Ruling Addresses Property Tax Question
Attorney General John Coryn issues a ruling on foreclosure sales.
In Opinion No. JC-0377 issued May 11, the attorney general found that a taxing unit does not have authority to adopt a "blanket" resolution for reselling tax foreclosure property as directed by the taxing unit's private tax attorneys.
The Harris County Attorney's Office had asked about a "blanket" or omnibus resolution for directing such property sales by its tax attorneys. Harris County, City of Houston, and Houston Independent School District had entered into an interlocal agreement about the sale, management, and resale of seized or foreclosed property. Under the agreement, property for which a sufficient bid was not received at the original tax sale was bid off to Harris County. The county took title to the property for the use and benefit of itself, the city, and the school district. Instead of making requests by separate "property-specific" resolutions for the resale of these properties, the agreement authorized the Harris County Constables to re-sell at public sale any and all property struck off to Harris County, as requested by the county's tax collection attorneys.
The opinion held that "section 34.05(c) requires a taxing unit to direct the resale of specific properties. Thus, in the absence of legislative authority providing otherwise, a taxing unit may not delegate this authority to its private tax-collection attorneys." The opinion reviewed the Tax Code sections addressing foreclosure and sale of property with a tax lien.
Section 34.01 deals with the initial sale of property as ordered by a court's judgment. Such property "shall be sold by the officer charged with selling the property, unless otherwise directed by the taxing unit that requested the order of sale or by an authorized agent or attorney for that unit." The sale must "be conducted in the manner similar property is sold under execution except as otherwise provided by" subtitle E of the Tax Code. When a sufficient bid at the foreclosure sale is not received, the property is "bid off" to the taxing unit that requested the order of sale. The taxing unit takes title to the property in trust for itself and the other taxing units with established tax liens.
Section 34.05 explains how the taxing unit may resale property to which it has taken title at an initial foreclosure sale. The "taxing unit may sell the property at any time by public or private sale." The taxing unit by resolution of its governing body may request the sheriff or a constable to sell the property at a public sale. If the purchasing taxing unit has not sold the property within six months after the owner's right of redemption terminates, any taxing unit entitled to receive proceeds of the sale may request the sheriff or a constable to sell the property at a public sale. All public sales requested shall be conducted in the manner prescribed by the Texas Rules of Civil Procedure.
The attorney general found that Section 34.05(c) does not expressly require a governing body to adopt a separate resolution to request the resale of each property that the taxing unit acquires. He wrote "... while it may be advisable to adopt a separate resolution to request the resale of each property that a taxing unit acquires as a result of a 'bid off' at a tax-foreclosure sale, we do not believe that a taxing unit is required to do so under section 34.05(c) of the Tax Code." He added that a validly adopted resolution or order of a governmental unit remains in effect until set aside or superseded by another order.
"Thus, section 34.05(c) does not prohibit a taxing unit from adopting a standing resolution directing the sheriff or a constable to resell at a public sale foreclosed property the taxing unit acquires," the opinion noted. "However, the more significant issue raised with respect to the resolution at issue is the authority of a taxing unit to delegate its authority to direct the resale of specific property to its private tax-collection attorneys by providing that they instruct the sheriff or a constable as to when specific properties are sold."
The opinion held that Section 34.05(c) expressly requires the "taxing unit purchasing the property" to "request the sheriff or a constable to sell the property at a public sale." It stated: "Unless expressly authorized by the legislature, a governmental entity may not delegate its legislatively entrusted authority to another entity. Neither section 34.05(c) or any other statutory provision that we have found authorizes the taxing unit to delegate its property-resale-request authority."
The opinion added, "Moreover, when the legislature has intended to authorize a taxing unit's attorneys or other persons to act as agents for the taxing unit in the sale of foreclosed property, it has so expressly provided." The opinion cited Section 34.01(a), dealing with the initial sale of foreclosed property, as an example where the legislature directs that a taxing unit's authorized agent or attorney may request the sale.