By Dutton                                             H.B. No. 3263

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the authorization of an interlocal agreement between

 1-3     taxing units that provides for the disposal of tax foreclosed

 1-4     property at less than market value.

 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-6           SECTION 1.  Subchapter A, Chapter 34, Tax Code, is amended by

 1-7     adding Section 34.051 to read as follows:

 1-8           Sec. 34.051.  RESALE BY TAXING UNIT FOR THE PURPOSE OF URBAN

 1-9     REDEVELOPMENT.  (a)  A municipality is authorized to resell tax

1-10     foreclosed property for less than the market value specified in the

1-11     judgment of foreclosure or less than the total amount of the

1-12     judgments against the property if consent to such a conveyance is

1-13     evidenced by an interlocal agreement between the municipality and

1-14     each taxing unit that is a party to the judgment providing,

1-15     however, that the interlocal agreement complies with the

1-16     requirements of Subsection (c).

1-17           (b)  Any property sold under this section must be sold

1-18     conditioned on its use consistent with the municipality's urban

1-19     redevelopment plans within two years from the date of conveyance,

1-20     or title to the property reverts to the municipality.  This two

1-21     year reverter condition does not apply if the property is sold to a

1-22     nonprofit entity that holds the property in a land bank for the

1-23     sole purpose of conveying the property for urban redevelopment that

1-24     is consistent with or part of the municipality's urban

 2-1     redevelopment plans.  Any property held in such a land bank shall

 2-2     be exempt from ad valorem taxation and deemed to be held on behalf

 2-3     of the municipality for a public purpose if the entity holding

 2-4     title complies with the requirements of the interlocal agreement

 2-5     provided for in Subsection (c) for use in the municipality's urban

 2-6     redevelopment plans.

 2-7           (c)  Any taxing unit may enter into an interlocal agreement

 2-8     with the municipality for the resale of tax foreclosed properties

 2-9     to be used for a purpose consistent with the municipality's urban

2-10     redevelopment plans.  Any such interlocal agreement should include

2-11     the following:

2-12                 (1)  A general statement and goals of the

2-13     municipality's urban redevelopment plans.

2-14                 (2)  A statement that the interlocal agreement concerns

2-15     only tax foreclosed property that is either vacant or distressed

2-16     and has a tax delinquency of six or more years.

2-17                 (3)  A statement that the properties will be used only

2-18     for a purpose consistent with an urban redevelopment plan that is

2-19     primarily aimed at providing housing for families of low or

2-20     moderate income.

2-21                 (4)  A statement that the principal goal of the

2-22     interlocal agreement is to provide an efficient mechanism for

2-23     returning deteriorated or unproductive properties to the tax rolls,

2-24     enhancing the value of ownership to the surrounding properties, and

2-25     improving the safety and quality of life in deteriorating

2-26     neighborhoods.

2-27                 (5)  All properties are sold subject to any right of

 3-1     redemption.

 3-2           (d)  An action attacking the validity of a sale of property

 3-3     pursuant to this section may not be instituted after the expiration

 3-4     of one year after the date of the sale and then only after the

 3-5     unconditional tender into the registry of the court of an amount

 3-6     equal to all taxes, penalties, interest, costs, and post-judgment

 3-7     interest of all judgments on which the original foreclosure sale

 3-8     was based.