S.B. No. 2091

AN ACT

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.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 33.43(a), Tax Code, is amended to read as follows:

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

(1) the taxing unit is legally constituted and authorized to impose and collect ad valorem taxes on property;

(2) tax in a stated amount was legally imposed on each separately described property for each year specified and on each person named if known who owned the property on January 1 of the year for which the tax was imposed;

(3) the tax was imposed in the county in which the suit is filed;

(4) the tax is delinquent;

(5) penalties, interest, and costs authorized by law in a stated amount for each separately assessed property are due;

(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 Section 34.01 or 34.0101, or under Section 253.010, Local Government Code, as applicable, if the suit seeks to foreclose a tax lien;

(7) the person sued owned the property on January 1 of the year for which the tax was imposed if the suit seeks to enforce personal liability;

(8) the person sued owns the property when the suit is filed if the suit seeks to foreclose a tax lien;

(9) the taxing unit asserts a lien on each separately described property to secure the payment of all taxes, penalties, interest, and costs due if the suit seeks to foreclose a tax lien;

(10) all things required by law to be done have been done properly by the appropriate officials; and

(11) the attorney signing the petition is legally authorized to prosecute the suit on behalf of the taxing unit.

SECTION 2. Subchapter A, Chapter 34, Tax Code, is amended by adding Section 34.0101 to read as follows:

Sec. 34.0101. SALE OF CERTAIN PROPERTY TO OWNER OF ABUTTING PROPERTY. (a) In this section:

(1) "Flood insurance rate map" means the most recent flood hazard map published by the Federal Emergency Management Agency under the National Flood Insurance Act of 1968 (42 U.S.C. Section 4001 et seq.).

(2) "Floodway" means an area that is identified on the flood insurance rate map as a regulatory floodway, including the channel of a river or other watercourse and the adjacent land areas that must be reserved for the discharge of a base flood, also referred to as a 100-year flood, without cumulatively increasing the water surface elevation more than a designated height.

(b) This section applies to real property:

(1) that is:

(A) seized under a tax warrant issued under Subchapter E, 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

(C) located in:

(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.

(c) Sections 34.01(b), (c), (d), (e), (f), (g), (h), (i), (m), (n), (q), and (s), 34.02, 34.03, 34.04, and 34.21 apply to a sale of real property under this section.

(d) Notwithstanding any other law, including Sections 263.001 and 272.001, Local Government Code, and subject to Subsection (e) of this section, a taxing unit that requested a tax warrant or order of sale for real property subject to this section may direct the officer charged with selling the property to sell the property to an owner of abutting property at a private sale.

(e) A taxing unit may not direct 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) 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 must give notice of the sale to each abutting owner. The notice must 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) A purchaser of property under this section must meet the requirements of Section 34.015.

(h) A taxing unit that directs the sale of real property under this section may not sell the property for an amount that is less than the lesser of:

(1) the property's market value, as specified in the warrant or the judgment, as applicable; or

(2) the following amount, as applicable:

(A) the amount provided by Section 34.01(p), in the case of property described by Subsection (b)(1)(A) of this section; or

(B) the amount provided by Section 34.01(b), in the case of property described by Subsection (b)(1)(B) of this section.

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

SECTION 3. Sections 34.02(a) and (d), Tax Code, are amended to read as follows:

(a) The proceeds of a tax sale under Section 33.94, [or] 34.01, or 34.0101 shall be applied in the order prescribed by Subsection (b). The amount included under each subdivision of Subsection (b) must be fully paid before any of the proceeds may be applied to the amount included under a subsequent subdivision.

(d) The officer conducting a sale under Section 33.94, [or] 34.01, or 34.0101 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.

SECTION 4. Section 33.43(a), Tax Code, as amended by this Act, applies only to a petition initiating a suit to collect a delinquent property tax filed on or after the effective date of this Act.

SECTION 5. This Act takes effect September 1, 2023.

______________________________ ______________________________

President of the Senate Speaker of the House

I hereby certify that S.B. No. 2091 passed the Senate on April 4, 2023, by the following vote: Yeas 30, Nays 1; and that the Senate concurred in House amendment on May 26, 2023, by the following vote: Yeas 28, Nays 3.

______________________________ Secretary of the Senate

I hereby certify that S.B. No. 2091 passed the House, with amendment, on May 19, 2023, by the following vote: Yeas 102, Nays 41, two present not voting.

______________________________ Chief Clerk of the House

Approved:

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Date

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Governor