HB1108ham003 97TH GENERAL ASSEMBLY

Rep. Karen A. Yarbrough

Filed: 3/8/2011

09700HB1108ham003 LRB097 07684 KMW 52442 a

AMENDMENT TO HOUSE BILL 1108

AMENDMENT NO. ______. Amend House Bill 1108 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 55. The Illinois Municipal Code is amended by changing Section 11-20-15 and by adding Sections 11-20-15.1 and 11-20-17 as follows:

(65 ILCS 5/11-20-15)

Sec. 11-20-15. Lien for removal costs.

(a) If the municipality incurs a removal cost under Section 11-20-7, 11-20-8, 11-20-12, or 11-20-13, or 11-20-17 with respect to any underlying parcel, then that cost is a lien upon that underlying parcel. This lien is superior to all other liens and encumbrances, except tax liens and as otherwise provided in subsection (c) of this Section.

(b) To perfect a lien under this Section, the municipality must, within one year after the removal cost is incurred, file notice of lien in the office of the recorder in the county in which the underlying parcel is located or, if the underlying parcel is registered under the Torrens system, in the office of the Registrar of Titles of that county. The notice must consist of a sworn statement setting out:

(1) a description of the underlying parcel that sufficiently identifies the parcel;

(2) the amount of the removal cost; and

(3) the date or dates when the removal cost was incurred by the municipality.

If, for any one parcel, the municipality engaged in any removal activity on more than one occasion during the course of one year, then the municipality may combine any or all of the costs of each of those activities into a single notice of lien.

(c) A lien under this Section is not valid as to: (i) any purchaser whose rights in and to the underlying parcel arose after the removal activity but before the filing of the notice of lien; or (ii) any mortgagee, judgment creditor, or other lienor whose rights in and to the underlying parcel arose before the filing of the notice of lien.

(d) The removal cost is not a lien on the underlying parcel unless a notice is personally served on, or sent by certified mail to, the person to whom was sent the tax bill for the general taxes on the property for the taxable year immediately preceding the removal activities. The notice must be delivered or sent after the removal activities have been performed, and it must: (i) state the substance of this Section and the substance of any ordinance of the municipality implementing this Section; (ii) identify the underlying parcel, by common description; and (iii) describe the removal activity.

(e) A lien under this Section may be enforced by proceedings to foreclose as in case of mortgages or mechanics' liens. An action to foreclose a lien under this Section must be commenced within 2 years after the date of filing notice of lien.

(f) Any person who performs a removal activity by the authority of the municipality may, in his or her own name, file a lien and foreclose on that lien in the same manner as a municipality under this Section.

(g) A failure to file a foreclosure action does not, in any way, affect the validity of the lien against the underlying parcel.

(h) Upon payment of the lien cost by the owner of the underlying parcel after notice of lien has been filed, the municipality (or its agent under subsection (f)) shall release the lien, and the release may be filed of record by the owner at his or her sole expense as in the case of filing notice of lien.

(i) For the purposes of this Section:

"Lien cost" means the removal cost and the filing costs for any notice of lien under subsection (b).

"Removal activity" means any activity for which a removal cost was incurred.

"Removal cost" means a removal cost as defined under Section 11-20-7, 11-20-8, 11-20-12, or 11-20-13, or 11-20-17.

"Underlying parcel" means a parcel of private property upon which a removal activity was performed.

"Year" means a 365-day period.

(j) This Section applies only to liens filed after August 14, 2009 (the effective date of Public Act 96-462).

(k) This Section shall not apply to a lien filed pursuant to Section 11-20-15.1.

(Source: P.A. 96-462, eff. 8-14-09; 96-856, eff. 3-1-10; 96-1000, eff. 7-2-10.)

(65 ILCS 5/11-20-15.1)

Sec. 11-20-15.1. Lien for costs of removal, securing, and enclosing on abandoned residential property.

(a) If the municipality elects to incur a removal cost pursuant to subsection (d) of Section 11-20-7, subsection (d) of Section 11-20-8, subsection (d) of Section 11-20-12, or subsection (e) of Section 11-20-13, or subsection (g) of 11-20-17, or a securing or enclosing cost pursuant to Section 11-31-1.01 with respect to an abandoned residential property, then that cost is a lien upon the underlying parcel of that abandoned residential property. This lien is superior to all other liens and encumbrances, except tax liens and as otherwise provided in this Section.

(b) To perfect a lien under this Section, the municipality must, within one year after the cost is incurred for the activity, file notice of the lien in the office of the recorder in the county in which the abandoned residential property is located or, if the abandoned residential property is registered under the Torrens system, in the office of the Registrar of Titles of that county, a sworn statement setting out:

(1) a description of the abandoned residential property that sufficiently identifies the parcel;

(2) the amount of the cost of the activity;

(3) the date or dates when the cost for the activity was incurred by the municipality; and

(4) a statement that the lien has been filed pursuant to subsection (d) of Section 11-20-7, subsection (d) of Section 11-20-8, subsection (d) of Section 11-20-12, subsection (e) of Section 11-20-13, subsection (g) of 11-20-17, or Section 11-31-1.01, as applicable.

If, for any abandoned residential property, the municipality engaged in any activity on more than one occasion during the course of one year, then the municipality may combine any or all of the costs of each of those activities into a single notice of lien.

(c) To enforce a lien pursuant to this Section, the municipality must maintain contemporaneous records that include, at a minimum: (i) a dated statement of finding by the municipality that the property for which the work is to be performed has become abandoned residential property, which shall include (1) the date when the property was first known or observed to be unoccupied by any lawful occupant or occupants, (2) a description of the actions taken by the municipality to contact the legal owner or owners of the property identified on the recorded mortgage, or, if known, any agent of the owner or owners, including the dates such actions were taken, and (3) a statement that no contacts were made with the legal owner or owners or their agents as a result of such actions, (ii) a dated certification by an authorized official of the municipality of the necessity and specific nature of the work to be performed, (iii) a copy of the agreement with the person or entity performing the work that includes the legal name of the person or entity, the rate or rates to be charged for performing the work, and an estimate of the total cost of the work to be performed, (iv) detailed invoices and payment vouchers for all payments made by the municipality for such work, and (v) a statement as to whether the work was engaged through a competitive bidding process, and if so, a copy of all proposals submitted by the bidders for such work.

(d) A lien under this Section shall be enforceable exclusively at the hearing for confirmation of sale of the abandoned residential property that is held pursuant to subsection (b) of Section 15-1508 of the Code of Civil Procedure and shall be limited to a claim of interest in the proceeds of the sale and subject to the requirements of this Section. Any mortgagee who holds a mortgage on the property, or any beneficiary or trustee who holds a deed of trust on the property, may contest the lien or the amount of the lien at any time during the foreclosure proceeding upon motion and notice in accordance with court rules applicable to motions generally. Grounds for forfeiture of the lien or the superior status of the lien granted by subsection (a) of this Section shall include, but not be limited to, a finding by the court that: (i) the municipality has not complied with subsection (b) or (c) of this Section, (ii) the scope of the work was not reasonable under the circumstances, (iii) the work exceeded the authorization for the work to be performed under subsection (a) of Section 11-20-7, subsection (a) of Section 11-20-8, subsection (a) of Section 11-20-12, subsection (a) of Section 11-20-13, or subsection (a) of Section 11-31-1.01, as applicable, or (iv) the cost of the services rendered or materials provided was not commercially reasonable. Forfeiture of the superior status of the lien otherwise granted by this Section shall not constitute a forfeiture of the lien as a subordinate lien.

(e) Upon payment of the amount of a lien filed under this Section by the mortgagee, servicer, owner, or any other person, the municipality shall release the lien, and the release may be filed of record by the person making such payment at the person's sole expense as in the case of filing notice of lien.

(f) Notwithstanding any other provision of this Section, a municipality may not file a lien pursuant to this Section for activities performed pursuant to Section 11-20-7, Section 11-20-8, Section 11-20-12, Section 11-20-13, or Section 11-31-1.01, if: (i) the mortgagee or servicer of the abandoned residential property has provided notice to the municipality that the mortgagee or servicer has performed or will perform the remedial actions specified in the notice that the municipality otherwise might perform pursuant to subsection (d) of Section 11-20-7, subsection (d) of Section 11-20-8, subsection (d) of Section 11-20-12, subsection (e) of Section 11-20-13, or Section 11-31-1.01, provided that the remedial actions specified in the notice have been performed or are performed or initiated in good faith within 30 days of such notice; or (ii) the municipality has provided notice to the mortgagee or servicer of a problem with the property requiring the remedial actions specified in the notice that the municipality otherwise would perform pursuant to subsection (d) of Section 11-20-7, subsection (d) of Section 11-20-8, subsection (d) of Section 11-20-12, subsection (e) of Section 11-20-13, or Section 11-31-1.01, and the mortgagee or servicer has performed or performs or initiates in good faith the remedial actions specified in the notice within 30 days of such notice.

(g) This Section and subsection (d) of Section 11-20-7, subsection (d) of Section 11-20-8, subsection (d) of Section 11-20-12, subsection (e) of Section 11-20-13, subsection (g) of 11-20-17, or Section 11-31-1.01 shall apply only to activities performed, costs incurred, and liens filed after the effective date of this amendatory Act of the 96th General Assembly.

(h) For the purposes of this Section and subsection (d) of Section 11-20-7, subsection (d) of Section 11-20-8, subsection (d) of Section 11-20-12, subsection (e) of Section 11-20-13, subsection (g) of 11-20-17, or Section 11-31-1.01:

"Abandoned residential property" means any type of permanent residential dwelling unit, including detached single family structures, and townhouses, condominium units and multifamily rental apartments covering the entire property, and manufactured homes treated under Illinois law as real estate and not as personal property, that has been unoccupied by any lawful occupant or occupants for at least 90 days, and for which after such 90 day period, the municipality has made good faith efforts to contact the legal owner or owners of the property identified on the recorded mortgage, or, if known, any agent of the owner or owners, and no contact has been made. A property for which the municipality has been given notice of the order of confirmation of sale pursuant to subsection (b-10) of Section 15-1508 of the Code of Civil Procedure shall not be deemed to be an abandoned residential property for the purposes of subsection (d) of Section 11-20-7, subsection (d) of Section 11-20-8, subsection (d) of Section 11-20-12, subsection (e) of Section 11-20-13, subsection (g) of 11-20-17, and Section 11-31-1.01 of this Code.

"MERS program" means the nationwide Mortgage Electronic Registration System approved by Fannie Mae, Freddie Mac, and Ginnie Mae that has been created by the mortgage banking industry with the mission of registering every mortgage loan in the United States to lawfully make information concerning each residential mortgage loan and the property securing it available by Internet access to mortgage originators, servicers, warehouse lenders, wholesale lenders, retail lenders, document custodians, settlement agents, title companies, insurers, investors, county recorders, units of local government, and consumers.

(i) Any entity or person who performs a removal, securing, or enclosing activity pursuant to the authority of a municipality under subsection (d) of Section 11-20-7, subsection (d) of Section 11-20-8, subsection (d) of Section 11-20-12, subsection (e) of Section 11-20-13, subsection (g) of Section 11-20-17, or Section 11-31-1.01, may, in its, his, or her own name, file a lien pursuant to subsection (b) of this Section and appear in a foreclosure action on that lien pursuant to subsection (d) of this Section in the place of the municipality, provided that the municipality shall remain subject to subsection (c) of this Section, and such party shall be subject to all of the provisions in this Section as if such party were the municipality.

(i-5) All amounts received by the municipality for costs incurred pursuant to this Section for which the municipality has been reimbursed under Section 7.31 of the Illinois Housing Development Act shall be remitted to the State Treasurer for deposit into the Abandoned Residential Property Municipality Relief Fund.

(j) If prior to subsection (d) of Section 11-20-7, subsection (d) of Section 11-20-8, subsection (d) of Section 11-20-12, and subsection (e) of Section 11-20-13, and subsection (g) of Section 11-20-17, becoming inoperative a lien is filed pursuant to any of those subsections, then the lien shall remain in full force and effect after the subsections have become inoperative, subject to all of the provisions of this Section. If prior to the repeal of Section 11-31-1.01 a lien is filed pursuant to Section 11-31-1.01, then the lien shall remain in full force and effect after the repeal of Section 11-31-1.01, subject to all of the provisions of this Section.

(Source: P.A. 96-856, eff. 3-1-10; 96-1419, eff. 10-1-10.)

(65 ILCS 5/11-20-17 new)

Sec. 11-20-17. Vacant and abandoned property ordinances.

(a) For the purposes of minimizing the hazards to persons and property resulting from vacant and abandoned property, the corporate authority of each municipality may prescribe rules, regulations, or ordinances for the maintenance of vacant and abandoned property. The corporate authorities of a municipality may impose registration fees for vacant and abandoned property and fines for failure to comply with the rules, regulations, or ordinances enacted pursuant to this Section.

(b) Pursuant to such rules, regulations, or ordinances, municipalities may hold responsible for failure to maintain or secure a vacant and abandoned property (i) any owner of the property, (ii) any beneficiary or trustee who holds a deed of trust on the property, or (iii) any mortgagee who holds a mortgage on the property.

(c) A beneficiary, trustee, or mortgagee seeking to comply with rules, regulations, or ordinances regarding the maintenance or security of vacant property may enter that property to remedy any potential violation of a rule, regulation, or ordinance to maintain or secure vacant property, provided such entry is not barred by an automatic stay issued by a bankruptcy court.

(d) Beneficiaries, trustees, mortgagees, and their agents and assignees shall be held harmless from and against all claims of negligence, civil trespass, and criminal trespass in connection with compliance activity under the rules, regulations, and ordinances for the maintenance or security of vacant property, provided that the person authorizing or engaging in the compliance activity has (i) made a good faith effort to identify any owner and occupant of the property, and (ii) made a good faith effort to contact any owner and occupant in a manner reasonably calculated to give the owner and occupant notice that the compliance activity is imminent.

(e) For the purpose of this Section, "owner" means the legal or beneficial owner of an improved or unimproved parcel of real estate.

(f) For the purpose of this Section, "mortgagee" means (i) the holder of an indebtedness, obligee of a non-monetary obligation secured by a mortgage, any assignee of the mortgage, or any person designated or authorized to act on behalf of such holder, (ii) any person or entity who previously initiated a foreclosure on the vacant property or obtained a foreclosure judgment against the vacant property if the deed to vacant property has not been transferred to the purchaser at the judicial sale, or (iii) any person claiming through a mortgagee as successor.

(g) For the purpose of this section, "vacant property" means any property having complete or incomplete structures that are empty or otherwise uninhabited.

(h) For the purpose of this Section, "removal cost" means the total value of fees and fines imposed pursuant to rules, regulations, or ordinances regarding maintenance, security, or demolition of vacant property.

(i) To enforce fees and fines pursuant to this Section, a municipality may: (i) elect to obtain a lien upon the underlying property for the removal cost in accordance with Section 11-20-15; (ii) in the case of an abandoned residential property as defined in Section 11-20-15.1, elect to obtain a lien for the removal cost pursuant to Section 11-20-15.1, in which case the provisions of Section 11-20-15.1 shall be the exclusive remedy for the removal cost; or (iii) elect to obtain a lien for the removal cost by exercising any enforcement actions available under its police powers.

Section 60. The Code of Civil Procedure is amended by changing Sections 15-1512 and by adding Section 15-1510.5 as follows:

(735 ILCS 5/15-1510.5 new)

Sec. 15-1510.5. Mortgage Foreclosure Prevention Fee.

(a) Definitions.

"Civil legal services provider" means a not-for-profit corporation that (1) employs one or more attorneys who are licensed to practice law in the State of Illinois and who directly provide civil legal services or (2) is established for the purpose of providing civil legal services by an organized panel of pro bono attorneys.

"Community-based outreach" means in-person contact with mortgagors in foreclosure intended to inform such mortgagors about the foreclosure process and the mortgagors' rights and options for assistance in the process, including the availability of mortgage foreclosure housing counseling and mortgage foreclosure legal services.

"Comprehensive court-sponsored foreclosure mediation programs" means programs, administered at least in part by an Illinois Circuit Court, that offer mediation in actions for foreclosure. Programs shall provide mortgagors access to housing counseling and legal services and include community-based outreach.

"Governmental agency" means any State, county, or local government body in Illinois, and any agency or instrumentality thereof, corporate or otherwise.

"HUD-approved housing counseling agency" means a mortgage foreclosure housing counseling agency that is approved by the United States Department of Housing and Urban Development, or any successor agency.

"Mortgage foreclosure housing counseling" means housing counseling provided by a mortgage foreclosure counselor that works for a HUD-approved housing counseling agency.

"Mortgage foreclosure legal services" means legal services to mortgagors with an interest in a property subject to a mortgage foreclosure proceeding under Article XV of the Code of Civil Procedure provided by a civil legal service attorney that works for a civil legal services provider.

"Mortgage Foreclosure Prevention Fund" means a special fund used expressly to support mortgage foreclosure prevention programs.

(b) There shall be a $500 Mortgage Foreclosure Prevention Fee collected from the proceeds resulting from a judicial sale of residential real estate conducted pursuant to a foreclosure judgment under this Article. The fee shall be remitted to the Department of Revenue by the purchaser at the time of sale and the Department shall deposit these amounts into the Mortgage Foreclosure Prevention Fund. Amounts in the Fund may be expended only for eligible activities described in this Section.

Eligible foreclosure mitigation activities are mortgage foreclosure housing counseling, mortgage foreclosure legal services, community-based outreach, and administration of comprehensive court-sponsored foreclosure mediation programs.

Eligible entities are HUD-approved housing counseling agencies, civil legal services providers, not-for-profit corporations, and governmental agencies.

(c) All of the moneys in the Fund collected in counties with a population greater than 3,000,000 shall be used to make grants to eligible entities for eligible foreclosure mitigation activities to be carried out in coordination with comprehensive court-sponsored foreclosure mediation programs serving residents of the county in which the funds were collected. At least 75% of those moneys shall be used to make grants to eligible entities for mortgage foreclosure housing counseling or mortgage foreclosure legal services.

(d) Moneys in the Fund collected in counties with a population less than 3,000,000 shall be used to make grants to eligible entities for eligible foreclosure mitigation activities serving residents of the county in which the funds were collected. At least 75% of those moneys shall be used to make grants to eligible entities for mortgage foreclosure housing counseling or mortgage foreclosure legal services.

(e) All grants shall be made by the Illinois Housing Development Authority (IDHA). IHDA may prescribe reasonable rules for the administration of this Section.

(735 ILCS 5/15-1512) (from Ch. 110, par. 15-1512)

Sec. 15-1512. Application of Proceeds of Sale and Surplus. The proceeds resulting from a sale of real estate under this Article shall be applied in the following order:

(a) the reasonable expenses of sale;

(b) the reasonable expenses of securing possession before sale, holding, maintaining, and preparing the real estate for sale, including payment of taxes and other governmental charges, premiums on hazard and liability insurance, receiver's and management fees, the Mortgage Foreclosure Prevention Fee, and, to the extent provided for in the mortgage or other recorded agreement and not prohibited by law, reasonable attorneys' fees, payments made pursuant to Section 15-1505 and other legal expenses incurred by the mortgagee;

(c) if the sale was pursuant to judicial foreclosure, satisfaction of claims in the order of priority adjudicated in the judgment of foreclosure or order confirming the sale; and

(d) remittance of any surplus to be held by the person appointed by the court to conduct the sale until further order of the court. If there is a surplus, such person conducting the sale shall send written notice to all parties to the proceeding advising them of the amount of the surplus, and that the surplus shall be held until a party obtains a court order for its distribution or until, in the absence of an order, the surplus is forfeited to the State.

(Source: P.A. 86-974.)

Section 65. The State Finance Act is amended by adding Section 5.786 as follows:

(30 ILCS 105/5.786 new)

Sec. 5.786. The Mortgage Foreclosure Prevention Fund.

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