1-1 By: Ellis S.B. No. 1249
1-2 (In the Senate - Filed March 12, 1997; March 17, 1997, read
1-3 first time and referred to Committee on Intergovernmental
1-4 Relations; April 11, 1997, reported favorably, as amended, by the
1-5 following vote: Yeas 11, Nays 0; April 11, 1997, sent to printer.)
1-6 COMMITTEE AMENDMENT NO. 1 By: Shapiro
1-7 Amend S.B. No. 1249 as follows:
1-8 (1) In SECTION 2 of the bill:
1-9 (a) In the section heading (Introduced version page 2, line
1-10 30) strike "Subsection (h)" and insert "Subsections (h) and (i)"
1-11 (b) In Subsection (c), Section 34.05, Tax Code (Introduced
1-12 version page 2, lines 52 and 53), between "Subsection (h)" and
1-13 "before" insert "or (i)"
1-14 (c) In Section 34.05, Tax Code (Introduced version page 3,
1-15 between lines 13 and 14), insert Subsection (i) to read as follows:
1-16 "(i) In lieu of a sale pursuant to Subsections (c) and (d)
1-17 of this section, the taxing unit that purchased the property may
1-18 sell the property at a private sale for an amount less than
1-19 required under Subsection (h) of this section with the consent of
1-20 each taxing unit entitled to receive proceeds of the sale under the
1-21 judgment. This subsection does not authorize a sale of property in
1-22 violation of Section 52, Article III, Texas Constitution."
1-23 (2) In SECTION 4 of the bill (Introduced version page 3,
1-24 line 25), strike Subsection (a) and reletter Subsections (b) and
1-25 (c) accordingly.
1-26 (3) In SECTION 5 of the bill (Introduced version page 3,
1-27 line 43), between "suspended" and "." insert ", and that this Act
1-28 take effect and be in force from and after its passage, and it is
1-29 so enacted"
1-30 COMMITTEE AMENDMENT NO. 2 By: Shapiro
1-31 Amend S.B. No. 1249 as follows:
1-32 (1) At page 2 of S.B. No. 1249 insert on line 21 after the
1-33 word "period" the following: "and until the commencement of an
1-34 action challenging the validity of the tax sale"
1-35 (2) At page 3 of S.B. No. 1249 insert on line 16 "(a)" after
1-36 the period following the word "SALE"
1-37 (3) At page 3 of S.B. No. 1249 insert after line 24 and
1-38 before line 25 (at end of SECTION 3) the following language:
1-39 "(b) A person may not commence an action challenging the
1-40 validity of a tax sale after the time set forth in Section
1-41 33.54(a)(1) or (2), as applicable to the property, against a
1-42 subsequent purchaser for value who acquired the property in
1-43 reliance on the tax sale. Such purchaser may conclusively presume
1-44 that the tax sale was valid and shall have full title to the
1-45 property free and clear of the right, title, and interest of any
1-46 person that arose before the tax sale, subject only to recorded
1-47 restrictive covenants and valid easements of record set forth in
1-48 Section 34.01(d) and subject to applicable rights of redemption.
1-49 (c) If a person is not barred from bringing an action
1-50 challenging the validity of a tax sale under Subsection (b) or any
1-51 other provision of this code or applicable law, such person must
1-52 bring an action no later than two years after the cause of action
1-53 accrues to recover real property claimed by another who: (1) pays
1-54 applicable taxes on the real property before overdue; and (2)
1-55 claims the property under a registered deed executed pursuant to
1-56 Section 34.01. This subsection does not apply to a claim based on
1-57 a forged deed."
1-58 A BILL TO BE ENTITLED
1-59 AN ACT
1-60 relating to the sale of property for delinquent ad valorem taxes.
1-61 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-62 SECTION 1. Section 33.54, Tax Code, is amended to read as
1-63 follows:
1-64 Sec. 33.54. LIMITATION ON ACTIONS RELATING TO PROPERTY SOLD
2-1 FOR TAXES. (a) Except as provided by Subsection (b) [of this
2-2 section], an [a cause of] action relating to the title to property
2-3 may not be maintained against the purchaser of the property at a
2-4 tax sale unless the action is commenced:
2-5 (1) before the first anniversary of the date that
2-6 [commences within three years after] the deed executed to the
2-7 purchaser at the tax sale is filed of record; or
2-8 (2) before the second anniversary of the date that the
2-9 deed executed to the purchaser is filed of record, if on the date
2-10 that the suit to collect the delinquent tax was filed the property
2-11 was:
2-12 (A) the residence homestead of the owner; or
2-13 (B) land appraised or eligible to be appraised
2-14 under Subchapter C or D, Chapter 23.
2-15 (b) If a person other than the purchaser at the tax sale or
2-16 the person's [his] successor in interest pays taxes on the property
2-17 during the applicable limitations period [three years following the
2-18 date the deed is filed] and that person was not served citation in
2-19 the suit to foreclose the tax lien, that [the three-year]
2-20 limitations period does not apply to that person.
2-21 (c) When actions are barred by this section, the purchaser
2-22 at the tax sale or the purchaser's [his] successor in interest has
2-23 [shall be held to have] full title to the property, precluding all
2-24 other claims.
2-25 SECTION 2. Section 34.05, Tax Code, is amended by amending
2-26 Subsections (b), (c), and (d), and adding Subsection (h) to read as
2-27 follows:
2-28 (b) Property [Unless the property is] sold pursuant to
2-29 Subsections (c) and (d) of this section[, it] may [not] be sold for
2-30 any [less than the market value specified in the judgment of
2-31 foreclosure or the total] amount [of the judgments against the
2-32 property, whichever is less, without the consent of each taxing
2-33 unit entitled to receive proceeds of the sale under the judgment.
2-34 Joinder of the taxing units in the conveyance of the property
2-35 constitutes consent. The presiding officer of the governing body
2-36 of a taxing unit may consent in behalf of the taxing unit]. This
2-37 subsection does not authorize a sale of property in violation of
2-38 Section 52, Article III, Texas Constitution.
2-39 (c) The taxing unit purchasing the property by resolution of
2-40 its governing body may request the sheriff to sell the property at
2-41 a public sale. If the purchasing taxing unit has not sold the
2-42 property within six months after the date on which the owner's
2-43 right of redemption terminates, any taxing unit that is entitled to
2-44 receive proceeds of the sale by resolution of its governing body
2-45 may request the sheriff in writing to sell the property at a public
2-46 sale. On receipt of a request made under this subsection, the
2-47 sheriff shall sell the property as provided by Subsection (d) of
2-48 this section, unless the property is sold pursuant to Subsection
2-49 (h) of this section before the date set for the public sale.
2-50 (d) Except as provided by this subsection, all public sales
2-51 requested as provided by Subsection (c) of this section shall be
2-52 conducted in the manner prescribed by the Rules of Civil Procedure
2-53 for the sale of property under execution. The notice of the sale
2-54 must contain a description of the property to be sold, which must
2-55 be a legal description in the case of real property, the number and
2-56 style of the suit under which the property was sold at the tax
2-57 foreclosure sale, and the date of the tax foreclosure sale. [The
2-58 officer conducting the sale shall reject any bid for the property
2-59 if it is his judgment that the amount bid is insufficient. If all
2-60 bids are insufficient, the property shall be readvertised and
2-61 offered for sale again.] The acceptance of a bid by the officer
2-62 conducting the sale is conclusive and binding on the question of
2-63 its sufficiency. An action to set aside the sale on the grounds
2-64 that the bid is insufficient may not be sustained in court, except
2-65 that a taxing unit that participates in distribution of proceeds of
2-66 the sale may file an action within one year after the date of the
2-67 sale to set aside the sale on the grounds of fraud or collusion
2-68 between the officer making the sale and the purchaser.
2-69 (h) In lieu of a sale pursuant to Subsections (c) and (d) of
3-1 this section, the taxing unit that purchased the property may sell
3-2 the property at a private sale. Consent of each taxing unit
3-3 entitled to receive proceeds of the sale under the judgment is not
3-4 required. Property sold under this subsection may not be sold for
3-5 an amount that is less than the lesser of:
3-6 (1) the market value specified in the judgment of
3-7 foreclosure; or
3-8 (2) the total amount of the judgments against the
3-9 property.
3-10 SECTION 3. Subchapter A, Chapter 34, Tax Code, is amended by
3-11 adding Section 34.08 to read as follows:
3-12 Sec. 34.08. CHALLENGE TO VALIDITY OF TAX SALE. A person may
3-13 not commence an action that challenges the validity of a tax sale
3-14 under this chapter unless the person:
3-15 (1) deposits into the registry of the court an amount
3-16 equal to the amount of the delinquent taxes, penalties, and
3-17 interest specified in the judgment of foreclosure obtained against
3-18 the property plus all costs of the tax sale; or
3-19 (2) files an affidavit of inability to pay under Rule
3-20 145, Texas Rules of Civil Procedure.
3-21 SECTION 4. (a) This Act takes effect September 1, 1998.
3-22 (b) The changes in law made by Sections 1 and 3 of this Act
3-23 apply only to an action that relates to the title to property sold
3-24 for taxes or challenges the validity of a tax sale and that is
3-25 commenced on or after September 1, 1998. An action commenced
3-26 before September 1, 1998, is covered by the law in effect when the
3-27 property was sold, and the former law is continued in effect for
3-28 that purpose.
3-29 (c) The changes in law made by Section 2 of this Act apply
3-30 only to the resale of property by a taxing unit on or after
3-31 September 1, 1998. The resale of property by a taxing unit before
3-32 September 1, 1998, is covered by the law in effect when the
3-33 property was resold, and the former law is continued in effect for
3-34 that purpose.
3-35 SECTION 5. The importance of this legislation and the
3-36 crowded condition of the calendars in both houses create an
3-37 emergency and an imperative public necessity that the
3-38 constitutional rule requiring bills to be read on three several
3-39 days in each house be suspended, and this rule is hereby suspended.
3-40 * * * * *