BILL ANALYSIS

Senate Research Center	S.B. 2091
	By: West
	Local Government
	6/8/2023
	Enrolled

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

S.B. 2091 proposes an amendment to the Tax Code in the State of Texas, allowing the taxing unit to sell seized or foreclosed property to an abutting property owner, without the need for a public sale. The amendment applies to real property that is landlocked or is a narrow strip of land or other parcel of land that cannot be used independently under its current zoning classification or development ordinances.

The property may also be located in a floodway or an area designated as having an annual chance of flooding. The purchaser of the property must meet the requirements of Section 34.015. The bill does not require the taxing unit to offer the property for sale to the public, and the unit may sell the property at a price lower than required under Section 34.01(p). The bill also allows the sale of the property without the consent of any taxing unit entitled to receive proceeds from the sale.

S.B. 2091 amends current law relating to the authority of a taxing unit to sell certain seized or foreclosed property to an owner of an abutting property without conducting a public sale.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 33.43(a), Tax Code, as follows:

(a) Provides that a petition initiating a suit to collect a delinquent property tax is sufficient if it alleges that:

(1)-(5) makes no changes to these subdivisions;

(6) the taxing unit is entitled to recover each penalty that is incurred and all interest that accrues on delinquent taxes imposed on the property from the date of the judgment to the date of the sale under certain sections, including Section 34.0101, as applicable, if the suit seeks to foreclose a tax lien; and

(7)-(11) makes no changes to these subdivisions.

SECTION 2. Amends Subchapter A, Chapter 34, Tax Code, by adding Section 34.0101, as follows:

Sec. 34.0101. SALE OF CERTAIN PROPERTY TO OWNER OF ABUTTING PROPERTY. (a) Defines "flood insurance rate map" and "floodway."

(b) Provides that this section applies to real property:

(1) that is:

(A) seized under a tax warrant issued under Subchapter E (Seizure of Real Property), Chapter 33; or

(B) ordered sold pursuant to foreclosure of a tax lien; and

(2) that is:

(A) a narrow strip of land or other parcel of land that because of its shape or small area cannot be used independently under its current zoning classification or under applicable subdivision or other development ordinances;

(B) landlocked without direct access to a public road; or

(i) an area designated by the Federal Emergency Management Agency under the National Flood Insurance Act of 1968 (42 U.S.C. Section 4001 et seq.) as having a two-tenths of one percent or greater annual chance of flooding; or

(ii) a floodway.

(d) Authorizes a taxing unit that requested a tax warrant or order of sale for real property subject to this section, notwithstanding any other law, including Sections 263.001 (Sale or Lease of Real Property) and 272.001 (Notice of Sale or Exchange of Land by Political Subdivision; Exceptions), Local Government Code, and subject to Subsection (e) of this section, to direct the officer charged with selling the property to sell the property to an owner of abutting property at a private sale.

(e) Prohibits a taxing unit from directing the sale of real property at a private sale under this section unless:

(1) the property is offered for sale at a public auction; and

(2) a bid sufficient to pay the amount specified by Subsection (h) is not received.

(f) Requires a taxing unit that directs the private sale under this section of real property that abuts two or more adjacent parcels of real property having different owners to give notice of the sale to each abutting owner. Requires that the notice state that the taxing unit will:

(1) offer the property for sale;

(2) accept sealed bids for the property; and

(3) sell the property to the highest bidder.

(g) Requires a purchaser of property under this section to meet the requirements of Section 34.015 (Persons Eligible to Purchase Real Property).

(h) Prohibits a taxing unit that directs the sale of real property under this section from selling the property for an amount that is less than the lesser of certain amounts.

(i) Authorizes a taxing unit that requested a tax warrant or order of sale for real property subject to this section to sell the property under this section without the consent of any taxing unit entitled to receive proceeds of the sale.

SECTION 3. Amends Sections 34.02(a) and (d), Tax Code, as follows:

(a) Requires that the proceeds of a tax sale under certain sections, including Section 34.0101, be applied in the order prescribed by Subsection (b) (relating to requiring that the proceeds of a tax sale be applied to certain costs).�

(d) Requires the officer conducting a sale under certain sections, including Section 34.0101, to 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.

SECTION 4. Makes application of Section 33.43(a), Tax Code, as amended by this Act, prospective.

SECTION 5. Effective date: September 1, 2023.