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) of the 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 

in the same session without reference to each other, the statutes must be harmonized ifpossible. See 

TEX. GOV’T CODE ANN. 9 311.025(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), a property subject to foreclosure may be sold to a taxing unit that is a party to the 

judgment. See TEX. TAX CODE ANN. 5 34.01(c) (Vernon 1992). The taxing unit may resell the 

property at any time. See id. 5 34.05 (Vernon 1992 & Supp. 1999). Section 34.06, the provision at 

issue in your request, governs the distribution of the proceeds of the resale of a property purchased 

by a taxing unit. Prior to the 1997 legislative session, section 34.06 of the Tax Code provided as 

follows: 

(a) The proceeds of a resale ofproperty purchased by a taxing 

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 the 
The Honorable Yolanda de Leon - Page 2 (X-0058) 

proceeds as provided by Section 34.02 of this 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 

the Tax Code. See Syntax, Inc. v. Hall, 899 S.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, at the end of seven years, no claimant has established a right to those 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 all costs and expenses of 

court, [a&] sale, and resale and, after deducting an amount equal to 

the amount the taxing unit has reasonably spentfor the maintenance 

andpreservation oftheproperty, shall distribute the remainder of the 

proceeds as provided by Section 34.02 of this 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. 5 7. 

House Bill 3306 amended section 34.06(b) as follows: 

The purchasing taxing unit shall pay all costs and expenses of 

court and sale and shall distribute the remainder of the proceeds to 

each taxing unit participating in the sale in an amount equal to the 

proportion each participant’s taxes, penalties, and interest bear to 

the total amount of taxes, penalties, and interest due all participants 

in the sale, less any amountspreviouslypaid as costs on theproperty 

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) to the Tax Code, which defined the term “costs” to “include all those amounts 

‘As ma&d by Act of May 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’T CODE ANN. fj 3 11.025(b) (V emon 1998). Ifthe statutes are irreconcilable, 

the latest in date of enactment prevails. See id. For purposes of this provision, the date of enactment 

is the date on which the last legislative vote is taken on the bill enacting the statue. Id. § 3 11.025(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, a taxing unit is permitted to retain costs and expenses of court, 

sale, resale, and an amount equal to the amount the taxing unit has reasonably spent for the 

maintenance and preservation of the 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 141 retained 

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 a pro 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 a certain degree in the sale, rather than distribute the proceeds as 

provided by Section 34.02 of this codefor distributions ofproceeds after payment of 

costs. 

SENATE COMM. ON STATE AFFAIRS, BILL ANALYSIS, Tex. C.S.H.B. 3306,75th Leg., R.S. (1997) 

(emphasis added). 

In sum, because Senate Bill 141 mandates distribution of excess proceeds pursuant to section 

34.02 ofthe Tax Code whereas House Bill 3306 mandates immediate distribution of excess 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 141 was taken on May 23, 1997. See 

S.J. OF TEX., 75th Leg., R.S. 2597 (1997). The last legislative vote on House Bill 3306 was taken 

on May 25, 1997. See H.J. OF TEX., 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’T CODE ANN. 5 311.025(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 Bill 
The Honorable Yolanda de Leon - Page 4 (JC-0058) 

3306 became effective. As of January 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 by the Seventy-fifth 

Legislature in 1997 as Senate Bill 141 and House Bill 3306 cannot be 

harmonized. Pursuant to the Code Construction Act, House Bill 

3306, the later enacted provision, prevails. See TEX. GOV’T CODE 

ANN. 5 311.025(b), (d) (Vernon 1998). 

Yo very truly, . 4 c -. 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