1-1 By: Glaze (Senate Sponsor - Cain) H.B. No. 1743
1-2 (In the Senate - Received from the House April 12, 1995;
1-3 April 18, 1995, read first time and referred to Committee on State
1-4 Affairs; April 21, 1995, reported favorably by the following vote:
1-5 Yeas 11, Nays 0; April 21, 1995, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to preservation of historic properties by certain
1-9 municipalities.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Subchapter A, Chapter 214, Local Government Code,
1-12 is amended by adding Section 214.00111 to read as follows:
1-13 Sec. 214.00111. ADDITIONAL AUTHORITY TO PRESERVE SUBSTANDARD
1-14 BUILDING AS HISTORIC PROPERTY. (a) This section applies only to a
1-15 municipality that is designated as a certified local government by
1-16 the state historic preservation officer as provided by 16 U.S.C.A.
1-17 Section 470 et seq.
1-18 (b) This section does not apply to an owner-occupied,
1-19 single-family dwelling.
1-20 (c) Before a notice is sent or a hearing is conducted under
1-21 Section 214.001, the historic preservation board of a municipality
1-22 may review a building described by Section 214.001(a) to determine
1-23 whether the building can be rehabilitated and designated:
1-24 (1) on the National Register of Historic Places;
1-25 (2) as a Recorded Texas Historic Landmark; or
1-26 (3) as historic property through a municipal historic
1-27 designation.
1-28 (d) If a municipal historic preservation board reviews a
1-29 building, the board shall submit a written report to the
1-30 municipality indicating the results of the review conducted under
1-31 this section before a public hearing is conducted under Section
1-32 214.001.
1-33 (e) If the municipal historic preservation board report
1-34 determines that the building may not be rehabilitated and
1-35 designated as historic property, the municipality may proceed as
1-36 provided by Section 214.001.
1-37 (f) If the municipal historic preservation board report
1-38 determines that the building may be rehabilitated and designated as
1-39 historic property, the municipality may not permit the building to
1-40 be demolished for at least 90 days after the date the report is
1-41 submitted. During this 90-day period, the municipality shall
1-42 notify the owner and attempt to identify a feasible alternative use
1-43 for the building or locate an alternative purchaser to rehabilitate
1-44 and maintain the building. If the municipality is not able to
1-45 locate the owner or if the owner does not respond within the 90-day
1-46 period, the municipality may appoint a receiver as provided by
1-47 Section 214.003.
1-48 (g) The municipality may require the building to be
1-49 demolished as provided by Section 214.001 after the expiration of
1-50 the 90-day period if the municipality is not able to:
1-51 (1) identify a feasible alternative use for the
1-52 building;
1-53 (2) locate an alternative purchaser to rehabilitate
1-54 and maintain the building; or
1-55 (3) appoint a receiver for the building as provided by
1-56 Section 214.003.
1-57 (h) An owner of a building described by Section 214.001(a)
1-58 is not liable for penalties related to the building that accrue
1-59 during the 90-day period provided for disposition of historic
1-60 property under this section.
1-61 SECTION 2. Section 214.003, Local Government Code, is
1-62 amended to read as follows:
1-63 Sec. 214.003. Receiver. (a) A home-rule municipality may
1-64 bring an action in district court against an owner of residential
1-65 property that is not in substantial compliance with the municipal
1-66 ordinances regarding:
1-67 (1) fire protection;
1-68 (2) structural integrity;
2-1 (3) zoning; or
2-2 (4) disposal of refuse.
2-3 (b) Except as provided by Subsection (c), the <The> court
2-4 may appoint as a receiver for the property a nonprofit organization
2-5 with a demonstrated record of rehabilitating residential properties
2-6 if the court finds that:
2-7 (1) the structures on the property are in violation of
2-8 the standards set forth in Section 214.001(b) and an ordinance
2-9 described by Subsection (a);
2-10 (2) notice of violation was given to the record owner
2-11 of the property; and
2-12 (3) a public hearing as required by Section 214.001(c)
2-13 has been conducted.
2-14 (c) The court may appoint as a receiver for historic
2-15 property subject to Section 214.00111 a nonprofit organization or
2-16 an individual with a demonstrated record of rehabilitating
2-17 historical buildings if the court finds that:
2-18 (1) the structures on the property are in violation of
2-19 the standards established under Section 214.001(b) and an ordinance
2-20 described by Subsection (a);
2-21 (2) the structure has been reviewed by the municipal
2-22 historic preservation board and the structure meets the criteria
2-23 set forth in Section 214.00111;
2-24 (3) notice of the violation was given to the record
2-25 owner of the property; and
2-26 (4) a public hearing as required by Section 214.001
2-27 has been conducted.
2-28 (d) <(c)> For the purposes of this section, if the record
2-29 owner does not appear at the hearing required by Section
2-30 214.001(c), the hearing shall be conducted as if the owner had
2-31 personally appeared.
2-32 (e) <(d)> In the action, the record owners and any
2-33 lienholders of record of the property shall be served with personal
2-34 notice of the proceedings or, if not available after due diligence,
2-35 may be served by publication. Actual service or service by
2-36 publication on the record owners or lienholders constitutes notice
2-37 to all unrecorded owners or lienholders.
2-38 (f) <(e)> The court may issue, on a showing of imminent risk
2-39 of injury to any person occupying the property or a person in the
2-40 community, any mandatory or prohibitory temporary restraining
2-41 orders and temporary injunctions necessary to protect the public
2-42 health and safety.
2-43 (g) <(f)> A receiver appointed by the court may:
2-44 (1) take control of the property;
2-45 (2) collect rents due on the property;
2-46 (3) make or have made any repairs necessary to bring
2-47 the property into compliance with:
2-48 (A) minimum standards in local ordinances; or
2-49 (B) guidelines for rehabilitating historic
2-50 properties established by the secretary of the interior under 16
2-51 U.S.C.A. Section 470 et seq. or the municipal historic preservation
2-52 board, if the property is considered historic property under
2-53 Section 214.00111;
2-54 (4) make payments necessary for the maintenance or
2-55 restoration of utilities to the properties;
2-56 (5) purchase materials necessary to accomplish
2-57 repairs;
2-58 (6) renew existing rental contracts and leases;
2-59 (7) enter into new rental contracts and leases;
2-60 (8) affirm, renew, or enter into a new contract
2-61 providing for insurance coverage on the property; and
2-62 (9) exercise all other authority that an owner of the
2-63 property would have except for the authority to sell the property.
2-64 (h) <(g)> On the completion of the restoration to the
2-65 property of the minimum code standards of the municipality or
2-66 guidelines for rehabilitating historic property:
2-67 (1) the receiver shall file with the court a full
2-68 accounting of all costs and expenses incurred in the repairs,
2-69 including reasonable costs for labor and supervision, and all
2-70 income received from the property;
3-1 (2) if the income exceeds the cost and expense of
3-2 rehabilitation, the rehabilitated property shall be restored to the
3-3 owners and any net income shall be returned to the owners; and
3-4 (3) if costs and expenses exceed the income received
3-5 during the receivership, the receiver shall maintain control of the
3-6 property until the time all rehabilitation and maintenance costs
3-7 are recovered.
3-8 (i) <(h)> Any record lienholder may, after initiation of an
3-9 action by a municipality:
3-10 (1) intervene in the action; and
3-11 (2) request appointment as a receiver:
3-12 (A) under the same conditions as the nonprofit
3-13 organization; and
3-14 (B) on a demonstration to the court of an
3-15 ability and willingness to rehabilitate the property.
3-16 (j) <(i)> For the purposes of this section, the interests
3-17 and rights of an unrecorded lienholder or unrecorded property owner
3-18 are, in all respects, inferior to the rights of a duly appointed
3-19 receiver.
3-20 (k) <(j)> The court may not appoint a receiver for any
3-21 property that:
3-22 (1) is an owner-occupied, single-family residence; or
3-23 (2) is zoned nonresidential and used in a
3-24 nonresidential character.
3-25 (l) <(k)> A receiver appointed by a district court under
3-26 this section, or the home-rule municipality that filed the action
3-27 under which the receiver was appointed, may petition the court to
3-28 terminate the receivership and order the sale of the property
3-29 <transfer ownership of the property to the receiver>:
3-30 (1) if the receiver has been in control of the
3-31 property for more than two years and no legal owner has been
3-32 identified after a diligent search; or
3-33 (2) after the receiver has been in control of the
3-34 property for more than three years, if an owner has been identified
3-35 and served with notices but has failed to assume control or repay
3-36 all rehabilitation and maintenance costs of the receiver.
3-37 (m) <(l)> In the action, the record owners and any
3-38 lienholders of record of the property shall be served with personal
3-39 notice of the proceedings or, if not found after due diligence, may
3-40 be served by publication. Actual service or service by publication
3-41 on all record owners and lienholders of record constitutes notice
3-42 to all unrecorded owners and lienholders.
3-43 (n) The <(m) Subject to all previously recorded bona fide
3-44 liens, the> court may order <award clear title to> the sale of the
3-45 property <to the receiver> if the court finds that:
3-46 (1) notice was given to each record owner of the
3-47 property and each lienholder of record;
3-48 (2) the receiver has been in control of the property
3-49 for more than two years and no legal owner has been identified
3-50 after a diligent search, or the receiver has been in control of the
3-51 property for more than three years and an owner has been identified
3-52 but has failed to repay all rehabilitation and maintenance costs of
3-53 the receiver; and
3-54 (3) no lienholder of record has intervened in the
3-55 action and offered to repay the costs of the receiver and assume
3-56 control of the property.
3-57 (o) The court shall order the sale to be conducted by the
3-58 petitioner in the same manner that a sale is conducted under
3-59 Chapter 51, Property Code. If the record owners and lienholders
3-60 are identified, notice of the date and time of the sale must be
3-61 sent in the same manner as provided by Chapter 51, Property Code.
3-62 If the owner cannot be located after due diligence, the owner may
3-63 be served notice by publication. The receiver may bid on the
3-64 property at the sale. The petitioner shall make a report of the
3-65 sale to the court.
3-66 (p) The court shall confirm the sale and order a
3-67 distribution of the proceeds of the sale in the following order:
3-68 (1) court costs;
3-69 (2) costs and expenses of the receiver; and
3-70 (3) valid liens.
4-1 (q) Any remaining sums must be paid to the owner. If the
4-2 owner is not identified or cannot be located, the court shall order
4-3 the remaining sums to be deposited in an interest-bearing account
4-4 with the district clerk's office in the district in which the
4-5 action is pending, and the clerk shall hold the funds as provided
4-6 by other law.
4-7 (r) After the proceeds are distributed, the court shall
4-8 award fee title to the purchaser subject to any recorded bona fide
4-9 liens that were not paid by the proceeds of the sale.
4-10 SECTION 3. The importance of this legislation and the
4-11 crowded condition of the calendars in both houses create an
4-12 emergency and an imperative public necessity that the
4-13 constitutional rule requiring bills to be read on three several
4-14 days in each house be suspended, and this rule is hereby suspended.
4-15 * * * * *