This website will be unavailable from Thursday, May 30, 2024 at 6:00 p.m. through Monday, June 3, 2024 at 7:00 a.m. due to data center maintenance.
79R15155 E
By: Paxton, Eiland H.B. No. 2220
Substitute the following for H.B. No. 2220:
By: Solomons C.S.H.B. No. 2220
A BILL TO BE ENTITLED
AN ACT
relating to the transfer of an ad valorem tax lien and to a contract
for foreclosure of an ad valorem tax lien.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 32.06, Tax Code, is amended to read as
follows:
Sec. 32.06. TRANSFER OF TAX LIEN. (a) In this section:
(1) "Mortgage servicer" has the meaning assigned by
Section 51.0001, Property Code.
(2) "Transferee" means a person authorized to pay the
taxes of another.
(a-1) A person may authorize another person to pay the
delinquent taxes imposed by a taxing unit on the person's real
property by filing with the collector for the unit a sworn document
stating:
(1) the authorization;
(2) the name and street address of the transferee[,
naming the other person] authorized to pay the taxes of the property
owner; and
(3) a description of[, and describing] the property by
street address, if applicable, and legal description.
(a-2) After a tax lien is transferred, taxes on the property
that become due in subsequent tax years may be transferred before
the delinquency date in the manner provided by Subsection (a-1).
(a-3) Taxes may be transferred before the delinquency date
in the manner provided by Subsection (a-1) only if the real property
is not subject to a lien other than the tax lien.
(b) If a transferee [person] authorized to pay a property
owner's [another's] taxes pursuant to Subsection (a-1) [(a)] pays
the taxes and any penalties and interest imposed, the collector
shall issue a tax receipt to that transferee [the person paying the
taxes]. In addition, the collector or a person designated by the
collector shall certify on the sworn document that payment of the
taxes and any penalties and interest on the described property and
collection costs has been made by the transferee on behalf of the
property owner [a person other than the person] liable for the taxes
when imposed and that the taxing unit's tax lien is transferred to
that transferee [the person paying the taxes]. The collector shall
attach to the sworn document the collector's seal of office or sign
the document before a notary public and deliver the sworn document,
a tax receipt, and the affidavit attesting to the transfer of the
tax lien to the transferee [person paying the taxes]. The sworn
document, tax receipt, and affidavit attesting to the transfer of
the tax lien may be combined into one document. The collector shall
conspicuously identify in the applicable taxpayer's account the
date of the transfer of a tax lien transferred under this section
[keep a record of all tax liens transferred as provided by this
section].
(c) Except as otherwise provided by this section, the
transferee of a tax lien and any successor in interest is entitled
to foreclose the lien:
(1) in the manner provided by law for foreclosure of
tax liens; or
(2) in the manner specified in rules of civil
procedure adopted by the Supreme Court of Texas under Section 50,
Article XVI, Texas Constitution, and Section 32.065 of this code,
if the property owner and the transferee enter into a contract that
is secured by a lien on the property [Section 51.002, Property
Code].
(d) To be enforceable, a tax lien transferred as provided by
this section must be recorded with the sworn statement and
affidavit attesting to the transfer of the tax lien as described in
Subsection (b) in the deed records of each county in which the
property encumbered by the lien is located.
(e) A transferee [person] holding a tax lien transferred as
provided by this section may not charge a greater rate of interest
than 18 percent a year on the taxes, penalties, and interest paid to
a taxing unit as shown on the tax receipt, plus only those [and]
recording and other expenses paid to acquire and record the lien.
(f) The mortgage servicer [holder] of a preexisting lien on
property encumbered by a tax lien transferred as provided by
Subsection (b) [this section] is entitled, within six months after
the date on which the tax lien is recorded in all counties in which
the property is located, to obtain a release of the transferred tax
lien by paying [pay] the transferee [holder] of the tax lien the
amount owed under the contract between the property owner and the
transferee. A transferee may charge a reasonable fee for a payoff
statement that is requested after an initial payoff statement is
provided.
(g) At any time after the end of the six-month period
specified by Subsection (f) and before a notice of foreclosure of
the transferred tax lien is sent, the transferee of the tax lien or
the holder of the tax lien may require the property owner to provide
written authorization and pay a reasonable fee before providing
information regarding the current balance owed by the property
owner to the transferee or the holder of the tax lien.
(h) A mortgage servicer who pays a transferred tax lien
[paid for the lien, plus interest accrued at the rate provided by
Subsection (e) and recording expenses, and] becomes subrogated to
all rights in the lien.
(i) [(g)] A foreclosure of [suit to foreclose] a tax lien
transferred as provided by this section may not be instituted
within one year from the date on which the lien is recorded in all
counties in which the property is located, unless the contract
between the owner of the property and the transferee provides
otherwise.
(j) [(h)] After one year from the date on which a tax lien
transferred as provided by this section is recorded in all counties
in which the property is located, the transferee [holder] of the
lien may [file suit to] foreclose the lien in the manner provided by
Subsection (c) [unless a contract between the holder of the lien and
the owner of the property encumbered by the lien provides
otherwise]. If a foreclosure procedure [the suit] results in
foreclosure of the lien, the transferee [person filing suit] is
entitled to recover attorney's fees in an amount not to exceed 10
percent of the judgment. The proceeds of a sale following
foreclosure as provided by this subsection shall be applied first
to the payment of court costs, then to the payment of the judgment,
including accrued interest, and then to the payment of any
attorney's fees fixed in the judgment. Any remaining proceeds
shall be paid to other holders of liens on the property in the order
of their priority and then to the person whose property was sold at
the tax sale.
(k) Beginning on the date the foreclosure deed is recorded,
the [(i) The] person whose property is sold as provided by
Subsection (c) [this section] or the mortgage servicer of [any
person holding] a prior recorded [first] lien against the property
is entitled[, within one year after the date the property is sold,]
to redeem the foreclosed property from the purchaser [at the tax
sale] by paying the [that] purchaser or successor 125 [the tax sale
purchase price, plus costs, and interest accrued on the judgment to
the date of redemption or 118] percent of the purchase price during
the first year of the redemption period or 150 percent of the
purchase price during the second year of the redemption period with
cash or cash equivalent funds. The right of redemption may be
exercised on or before the second anniversary of the date on which
the purchaser's deed is filed of record if the property sold was the
residence homestead of the owner, was land designated for
agricultural use, or was a mineral interest. For any other
property, the right of redemption must be exercised not later than
the 180th day after the date on which the purchaser's deed is filed
of record [amount of the judgment, whichever is less]. If a person
redeems the property as provided by this subsection, the purchaser
at the tax sale shall deliver a deed to the property to the person
redeeming the property. If the person who owned the property at the
time of foreclosure redeems the property, all liens existing on the
property at the time of the tax sale remain in effect to the extent
not paid from the sale proceeds.
SECTION 2. Section 32.065, Tax Code, is amended by amending
Subsections (a)-(d) and (f) and adding Subsections (b-1) and (g) to
read as follows:
(a) Section 32.06 does not abridge the right of an owner of
real property to enter into a contract for the payment of taxes
[with the holder of a lien on the property, including a transferee
under Section 32.06 or this section, or affect a contract between
the owner and holder of a lien for the payment of taxes on the
property].
(b) Notwithstanding any agreement to the contrary, a [A]
contract entered into under Subsection (a) between a transferee and
the property owner under Section 32.06 that is secured by a lien on
the property shall [may] provide for a power of foreclosure
authorized under Section 32.06(c), and:
(1) an event of default; [and]
(2) notice of acceleration;
(3) recording of the contract in each county in which
the property is located;
(4) recording of the sworn document and affidavit
attesting to the transfer of the tax lien;
(5) requiring the transferee to serve foreclosure
notices on the property owner at the property owner's last known
address in the manner required by Sections 51.002(b), (d), and (e),
Property Code, or by a commercially reasonable delivery service
that maintains verifiable records of deliveries for at least five
years from the date of delivery; and
(6) requiring, at the time the foreclosure notices
required by Subdivision (5) are served on the property owner, the
transferee to serve a copy of the foreclosure notices in the same
manner on the mortgage servicer of any recorded real property lien
encumbering the property that includes on the first page, in
14-point boldfaced type or 14-point uppercase typewritten letters,
a statement that reads substantially as follows:
"PURSUANT TO TEXAS TAX CODE SECTION 32.06, THE
FORECLOSURE SALE REFERRED TO IN THIS DOCUMENT IS A
SUPERIOR TRANSFER TAX LIEN SUBJECT TO RIGHT OF
REDEMPTION UNDER CERTAIN CONDITIONS. THE FORECLOSURE
IS SCHEDULED TO OCCUR ON THE (DATE)."
(b-1) On an event of default and notice of acceleration, the
mortgage servicer of a recorded lien encumbering real property may
obtain a release of a transferred tax lien on the property by paying
the transferee of the tax lien or the holder of the tax lien the
amount owed by the property owner to that transferee or holder.
(c) Except as provided by Section 32.06 or another
[Notwithstanding any other] provision of this code, a transferee of
a tax lien is subrogated to and is entitled to exercise any right or
remedy possessed by the transferring taxing unit, including or
related to foreclosure or judicial sale.
(d) Chapters 342 and 346, Finance Code, [and Section
302.102, Finance Code,] do not apply to a transaction covered by
this section. The transferee of a tax lien under this section is
not required to obtain a license under Title 4, Finance Code.
(f) The first written communication by the transferee
[lender] to the transferee's [its] prospective borrower shall
disclose each type and the amount [types] of possible additional
charges or fees that may be incurred by the borrower in connection
with the loan or contract under this section.
(g) An affidavit of the transferee executed after
foreclosure of a tax lien that recites compliance with the terms of
Section 32.06 and this section and is recorded in each county in
which the property is located:
(1) is prima facie evidence of compliance with Section
32.06 and this section; and
(2) may be relied on conclusively by a bona fide
purchaser for value without notice of any failure to comply.
SECTION 3. This Act takes effect September 1, 2005.