87R7119 JAM-D
By: Gutierrez S.B. No. 596
A BILL TO BE ENTITLED
AN ACT
relating to the adoption of a land bank program by the Texas State
Affordable Housing Corporation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 2306, Government Code, is amended by
adding Subchapter PP to read as follows:
SUBCHAPTER PP. VETERANS' LAND BANK PROGRAM
Sec. 2306.1151. DEFINITIONS. In this subchapter:
(1) "Affordable" means that the monthly mortgage
payment or contract rent does not exceed 30 percent of the
applicable median family income for that unit size, in accordance
with the income and rent limit rules adopted by the Texas Department
of Housing and Community Affairs.
(2) "Community housing development organization" or
"organization" means an organization that:
(A) meets the definition of a community housing
development organization in 24 C.F.R. Section 92.2; and
(B) is certified by a municipality or county as a
community housing development organization.
(3) "Corporation" means the Texas State Affordable
Housing Corporation.
(4) "Land bank" means an entity established or
approved by the corporation for the purpose of acquiring, holding,
and transferring unimproved real property under this subchapter to
provide affordable housing for veterans who are members of
low-income households.
(5) "Land bank plan" or "plan" means a plan adopted by
the corporation as provided by Section 2306.1155.
(6) "Land bank program" or "program" means a program
adopted under Section 2306.1153.
(7) "Low-income household" means a household with an
income of not greater than 80 percent of the area median family
income, based on gross household income, adjusted for household
size, for a municipality or, if located in an area that is not part
of a municipality, a county, as determined annually by the United
States Department of Housing and Urban Development.
(8) "Qualified participating developer" means a
developer who meets the requirements of Section 2306.1154 and
includes a qualified organization under Section 2306.1160.
(9) "Veteran" has the meaning provided by Section
161.001, Natural Resources Code.
Sec. 2306.1152. APPLICABILITY OF OTHER LAW. This
subchapter controls to the extent of any conflict between this
subchapter and another provision of this chapter.
Sec. 2306.1153. LAND BANK PROGRAM. (a) The corporation
shall adopt a land bank program and establish or approve a land bank
for the purpose of acquiring, holding, and transferring unimproved
real property under this subchapter to provide affordable housing
for veterans who are members of low-income households.
(b) Property held by the land bank must include property
acquired in the manner provided by Section 2306.1157 and may
include other property acquired by or transferred to the land bank.
(c) A sale or other transfer of property for use in
connection with the program is a sale for a public purpose.
Sec. 2306.1154. QUALIFIED PARTICIPATING DEVELOPER. To
qualify to participate in the program, a developer must:
(1) have developed three or more housing units within
the three-year period preceding the submission of a proposal to the
land bank seeking to acquire real property from the land bank;
(2) have a development plan approved by the
corporation for the land bank property; and
(3) meet any other requirements adopted by the
corporation in the land bank plan.
Sec. 2306.1155. LAND BANK PLAN. (a) The corporation shall
operate the program in conformance with a land bank plan.
(b) The corporation shall adopt a plan annually. The plan
may be amended from time to time.
(c) In developing the plan, the corporation shall consider
any other housing plans adopted by a municipality or county in which
the corporation intends to implement the program.
(d) The plan must include the following:
(1) a list of community housing development
organizations eligible to participate in the right of first refusal
provided by Section 2306.1160;
(2) a list of the parcels of real property that may
become eligible for sale or transfer to the land bank during the
next year;
(3) the corporation's plan for affordable housing
development on those parcels of real property; and
(4) the sources and amounts of public subsidies
anticipated to be available for affordable housing development
previously approved by the corporation at the time of the plan.
Sec. 2306.1156. PUBLIC HEARING ON PROPOSED PLAN. (a)
Before adopting a plan, the corporation shall hold a public hearing
on the proposed plan.
(b) The corporation shall provide notice of the hearing to
all community housing development organizations and to
neighborhood associations identified by the corporation as serving
the neighborhoods in which properties anticipated to be available
for sale or transfer to the land bank under this subchapter are
located.
(c) The corporation shall make copies of the proposed plan
available to the public not later than the 60th day before the date
of the public hearing.
Sec. 2306.1157. PRIVATE SALE TO LAND BANK. (a)
Notwithstanding any other law and except as provided by Subsection
(e), property that is ordered sold pursuant to foreclosure of a tax
lien may be sold in a private sale to a land bank by the officer
charged with the sale of the property without first offering the
property for sale as otherwise provided by Section 34.01, Tax Code,
if:
(1) the market value of the property as specified in
the judgment of foreclosure is less than the total amount due under
the judgment, including all taxes, penalties, and interest, plus
the value of nontax liens held by a taxing unit and awarded by the
judgment, court costs, and the cost of the sale;
(2) the property is not improved with a building or
buildings;
(3) there are delinquent taxes on the property for a
total of at least five years; and
(4) all taxing units that are parties to the tax suit
have executed an interlocal agreement that enables those units to
agree to participate in the program while retaining the right to
withhold consent to the sale of specific properties to the land
bank.
(b) If the person being sued in a suit for foreclosure of a
tax lien does not contest the market value of the property in the
suit, the person waives the right to challenge the amount of the
market value determined by the court for purposes of the sale of the
property under Section 33.50, Tax Code.
(c) For any sale of property under this section, each person
who was a defendant to the judgment, or that person's attorney,
shall be given, not later than the 90th day before the date of sale,
written notice of the proposed method of sale of the property by the
officer charged with the sale of the property. Notice shall be
given in the manner prescribed by Rule 21a, Texas Rules of Civil
Procedure.
(d) After receipt of the notice required by Subsection (c)
and before the date of the proposed sale, the owner of the property
subject to sale may file with the officer charged with the sale a
written request that the property not be sold in the manner provided
by this section.
(e) If the officer charged with the sale receives a written
request as provided by Subsection (d), the officer shall sell the
property as otherwise provided in Section 34.01, Tax Code.
(f) The owner of the property subject to sale may not
receive any proceeds of a sale under this section. However, the
owner does not have any personal liability for a deficiency of the
judgment as a result of a sale under this section.
(g) Notwithstanding any other law, if consent is given by
the taxing units that are a party to the judgment, property may be
sold to the land bank for less than the market value of the property
as specified in the judgment or less than the total of all taxes,
penalties, and interest, plus the value of nontax liens held by a
taxing unit and awarded by the judgment, court costs, and the cost
of the sale.
(h) The deed of conveyance of the property sold to a land
bank under this section conveys to the land bank the right, title,
and interest acquired or held by each taxing unit that was a party
to the judgment, subject to the right of redemption.
Sec. 2306.1158. SUBSEQUENT RESALE BY LAND BANK. (a) Each
subsequent resale by a land bank of property acquired by the land
bank under Section 2306.1157 must comply with the conditions of
this section.
(b) Within the three-year period following the date of
acquisition, the land bank must sell a property to a qualified
participating developer for the purpose of construction of
affordable housing for sale or rent to veterans who are members of
low-income households.
(c) If after three years a qualified participating
developer has not purchased the property, the property shall be
transferred from the land bank to the taxing units who were parties
to the judgment for disposition as otherwise allowed under the law.
(d) Unless the corporation increases the amount in its plan,
the number of properties acquired by a qualified participating
developer under this section on which development has not been
completed may not at any given time exceed three times the annual
average residential production completed by the qualified
participating developer during the preceding two-year period as
determined by the corporation.
(e) The deed conveying a property sold by the land bank must
include a right of reverter so that if the qualified participating
developer does not apply for a construction permit and close on any
construction financing within the two-year period following the
date of the conveyance of the property from the land bank to the
qualified participating developer, the property will revert to the
land bank for subsequent resale to another qualifying participating
developer or conveyance to the taxing units who were parties to the
judgment for disposition as otherwise allowed under the law.
Sec. 2306.1159. RESTRICTIONS ON OCCUPANCY AND USE OF
PROPERTY. (a) The land bank shall impose, in accordance with this
section, deed restrictions on property sold to qualified
participating developers requiring the development and subsequent
sale or rental of the property to veterans who are members of
low-income households.
(b) At least 25 percent of the land bank properties sold
during any given state fiscal year to be developed for sale shall be
deed restricted for sale to households with incomes not greater
than 60 percent of the area median family income, based on gross
household income, adjusted for household size, for the applicable
municipality or, if located in an area that is not part of a
municipality, the applicable county, as determined annually by the
United States Department of Housing and Urban Development.
(c) If property is developed for rental housing, the deed
restrictions must be for a period of not less than 20 years and must
require that:
(1) 100 percent of the rental units be occupied by and
affordable to households with incomes not greater than 60 percent
of area median family income, based on gross household income,
adjusted for household size, for the applicable municipality or, if
located in an area that is not part of a municipality, the
applicable county, as determined annually by the United States
Department of Housing and Urban Development;
(2) 40 percent of the units be occupied by and
affordable to households with incomes not greater than 50 percent
of area median family income, based on gross household income,
adjusted for household size, for the applicable municipality or, if
located in an area that is not part of a municipality, the
applicable county, as determined annually by the United States
Department of Housing and Urban Development; or
(3) 20 percent of the units be occupied by and
affordable to households with incomes not greater than 30 percent
of area median family income, based on gross household income,
adjusted for household size, for the applicable municipality or, if
located in an area that is not part of a municipality, the
applicable county, as determined annually by the United States
Department of Housing and Urban Development.
(d) The deed restrictions under Subsection (c) must require
the owner to file an annual occupancy report with the corporation on
a reporting form provided by the corporation. The deed
restrictions must also prohibit any exclusion of an individual or
family from admission to the development based solely on the
participation of the individual or family in the housing choice
voucher program under Section 8, United States Housing Act of 1937
(42 U.S.C. Section 1437f), as amended.
(e) Except as otherwise provided by this section, if the
deed restrictions imposed under this section are for a term of
years, the deed restrictions renew automatically.
(f) The land bank or the corporation may modify or add to the
deed restrictions imposed under this section. Any modifications or
additions made by the corporation must be adopted by the
corporation as part of its plan and must comply with the
restrictions set forth in Subsections (b), (c), and (d).
Sec. 2306.1160. RIGHT OF FIRST REFUSAL. (a) In this
section, "qualified organization" means a community housing
development organization that:
(1) contains within its designated geographical
boundaries of operation, as set forth in its application for
certification filed with and approved by the municipality or county
certifying the organization, a portion of the property that the
land bank is offering for sale;
(2) has built at least three single-family homes or
duplexes or one multifamily residential dwelling of four or more
units in compliance with all applicable building codes within the
preceding two-year period and within the organization's designated
geographical boundaries of operation; and
(3) within the preceding three-year period has
developed or rehabilitated housing units within a two-mile radius
of the property that the land bank is offering for sale.
(b) The land bank shall first offer for sale to qualified
organizations any property acquired by the land bank under Section
2306.1157.
(c) Notice must be provided to the qualified organizations
by certified mail, return receipt requested, not later than the
60th day before the beginning of the period in which a right of
first refusal may be exercised.
(d) The corporation shall specify in its plan the period
during which the right of first refusal provided by this section may
be exercised by a qualified organization. That period must be at
least nine months but not more than 26 months from the date of the
deed of conveyance of the property to the land bank.
(e) If the land bank conveys the property to a qualified
organization before the expiration of the period specified by the
corporation under Subsection (d), the interlocal agreement
executed under Section 2306.1157(a)(4) must provide tax abatement
for the property until the expiration of that period.
(f) During the specified period, the land bank may not sell
the property to a qualified participating developer other than a
qualified organization. If all qualified organizations notify the
land bank that they are declining to exercise their right of first
refusal during the specified period, or if an offer to purchase the
property is not received from a qualified organization during that
period, the land bank may sell the property to any other qualified
participating developer at the same price that the land bank
offered the property to the qualified organizations.
(g) In its plan, the corporation shall establish the
additional period, if any, that a property may be held in the land
bank once an offer has been received and accepted from a qualified
organization or other qualified participating developer.
(h) If more than one qualified organization expresses an
interest in exercising its right of first refusal, the organization
that has designated the most geographically compact area
encompassing a portion of the property shall be given priority.
(i) In its plan, the corporation may provide for other
rights of first refusal for any other nonprofit corporation
exempted from federal income tax under Section 501(c)(3), Internal
Revenue Code of 1986, as amended, provided that the preeminent
right of first refusal is provided to qualified organizations as
provided by this section.
(j) The land bank is not required to provide a right of first
refusal to qualified organizations under this section if the land
bank is selling property that reverted to the land bank under
Section 2306.1158(e) or was acquired by the land bank in a manner
other than that provided by Section 2306.1157.
Sec. 2306.1161. OPEN RECORDS AND MEETINGS. The land bank
shall comply with the requirements of Chapters 551 and 552.
Sec. 2306.1162. RECORDS; AUDIT; REPORT. (a) The land bank
shall keep accurate minutes of its meetings and shall keep accurate
records and books of account that conform with generally accepted
principles of accounting and that clearly reflect the income and
expenses of the land bank and all transactions in relation to its
property.
(b) The land bank shall file with the corporation not later
than the 90th day after the close of the state fiscal year annual
audited financial statements prepared by a certified public
accountant. The financial transactions of the land bank are
subject to audit by the corporation.
(c) For purposes of evaluating the effectiveness of the
program, the land bank shall submit an annual performance report to
the corporation not later than November 1 of each year in which the
land bank acquires or sells property under this subchapter. The
performance report must include:
(1) a complete and detailed written accounting of all
money and properties received and disbursed by the land bank during
the preceding state fiscal year;
(2) for each property acquired by the land bank during
the preceding state fiscal year:
(A) the street address of the property;
(B) the legal description of the property;
(C) the date the land bank took title to the
property;
(D) the name and mailing address of the property
owner of record at the time of the acquisition;
(E) the amount of taxes and other costs owed at
the time of the foreclosure if the property was acquired under
Section 2306.1157; and
(F) the assessed value of the property on the tax
roll at the time of the foreclosure if the property was acquired
under Section 2306.1157;
(3) for each property sold by the land bank during the
preceding state fiscal year to a qualified participating developer:
(A) the street address of the property;
(B) the legal description of the property;
(C) the name and mailing address of the
purchaser;
(D) the price paid by the purchaser;
(E) the maximum incomes allowed for the
households by the terms of the sale; and
(F) the source and amount of any public subsidy
made available to facilitate the sale or rental of the property to a
veteran who is a member of a household within the targeted income
levels;
(4) for each property sold by a qualified
participating developer during the preceding state fiscal year, the
buyer's household income and a description of all use and sale
restrictions; and
(5) for each property developed for rental housing
with an active deed restriction, a copy of the most recent annual
report filed by the owner with the land bank.
(d) The land bank shall maintain in its records for
inspection a copy of the sale settlement statement for each
property sold by a qualified participating developer and a copy of
the first page of the mortgage note with the interest rate and
indicating the volume and page number of the instrument as filed
with the county clerk.
(e) The land bank shall provide copies of the performance
report to any taxing units who were parties to a sale of property
under Section 2306.1157. The land bank shall provide notice of the
availability of the performance report for review to the
organizations and neighborhood associations identified by the
corporation as serving the neighborhoods in which are located
properties sold or transferred to the land bank under this
subchapter.
(f) The land bank and the corporation shall maintain copies
of the performance report available for public review.
SECTION 2. Sections 11.18(d) and (o), Tax Code, are amended
to read as follows:
(d) A charitable organization must be organized exclusively
to perform religious, charitable, scientific, literary, or
educational purposes and, except as permitted by Subsections (h)
and (l), engage exclusively in performing one or more of the
following charitable functions:
(1) providing medical care without regard to the
beneficiaries' ability to pay, which in the case of a nonprofit
hospital or hospital system means providing charity care and
community benefits in accordance with Section 11.1801;
(2) providing support or relief to orphans,
delinquent, dependent, or handicapped children in need of
residential care, abused or battered spouses or children in need of
temporary shelter, the impoverished, or victims of natural disaster
without regard to the beneficiaries' ability to pay;
(3) providing support without regard to the
beneficiaries' ability to pay to:
(A) elderly persons, including the provision of:
(i) recreational or social activities; and
(ii) facilities designed to address the
special needs of elderly persons; or
(B) the handicapped, including training and
employment:
(i) in the production of commodities; or
(ii) in the provision of services under 41
U.S.C. Sections 8501-8506;
(4) preserving a historical landmark or site;
(5) promoting or operating a museum, zoo, library,
theater of the dramatic or performing arts, or symphony orchestra
or choir;
(6) promoting or providing humane treatment of
animals;
(7) acquiring, storing, transporting, selling, or
distributing water for public use;
(8) answering fire alarms and extinguishing fires with
no compensation or only nominal compensation to the members of the
organization;
(9) promoting the athletic development of boys or
girls under the age of 18 years;
(10) preserving or conserving wildlife;
(11) promoting educational development through loans
or scholarships to students;
(12) providing halfway house services pursuant to a
certification as a halfway house by the parole division of the Texas
Department of Criminal Justice;
(13) providing permanent housing and related social,
health care, and educational facilities for persons who are 62
years of age or older without regard to the residents' ability to
pay;
(14) promoting or operating an art gallery, museum, or
collection, in a permanent location or on tour, that is open to the
public;
(15) providing for the organized solicitation and
collection for distributions through gifts, grants, and agreements
to nonprofit charitable, education, religious, and youth
organizations that provide direct human, health, and welfare
services;
(16) performing biomedical or scientific research or
biomedical or scientific education for the benefit of the public;
(17) operating a television station that produces or
broadcasts educational, cultural, or other public interest
programming and that receives grants from the Corporation for
Public Broadcasting under 47 U.S.C. Section 396, as amended;
(18) providing housing for low-income and
moderate-income families, for unmarried individuals 62 years of age
or older, for handicapped individuals, and for families displaced
by urban renewal, through the use of trust assets that are
irrevocably and, pursuant to a contract entered into before
December 31, 1972, contractually dedicated on the sale or
disposition of the housing to a charitable organization that
performs charitable functions described by Subdivision (9);
(19) providing housing and related services to persons
who are 62 years of age or older in a retirement community, if the
retirement community provides independent living services,
assisted living services, and nursing services to its residents on
a single campus:
(A) without regard to the residents' ability to
pay; or
(B) in which at least four percent of the
retirement community's combined net resident revenue is provided in
charitable care to its residents;
(20) providing housing on a cooperative basis to
students of an institution of higher education if:
(A) the organization is exempt from federal
income taxation under Section 501(a), Internal Revenue Code of
1986, as amended, by being listed as an exempt entity under Section
501(c)(3) of that code;
(B) membership in the organization is open to all
students enrolled in the institution and is not limited to those
chosen by current members of the organization;
(C) the organization is governed by its members;
and
(D) the members of the organization share the
responsibility for managing the housing;
(21) acquiring, holding, and transferring unimproved
real property under an urban land bank demonstration program
established under Chapter 379C, Local Government Code, as or on
behalf of a land bank;
(22) acquiring, holding, and transferring unimproved
real property under an urban land bank program established under
Chapter 379E, Local Government Code, as or on behalf of a land bank;
(22-a) acquiring, holding, and transferring
unimproved real property under a land bank program established
under Subchapter PP, Chapter 2306, Government Code, as or on behalf
of a land bank;
(23) providing housing and related services to
individuals who:
(A) are unaccompanied and homeless and have a
disabling condition; and
(B) have been continuously homeless for a year or
more or have had at least four episodes of homelessness in the
preceding three years;
(24) operating a radio station that broadcasts
educational, cultural, or other public interest programming,
including classical music, and that in the preceding five years has
received or been selected to receive one or more grants from the
Corporation for Public Broadcasting under 47 U.S.C. Section 396, as
amended; or
(25) providing, without regard to the beneficiaries'
ability to pay, tax return preparation services and assistance with
other financial matters.
(o) For purposes of Subsection (a)(2), real property
acquired, held, and transferred by an organization that performs
the function described by Subsection (d)(21), [or] (22), or (22-a)
is considered to be used exclusively by the qualified charitable
organization to perform that function.
SECTION 3. Section 11.18, Tax Code, as amended by this Act,
applies only to an ad valorem tax year that begins on or after the
effective date of this Act.
SECTION 4. This Act takes effect September 1, 2021.