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.