88R10204 JAM-D
By: Garcia H.B. No. 2476
A BILL TO BE ENTITLED
AN ACT
relating to the adoption of a veterans' land bank program by the
Texas State Affordable Housing Corporation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2306.566(c), Government Code, is amended
to read as follows:
(c) The corporation's plan must include:
(1) specific proposals to help serve rural and other
underserved areas of the state; and
(2) the veterans' land bank plan developed under
Section 2306.5622.
SECTION 2. Subchapter Y, Chapter 2306, Government Code, is
amended by adding Section 2306.5622 to read as follows:
Sec. 2306.5622. VETERANS' LAND BANK PROGRAM. (a) In this
section:
(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) "Low-income household" means a household with an
income of not greater than 60 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.
(4) "Qualified participating developer" means a
developer who meets the requirements of Subsection (f) and includes
a qualified organization under Subsection (t).
(5) "Veteran" has the meaning provided by Section
161.001, Natural Resources Code.
(6) "Veterans' land bank" means an entity established
or approved by the corporation for the purpose of acquiring,
holding, and transferring unimproved real property under this
section to provide affordable housing for veterans who are members
of low-income households.
(7) "Veterans' land bank plan" or "plan" means a plan
adopted by the corporation as provided by Subsection (g).
(8) "Veterans' land bank program" or "program" means a
program adopted under Subsection (c).
(b) This section controls to the extent of any conflict
between this section and another provision of this chapter.
(c) The corporation shall adopt a veterans' land bank
program and establish or approve a veterans' land bank for the
purpose of acquiring, holding, and transferring unimproved real
property under this section to provide affordable housing for
veterans who are members of low-income households.
(d) Property held by the veterans' land bank must include
property acquired in the manner provided by Subsection (i) and may
include other property acquired by or transferred to the veterans'
land bank.
(e) A sale or other transfer of property for use in
connection with the program is a sale for a public purpose.
(f) 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
veterans' land bank seeking to acquire real property from the
veterans' land bank;
(2) have a development plan approved by the
corporation for the veterans' land bank property; and
(3) meet any other requirements adopted by the
corporation in the veterans' land bank plan.
(g) The corporation shall operate the program in
conformance with a veterans' land bank plan. The corporation shall
adopt a plan annually. The plan may be amended from time to time.
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. The plan must
include the corporation's plan for affordable housing development
on parcels of real property.
(h) Before adopting a plan, the corporation shall hold a
public hearing on the proposed plan. 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 veterans'
land bank under this section are located. The corporation shall
make copies of the proposed plan available to the public not later
than the 30th day before the date of the public hearing.
(i) Notwithstanding any other law and except as provided by
Subsection (m), property that is ordered sold pursuant to
foreclosure of a tax lien may be sold in a private sale to a
veterans' 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
veterans' land bank.
(j) 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.
(k) For any sale of property under Subsection (i), 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.
(l) After receipt of the notice required by Subsection (k)
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 Subsection (i).
(m) If the officer charged with the sale receives a written
request as provided by Subsection (l), the officer shall sell the
property as otherwise provided in Section 34.01, Tax Code.
(n) 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.
(o) 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 veterans' 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.
(p) The deed of conveyance of the property sold to a
veterans' land bank under Subsection (i) conveys to the veterans'
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.
(q) Each subsequent resale by a veterans' land bank of
property acquired by the veterans' land bank under Subsection (i)
must comply with the conditions of this subsection. Within the
10-year period following the date of acquisition, the veterans'
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.
If after 10 years a qualified participating developer has not
purchased the property, the property shall be transferred from the
veterans' land bank to the taxing units who were parties to the
judgment for disposition as otherwise allowed under the law. The
deed conveying a property sold by the veterans' 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 veterans' land bank
to the qualified participating developer, the property will revert
to the veterans' 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.
(r) The veterans' land bank shall impose, in accordance with
this subsection and Subsection (s), 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. At least 25
percent of the veterans' 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. 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.
(s) The deed restrictions relating to rental housing under
this subsection and Subsection (r) 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. Except as otherwise provided by this subsection, if the
deed restrictions imposed under this subsection or Subsection (r)
are for a term of years, the deed restrictions renew automatically.
The veterans' land bank or the corporation may modify or add to the
deed restrictions imposed under this subsection or Subsection (r).
Any modifications or additions made by the corporation must be
adopted by the corporation as part of its plan.
(t) The veterans' land bank shall first offer for sale to
qualified organizations any property acquired by the veterans' land
bank under Subsection (i). 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. The corporation shall
specify in its plan the period during which the right of first
refusal provided by this subsection 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 veterans' land bank. If the veterans' land bank
conveys the property to a qualified organization before the
expiration of the period specified by the corporation under this
subsection, the interlocal agreement executed under Subsection
(i)(4) must provide tax abatement for the property until the
expiration of that period. During the specified period, the
veterans' land bank may not sell the property to a qualified
participating developer other than a qualified organization. If
all qualified organizations notify the veterans' 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
veterans' land bank may sell the property to any other qualified
participating developer at the same price that the veterans' land
bank offered the property to the qualified organizations. In its
plan, the corporation shall establish the additional period, if
any, that a property may be held in the veterans' land bank once an
offer has been received and accepted from a qualified organization
or other qualified participating developer. 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. 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 subsection. The veterans' land
bank is not required to provide a right of first refusal to
qualified organizations under this subsection if the veterans' land
bank is selling property that reverted to the veterans' land bank
under Subsection (q) or was acquired by the veterans' land bank in a
manner other than that provided by Subsection (i). In this
subsection, "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
veterans' 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 veterans' land bank is offering for sale.
(u) The veterans' land bank shall comply with the
requirements of Chapters 551 and 552. The veterans' 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 veterans' land bank and all transactions in
relation to its property.
(v) For purposes of evaluating the effectiveness of the
program, the veterans' land bank shall submit an annual performance
report to the corporation not later than November 1 of each year in
which the veterans' land bank acquires or sells property under this
section. The performance report must include:
(1) a complete and detailed written accounting of all
money and properties received and disbursed by the veterans' land
bank during the preceding state fiscal year;
(2) for each property acquired by the veterans' 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 veterans' 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
Subsection (i); and
(F) the assessed value of the property on the tax
roll at the time of the foreclosure if the property was acquired
under Subsection (i);
(3) for each property sold by the veterans' 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 veterans' land bank.
(w) The veterans' land bank shall provide copies of the
performance report to any taxing units who were parties to a sale of
property under Subsection (i). The veterans' 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 veterans' land
bank under this section. The veterans' land bank and the
corporation shall maintain copies of the performance report
available for public review.
(x) The veterans' 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.
SECTION 3. 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 veterans' land bank program
established under Section 2306.5622, Government Code, as or on
behalf of a veterans' 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 4. 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 5. This Act takes effect September 1, 2023.