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