes.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. Section 33.54, Tax Code, is amended to read as
1-4 follows:
1-5 Sec. 33.54. LIMITATION ON ACTIONS RELATING TO PROPERTY SOLD
1-6 FOR TAXES. (a) Except as provided by Subsection (b) [of this
1-7 section], an [a cause of] action relating to the title to property
1-8 may not be maintained against the purchaser of the property at a
1-9 tax sale unless the action is commenced:
1-10 (1) before the first anniversary of the date that
1-11 [commences within three years after] the deed executed to the
1-12 purchaser at the tax sale is filed of record; or
1-13 (2) before the second anniversary of the date that the
1-14 deed executed to the purchaser is filed of record, if on the date
1-15 that the suit to collect the delinquent tax was filed the property
1-16 was:
1-17 (A) the residence homestead of the owner; or
1-18 (B) land appraised or eligible to be appraised
1-19 under Subchapter C or D, Chapter 23.
1-20 (b) If a person other than the purchaser at the tax sale or
1-21 the person's [his] successor in interest pays taxes on the property
1-22 during the applicable limitations period and until the commencement
1-23 of an action challenging the validity of the tax sale [three years
2-1 following the date the deed is filed] and that person was not
2-2 served citation in the suit to foreclose the tax lien, that [the
2-3 three-year] limitations period does not apply to that person.
2-4 (c) When actions are barred by this section, the purchaser
2-5 at the tax sale or the purchaser's [his] successor in interest has
2-6 [shall be held to have] full title to the property, precluding all
2-7 other claims.
2-8 SECTION 2. Section 34.05, Tax Code, is amended by amending
2-9 Subsections (b), (c), and (d), and adding Subsections (h) and (i)
2-10 to read as follows:
2-11 (b) Property [Unless the property is] sold pursuant to
2-12 Subsections (c) and (d) of this section[, it] may [not] be sold for
2-13 any [less than the market value specified in the judgment of
2-14 foreclosure or the total] amount [of the judgments against the
2-15 property, whichever is less, without the consent of each taxing
2-16 unit entitled to receive proceeds of the sale under the judgment.
2-17 Joinder of the taxing units in the conveyance of the property
2-18 constitutes consent. The presiding officer of the governing body
2-19 of a taxing unit may consent in behalf of the taxing unit]. This
2-20 subsection does not authorize a sale of property in violation of
2-21 Section 52, Article III, Texas Constitution.
2-22 (c) The taxing unit purchasing the property by resolution of
2-23 its governing body may request the sheriff to sell the property at
2-24 a public sale. If the purchasing taxing unit has not sold the
2-25 property within six months after the date on which the owner's
3-1 right of redemption terminates, any taxing unit that is entitled to
3-2 receive proceeds of the sale by resolution of its governing body
3-3 may request the sheriff in writing to sell the property at a public
3-4 sale. On receipt of a request made under this subsection, the
3-5 sheriff shall sell the property as provided by Subsection (d) of
3-6 this section, unless the property is sold pursuant to Subsection
3-7 (h) or (i) of this section before the date set for the public sale.
3-8 (d) Except as provided by this subsection, all public sales
3-9 requested as provided by Subsection (c) of this section shall be
3-10 conducted in the manner prescribed by the Rules of Civil Procedure
3-11 for the sale of property under execution. The notice of the sale
3-12 must contain a description of the property to be sold, which must
3-13 be a legal description in the case of real property, the number and
3-14 style of the suit under which the property was sold at the tax
3-15 foreclosure sale, and the date of the tax foreclosure sale. [The
3-16 officer conducting the sale shall reject any bid for the property
3-17 if it is his judgment that the amount bid is insufficient. If all
3-18 bids are insufficient, the property shall be readvertised and
3-19 offered for sale again.] The acceptance of a bid by the officer
3-20 conducting the sale is conclusive and binding on the question of
3-21 its sufficiency. An action to set aside the sale on the grounds
3-22 that the bid is insufficient may not be sustained in court, except
3-23 that a taxing unit that participates in distribution of proceeds of
3-24 the sale may file an action within one year after the date of the
3-25 sale to set aside the sale on the grounds of fraud or collusion
4-1 between the officer making the sale and the purchaser.
4-2 (h) In lieu of a sale pursuant to Subsections (c) and (d) of
4-3 this section, the taxing unit that purchased the property may sell
4-4 the property at a private sale. Consent of each taxing unit
4-5 entitled to receive proceeds of the sale under the judgment is not
4-6 required. Property sold under this subsection may not be sold for
4-7 an amount that is less than the lesser of:
4-8 (1) the market value specified in the judgment of
4-9 foreclosure; or
4-10 (2) the total amount of the judgments against the
4-11 property.
4-12 (i) In lieu of a sale pursuant to Subsections (c) and (d) of
4-13 this section, the taxing unit that purchased the property may sell
4-14 the property at a private sale for an amount less than required
4-15 under Subsection (h) of this section with the consent of each
4-16 taxing unit entitled to receive proceeds of the sale under the
4-17 judgment. This subsection does not authorize a sale of property in
4-18 violation of Section 52, Article III, Texas Constitution.
4-19 SECTION 3. Subchapter A, Chapter 34, Tax Code, is amended by
4-20 adding Section 34.08 to read as follows:
4-21 Sec. 34.08. CHALLENGE TO VALIDITY OF TAX SALE. (a) A
4-22 person may not commence an action that challenges the validity of a
4-23 tax sale under this chapter unless the person:
4-24 (1) deposits into the registry of the court an amount
4-25 equal to the amount of the delinquent taxes, penalties, and
5-1 interest specified in the judgment of foreclosure obtained against
5-2 the property plus all costs of the tax sale; or
5-3 (2) files an affidavit of inability to pay under Rule
5-4 145, Texas Rules of Civil Procedure.
5-5 (b) A person may not commence an action challenging the
5-6 validity of a tax sale after the time set forth in Section
5-7 33.54(a)(1) or (2), as applicable to the property, against a
5-8 subsequent purchaser for value who acquired the property in
5-9 reliance on the tax sale. Such purchaser may conclusively presume
5-10 that the tax sale was valid and shall have full title to the
5-11 property free and clear of the right, title, and interest of any
5-12 person that arose before the tax sale, subject only to recorded
5-13 restrictive covenants and valid easements of record set forth in
5-14 Section 34.01(d) and subject to applicable rights of redemption.
5-15 (c) If a person is not barred from bringing an action
5-16 challenging the validity of a tax sale under Subsection (b) or any
5-17 other provision of this code or applicable law, such person must
5-18 bring an action no later than two years after the cause of action
5-19 accrues to recover real property claimed by another who: (1) pays
5-20 applicable taxes on the real property before overdue; and
5-21 (2) claims the property under a registered deed executed pursuant
5-22 to Section 34.01. This subsection does not apply to a claim based
5-23 on a forged deed.
5-24 SECTION 4. (a) The changes in law made by Sections 1 and 3
5-25 of this Act apply only to an action that relates to the title to
6-1 property sold for taxes or challenges the validity of a tax sale
6-2 and that is commenced on or after September 1, 1997. An action
6-3 commenced before September 1, 1997, is covered by the law in effect
6-4 when the property was sold, and the former law is continued in
6-5 effect for that purpose.
6-6 (b) The changes in law made by Section 2 of this Act apply
6-7 only to the resale of property by a taxing unit on or after
6-8 September 1, 1997. The resale of property by a taxing unit before
6-9 September 1, 1997, is covered by the law in effect when the
6-10 property was resold, and the former law is continued in effect for
6-11 that purpose.
6-12 SECTION 5. The importance of this legislation and the
6-13 crowded condition of the calendars in both houses create an
6-14 emergency and an imperative public necessity that the
6-15 constitutional rule requiring bills to be read on three several
6-16 days in each house be suspended, and this rule is hereby suspended,
6-17 and that this Act take effect and be in force from and after its
6-18 passage, and it is so enacted.
_______________________________ _______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1249 passed the Senate on
April 25, 1997, by the following vote: Yeas 28, Nays 0; and that
the Senate concurred in House amendment on May 30, 1997, by a
viva-voce vote.
_______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1249 passed the House, with
amendment, on May 28, 1997, by a non-record vote.
_______________________________
Chief Clerk of the House
Approved:
_______________________________
Date
_______________________________
Governor