Relating to the appointment of a receiver for and sale of certain parcels of land that are abandoned, unoccupied, tax delinquent, and undeveloped in certain municipalities.

89(R) SB 1579 - Enrolled version - Bill Text

S.B. No. 1579

AN ACT

relating to the appointment of a receiver for and sale of certain

parcels of land that are abandoned, unoccupied, tax delinquent, and

undeveloped in certain municipalities.

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

SECTION 1. Chapter 212, Local Government Code, is amended

by adding Subchapter I to read as follows:

SUBCHAPTER I.

ABANDONED, UNOCCUPIED, AND TAX DELINQUENT

UNDEVELOPED PARCELS IN CERTAIN MUNICIPALITIES

Sec.

212.301.

APPLICABILITY.

(a)

This subchapter applies

to a municipality that is located in a county that:

(1)

contains a municipality with a population of more

than 500,000; and

(2) is adjacent to an international border.

(b)

This subchapter applies only to land that is located

within the boundaries of a municipality.

Sec.

212.302.

ADMINISTRATIVE DETERMINATION.

(a) The

governing body of a municipality may implement an expedited process

to administratively determine that an undeveloped parcel of land is

abandoned, unoccupied, and tax delinquent if the parcel:

(1)

has never been platted or surveyed or has remained

undeveloped and unoccupied for 25 years or more after the date the

land was platted or surveyed;

(2)

if located in a subdivision, is part of a

subdivision in which 50 percent or more of the parcels are:

(A) undeveloped, abandoned, or unoccupied; and

(B) 10 acres or less in size;

(3)

has an assessed value of less than $1,000 as

indicated on the most recent appraisal roll for the appraisal

district in which the parcel is located;

(4)

is not valued for ad valorem taxation as land for

agricultural use under Subchapter C, Chapter 23, Tax Code;

(5)

has delinquent ad valorem taxes owed for the

current tax year, as defined by Section 1.04, Tax Code; and

(6)

has delinquent ad valorem taxes owed for at least 5

out of the preceding 10 tax years.

(b)

The municipality does not have an ownership interest in

any undeveloped parcel of land that is administratively determined

to be abandoned, unoccupied, and tax delinquent or that is placed in

a receivership under this subchapter, except for any existing or

future legal interest established by other law.

Sec.

212.303.

PUBLIC HEARING.

(a)

Before a municipality

may make an administrative determination under Section 212.302, the

municipality must:

(1) hold a public hearing on the matter; and

(2)

make reasonable efforts to notify each owner and

lienholder of the parcel of land of the time and place of the

hearing as provided by Section 212.304.

(b)

The hearing may be held by the governing body of the

municipality or an appropriate municipal commission or board

appointed by the governing body.

The Texas Rules of Evidence do not

apply to a hearing conducted under this section.

(c)

At the hearing, an owner or lienholder may provide

testimony and present evidence to refute any of the applicable

factors for a determination under Section 212.302.

It is an

affirmative defense to a determination under Section 212.302 that

the ad valorem taxes imposed on a parcel of land have been paid in

full and no delinquent ad valorem taxes or penalties are owed on the

parcel at the time of the hearing, regardless of whether the taxes

or penalties were paid after the notice provided under Section

212.304.

(d)

The municipality may conduct a single hearing for

multiple parcels of land and make a determination that multiple

parcels of land are abandoned, unoccupied, and tax delinquent based

on the same evidence.

(e)

Not later than the 14th day after the date of the

hearing, if a parcel of land is determined to be abandoned,

unoccupied, and tax delinquent, the municipality shall issue a

resolution of its determination.

(f)

Not later than the 14th day after the date of the

resolution, the municipality shall:

(1) post notice of the resolution at the city hall; and

(2)

publish in a newspaper of general circulation in

the municipality in which the parcel of land is located a notice of

the determination containing:

(A) a description of the parcel;

(B) the date of the hearing;

(C)

a brief statement of the results of the

resolution;

(D)

instructions stating where a complete copy of

the resolution may be obtained; and

(E)

notice that the resolution is appealable to a

district court in the county within 60 calendar days of the

resolution.

(g)

In lieu of the notice required by Subsection (f), the

municipality may:

(1)

post the information required by Subsection (f)(2)

on the municipality's Internet website; and

(2)

publish a notice in a newspaper of general

circulation in the municipality in which the parcel of land is

located stating that:

(A)

the governing body of the municipality has

adopted a resolution under this subchapter; and

(B)

the information required by Subsection

(f)(2) may be found on the municipality's Internet website.

Sec.

212.304.

NOTICE OF HEARING. (a)

The municipality

shall:

(1)

provide notice of the hearing to each record owner

of the applicable parcel of land, each person who paid the ad

valorem taxes imposed on the parcel of land during the 15 most

recent tax years, and each holder of a recorded lien against the

applicable parcel of land by:

(A) personal delivery;

(B)

certified mail with return receipt requested

to the last known address of each owner, each person who paid the ad

valorem taxes imposed on the parcel of land during the 15 most

recent tax years, and each lienholder; or

(C)

delivery to the last known address of each

owner, each person who paid the ad valorem taxes imposed on the

parcel of land during the 15 most recent tax years, and each

lienholder by the United States Postal Service using signature

confirmation services;

(2)

publish notice of the hearing in a newspaper of

general circulation in the municipality and on the municipality's

Internet website on or before the 10th day before the date of the

hearing; and

(3)

file in the property records of the county in which

the parcel of land is located notice of the hearing that contains:

(A)

the name and last known address of the owner

of the applicable parcel of land; and

(B)

a description of the administrative

determination proceeding, including notice that the administrative

determination may result in the extinguishment of any and all

rights and legal interests in the parcel of land.

(b)

Notice under Subsection (a)(1) must be provided to each

owner, each person who paid the ad valorem taxes imposed on the

parcel of land during the 15 most recent tax years, and each

lienholder for whom an address can be reasonably ascertained from

the deed of trust or other applicable instrument on file in the

office of the county clerk for the county in which the parcel of

land is located, in the records of the county tax office for the

county in which the parcel of land is located, or in the records of

the office of the central appraisal district for the county in which

the parcel of land is located.

The filed notice under Subsection

(a)(3) must contain the name and address of each owner to the extent

that that information can be reasonably ascertained from the deed

of trust or other applicable instrument on file in the office of the

county clerk, in the records of the county tax office, or in the

records of the office of the central appraisal district for the

county.

(c) The filing of notice under Subsection (a)(3):

(1)

is binding on subsequent grantees, lienholders, or

other transferees of an interest in the parcel of land who acquire

that interest after the filing of the notice; and

(2)

constitutes notice of the proceeding on any

subsequent recipient of any interest in the parcel of land who

acquires that interest after the filing of the notice.

(d)

An owner or lienholder is presumed to have received

actual and constructive notice of the hearing if the municipality

complies with this section, regardless of whether the municipality

receives a response from the person.

Sec.

212.305.

JUDICIAL REVIEW.

(a)

Any owner or lienholder

of record of a parcel of land aggrieved by a resolution issued under

Section 212.303 may file in a district court in the county in which

the parcel of land is located a verified petition alleging that the

decision is illegal, wholly or partly, and stating with specificity

the grounds of the alleged illegality.

The petition must be filed

by an owner, owner's agent, or lienholder of the parcel of land

within 60 calendar days of the resolution.

If a petition is not

filed within 60 calendar days of the resolution, the resolution

shall become final.

(b)

On the filing of a petition under Subsection (a), the

court may issue a writ of certiorari directed to the municipality to

review the resolution of the municipality and shall prescribe in

the writ the time within which a return on the writ must be made and

served on the relator or the relator's attorney.

(c)

The municipality is not required to return the original

papers acted on by it, but it is sufficient for the municipality to

return certified or sworn copies of the papers or parts of the

papers as may be called for by the writ.

(d)

Appeal of the municipality's determination under this

subchapter shall be conducted under the substantial evidence rule.

Sec.

212.306.

CIVIL ACTION FOR RECEIVERSHIP. (a)

After a

final determination that an undeveloped parcel of land is

abandoned, unoccupied, and tax delinquent, the municipality shall

bring a civil action to have the parcel placed in a receivership.

On a final determination that an undeveloped parcel of land is

abandoned, unoccupied, and tax delinquent as provided by this

subchapter, an owner's or lienholder's rights and legal interests

are extinguished, subject to the provisions of this subchapter

regarding any net proceeds resulting from the disposition of the

property, and transferred to the receiver.

(b)

The only allegations required to be pleaded in an action

for receivership brought under this section are:

(1)

the identification of the applicable parcel of

land;

(2)

the relationship of the defendant to the real

property;

(3)

the notice of the administrative hearing given to

the owner; and

(4)

the administrative determination that the parcel

of land is abandoned, unoccupied, and tax delinquent.

(c)

The court may appoint as receiver any person with a

demonstrated record of knowledge of the problems created by

undeveloped parcels of land described by this section. In

selecting a receiver, the court may also take into consideration

whether the person owns property in the affected area.

The court

may not appoint as a receiver

the municipality, an official or

employee of the municipality, a relative of an official or employee

of the municipality within the third degree of consanguinity or

affinity, or a person who may directly benefit from an

administrative action taken as a receiver.

(d)

In a civil action under this subchapter, the record

owners and any lienholders of record of the land subject to the

action shall be served with personal notice of the proceedings as

provided by the Texas Rules of Civil Procedure.

Service on the

record owners or lienholders constitutes notice to all unrecorded

owners or lienholders.

Sec.

212.307.

AUTHORITY AND DUTY OF RECEIVER. (a)

Unless

inconsistent with this chapter or other law, the rules of equity

govern all matters relating to the appointment, powers, duties, and

liabilities of a receiver and to the powers of a court regarding a

receiver. A receiver appointed by the court may:

(1) take control of the parcel of land;

(2)

make or have made any repairs or improvements to

the parcel of land to make it developable;

(3)

make provisions for the parcel of land to be

subject to street, road, drainage, utility, and other

infrastructure requirements;

(4)

aggregate the parcel of land with other parcels

that have been similarly determined to be abandoned, unoccupied,

and tax delinquent;

(5) plat or replat the parcel of land;

(6)

accept the grant or donation of any parcel of land

within the affected area to carry out the purpose of this

subchapter; and

(7)

exercise all other authority that an owner of the

parcel of land could have exercised, including the authority to

sell the parcel.

(b)

Before a person assumes the duties of a receiver, the

person must be sworn to perform the duties faithfully.

(c) The appointed receiver is an officer of the court.

(d)

If a receiver dies, resigns, or becomes incapacitated,

the court shall appoint a receiver to succeed the former receiver.

(e)

If the donation of a parcel of land to the receiver is

not challenged before the first anniversary of the donation date,

the donation is final and not revocable under any other legal

proceeding.

(f)

A parcel of land under the control of a receiver

appointed under this subchapter may be redeemed by the record owner

or the owner's agent during the 12 months following the appointment

of the receiver by paying all current and delinquent ad valorem

taxes owed and the proportional cost of notice and administrative

fees, if applicable.

(g)

All funds that come into the hands of the receiver shall

be deposited in a place in this state directed by the court.

The

receiver's use of the funds in connection with the receiver's duties

or authority under this subchapter shall be subject to the approval

of the court. All net proceeds from the disposition of a parcel of

land by the receiver shall be placed in trust and remain in trust

for at least three years, unless claimed before the expiration of

the trust period. The court must order additional notices to an

owner or lienholder about the net proceeds as are practicable

during the trust period and, on expiration of the trust period, any

money remaining in the receivership shall escheat to the state.

Funds escheated to the state under this subchapter are subject to

disposition or recovery under Subchapters C and D, Chapter 71,

Property Code.

(h)

After the receiver has improved the parcel of land to

the degree that the parcel is developable and meets all applicable

standards, or before petitioning the court for termination of the

receivership, the receiver shall file with the court:

(1)

a summary and accounting of all costs and expenses

incurred, which may, at the receiver's discretion, include a

receivership fee of up to 15 percent of the costs and expenses

incurred, unless the court, for good cause shown, authorizes a

different limit;

(2)

a statement describing the disposition of each

parcel of land, including whether the parcel was aggregated with

other parcels;

(3)

a statement of all revenues collected by the

receiver in connection with the use or disposition of the parcels of

land; and

(4)

to the extent required by the court, a description

of any undivided interest of an owner or lienholder, whether

identified or not, in the net proceeds from the disposition of the

property.

(i)

The court must approve any sale of the property by the

receiver.

(j)

A receiver shall have a lien on the property under

receivership for all of the receiver's unreimbursed costs and

expenses and any receivership fee as detailed in the summary and

accounting under Subsection (h)(1).

Sec.

212.308.

SALE OF PROPERTY.

(a)

A sale under this

subchapter must be made by:

(1) public auction;

(2) sealed bid; or

(3) sealed proposal.

(b)

Before a sale may take place under this subchapter, the

receiver must publish notice of the proposed sale before the 60th

day before the date the sale is to be held and again before the 30th

day before the date the sale is to be held.

The notice must be

published in English and Spanish in a newspaper of general

circulation in the municipality in which the real property is

located.

The notice must:

(1) clearly identify the property to be sold;

(2)

specify the procedures and date for the public

auction, sealed bid, or sealed proposal method of sale;

(3) state the minimum bid for the property, if any;

(4)

state any specific financial terms of sale imposed

by the receiver; and

(5)

describe the restrictions, conditions, and

limitations on the use of the property that the receiver has

determined are appropriate, other than the restrictions,

conditions, and limitations provided by other law.

(c)

In addition to the notice required by Subsection (b), to

maximize the price at which the property is sold and the number of

bidders, the receiver shall exercise best efforts to provide notice

of the proposed sale to those persons who may have the business

expertise, financial capability, and interest in developing the

property, including local, state, and national trade associations

whose members are development, real estate, or financial

professionals.

(d)

On the closing of a sale of property under this

subchapter, fee simple title shall be vested in the purchaser.

(e)

The receiver may reject any and all offers.

If the

receiver rejects all offers, the receiver may subsequently reoffer

the same property for sale, reorganize the property and offer the

property for sale, or combine all or part of the property with other

property and offer the combined property for sale.

(f)

If the procedures in this section are followed and a

sale occurs, the sale price obtained for the property is conclusive

as to the fair market value of the property at the time of the sale.

SECTION 2. This Act takes effect September 1, 2025.

______________________________

______________________________

President of the Senate

Speaker of the House

I hereby certify that S.B. No. 1579 passed the Senate on

April 24, 2025, by the following vote: Yeas 29, Nays 2; and that

the Senate concurred in House amendment on May 30, 2025, by the

following vote: Yeas 28, Nays 3.

______________________________

Secretary of the Senate

I hereby certify that S.B. No. 1579 passed the House, with

amendment, on May 27, 2025, by the following vote: Yeas 83,

Nays 55, three present not voting.

______________________________

Chief Clerk of the House

Approved:

______________________________

Date

______________________________

Governor