BILL ANALYSIS



C.S.H.B. 740
By: Farrar
04-12-95
Committee Report (Substituted)


BACKGROUND


As of December, 1994, the City of Houston was in possession of 237
properties that it foreclosed upon because of delinquent taxes. 
Many of these properties are unmarketable as residential
properties, and the City of Houston has had difficulty conveying
these properties for the amount of taxes owed or the fair market
value.  Charitable organizations that develop properties for low-income housing would like for the City of Houston to foreclose on
additional properties that may be more suitable for residential
development.  Due to the large number of properties that the City
of Houston has been unable to sell, the city is hesitant to
foreclose upon additional properties because of requirements
regarding the purchase and sale of such properties, and the
liability that the city incurs once it forecloses on a property. 
There are several posting, notice, and time procedures in the Tax
Code, the Local Government Code, and the Rules of Civil Procedure
that the City must comply with in the acquisition and transfer of
these properties.


PURPOSE

The bill's purpose is to allow the a municipality with a population
of 1.5 million or more to develop its own time, posting, and notice
provisions regarding the sale of tax-foreclosed properties.  This
addition is designed to encourage cities to foreclose on tax-delinquent properties.  

RULEMAKING AUTHORITY

This bill would grant municipalities with a population of 1.5
million or more authority to make rules pertaining to the sale of
tax-foreclosed properties such as time of sale, posting of notice
of the sale, as well as the publication of notice of the sale.


SECTION BY SECTION ANALYSIS

SECTION 1.

     This section allows the governing body of a city with 1.5
million or more residents to provide for the manner in which land
that has been foreclosed on due to delinquent taxes may be sold. 

SECTION 2.

     Emergency clause.  Effective upon passage.

COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute adds language limiting alternate manner of sale by
city to sales to charitable organization entitled to exemption
under Section 11.181 of the Tax Code.

SUMMARY OF COMMITTEE ACTION

HB 740 was considered by the committee in a public hearing on April
10, 1995.  The committee considered a complete substitute for the
bill.  The substitute was adopted without objection.  The following
people testified in favor of the bill:  Rep. Farrar; Milby Hart,
representing himself and Houston Habitat for Humanity, Inc.; and
Dan Doherty, representing the City of Houston.  The bill was
reported favorably as substituted, with the recommendation that it
do pass and be printed, by a record vote of 8 ayes, 0 nays, 0 pnv,
and 1 absent.