By: Lucio S.B. No. 1117
A BILL TO BE ENTITLED
AN ACT
relating to the functions of certain urban land bank programs.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 379E.003, Local Government Code, is
amended by amending Subdivision (3) and adding Subdivision (4-a) to
read as follows:
(3) "Land bank" means an entity established or
approved by the governing body of a municipality to exercise [for]
the powers [purpose] of acquiring, holding, developing, and
transferring [unimproved] real property under this chapter.
(4-a) "Moderate income household" means a household
that:
(A) requires assistance in securing sanitary,
decent, and safe housing, considering:
(i) the amount of the total income
available for housing needs of the individuals or families who are
members of the household;
(ii) the size of the household;
(iii) the cost and condition of available
housing facilities;
(iv) the ability of the individuals or
families who are members of the household to compete successfully
in the private housing market and to pay the amounts required by
that market for sanitary, decent, and safe housing; and
(v) standards that are established for the
purpose of federal programs and that use income to determine
eligibility for the programs; and
(B) does not qualify as a low income household.
SECTION 2. Section 379E.004(b), Local Government Code, is
amended to read as follows:
(b) The governing body of a municipality that adopts an
urban land bank program shall establish or approve a land bank to
exercise [for] the powers [purpose] of acquiring, holding,
developing, and transferring [unimproved] real property under this
chapter.
SECTION 3. Section 379E.005, Local Government Code, is
amended to read as follows:
Sec. 379E.005. QUALIFIED PARTICIPATING DEVELOPER. To
qualify to participate in an urban land bank program, a developer
other than the land bank 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 by the land bank or the
municipality; and
(3) meet any other requirements adopted by the
municipality in the urban land bank plan.
SECTION 4. Section 379E.006(c), Local Government Code, is
amended to read as follows:
(c) In developing the plan, the municipality shall consider
any other housing plans adopted by the municipality, including any
[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.
SECTION 5. Section 379E.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 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 6. Section 379E.009, Local Government Code, is
amended to read as follows:
Sec. 379E.009. SUBSEQUENT RESALE OR DEVELOPMENT BY LAND
BANK. (a) Within the five-year period following the date [Each
subsequent resale] of acquisition of a property [acquired] by a
land bank, the 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:
(1) sell the [a] property to a qualified participating
developer for the purpose of construction or rehabilitation of
affordable housing for sale or rent to low or moderate income
households; or
(2) develop the property for the purposes described by
Subdivision (1).
(b) If after five [three] years a qualified participating
developer has not purchased the property or the land bank has not
developed 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 given time exceed three times the
annual average residential production completed by the qualified
participating developer during the preceding three-year [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 three-year [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 development by the land bank, 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.
(e) Each subsequent resale that a land bank makes to a
qualified participating developer with respect to a property
acquired by the land bank under this chapter must comply with the
conditions of this section.
SECTION 7. Sections 379E.010(a), (b), (c), and (d), Local
Government Code, are amended to read as follows:
(a) The land bank shall impose deed restrictions on property
developed by the land bank or sold to qualified participating
developers requiring the development and subsequent sale or rental
of the property to low or moderate income households.
(b) For land bank properties developed by the land bank for
sale, and for [At least 25 percent of the] land bank properties sold
to a qualified participating developer for development for sale, in
[during] any given fiscal year:
(1) at least 45 percent of the properties must [to] be
deed restricted for sale [developed for sale shall be deed
restricted for sale] to households with a [gross] household income
of [incomes] not more [greater] than 80 [60] percent of the area
median family income, based on gross household income, adjusted for
household size, for the metropolitan statistical area in which the
properties are [municipality is] located, as determined annually by
the United States Department of Housing and Urban Development;
(2) at least 25 percent of the properties must be deed
restricted for sale to households with a household income of not
more than 60 percent of the area median family income, based on
gross household income, adjusted for household size, for the
metropolitan statistical area in which the properties are located,
as determined annually by the United States Department of Housing
and Urban Development; and
(3) the remaining properties must be deed restricted
for sale to households with a household income of not more than 120
percent of the area median family income, based on gross household
income, adjusted for household size, for the metropolitan
statistical area in which the properties are located, as determined
annually by the United States Department of Housing and Urban
Development.
(c) If property is developed and used for rental housing,
the deed restrictions must be for a period of not less than 30 [20]
years and must require that 100 percent of the units are occupied by
and affordable to households with incomes not greater than 80
percent of area median family income, based on gross household
income, adjusted for household size, for the metropolitan
statistical area in which the units are located, as determined
annually by the United States Department of Housing and Urban
Development, and must also require that of those units:
(1) at least 40 [100] percent are [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 units are [municipality is] located,
as determined annually by the United States Department of Housing
and Urban Development; and
(2) at least 20 [40] percent are [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 units are [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 or acceptable to 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.
SECTION 8. Sections 379E.013(c) and (d), Local Government
Code, are amended to read as follows:
(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, develops, 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 mailing 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 purchaser
[developer];
(D) the [purchase] price paid by the purchaser
[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 the land bank or 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 for [filed by] the property [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 the land bank or 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.
SECTION 9. Section 11.18(d), Tax Code, is amended 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 without regard to the
beneficiaries' ability to pay to:
(A) elderly persons, including the provision of:
(i) recreational or social activities; and
(ii) facilities designed to address the
special needs of elderly persons; or
(B) the handicapped, including training and
employment:
(i) in the production of commodities; or
(ii) in the provision of services under 41
U.S.C. Sections 8501-8506;
(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 parole 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;
(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;
(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;
(23) providing housing and related services to
individuals who:
(A) are unaccompanied and homeless and have a
disabling condition; and
(B) have been continuously homeless for a year or
more or have had at least four episodes of homelessness in the
preceding three years;
(24) operating a radio station that broadcasts
educational, cultural, or other public interest programming,
including classical music, and that in the preceding five years has
received or been selected to receive one or more grants from the
Corporation for Public Broadcasting under 47 U.S.C. Section 396, as
amended; or
(25) providing, without regard to the beneficiaries'
ability to pay, tax return preparation services and assistance with
other financial matters.
SECTION 10. The changes in law made by this Act to Chapter
379E, Local Government Code, apply only to a property acquired by a
land bank on or after the effective date of this Act. A property
acquired by a land bank before the effective date of this Act is
governed by the law in effect immediately before the effective date
of this Act, and the former law is continued in effect for that
purpose.
SECTION 11. 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 12. This Act takes effect September 1, 2019.