Texas 2011 - 82nd Regular

Texas House Bill HB1729 Compare Versions

The same version is selected twice. Please select two different versions to compare.

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	82R22722 MXM-F
2	2	By: Keffer H.B. No. 1729
3	3	Substitute the following for H.B. No. 1729:
4	4	By: Cook C.S.H.B. No. 1729
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the sale of surplus leased land by a governmental entity
10	10	to a private party.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Subtitle F, Title 10, Government Code, is
13	13	amended by adding Chapter 2267 to read as follows:
14	14	CHAPTER 2267. SALE OF LEASED LAND BY GOVERNMENTAL ENTITIES
15	15	SUBCHAPTER A. GENERAL PROVISIONS
16	16	Sec. 2267.001. DEFINITIONS. In this chapter:
17	17	(1) "Bulk purchaser" means any person, including
18	18	successors in interest, heirs, or assigns, that acquires a leased
19	19	tract, wholly or partly, from a governmental entity in accordance
20	20	with Subchapter C. The term does not include a lessee who acquires
21	21	an individual leased tract under Section 2267.051 or Subchapter D.
22	22	(2) "Bulk sale" means a sale to a bulk purchaser of
23	23	multiple leased tracts, wholly or partly, from a governmental
24	24	entity in accordance with Subchapter C. The term does not include a
25	25	sale to a lessee who acquires an individual leased tract under
26	26	Section 2267.051 or Subchapter D.
27	27	(3) "Closing date" means the date on which the
28	28	governmental entity transfers its interest in the leased tract,
29	29	wholly or partly, to a bulk purchaser. There may be multiple
30	30	closing dates if the leased tract is sold in portions.
31	31	(4) "Consumer price index" means the consumer price
32	32	index for Housing, Dallas-Fort Worth, TX area, Series Id:
33	33	CUURA316SAH, Base Period: 1982-84 = 100, as published by the Bureau
34	34	of Labor Statistics of the United States Department of Labor, or its
35	35	equivalent if the series is discontinued.
36	36	(5) "Leased tract" means all or any portion of
37	37	government land that is:
38	38	(A) leased by a governmental entity before
39	39	application of this chapter; and
40	40	(B) subject to this chapter under Section
41	41	2267.003.
42	42	(6) "Lessee" means a person that leases a leased tract
43	43	under a residential or commercial lease from a governmental entity.
44	44	The term includes the lessee's heirs, successors, and assigns.
45	45	Sec. 2267.002. APPLICABILITY TO ALL GOVERNMENTAL ENTITIES.
46	46	This chapter applies to this state and each political subdivision
47	47	of this state, including a municipality, a county, a river
48	48	authority or other water district, a state agency, and any other
49	49	governmental entity of this state.
50	50	Sec. 2267.003. APPLICABILITY ONLY TO SURPLUS PROPERTY.
51	51	This chapter applies only to a leased tract:
52	52	(1) that is owned by, and designated as surplus
53	53	property by, a governmental entity; and
54	54	(2) that the governmental entity elects to sell under
55	55	this chapter.
56	56	Sec. 2267.004. OPTIONS CUMULATIVE. The options provided by
57	57	this chapter are in addition to and not instead of any other lease
58	58	or sale of surplus property options that a governmental entity
59	59	otherwise has.
60	60	Sec. 2267.005. CONTINUING APPLICABILITY OF PROVISIONS. A
61	61	provision of this chapter that applies to the lessee of a leased
62	62	tract under this chapter applies to any subsequent owner of the
63	63	leased tract.
64	64	Sec. 2267.006. PLATTING LAW INAPPLICABLE. A sale of the
65	65	leased tract under this chapter is not subject to Chapter 212 or
66	66	232, Local Government Code, or any other platting requirement.
67	67	Sec. 2267.007. NONAPPLICABILITY OF CERTAIN OTHER LAWS. The
68	68	following laws do not apply to the sale of an individual leased
69	69	tract or bulk sale under this chapter:
70	70	(1) Chapter 180, Finance Code;
71	71	(2) Chapter 272, Local Government Code;
72	72	(3) Chapter 31, Natural Resources Code;
73	73	(4) Section 8502.013, Special District Local Laws
74	74	Code; and
75	75	(5) Section 49.226, Water Code.
76	76	[Sections 2267.008-2267.050 reserved for expansion]
77	77	SUBCHAPTER B. SALE OF LEASED LAND BY GOVERNMENTAL ENTITY DIRECTLY
78	78	TO INDIVIDUAL WHO IS LEASING LAND FROM GOVERNMENTAL ENTITY
79	79	Sec. 2267.051. SALE OF LEASED LAND TO PERSON LEASING LAND
80	80	FOR FAIR MARKET VALUE. A governmental entity may, without notice or
81	81	the solicitation of bids, sell land it owns to the lessee for not
82	82	less than the fair market value of the unencumbered fee simple
83	83	estate as determined under Section 2267.052.
84	84	Sec. 2267.052. APPRAISALS. (a) An appraiser hired under
85	85	this section must be:
86	86	(1) disinterested; and
87	87	(2) a licensed appraiser under Chapter 1103,
88	88	Occupations Code.
89	89	(b) Before a sale under Section 2267.051, the lessee shall
90	90	hire an appraiser to determine the current fair market value of
91	91	land. Not later than the 60th day after the date the appraiser is
92	92	hired, the appraiser shall complete the appraisal and send the
93	93	completed appraisal to the lessee and the governmental entity.
94	94	(c) If the governmental entity rejects the fair market value
95	95	determined by the appraisal, the governmental entity shall hire
96	96	another appraiser to conduct a second appraisal. Not later than the
97	97	60th day after the date the governmental entity rejects the initial
98	98	appraisal, the second appraisal must be completed and sent to the
99	99	lessee and the governmental entity.
100	100	(d) If the lessee rejects the fair market value determined
101	101	by the second appraiser, the two appraisers shall meet and attempt
102	102	to reach an agreement on the fair market value not later than the
103	103	30th day after the date the lessee receives the governmental
104	104	entity's appraisal.
105	105	(e) If the two appraisers fail to reach agreement on or
106	106	before the 10th day after the date of the meeting, not later than
107	107	the 20th day after the date of the meeting the governmental entity
108	108	shall request that the comptroller appoint a third appraiser to
109	109	reconcile the two previous appraisals. Not later than the 30th day
110	110	after the date of the request, the comptroller shall appoint the
111	111	third appraiser.
112	112	(f) Not later than the 30th day after the date the third
113	113	appraiser is appointed, the third appraisal must be completed and
114	114	sent to the lessee and the governmental entity. The third appraisal
115	115	is final and binding on all parties.
116	116	(g) The appraisal costs must be paid by the person who
117	117	requests the appraisal, except that the lessee and the governmental
118	118	entity shall each pay one-half of the cost of any third appraisal.
119	119	(h) An appraisal may not:
120	120	(1) include consideration of a freeze or other
121	121	suspension of lease rate increases for the homestead of a person who
122	122	is 65 years of age or older; and
123	123	(2) include the value of any improvements constructed
124	124	on the lot or over the water that is the lessee's property.
125	125	Sec. 2267.053. NO WATER CODE PERMIT EXEMPTION. (a) A
126	126	leased tract sold by the governmental entity under this chapter is
127	127	ineligible for, and the owner is not entitled to, the exemption
128	128	provided by Section 11.142(a), Water Code. The purpose of this
129	129	section is to protect the public health, safety, or welfare and to
130	130	ensure an adequate municipal, county, water district, river
131	131	authority, or other governmental water supply.
132	132	(b) The instrument conveying the leased tract must include a
133	133	provision stating that the exemption does not apply to the
134	134	conveyance.
135	135	[Sections 2267.054-2267.100 reserved for expansion]
136	136	SUBCHAPTER C. SALE OF LEASED LAND BY GOVERNMENTAL ENTITY TO BULK
137	137	PURCHASERS; LESSEE OPTIONS TO PURCHASE OR LEASE FROM BULK PURCHASER
138	138	Sec. 2267.101. SALE OF LEASED LAND TO BULK PURCHASER. (a)
139	139	Instead of a sale under Section 2267.051, a governmental entity may
140	140	by resolution pursue a bulk sale of all or part of the property
141	141	leased to a lessee to a bulk purchaser under this subchapter.
142	142	(b) A lessee may not purchase land under Section 2267.051
143	143	from the effective date indicated in the resolution until the date
144	144	on which any resulting bulk purchase and sale agreement is declared
145	145	terminated by the governmental entity.
146	146	(c) If the bulk sale of the leased property is completed and
147	147	ownership of the land is transferred to the bulk purchaser, the
148	148	lessee may not purchase land under Section 2267.051 and the
149	149	lessee's only purchase and lease options are those described by
150	150	this subchapter and Subchapter D. This subsection does not apply to
151	151	a lessee who timely exercises an option to purchase the land it is
152	152	leasing.
153	153	Sec. 2267.102. OPPORTUNITY OF LESSEE TO BUY LEASED TRACT.
154	154	Each lessee is entitled to buy the lessee's individual leased tract
155	155	from the bulk purchaser or continue leasing the applicable leased
156	156	tract from the bulk purchaser in accordance with the purchase or
157	157	lease options described by Sections 2267.103 through 2267.106.
158	158	Sec. 2267.103. OPTION TO PURCHASE FOR CASH. (a) The lessee
159	159	may purchase the leased tract in cash or through lender financing
160	160	for 100 percent of land only assessed value without any exemptions,
161	161	as determined by the appraisal district, for the most current
162	162	tax-assessed value.
163	163	(b) This option must be available on the closing date and
164	164	until at least the first anniversary of the closing date.
165	165	Sec. 2267.104. OPTION TO PURCHASE FOR LOAN. (a) The lessee
166	166	may purchase the individual leased tract by seller financing for
167	167	the percent of assessed value only as set forth in Section 2267.103,
168	168	with a down payment of 10 percent and an interest rate of 6 percent,
169	169	with a 30-year amortization.
170	170	(b) The lessee may not be charged any origination fees or
171	171	points as a part of the closing costs involved in this option.
172	172	(c) This option must be available on the closing date and
173	173	until at least the first anniversary of the closing date.
174	174	Sec. 2267.105. OPTION FOR 99-YEAR LEASE. (a) The lessee
175	175	may enter into a new 99-year lease for the leased tract at a rental
176	176	rate of six percent of the land only assessed value without any
177	177	exemptions, as determined by the appraisal district, for the
178	178	tax-assessed value that was used to determine the bulk purchaser's
179	179	purchase price.
180	180	(b) The rental price is subject to annual consumer price
181	181	index increases or decreases.
182	182	(c) The 99-year lease must include an option to purchase the
183	183	applicable leased tract at the land only assessed value without any
184	184	exemptions, as determined by the appraisal district, at the time of
185	185	the lessee's purchase. This value may not be less than the
186	186	tax-assessed value that was used to determine the bulk purchaser's
187	187	purchase price.
188	188	(d) This option must be available until at least the first
189	189	anniversary of the closing date.
190	190	Sec. 2267.106. OPTION FOR 20-YEAR LEASE FOR SENIOR
191	191	CITIZENS. (a) This section applies only to a lessee who is 65 years
192	192	of age or older and who receives a property tax exemption under
193	193	Section 11.13, Tax Code, for a structure on the lessee's individual
194	194	leased tract. The lessee must have received the property tax
195	195	exemption for a structure on the lessee's individual leased tract
196	196	by the first day of January before the bulk purchaser's closing
197	197	date.
198	198	(b) The lessee may enter into a 20-year lease for the leased
199	199	tract at a rental rate of six percent of the land only assessed
200	200	value without any exemptions, as determined by the appraisal
201	201	district, for the tax-assessed value that was used to determine the
202	202	bulk purchaser's purchase price.
203	203	(c) The rental price is subject to annual consumer price
204	204	index increases or decreases. All annual consumer price index
205	205	increases or decreases are deferred, and accrued and compounded for
206	206	20 years at the six percent rate.
207	207	(d) The 20-year lease must include an option to purchase the
208	208	applicable leased tract at the land only assessed value without any
209	209	exemptions, as determined by the appraisal district, at the time of
210	210	the lessee's purchase. This value may not be less than the
211	211	tax-assessed value that was used to determine the bulk purchaser's
212	212	purchase price.
213	213	(e) This option must be available until at least the first
214	214	anniversary of the closing date.
215	215	Sec. 2267.107. EXTENSION OF EXISTING LEASE IF OPTIONS NOT
216	216	EXERCISED; EIGHT-YEAR OPTION TO PURCHASE. (a) The bulk purchaser
217	217	shall extend the existing lease of any lessee who does not timely
218	218	exercise one of the options in Sections 2267.103 through 2267.106.
219	219	The bulk purchaser shall extend the lease as necessary to allow for
220	220	the full eight-year purchase option period provided by this
221	221	section.
222	222	(b) Not later than the eighth anniversary of the closing
223	223	date, the lessee may purchase the lessee's individual leased tract
224	224	for the greater of:
225	225	(1) the land only assessed value without any
226	226	exemptions, as determined by the appraisal district at the time of
227	227	the lessee's purchase; or
228	228	(2) the tax-assessed value that was used to determine
229	229	the bulk purchaser's purchase price.
230	230	(c) This section does not prevent the bulk purchaser from
231	231	offering additional purchase or lease options to a lessee.
232	232	Sec. 2267.108. DETERMINATION OF LEASE RATE OR PURCHASE
233	233	PRICE WHEN APPRAISAL DISTRICT VALUE UNAVAILABLE. (a) This section
234	234	applies when the appraisal district does not provide an assessed
235	235	value for the applicable portion of the leased tract for the
236	236	applicable year.
237	237	(b) To determine the purchase price or lease rate, the land
238	238	only assessed value without any exemptions for the applicable
239	239	portion of the leased tract must be calculated based on the assessed
240	240	value per square foot of comparable tracts with similar physical
241	241	characteristics in the applicable county or adjoining counties, as
242	242	determined by the selling governmental entity.
243	243	Sec. 2267.109. LIEN ON LEASED TRACT; LESSEE DUTIES. (a)
244	244	In this section, "lienholder" means any mortgagee under a mortgage,
245	245	or a trustee or beneficiary under a deed of trust, holding a lien on
246	246	any portion of the leased tract.
247	247	(b) On the date the sale of an individual leased tract
248	248	closes, the lessee shall:
249	249	(1) pay any debt secured by a lien on the lessee's
250	250	leasehold estate; or
251	251	(2) deliver the express written consent of each
252	252	lienholder on the leasehold estate in the leased tract permitting
253	253	the lessee to grant a purchase money lien on the fee simple estate
254	254	in the leased tract.
255	255	Sec. 2267.110. PROPERTY OWNERS' ASSOCIATION. The bulk
256	256	purchaser may create a property owners' association with the power
257	257	to assess property, impose a lien, and collect dues and assessments
258	258	for the operation of the property owners' association.
259	259	Sec. 2267.111. DEED RESTRICTIONS. The selling governmental
260	260	entity may impose a deed restriction on the leased tract conveyed to
261	261	the bulk purchaser that was included in the individual leases
262	262	conveyed.
263	263	[Sections 2267.112-2267.150 reserved for expansion]
264	264	SUBCHAPTER D. PROCEDURES FOR LESSEE PURCHASING LAND FROM BULK
265	265	PURCHASER
266	266	Sec. 2267.151. LESSEE'S RIGHT TO PURCHASE LEASED TRACT WHEN
267	267	BULK PURCHASER CLOSES. (a) In the manner provided by this
268	268	subchapter, a lessee may buy the lessee's individual leased tract
269	269	from the bulk purchaser under Section 2267.103 or 2267.104
270	270	concurrently with the bulk purchaser making its purchase from the
271	271	governmental entity on the closing date.
272	272	(b) The lessee shall notify the selling governmental entity
273	273	and the bulk purchaser not later than the 90th day after the
274	274	effective date of the purchase and sale agreement between the
275	275	entity and the bulk purchaser of the lessee's intent to purchase the
276	276	applicable leased tract using the format provided by the entity and
277	277	the bulk purchaser.
278	278	(c) Not later than the closing date, the lessee and the bulk
279	279	purchaser must enter into a purchase and sale agreement in
280	280	substantially the form as agreed to between the selling
281	281	governmental entity and the bulk purchaser.
282	282	Sec. 2267.152. PURCHASE PRICE REQUIRED IN AGREEMENT. The
283	283	purchase and sale agreement must contain the purchase price for the
284	284	individual leased tract in accordance with the applicable purchase
285	285	option under Section 2267.103 or 2267.104.
286	286	Sec. 2267.153. SURVEY REQUIRED. (a) The lessee shall
287	287	deliver an accurate survey of the lessee's individual leased tract
288	288	to the selling governmental entity and the bulk purchaser not later
289	289	than the 45th day before the closing date, at the lessee's expense.
290	290	(b) The survey must be acceptable to the title company
291	291	selected by the bulk purchaser and lessee and approved by the
292	292	selling governmental entity for the purpose of issuing a policy of
293	293	title insurance on the applicable portion of the leased tract.
294	294	(c) The survey must be prepared by a licensed state land
295	295	surveyor or a registered professional land surveyor acceptable to
296	296	the selling governmental entity and the bulk purchaser.
297	297	(d) The survey must include the boundaries of the lessee's
298	298	leased tract. The boundaries must be consistent with any master
299	299	survey prepared on behalf of the selling governmental entity in
300	300	conjunction with the sale of the leased tract to the bulk purchaser.
301	301	(e) The survey must include all improvements on the leased
302	302	tract and indicate any encroachments across the applicable boundary
303	303	lines.
304	304	(f) The survey must be reviewed and approved by the selling
305	305	governmental entity and the bulk purchaser.
306	306	(g) The selling governmental entity or the bulk purchaser
307	307	may perform an inspection of the applicable leased tract to verify
308	308	the accuracy of the survey and any encroachments.
309	309	Sec. 2267.154. TITLE COMMITMENT REQUIRED. The lessee shall
310	310	provide a title commitment from the title company selected by the
311	311	lessee and the bulk purchaser. The lessee shall pay for the title
312	312	commitment.
313	313	Sec. 2267.155. OBJECTIONS TO TITLE COMMITMENT OR SURVEY.
314	314	(a) The lessee must notify the bulk purchaser of any objections to
315	315	any items on the title commitment or survey not later than:
316	316	(1) the 15th day after the date the lessee receives the
317	317	title commitment or survey, as applicable; and
318	318	(2) the 45th day before the proposed closing date.
319	319	(b) The bulk purchaser or the selling governmental entity is
320	320	not required to cure any items described by Subsection (a) or to
321	321	incur any expenses in curing the items, except that the bulk
322	322	purchaser or the entity, as applicable, shall use good faith
323	323	efforts to address or remove those requirements or exceptions shown
324	324	on Schedule C of the title commitment that apply to or are created
325	325	by the bulk purchaser or entity. Despite this good faith exception,
326	326	the bulk purchaser or entity is not required to cure any exceptions
327	327	on the attached Schedule C regarding legal right of access to or
328	328	from the applicable leased tract.
329	329	Sec. 2267.156. "AS-IS" PURCHASE; NO WARRANTIES. (a) The
330	330	lessee purchases the applicable individual leased tract in its
331	331	"as-is" condition.
332	332	(b) The bulk purchaser:
333	333	(1) is not required to make any improvements or
334	334	modifications; and
335	335	(2) may not make any representations or warranties as
336	336	to the condition or use of the applicable leased tract.
337	337	Sec. 2267.157. NO RESPONSIBILITY FOR BROKER FEES OR
338	338	COMMISSIONS. The bulk purchaser is not responsible for any broker
339	339	fees or commissions due to any broker or agent engaged or claiming
340	340	to have been engaged by the lessee for the purchase and sale of the
341	341	applicable leased tract.
342	342	Sec. 2267.158. COSTS FOR WHICH BULK PURCHASER IS
343	343	RESPONSIBLE. The bulk purchaser is responsible for the following
344	344	costs:
345	345	(1) one-half of any escrow fee;
346	346	(2) costs to release existing liens placed on the
347	347	applicable portion of the leased tract by the bulk purchaser;
348	348	(3) prepayment penalties and recording fees;
349	349	(4) costs to release the bulk purchaser's loan
350	350	liability to the extent applicable to the individual leased tract;
351	351	(5) costs related to tax statements or certificates;
352	352	and
353	353	(6) costs to prepare the deed.
354	354	Sec. 2267.159. COSTS FOR WHICH LESSEE IS RESPONSIBLE. The
355	355	lessee is responsible for the following costs:
356	356	(1) one-half of any escrow fee;
357	357	(2) costs associated with a loan or financing for the
358	358	applicable portion of the leased tract, including:
359	359	(A) loan origination, discount, buy-down, and
360	360	commitment fees;
361	361	(B) appraisal fees;
362	362	(C) loan application fees;
363	363	(D) credit reports costs;
364	364	(E) costs to prepare loan documents;
365	365	(F) loan-related inspection fees; and
366	366	(G) interest on the loan from the date of
367	367	disbursement to the date of the first monthly payment;
368	368	(3) the cost of the survey prepared under Section
369	369	2267.153;
370	370	(4) recording fees;
371	371	(5) costs for copies of easements and restrictions;
372	372	(6) the cost of the mortgagee policy of title
373	373	insurance, including any endorsements required by the lender;
374	374	(7) the cost of any prepaid items, including insurance
375	375	premiums and reserves and taxes;
376	376	(8) underwriting fees; and
377	377	(9) the cost of any owner's policy of title insurance,
378	378	including endorsements obtained by the lessee.
379	379	Sec. 2267.160. TAXES. Taxes are prorated as of the closing
380	380	date. If the taxes are not paid as of the closing date, the lessee is
381	381	responsible for paying the taxes.
382	382	Sec. 2267.161. TITLE COMPANY AND ESCROW AGENT. The title
383	383	company and escrow agent must be acceptable to the selling
384	384	governmental entity and agreed to by the lessee and the bulk
385	385	purchaser in the purchase and sale agreement.
386	386	Sec. 2267.162. DELIVERY OF PURCHASE AND SALE AGREEMENT AND
387	387	EARNEST MONEY. On or before the closing date, $1,000 in earnest
388	388	money and the executed purchase and sale agreement between the
389	389	lessee and the bulk purchaser must be timely delivered to the title
390	390	company or escrow agent.
391	391	Sec. 2267.163. DELIVERY OF COMPLETED DOCUMENTS TO ESCROW
392	392	AGENT. On or before the date of the sale to the lessee, the bulk
393	393	purchaser and the lessee shall complete all documentation necessary
394	394	to transfer the applicable leased tract from the bulk purchaser to
395	395	the lessee and deliver the completed and executed documents to the
396	396	applicable escrow agent.
397	397	Sec. 2267.164. RECORDING OF DOCUMENTS. (a) The special
398	398	warranty deed or any other documents transferring the applicable
399	399	portion of the leased tract to the lessee may not be recorded before
400	400	the closing date.
401	401	(b) Promptly after the escrow agent receives written notice
402	402	from the selling governmental entity or the title company or escrow
403	403	agent facilitating the closing of the leased tract from the entity
404	404	to the bulk purchaser that the closing has been completed, the agent
405	405	shall file the special warranty deed and any other applicable
406	406	documents to transfer the leased tract to the lessee in the real
407	407	property records of the county in which the leased tract is located.
408	408	SECTION 2. This Act takes effect September 1, 2011.