   OFFICE   OF THE    ATTORNEY   GENERAL.   ST*TE   OF TEXAS

   JOHN      CORNYN




                                                     May 26, 1999



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


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 CODEANN. 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’TCODE
                ANN. 5 311.025(b), (d) (Vernon 1998).




                                            4 c
                                                 Yo    very truly, .

                                            -.          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
