HBA-DMD C.S.H.B. 2374 76(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 2374
By: Burnam
Urban Affairs
3/30/1999
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Under current law, 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. When an owner fails to
comply with the plan, the municipality is forced to take action, which
generally requires the expenditure of municipal funds.  

C.S.H.B. 2374 authorizes 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 thirty days, to cover the
costs of repair or for repairing, removing, or demolishing the building. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 214.001(k) and (m), Local Government Code, 

(k) Authorizes a municipality, 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, to require the
owner, lienholder, or mortgagee to post a cash or surety bond in an amount
adequate to cover the costs for the repairing, removing, or demolishing of
the building.  Authorizes the municipality to require, in lieu of a bond,
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. Provides that the bond must be posted, or the letter of
credit or third party guaranty provided, within thirty days of the date the
order is issued by the municipality. Makes a nonsubstantive change. 

(m) Sets forth 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 SECTION 1 (Section 214.001(k), Local Government Code)
of this Act prospective. 

SECTION 3.Emergency clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

This substitute differs from the original bill in SECTION 1 by amending
Section 214.001(k) and (m), rather than Section 214.001(l), Local
Government Code. In addition, SECTION 2 of this substitute makes
application of Section 214.001(k) of this Act prospective. This substitute
authorizes a municipality, if the owner, lienholder, or mortgage owns
property, including structures or improvements on property, within the
municipal boundaries that exceeds $100,000 in total value, to require the
owner, lienholder, or mortgagee to post a cash or surety bond in an amount
adequate  to cover the costs for the repairing, removing, or demolishing of
the building.  Additionally, this substitute authorizes the municipality to
require, in lieu of a bond, 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 and provides that the bond must be
posted, or the letter of credit or third party guaranty provided, within
thirty days of the date the order is issued by the municipality. Section
214.081(m), Local Government Code, is existing law being changed by this
substitute to set forth 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 214.001(l), Local Government Code, of the original bill authorizes
a municipality to require the owner, lienholder, or mortgagee of record of
a building under the provisions of this chapter, to post a cash or surety
bond in order to cover the costs for the security or repair of the building
to ensure that the municipality does not incur expenses for vacating,
securing, removing, or demolishing the building or relocating the
building's occupants because of the failure of the owner, lienholder, or
mortgagee of record to comply with the ordinance and perform the work in
the allotted time.