78R6736 RCJ-F
By: Haggerty H.B. No. 2675
A BILL TO BE ENTITLED
AN ACT
relating to the sale of ad valorem tax liens.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 32, Tax Code, is amended by adding
Sections 32.08-32.17 to read as follows:
Sec. 32.08. SALE OF TAX LIENS. (a) A taxing unit may sell a
tax lien that exists in favor of the taxing unit or another taxing
unit for which it collects taxes and that secures the payment of
delinquent taxes owed to the taxing unit or the other taxing unit at
a private sale. Consent to the sale of the tax lien by any other
taxing unit that holds a tax lien on the property subject to the
lien is not required.
(b) A tax lien may not be sold for an amount that is less
than the lesser of:
(1) the appraised value of the property as shown on the
appraisal roll for the most recent tax year for which the taxes
secured by the tax lien were imposed; or
(2) the total amount of the taxes, penalties, and
interest imposed on the property on the date the tax lien is sold.
Sec. 32.09. NOTICE OF SALE. (a) At least 30 days before the
date on which the sale of a tax lien is scheduled to occur, the
collector for the taxing unit shall send a notice by certified mail
to the owner of the property at the owner's address as it appears on
the current or most recent delinquent tax roll, as applicable.
(b) The notice must identify the property to which the tax
lien is attached and be in substantially the following form:
PROPOSED SALE OF TAX LIEN
The property identified in this notice is subject
to an ad valorem tax lien in favor of
__________________(name of taxing unit) for ____
(year) tax year in the total amount of $____.
According to the current or most recent
delinquent tax roll, you own an interest in this
property. You are advised that on or after
_____________(proposed date of sale), the tax lien on
this property may be sold.
If you wish to pay the delinquent taxes and
penalties and interest before the date of the sale, you
may contact ___________________________(name, title,
business address, and telephone number of applicable
collector).
After this tax lien is sold, the purchaser of the
lien will have the right to collect and enforce the
delinquent taxes, penalties, interest, and collection
fees on the property identified in this notice.
Sec. 32.10. CERTIFICATE OF SALE. (a) On the sale of a tax
lien under Section 32.08, the collector for the applicable taxing
unit shall issue and deliver to the purchaser of the tax lien a
certificate that identifies the property to which the lien is
attached and the total amount secured by the lien on the date of the
sale, including taxes, penalties, interest, and collection fees.
(b) The collector shall:
(1) impress the certificate with the collector's seal
of office; and
(2) retain a copy of each certificate issued under
Subsection (a).
(c) A certificate issued under this section constitutes
prima facie evidence that each condition precedent to the sale of
the tax lien described by the certificate has been satisfied.
Sec. 32.11. RECORD OF PURCHASE. To be enforceable by the
purchaser of a tax lien purchased under Section 32.08, the
purchaser of the lien must record the tax lien in the deed of
records of each county in which the property to which the lien is
attached is located.
Sec. 32.12. INTEREST, PENALTIES, AND FEES. A person who
purchases a tax lien may seek to collect the amount secured by the
tax lien, including interest, penalties, and any collection fees
that the applicable taxing units would have been entitled to
recover.
Sec. 32.13. PREEXISTING LIENS. (a) Not later than six
months after the date on which a tax lien is recorded under Section
32.11, the holder of a preexisting lien on the property may pay the
purchaser of the purchased tax lien the total amount the purchaser
paid for the lien, plus any penalty or interest that would have
subsequently accrued had the tax lien not been sold, and recording
expenses.
(b) On payment of the appropriate amount under Subsection
(a), the holder of the preexisting lien is subrogated to all rights
in the lien.
Sec. 32.14. SUBSEQUENTLY IMPOSED TAXES. The purchaser of a
tax lien under Section 32.08 may voluntarily elect to pay any taxes
imposed on the property, timely or otherwise.
Sec. 32.15. FORECLOSURE OF TAX LIEN. (a) Not earlier than
the 181st day after the date on which a tax lien is recorded as
provided by Section 32.11, the purchaser of the lien may file suit
to foreclose the tax lien.
(b) The purchaser of a tax lien and any successor in
interest may foreclose the lien:
(1) in the manner provided by law for foreclosure of a
tax lien by a taxing unit; or
(2) in the manner provided by Section 51.002, Property
Code.
(c) A person who forecloses a tax lien under Subsection
(b)(2) must simultaneously notify in writing each lienholder of
record of the foreclosure.
(d) If a suit is filed under Subsection (b)(1) and the
judgment in the suit is for foreclosure of the tax lien, the person
who filed the suit is entitled to recover reasonable attorney's
fees.
(e) The proceeds of a sale of the property under a judgment
of foreclosure shall be applied:
(1) first to payment of court costs;
(2) second to payment of the amount of the judgment,
including accrued interest;
(3) third to payment of any attorney's fees awarded in
the judgment;
(4) fourth to payment of other holders of a lien
attached to the property, in order of priority; and
(5) fifth to the owner of the property sold at the
sale.
(f) If foreclosure of the property is in the manner provided
by Section 51.002, Property Code, the person foreclosing may
recover all expenses incurred in the foreclosure. The proceeds of a
sale on the foreclosure shall be applied:
(1) first to payment of the amount due the person
holding the tax lien, including accrued interest and any expense of
foreclosure;
(2) second to payment of other holders of a lien
attached to the property in order of priority; and
(3) third to the owner of the property sold at the
sale.
Sec. 32.16. RIGHT OF REDEMPTION OF RESIDENCE HOMESTEAD OR
LAND DESIGNATED FOR AGRICULTURAL USE. (a) The owner of real
property sold at a sale under Section 32.15 that was used as the
residence homestead of the owner or that was land designated for
agricultural use when the suit under Section 32.15 was filed or on
the date of foreclosure under Section 51.002, Property Code, or a
person who holds a first lien that is attached to the property, may
redeem the property on or before the second anniversary of the date
on which the purchaser's deed is filed for record by paying the
purchaser the amount the purchaser bid for the property, the amount
of the deed recording fee, and the amount paid by the purchaser as
taxes, penalties, interest, and costs on the property, plus a
redemption premium of 25 percent of the aggregate total if the
property is redeemed during the first year of the redemption period
or 50 percent of the aggregate total if the property is redeemed
during the second year of the redemption period.
(b) The owner of real property sold at a tax sale other than
property that was used as the residence homestead of the owner or
that was land designated for agricultural use when the suit for
foreclosure under Section 32.15 was filed or on the date of
foreclosure under Section 51.002, Property Code, or a person who
holds a first lien attached to the property, may redeem the property
in the same manner and by paying the same amounts as prescribed by
Subsection (a), as applicable, except that:
(1) the owner's right of redemption may be exercised
not later than the 180th day following the date on which the
purchaser's deed is filed for record; and
(2) the redemption premium payable by the owner or
holder of the first lien to a purchaser may not exceed 25 percent.
(c) In this section, "costs," "land designated for
agricultural use," and "residence homestead" have the meanings
assigned by Section 34.21.
Sec. 32.17. VOID OR DEFECTIVE TAX LIEN. If the sale or
purchase of a tax lien under Section 32.08 is declared void or
defective, the taxing unit selling the tax lien shall refund to the
purchaser of the tax lien the total amount that purchaser paid for
the lien, plus any recording fees paid by the purchaser.
SECTION 2. This Act takes effect September 1, 2003.