82R1241 JAM-D
By: Lucio S.B. No. 1691
A BILL TO BE ENTITLED
AN ACT
relating to the establishment of the rural housing land assemblage
program.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle C, Title 12, Local Government Code, is
amended by adding Chapter 394A to read as follows:
CHAPTER 394A. RURAL HOUSING LAND ASSEMBLAGE PROGRAM
Sec. 394A.001. SHORT TITLE. This chapter may be cited as
the Rural Housing Land Assemblage Program Act.
Sec. 394A.002. DEFINITIONS. In this chapter:
(1) "Affordable" means that the monthly mortgage
payment or contract rent does not exceed 30 percent of the
applicable median income for that unit size, in accordance with the
income and rent limit rules adopted by the department.
(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 as a community housing
development organization according to the requirements of federal
law.
(3) "Department" means the Texas Department of Housing
and Community Affairs.
(4) "Low-income household" means:
(A) for rental housing, a household with a gross
income not to exceed 60 percent of the greater of the area median
income or national nonmetropolitan median income, adjusted for
household size, as determined annually by the United States
Department of Housing and Urban Development; or
(B) for purchased housing, a household with a
gross income not to exceed 80 percent of the greater of the area
median income or the state median income, adjusted for household
size, as determined annually by the United States Department of
Housing and Urban Development or by the department based on data
from the United States Department of Housing and Urban Development,
as appropriate.
(5) "Qualified participating developer" means a
developer who meets the requirements of Section 394A.005 and
includes a qualified organization under Section 394A.011.
(6) "Rural county" means a county classified as a
rural county by the United States Department of Agriculture for
purposes of the rural housing loan programs authorized by the
Housing Act of 1949 (42 U.S.C. Section 1471 et seq.).
(7) "Rural housing land assemblage entity" or "entity"
means an entity established or designated by the governing bodies
of one or more rural municipalities or rural counties for the
purpose of implementing and operating a rural housing land
assemblage program.
(8) "Rural housing land assemblage plan" or "plan"
means a plan adopted and approved as provided by Section 394A.006.
(9) "Rural housing land assemblage program" means a
program to acquire, hold, and transfer real property under this
chapter for the purpose of providing affordable housing for
low-income households.
(10) "Rural municipality" means a municipality
classified as a rural municipality by the United States Department
of Agriculture for purposes of the rural housing loan programs
authorized by the Housing Act of 1949 (42 U.S.C. Section 1471 et
seq.).
Sec. 394A.003. RURAL HOUSING LAND ASSEMBLAGE PROGRAM. The
governing bodies of one or more rural municipalities or rural
counties may participate in a rural housing land assemblage
program. As part of the program, a participating rural
municipality or county shall:
(1) with any other participating rural municipalities
or counties, enter into interlocal agreements governing the scope
and operation of the program, subject to the provisions of this
chapter; and
(2) establish or designate an entity to serve as the
rural housing land assemblage entity in charge of implementing and
operating the program.
Sec. 394A.004. RURAL HOUSING LAND ASSEMBLAGE ENTITY. A
rural housing land assemblage entity may acquire, hold, and
transfer, for the purpose of providing affordable housing for
low-income households, real property that is not improved with a
habitable building or buildings and is otherwise unoccupied.
Sec. 394A.005. QUALIFIED PARTICIPATING DEVELOPER. To
qualify to participate in a rural housing land assemblage program,
a developer must:
(1) have built three or more housing units within the
three-year period preceding the submission of a proposal to a rural
housing land assemblage entity seeking to acquire real property
from the entity;
(2) have a development plan approved by the entity and
each participating rural municipality or county for the property;
and
(3) meet any other requirements adopted by the entity
in the rural housing land assemblage plan.
Sec. 394A.006. RURAL HOUSING LAND ASSEMBLAGE PLAN. (a) A
rural housing land assemblage entity that implements and operates a
rural housing land assemblage program shall operate the program in
conformance with a rural housing land assemblage plan. The entity
shall adopt a plan annually and may amend the plan as necessary.
The adoption of the plan and any amendments to the plan are subject
to approval by the governing body of each participating rural
municipality or county.
(b) In developing the plan, a rural housing land assemblage
entity shall consider housing plans adopted by each participating
rural municipality or county, including comprehensive plans
submitted to the United States Department of Housing and Urban
Development and all fair housing plans and policies adopted or
agreed to by the municipalities or counties.
(c) The plan must include the following:
(1) a list of qualified organizations eligible to
participate in the right of first refusal provided by Section
394A.011;
(2) the amount of time, if any, that a property may be
held by a rural housing land assemblage entity once an offer has
been received and accepted from a qualified organization or other
qualified participating developer;
(3) a list of the parcels of real property that may
become eligible for sale to the entity during the upcoming year;
(4) the entity's plan for affordable housing
development on those parcels of real property; and
(5) the sources and amounts of funding anticipated to
be available from each participating rural municipality or county
for subsidies for development of affordable housing in the
applicable rural municipality or county, including any money
specifically available for housing developed under the program, as
approved by the governing body of the applicable rural municipality
or county before the plan is adopted by the entity.
Sec. 394A.007. PUBLIC HEARING ON PROPOSED PLAN. (a) Before
adopting a plan, a rural housing land assemblage entity shall hold a
public hearing on the proposed plan.
(b) The director of the rural housing land assemblage entity
shall provide notice of the hearing to all community housing
development organizations and to neighborhood associations
identified by the entity as serving the areas in which properties
anticipated to be available for sale to the entity under this
chapter are located.
(c) The director of the rural housing land assemblage entity
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. 394A.008. PRIVATE SALE TO LAND ASSEMBLAGE ENTITY. (a)
Notwithstanding any other law and except as provided by Subsection
(f), real property that is ordered sold pursuant to foreclosure of a
tax lien may be sold in a private sale to a rural housing land
assemblage entity 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 property is used for the purpose of providing
affordable housing as described by Section 394A.004;
(2) the market value of the property as appraised by
the local appraisal district and 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;
(3) the property is not improved with a habitable
building or buildings and is otherwise unoccupied;
(4) there are delinquent taxes on the property for a
total of at least five years; and
(5) each rural municipality or rural county that
participates in the rural housing land assemblage program 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 entity.
(b) A sale of property for use in connection with the rural
housing land assemblage 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 section, each person
who was a defendant to the judgment, or that person's attorney,
shall be given, not later than the 60th 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 shall 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 section.
(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 section. However, the
owner does not have any personal liability for a deficiency of the
judgment as a result of a sale under this section.
(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 rural housing land assemblage entity 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 rural
housing land assemblage entity under this section conveys to the
entity 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. 394A.009. EXEMPTION FROM AD VALOREM TAXATION.
Property sold to and held by a rural housing land assemblage entity
for subsequent resale is entitled to an exemption from ad valorem
taxation for a period not to exceed three years from the date of
acquisition. The exemption period may be renewed for a property for
an additional period, not to exceed three years, on approval of the
governing body of each participating rural municipality or county
and any other taxing unit in which the property is located. Property
is entitled to an exemption under this section only during the
period the property is held by the entity.
Sec. 394A.010. SUBSEQUENT RESALE BY LAND ASSEMBLAGE ENTITY.
(a) Except as provided by Subsection (b), each subsequent resale of
property acquired by a rural housing land assemblage entity under
this chapter must comply with the conditions of this section.
(b) Notwithstanding any other law, this section does not
apply to property sold to an eligible adjacent property owner under
Section 394A.012.
(c) A rural housing land assemblage entity must sell a
property to a qualified participating developer within the
four-year period following the date of acquisition for the purpose
of construction of affordable housing for sale or rent to
low-income households. If after four years a qualified
participating developer has not purchased the property, the
property shall be transferred from the entity to the taxing units
that were parties to the judgment for disposition as otherwise
allowed under the law.
(d) Unless a rural housing land assemblage entity 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 given 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 entity.
(e) The deed conveying a property sold by a rural housing
land assemblage entity 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 three-year period following the date of the conveyance of the
property from the entity to the qualified participating developer,
the property will revert to the entity for subsequent resale in
accordance with this chapter or conveyance to the taxing units that
were parties to the judgment for disposition as otherwise allowed
under the law.
Sec. 394A.011. RIGHT OF FIRST REFUSAL TO QUALIFIED
ORGANIZATIONS. (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, a portion of the property that a rural housing land
assemblage entity 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 two-year period has built or
rehabilitated housing units within a one-half mile radius of the
property that the entity is offering for sale.
(b) Except as provided by Section 394A.012, a rural housing
land assemblage entity 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.
(d) A rural housing land assemblage entity 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 months from the date of the deed of conveyance
of the property to the entity.
(e) During the specified period, a rural housing land
assemblage entity may not sell the property to a qualified
participating developer other than a qualified organization. If
all qualified organizations notify the entity 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
entity may sell the property to any other qualified participating
developer at the same price that the entity offered the property to
the qualified organizations.
(f) 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.
(g) In its plan, a rural housing land assemblage entity may
provide for rights of second refusal for any other nonprofit
corporation exempted from federal income tax under Section
501(c)(3), Internal Revenue Code of 1986, as amended. The rights of
second refusal permitted by this subsection must be exercised
during the period described by Subsection (d).
(h) A rural housing land assemblage entity is not required
to provide a right of first refusal to qualified organizations
under this section if the entity is selling property that reverted
to the entity under Section 394A.010.
Sec. 394A.012. PROPERTY DETERMINED TO BE INAPPROPRIATE FOR
RESIDENTIAL DEVELOPMENT: PREEMINENT RIGHT OF FIRST REFUSAL. (a)
In this section, "eligible adjacent property owner" means a person
who:
(1) owns property located adjacent to property owned
by a rural housing land assemblage entity;
(2) has owned the adjacent property and continuously
occupied that property as a primary residence for the two-year
period preceding the date of the sale; and
(3) satisfies eligibility requirements specified by
the entity in its annual plan.
(b) Notwithstanding any other right of first refusal
granted under this chapter, if a rural housing land assemblage
entity determines that a property owned by the entity is not
appropriate for residential development, the entity first shall
offer the property for sale to an eligible adjacent property owner
according to terms and conditions that are consistent with this
chapter, as specified by the entity in its annual plan.
(c) A rural housing land assemblage entity shall sell the
property to an eligible adjacent property owner, at whichever value
is lower:
(1) the fair market value for the property as
determined by the appraisal district in which the property is
located; or
(2) the sales price recorded in the entity's annual
plan.
(d) Except as provided by Subsection (e), an adjacent
property owner that purchases property under this section may not
lease, sell, or transfer that property to another person before the
third anniversary of the date the adjacent property owner purchased
that property from a rural housing land assemblage entity.
(e) Subsection (d) does not apply to the transfer of
property purchased under this section if the transfer:
(1) is made according to a policy adopted by a rural
housing land assemblage entity in its annual plan; and
(2) is made to a family member of the eligible adjacent
property owner or occurs as a result of the death of the eligible
adjacent property owner.
Sec. 394A.013. RESTRICTIONS ON OCCUPANCY AND USE OF
PROPERTY. (a) A rural housing land assemblage entity shall impose
deed restrictions on property sold to qualified participating
developers requiring the development and sale, rental, or
lease-purchase of the property to low-income households.
(b) Each rural housing land assemblage entity property sold
during any given fiscal year to be developed for sale must be
deed-restricted for sale to low-income households.
(c) If property is developed for rental housing, the deed
restrictions must be for a period of not less than 15 years and must
require that 100 percent of the rental units be occupied by
low-income households.
(d) The deed restrictions under Subsection (c) must require
the owner to file an annual occupancy report with the rural housing
land assemblage entity and with each participating rural
municipality or county on a reporting form provided by the entity.
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) A rural housing land assemblage entity may modify or add
to the deed restrictions imposed under this section. Any
modifications or additions must be adopted by the entity as part of
its plan and must comply with the restrictions set forth in
Subsections (b), (c), and (d).
Sec. 394A.014. DEPARTMENT RULEMAKING AUTHORITY. The
department shall develop and adopt guidelines and rules governing
the operation of a rural housing land assemblage program, including
reporting requirements for rural housing land assemblage entities
and additional affordability terms and income targeting.
Sec. 394A.015. OPEN RECORDS AND MEETINGS. A rural housing
land assemblage entity is subject to Chapters 551 and 552,
Government Code.
Sec. 394A.016. RECORDS; AUDIT. (a) A rural housing land
assemblage entity 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 entity and all transactions
in relation to its property.
(b) Not later than the 90th day after the close of a rural
housing land assemblage entity's fiscal year, the entity shall file
with each participating rural municipality or county annual audited
financial statements prepared by a certified public accountant.
The financial transactions of the entity are subject to audit by a
participating rural municipality or county and by the department.
SECTION 2. This Act takes effect September 1, 2011.