SRC-TNM H.B. 3263 75(R)   BILL ANALYSIS


Senate Research Center   H.B. 3263
By: Dutton (Gallegos)
Intergovernmental Relations
5-8-97
Engrossed


DIGEST 

Currently, within large metropolitan areas, there are a substantial number
of deteriorating neighborhoods.  A significant contribution to
neighborhood decline are large numbers of vacant or distressed properties
encumbered with delinquent tax liens, health and safety liens, judgment
liens, and other such obstacles that make any private redevelopment
uneconomical.  These kinds of properties provide no revenue to local
taxing units and require the continued expenditure of public funds to
safeguard the surrounding property owners.  H.B. 3263 would authorize a
municipality to use the tax foreclosure process to acquire vacant and
distressed properties for use in urban redevelopment plans which have a
principal goal of providing for the construction of low and moderate
income homes within declining neighborhoods. 

PURPOSE

As proposed, H.B. 3263 outlines provisions regarding authorization of an
interlocal agreement between taxing units that provides for the disposal
of tax foreclosed property at less than market value. 

RULEMAKING AUTHORITY

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 34.051, as
follows: 

Sec. 34.051. RESALE BY TAXING UNIT FOR THE PURPOSE OF URBAN REDEVELOPMENT.
Provides that a municipality is authorized to resell tax foreclosed
property for less than the market value specified in the judgment of
foreclosure or less than the total amount of the judgments against the
property if consent to such a conveyance is evidenced by an interlocal
agreement between the municipality and each taxing unit that is a party to
the judgment providing, however, that the interlocal agreement complies
with the requirements of Subsection (c).  Requires any property sold under
this section to be sold conditioned on its use consistent with the
municipality's urban redevelopment plans within two years from the date of
conveyance, or title to the property reverts to the municipality. Provides
that this two year reverter condition does not apply if the property is
sold to a nonprofit entity that holds the property for urban redevelopment
that is consistent with or part of the municipality's urban redevelopment
plans.  Requires any property held in such a land bank to be exempt from
ad valorem taxation and deemed to be held on behalf of the municipality
for a public purpose if the entity holding title complies with the
requirements of the interlocal agreement provided for in Subsection (c)
for use in the municipality's urban redevelopment plans.  Authorizes any
taxing unit to enter into an interlocal agreement with the municipality
for the resale of tax foreclosed properties to be used for a purpose
consistent with the municipality's urban redevelopment plans.  Sets forth
information to be included in any such interlocal agreement.  Prohibits an
action attacking the validity of a sale of property pursuant to this
section from being instituted after the expiration of one year after the
date  



 of the sale and then only after the unconditional tender into the
registry of the court of an amount equal to all taxes, penalties,
interest, costs, and post-judgment interest of all judgments on which the
original foreclosure sale was based.  

SECTION 2. Effective date: 90 days after adjournment.