BILL ANALYSIS


                                                         H.B. 740
                                               By: Farrar (Ellis)
                                      Intergovernmental Relations
                                                         05-17-95
                              Senate Committee Report (Unamended)
BACKGROUND

As of December 1994, the City of Houston (city) 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 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 the city to foreclose on additional properties
that may be more suitable for residential development.  Due to the
large number of properties that the city 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

As proposed, H.B. 740 authorizes the governing body of a
municipality with a population of 1.5 million or more to provide
for the manner in which land ordered sold pursuant to foreclosure
of an ad valorem tax lien in favor of the municipality may be sold
if the land is sold to a charitable organization.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 34A, Tax Code, by adding Section 34.105,
as follows:

     Sec. 34.105.  ALTERNATE MANNER OF SALE.  Authorizes the
     governing body of a municipality with a population of 1.5
     million or more to provide for the manner in which land
     ordered sold pursuant to foreclosure of a tax lien in favor of
     the municipality may be sold if the land is sold to a
     charitable organization entitled to an exemption under Section
     11.181 from ad valorem taxation on real property owned by the
     organization.
SECTION 2. Emergency clause.
           Effective date: upon passage.