Bill Text: TX HB1729 | 2011-2012 | 82nd Legislature | Comm Sub
Bill Title: Relating to the sale of surplus leased land by a governmental entity to a private party.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2011-05-12 - Placed on General State Calendar [HB1729 Detail]
Download: Texas-2011-HB1729-Comm_Sub.html
82R22722 MXM-F | |||
By: Keffer | H.B. No. 1729 | ||
Substitute the following for H.B. No. 1729: | |||
By: Cook | C.S.H.B. No. 1729 |
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relating to the sale of surplus leased land by a governmental entity | ||
to a private party. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Subtitle F, Title 10, Government Code, is | ||
amended by adding Chapter 2267 to read as follows: | ||
CHAPTER 2267. SALE OF LEASED LAND BY GOVERNMENTAL ENTITIES | ||
SUBCHAPTER A. GENERAL PROVISIONS | ||
Sec. 2267.001. DEFINITIONS. In this chapter: | ||
(1) "Bulk purchaser" means any person, including | ||
successors in interest, heirs, or assigns, that acquires a leased | ||
tract, wholly or partly, from a governmental entity in accordance | ||
with Subchapter C. The term does not include a lessee who acquires | ||
an individual leased tract under Section 2267.051 or Subchapter D. | ||
(2) "Bulk sale" means a sale to a bulk purchaser of | ||
multiple leased tracts, wholly or partly, from a governmental | ||
entity in accordance with Subchapter C. The term does not include a | ||
sale to a lessee who acquires an individual leased tract under | ||
Section 2267.051 or Subchapter D. | ||
(3) "Closing date" means the date on which the | ||
governmental entity transfers its interest in the leased tract, | ||
wholly or partly, to a bulk purchaser. There may be multiple | ||
closing dates if the leased tract is sold in portions. | ||
(4) "Consumer price index" means the consumer price | ||
index for Housing, Dallas-Fort Worth, TX area, Series Id: | ||
CUURA316SAH, Base Period: 1982-84 = 100, as published by the Bureau | ||
of Labor Statistics of the United States Department of Labor, or its | ||
equivalent if the series is discontinued. | ||
(5) "Leased tract" means all or any portion of | ||
government land that is: | ||
(A) leased by a governmental entity before | ||
application of this chapter; and | ||
(B) subject to this chapter under Section | ||
2267.003. | ||
(6) "Lessee" means a person that leases a leased tract | ||
under a residential or commercial lease from a governmental entity. | ||
The term includes the lessee's heirs, successors, and assigns. | ||
Sec. 2267.002. APPLICABILITY TO ALL GOVERNMENTAL ENTITIES. | ||
This chapter applies to this state and each political subdivision | ||
of this state, including a municipality, a county, a river | ||
authority or other water district, a state agency, and any other | ||
governmental entity of this state. | ||
Sec. 2267.003. APPLICABILITY ONLY TO SURPLUS PROPERTY. | ||
This chapter applies only to a leased tract: | ||
(1) that is owned by, and designated as surplus | ||
property by, a governmental entity; and | ||
(2) that the governmental entity elects to sell under | ||
this chapter. | ||
Sec. 2267.004. OPTIONS CUMULATIVE. The options provided by | ||
this chapter are in addition to and not instead of any other lease | ||
or sale of surplus property options that a governmental entity | ||
otherwise has. | ||
Sec. 2267.005. CONTINUING APPLICABILITY OF PROVISIONS. A | ||
provision of this chapter that applies to the lessee of a leased | ||
tract under this chapter applies to any subsequent owner of the | ||
leased tract. | ||
Sec. 2267.006. PLATTING LAW INAPPLICABLE. A sale of the | ||
leased tract under this chapter is not subject to Chapter 212 or | ||
232, Local Government Code, or any other platting requirement. | ||
Sec. 2267.007. NONAPPLICABILITY OF CERTAIN OTHER LAWS. The | ||
following laws do not apply to the sale of an individual leased | ||
tract or bulk sale under this chapter: | ||
(1) Chapter 180, Finance Code; | ||
(2) Chapter 272, Local Government Code; | ||
(3) Chapter 31, Natural Resources Code; | ||
(4) Section 8502.013, Special District Local Laws | ||
Code; and | ||
(5) Section 49.226, Water Code. | ||
[Sections 2267.008-2267.050 reserved for expansion] | ||
SUBCHAPTER B. SALE OF LEASED LAND BY GOVERNMENTAL ENTITY DIRECTLY | ||
TO INDIVIDUAL WHO IS LEASING LAND FROM GOVERNMENTAL ENTITY | ||
Sec. 2267.051. SALE OF LEASED LAND TO PERSON LEASING LAND | ||
FOR FAIR MARKET VALUE. A governmental entity may, without notice or | ||
the solicitation of bids, sell land it owns to the lessee for not | ||
less than the fair market value of the unencumbered fee simple | ||
estate as determined under Section 2267.052. | ||
Sec. 2267.052. APPRAISALS. (a) An appraiser hired under | ||
this section must be: | ||
(1) disinterested; and | ||
(2) a licensed appraiser under Chapter 1103, | ||
Occupations Code. | ||
(b) Before a sale under Section 2267.051, the lessee shall | ||
hire an appraiser to determine the current fair market value of | ||
land. Not later than the 60th day after the date the appraiser is | ||
hired, the appraiser shall complete the appraisal and send the | ||
completed appraisal to the lessee and the governmental entity. | ||
(c) If the governmental entity rejects the fair market value | ||
determined by the appraisal, the governmental entity shall hire | ||
another appraiser to conduct a second appraisal. Not later than the | ||
60th day after the date the governmental entity rejects the initial | ||
appraisal, the second appraisal must be completed and sent to the | ||
lessee and the governmental entity. | ||
(d) If the lessee rejects the fair market value determined | ||
by the second appraiser, the two appraisers shall meet and attempt | ||
to reach an agreement on the fair market value not later than the | ||
30th day after the date the lessee receives the governmental | ||
entity's appraisal. | ||
(e) If the two appraisers fail to reach agreement on or | ||
before the 10th day after the date of the meeting, not later than | ||
the 20th day after the date of the meeting the governmental entity | ||
shall request that the comptroller appoint a third appraiser to | ||
reconcile the two previous appraisals. Not later than the 30th day | ||
after the date of the request, the comptroller shall appoint the | ||
third appraiser. | ||
(f) Not later than the 30th day after the date the third | ||
appraiser is appointed, the third appraisal must be completed and | ||
sent to the lessee and the governmental entity. The third appraisal | ||
is final and binding on all parties. | ||
(g) The appraisal costs must be paid by the person who | ||
requests the appraisal, except that the lessee and the governmental | ||
entity shall each pay one-half of the cost of any third appraisal. | ||
(h) An appraisal may not: | ||
(1) include consideration of a freeze or other | ||
suspension of lease rate increases for the homestead of a person who | ||
is 65 years of age or older; and | ||
(2) include the value of any improvements constructed | ||
on the lot or over the water that is the lessee's property. | ||
Sec. 2267.053. NO WATER CODE PERMIT EXEMPTION. (a) A | ||
leased tract sold by the governmental entity under this chapter is | ||
ineligible for, and the owner is not entitled to, the exemption | ||
provided by Section 11.142(a), Water Code. The purpose of this | ||
section is to protect the public health, safety, or welfare and to | ||
ensure an adequate municipal, county, water district, river | ||
authority, or other governmental water supply. | ||
(b) The instrument conveying the leased tract must include a | ||
provision stating that the exemption does not apply to the | ||
conveyance. | ||
[Sections 2267.054-2267.100 reserved for expansion] | ||
SUBCHAPTER C. SALE OF LEASED LAND BY GOVERNMENTAL ENTITY TO BULK | ||
PURCHASERS; LESSEE OPTIONS TO PURCHASE OR LEASE FROM BULK PURCHASER | ||
Sec. 2267.101. SALE OF LEASED LAND TO BULK PURCHASER. (a) | ||
Instead of a sale under Section 2267.051, a governmental entity may | ||
by resolution pursue a bulk sale of all or part of the property | ||
leased to a lessee to a bulk purchaser under this subchapter. | ||
(b) A lessee may not purchase land under Section 2267.051 | ||
from the effective date indicated in the resolution until the date | ||
on which any resulting bulk purchase and sale agreement is declared | ||
terminated by the governmental entity. | ||
(c) If the bulk sale of the leased property is completed and | ||
ownership of the land is transferred to the bulk purchaser, the | ||
lessee may not purchase land under Section 2267.051 and the | ||
lessee's only purchase and lease options are those described by | ||
this subchapter and Subchapter D. This subsection does not apply to | ||
a lessee who timely exercises an option to purchase the land it is | ||
leasing. | ||
Sec. 2267.102. OPPORTUNITY OF LESSEE TO BUY LEASED TRACT. | ||
Each lessee is entitled to buy the lessee's individual leased tract | ||
from the bulk purchaser or continue leasing the applicable leased | ||
tract from the bulk purchaser in accordance with the purchase or | ||
lease options described by Sections 2267.103 through 2267.106. | ||
Sec. 2267.103. OPTION TO PURCHASE FOR CASH. (a) The lessee | ||
may purchase the leased tract in cash or through lender financing | ||
for 100 percent of land only assessed value without any exemptions, | ||
as determined by the appraisal district, for the most current | ||
tax-assessed value. | ||
(b) This option must be available on the closing date and | ||
until at least the first anniversary of the closing date. | ||
Sec. 2267.104. OPTION TO PURCHASE FOR LOAN. (a) The lessee | ||
may purchase the individual leased tract by seller financing for | ||
the percent of assessed value only as set forth in Section 2267.103, | ||
with a down payment of 10 percent and an interest rate of 6 percent, | ||
with a 30-year amortization. | ||
(b) The lessee may not be charged any origination fees or | ||
points as a part of the closing costs involved in this option. | ||
(c) This option must be available on the closing date and | ||
until at least the first anniversary of the closing date. | ||
Sec. 2267.105. OPTION FOR 99-YEAR LEASE. (a) The lessee | ||
may enter into a new 99-year lease for the leased tract at a rental | ||
rate of six percent of the land only assessed value without any | ||
exemptions, as determined by the appraisal district, for the | ||
tax-assessed value that was used to determine the bulk purchaser's | ||
purchase price. | ||
(b) The rental price is subject to annual consumer price | ||
index increases or decreases. | ||
(c) The 99-year lease must include an option to purchase the | ||
applicable leased tract at the land only assessed value without any | ||
exemptions, as determined by the appraisal district, at the time of | ||
the lessee's purchase. This value may not be less than the | ||
tax-assessed value that was used to determine the bulk purchaser's | ||
purchase price. | ||
(d) This option must be available until at least the first | ||
anniversary of the closing date. | ||
Sec. 2267.106. OPTION FOR 20-YEAR LEASE FOR SENIOR | ||
CITIZENS. (a) This section applies only to a lessee who is 65 years | ||
of age or older and who receives a property tax exemption under | ||
Section 11.13, Tax Code, for a structure on the lessee's individual | ||
leased tract. The lessee must have received the property tax | ||
exemption for a structure on the lessee's individual leased tract | ||
by the first day of January before the bulk purchaser's closing | ||
date. | ||
(b) The lessee may enter into a 20-year lease for the leased | ||
tract at a rental rate of six percent of the land only assessed | ||
value without any exemptions, as determined by the appraisal | ||
district, for the tax-assessed value that was used to determine the | ||
bulk purchaser's purchase price. | ||
(c) The rental price is subject to annual consumer price | ||
index increases or decreases. All annual consumer price index | ||
increases or decreases are deferred, and accrued and compounded for | ||
20 years at the six percent rate. | ||
(d) The 20-year lease must include an option to purchase the | ||
applicable leased tract at the land only assessed value without any | ||
exemptions, as determined by the appraisal district, at the time of | ||
the lessee's purchase. This value may not be less than the | ||
tax-assessed value that was used to determine the bulk purchaser's | ||
purchase price. | ||
(e) This option must be available until at least the first | ||
anniversary of the closing date. | ||
Sec. 2267.107. EXTENSION OF EXISTING LEASE IF OPTIONS NOT | ||
EXERCISED; EIGHT-YEAR OPTION TO PURCHASE. (a) The bulk purchaser | ||
shall extend the existing lease of any lessee who does not timely | ||
exercise one of the options in Sections 2267.103 through 2267.106. | ||
The bulk purchaser shall extend the lease as necessary to allow for | ||
the full eight-year purchase option period provided by this | ||
section. | ||
(b) Not later than the eighth anniversary of the closing | ||
date, the lessee may purchase the lessee's individual leased tract | ||
for the greater of: | ||
(1) the land only assessed value without any | ||
exemptions, as determined by the appraisal district at the time of | ||
the lessee's purchase; or | ||
(2) the tax-assessed value that was used to determine | ||
the bulk purchaser's purchase price. | ||
(c) This section does not prevent the bulk purchaser from | ||
offering additional purchase or lease options to a lessee. | ||
Sec. 2267.108. DETERMINATION OF LEASE RATE OR PURCHASE | ||
PRICE WHEN APPRAISAL DISTRICT VALUE UNAVAILABLE. (a) This section | ||
applies when the appraisal district does not provide an assessed | ||
value for the applicable portion of the leased tract for the | ||
applicable year. | ||
(b) To determine the purchase price or lease rate, the land | ||
only assessed value without any exemptions for the applicable | ||
portion of the leased tract must be calculated based on the assessed | ||
value per square foot of comparable tracts with similar physical | ||
characteristics in the applicable county or adjoining counties, as | ||
determined by the selling governmental entity. | ||
Sec. 2267.109. LIEN ON LEASED TRACT; LESSEE DUTIES. (a) | ||
In this section, "lienholder" means any mortgagee under a mortgage, | ||
or a trustee or beneficiary under a deed of trust, holding a lien on | ||
any portion of the leased tract. | ||
(b) On the date the sale of an individual leased tract | ||
closes, the lessee shall: | ||
(1) pay any debt secured by a lien on the lessee's | ||
leasehold estate; or | ||
(2) deliver the express written consent of each | ||
lienholder on the leasehold estate in the leased tract permitting | ||
the lessee to grant a purchase money lien on the fee simple estate | ||
in the leased tract. | ||
Sec. 2267.110. PROPERTY OWNERS' ASSOCIATION. The bulk | ||
purchaser may create a property owners' association with the power | ||
to assess property, impose a lien, and collect dues and assessments | ||
for the operation of the property owners' association. | ||
Sec. 2267.111. DEED RESTRICTIONS. The selling governmental | ||
entity may impose a deed restriction on the leased tract conveyed to | ||
the bulk purchaser that was included in the individual leases | ||
conveyed. | ||
[Sections 2267.112-2267.150 reserved for expansion] | ||
SUBCHAPTER D. PROCEDURES FOR LESSEE PURCHASING LAND FROM BULK | ||
PURCHASER | ||
Sec. 2267.151. LESSEE'S RIGHT TO PURCHASE LEASED TRACT WHEN | ||
BULK PURCHASER CLOSES. (a) In the manner provided by this | ||
subchapter, a lessee may buy the lessee's individual leased tract | ||
from the bulk purchaser under Section 2267.103 or 2267.104 | ||
concurrently with the bulk purchaser making its purchase from the | ||
governmental entity on the closing date. | ||
(b) The lessee shall notify the selling governmental entity | ||
and the bulk purchaser not later than the 90th day after the | ||
effective date of the purchase and sale agreement between the | ||
entity and the bulk purchaser of the lessee's intent to purchase the | ||
applicable leased tract using the format provided by the entity and | ||
the bulk purchaser. | ||
(c) Not later than the closing date, the lessee and the bulk | ||
purchaser must enter into a purchase and sale agreement in | ||
substantially the form as agreed to between the selling | ||
governmental entity and the bulk purchaser. | ||
Sec. 2267.152. PURCHASE PRICE REQUIRED IN AGREEMENT. The | ||
purchase and sale agreement must contain the purchase price for the | ||
individual leased tract in accordance with the applicable purchase | ||
option under Section 2267.103 or 2267.104. | ||
Sec. 2267.153. SURVEY REQUIRED. (a) The lessee shall | ||
deliver an accurate survey of the lessee's individual leased tract | ||
to the selling governmental entity and the bulk purchaser not later | ||
than the 45th day before the closing date, at the lessee's expense. | ||
(b) The survey must be acceptable to the title company | ||
selected by the bulk purchaser and lessee and approved by the | ||
selling governmental entity for the purpose of issuing a policy of | ||
title insurance on the applicable portion of the leased tract. | ||
(c) The survey must be prepared by a licensed state land | ||
surveyor or a registered professional land surveyor acceptable to | ||
the selling governmental entity and the bulk purchaser. | ||
(d) The survey must include the boundaries of the lessee's | ||
leased tract. The boundaries must be consistent with any master | ||
survey prepared on behalf of the selling governmental entity in | ||
conjunction with the sale of the leased tract to the bulk purchaser. | ||
(e) The survey must include all improvements on the leased | ||
tract and indicate any encroachments across the applicable boundary | ||
lines. | ||
(f) The survey must be reviewed and approved by the selling | ||
governmental entity and the bulk purchaser. | ||
(g) The selling governmental entity or the bulk purchaser | ||
may perform an inspection of the applicable leased tract to verify | ||
the accuracy of the survey and any encroachments. | ||
Sec. 2267.154. TITLE COMMITMENT REQUIRED. The lessee shall | ||
provide a title commitment from the title company selected by the | ||
lessee and the bulk purchaser. The lessee shall pay for the title | ||
commitment. | ||
Sec. 2267.155. OBJECTIONS TO TITLE COMMITMENT OR SURVEY. | ||
(a) The lessee must notify the bulk purchaser of any objections to | ||
any items on the title commitment or survey not later than: | ||
(1) the 15th day after the date the lessee receives the | ||
title commitment or survey, as applicable; and | ||
(2) the 45th day before the proposed closing date. | ||
(b) The bulk purchaser or the selling governmental entity is | ||
not required to cure any items described by Subsection (a) or to | ||
incur any expenses in curing the items, except that the bulk | ||
purchaser or the entity, as applicable, shall use good faith | ||
efforts to address or remove those requirements or exceptions shown | ||
on Schedule C of the title commitment that apply to or are created | ||
by the bulk purchaser or entity. Despite this good faith exception, | ||
the bulk purchaser or entity is not required to cure any exceptions | ||
on the attached Schedule C regarding legal right of access to or | ||
from the applicable leased tract. | ||
Sec. 2267.156. "AS-IS" PURCHASE; NO WARRANTIES. (a) The | ||
lessee purchases the applicable individual leased tract in its | ||
"as-is" condition. | ||
(b) The bulk purchaser: | ||
(1) is not required to make any improvements or | ||
modifications; and | ||
(2) may not make any representations or warranties as | ||
to the condition or use of the applicable leased tract. | ||
Sec. 2267.157. NO RESPONSIBILITY FOR BROKER FEES OR | ||
COMMISSIONS. The bulk purchaser is not responsible for any broker | ||
fees or commissions due to any broker or agent engaged or claiming | ||
to have been engaged by the lessee for the purchase and sale of the | ||
applicable leased tract. | ||
Sec. 2267.158. COSTS FOR WHICH BULK PURCHASER IS | ||
RESPONSIBLE. The bulk purchaser is responsible for the following | ||
costs: | ||
(1) one-half of any escrow fee; | ||
(2) costs to release existing liens placed on the | ||
applicable portion of the leased tract by the bulk purchaser; | ||
(3) prepayment penalties and recording fees; | ||
(4) costs to release the bulk purchaser's loan | ||
liability to the extent applicable to the individual leased tract; | ||
(5) costs related to tax statements or certificates; | ||
and | ||
(6) costs to prepare the deed. | ||
Sec. 2267.159. COSTS FOR WHICH LESSEE IS RESPONSIBLE. The | ||
lessee is responsible for the following costs: | ||
(1) one-half of any escrow fee; | ||
(2) costs associated with a loan or financing for the | ||
applicable portion of the leased tract, including: | ||
(A) loan origination, discount, buy-down, and | ||
commitment fees; | ||
(B) appraisal fees; | ||
(C) loan application fees; | ||
(D) credit reports costs; | ||
(E) costs to prepare loan documents; | ||
(F) loan-related inspection fees; and | ||
(G) interest on the loan from the date of | ||
disbursement to the date of the first monthly payment; | ||
(3) the cost of the survey prepared under Section | ||
2267.153; | ||
(4) recording fees; | ||
(5) costs for copies of easements and restrictions; | ||
(6) the cost of the mortgagee policy of title | ||
insurance, including any endorsements required by the lender; | ||
(7) the cost of any prepaid items, including insurance | ||
premiums and reserves and taxes; | ||
(8) underwriting fees; and | ||
(9) the cost of any owner's policy of title insurance, | ||
including endorsements obtained by the lessee. | ||
Sec. 2267.160. TAXES. Taxes are prorated as of the closing | ||
date. If the taxes are not paid as of the closing date, the lessee is | ||
responsible for paying the taxes. | ||
Sec. 2267.161. TITLE COMPANY AND ESCROW AGENT. The title | ||
company and escrow agent must be acceptable to the selling | ||
governmental entity and agreed to by the lessee and the bulk | ||
purchaser in the purchase and sale agreement. | ||
Sec. 2267.162. DELIVERY OF PURCHASE AND SALE AGREEMENT AND | ||
EARNEST MONEY. On or before the closing date, $1,000 in earnest | ||
money and the executed purchase and sale agreement between the | ||
lessee and the bulk purchaser must be timely delivered to the title | ||
company or escrow agent. | ||
Sec. 2267.163. DELIVERY OF COMPLETED DOCUMENTS TO ESCROW | ||
AGENT. On or before the date of the sale to the lessee, the bulk | ||
purchaser and the lessee shall complete all documentation necessary | ||
to transfer the applicable leased tract from the bulk purchaser to | ||
the lessee and deliver the completed and executed documents to the | ||
applicable escrow agent. | ||
Sec. 2267.164. RECORDING OF DOCUMENTS. (a) The special | ||
warranty deed or any other documents transferring the applicable | ||
portion of the leased tract to the lessee may not be recorded before | ||
the closing date. | ||
(b) Promptly after the escrow agent receives written notice | ||
from the selling governmental entity or the title company or escrow | ||
agent facilitating the closing of the leased tract from the entity | ||
to the bulk purchaser that the closing has been completed, the agent | ||
shall file the special warranty deed and any other applicable | ||
documents to transfer the leased tract to the lessee in the real | ||
property records of the county in which the leased tract is located. | ||
SECTION 2. This Act takes effect September 1, 2011. |