Texas 2019 - 86th Regular

Texas House Bill HB834 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	86R6550 JAM-D
2	2	By: Hernandez H.B. No. 834
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the authority of a county to adopt a land bank program.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Subtitle B, Title 12, Local Government Code, is
10	10	amended by adding Chapter 388 to read as follows:
11	11	CHAPTER 388. LAND BANK PROGRAM
12	12	Sec. 388.001. DEFINITIONS. In this chapter:
13	13	(1) "Affordable" means that the monthly mortgage
14	14	payment or contract rent does not exceed 30 percent of the
15	15	applicable median family income for that unit size, in accordance
16	16	with the income and rent limit rules adopted by the Texas Department
17	17	of Housing and Community Affairs.
18	18	(2) "Community housing development organization" or
19	19	"organization" means an organization that:
20	20	(A) meets the definition of a community housing
21	21	development organization in 24 C.F.R. Section 92.2; and
22	22	(B) is certified by the county as a community
23	23	housing development organization.
24	24	(3) "Land bank" means an entity established or
25	25	approved by the governing body of a county for the purpose of
26	26	acquiring, holding, and transferring unimproved real property
27	27	under this chapter.
28	28	(4) "Land bank plan" or "plan" means a plan adopted by
29	29	the governing body of a county as provided by Section 388.004.
30	30	(5) "Land bank program" or "program" means a program
31	31	adopted under Section 388.002.
32	32	(6) "Low income household" means a household with an
33	33	income of not greater than 80 percent of the area median family
34	34	income, based on gross household income, adjusted for household
35	35	size, for the county, as determined annually by the United States
36	36	Department of Housing and Urban Development.
37	37	(7) "Qualified participating developer" means a
38	38	developer who meets the requirements of Section 388.003 and
39	39	includes a qualified organization under Section 388.009.
40	40	Sec. 388.002. LAND BANK PROGRAM. (a) The governing body of
41	41	a county may adopt a land bank program in which the officer charged
42	42	with selling real property ordered sold pursuant to foreclosure of
43	43	a tax lien may sell certain eligible real property by private sale
44	44	for purposes of affordable housing development as provided by this
45	45	chapter.
46	46	(b) The governing body of a county that adopts a land bank
47	47	program shall establish or approve a land bank for the purpose of
48	48	acquiring, holding, and transferring unimproved real property
49	49	under this chapter.
50	50	(c) A land bank program established under this chapter may
51	51	not operate in a municipality that has adopted an urban land bank
52	52	program under Chapter 373A, 379C, 379D, or 379E.
53	53	Sec. 388.003. QUALIFIED PARTICIPATING DEVELOPER. To
54	54	qualify to participate in a land bank program, a developer must:
55	55	(1) have developed three or more housing units within
56	56	the three-year period preceding the submission of a proposal to the
57	57	land bank seeking to acquire real property from the land bank;
58	58	(2) have a development plan approved by the county for
59	59	the land bank property; and
60	60	(3) meet any other requirements adopted by the county
61	61	in the land bank plan.
62	62	Sec. 388.004. LAND BANK PLAN. (a) A county that adopts a
63	63	land bank program shall operate the program in conformance with a
64	64	land bank plan.
65	65	(b) The governing body of a county that adopts a land bank
66	66	program shall adopt a plan annually. The plan may be amended from
67	67	time to time.
68	68	(c) In developing the plan, the county shall consider any
69	69	other housing plans adopted by the county, including any fair
70	70	housing plans and policies adopted or agreed to by the county.
71	71	(d) The plan must include the following:
72	72	(1) a list of community housing development
73	73	organizations eligible to participate in the right of first refusal
74	74	provided by Section 388.009;
75	75	(2) a list of the parcels of real property that may
76	76	become eligible for sale to the land bank during the next year;
77	77	(3) the county's plan for affordable housing
78	78	development on those parcels of real property; and
79	79	(4) the sources and amounts of money anticipated to be
80	80	available from the county for subsidies for development of
81	81	affordable housing in the county, including any money specifically
82	82	available for housing developed under the program, as approved by
83	83	the governing body of the county at the time the plan is adopted.
84	84	Sec. 388.005. PUBLIC HEARING ON PROPOSED PLAN. (a) Before
85	85	adopting a plan, a county shall hold a public hearing on the
86	86	proposed plan.
87	87	(b) The county clerk or the county clerk's designee shall
88	88	provide notice of the hearing to all community housing development
89	89	organizations and to neighborhood associations identified by the
90	90	county as serving the neighborhoods in which properties anticipated
91	91	to be available for sale to the land bank under this chapter are
92	92	located.
93	93	(c) The county clerk or the county clerk's designee shall
94	94	make copies of the proposed plan available to the public not later
95	95	than the 60th day before the date of the public hearing.
96	96	Sec. 388.006. PRIVATE SALE TO LAND BANK. (a)
97	97	Notwithstanding any other law and except as provided by Subsection
98	98	(f), property that is ordered sold pursuant to foreclosure of a tax
99	99	lien may be sold in a private sale to a land bank by the officer
100	100	charged with the sale of the property without first offering the
101	101	property for sale as otherwise provided by Section 34.01, Tax Code,
102	102	if:
103	103	(1) the market value of the property as specified in
104	104	the judgment of foreclosure is less than the total amount due under
105	105	the judgment, including all taxes, penalties, and interest, plus
106	106	the value of nontax liens held by a taxing unit and awarded by the
107	107	judgment, court costs, and the cost of the sale;
108	108	(2) the property is not improved with a building or
109	109	buildings;
110	110	(3) there are delinquent taxes on the property for a
111	111	total of at least five years; and
112	112	(4) the county has executed with the other taxing
113	113	units that are parties to the tax suit an interlocal agreement that
114	114	enables those units to agree to participate in the program while
115	115	retaining the right to withhold consent to the sale of specific
116	116	properties to the land bank.
117	117	(b) A sale of property for use in connection with the
118	118	program is a sale for a public purpose.
119	119	(c) If the person being sued in a suit for foreclosure of a
120	120	tax lien does not contest the market value of the property in the
121	121	suit, the person waives the right to challenge the amount of the
122	122	market value determined by the court for purposes of the sale of the
123	123	property under Section 33.50, Tax Code.
124	124	(d) For any sale of property under this chapter, each person
125	125	who was a defendant to the judgment, or that person's attorney,
126	126	shall be given, not later than the 90th day before the date of sale,
127	127	written notice of the proposed method of sale of the property by the
128	128	officer charged with the sale of the property. Notice shall be
129	129	given in the manner prescribed by Rule 21a, Texas Rules of Civil
130	130	Procedure.
131	131	(e) After receipt of the notice required by Subsection (d)
132	132	and before the date of the proposed sale, the owner of the property
133	133	subject to sale may file with the officer charged with the sale a
134	134	written request that the property not be sold in the manner provided
135	135	by this chapter.
136	136	(f) If the officer charged with the sale receives a written
137	137	request as provided by Subsection (e), the officer shall sell the
138	138	property as otherwise provided in Section 34.01, Tax Code.
139	139	(g) The owner of the property subject to sale may not
140	140	receive any proceeds of a sale under this chapter. However, the
141	141	owner does not have any personal liability for a deficiency of the
142	142	judgment as a result of a sale under this chapter.
143	143	(h) Notwithstanding any other law, if consent is given by
144	144	the taxing units that are a party to the judgment, property may be
145	145	sold to the land bank for less than the market value of the property
146	146	as specified in the judgment or less than the total of all taxes,
147	147	penalties, and interest, plus the value of nontax liens held by a
148	148	taxing unit and awarded by the judgment, court costs, and the cost
149	149	of the sale.
150	150	(i) The deed of conveyance of the property sold to a land
151	151	bank under this section conveys to the land bank the right, title,
152	152	and interest acquired or held by each taxing unit that was a party
153	153	to the judgment, subject to the right of redemption.
154	154	Sec. 388.007. SUBSEQUENT RESALE BY LAND BANK. (a) Each
155	155	subsequent resale by a land bank of property acquired by the land
156	156	bank under this chapter must comply with the conditions of this
157	157	section.
158	158	(b) Within the three-year period following the date of
159	159	acquisition, the land bank must sell a property to a qualified
160	160	participating developer for the purpose of construction of
161	161	affordable housing for sale or rent to low income households.
162	162	(c) If after three years a qualified participating
163	163	developer has not purchased the property, the property shall be
164	164	transferred from the land bank to the taxing units who were parties
165	165	to the judgment for disposition as otherwise allowed under the law.
166	166	(d) Unless the county increases the amount in its plan, the
167	167	number of properties acquired by a qualified participating
168	168	developer under this section on which development has not been
169	169	completed may not at any given time exceed three times the annual
170	170	average residential production completed by the qualified
171	171	participating developer during the preceding two-year period as
172	172	determined by the county.
173	173	(e) The deed conveying a property sold by the land bank must
174	174	include a right of reverter so that if the qualified participating
175	175	developer does not apply for a construction permit and close on any
176	176	construction financing within the two-year period following the
177	177	date of the conveyance of the property from the land bank to the
178	178	qualified participating developer, the property will revert to the
179	179	land bank for subsequent resale to another qualifying participating
180	180	developer or conveyance to the taxing units who were parties to the
181	181	judgment for disposition as otherwise allowed under the law.
182	182	Sec. 388.008. RESTRICTIONS ON OCCUPANCY AND USE OF
183	183	PROPERTY. (a) The land bank shall impose deed restrictions on
184	184	property sold to qualified participating developers requiring the
185	185	development and subsequent sale or rental of the property to low
186	186	income households.
187	187	(b) At least 25 percent of the land bank properties sold
188	188	during any given fiscal year to be developed for sale shall be deed
189	189	restricted for sale to households with incomes not greater than 60
190	190	percent of the area median family income, based on gross household
191	191	income, adjusted for household size, for the county, as determined
192	192	annually by the United States Department of Housing and Urban
193	193	Development.
194	194	(c) If property is developed for rental housing, the deed
195	195	restrictions must be for a period of not less than 20 years and must
196	196	require that:
197	197	(1) 100 percent of the rental units be occupied by and
198	198	affordable to households with incomes not greater than 60 percent
199	199	of area median family income, based on gross household income,
200	200	adjusted for household size, for the county, as determined annually
201	201	by the United States Department of Housing and Urban Development;
202	202	(2) 40 percent of the units be occupied by and
203	203	affordable to households with incomes not greater than 50 percent
204	204	of area median family income, based on gross household income,
205	205	adjusted for household size, for the county, as determined annually
206	206	by the United States Department of Housing and Urban Development;
207	207	or
208	208	(3) 20 percent of the units be occupied by and
209	209	affordable to households with incomes not greater than 30 percent
210	210	of area median family income, based on gross household income,
211	211	adjusted for household size, for the county, as determined annually
212	212	by the United States Department of Housing and Urban Development.
213	213	(d) The deed restrictions under Subsection (c) must require
214	214	the owner to file an annual occupancy report with the county on a
215	215	reporting form provided by the county. The deed restrictions must
216	216	also prohibit any exclusion of an individual or family from
217	217	admission to the development based solely on the participation of
218	218	the individual or family in the housing choice voucher program
219	219	under Section 8, United States Housing Act of 1937 (42 U.S.C.
220	220	Section 1437f).
221	221	(e) Except as otherwise provided by this section, if the
222	222	deed restrictions imposed under this section are for a term of
223	223	years, the deed restrictions shall renew automatically.
224	224	(f) The land bank or the governing body of the county may
225	225	modify or add to the deed restrictions imposed under this section.
226	226	Any modifications or additions made by the governing body of the
227	227	county must be adopted by the county as part of its plan and must
228	228	comply with the restrictions set forth in Subsections (b), (c), and
229	229	(d).
230	230	Sec. 388.009. RIGHT OF FIRST REFUSAL. (a) In this section,
231	231	"qualified organization" means a community housing development
232	232	organization that:
233	233	(1) contains within its designated geographical
234	234	boundaries of operation, as set forth in its application for
235	235	certification filed with and approved by the county, a portion of
236	236	the property that the land bank is offering for sale;
237	237	(2) has built at least three single-family homes or
238	238	duplexes or one multifamily residential dwelling of four or more
239	239	units in compliance with all applicable building codes within the
240	240	preceding two-year period and within the organization's designated
241	241	geographical boundaries of operation; and
242	242	(3) within the preceding three-year period has
243	243	developed or rehabilitated housing units within a two-mile radius
244	244	of the property that the land bank is offering for sale.
245	245	(b) The land bank shall first offer a property for sale to
246	246	qualified organizations.
247	247	(c) Notice must be provided to the qualified organizations
248	248	by certified mail, return receipt requested, not later than the
249	249	60th day before the beginning of the period in which a right of
250	250	first refusal may be exercised.
251	251	(d) The county shall specify in its plan the period during
252	252	which the right of first refusal provided by this section may be
253	253	exercised by a qualified organization. That period must be at
254	254	least nine months but not more than 26 months from the date of the
255	255	deed of conveyance of the property to the land bank.
256	256	(e) If the land bank conveys the property to a qualified
257	257	organization before the expiration of the period specified by the
258	258	county under Subsection (d), the interlocal agreement executed
259	259	under Section 388.006(a)(4) must provide tax abatement for the
260	260	property until the expiration of that period.
261	261	(f) During the specified period, the land bank may not sell
262	262	the property to a qualified participating developer other than a
263	263	qualified organization. If all qualified organizations notify the
264	264	land bank that they are declining to exercise their right of first
265	265	refusal during the specified period, or if an offer to purchase the
266	266	property is not received from a qualified organization during that
267	267	period, the land bank may sell the property to any other qualified
268	268	participating developer at the same price that the land bank
269	269	offered the property to the qualified organizations.
270	270	(g) In its plan, the county shall establish the amount of
271	271	additional time, if any, that a property may be held in the land
272	272	bank once an offer has been received and accepted from a qualified
273	273	organization or other qualified participating developer.
274	274	(h) If more than one qualified organization expresses an
275	275	interest in exercising its right of first refusal, the organization
276	276	that has designated the most geographically compact area
277	277	encompassing a portion of the property shall be given priority.
278	278	(i) In its plan, the county may provide for other rights of
279	279	first refusal for any other nonprofit corporation exempted from
280	280	federal income tax under Section 501(c)(3), Internal Revenue Code
281	281	of 1986, provided that the preeminent right of first refusal is
282	282	provided to qualified organizations as provided by this section.
283	283	(j) The land bank is not required to provide a right of first
284	284	refusal to qualified organizations under this section if the land
285	285	bank is selling property that reverted to the land bank under
286	286	Section 388.007(e).
287	287	Sec. 388.010. OPEN RECORDS AND MEETINGS. The land bank
288	288	shall comply with the requirements of Chapters 551 and 552,
289	289	Government Code.
290	290	Sec. 388.011. RECORDS; AUDIT; REPORT. (a) The land bank
291	291	shall keep accurate minutes of its meetings and shall keep accurate
292	292	records and books of account that conform with generally accepted
293	293	principles of accounting and that clearly reflect the income and
294	294	expenses of the land bank and all transactions in relation to its
295	295	property.
296	296	(b) The land bank shall file with the county not later than
297	297	the 90th day after the close of the fiscal year annual audited
298	298	financial statements prepared by a certified public accountant.
299	299	The financial transactions of the land bank are subject to audit by
300	300	the county.
301	301	(c) For purposes of evaluating the effectiveness of the
302	302	program, the land bank shall submit an annual performance report to
303	303	the county not later than November 1 of each year in which the land
304	304	bank acquires or sells property under this chapter. The
305	305	performance report must include:
306	306	(1) a complete and detailed written accounting of all
307	307	money and properties received and disbursed by the land bank during
308	308	the preceding fiscal year;
309	309	(2) for each property acquired by the land bank during
310	310	the preceding fiscal year:
311	311	(A) the street address of the property;
312	312	(B) the legal description of the property;
313	313	(C) the date the land bank took title to the
314	314	property;
315	315	(D) the name and mailing address of the property
316	316	owner of record at the time of the foreclosure;
317	317	(E) the amount of taxes and other costs owed at
318	318	the time of the foreclosure; and
319	319	(F) the assessed value of the property on the tax
320	320	roll at the time of the foreclosure;
321	321	(3) for each property sold by the land bank during the
322	322	preceding fiscal year to a qualified participating developer:
323	323	(A) the street address of the property;
324	324	(B) the legal description of the property;
325	325	(C) the name and mailing address of the
326	326	purchaser;
327	327	(D) the price paid by the purchaser;
328	328	(E) the maximum incomes allowed for the
329	329	households by the terms of the sale; and
330	330	(F) the source and amount of any public subsidy
331	331	provided by the county to facilitate the sale or rental of the
332	332	property to a household within the targeted income levels;
333	333	(4) for each property sold by a qualified
334	334	participating developer during the preceding fiscal year, the
335	335	buyer's household income and a description of all use and sale
336	336	restrictions; and
337	337	(5) for each property developed for rental housing
338	338	with an active deed restriction, a copy of the most recent annual
339	339	report filed by the owner with the land bank.
340	340	(d) The land bank shall maintain in its records for
341	341	inspection a copy of the sale settlement statement for each
342	342	property sold by a qualified participating developer and a copy of
343	343	the first page of the mortgage note with the interest rate and
344	344	indicating the volume and page number of the instrument as filed
345	345	with the county clerk.
346	346	(e) The land bank shall provide copies of the performance
347	347	report to the taxing units who were parties to the judgment of
348	348	foreclosure and shall provide notice of the availability of the
349	349	performance report for review to the organizations and neighborhood
350	350	associations identified by the county as serving the neighborhoods
351	351	in which properties sold to the land bank under this chapter are
352	352	located.
353	353	(f) The land bank and the county shall maintain copies of
354	354	the performance report available for public review.
355	355	SECTION 2. Sections 11.18(d) and (o), Tax Code, are amended
356	356	to read as follows:
357	357	(d) A charitable organization must be organized exclusively
358	358	to perform religious, charitable, scientific, literary, or
359	359	educational purposes and, except as permitted by Subsections (h)
360	360	and (l), engage exclusively in performing one or more of the
361	361	following charitable functions:
362	362	(1) providing medical care without regard to the
363	363	beneficiaries' ability to pay, which in the case of a nonprofit
364	364	hospital or hospital system means providing charity care and
365	365	community benefits in accordance with Section 11.1801;
366	366	(2) providing support or relief to orphans,
367	367	delinquent, dependent, or handicapped children in need of
368	368	residential care, abused or battered spouses or children in need of
369	369	temporary shelter, the impoverished, or victims of natural disaster
370	370	without regard to the beneficiaries' ability to pay;
371	371	(3) providing support without regard to the
372	372	beneficiaries' ability to pay to:
373	373	(A) elderly persons, including the provision of:
374	374	(i) recreational or social activities; and
375	375	(ii) facilities designed to address the
376	376	special needs of elderly persons; or
377	377	(B) the handicapped, including training and
378	378	employment:
379	379	(i) in the production of commodities; or
380	380	(ii) in the provision of services under 41
381	381	U.S.C. Sections 8501-8506;
382	382	(4) preserving a historical landmark or site;
383	383	(5) promoting or operating a museum, zoo, library,
384	384	theater of the dramatic or performing arts, or symphony orchestra
385	385	or choir;
386	386	(6) promoting or providing humane treatment of
387	387	animals;
388	388	(7) acquiring, storing, transporting, selling, or
389	389	distributing water for public use;
390	390	(8) answering fire alarms and extinguishing fires with
391	391	no compensation or only nominal compensation to the members of the
392	392	organization;
393	393	(9) promoting the athletic development of boys or
394	394	girls under the age of 18 years;
395	395	(10) preserving or conserving wildlife;
396	396	(11) promoting educational development through loans
397	397	or scholarships to students;
398	398	(12) providing halfway house services pursuant to a
399	399	certification as a halfway house by the parole division of the Texas
400	400	Department of Criminal Justice;
401	401	(13) providing permanent housing and related social,
402	402	health care, and educational facilities for persons who are 62
403	403	years of age or older without regard to the residents' ability to
404	404	pay;
405	405	(14) promoting or operating an art gallery, museum, or
406	406	collection, in a permanent location or on tour, that is open to the
407	407	public;
408	408	(15) providing for the organized solicitation and
409	409	collection for distributions through gifts, grants, and agreements
410	410	to nonprofit charitable, education, religious, and youth
411	411	organizations that provide direct human, health, and welfare
412	412	services;
413	413	(16) performing biomedical or scientific research or
414	414	biomedical or scientific education for the benefit of the public;
415	415	(17) operating a television station that produces or
416	416	broadcasts educational, cultural, or other public interest
417	417	programming and that receives grants from the Corporation for
418	418	Public Broadcasting under 47 U.S.C. Section 396, as amended;
419	419	(18) providing housing for low-income and
420	420	moderate-income families, for unmarried individuals 62 years of age
421	421	or older, for handicapped individuals, and for families displaced
422	422	by urban renewal, through the use of trust assets that are
423	423	irrevocably and, pursuant to a contract entered into before
424	424	December 31, 1972, contractually dedicated on the sale or
425	425	disposition of the housing to a charitable organization that
426	426	performs charitable functions described by Subdivision (9);
427	427	(19) providing housing and related services to persons
428	428	who are 62 years of age or older in a retirement community, if the
429	429	retirement community provides independent living services,
430	430	assisted living services, and nursing services to its residents on
431	431	a single campus:
432	432	(A) without regard to the residents' ability to
433	433	pay; or
434	434	(B) in which at least four percent of the
435	435	retirement community's combined net resident revenue is provided in
436	436	charitable care to its residents;
437	437	(20) providing housing on a cooperative basis to
438	438	students of an institution of higher education if:
439	439	(A) the organization is exempt from federal
440	440	income taxation under Section 501(a), Internal Revenue Code of
441	441	1986, as amended, by being listed as an exempt entity under Section
442	442	501(c)(3) of that code;
443	443	(B) membership in the organization is open to all
444	444	students enrolled in the institution and is not limited to those
445	445	chosen by current members of the organization;
446	446	(C) the organization is governed by its members;
447	447	and
448	448	(D) the members of the organization share the
449	449	responsibility for managing the housing;
450	450	(21) acquiring, holding, and transferring unimproved
451	451	real property under an urban land bank demonstration program
452	452	established under Chapter 379C, Local Government Code, as or on
453	453	behalf of a land bank;
454	454	(22) acquiring, holding, and transferring unimproved
455	455	real property under an urban land bank program established under
456	456	Chapter 379E, Local Government Code, as or on behalf of a land bank;
457	457	(22-a) acquiring, holding, and transferring
458	458	unimproved real property under a land bank program established
459	459	under Chapter 388, Local Government Code, as or on behalf of a land
460	460	bank;
461	461	(23) providing housing and related services to
462	462	individuals who:
463	463	(A) are unaccompanied and homeless and have a
464	464	disabling condition; and
465	465	(B) have been continuously homeless for a year or
466	466	more or have had at least four episodes of homelessness in the
467	467	preceding three years;
468	468	(24) operating a radio station that broadcasts
469	469	educational, cultural, or other public interest programming,
470	470	including classical music, and that in the preceding five years has
471	471	received or been selected to receive one or more grants from the
472	472	Corporation for Public Broadcasting under 47 U.S.C. Section 396, as
473	473	amended; or
474	474	(25) providing, without regard to the beneficiaries'
475	475	ability to pay, tax return preparation services and assistance with
476	476	other financial matters.
477	477	(o) For purposes of Subsection (a)(2), real property
478	478	acquired, held, and transferred by an organization that performs
479	479	the function described by Subsection (d)(21), [or] (22), or (22-a)
480	480	is considered to be used exclusively by the qualified charitable
481	481	organization to perform that function.
482	482	SECTION 3. Section 11.18, Tax Code, as amended by this Act,
483	483	applies only to an ad valorem tax year that begins on or after the
484	484	effective date of this Act.
485	485	SECTION 4. This Act takes effect September 1, 2019.