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