Texas 2021 - 87th Regular

Texas Senate Bill SB1570 Compare Versions

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1	1	87R7949 JAM-D
2	2	By: Lucio S.B. No. 1570
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the authority of a county to adopt a land bank program.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Subtitle B, Title 12, Local Government Code, is
10	10	amended by adding Chapter 388 to read as follows:
11	11	CHAPTER 388. LAND BANK PROGRAM
12	12	Sec. 388.001. DEFINITIONS. In this chapter:
13	13	(1) "Affordable" means that the monthly mortgage
14	14	payment or contract rent does not exceed 30 percent of the
15	15	applicable median family income for that unit size, in accordance
16	16	with the income and rent limit rules adopted by the Texas Department
17	17	of Housing and Community Affairs.
18	18	(2) "Community housing development organization" or
19	19	"organization" means an organization that:
20	20	(A) meets the definition of a community housing
21	21	development organization in 24 C.F.R. Section 92.2; and
22	22	(B) is certified by the county as a community
23	23	housing development organization.
24	24	(3) "Land bank" means an entity established or
25	25	approved by the governing body of a county for the purpose of
26	26	acquiring, holding, and transferring unimproved real property
27	27	under this chapter.
28	28	(4) "Land bank plan" or "plan" means a plan adopted by
29	29	the governing body of a county as provided by Section 388.004.
30	30	(5) "Land bank program" or "program" means a program
31	31	adopted under Section 388.002.
32	32	(6) "Low income household" means a household with an
33	33	income of not greater than 80 percent of the area median family
34	34	income, based on gross household income, adjusted for household
35	35	size, for the county, as determined annually by the United States
36	36	Department of Housing and Urban Development.
37	37	(7) "Qualified participating developer" means a
38	38	developer who meets the requirements of Section 388.003 and
39	39	includes a qualified organization under Section 388.009.
40	40	Sec. 388.002. LAND BANK PROGRAM. (a) The governing body of
41	41	a county may adopt a land bank program in which the officer charged
42	42	with selling real property ordered sold pursuant to foreclosure of
43	43	a tax lien may sell certain eligible real property by private sale
44	44	for purposes of affordable housing development as provided by this
45	45	chapter.
46	46	(b) The governing body of a county that adopts a land bank
47	47	program shall establish or approve a land bank for the purpose of
48	48	acquiring, holding, and transferring unimproved real property
49	49	under this chapter.
50	50	(c) A land bank program established under this chapter may
51	51	not operate in a municipality that:
52	52	(1) has adopted an urban land bank program under
53	53	Chapter 373A, 379C, 379D, or 379E; or
54	54	(2) operates a land bank as a local government
55	55	corporation under Subchapter D, Chapter 431, Transportation Code.
56	56	Sec. 388.003. QUALIFIED PARTICIPATING DEVELOPER. To
57	57	qualify to participate in a land bank program, a developer must:
58	58	(1) have developed three or more housing units within
59	59	the three-year period preceding the submission of a proposal to the
60	60	land bank seeking to acquire real property from the land bank;
61	61	(2) have a development plan approved by the county for
62	62	the land bank property; and
63	63	(3) meet any other requirements adopted by the county
64	64	in the land bank plan.
65	65	Sec. 388.004. LAND BANK PLAN. (a) A county that adopts a
66	66	land bank program shall operate the program in conformance with a
67	67	land bank plan.
68	68	(b) The governing body of a county that adopts a land bank
69	69	program shall adopt a plan annually. The plan may be amended from
70	70	time to time.
71	71	(c) In developing the plan, the county shall consider any
72	72	other housing plans adopted by the county, including any fair
73	73	housing plans and policies adopted or agreed to by the county.
74	74	(d) The plan must include the following:
75	75	(1) a list of community housing development
76	76	organizations eligible to participate in the right of first refusal
77	77	provided by Section 388.009;
78	78	(2) a list of the parcels of real property that may
79	79	become eligible for sale to the land bank during the next year;
80	80	(3) the county's plan for affordable housing
81	81	development on those parcels of real property; and
82	82	(4) the sources and amounts of money anticipated to be
83	83	available from the county for subsidies for development of
84	84	affordable housing in the county, including any money specifically
85	85	available for housing developed under the program, as approved by
86	86	the governing body of the county at the time the plan is adopted.
87	87	Sec. 388.005. PUBLIC HEARING ON PROPOSED PLAN. (a) Before
88	88	adopting a plan, a county shall hold a public hearing on the
89	89	proposed plan.
90	90	(b) The county clerk or the county clerk's designee shall
91	91	provide notice of the hearing to all community housing development
92	92	organizations and to neighborhood associations identified by the
93	93	county as serving the neighborhoods in which properties anticipated
94	94	to be available for sale to the land bank under this chapter are
95	95	located.
96	96	(c) The county clerk or the county clerk's designee shall
97	97	make copies of the proposed plan available to the public not later
98	98	than the 60th day before the date of the public hearing.
99	99	Sec. 388.006. PRIVATE SALE TO LAND BANK. (a)
100	100	Notwithstanding any other law and except as provided by Subsection
101	101	(f), property that is ordered sold pursuant to foreclosure of a tax
102	102	lien may be sold in a private sale to a land bank by the officer
103	103	charged with the sale of the property without first offering the
104	104	property for sale as otherwise provided by Section 34.01, Tax Code,
105	105	if:
106	106	(1) the market value of the property as specified in
107	107	the judgment of foreclosure is less than the total amount due under
108	108	the judgment, including all taxes, penalties, and interest, plus
109	109	the value of nontax liens held by a taxing unit and awarded by the
110	110	judgment, court costs, and the cost of the sale;
111	111	(2) the property is not improved with a building or
112	112	buildings;
113	113	(3) there are delinquent taxes on the property for a
114	114	total of at least five years; and
115	115	(4) the county has executed with the other taxing
116	116	units that are parties to the tax suit an interlocal agreement that
117	117	enables those units to agree to participate in the program while
118	118	retaining the right to withhold consent to the sale of specific
119	119	properties to the land bank.
120	120	(b) A sale of property for use in connection with the
121	121	program is a sale for a public purpose.
122	122	(c) If the person being sued in a suit for foreclosure of a
123	123	tax lien does not contest the market value of the property in the
124	124	suit, the person waives the right to challenge the amount of the
125	125	market value determined by the court for purposes of the sale of the
126	126	property under Section 33.50, Tax Code.
127	127	(d) For any sale of property under this chapter, each person
128	128	who was a defendant to the judgment, or that person's attorney,
129	129	shall be given, not later than the 90th day before the date of sale,
130	130	written notice of the proposed method of sale of the property by the
131	131	officer charged with the sale of the property. Notice shall be
132	132	given in the manner prescribed by Rule 21a, Texas Rules of Civil
133	133	Procedure.
134	134	(e) After receipt of the notice required by Subsection (d)
135	135	and before the date of the proposed sale, the owner of the property
136	136	subject to sale may file with the officer charged with the sale a
137	137	written request that the property not be sold in the manner provided
138	138	by this chapter.
139	139	(f) If the officer charged with the sale receives a written
140	140	request as provided by Subsection (e), the officer shall sell the
141	141	property as otherwise provided in Section 34.01, Tax Code.
142	142	(g) The owner of the property subject to sale may not
143	143	receive any proceeds of a sale under this chapter. However, the
144	144	owner does not have any personal liability for a deficiency of the
145	145	judgment as a result of a sale under this chapter.
146	146	(h) Notwithstanding any other law, if consent is given by
147	147	the taxing units that are a party to the judgment, property may be
148	148	sold to the land bank for less than the market value of the property
149	149	as specified in the judgment or less than the total of all taxes,
150	150	penalties, and interest, plus the value of nontax liens held by a
151	151	taxing unit and awarded by the judgment, court costs, and the cost
152	152	of the sale.
153	153	(i) The deed of conveyance of the property sold to a land
154	154	bank under this section conveys to the land bank the right, title,
155	155	and interest acquired or held by each taxing unit that was a party
156	156	to the judgment, subject to the right of redemption.
157	157	Sec. 388.007. SUBSEQUENT RESALE BY LAND BANK. (a) Each
158	158	subsequent resale by a land bank of property acquired by the land
159	159	bank under this chapter must comply with the conditions of this
160	160	section.
161	161	(b) Within the three-year period following the date of
162	162	acquisition, the land bank must sell a property to a qualified
163	163	participating developer for the purpose of construction of
164	164	affordable housing for sale or rent to low income households.
165	165	(c) If after three years a qualified participating
166	166	developer has not purchased the property, the property shall be
167	167	transferred from the land bank to the taxing units who were parties
168	168	to the judgment for disposition as otherwise allowed under the law.
169	169	(d) Unless the county increases the amount in its plan, the
170	170	number of properties acquired by a qualified participating
171	171	developer under this section on which development has not been
172	172	completed may not at any given time exceed three times the annual
173	173	average residential production completed by the qualified
174	174	participating developer during the preceding two-year period as
175	175	determined by the county.
176	176	(e) The deed conveying a property sold by the land bank must
177	177	include a right of reverter so that if the qualified participating
178	178	developer does not apply for a construction permit and close on any
179	179	construction financing within the two-year period following the
180	180	date of the conveyance of the property from the land bank to the
181	181	qualified participating developer, the property will revert to the
182	182	land bank for subsequent resale to another qualifying participating
183	183	developer or conveyance to the taxing units who were parties to the
184	184	judgment for disposition as otherwise allowed under the law.
185	185	Sec. 388.008. RESTRICTIONS ON OCCUPANCY AND USE OF
186	186	PROPERTY. (a) The land bank shall impose deed restrictions on
187	187	property sold to qualified participating developers requiring the
188	188	development and subsequent sale or rental of the property to low
189	189	income households.
190	190	(b) At least 25 percent of the land bank properties sold
191	191	during any given fiscal year to be developed for sale shall be deed
192	192	restricted for sale to households with incomes not greater than 60
193	193	percent of the area median family income, based on gross household
194	194	income, adjusted for household size, for the county, as determined
195	195	annually by the United States Department of Housing and Urban
196	196	Development.
197	197	(c) If property is developed for rental housing, the deed
198	198	restrictions must be for a period of not less than 20 years and must
199	199	require that:
200	200	(1) 100 percent of the rental units be occupied by and
201	201	affordable to households with incomes not greater than 60 percent
202	202	of area median family income, based on gross household income,
203	203	adjusted for household size, for the county, as determined annually
204	204	by the United States Department of Housing and Urban Development;
205	205	(2) 40 percent of the units be occupied by and
206	206	affordable to households with incomes not greater than 50 percent
207	207	of area median family income, based on gross household income,
208	208	adjusted for household size, for the county, as determined annually
209	209	by the United States Department of Housing and Urban Development;
210	210	or
211	211	(3) 20 percent of the units be occupied by and
212	212	affordable to households with incomes not greater than 30 percent
213	213	of area median family income, based on gross household income,
214	214	adjusted for household size, for the county, as determined annually
215	215	by the United States Department of Housing and Urban Development.
216	216	(d) The deed restrictions under Subsection (c) must require
217	217	the owner to file an annual occupancy report with the county on a
218	218	reporting form provided by the county. The deed restrictions must
219	219	also prohibit any exclusion of an individual or family from
220	220	admission to the development based solely on the participation of
221	221	the individual or family in the housing choice voucher program
222	222	under Section 8, United States Housing Act of 1937 (42 U.S.C.
223	223	Section 1437f).
224	224	(e) Except as otherwise provided by this section, if the
225	225	deed restrictions imposed under this section are for a term of
226	226	years, the deed restrictions shall renew automatically.
227	227	(f) The land bank or the governing body of the county may
228	228	modify or add to the deed restrictions imposed under this section.
229	229	Any modifications or additions made by the governing body of the
230	230	county must be adopted by the county as part of its plan and must
231	231	comply with the restrictions set forth in Subsections (b), (c), and
232	232	(d).
233	233	Sec. 388.009. RIGHT OF FIRST REFUSAL. (a) In this section,
234	234	"qualified organization" means a community housing development
235	235	organization that:
236	236	(1) contains within its designated geographical
237	237	boundaries of operation, as set forth in its application for
238	238	certification filed with and approved by the county, a portion of
239	239	the property that the land bank is offering for sale;
240	240	(2) has built at least three single-family homes or
241	241	duplexes or one multifamily residential dwelling of four or more
242	242	units in compliance with all applicable building codes within the
243	243	preceding two-year period and within the organization's designated
244	244	geographical boundaries of operation; and
245	245	(3) within the preceding three-year period has
246	246	developed or rehabilitated housing units within a two-mile radius
247	247	of the property that the land bank is offering for sale.
248	248	(b) The land bank shall first offer a property for sale to
249	249	qualified organizations.
250	250	(c) Notice must be provided to the qualified organizations
251	251	by certified mail, return receipt requested, not later than the
252	252	60th day before the beginning of the period in which a right of
253	253	first refusal may be exercised.
254	254	(d) The county shall specify in its plan the period during
255	255	which the right of first refusal provided by this section may be
256	256	exercised by a qualified organization. That period must be at
257	257	least nine months but not more than 26 months from the date of the
258	258	deed of conveyance of the property to the land bank.
259	259	(e) If the land bank conveys the property to a qualified
260	260	organization before the expiration of the period specified by the
261	261	county under Subsection (d), the interlocal agreement executed
262	262	under Section 388.006(a)(4) must provide tax abatement for the
263	263	property until the expiration of that period.
264	264	(f) During the specified period, the land bank may not sell
265	265	the property to a qualified participating developer other than a
266	266	qualified organization. If all qualified organizations notify the
267	267	land bank that they are declining to exercise their right of first
268	268	refusal during the specified period, or if an offer to purchase the
269	269	property is not received from a qualified organization during that
270	270	period, the land bank may sell the property to any other qualified
271	271	participating developer at the same price that the land bank
272	272	offered the property to the qualified organizations.
273	273	(g) In its plan, the county shall establish the amount of
274	274	additional time, if any, that a property may be held in the land
275	275	bank once an offer has been received and accepted from a qualified
276	276	organization or other qualified participating developer.
277	277	(h) If more than one qualified organization expresses an
278	278	interest in exercising its right of first refusal, the organization
279	279	that has designated the most geographically compact area
280	280	encompassing a portion of the property shall be given priority.
281	281	(i) In its plan, the county may provide for other rights of
282	282	first refusal for any other nonprofit corporation exempted from
283	283	federal income tax under Section 501(c)(3), Internal Revenue Code
284	284	of 1986, provided that the preeminent right of first refusal is
285	285	provided to qualified organizations as provided by this section.
286	286	(j) The land bank is not required to provide a right of first
287	287	refusal to qualified organizations under this section if the land
288	288	bank is selling property that reverted to the land bank under
289	289	Section 388.007(e).
290	290	Sec. 388.010. OPEN RECORDS AND MEETINGS. The land bank
291	291	shall comply with the requirements of Chapters 551 and 552,
292	292	Government Code.
293	293	Sec. 388.011. RECORDS; AUDIT; REPORT. (a) The land bank
294	294	shall keep accurate minutes of its meetings and shall keep accurate
295	295	records and books of account that conform with generally accepted
296	296	principles of accounting and that clearly reflect the income and
297	297	expenses of the land bank and all transactions in relation to its
298	298	property.
299	299	(b) The land bank shall file with the county not later than
300	300	the 90th day after the close of the fiscal year annual audited
301	301	financial statements prepared by a certified public accountant.
302	302	The financial transactions of the land bank are subject to audit by
303	303	the county.
304	304	(c) For purposes of evaluating the effectiveness of the
305	305	program, the land bank shall submit an annual performance report to
306	306	the county not later than November 1 of each year in which the land
307	307	bank acquires or sells property under this chapter. The
308	308	performance report must include:
309	309	(1) a complete and detailed written accounting of all
310	310	money and properties received and disbursed by the land bank during
311	311	the preceding fiscal year;
312	312	(2) for each property acquired by the land bank during
313	313	the preceding fiscal year:
314	314	(A) the street address of the property;
315	315	(B) the legal description of the property;
316	316	(C) the date the land bank took title to the
317	317	property;
318	318	(D) the name and mailing address of the property
319	319	owner of record at the time of the foreclosure;
320	320	(E) the amount of taxes and other costs owed at
321	321	the time of the foreclosure; and
322	322	(F) the assessed value of the property on the tax
323	323	roll at the time of the foreclosure;
324	324	(3) for each property sold by the land bank during the
325	325	preceding fiscal year to a qualified participating developer:
326	326	(A) the street address of the property;
327	327	(B) the legal description of the property;
328	328	(C) the name and mailing address of the
329	329	purchaser;
330	330	(D) the price paid by the purchaser;
331	331	(E) the maximum incomes allowed for the
332	332	households by the terms of the sale; and
333	333	(F) the source and amount of any public subsidy
334	334	provided by the county to facilitate the sale or rental of the
335	335	property to a household within the targeted income levels;
336	336	(4) for each property sold by a qualified
337	337	participating developer during the preceding fiscal year, the
338	338	buyer's household income and a description of all use and sale
339	339	restrictions; and
340	340	(5) for each property developed for rental housing
341	341	with an active deed restriction, a copy of the most recent annual
342	342	report filed by the owner with the land bank.
343	343	(d) The land bank shall maintain in its records for
344	344	inspection a copy of the sale settlement statement for each
345	345	property sold by a qualified participating developer and a copy of
346	346	the first page of the mortgage note with the interest rate and
347	347	indicating the volume and page number of the instrument as filed
348	348	with the county clerk.
349	349	(e) The land bank shall provide copies of the performance
350	350	report to the taxing units who were parties to the judgment of
351	351	foreclosure and shall provide notice of the availability of the
352	352	performance report for review to the organizations and neighborhood
353	353	associations identified by the county as serving the neighborhoods
354	354	in which properties sold to the land bank under this chapter are
355	355	located.
356	356	(f) The land bank and the county shall maintain copies of
357	357	the performance report available for public review.
358	358	SECTION 2. Sections 11.18(d) and (o), Tax Code, are amended
359	359	to read as follows:
360	360	(d) A charitable organization must be organized exclusively
361	361	to perform religious, charitable, scientific, literary, or
362	362	educational purposes and, except as permitted by Subsections (h)
363	363	and (l), engage exclusively in performing one or more of the
364	364	following charitable functions:
365	365	(1) providing medical care without regard to the
366	366	beneficiaries' ability to pay, which in the case of a nonprofit
367	367	hospital or hospital system means providing charity care and
368	368	community benefits in accordance with Section 11.1801;
369	369	(2) providing support or relief to orphans,
370	370	delinquent, dependent, or handicapped children in need of
371	371	residential care, abused or battered spouses or children in need of
372	372	temporary shelter, the impoverished, or victims of natural disaster
373	373	without regard to the beneficiaries' ability to pay;
374	374	(3) providing support without regard to the
375	375	beneficiaries' ability to pay to:
376	376	(A) elderly persons, including the provision of:
377	377	(i) recreational or social activities; and
378	378	(ii) facilities designed to address the
379	379	special needs of elderly persons; or
380	380	(B) the handicapped, including training and
381	381	employment:
382	382	(i) in the production of commodities; or
383	383	(ii) in the provision of services under 41
384	384	U.S.C. Sections 8501-8506;
385	385	(4) preserving a historical landmark or site;
386	386	(5) promoting or operating a museum, zoo, library,
387	387	theater of the dramatic or performing arts, or symphony orchestra
388	388	or choir;
389	389	(6) promoting or providing humane treatment of
390	390	animals;
391	391	(7) acquiring, storing, transporting, selling, or
392	392	distributing water for public use;
393	393	(8) answering fire alarms and extinguishing fires with
394	394	no compensation or only nominal compensation to the members of the
395	395	organization;
396	396	(9) promoting the athletic development of boys or
397	397	girls under the age of 18 years;
398	398	(10) preserving or conserving wildlife;
399	399	(11) promoting educational development through loans
400	400	or scholarships to students;
401	401	(12) providing halfway house services pursuant to a
402	402	certification as a halfway house by the parole division of the Texas
403	403	Department of Criminal Justice;
404	404	(13) providing permanent housing and related social,
405	405	health care, and educational facilities for persons who are 62
406	406	years of age or older without regard to the residents' ability to
407	407	pay;
408	408	(14) promoting or operating an art gallery, museum, or
409	409	collection, in a permanent location or on tour, that is open to the
410	410	public;
411	411	(15) providing for the organized solicitation and
412	412	collection for distributions through gifts, grants, and agreements
413	413	to nonprofit charitable, education, religious, and youth
414	414	organizations that provide direct human, health, and welfare
415	415	services;
416	416	(16) performing biomedical or scientific research or
417	417	biomedical or scientific education for the benefit of the public;
418	418	(17) operating a television station that produces or
419	419	broadcasts educational, cultural, or other public interest
420	420	programming and that receives grants from the Corporation for
421	421	Public Broadcasting under 47 U.S.C. Section 396, as amended;
422	422	(18) providing housing for low-income and
423	423	moderate-income families, for unmarried individuals 62 years of age
424	424	or older, for handicapped individuals, and for families displaced
425	425	by urban renewal, through the use of trust assets that are
426	426	irrevocably and, pursuant to a contract entered into before
427	427	December 31, 1972, contractually dedicated on the sale or
428	428	disposition of the housing to a charitable organization that
429	429	performs charitable functions described by Subdivision (9);
430	430	(19) providing housing and related services to persons
431	431	who are 62 years of age or older in a retirement community, if the
432	432	retirement community provides independent living services,
433	433	assisted living services, and nursing services to its residents on
434	434	a single campus:
435	435	(A) without regard to the residents' ability to
436	436	pay; or
437	437	(B) in which at least four percent of the
438	438	retirement community's combined net resident revenue is provided in
439	439	charitable care to its residents;
440	440	(20) providing housing on a cooperative basis to
441	441	students of an institution of higher education if:
442	442	(A) the organization is exempt from federal
443	443	income taxation under Section 501(a), Internal Revenue Code of
444	444	1986, as amended, by being listed as an exempt entity under Section
445	445	501(c)(3) of that code;
446	446	(B) membership in the organization is open to all
447	447	students enrolled in the institution and is not limited to those
448	448	chosen by current members of the organization;
449	449	(C) the organization is governed by its members;
450	450	and
451	451	(D) the members of the organization share the
452	452	responsibility for managing the housing;
453	453	(21) acquiring, holding, and transferring unimproved
454	454	real property under an urban land bank demonstration program
455	455	established under Chapter 379C, Local Government Code, as or on
456	456	behalf of a land bank;
457	457	(22) acquiring, holding, and transferring unimproved
458	458	real property under an urban land bank program established under
459	459	Chapter 379E, Local Government Code, as or on behalf of a land bank;
460	460	(22-a) acquiring, holding, and transferring
461	461	unimproved real property under a land bank program established
462	462	under Chapter 388, Local Government Code, as or on behalf of a land
463	463	bank;
464	464	(23) providing housing and related services to
465	465	individuals who:
466	466	(A) are unaccompanied and homeless and have a
467	467	disabling condition; and
468	468	(B) have been continuously homeless for a year or
469	469	more or have had at least four episodes of homelessness in the
470	470	preceding three years;
471	471	(24) operating a radio station that broadcasts
472	472	educational, cultural, or other public interest programming,
473	473	including classical music, and that in the preceding five years has
474	474	received or been selected to receive one or more grants from the
475	475	Corporation for Public Broadcasting under 47 U.S.C. Section 396, as
476	476	amended; or
477	477	(25) providing, without regard to the beneficiaries'
478	478	ability to pay, tax return preparation services and assistance with
479	479	other financial matters.
480	480	(o) For purposes of Subsection (a)(2), real property
481	481	acquired, held, and transferred by an organization that performs
482	482	the function described by Subsection (d)(21), [or] (22), or (22-a)
483	483	is considered to be used exclusively by the qualified charitable
484	484	organization to perform that function.
485	485	SECTION 3. Section 11.18, Tax Code, as amended by this Act,
486	486	applies only to an ad valorem tax year that begins on or after the
487	487	effective date of this Act.
488	488	SECTION 4. This Act takes effect September 1, 2021.