Texas 2013 - 83rd Regular

Texas Senate Bill SB247 Compare Versions

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1	1	By: Carona, et al. S.B. No. 247
2	2	(Miller of Comal, Oliveira)
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the transfer of an ad valorem tax lien; providing an
8	8	administrative penalty.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Subsection (c), Section 351.0021, Finance Code,
11	11	is amended to read as follows:
12	12	(c) A property tax lender or any successor in interest may
13	13	not charge:
14	14	(1) any fee, other than interest, after closing in
15	15	connection with the transfer of a tax lien unless the fee is
16	16	expressly authorized under this section; or
17	17	(2) any interest that is not expressly authorized
18	18	under Section 32.06, Tax Code.
19	19	SECTION 2. Subchapter A, Chapter 351, Finance Code, is
20	20	amended by adding Sections 351.0022 and 351.0023 to read as
21	21	follows:
22	22	Sec. 351.0022. WAIVER PROHIBITED. Except as specifically
23	23	permitted by this chapter or Chapter 32, Tax Code, a property owner
24	24	may not waive or limit a requirement imposed on a property tax
25	25	lender by this chapter.
26	26	Sec. 351.0023. SOLICITATION OF LOANS; NOTICE. (a) A
27	27	property tax lender who solicits property tax loans by mail,
28	28	e-mail, or other print or electronic media shall include on the
29	29	first page of all solicitation materials, in at least 12-point
30	30	boldface type, a notice substantially similar to the following:
31	31	"YOUR TAX OFFICE MAY OFFER DELINQUENT TAX INSTALLMENT PLANS THAT
32	32	MAY BE LESS COSTLY TO YOU. YOU CAN REQUEST INFORMATION ABOUT THE
33	33	AVAILABILITY OF THESE PLANS FROM THE TAX OFFICE."
34	34	(b) A property tax lender who solicits property tax loans by
35	35	broadcast media, including a television or radio broadcast, shall
36	36	state the following in the broadcast: "YOUR TAX OFFICE MAY OFFER
37	37	DELINQUENT TAX INSTALLMENT PLANS THAT MAY BE LESS COSTLY TO YOU.
38	38	YOU CAN REQUEST INFORMATION ABOUT THE AVAILABILITY OF THESE PLANS
39	39	FROM THE TAX OFFICE."
40	40	(c) A property tax lender may not, in any manner, advertise
41	41	or cause to be advertised a false, misleading, or deceptive
42	42	statement or representation relating to a rate, term, or condition
43	43	of a property tax loan.
44	44	(d) A property tax lender who refers to a rate or charge in
45	45	an advertisement shall state the rate or charge fully and clearly.
46	46	If the rate or charge is a rate of finance charge, the advertisement
47	47	must include the annual percentage rate and specifically refer to
48	48	the rate as an "annual percentage rate." The advertisement must
49	49	state that the annual percentage rate may be increased after the
50	50	contract is executed, if applicable. The advertisement may not
51	51	refer to any other rate, except that a simple annual rate that is
52	52	applied to the unpaid balance of a property tax loan may be stated
53	53	in conjunction with, but not more conspicuously than, the annual
54	54	percentage rate.
55	55	(e) If an advertisement for a property tax loan includes the
56	56	number of payments, period of repayment, amount of any payment, or
57	57	amount of any finance charges, the advertisement must, in addition
58	58	to any applicable requirements of Subsection (d), include:
59	59	(1) the terms of repayment, including the repayment
60	60	obligations over the full term of the loan and any balloon payment;
61	61	(2) the annual percentage rate, and must refer to that
62	62	rate as the annual percentage rate; and
63	63	(3) a statement that the lender may increase the
64	64	annual percentage rate after the contract is executed, if
65	65	applicable.
66	66	(f) The finance commission may adopt rules to implement and
67	67	enforce this section.
68	68	(g) Notwithstanding Section 14.251, the commissioner may
69	69	assess an administrative penalty under Subchapter F, Chapter 14,
70	70	against a property tax lender who violates this section, regardless
71	71	of whether the violation is knowing or wilful.
72	72	SECTION 3. Section 351.003, Finance Code, is amended to
73	73	read as follows:
74	74	Sec. 351.003. SECONDARY MARKET TRANSACTIONS. (a) Except
75	75	as provided by Subsection (b), this [This] chapter does not
76	76	prohibit a property tax lender from receiving compensation from a
77	77	party other than the property tax loan applicant for the sale,
78	78	transfer, assignment, or release of rights on the closing of a
79	79	property tax loan transaction.
80	80	(b) A person may not sell, transfer, assign, or release
81	81	rights to a property tax loan to a person who is not licensed under
82	82	Section 351.051 or exempt from the application of this chapter
83	83	under Section 351.051(c).
84	84	(c) The finance commission shall adopt rules to implement
85	85	this section.
86	86	SECTION 4. Subsection (c), Section 351.051, Finance Code,
87	87	is amended to read as follows:
88	88	(c) Except as provided by Section 351.003, this [This]
89	89	chapter does not apply to:
90	90	(1) any of the following entities or an employee of any
91	91	of the following entities, if the employee is acting for the benefit
92	92	of the employer:
93	93	(A) a bank, savings bank, or savings and loan
94	94	association, or a subsidiary or an affiliate of a bank, savings
95	95	bank, or savings and loan association; or
96	96	(B) a state or federal credit union, or a
97	97	subsidiary, affiliate, or credit union service organization of a
98	98	state or federal credit union; or
99	99	(2) an individual who:
100	100	(A) is related to the property owner within the
101	101	second degree of consanguinity or affinity, as determined under
102	102	Chapter 573, Government Code [makes a property tax loan from the
103	103	individual's own funds to a spouse, former spouse, or persons in the
104	104	lineal line of consanguinity of the individual lending the money];
105	105	or
106	106	(B) makes five or fewer property tax loans in any
107	107	consecutive 12-month period from the individual's own funds.
108	108	SECTION 5. Subsection (a), Section 351.054, Finance Code,
109	109	is amended to read as follows:
110	110	(a) A transferee of a tax lien must include with the sworn
111	111	document executed by the borrower and filed with the collector of a
112	112	taxing unit under Section 32.06(a-1), Tax Code, the information
113	113	required by this section.
114	114	SECTION 6. The heading to Section 32.06, Tax Code, is
115	115	amended to read as follows:
116	116	Sec. 32.06. PROPERTY TAX LOANS; TRANSFER OF TAX LIEN.
117	117	SECTION 7. Subdivision (2), Subsection (a), Section 32.06,
118	118	Tax Code, is amended to read as follows:
119	119	(2) "Transferee" means a person who is licensed under
120	120	Chapter 351, Finance Code, or is exempt from the application of that
121	121	chapter under Section 351.051(c), Finance Code, and who is:
122	122	(A) authorized to pay the taxes of another; or
123	123	(B) a successor in interest to a tax lien that is
124	124	transferred under this section.
125	125	SECTION 8. Section 32.06, Tax Code, is amended by amending
126	126	Subsections (a-1), (a-2), (a-3), (a-4), (b), (c), (d), (e-1),
127	127	(f-4), (g), (h), (i), and (j) and adding Subsections (a-5), (a-6),
128	128	(a-7), (a-8), (a-9), and (l) to read as follows:
129	129	(a-1) A property owner [person] may authorize another
130	130	person to pay the taxes imposed by a taxing unit on the owner's
131	131	[person's] real property by executing and filing with the collector
132	132	for the taxing unit:
133	133	(1) a sworn document stating:
134	134	(A) the authorization for payment of the taxes;
135	135	(B) the name and street address of the transferee
136	136	authorized to pay the taxes of the property owner;
137	137	(C) a description of the property by street
138	138	address, if applicable, and legal description; and
139	139	(D) notice has been given to the property owner
140	140	that if the property owner is [age 65 or] disabled, the property
141	141	owner may be eligible for a tax deferral under Section 33.06; and
142	142	(2) the information required by Section 351.054,
143	143	Finance Code.
144	144	(a-2) Except as provided by Subsection (a-8), a [A] tax lien
145	145	may be transferred to the person who pays the taxes on behalf of the
146	146	property owner under the authorization described by Subsection
147	147	(a-1) for:
148	148	(1) taxes that are delinquent at the time of payment;
149	149	or
150	150	(2) taxes that are due but not delinquent at the time
151	151	of payment if[:
152	152	[(A)] the property is not subject to a recorded
153	153	mortgage lien[; or
154	154	[(B) a tax lien transfer authorized by the
155	155	property owner has been executed and recorded for one or more prior
156	156	years on the same property and the property owner has executed an
157	157	authorization consenting to a transfer of the tax liens for both the
158	158	taxes on the property that are not delinquent and taxes on the
159	159	property that are delinquent in the manner provided by Subsection
160	160	(a-1)].
161	161	(a-3) A person who is 65 years of age or older may not
162	162	authorize a transfer of a tax lien on real property on which the
163	163	person is eligible to claim an exemption from taxation under
164	164	Section 11.13(c). [If the property owner has executed an
165	165	authorization under Subsection (a-2)(2)(B) consenting to a
166	166	transfer of the tax liens for both the taxes on the property that
167	167	are not delinquent and taxes on the property that are delinquent,
168	168	the collector's certification under Subsection (b) may be in one
169	169	document.]
170	170	(a-4) The Finance Commission of Texas shall:
171	171	(1) prescribe the form and content of an appropriate
172	172	disclosure statement to be provided to a property owner before the
173	173	execution of a tax lien transfer;
174	174	(2) adopt rules relating to the reasonableness of
175	175	closing costs, fees, and other charges permitted under this
176	176	section; [and]
177	177	(3) by rule prescribe the form and content of the sworn
178	178	document under Subsection (a-1) and the certified statement under
179	179	Subsection (b); and
180	180	(4) by rule prescribe the form and content of a request
181	181	a lender with an existing recorded lien on the property must use to
182	182	request a payoff statement and the transferee's response to the
183	183	request, including the period within which the transferee must
184	184	respond.
185	185	(a-5) At the time the transferee provides the disclosure
186	186	statement required by Subsection (a-4)(1), the transferee must also
187	187	describe the type and approximate cost range of each additional
188	188	charge or fee that the property owner may incur in connection with
189	189	the transfer.
190	190	(a-6) Notwithstanding Subsection (f-3), a lender described
191	191	by Subsection (a-4)(4) may request a payoff statement before the
192	192	tax loan becomes delinquent. The Finance Commission of Texas by
193	193	rule shall require a transferee who receives a request for a payoff
194	194	statement to deliver the requested payoff statement on the
195	195	prescribed form within a period prescribed by finance commission
196	196	rule. The prescribed period must allow the transferee at least
197	197	seven business days after the date the request is received to
198	198	deliver the payoff statement. The consumer credit commissioner may
199	199	assess an administrative penalty under Subchapter F, Chapter 14,
200	200	Finance Code, against a transferee who wilfully fails to provide
201	201	the payoff statement as prescribed by finance commission rule.
202	202	(a-7) A contract between a transferee and a property owner
203	203	that purports to authorize payment of taxes that are not delinquent
204	204	or due at the time of the authorization, or that lacks the
205	205	authorization described by Subsection (a-1), is void.
206	206	(a-8) A tax lien may not be transferred to the person who
207	207	pays the taxes on behalf of the property owner under the
208	208	authorization described by Subsection (a-1) if the real property:
209	209	(1) has been financed, wholly or partly, with a grant
210	210	or below market rate loan provided by a governmental program or
211	211	nonprofit organization and is subject to the covenants of the grant
212	212	or loan; or
213	213	(2) is encumbered by a lien recorded under Subchapter
214	214	A, Chapter 214, Local Government Code.
215	215	(a-9) The Finance Commission of Texas may adopt rules to
216	216	implement Subsection (a-8).
217	217	(b) If a transferee authorized to pay a property owner's
218	218	taxes under [pursuant to] Subsection (a-1) pays the taxes and any
219	219	penalties, [and] interest, and collection costs imposed, the
220	220	collector shall issue a tax receipt to that transferee. In
221	221	addition, the collector or a person designated by the collector
222	222	shall certify that the taxes and any penalties, [and] interest, and
223	223	collection costs on the subject property [and collection costs]
224	224	have been paid by the transferee on behalf of the property owner and
225	225	that the taxing unit's tax lien is transferred to that
226	226	transferee. The collector shall attach to the certified statement
227	227	the collector's seal of office or sign the statement before a notary
228	228	public and deliver a tax receipt and the certified statement
229	229	attesting to the transfer of the tax lien to the transferee within
230	230	30 days. The tax receipt and certified statement may be combined
231	231	into one document. The collector shall identify in a discrete
232	232	field in the applicable property owner's account the date of the
233	233	transfer of a tax lien transferred under this section. When a tax
234	234	lien is released, the transferee shall file a release with the
235	235	county clerk of each county in which the property encumbered by the
236	236	lien is located for recordation by the clerk and send a copy to the
237	237	collector. The transferee may charge the property owner a
238	238	reasonable fee for filing the release.
239	239	(c) Except as otherwise provided by this section, the
240	240	transferee of a tax lien [and any successor in interest] is entitled
241	241	to foreclose the lien[:
242	242	[(1)] in the manner provided by law for foreclosure of
243	243	tax liens[; or
244	244	[(2) in the manner specified in Section 51.002,
245	245	Property Code, and Section 32.065, after the transferee or a
246	246	successor in interest obtains a court order for foreclosure under
247	247	Rule 736, Texas Rules of Civil Procedure, except as provided by
248	248	Subsection (c-1) of this section, if the property owner and the
249	249	transferee enter into a contract that is secured by a lien on the
250	250	property].
251	251	(d) A transferee shall record a tax lien transferred as
252	252	provided by this section with the certified statement attesting to
253	253	the transfer of the tax lien as described by Subsection (b) in the
254	254	deed records of each county in which the property encumbered by the
255	255	lien is located.
256	256	(e-1) A transferee of a tax lien may not charge a fee for any
257	257	expenses arising after the closing of a loan secured by a tax lien
258	258	transferred under this section, including collection costs, except
259	259	for:
260	260	(1) interest expressly authorized under this section;
261	261	(2) the fees for filing the release of the tax lien
262	262	under Subsection (b);
263	263	(3) the fee for providing a payoff statement under
264	264	Subsection (f-3);
265	265	(4) the fee for providing information regarding the
266	266	current balance owed by the property owner under Subsection (g);
267	267	and
268	268	(5) the fees expressly authorized under Section
269	269	351.0021, Finance Code.
270	270	(f-4) Failure to comply with Subsection (b-1), (f), or (f-1)
271	271	does not invalidate a tax lien transferred under this section [this
272	272	chapter, a contract lien,] or a deed of trust.
273	273	(g) At any time after the end of the six-month period
274	274	specified by Subsection (f) and before a notice of foreclosure of
275	275	the transferred tax lien is sent, the transferee of the tax lien [or
276	276	the holder of the tax lien] may require the property owner to
277	277	provide written authorization and pay a reasonable fee before
278	278	providing information regarding the current balance owed by the
279	279	property owner to the transferee [or the holder of the tax lien].
280	280	(h) A mortgage servicer who pays a property tax loan secured
281	281	by a [transferred] tax lien transferred under this section becomes
282	282	subrogated to all rights in the lien.
283	283	(i) A judicial [Except as provided by Section 33.445, a]
284	284	foreclosure of a tax lien transferred under [as provided by] this
285	285	section may not be instituted within one year from the date on which
286	286	the lien is recorded in all counties in which the property is
287	287	located, unless the contract between the owner of the property and
288	288	the transferee provides otherwise.
289	289	(j) After one year from the date on which a tax lien
290	290	transferred under [as provided by] this section is recorded in all
291	291	counties in which the property is located, the transferee of the
292	292	lien may foreclose the lien in the manner provided by Subsection (c)
293	293	unless the [a] contract between the transferee [holder of the lien]
294	294	and the owner of the property encumbered by the lien provides
295	295	otherwise. The proceeds of a sale following a judicial foreclosure
296	296	as provided by this subsection shall be applied first to the payment
297	297	of court costs, then to payment of the judgment, including accrued
298	298	interest, and then to the payment of any attorney's fees fixed in
299	299	the judgment. Any remaining proceeds shall be paid to other
300	300	holders of liens on the property in the order of their priority and
301	301	then to the person whose property was sold at the tax sale.
302	302	(l) Except as specifically provided by this section, a
303	303	property owner cannot waive or limit any requirement imposed on a
304	304	transferee by this section.
305	305	SECTION 9. Section 32.065, Tax Code, is amended by amending
306	306	Subsection (b) and adding Subsection (i) to read as follows:
307	307	(b) Notwithstanding any agreement to the contrary, a
308	308	contract entered into under Subsection (a) between a transferee and
309	309	the property owner under Section 32.06 that is secured by a priority
310	310	lien on the property shall provide for [a power of sale and]
311	311	foreclosure in the manner provided by Section 32.06(c)
312	312	[32.06(c)(2)] and:
313	313	(1) an event of default;
314	314	(2) notice of acceleration; and
315	315	(3) recording of the deed of trust or other instrument
316	316	securing the contract entered into under Subsection (a) in each
317	317	county in which the property is located.[;
318	318	[(4) recording of the sworn document and affidavit
319	319	attesting to the transfer of the tax lien;
320	320	[(5) requiring the transferee to serve foreclosure
321	321	notices on the property owner at the property owner's last known
322	322	address in the manner provided by Section 32.06(c)(2) or by a
323	323	commercially reasonable delivery service that maintains verifiable
324	324	records of deliveries for at least five years from the date of
325	325	delivery; and
326	326	[(6) requiring, at the time the foreclosure notices
327	327	required by Subdivision (5) are served on the property owner, the
328	328	transferee to serve a copy of the notice of sale in the same manner
329	329	on the mortgage servicer or the holder of all recorded real property
330	330	liens encumbering the property that includes on the first page, in
331	331	14-point boldfaced type or 14-point uppercase typewritten letters,
332	332	a statement that reads substantially as follows: "PURSUANT TO
333	333	TEXAS TAX CODE SECTION 32.06, THE FORECLOSURE SALE REFERRED TO IN
334	334	THIS DOCUMENT IS A SUPERIOR TRANSFER TAX LIEN SUBJECT TO RIGHT OF
335	335	REDEMPTION UNDER CERTAIN CONDITIONS. THE FORECLOSURE IS SCHEDULED
336	336	TO OCCUR ON THE (DATE)."]
337	337	(i) An agreement under this section that attempts to create
338	338	a lien for the payment of taxes that are not delinquent or due at the
339	339	time the property owner executes the sworn document under Section
340	340	32.06(a-1) is void.
341	341	SECTION 10. Subsection (c-1), Section 32.06, Tax Code, is
342	342	repealed.
343	343	SECTION 11. The changes in law made by this Act apply only
344	344	to a contract entered into on or after the effective date of this
345	345	Act. A contract entered into before that date is governed by the
346	346	law in effect immediately before the effective date of this Act, and
347	347	that law is continued in effect for that purpose.
348	348	SECTION 12. This Act takes effect immediately if it
349	349	receives a vote of two-thirds of all the members elected to each
350	350	house, as provided by Section 39, Article III, Texas Constitution.
351	351	If this Act does not receive the vote necessary for immediate
352	352	effect, this Act takes effect September 1, 2013.