OFFICE OF THE ATTORNEY GENERAL. ST*TE OF TEXAS JOHN CORNYN

May 26, 1999

The Honorable Yolanda de Leon Cameron County Attorney and Criminal District Attorney Cameron County Courthouse 974 East Harrison Street Brownsville, Texas 78520 Opinion No. JC-0058 Re: The effect of two 1997 amendments to section 34.06(b) of the Tax Code (RQ-0031)

Dear Ms. de Leon: In 1997, the legislature enacted two provisions amending section 34.06(b) ofthe Tax Code, Senate Bill 141 and House Bill 3306. You ask whether House Bill 3306 prevails over Senate Bill 141. The Code Construction Act provides that when amendments to the same statute are enacted inthe same session without reference to each other, the statutes must be harmonized ifpossible. See TEX. GOV’T CODEANN.9311.025(b) (Vernon 1998). Ifthe statutes are irreconcilable, the latest in date of enactment prevails. 

### Id. We conclude that the amendments to section 34.06(b) cannot be harmonized and that House Bill 3306, the later enacted provision, prevails. Subchapter A of chapter 34 of the Tax Code governs tax foreclosure sales. Pursuant to section 34.01 (c), aproperty subject to foreclosure may be sold to ataxing unit that is aparty to the judgment. See TEX. TAX CODE ANN. 5 34.01(c) (Vernon 1992). The taxing unit may resell the property atany time. See 

### id. 534.05 (Vernon 1992 & Supp. 1999). Section 34.06, the provision at issue in your request, governs the distribution ofthe proceeds of the resale of aproperty purchased by ataxing unit. Prior to the 1997 legislative session, section 34.06 of the Tax Code provided as follows: (a) The proceeds ofaresale ofproperty purchased by ataxing

unit at a tax foreclosure sale shall be paid to the purchasing taxing unit. (b) The purchasing taxing unit shall pay all costs and expenses of court and sale and shall distribute the remainder of theThe Honorable Yolanda de Leon - Page 2 (X-0058)

proceeds asprovided by Section 34.02 ofthis code for distribution of proceeds after payment of costs.’ In May 1995, the Texas Supreme Court ruled that section 34.06(b) requires a taxing authority to deposit excess proceeds from a sale with the registry of the trial court pursuant to section 34.02 of 

### theTax Code. 

### SeeSyntax,Inc. v.Hall, 899S.W.2d 189,192 (Tex. 1995). Under section 34.02, the Court held, “taxing authorities are to receive only taxes, penalties, and interest due. Under subsection (c), any excess is to be paid to the clerk of the court issuing the order of sale. There is no statutory authority under section 34.02 for distribution of excess proceeds to any taxing authority.” 

### Id. at 191. The Court also noted that “taxing authorities would only receive excess proceeds if, atthe end ofseven years, no claimant has established aright tothose funds under section 

### 34.03.” Id. In 1997, the legislature enacted two bills amending section 34.06, Senate Bill 141 andHouse Bill 3306. Senate Bill 141 amended section 34.06(b) as follows: The purchasing taxing unit shall pay allcosts and expenses of 

### court, [a&] sale, and 

### resale and,afterdeducting anamount equal to theamount thetaxing unithasreasonably spentfor themaintenance andpreservation oftheproperty, shall distribute the remainder ofthe proceeds asprovided by Section 34.02 ofthis code for distribution of proceeds after payment of costs. Act ofMay 23,1997,75th Leg., R.S., ch. 914, 5 3, 1997 Tex. Gen. Laws 2898,290O. Senate Bill 141 did not amend section 34.02. This enactment took effect on September 1, 1997. See 

### id. 57. House Bill 3306 amended section 34.06(b) as follows:

The purchasing taxing unit shall pay allcosts and expenses of court and sale and shall distribute the remainder of the proceeds 

### to each taxing unitparticipating inthesale inan amount equal to the proportion eachparticipant’s taxes,penalties, and interest bear to the total amount oftaxes,penalties, and interest dueallparticipants inthesale, lessanyamountspreviouslypaid ascostsontheproperty as defined under Section 34.21(i) [p 

### 11: Act ofMay 25,1997,75th Leg., R.S., ch. 906,s lo,1997 Tex. Gen. Laws 2854,2856. This bill also added section 34.21(i) tothe Tax Code, which defined the term “costs” to “include allthose amounts

‘ Asma&d by Act ofMay 26,1979,66th Leg., R.S., ch. 84 1, §1,1919 Tex. Gem Laws 2217,2299, amended by Act of May 23,1997,75th Leg., R.S., ch. 914, 5 3,1997 Tex. Gen. Laws 2898,290O; Act of May 25, 1997,75th Leg., R.S., ch. 906,# 10, 1997 Tex. Gen. Laws 2854,2856.The Honorable Yolanda de Le6n - Page 3 (X-0058)

reasonably expended by the purchaser or taxing unit in the maintenance, preservation, and safekeeping of the property, including but not limited to” items such as hazard insurance and improvements required by building standards or lease terms. See 

### id. 5 11. This enactment took effect on January 1, 1998. 

### Id. 5 14. Again, the Code Construction Act provides that when amendments to the same statute are enacted in the same session without reference to each other, the statutes must be harmonized if possible. See TEX.GOV’TCODEANN.fj311.025(b) (Vemon 1998). Ifthe statutes areirreconcilable, the latest in date ofenactment prevails. See 

### id. For purposes ofthis provision, the date of enactment isthe date on which the last legislative vote istaken on the bill enacting the statue. 

### Id. §311.025(d). We do not believe that these two amendments to section 34.06(b) of the Tax Code can be harmonized. Under Senate Bill 141, ataxing unit ispermitted to retain costs and expenses ofcourt, sale, resale, and an amount equal to the amount the taxing unit has reasonably spent for the maintenance and preservation ofthe property. After deducting those amounts, however, the taxing unit must distribute the remainder of the proceeds as provided by section 34.02. Only two years before, the Supreme Court had determined that section 34.02 foreclosed immediate distribution of excess proceeds to the taxing authorities. See 

### Syntax, 899 S.W.2d at 192. Senate Bill 141retained the reference to and did not amend section 34.02. House Bill 3306, on the other hand, deleted the reference to section 34.02. Under House Bill 3306, the purchasing taxing unit, after paying costs and expenses of court and sale and costs defined in section 34.21(i), is required to immediately distribute the remainder of the proceeds to the taxing units participating in the sale on apro rata basis. As the Senate committee bill analysis stated:

[This bill] [almends Section 34.06(b), Tax Code, to require the purchasing taxing unit to distribute the remainder of the proceeds to each taxing unit participating to acertain degree in the sale, 

### rather than distribute theproceeds as provided bySection 34.02ofthiscodefor distributions ofproceeds afterpayment of costs. SENATECOMM.ONSTATEAFFAIRS,BILL ANALYSIS,Tex. C.S.H.B. 3306,75th Leg., R.S. (1997) (emphasis added). In sum, because Senate Bill 141mandates distribution ofexcess proceeds pursuant to section 34.02 ofthe Tax Code whereas House Bill 3306 mandates immediate distribution ofexcess proceeds among the participating taxing units, the two amendments to section 34.06(b) cannot be harmonized and are irreconcilable. The last legislative vote on Senate Bill 141was taken on May 23, 1997. See S.J. OFTEX., 75th Leg., R.S. 2597 (1997). The last legislative vote on House Bill 3306 was taken on May 25, 1997. See H.J. OFTEX., 75th Leg., R.S. 3734 (1997). Accordingly, under the terms of the Code Construction Act, the amendments to section 34.06(b) made by House Bill 3306 must prevail. See TEX.GOV’TCODEANN.5311.025(b), (d) (Vernon 1998). Therefore, Senate Bill 141 was in effect only from its effective date, September 1,1997, until January 1,1998, when House BillThe Honorable Yolanda de Leon - Page 4 (JC-0058)

3306 became effective. As ofJanuary 1,1998, the House Bill 3306 amendments to section 34.06(b) superseded the Senate Bill 141 amendments to section 34.06(b). 

### SUMMARY Amendments to section 34.06(b) adopted bythe Seventy-fifth Legislature in 1997 as Senate Bill 141and House Bill 3306 cannot be harmonized. Pursuant to the Code Construction Act, House Bill 3306, the later enacted provision, prevails. See TEX.GOV’TCODE ANN.5311.025(b), (d)(Vernon 1998). Yo very truly,

. 

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-. CG,-v-l (3 “3” JOHN CORNYN Attorney General of Texas ANDY TAYLOR First Assistant Attorney General CLARK RENT ERVIN Deputy Attorney General - General Counsel ELIZABETH ROBINSON Chair, Opinion Committee Prepared by Mary R. Crouter Assistant Attorney General