By:  Ellis                                   S.B. No. 1679

         97S0858/1                           

                                A BILL TO BE ENTITLED

                                       AN ACT

 1-1     relating to the transfer and enforcement of certain tax liens.

 1-2           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-3           SECTION 1.  Section 32.06, Tax Code, is amended to read as

 1-4     follows:

 1-5           Sec. 32.06.  TRANSFER OF TAX LIEN.  (a)  A person may

 1-6     authorize another person to pay the taxes imposed by a taxing unit

 1-7     on the person's real property by filing with the collector for the

 1-8     unit a sworn document stating the authorization, naming the other

 1-9     person authorized to pay the taxes, and describing the property.

1-10           (b)  The governing body of a taxing unit may adopt, in the

1-11     manner required by law for official action by the body, a procedure

1-12     to provide for the sale and transfer by the taxing unit of any tax

1-13     lien existing in the unit's favor which represents a delinquent

1-14     tax.  A taxing unit may sell and transfer a tax lien on a residence

1-15     homestead, as defined by Section 11.13, under this subsection only

1-16     if all or part of the delinquent tax on that residence homestead

1-17     has been delinquent for at least three years.  The provisions of

1-18     the procedure shall be those deemed appropriate by the governing

1-19     body, subject to the provisions of this section.  Tax liens of a

1-20     taxing unit may be sold and transferred pursuant to this subsection

1-21     to any person, in any lot or block, and for any purchase price

1-22     deemed appropriate by the governing body, provided that, prior to

1-23     any such sale and transfer, the collector for the taxing unit shall

 2-1     cause to be inserted in the legal organ for the taxing unit once a

 2-2     week for two consecutive weeks, the second publication being at

 2-3     least 30 days prior to the sale and transfer, a notice listing the

 2-4     names of all delinquent taxpayers and the related properties

 2-5     subject to such sale and transfer.  The sale and transfer of each

 2-6     tax lien pursuant to this subsection shall be evidenced by a sworn

 2-7     document issued by the taxing unit reciting the full amount of the

 2-8     tax lien, including penalties and interest then accrued, and naming

 2-9     the purchaser of the tax lien, the delinquent taxpayer, and the

2-10     related property.  In offering a tax lien for sale and transfer

2-11     under this subsection, the taxing unit may set a minimum price for

2-12     the sale and may accept or reject any offer made to purchase the

2-13     lien.

2-14           (c)  If a person authorized to pay another's taxes pursuant

2-15     to Subsection (a) pays the taxes and any penalties and interest

2-16     imposed or if a person purchases a tax lien from a taxing unit

2-17     pursuant to Subsection (b), the collector for the taxing unit shall

2-18     issue a tax receipt to the person [paying the taxes].  In addition,

2-19     the collector shall certify on the sworn document that payment of

2-20     the taxes and any penalties and interest on the described property

2-21     has been made by a person other than the person liable for the tax

2-22     [taxes when imposed] and that the taxing unit's tax lien is

2-23     transferred to the person paying the taxes or purchasing the tax

2-24     lien.  The collector shall attach to the document the collector's

2-25     seal of office and deliver the document to the person paying the

 3-1     taxes.  The collector shall keep a record of all tax liens

 3-2     transferred as provided by this section.

 3-3           (d)(1) [(c)]  Except as otherwise provided by this section,

 3-4     the transferee of a tax lien and any assignee or successor in

 3-5     interest of such transferee shall be subrogated to and shall have

 3-6     the same rights, powers, liens, and priority of payments as might

 3-7     have been exercised or claimed by the taxing unit before the

 3-8     transfer, including the right to collect the full amount of the

 3-9     delinquent tax together with all penalties, interest, and other

3-10     amounts provided by law and the right [is entitled] to foreclose

3-11     the lien:

3-12                       (A) [(1)]  in the manner provided by law for

3-13     foreclosure of tax liens; or

3-14                       (B) [(2)]  in the manner specified in Section

3-15     51.002, Property Code.

3-16                 (2)  A taxing unit may provide in its procedure for the

3-17     sale and transfer of a tax lien under Subsection (b) limitations on

3-18     the authority of the transferee of the lien to protect a delinquent

3-19     taxpayer from abusive, deceptive, or unfair debt collection

3-20     practices and may provide as a sanction for a violation of a

3-21     limitation the reversion of the transferee's interest in the lien

3-22     to the taxing unit.

3-23           (e) [(d)]  To be enforceable, a tax lien transferred as

3-24     provided by this section must be recorded in the deed records of

3-25     each county in which the property encumbered by the lien is

 4-1     located.

 4-2           (f) [(e)]  A person holding a tax lien transferred as

 4-3     provided by Subsection (a) [this section] may not charge a greater

 4-4     rate of interest than 18 percent a year on the taxes, penalties,

 4-5     interest, and recording expenses paid to acquire and record the

 4-6     lien.

 4-7           (g) [(f)]  The holder of a preexisting lien on property

 4-8     encumbered by a tax lien transferred as provided by this section is

 4-9     entitled, within six months after the date on which the tax lien is

4-10     recorded in all counties in which the property is located, to pay

4-11     the holder of the tax lien the amount paid for the lien, plus

4-12     interest accrued at the rate provided by Subsection (e) and

4-13     recording expenses, and becomes subrogated to all rights in the

4-14     lien.

4-15           (h) [(g)]  A suit to foreclose a tax lien transferred as

4-16     provided by Subsection (a) [this section] may not be instituted

4-17     within one year from the date on which the lien is recorded in all

4-18     counties in which the property is located.  A suit to foreclose a

4-19     tax lien transferred as provided by Subsection (b) may not be

4-20     instituted within 60 days from the date on which the lien is

4-21     recorded in all counties in which the property is located, unless

4-22     the contract between the owner of the property and the transferee

4-23     provides otherwise.

4-24           (i)  After the period provided in Subsection (h) has expired

4-25     [(h)  After one year from the date on which a tax lien transferred

 5-1     as provided by this section is recorded in all counties in which

 5-2     the property is located], the holder of the lien may file suit to

 5-3     foreclose the lien unless a contract between the holder of the lien

 5-4     and the owner of the property encumbered by the lien provides

 5-5     otherwise.  If a [the] suit results in foreclosure of a tax [the]

 5-6     lien transferred pursuant to Subsection (a), the person filing suit

 5-7     is entitled to recover attorney's fees in an amount not to exceed

 5-8     10 percent of the judgment.  The proceeds of a sale following

 5-9     foreclosure as provided by this subsection shall be applied first

5-10     to the payment of court costs, then to payment of the judgment,

5-11     including accrued interest, and then to the payment of any

5-12     attorney's fees fixed in the judgment.  Any remaining proceeds

5-13     shall be paid to other holders of liens on the property in the

5-14     order of their priority and then to the person whose property was

5-15     sold at the tax sale.

5-16           (j) [(i)]  The person whose property is sold as provided by

5-17     this section or any person holding a first lien against the

5-18     property is entitled, within one year after the date the property

5-19     is sold, to redeem the property from the purchaser at the tax sale

5-20     by paying that purchaser the tax sale purchase price, plus costs,

5-21     and interest accrued on the judgment to the date of redemption or

5-22     118 percent of the amount of the judgment, whichever is less.  If a

5-23     person redeems the property as provided by this subsection, the

5-24     purchaser at the tax sale shall deliver a deed to the property to

5-25     the person redeeming the property.  If the person who owned the

 6-1     property at the time of foreclosure redeems the property, all liens

 6-2     existing on the property at the time of the tax sale remain in

 6-3     effect to the extent not paid from the sale proceeds.

 6-4           SECTION 2.  The importance of this legislation and the

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

 6-6     emergency and an imperative public necessity that the

 6-7     constitutional rule requiring bills to be read on three several

 6-8     days in each house be suspended, and this rule is hereby suspended,

 6-9     and that this Act take effect and be in force from and after its

6-10     passage, and it is so enacted.