Bill Text: TX HB834 | 2019-2020 | 86th Legislature | Introduced


Bill Title: Relating to the authority of a county to adopt a land bank program.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2019-04-04 - Left pending in committee [HB834 Detail]

Download: Texas-2019-HB834-Introduced.html
  86R6550 JAM-D
 
  By: Hernandez H.B. No. 834
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the authority of a county to adopt a land bank program.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle B, Title 12, Local Government Code, is
  amended by adding Chapter 388 to read as follows:
  CHAPTER 388. LAND BANK PROGRAM
         Sec. 388.001.  DEFINITIONS. In this chapter:
               (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 the county as a community
  housing development organization.
               (3)  "Land bank" means an entity established or
  approved by the governing body of a county for the purpose of
  acquiring, holding, and transferring unimproved real property
  under this chapter.
               (4)  "Land bank plan" or "plan" means a plan adopted by
  the governing body of a county as provided by Section 388.004.
               (5)  "Land bank program" or "program" means a program
  adopted under Section 388.002.
               (6)  "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 the county, as determined annually by the United States
  Department of Housing and Urban Development.
               (7)  "Qualified participating developer" means a
  developer who meets the requirements of Section 388.003 and
  includes a qualified organization under Section 388.009.
         Sec. 388.002.  LAND BANK PROGRAM. (a) The governing body of
  a county may adopt a land bank program in which the officer charged
  with selling real property ordered sold pursuant to foreclosure of
  a tax lien may sell certain eligible real property by private sale
  for purposes of affordable housing development as provided by this
  chapter.
         (b)  The governing body of a county that adopts a land bank
  program shall establish or approve a land bank for the purpose of
  acquiring, holding, and transferring unimproved real property
  under this chapter.
         (c)  A land bank program established under this chapter may
  not operate in a municipality that has adopted an urban land bank
  program under Chapter 373A, 379C, 379D, or 379E.
         Sec. 388.003.  QUALIFIED PARTICIPATING DEVELOPER.  To
  qualify to participate in a land bank 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 county for
  the land bank property; and
               (3)  meet any other requirements adopted by the county
  in the land bank plan.
         Sec. 388.004.   LAND BANK PLAN. (a) A county that adopts a
  land bank program shall operate the program in conformance with a
  land bank plan.
         (b)  The governing body of a county that adopts a land bank
  program shall adopt a plan annually. The plan may be amended from
  time to time.
         (c)  In developing the plan, the county shall consider any
  other housing plans adopted by the county, including any fair
  housing plans and policies adopted or agreed to by the county.
         (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 388.009;
               (2)  a list of the parcels of real property that may
  become eligible for sale to the land bank during the next year;
               (3)  the county's plan for affordable housing
  development on those parcels of real property; and
               (4)  the sources and amounts of money anticipated to be
  available from the county for subsidies for development of
  affordable housing in the county, including any money specifically
  available for housing developed under the program, as approved by
  the governing body of the county at the time the plan is adopted.
         Sec. 388.005.  PUBLIC HEARING ON PROPOSED PLAN. (a) Before
  adopting a plan, a county shall hold a public hearing on the
  proposed plan.
         (b)  The county clerk or the county clerk's designee shall
  provide notice of the hearing to all community housing development
  organizations and to neighborhood associations identified by the
  county as serving the neighborhoods in which properties anticipated
  to be available for sale to the land bank under this chapter are
  located.
         (c)  The county clerk or the county clerk's designee 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. 388.006.  PRIVATE SALE TO LAND BANK. (a)
  Notwithstanding any other law and except as provided by Subsection
  (f), 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)  the county has executed with the other taxing
  units that are parties to the tax suit 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)  A sale of property for use in connection with the
  program is a sale for a public purpose.
         (c)  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.
         (d)  For any sale of property under this chapter, 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.
         (e)  After receipt of the notice required by Subsection (d)
  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 chapter.
         (f)  If the officer charged with the sale receives a written
  request as provided by Subsection (e), the officer shall sell the
  property as otherwise provided in Section 34.01, Tax Code.
         (g)  The owner of the property subject to sale may not
  receive any proceeds of a sale under this chapter. However, the
  owner does not have any personal liability for a deficiency of the
  judgment as a result of a sale under this chapter.
         (h)  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.
         (i)  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. 388.007.  SUBSEQUENT RESALE BY LAND BANK. (a) Each
  subsequent resale by a land bank of property acquired by the land
  bank under this chapter 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 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 county 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 county.
         (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. 388.008.  RESTRICTIONS ON OCCUPANCY AND USE OF
  PROPERTY. (a) The land bank shall impose deed restrictions on
  property sold to qualified participating developers requiring the
  development and subsequent sale or rental of the property to low
  income households.
         (b)  At least 25 percent of the land bank properties sold
  during any given 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 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 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 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 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 county on a
  reporting form provided by the county. 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).
         (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 shall renew automatically.
         (f)  The land bank or the governing body of the county may
  modify or add to the deed restrictions imposed under this section.
  Any modifications or additions made by the governing body of the
  county must be adopted by the county as part of its plan and must
  comply with the restrictions set forth in Subsections (b), (c), and
  (d).
         Sec. 388.009.  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 county, 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 a property for sale to
  qualified organizations.
         (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 county 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
  county under Subsection (d), the interlocal agreement executed
  under Section 388.006(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 county shall establish the amount of
  additional time, 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 county 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, 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 388.007(e).
         Sec. 388.010.  OPEN RECORDS AND MEETINGS. The land bank
  shall comply with the requirements of Chapters 551 and 552,
  Government Code.
         Sec. 388.011.  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 county not later than
  the 90th day after the close of the 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 county.
         (c)  For purposes of evaluating the effectiveness of the
  program, the land bank shall submit an annual performance report to
  the county not later than November 1 of each year in which the land
  bank acquires or sells property under this chapter.  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 fiscal year;
               (2)  for each property acquired by the land bank during
  the preceding 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 foreclosure;
                     (E)  the amount of taxes and other costs owed at
  the time of the foreclosure; and
                     (F)  the assessed value of the property on the tax
  roll at the time of the foreclosure;
               (3)  for each property sold by the land bank during the
  preceding 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
  provided by the county to facilitate the sale or rental of the
  property to a household within the targeted income levels;
               (4)  for each property sold by a qualified
  participating developer during the preceding 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 the taxing units who were parties to the judgment of
  foreclosure and shall provide notice of the availability of the
  performance report for review to the organizations and neighborhood
  associations identified by the county as serving the neighborhoods
  in which properties sold to the land bank under this chapter are
  located.
         (f)  The land bank and the county 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 Chapter 388, Local 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, 2019.
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