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In genera[, property subject to the City's lien may be so[d, in whole or in parcels, pumuant to court order to collect the amounts
<br />due. Federal law does not allow for the collection of penalty and interest against an estate in bankruptcy. Federal bankruptcy
<br />law provides that an automatic stay of action by creditors and other entities, including governmental units, goes into effect with
<br />the filing of any petition in bankruptcy. The automatic stay prevents governmental units from foreclosing on property and
<br />prevents liens for post-petition taxes from attaching to proper~y and obtaining secured creditor status un[ess, in either case, an
<br />order lifting the stay is obtained from the bankruptcy court. [n many cases post-petition taxes are paid as an administrative
<br />expense of the estate in bankruptcy or by order of the bankruptcy court,
<br />
<br />The Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), enacted on August 9, 1989, contains
<br />certain provisions which affect the time for protesting proper~y valuations, the fixing of tax liens and the collection of penalties
<br />and interest on delinquent taxes on real property owned by the FDIC and the RTC.
<br />
<br />Under FIRREA, real property held by the FDIC or RTC is still subject to ad valorem taxation, but (i) no real property of the FDIC
<br />or RTC is subject to foreclosure or sale without the consent of the FDIC or RTC and no involuntary lien will attach to such
<br />property, (ii) the FDiC or RTC is not liable for any penalties or fines, including those arising from the failure to pay any real
<br />property tax when due and (iii) notwithstanding the failure of a person to challenge an appraisal in accordance with State law,
<br />such value will be determined as of the period for which such tax is imposed.
<br />
<br />Tax Rate Limitations
<br />
<br />Imposed by Article Xl, Section 5 of the Texas Constitution applicable to cities of more than 5,000 population: $2.50 per $100
<br />assessed valuation. The City operates under a Home Rule Charter, which adopts the Constitutional provisions.
<br />
<br />Issuer's Rights in the Event of Tax Delinquencies
<br />
<br />Taxes levied by the Issuer are a persona[ obligation of the owner of the property as of January 1 of the year for which the tax is
<br />imposed. On January 1 of each year, a tax lien attaches to property to secure the payment of all state and local taxes,
<br />penalties, and interest ultimately imposed for the year on the property. The lien exists in favor of the State of Texas and each
<br />local taxing unit, including the Issuer, having power to tax the property. The Issuer's tax lien is on a parity with tax liens of such
<br />other taxing units. A tax lien on rea[ proper~y takes priority over the claim of most creditors and other holders of liens on the
<br />property encumbered by the tax lien, whether or not the debt or lien existed before the attachment of the tax lien; however,
<br />whether a lien of the United States is on a parity with or takes priority over a tax lien of the Issuer is determined by applicable
<br />federal law. Personal property, under certain circumstances, is subject to seizure and sale for the payment of delinquent taxes,
<br />penalty, and interest.
<br />
<br />At any time after taxes on property become delinquent, the Issuer may file suit to foreclose the lien securing payment of the tax,
<br />to enforce persona[ liability for the tax, or both. In filing a suit to foreclose a tax lien on rea[ property, the Issuer must join other
<br />taxing units that have claims for delinquent taxes against all or part of the same property. Collection of delinquent taxes may
<br />be adversely affected by the amount of taxes owed to other taxing units, by the effects of market conditions on the foreclosure
<br />sale price, by taxpayer redemption rights (a taxpayer may redeem property within two (2) years after the purchaser's deed
<br />issued at the foreclosure sale is filed in the City records) or by bankruptcy proceedings which restrict the collection of taxpayer
<br />debts. Federal bankruptcy law provides that an automatic stay of actions by creditors and other entities, including
<br />governmental units, goes into effect with the filing of any petition in bankruptcy. The automatic stay prevents governmental
<br />units from foreclosing on property and prevents liens for post-petition taxes from attaching to property and obtaining secured
<br />creditor status unless, in either case, an order liffdng the stay is obtained from the bankruptcy court. In many cases, post-
<br />petition taxes are paid as an administrative expense of the estate in bankruptcy or by order of the bankruptcy court.
<br />
<br />CITY APPLICATION OF THE PROPERTY TAX CODE
<br />
<br />The City grants an exemption of $17,000 to the market value of the residence homestead of persons 65 years of age or older
<br />and the disabled. See Appendix A - Table 10 for a listing of the amounts of these exemptions.
<br />
<br />The City does not grant an additional exemption of 20% of the market value of residence homesteads, minimum exemption of
<br />$5,000.
<br />
<br />The City taxes only business persona[ property.
<br />
<br />The City does not permit split payments and does not allow discounts,
<br />
<br />The City currently grants the freeport exemption. Pursuant to City action taken on December 11, 1989, the City elected not to
<br />continue to tax Article VIII, Section 1-j (~freeport") exempt property.
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