By: Davis of Harris H.B. No. 3419
A BILL TO BE ENTITLED
AN ACT
relating to procedural and technical corrections and clarification
of the Property Tax Code, procedures for the seizure of property,
and distribution of tax sale proceeds.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 33.91, Tax Code, is amended by amending
Subsection (a) and adding Subsection (c) to read as follows:
(a) After notice has been provided to a person, the person's
real property, whether improved or unimproved, is subject to
seizure by a municipality for the payment of delinquent ad valorem
taxes, penalties, and interest the person owes on the property and
the amount secured by a municipal health or safety lien on the
property if:
(1) the property:
(A) is in a municipality;
(B) is less than one acre; and
(C) has been abandoned[, unused, and vacant] for
at least one year;
(2) the taxes on the property are delinquent for:
(A) each of the preceding five years; or
(B) each of the preceding three years if a lien on
the property has been created on the property in favor of the
municipality for the cost of remedying a health or safety hazard on
the property; and
(3) the tax collector of the municipality determines
that seizure of the property under this subchapter for the payment
of the delinquent taxes, penalties, and interest, and of a
municipal health and safety lien on the property, would be in the
best interest of the municipality and the other taxing units after
determining that the sum of all outstanding tax and municipal
claims against the property plus the estimated costs under Section
33.48 of a standard judicial foreclosure exceed the anticipated
proceeds from a tax sale.
(c) Under this section, a property is presumed to have been
abandoned for at least one year if, during that period, the property
has remained vacant and no lawful act of ownership of the property
has been exercised. As used in this section, "vacant" means the
absence of any activity by the property owners, tenants, or
licensees related to residency, work, trade, business, leisure or
recreation. As used in this section, "lawful act of ownership"
includes mowing, cutting of weeds, repairing or demolishing a
structure or fence, removing debris, and other forms of property
maintenance performed by the owners or at their request. Vacancy
and the absence of any lawful act of ownership may be shown by
affidavit of any competent person with personal knowledge of the
facts.
SECTION 2. Section 33.911, Tax Code, is amended by amending
Subsection (a) and adding Subsection (c) to read as follows:
(a) After notice has been provided to a person, the person's
real property, whether improved or unimproved, is subject to
seizure by a county for the payment of delinquent ad valorem taxes,
penalties, and interest the person owes on the property if:
(1) the property:
(A) is in the county;
(B) is not in a municipality; and
(C) has been abandoned[, unused, and vacant] for
at least one year;
(2) the taxes on the property are delinquent for each
of the preceding five years; and
(3) the county tax assessor-collector determines that
seizure of the property under this subchapter for the payment of the
delinquent taxes, penalties, and interest would be in the best
interest of the county and the other taxing units after determining
that the sum of all outstanding tax and county claims against the
property plus the estimated costs of a standard judicial
foreclosure exceed the anticipated proceeds from a tax sale.
(c) Under this section, a property is presumed to have been
abandoned for at least one year if, during that period, the property
has remained vacant and no lawful act of ownership of the property
has been exercised. As used in this section, "vacant" means the
absence of any activity by the property owners, tenants, or
licensees related to residency, work, trade, business, leisure or
recreation. As used in this section, "lawful act of ownership"
includes mowing, cutting of weeds, repairing or demolishing a
structure or fence, removing debris, and other forms of property
maintenance performed by the owners or at their request. Vacancy
and the absence of any lawful act of ownership may be shown by
affidavit of any competent person with personal knowledge of the
facts.
SECTION 3. Section 33.912, Tax Code, is amended to read as
follows:
(a) A person is considered to have been provided the notice
required by Section 33.91 and 33.911 if by affidavit or otherwise
the collector shows that the assessor for the municipality or
county mailed the person each bill for municipal or county taxes
required to be sent the person by Section 31.01:
(1) in each of the five preceding years, if the taxes
on the property are delinquent for each of those years; or
(2) in each of the three preceding years, if:
(A) the taxes on the property are delinquent for
each of those years; and
(B) a lien on the property has been created on the
property in favor of the municipality for the cost of remedying a
health or safety hazard on the property.
(b) If the notice provided by Subsection (a) has not been
provided, notice shall be given by the assessor or by the attorney
for the taxing unit by:
(1) serving, in the manner provided by Rule 21a, Texas
Rules of Civil Procedure, a true and correct copy of the application
for tax warrant made under Section 33.92 to each person known, or
constructively known through reasonable inquiry, to own or have an
interest in the property;
(2) publishing in the English language a notice of the
assessor's intent to seize the property in some newspaper published
in the county in which the property is situated if, after exercising
reasonable diligence, the assessor cannot determine ownership or
the address of the known owners; or
(3) posting in the English language a notice of the
assessor's intent to seize the property as provided by Subsection
(g) if, after exercising reasonable diligence, the assessor cannot
determine ownership or the address of the known owners.
(c) A notice under subdivision (1) of Subsection (b) shall
be provided at the time of filing the application, and must be
supported by a certificate of service appearing on the application
in the same manner and form as provided by Rule 21a, Texas Rules of
Civil Procedure. The notice is sufficient if sent to the person's
last known address.
(d) A notice by publication or posting under Subsection (b)
must substantially comply with this subsection. The notice must:
(1) be published or, if applicable, posted at least 10
and not more than 180 days before the date of filing the application
for tax warrant under Section 33.92;
(2) be directed to the owners by name, if known, or, if
unknown, to "the unknown owners of the below described property";
(3) state that the assessor intends to seize the
property as abandoned property and that the property will be sold at
public auction without further notice unless all delinquent taxes,
penalties and interest are paid prior to its sale; and
(4) describe the property.
(e) A description of the property under subdivision (4) of
Subsection (d) is sufficient if it is the same property description
that appears on the current tax roll.
(f) A notice by publication or posting under Subsection (b)
may pertain to multiple properties and multiple owners in a single
notice.
(g) For publishing a notice under subdivision (2) of
Subsection (b), a newspaper may charge a rate that does not exceed
the greater of two cents per word or an amount equal to the
published word or line rate of that newspaper for the same class of
advertising. If there is not a newspaper published in the county
where the property is situated, or a newspaper that will publish the
notice for the rate authorized by this subsection, chargeable as
costs and payable upon the sale of the property, the assessor shall
post the notice in writing in three public places in the county. One
of the posted notices must be at the door of the county courthouse.
Proof of the posting shall be made by affidavit of the person
posting it or by the attorney for the applicant.
(h) A person is considered to have been provided the notice
required by Sections 33.91 and 33.911 and in the manner provided by
Subsection (b) of this section if the application for tax warrant:
(1) contains the certificate of service as provided by
subdivision (1) of Subsection (b);
(2) is accompanied by the affidavit of the applicant
stating the fact of publication under subdivision (2) of Subsection
(b), with a copy of the published notice attached thereto; or
(3) is accompanied by the affidavit of posting
authorized by Subsection (g) stating the fact of posting and facts
supporting the necessity of posting.
(i) A failure to receive a notice under this section does
not affect the validity of a sale of the seized property or title to
the property.
SECTION 4. Section 33.92, Tax Code, is amended by amending
Subsection (b) and adding Subsection (d) to read as follows:
(b) The court shall issue the tax warrant if by affidavit
the collector shows that the property is subject to seizure under
Section 33.91 or 33.911. A showing that the property has been
abandoned for at least one year, as an element required under
Sections 33.91(a)(1)(C) and 33.911(a)(1)(C), may be made by
affidavit of any competent person with personal knowledge of the
relevant facts.
(d) The collector is entitled, upon request in the
application, to recover attorney's fees in an amount equal to the
compensation specified in the contract with the attorney if:
(1) the taxing unit served by the collector contracts
with an attorney under Section 6.30;
(2) the existence of the contract and the amount of
attorney's fees that equal the compensation specified in the
contract are supported by the affidavit of the applicant; and
(3) the tax sought to be recovered is not subject to
the additional penalty under Section 33.07 or 33.08 at the time the
application is filed.
SECTION 5. Subsections (a) and (c) of Section 33.93, Tax
Code, is amended to read as follows:
(a) A tax warrant shall direct the sheriff or a constable in
the county and the collector for the municipality or the county to
seize the property described in the warrant, subject to the right of
redemption, for the payment of the ad valorem taxes, penalties,
[and] interest, and attorney's fees owing on the property included
in the application, the amount secured by a municipal health or
safety lien on the property included in the application, and the
costs of seizure and sale. The warrant shall direct the person
whose property is seized to disclose to a person executing the
warrant the name and address if known of any other person having an
interest in the property.
(c) On issuance of a tax warrant, the collector shall take
possession of the property pending its sale by the sheriff or
constable.
SECTION 6. Section 33.94(a), Tax Code, is amended to read as
follows:
(a) After a seizure of property preceded by notice under
Subsection (a) of Section 33.912, the collector for the
municipality or county shall make a reasonable inquiry to determine
the identity and address of any person, other than the person
against whom the tax warrant is issued, having an interest in the
property. The collector shall deliver as soon as possible a notice
stating the time and place of the sale and briefly describing the
property seized to:
(1) the person against whom the warrant is issued,
including those persons who received notice under Section
33.912(a);
(2) those persons who received notice under Section
33.912(b)(1); and
(3) [to] any other person the collector determines has
an interest in the property if the collector can ascertain the
address of the other person.
SECTION 7. Section 34.01(a), Tax Code, is amended to read as
follows:
(a) Property seized under a tax warrant pursuant to
Subchapter E, Chapter 33 or ordered sold pursuant to foreclosure of
a tax lien shall be sold by the officer charged with selling the
property, unless otherwise directed by the taxing unit that
requested the warrant or order of sale or by an authorized agent or
attorney for that unit. The sale shall be conducted in the manner
similar property is sold under execution except as otherwise
provided by this subtitle.
SECTION 8. Subsections (b), (d), (e), and (f), of Section
34.02, Tax Code, are amended to read as follows:
(b) The proceeds shall be applied to:
(1) [all] the costs of advertising the tax sale [and
all original court costs payable to the clerk of the court];
(2) [all fees and commissions payable to the officer
conducting the sale] any fees ordered paid under the judgment to an
appointed attorney ad litem;
(3) [taxes, penalties, and interest that are due under
the judgment] the original court costs payable to the clerk of the
court; [and]
(4) [any other amount awarded to a taxing unit under
the judgment] the fees and commissions payable to the officer
conducting the sale[.];
(5) the expenses incurred by a taxing unit in
determining necessary parties and in procuring necessary legal
descriptions of the property if those expenses were awarded to the
taxing unit under the judgment pursuant to Section 33.48(a)(4);
(6) the taxes, penalties, interest, and attorney's
fees that are due under the judgment; and
(7) any other amount awarded to a taxing unit under the
judgment.
(d) [If the sale is pursuant to foreclosure of a tax lien,]
T[t]he officer conducting a [the] sale under Section 33.94 or 34.01
shall pay any excess proceeds after payment of all amounts due all
participants in the sale as specified by Subsection (b) to the clerk
of the court issuing the warrant or order of sale.
(e) [If the sale is pursuant to seizure of personal
property, the officer conducting the sale shall distribute any
excess of proceeds as provided by law for excess proceeds in the
case of execution] In this section, "taxes" includes a charge, fee,
or expense that is expressly authorized by Section 32.06 or 32.065.
[(f) In this section, "taxes" includes a charge, fee, or
expense that is expressly authorized by Section 32.06 or 32.065.]
SECTION 9. Section 34.04(c), Tax Code, is amended to read as
follows:
(c) At the hearing the court shall order that the proceeds
be paid according to the following priorities to each party that
establishes its claim to the proceeds:
(1) to the tax sale purchaser if the tax sale has been
adjudged to be void and the purchaser has prevailed in an action
against the taxing units under Section 34.07 (d) by final judgment;
(2) to a taxing unit for any taxes, penalties, or
interest that have become due or delinquent on the subject property
subsequent to the date of the judgment or that were omitted from the
judgment by accident or mistake;
(3) to any other lienholder, consensual or otherwise,
for the amount due under a lien, in accordance with the priorities
established by applicable law;
(4) to a taxing unit for any unpaid taxes, penalties,
interest, or other amounts adjudged due under the judgment that
were not satisfied from the proceeds from the tax sale; and
(5) to each former owner of the property, as their
interests may appear.
SECTION 10. Section 34.06(d), Tax Code, is amended to read as
follows:
(d) After retaining the amount authorized by Subsection
(c), the purchasing taxing unit shall then pay all costs of[:]
[(1) the officer conducting the sale of the property;
and]
[(2) the clerk of the court in connection with the suit
and the sale of the property]
the suit and sale in the same manner and in the same order of
priority as provided by subdivisions (1)-(5) of Section 34.02(b).
SECTION 11. Section 34.21, Tax Code, is amended by adding
new Subsection (k) to read as follows:
(k) The inclusion of dues and assessments for maintenance
owing to a property owners' association under subsection (g) as a
form of "costs" shall not be construed as:
(1) a waiver of any immunity, to which a taxing unit
may be entitled, from suit or from liability for such dues or
assessments, or
(2) authority for a taxing unit to make an expenditure
of public funds in violation of Section 50, Article III, Texas
Constitution, Section 51, Article III, Texas Constitution, Section
52(a), Article III, Texas Constitution, or Section 3, Article XI,
Texas Constitution.
SECTION 12. This Act takes effect September 1, 2003.
SECTION 13. The changes in law made by Sections 1, 2, 3, 4,
5, and 6 of this Act apply to tax warrant proceedings in which an
application for tax warrant was filed on or after the effective date
of this Act. Tax warrant proceedings commenced by application
before the effective date of this Act are governed by the law as it
existed immediately before the effective date of this Act, and that
law is continued in effect for that purpose.
SECTION 14. The changes in law made by Section 8 of this Act
apply to distributions of tax sale proceeds made on or after the
effective date of this Act, regardless of whether the tax sale was
conducted before, on, or after that date.
SECTION 15. The changes in law made by Section 9 of this Act
apply to all causes of action pending on the effective date of this
Act, or brought after that date.
SECTION 16. The changes in law made by Section 10 of this
Act apply to distributions of tax resale proceeds made on or after
the effective date of this Act, regardless of whether the tax resale
was conducted before, on, or after that date.
SECTION 17. The importance of this legislation and the
crowded condition of the calendars of both houses create an
emergency and an imperative public necessity that the
constitutional rule requiring bills to be read on three several
days in each house be suspended, and this rule is hereby suspended.