BILL ANALYSIS H.B. 741 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. PURPOSE As proposed, H.B. 741 creates an exemption to liability imposed on municipalities with a population of 1.5 million for a claim arising from land acquired at a sale following the foreclosure of a lien held by the municipality. 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 101C, Civil Practice and Remedies Code, by adding Section 101.064, as follows: Sec. 101.064. LAND ACQUIRED UNDER FORECLOSURE OF LIEN. (a) Provides that this section applies only to a municipality with a population of 1.5 million or more that acquires land at a sale following the foreclosure of a lien held by the municipality. (b) Provides that this chapter does not apply to a claim that arises after the date the land was acquired and before the date the land is sold, conveyed, or exchanged by the municipality; and arises from the condition of the land, a premises defect on the land, or an action committed by any person, other than an agent or employee of the municipality, on the land. (c) Defines "land." SECTION 2. Makes application of this Act prospective. SECTION 3. Emergency clause. Effective date: upon passage.