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.