By: Carona, et al.	S.B. No. 247
	(Miller of Comal, Oliveira)

	A BILL TO BE ENTITLED
	AN ACT
	relating to the transfer of an ad valorem tax lien; providing an
	administrative penalty.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Subsection (c), Section 351.0021, Finance Code,
	is amended to read as follows:
	(c)  A property tax lender or any successor in interest may
	not charge:
	(1)  any fee, other than interest, after closing in
	connection with the transfer of a tax lien unless the fee is
	expressly authorized under this section; or
	(2)  any interest that is not expressly authorized
	under Section 32.06, Tax Code.
	SECTION 2.  Subchapter A, Chapter 351, Finance Code, is
	amended by adding Sections 351.0022 and 351.0023 to read as
	follows:
	Sec. 351.0022.  WAIVER PROHIBITED. Except as specifically
	permitted by this chapter or Chapter 32, Tax Code, a property owner
	may not waive or limit a requirement imposed on a property tax
	lender by this chapter.
	Sec. 351.0023.  SOLICITATION OF LOANS; NOTICE. (a)  A
	property tax lender who solicits property tax loans by mail,
	e-mail, or other print or electronic media shall include on the
	first page of all solicitation materials, in at least 12-point
	boldface type, a notice substantially similar to the following:
	"YOUR TAX OFFICE MAY OFFER DELINQUENT TAX INSTALLMENT PLANS THAT
	MAY BE LESS COSTLY TO YOU. YOU CAN REQUEST INFORMATION ABOUT THE
	AVAILABILITY OF THESE PLANS FROM THE TAX OFFICE."
	(b)  A property tax lender who solicits property tax loans by
	broadcast media, including a television or radio broadcast, shall
	state the following in the broadcast:  "YOUR TAX OFFICE MAY OFFER
	DELINQUENT TAX INSTALLMENT PLANS THAT MAY BE LESS COSTLY TO YOU.
	YOU CAN REQUEST INFORMATION ABOUT THE AVAILABILITY OF THESE PLANS
	FROM THE TAX OFFICE."
	(c)  A property tax lender may not, in any manner, advertise
	or cause to be advertised a false, misleading, or deceptive
	statement or representation relating to a rate, term, or condition
	of a property tax loan.
	(d)  A property tax lender who refers to a rate or charge in
	an advertisement shall state the rate or charge fully and clearly.
	If the rate or charge is a rate of finance charge, the advertisement
	must include the annual percentage rate and specifically refer to
	the rate as an "annual percentage rate."  The advertisement must
	state that the annual percentage rate may be increased after the
	contract is executed, if applicable.  The advertisement may not
	refer to any other rate, except that a simple annual rate that is
	applied to the unpaid balance of a property tax loan may be stated
	in conjunction with, but not more conspicuously than, the annual
	percentage rate.
	(e)  If an advertisement for a property tax loan includes the
	number of payments, period of repayment, amount of any payment, or
	amount of any finance charges, the advertisement must, in addition
	to any applicable requirements of Subsection (d), include:
	(1)  the terms of repayment, including the repayment
	obligations over the full term of the loan and any balloon payment;
	(2)  the annual percentage rate, and must refer to that
	rate as the annual percentage rate; and
	(3)  a statement that the lender may increase the
	annual percentage rate after the contract is executed, if
	applicable.
	(f)  The finance commission may adopt rules to implement and
	enforce this section.
	(g)  Notwithstanding Section 14.251, the commissioner may
	assess an administrative penalty under Subchapter F, Chapter 14,
	against a property tax lender who violates this section, regardless
	of whether the violation is knowing or wilful.
	SECTION 3.  Section 351.003, Finance Code, is amended to
	read as follows:
	Sec. 351.003.  SECONDARY MARKET TRANSACTIONS. (a)  Except
	as provided by Subsection (b), this [This] chapter does not
	prohibit a property tax lender from receiving compensation from a
	party other than the property tax loan applicant for the sale,
	transfer, assignment, or release of rights on the closing of a
	property tax loan transaction.
	(b)  A person may not sell, transfer, assign, or release
	rights to a property tax loan to a person who is not licensed under
	Section 351.051 or exempt from the application of this chapter
	under Section 351.051(c).
	(c)  The finance commission shall adopt rules to implement
	this section.
	SECTION 4.  Subsection (c), Section 351.051, Finance Code,
	is amended to read as follows:
	(c)  Except as provided by Section 351.003, this [This]
	chapter does not apply to:
	(1)  any of the following entities or an employee of any
	of the following entities, if the employee is acting for the benefit
	of the employer:
	(A)  a bank, savings bank, or savings and loan
	association, or a subsidiary or an affiliate of a bank, savings
	bank, or savings and loan association; or
	(B)  a state or federal credit union, or a
	subsidiary, affiliate, or credit union service organization of a
	state or federal credit union; or
	(2)  an individual who:
	(A)  is related to the property owner within the
	second degree of consanguinity or affinity, as determined under
	Chapter 573, Government Code [makes a property tax loan from the
	individual's own funds to a spouse, former spouse, or persons in the
	lineal line of consanguinity of the individual lending the money];
	or
	(B)  makes five or fewer property tax loans in any
	consecutive 12-month period from the individual's own funds.
	SECTION 5.  Subsection (a), Section 351.054, Finance Code,
	is amended to read as follows:
	(a)  A transferee of a tax lien must include with the sworn
	document executed by the borrower and filed with the collector of a
	taxing unit under Section 32.06(a-1), Tax Code, the information
	required by this section.
	SECTION 6.  The heading to Section 32.06, Tax Code, is
	amended to read as follows:
	Sec. 32.06.  PROPERTY TAX LOANS; TRANSFER OF TAX LIEN.
	SECTION 7.  Subdivision (2), Subsection (a), Section 32.06,
	Tax Code, is amended to read as follows:
	(2)  "Transferee" means a person who is licensed under
	Chapter 351, Finance Code, or is exempt from the application of that
	chapter under Section 351.051(c), Finance Code, and who is:
	(A)  authorized to pay the taxes of another; or
	(B)  a successor in interest to a tax lien that is
	transferred under this section.
	SECTION 8.  Section 32.06, Tax Code, is amended by amending
	Subsections (a-1), (a-2), (a-3), (a-4), (b), (c), (d), (e-1),
	(f-4), (g), (h), (i), and (j) and adding Subsections (a-5), (a-6),
	(a-7), (a-8), (a-9), and (l) to read as follows:
	(a-1)  A property owner [person] may authorize another
	person to pay the taxes imposed by a taxing unit on the owner's
	[person's] real property by executing and filing with the collector
	for the taxing unit:
	(1)  a sworn document stating:
	(A)  the authorization for payment of the taxes;
	(B)  the name and street address of the transferee
	authorized to pay the taxes of the property owner;
	(C)  a description of the property by street
	address, if applicable, and legal description; and
	(D)  notice has been given to the property owner
	that if the property owner is [age 65 or] disabled, the property
	owner may be eligible for a tax deferral under Section 33.06; and
	(2)  the information required by Section 351.054,
	Finance Code.
	(a-2)  Except as provided by Subsection (a-8), a [A] tax lien
	may be transferred to the person who pays the taxes on behalf of the
	property owner under the authorization described by Subsection
	(a-1) for:
	(1)  taxes that are delinquent at the time of payment;
	or
	(2)  taxes that are due but not delinquent at the time
	of payment if[:
	[(A)]  the property is not subject to a recorded
	mortgage lien[; or
	[(B)     a tax lien transfer authorized by the
	property owner has been executed and recorded for one or more prior
	years on the same property and the property owner has executed an
	authorization consenting to a transfer of the tax liens for both the
	taxes on the property that are not delinquent and taxes on the
	property that are delinquent in the manner provided by Subsection
	(a-1)].
	(a-3)  A person who is 65 years of age or older may not
	authorize a transfer of a tax lien on real property on which the
	person is eligible to claim an exemption from taxation under
	Section 11.13(c).  [If the property owner has executed an
	authorization under Subsection (a-2)(2)(B) consenting to a
	transfer of the tax liens for both the taxes on the property that
	are not delinquent and taxes on the property that are delinquent,
	the collector's certification under Subsection (b) may be in one
	document.]
	(a-4)  The Finance Commission of Texas shall:
	(1)  prescribe the form and content of an appropriate
	disclosure statement to be provided to a property owner before the
	execution of a tax lien transfer;
	(2)  adopt rules relating to the reasonableness of
	closing costs, fees, and other charges permitted under this
	section; [and]
	(3)  by rule prescribe the form and content of the sworn
	document under Subsection (a-1) and the certified statement under
	Subsection (b); and
	(4)  by rule prescribe the form and content of a request
	a lender with an existing recorded lien on the property must use to
	request a payoff statement and the transferee's response to the
	request, including the period within which the transferee must
	respond.
	(a-5)  At the time the transferee provides the disclosure
	statement required by Subsection (a-4)(1), the transferee must also
	describe the type and approximate cost range of each additional
	charge or fee that the property owner may incur in connection with
	the transfer.
	(a-6)  Notwithstanding Subsection (f-3), a lender described
	by Subsection (a-4)(4) may request a payoff statement before the
	tax loan becomes delinquent.  The Finance Commission of Texas by
	rule shall require a transferee who receives a request for a payoff
	statement to deliver the requested payoff statement on the
	prescribed form within a period prescribed by finance commission
	rule.  The prescribed period must allow the transferee at least
	seven business days after the date the request is received to
	deliver the payoff statement. The consumer credit commissioner may
	assess an administrative penalty under Subchapter F, Chapter 14,
	Finance Code, against a transferee who wilfully fails to provide
	the payoff statement as prescribed by finance commission rule.
	(a-7)  A contract between a transferee and a property owner
	that purports to authorize payment of taxes that are not delinquent
	or due at the time of the authorization, or that lacks the
	authorization described by Subsection (a-1), is void.
	(a-8)  A tax lien may not be transferred to the person who
	pays the taxes on behalf of the property owner under the
	authorization described by Subsection (a-1) if the real property:
	(1)  has been financed, wholly or partly, with a grant
	or below market rate loan provided by a governmental program or
	nonprofit organization and is subject to the covenants of the grant
	or loan; or
	(2)  is encumbered by a lien recorded under Subchapter
	A, Chapter 214, Local Government Code.
	(a-9)  The Finance Commission of Texas may adopt rules to
	implement Subsection (a-8).
	(b)  If a transferee authorized to pay a property owner's
	taxes under [pursuant to] Subsection (a-1) pays the taxes and any
	penalties, [and] interest, and collection costs imposed, the
	collector shall issue a tax receipt to that transferee.  In
	addition, the collector or a person designated by the collector
	shall certify that the taxes and any penalties, [and] interest, and
	collection costs on the subject property [and collection costs]
	have been paid by the transferee on behalf of the property owner and
	that the taxing unit's tax lien is transferred to that
	transferee.  The collector shall attach to the certified statement
	the collector's seal of office or sign the statement before a notary
	public and deliver a tax receipt and the certified statement
	attesting to the transfer of the tax lien to the transferee within
	30 days.  The tax receipt and certified statement may be combined
	into one document.  The collector shall identify in a discrete
	field in the applicable property owner's account the date of the
	transfer of a tax lien transferred under this section.  When a tax
	lien is released, the transferee shall file a release with the
	county clerk of each county in which the property encumbered by the
	lien is located for recordation by the clerk and send a copy to the
	collector.  The transferee may charge the property owner a
	reasonable fee for filing the release.
	(c)  Except as otherwise provided by this section, the
	transferee of a tax lien [and any successor in interest] is entitled
	to foreclose the lien[:
	[(1)]  in the manner provided by law for foreclosure of
	tax liens[; or
	[(2)     in the manner specified in Section 51.002,
	Property Code, and Section 32.065, after the transferee or a
	successor in interest obtains a court order for foreclosure under
	Rule 736, Texas Rules of Civil Procedure, except as provided by
	Subsection (c-1) of this section, if the property owner and the
	transferee enter into a contract that is secured by a lien on the
	property].
	(d)  A transferee shall record a tax lien transferred as
	provided by this section with the certified statement attesting to
	the transfer of the tax lien as described by Subsection (b) in the
	deed records of each county in which the property encumbered by the
	lien is located.
	(e-1)  A transferee of a tax lien may not charge a fee for any
	expenses arising after the closing of a loan secured by a tax lien
	transferred under this section, including collection costs, except
	for:
	(1)  interest expressly authorized under this section;
	(2)  the fees for filing the release of the tax lien
	under Subsection (b);
	(3)  the fee for providing a payoff statement under
	Subsection (f-3);
	(4)  the fee for providing information regarding the
	current balance owed by the property owner under Subsection (g);
	and
	(5)  the fees expressly authorized under Section
	351.0021, Finance Code.
	(f-4)  Failure to comply with Subsection (b-1), (f), or (f-1)
	does not invalidate a tax lien transferred under this section [this
	chapter, a contract lien,] or a deed of trust.
	(g)  At any time after the end of the six-month period
	specified by Subsection (f) and before a notice of foreclosure of
	the transferred tax lien is sent, the transferee of the tax lien [or
	the holder of the tax lien] may require the property owner to
	provide written authorization and pay a reasonable fee before
	providing information regarding the current balance owed by the
	property owner to the transferee [or the holder of the tax lien].
	(h)  A mortgage servicer who pays a property tax loan secured
	by a [transferred] tax lien transferred under this section becomes
	subrogated to all rights in the lien.
	(i)  A judicial [Except as provided by Section 33.445, a]
	foreclosure of a tax lien transferred under [as provided by] this
	section may not be instituted within one year from the date on which
	the lien is recorded in all counties in which the property is
	located, unless the contract between the owner of the property and
	the transferee provides otherwise.
	(j)  After one year from the date on which a tax lien
	transferred under [as provided by] this section is recorded in all
	counties in which the property is located, the transferee of the
	lien may foreclose the lien in the manner provided by Subsection (c)
	unless the [a] contract between the transferee [holder of the lien]
	and the owner of the property encumbered by the lien provides
	otherwise. The proceeds of a sale following a judicial foreclosure
	as provided by this subsection shall be applied first to the payment
	of court costs, then to payment of the judgment, including accrued
	interest, and then to the payment of any attorney's fees fixed in
	the judgment.  Any remaining proceeds shall be paid to other
	holders of liens on the property in the order of their priority and
	then to the person whose property was sold at the tax sale.
	(l)  Except as specifically provided by this section, a
	property owner cannot waive or limit any requirement imposed on a
	transferee by this section.
	SECTION 9.  Section 32.065, Tax Code, is amended by amending
	Subsection (b) and adding Subsection (i) to read as follows:
	(b)  Notwithstanding any agreement to the contrary, a
	contract entered into under Subsection (a) between a transferee and
	the property owner under Section 32.06 that is secured by a priority
	lien on the property shall provide for [a power of sale and]
	foreclosure in the manner provided by Section 32.06(c)
	[32.06(c)(2)] and:
	(1)  an event of default;
	(2)  notice of acceleration; and
	(3)  recording of the deed of trust or other instrument
	securing the contract entered into under Subsection (a) in each
	county in which the property is located.[;
	[(4)     recording of the sworn document and affidavit
	attesting to the transfer of the tax lien;
	[(5)     requiring the transferee to serve foreclosure
	notices on the property owner at the property owner's last known
	address in the manner provided by Section 32.06(c)(2) or by a
	commercially reasonable delivery service that maintains verifiable
	records of deliveries for at least five years from the date of
	delivery; and
	[(6)     requiring, at the time the foreclosure notices
	required by Subdivision (5) are served on the property owner, the
	transferee to serve a copy of the notice of sale in the same manner
	on the mortgage servicer or the holder of all recorded real property
	liens encumbering the property that includes on the first page, in
	14-point boldfaced type or 14-point uppercase typewritten letters,
	a statement that reads substantially as follows:     "PURSUANT TO
	TEXAS TAX CODE SECTION 32.06, THE FORECLOSURE SALE REFERRED TO IN
	THIS DOCUMENT IS A SUPERIOR TRANSFER TAX LIEN SUBJECT TO RIGHT OF
	REDEMPTION UNDER CERTAIN CONDITIONS.     THE FORECLOSURE IS SCHEDULED
	TO OCCUR ON THE (DATE)."]
	(i)  An agreement under this section that attempts to create
	a lien for the payment of taxes that are not delinquent or due at the
	time the property owner executes the sworn document under Section
	32.06(a-1) is void.
	SECTION 10.  Subsection (c-1), Section 32.06, Tax Code, is
	repealed.
	SECTION 11.  The changes in law made by this Act apply only
	to a contract entered into on or after the effective date of this
	Act. A contract entered into before that date is governed by the
	law in effect immediately before the effective date of this Act, and
	that law is continued in effect for that purpose.
	SECTION 12.  This Act takes effect immediately if it
	receives a vote of two-thirds of all the members elected to each
	house, as provided by Section 39, Article III, Texas Constitution.
	If this Act does not receive the vote necessary for immediate
	effect, this Act takes effect September 1, 2013.