78R8509 KEG-F
By: Corte H.B. No. 2396
A BILL TO BE ENTITLED
AN ACT
relating to the administration of and insurance requirements for
certain Veterans' Land Board programs.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 161.212(a), (b), and (c), Natural
Resources Code, are amended to read as follows:
(a) Before purchasing land under the provisions of this
chapter, the board shall have an appraisal [appraisement] of the
property made to determine its value.
(b) A person making an appraisal on behalf of [An appraiser
representing] the board shall be licensed or certified as an
appraiser by the State of Texas [reasonably qualified to give
competent appraisals of land].
(c) The appraiser shall make a written report to the board
in the form and manner required by the board. [affidavit form, duly
sworn to before a notary public or other official authorized to
administer oaths, and showing:
[(1) the appraised value of the land;
[(2) the name and address of any person contacted
relative to the valuation of the land;
[(3) that the appraiser has examined the records of
the county clerk's office relative to the amount paid by the vendor
for the land;
[(4) that he has checked past sales of adjacent land to
aid in determining valuation; and
[(5) that neither the appraiser nor any member of his
family has received any personal benefits from the transaction and
does not expect to receive any future personal benefits from the
transaction.]
SECTION 2. Section 161.214, Natural Resources Code, is
amended to read as follows:
Sec. 161.214. TITLE. (a) Before making payment for land,
the board shall have the title of the property sought to be
purchased examined and may require for this purpose a title
insurance policy or appropriate examination of title [an abstract
of title or policy of title insurance]. The board may submit the
title to the attorney general for examination and opinion.
(b) The board may purchase land that has [is subject to
outstanding mineral leases or that has all or part of the] mineral
interests outstanding or that is subject to title exceptions
acceptable to the board[, but the title must otherwise be
marketable and good].
SECTION 3. Section 161.227, Natural Resources Code, is
amended to read as follows:
Sec. 161.227. LEASE OF LAND. (a) No land purchased under
this chapter may be leased by the purchaser for a term of more than
10 years except as follows:
(1) leases for oil, gas, and other minerals may be for
a term of not more than 10 years, and as long thereafter as such oil,
gas, and other minerals are produced from the land in commercial
quantities; [and]
(2) leases for coal and lignite may be for a term of
not more than 40 years, and as long thereafter as such coal and
lignite are produced from the land in commercial quantities; and
(3) leases, whether referred to as leases, licenses,
or easements, for microwave, radio, or other communication towers,
may be for a term of not more than 50 years.
(b) No lease may contain a provision for option or renewal
of the lease or re-lease of the property for any term which would
cause the entire fixed term of such lease or leases to exceed the
applicable maximum fixed term set forth in Subsection (a)(1), [or]
(2), or (3) above, and the taking of any such option, renewal, or
re-lease agreement in a separate instrument to take effect in the
future is prohibited. A lease or instrument that contains an
option, renewal, or re-lease agreement in violation of this section
is expressly declared to be void.
SECTION 4. Section 161.281(c), Natural Resources Code, is
amended to read as follows:
(c) In order to respond to market conditions, the board may
from time to time by rule set the minimum acreage that a veteran may
purchase. However, the board may not set the minimum acreage at
less than one acre [five acres].
SECTION 5. Section 161.283(b), Natural Resources Code, is
amended to read as follows:
(b) The board shall pay not more than $60,000 [$40,000] for
the property, but may pay more if the veteran pays to the board or
the board's designee in cash, in accordance with its rules, that
portion of the purchase price in excess of the amount that the board
agrees to pay. The amount shall be paid not later than the date on
which the board acquires title to the property.
SECTION 6. Section 161.288, Natural Resources Code, is
amended to read as follows:
Sec. 161.288. REFUND. If the title to the land is not
approved and accepted by the board, any amount paid to the board or
the board's designee in excess of the amount that the board agreed
to pay for the selected land shall be refunded to the veteran
together with any other down payment remitted to the board.
SECTION 7. Section 161.315, Natural Resources Code, is
amended to read as follows:
Sec. 161.315. NOTICE TO COUNTY CLERK. Notice of the board's
action in forfeiting the original contract shall be mailed to the
county clerk of the county in which the land is located and the
clerk shall:
(1) enter a notation of the forfeiture on the margin of
the page or pages containing the record of the original contract; or
(2) record the notice of forfeiture.
SECTION 8. Section 161.317, Natural Resources Code, is
amended to read as follows:
Sec. 161.317. REINSTATEMENT OF PURCHASE. (a) If a sale is
forfeited and the title to the land revested in the fund, the
original purchaser or the original purchaser's [his] vendee is
entitled to reinstate the [his] purchase contract at any time
before the date on which the board meets and orders the land to be
advertised for resale or for lease for mineral development but not
after that time. If a contract is forfeited more than two times,
the board may require, as a condition of reinstatement, that the
purchaser or the purchaser's vendee pay the account in full.
(b) A person who exercises a right of reinstatement shall:
(1) pay all delinquent installments, penalties, and
costs incident to the reinstatement; and
(2) fulfill any other requirements [as] prescribed by
the board.
SECTION 9. Section 161.320, Natural Resources Code, is
amended to read as follows:
Sec. 161.320. LATE PAYMENTS; DEFAULT INTEREST RATE [ON
DELINQUENT PRINCIPAL AND INTEREST]. (a) The board may impose
charges for late payments.
(b) In addition to charging for late payments under
Subsection (a), the board may set and impose a default rate of
interest on:
(1) the past due amounts; or
(2) the entire unpaid balance. [Principal and interest
that become delinquent shall bear interest from the date the
principal and interest become delinquent until paid at a rate to be
determined by the board.]
SECTION 10. Section 161.323, Natural Resources Code, is
amended to read as follows:
Sec. 161.323. LIABILITY. The liability of the original
veteran purchaser and any subsequent assignee or assignees of the
veteran are joint and several, but the original veteran purchaser
is primarily liable for payment of the money under the original
contract of sale and purchase. The board may release an assignor
from liability under this section if at least three years have
passed since the approved assignment.
SECTION 11. Section 161.361, Natural Resources Code, is
amended to read as follows:
Sec. 161.361. DEFINITION [DEFINITIONS]. In this
subchapter, "person[:
[(1) "Persons] purchasing land under the program"
means a person or a person's [his] successor or assign who buys land
from the board under a contract of sale and purchase regardless of
whether the land is sold under Sections 161.175 and 161.231 through
161.234 or Section 161.319 [of this code] or Subchapter G, or who
buys land using a mortgage loan under Subchapter K [of this
chapter].
[(2) "Person in the group" means a person purchasing
land under the program who has elected to accept the offer of the
insurance coverage provided in this subchapter.
[(3) "The indebtedness due to the board" means the
principal of and interest on the indebtedness necessary to pay in
full the obligation set forth in any contract of sale and purchase
under which a person in the group is purchasing land from the board,
exclusive of delinquent principal, interest, and penalties.]
SECTION 12. Sections 161.362(a) and (b), Natural Resources
Code, are amended to read as follows:
(a) Persons purchasing land under the program [Each veteran
purchaser] shall carry insurance on the improvements on the
property in an amount [under contract of purchase] that the board
considers necessary. Failure [, and failure] to do so will subject
the contract to forfeiture or the mortgage to foreclosure [under
Subchapter H of this chapter].
(b) The board may promulgate rules [it considers] necessary
to enforce this subchapter [section].
SECTION 13. Section 161.363, Natural Resources Code, is
amended to read as follows:
Sec. 161.363. [MASTER] INSURANCE CONTRACT. The board may
enter into a [master] contract or agreement with one or more [life]
insurance companies authorized to do business in this state to
provide [group] life, disability, or other insurance coverage to
persons purchasing land under the program, if it is in the best
interest of [cancelling on death the indebtedness due to the board
of persons purchasing land under] the program.
SECTION 14. Section 161.366, Natural Resources Code, is
amended to read as follows:
Sec. 161.366. INSURANCE NOT MANDATORY. It is not mandatory
that a person purchasing land under the program accept the offer of
the insurance coverage, and refusal by the person to accept the
offer of the coverage shall not be a ground for the board to decline
to enter into a contract of sale and purchase or a mortgage with the
person.
SECTION 15. Section 161.368, Natural Resources Code, is
amended to read as follows:
Sec. 161.368. COLLECTION OF PREMIUM. The board may collect
or provide for collection of the insurance premium [for insurance
coverage] in a reasonable manner.
SECTION 16. Section 161.370, Natural Resources Code, is
amended to read as follows:
Sec. 161.370. CANCELLATION BY INSURER. The [master]
contract or agreement shall not prohibit cancellation by the
insurer of the entire contract on reasonable notice to the board but
shall prohibit cancellation of individual coverage except as
provided in this subchapter.
SECTION 17. The heading to Section 161.371, Natural
Resources Code, is amended to read as follows:
Sec. 161.371. TERMINATION OF INDIVIDUAL COVERAGE
[INSURANCE].
SECTION 18. Section 161.371(a), Natural Resources Code, is
amended to read as follows:
(a) Individual [The] insurance coverage may [shall] be
terminated for any person on terms agreed to by the insurer and the
board [in the group on:
[(1) the satisfaction of the indebtedness due the
board;
[(2) the board's approval of a transfer of interest in
the land being purchased from the board; or
[(3) failure to make timely payment of the premium to
be paid for the coverage].
SECTION 19. Section 161.503(c), Natural Resources Code, is
amended to read as follows:
(c) The board shall adopt credit, underwriting, and
appraisal standards that protect the best interest of the program
and limit the exposure of the fund to any losses. [obtain insurance:
[(1) covering at least 50 percent of all losses
anticipated in connection with payment defaults on loans secured by
first or second mortgages, based on the advice of one or more
qualified consultants to the board as to potential losses that may
be reasonably expected on the loans as determined by analysis that
includes actual experience in the residential mortgage lending
industry on similar types of mortgage loans; or
[(2) that insures repayment of at least 50 percent of
the outstanding principal amount of all loans made under this
subchapter if the loans are not repaid by the recipients.]
SECTION 20. Section 161.509, Natural Resources Code, is
amended to read as follows:
Sec. 161.509. LATE PAYMENTS; DEFAULT INTEREST RATE [ON
DELINQUENT PRINCIPAL AND INTEREST]. (a) The board may impose
charges for late payments.
(b) In addition to charging for late payments under
Subsection (a), the board may set and impose a default rate of
interest on:
(1) the past due amounts; or
(2) the entire unpaid balance. [Principal and interest
that become delinquent bear interest at a rate determined by the
board.]
SECTION 21. Sections 161.212(d), 161.362(c), 161.364,
161.365, 161.367, 161.369, and 161.371(b) and (c), Natural
Resources Code, are repealed.
SECTION 22. This Act takes effect September 1, 2003, and
applies only to an insurance contract or agreement that is
delivered or issued for delivery on or after that date. A contract
or agreement that is delivered or issued for delivery before
September 1, 2003, is governed by the law as it existed immediately
before the effective date of this Act, and that law is continued in
effect for that purpose.