| 1 | 1 | | 85R4188 SMH-F |
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| 2 | 2 | | By: Walle H.B. No. 3725 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the priority of a transferred ad valorem tax lien. |
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| 8 | 8 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 9 | 9 | | SECTION 1. Sections 32.05(b) and (b-1), Tax Code, are |
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| 10 | 10 | | amended to read as follows: |
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| 11 | 11 | | (b) Except as provided by Subsections (b-1) and |
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| 12 | 12 | | [Subsection] (c)(1), a tax lien provided by this chapter takes |
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| 13 | 13 | | priority over: |
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| 14 | 14 | | (1) the claim of any creditor of a person whose |
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| 15 | 15 | | property is encumbered by the lien; |
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| 16 | 16 | | (2) the claim of any holder of a lien on property |
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| 17 | 17 | | encumbered by the tax lien, including any lien held by a property |
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| 18 | 18 | | owners' association, homeowners' association, condominium unit |
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| 19 | 19 | | owners' association, or council of owners of a condominium regime |
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| 20 | 20 | | under a restrictive covenant, condominium declaration, master |
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| 21 | 21 | | deed, or other similar instrument that secures regular or special |
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| 22 | 22 | | maintenance assessments, fees, dues, interest, fines, costs, |
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| 23 | 23 | | attorney's fees, or other monetary charges against the property; |
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| 24 | 24 | | and |
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| 25 | 25 | | (3) any right of remainder, right or possibility of |
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| 26 | 26 | | reverter, or other future interest in, or encumbrance against, the |
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| 27 | 27 | | property, whether vested or contingent. |
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| 28 | 28 | | (b-1) The priority given to a tax lien by Subsection (b) |
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| 29 | 29 | | prevails, regardless of whether the debt, lien, future interest, or |
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| 30 | 30 | | other encumbrance existed before attachment of the tax lien, except |
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| 31 | 31 | | that a tax lien is inferior to a debt, lien, future interest, or |
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| 32 | 32 | | other encumbrance that existed before the attachment of the tax |
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| 33 | 33 | | lien if the tax lien is transferred to a transferee and: |
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| 34 | 34 | | (1) the closing costs of the loan secured by the |
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| 35 | 35 | | transferred tax lien exceeded $500; or |
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| 36 | 36 | | (2) discount points were charged in connection with |
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| 37 | 37 | | the loan secured by the transferred tax lien. |
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| 38 | 38 | | SECTION 2. Section 32.065(b), Tax Code, is amended to read |
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| 39 | 39 | | as follows: |
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| 40 | 40 | | (b) Notwithstanding any agreement to the contrary, a |
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| 41 | 41 | | contract entered into under Subsection (a) between a transferee and |
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| 42 | 42 | | the property owner under Section 32.06 that is secured by a |
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| 43 | 43 | | [priority] lien on the property shall provide for foreclosure in |
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| 44 | 44 | | the manner provided by Section 32.06(c) and: |
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| 45 | 45 | | (1) an event of default; |
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| 46 | 46 | | (2) notice of acceleration; and |
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| 47 | 47 | | (3) recording of the deed of trust or other instrument |
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| 48 | 48 | | securing the contract entered into under Subsection (a) in each |
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| 49 | 49 | | county in which the property is located. |
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| 50 | 50 | | SECTION 3. The change in law made by this Act applies only |
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| 51 | 51 | | to a tax lien transferred on or after the effective date of this |
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| 52 | 52 | | Act. A tax lien transferred before the effective date of this Act |
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| 53 | 53 | | is governed by the law in effect immediately before the effective |
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| 54 | 54 | | date of this Act, and that law is continued in effect for that |
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| 55 | 55 | | purpose. |
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| 56 | 56 | | SECTION 4. This Act takes effect September 1, 2017. |
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