81R4732 ACP-F

By: Giddings H.B. No. 2344

A BILL TO BE ENTITLED

AN ACT

relating to the urban land bank demonstration program in certain municipalities.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 379C.008(a), Local Government Code, is amended to read as follows:

(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 habitable building or buildings or an uninhabitable building or buildings that are occupied or claimed as a residence by an owner or tenant who is legally entitled to occupy the 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; and

(5) the property:

(A) is located in an area that is not zoned for residential housing; and

(B) on development, will be zoned for more than one use that includes residential housing.

SECTION 2. Sections 379C.009(b) and (d), Local Government Code, are amended to read as follows:

(b) The land bank must sell a property to a qualified participating developer within the four-year [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 four [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) 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 three-year [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 qualified participating developer or conveyance to the taxing units who were parties to the judgment for disposition as otherwise allowed under the law.

SECTION 3. Section 379C.010(a), Local Government Code, is amended to read as follows:

(a) The land bank shall impose deed restrictions on property sold to qualified participating developers requiring the development and sale, [or] rental, or lease-purchase of the property to low income households.

SECTION 4. Chapter 379C, Local Government Code, is amended by adding Section 379C.0105 to read as follows:

Sec. 379C.0105. LOT EXCHANGE PERMITTED. (a) Notwithstanding Section 379C.010, the land bank may permit a qualified participating developer to exchange a property purchased from the land bank with any other property purchased by the developer if:

(1) the developer agrees to construct on the property affordable housing for low income households as provided by this chapter; and

(2) the property will be located in:

(A) the planned development incorporating the property originally purchased from the land bank; or

(B) another location as approved by the land bank.

(b) The land bank shall adjust the deed restrictions under Section 379C.010 for each of the properties exchanged by the developer under this section.

SECTION 5. Chapter 379C, Local Government Code, is amended by adding Section 379C.0106 to read as follows:

Sec. 379C.0106. RIGHT OF FIRST REFUSAL FOR PROPERTY DETERMINED TO BE INAPPROPRIATE FOR RESIDENTIAL DEVELOPMENT. (a) In this section, "eligible adjacent property owner" means a person who:

(1) owns property located adjacent to property owned by the land bank;

(2) has owned the adjacent property and continuously occupied that property as a primary residence for the two-year period preceding the date of the sale; and

(3) satisfies eligibility requirements adopted by the land bank.

(b) Notwithstanding any other right of first refusal granted under this chapter, if the land bank determines that a property owned by the land bank is not appropriate for residential development, the land bank first shall offer the property for sale to an eligible adjacent property owner according to terms and conditions developed by the land bank that are consistent with this chapter.

(c) The land bank shall sell the property to an eligible adjacent property owner, at whichever value is lower:

(1) the fair market value for the property as determined by the appraisal district in which the property is located; or

(2) the sales price recorded in the annual plan.

(d) Except as provided by Subsection (e), an adjacent property owner that purchases property under this section may not lease, sell, or transfer that property to another person before the third anniversary of the date the adjacent property owner purchased that property from the land bank.

(e) Subsection (d) does not apply to the transfer of property purchased under this section if the transfer:

(1) is made according to a policy adopted by the land bank; and

(2) is made to a family member of the eligible adjacent property owner or occurs as a result of the death of the eligible adjacent property owner.

SECTION 6. Sections 379C.009(b) and (d), Local Government Code, as amended by this Act, and Section 379C.0105, Local Government Code, as added by this Act, apply to property purchased from a land bank by a qualified participating developer without regard to whether the purchase was made before, on, or after the effective date of this Act.

SECTION 7. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2009.