Bill Text: TX SB1918 | 2019-2020 | 86th Legislature | Comm Sub

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to the creation of an urban land bank by certain municipalities; granting authority to issue bonds.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed - Dead) 2019-05-01 - Referred to Urban Affairs [SB1918 Detail]

Download: Texas-2019-SB1918-Comm_Sub.html
 
 
  By: Alvarado  S.B. No. 1918
         (In the Senate - Filed March 7, 2019; March 19, 2019, read
  first time and referred to Committee on Intergovernmental
  Relations; April 15, 2019, reported adversely, with favorable
  Committee Substitute by the following vote:  Yeas 7, Nays 0;
  April 15, 2019, sent to printer.)
Click here to see the committee vote
 
  COMMITTEE SUBSTITUTE FOR S.B. No. 1918 By:  Alvarado
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to the creation of an urban land bank by certain
  municipalities; granting authority to issue bonds.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle A, Title 12, Local Government Code, is
  amended by adding Chapter 379H to read as follows:
  CHAPTER 379H.  URBAN LAND BANK PROGRAM IN MUNICIPALITY WITH
  POPULATION OF TWO MILLION OR MORE
  SUBCHAPTER A.  GENERAL PROVISIONS
         Sec. 379H.001.  SHORT TITLE. This chapter may be cited as
  the Urban Land Bank Program for a Municipality with a Population of
  Two Million or More.
         Sec. 379H.002.  APPLICABILITY OF CHAPTER. This chapter
  applies only to a municipality with a population of two million or
  more.
         Sec. 379H.003.  DEFINITIONS. In this chapter:
               (1)  "Board" means the board of directors of a land
  bank.
               (2)  "Land bank" means an entity established or
  approved by the governing body of a municipality under this
  chapter.
               (3)  "Non-qualifying municipality" means a
  municipality to which this chapter does not apply and that is
  located in the same county in which a municipality to which this
  chapter does apply is predominantly located.
               (4)  "Real property" means land, land under water, and
  any structure, easement, air rights, franchise, or incorporeal
  hereditament, every estate, interest, and right therein, legal and
  equitable, including terms for years and liens by way of judgment,
  mortgage, or otherwise, and any fixture or improvement located
  thereon.
         Sec. 379H.004.  APPLICABILITY OF OTHER LAW. A land bank
  created under this chapter:
               (1)  is:
                     (A)  a governmental unit, as defined by Section
  101.001, Civil Practice and Remedies Code;
                     (B)  a local government corporation, as defined by
  Section 431.003, Transportation Code; and
                     (C)  a public nonprofit corporation that has and
  may exercise all of the rights, powers, privileges, authority, and
  functions given by the general laws of this state to nonprofit
  corporations in this state;
               (2)  is not:
                     (A)  a program created or operating under Chapter
  373 or 374; or
                     (B)  a housing finance corporation created under
  Chapter 394; and
               (3)  must comply with the requirements of Chapters 551
  and 552, Government Code.
         Sec. 379H.005.  PURPOSE. A land bank created under this
  chapter exists for the purpose of acquiring, managing, and
  disposing of vacant, abandoned, and deteriorated properties and
  returning those properties to productive uses, including
  affordable housing, workforce housing, public service housing,
  community-based economic development, food desert solutions,
  beautification and public art, parks and recreation, flood
  reduction and storm resiliency, and other uses necessary and
  appropriate to stabilize communities, improve living conditions,
  and protect against the displacement of residents of the
  municipality served by the land bank.
         Sec. 379H.006.  CONSTRUCTION. This chapter shall be
  construed liberally to carry out the intended purposes as a
  complete and independent authorization for the performance of each
  and every act and thing authorized by this chapter, and all powers
  granted shall be broadly interpreted to carry out the intended
  purposes and not as a limitation of powers.  Except as otherwise
  provided by this chapter, a land bank, in the exercise of its powers
  and duties under this chapter and with respect to real property held
  by the land bank, has the same amount of control as if the land bank
  represented a private property owner, and the land bank is not
  subject to restrictions imposed by the charter, ordinances, or
  resolutions of a local unit of government.
  SUBCHAPTER B. BOARD OF DIRECTORS
         Sec. 379H.051.  COMPOSITION OF BOARD. The size, membership,
  composition, and officers of the board of directors of a land bank,
  and methods of appointment to the board, must be established by the
  certificate of formation and the bylaws of the land bank.
         Sec. 379H.052.  ELIGIBILITY FOR MEMBERSHIP. (a)  In this
  section, "public officer" means an individual who is elected to a
  municipal office. 
         (b)  A municipal employee is eligible to serve as a member of
  the board, and notwithstanding any law to the contrary, a public
  officer is eligible to serve as a member of the board and acceptance
  of the appointment will neither terminate nor impair service in the
  public office. 
         Sec. 379H.053.  MEETINGS; ATTENDANCE. (a)  The board shall
  meet in regular session according to a schedule adopted by the
  board.
         (b)  The board may meet in a special session:
               (1)  convened by the president of the board in
  accordance with the bylaws of the board; or
               (2)  on written notice signed by a majority of the board
  members.
         (c)  The presence of a majority of the board's total
  membership constitutes a quorum for any regular or special session.
         (d)  The board shall establish rules related to the
  attendance and participation of members in regular or special
  meetings of the board. Rules adopted under this subsection may
  provide for the removal from office of a member for failure to
  comply with the rules if a majority of the remaining members of the
  board vote for the removal. Removal under this subsection takes
  effect the first day of the calendar month following the date of the
  vote. A person removed under this subsection is ineligible for
  reappointment to the board unless reappointment is confirmed
  unanimously by the board.
         Sec. 379H.054.  BOARD ACTIONS. (a)  Subject to Subsection
  (b), actions of the board must be approved by the affirmative vote
  of a quorum of the board. 
         (b)  Action on the following matters requires approval by a
  majority of the total membership of the board:
               (1)  adoption of bylaws or rules for conduct of the
  business of the land bank for which the board serves;
               (2)  hiring or firing of any employee or contractor of
  the land bank for which the board serves;
               (3)  incurring debt;
               (4)  adoption or amendment of the annual budget; and
               (5)  sale, lease, encumbrance, or alienation of or
  improvements to real or personal property with a value of more than
  $50,000.
         (c)  By majority vote, the board may delegate the hiring and
  firing of employees and contractors to a specific officer or
  committee of the land bank for which the board serves, under terms
  and to the extent specified by the board.
         (d)  A board member may not vote by proxy.
         (e)  A board member may request a recorded vote on any
  resolution or action of the land bank.
         Sec. 379H.055.  CONFLICT OF INTEREST. (a)  A board member
  or employee of a land bank may not:
               (1)  acquire any direct or indirect interest in real
  property of the land bank, in any real property to be acquired by
  the land bank, or in any real property to be acquired from the land
  bank; or
               (2)  have any direct or indirect interest in any
  contract or proposed contract for materials or services to be
  furnished or used by the land bank.
         (b)  The provisions of the former Texas Non-Profit
  Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil
  Statutes) related to powers, standards of conduct, and interests in
  contracts apply to the directors and officers of the land bank.
         (c)  The board may adopt supplemental rules addressing
  potential conflicts of interest and ethical guidelines for board
  members and land bank employees.
         Sec. 379H.056.  COMPENSATION; REIMBURSEMENT. (a)  Board
  members serve without compensation.
         (b)  The board may reimburse a member for expenses actually
  incurred in the performance of duties on behalf of the land bank.
  SUBCHAPTER C.  CREATION, OPERATION, AND DISSOLUTION OF LAND BANK
         Sec. 379H.101.  CREATION OF LAND BANK.  (a)  The governing
  body of a municipality may create a land bank by the adoption of an
  ordinance approving the land bank's certificate of formation and
  bylaws.
         (b)  Approval by the governing body of a municipality of the
  certificate of formation and bylaws of a corporation created under
  Chapter 431, Transportation Code, that will serve as a land bank
  under this chapter is sufficient to create a land bank under this
  section.
         (c)  A land bank's certificate of formation and bylaws
  approved under this section may not be changed or amended unless the
  governing body of the municipality for which the land bank was
  created approves the change or amendment by the adoption of an
  ordinance.
         Sec. 379H.102.  GENERAL POWERS OF LAND BANK. (a)  A land
  bank has all powers necessary to carry out the purposes of this
  chapter, including the power to:
               (1)  adopt, amend, and repeal bylaws for the regulation
  of the land bank's affairs and the conduct of the land bank's
  business;
               (2)  sue and be sued in the land bank's own name and
  plead and be interpleaded in all civil actions, including actions
  to clear title to real property of the land bank;
               (3)  adopt and alter a seal;
               (4)  borrow funds necessary for the operation of the
  land bank from private lenders, municipalities, this state, and the
  federal government;
               (5)  adopt any policy for procurement that is
  recognized under state law and permitted for governmental entities,
  including a policy recognized under Chapters 252 and 271 of this
  code, Chapter 431, Transportation Code, and Chapters 2254 and 2269,
  Government Code;
               (6)  issue negotiable revenue bonds and notes under
  this chapter;
               (7)  procure insurance or guarantees from this state or
  the federal government of the payments of any debts or parts of
  debts incurred by the land bank and pay premiums in connection with
  those debts;
               (8)  enter into contracts and other agreements
  necessary, incidental, or convenient to the performance of the land
  bank's duties and the exercise of the land bank's powers, including
  governmental agreements under Subchapter D, Chapter 431,
  Transportation Code, or interlocal contracts under Section
  791.011, Government Code, for the joint exercise of powers under
  this chapter;
               (9)  enter into contracts and other agreements with the
  municipality that created the land bank for the performance of
  services in accordance with Chapter 311, Tax Code;
               (10)  make and execute contracts and other instruments
  necessary or convenient to the exercise of the land bank's powers;
               (11)  procure insurance against losses in connection
  with the real property, assets, or activities of the land bank;
               (12)  invest money of the land bank, at the discretion
  of the board, in instruments, obligations, securities, or property
  determined proper by the board and name and use depositories for the
  land bank's money;
               (13)  enter into contracts for the management of,
  collection of rent from, or sale of real property of the land bank;
               (14)  design, develop, construct, demolish,
  reconstruct, rehabilitate, renovate, relocate, or otherwise
  improve real property of the land bank;
               (15)  set, charge, and collect rents, fees, and charges
  for the use of real property of the land bank and for services
  provided by the land bank;
               (16)  finance by loan, grant, lease, or otherwise
  refinance, construct, erect, assemble, purchase, acquire, own,
  repair, remodel, rehabilitate, modify, maintain, extend, improve,
  install, sell, equip, expand, add to, operate, or manage real
  property of the land bank and pay the costs of those activities from
  the proceeds of loans by persons, corporations, limited or general
  partnerships, and other entities;
               (17)  grant or acquire a license, easement, lease, as
  lessor or lessee, or option with respect to real property of the
  land bank;
               (18)  enter into partnerships, joint ventures, and
  other collaborative relationships with the municipality that
  created the land bank and other public and private entities for the
  ownership, management, development, and disposition of real
  property of the land bank;
               (19)  make application directly or indirectly to any
  federal, state, county, or municipal government or agency or to any
  other public or private source for loans, grants, guarantees, or
  other financial assistance in furtherance of the land bank's public
  purpose and accept and use the loans, grants, guarantees, or
  financial assistance on terms prescribed by that federal, state,
  county, or municipal government or agency or other source;
               (20)  as security for the repayment of any notes or
  other obligations of the land bank, pledge, mortgage, convey,
  assign, hypothecate, or otherwise encumber any property of the land
  bank, including real property, fixtures, personal property,
  revenue, and other funds, and execute any lease, trust indenture,
  trust agreement, agreement for the sale of the land bank's notes of
  other obligation, loan agreement, mortgage, security agreement, or
  other agreement necessary or desirable as determined by the land
  bank; and
               (21)  hold title to real property for purposes of
  establishing contracts with public and private nonprofit community
  land trusts, including long-term lease contracts.
         (b)  A land bank may not:
               (1)  exercise the power of eminent domain; or
               (2)  acquire real property outside the geographical
  boundaries of the municipality that created the land bank.
         Sec. 379H.103.  RESOLUTION OF COMPLEX TITLE QUESTIONS. A
  land bank may provide assistance and guidance to owners of real
  property for which there are complex, highly divided fractional
  interests in the real property because of multigenerational
  intestate distributions, unknown heirs, and other interested
  parties for whom accurate information cannot be ascertained.
         Sec. 379H.104.  INTERLOCAL CONTRACTS. (a)  A land bank may
  enter into an interlocal contract under Section 791.011, Government
  Code, with:
               (1)  a municipality for a program created by the
  municipality under Chapter 373 or 374; or 
               (2)  a non-qualifying municipality for the purpose of
  the land bank conducting land bank activities on behalf of and
  within the geographical boundaries of the non-qualifying
  municipality. 
         (b)  Notwithstanding Section 379H.102(b)(2), a land bank may
  acquire real property within the geographical boundaries of a
  non-qualifying municipality with which it has entered into an
  agreement under Subsection (a).
         Sec. 379H.105.  RECORDS AND REPORTS. (a)  A land bank shall
  keep accurate minutes of the land bank's 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 the land bank's real property.
         (b)  A land bank shall maintain and make available for public
  review and inspection:
               (1)  an inventory of all real property held by the land
  bank; 
               (2)  a copy of the sale settlement statement for each
  real property sold or transferred to a third party; and
               (3)  a copy of the performance report filed under
  Subsection (e).
         (c)  Not later than the 90th day after the end of the fiscal
  year of the municipality that created the land bank, the land bank
  shall file with the municipality an annual audited financial
  statement prepared by a certified public accountant.
         (d)  Financial transactions of a land bank are subject to
  audit by the municipality that created the land bank.
         (e)  For purposes of evaluating the effectiveness of a land
  bank created under this chapter, a land bank shall submit an annual
  performance report to the municipality that created the land bank
  not later than November 1 of each year in which the land bank
  acquires or sells real property in accordance with this chapter.
         Sec. 379H.106.  STAFF. (a)  A land bank may employ an
  executive director, counsel and legal staff, technical experts, and
  other agents and employees, permanent or temporary, that the land
  bank may require and may determine the qualifications and set the
  compensation and benefits of each of those persons. 
         (b)  A land bank may enter into contracts and agreements with
  municipalities for staffing services to be provided to the land
  bank by those municipalities or for the land bank to provide such
  staffing services to those municipalities.
         Sec. 379H.107.  ADVISORY COMMITTEE AND NEIGHBORHOOD
  CONSULTATION. (a)  A land bank shall create one or more advisory
  committees to consult with and advise the land bank on:
               (1)  properties within the municipality served by the
  land bank that are imposing the greatest harm on neighborhoods and
  communities in the municipality;
               (2)  neighborhood priorities for new uses of those
  properties; and
               (3)  the range of potential transferees of those
  properties.
         (b)  As appropriate to the location of the real property of
  the land bank, advisory committee membership and neighborhood
  consultations shall include formal and informal
  neighborhood-specific community associations, residents'
  associations, faith communities, community development
  corporations, and anchor institutions.
         Sec. 379H.108.  DISSOLUTION OF LAND BANK. (a)  A land bank
  may be dissolved not earlier than the 60th day after the date an
  affirmative resolution to dissolve the land bank is approved by
  two-thirds of the membership of the board and confirmed by
  resolution of the municipality that created the land bank. 
         (b)  Not less than 60 days before the consideration of a
  resolution of dissolution by the board, the board shall:
               (1)  provide to the governing body of the municipality
  that created the land bank written notice of the board's intent to
  vote on a resolution for dissolution of the land bank;
               (2)  publish the notice in a local newspaper of general
  circulation; and
               (3)  send the notice by certified mail to the trustee of
  any outstanding bonds of the land bank. 
         (c)  On dissolution of the land bank, all real property,
  personal property, and other assets and obligations of the land
  bank become the assets and obligations of the municipality that
  created the land bank.
  SUBCHAPTER D. ACQUISITION AND DISPOSITION OF PROPERTY
         Sec. 379H.151.  TAX EXEMPT STATUS OF LAND BANK PROPERTY. The
  real property of a land bank, including real property held by a land
  bank under a long-term lease contract with a community land trust,
  and the land bank's income and operations are exempt as public
  property used for public purposes from all license fees, recording
  fees, and all other taxes imposed by this state or by political
  subdivisions of this state.
         Sec. 379H.152.  TITLE HELD BY LAND BANK. All real property
  acquired by a land bank must be held in the name of the land bank.
         Sec. 379H.153.  QUIET TITLE ACTIONS. (a)  A land bank may
  file an action to quiet title as to any real property in which the
  land bank has an interest.  For purposes of a quiet title action,
  the land bank is considered to be the holder of sufficient legal and
  equitable interests and possessory rights to qualify the land bank
  as an adequate complainant in the action.
         (b)  Before filing an action to quiet title, the land bank
  shall conduct an examination of title to determine the identity of
  all persons and entities possessing a claim or interest in or to the
  real property.  Service of the complaint to quiet title shall be
  provided to the interested parties by the following methods:
               (1)  by first class mail to an identity and address as
  reasonably ascertainable by an inspection of public records;
               (2)  in the case of occupied real property, by
  registered or certified mail addressed to "occupant";
               (3)  by posting a copy of the notice on the real
  property;
               (4)  by publication in a newspaper of general
  circulation in the municipality in which the property is located;
  and
               (5)  by another method the court may order.
         (c)  As part of the complaint to quiet title, a land bank
  shall file an affidavit identifying all parties potentially having
  an interest in the real property and the form of notice provided.
         (d)  A court hearing an action under this section shall:
               (1)  schedule a hearing on the complaint not later than
  the 90th day after the date of the filing of the affidavit under
  Subsection (c); and
               (2)  issue a final judgment not later than the 120th day
  after the date of the filing of the complaint for all matters on
  which an answer was not filed by an interested party.
         (e)  A land bank may join in a single complaint to quiet title
  for one or more parcels of real property.
         Sec. 379H.154.  ACQUISITION OF PROPERTY GENERALLY. (a)  A
  land bank may acquire real property by gift, devise, transfer,
  exchange, foreclosure, purchase, purchase contracts, lease
  purchase agreements, installment sales contracts, land contracts,
  or transfers from a municipality on terms as agreed by the land bank
  and the municipality, or through any other means on terms and in a
  manner the land bank considers appropriate.
         (b)  Notwithstanding any other law to the contrary, a
  municipality served by a land bank or a non-qualifying municipality
  that has entered into an interlocal contract with a land bank under
  Section 379H.104 may transfer to the land bank real property of the
  municipality or non-qualifying municipality on terms and according
  to procedures determined by the municipality or non-qualifying
  municipality.
         (c)  A land bank may acquire real property from this state,
  the municipality served by the land bank, the county in which that
  municipality is located, a governmental entity within the county,
  the federal government, or an agency or department of the federal
  government.
         (d)  A land bank shall maintain all of its real property in
  accordance with the laws and ordinances of the jurisdiction in
  which the real property is located.
         Sec. 379H.155.  ACQUISITION OF FORECLOSED OR SEIZED
  PROPERTY. (a)  In this section, "taxing unit" has the meaning
  assigned by Section 1.04, Tax Code.
         (b)  A land bank may submit a written bid to acquire real
  property at a tax sale conducted in accordance with Section 34.01,
  Tax Code. The bid:
               (1)  must be in an amount not less than the amount
  calculated under Section 34.01(b), Tax Code; and
               (2)  may be submitted in writing in advance of the
  auction or tendered in person at the auction.
         (c)  If the bid submitted under Subsection (b) is the highest
  bid received at the sale, the land bank:
               (1)  shall:
                     (A)  pay in cash the amount of the costs and
  expenses as described by Section 33.48, Tax Code, and any penalties
  described by Section 33.07 or 33.08, Tax Code; or
                     (B)  remit payment of the amounts described by
  Paragraph (A) to the selling officer by check or electronic funds
  transfer not later than the seventh calendar day after the date of
  the auction; and
               (2)  is entitled to credit bid that portion of the bid
  amount consisting of the amount of the taxes, penalties, other than
  penalties described by Sections 33.07 and 33.08, Tax Code, and
  interest set forth in the judgment.
         (d)  A taxing unit that is a party to a judgment of
  foreclosure for property sold at auction may request that the
  selling officer bid off the property to the taxing unit in the
  manner provided by Section 34.01(j), Tax Code, and, if the request
  is granted, the transfer to the taxing unit prevails over a bid by
  the land bank if the land bank's bid is the only bid sufficient to
  satisfy the minimum bid described by Section 34.01(j), Tax Code.
         (e)  The aggregate amount of all credit bids in a calendar
  year shall be considered satisfied by the aggregate expenditure in
  that calendar year of an amount equal to or greater than the credit
  bid amount, which expenditures are attributable directly and
  indirectly to maintenance, rehabilitation, construction,
  demolition, and remediation activities. As to any specific tract
  of property acquired by the credit bid and transferred by a land
  bank to a public entity described by Section 379H.158(a), the
  credit bid shall be considered satisfied by that transfer.
         (f)  A land bank may submit a written request to a taxing unit
  at any time for the commencement of tax foreclosure proceedings for
  delinquent taxes on real property, other than property legally
  owned and occupied.  A land bank may not submit a written request to
  a taxing unit under this subsection for legally occupied
  residential real property unless the property is five or more years
  delinquent.
         (g)  A request submitted under Subsection (f) must include a
  commitment to tender a bid in the amount specified under Subsection
  (b). On receipt of the written request, the taxing unit, or the
  governmental office acting on behalf of the taxing unit, shall
  commence enforcement proceedings in accordance with Section 33.41,
  Tax Code.
         (h)  If there is no private third party bid in an amount more
  than the bid of the land bank, the real property must be sold to the
  land bank.
         (i)  A sale to a land bank under this section is not a sale to
  a taxing unit under Section 34.01(j) or (p) or 34.21, Tax Code.
         (j)  A land bank may bid an amount higher than the amount
  calculated under Section 34.01(b), Tax Code, and if that higher bid
  amount is the highest successful bid, the land bank shall pay the
  full amount of the bid in cash.
         (k)  The deed to a land bank vests good and perfect title in
  the land bank to the right, title, and interest owned by the
  defendants included in the foreclosure judgment, including the
  defendants' right to the use and possession of the property,
  subject only to the defendants' right of redemption, the terms of a
  recorded restrictive covenant running with the land that was
  recorded before January 1 of the year in which the tax lien on the
  property arose, a recorded lien that arose under that restrictive
  covenant that was not extinguished by the judgment foreclosing the
  tax lien, and each easement of record as of the date of the sale that
  was recorded before January 1 of the year the tax lien arose.
         (l)  A sale of real property to a land bank under this
  section:
               (1)  extinguishes each lien securing payment of the
  delinquent taxes, penalties, and interest against the property and
  included in the judgment; and
               (2)  does not affect the personal liability of any
  person for those taxes, penalties, and interest included in the
  judgment that are not satisfied from the proceeds of the sale.
         (m)  A municipality, and any taxing unit levying property
  taxes within the geographical jurisdiction of the municipality, may
  convey tax foreclosed real property owned by the municipality or
  the taxing unit to the land bank on terms and for an amount of
  consideration determined by the transferor and the land bank.
         (n)  A bid submitted by a land bank in accordance with this
  section is considered a bid for the amount calculated under Section
  34.01(b), Tax Code, and must be received in accordance with Section
  34.01(j), Tax Code.
         Sec. 379H.156.  REDEMPTION BY OWNER OF FORECLOSED PROPERTY.
  (a)  The owner of real property sold to a land bank under Section
  379H.155 may redeem the property in the manner prescribed for
  owners of real property sold at a tax sale to a purchaser other than
  a taxing unit under Section 34.21, Tax Code.
         (b)  The price to be paid by the owner of real property sold
  to a land bank under this section to redeem the property shall be in
  the amounts set forth in Sections 34.21(a) and (e), Tax Code. For
  the purposes of calculating the price, the bid paid by the land bank
  shall be the aggregate amount of the land bank's bid as described by
  Section 379H.155(b).
         (c)  If the owner of real property sold to a land bank under
  Section 379H.155 redeems the property by paying to the land bank the
  full amount required to redeem as set forth in Sections 34.21(a) and
  (e), Tax Code, the land bank shall:
               (1)  retain an amount equal to the amount paid in cash
  by the land bank in accordance with Section 379H.155;
               (2)  retain any redemption premium and any reasonable
  costs the land bank may have expended on maintenance or
  environmental remediation of the property being redeemed; and
               (3)  remit to the county assessor-collector any
  remaining amounts to be distributed among the taxing units that
  were parties to the judgment of foreclosure in an amount equal to
  the proportion of each taxing unit's taxes, penalties, and interest
  due in accordance with the judgment of foreclosure.
         Sec. 379H.157.  DISPOSITION OF PROPERTY GENERALLY. (a)  A
  land bank may convey, exchange, sell, transfer, lease as lessor,
  grant, release and demise, pledge, or hypothecate any interest in,
  on, or to real property of the land bank.
         (b)  A municipality may, in the ordinance creating a land
  bank, require that a particular form of disposition of real
  property of the land bank, or any disposition of real property
  located within a specified jurisdiction of the municipality, be
  subject to specified voting and approval requirements of the board.
  Unless restricted under this subsection, the board may delegate to
  officers and employees the authority to enter into and execute
  agreements, instruments of conveyance, and all other related
  documents pertaining to the conveyance of real property by the land
  bank.
         (c)  A land bank shall determine the terms, conditions, form,
  and substance of consideration necessary and appropriate to convey,
  exchange, sell, transfer, lease as lessor, grant, or mortgage as
  mortgagor any interest in, on, or to real property of the land bank.
  Consideration may take the form of monetary payments and secured
  financial obligations, covenants, and conditions related to the
  present and future use of the property, deed covenants and
  limitations, contractual commitments of the transferee, mortgage
  financing, defeasible fees, and other forms of consideration as
  determined by the board to be in the best interests of the land
  bank. The board shall determine and state in the land bank's
  policies and procedures the general terms for consideration to be
  received by the land bank for the transfer of real property of the
  land bank.
         (d)  The board may authorize in the board's policies
  governing the disposition of land bank property a program for the
  disposition of land bank property to owners of contiguous
  properties.
         (e)  A municipality may recommend that a land bank created by
  the municipality, and the land bank may in the land bank's own
  policies and procedures, establish a hierarchical ranking of
  priorities for the use of real property conveyed by the land bank,
  including use for:
               (1)  purely public spaces and places;
               (2)  flood reduction, storm water retention and
  drainage, and storm resiliency;
               (3)  affordable housing, workforce housing, or public
  service housing;
               (4)  community-based economic development, including
  retail, commercial, and industrial activities;
               (5)  food desert solutions;
               (6)  beautification and public art, parks, and
  recreation;
               (7)  conservation areas; and
               (8)  community land trusts or other public entities.
         Sec. 379H.158.  DISPOSITION OF PROPERTY FOR FLOOD CONTROL
  AND STORM WATER DRAINAGE AND PLANNING. (a)  A land bank may convey
  to a public entity such as a flood control district or a municipal
  parks and recreation department real property held by the land
  bank:
               (1)  for which the highest and best use is flood control
  or storm water retention or drainage; and
               (2)  that, as a result of housing and building code
  restrictions, flood plain elevations, other local, state, or
  federal laws, or public or private agreements, conditions, and
  limitations, is no longer capable of being developed or
  redeveloped.
         (b)  The transfer of real property by a land bank under this
  section may be:
               (1)  by grant, deed lease, or other conveyance and may
  include additional limitations, restrictions, and conditions
  determined by the land bank; and 
               (2)  for nominal consideration, for consideration
  consisting of contractual commitments, for an exchange of real
  properties, or for other consideration determined by the land bank.
         Sec. 379H.159.  AFFORDABLE HOUSING REQUIREMENT. A land bank
  created under this chapter shall adopt a policy requiring not less
  than 70 percent of real property conveyed for residential purposes
  to the land bank be deed restricted for housing that is affordable
  to households with an income of not greater than 80 percent of the
  area median family income, adjusted for household size, for the
  municipality, as determined annually by the United States
  Department of Housing and Urban Development, unless otherwise
  required by:
               (1)  the governing body of the municipality for which
  the land bank is created;
               (2)  a source of funding; or
               (3)  a transferor of an interest in the real property.
  SUBCHAPTER E. FINANCING OF LAND BANK OPERATIONS
         Sec. 379H.201.  GENERAL FINANCING. (a)  A land bank may
  receive funding through grants and loans from the municipality that
  created the land bank, other municipalities, this state, the
  federal government, and other public or private sources.
         (b)  A land bank may receive and retain payments for services
  rendered, for rents and leasehold payments received, for
  consideration for disposition of real and personal property, for
  proceeds of insurance coverage for losses incurred, for income from
  investments, and for any other asset or activity permitted under
  this chapter.
         Sec. 379H.202.  SALE OF LAND BANK PROPERTY. At the time a
  land bank sells or otherwise disposes of real property, the
  proceeds from the sale, if any, shall be allocated to operations and
  expenses of the land bank.
         Sec. 379H.203.  TAX PENALTY FINANCING. The governing
  authority of the municipality that created the land bank, and a
  taxing unit within the geographical boundaries of the municipality,
  may increase the amount of the penalty imposed for the nonpayment of
  real property taxes of the municipality levied within that
  jurisdiction under Section 33.01, Tax Code, by increasing the
  penalty amount on delinquent taxes on July 1, as described by
  Section 33.01(a), Tax Code, from 12 percent to 14 percent. The
  supplemental penalty authorized by this subsection applies only to
  properties not owned and occupied as a residence homestead as
  defined by Section 11.13(j)(1), Tax Code. If the supplemental
  penalty is authorized and collected, all such supplemental revenue
  must be transferred to the land bank.
         Sec. 379H.204.  COLLECTION OF TAXES ON PROPERTY CONVEYED BY
  LAND BANK. Not more than 75 percent of the real property taxes the
  municipality that created the land bank collected on real property,
  excluding any school district or county ad valorem tax, conveyed by
  a land bank under the laws of this state shall be remitted to the
  land bank. The real property taxes of any other taxing unit, as to
  real property of the land bank, may also be allocated to the land
  bank in a similar manner under an interlocal agreement between the
  other taxing unit and the land bank. The specific percentage of
  those taxes to be remitted shall be established by ordinance,
  resolution, or interlocal cooperation agreement of the land bank.
  The allocation of property tax revenue shall begin with the first
  taxable year following the date of conveyance and shall continue
  for a period of five years. The funds shall be remitted to the land
  bank in accordance with the administrative procedures established
  by the assessor-collector of the county in which the land bank is
  located. The allocation of property tax revenue may not occur if
  those taxes have been previously allocated to a tax increment
  reinvestment zone, or to secure a debt of the municipality or other
  taxing unit, unless the municipality or other taxing unit enters
  into an agreement with the land bank for the remittance of those
  funds to the land bank. Any property tax revenue allocated to the
  land bank under this subsection shall be excluded from the
  calculation of ad valorem tax revenue under the municipality's
  charter.
         Sec. 379H.205.  ISSUANCE OF BONDS. (a)  A land bank may
  issue bonds for the land bank's purposes. The principal and
  interest of bonds issued under this section are payable from the
  land bank's general revenue. Any bonds issued under this section
  may be secured by a pledge of any revenue, including grants or
  contributions from this state, the federal government, or any
  agency or instrumentality of this state or the federal government,
  or by a mortgage of any real property of the land bank.
         (b)  Bonds issued by a land bank are negotiable instruments
  under the law.
         (c)  Bonds of a land bank issued under this section and the
  income from those bonds shall at all times be free from taxation for
  state or local purposes under any provision of state law.
         (d)  Bonds issued by a land bank must be authorized by
  resolution of the board and shall be limited obligations of the land
  bank.  A land bank may not issue bonds unless authorized by the
  municipality for which the land bank is created.
         (e)  The principal and interest, costs of issuance, and other
  costs incidental to bonds issued under this section shall be
  payable solely from the income and revenue derived from the sale,
  lease, or other disposition of the assets of the land bank. 
         (f)  In the discretion of the land bank, the bonds may be
  additionally secured by mortgage or other security device covering
  all or part of the project from which the revenue pledged may be
  derived.
         (g)  Any refunding bonds issued shall be payable from any
  source described by this section or from the investment of any of
  the proceeds of the refunding bonds, may not constitute an
  indebtedness or pledge of the general credit of a municipality or
  any other governmental entity within the meaning of any
  constitutional or statutory limitation of indebtedness, and must
  contain a recital to that effect.
         (h)  Bonds of the land bank may be issued in the form, may be
  in the denominations, may bear interest, may mature in the manner,
  and may be executed by one or more members of the board as provided
  by the resolution authorizing the issuance of the bonds.  The bonds
  may be subject to redemption at the option of and in the manner
  determined by the board in the resolution authorizing the issuance
  of the bonds.
         (i)  The municipality in which a land bank operates may
  guarantee, insure, or otherwise become primarily or secondarily
  obligated on the indebtedness of the land bank subject to all other
  provisions of state law applicable to municipal indebtedness.
         (j)  Bonds issued by a land bank shall be issued, sold, and
  delivered in accordance with the terms and provisions of a
  resolution adopted by the board. The board of a land bank may sell
  the bonds in a manner, either at public or at private sale, and for a
  price as the board determines to be in the best interests of the
  land bank. The resolution issuing bonds shall be published in a
  newspaper of general circulation within the jurisdiction of the
  land bank.
         (k)  A board member or a person executing the bonds is not
  liable personally on any bonds by reason of the issuance of the
  bonds. The bonds or other obligations of the land bank are not a
  debt of the municipality that created the land bank or of this state
  and must state so on their face. The municipality, this state, or
  any revenue or any property of a municipality or this state is not
  liable for the bond.
         SECTION 2.  Section 379E.002, Local Government Code, is
  amended to read as follows:
         Sec. 379E.002.  APPLICABILITY; CONSTRUCTION WITH OTHER LAW.
  This chapter applies only to a municipality:
               (1)  to which Chapter 379C or 379H [or 379D] does not
  apply; and
               (2)  that has not ever adopted a homestead land bank
  program under Subchapter E, Chapter 373A.
         SECTION 3.  Chapter 379D, Local Government Code, is
  repealed.
         SECTION 4.  The Houston Land Bank, a public nonprofit
  corporation evidenced by its amended and restated Certificate of
  Formation dated September 26, 2018, as filed with the Secretary of
  State under File No. 155688901, under ordinance dated HCD 18-51,
  approved and adopted by the city council of the City of Houston on
  July 25, 2018, and originally created as the Land Assemblage
  Redevelopment Authority under Subchapter D, Chapter 431,
  Transportation Code, is a land bank under Chapter 379H, Local
  Government Code, as added by this Act, and shall continue to possess
  the statutory authorization by which it was originally created
  under Subchapter D, Chapter 431, Transportation Code. All actions
  of the board of directors and employees of the Houston Land Bank,
  all contracts, agreements, services, and real property
  acquisitions and dispositions taken before the effective date of
  this Act shall remain unaffected by the adoption of an ordinance
  under Chapter 379H, Local Government Code, as added by this Act.
         SECTION 5.  This Act takes effect September 1, 2019.
 
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