Sec. 379D.012. RIGHT OF SECOND REFUSAL IN 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 two-mile radius of the property that the land bank is offering for sale.

(b) If all eligible adjacent property owners fail to exercise the right of first refusal under Section 379D.011, the land bank shall offer a property for sale to qualified organizations that are eligible to acquire additional properties from the land bank under Section 379D.009(c). If a qualified organization is not eligible to acquire additional properties under that subsection at the time the property first becomes available for sale, the land bank is not required to hold the property from sale until the organization becomes eligible to purchase the property by the right of second refusal described by this section.

(c) Notice must be provided to the qualified organizations by certified mail, return receipt requested, not later than the 60th day before the beginning of the period in which the right of second refusal may be exercised.

(d) The municipality shall specify in its plan the period during which the right of second refusal provided by this section may be exercised by a qualified organization. That period must be at least 90 days in duration and begin after the period in which the right of first refusal described by Section 379D.011 may be exercised and at least three months but not more than 26 months from the date of the deed of conveyance of the property to the land bank.

(e) During the period specified for the right of second refusal under Subsection (d), 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 second 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 second 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 second refusal for any other nonprofit corporation exempted from federal income tax under Section 501(c)(3), Internal Revenue Code of 1986, provided that the preeminent right of second refusal is provided to qualified organizations as provided by this section.

(i) The land bank is not required to provide a right of second refusal to qualified organizations under this section if the land bank is selling property that reverted to the land bank under Section 379D.009(d).

Added by Acts 2005, 79th Leg., Ch. 795 (S.B. 356), Sec. 1, eff. September 1, 2005.