ARIZONA STATE SENATE

RESEARCH STAFF

 

JAMES F. KEANE

LEGISLATIVE  RESEARCH ANALYST

GOVERNMENT COMMITTEE

Telephone: (602) 542-3171

Facsimile: (602) 542-7833

 

TO:                  MEMBERS OF THE SENATE GOVERNMENT COMMITTEE                  

DATE:             March 29, 2001

 

SUBJECT:       Strike Everything Amendment to H.B. 2283

                                                                                                                                                           

           

 

Purpose

 

Grants tax lien purchasers the option of sending foreclosure notices to the owner of the property according to the records of the county assessor, the tax roll or the records of the county treasurer, rather than according to the records of the county recorder.  Clarifies priority of multiple tax year liens.

 

Background

 

Statute classifies property taxes as a lien on the assessed property and authorizes county treasurers to sell the tax lien for unpaid, delinquent taxes. Tax liens are sold to the person who pays the entire amount of the delinquent taxes and penalties on the property and who accepts the lowest rate of interest on the tax lien amount.  At any time beginning three years after the sale of a tax lien, if the lien is not redeemed, the purchaser is allowed to bring an action in superior court to foreclose the right to redeem.  If the court finds that the tax lien sale is valid and that the tax lien has not been redeemed, the court is required to foreclose the right of the original property owner to redeem the tax lien and is required to convey the real property to the owner of the tax lien. 

 

This legislation alters the notification requirements for foreclosing the right to redeem a tax lien and stipulates that no tax lien is prior and superior to liens for taxes accruing in other years.  Under a recent case, the Arizona Court of Appeals (Bauza Holdings, LLC v. Primeco, Inc.) had been asked to decide whether the holder of one year’s lien could extinguish the interest of holders of other years’ liens; the court ruled that it could not decide based on the construction of the tax lien system.  This legislation intends to provide clear direction regarding this issue.

 

This legislation has no fiscal impact upon the state general fund.

 

Provisions

 

1.      Stipulates that a tax lien is not prior and superior to liens for taxes accruing in any other years.

 

2.      Grants purchasers of tax liens about to foreclose on a tax lien the option to send notice of intent to foreclose to the property owner according to the records of the county assessor, the situs address of the property shown on the tax roll or the tax bill mailing address according to the records of the county treasurer, rather than the property owner of record according to the county recorder.

 

3.      Provides for a general effective date.

 

House Action

 

JUD                 1/16/01            DP       10-0-0-0

3rd Read           2/19/01                        50-8-2-0

 

JFK/jas