Bill Text: TX SB596 | 2021-2022 | 87th Legislature | Introduced
Bill Title: Relating to the adoption of a land bank program by the Texas State Affordable Housing Corporation.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2021-03-11 - Referred to Vet Affairs & Border Security [SB596 Detail]
Download: Texas-2021-SB596-Introduced.html
87R7119 JAM-D | ||
By: Gutierrez | S.B. No. 596 |
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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), [ |
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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. |