bill protecting buyers relying on a wrong tax certificate

The text as introduced · 449 words

89R12974 JBD-F

By: Darby
H.B. No. 3710

A BILL TO BE ENTITLED

AN ACT

relating to the effect of a tax certificate accompanying a transfer

of certain property.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 31.08, Tax Code, is amended by amending

Subsection (b) and adding Subsection (d) to read as follows:

(b) Except as provided by Subsections [ Subsection ] (c) and

(d) [ of this section ], if a person transfers property accompanied

by a tax certificate that erroneously indicates that no delinquent

taxes, penalties, or interest are due a taxing unit on the property

or that fails to include property because of its omission from an

appraisal roll as described under Section 25.21, the taxing unit's

tax lien on the property , including, if applicable, the tax lien

securing the payment of any delinquent taxes, penalties, or

interest that are subsequently determined to be due the taxing unit

on the property because a residence homestead exemption was

erroneously allowed for the property and was subsequently canceled,

is extinguished and the purchaser of the property is absolved of

liability to the taxing unit for delinquent taxes, penalties, or

interest on the property or for taxes based on omitted property.

The person who was liable for the tax for the year the tax was

imposed or the property was omitted remains personally liable for

the tax and for any penalties or interest.

(d) A tax certificate that accompanies a transfer of

property and erroneously indicates that no delinquent taxes,

penalties, or interest are due a taxing unit on the property because

a residence homestead exemption was erroneously allowed for the

property and was subsequently canceled does not extinguish the tax

lien securing the payment of any delinquent taxes, penalties, or

interest that are subsequently determined to be due the taxing unit

on the property if the chief appraiser or the collector for a taxing

unit determines that the transfer of the property occurred between:

(1) two individuals who are related within the first

degree by consanguinity or affinity, as determined under Chapter

573, Government Code;

(2) an employer and an employee;

(3) a parent company and a subsidiary of that parent

company; or

(4) a trust and a beneficiary of that trust.

SECTION 2. The change in law made by this Act applies only

to a tax certificate issued on or after the effective date of this

Act. A tax certificate issued before the effective date of this Act

is covered by the law in effect on the date of issuance, and the

former law is continued in effect for that purpose.

SECTION 3. This Act takes effect September 1, 2025.