By: Rodriguez, et al. (Senate Sponsor - Barrientos) H.B. No. 525
(In the Senate - Received from the House May 2, 2005;
May 3, 2005, read first time and referred to Committee on
Intergovernmental Relations; May 12, 2005, reported favorably by
the following vote: Yeas 5, Nays 0; May 12, 2005, sent to printer.)
A BILL TO BE ENTITLED
AN ACT
relating to the creation of homestead preservation districts,
reinvestment zones, and other programs to increase home ownership
and provide affordable housing.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle A, Title 12, Local Government Code, is
amended by adding Chapter 373A to read as follows:
CHAPTER 373A. HOMESTEAD PRESERVATION DISTRICTS AND REINVESTMENT
ZONES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 373A.001. PURPOSE. The purpose of this chapter is to:
(1) promote the ability of municipalities to increase
home ownership, provide affordable housing, and prevent the
involuntary loss of homesteads by existing low-income and
moderate-income homeowners living in disadvantaged neighborhoods;
(2) protect a municipality's interest in improving
economic and social conditions within disadvantaged communities by
enhancing the viability of home ownership among low-income and
moderate-income residents in areas experiencing economic
pressures; and
(3) provide municipalities with a means to expand and
protect the homestead interests of low-income and moderate-income
families.
Sec. 373A.002. DEFINITIONS. In this chapter:
(1) "Central business district" means a compact and
contiguous geographical area of a municipality in which at least 90
percent of the land is used or zoned for commercial purposes and
that has historically been the primary location in the municipality
where business has been transacted.
(2) "Community housing development organization" has
the meaning assigned by 42 U.S.C. Section 12704.
(3) "District" means a homestead preservation
district designated under Subchapter B.
(4) "Taxing unit" has the meaning assigned by Section
1.04, Tax Code.
(5) "Trust" means a homestead land trust created or
designated under Subchapter C.
(6) "Zone" means a homestead preservation
reinvestment zone created under Subchapter D.
Sec. 373A.003. APPLICABILITY OF CHAPTER. This chapter
applies only to a municipality with a population of more than
650,000 that is located in a uniform state service region with fewer
than 550,000 occupied housing units as determined by the most
recent United States decennial census.
[Sections 373A.004-373A.050 reserved for expansion]
SUBCHAPTER B. GENERAL POWERS AND DUTIES
Sec. 373A.051. MUNICIPAL POWER TO DESIGNATE DISTRICT.
(a) To promote and expand the ownership of affordable housing and
to prevent the involuntary loss of homesteads by existing
homeowners living in the area, the governing body of a municipality
by ordinance may designate as a homestead preservation district an
area in the municipality that is eligible under Section 373A.052.
(b) The ordinance must describe the boundaries of the
district and designate the powers that apply to the district under
this chapter.
Sec. 373A.052. ELIGIBILITY FOR DESIGNATION. (a) To be
designated as a district under this subchapter, an area must be
composed of census tracts forming a spatially compact area
contiguous to a central business district and with:
(1) fewer than 25,000 residents;
(2) fewer than 8,000 households;
(3) a number of owner-occupied households that does
not exceed 50 percent of the total households in the area;
(4) housing stock at least 55 percent of which was
built at least 45 years ago;
(5) an unemployment rate that is greater than 10
percent;
(6) an overall poverty rate that is at least two times
the poverty rate for the entire municipality; and
(7) in each census tract within the area, a median
family income that is less than 60 percent of the median family
income for the entire municipality.
(b) An area that is designated as a district under this
subchapter may retain its designation as a district regardless of
whether the area continues to meet the eligibility criteria
provided by this section, except that an area that does not elect to
retain its designation as permitted by this subsection must meet
all eligibility criteria to be considered for subsequent
redesignation as a district.
Sec. 373A.053. INVENTORY OF PROPERTIES. (a) The
municipality and any county containing all or the greatest portion
of the district shall each prepare on an annual basis an inventory
of all land owned by the municipality or county, as appropriate, in
the district and the current and projected uses of the land.
(b) The municipality and the county shall prepare on an
annual basis a list of parcels of land for which delinquent taxes
have been owed for a period of two or more years.
(c) The municipality and the county shall make the
inventories prepared under Subsection (a) available to the public
on request.
Sec. 373A.054. ADDITIONAL METHODS OF INCREASING THE SUPPLY
OF AFFORDABLE HOUSING. A municipality that designates a district
under Section 373A.051 may provide tax-exempt bond financing, offer
density bonuses, or provide other incentives to increase the supply
of affordable housing and maintain the affordability of existing
housing for low-income and moderate-income families.
[Sections 373A.055-373A.100 reserved for expansion]
SUBCHAPTER C. HOMESTEAD LAND TRUST
Sec. 373A.101. CREATION. The governing body of a
municipality by ordinance may create or designate under this
subchapter one or more homestead land trusts, including a land
trust operated by a community housing development organization
certified by the municipality, to operate in an area that includes a
district designated by the municipality.
Sec. 373A.102. NATURE OF TRUST. A trust must be a nonprofit
organization that is:
(1) created to acquire and hold land for the benefit of
developing and preserving long-term affordable housing in the
district; and
(2) exempt from federal income taxation under Section
501(a), Internal Revenue Code of 1986, by being certified as an
exempt organization under Section 501(c)(3), Internal Revenue Code
of 1986.
Sec. 373A.103. PURPOSE OF TRUST. The purpose of a trust is
to:
(1) control local land use and reduce absentee
ownership;
(2) provide affordable housing for low-income and
moderate-income residents in the community;
(3) promote resident ownership and control of housing;
(4) keep housing affordable for future residents; and
(5) capture the value of public investment for
long-term community benefit.
Sec. 373A.104. BOARD OF DIRECTORS. (a) A trust shall be
governed by a board of directors.
(b) The governing body of the municipality shall appoint the
directors of a trust created by the municipality.
(c) The initial board of a trust created by the municipality
must be composed of four members of the governing body of the
municipality and three residents of the district.
(d) If a trust holds land that provides at least 100 housing
units, at least one-third of the board members must reside in
housing units located on land held by the trust.
Sec. 373A.105. TITLE TO LAND. (a) A trust may retain title
to land it acquires and may lease housing units located on the land
or sell housing units located on the land under long-term ground
leases, as provided by Section 373A.106.
(b) A trust may not transfer title to any land owned by the
trust without obtaining:
(1) a unanimous vote of the board members of the trust;
(2) approval by the municipality and county in which
the land is located, as provided through a resolution of the
governing bodies of the municipality and county adopted with the
affirmative vote of four-fifths of the members following a public
hearing; and
(3) the provision by the board of the trust of advance
notice to all persons who own or rent housing units located on land
owned by the trust.
Sec. 373A.106. SALE OR LEASE OF HOUSING UNITS. (a) A trust
shall sell or lease all housing units only to families with a yearly
income at the time of purchase or lease of the housing unit at or
below 70 percent of the area median family income, adjusted for
family size.
(b) At least 40 percent of the housing units sold or leased
by the trust must be sold or leased to families with a yearly income
at the time of purchase or lease at or below 50 percent of the area
median family income, adjusted for family size.
(c) At least 10 percent of the housing units sold or leased
by the trust must be sold or leased to families with a yearly income
at the time of purchase or lease at or below 30 percent of the area
median family income, adjusted for family size.
Sec. 373A.107. TRANSFER FROM GOVERNMENTAL ENTITIES;
FORGIVING OUTSTANDING TAXES. (a) A governmental entity may
transfer land to a trust without competitive bidding.
(b) A taxing unit may forgive outstanding taxes and fees on
property transferred under this section if otherwise allowed by
law.
Sec. 373A.108. TAX EXEMPTIONS. (a) A trust's real
property is exempt from property taxation by this state or a
political subdivision of this state, other than a school district.
(b) Subject to approval by the governing body of the
municipality or county, as appropriate, in which the district is
located, the real property of any land trust operating in the
district under other law is exempt from property taxation by the
municipality or county if the land trust is exempt from federal
income taxation under Section 501(a), Internal Revenue Code of
1986, by being certified as an exempt organization under Section
501(c)(3), Internal Revenue Code of 1986.
Sec. 373A.109. RELATION TO OTHER LAW. This subchapter does
not preclude the creation of a land trust by a nonprofit
organization, including a community housing development
organization, under other statutory or common law or the operation
of that land trust inside or outside the district.
[Sections 373A.110-373A.150 reserved for expansion]
SUBCHAPTER D. HOMESTEAD PRESERVATION REINVESTMENT ZONE
Sec. 373A.151. NONAPPLICABILITY OF OTHER LAW. Chapter 311,
Tax Code, does not apply to a homestead preservation reinvestment
zone created under this subchapter.
Sec. 373A.152. GENERAL AUTHORITY TO CREATE HOMESTEAD
PRESERVATION REINVESTMENT ZONE. (a) A municipality by ordinance
may create a homestead preservation reinvestment zone as provided
by this section if the municipality finds that the area to be
included in the zone is unproductive, underdeveloped, or blighted
as provided by Section 1-g(b), Article VIII, Texas Constitution.
The governing body of the municipality shall administer the zone.
(b) The boundaries of a zone must be contained entirely
within the boundaries of a district.
(c) Before adopting an ordinance creating a zone, the
governing body of the municipality must prepare a preliminary zone
financing plan. As soon as the plan is completed, a copy of the plan
must be sent to the governing body of the county that will contain
all or the greatest portion of the zone.
(d) Before adopting an ordinance creating a zone, the
municipality must hold a public hearing on the creation of the zone
and its benefits to the municipality and to property in the proposed
zone. At the hearing an interested person may speak for or against
the creation of the zone, its boundaries, or the concept of tax
increment financing. Not later than the seventh day before the date
of the hearing, notice of the hearing must be published in a
newspaper having general circulation in the municipality.
(e) Not later than the 60th day before the date of the public
hearing required by Subsection (d), the governing body of the
municipality must notify in writing the governing body of the
county described by Subsection (c) that it intends to establish the
zone. The notice must contain a description of the proposed
boundaries of the zone, the tentative plans for the development or
redevelopment of the zone, and an estimate of the general impact of
the proposed zone on property values and tax revenues. The notice
may be given later than the 60th day before the date of the public
hearing if the governing body of the county agrees to waive the
requirement.
(f) On review of the information provided under Subsection
(e), the governing body of the county shall notify the municipality
regarding whether the county intends to participate in the zone. If
the governing body of the county decides to participate in the zone,
the governing body of the county on an annual basis may reconsider
its decision to participate.
Sec. 373A.153. DETERMINATION OF AMOUNT OF TAX INCREMENT.
(a) The amount of a taxing unit's tax increment for a year is the
amount of property taxes imposed by the unit for that year on the
captured appraised value of real property taxable by the unit and
located in a zone.
(b) The captured appraised value of real property taxable by
a taxing unit for a year is the total appraised value of all real
property taxable by the unit and located in a zone for that year
less the tax increment base of the unit.
(c) The tax increment base of a taxing unit is the total
appraised value of all real property taxable by the unit and located
in a zone for the year in which the zone was created under this
subchapter.
Sec. 373A.154. TAX INCREMENT FUND. The governing body of
the municipality shall establish a tax increment fund for the zone.
Sec. 373A.155. COLLECTION AND DEPOSIT OF TAX INCREMENTS.
(a) Each taxing unit that taxes real property located in a zone
shall provide for the collection of its taxes in the zone as for any
other property taxed by the unit.
(b) Except as provided by Subsection (d), each taxing unit
shall pay into the tax increment fund for the zone an amount equal
to the tax increment produced by the unit.
(c) A taxing unit shall make a payment required by
Subsection (b) not later than the 90th day after the delinquency
date for the unit's property taxes. A delinquent payment incurs a
penalty of five percent of the amount delinquent and accrues
interest at an annual rate of 10 percent.
(d) A taxing unit other than the municipality is not
required to pay into the tax increment fund any of its tax increment
produced from property located in a zone unless the taxing unit
enters into an agreement to do so with the governing body of the
municipality that created the zone. A taxing unit may enter into an
agreement under this subsection at any time before or after the zone
is created. The agreement may include conditions for payment of
that tax increment into the fund and must specify the portion of the
tax increment to be paid into the fund and the years for which that
tax increment is to be paid into the fund. The agreement and the
conditions in the agreement are binding on the taxing unit and the
municipality.
Sec. 373A.156. ANNUAL PLAN. (a) The governing body of the
municipality shall develop an annual plan that details the amount
of money in the tax increment fund and the proposed uses for the
money.
(b) The municipality must hold a public hearing on the
annual plan.
Sec. 373A.157. ADMINISTRATION AND USE OF TAX INCREMENT
FUND. (a) The tax increment fund is administered by the governing
body of the municipality in accordance with the annual plan
developed by the municipality under Section 373A.156. Revenue from
the tax increment fund must be dedicated as provided by this section
to the development and preservation of affordable housing in the
zone by a community housing development organization certified by
the municipality, a trust created or designated by the
municipality, or another entity as provided by this section.
(b) All revenue from the tax increment fund must be expended
to benefit families that have a yearly income at or below 70 percent
of the area median family income, adjusted for family size.
(c) At least 50 percent of the revenue from the tax
increment fund expended annually must benefit families that have a
yearly income at or below 50 percent of the area median family
income, adjusted for family size.
(d) At least 25 percent of the revenue from the tax
increment fund expended annually must benefit families that have a
yearly income at or below 30 percent of the area median family
income, adjusted for family size.
(e) The municipality must spend at least 80 percent of the
revenue expended annually from the tax increment fund for the
purchase of real property and the construction or rehabilitation of
affordable housing in the zone. The municipality may spend not more
than 10 percent of the revenue expended annually from the tax
increment fund for administration of the zone.
(f) The municipality may provide not more than 10 percent of
the revenue expended annually from the tax increment fund to
designated land banks and community housing development
organizations for the administration of housing-related activities
in the zone.
(g) All housing created or rehabilitated with revenue from
the tax increment fund must have at least a 30-year affordability
period.
Sec. 373A.158. ANNUAL REPORT. (a) On or before the 90th
day following the end of the fiscal year of the municipality, the
governing body of the municipality shall submit to the chief
executive officer of each taxing unit that imposes property taxes
on real property in a zone created by the municipality under this
subchapter a detailed report on the status of the zone.
(b) The report must include:
(1) the amount and source of revenue in the tax
increment fund established for the zone;
(2) the amount and purpose of expenditures from the
fund and the income levels of the persons who benefited from the
expenditures;
(3) the number of parcels of property purchased,
housing units rehabilitated, and housing units constructed and the
income levels of the persons residing in the housing units;
(4) the tax increment base and current captured
appraised value retained by the zone;
(5) the total amount of tax increments received; and
(6) any additional information necessary to
demonstrate strict compliance with the provisions of this
subchapter.
(c) The municipality shall send a copy of a report made
under this section to:
(1) the attorney general;
(2) the comptroller;
(3) the Texas Department of Housing and Community
Affairs; and
(4) a participating county, if any.
(d) The municipality shall make the report available to the
public on the municipality's official website.
[Sections 373A.159-373A.200 reserved for expansion]
SUBCHAPTER E. HOMESTEAD LAND BANK PROGRAM
Sec. 373A.201. SHORT TITLE. This subchapter may be cited as
the Homestead Land Bank Program Act.
Sec. 373A.202. APPLICABILITY. This subchapter applies only
to a municipality that has designated a district under Section
373A.051.
Sec. 373A.203. 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;
(B) is certified by the municipality as a
community housing development organization;
(C) is governed exclusively by a board of at
least five members unrelated by blood, marriage, or business
interest; and
(D) is not controlled, directly or indirectly, by
any other party through any contract, arrangement, understanding,
relationship, voting power, affiliation, trust, proxy, power of
attorney, pooling arrangement, security, warrant, partnership,
option, discretionary account, joint venture, interlocking
directors, or other device, as evidenced by a notarized affidavit
signed by each board member.
(3) "Homestead land bank plan" or "plan" means a plan
adopted by the governing body of a municipality as provided by
Section 373A.206.
(4) "Homestead land bank program" or "program" means a
program adopted under Section 373A.204.
(5) "Land bank" means an entity established or
approved by the governing body of a municipality for the purpose of
acquiring, holding, and transferring unimproved real property
under this subchapter.
(6) "Low income household" means a household with a
gross income of not greater than 80 percent of the area median
family income, adjusted for household size, for the metropolitan
statistical area in which the municipality is located, 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 373A.205 and
includes a qualified organization under Section 373A.211.
Sec. 373A.204. HOMESTEAD LAND BANK PROGRAM. (a) The
governing body of a municipality may adopt a homestead 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 subchapter.
(b) The governing body of a municipality that adopts a
homestead land bank program shall establish or approve a land bank
for the purpose of acquiring, holding, and transferring unimproved
real property under this subchapter.
Sec. 373A.205. QUALIFIED PARTICIPATING DEVELOPER. To
qualify to participate in a homestead land bank program, a
developer must:
(1) have developed three or more housing units within
the 10-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
municipality for the land bank property; and
(3) meet any other requirements adopted by the
municipality in the homestead land bank plan.
Sec. 373A.206. HOMESTEAD LAND BANK PLAN. (a) A
municipality that adopts a homestead land bank program shall
operate the program in conformance with a homestead land bank plan.
(b) The governing body of a municipality that adopts a
homestead land bank program shall adopt a plan annually. The plan
may be amended from time to time.
(c) In developing the plan, the municipality shall consider
other housing plans adopted by the municipality, including the
comprehensive plan submitted to the United States Department of
Housing and Urban Development and all fair housing plans and
policies adopted or agreed to by the municipality.
(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 373A.211;
(2) a list of the parcels of real property that may
become eligible for sale to the land bank during the upcoming year;
(3) the municipality's plan for affordable housing
development on those parcels of real property; and
(4) the sources and amounts of funding anticipated to
be available from the municipality for subsidies for development of
affordable housing in the municipality, including any money
specifically available for housing developed under the program, as
approved by the governing body of the municipality at the time the
plan is adopted.
Sec. 373A.207. PUBLIC HEARING ON PROPOSED PLAN.
(a) Before adopting a plan, a municipality shall hold a public
hearing on the proposed plan.
(b) The city manager or the city manager's designee shall
provide notice of the hearing to all community housing development
organizations and to neighborhood associations identified by the
municipality as serving the neighborhoods in which properties
anticipated to be available for sale to the land bank under this
subchapter are located.
(c) The city manager or the city manager'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. 373A.208. 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 appraised by
the local appraisal district and 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 municipality 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 subchapter, each
person who was a defendant to the judgment, or that person's
attorney, shall be given, not later than the 60th 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 subchapter.
(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 subchapter. However, the
owner does not have any personal liability for a deficiency of the
judgment as a result of a sale under this subchapter.
(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.
(j) Property sold to and held by the land bank for
subsequent resale is eligible for an exemption from ad valorem
taxation for a period not to exceed three years from the date of
acquisition. Property is eligible for an exemption under this
subsection only during the period the property is held by the land
bank.
Sec. 373A.209. SUBSEQUENT RESALE BY LAND BANK. (a) Each
subsequent resale of property acquired by a land bank under this
subchapter must comply with the conditions of this section.
(b) The land bank must sell a property to a qualified
participating developer within the three-year period following the
date of acquisition for the purpose of construction of affordable
housing for sale or rent to low income households. 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.
(c) Unless the municipality 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 municipality.
(d) 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
later of the date of the conveyance of the property from the land
bank to the qualified participating developer or the expiration of
the period specified by the municipality under Section 373A.211(d),
the property will revert to the land bank for subsequent resale to
another qualified participating developer or conveyance to the
taxing units who were parties to the judgment for disposition as
otherwise allowed under the law.
Sec. 373A.210. 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 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 gross household incomes not
greater than 60 percent of the area median family income, adjusted
for household size, for the metropolitan statistical area in which
the municipality is located, 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 metropolitan statistical area
in which the municipality is located, 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 metropolitan statistical area
in which the municipality is located, 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 metropolitan statistical area
in which the municipality is located, 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 municipality
on a reporting form provided by the municipality. 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 municipality
may modify or add to the deed restrictions imposed under this
section. Any modifications or additions made by the governing body
of the municipality must be adopted by the municipality as part of
its plan and must comply with the restrictions set forth in
Subsections (b), (c), and (d).
Sec. 373A.211. 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, a
portion of the property that the land bank is offering for sale;
(2) has developed or rehabilitated 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 10-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 municipality 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 90 days in duration and begin at least three months but not
more than 26 months following 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
municipality under Subsection (d), the interlocal agreement
executed under Section 373A.208(a)(4) may 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 municipality 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 municipality 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 373A.209(d).
Sec. 373A.212. OPEN RECORDS AND MEETINGS. The land bank
shall comply with the requirements of Chapters 551 and 552,
Government Code.
Sec. 373A.213. 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 municipality 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 municipality.
(c) For purposes of evaluating the effectiveness of the
program, the land bank shall submit an annual performance report to
the municipality 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 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 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
developer;
(D) the purchase price paid by the developer;
(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 municipality 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 complete 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 municipality as serving the
neighborhoods in which properties sold to the land bank under this
subchapter are located.
(f) The land bank and the municipality shall maintain copies
of the performance report available for public review.
SECTION 2. This Act takes effect September 1, 2005.
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