Untitled Texas Attorney General Opinion ( 1985 )

’ .
.;
The Attorney (General of Texas
Augunt 28, 1985
JIM MAlTOX
Attorney General
Suprema Court Bullding
Honorable Carry l4auro Opinion Ro. m-347
P. 0. BOX 12549 Come.issioner
AU#lh. TX. 75711.2545 General Land Off ice Be: Whether the school land
5121475.2501 Stephen P. Austin Bullding board Is authorized to sell
Telex 9101874-1397 Austin, Texas 78701 certain tracts of land acquired
wecopier 5121475-0256
thiough tax foreclosure sales
714 Jackron. Sub 700 Dear Commissioner Matwo:
Oallas. TX. 75202.4509
2W742BQU
You inquire whether the School Land Board has authority to sell
two tracts of land acquired by the state through tax foreclosure
4924 Albena Ave., Suite 160 sales. You advise us that, pursqant to court-ordered tax foreclosure
E, Paso. TX. 799052793 sales following the iioreclosure of tax liens , title to certain lots in
9151533-3484 Bracken ln Coma1 County were bid off to the state In 1922 and title to
certain lots in Aappy In Swisher County were bid off to the state in
1951. For lack of bidders, the land was sold to the state as a taxing
1 Texas. Suite 7W
, ,oustcn. TX. 77OQ2.3111 unit which YSB a pa1:t.y to the foreclosure suit, and apparently there
71Y2255996 has not been a resallc by the purchasing taxing unit.
You first ask lrhether section 15.01(a)(2) of the Education Code
806 Broadway, Suite 312
places these tax foreclosure tracts In the permanent school fund. It
Lubbock. TX. 794012479
8061747.5239
is our opinion thal: the land in question does not belong to the
permanent school fund and that the School Land Board does not have
authority to sell the land.
4209 N. Tenth. Suite S
McAllen. TX. 75501.lS55
512l552-4547
Section 15.01(a)(2) of the Education Code provides that
(a) The permanent school fund, which shall
200 Main Plaza. Suite 400 constitute a perpetual endowmant for the public
San Antonio. TX. 702052797 free schools of this state, shall consist of:
51212251191
. . . .
An Equal OpportunityI
Allmmalive Action EmPlOYOf (2) all the unappropriated public domain
remeinhg in Texas, including all land
recovex,ed by the state by suit or othervise
except pine forest land as defined in Section
12, Article 2613. Revised Civil Statutes of
Texas, 1925, as amended. . . .
p. 1579
Aonorable Carry Mauro - Page 2 (Jl+367)
The issue is whether the lam. in question is “laad recovered by the
state by suit or otherwise” within the meaning of rection 15.01(a)(2).
Originally, article 5616, Texas Revised Civil Statutes, 1925.
vhich contained the same prov~lslons as article 5385, Revised Civil
Statutes of 1911. end the Settlemant Act of 1900, provided that
all of the unapprop,r?tated public domain remaining
in the State, of vtstever character and vhereso-
ever located, including any lands recovered by the
State, except that included in lekes, bays, and
islands along the GIrlif of Mexico within tidewater
limits and except p:Lne forest lands as defined In
Article 2613 . . . 4s set apart and granted to the
permanent school fuc.d of the state.
Article 5620, Texas Revised Civil Statutes of 1925. vith the same
provisions as article 5668, Revised Civil Statutes of 1911. and the
Settlement Act of 1900. and uov codified as section 11.077 of the
Natural Resources Code, direc(,ed that
when any public l,ands are held, occupied or
claimed by any perscn. association or corporation.
adversely to the S,:ats. or to any fund or when
lands are forfeited to the State for any cause.
the Attorney Genccsl shall institute suit
therefor. . . .
We believe the language in section 15.01 (a) (2). stetlng that the
permanent school fund shall c.onsist. in part, of all the unappro-
priated public domain includ:lug all land recovered by the state by
suit or otherwise, is applict&le to land recovered by the state for
reasons such as fraud or nisttike or failure to comply vith conditions
of the lav which authorized the! grant or sale of public land or school
land. See Barber v. Giles , :!C18 S.W.2d 553. 556 (Tex. 1968); Main v.
Cartwright, 200 S.W. 867, 8!iC1 (Tex. Civ. App. - El Paso 1918. no
writ). Such land would lnclt.de that recovered by suits by the state
to cancel patents CO public, land. Recovery of land by suit in
trespass to try title on behalf of the state to forfeit a sale for
failure to reside on or imprave land or to comply with the lav as an
actual settlor would constitute land recovered by the state. Cf.
State v. Hughes, 79 S.W. 608 IJ!ex. Civ. App. 1906). aff’d, 80 S.W. )24
(Tex. 1906); Duncan v. State, 67 S.W. 903 (Tex. Cmpp. 1902, uo
writ). Another example vould be land forfeited to the state for non-
payment of interest on purchaw price.
A tax sale and the right11 acquired thereunder are governed by the
lav in force at the time of the sale. & Land v. Banks, 256 S.W.
786, 788 (Tex. 1923); Bente v, Sullivan, 115 S.U. 350 (Tex. Clv. App.
.p. 1580
Roaorable Carry klauro - Page 3 (a-367)
1908. vrit ref’d). The tax sale In 1922 was conducted under article
7689, Texas Revised Civil ,;tatutes of 1911, vhich provided, in
pertinent part:
[Ilf there shall be no bidder for such land, that
the county attorney aihall bid said property off to
the state for the emount of all taxes. penalties.
interest and costs trd,judged against said property;
and, in the absenclc of the county attorney, the
sheriff is authorized to bid to the state, when
there are no bidd~rlrs. . . . And, in all such
cases vhere the property Is bid off to the state,
it shall be the duQ of the sheriff to make and
execute deeds to the state, using forma to be
prescribed and furnished by the comptroller,
shoving in each case. the amount of taxes,
interest, penalty clud costs for which sold, and
the clerk’s fee for recording deeds as hereinafter
provided. . . . And. when lands thus sold to the
state shall be redeemed, it shall be the duty of
the collector of t,):ces, vhen any such redemption
is made, to make t,he proper distribution of the
moneys received by him in such redemption, paying
to each officer the amount of costs found to be
due, and to the state and county the taxes,
interest and penalties due each respectively.
Substantially the same provisions vere carried forvard in article
7328, Texas Revised Civil St;itutes of 1925, but with the addition of
the follovlng language:
If any of the land thus sold to the State is not
redeemed within the tlms prescribed by this lav.
the sheriff shall sell the same at public outcry
to the highest bMder. . . . The sheriff shall
sand the amount rrcelved from such sale to the
State Treasurer afl:ar deducting the amount of the
county taxes, interest and penalty of the county
tax which he ahal: pay to the county treasurer.
The sheriff. In behalf of the State, shell execute
a deed conveying title to said property when sold
and paid for.
Prior to the enactment of arc:icle 7365b. Texas Revised Civil Statutes,
in 1937, each taxing unit could separately enforce its tax lien
against the.same property vi131 different suits, judgments, executions,
sales and conveyances and with the resulting extra cost and confusion
of titles and rights. See City of El Paso v. Porti, 181 S.W.Zd 579
(Tex. 1966) ; Pearsall Iade@ndent School District v. Widner. 136
p. 1581
honorable Carry Mauro - Page 4 (m-242)
S.Y.2d 647 (Tex. Civ. App. - !itm Antonio 1940, no nit). TO prevent
multiplicity of suits and inc:.ude all taxing unltr in a suit brought
by any one of them, article 1345b provided, In pertinent part. the
follovlng:
Sec. 2. In sny s~~:Lthereafter brought by or in
behalf of my taxing unit ss above defined, for
delinquent ad vrlorem taxes levied lgslnst
property by my such tsxing unit, the plaintiff
may implead as parties defendant any or all other
taxing units having delinquent ad valorem tax
claims against such p’roperty, or sny part thereof,
end it shall be the duty of each defendant taxing
unit. upon being sewed with citetion as provided
by law to appear in said cause and file its claim
for delinquent ad vslorem taxes against such
property, or sny part thereof.
. . . .
Sec. 9. If the property be sold to any taxing
unit vhich is e party to the judgment under decree
of Court in said su:lt, the title to said property
shall be bid In and held by the taxing unit
purchasing sme for the use and benefit of Itself
and all other taxing units which ere parties to
the suit and which have been adjudged in said suit
to hsve tsx liens s]tsinst such property, pro rats
and in proportion to the amount of the tsx liens
in favor of said respective taxing units as
established by the judgment in sefd suit, and
costs and expenses rhsll not be payable until sale
by such taxing unit 80 purchsslng same . . . When
euch property is so sold st public or private
sale. the proceeds rB,ereof &all be received by or
paid over to the trc:Lng unit which purchased said
property at the tw: foreclosure sale, for the
account of itself .and all other taxing units
adjudged to have a 1:a.x lien against such property.
and all taxing uniw so receiving said proceeds
shall first pay out of the same ell costs and
expenses of Court a!rd of sale, end distribute the
reminder emong all taxing units for which
purchasing taxing ,mit purchased sad held ssid
property. pro rstn end in proportion to the
amounts of their tm liens egsinst said property
as established in solid judgment.
. . . .
p. 1582
_ ‘.
Aonorsble Gerry Msuro - Psge 5 (Jn-347)
If the Stste of Texxm ie the ruing unit which
purchssed mid propcay et the tsx foreclosure
sale, the Comirsioners Court of the county In
which the property ia loceted shell heve suthority
to set for the Ststc! of Texsm in msking privste
ssles snd conveysncerl of ssld property, AS herein
provided, or in ret,u.esting the Sherfff. or in
appointing A Coumis~~:loner. to meke public ssle
thereof, and in receiving snd distributing the
proceeds of such sslee; and sll lsles end con-
veysncer msde in behalf of the Stste of Texss by
the Cownisslonere Court, or msde by the Sheriff or
say Commissioner spplwinted by the Comissioners
Court. under the provisions hereof, shall operate
to transfer to the *purchaser at such ssle sll
right, title snd interest ecquired or held by the
Stste of Texss AS pwcheser et the tsx foreclosure
sale. . . .
At the time of the 1951 tsx foreclosure esle, the provisions of
article 7345b were cumuletivc: of snd in addition to srticle 7328
except that, ss to A confl:tct, the provisions of srticle 7345b
prev&ed. Tex. Rev. Civ. Stilt. srt. 7j45b. $13 (1937). See Little
v. Dennis, 187 S.W.2d 76 (Tex., 1945); Uillscy County PeterControl h
Improvement District v. Levis, 119 S.W.2d 159 (Tex. Civ. App. - San
Antonio 1938, no writ). In 1979, both srticle 7328 sad article 7345b
were repealed end incorporsted into the Property Tex Code. See
- TAX
Code, ch. 34, eubchspter A.
We belleve that the lenl&mge of the sheriffs’ deeds conveying
title to the stste In 1922 sod 1951 conforms to the lsnguege of the
ststutes suthorizing ruch deedo on those dates. Article 7689. Texas
Revised Civil Statutes of lS,ll, directed the s&Tiff to meke end
execute deeds to the stste. wing forms prescribed snd furnished by
the comptroller and. as direcl:ed. the deed shovs the amount of state ’
snd county texes, interest, penalty. sad costs. Ye do not know the
form prescribed by the compt::oller. but ve note that virtuslly the
seme lsngusge of conveyence slIpears in the tax deed litigated in Land
v. Banks, m, In 1923. As directed by section 9 of srticle 7345b,
the deed in 1951 expressly provides thst the title to the property in
Swisher County vss bid in snd lheld by the stete in trust for the use
snd benefit of itself snd sll other taxing units which were psrties to
the suit.
No psyment of money occurs st the time of the first foreclosure
sale to A taxing unit but, instead, occurs when the property Is
redeemed or resold by the purchasing taxing unit. The .purchsslng
taxing unit holds title to tha! property for the benefit of itself snd
the other units until it is asold and the proceeds from that sale are
p. 1583
Aonorsble Carry Msuro - Psge 6 (m-347)
epportioned. See Tu Code, 13~L,Ol(c); Attorney Genersl Opinion O-974
(1939). -
We conclude thst lsnd scqulred st the tsx foreclosure ssles st
which the stste vss the purcharing taxing unit is not “land recovered
by the state by euit or oth(Lrvlse” within the mesalog of section
15.01(s) (2) of the Educstion &de. It is not A recovery of lsnd by
the state but A tsx esle to the ante for the benefit of itself sad AS
trustee for the other ruing units, with the ultlmste purpose of
selling it snd thereby procuring the money to psy the texes due each
tsxing unit. See Chlldress County v. Schultz, 199 S.W.2d 860, 862
(Tex. Civ. App.
- brillo 13146, no writ). Cf. Attorney Genersl
Opinion V-782 (1949). At the, l xpirstion of th‘;rtedemption period,
title vests in the purchssing taxing unit, which then holds the title
for resale sad for the purpo!,e of collecting the delinquent taxes.
See State v. City of San Aht~nlio. 209 S.W.2d 756, 758 (Tex. 19481;
Lubbock Independent School Dd;zct v. Owens. 217 S.W.Zd 186, 188
(Tex. Civ. App. - Amarillo 194lc, writ ref’d).
There are or hsve be& st;Ltutes thst specified certsln conditions
under which land would become part of the permanent school fund or
pert of the stste forest. Arclcle 5304. Texss Revised Civil Statutes
of 1911, first enacted in 1879. spplied only in unorganized counties.
t The legislature provided thsl. when lands were sold in unorgenixed
counties and bid in by the comptroller for the state for delinquent
taxes and not redeemed by the ‘nmer , the land thus sold and unredeemed
became vscsnt and reverted to tbe public free school fund, to be sold
and disposed of ss other laude belonging to the public free school
fund. Section 71.202 of the Prl>perty Code also expressly appropriates
and sets apart to the permsmult school fund ell real property thst
eschests to the stste of Tert,ns under Title 6 of that code. See
Attorney Genersl Opinion IS?-18 (1979). T%is office 1180 determined~
Attorney General Opfnton IN-18 that lend devised to the state of Texas
under terms of so individusl’e ~~111 snd not deslgneted to a perticulsr
use becomes e psrt of the permsnent school fund.
In 1935. prior to the lnnmctment In 1937 of erticle 7345b. Texss
Revised Civil Statutes of 192!5!, which consolideted the foreclosure of
tsx liens of the different taxing units lo one suit snd one
foreclosure ssle. the legirlrture added section 12 to srtlcle 2613.
Texas Revised Civil Statutes ofi 1925, and amended srticle 5416. Texas
Revised Civil Statutes Of 1925. Chapter 312, Forty-fourth
Legislature, 1935. now codific!d in sections 15.01(s)(2) and 88.111 of
the Education Code. provides thst , when pine forest lend is sold to
the state for the peyment elf taxes. interest, penslty. snd costs
edjudged against the lsnd AS Ilrwided by article 7328 snd not redeemed
or resold se provided by erticle 7328. the lend shall be withdrawn
from the market end shall be held, protected, snd administered by the
Board of the Texas A&MUniversity System as state forest. Thus, the
p. 1584
; ' -.
Bonorsble Gsrry Hsuro - Pege 7 (JM-347)
legislsture lxpreeely rpecifietl its intention thst the ltete retein
pine forest lsnd bought in by the stste st A tu foreclosure rele
under srticle 7328 vhen the lsnd WASnot redeemed or resold snd rtsted
its intention tbst euch pine foreet lsnd is not retsined ss psrt of
the permanent school fund. It :Ls our opinion thst the ststus of sll
other lsnd purchseed st A tu foreclosure esle by A tuing unit is not
sltered by the fact thst the LcSislsture expresrly directed thst pine
forest lsnd ecquired by the state et A tax foreclosure ssle conducted
under article 7328 be retsinei. snd sdministered ss state forest snd
that it not be retained AS part of the permanent school fund. -See
Attorney General Opinion O-2871 (1941).
We find nothing in the statutes or esses which indicates that the
legislature intended thst title to reel property scquired by the state
as s taxing unit st e tax forec’losure sale in Comsl County in 1922 or
in Swisher County in 1951 uou:k(L become psrt of the permanent school
fund. It is our opinion thst the statutes authorizing acquisitions of
title by the state st tsx foret:losure ssles provide otherwise.
You slso inquire vho has nahority to sell the lands in question
if the land is not in the pemsnent school fund vhere it would be
subject to sale by the School Iand Board snd how the proceeds would be
sllocsted.
Since the Coma1 sad Svishcr County trscts have not been resold by
the state since the stste became the purchasing taxing unit at the
foreclosure sales. title rem&l!5 in the state. The power and duty to
provide for the sale and conveyance of such title Is in the legisls-
ture .
The authority of s purc’wwing taxing unit to resell property
Acquired at e tsx foreclosure wle appears in section 34.05 of the TAX
Code. Prior to 1983, section :)4.05(e) provided thst
(A) If property is; sold to e taxing unit that
ie A psrty to the judgment, the taxing unit msy
sell the property at any time, subject to any
rixht
.. of redemotion existinn at the time of the
sale. If prop&ty is eold & the state. the com-
missioners court of ?:he county in which the pro-
perty is loceted msyikct for the state. (Emphssis
added).
Unless the property is sold by the sheriff et s public ssle, It msy
not be sold for less than the market vslue specified in the judpent
of foreclosure or the total amount of the judgments against the
property, whichever is less, vtthout the cdnsrnt of each taxing unit
entl~tled to proceeds of the sale. Tax Code 434.05(b). Section
34.05(c) provides, in pert, th,nlt
Ronorsble Gsrry Msuro - Page 8 (JM-347)
(c) The taxing un:it purchssing the property by
resolution of its governing body mey request the
sheriff to sell the Froperty st A public sale. If
the purchsring ruing unit hss not sold the pro-
perty vlthin six months sfter the date on which
the ovner’s right of redemption ter mina tes lny
,
taxing unit that is entitled to receive proceeds
of the ssle by resolution of its governing body
may request the sheriff in writing to sell the
property at A public ssle,
In 1982. article 8, section l-e of the Texas Constitution was
amended to provide that no stilte ad vslorem taxes shall be levied on
any property in this stste, end. in 1983, the legislature amended the
Property TAX Code to conform it to that and other changes in the
constitution concerning property taxation. See Bill Analysis prepared
for House Ways snd Means Comictee. filed % Bill File on E.B. No.
1203. Legislative Rdference Li’b,rsry (1983). In so doing, chapter 851,
Sixty-eighth Legislature. 198:#, deleted the last sentence -in section
34.05(s) which, prior-to-thst” time, had authorized the commissioners
court of the county in which t.he property is locsted to set for the
state In the sale of property u,hen title to the property WAS scquired
by the state at s tsx foreclosure sale. Chapter 851 also repealed all
of section 34.08. which had specified that the state vss a tsxing unit
for purposes of chapter 34 of the Property Tax Code.
As a result of the 1983 ~nlendments to the Property Tax Code, the
code no longer authorizes the commissioners court of the county in
which the property lo located to ect for the stste in making A private
ssle of the property or in s request to the sheriff to sell the
property st public sale. With the repesl of section 34.08. it is
questionsble whether the state is a taxing unit for purposes of the
chapter of the code which suthorizes the sale of such property.
We ere unable to find tuly statute suthortzing any officisl or
governments1 entity to make a ssle for the stste where the stste was
the purchasing taxing unit. ‘Where the purchssing tsxing unit has not
sold the property vithin six months sf ter the owner’s right of
redemption expires, section 34.05(c) still authorizes eny taxing unit
that Is entitled to receive proceeds of the ssle to request the
nhrriff to sell the property ,at A public ssle. Rowever, ve find no
statute that authorizes soy person to make A d$strlbutlon of the
proceeds of such a public sale when title is In the stste.
Section 34.06 of the Property Tax Code is the legislsture’s grant
of authority for the distribution of the proceeds of s resale. It
provides
P. 1586
Aonorable Gsrry tlsuro - Pege 9 UM-347)
(A) The proceeds of a ressle of property
purchesed by e taxfnt unit et A tsx foreclosure
ssle shsll be psid to the purchssing tsxing unit.
(b) The purchasing tsxing unit ,shell pey sll
costs snd expenses cf court and ssle snd shall
distribute the reminder of the proceeds AS
provided by section 34.02 of this code for dls-
tribution of proceeds after peyment of costs.
If the stste no longer is a texing unit for purposes of a tax sale snd
no person or entity is suthorimd to set for the stste at A ressle of
property sold to the state st foreclosure ssle. the proceeds of a
resale csnnot be paid to or distributed by the purchasing tsxlng unit
AS directed by section 34.06.
We conclude that the legi.trlsture hss made no genersl provision
for the resale and conveyance of its title to tracts of land acquired
by the state through tax foreclosure ssles. Rowwet, Chspter 953.
Acts of the 69th Legislature, 1985. which becomes effective August 26.
1985, authorizes the comaisslot.er of the General Land Office to convey
ell of the interest of the st,srte in Lots 8 snd 9, Block 9, City of
Bracken, Coma1 County.
S IJ M M A R Y
--
The real property .rcquired by the state AS the
purchssing taxing unit at A tax foreclosure sale
does not belong to c:be permsnent school fund snd
the School Lend Bosi,d, does not have suthority to
sell such land. Gn!.y the purchssing taxing unit
is authorized by statute to resell lsnd which it
acquired et A tsx fc’reclosure sale and to receive
end distribute the :?roceeds of A resele of such
property. Current ot.stutes do not authorize sny
officisl or governmntsl entity to act for the
stste In a ressle end distribution of proceeds
when the state was tae purchasing taxing unit st a
prior tax foreclosure sale. Eovever, effective
August 26, 1985. the legislsture has authorized
conveyance of the specific property in Coma1
County.
Jrn WATTOX
Attorney Genersl of Texas
p. 1587
Honorable Carry Uauro - Page 10 (Jn-347)
TON GREEN
First Assistant Attorney General
DAVID R. RICRUDS
Executive Assistant Attorney Ccnsral
ROBERTGRAY
Special Assistant Attorney General
RICK GILPIN
Chairman, Opinion Conmittct
Prepared by Nancy Sutton
Assistant Attorney Generel
APPROVED:
OPINIONCOMnITTEE
Rick Gilpin. ChaIrman
Colln Carl
Susan Garrison
Tony Gulllory
Jim Hoellinger
' Jennifer Riggs
Nancy Sutton
Sarah Woelk
-_
p. 1588