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A BILL TO BE ENTITLED
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AN ACT
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relating to land bank demonstration programs. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 379C, Local Government Code, is amended |
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by adding Section 379C.015 to read as follows: |
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Sec. 379C.015. PARTICIPATION IN COUNTY LAND BANK PROGRAM. |
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(a) A land bank established or approved by the governing body of a |
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municipality under this chapter may participate in a land bank |
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program established or approved by a county under Chapter 388 if the |
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participation of the municipality in the county land bank program |
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is incorporated into each entity's land bank demonstration plan |
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under Sections 379C.006 and 388.005, as applicable. |
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(b) The authority of a municipally established land bank |
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participating in a program established under Chapter 388 is limited |
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to the powers granted under this chapter. |
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SECTION 2. Subtitle B, Title 12, Local Government Code, is |
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amended by adding Chapter 388 to read as follows: |
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CHAPTER 388. LAND BANK DEMONSTRATION PROGRAM |
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Sec. 388.001. APPLICABILITY. This chapter applies only to |
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a county that: |
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(1) contains a majority of the territory of a |
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home-rule municipality that has a population of 1.18 million or |
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more; and |
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(2) has a total area of less than 1,300 square miles. |
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Sec. 388.002. DEFINITIONS. In this chapter: |
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(1) "Community housing development organization" or |
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"organization" means an organization that: |
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(A) meets the definition of a community housing |
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development organization in 24 C.F.R. Section 92.2; and |
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(B) is certified by the county as a community |
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housing development organization. |
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(2) "Land bank" means an entity established or |
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approved by the governing body of a county for the purpose of |
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acquiring, holding, and transferring unimproved real property |
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under this chapter. |
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(3) "Land bank demonstration plan" or "plan" means a |
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plan adopted by the governing body of a county as provided by |
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Section 388.005. |
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(4) "Land bank demonstration program" or "program" |
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means a program adopted under Section 388.003. |
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(5) "Low income household" means a household with a |
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gross income of not greater than 115 percent of the area median |
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family income, adjusted for household size, for the county, as |
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determined annually by the United States Department of Housing and |
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Urban Development. |
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(6) "Qualified participating developer" means a |
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developer who meets the requirements of Section 388.004 and |
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includes a qualified organization under Section 388.013. |
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Sec. 388.003. LAND BANK DEMONSTRATION PROGRAM. (a) The |
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governing body of a county may adopt a land bank demonstration |
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program in which the officer charged with selling real property |
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ordered sold pursuant to foreclosure of a tax lien may sell certain |
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eligible real property by private sale for purposes of affordable |
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housing development as provided by this chapter. |
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(b) The governing body of a county that adopts a land bank |
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demonstration program shall establish or approve a land bank for |
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the purpose of acquiring, holding, and transferring unimproved real |
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property under this chapter. |
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Sec. 388.004. QUALIFIED PARTICIPATING DEVELOPER. To |
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qualify to participate in a land bank demonstration program, a |
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developer must: |
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(1) have built one or more housing units within the |
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three-year period preceding the submission of a proposal to the |
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land bank seeking to acquire real property from the land bank; |
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(2) have a development plan approved by the county for |
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the land bank property; and |
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(3) meet any other requirements adopted by the county |
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in the land bank demonstration plan. |
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Sec. 388.005. LAND BANK DEMONSTRATION PLAN. (a) A county |
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that adopts a land bank demonstration program shall operate the |
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program in conformance with a land bank demonstration plan. |
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(b) The governing body of a county that adopts a land bank |
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demonstration program shall adopt a plan annually. The plan may be |
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amended from time to time. |
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(c) In developing the plan, the county shall consider any |
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other housing plans adopted by the county, including any fair |
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housing plans and policies adopted or agreed to by the county. |
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(d) The plan must include the following: |
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(1) a list of community housing development |
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organizations eligible to participate in the right of first refusal |
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provided by Section 388.013; |
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(2) a list of the parcels of real property that may |
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become eligible for sale to the land bank during the upcoming year; |
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(3) the county's plan for affordable housing |
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development on those parcels of real property; and |
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(4) the sources and amounts of funding anticipated to |
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be available from the county for subsidies for development of |
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affordable housing in the county, including any money specifically |
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available for housing developed under the program, as approved by |
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the governing body of the county at the time the plan is adopted. |
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Sec. 388.006. PUBLIC HEARING ON PROPOSED PLAN. (a) Before |
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adopting a plan, a county shall hold a public hearing on the |
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proposed plan. |
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(b) The county clerk or the county clerk's designee shall |
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provide notice of the hearing to all community housing development |
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organizations and to neighborhood associations identified by the |
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county as serving the neighborhoods in which properties anticipated |
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to be available for sale to the land bank under this chapter are |
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located. |
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(c) The county clerk or the county clerk's designee shall |
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make copies of the proposed plan available to the public not later |
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than the 60th day before the date of the public hearing. |
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Sec. 388.007. PRIVATE SALE TO LAND BANK. (a) |
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Notwithstanding any other law and except as provided by Subsection |
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(g), property that is ordered sold pursuant to foreclosure of a tax |
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lien may be sold in a private sale to a land bank by the officer |
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charged with the sale of the property without first offering the |
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property for sale as otherwise provided by Section 34.01, Tax Code, |
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if: |
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(1) the market value of the property as specified in |
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the judgment of foreclosure is less than the total amount due under |
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the judgment, including all taxes, penalties, and interest, plus |
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the value of nontax liens held by a taxing unit and awarded by the |
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judgment, court costs, and the cost of the sale; |
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(2) the property is not improved with a habitable |
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building or buildings or an uninhabitable building or buildings |
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that are occupied as a residence by an owner or tenant who is |
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legally entitled to occupy the building or buildings; |
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(3) there are delinquent taxes on the property for a |
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total of at least five years; and |
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(4) the county has executed with the other taxing |
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units that are parties to the tax suit an interlocal agreement that |
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enables those units to agree to participate in the program while |
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retaining the right to withhold consent to the sale of specific |
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properties to the land bank. |
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(b) The property may be sold to a land bank, regardless of |
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current zoning, and on development may be zoned for more than one |
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use that must include residential housing in accordance with this |
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chapter, provided that the requirements of Subsection (a) are |
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satisfied. |
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(c) A sale of property for use in connection with the |
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program is a sale for a public purpose. |
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(d) If the person being sued in a suit for foreclosure of a |
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tax lien does not contest the market value of the property in the |
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suit, the person waives the right to challenge the amount of the |
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market value determined by the court for purposes of the sale of the |
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property under Section 33.50, Tax Code. |
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(e) For any sale of property under this chapter, each person |
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who was a defendant to the judgment, or that person's attorney, |
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shall be given, not later than the 90th day before the date of sale, |
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written notice of the proposed method of sale of the property by the |
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officer charged with the sale of the property. Notice shall be |
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given in the manner prescribed by Rule 21a, Texas Rules of Civil |
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Procedure. |
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(f) After receipt of the notice required by Subsection (e) |
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and before the date of the proposed sale, the owner of the property |
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subject to sale may file with the officer charged with the sale a |
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written request that the property not be sold in the manner provided |
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by this chapter. |
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(g) If the officer charged with the sale receives a written |
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request as provided by Subsection (f), the officer shall sell the |
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property as otherwise provided in Section 34.01, Tax Code. |
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(h) The owner of the property subject to sale may not |
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receive any proceeds of a sale under this chapter. However, the |
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owner does not have any personal liability for a deficiency of the |
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judgment as a result of a sale under this chapter. |
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(i) Notwithstanding any other law, if consent is given by |
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the taxing units that are a party to the judgment, property may be |
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sold to the land bank for less than the market value of the property |
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as specified in the judgment or less than the total of all taxes, |
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penalties, and interest, plus the value of nontax liens held by a |
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taxing unit and awarded by the judgment, court costs, and the cost |
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of the sale. |
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(j) The deed of conveyance of the property sold to a land |
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bank under this section conveys to the land bank the right, title, |
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and interest acquired or held by each taxing unit that was a party |
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to the judgment, subject to the right of redemption. |
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Sec. 388.008. SUBSEQUENT RESALE BY LAND BANK. (a) Except |
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as provided by Subsection (b), each subsequent resale of property |
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acquired by a land bank under this chapter must comply with the |
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conditions of this section. |
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(b) Notwithstanding any other law, this section does not |
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apply to property sold to an eligible adjacent property owner under |
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Section 388.011. |
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(c) Except as provided by Subsection (d), the land bank must |
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sell a property to a qualified participating developer within the |
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four-year period following the date of acquisition for the purpose |
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of construction of affordable housing for sale or rent to low income |
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households. |
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(d) Before the completion of the four-year period described |
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by Subsection (c), the land bank may, subject to Section 388.011: |
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(1) transfer property that the land bank determines is |
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not appropriate for residential development to the taxing units |
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described by Subsection (c); or |
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(2) sell property described by Subdivision (1) to a |
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political subdivision or a nonprofit organization. |
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(e) If after four years a qualified participating developer |
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has not purchased the property, the property shall be transferred |
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from the land bank to the taxing units who were parties to the |
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judgment for disposition as otherwise allowed under the law. |
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(f) Unless the county increases the amount in its plan, the |
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number of properties acquired by a qualified participating |
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developer under this section on which development has not been |
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completed may not at any given time exceed three times the annual |
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average residential production completed by the qualified |
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participating developer during the preceding two-year period as |
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determined by the county. |
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(g) The deed conveying a property sold by the land bank must |
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include a right of reverter so that if the qualified participating |
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developer does not apply for a construction permit and close on any |
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construction financing within the three-year period following the |
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date of the conveyance of the property from the land bank to the |
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qualified participating developer, the property will revert to the |
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land bank for subsequent resale in accordance with this chapter or |
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conveyance to the taxing units who were parties to the judgment for |
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disposition as otherwise allowed under the law. If the property is |
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replatted under Section 388.012, the right of reverter applies to |
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the entire property as replatted. |
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Sec. 388.009. RESTRICTIONS ON OCCUPANCY AND USE OF |
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PROPERTY. (a) The land bank shall impose deed restrictions on |
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property sold to qualified participating developers requiring the |
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development and sale, rental, or lease-purchase of the property to |
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low income households. |
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(b) Each land bank property sold during any given fiscal |
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year to be developed for sale must be deed restricted for sale to |
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low income households, and: |
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(1) at least 25 percent of those land bank properties |
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must be deed restricted for sale to households with gross household |
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incomes not greater than 60 percent of the area median family |
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income, adjusted for household size; and |
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(2) not more than 30 percent of those land bank |
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properties may be deed restricted for sale to households with gross |
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household incomes greater than 80 percent of the area median family |
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income, adjusted for household size. |
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(c) If property is developed for rental housing, the deed |
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restrictions must be for a period of not less than 15 years and must |
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require that: |
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(1) 100 percent of the rental units be occupied by |
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households with incomes not greater than 60 percent of area median |
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family income, based on gross household income, adjusted for |
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household size, for the county, as determined annually by the |
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United States Department of Housing and Urban Development; |
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(2) 40 percent of the units be occupied by households |
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with incomes not greater than 50 percent of area median family |
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income, based on gross household income, adjusted for household |
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size, for the county, as determined annually by the United States |
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Department of Housing and Urban Development; or |
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(3) 20 percent of the units be occupied by households |
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with incomes not greater than 30 percent of area median family |
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income, based on gross household income, adjusted for household |
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size, for the county, as determined annually by the United States |
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Department of Housing and Urban Development. |
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(d) The deed restrictions under Subsection (c) must require |
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the owner to file an annual occupancy report with the county on a |
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reporting form provided by the county. The deed restrictions must |
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also prohibit any exclusion of an individual or family from |
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admission to the development based solely on the participation of |
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the individual or family in the housing choice voucher program |
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under Section 8, United States Housing Act of 1937 (42 U.S.C. |
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Section 1437f), as amended. |
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(e) Except as otherwise provided by this section, if the |
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deed restrictions imposed under this section are for a term of |
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years, the deed restrictions shall renew automatically. |
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(f) The land bank or the governing body of the county may |
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modify or add to the deed restrictions imposed under this section. |
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Any modifications or additions made by the governing body of the |
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county must be adopted by the county as part of its plan and must |
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comply with the restrictions set forth in Subsections (b), (c), and |
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(d). |
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Sec. 388.010. LOT EXCHANGE PERMITTED. (a) Notwithstanding |
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Section 388.009, the land bank may permit a qualified participating |
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developer to exchange a property purchased from the land bank with |
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any other property owned by the developer if: |
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(1) the developer agrees to construct on the other |
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property affordable housing for low income households as provided |
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by this chapter; and |
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(2) the other property will be located in: |
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(A) a planned development incorporating the |
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property originally purchased from the land bank; or |
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(B) another location as approved by the land |
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bank. |
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(b) The land bank shall adjust the deed restrictions under |
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Section 388.009 for each of the properties exchanged by the |
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developer under this section. |
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Sec. 388.011. PROPERTY DETERMINED TO BE INAPPROPRIATE FOR |
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RESIDENTIAL DEVELOPMENT: RIGHT OF FIRST REFUSAL. (a) In this |
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section, "eligible adjacent property owner" means a person who: |
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(1) owns property located adjacent to property owned |
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by the land bank; and |
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(2) satisfies eligibility requirements adopted by the |
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land bank. |
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(b) Notwithstanding any other right of first refusal |
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granted under this chapter, if the land bank determines that a |
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property owned by the land bank is not appropriate for residential |
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development, the land bank first shall offer the property for sale |
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to an eligible adjacent property owner according to terms and |
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conditions developed by the land bank that are consistent with this |
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chapter. |
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(c) The land bank shall sell the property to an eligible |
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adjacent property owner, at whichever value is lower: |
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(1) the fair market value for the property as |
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determined by the appraisal district in which the property is |
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located; or |
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(2) the sales price recorded in the annual plan. |
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(d) Except as provided by Subsection (e), an adjacent |
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property owner that purchases property under this section may not |
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lease, sell, or transfer that property to another person before the |
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third anniversary of the date the adjacent property owner purchased |
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that property from the land bank. |
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(e) Subsection (d) does not apply to the transfer of |
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property purchased under this section if the transfer: |
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(1) is made according to a policy adopted by the land |
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bank; and |
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(2) is made to a family member of the eligible adjacent |
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property owner or occurs as a result of the death of the eligible |
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adjacent property owner. |
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Sec. 388.012. REPLATTING BY QUALIFIED PARTICIPATING |
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DEVELOPER. The land bank may sell two adjacent properties that are |
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owned by the land bank to a qualified participating developer if: |
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(1) at least one of the properties is appropriate for |
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residential development; and |
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(2) the developer agrees to replat the two adjacent |
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properties as one property that is appropriate for residential |
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development. |
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Sec. 388.013. RIGHT OF FIRST REFUSAL TO QUALIFIED |
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ORGANIZATIONS. (a) In this section, "qualified organization" |
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means a community housing development organization that: |
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(1) contains within its designated geographical |
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boundaries of operation, as set forth in its application for |
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certification filed with and approved by the county, a portion of |
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the property that the land bank is offering for sale; |
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(2) has built at least three single-family homes or |
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duplexes or one multifamily residential dwelling of four or more |
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units in compliance with all applicable building codes within the |
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preceding two-year period and within the organization's designated |
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geographical boundaries of operation; and |
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(3) within the preceding two-year period has built or |
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rehabilitated housing units within a one-half mile radius of the |
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property that the land bank is offering for sale. |
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(b) Except as provided by Section 388.011, the land bank |
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shall first offer a property for sale to qualified organizations. |
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(c) Notice must be provided to the qualified organizations |
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by certified mail, return receipt requested. |
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(d) The county shall specify in its plan that the period |
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during which the right of first refusal provided by this section may |
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be exercised by a qualified organization is six months from the date |
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of the deed of conveyance of the property to the land bank. |
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(e) During the specified period, the land bank may not sell |
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the property to a qualified participating developer other than a |
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qualified organization. If all qualified organizations notify the |
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land bank that they are declining to exercise their right of first |
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refusal during the specified period, or if an offer to purchase the |
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property is not received from a qualified organization during that |
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period, the land bank may sell the property to any other qualified |
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participating developer at the same price that the land bank |
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offered the property to the qualified organizations. |
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(f) In its plan, the county shall establish the amount of |
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additional time, if any, that a property may be held in the land |
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bank once an offer has been received and accepted from a qualified |
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organization or other qualified participating developer. |
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(g) If more than one qualified organization expresses an |
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interest in exercising its right of first refusal, the organization |
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that has designated the most geographically compact area |
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encompassing a portion of the property shall be given priority. |
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(h) In its plan, the county may provide for other rights of |
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first refusal for any other nonprofit corporation exempted from |
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federal income tax under Section 501(c)(3), Internal Revenue Code |
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of 1986, as amended, provided that the preeminent right of first |
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refusal is provided to qualified organizations as provided by this |
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section. |
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(i) The land bank is not required to provide a right of first |
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refusal to qualified organizations under this section if the land |
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bank is selling property that reverted to the land bank under |
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Section 388.008(g). |
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Sec. 388.014. OPEN RECORDS AND MEETINGS. The land bank |
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shall comply with the requirements of Chapters 551 and 552, |
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Government Code. |
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Sec. 388.015. RECORDS; AUDIT; REPORT. (a) The land bank |
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shall keep accurate minutes of its meetings and shall keep accurate |
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records and books of account that conform with generally accepted |
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principles of accounting and that clearly reflect the income and |
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expenses of the land bank and all transactions in relation to its |
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property. |
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(b) The land bank shall file with the county not later than |
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the 90th day after the close of the fiscal year annual audited |
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financial statements prepared by a certified public accountant. |
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The financial transactions of the land bank are subject to audit by |
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the county. |
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(c) For purposes of evaluating the effectiveness of the |
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program, the land bank shall submit an annual performance report to |
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the county not later than November 1 of each year in which the land |
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bank acquires or sells property under this chapter. The |
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performance report must include: |
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(1) a complete and detailed written accounting of all |
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money and properties received and disbursed by the land bank during |
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the preceding fiscal year; |
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(2) for each property acquired by the land bank during |
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the preceding fiscal year: |
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(A) the street address of the property; |
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(B) the legal description of the property; |
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(C) the date the land bank took title to the |
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property; |
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(D) the name and address of the property owner of |
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record at the time of the foreclosure; |
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(E) the amount of taxes and other costs owed at |
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the time of the foreclosure; and |
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(F) the assessed value of the property on the tax |
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roll at the time of the foreclosure; |
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(3) for each property sold by the land bank during the |
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preceding fiscal year to a qualified participating developer or |
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eligible adjacent property owner: |
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(A) the street address of the property; |
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(B) the legal description of the property; |
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(C) the name and mailing address of the |
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purchaser; |
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(D) the purchase price paid; and |
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(E) if sold to a qualified participating |
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developer: |
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(i) the maximum incomes allowed for the |
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households by the terms of the sale; and |
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(ii) the source and amount of any public |
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subsidy provided by the county to facilitate the sale or rental of |
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the property to a household within the targeted income levels; |
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(4) for each property sold by a qualified |
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participating developer during the preceding fiscal year, the |
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buyer's household income and a description of all use and sale |
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restrictions; and |
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(5) for each property developed for rental housing |
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with an active deed restriction, a copy of the most recent annual |
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report filed by the owner with the land bank. |
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(d) The land bank shall maintain in its records for |
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inspection a copy of the sale settlement statement for each |
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property sold by a qualified participating developer and a copy of |
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the first page of the mortgage note with the interest rate and |
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indicating the volume and page number of the instrument as filed |
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with the county clerk. |
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(e) The land bank shall provide copies of the performance |
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report to the taxing units who were parties to the judgment of |
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foreclosure and shall provide notice of the availability of the |
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performance report for review to the organizations and neighborhood |
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associations identified by the county as serving the neighborhoods |
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in which properties sold to the land bank under this chapter are |
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located. |
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(f) The land bank and the county shall maintain copies of |
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the performance report available for public review. |
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Sec. 388.016. PARTICIPATION IN MUNICIPAL LAND BANK PROGRAM. |
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(a) A land bank established or approved by the governing body of a |
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county under this chapter may participate in a land bank program |
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established or approved by a municipality under Chapter 379C if the |
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participation of the county in the municipal land bank program is |
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incorporated into each entity's land bank demonstration plan under |
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Sections 379C.006 and 388.005, as applicable. |
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(b) The authority of a county-established land bank |
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participating in a program established under Chapter 379C is |
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limited to the powers granted under this chapter. |
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SECTION 3. This Act takes effect September 1, 2015. |