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.