CHAPTER 379C. URBAN LAND BANK DEMONSTRATION PROGRAM

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LOCAL GOVERNMENT CODE

TITLE 12. PLANNING AND DEVELOPMENT

SUBTITLE A. MUNICIPAL PLANNING AND DEVELOPMENT

CHAPTER 379C. URBAN LAND BANK DEMONSTRATION PROGRAM

Sec. 379C.001. SHORT TITLE. This chapter may be cited as the

Urban Land Bank Demonstration Program Act.

Added by Acts 2003, 78th Leg., ch. 299, Sec. 1, eff. Sept. 1,

2003.

Sec. 379C.002. APPLICABILITY. This chapter applies only to

home-rule municipalities that:

(1) have a population of 1.18 million or more; and

(2) are located predominantly in a county that has a total area

of less than 1,000 square miles.

Added by Acts 2003, 78th Leg., ch. 299, Sec. 1, eff. Sept. 1,

2003.

Sec. 379C.003. DEFINITIONS. In this chapter:

(1) "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; and

(B) is certified by the municipality as a community housing

development organization.

(2) "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

chapter.

(3) "Low income household" means a household with a gross income

of not greater than 115 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.

(4) "Qualified participating developer" means a developer who

meets the requirements of Section 379C.005 and includes a

qualified organization under Section 379C.011.

(5) "Urban land bank demonstration plan" or "plan" means a plan

adopted by the governing body of a municipality as provided by

Section 379C.006.

(6) "Urban land bank demonstration program" or "program" means a

program adopted under Section 379C.004.

Added by Acts 2003, 78th Leg., ch. 299, Sec. 1, eff. Sept. 1,

2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

1034, Sec. 5, eff. September 1, 2007.

Sec. 379C.004. URBAN LAND BANK DEMONSTRATION PROGRAM. (a) The

governing body of a municipality may adopt an urban land bank

demonstration 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

chapter.

(b) The governing body of a municipality that adopts an urban

land bank demonstration program shall establish or approve a land

bank for the purpose of acquiring, holding, and transferring

unimproved real property under this chapter.

Added by Acts 2003, 78th Leg., ch. 299, Sec. 1, eff. Sept. 1,

2003.

Sec. 379C.005. QUALIFIED PARTICIPATING DEVELOPER. To qualify to

participate in an urban land bank demonstration program, a

developer must:

(1) have built three or more housing units within the three-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 urban land bank demonstration plan.

Added by Acts 2003, 78th Leg., ch. 299, Sec. 1, eff. Sept. 1,

2003.

Sec. 379C.006. URBAN LAND BANK DEMONSTRATION PLAN. (a) A

municipality that adopts an urban land bank demonstration program

shall operate the program in conformance with an urban land bank

demonstration plan.

(b) The governing body of a municipality that adopts an urban

land bank demonstration program shall adopt a plan annually. The

plan may be amended from time to time.

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 379C.011;

(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.

Added by Acts 2003, 78th Leg., ch. 299, Sec. 1, eff. Sept. 1,

2003.

Sec. 379C.007. 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 chapter are located.

copies of the proposed plan available to the public not later

than the 60th day before the date of the public hearing.

Added by Acts 2003, 78th Leg., ch. 299, Sec. 1, eff. Sept. 1,

2003.

Sec. 379C.008. 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 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 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.

(a-1) The property may be sold to a land bank, regardless of

current zoning, and on development may be zoned for more than one

use that must include residential housing in accordance with this

chapter, provided that the requirements of Subsection (a) are

satisfied.

(b) A sale of property for use in connection with the program is

a sale for a public purpose.

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 chapter, each person who

was a defendant to the judgment, or that person's attorney, shall

be given, not later than the 90th 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 chapter.

(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 chapter. However, the owner

does not have any personal liability for a deficiency of the

judgment as a result of a sale under this chapter.

(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.

Added by Acts 2003, 78th Leg., ch. 299, Sec. 1, eff. Sept. 1,

2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

1034, Sec. 6, eff. September 1, 2007.

Acts 2009, 81st Leg., R.S., Ch.

1297, Sec. 1, eff. June 19, 2009.

Sec. 379C.009. SUBSEQUENT RESALE BY LAND BANK. (a) Except as

provided by Subsection (a-1), each subsequent resale of property

acquired by a land bank under this chapter must comply with the

conditions of this section.

(a-1) Notwithstanding any other law, this section does not apply

to property sold to an eligible adjacent property owner under

Section 379C.0106.

(b) The land bank must sell a property to a qualified

participating developer within the four-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

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.

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 three-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 in

accordance with this chapter or conveyance to the taxing units

who were parties to the judgment for disposition as otherwise

allowed under the law. If the property is replatted under

Section 379C.0107, the right of reverter applies to the entire

property as replatted.

Added by Acts 2003, 78th Leg., ch. 299, Sec. 1, eff. Sept. 1,

2003.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

1297, Sec. 2, eff. June 19, 2009.

Sec. 379C.010. 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, rental, or lease-purchase of the property

to low income households.

(b) Each land bank property sold during any given fiscal year to

be developed for sale must be deed restricted for sale to low

income households, and:

(1) at least 25 percent of those land bank properties must 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; and

(2) not more than 30 percent of those land bank properties may

be deed restricted for sale to households with gross household

incomes greater than 80 percent of the area median family income,

adjusted for household size.

restrictions must be for a period of not less than 15 years and

must require that:

(1) 100 percent of the rental units be occupied by 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 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 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), as amended.

(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).

Added by Acts 2003, 78th Leg., ch. 299, Sec. 1, eff. Sept. 1,

2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

1034, Sec. 7, eff. September 1, 2007.

Acts 2009, 81st Leg., R.S., Ch.

1297, Sec. 3, eff. June 19, 2009.

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 owned by the developer if:

(1) the developer agrees to construct on the other property

affordable housing for low income households as provided by this

chapter; and

(2) the other property will be located in:

(A) a 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.

Added by Acts 2009, 81st Leg., R.S., Ch.

1297, Sec. 4, eff. June 19, 2009.

Sec. 379C.0106. PROPERTY DETERMINED TO BE INAPPROPRIATE FOR

RESIDENTIAL DEVELOPMENT: RIGHT OF FIRST REFUSAL. (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.

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.

Added by Acts 2009, 81st Leg., R.S., Ch.

1297, Sec. 5, eff. June 19, 2009.

Sec. 379C.0107. REPLATTING BY QUALIFIED PARTICIPATING DEVELOPER.

The land bank may sell two adjacent properties that are owned by

the land bank to a qualified participating developer if:

(1) at least one of the properties is appropriate for

residential development; and

(2) the developer agrees to replat the two adjacent properties

as one property that is appropriate for residential development.

Added by Acts 2009, 81st Leg., R.S., Ch.

1297, Sec. 6, eff. June 19, 2009.

Sec. 379C.011. RIGHT OF FIRST REFUSAL TO QUALIFIED

ORGANIZATIONS. (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 built 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 two-year period and within the organization's

designated geographical boundaries of operation; and

(3) within the preceding two-year period has built or

rehabilitated housing units within a one-half mile radius of the

property that the land bank is offering for sale.

(b) Except as provided by Section 379C.0106, the land bank shall

first offer a property for sale to qualified organizations.

certified mail, return receipt requested.

(d) The municipality shall specify in its plan that the period

during which the right of first refusal provided by this section

may be exercised by a qualified organization is six months from

the date of the deed of conveyance of the property to the land

bank.

(e) 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.

(f) 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.

(g) 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.

(h) 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, as amended, provided that the preeminent right of

first refusal is provided to qualified organizations as provided

by this section.

(i) 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 379C.009(d).

Added by Acts 2003, 78th Leg., ch. 299, Sec. 1, eff. Sept. 1,

2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

1034, Sec. 8, eff. September 1, 2007.

Acts 2009, 81st Leg., R.S., Ch.

1297, Sec. 7, eff. June 19, 2009.

Acts 2009, 81st Leg., R.S., Ch.

1297, Sec. 8, eff. June 19, 2009.

Sec. 379C.012. OPEN RECORDS AND MEETINGS. The land bank shall

comply with the requirements of Chapters 551 and 552, Government

Code.

Added by Acts 2003, 78th Leg., ch. 299, Sec. 1, eff. Sept. 1,

2003.

Sec. 379C.013. 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.

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 chapter. 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;

(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 or eligible

adjacent property owner:

(A) the street address of the property;

(B) the legal description of the property;

(D) the purchase price paid; and

(E) if sold to a qualified participating developer:

(i) the maximum incomes allowed for the households by the terms

of the sale; and

(ii) 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

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 chapter are located.

(f) The land bank and the municipality shall maintain copies of

the performance report available for public review.

Added by Acts 2003, 78th Leg., ch. 299, Sec. 1, eff. Sept. 1,

2003.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

1297, Sec. 9, eff. June 19, 2009.

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