House Bill No. 3710 amends Section 31.08 of the Texas Tax Code to clarify the implications of tax certificates that accompany property transfers. The bill specifies that if a tax certificate erroneously indicates that no delinquent taxes, penalties, or interest are owed on a property, the tax lien is extinguished, and the purchaser is not liable for any delinquent amounts. However, the original taxpayer remains liable for taxes, penalties, or interest for the year the tax was imposed or the property was omitted. Additionally, the bill introduces a new subsection that states that if a tax certificate incorrectly indicates no delinquent amounts due due to an erroneously allowed residence homestead exemption, the tax lien is not extinguished if the property transfer occurs between certain related parties, such as family members, employer-employee relationships, parent companies and subsidiaries, or trusts and beneficiaries.

The changes made by this bill will only apply to tax certificates issued on or after its effective date of September 1, 2025. Tax certificates issued prior to this date will continue to be governed by the existing law. This legislation aims to provide clarity and protection for property purchasers while ensuring that tax liabilities are appropriately addressed.

Statutes affected:
Introduced: Tax Code 31.08 (Tax Code 31)
House Committee Report: Tax Code 31.08 (Tax Code 31)