85R2214 CJC-D
By: Dutton H.B. No. 1833
A BILL TO BE ENTITLED
AN ACT
relating to the exemption of real property from ad valorem taxation
during the period between the issuance of a judgment foreclosing a
tax lien on the property and the sale of the property at a tax sale
conducted under that judgment or the payment by the property owner
of that judgment before the sale, as applicable.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by
adding Section 11.281 to read as follows:
Sec. 11.281. PROPERTY SUBJECT TO FORECLOSURE JUDGMENT. (a)
Property is exempt from taxation by a taxing unit during the period
of time beginning on the date a judgment foreclosing a tax lien on
the property is entered and ending:
(1) on the date the property is sold to a purchaser or
bid off to a taxing unit at a tax sale conducted under that
judgment; or
(2) if the property owner pays the amount of the
judgment before the property is sold or bid off, on the date the
owner pays the judgment.
(b) If the property owner pays the amount of the judgment
before the property is sold or redeems the property in the manner
provided by Section 34.21, a penalty is imposed on the property in
an amount equal to the amount of the taxes that would have been
imposed on the property during the period of time the property was
exempted from taxation under Subsection (a), plus interest at an
annual rate of seven percent calculated from the dates on which the
taxes would have become due. A tax lien attaches to the property on
the date the property owner pays the judgment or redeems the
property, as applicable, to secure payment of the penalty and
interest imposed under this subsection. The lien exists in favor of
all taxing units for which the penalty is imposed.
SECTION 2. Section 11.43(a), Tax Code, is amended to read as
follows:
(a) To receive an exemption, a person claiming the
exemption, other than an exemption authorized by Section 11.11,
11.12, 11.14, 11.145, 11.146, 11.15, 11.16, 11.161, [or] 11.25, or
11.281 [of this code], must apply for the exemption. To apply for
an exemption, a person must file an exemption application form with
the chief appraiser for each appraisal district in which the
property subject to the claimed exemption has situs.
SECTION 3. Section 33.52(d), Tax Code, is amended to read as
follows:
(d) Except as provided by Section 11.281 [34.05(k)], a
taxing unit's claim for taxes that become delinquent after the date
of the judgment is not affected by the entry of the judgment or a tax
sale conducted under that judgment. Those taxes may be collected by
any remedy provided by this title.
SECTION 4. Section 34.01(l), Tax Code, is amended to read as
follows:
(l) Notwithstanding that property is bid off to a taxing
unit under this section, a taxing unit that established a tax lien
in the suit may continue to enforce collection of any amount for
which a former owner of the property is liable to the taxing unit[,
including any post-judgment taxes, penalties, and interest,] in any
other manner provided by law.
SECTION 5. Sections 34.05(j) and (k), Tax Code, are amended
to read as follows:
(j) In lieu of a sale pursuant to Subsections (c) and (d),
the taxing unit that purchased the property may sell the property at
a private sale for an amount equal to or greater than its market
value, as shown by the most recent certified appraisal roll, if:
(1) the [sum of the] amount of the judgment [plus
post-judgment taxes, penalties, and interest] owing against the
property exceeds the market value of the property; and
(2) each taxing unit entitled to receive proceeds of
the sale consents to the sale for that amount.
(k) A sale under Subsection (j) discharges and extinguishes
all liens foreclosed by the judgment [and, with the exception of the
prorated tax for the current year that is assessed under Section
26.10, the liens for post-judgment taxes that accrued from the date
of judgment until the date the taxing unit purchased the property].
The presiding officer of a taxing unit selling real property under
Subsection (j) shall execute a deed to the property conveying to the
purchaser the right, title, and interest acquired or held by each
taxing unit that was a party to the judgment foreclosing tax liens
on the property. The conveyance is subject to any remaining right
of redemption at the time of the sale and to the purchaser's
obligation to pay the prorated taxes for the current year as
provided by Section 26.10. The deed must recite that the liens
foreclosed by the judgment [and the post-judgment tax liens] are
discharged and extinguished by virtue of the conveyance.
SECTION 6. The changes in law made by this Act apply only to
an ad valorem tax year that begins on or after January 1, 2018.
SECTION 7. This Act takes effect January 1, 2018, but only
if the constitutional amendment proposed by the 85th Legislature,
Regular Session, 2017, authorizing the legislature to exempt real
property from ad valorem taxation during the period between the
issuance of a judgment foreclosing a tax lien on the property and
the sale of the property at a tax sale conducted under that judgment
or the payment by the property owner of that judgment before the
sale, as applicable, is approved by the voters. If that
constitutional amendment is not approved by the voters, this Act
has no effect.