JH H.B. 3263 75(R) BILL ANALYSIS URBAN AFFAIRS H.B. 3263 By: Dutton 4-10-97 Committee Report (Unamended) BACKGROUND Within large metropolitan areas, there are frequently found deteriorated and distressed neighborhoods which need revitalization assistance and incentives to reverse the decaying process. A significant contributor to neighborhood decline are large numbers of vacant or distressed properties encumbered with delinquent tax liens, health and safety liens, judgement liens and other such problems 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. A municipal redevelopment plan can provide incentives and assistance to civic clubs, neighborhood associations, development corporations, churches, and others seeking to preserve, stabilize, and revitalize these kinds of neighborhoods. An efficient mechanism is needed to place these kinds of properties into productive use. Returning these abandoned properties to neighborhood standards will provide assistance to low and moderate income family home ownership and enhance the value and desirability of the surrounding properties thus expanding the tax base of local taxing units as well as reducing the expenditure of public funds for health and safety measures on these properites. PURPOSE 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. This bill would authorize the local taxing units to enter into interlocal agreements with the principal municipality to acquire these properties through the statutory tax foreclosure process, establish a land bank for redevelopment and to take the necessary steps to return the subject properties to productive use without individual taxing unit consent at each stage of the process for each property. All taxing units would obtain financial benefit from the results of returning properties with uncollectible taxes to productive use and reversing the decaying property values in blighted neighborhoods. Surrounding residents would benefit from improved quality of life within their community. 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. Adds Section 34.051 to the Tax Code as follows: Subsection (a) authorizes the sale of tax foreclosed properties for less than market value if sold pursuant to the terms of an interlocal agreement consistent with the provisions of Subsection (c). Subsection (b) provides for a reverter in title to the municipality if the property is not used within two years for a purpose consistent with the municipality's urban redevelopment plans. It further provides for creation of a land bank by a non profit entity that would hold the property for a public purpose on behalf of the municipality for ultimate use consistent with the redevelopment plans which are the subject of the interlocal agreements provided for in Subsection (c). Subsection (c) authorizes interlocal agreements between taxing units for the resale of tax foreclosed properties for use in urban redevelopment plans. This subsection provides general guidelines for the interlocal agreement to ensure that the properties are used for the purpose of implementing the municipality's urban redevelopment plans. Subsection (d) provides for the limitation of any action to challenge the validity of a sale of property pursuant to this section.