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78R6020 JD-F
By: Elkins H.B. No. 2176
A BILL TO BE ENTITLED
AN ACT
relating to ad valorem tax sales of real and personal property
following foreclosure or seizure of the property; authorizing a
sale by on-line auction.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 33.25, Tax Code, is amended to read as
follows:
Sec. 33.25. [NOTICE OF] TAX SALE: NOTICE; METHOD;
DISPOSITION OF PROCEEDS. (a) After [Except as provided by
Subsection (c), after] a seizure of personal property, the
collector shall make a reasonable inquiry to determine the identity
and to ascertain the address of any person having an interest in the
property other than the person against whom the tax warrant is
issued. The collector shall provide in writing the name and address
of each other person the collector identifies as having an interest
in the property to the peace officer charged with executing the
warrant. The peace officer shall deliver as soon as possible a
written notice stating the time and place of the sale and briefly
describing the property seized to the person against whom the
warrant is issued and to any other person having an interest in the
property whose name and address the collector provided to the peace
officer. The posting of the notice and the sale of the property
shall be conducted by the peace officer:
(1) in the manner required for the sale under
execution of personal property; or
(2) in the manner provided by Section 34.014.
(b) The peace officer charged with selling the property may
enter into an agreement with a person who holds an auctioneer's
license to advertise the auction sale of the property and to conduct
the auction sale of the property. The terms of the agreement
entered into by the peace officer with the licensed auctioneer must
be approved in writing by the collector of each taxing unit entitled
to receive proceeds from the sale of the property. An agreement
that is not approved by a collector is voidable by that collector.
An agreement entered into under this subsection that is approved by
all necessary collectors is presumed to be commercially reasonable
and the presumption may not be rebutted by any person.
(c) Failure to send or receive a [the] notice required
[provided] by this section does not affect the validity of the sale
or title to the seized property.
(d) The proceeds of a sale of property under this section
shall be applied to:
(1) any compensation owed to or any expense advanced
by the licensed auctioneer under a contract entered into under
Subsection (b) or a service provider under an agreement entered
into under Section 34.014;
(2) all usual costs, expenses, and fees of the seizure
and sale, payable to the peace officer conducting the sale;
(3) all additional expenses incurred in advertising
the sale or in removing, storing, preserving, or safeguarding the
seized property pending its sale;
(4) all usual court costs payable to the clerk of the
court that issued the tax warrant; and
(5) taxes, penalties, and interest included in the
application for warrant.
(e) The peace officer conducting the sale shall pay any
excess proceeds after payment of all amounts as required by
Subsection (d) in the manner provided in the case of execution.
[(c) After a seizure of personal property defined by Sections
33.21(d)(2)-(5), the collector shall apply the seized property
toward the payment of the taxes, penalties, and interest included
in the application for warrant and all costs of the seizure.]
SECTION 2. Section 34.01(r), Tax Code, is amended to read as
follows:
(r) Except as provided by this subsection and by Section
34.014, a [A] sale of real property under this section must take
place at the county courthouse in the county in which the land is
located. The commissioners court of the county may designate an
[the] area in the county courthouse or another location in the
county where sales under this section must take place and shall
record any designated area or other location in the real property
records of the county. If the commissioners court designates an
area in the courthouse or another location in the county for sales,
a sale must occur in that area or at that location. If the
commissioners court does not designate an area in the courthouse or
another location in the county for sales, a sale must occur in the
same area in the courthouse that is designated by the commissioners
court for the sale of real property under Section 51.002, Property
Code.
SECTION 3. Subchapter A, Chapter 34, Tax Code, is amended by
adding Section 34.014 to read as follows:
Sec. 34.014. ON-LINE AUCTION ALTERNATIVE METHOD OF SALE.
(a) The commissioners court of a county by official action may
authorize an officer of the county charged with selling property
under this subchapter or Chapter 33 by public auction to enter into
an agreement with a service provider to advertise the auction and to
conduct the auction sale of the property using the Internet if the
property to be sold is:
(1) personal property seized under Subchapter B,
Chapter 33;
(2) real property seized under Subchapter E, Chapter
33;
(3) real property being sold under Section 34.01; or
(4) real property being resold under Section 34.05.
(b) A sale in the manner authorized by Subsection (a) may be
conducted only if the collector for each taxing unit entitled to
receive proceeds from the sale of the property gives the
collector's written consent to the sale and to the terms of the
agreement entered into under that subsection. An agreement that is
not approved by a collector is voidable by that collector. An
agreement entered into under Subsection (a) that is approved by all
necessary collectors is presumed to be commercially reasonable, and
the presumption may not be rebutted by any person.
(c) An agreement entered into under Subsection (a) must
include provisions that require the service provider to advertise
the property for auction and to organize, post, host, and service
the information relating to the advertisement and auction of the
property.
(d) Advertising of an auction on the Internet must be posted
on the Internet at least 30 days before the auction begins and
remain posted until the auction is closed. An auction-advertising
website shall be developed and maintained to accommodate all
necessary aspects of auction advertising as considered necessary or
advisable by the officer charged with selling the property.
(e) The service provider, at the direction of the officer
charged with selling the property, shall develop a web-based
marketing effort, disseminate due diligence information on-line to
potential bidders, and support the sale of the property.
(f) The advertising relating to property to be sold by
auction on the Internet must include:
(1) a description of each property or lot of property,
including any property parcel number, the property address, and the
most recent appraised value;
(2) photographs of the property, if available;
(3) maps depicting the location of real property;
(4) a description of any special features of the
property;
(5) the terms of the auction sale;
(6) the minimum acceptable bid for the property;
(7) a statement that no representation or warranty is
made regarding the property; and
(8) any other information considered necessary or
advisable by the officer charged with selling the property or the
service provider to assist a bidder in making an informed purchase
decision.
(g) The agreement may require the service provider to assign
passwords to registered and prequalified bidders in accordance with
criteria for the qualification of bidders adopted by the officer
charged with selling the property and structure an auction so that
those bidders may bid automatically.
(h) The agreement may require the service provider to send
notice to registered and prequalified bidders by electronic mail on
the occurrence of:
(1) the posting on-line of auction-advertising
information;
(2) the commencement of an auction;
(3) the receipt of an initial or a higher bid;
(4) the closing of an auction; or
(5) the sale of property to a bidder.
(i) The agreement may require the service provider to
structure the website so as to inform potential bidders of relevant
information concerning tax sales of property in this state as
required by the officer charged with selling the property or as
considered advisable by the service provider. To be eligible to bid
on property, a person must acknowledge receipt of the information.
(j) The agreement may require that bidders submit a
qualifying deposit to the treasurer of the political subdivision or
the taxing unit that requested the order of sale in an amount
sufficient to demonstrate the bidder's ability to comply with all
terms of a sale as a precondition for bidding.
(k) The agreement may require the service provider to
structure the website so as to enable prequalified bidders who do
not have Internet access to submit a bid on the property by
telephone, facsimile, or mail.
(l) The agreement may require the service provider to
structure the website in a manner that permits the officer charged
with selling the property or the taxing unit that requested the
order of sale to:
(1) withdraw or remove one or more properties from the
auction advertising for any reason or remove one or more properties
from an auction before the opening of bids;
(2) reject any bid for any reason; or
(3) discontinue or conclude an auction at any time.
(m) Each auction shall be continued for a reasonable period
as determined by the officer charged with selling the property or
the taxing unit that requested the order of sale before the auction
and be advertised on the website. The auction may not be
discontinued or concluded before the time advertised except at the
specific direction of the officer or taxing unit.
(n) Except as provided by this section:
(1) the provisions of Section 34.01 apply to a sale
conducted under this section; and
(2) a reference in law to a sale under Section 34.01
includes a sale conducted under this section.
SECTION 4. This Act takes effect September 1, 2003, and
applies only to the sale of tax foreclosed property pursuant to an
order of sale issued on or after the effective date of this Act.