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Texas Tax Code - Section 34.04. Claims For Excess Proceeds

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§ 34.04. CLAIMS FOR EXCESS PROCEEDS.  (a) A person, 
including a taxing unit, may file a petition in the court that 
ordered the seizure or sale setting forth a claim to the excess 
proceeds.  The petition must be filed before the second anniversary 
of the date of the sale of the property.  The petition is not 
required to be filed as an original suit separate from the 
underlying suit for seizure of the property or foreclosure of a tax 
lien on the property but may be filed under the cause number of the 
underlying suit.
	(b)  A copy of the petition shall be served, in the manner 
prescribed by Rule 21a, Texas Rules of Civil Procedure, as amended, 
or that rule's successor, on all parties to the underlying action 
not later than the 20th day before the date set for a hearing on the 
petition.
	(c)  At the hearing the court shall order that the proceeds 
be paid according to the following priorities to each party that 
establishes its claim to the proceeds:
		(1)  to the tax sale purchaser if the tax sale has been 
adjudged to be void and the purchaser has prevailed in an action 
against the taxing units under Section 34.07(d) by final judgment;
		(2)  to a taxing unit for any taxes, penalties, or 
interest that have become due or delinquent on the subject property 
subsequent to the date of the judgment or that were omitted from the 
judgment by accident or mistake;
		(3)  to any other lienholder, consensual or otherwise, 
for the amount due under a lien, in accordance with the priorities 
established by applicable law;
		(4)  to a taxing unit for any unpaid taxes, penalties, 
interest, or other amounts adjudged due under the judgment that 
were not satisfied from the proceeds from the tax sale;  and
		(5)  to each former owner of the property, as the 
interest of each may appear.
	(d)  Interest or costs may not be allowed under this section.                  
	(e)  an order under this section is appealable.                                
	(f)  A person may not take an assignment of an owner's claim 
to excess proceeds unless:
		(1)  the assignment is taken on or after the 36th day 
after the date the excess proceeds are deposited in the registry of 
the court;
		(2)  the assignment is in writing and signed by the 
assignor;  and          
		(3)  the assignment document contains a sworn statement 
by the assignor affirming:
			(A)  that the assignment was given voluntarily;                              
			(B)  the date on which the assignment was made and 
that the date was not earlier than the 36th day after the date the 
excess proceeds were deposited in the registry of the court;
			(C)  that the assignor has received the notice 
from the clerk required by Section 34.03;
			(D)  the nature and amount of consideration given 
for the assignment;      
			(E)  the circumstances under which the excess 
proceeds are in the registry of the court;
			(F)  the amount of the claim to excess proceeds in 
the registry of the court;
			(G)  that the assignor has made no other 
assignments of the assignor's claim to the excess proceeds;  and
			(H)  that the assignor knows that the assignor may 
retain counsel.         
	(g)  An assignee who obtains excess proceeds without 
complying with Subsection (f) is liable to the assignor for the 
amount of excess proceeds obtained plus attorney's fees and 
expenses.
	(h)  An assignee who files a petition setting forth a claim 
to excess proceeds must attach a copy of the assignment document and 
produce the original of the assignment document in court at the 
hearing on the petition.  If the original assignment document is 
lost, the assignee must obtain the presence of the assignor to 
testify at the hearing.
	(i)  A fee charged to obtain excess proceeds for an owner may 
not be greater than 25 percent of the amount obtained or $1,000, 
whichever is less.

Acts 1979, 66th Leg., p. 2298, ch. 841, § 1, eff. Jan. 1, 1982.  
Amended by Acts 1983, 68th Leg., p. 4829, ch. 851, § 26, eff. 
Aug. 29, 1983;  Acts 1999, 76th Leg., ch. 1185, § 2, eff. Sept. 1, 
1999;  Acts 1999, 76th Leg., ch. 1481, § 26, eff. Sept. 1, 1999;  
Acts 2001, 77th Leg., ch. 1420, § 18.007, eff. Sept. 1, 2001;  
Acts 2001, 77th Leg., ch. 1430, § 27, eff. Sept. 1, 2001;  Acts 
2003, 78th Leg., ch. 319, § 10, eff. June 18, 2003.

Last modified: August 11, 2007