Texas Tax Code - TAX § 31.061. Payment of Taxes Assessed Against Real Property by Conveyance to Taxing Unit of Property

(a) An owner of real property may, subject to the approval of the governing body of all of the taxing units, by deed convey the property to the taxing unit that is owed the largest amount of the taxes, penalties, and interest assessed against the property in payment of the taxes, including delinquent taxes, penalties, and interest assessed against the property by each taxing unit.  The taxing unit acquiring the property holds title to the property on behalf of each taxing unit.  The lien of each taxing unit on the property conveyed is extinguished at the time of the conveyance.  The taxing unit acquiring the property may, subject to the approval of the governing body of another taxing unit, by deed convey the property to that taxing unit.  The taxing unit acquiring the property holds title to the property on behalf of each taxing unit.

(b) A taxing unit acquiring property under this section may sell the property.  The sale may be conducted in a manner provided by Section 34.05 .  If the taxing unit sells the property within six months after the date the owner conveys the property, the taxing unit shall pay to each taxing unit its proportionate share of the sale proceeds according to each taxing unit's share of the total amount of the taxes, penalties, and interest owed at the time of the acquisition.

(c) A taxing unit that does not sell property acquired under this section within six months after the date the owner conveys the property shall pay to each taxing unit its proportionate share, as determined under Subsection (b), of the appraised market value of the property as shown on the most recent tax roll, less the value of all encumbrances burdening the property.  On making the payment provided by this subsection, the taxing unit owns the property outright and not on behalf of each taxing unit.  The period during which a taxing unit may hold title to the property on behalf of each taxing unit may be extended subject to the approval of the governing body of each taxing unit.

(d) The collector shall credit against the taxes, penalties, and interest owed each taxing unit:

(1) the taxing unit's share, as determined under Subsection (b), of the sale price if the property is sold within six months after the date the owner conveys the property;  or

(2) the taxing unit's share, as determined under Subsection (b), of the appraised market value of the property as shown on the most recent tax roll, less the value of all encumbrances burdening the property, if the property is not sold within six months after the date the owner conveys the property.

(e) The owner remains personally liable to each taxing unit to the extent the amount of the taxes, penalties, and interest owed each taxing unit exceeds the amount credited under Subsection (d).  The owner is entitled to a refund from each taxing unit to the extent the amount credited under Subsection (d) exceeds the amount of the taxes, penalties, and interest owed the taxing unit.

(f) A conveyance of property to a taxing unit under this section is voidable by the taxing unit at any time that the taxing unit owns the property and determines that the condition of the property on the date the owner conveyed it was or may have been in violation of a federal or state law, regulation, rule, or order.  If the taxing unit voids the conveyance:

(1) the taxing unit shall execute a quitclaim deed of the property to the owner, file the deed in the county records, and give notice of the deed and its filing to the owner;

(2) the collector shall remove the credit against the taxes, penalties, and interest owed each taxing unit made under this section;

(3) a taxing unit that does not acquire the property shall refund the payment made to it by the taxing unit that acquires the property and reinstate the taxes, penalties, and interest owed the taxing unit;  and

(4) the lien of each taxing unit is reinstated as of the date it originally attached.


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