H.B. No. 1742
AN ACT
relating to urban land bank demonstration programs.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 361.1875, Health and Safety Code, is
amended to read as follows:
Sec. 361.1875. EXCLUSION OF CERTAIN POTENTIALLY
RESPONSIBLE PARTIES. (a) The commission may not name a person as a
responsible party for an enforcement action or require a person to
reimburse remediation costs for a site if the commission has
conducted an investigation of a site owned or operated by the person
and as a result of the investigation has determined that:
(1) the contaminants that are the subject of
investigation under this subchapter appear to originate from an
up-gradient, off-site source that is not owned or operated by the
person;
(2) additional corrective action is not required at
the site owned or operated by the person; and
(3) the commission will not undertake a formal
enforcement action in the matter.
(b) The commission may not name a land bank established
under Chapter 379C, Local Government Code, as a responsible party
for an enforcement action or require the land bank to reimburse
remediation costs for a site if the commission has conducted an
investigation of a site owned or operated by the land bank and as a
result of the investigation has determined that:
(1) the contaminants that are the subject of
investigation under this subchapter:
(A) appear to originate from an up-gradient,
off-site source that is not owned or operated by the land bank; or
(B) appear to have been present on the site
before the land bank purchased the site; and
(2) the land bank could not have reasonably known
about the contaminants at the time the land bank purchased the site.
SECTION 2. Section 361.271(b), Health and Safety Code, is
amended to read as follows:
(b) A political subdivision, a land bank established under
Chapter 379C, Local Government Code, or an officer or employee of
the political subdivision or land bank is not a person responsible
for solid waste released or threatened to be released from a
facility or at a site if:
(1) the political subdivision or land bank acquired
ownership or control of the facility or site through a
[bankruptcy,] tax delinquency[, abandonment,] or if the
subdivision acquired ownership or control of the facility or site
through bankruptcy, abandonment, or other circumstances in which
the subdivision involuntarily acquired title to the facility or
site by virtue of the subdivision’s function as sovereign; and
(2) the political subdivision, land bank, officer, or
employee did not cause or contribute to the release or threatened
release of solid waste at the facility or site.
SECTION 3. Section 373A.003, Local Government Code, is
amended to read as follows:
Sec. 373A.003. APPLICABILITY OF CHAPTER. (a) This chapter
applies [only] to a municipality with a population of more than
650,000 that is located in a uniform state service region with fewer
than 550,000 occupied housing units as determined by the most
recent United States decennial census.
(b) Subchapters A, B, C, and D apply to any municipality
with a population of 1.18 million or more which is located
predominantly in a county that has a total area of less than 1,000
square miles and has adopted an urban land bank demonstration
program under Chapter 379C, Local Government Code.
SECTION 4. Section 373A.052, Local Government Code, is
amended to read as follows:
Sec. 373A.052. ELIGIBILITY FOR DESIGNATION. (a) To be
designated as a district within a municipality described by Section
373.003(a) under this subchapter, an area must be composed of
census tracts forming a spatially compact area contiguous to a
central business district and with:
(1) fewer than 25,000 residents;
(2) fewer than 8,000 households;
(3) a number of owner-occupied households that does
not exceed 50 percent of the total households in the area;
(4) housing stock at least 55 percent of which was
built at least 45 years ago;
(5) an unemployment rate that is greater than 10
percent;
(6) an overall poverty rate that is at least two times
the poverty rate for the entire municipality; and
(7) in each census tract within the area, a median
family income that is less than 60 percent of the median family
income for the entire municipality.
(b) To be designated as a district within a municipality
described by Section 373.003(b) under this subchapter, an area must
be composed of census tracts forming a spatially compact area
contiguous to a central business district and with:
(1) fewer than 75,000 residents;
(2) a median family income that is less than $30,000
according to the last decennial census; and
(3) an overall poverty rate that is at least two times
the poverty rate for the entire municipality.
(c) An area that is designated as a district under this
subchapter may retain its designation as a district regardless of
whether the area continues to meet the eligibility criteria
provided by this section, except that an area that does not elect to
retain its designation as permitted by this subsection must meet
all eligibility criteria to be considered for subsequent
redesignation as a district.
SECTION 5. Section 379C.003(3), Local Government Code, is
amended to read as follows:
(3) “Low income household” means a household with a
gross income of not greater than 115 [80] percent of the area median
family income, adjusted for household size, for the metropolitan
statistical area in which the municipality is located, as
determined annually by the United States Department of Housing and
Urban Development.
SECTION 6. Section 379C.008(a), Local Government Code, is
amended to read as follows:
(a) Notwithstanding any other law and except as provided by
Subsection (f), property that is ordered sold pursuant to
foreclosure of a tax lien may be sold in a private sale to a land
bank by the officer charged with the sale of the property without
first offering the property for sale as otherwise provided by
Section 34.01, Tax Code, if:
(1) the market value of the property as specified in
the judgment of foreclosure is less than the total amount due under
the judgment, including all taxes, penalties, and interest, plus
the value of nontax liens held by a taxing unit and awarded by the
judgment, court costs, and the cost of the sale;
(2) the property is not improved with a habitable
building or buildings or an uninhabitable building or buildings
that are occupied as a residence by an owner or tenant who is
legally entitled to occupy the building or buildings;
(3) there are delinquent taxes on the property for a
total of at least five [each of the preceding six] years; and
(4) the municipality has executed with the other
taxing units that are parties to the tax suit an interlocal
agreement that enables those units to agree to participate in the
program while retaining the right to withhold consent to the sale of
specific properties to the land bank.
SECTION 7. Section 379C.010(b), Local Government Code, is
amended to read as follows:
(b) Each land bank property sold during any given fiscal
year to be developed for sale must be deed restricted for sale to
low income households, and:
(1) at [At] least 25 percent of those [the] land bank
properties must [sold during any given fiscal year to be developed
for sale shall] be deed restricted for sale to households with gross
household incomes not greater than 60 percent of the area median
family income, adjusted for household size; and
(2) not more than 30 percent of those land bank
properties may be deed restricted for sale to households with gross
household incomes greater than 80 percent of the area median family
income, adjusted for household size [, for the metropolitan
statistical area in which the municipality is located, as
determined annually by the United States Department of Housing and
Urban Development].
SECTION 8. Section 379C.011(d), Local Government Code, is
amended to read as follows:
(d) The municipality shall specify in its plan that the
period during which the right of first refusal provided by this
section may be exercised by a qualified organization is six [. That
period must be at least nine months but not more than 26] months
from the date of the deed of conveyance of the property to the land
bank.
SECTION 9. Section 379D.010(a), Local Government Code, is
amended to read as follows:
(a) The land bank shall impose deed restrictions with
appropriate terms and conditions on property sold to qualified
participating developers and eligible adjacent property owners
that require:
(1) the development and sale or rental of the property
to low income households, if the property is sold to a qualified
participating developer; or
(2) the use of the property to be consistent and
compatible with the residential character of the neighborhood and
any applicable standards for use adopted by the land bank, if the
property is sold to an eligible adjacent property owner.
SECTION 10. Section 379D.011, Local Government Code, is
amended to read as follows:
Sec. 379D.011. RIGHT OF FIRST REFUSAL IN ELIGIBLE ADJACENT
PROPERTY OWNERS; CONDITIONS OF PURCHASE. (a) Property acquired by
the land bank shall be offered for sale, at fair market value as
determined by the appraisal district in which the property is
located, to eligible adjacent property owners under a right of
first refusal on terms and conditions developed by the land bank
that are consistent with this chapter.
(b) To be eligible to exercise a right of first refusal
under this section, an owner of property adjacent to property
acquired by the land bank:
(1) must have owned and continuously occupied that
property for at least the five preceding years as that person’s
principal residence; and
(2) must meet any eligibility requirements adopted by
the land bank.
(c) An adjacent property owner who purchases property under
this section may not lease, sell, or otherwise transfer the
property to another party before the 10th anniversary of the date
the adjacent property owner purchases the property. This
prohibition does not apply to a transfer of property, as allowed by
policies adopted by the land bank:
(1) to a family member of the adjacent property owner;
or
(2) in the case of the death of the adjacent property
owner.
SECTION 11. Chapter 379D, Local Government Code, is amended
by adding Section 379D.015 to read as follows:
Sec. 379D.015. EFFECT OF SALE TO LAND BANK OR SUBSEQUENT
PURCHASERS OR LENDERS FOR VALUE; LIMITATION ON CERTAIN CAUSES OF
ACTION. After the first anniversary of a sale of property to a land
bank under this chapter:
(1) a third party, other than a qualified
participating developer or eligible adjacent property owner who
purchased the property from the land bank under this chapter or a
person with a cause of action based on a right, title, interest, or
other claim described by Subdivision (2)(A)(ii), may not bring a
cause of action to set aside or otherwise challenge the sale of the
property to the land bank, including a cause of action that is
brought against:
(A) a qualified participating developer or
eligible adjacent property owner who purchases property from the
land bank under Section 379D.009 or 379D.011, as applicable; or
(B) any other subsequent purchaser for value or
lender for value; and
(2) a qualified participating developer or eligible
adjacent property owner who purchases property from a land bank
under this chapter or any other subsequent purchaser for value or,
if applicable, a lender for a developer, owner, or purchaser
described by this subdivision or any other subsequent lender for
value:
(A) has, with the following characteristics, a
full title to the property:
(i) except as provided by Subparagraph
(ii), the title is not subject to any right, title, interest, or
other claim a person acquired in the property before or after the
sale of the property to the land bank, including a right of first
refusal, right of second refusal, and any other right, title,
interest, or other claim provided by this chapter, other than the
right of reverter provided by Section 379D.009(d); and
(ii) the title is subject only to:
(a) the recorded restrictive
covenants, liens, and valid easements of record described by
Section 34.01(n), Tax Code;
(b) any rights of redemption
applicable to the property;
(c) any cause of action to impeach the
property deed based on a claim of fraud;
(d) the right of reverter provided by
Section 379D.009(d) and the recorded deed restrictions described by
Section 379D.010; and
(e) any right, title, interest, or
other claim with respect to the property that arose after the sale
of the property to the land bank under a law other than this
chapter; and
(B) may conclusively presume that:
(i) the sale of the property to the land
bank under this chapter was valid; and
(ii) a mortgage on or a subsequent sale of
the property complies with this chapter and is subject only to a
right, title, interest, or other claim provided by Paragraph
(A)(ii).
SECTION 12. Subtitle A, Title 12, Local Government Code, is
amended by adding Chapter 379E to read as follows:
CHAPTER 379E. URBAN LAND BANK PROGRAM
Sec. 379E.001. SHORT TITLE. This chapter may be cited as
the Urban Land Bank Program Act.
Sec. 379E.002. APPLICABILITY; CONSTRUCTION WITH OTHER LAW.
This chapter applies only to a municipality:
(1) to which Chapter 379C or 379D does not apply; and
(2) that has not ever adopted a homestead land bank
program under Subchapter E, Chapter 373A.
Sec. 379E.003. DEFINITIONS. In this chapter:
(1) “Affordable” means that the monthly mortgage
payment or contract rent does not exceed 30 percent of the
applicable median family income for that unit size, in accordance
with the income and rent limit rules adopted by the Texas Department
of Housing and Community Affairs.
(2) “Community housing development organization” or
“organization” means an organization that:
(A) meets the definition of a community housing
development organization in 24 C.F.R. Section 92.2; and
(B) is certified by the municipality as a
community housing development organization.
(3) “Land bank” means an entity established or
approved by the governing body of a municipality for the purpose of
acquiring, holding, and transferring unimproved real property
under this chapter.
(4) “Low income household” means a household with a
gross income of not greater than 80 percent of the area median
family income, adjusted for household size, for the metropolitan
statistical area in which the municipality is located, as
determined annually by the United States Department of Housing and
Urban Development.
(5) “Qualified participating developer” means a
developer who meets the requirements of Section 379E.005 and
includes a qualified organization under Section 379E.011.
(6) “Urban land bank plan” or “plan” means a plan
adopted by the governing body of a municipality as provided by
Section 379E.006.
(7) “Urban land bank program” or “program” means a
program adopted under Section 379E.004.
Sec. 379E.004. URBAN LAND BANK PROGRAM. (a) The governing
body of a municipality may adopt an urban land bank program in which
the officer charged with selling real property ordered sold
pursuant to foreclosure of a tax lien may sell certain eligible real
property by private sale for purposes of affordable housing
development as provided by this chapter.
(b) The governing body of a municipality that adopts an
urban land bank program shall establish or approve a land bank for
the purpose of acquiring, holding, and transferring unimproved real
property under this chapter.
Sec. 379E.005. QUALIFIED PARTICIPATING DEVELOPER. To
qualify to participate in an urban land bank program, a developer
must:
(1) have developed three or more housing units within
the three-year period preceding the submission of a proposal to the
land bank seeking to acquire real property from the land bank;
(2) have a development plan approved by the
municipality for the land bank property; and
(3) meet any other requirements adopted by the
municipality in the urban land bank plan.
Sec. 379E.006. URBAN LAND BANK PLAN. (a) A municipality
that adopts an urban land bank program shall operate the program in
conformance with an urban land bank plan.
(b) The governing body of a municipality that adopts an
urban land bank program shall adopt a plan annually. The plan may
be amended from time to time.
(c) In developing the plan, the municipality shall consider
other housing plans adopted by the municipality, including the
comprehensive plan submitted to the United States Department of
Housing and Urban Development and all fair housing plans and
policies adopted or agreed to by the municipality.
(d) The plan must include the following:
(1) a list of community housing development
organizations eligible to participate in the right of first refusal
provided by Section 379E.011;
(2) a list of the parcels of real property that may
become eligible for sale to the land bank during the next year;
(3) the municipality’s plan for affordable housing
development on those parcels of real property; and
(4) the sources and amounts of money anticipated to be
available from the municipality for subsidies for development of
affordable housing in the municipality, including any money
specifically available for housing developed under the program, as
approved by the governing body of the municipality at the time the
plan is adopted.
Sec. 379E.007. PUBLIC HEARING ON PROPOSED PLAN. (a) Before
adopting a plan, a municipality shall hold a public hearing on the
proposed plan.
(b) The city manager or the city manager’s designee shall
provide notice of the hearing to all community housing development
organizations and to neighborhood associations identified by the
municipality as serving the neighborhoods in which properties
anticipated to be available for sale to the land bank under this
chapter are located.
(c) The city manager or the city manager’s designee shall
make copies of the proposed plan available to the public not later
than the 60th day before the date of the public hearing.
Sec. 379E.008. PRIVATE SALE TO LAND BANK. (a)
Notwithstanding any other law and except as provided by Subsection
(f), property that is ordered sold pursuant to foreclosure of a tax
lien may be sold in a private sale to a land bank by the officer
charged with the sale of the property without first offering the
property for sale as otherwise provided by Section 34.01, Tax Code,
if:
(1) the market value of the property as specified in
the judgment of foreclosure is less than the total amount due under
the judgment, including all taxes, penalties, and interest, plus
the value of nontax liens held by a taxing unit and awarded by the
judgment, court costs, and the cost of the sale;
(2) the property is not improved with a building or
buildings;
(3) there are delinquent taxes on the property for a
total of at least five years; and
(4) the municipality has executed with the other
taxing units that are parties to the tax suit an interlocal
agreement that enables those units to agree to participate in the
program while retaining the right to withhold consent to the sale of
specific properties to the land bank.
(b) A sale of property for use in connection with the
program is a sale for a public purpose.
(c) If the person being sued in a suit for foreclosure of a
tax lien does not contest the market value of the property in the
suit, the person waives the right to challenge the amount of the
market value determined by the court for purposes of the sale of the
property under Section 33.50, Tax Code.
(d) For any sale of property under this chapter, each person
who was a defendant to the judgment, or that person’s attorney,
shall be given, not later than the 90th day before the date of sale,
written notice of the proposed method of sale of the property by the
officer charged with the sale of the property. Notice must be given
in the manner prescribed by Rule 21a, Texas Rules of Civil
Procedure.
(e) After receipt of the notice required by Subsection (d)
and before the date of the proposed sale, the owner of the property
subject to sale may file with the officer charged with the sale a
written request that the property not be sold in the manner provided
by this chapter.
(f) If the officer charged with the sale receives a written
request as provided by Subsection (e), the officer shall sell the
property as otherwise provided in Section 34.01, Tax Code.
(g) The owner of the property subject to sale may not
receive any proceeds of a sale under this chapter. However, the
owner does not have any personal liability for a deficiency of the
judgment as a result of a sale under this chapter.
(h) Notwithstanding any other law, if consent is given by
the taxing units that are a party to the judgment, property may be
sold to the land bank for less than the market value of the property
as specified in the judgment or less than the total of all taxes,
penalties, and interest, plus the value of nontax liens held by a
taxing unit and awarded by the judgment, court costs, and the cost
of the sale.
(i) The deed of conveyance of the property sold to a land
bank under this section conveys to the land bank the right, title,
and interest acquired or held by each taxing unit that was a party
to the judgment, subject to the right of redemption.
Sec. 379E.009. SUBSEQUENT RESALE BY LAND BANK. (a) Each
subsequent resale of property acquired by a land bank under this
chapter must comply with the conditions of this section.
(b) Within the three-year period following the date of
acquisition, the land bank must sell a property to a qualified
participating developer for the purpose of construction of
affordable housing for sale or rent to low income households. If
after three years a qualified participating developer has not
purchased the property, the property shall be transferred from the
land bank to the taxing units who were parties to the judgment for
disposition as otherwise allowed under the law.
(c) Unless the municipality increases the amount in its
plan, the number of properties acquired by a qualified
participating developer under this section on which development has
not been completed may not at any time exceed three times the annual
average residential production completed by the qualified
participating developer during the preceding two-year period as
determined by the municipality.
(d) The deed conveying a property sold by the land bank must
include a right of reverter so that, if the qualified participating
developer does not apply for a construction permit and close on any
construction financing within the two-year period following the
date of the conveyance of the property from the land bank to the
qualified participating developer, the property will revert to the
land bank for subsequent resale to another qualified participating
developer or conveyance to the taxing units who were parties to the
judgment for disposition as otherwise allowed under the law.
Sec. 379E.010. RESTRICTIONS ON OCCUPANCY AND USE OF
PROPERTY. (a) The land bank shall impose deed restrictions on
property sold to qualified participating developers requiring the
development and sale or rental of the property to low income
households.
(b) At least 25 percent of the land bank properties sold
during any given fiscal year to be developed for sale shall be deed
restricted for sale to households with gross household incomes not
greater than 60 percent of the area median family income, adjusted
for household size, for the metropolitan statistical area in which
the municipality is located, as determined annually by the United
States Department of Housing and Urban Development.
(c) If property is developed for rental housing, the deed
restrictions must be for a period of not less than 20 years and must
require that:
(1) 100 percent of the rental units be occupied by and
affordable to households with incomes not greater than 60 percent
of area median family income, based on gross household income,
adjusted for household size, for the metropolitan statistical area
in which the municipality is located, as determined annually by the
United States Department of Housing and Urban Development;
(2) 40 percent of the units be occupied by and
affordable to households with incomes not greater than 50 percent
of area median family income, based on gross household income,
adjusted for household size, for the metropolitan statistical area
in which the municipality is located, as determined annually by the
United States Department of Housing and Urban Development; or
(3) 20 percent of the units be occupied by and
affordable to households with incomes not greater than 30 percent
of area median family income, based on gross household income,
adjusted for household size, for the metropolitan statistical area
in which the municipality is located, as determined annually by the
United States Department of Housing and Urban Development.
(d) The deed restrictions under Subsection (c) must require
the owner to file an annual occupancy report with the municipality
on a reporting form provided by the municipality. The deed
restrictions must also prohibit any exclusion of an individual or
family from admission to the development based solely on the
participation of the individual or family in the housing choice
voucher program under Section 8, United States Housing Act of 1937
(42 U.S.C. Section 1437f), as amended.
(e) Except as otherwise provided by this section, if the
deed restrictions imposed under this section are for a term of
years, the deed restrictions shall renew automatically.
(f) The land bank or the governing body of the municipality
may modify or add to the deed restrictions imposed under this
section. Any modifications or additions made by the governing body
of the municipality must be adopted by the municipality as part of
its plan and must comply with the restrictions set forth in
Subsections (b), (c), and (d).
Sec. 379E.011. RIGHT OF FIRST REFUSAL. (a) In this
section, “qualified organization” means a community housing
development organization that:
(1) contains within its designated geographical
boundaries of operation, as set forth in its application for
certification filed with and approved by the municipality, a
portion of the property that the land bank is offering for sale;
(2) has built at least three single-family homes or
duplexes or one multifamily residential dwelling of four or more
units in compliance with all applicable building codes within the
preceding two-year period and within the organization’s designated
geographical boundaries of operation; and
(3) within the preceding three-year period has
developed or rehabilitated housing units within a two-mile radius
of the property that the land bank is offering for sale.
(b) The land bank shall first offer a property for sale to
qualified organizations.
(c) Notice must be provided to the qualified organizations
by certified mail, return receipt requested, not later than the
60th day before the beginning of the period in which a right of
first refusal may be exercised.
(d) The municipality shall specify in its plan the period
during which the right of first refusal provided by this section may
be exercised by a qualified organization. That period must be at
least nine months but not more than 26 months from the date of the
deed of conveyance of the property to the land bank.
(e) If the land bank conveys the property to a qualified
organization before the expiration of the period specified by the
municipality under Subsection (d), the interlocal agreement
executed under Section 379E.008(a)(4) must provide tax abatement
for the property until the expiration of that period.
(f) During the specified period, the land bank may not sell
the property to a qualified participating developer other than a
qualified organization. If all qualified organizations notify the
land bank that they are declining to exercise their right of first
refusal during the specified period, or if an offer to purchase the
property is not received from a qualified organization during that
period, the land bank may sell the property to any other qualified
participating developer at the same price that the land bank
offered the property to the qualified organizations.
(g) In its plan, the municipality shall establish the amount
of additional time, if any, that a property may be held in the land
bank once an offer has been received and accepted from a qualified
organization or other qualified participating developer.
(h) If more than one qualified organization expresses an
interest in exercising its right of first refusal, the organization
that has designated the most geographically compact area
encompassing a portion of the property shall be given priority.
(i) In its plan, the municipality may provide for other
rights of first refusal for any other nonprofit corporation
exempted from federal income tax under Section 501(c)(3), Internal
Revenue Code of 1986, as amended, provided that the preeminent
right of first refusal is provided to qualified organizations as
provided by this section.
(j) The land bank is not required to provide a right of first
refusal to qualified organizations under this section if the land
bank is selling property that reverted to the land bank under
Section 379E.009(d).
Sec. 379E.012. OPEN RECORDS AND MEETINGS. The land bank
shall comply with the requirements of Chapters 551 and 552,
Government Code.
Sec. 379E.013. RECORDS; AUDIT; REPORT. (a) The land bank
shall keep accurate minutes of its meetings and shall keep accurate
records and books of account that conform with generally accepted
principles of accounting and that clearly reflect the income and
expenses of the land bank and all transactions in relation to its
property.
(b) The land bank shall file with the municipality not later
than the 90th day after the close of the fiscal year annual audited
financial statements prepared by a certified public accountant.
The financial transactions of the land bank are subject to audit by
the municipality.
(c) For purposes of evaluating the effectiveness of the
program, the land bank shall submit an annual performance report to
the municipality not later than November 1 of each year in which the
land bank acquires or sells property under this chapter. The
performance report must include:
(1) a complete and detailed written accounting of all
money and properties received and disbursed by the land bank during
the preceding fiscal year;
(2) for each property acquired by the land bank during
the preceding fiscal year:
(A) the street address of the property;
(B) the legal description of the property;
(C) the date the land bank took title to the
property;
(D) the name and address of the property owner of
record at the time of the foreclosure;
(E) the amount of taxes and other costs owed at
the time of the foreclosure; and
(F) the assessed value of the property on the tax
roll at the time of the foreclosure;
(3) for each property sold by the land bank during the
preceding fiscal year to a qualified participating developer:
(A) the street address of the property;
(B) the legal description of the property;
(C) the name and mailing address of the
developer;
(D) the purchase price paid by the developer;
(E) the maximum incomes allowed for the
households by the terms of the sale; and
(F) the source and amount of any public subsidy
provided by the municipality to facilitate the sale or rental of the
property to a household within the targeted income levels;
(4) for each property sold by a qualified
participating developer during the preceding fiscal year, the
buyer’s household income and a description of all use and sale
restrictions; and
(5) for each property developed for rental housing
with an active deed restriction, a copy of the most recent annual
report filed by the owner with the land bank.
(d) The land bank shall maintain in its records for
inspection a copy of the sale settlement statement for each
property sold by a qualified participating developer and a copy of
the first page of the mortgage note with the interest rate and
indicating the volume and page number of the instrument as filed
with the county clerk.
(e) The land bank shall provide copies of the performance
report to the taxing units who were parties to the judgment of
foreclosure and shall provide notice of the availability of the
performance report for review to the organizations and neighborhood
associations identified by the municipality as serving the
neighborhoods in which properties sold to the land bank under this
chapter are located.
(f) The land bank and the municipality shall maintain copies
of the performance report available for public review.
SECTION 13. Section 11.18, Tax Code, is amended by amending
Subsection (d) and adding Subsection (o) to read as follows:
(d) A charitable organization must be organized exclusively
to perform religious, charitable, scientific, literary, or
educational purposes and, except as permitted by Subsections (h)
and (l), engage exclusively in performing one or more of the
following charitable functions:
(1) providing medical care without regard to the
beneficiaries’ ability to pay, which in the case of a nonprofit
hospital or hospital system means providing charity care and
community benefits in accordance with Section 11.1801;
(2) providing support or relief to orphans,
delinquent, dependent, or handicapped children in need of
residential care, abused or battered spouses or children in need of
temporary shelter, the impoverished, or victims of natural disaster
without regard to the beneficiaries’ ability to pay;
(3) providing support to elderly persons, including
the provision of recreational or social activities and facilities
designed to address the special needs of elderly persons, or to the
handicapped, without regard to the beneficiaries’ ability to pay;
(4) preserving a historical landmark or site;
(5) promoting or operating a museum, zoo, library,
theater of the dramatic or performing arts, or symphony orchestra
or choir;
(6) promoting or providing humane treatment of
animals;
(7) acquiring, storing, transporting, selling, or
distributing water for public use;
(8) answering fire alarms and extinguishing fires with
no compensation or only nominal compensation to the members of the
organization;
(9) promoting the athletic development of boys or
girls under the age of 18 years;
(10) preserving or conserving wildlife;
(11) promoting educational development through loans
or scholarships to students;
(12) providing halfway house services pursuant to a
certification as a halfway house by the pardons and paroles
division of the Texas Department of Criminal Justice;
(13) providing permanent housing and related social,
health care, and educational facilities for persons who are 62
years of age or older without regard to the residents’ ability to
pay;
(14) promoting or operating an art gallery, museum, or
collection, in a permanent location or on tour, that is open to the
public;
(15) providing for the organized solicitation and
collection for distributions through gifts, grants, and agreements
to nonprofit charitable, education, religious, and youth
organizations that provide direct human, health, and welfare
services;
(16) performing biomedical or scientific research or
biomedical or scientific education for the benefit of the public;
(17) operating a television station that produces or
broadcasts educational, cultural, or other public interest
programming and that receives grants from the Corporation for
Public Broadcasting under 47 U.S.C. Section 396, as amended;
(18) providing housing for low-income and
moderate-income families, for unmarried individuals 62 years of age
or older, for handicapped individuals, and for families displaced
by urban renewal, through the use of trust assets that are
irrevocably and, pursuant to a contract entered into before
December 31, 1972, contractually dedicated on the sale or
disposition of the housing to a charitable organization that
performs charitable functions described by Subdivision (9);
(19) providing housing and related services to persons
who are 62 years of age or older in a retirement community, if the
retirement community provides independent living services,
assisted living services, and nursing services to its residents on
a single campus:
(A) without regard to the residents’ ability to
pay; or
(B) in which at least four percent of the
retirement community’s combined net resident revenue is provided in
charitable care to its residents; [or]
(20) providing housing on a cooperative basis to
students of an institution of higher education if:
(A) the organization is exempt from federal
income taxation under Section 501(a), Internal Revenue Code of
1986, as amended, by being listed as an exempt entity under Section
501(c)(3) of that code;
(B) membership in the organization is open to all
students enrolled in the institution and is not limited to those
chosen by current members of the organization;
(C) the organization is governed by its members;
and
(D) the members of the organization share the
responsibility for managing the housing;
(21) acquiring, holding, and transferring unimproved
real property under an urban land bank demonstration program
established under Chapter 379C, Local Government Code, as or on
behalf of a land bank; or
(22) acquiring, holding, and transferring unimproved
real property under an urban land bank program established under
Chapter 379E, Local Government Code, as or on behalf of a land bank.
(o) For purposes of Subsection (a)(2), real property
acquired, held, and transferred by an organization that performs
the function described by Subsection (d)(21) is considered to be
used exclusively by the qualified charitable organization to
perform that function.
SECTION 14. (a) Section 361.1875, Health and Safety Code,
as amended by this Act, applies only to a site investigation
conducted by the Texas Commission on Environmental Quality that
begins on or after the effective date of this Act. A site
investigation that begins before the effective date of this Act is
governed by the law in effect at the time the investigation began,
and the former law is continued in effect for that purpose.
(b) Section 361.271(b), Health and Safety Code, as amended
by this Act, applies only to an enforcement action initiated by the
Texas Commission on Environmental Quality on or after the effective
date of this Act. An enforcement action initiated before the
effective date of this Act is governed by the law in effect at the
time the action was initiated, and the former law is continued in
effect for that purpose.
(c) The changes in law made by this Act to Chapter 379C,
Local Government Code, apply only to an urban land bank
demonstration program operating in conformance with an urban land
bank demonstration plan adopted by the governing body of a
municipality on or after the effective date of this Act. An urban
land bank demonstration program operating in conformance with an
urban land bank demonstration plan adopted before the effective
date of this Act is governed by the law in effect at the time the
plan was adopted until a subsequent plan is adopted, and the former
law is continued in effect for that purpose.
(d) Section 11.18, Tax Code, as amended by this Act, applies
only to an ad valorem tax year that begins on or after the effective
date of this Act.
SECTION 15. Section 11.18, Tax Code, as amended by this Act,
applies only to an ad valorem tax year that begins on or after the
effective date of this Act.
SECTION 16. It is the intent of the legislature that the
passage by the 80th Legislature, Regular Session, 2007, of another
bill that amends Chapter 373A, Local Government Code, and the
amendments made by this Act shall be harmonized, if possible, as
provided by Section 311.025(b), Government Code, so that effect may
be given to each. If the amendments made by this Act to Chapter
373A, Local Government Code, and the amendments made to Chapter
373A, Local Government Code, by any other bill are irreconcilable,
it is the intent of the legislature that this Act prevail,
regardless of the relative dates of enactment of this Act and the
other bill or bills, but only to the extent that any differences are
irreconcilable.
SECTION 17. Section 379D.015, Local Government Code, as
added by this Act, applies only to a cause of action that accrues on
or after the effective date of this Act and concerns property that
is first purchased by a land bank under Section 379D.015, Local
Government Code, on or after the effective date of this Act.
SECTION 18. This Act takes effect September 1, 2007.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1742 was passed by the House on May 4,
2007, by the following vote: Yeas 137, Nays 0, 1 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 1742 on May 25, 2007, by the following vote: Yeas 140, Nays 0,
2 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 1742 was passed by the Senate, with
amendments, on May 23, 2007, by the following vote: Yeas 30, Nays
0.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor
H.B. No. 1742
AN ACT
relating to urban land bank demonstration programs.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 361.1875, Health and Safety Code, is
amended to read as follows:
Sec. 361.1875. EXCLUSION OF CERTAIN POTENTIALLY
RESPONSIBLE PARTIES. (a) The commission may not name a person as a
responsible party for an enforcement action or require a person to
reimburse remediation costs for a site if the commission has
conducted an investigation of a site owned or operated by the person
and as a result of the investigation has determined that:
(1) the contaminants that are the subject of
investigation under this subchapter appear to originate from an
up-gradient, off-site source that is not owned or operated by the
person;
(2) additional corrective action is not required at
the site owned or operated by the person; and
(3) the commission will not undertake a formal
enforcement action in the matter.
(b) The commission may not name a land bank established
under Chapter 379C, Local Government Code, as a responsible party
for an enforcement action or require the land bank to reimburse
remediation costs for a site if the commission has conducted an
investigation of a site owned or operated by the land bank and as a
result of the investigation has determined that:
(1) the contaminants that are the subject of
investigation under this subchapter:
(A) appear to originate from an up-gradient,
off-site source that is not owned or operated by the land bank; or
(B) appear to have been present on the site
before the land bank purchased the site; and
(2) the land bank could not have reasonably known
about the contaminants at the time the land bank purchased the site.
SECTION 2. Section 361.271(b), Health and Safety Code, is
amended to read as follows:
(b) A political subdivision, a land bank established under
Chapter 379C, Local Government Code, or an officer or employee of
the political subdivision or land bank is not a person responsible
for solid waste released or threatened to be released from a
facility or at a site if:
(1) the political subdivision or land bank acquired
ownership or control of the facility or site through a
[bankruptcy,] tax delinquency[, abandonment,] or if the
subdivision acquired ownership or control of the facility or site
through bankruptcy, abandonment, or other circumstances in which
the subdivision involuntarily acquired title to the facility or
site by virtue of the subdivision’s function as sovereign; and
(2) the political subdivision, land bank, officer, or
employee did not cause or contribute to the release or threatened
release of solid waste at the facility or site.
SECTION 3. Section 373A.003, Local Government Code, is
amended to read as follows:
Sec. 373A.003. APPLICABILITY OF CHAPTER. (a) This chapter
applies [only] to a municipality with a population of more than
650,000 that is located in a uniform state service region with fewer
than 550,000 occupied housing units as determined by the most
recent United States decennial census.
(b) Subchapters A, B, C, and D apply to any municipality
with a population of 1.18 million or more which is located
predominantly in a county that has a total area of less than 1,000
square miles and has adopted an urban land bank demonstration
program under Chapter 379C, Local Government Code.
SECTION 4. Section 373A.052, Local Government Code, is
amended to read as follows:
Sec. 373A.052. ELIGIBILITY FOR DESIGNATION. (a) To be
designated as a district within a municipality described by Section
373.003(a) under this subchapter, an area must be composed of
census tracts forming a spatially compact area contiguous to a
central business district and with:
(1) fewer than 25,000 residents;
(2) fewer than 8,000 households;
(3) a number of owner-occupied households that does
not exceed 50 percent of the total households in the area;
(4) housing stock at least 55 percent of which was
built at least 45 years ago;
(5) an unemployment rate that is greater than 10
percent;
(6) an overall poverty rate that is at least two times
the poverty rate for the entire municipality; and
(7) in each census tract within the area, a median
family income that is less than 60 percent of the median family
income for the entire municipality.
(b) To be designated as a district within a municipality
described by Section 373.003(b) under this subchapter, an area must
be composed of census tracts forming a spatially compact area
contiguous to a central business district and with:
(1) fewer than 75,000 residents;
(2) a median family income that is less than $30,000
according to the last decennial census; and
(3) an overall poverty rate that is at least two times
the poverty rate for the entire municipality.
(c) An area that is designated as a district under this
subchapter may retain its designation as a district regardless of
whether the area continues to meet the eligibility criteria
provided by this section, except that an area that does not elect to
retain its designation as permitted by this subsection must meet
all eligibility criteria to be considered for subsequent
redesignation as a district.
SECTION 5. Section 379C.003(3), Local Government Code, is
amended to read as follows:
(3) “Low income household” means a household with a
gross income of not greater than 115 [80] percent of the area median
family income, adjusted for household size, for the metropolitan
statistical area in which the municipality is located, as
determined annually by the United States Department of Housing and
Urban Development.
SECTION 6. Section 379C.008(a), Local Government Code, is
amended to read as follows:
(a) Notwithstanding any other law and except as provided by
Subsection (f), property that is ordered sold pursuant to
foreclosure of a tax lien may be sold in a private sale to a land
bank by the officer charged with the sale of the property without
first offering the property for sale as otherwise provided by
Section 34.01, Tax Code, if:
(1) the market value of the property as specified in
the judgment of foreclosure is less than the total amount due under
the judgment, including all taxes, penalties, and interest, plus
the value of nontax liens held by a taxing unit and awarded by the
judgment, court costs, and the cost of the sale;
(2) the property is not improved with a habitable
building or buildings or an uninhabitable building or buildings
that are occupied as a residence by an owner or tenant who is
legally entitled to occupy the building or buildings;
(3) there are delinquent taxes on the property for a
total of at least five [each of the preceding six] years; and
(4) the municipality has executed with the other
taxing units that are parties to the tax suit an interlocal
agreement that enables those units to agree to participate in the
program while retaining the right to withhold consent to the sale of
specific properties to the land bank.
SECTION 7. Section 379C.010(b), Local Government Code, is
amended to read as follows:
(b) Each land bank property sold during any given fiscal
year to be developed for sale must be deed restricted for sale to
low income households, and:
(1) at [At] least 25 percent of those [the] land bank
properties must [sold during any given fiscal year to be developed
for sale shall] be deed restricted for sale to households with gross
household incomes not greater than 60 percent of the area median
family income, adjusted for household size; and
(2) not more than 30 percent of those land bank
properties may be deed restricted for sale to households with gross
household incomes greater than 80 percent of the area median family
income, adjusted for household size [, for the metropolitan
statistical area in which the municipality is located, as
determined annually by the United States Department of Housing and
Urban Development].
SECTION 8. Section 379C.011(d), Local Government Code, is
amended to read as follows:
(d) The municipality shall specify in its plan that the
period during which the right of first refusal provided by this
section may be exercised by a qualified organization is six [. That
period must be at least nine months but not more than 26] months
from the date of the deed of conveyance of the property to the land
bank.
SECTION 9. Section 379D.010(a), Local Government Code, is
amended to read as follows:
(a) The land bank shall impose deed restrictions with
appropriate terms and conditions on property sold to qualified
participating developers and eligible adjacent property owners
that require:
(1) the development and sale or rental of the property
to low income households, if the property is sold to a qualified
participating developer; or
(2) the use of the property to be consistent and
compatible with the residential character of the neighborhood and
any applicable standards for use adopted by the land bank, if the
property is sold to an eligible adjacent property owner.
SECTION 10. Section 379D.011, Local Government Code, is
amended to read as follows:
Sec. 379D.011. RIGHT OF FIRST REFUSAL IN ELIGIBLE ADJACENT
PROPERTY OWNERS; CONDITIONS OF PURCHASE. (a) Property acquired by
the land bank shall be offered for sale, at fair market value as
determined by the appraisal district in which the property is
located, to eligible adjacent property owners under a right of
first refusal on terms and conditions developed by the land bank
that are consistent with this chapter.
(b) To be eligible to exercise a right of first refusal
under this section, an owner of property adjacent to property
acquired by the land bank:
(1) must have owned and continuously occupied that
property for at least the five preceding years as that person’s
principal residence; and
(2) must meet any eligibility requirements adopted by
the land bank.
(c) An adjacent property owner who purchases property under
this section may not lease, sell, or otherwise transfer the
property to another party before the 10th anniversary of the date
the adjacent property owner purchases the property. This
prohibition does not apply to a transfer of property, as allowed by
policies adopted by the land bank:
(1) to a family member of the adjacent property owner;
or
(2) in the case of the death of the adjacent property
owner.
SECTION 11. Chapter 379D, Local Government Code, is amended
by adding Section 379D.015 to read as follows:
Sec. 379D.015. EFFECT OF SALE TO LAND BANK OR SUBSEQUENT
PURCHASERS OR LENDERS FOR VALUE; LIMITATION ON CERTAIN CAUSES OF
ACTION. After the first anniversary of a sale of property to a land
bank under this chapter:
(1) a third party, other than a qualified
participating developer or eligible adjacent property owner who
purchased the property from the land bank under this chapter or a
person with a cause of action based on a right, title, interest, or
other claim described by Subdivision (2)(A)(ii), may not bring a
cause of action to set aside or otherwise challenge the sale of the
property to the land bank, including a cause of action that is
brought against:
(A) a qualified participating developer or
eligible adjacent property owner who purchases property from the
land bank under Section 379D.009 or 379D.011, as applicable; or
(B) any other subsequent purchaser for value or
lender for value; and
(2) a qualified participating developer or eligible
adjacent property owner who purchases property from a land bank
under this chapter or any other subsequent purchaser for value or,
if applicable, a lender for a developer, owner, or purchaser
described by this subdivision or any other subsequent lender for
value:
(A) has, with the following characteristics, a
full title to the property:
(i) except as provided by Subparagraph
(ii), the title is not subject to any right, title, interest, or
other claim a person acquired in the property before or after the
sale of the property to the land bank, including a right of first
refusal, right of second refusal, and any other right, title,
interest, or other claim provided by this chapter, other than the
right of reverter provided by Section 379D.009(d); and
(ii) the title is subject only to:
(a) the recorded restrictive
covenants, liens, and valid easements of record described by
Section 34.01(n), Tax Code;
(b) any rights of redemption
applicable to the property;
(c) any cause of action to impeach the
property deed based on a claim of fraud;
(d) the right of reverter provided by
Section 379D.009(d) and the recorded deed restrictions described by
Section 379D.010; and
(e) any right, title, interest, or
other claim with respect to the property that arose after the sale
of the property to the land bank under a law other than this
chapter; and
(B) may conclusively presume that:
(i) the sale of the property to the land
bank under this chapter was valid; and
(ii) a mortgage on or a subsequent sale of
the property complies with this chapter and is subject only to a
right, title, interest, or other claim provided by Paragraph
(A)(ii).
SECTION 12. Subtitle A, Title 12, Local Government Code, is
amended by adding Chapter 379E to read as follows:
CHAPTER 379E. URBAN LAND BANK PROGRAM
Sec. 379E.001. SHORT TITLE. This chapter may be cited as
the Urban Land Bank Program Act.
Sec. 379E.002. APPLICABILITY; CONSTRUCTION WITH OTHER LAW.
This chapter applies only to a municipality:
(1) to which Chapter 379C or 379D does not apply; and
(2) that has not ever adopted a homestead land bank
program under Subchapter E, Chapter 373A.
Sec. 379E.003. DEFINITIONS. In this chapter:
(1) “Affordable” means that the monthly mortgage
payment or contract rent does not exceed 30 percent of the
applicable median family income for that unit size, in accordance
with the income and rent limit rules adopted by the Texas Department
of Housing and Community Affairs.
(2) “Community housing development organization” or
“organization” means an organization that:
(A) meets the definition of a community housing
development organization in 24 C.F.R. Section 92.2; and
(B) is certified by the municipality as a
community housing development organization.
(3) “Land bank” means an entity established or
approved by the governing body of a municipality for the purpose of
acquiring, holding, and transferring unimproved real property
under this chapter.
(4) “Low income household” means a household with a
gross income of not greater than 80 percent of the area median
family income, adjusted for household size, for the metropolitan
statistical area in which the municipality is located, as
determined annually by the United States Department of Housing and
Urban Development.
(5) “Qualified participating developer” means a
developer who meets the requirements of Section 379E.005 and
includes a qualified organization under Section 379E.011.
(6) “Urban land bank plan” or “plan” means a plan
adopted by the governing body of a municipality as provided by
Section 379E.006.
(7) “Urban land bank program” or “program” means a
program adopted under Section 379E.004.
Sec. 379E.004. URBAN LAND BANK PROGRAM. (a) The governing
body of a municipality may adopt an urban land bank program in which
the officer charged with selling real property ordered sold
pursuant to foreclosure of a tax lien may sell certain eligible real
property by private sale for purposes of affordable housing
development as provided by this chapter.
(b) The governing body of a municipality that adopts an
urban land bank program shall establish or approve a land bank for
the purpose of acquiring, holding, and transferring unimproved real
property under this chapter.
Sec. 379E.005. QUALIFIED PARTICIPATING DEVELOPER. To
qualify to participate in an urban land bank program, a developer
must:
(1) have developed three or more housing units within
the three-year period preceding the submission of a proposal to the
land bank seeking to acquire real property from the land bank;
(2) have a development plan approved by the
municipality for the land bank property; and
(3) meet any other requirements adopted by the
municipality in the urban land bank plan.
Sec. 379E.006. URBAN LAND BANK PLAN. (a) A municipality
that adopts an urban land bank program shall operate the program in
conformance with an urban land bank plan.
(b) The governing body of a municipality that adopts an
urban land bank program shall adopt a plan annually. The plan may
be amended from time to time.
(c) In developing the plan, the municipality shall consider
other housing plans adopted by the municipality, including the
comprehensive plan submitted to the United States Department of
Housing and Urban Development and all fair housing plans and
policies adopted or agreed to by the municipality.
(d) The plan must include the following:
(1) a list of community housing development
organizations eligible to participate in the right of first refusal
provided by Section 379E.011;
(2) a list of the parcels of real property that may
become eligible for sale to the land bank during the next year;
(3) the municipality’s plan for affordable housing
development on those parcels of real property; and
(4) the sources and amounts of money anticipated to be
available from the municipality for subsidies for development of
affordable housing in the municipality, including any money
specifically available for housing developed under the program, as
approved by the governing body of the municipality at the time the
plan is adopted.
Sec. 379E.007. PUBLIC HEARING ON PROPOSED PLAN. (a) Before
adopting a plan, a municipality shall hold a public hearing on the
proposed plan.
(b) The city manager or the city manager’s designee shall
provide notice of the hearing to all community housing development
organizations and to neighborhood associations identified by the
municipality as serving the neighborhoods in which properties
anticipated to be available for sale to the land bank under this
chapter are located.
(c) The city manager or the city manager’s designee shall
make copies of the proposed plan available to the public not later
than the 60th day before the date of the public hearing.
Sec. 379E.008. PRIVATE SALE TO LAND BANK. (a)
Notwithstanding any other law and except as provided by Subsection
(f), property that is ordered sold pursuant to foreclosure of a tax
lien may be sold in a private sale to a land bank by the officer
charged with the sale of the property without first offering the
property for sale as otherwise provided by Section 34.01, Tax Code,
if:
(1) the market value of the property as specified in
the judgment of foreclosure is less than the total amount due under
the judgment, including all taxes, penalties, and interest, plus
the value of nontax liens held by a taxing unit and awarded by the
judgment, court costs, and the cost of the sale;
(2) the property is not improved with a building or
buildings;
(3) there are delinquent taxes on the property for a
total of at least five years; and
(4) the municipality has executed with the other
taxing units that are parties to the tax suit an interlocal
agreement that enables those units to agree to participate in the
program while retaining the right to withhold consent to the sale of
specific properties to the land bank.
(b) A sale of property for use in connection with the
program is a sale for a public purpose.
(c) If the person being sued in a suit for foreclosure of a
tax lien does not contest the market value of the property in the
suit, the person waives the right to challenge the amount of the
market value determined by the court for purposes of the sale of the
property under Section 33.50, Tax Code.
(d) For any sale of property under this chapter, each person
who was a defendant to the judgment, or that person’s attorney,
shall be given, not later than the 90th day before the date of sale,
written notice of the proposed method of sale of the property by the
officer charged with the sale of the property. Notice must be given
in the manner prescribed by Rule 21a, Texas Rules of Civil
Procedure.
(e) After receipt of the notice required by Subsection (d)
and before the date of the proposed sale, the owner of the property
subject to sale may file with the officer charged with the sale a
written request that the property not be sold in the manner provided
by this chapter.
(f) If the officer charged with the sale receives a written
request as provided by Subsection (e), the officer shall sell the
property as otherwise provided in Section 34.01, Tax Code.
(g) The owner of the property subject to sale may not
receive any proceeds of a sale under this chapter. However, the
owner does not have any personal liability for a deficiency of the
judgment as a result of a sale under this chapter.
(h) Notwithstanding any other law, if consent is given by
the taxing units that are a party to the judgment, property may be
sold to the land bank for less than the market value of the property
as specified in the judgment or less than the total of all taxes,
penalties, and interest, plus the value of nontax liens held by a
taxing unit and awarded by the judgment, court costs, and the cost
of the sale.
(i) The deed of conveyance of the property sold to a land
bank under this section conveys to the land bank the right, title,
and interest acquired or held by each taxing unit that was a party
to the judgment, subject to the right of redemption.
Sec. 379E.009. SUBSEQUENT RESALE BY LAND BANK. (a) Each
subsequent resale of property acquired by a land bank under this
chapter must comply with the conditions of this section.
(b) Within the three-year period following the date of
acquisition, the land bank must sell a property to a qualified
participating developer for the purpose of construction of
affordable housing for sale or rent to low income households. If
after three years a qualified participating developer has not
purchased the property, the property shall be transferred from the
land bank to the taxing units who were parties to the judgment for
disposition as otherwise allowed under the law.
(c) Unless the municipality increases the amount in its
plan, the number of properties acquired by a qualified
participating developer under this section on which development has
not been completed may not at any time exceed three times the annual
average residential production completed by the qualified
participating developer during the preceding two-year period as
determined by the municipality.
(d) The deed conveying a property sold by the land bank must
include a right of reverter so that, if the qualified participating
developer does not apply for a construction permit and close on any
construction financing within the two-year period following the
date of the conveyance of the property from the land bank to the
qualified participating developer, the property will revert to the
land bank for subsequent resale to another qualified participating
developer or conveyance to the taxing units who were parties to the
judgment for disposition as otherwise allowed under the law.
Sec. 379E.010. RESTRICTIONS ON OCCUPANCY AND USE OF
PROPERTY. (a) The land bank shall impose deed restrictions on
property sold to qualified participating developers requiring the
development and sale or rental of the property to low income
households.
(b) At least 25 percent of the land bank properties sold
during any given fiscal year to be developed for sale shall be deed
restricted for sale to households with gross household incomes not
greater than 60 percent of the area median family income, adjusted
for household size, for the metropolitan statistical area in which
the municipality is located, as determined annually by the United
States Department of Housing and Urban Development.
(c) If property is developed for rental housing, the deed
restrictions must be for a period of not less than 20 years and must
require that:
(1) 100 percent of the rental units be occupied by and
affordable to households with incomes not greater than 60 percent
of area median family income, based on gross household income,
adjusted for household size, for the metropolitan statistical area
in which the municipality is located, as determined annually by the
United States Department of Housing and Urban Development;
(2) 40 percent of the units be occupied by and
affordable to households with incomes not greater than 50 percent
of area median family income, based on gross household income,
adjusted for household size, for the metropolitan statistical area
in which the municipality is located, as determined annually by the
United States Department of Housing and Urban Development; or
(3) 20 percent of the units be occupied by and
affordable to households with incomes not greater than 30 percent
of area median family income, based on gross household income,
adjusted for household size, for the metropolitan statistical area
in which the municipality is located, as determined annually by the
United States Department of Housing and Urban Development.
(d) The deed restrictions under Subsection (c) must require
the owner to file an annual occupancy report with the municipality
on a reporting form provided by the municipality. The deed
restrictions must also prohibit any exclusion of an individual or
family from admission to the development based solely on the
participation of the individual or family in the housing choice
voucher program under Section 8, United States Housing Act of 1937
(42 U.S.C. Section 1437f), as amended.
(e) Except as otherwise provided by this section, if the
deed restrictions imposed under this section are for a term of
years, the deed restrictions shall renew automatically.
(f) The land bank or the governing body of the municipality
may modify or add to the deed restrictions imposed under this
section. Any modifications or additions made by the governing body
of the municipality must be adopted by the municipality as part of
its plan and must comply with the restrictions set forth in
Subsections (b), (c), and (d).
Sec. 379E.011. RIGHT OF FIRST REFUSAL. (a) In this
section, “qualified organization” means a community housing
development organization that:
(1) contains within its designated geographical
boundaries of operation, as set forth in its application for
certification filed with and approved by the municipality, a
portion of the property that the land bank is offering for sale;
(2) has built at least three single-family homes or
duplexes or one multifamily residential dwelling of four or more
units in compliance with all applicable building codes within the
preceding two-year period and within the organization’s designated
geographical boundaries of operation; and
(3) within the preceding three-year period has
developed or rehabilitated housing units within a two-mile radius
of the property that the land bank is offering for sale.
(b) The land bank shall first offer a property for sale to
qualified organizations.
(c) Notice must be provided to the qualified organizations
by certified mail, return receipt requested, not later than the
60th day before the beginning of the period in which a right of
first refusal may be exercised.
(d) The municipality shall specify in its plan the period
during which the right of first refusal provided by this section may
be exercised by a qualified organization. That period must be at
least nine months but not more than 26 months from the date of the
deed of conveyance of the property to the land bank.
(e) If the land bank conveys the property to a qualified
organization before the expiration of the period specified by the
municipality under Subsection (d), the interlocal agreement
executed under Section 379E.008(a)(4) must provide tax abatement
for the property until the expiration of that period.
(f) During the specified period, the land bank may not sell
the property to a qualified participating developer other than a
qualified organization. If all qualified organizations notify the
land bank that they are declining to exercise their right of first
refusal during the specified period, or if an offer to purchase the
property is not received from a qualified organization during that
period, the land bank may sell the property to any other qualified
participating developer at the same price that the land bank
offered the property to the qualified organizations.
(g) In its plan, the municipality shall establish the amount
of additional time, if any, that a property may be held in the land
bank once an offer has been received and accepted from a qualified
organization or other qualified participating developer.
(h) If more than one qualified organization expresses an
interest in exercising its right of first refusal, the organization
that has designated the most geographically compact area
encompassing a portion of the property shall be given priority.
(i) In its plan, the municipality may provide for other
rights of first refusal for any other nonprofit corporation
exempted from federal income tax under Section 501(c)(3), Internal
Revenue Code of 1986, as amended, provided that the preeminent
right of first refusal is provided to qualified organizations as
provided by this section.
(j) The land bank is not required to provide a right of first
refusal to qualified organizations under this section if the land
bank is selling property that reverted to the land bank under
Section 379E.009(d).
Sec. 379E.012. OPEN RECORDS AND MEETINGS. The land bank
shall comply with the requirements of Chapters 551 and 552,
Government Code.
Sec. 379E.013. RECORDS; AUDIT; REPORT. (a) The land bank
shall keep accurate minutes of its meetings and shall keep accurate
records and books of account that conform with generally accepted
principles of accounting and that clearly reflect the income and
expenses of the land bank and all transactions in relation to its
property.
(b) The land bank shall file with the municipality not later
than the 90th day after the close of the fiscal year annual audited
financial statements prepared by a certified public accountant.
The financial transactions of the land bank are subject to audit by
the municipality.
(c) For purposes of evaluating the effectiveness of the
program, the land bank shall submit an annual performance report to
the municipality not later than November 1 of each year in which the
land bank acquires or sells property under this chapter. The
performance report must include:
(1) a complete and detailed written accounting of all
money and properties received and disbursed by the land bank during
the preceding fiscal year;
(2) for each property acquired by the land bank during
the preceding fiscal year:
(A) the street address of the property;
(B) the legal description of the property;
(C) the date the land bank took title to the
property;
(D) the name and address of the property owner of
record at the time of the foreclosure;
(E) the amount of taxes and other costs owed at
the time of the foreclosure; and
(F) the assessed value of the property on the tax
roll at the time of the foreclosure;
(3) for each property sold by the land bank during the
preceding fiscal year to a qualified participating developer:
(A) the street address of the property;
(B) the legal description of the property;
(C) the name and mailing address of the
developer;
(D) the purchase price paid by the developer;
(E) the maximum incomes allowed for the
households by the terms of the sale; and
(F) the source and amount of any public subsidy
provided by the municipality to facilitate the sale or rental of the
property to a household within the targeted income levels;
(4) for each property sold by a qualified
participating developer during the preceding fiscal year, the
buyer’s household income and a description of all use and sale
restrictions; and
(5) for each property developed for rental housing
with an active deed restriction, a copy of the most recent annual
report filed by the owner with the land bank.
(d) The land bank shall maintain in its records for
inspection a copy of the sale settlement statement for each
property sold by a qualified participating developer and a copy of
the first page of the mortgage note with the interest rate and
indicating the volume and page number of the instrument as filed
with the county clerk.
(e) The land bank shall provide copies of the performance
report to the taxing units who were parties to the judgment of
foreclosure and shall provide notice of the availability of the
performance report for review to the organizations and neighborhood
associations identified by the municipality as serving the
neighborhoods in which properties sold to the land bank under this
chapter are located.
(f) The land bank and the municipality shall maintain copies
of the performance report available for public review.
SECTION 13. Section 11.18, Tax Code, is amended by amending
Subsection (d) and adding Subsection (o) to read as follows:
(d) A charitable organization must be organized exclusively
to perform religious, charitable, scientific, literary, or
educational purposes and, except as permitted by Subsections (h)
and (l), engage exclusively in performing one or more of the
following charitable functions:
(1) providing medical care without regard to the
beneficiaries’ ability to pay, which in the case of a nonprofit
hospital or hospital system means providing charity care and
community benefits in accordance with Section 11.1801;
(2) providing support or relief to orphans,
delinquent, dependent, or handicapped children in need of
residential care, abused or battered spouses or children in need of
temporary shelter, the impoverished, or victims of natural disaster
without regard to the beneficiaries’ ability to pay;
(3) providing support to elderly persons, including
the provision of recreational or social activities and facilities
designed to address the special needs of elderly persons, or to the
handicapped, without regard to the beneficiaries’ ability to pay;
(4) preserving a historical landmark or site;
(5) promoting or operating a museum, zoo, library,
theater of the dramatic or performing arts, or symphony orchestra
or choir;
(6) promoting or providing humane treatment of
animals;
(7) acquiring, storing, transporting, selling, or
distributing water for public use;
(8) answering fire alarms and extinguishing fires with
no compensation or only nominal compensation to the members of the
organization;
(9) promoting the athletic development of boys or
girls under the age of 18 years;
(10) preserving or conserving wildlife;
(11) promoting educational development through loans
or scholarships to students;
(12) providing halfway house services pursuant to a
certification as a halfway house by the pardons and paroles
division of the Texas Department of Criminal Justice;
(13) providing permanent housing and related social,
health care, and educational facilities for persons who are 62
years of age or older without regard to the residents’ ability to
pay;
(14) promoting or operating an art gallery, museum, or
collection, in a permanent location or on tour, that is open to the
public;
(15) providing for the organized solicitation and
collection for distributions through gifts, grants, and agreements
to nonprofit charitable, education, religious, and youth
organizations that provide direct human, health, and welfare
services;
(16) performing biomedical or scientific research or
biomedical or scientific education for the benefit of the public;
(17) operating a television station that produces or
broadcasts educational, cultural, or other public interest
programming and that receives grants from the Corporation for
Public Broadcasting under 47 U.S.C. Section 396, as amended;
(18) providing housing for low-income and
moderate-income families, for unmarried individuals 62 years of age
or older, for handicapped individuals, and for families displaced
by urban renewal, through the use of trust assets that are
irrevocably and, pursuant to a contract entered into before
December 31, 1972, contractually dedicated on the sale or
disposition of the housing to a charitable organization that
performs charitable functions described by Subdivision (9);
(19) providing housing and related services to persons
who are 62 years of age or older in a retirement community, if the
retirement community provides independent living services,
assisted living services, and nursing services to its residents on
a single campus:
(A) without regard to the residents’ ability to
pay; or
(B) in which at least four percent of the
retirement community’s combined net resident revenue is provided in
charitable care to its residents; [or]
(20) providing housing on a cooperative basis to
students of an institution of higher education if:
(A) the organization is exempt from federal
income taxation under Section 501(a), Internal Revenue Code of
1986, as amended, by being listed as an exempt entity under Section
501(c)(3) of that code;
(B) membership in the organization is open to all
students enrolled in the institution and is not limited to those
chosen by current members of the organization;
(C) the organization is governed by its members;
and
(D) the members of the organization share the
responsibility for managing the housing;
(21) acquiring, holding, and transferring unimproved
real property under an urban land bank demonstration program
established under Chapter 379C, Local Government Code, as or on
behalf of a land bank; or
(22) acquiring, holding, and transferring unimproved
real property under an urban land bank program established under
Chapter 379E, Local Government Code, as or on behalf of a land bank.
(o) For purposes of Subsection (a)(2), real property
acquired, held, and transferred by an organization that performs
the function described by Subsection (d)(21) is considered to be
used exclusively by the qualified charitable organization to
perform that function.
SECTION 14. (a) Section 361.1875, Health and Safety Code,
as amended by this Act, applies only to a site investigation
conducted by the Texas Commission on Environmental Quality that
begins on or after the effective date of this Act. A site
investigation that begins before the effective date of this Act is
governed by the law in effect at the time the investigation began,
and the former law is continued in effect for that purpose.
(b) Section 361.271(b), Health and Safety Code, as amended
by this Act, applies only to an enforcement action initiated by the
Texas Commission on Environmental Quality on or after the effective
date of this Act. An enforcement action initiated before the
effective date of this Act is governed by the law in effect at the
time the action was initiated, and the former law is continued in
effect for that purpose.
(c) The changes in law made by this Act to Chapter 379C,
Local Government Code, apply only to an urban land bank
demonstration program operating in conformance with an urban land
bank demonstration plan adopted by the governing body of a
municipality on or after the effective date of this Act. An urban
land bank demonstration program operating in conformance with an
urban land bank demonstration plan adopted before the effective
date of this Act is governed by the law in effect at the time the
plan was adopted until a subsequent plan is adopted, and the former
law is continued in effect for that purpose.
(d) Section 11.18, Tax Code, as amended by this Act, applies
only to an ad valorem tax year that begins on or after the effective
date of this Act.
SECTION 15. Section 11.18, Tax Code, as amended by this Act,
applies only to an ad valorem tax year that begins on or after the
effective date of this Act.
SECTION 16. It is the intent of the legislature that the
passage by the 80th Legislature, Regular Session, 2007, of another
bill that amends Chapter 373A, Local Government Code, and the
amendments made by this Act shall be harmonized, if possible, as
provided by Section 311.025(b), Government Code, so that effect may
be given to each. If the amendments made by this Act to Chapter
373A, Local Government Code, and the amendments made to Chapter
373A, Local Government Code, by any other bill are irreconcilable,
it is the intent of the legislature that this Act prevail,
regardless of the relative dates of enactment of this Act and the
other bill or bills, but only to the extent that any differences are
irreconcilable.
SECTION 17. Section 379D.015, Local Government Code, as
added by this Act, applies only to a cause of action that accrues on
or after the effective date of this Act and concerns property that
is first purchased by a land bank under Section 379D.015, Local
Government Code, on or after the effective date of this Act.
SECTION 18. This Act takes effect September 1, 2007.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1742 was passed by the House on May 4,
2007, by the following vote: Yeas 137, Nays 0, 1 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 1742 on May 25, 2007, by the following vote: Yeas 140, Nays 0,
2 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 1742 was passed by the Senate, with
amendments, on May 23, 2007, by the following vote: Yeas 30, Nays
0.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor