Texas 2021 - 87th Regular

Texas House Bill HB1564 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	H.B. No. 1564
	1	+	By: González of El Paso (Senate Sponsor - Blanco) H.B. No. 1564
	2	+	(In the Senate - Received from the House May 5, 2021;
	3	+	May 17, 2021, read first time and referred to Committee on Local
	4	+	Government; May 21, 2021, reported favorably by the following
	5	+	vote: Yeas 6, Nays 0; May 21, 2021, sent to printer.)
	6	+	Click here to see the committee vote
2	7
3	8
	9	+	A BILL TO BE ENTITLED
4	10		AN ACT
5	11		relating to the appointment of a receivership for and disposition
6	12		of certain platted lots that are abandoned, unoccupied, and
7	13		undeveloped in certain counties.
8	14		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	15		SECTION 1. The legislature finds that:
10	16		(1) in the decades beginning with and following the
11	17		1960s, purchasers from all over the United States and elsewhere
12	18		were lured by misrepresentations into buying lots in remote areas
13	19		of the state with promises of future development;
14	20		(2) the lots in one such area comprised more than
15	21		50,000 acres that have stood virtually undeveloped for more than 25
16	22		years after being platted;
17	23		(3) the area has been carved into lots as small as
18	24		one-quarter acre, creating highly fractionalized and uneconomic
19	25		real estate conditions, defeating any reasonable possibility of
20	26		developing the lots, depriving the purchasers of the value of their
21	27		investments, and effectively preventing installation of streets,
22	28		water, sanitation, electricity, and other infrastructure;
23	29		(4) in addition, the lots had, and have, in common an
24	30		absence of water and electricity, substandard, if any,
25	31		thoroughfares, and no reasonable prospect that the lots can be
26	32		developed for residential or commercial use;
27	33		(5) over the decades, the original purchasers have
28	34		abandoned the lots, the purchasers cannot be located, or the
29	35		purchasers died, in many cases leaving individuals representing
30	36		multiple generations of families as holders of a complicated web of
31	37		undivided interests in lots they may know nothing about;
32	38		(6) the lots are so lacking in value that local
33	39		governments have either removed them from the tax rolls altogether,
34	40		are unable to determine who owns them, or have found it uneconomical
35	41		to collect the pennies in property tax revenue they may represent;
36	42		(7) in recent years, rapid residential growth has
37	43		reached the areas adjacent to the lots, creating a substantial
38	44		demand for residential properties that cannot be met due to the
39	45		fractionalized nature of the properties and the absence of basic
40	46		infrastructure;
41	47		(8) the lots are often used for illegal dumping of
42	48		waste and hazardous materials and other purposes contrary to public
43	49		health and safety; and
44	50		(9) it is necessary to establish a system by which the
45	51		lots may be aggregated and re-platted in order to be able to return
46	52		them to the market, provide for streets, water, sanitation,
47	53		electricity, and other infrastructure, and ensure that any future
48	54		economic value that may be returned to the lots inures to the
49	55		benefit of any owners and lienholders who can be located.
50	56		SECTION 2. Chapter 232, Local Government Code, is amended
51	57		by adding Subchapter F to read as follows:
52	58		SUBCHAPTER F. ABANDONED, UNOCCUPIED, AND UNDEVELOPED
53	59		PLATTED LOTS IN CERTAIN COUNTIES
54	60		Sec. 232.151. APPLICABILITY. This subchapter applies to a
55	61		county that:
56	62		(1) has a population of more than 800,000;
57	63		(2) is adjacent to an international border; and
58	64		(3) contains more than 30,000 acres of lots that have
59	65		remained substantially undeveloped for more than 25 years after the
60	66		date the lots were platted.
61	67		Sec. 232.152. ADMINISTRATIVE DETERMINATION. (a) In
62	68		addition to the authority granted under Section 232.045, a
63	69		commissioners court may implement an expedited process to
64	70		administratively determine that a platted lot is abandoned,
65	71		unoccupied, and undeveloped if the lot:
66	72		(1) has remained undeveloped for 25 years or more
67	73		after the date the lot was platted;
68	74		(2) is part of a subdivision in which 50 percent or
69	75		more of the lots are undeveloped or unoccupied;
70	76		(3) is part of a subdivision in which 50 percent or
71	77		more of the lots are 10 acres or less in size;
72	78		(4) had an assessed value of less than $1,000 as of
73	79		January 1, 2021; and
74	80		(5) as of January 1, 2021, was not valued for ad
75	81		valorem taxation as land for agricultural use pursuant to
76	82		Subchapter C, Chapter 23, Tax Code.
77	83		(b) The county does not have an ownership interest in any
78	84		lot that is administratively determined to be abandoned,
79	85		unoccupied, and undeveloped or that is placed in a receivership
80	86		under this subchapter, except for any existing or future legal
81	87		interest established by other law.
82	88		Sec. 232.153. PUBLIC HEARING. (a) Before a county may make
83	89		an administrative determination that a platted lot is abandoned,
84	90		unoccupied, and undeveloped, the county must:
85	91		(1) hold a public hearing on the matter; and
86	92		(2) make reasonable efforts to notify each owner and
87	93		lienholder of the lot of the time and place of the hearing as
88	94		provided by Section 232.154.
89	95		(b) The hearing may be held by the commissioners court of
90	96		the county or an appropriate county commission or board appointed
91	97		by the commissioners court. The Texas Rules of Evidence do not apply
92	98		to a hearing conducted under this section.
93	99		(c) At the hearing, an owner or lienholder may provide
94	100		testimony and present evidence to refute any of the five required
95	101		elements for a determination under Section 232.152. It is an
96	102		affirmative defense to a determination under Section 232.152 that a
97	103		lot's ad valorem taxes have been paid in full for each year that the
98	104		taxing authority issued a tax invoice.
99	105		(d) The county may conduct a single hearing for multiple
100	106		lots and make a determination that multiple lots are abandoned,
101	107		unoccupied, and undeveloped based on the same evidence.
102	108		(e) Not later than the 14th day after the date of the
103	109		hearing, if a lot is determined to be abandoned, unoccupied, and
104	110		undeveloped, the county shall issue an order of its determination.
105	111		(f) Not later than the 14th day after the date of the order,
106	112		the county shall:
107	113		(1) post notice of the order at the county courthouse;
108	114		and
109	115		(2) publish in a newspaper of general circulation in
110	116		the county in which the lot is located a notice of the determination
111	117		containing:
112	118		(A) a description of the lot;
113	119		(B) the date of the hearing;
114	120		(C) a brief statement of the results of the
115	121		order;
116	122		(D) instructions stating where a complete copy of
117	123		the order may be obtained; and
118	124		(E) notice that the order is appealable to a
119	125		district court in the county within 60 calendar days of the order.
120	126		(g) In lieu of the notice required by Subsection (f), the
121	127		county may:
122	128		(1) post the information required by Subsection (f)(2)
123	129		on the county's Internet website; and
124	130		(2) publish a notice in a newspaper of general
125	131		circulation in the county in which the lot is located stating that:
126	132		(A) the commissioners court has adopted an order
127	133		under this subchapter; and
128	134		(B) the information required by Subsection
129	135		(f)(2) may be found on the county's Internet website.
130	136		Sec. 232.154. NOTICE OF HEARING. (a) The county shall:
131	137		(1) provide notice of the hearing to each record owner
132	138		of the applicable lot and to each holder of a recorded lien against
133	139		the applicable lot by:
134	140		(A) personal delivery;
135	141		(B) certified mail with return receipt requested
136	142		to the last known address of each owner and lienholder; or
137	143		(C) delivery to the last known address of each
138	144		owner or lienholder by the United States Postal Service using
139	145		signature confirmation services;
140	146		(2) publish notice of the hearing in a newspaper of
141	147		general circulation in the county on or before the 10th day before
142	148		the date of the hearing and on the county's Internet website; and
143	149		(3) file in the property records of the county notice
144	150		of the hearing that contains:
145	151		(A) the name and last known address of the owner
146	152		of the applicable lot; and
147	153		(B) a description of the administrative
148	154		determination proceeding, including notice that the administrative
149	155		determination may result in the extinguishment of any and all
150	156		rights and legal interests in the lot.
151	157		(b) Notice under Subsection (a)(1) must be provided to each
152	158		owner and lienholder for whom an address can be reasonably
153	159		ascertained from the deed of trust or other applicable instrument
154	160		on file in the office of the county clerk or in the records of the
155	161		office of the central appraisal district for the county. The filed
156	162		notice under Subsection (a)(3) must contain the name and address of
157	163		each owner to the extent that that information can be reasonably
158	164		ascertained from the deed of trust or other applicable instrument
159	165		on file in the office of the county clerk or in the records of the
160	166		office of the central appraisal district for the county.
161	167		(c) The filing of notice under Subsection (a)(3):
162	168		(1) is binding on subsequent grantees, lienholders, or
163	169		other transferees of an interest in the platted lot who acquire that
164	170		interest after the filing of the notice; and
165	171		(2) constitutes notice of the proceeding on any
166	172		subsequent recipient of any interest in the platted lot who
167	173		acquires that interest after the filing of the notice.
168	174		(d) An owner or lienholder is presumed to have received
169	175		actual and constructive notice of the hearing if the commissioners
170	176		court complies with this section, regardless of whether the
171	177		commissioners court receives a response from the person.
172	178		Sec. 232.155. JUDICIAL REVIEW. (a) Any owner or lienholder
173	179		of record of a platted lot aggrieved by an order issued under
174	180		Section 232.153 may file in a district court in the county in which
175	181		the property is located a verified petition alleging that the
176	182		decision is illegal, in whole or in part, and stating with
177	183		specificity the grounds of the alleged illegality. The petition
178	184		must be filed by an owner or lienholder of the lot within 60
179	185		calendar days of the order. If a petition is not filed within 60
180	186		calendar days of the order, the order shall become final.
181	187		(b) On the filing of a petition under Subsection (a), the
182	188		court may issue a writ of certiorari directed to the county to
183	189		review the order of the county and shall prescribe in the writ the
184	190		time within which a return on the writ must be made and served on the
185	191		relator or the relator's attorney.
186	192		(c) The county is not required to return the original papers
187	193		acted on by it, but it is sufficient for the county to return
188	194		certified or sworn copies of the papers or parts of the papers as
189	195		may be called for by the writ.
190	196		(d) Appeal of the county's determination under this
191	197		subchapter shall be conducted under the substantial evidence rule.
192	198		Sec. 232.156. CIVIL ACTION FOR RECEIVERSHIP. (a) After a
193	199		final determination that a platted lot is abandoned, unoccupied,
194	200		and undeveloped, the county shall bring a civil action to have the
195	201		lot placed in a receivership. On a final determination that a
196	202		platted lot is abandoned, unoccupied, and undeveloped as provided
197	203		by this subchapter, an owner or lienholder's rights and legal
198	204		interests are extinguished, subject to the provisions of this
199	205		subchapter regarding any net proceeds resulting from the
200	206		disposition of the property, and transferred to the receiver.
201	207		(b) The only allegations required to be pleaded in an action
202	208		for receivership brought under this section are:
203	209		(1) the identification of the applicable lot;
204	210		(2) the relationship of the defendant to the real
205	211		property;
206	212		(3) the notice of the administrative hearing given to
207	213		the owner; and
208	214		(4) the administrative determination that the lot has
209	215		been abandoned, unoccupied, and undeveloped.
210	216		(c) The court may appoint as receiver any person with a
211	217		demonstrated record of knowledge of the problems created by
212	218		abandoned, unoccupied, and undeveloped platted lots. In selecting a
213	219		receiver, the court may also take into consideration whether the
214	220		person owns property in the affected area. The court may not appoint
215	221		the county, a county official or county employee, or a relative of a
216	222		county official or county employee within the third degree of
217	223		consanguinity or affinity as a receiver.
218	224		(d) In a civil action under this subchapter, the record
219	225		owners and any lienholders of record of the lot shall be served with
220	226		personal notice of the proceedings as provided by the Texas Rules of
221	227		Civil Procedure. Service on the record owners or lienholders
222	228		constitutes notice to all unrecorded owners or lienholders.
223	229		Sec. 232.157. AUTHORITY AND DUTY OF RECEIVER. (a) Unless
224	230		inconsistent with this chapter or other law, the rules of equity
225	231		govern all matters relating to the appointment, powers, duties, and
226	232		liabilities of a receiver and to the powers of a court regarding a
227	233		receiver. A receiver appointed by the court may:
228	234		(1) take control of the platted lot;
229	235		(2) make or have made any repairs or improvements to
230	236		the platted lot to make the lot developable;
231	237		(3) make provisions for the platted lot to be subject
232	238		to street, road, drainage, utility, and other infrastructure
233	239		requirements;
234	240		(4) aggregate the platted lot with other lots that
235	241		have been similarly determined to be abandoned, unoccupied, and
236	242		undeveloped;
237	243		(5) re-plat the platted lot;
238	244		(6) accept the grant or donation of any lot within the
239	245		affected area to carry out the purpose of this subchapter; and
240	246		(7) exercise all other authority that an owner of the
241	247		platted lot could have exercised, including the authority to sell
242	248		the lot.
243	249		(b) Before a person assumes the duties of a receiver, the
244	250		person must be sworn to perform the duties faithfully.
245	251		(c) The appointed receiver is an officer of the court.
246	252		(d) If a receiver dies, resigns, or becomes incapacitated,
247	253		the court shall appoint a receiver to succeed the former receiver.
248	254		(e) If the donation of a lot to the receiver is not
249	255		challenged before the first anniversary of the donation date, the
250	256		donation is final and not revocable under any other legal
251	257		proceeding.
252	258		(f) All funds that come into the hands of the receiver shall
253	259		be deposited in a place in this state directed by the court. The
254	260		receiver's use of the funds in connection with the receiver's duties
255	261		or authority under this subchapter shall be subject to the approval
256	262		of the court. All net proceeds from the disposition of a lot by the
257	263		receiver shall be placed in trust and remain in trust for at least
258	264		three years, unless claimed before the expiration of the trust
259	265		period. The court must order additional notices to an owner or
260	266		lienholder about the net proceeds as are practicable during the
261	267		trust period and, on expiration of the trust period, any money
262	268		remaining in the receivership shall escheat to the state. Funds
263	269		escheated to the state under this subchapter are subject to
264	270		disposition or recovery under Subchapters C and D, Chapter 71,
265	271		Property Code.
266	272		(g) After the receiver has improved the platted lot to the
267	273		degree that the lot is developable and meets all applicable
268	274		standards, or before petitioning the court for termination of the
269	275		receivership, the receiver shall file with the court:
270	276		(1) a summary and accounting of all costs and expenses
271	277		incurred, which may, at the receiver's discretion, include a
272	278		receivership fee of up to 15 percent of the costs and expenses
273	279		incurred, unless the court, for good cause shown, authorizes a
274	280		different limit;
275	281		(2) a statement describing the disposition of each
276	282		lot, including whether the lot was aggregated with other lots;
277	283		(3) a statement of all revenues collected by the
278	284		receiver in connection with the use or disposition of the lots; and
279	285		(4) to the extent required by the court, a description
280	286		of any undivided interest of an owner or lienholder, whether
281	287		identified or not, in the net proceeds from the disposition of the
282	288		property.
283	289		(h) The court must approve any sale of the property by the
284	290		receiver.
285	291		(i) A receiver shall have a lien on the property under
286	292		receivership for all of the receiver's unreimbursed costs and
287	293		expenses and any receivership fee as detailed in the summary and
288	294		accounting under Subsection (g)(1).
289	295		Sec. 232.158. SALE OF PROPERTY. (a) A sale under this
290	296		subchapter must be made by:
291	297		(1) public auction;
292	298		(2) sealed bid; or
293	299		(3) sealed proposal.
294	300		(b) Before a sale may take place under this subchapter, the
295	301		receiver must publish notice of the proposed sale before the 60th
296	302		day before the date the sale is to be held and again before the 30th
297	303		day before the date the sale is to be held. The notice must be
298	304		published in English and Spanish in a newspaper of general
299	305		circulation in the county in which the real property is located.
300	306		The notice must:
301	307		(1) clearly identify the property to be sold;
302	308		(2) specify the procedures and date for the public
303	309		auction, sealed bid, or sealed proposal method of sale;
304	310		(3) state the minimum bid for the property, if any;
305	311		(4) state any specific financial terms of sale imposed
306	312		by the receiver; and
307	313		(5) describe the restrictions, conditions, and
308	314		limitations on the use of the property that the receiver has
309	315		determined are appropriate, other than the restrictions,
310	316		conditions, and limitations provided by other law.
311	317		(c) In addition to the notice required by Subsection (b), to
312	318		maximize the price at which the property is sold and the number of
313	319		bidders, the receiver shall exercise best efforts to provide notice
314	320		of the proposed sale to those persons who may have the business
315	321		expertise, financial capability, and interest in developing the
316	322		property, including local, state, and national trade associations
317	323		whose members are development, real estate, or financial
318	324		professionals.
319	325		(d) On the closing of a sale of property under this
320	326		subchapter, fee simple title shall be vested in the purchaser.
321	327		(e) The receiver may reject any and all offers. If the
322	328		receiver rejects all offers, the receiver may subsequently reoffer
323	329		the same property for sale, reorganize the property and offer the
324	330		property for sale, or combine all or part of the property with other
325	331		property and offer the combined property for sale.
326	332		(f) If the procedures in this section are followed and a
327	333		sale occurs, the sale price obtained for the property is conclusive
328	334		as to the fair market value of the property at the time of the sale.
329	335		SECTION 3. This Act takes effect September 1, 2021.
330		-	______________________________ ______________________________
331		-	President of the Senate Speaker of the House
332		-	I certify that H.B. No. 1564 was passed by the House on May 5,
333		-	2021, by the following vote: Yeas 122, Nays 24, 1 present, not
334		-	voting.
335		-	______________________________
336		-	Chief Clerk of the House
337		-	I certify that H.B. No. 1564 was passed by the Senate on May
338		-	27, 2021, by the following vote: Yeas 31, Nays 0.
339		-	______________________________
340		-	Secretary of the Senate
341		-	APPROVED: _____________________
342		-	Date
343		-	_____________________
344		-	Governor
	336	+	* * * * *