H.B. No. 1743
1-1 AN ACT
1-2 relating to preservation of historic properties by certain
1-3 municipalities.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subchapter A, Chapter 214, Local Government Code,
1-6 is amended by adding Section 214.00111 to read as follows:
1-7 Sec. 214.00111. ADDITIONAL AUTHORITY TO PRESERVE SUBSTANDARD
1-8 BUILDING AS HISTORIC PROPERTY. (a) This section applies only to a
1-9 municipality that is designated as a certified local government by
1-10 the state historic preservation officer as provided by 16 U.S.C.A.
1-11 Section 470 et seq.
1-12 (b) This section does not apply to an owner-occupied,
1-13 single-family dwelling.
1-14 (c) Before a notice is sent or a hearing is conducted under
1-15 Section 214.001, the historic preservation board of a municipality
1-16 may review a building described by Section 214.001(a) to determine
1-17 whether the building can be rehabilitated and designated:
1-18 (1) on the National Register of Historic Places;
1-19 (2) as a Recorded Texas Historic Landmark; or
1-20 (3) as historic property through a municipal historic
1-21 designation.
1-22 (d) If a municipal historic preservation board reviews a
1-23 building, the board shall submit a written report to the
1-24 municipality indicating the results of the review conducted under
2-1 this section before a public hearing is conducted under Section
2-2 214.001.
2-3 (e) If the municipal historic preservation board report
2-4 determines that the building may not be rehabilitated and
2-5 designated as historic property, the municipality may proceed as
2-6 provided by Section 214.001.
2-7 (f) If the municipal historic preservation board report
2-8 determines that the building may be rehabilitated and designated as
2-9 historic property, the municipality may not permit the building to
2-10 be demolished for at least 90 days after the date the report is
2-11 submitted. During this 90-day period, the municipality shall
2-12 notify the owner and attempt to identify a feasible alternative use
2-13 for the building or locate an alternative purchaser to rehabilitate
2-14 and maintain the building. If the municipality is not able to
2-15 locate the owner or if the owner does not respond within the 90-day
2-16 period, the municipality may appoint a receiver as provided by
2-17 Section 214.003.
2-18 (g) The municipality may require the building to be
2-19 demolished as provided by Section 214.001 after the expiration of
2-20 the 90-day period if the municipality is not able to:
2-21 (1) identify a feasible alternative use for the
2-22 building;
2-23 (2) locate an alternative purchaser to rehabilitate
2-24 and maintain the building; or
2-25 (3) appoint a receiver for the building as provided by
2-26 Section 214.003.
2-27 (h) An owner of a building described by Section 214.001(a)
3-1 is not liable for penalties related to the building that accrue
3-2 during the 90-day period provided for disposition of historic
3-3 property under this section.
3-4 SECTION 2. Section 214.003, Local Government Code, is
3-5 amended to read as follows:
3-6 Sec. 214.003. Receiver. (a) A home-rule municipality may
3-7 bring an action in district court against an owner of residential
3-8 property that is not in substantial compliance with the municipal
3-9 ordinances regarding:
3-10 (1) fire protection;
3-11 (2) structural integrity;
3-12 (3) zoning; or
3-13 (4) disposal of refuse.
3-14 (b) Except as provided by Subsection (c), the <The> court
3-15 may appoint as a receiver for the property a nonprofit organization
3-16 with a demonstrated record of rehabilitating residential properties
3-17 if the court finds that:
3-18 (1) the structures on the property are in violation of
3-19 the standards set forth in Section 214.001(b) and an ordinance
3-20 described by Subsection (a);
3-21 (2) notice of violation was given to the record owner
3-22 of the property; and
3-23 (3) a public hearing as required by Section 214.001(c)
3-24 has been conducted.
3-25 (c) The court may appoint as a receiver for historic
3-26 property subject to Section 214.00111 a nonprofit organization or
3-27 an individual with a demonstrated record of rehabilitating
4-1 historical buildings if the court finds that:
4-2 (1) the structures on the property are in violation of
4-3 the standards established under Section 214.001(b) and an ordinance
4-4 described by Subsection (a);
4-5 (2) the structure has been reviewed by the municipal
4-6 historic preservation board and the structure meets the criteria
4-7 set forth in Section 214.00111;
4-8 (3) notice of the violation was given to the record
4-9 owner of the property; and
4-10 (4) a public hearing as required by Section 214.001
4-11 has been conducted.
4-12 (d) <(c)> For the purposes of this section, if the record
4-13 owner does not appear at the hearing required by Section
4-14 214.001(c), the hearing shall be conducted as if the owner had
4-15 personally appeared.
4-16 (e) <(d)> In the action, the record owners and any
4-17 lienholders of record of the property shall be served with personal
4-18 notice of the proceedings or, if not available after due diligence,
4-19 may be served by publication. Actual service or service by
4-20 publication on the record owners or lienholders constitutes notice
4-21 to all unrecorded owners or lienholders.
4-22 (f) <(e)> The court may issue, on a showing of imminent risk
4-23 of injury to any person occupying the property or a person in the
4-24 community, any mandatory or prohibitory temporary restraining
4-25 orders and temporary injunctions necessary to protect the public
4-26 health and safety.
4-27 (g) <(f)> A receiver appointed by the court may:
5-1 (1) take control of the property;
5-2 (2) collect rents due on the property;
5-3 (3) make or have made any repairs necessary to bring
5-4 the property into compliance with:
5-5 (A) minimum standards in local ordinances; or
5-6 (B) guidelines for rehabilitating historic
5-7 properties established by the secretary of the interior under 16
5-8 U.S.C.A. Section 470 et seq. or the municipal historic preservation
5-9 board, if the property is considered historic property under
5-10 Section 214.00111;
5-11 (4) make payments necessary for the maintenance or
5-12 restoration of utilities to the properties;
5-13 (5) purchase materials necessary to accomplish
5-14 repairs;
5-15 (6) renew existing rental contracts and leases;
5-16 (7) enter into new rental contracts and leases;
5-17 (8) affirm, renew, or enter into a new contract
5-18 providing for insurance coverage on the property; and
5-19 (9) exercise all other authority that an owner of the
5-20 property would have except for the authority to sell the property.
5-21 (h) <(g)> On the completion of the restoration to the
5-22 property of the minimum code standards of the municipality or
5-23 guidelines for rehabilitating historic property:
5-24 (1) the receiver shall file with the court a full
5-25 accounting of all costs and expenses incurred in the repairs,
5-26 including reasonable costs for labor and supervision, and all
5-27 income received from the property;
6-1 (2) if the income exceeds the cost and expense of
6-2 rehabilitation, the rehabilitated property shall be restored to the
6-3 owners and any net income shall be returned to the owners; and
6-4 (3) if costs and expenses exceed the income received
6-5 during the receivership, the receiver shall maintain control of the
6-6 property until the time all rehabilitation and maintenance costs
6-7 are recovered.
6-8 (i) <(h)> Any record lienholder may, after initiation of an
6-9 action by a municipality:
6-10 (1) intervene in the action; and
6-11 (2) request appointment as a receiver:
6-12 (A) under the same conditions as the nonprofit
6-13 organization; and
6-14 (B) on a demonstration to the court of an
6-15 ability and willingness to rehabilitate the property.
6-16 (j) <(i)> For the purposes of this section, the interests
6-17 and rights of an unrecorded lienholder or unrecorded property owner
6-18 are, in all respects, inferior to the rights of a duly appointed
6-19 receiver.
6-20 (k) <(j)> The court may not appoint a receiver for any
6-21 property that:
6-22 (1) is an owner-occupied, single-family residence; or
6-23 (2) is zoned nonresidential and used in a
6-24 nonresidential character.
6-25 (l) <(k)> A receiver appointed by a district court under
6-26 this section, or the home-rule municipality that filed the action
6-27 under which the receiver was appointed, may petition the court to
7-1 terminate the receivership and order the sale of the property
7-2 <transfer ownership of the property to the receiver>:
7-3 (1) if the receiver has been in control of the
7-4 property for more than two years and no legal owner has been
7-5 identified after a diligent search; or
7-6 (2) after the receiver has been in control of the
7-7 property for more than three years, if an owner has been identified
7-8 and served with notices but has failed to assume control or repay
7-9 all rehabilitation and maintenance costs of the receiver.
7-10 (m) <(l)> In the action, the record owners and any
7-11 lienholders of record of the property shall be served with personal
7-12 notice of the proceedings or, if not found after due diligence, may
7-13 be served by publication. Actual service or service by publication
7-14 on all record owners and lienholders of record constitutes notice
7-15 to all unrecorded owners and lienholders.
7-16 (n) The <(m) Subject to all previously recorded bona fide
7-17 liens, the> court may order <award clear title to> the sale of the
7-18 property <to the receiver> if the court finds that:
7-19 (1) notice was given to each record owner of the
7-20 property and each lienholder of record;
7-21 (2) the receiver has been in control of the property
7-22 for more than two years and no legal owner has been identified
7-23 after a diligent search, or the receiver has been in control of the
7-24 property for more than three years and an owner has been identified
7-25 but has failed to repay all rehabilitation and maintenance costs of
7-26 the receiver; and
7-27 (3) no lienholder of record has intervened in the
8-1 action and offered to repay the costs of the receiver and assume
8-2 control of the property.
8-3 (o) The court shall order the sale to be conducted by the
8-4 petitioner in the same manner that a sale is conducted under
8-5 Chapter 51, Property Code. If the record owners and lienholders
8-6 are identified, notice of the date and time of the sale must be
8-7 sent in the same manner as provided by Chapter 51, Property Code.
8-8 If the owner cannot be located after due diligence, the owner may
8-9 be served notice by publication. The receiver may bid on the
8-10 property at the sale. The petitioner shall make a report of the
8-11 sale to the court.
8-12 (p) The court shall confirm the sale and order a
8-13 distribution of the proceeds of the sale in the following order:
8-14 (1) court costs;
8-15 (2) costs and expenses of the receiver; and
8-16 (3) valid liens.
8-17 (q) Any remaining sums must be paid to the owner. If the
8-18 owner is not identified or cannot be located, the court shall order
8-19 the remaining sums to be deposited in an interest-bearing account
8-20 with the district clerk's office in the district in which the
8-21 action is pending, and the clerk shall hold the funds as provided
8-22 by other law.
8-23 (r) After the proceeds are distributed, the court shall
8-24 award fee title to the purchaser subject to any recorded bona fide
8-25 liens that were not paid by the proceeds of the sale.
8-26 SECTION 3. The importance of this legislation and the
8-27 crowded condition of the calendars in both houses create an
9-1 emergency and an imperative public necessity that the
9-2 constitutional rule requiring bills to be read on three several
9-3 days in each house be suspended, and this rule is hereby suspended.