Amy Bjelland 1700 W. Washington

Legislative Research Analysts Phoenix, AZ 85007-2848

(602) 542-3860 FAX (602) 542-4511

To: Members of the Counties and Municipalities Informational Meeting

Re: HB 2283 ~~courts; time payment fee~~ (now: property tax liens)

Date: April 12, 2001

The Senate adopted a strike-everything amendment to HB 2283 regarding property tax liens. The Senate engrossed bill clarifies tax lien priority and broadens foreclosure notice requirements.

History

Arizona law allows a tax lienholder to file a notice of foreclosure on a parcel of real property after three years. There is no requirement that the foreclosing lienholder notice other lienholders. A separate provision of law states that a lienholder who forecloses takes title subject to unextinguished tax liens from other years.

This ambiguity in the law gave rise to the question of whether a tax lienholder could foreclose tax liens from other years. A recent Arizona Court of Appeals decision, Bauza Holdings, L.L.C. v. Primeco, Inc. (18 P.3d 132 (Jan. 25, 2001)), held that a tax lien takes priority over all other liens, except liens held by the state or liens for taxes accruing in any other year (emphasis added). This means that a tax lienholder cannot foreclose tax liens from other year, and takes title to property in a foreclosure action subject to unextinguished liens.

Provisions

· Specifies that a tax lien does not have priority over liens for taxes accruing in any other years.

· Authorizes the purchaser of a tax lien to send notice of intent to file a foreclosure action to one of several addresses other than just the address of the property owner of record.

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