PREFILED JAN 02 2024
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REFERENCE TITLE: tax liens; redemption; property sale |
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State of Arizona House of Representatives Fifty-sixth Legislature Second Regular Session 2024
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HB 2098 |
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Introduced by Representatives Griffin: Parker J
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An Act
amending sections 11-495, 42-18103, 42-18108, 42-18127, 42-18151, 42-18152, 42-18154, 42-18201, 42-18202, 42-18204, 42-18205, 42-18302 and 42-18303, Arizona Revised Statutes; relating to property tax.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 11-495, Arizona Revised Statutes, is amended to read:
11-495. Taxpayers' information fund
A. A taxpayers' information fund is established in each county treasury consisting of monies collected from the public records copy surcharge imposed pursuant to section 11-496, the tax lien processing fee imposed pursuant to section 42-18116, subsection C, fifteen dollars $15 of each judgment deed fee collected pursuant to section 42-18205, subsection A B, interest earned from the elderly assistance fund pursuant to section 42-17401, the community facilities district special assessment fee imposed pursuant to section 48-721 and the fees authorized for collecting municipal fire and emergency services fees in certain areas of the county as prescribed in section 9-500.23.
B. The county treasurer shall administer the fund and spend monies in the fund only to defray the cost of converting or upgrading an automated public information system as follows:
1. Purchasing computer hardware and software.
2. Training employees to operate the system.
3. Maintaining the system, including purchasing equipment maintenance agreements.
4. Updating the system hardware and software.
5. In counties with a population of more than two million persons, notifying property owners of the tax and ownership status of a taxpayer's parcel prior to the taxpayer's parcel being sold at a deed sale and the tax and ownership status of any parcels being sold at a deed sale that are adjacent to a taxpayer's parcel, prior to the deed sale.
C. The county treasurer shall annually submit to the board of supervisors the amount of anticipated revenues under this section. If the projected revenues are considered to be insufficient to establish and maintain the fund at an adequate level, the monies may accumulate until sufficient monies are available in the fund.
Sec. 2. Section 42-18103, Arizona Revised Statutes, is amended to read:
42-18103. Notice of delinquent taxes; property information report
A. On or before September 1 of each year the county treasurer shall send by certified mail, return receipt requested, to the last known address of each person or firm that owes delinquent taxes notice that there are delinquent taxes against the real property that is assessed in the taxpayer's name. If any notice sent pursuant to this section is returned as undeliverable, the county treasurer shall conduct an additional search to locate and notify the property owner of record.
b. The county treasurer shall contract with a title company or an abstract company to provide a property information report in order to identify the person or firm to which notice must be sent pursuant to subsection A of this section. The county treasurer may advertise and accept bids for the contract and may contract with any title company or abstract company, regardless of the company's location, if:
1. The fee charged by the title company or abstract company is reasonable.
2. THe title company or abstract company is authorized to do business in this state.
Sec. 3. Section 42-18108, Arizona Revised Statutes, is amended to read:
42-18108. Personal notice of proposed sale
A. At least sixty but not more than one hundred twenty days before the sale of a tax lien, the county treasurer shall send by certified mail, return receipt requested, a copy of the notice of proposed sale to the owner of each parcel of property on the delinquent tax list at the owner's last known address. If any notice sent pursuant to this section is returned as undeliverable, the county treasurer shall conduct an additional search to locate and notify the property owner of record.
B. The county treasurer shall use the property information report provided pursuant to section 42-18103, subsection B to locate and notify the property owner of record for each parcel of property on the delinquent tax list.
Sec. 4. Section 42-18127, Arizona Revised Statutes, is amended to read:
42-18127. Expiration of lien and certificate; notice; applicability
A. If the certificate of purchase is not redeemed and the purchaser or the purchaser's heirs or assigns fail to commence an action to foreclose the right of redemption as provided by this chapter within ten years after the last day of the month in which the original certificate of purchase, including any subsequent taxes paid, was acquired pursuant to section 42-18114, the certificate of purchase or registered certificate expires and the lien is void.
B. Within three hundred sixty-five days before the expiration date, the county treasurer shall notify the purchaser by certified mail of the pending expiration. Within thirty days after expiration, the treasurer shall notify the purchaser by mail or email, if practicable, that the lien and certificate of purchase or registered certificate have expired.
C. This section does not apply if, at the time of expiration:
1. The parcel for which the lien was purchased is subject to a judicial proceeding or a thirty-day sixty-day notice pursuant to section 42-18202.
2. Other applicable law or a court order prohibits the commencement of an action to foreclose the right to redeem. The expiration date of the tax lien shall be extended to twelve months after the termination of such a prohibition.
Sec. 5. Section 42-18151, Arizona Revised Statutes, is amended to read:
42-18151. Who may redeem real property tax liens; persons owning partial interest
A. A real property tax lien that is sold under article 3 of this chapter may be redeemed by:
1. The owner.
2. Any person that wants to pay on behalf of the owner by making a charitable gift.
3. The owner's agent, assignee or attorney.
4. Any person who has a legal or equitable claim in the property, including a certificate of purchase of a different date.
B. A person who owns an interest in real property less than the whole may redeem a tax lien against that interest as a percentage of the entire liability reported by the county assessor by paying the proportionate part of the whole amount due.
Sec. 6. Section 42-18152, Arizona Revised Statutes, is amended to read:
42-18152. When lien may be fully redeemed; partial payment refund
A. A real property tax lien may be fully redeemed at any time:
1. Within three five years after the date of the tax lien sale.
2. After three five years but before the delivery of a treasurer's deed to the purchaser or the purchaser's heirs or assigns.
B. A lien that has been partially redeemed under section 42-18056, subsection C must be fully redeemed before the delivery of a treasurer's deed to the purchaser.
C. The county treasurer shall refund all partial payment amounts impounded under section 42-18056, subsection E, to the person or persons or their heirs or assigns within thirty days after delivering the treasurer's deed to the purchaser.
Sec. 7. Section 42-18154, Arizona Revised Statutes, is amended to read:
42-18154. Certificate of redemption; statement of partial payment; issuance; contents; fee
A. If a person requests to redeem a real property tax lien that was sold under article 3 of this chapter, and if the county treasurer is satisfied that the person has the right to redeem the tax lien, under section 42-18151 and if the person pays the amount due, the county treasurer shall issue to the person a certificate of redemption to the property owner.
B. The certificate shall:
1. Describe the parcels on which the tax lien is redeemed.
2. State:
(a) The date of redemption.
(b) The amount paid.
(c) By whom redeemed.
C. If a person requests to make a partial payment on a certificate of purchase in a county with a population of more than three million persons and if the county treasurer is satisfied that the person has the right to make a partial payment and if the person pays the amount due pursuant to section 42-18056, subsection C, the treasurer shall issue to the person a statement of partial payment. The partial payment statement shall:
1. Identify the person or entity making the partial payment.
2. Describe the parcels on which the partial payment is made.
3. State:
(a) The date of the partial payment.
(b) The amount paid.
(c) The amount remaining due to fully redeem the lien on the date of the partial payment.
D. For each certificate of redemption and statement of partial payment, the county treasurer shall:
1. Make the proper entries in the treasurer's record of tax lien sales.
2. Collect a fee of five dollars $5 for the first and last partial payment and ten dollars $10 for a full redemption if no partial payments were made.
E. A holder of a certificate of redemption may record the certificate in the office of the county recorder.
Sec. 8. Section 42-18201, Arizona Revised Statutes, is amended to read:
42-18201. Action to foreclose right to redeem; subsequent certificates of purchase by assignment; prohibition
A. Except as provided in subsection B or C of this section, at any time beginning three five years after the sale of a tax lien sale but not later more than ten years after the last day of the month in which the lien was acquired pursuant to section 42-18114, if the lien is not redeemed, the purchaser certificate of purchase holder or the purchaser's certificate of purchase holder's heirs or assigns, or the state if it is the assignee, may bring an action to foreclose the right to redeem. The action to foreclose the right to redeem shall be filed in the superior court in the county in which the real property is located and shall name the county treasurer and any other persons with a recorded interest in the property as a party parties to the action. If any applicable law or court order prohibits bringing an action to foreclose the right to redeem, the limitation provided herein shall be extended twelve months following the termination of such prohibition.
B. For a subsequent year certificate of purchase by assignment issued under section 42-18121, subsection B, at any time beginning three years after the date the subsequent year certificate of purchase was assigned but not later than ten years after the last day of the month in which the tax lien was assigned under section 42-18121, if the lien is not redeemed, the purchaser subsequent year certificate of purchase holder or the purchaser's subsequent year certificate of purchase holder's heirs or assigns, or the state if it is the assignee, may bring an action to foreclose the right to redeem the lien represented by certificates of purchase acquired by assignment and held by the party that filed the action to foreclose. All certificates of purchase held by other parties remain in place. The action to foreclose the right to redeem shall be filed in the superior court in the county in which the real property is located and shall name the county treasurer and any other persons with a recorded interest in the property as a party parties to the action. If any applicable law or court order prohibits bringing an action to foreclose the right to redeem, the limitation provided in this subsection shall be extended twelve months following the termination of the prohibition.
C. an action to foreclose the right to redeem may not be filed under this section unless the amount required to redeem the real property tax lien determined pursuant to section 42-18153 exceeds five percent of the fair market value of the real property as shown by the county assessor's valuation of the real property for the current tax year or $50,000, whichever is less.
Sec. 9. Section 42-18202, Arizona Revised Statutes, is amended to read:
42-18202. Notice
A. At least thirty sixty days before filing an action to foreclose the right to redeem under this article, but not more than one hundred eighty days before such an action is commenced or may be commenced under section 42-18201, the purchaser certificate of purchase holder shall send notice of intent to file the foreclosure action by certified mail, return receipt requested, to:
1. The property owner of record according to the records of the county recorder in the county in which the property is located or to all of the following, including:
(a) The property owner, as determined by section 42-13051, at the property owner's mailing address according to the records of the county assessor in the county in which the property is located. If any notice sent pursuant to this paragraph is returned as undeliverable, the certificate of purchase holder shall provide for a search, consistent with section 42-18103, subsection B, to locate and notify the property owner of record.
(b) The situs address of the property, if shown on the tax roll and if different from the property owner's address under subdivision (a) of this paragraph.
(c) The tax bill mailing address according to the records of the county treasurer in the county in which the property is located if that address is different from the addresses under subdivisions (a) and (b) of this paragraph.
2. Any lienholder of record that has recorded a lien against the property if an address appears on the recorded lien.
3. Any mortgagee of record if an address appears on the recorded mortgage.
4. Any vendee of a recorded contract for deed if an address appears on the recorded contract.
5. Any person to whom the property was assessed on the tax roll for the year in which the property was last assessed.
6. Any lienholder of record that has recorded a lien against mobile home that is located on the property is an address appears on the recorded lien.
7. Any legal titleholder of record of property that is contiguous to the property described in the certificate of purchase, if the property described is submerged land or common elements of a subdivision and if the address of the titleholder of contiguous property appears on the record of conveyance of the PROPERTY to the legal titleholder. For the purposes of this paragraph, "contiguous":
(a) Means touching, meeting or joining at the surface or border, other than at a corner or a single point, and not separated by submerged lands.
(b) Do not include submerged lands that lie below the ordinary high-water mark and that are sovereign lands.
B. The notice required by subsection A of this section shall include the following warning statement in substantially the following form:
Notice: There are unpaid taxes on the property located at (address) that you may own or have a legal interest in or that may be contiguous to your property. The property will be sold at public auction on (date) unless the outstanding taxes are paid. To make payment or to receive further information, contact (certificate of purchase holder) immediately at (address) or (Telephone number). The (county) county treasurer can provide more information about the foreclosure process and your rights in the foreclosure process.
2. C. In addition to the notice required by subsection A of this section, The certificate of purchase holder shall also notify the treasurer of the county in which the real property is located. The county treasurer may not accept partial payments under section 42-18056, subsection C after the date the treasurer receives a notice of action to foreclose the right to redeem.
B. D. The notice required by subsections A and B of this section shall include:
1. The property owner's name.
2. The real property tax parcel identification number.
3. The county assessor's description of the real property.
4. The certificate of purchase number.
5. The proposed date of filing the action.
E. When the county treasurer receives the notice required by subsection B of this section, the county treasurer shall:
1. Publish a copy of the notice in a newspaper of general circulation in the county where the property is located and include the following warning statement in substantially the following form:
Notice: There are unpaid taxes on the property located at (address) that you may own or have a legal interest in or that may be contiguous to your property. The property will be sold at public auction on (date) unless the outstanding taxes are paid. To make payment or to receive further information, contact (certificate of purchase holder) immediately at (address) or (telephone number). You may be eligible for free legal assistance if you reach out to (name of free legal services organization) at (address), (telephone number) for legal advice about how to respond to this notice.
2. Post the notice and warning statement in a conspicuous place on the property.
3. Post the notice and warning statement in a conspicuous place on the county treasurer's website and at the county treasurer's office.
4. Record the notice and warning statement. A person acquiring an interest in the property after the notice is recorded is deemed to be on notice of the pending sale and no other notice to that person is required. The sale of the property automatically releases any recorded notice of tax sale for that property. If the property is redeemed, the county treasurer shall record a release of the notice on payment of the recording fee.
C. F. If the purchaser certificate of purchase holder:
1. Complies with subsection A, paragraph 1, subdivisions (a), (b) and (c) subsections A and B of this section, the purchaser certificate of purchase holder is considered to have substantially complied with the requirements of this section and is not required to send the notice to any other address.
2. Fails to send the notice required by this section, the purchaser certificate of purchase holder is considered to have substantially failed to comply with this section. A court may not enter any judgment to foreclose the right to redeem under this article until the purchaser certificate of purchase holder sends the notice required by this section.
Sec. 10. Section 42-18204, Arizona Revised Statutes, is amended to read:
42-18204. Judgment foreclosing right to redeem; effect
A. In an action to foreclose the right to redeem, if the court finds that the sale of the tax lien is valid and that the tax lien has not been redeemed, the court shall enter judgment:
1. Foreclosing the right of the defendant to redeem.
2. Directing the county treasurer to expeditiously execute and deliver to the party in whose favor judgment is entered, including the state, a deed conveying the property described in the certificate of purchase sale of the property in accordance with the requirements of this chapter.
B. After entering judgment the parties whose rights to redeem the tax lien are thereby foreclosed have no further legal or equitable right, title or interest in the property subject to the right of appeal and stay of execution as in other civil actions.
C. The foreclosure of the right to redeem does not extinguish any of the following:
1. An easement on or appurtenant to the property.
D. The foreclosure of the right to redeem does not extinguish any
2. A lien for an assessment levied pursuant to title 48, chapter 4, 6, 14 or 18, or section 9-276.
3. The property owner's or other lienholder's interest in the proceeds from the sale of the property.
Sec. 11. Section 42-18205, Arizona Revised Statutes, is amended to read:
42-18205. County treasurer's deed; form
A. The county board of supervisors shall sell the property in the same manner as the sale of land by the state under tax deed pursuant to article 7 of this chapter.
A. B. On receiving a certified copy of a judgment foreclosing the right to redeem and a fee of fifty dollars $50 per parcel, the county treasurer shall execute and deliver to the party in whose favor the judgment was entered that purchased the property pursuant to subsection A of this section a deed conveying the property described in the judgment sale.
B. C. The deed shall include the following information:
1. The date, court action number and name of the judgment of the sale.
2. The name of the purchaser at the sale.
3. The property description.
4. The date of the conveyance.
5. A formal acknowledgment by the treasurer.
Sec. 12. Heading change
The article heading of title 42, chapter 18, article 7, Arizona Revised Statutes, is changed from "sale of land held by state under tax deed" to "sale of land held by state under tax deed or after judicial foreclosure of right of redemption".
Sec. 13. Section 42-18302, Arizona Revised Statutes, is amended to read:
42-18302. Notice of sale; third-party contractor
A. The board of supervisors shall advertise the real property for sale at a public sale. The advertisement shall be by:
1. Publishing the list and notice of sale in a newspaper of general circulation in the county at least once a week for at least two weeks, but not more than three weeks, before the stated date of the sale.
2. Continuously posting a current list and notice in the offices of the board of supervisors.
3. Posting on a multiple listing service for at least thirty days before the date of the sale.
B. The newspaper that prints publishes the list and notice shall also post the list and notice on the internet on a website that posts the legal notices of ten or more Arizona newspapers.
C. The board of supervisors may contract with a third party to operate and advertise the public sale. The contract may provide that a property sells for more than the AMOUNT of the taxes, penalties, interest and costs charged against the property, the private party operating and advertising the public sale and advertising the property may receive up to three percent of the amount of the sale price of a property that is more than the amount of the taxes, penalties, interest and costs charged against the property.
Sec. 14. Section 42-18303, Arizona Revised Statutes, is amended to read:
42-18303. Auction and sale of land held by state under tax deed or after foreclosure of the right to redeem; disposition of proceeds
A. After advertisement, pursuant to section 42-18302, the board of supervisors may sell the real property in the county held by the this state by tax deed or for which a judgment foreclosing the right to redeem has been entered to the highest bidder for cash except as provided in subsections E and F of this section. The property may shall also be posted on the treasurer's website. The sale may shall include a live auction or an online bidding process in which the board receives bids electronically over the internet in a real-time, competitive bidding event.
B. On selling the property, the board of supervisors shall execute and deliver to the property purchaser, at the property purchaser's cost, a deed conveying the title of the state in and to the parcel purchased. The deed shall be acknowledged by the chairman and clerk of the board.
C. The purchase money shall be paid to the county treasurer. The county treasurer shall:
1. For a property for which a judgment foreclosing the right to redeem has been entered, distribute the proceeds to the certificate of purchase holder on the property in the amount of the tax lien and any penalties, fees and costs charged against the parcel.
2. for a property held by this state under tax deed, after deducting and distributing interest, penalties, fees and costs charged against the parcel, the treasurer shall apportion monies the unpaid delinquent taxes to the funds of the various taxing authorities in proportion to their current share of the taxes charged against real property.
3. Distribute any balance remaining with the treasurer after payment of the taxes, interest, penalties, fees and costs shall be paid pursuant to paragraph 1 or 2 of this subsection to the property owner of the property who was dispossessed by the sale. Any monies that remain unclaimed after one hundred twenty days shall be disposed of pursuant to title 44, chapter 3.
D. If the property is not sold before the time for the next succeeding notice of sale, the board of supervisors may omit it from the notice.
E. The board of supervisors may accept an a market-rate offer from, and sell real property held by this state by tax deed to, the county or a city, town or special taxing district in the county for a public purpose related to transportation or flood control. The board of supervisors shall convey the deed and apportion the monies received in the transaction in the manner prescribed by this section.
F. The board of supervisors may sell real property in the county held by the this state by tax deed to the owner of contiguous real property that is used for residential purposes, and the board may accept an offer by the contiguous owner to purchase the property, if both of the following conditions apply:
1. Both the property offered for sale and the contiguous property were at one time under common ownership, or the property offered for sale is part of a common area maintained by a homeowners' association as determined by the county assessor.
2. The property offered for sale cannot be separately used for residential purposes pursuant to applicable building codes and ordinances of the jurisdiction in which the property is located due to its size, configuration or recorded common area restrictions.
G. If an offer under subsection E or F of this section is pending at the time of the auction under this section, the board of supervisors shall remove the property from the auction.
H. G. Subsection F of this section does not apply if there is more than one contiguous parcel of property that meets the requirements prescribed by subsection F of this section.
Sec. 15. Short title
This act may be cited as the "Property Equity Protection Act".
Sec. 16. Emergency
This act is an emergency measure that is necessary to preserve the public peace, health or safety and is operative immediately as provided by law.