HB0760ham001 97TH GENERAL ASSEMBLY

Rep. Karen A. Yarbrough

Filed: 3/24/2011

09700HB0760ham001 LRB097 03588 KMW 53441 a

AMENDMENT TO HOUSE BILL 760

AMENDMENT NO. ______. Amend House Bill 760 by replacing everything after the enacting clause with the following:

"Section 1. Findings. The General Assembly finds that additional action is needed to help prevent foreclosures and revitalize the economy in the State of Illinois. Foreclosures are leaving families homeless or in dire financial straits. Many borrowers could receive loan modifications under their existing mortgage, which would help to alleviate this crisis, keep families in their homes, and save Illinois neighborhoods and communities from further damage. Many foreclosures could be prevented with a modest investment in prevention activities, including, outreach to borrowers and court-sponsored mediation to help borrowers and lenders arrive at mutually-agreeable loan modifications. Foreclosed properties contribute to the number of vacant, abandoned, and tax-delinquent properties that threaten communities around the State because those properties diminish property values, enable crime, and create health hazards. Such properties also impose large costs on municipalities and, at the same time, result in decreased revenue for the municipalities. The need exists to address the problems of vacant and abandoned property in a coordinated manner and to foster the development of such property and promote economic growth. Municipalities lack tools necessary to ensure that vacant properties are adequately maintained and secured. Land banks are one of the tools that can be used by communities to facilitate the return of vacant, abandoned, and tax-delinquent properties to productive use. Local governments should be empowered to create land banks to acquire, develop, maintain, and dispose of vacant and abandoned properties that present a threat to communities around the State. Abandoned properties may remain in the foreclosure process for a year or more, which harms both communities and financial institutions with a legal interest in the property. The foreclosure process for abandoned properties should be expedited to help return the properties to productive use.

Section 3. Short title. This Act may be cited as the Illinois Land Banking Act.

Section 5. Definitions.

"Authority" means the land bank authority created pursuant to this Act.

"Governmental unit" means a county or municipality.

"Intergovernmental agreement" means a contractual agreement between 2 or more governmental agencies, including, but not limited to, an agreement to jointly exercise any power, privilege, or authority that agencies share in common and that each might exercise separately under this Act.

Section 10. Authorization. A municipality may create a land bank authority with the powers and restrictions specified in this Act. In creating an authority, the municipality shall provide for all of the following:

(1) Articles of incorporation for the authority, that shall be filed with the Secretary of State and shall include, in addition to other required and permissible articles, an article specifying that the purpose of the land bank authority is to stabilize communities by:

(A) Acquiring property that is vacant or abandoned and in the foreclosure process or is otherwise nonrevenue-generating or nontax-producing.

(B) Facilitating the reclamation, rehabilitation, and reutilization of property that is vacant, abandoned, in process of foreclosure, or is otherwise nonrevenue-generating or nontax-producing.

(C) Efficiently holding and managing property that is vacant, abandoned, in process of foreclosure, or is otherwise nonrevenue-generating or nontax-producing pending its reclamation, rehabilitation, and reutilization.

(2) The size of the board of directors for the authority, which shall be composed of an odd number of members.

(3) The qualifications, methods of selection, and terms of office of the board members.

Two or more governmental units may elect to enter into an intergovernmental agreement that creates a single land bank to act on behalf of the governmental units, and the agreement shall be authorized by and be in accordance with the provisions of this Section.

Section 15. Board of directors; conflicts of interest. The authority shall be governed by a board of directors. The board shall consist of 3 or more directors. The board of directors shall be composed of an odd number of members. The size of the board may be adjusted in accordance with the land bank's by-laws.

Notwithstanding any law to the contrary, any public officer shall be eligible to serve as a board member and the acceptance of the appointment shall neither terminate nor impair such public office. For the purposes of this Section, "public officer" means a person who is elected to a State or local government office.

Any State or local government employee shall be eligible to serve as a board member.

The board of the authority shall meet from time to time as required, and the presence of a majority of the board of directors shall constitute a quorum. A chairperson shall be elected from among the members, and he or she shall execute all deeds, leases, and contracts of the authority when authorized by the board. The board of the authority shall conduct meetings in accordance with the Open Meetings Act. The board of the authority shall adopt a code of ethics for its directors, officers, and employees. The board of the authority shall establish policies and procedures requiring the disclosure of relationships that may give rise to a conflict of interest.

Members of a board shall not be liable personally for the obligations of the land bank, and the rights of creditors shall be solely against the land bank.

Members of the board must file written statements of economic interest in accordance with Section 4A-101 of the Illinois Governmental Ethics Act.

The board of the authority shall require that any member of the board with a direct or indirect interest in any matter disclose the member's interest to the board before the board takes any action on that matter.

Members of the board of directors of an authority shall serve without compensation.

It shall be unlawful for a member of the board, the spouse of a member of the board, or an immediate family member of a member of the board to have or acquire a contract or have or acquire a direct pecuniary interest in a contract with the authority that relates to the authority. Any of these contracts shall be deemed null and void. The limitations shall remain in force for one year after the conclusion of the person's term of office.

If a member of the board, the spouse of a member of the board, or an immediate family member of a member of the board is entitled to receive distributable income of a partnership, association, corporation, or other business entity, then it is unlawful for that partnership, association, corporation, or other business entity to have or acquire a contract or a direct pecuniary interest in a contract with the authority that relates to the authority. Any of these contracts shall be deemed null and void. The limitations shall remain in force for one year after the conclusion of the person's term of office.

Section 20. Powers. The authority may perform any or all of the powers enumerated in this Section, subject to any conditions, restrictions, or limitations of the governmental unit, including the power to:

(a) Acquire property pursuant to Section 25 of this Act.

(b) Adopt, amend, and repeal bylaws for the regulation of its affairs and the conduct of its business.

(c) Sue and be sued in its own name and plead and be impleaded, including, but not limited to, defending the authority in an action to clear title to property conveyed by the authority.

(d) Take any action, provide any notice, or instate any proceeding required to clear or quiet title to property held by the authority in order to establish ownership by and vest title to property in the authority.

(e) Be made party to and defend any action or proceeding concerning title claims against property held by the authority.

(f) Subject to the written approval of the board of directors and the municipality that created the authority under this Act, borrow money and issue bonds and notes.

(g) Enter into contracts and other instruments necessary, incidental, or convenient to the performance of its duties and the exercise of its powers, including, but not limited to, intergovernmental agreements, for the joint exercise of power under this Act.

(h) Enter into contracts for the management of, the collection of rent from, and the sale of real property held by an authority.

(i) Enter into contracts with other entities, public or private, for the provision of all or a portion of the services necessary for the management and operation of the authority.

(j) Solicit and accept gifts, grants, labor, loans, and other aid from any person, the federal government, this State, a political subdivision of this State or any agency of the federal government, or an intergovernmental entity created under the laws of this State or participate in any other way in a program of the federal government, this State, a political subdivision of this State, or an intergovernmental entity created under the laws of this State.

(k) Procure insurance against loss in connection with the property, assets, or activities of the authority.

(l) Control, hold, manage, maintain, operate, repair, lease as lessor, secure, prevent the waste or deterioration of, demolish, and take all other actions necessary to preserve the value of the property it holds or owns.

(m) Remediate environmental contamination on any property held by the authority.

(n) Fix, charge, and collect rents, fees, and charges for use of property under the control of the authority or for services provided by the authority.

(o) Grant or acquire a license, easement, or option with respect to property as the authority determines is reasonably necessary to achieve the purposes of the Act.

(p) Pay any tax or special assessment due on property acquired or owned by the authority.

(q) Subject to the Public Funds Investment Act, invest money of the authority, at the discretion of the board of directors of the authority, in instruments, obligations, securities, or property determined proper by the board of directors of the authority, and name and use depositories for its money.

(r) Employ its own employees or use employees of the authorizing municipality or employees of the parties to intergovernmental agreements.

(s) Employ legal and technical experts, other officers, agents, or employees and pay them from the funds of the authority and determine the qualifications, duties, and compensation of those it employs.

(t) The board of directors of an authority may delegate to one or more of its members, officers, agents, or employees any powers or duties it considers proper.

(u) Reimburse members of the board of directors of the authority for actual and necessary expenses subject to available appropriations.

(v) Contract for goods and services and engage personnel as necessary and engage the services of private consultants, managers, legal counsel, engineers, accounts, and auditors for rendering professional financial assistance and advice payable out of any money available to the authority.

(w) Prepare the reports or plans the authority considers necessary to assist it in the exercise of its powers under this Act and to monitor and evaluate progress under this Act.

(x) Extinguish taxes pursuant to Section 35 of this Act.

(y) Convey, sell, transfer, exchange, lease as lessor, or otherwise dispose of property, rights, or interests in property to which the authority holds a legal interest to any public or private person for value determined by the authority.

An authority shall not exercise the power of eminent domain.

The powers granted by this Act are in addition to the powers granted by any other law, statute, or charter.

Section 25. Acquisition of property. The authority may acquire real property or rights or interests in real property by gift, devise, transfer, exchange, foreclosure, purchase, purchase contracts, lease purchase agreements, installment sales contracts, land contracts, or otherwise on terms and conditions and in a manner the authority considers proper.

The authority may hold and own in its name any property acquired by it or conveyed to it by this State, a foreclosing governmental unit, a unit of local government, an intergovernmental entity created under the laws of this State, or any other public or private person, including, but not limited to, property without clear title.

The authority may only acquire property within the jurisdiction of one of the municipalities granting the authority power under this Act or within the jurisdiction of a governmental entity pursuant to an intergovernmental agreement with that governmental entity. A property outside the corporate limits of a municipality is not considered within the jurisdiction of the municipality until annexation is completed pursuant to Section 7-1-1 of the Illinois Municipal Code.

All deeds, mortgages, contracts, leases, purchases, or other agreements regarding property of an authority, including agreements to acquire or dispose of real property, shall be approved by and executed in the name of the authority.

The authority shall have the right to purchase properties at tax sales conducted in accordance with Division 3.5 of the Property Tax Code.

(1) The authority may tender a bid at a tax sale that is a credit bid, consisting of the obligation of the authority to satisfy the component parts of the bid by payments to the respective political subdivisions.

(2) A bid by the authority at a tax sale for the minimum amount shall take priority over all other bids for the same property.

Section 30. Financing of land bank operations. A land bank may receive funding through grants and loans from the governmental unit that created the land bank, from other municipalities, from the State of Illinois, from the federal government, and from other public and private sources.

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 and activity lawfully permitted to a land bank under this Act

A municipality may authorize the remittance of a portion of the real property taxes collected on real property conveyed by a land bank authority. Up to 50% of those taxes may be remitted to the land bank authority for up to 5 years after the land bank has completed the conveyance of the property.

A land bank shall have power to issue bonds for any of its corporate purposes, the principal and interest of which are payable from its revenues generally. Any of the bonds may be secured by a pledge of any revenues, including grants or contributions, or by a mortgage of any property of the land bank.

Bonds issued by the land bank shall be authorized by resolution of the board and shall be limited obligations of the land bank; the principal and interest, costs of issuance, and other costs incidental thereto shall be payable solely from the income and revenue derived from the sale, lease, or other disposition of the assets of the land bank. 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 revenues so pledged may be derived. Any refunding bonds issued shall be payable from any source described in this Section or from the investment of any of the proceeds of the refunding bonds and shall not constitute an indebtedness or pledge of the general credit of any governmental unit or municipality within the meaning of any constitutional or statutory limitation of indebtedness, and each bond shall state that requirement.

Section 35. Taxes. When real property is acquired by the authority, and that real property is encumbered by a lien or claim for real property taxes owed to the governmental unit or units that created the land bank, the land bank shall have the power, by resolution of the board, to discharge and extinguish any and all liens and claims. Whenever any real property is acquired by a land bank, and that real property is encumbered by a lien or claim for real property taxes owed to the school district, or to a municipality other than the governmental unit or units that created the land bank, the land bank shall have the power, by resolution of the board, to discharge and extinguish any and all such liens or claims if and only if the school district, or municipality other than the governmental unit or units that created the land bank, and the land bank, have entered into an agreement authorizing such discharge and extinguishment. To the extent necessary and appropriate, the land bank shall file in appropriate public records evidence of the extinguishment and dissolution of the liens or claims.

All moneys received by an authority as payment of taxes, penalties, or interest, or from the redemption or sale of property subject to a tax lien of any taxing unit shall be returned to the appropriate local tax collecting unit in which the property is located.

Property of an authority is public property devoted to an essential public and governmental function and purpose. Income of the authority is considered to be for a public and governmental purpose. The property of the authority and its income and operation are exempt from all taxes and special assessments of this State and all units of local government. Bonds or notes issued by the authority, and the interest on and income from those bonds and notes, are exempt from all taxation of this State or a unit of local government.

Section 40. Proceeds. Except as otherwise provided in this Act, as required by other law, as required under the provisions of a deed, or as an authority otherwise agrees, any proceeds received by the authority may be retained by the authority for the purposes of this Act.

Section 45. Record maintenance. The authority shall maintain a written inventory of all property held by the authority. The property shall be inventoried and classified by the authority according to title status and suitability for use. The inventory shall be available for public inspection during regular business hours.

For each property held, the authority shall establish and maintain itemized records and accounts reflecting all transactions, expenditures, and revenues relating to all property held by the authority.

Section 50. Dissolution. The articles of incorporation shall specify the procedure under which a land bank authority may be dissolved. Upon dissolution of the land bank all real property, personal property, and other assets of the land bank shall become the assets of the governmental unit or units that created the land bank. In the event that 2 or more governmental units create a land bank authority, the withdrawal of one or more governmental units shall not result in the dissolution of the land bank unless the intergovernmental agreement so provides, and there is no governmental unit that desires to continue the existence of the land bank.

Section 99. Effective date. This Act takes effect upon becoming law.".