By Ellis                                        S.B. No. 1249

      75R7532 JD-F                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the sale of property for delinquent ad valorem taxes.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Section 33.54, Tax Code, is amended to read as

 1-5     follows:

 1-6           Sec. 33.54.  LIMITATION ON ACTIONS RELATING TO PROPERTY SOLD

 1-7     FOR TAXES.  (a)  Except as provided by Subsection (b) [of this

 1-8     section], an [a cause of] action relating to the title to property

 1-9     may not be maintained against the purchaser of the property at a

1-10     tax sale unless the action is commenced:

1-11                 (1)  before the first anniversary of the date that

1-12     [commences within three years after] the deed executed to the

1-13     purchaser at the tax sale is filed of record; or

1-14                 (2)  before the second anniversary of the date that the

1-15     deed executed to the purchaser is filed of record, if on the date

1-16     that the suit to collect the delinquent tax was filed the property

1-17     was:

1-18                       (A)  the residence homestead of the owner; or

1-19                       (B)  land appraised or eligible to be appraised

1-20     under Subchapter C or D, Chapter 23.

1-21           (b)  If a person other than the purchaser at the tax sale or

1-22     the person's [his] successor in interest pays taxes on the property

1-23     during the applicable limitations period [three years following the

1-24     date the deed is filed] and that person was not served citation in

 2-1     the suit to foreclose the tax lien, that [the three-year]

 2-2     limitations period does not apply to that person.

 2-3           (c)  When actions are barred by this section, the purchaser

 2-4     at the tax sale or the purchaser's [his] successor in interest has

 2-5     [shall be held to have] full title to the property, precluding all

 2-6     other claims.

 2-7           SECTION 2.  Section 34.05, Tax Code, is amended by amending

 2-8     Subsections (b), (c), and (d), and adding Subsection (h) to read as

 2-9     follows:

2-10           (b)  Property [Unless the property is] sold pursuant to

2-11     Subsections (c) and (d) of this section[, it] may [not] be sold for

2-12     any [less than the market value specified in the judgment of

2-13     foreclosure or the total] amount [of the judgments against the

2-14     property, whichever is less, without the consent of each taxing

2-15     unit entitled to receive proceeds of the sale under the judgment.

2-16     Joinder of the taxing units in the conveyance of the property

2-17     constitutes consent.  The presiding officer of the governing body

2-18     of a taxing unit may consent in behalf of the taxing unit].  This

2-19     subsection does not authorize a sale of property in violation of

2-20     Section 52, Article III, Texas Constitution.

2-21           (c)  The taxing unit purchasing the property by resolution of

2-22     its governing body may request the sheriff to sell the property at

2-23     a public sale.  If the purchasing taxing unit has not sold the

2-24     property within six months after the date on which the owner's

2-25     right of redemption terminates, any taxing unit that is entitled to

2-26     receive proceeds of the sale by resolution of its governing body

2-27     may request the sheriff in writing to sell the property at a public

 3-1     sale.  On receipt of a request made under this subsection, the

 3-2     sheriff shall sell the property as provided by Subsection (d) of

 3-3     this section, unless the property is sold pursuant to Subsection

 3-4     (h) before the date set for the public sale.

 3-5           (d)  Except as provided by this subsection, all public sales

 3-6     requested as provided by Subsection (c) of this section shall be

 3-7     conducted in the manner prescribed by the Rules of Civil Procedure

 3-8     for the sale of property under execution.  The notice of the sale

 3-9     must contain a description of the property to be sold, which must

3-10     be a legal description in the case of real property, the number and

3-11     style of the suit under which the property was sold at the tax

3-12     foreclosure sale, and the date of the tax foreclosure sale.  [The

3-13     officer conducting the sale shall reject any bid for the property

3-14     if it is his judgment that the amount bid is insufficient.  If all

3-15     bids are insufficient, the property shall be readvertised and

3-16     offered for sale again.]  The acceptance of a bid by the officer

3-17     conducting the sale is conclusive and binding on the question of

3-18     its sufficiency.  An action to set aside the sale on the grounds

3-19     that the bid is insufficient may not be sustained in court, except

3-20     that a taxing unit that participates in distribution of proceeds of

3-21     the sale may file an action within one year after the date of the

3-22     sale to set aside the sale on the grounds of fraud or collusion

3-23     between the officer making the sale and the purchaser.

3-24           (h)  In lieu of a sale pursuant to Subsections (c) and (d),

3-25     the taxing unit that purchased the property may sell the property

3-26     at a private sale.  Consent of each taxing unit entitled to receive

3-27     proceeds of the sale under the judgment is not required.  Property

 4-1     sold under this subsection may not be sold for an amount that is

 4-2     less than the lesser of:

 4-3                 (1)  the market value specified in the judgment of

 4-4     foreclosure; or

 4-5                 (2)  the total amount of the judgments against the

 4-6     property.

 4-7           SECTION 3.  Subchapter A, Chapter 34, Tax Code, is amended by

 4-8     adding Section 34.08 to read as follows:

 4-9           Sec. 34.08.  CHALLENGE TO VALIDITY OF TAX SALE.  A person may

4-10     not commence an action that challenges the validity of a tax sale

4-11     under this chapter unless the person:

4-12                 (1)  deposits into the registry of the court an amount

4-13     equal to the amount of the delinquent taxes, penalties, and

4-14     interest specified in the judgment of foreclosure obtained against

4-15     the property plus all costs of the tax sale; or

4-16                 (2)  files an affidavit of inability to pay under Rule

4-17     145, Texas Rules of Civil Procedure.

4-18           SECTION 4.  (a)  This Act takes effect September 1, 1998.

4-19           (b)  The changes in law made by Sections 1 and 3 of this Act

4-20     apply only to an action that relates to the title to property sold

4-21     for taxes or challenges the validity of a tax sale and that is

4-22     commenced on or after September 1, 1998.  An action commenced

4-23     before September 1, 1998, is covered by the law in effect when the

4-24     property was sold, and the former law is continued in effect for

4-25     that purpose.

4-26           (c)  The changes in law made by Section 2 of this Act apply

4-27     only to the resale of property by a taxing unit on or after

 5-1     September 1, 1998.  The resale of property by a taxing unit before

 5-2     September 1, 1998, is covered by the law in effect when the

 5-3     property was resold, and the former law is continued in effect for

 5-4     that purpose.

 5-5           SECTION 5.  The importance of this legislation and the

 5-6     crowded condition of the calendars in both houses create an

 5-7     emergency and an imperative public necessity that the

 5-8     constitutional rule requiring bills to be read on three several

 5-9     days in each house be suspended, and this rule is hereby suspended.