SRC-JXG H.B. 2374 76(R)   BILL ANALYSIS


Senate Research Center   H.B. 2374
76R10903 SMJ-DBy: Burnam (Moncrief)
Intergovernmental Relations
5/4/1999
Engrossed


DIGEST 

Currently, Texas law provides that when a building is identified as
substandard the owner is allowed to submit an action plan to the
municipality detailing the amount of time needed to rectify the problem,
but the owner is not required to post a form of security to back the action
plan. The municipality is forced to take action, when an owner fails to
comply with the plan, which generally requires the expenditure of municipal
funds. H.B. 2374 would authorize a municipality to require owners,
lienholders, or mortgagees of buildings that exceed $100,000 in total
value, to post a cash or surety bond, or a letter of credit, within 30
days, to cover the costs of repair or for repairing, removing, or
demolishing the building. 

PURPOSE

As proposed, H.B. 2374 sets forth financial guaranty requirements for
certain owners, lienholders, and mortgagees of certain substandard
buildings. 

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 Sections 214.001(k) and (m), Local Government Code, as
follows: 

(k) Requires a  municipality to require the owner, lienholder, or mortgagee
to regularly submit progress reports to the municipality to demonstrate
compliance with the time schedules established for commencement and
performance of the work, if the municipality allows the owner, lienholder,
or mortgagee more than 90 days to complete any part of the work required to
repair, remove, or demolish the building. Authorizes the municipality to
require the owner, lienholder, or mortgagee to post a cash or surety bond
in an amount adequate to cover the cost of repairing, removing, or
demolishing a building under this subsection, if the owner, lienholder, or
mortgagee owns property, including structures or improvements on property,
within the municipal boundaries that exceeds $100,000 in total value.
Authorizes the municipality  to require the owner, lienholder, or mortgagee
to provide a letter of credit from a financial institution or a guaranty
from a third party approved by the municipality, in lieu of a bond.
Requires the bond to be posted, or the letter of credit or third party
guaranty provided, no later than the 30th day after the date the
municipality issues the order. Deletes text regarding progress reports
demonstrating that the owner, lienholder, or mortgagee has complied. 

(m) Provides that this subsection does not limit the ability of a
municipality to collect on a bond or other financial guaranty that may be
required by Subsection (k). 
 
SECTION 2. Effective date: September 1, 1999.
           Makes application of this Act prospective.

SECTION 3. Emergency clause.