Texas 2019 - 86th Regular

Texas Senate Bill SB1918 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		By: Alvarado S.B. No. 1918
	2	+	(In the Senate - Filed March 7, 2019; March 19, 2019, read
	3	+	first time and referred to Committee on Intergovernmental
	4	+	Relations; April 15, 2019, reported adversely, with favorable
	5	+	Committee Substitute by the following vote: Yeas 7, Nays 0;
	6	+	April 15, 2019, sent to printer.)
	7	+	Click here to see the committee vote
	8	+	COMMITTEE SUBSTITUTE FOR S.B. No. 1918 By: Alvarado
2	9
3	10
4	11		A BILL TO BE ENTITLED
5	12		AN ACT
6	13		relating to the creation of an urban land bank by certain
7	14		municipalities; granting authority to issue bonds.
8	15		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	16		SECTION 1. Subtitle A, Title 12, Local Government Code, is
10	17		amended by adding Chapter 379H to read as follows:
11	18		CHAPTER 379H. URBAN LAND BANK PROGRAM IN MUNICIPALITY WITH
12	19		POPULATION OF TWO MILLION OR MORE
13	20		SUBCHAPTER A. GENERAL PROVISIONS
14	21		Sec. 379H.001. SHORT TITLE. This chapter may be cited as
15	22		the Urban Land Bank Program for a Municipality with a Population of
16	23		Two Million or More.
17	24		Sec. 379H.002. APPLICABILITY OF CHAPTER. This chapter
18	25		applies only to a municipality with a population of two million or
19	26		more.
20	27		Sec. 379H.003. DEFINITIONS. In this chapter:
21	28		(1) "Board" means the board of directors of a land
22	29		bank.
23	30		(2) "Land bank" means an entity established or
24	31		approved by the governing body of a municipality under this
25	32		chapter.
26	33		(3) "Non-qualifying municipality" means a
27	34		municipality to which this chapter does not apply and that is
28	35		located in the same county in which a municipality to which this
29	36		chapter does apply is predominantly located.
30	37		(4) "Real property" means land, land under water, and
31	38		any structure, easement, air rights, franchise, or incorporeal
32	39		hereditament, every estate, interest, and right therein, legal and
33	40		equitable, including terms for years and liens by way of judgment,
34	41		mortgage, or otherwise, and any fixture or improvement located
35	42		thereon.
36	43		Sec. 379H.004. APPLICABILITY OF OTHER LAW. A land bank
37	44		created under this chapter:
38	45		(1) is:
39	46		(A) a governmental unit, as defined by Section
40	47		101.001, Civil Practice and Remedies Code;
41	48		(B) a local government corporation, as defined by
42	49		Section 431.003, Transportation Code; and
43	50		(C) a public nonprofit corporation that has and
44	51		may exercise all of the rights, powers, privileges, authority, and
45	52		functions given by the general laws of this state to nonprofit
46	53		corporations in this state;
47	54		(2) is not:
48	55		(A) a program created or operating under Chapter
49	56		373 or 374; or
50	57		(B) a housing finance corporation created under
51	58		Chapter 394; and
52	59		(3) must comply with the requirements of Chapters 551
53	60		and 552, Government Code.
54	61		Sec. 379H.005. PURPOSE. A land bank created under this
55	62		chapter exists for the purpose of acquiring, managing, and
56	63		disposing of vacant, abandoned, and deteriorated properties and
57	64		returning those properties to productive uses, including
58	65		affordable housing, workforce housing, public service housing,
59	66		community-based economic development, food desert solutions,
60	67		beautification and public art, parks and recreation, flood
61	68		reduction and storm resiliency, and other uses necessary and
62	69		appropriate to stabilize communities, improve living conditions,
63	70		and protect against the displacement of residents of the
64	71		municipality served by the land bank.
65	72		Sec. 379H.006. CONSTRUCTION. This chapter shall be
66	73		construed liberally to carry out the intended purposes as a
67	74		complete and independent authorization for the performance of each
68	75		and every act and thing authorized by this chapter, and all powers
69	76		granted shall be broadly interpreted to carry out the intended
70	77		purposes and not as a limitation of powers. Except as otherwise
71	78		provided by this chapter, a land bank, in the exercise of its powers
72	79		and duties under this chapter and with respect to real property held
73	80		by the land bank, has the same amount of control as if the land bank
74	81		represented a private property owner, and the land bank is not
75	82		subject to restrictions imposed by the charter, ordinances, or
76	83		resolutions of a local unit of government.
77	84		SUBCHAPTER B. BOARD OF DIRECTORS
78	85		Sec. 379H.051. COMPOSITION OF BOARD. The size, membership,
79	86		composition, and officers of the board of directors of a land bank,
80	87		and methods of appointment to the board, must be established by the
81	88		certificate of formation and the bylaws of the land bank.
82	89		Sec. 379H.052. ELIGIBILITY FOR MEMBERSHIP. (a) In this
83	90		section, "public officer" means an individual who is elected to a
84	91		municipal office.
85	92		(b) A municipal employee is eligible to serve as a member of
86	93		the board, and notwithstanding any law to the contrary, a public
87	94		officer is eligible to serve as a member of the board and acceptance
88	95		of the appointment will neither terminate nor impair service in the
89	96		public office.
90	97		Sec. 379H.053. MEETINGS; ATTENDANCE. (a) The board shall
91	98		meet in regular session according to a schedule adopted by the
92	99		board.
93	100		(b) The board may meet in a special session:
94	101		(1) convened by the president of the board in
95	102		accordance with the bylaws of the board; or
96	103		(2) on written notice signed by a majority of the board
97	104		members.
98	105		(c) The presence of a majority of the board's total
99	106		membership constitutes a quorum for any regular or special session.
100	107		(d) The board shall establish rules related to the
101	108		attendance and participation of members in regular or special
102	109		meetings of the board. Rules adopted under this subsection may
103	110		provide for the removal from office of a member for failure to
104	111		comply with the rules if a majority of the remaining members of the
105	112		board vote for the removal. Removal under this subsection takes
106	113		effect the first day of the calendar month following the date of the
107	114		vote. A person removed under this subsection is ineligible for
108	115		reappointment to the board unless reappointment is confirmed
109	116		unanimously by the board.
110	117		Sec. 379H.054. BOARD ACTIONS. (a) Subject to Subsection
111	118		(b), actions of the board must be approved by the affirmative vote
112	119		of a quorum of the board.
113	120		(b) Action on the following matters requires approval by a
114	121		majority of the total membership of the board:
115	122		(1) adoption of bylaws or rules for conduct of the
116	123		business of the land bank for which the board serves;
117	124		(2) hiring or firing of any employee or contractor of
118	125		the land bank for which the board serves;
119	126		(3) incurring debt;
120	127		(4) adoption or amendment of the annual budget; and
121	128		(5) sale, lease, encumbrance, or alienation of or
122	129		improvements to real or personal property with a value of more than
123	130		$50,000.
124	131		(c) By majority vote, the board may delegate the hiring and
125	132		firing of employees and contractors to a specific officer or
126	133		committee of the land bank for which the board serves, under terms
127	134		and to the extent specified by the board.
128	135		(d) A board member may not vote by proxy.
129	136		(e) A board member may request a recorded vote on any
130	137		resolution or action of the land bank.
131	138		Sec. 379H.055. CONFLICT OF INTEREST. (a) A board member
132	139		or employee of a land bank may not:
133	140		(1) acquire any direct or indirect interest in real
134	141		property of the land bank, in any real property to be acquired by
135	142		the land bank, or in any real property to be acquired from the land
136	143		bank; or
137	144		(2) have any direct or indirect interest in any
138	145		contract or proposed contract for materials or services to be
139	146		furnished or used by the land bank.
140	147		(b) The provisions of the former Texas Non-Profit
141	148		Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil
142	149		Statutes) related to powers, standards of conduct, and interests in
143	150		contracts apply to the directors and officers of the land bank.
144	151		(c) The board may adopt supplemental rules addressing
145	152		potential conflicts of interest and ethical guidelines for board
146	153		members and land bank employees.
147	154		Sec. 379H.056. COMPENSATION; REIMBURSEMENT. (a) Board
148	155		members serve without compensation.
149	156		(b) The board may reimburse a member for expenses actually
150	157		incurred in the performance of duties on behalf of the land bank.
151	158		SUBCHAPTER C. CREATION, OPERATION, AND DISSOLUTION OF LAND BANK
152	159		Sec. 379H.101. CREATION OF LAND BANK. (a) The governing
153	160		body of a municipality may create a land bank by the adoption of an
154	161		ordinance approving the land bank's certificate of formation and
155	162		bylaws.
156	163		(b) Approval by the governing body of a municipality of the
157	164		certificate of formation and bylaws of a corporation created under
158	165		Chapter 431, Transportation Code, that will serve as a land bank
159	166		under this chapter is sufficient to create a land bank under this
160	167		section.
161	168		(c) A land bank's certificate of formation and bylaws
162	169		approved under this section may not be changed or amended unless the
163	170		governing body of the municipality for which the land bank was
164	171		created approves the change or amendment by the adoption of an
165	172		ordinance.
166	173		Sec. 379H.102. GENERAL POWERS OF LAND BANK. (a) A land
167	174		bank has all powers necessary to carry out the purposes of this
168	175		chapter, including the power to:
169	176		(1) adopt, amend, and repeal bylaws for the regulation
170	177		of the land bank's affairs and the conduct of the land bank's
171	178		business;
172	179		(2) sue and be sued in the land bank's own name and
173	180		plead and be interpleaded in all civil actions, including actions
174	181		to clear title to real property of the land bank;
175	182		(3) adopt and alter a seal;
176	183		(4) borrow funds necessary for the operation of the
177	184		land bank from private lenders, municipalities, this state, and the
178	185		federal government;
179	186		(5) adopt any policy for procurement that is
180	187		recognized under state law and permitted for governmental entities,
181	188		including a policy recognized under Chapters 252 and 271 of this
182	189		code, Chapter 431, Transportation Code, and Chapters 2254 and 2269,
183	190		Government Code;
184	191		(6) issue negotiable revenue bonds and notes under
185	192		this chapter;
186	193		(7) procure insurance or guarantees from this state or
187	194		the federal government of the payments of any debts or parts of
188	195		debts incurred by the land bank and pay premiums in connection with
189	196		those debts;
190	197		(8) enter into contracts and other agreements
191	198		necessary, incidental, or convenient to the performance of the land
192	199		bank's duties and the exercise of the land bank's powers, including
193	200		governmental agreements under Subchapter D, Chapter 431,
194	201		Transportation Code, or interlocal contracts under Section
195	202		791.011, Government Code, for the joint exercise of powers under
196	203		this chapter;
197	204		(9) enter into contracts and other agreements with the
198	205		municipality that created the land bank for the performance of
199	206		services in accordance with Chapter 311, Tax Code;
200	207		(10) make and execute contracts and other instruments
201	208		necessary or convenient to the exercise of the land bank's powers;
202	209		(11) procure insurance against losses in connection
203	210		with the real property, assets, or activities of the land bank;
204	211		(12) invest money of the land bank, at the discretion
205	212		of the board, in instruments, obligations, securities, or property
206	213		determined proper by the board and name and use depositories for the
207	214		land bank's money;
208	215		(13) enter into contracts for the management of,
209	216		collection of rent from, or sale of real property of the land bank;
210	217		(14) design, develop, construct, demolish,
211	218		reconstruct, rehabilitate, renovate, relocate, or otherwise
212	219		improve real property of the land bank;
213	220		(15) set, charge, and collect rents, fees, and charges
214	221		for the use of real property of the land bank and for services
215	222		provided by the land bank;
216	223		(16) finance by loan, grant, lease, or otherwise
217	224		refinance, construct, erect, assemble, purchase, acquire, own,
218	225		repair, remodel, rehabilitate, modify, maintain, extend, improve,
219	226		install, sell, equip, expand, add to, operate, or manage real
220	227		property of the land bank and pay the costs of those activities from
221	228		the proceeds of loans by persons, corporations, limited or general
222	229		partnerships, and other entities;
223	230		(17) grant or acquire a license, easement, lease, as
224	231		lessor or lessee, or option with respect to real property of the
225	232		land bank;
226	233		(18) enter into partnerships, joint ventures, and
227	234		other collaborative relationships with the municipality that
228	235		created the land bank and other public and private entities for the
229	236		ownership, management, development, and disposition of real
230	237		property of the land bank;
231	238		(19) make application directly or indirectly to any
232	239		federal, state, county, or municipal government or agency or to any
233	240		other public or private source for loans, grants, guarantees, or
234	241		other financial assistance in furtherance of the land bank's public
235	242		purpose and accept and use the loans, grants, guarantees, or
236	243		financial assistance on terms prescribed by that federal, state,
237	244		county, or municipal government or agency or other source;
238	245		(20) as security for the repayment of any notes or
239	246		other obligations of the land bank, pledge, mortgage, convey,
240	247		assign, hypothecate, or otherwise encumber any property of the land
241	248		bank, including real property, fixtures, personal property,
242	249		revenue, and other funds, and execute any lease, trust indenture,
243	250		trust agreement, agreement for the sale of the land bank's notes of
244	251		other obligation, loan agreement, mortgage, security agreement, or
245	252		other agreement necessary or desirable as determined by the land
246	253		bank; and
247	254		(21) hold title to real property for purposes of
248	255		establishing contracts with public and private nonprofit community
249	256		land trusts, including long-term lease contracts.
250	257		(b) A land bank may not:
251	258		(1) exercise the power of eminent domain; or
252	259		(2) acquire real property outside the geographical
253	260		boundaries of the municipality that created the land bank.
254	261		Sec. 379H.103. RESOLUTION OF COMPLEX TITLE QUESTIONS. A
255	262		land bank may provide assistance and guidance to owners of real
256	263		property for which there are complex, highly divided fractional
257	264		interests in the real property because of multigenerational
258	265		intestate distributions, unknown heirs, and other interested
259	266		parties for whom accurate information cannot be ascertained.
260	267		Sec. 379H.104. INTERLOCAL CONTRACTS. (a) A land bank may
261	268		enter into an interlocal contract under Section 791.011, Government
262	269		Code, with:
263	270		(1) a municipality for a program created by the
264	271		municipality under Chapter 373 or 374; or
265	272		(2) a non-qualifying municipality for the purpose of
266	273		the land bank conducting land bank activities on behalf of and
267	274		within the geographical boundaries of the non-qualifying
268	275		municipality.
269	276		(b) Notwithstanding Section 379H.102(b)(2), a land bank may
270	277		acquire real property within the geographical boundaries of a
271	278		non-qualifying municipality with which it has entered into an
272	279		agreement under Subsection (a).
273	280		Sec. 379H.105. RECORDS AND REPORTS. (a) A land bank shall
274	281		keep accurate minutes of the land bank's meetings and shall keep
275	282		accurate records and books of account that conform with generally
276	283		accepted principles of accounting and that clearly reflect the
277	284		income and expenses of the land bank and all transactions in
278	285		relation to the land bank's real property.
279	286		(b) A land bank shall maintain and make available for public
280	287		review and inspection:
281	288		(1) an inventory of all real property held by the land
282	289		bank;
283	290		(2) a copy of the sale settlement statement for each
284	291		real property sold or transferred to a third party; and
285	292		(3) a copy of the performance report filed under
286	293		Subsection (e).
287	294		(c) Not later than the 90th day after the end of the fiscal
288	295		year of the municipality that created the land bank, the land bank
289	296		shall file with the municipality an annual audited financial
290	297		statement prepared by a certified public accountant.
291	298		(d) Financial transactions of a land bank are subject to
292	299		audit by the municipality that created the land bank.
293	300		(e) For purposes of evaluating the effectiveness of a land
294	301		bank created under this chapter, a land bank shall submit an annual
295	302		performance report to the municipality that created the land bank
296	303		not later than November 1 of each year in which the land bank
297	304		acquires or sells real property in accordance with this chapter.
298	305		Sec. 379H.106. STAFF. (a) A land bank may employ an
299	306		executive director, counsel and legal staff, technical experts, and
300	307		other agents and employees, permanent or temporary, that the land
301	308		bank may require and may determine the qualifications and set the
302	309		compensation and benefits of each of those persons.
303	310		(b) A land bank may enter into contracts and agreements with
304	311		municipalities for staffing services to be provided to the land
305	312		bank by those municipalities or for the land bank to provide such
306	313		staffing services to those municipalities.
307	314		Sec. 379H.107. ADVISORY COMMITTEE AND NEIGHBORHOOD
308	315		CONSULTATION. (a) A land bank shall create one or more advisory
309	316		committees to consult with and advise the land bank on:
310	317		(1) properties within the municipality served by the
311	318		land bank that are imposing the greatest harm on neighborhoods and
312	319		communities in the municipality;
313	320		(2) neighborhood priorities for new uses of those
314	321		properties; and
315	322		(3) the range of potential transferees of those
316	323		properties.
317	324		(b) As appropriate to the location of the real property of
318	325		the land bank, advisory committee membership and neighborhood
319	326		consultations shall include formal and informal
320	327		neighborhood-specific community associations, residents'
321	328		associations, faith communities, community development
322	329		corporations, and anchor institutions.
323	330		Sec. 379H.108. DISSOLUTION OF LAND BANK. (a) A land bank
324	331		may be dissolved not earlier than the 60th day after the date an
325	332		affirmative resolution to dissolve the land bank is approved by
326	333		two-thirds of the membership of the board and confirmed by
327	334		resolution of the municipality that created the land bank.
328	335		(b) Not less than 60 days before the consideration of a
329	336		resolution of dissolution by the board, the board shall:
330	337		(1) provide to the governing body of the municipality
331	338		that created the land bank written notice of the board's intent to
332	339		vote on a resolution for dissolution of the land bank;
333	340		(2) publish the notice in a local newspaper of general
334	341		circulation; and
335	342		(3) send the notice by certified mail to the trustee of
336	343		any outstanding bonds of the land bank.
337	344		(c) On dissolution of the land bank, all real property,
338	345		personal property, and other assets and obligations of the land
339	346		bank become the assets and obligations of the municipality that
340	347		created the land bank.
341	348		SUBCHAPTER D. ACQUISITION AND DISPOSITION OF PROPERTY
342	349		Sec. 379H.151. TAX EXEMPT STATUS OF LAND BANK PROPERTY. The
343	350		real property of a land bank, including real property held by a land
344	351		bank under a long-term lease contract with a community land trust,
345	352		and the land bank's income and operations are exempt as public
346	353		property used for public purposes from all license fees, recording
347	354		fees, and all other taxes imposed by this state or by political
348	355		subdivisions of this state.
349	356		Sec. 379H.152. TITLE HELD BY LAND BANK. All real property
350	357		acquired by a land bank must be held in the name of the land bank.
351	358		Sec. 379H.153. QUIET TITLE ACTIONS. (a) A land bank may
352	359		file an action to quiet title as to any real property in which the
353	360		land bank has an interest. For purposes of a quiet title action,
354	361		the land bank is considered to be the holder of sufficient legal and
355	362		equitable interests and possessory rights to qualify the land bank
356	363		as an adequate complainant in the action.
357	364		(b) Before filing an action to quiet title, the land bank
358	365		shall conduct an examination of title to determine the identity of
359	366		all persons and entities possessing a claim or interest in or to the
360	367		real property. Service of the complaint to quiet title shall be
361	368		provided to the interested parties by the following methods:
362	369		(1) by first class mail to an identity and address as
363	370		reasonably ascertainable by an inspection of public records;
364	371		(2) in the case of occupied real property, by
365	372		registered or certified mail addressed to "occupant";
366	373		(3) by posting a copy of the notice on the real
367	374		property;
368	375		(4) by publication in a newspaper of general
369	376		circulation in the municipality in which the property is located;
370	377		and
371	378		(5) by another method the court may order.
372	379		(c) As part of the complaint to quiet title, a land bank
373	380		shall file an affidavit identifying all parties potentially having
374	381		an interest in the real property and the form of notice provided.
375	382		(d) A court hearing an action under this section shall:
376	383		(1) schedule a hearing on the complaint not later than
377	384		the 90th day after the date of the filing of the affidavit under
378	385		Subsection (c); and
379	386		(2) issue a final judgment not later than the 120th day
380	387		after the date of the filing of the complaint for all matters on
381	388		which an answer was not filed by an interested party.
382	389		(e) A land bank may join in a single complaint to quiet title
383	390		for one or more parcels of real property.
384	391		Sec. 379H.154. ACQUISITION OF PROPERTY GENERALLY. (a) A
385	392		land bank may acquire real property by gift, devise, transfer,
386	393		exchange, foreclosure, purchase, purchase contracts, lease
387	394		purchase agreements, installment sales contracts, land contracts,
388	395		or transfers from a municipality on terms as agreed by the land bank
389	396		and the municipality, or through any other means on terms and in a
390	397		manner the land bank considers appropriate.
391	398		(b) Notwithstanding any other law to the contrary, a
392	399		municipality served by a land bank or a non-qualifying municipality
393	400		that has entered into an interlocal contract with a land bank under
394	401		Section 379H.104 may transfer to the land bank real property of the
395	402		municipality or non-qualifying municipality on terms and according
396	403		to procedures determined by the municipality or non-qualifying
397	404		municipality.
398	405		(c) A land bank may acquire real property from this state,
399	406		the municipality served by the land bank, the county in which that
400	407		municipality is located, a governmental entity within the county,
401	408		the federal government, or an agency or department of the federal
402	409		government.
403	410		(d) A land bank shall maintain all of its real property in
404	411		accordance with the laws and ordinances of the jurisdiction in
405	412		which the real property is located.
406	413		Sec. 379H.155. ACQUISITION OF FORECLOSED OR SEIZED
407	414		PROPERTY. (a) In this section, "taxing unit" has the meaning
408	415		assigned by Section 1.04, Tax Code.
409	416		(b) A land bank may submit a written bid to acquire real
410	417		property at a tax sale conducted in accordance with Section 34.01,
411	418		Tax Code. The bid:
412	419		(1) must be in an amount not less than the amount
413	420		calculated under Section 34.01(b), Tax Code; and
414	421		(2) may be submitted in writing in advance of the
415	422		auction or tendered in person at the auction.
416	423		(c) If the bid submitted under Subsection (b) is the highest
417	424		bid received at the sale, the land bank:
418	425		(1) shall:
419	426		(A) pay in cash the amount of the costs and
420	427		expenses as described by Section 33.48, Tax Code, and any penalties
421	428		described by Section 33.07 or 33.08, Tax Code; or
422	429		(B) remit payment of the amounts described by
423	430		Paragraph (A) to the selling officer by check or electronic funds
424	431		transfer not later than the seventh calendar day after the date of
425	432		the auction; and
426	433		(2) is entitled to credit bid that portion of the bid
427	434		amount consisting of the amount of the taxes, penalties, other than
428	435		penalties described by Sections 33.07 and 33.08, Tax Code, and
429	436		interest set forth in the judgment.
430	437		(d) A taxing unit that is a party to a judgment of
431	438		foreclosure for property sold at auction may request that the
432	439		selling officer bid off the property to the taxing unit in the
433	440		manner provided by Section 34.01(j), Tax Code, and, if the request
434	441		is granted, the transfer to the taxing unit prevails over a bid by
435	442		the land bank if the land bank's bid is the only bid sufficient to
436	443		satisfy the minimum bid described by Section 34.01(j), Tax Code.
437	444		(e) The aggregate amount of all credit bids in a calendar
438	445		year shall be considered satisfied by the aggregate expenditure in
439	446		that calendar year of an amount equal to or greater than the credit
440	447		bid amount, which expenditures are attributable directly and
441	448		indirectly to maintenance, rehabilitation, construction,
442	449		demolition, and remediation activities. As to any specific tract
443	450		of property acquired by the credit bid and transferred by a land
444	451		bank to a public entity described by Section 379H.158(a), the
445	452		credit bid shall be considered satisfied by that transfer.
446	453		(f) A land bank may submit a written request to a taxing unit
447	454		at any time for the commencement of tax foreclosure proceedings for
448	455		delinquent taxes on real property, other than property legally
449	456		owned and occupied. A land bank may not submit a written request to
450	457		a taxing unit under this subsection for legally occupied
451	458		residential real property unless the property is five or more years
452	459		delinquent.
453	460		(g) A request submitted under Subsection (f) must include a
454	461		commitment to tender a bid in the amount specified under Subsection
455	462		(b). On receipt of the written request, the taxing unit, or the
456	463		governmental office acting on behalf of the taxing unit, shall
457	464		commence enforcement proceedings in accordance with Section 33.41,
458	465		Tax Code.
459	466		(h) If there is no private third party bid in an amount more
460	467		than the bid of the land bank, the real property must be sold to the
461	468		land bank.
462	469		(i) A sale to a land bank under this section is not a sale to
463	470		a taxing unit under Section 34.01(j) or (p) or 34.21, Tax Code.
464	471		(j) A land bank may bid an amount higher than the amount
465	472		calculated under Section 34.01(b), Tax Code, and if that higher bid
466	473		amount is the highest successful bid, the land bank shall pay the
467	474		full amount of the bid in cash.
468	475		(k) The deed to a land bank vests good and perfect title in
469	476		the land bank to the right, title, and interest owned by the
470	477		defendants included in the foreclosure judgment, including the
471	478		defendants' right to the use and possession of the property,
472	479		subject only to the defendants' right of redemption, the terms of a
473	480		recorded restrictive covenant running with the land that was
474	481		recorded before January 1 of the year in which the tax lien on the
475	482		property arose, a recorded lien that arose under that restrictive
476	483		covenant that was not extinguished by the judgment foreclosing the
477	484		tax lien, and each easement of record as of the date of the sale that
478	485		was recorded before January 1 of the year the tax lien arose.
479	486		(l) A sale of real property to a land bank under this
480	487		section:
481	488		(1) extinguishes each lien securing payment of the
482	489		delinquent taxes, penalties, and interest against the property and
483	490		included in the judgment; and
484	491		(2) does not affect the personal liability of any
485	492		person for those taxes, penalties, and interest included in the
486	493		judgment that are not satisfied from the proceeds of the sale.
487	494		(m) A municipality, and any taxing unit levying property
488	495		taxes within the geographical jurisdiction of the municipality, may
489	496		convey tax foreclosed real property owned by the municipality or
490	497		the taxing unit to the land bank on terms and for an amount of
491	498		consideration determined by the transferor and the land bank.
492	499		(n) A bid submitted by a land bank in accordance with this
493	500		section is considered a bid for the amount calculated under Section
494	501		34.01(b), Tax Code, and must be received in accordance with Section
495	502		34.01(j), Tax Code.
496	503		Sec. 379H.156. REDEMPTION BY OWNER OF FORECLOSED PROPERTY.
497	504		(a) The owner of real property sold to a land bank under Section
498	505		379H.155 may redeem the property in the manner prescribed for
499	506		owners of real property sold at a tax sale to a purchaser other than
500	507		a taxing unit under Section 34.21, Tax Code.
501	508		(b) The price to be paid by the owner of real property sold
502	509		to a land bank under this section to redeem the property shall be in
503	510		the amounts set forth in Sections 34.21(a) and (e), Tax Code. For
504	511		the purposes of calculating the price, the bid paid by the land bank
505	512		shall be the aggregate amount of the land bank's bid as described by
506	513		Section 379H.155(b).
507	514		(c) If the owner of real property sold to a land bank under
508	515		Section 379H.155 redeems the property by paying to the land bank the
509	516		full amount required to redeem as set forth in Sections 34.21(a) and
510	517		(e), Tax Code, the land bank shall:
511	518		(1) retain an amount equal to the amount paid in cash
512	519		by the land bank in accordance with Section 379H.155;
513	520		(2) retain any redemption premium and any reasonable
514	521		costs the land bank may have expended on maintenance or
515	522		environmental remediation of the property being redeemed; and
516	523		(3) remit to the county assessor-collector any
517	524		remaining amounts to be distributed among the taxing units that
518	525		were parties to the judgment of foreclosure in an amount equal to
519	526		the proportion of each taxing unit's taxes, penalties, and interest
520	527		due in accordance with the judgment of foreclosure.
521	528		Sec. 379H.157. DISPOSITION OF PROPERTY GENERALLY. (a) A
522	529		land bank may convey, exchange, sell, transfer, lease as lessor,
523	530		grant, release and demise, pledge, or hypothecate any interest in,
524	531		on, or to real property of the land bank.
525	532		(b) A municipality may, in the ordinance creating a land
526	533		bank, require that a particular form of disposition of real
527	534		property of the land bank, or any disposition of real property
528	535		located within a specified jurisdiction of the municipality, be
529	536		subject to specified voting and approval requirements of the board.
530	537		Unless restricted under this subsection, the board may delegate to
531	538		officers and employees the authority to enter into and execute
532	539		agreements, instruments of conveyance, and all other related
533	540		documents pertaining to the conveyance of real property by the land
534	541		bank.
535	542		(c) A land bank shall determine the terms, conditions, form,
536	543		and substance of consideration necessary and appropriate to convey,
537	544		exchange, sell, transfer, lease as lessor, grant, or mortgage as
538	545		mortgagor any interest in, on, or to real property of the land bank.
539	546		Consideration may take the form of monetary payments and secured
540	547		financial obligations, covenants, and conditions related to the
541	548		present and future use of the property, deed covenants and
542	549		limitations, contractual commitments of the transferee, mortgage
543	550		financing, defeasible fees, and other forms of consideration as
544	551		determined by the board to be in the best interests of the land
545	552		bank. The board shall determine and state in the land bank's
546	553		policies and procedures the general terms for consideration to be
547	554		received by the land bank for the transfer of real property of the
548	555		land bank.
549	556		(d) The board may authorize in the board's policies
550	557		governing the disposition of land bank property a program for the
551	558		disposition of land bank property to owners of contiguous
552	559		properties.
553	560		(e) A municipality may recommend that a land bank created by
554	561		the municipality, and the land bank may in the land bank's own
555	562		policies and procedures, establish a hierarchical ranking of
556	563		priorities for the use of real property conveyed by the land bank,
557	564		including use for:
558	565		(1) purely public spaces and places;
559	566		(2) flood reduction, storm water retention and
560	567		drainage, and storm resiliency;
561	568		(3) affordable housing, workforce housing, or public
562	569		service housing;
563	570		(4) community-based economic development, including
564	571		retail, commercial, and industrial activities;
565	572		(5) food desert solutions;
566	573		(6) beautification and public art, parks, and
567	574		recreation;
568	575		(7) conservation areas; and
569	576		(8) community land trusts or other public entities.
570	577		Sec. 379H.158. DISPOSITION OF PROPERTY FOR FLOOD CONTROL
571	578		AND STORM WATER DRAINAGE AND PLANNING. (a) A land bank may convey
572	579		to a public entity such as a flood control district or a municipal
573	580		parks and recreation department real property held by the land
574	581		bank:
575	582		(1) for which the highest and best use is flood control
576	583		or storm water retention or drainage; and
577	584		(2) that, as a result of housing and building code
578	585		restrictions, flood plain elevations, other local, state, or
579	586		federal laws, or public or private agreements, conditions, and
580	587		limitations, is no longer capable of being developed or
581	588		redeveloped.
582	589		(b) The transfer of real property by a land bank under this
583	590		section may be:
584	591		(1) by grant, deed lease, or other conveyance and may
585	592		include additional limitations, restrictions, and conditions
586	593		determined by the land bank; and
587	594		(2) for nominal consideration, for consideration
588	595		consisting of contractual commitments, for an exchange of real
589	596		properties, or for other consideration determined by the land bank.
590	597		Sec. 379H.159. AFFORDABLE HOUSING REQUIREMENT. A land bank
591	598		created under this chapter shall adopt a policy requiring not less
592	599		than 70 percent of real property conveyed for residential purposes
593	600		to the land bank be deed restricted for housing that is affordable
594	601		to households with an income of not greater than 80 percent of the
595	602		area median family income, adjusted for household size, for the
596	603		municipality, as determined annually by the United States
597	604		Department of Housing and Urban Development, unless otherwise
598	605		required by:
599	606		(1) the governing body of the municipality for which
600	607		the land bank is created;
601	608		(2) a source of funding; or
602	609		(3) a transferor of an interest in the real property.
603	610		SUBCHAPTER E. FINANCING OF LAND BANK OPERATIONS
604	611		Sec. 379H.201. GENERAL FINANCING. (a) A land bank may
605	612		receive funding through grants and loans from the municipality that
606	613		created the land bank, other municipalities, this state, the
607	614		federal government, and other public or private sources.
608	615		(b) A land bank may receive and retain payments for services
609	616		rendered, for rents and leasehold payments received, for
610	617		consideration for disposition of real and personal property, for
611	618		proceeds of insurance coverage for losses incurred, for income from
612	619		investments, and for any other asset or activity permitted under
613	620		this chapter.
614	621		Sec. 379H.202. SALE OF LAND BANK PROPERTY. At the time a
615	622		land bank sells or otherwise disposes of real property, the
616	623		proceeds from the sale, if any, shall be allocated to operations and
617	624		expenses of the land bank.
618	625		Sec. 379H.203. TAX PENALTY FINANCING. The governing
619	626		authority of the municipality that created the land bank, and a
620	627		taxing unit within the geographical boundaries of the municipality,
621	628		may increase the amount of the penalty imposed for the nonpayment of
622	629		real property taxes of the municipality levied within that
623	630		jurisdiction under Section 33.01, Tax Code, by increasing the
624	631		penalty amount on delinquent taxes on July 1, as described by
625	632		Section 33.01(a), Tax Code, from 12 percent to 14 percent. The
626	633		supplemental penalty authorized by this subsection applies only to
627	634		properties not owned and occupied as a residence homestead as
628	635		defined by Section 11.13(j)(1), Tax Code. If the supplemental
629	636		penalty is authorized and collected, all such supplemental revenue
630	637		must be transferred to the land bank.
631	638		Sec. 379H.204. COLLECTION OF TAXES ON PROPERTY CONVEYED BY
632	639		LAND BANK. Not more than 75 percent of the real property taxes the
633	640		municipality that created the land bank collected on real property,
634	641		excluding any school district or county ad valorem tax, conveyed by
635	642		a land bank under the laws of this state shall be remitted to the
636	643		land bank. The real property taxes of any other taxing unit, as to
637	644		real property of the land bank, may also be allocated to the land
638	645		bank in a similar manner under an interlocal agreement between the
639	646		other taxing unit and the land bank. The specific percentage of
640	647		those taxes to be remitted shall be established by ordinance,
641	648		resolution, or interlocal cooperation agreement of the land bank.
642	649		The allocation of property tax revenue shall begin with the first
643	650		taxable year following the date of conveyance and shall continue
644	651		for a period of five years. The funds shall be remitted to the land
645	652		bank in accordance with the administrative procedures established
646	653		by the assessor-collector of the county in which the land bank is
647	654		located. The allocation of property tax revenue may not occur if
648	655		those taxes have been previously allocated to a tax increment
649	656		reinvestment zone, or to secure a debt of the municipality or other
650	657		taxing unit, unless the municipality or other taxing unit enters
651	658		into an agreement with the land bank for the remittance of those
652	659		funds to the land bank. Any property tax revenue allocated to the
653	660		land bank under this subsection shall be excluded from the
654	661		calculation of ad valorem tax revenue under the municipality's
655	662		charter.
656	663		Sec. 379H.205. ISSUANCE OF BONDS. (a) A land bank may
657	664		issue bonds for the land bank's purposes. The principal and
658	665		interest of bonds issued under this section are payable from the
659	666		land bank's general revenue. Any bonds issued under this section
660	667		may be secured by a pledge of any revenue, including grants or
661	668		contributions from this state, the federal government, or any
662	669		agency or instrumentality of this state or the federal government,
663	670		or by a mortgage of any real property of the land bank.
664	671		(b) Bonds issued by a land bank are negotiable instruments
665	672		under the law.
666	673		(c) Bonds of a land bank issued under this section and the
667	674		income from those bonds shall at all times be free from taxation for
668	675		state or local purposes under any provision of state law.
669	676		(d) Bonds issued by a land bank must be authorized by
670	677		resolution of the board and shall be limited obligations of the land
671	678		bank. A land bank may not issue bonds unless authorized by the
672	679		municipality for which the land bank is created.
673	680		(e) The principal and interest, costs of issuance, and other
674	681		costs incidental to bonds issued under this section shall be
675	682		payable solely from the income and revenue derived from the sale,
676	683		lease, or other disposition of the assets of the land bank.
677	684		(f) In the discretion of the land bank, the bonds may be
678	685		additionally secured by mortgage or other security device covering
679	686		all or part of the project from which the revenue pledged may be
680	687		derived.
681	688		(g) Any refunding bonds issued shall be payable from any
682	689		source described by this section or from the investment of any of
683	690		the proceeds of the refunding bonds, may not constitute an
684	691		indebtedness or pledge of the general credit of a municipality or
685	692		any other governmental entity within the meaning of any
686	693		constitutional or statutory limitation of indebtedness, and must
687	694		contain a recital to that effect.
688	695		(h) Bonds of the land bank may be issued in the form, may be
689	696		in the denominations, may bear interest, may mature in the manner,
690	697		and may be executed by one or more members of the board as provided
691	698		by the resolution authorizing the issuance of the bonds. The bonds
692	699		may be subject to redemption at the option of and in the manner
693	700		determined by the board in the resolution authorizing the issuance
694	701		of the bonds.
695	702		(i) The municipality in which a land bank operates may
696	703		guarantee, insure, or otherwise become primarily or secondarily
697	704		obligated on the indebtedness of the land bank subject to all other
698	705		provisions of state law applicable to municipal indebtedness.
699	706		(j) Bonds issued by a land bank shall be issued, sold, and
700	707		delivered in accordance with the terms and provisions of a
701	708		resolution adopted by the board. The board of a land bank may sell
702	709		the bonds in a manner, either at public or at private sale, and for a
703	710		price as the board determines to be in the best interests of the
704	711		land bank. The resolution issuing bonds shall be published in a
705	712		newspaper of general circulation within the jurisdiction of the
706	713		land bank.
707	714		(k) A board member or a person executing the bonds is not
708	715		liable personally on any bonds by reason of the issuance of the
709	716		bonds. The bonds or other obligations of the land bank are not a
710	717		debt of the municipality that created the land bank or of this state
711	718		and must state so on their face. The municipality, this state, or
712	719		any revenue or any property of a municipality or this state is not
713	720		liable for the bond.
714	721		SECTION 2. Section 379E.002, Local Government Code, is
715	722		amended to read as follows:
716	723		Sec. 379E.002. APPLICABILITY; CONSTRUCTION WITH OTHER LAW.
717	724		This chapter applies only to a municipality:
718	725		(1) to which Chapter 379C or 379H [or 379D] does not
719	726		apply; and
720	727		(2) that has not ever adopted a homestead land bank
721	728		program under Subchapter E, Chapter 373A.
722	729		SECTION 3. Chapter 379D, Local Government Code, is
723	730		repealed.
724	731		SECTION 4. The Houston Land Bank, a public nonprofit
725	732		corporation evidenced by its amended and restated Certificate of
726	733		Formation dated September 26, 2018, as filed with the Secretary of
727	734		State under File No. 155688901, under ordinance dated HCD 18-51,
728	735		approved and adopted by the city council of the City of Houston on
729	736		July 25, 2018, and originally created as the Land Assemblage
730	737		Redevelopment Authority under Subchapter D, Chapter 431,
731	738		Transportation Code, is a land bank under Chapter 379H, Local
732	739		Government Code, as added by this Act, and shall continue to possess
733	740		the statutory authorization by which it was originally created
734	741		under Subchapter D, Chapter 431, Transportation Code. All actions
735	742		of the board of directors and employees of the Houston Land Bank,
736	743		all contracts, agreements, services, and real property
737	744		acquisitions and dispositions taken before the effective date of
738	745		this Act shall remain unaffected by the adoption of an ordinance
739	746		under Chapter 379H, Local Government Code, as added by this Act.
740	747		SECTION 5. This Act takes effect September 1, 2019.
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