Amend CSHB 1742 by adding the following Sections to read as 
follows and renumbering the subsequent Sections appropriately:
	SECTION ___.  Subsection (a), Section 379D.010, Local 
Government Code, is amended to read as follows:
	(a)  The land bank shall impose deed restrictions with 
appropriate terms and conditions on property sold to qualified 
participating developers and eligible adjacent property owners 
that require:
		(1)  the development and sale or rental of the property 
to low income households, if the property is sold to a qualified 
participating developer; or
		(2)  the use of the property to be consistent and 
compatible with the residential character of the neighborhood and 
any applicable standards for use adopted by the land bank, if the 
property is sold to an eligible adjacent property owner.
	SECTION ____.  Section 379D.011, Local Government Code, is 
amended to read as follows:
	Sec. 379D.011.  RIGHT OF FIRST REFUSAL IN ELIGIBLE ADJACENT 
PROPERTY OWNERS; CONDITIONS OF PURCHASE.  (a)  Property acquired by 
the land bank shall be offered for sale, at fair market value as 
determined by the appraisal district in which the property is 
located, to eligible adjacent property owners under a right of 
first refusal on terms and conditions developed by the land bank 
that are consistent with this chapter.
	(b)  To be eligible to exercise a right of first refusal 
under this section, an owner of property adjacent to property 
acquired by the land bank:
		(1)  must have owned and continuously occupied that 
property for at least the five preceding years as that person's 
principal residence; and
		(2)  must meet any eligibility requirements adopted by 
the land bank.
	(c)  An adjacent property owner who purchases property under 
this section may not lease, sell, or otherwise transfer the 
property to another party before the 10th anniversary of the date 
the adjacent property owner purchases the property.  This 
prohibition does not apply to a transfer of property, as allowed by 
policies adopted by the land bank:
		(1)  to a family member of the adjacent property owner; 
or           
		(2)  in the case of the death of the adjacent property 
owner.        
	SECTION ____.  Chapter 379D, Local Government Code, is 
amended by adding Section 379D.015 to read as follows:
	Sec. 379D.015.  EFFECT OF SALE TO LAND BANK OR SUBSEQUENT 
PURCHASERS OR LENDERS FOR VALUE; LIMITATION ON CERTAIN CAUSES OF 
ACTION.  After the first anniversary of a sale of property to a land 
bank under this chapter:
		(1)  a third party, other than a qualified 
participating developer or eligible adjacent property owner who 
purchased the property from the land bank under this chapter or a 
person with a cause of action based on a right, title, interest, or 
other claim described by Subdivision (2)(A)(ii), may not bring a 
cause of action to set aside or otherwise challenge the sale of the 
property to the land bank, including a cause of action that is 
brought against:
			(A)  a qualified participating developer or 
eligible adjacent property owner who purchases property from the 
land bank under Section 379D.009 or 379D.011, as applicable; or
			(B)  any other subsequent purchaser for value or 
lender for value; and
		(2)  a qualified participating developer or eligible 
adjacent property owner who purchases property from a land bank 
under this chapter or any other subsequent purchaser for value or, 
if applicable, a lender for a developer, owner, or purchaser 
described by this subdivision or any other subsequent lender for 
value:
			(A)  has, with the following characteristics, a 
full title to the property:

				(i)  except as provided by Subparagraph 
(ii), the title is not subject to any right, title, interest, or 
other claim a person acquired in the property before or after the 
sale of the property to the land bank, including a right of first 
refusal, right of second refusal, and any other right, title, 
interest, or other claim provided by this chapter, other than the 
right of reverter provided by Section 379D.009(d); and
				(ii)  the title is subject only to:                                  
					(a)  the recorded restrictive 
covenants, liens, and valid easements of record described by 
Section 34.01(n), Tax Code;
					(b)  any rights of redemption 
applicable to the property;         
					(c)  any cause of action to impeach the 
property deed based on a claim of fraud;
					(d)  the right of reverter provided by 
Section 379D.009(d) and the recorded deed restrictions described by 
Section 379D.010; and
					(e)  any right, title, interest, or 
other claim with respect to the property that arose after the sale 
of the property to the land bank under a law other than this 
chapter; and
			(B)  may conclusively presume that:                                   
				(i)  the sale of the property to the land 
bank under this chapter was valid; and
				(ii)  a mortgage on or a subsequent sale of 
the property complies with this chapter and is subject only to a 
right, title, interest, or other claim provided by Paragraph 
(A)(ii).
	SECTION ____.  Section 379D.015, Local Government Code, as 
added by this Act, applies only to a cause of action that accrues on 
or after the effective date of this Act and concerns property that 
is first purchased by a land bank under Section 379D.015, Local 
Government Code, on or after the effective date of this Act.