87R8876 TYPED
By: González of El Paso H.B. No. 1564
A BILL TO BE ENTITLED
AN ACT
relating to the appointment of a receivership for and disposition
of certain platted lots that are abandoned, unoccupied, and
undeveloped in certain counties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The legislature finds that:
(1) in the decades beginning with and following the 1960s,
purchasers from all over the United States and elsewhere were lured
by misrepresentations into buying lots in remote areas of the state
with promises of future development;
(2) the lots in one such area comprised more than 50,000
acres that have stood virtually undeveloped for more than 25 years
after being platted;
(3) carving that area into lots as small as one-quarter
acre, creating highly fractionalized and uneconomic real estate
conditions, defeating any reasonable possibility of developing the
lots, depriving the purchasers of the value of their investments,
and effectively preventing installation of streets, water,
sanitation, electricity and other infrastructure;
(4) in addition, the lots had, and have, in common an
absence of water and electricity, substandard, if any,
thoroughfares and no reasonable prospect that the lots can be
developed for residential or commercial use;
(5) over the decades, the original purchasers have
abandoned the lots, the purchasers cannot be located, or the
purchasers died, in many cases leaving individuals representing
multiple generations of families as holders of a complicated web of
undivided interests in lots they may know nothing about;
(6) the lots are so lacking in value that local governments
have either removed them from the tax rolls altogether, are unable
to determine who owns them, or have found it uneconomical to collect
the pennies in property tax revenue they may represent;
(7) in recent years, rapid residential growth has reached
the areas adjacent to the lots, creating a substantial demand for
residential properties that cannot be met due to the fractionalized
nature of the properties and the absence of basic infrastructure;
(8) the lots are often used for illegal dumping of waste and
hazardous materials and other purposes contrary to public health
and safety; and
(9) it is necessary to establish a system by which the lots
may be aggregated and re-platted in order to be able to return them
to the market, provide for streets, water, sanitation, electricity
and other infrastructure, and ensure that any future economic value
that may be returned to the lots inures to the benefit of any owners
and lienholders who can be located.
SECTION 2. Chapter 232, Local Government Code, is amended
by adding Subchapter F to read as follows:
SUBCHAPTER F. ABANDONED, UNOCCUPIED, AND UNDEVELOPED
PLATTED LOTS IN CERTAIN COUNTIES
Sec. 232.151. APPLICABILITY. This subchapter applies to a
county with a population of more than 800,000 that is adjacent to an
international border and contains more than 30,000 acres of lots
that remain substantially undeveloped despite having been platted
more than 25 years ago.
Sec. 232.152. ADMINISTRATIVE DETERMINATION. (a) In
addition to the authority granted under Section 232.045, a
commissioners court may implement an expedited process to
administratively determine that a platted lot is abandoned,
unoccupied, and undeveloped if the lot:
(1) has remained undeveloped for 25 years or more after the
date the lot was platted;
(2) is part of a subdivision in which 50 percent or more of
the lots are undeveloped or unoccupied;
(3) is part of a subdivision in which 50 percent or more of
the lots are ten acres or less in size;
(4) had an assessed value of less than $1000 as of January 1,
2021; and
(5) as of January 1, 2021, was not valued for ad valorem
taxation as land for agricultural use pursuant to Subchapter C,
Chapter 23, Tax Code.
(b) The county has no ownership interest in any lot that is
administratively determined to be abandoned, unoccupied and
undeveloped, or that is placed in a receivership under this
subchapter, except for any existing or future legal interest
established by other law.
Sec. 232.153. PUBLIC HEARING. (a) Before a county may make
an administrative determination that a platted lot is abandoned,
unoccupied, and undeveloped, the county must:
(1) hold a public hearing on the matter; and
(2) make reasonable efforts to notify each owner and
lienholder of the lot of the time and place of the hearing as
provided by Section 232.154.
(b) The hearing may be held by the commissioners court of
the county or an appropriate county commission or board appointed
by the commissioners court. The Texas Rules of Evidence do not apply
to a hearing conducted under this section.
(c) At the hearing, an owner or lienholder may provide
testimony and present evidence to refute any of the three required
elements for a determination under Section 232.152.
(d) The county may conduct a single hearing for multiple
lots and make a determination that multiple lots are abandoned,
unoccupied, and undeveloped based on the same evidence.
(e) After the hearing, if a lot is determined to be
abandoned, unoccupied, and undeveloped, the county shall within 14
days issue an order of its determination.
(f) Within 14 days after the date of the order, the county
shall:
(1) post notice of the order at the County Courthouse; and
(2) publish in a newspaper of general circulation in the
county in which the lot is located a notice of the determination
containing:
(A) a description of the lot;
(B) the date of the hearing;
(C) a brief statement of the results of the order;
(D) instructions stating where a complete copy of the order
may be obtained; and
(E) notice that the order is appealable to a district court
within the county within 60 calendar days of the order.
(g) In lieu of the notice required by Subsection (f), the
county may publish a notice in a newspaper of general circulation in
the county in which the lot is located that the commissioners court
has adopted an order under this subchapter and direct the public to
the county's website on which the information required by
Subsections (f)(2)(A) through (E) may be found.
Sec. 232.154. NOTICE OF HEARING. (a) The county shall:
(1) provide notice of the hearing to each record owner of
the applicable lot and to each holder of a recorded lien against the
applicable lot by:
(A) personal delivery;
(B) certified mail with return receipt requested to the last
known address of each owner and lienholder; or
(C) delivery to the last known address of each owner or
lienholder by the United States Postal Service using signature
confirmation services;
(2) publish notice of the hearing in a newspaper of general
circulation in the county on or before the 10th day before the date
of the hearing and on the county's website; and
(3) file in the property records of the county notice of the
hearing that contains:
(A) the name and last known address of the owner of the
applicable lot; and
(B) a description of the administrative determination
proceeding, including notice that the administrative determination
may result in the extinguishment of any and all rights and legal
interests in the lot.
(b) Notice under Subsection (a)(1) must be provided to each
owner and lienholder for whom an address can be reasonably
ascertained from the deed of trust or other applicable instrument
on file in the office of the county clerk or in the records of the
office of the central appraisal district for the county. The filed
notice under Subsection (a)(3) must contain the name and address of
each owner to the extent that that information can be reasonably
ascertained from the deed of trust or other applicable instrument
on file in the office of the county clerk or in the records of the
office of the central appraisal district for the county.
(c) The filing of notice under Subsection (a)(3):
(1) is binding on subsequent grantees, lienholders, or
other transferees of an interest in the platted lot who acquire that
interest after the filing of the notice; and
(2) constitutes notice of the proceeding on any
subsequent recipient of any interest in the platted lot who
acquires that interest after the filing of the notice.
(d) An owner or lienholder is presumed to have received
actual and constructive notice of the hearing if the commissioners
court complies with this section, regardless of whether the
commissioners court receives a response from the person.
Sec. 232.155. JUDICIAL REVIEW. (a) Any owner or lienholder
of record of a platted lot aggrieved by an order issued under
Section 232.153 may file in a district court in the county in which
the property is located a verified petition alleging that the
decision is illegal, in whole or in part, and stating with
specificity the grounds of the alleged illegality. The petition
must be filed by an owner or lienholder of the lot within 60
calendar days of the order. If a petition is not filed within 60
calendar days of the order, the order shall become final.
(b) On the filing of a petition under Subsection (a), the
court may issue a writ of certiorari directed to the county to
review the order of the county and shall prescribe in the writ the
time within which a return on the writ must be made, and served on
the relator or the relator's attorney.
(c) The county is not required to return the original papers
acted on by it, but it is sufficient for the county to return
certified or sworn copies of the papers or parts of the papers as
may be called for by the writ.
(d) Appeal of the county's determination under this
subchapter shall be conducted under the substantial evidence rule.
Sec. 232.156. CIVIL ACTION FOR RECEIVERSHIP. (a) After a
final determination that a platted lot is abandoned, unoccupied,
and undeveloped, the county shall bring a civil action to have the
lot placed in a receivership. Upon a final determination that a
platted lot is abandoned, unoccupied, and undeveloped as provided
by this subchapter, an owner or lienholder's rights and legal
interests are extinguished, subject to the provisions of this
subchapter regarding any net proceeds resulting from the
disposition of the property, and transferred to the receiver.
(b) The only allegations required to be pleaded in an action
for receivership brought under this section are:
(1) the identification of the applicable lot;
(2) the relationship of the defendant to the real
property;
(3) the owner was given notice of the administrative
hearing; and
(4) the lot has been administratively determined to be
abandoned, unoccupied, and undeveloped.
(c) The court may appoint as receiver any person with a
demonstrated record of knowledge of the problems created by
abandoned, unoccupied, and undeveloped platted lots. In selecting a
receiver, the court may also take into consideration whether the
person owns property in the affected area. The court may not appoint
as receiver the county, any county official or county employee or
any relative of a county official or county employee within the
third degree consanguinity or affinity.
(d) In a civil action under this subchapter, the record
owners and any lienholders of record of the lot shall be served with
personal notice of the proceedings as provided by the Texas Rules of
Civil Procedure. Service on the record owners or lienholders
constitutes notice to all unrecorded owners or lienholders.
Sec. 232.157. AUTHORITY AND DUTY OF RECEIVER. (a) Unless
inconsistent with this chapter or other law, the rules of equity
govern all matters relating to the appointment, powers, duties and
liabilities of a receiver and to the powers of a court regarding a
receiver. A receiver appointed by the court may:
(1) take control of the platted lot;
(2) make or have made any repairs or improvements to
the platted lot to make it developable;
(3) make provisions for the platted lot to be subject
to street, road, drainage, utility and other infrastructure
requirements;
(4) aggregate the platted lot with other lots that
have been similarly determined to be abandoned, unoccupied, and
undeveloped;
(5) re-plat the platted lot; and
(6) exercise all other authority that an owner of the
platted lot could have exercised, including the authority to sell
the lot.
(b) Before a person assumes the duties of a receiver, the
person must be sworn to perform the duties faithfully.
(c) The appointed receiver is an officer of the court.
(d) In the event a receiver dies, resigns or becomes
incapacitated, the court shall appoint a receiver to succeed the
former receiver.
(e) All funds that come into the hands of the receiver shall
be deposited in a place in this state directed by the court. The
receiver's use of the funds in connection with the receiver's duties
or authority under this subchapter shall be subject to the approval
of the court. All net proceeds from the disposition of a lot by the
receiver shall be placed in trust and remain in trust for at least
three years, unless claimed before the expiration of the trust
period. The court must order such additional notices to an owner or
lienholder about the net proceeds as are practicable during the
trust period and, upon expiration of the trust period, any money
remaining in the receivership shall escheat to the state. Funds
escheated to the state pursuant to this subchapter are subject to
disposition pursuant to Subchapters C and D, Chapter 71, Property
Code.
(f) When the receiver has improved the platted lot to the
degree that it is developable and meets all applicable standards,
or before petitioning the court for termination of the
receivership, the receiver shall file with the court:
(1) a summary and accounting of all costs and expenses
incurred, which may, at the receiver's discretion, include a
receivership fee of up to 15 percent of the costs and expenses
incurred, unless the court, for good cause shown, authorizes a
different limit;
(2) a statement describing the disposition of each lot,
including whether the lot was aggregated with other lots;
(3) a statement of all revenues collected by the receiver in
connection with the use or disposition of the lots; and
(4) to the extent required by the court, a description of
any undivided interest of an owner or lienholder, whether
identified or not, in the net proceeds from the disposition of the
property.
(g) The court must approve any sale or lease of the property
by the receiver.
(h) A receiver shall have a lien on the property under
receivership for all of the receiver's unreimbursed costs and
expenses and any receivership fee as detailed in the summary and
accounting under Subsection (f)(1).
SECTION 2. This Act takes effect September 1, 2021.