BILL ANALYSIS S.B. 1545 By: Henderson (Dutton) May 10, 1995 Committee Report (Unamended) BACKGROUND Currently, Texas municipalities are encountering increasing demands for the abatement of health and safety hazards connected with blighted or abandoned properties. Subchapter B, Chapter 33, Tax Code, provides an administrative process for taxing units to seize and sell personal property by warrant. If this same procedure could be used for real property with health or safety liens, the property could be returned to productivity faster. PURPOSE This bill would allow municipalities to seize and sell real property by warrant that is abandoned, unused, and vacant. Also it would allow the municipality to transfer the property to a charitable organization improving property for low-income housing for less than the tax warrant or market value of the property if a sufficient bid is not received at the sale. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 33 (Delinquency), Tax Code, by adding Subchapter E SEIZURE OF REAL PROPERTY. Section 33.91 PROPERTY SUBJECT TO SEIZURE. Provides a method for municipalities to seize and sell real property for the payment of taxes, penalties, interest, and the amount secured by municipal health and safety liens. Applies to property that: (1) the property: (A) is in a municipality; (B) is less than one acre; and (C) has been abandoned, unused, and vacant for at least one year; (2) the taxes on the property are delinquent for: (A) each of the preceding five years; or (B) each of the preceding three years if a lien on the property has been created on the property in favor of the municipality for the cost of remedying a health or safety hazard on the property; and (3) the tax collector of the municipality determines that seizure of the property would be in the best interest of the municipality. Section 33.92 INSTITUTION OF SEIZURE. (a) Once a property has become subject to seizure, a municipality may apply to a district court in the county for a tax warrant. (b) The court shall issue the warrant if by affidavit, the collector shows that the property is subject to seizure under Section 33.91. Section 33.93 TAX WARRANT. (a) The warrant shall direct the sheriff or a constable in the county, and the collector for the municipality to seize the property, subject to the right of redemption. The warrant shall also direct the person whose property is seized to disclose the name and address of any other person having an interest in the property. (b) A bond may not be required of a municipality for issuance or delivery of a tax warrant, and a fee or court cost may not be charged for the issuance or delivery of the warrant. (c) On issuance of a warrant, the collector shall take possession of the property pending its sale. Section 33.94 NOTICE OF TAX SALE. (a) After seizure of property, the collector for the municipality shall make a reasonable inquiry to determine the identity and address of any person having an interest in the property. The collector shall deliver a notice stating the time and place of the sale, including a brief description of the property. (b) Failure to send or receive a notice required by this section does not affect the validity of the sale, or title to the property. Section 33.95 PURCHASER. Provides that a purchaser at a tax sale may conclusively presume the validity of the sale and takes the property free of any claim of interest in the property, subject to the rights of redemption. SECTION 2. Amends Section 34.01 (Sale of Property), Tax Code, by adding Subsection (e) to permit the officer conducting the sale of the property to accept a bid for less than market value from an organization defined in Section 11.181 (Charitable Organization Improving Property for Low-Income Housing), Tax Code. Consent to the sale by the taxing units is not required. SECTION 3. Amends Section 16.002 (One-Year Limitations Period), Civil Practices and Remedies Code, by adding Subsection (b) to provide a one-year limitations period, from the date the property is sold, to challenge a seizure and sale under the provisions of Subchapter E, Chapter 33, Tax Code. SECTION 4. Amends Section 342.007 (Assessment of Expenses; Lien), Health and Safety Code, by adding Subsection (h) to allow a municipality to foreclose a sanitation lien under the provisions of Subchapter E, Chapter 33, Tax Code. SECTION 5. Amends Subchapter A (Dangerous Structures), Chapter 214, Local Government Code, by adding Section 214.004 SEIZURE AND SALE OF PROPERTY TO RECOVER EXPENSES. Provides for the foreclosure of a repair, removal or demolition lien under the provisions of Subchapter E, Chapter 33, Tax Code. SECTION 6. Amends Subchapter B (Plumbing and Sewers), Chapter 214, Local Government Code, by adding Section 214.015 SEIZURE AND SALE OF PROPERTY TO RECOVER EXPENSES. Provides for the foreclosure of a plumbing and sewer lien under the provisions of Subchapter E, Chapter 33, Tax Code. SECTION 7. Amends Subchapter C (Swimming Pool Enclosures), Chapter 214, Local Government Code, by adding Section 214.102 SEIZURE AND SALE OF PROPERTY TO RECOVER EXPENSES. Provides for the foreclosure of a swimming pool enclosure lien under the provisions of Subchapter E, Chapter 33, Tax Code. SECTION 8. Emergency Clause. SUMMARY OF COMMITTEE ACTION Pursuant to a notice posted in accordance with the rules, the committee met in a public hearing on May 9, 1995. The chair laid out S.B. 1545. By a record vote of 8 ayes, 0 nays, 0 present not voting and 3 absent, the committee voted to report S.B. 1545 to the House without amendment with the recommendation that it do pass.