Bill Text: TX SB762 | 2011-2012 | 82nd Legislature | Enrolled

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Bill Title: Relating to the transfer of an ad valorem tax lien; providing for the imposition of an administrative penalty.

Sponsorship: Partisan Bill (Republican 2)

Status: (Passed) 2011-06-17 - Effective on 9/1/11 [SB762 Detail]

Download: Texas-2011-SB762-Enrolled.html

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S.B. No. 762

AN ACT
relating to the transfer of an ad valorem tax lien; providing for
the imposition of an administrative penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 32.06, Tax Code, is amended by amending
Subsections (a-3), (d-1), (f-3), and (j) and adding Subsections
(e-1) and (e-2) to read as follows:
(a-3) 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 [collector shall certify]
in one document [the transfer of the liens for all the taxes].
(d-1) A right of rescission described by 12 C.F.R. Section
226.23 applies to a [tax lien] transfer under this section of a tax
lien on residential property owned and used by the property owner
for personal, family, or household purposes.
(e-1) A transferee of a tax lien may not charge a fee for any
expenses arising after closing, 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.
(e-2) The contract between the property owner and the
transferee may provide for interest for default, in addition to the
interest permitted under Subsection (e), if any part of the
installment remains unpaid after the 10th day after the date the
installment is due, including Sundays and holidays. If the lien
transferred is on residential property owned and used by the
property owner for personal, family, or household purposes, the
additional interest may not exceed five cents for each $1 of a
scheduled installment.
(f-3) Notwithstanding any contractual agreement with the
property owner, the transferee of a tax lien must provide the payoff
information required by this section to the greatest extent
permitted by 15 U.S.C. Section 6802 and 12 C.F.R. Part 216. The
payoff statement must meet the requirements of a payoff statement
defined by Section 12.017, Property Code. A transferee may charge a
reasonable fee for a payoff statement that is requested after an
initial payoff statement is provided. However, a transferee is not
required to release payoff information pursuant to a notice under
Subsection (f-1) unless the notice contains the information
prescribed by the Finance Commission of Texas.
(j) After one year from the date on which a tax lien
transferred 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 a
contract between the holder of the lien and the owner of the
property encumbered by the lien provides otherwise. [If a
foreclosure suit results in foreclosure of the lien, the transferee
is entitled to recover attorney's fees in an amount not to exceed 10
percent of the judgment.] 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.
SECTION 2. Subsection (b), Section 33.445, Tax Code, is
amended to read as follows:
(b) In consideration of the payment by the transferee of
those taxes and charges, each joined taxing unit shall transfer its
tax lien to the transferee in the form and manner provided by
Section 32.06(b) and enter its disclaimer in the suit. The transfer
of a tax lien under this subsection does not require authorization
by the property owner.
SECTION 3. Subchapter A, Chapter 351, Finance Code, is
amended by adding Section 351.0021 to read as follows:
Sec. 351.0021. AUTHORIZED CHARGES. (a) The contract
between a property tax lender and a property owner may require the
property owner to pay the following costs after closing:
(1) a reasonable fee for filing the release of a tax
lien authorized under Section 32.06(b), Tax Code;
(2) a reasonable fee for a payoff statement authorized
under Section 32.06(f-3), Tax Code;
(3) a reasonable fee for providing information
regarding the current balance owed by the property owner authorized
under Section 32.06(g), Tax Code;
(4) reasonable and necessary attorney's fees,
recording fees, and court costs for actions that are legally
required to respond to a suit filed under Chapter 33, Tax Code, or
to perform a foreclosure, including fees required to be paid to an
official and fees for an attorney ad litem;
(5) to the extent permitted by the United States
Bankruptcy Code, attorney's fees and court costs for services
performed after the property owner files a voluntary bankruptcy
petition;
(6) a reasonable fee for title examination and
preparation of an abstract of title by an attorney, a title company,
or a property search company authorized to do business in this
state;
(7) a processing fee for insufficient funds, as
authorized under Section 3.506, Business & Commerce Code;
(8) a fee for collateral protection insurance, as
authorized under Chapter 307;
(9) a prepayment penalty, unless the lien transferred
is on residential property owned and used by the property owner for
personal, family, or household purposes;
(10) recording expenses incurred in connection with a
modification necessary to preserve a borrower's ability to avoid a
foreclosure proceeding; and
(11) fees for copies of transaction documents
requested by the property owner.
(b) Notwithstanding Subsection (a)(11), a property tax
lender shall provide a property owner:
(1) one free copy of the transaction documents at
closing; and
(2) an additional free copy of the transaction
documents on the property owner's request following closing.
(c) A property tax lender 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.
(d) Except for charges authorized under Subsections (a)(1),
(2), (3), (9), and (11), any amount charged by a property tax lender
after closing must be for services performed by a person that is not
an employee of the property tax lender.
(e) The finance commission may adopt rules implementing and
interpreting this section.
SECTION 4. Section 351.006, Finance Code, is amended to
read as follows:
Sec. 351.006. ENFORCEMENT. (a) In addition to any other
applicable enforcement provisions, Subchapters E, F, and G, Chapter
14, apply to a violation of this chapter or Section 32.06 or 32.065,
Tax Code, in connection with property tax loans.
(b) Notwithstanding Section 14.251, the commissioner may
assess an administrative penalty under Subchapter F, Chapter 14,
against a person who violates Section 32.06(b-1), Tax Code,
regardless of whether the violation is knowing or wilful.
SECTION 5. Subsection (a), Section 351.051, Finance Code,
is amended to read as follows:
(a) A person must hold a license issued under this chapter
to:
(1) engage in the business of making, transacting, or
negotiating property tax loans; or
(2) contract for, charge, or receive, directly or
indirectly, in connection with a property tax loan subject to this
chapter, a charge, including interest, compensation,
consideration, or another expense, authorized under this chapter or
Chapter 32, Tax Code [that in the aggregate exceeds the charges
authorized under other law].
SECTION 6. (a) The Finance Commission of Texas shall
conduct a study regarding the fees, costs, interest, and other
expenses charged to property owners by property tax lenders in
conjunction with the transfer of property tax liens and the payoff
of loans secured by property tax liens.
(b) Not later than June 1, 2012, the Finance Commission of
Texas shall submit to the legislature a report containing the
findings of the study conducted under Subsection (a) of this
section and any recommendations for legislative changes.
SECTION 7. The changes in law made by this Act apply only to
the transfer of an ad valorem tax lien that occurs on or after the
effective date of this Act. A transfer of an ad valorem tax lien
that occurs before the effective date of this Act is governed by the
law in effect at the time the transfer occurred, and the former law
is continued in effect for that purpose.
SECTION 8. This Act takes effect September 1, 2011.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 762 passed the Senate on
March 24, 2011, by the following vote: Yeas 31, Nays 0; and that
the Senate concurred in House amendments on May 25, 2011, by the
following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 762 passed the House, with
amendments, on May 23, 2011, by the following vote: Yeas 140,
Nays 1, two present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor