Rep. Karen A. Yarbrough

Filed: 4/13/2011

 

 


 

 


 
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1
AMENDMENT TO HOUSE BILL 760

2    AMENDMENT NO. ______. Amend House Bill 760 by replacing
3everything after the enacting clause with the following:
 
4    "Section 1. Findings. The General Assembly finds that
5additional action is needed to help prevent foreclosures and
6revitalize the economy in the State of Illinois. Foreclosures
7are leaving families homeless or in dire financial straits.
8Many borrowers could receive loan modifications under their
9existing mortgage, which would help to alleviate this crisis,
10keep families in their homes, and save Illinois neighborhoods
11and communities from further damage. Many foreclosures could be
12prevented with a modest investment in prevention activities,
13including, outreach to borrowers and court-sponsored mediation
14to help borrowers and lenders arrive at mutually-agreeable loan
15modifications. Foreclosed properties contribute to the number
16of vacant, abandoned, and tax-delinquent properties that
17threaten communities around the State because those properties

 

 

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1diminish property values, enable crime, and create health
2hazards. Such properties also impose large costs on
3municipalities and, at the same time, result in decreased
4revenue for the municipalities. The need exists to address the
5problems of vacant and abandoned property in a coordinated
6manner and to foster the development of such property and
7promote economic growth. Municipalities lack tools necessary
8to ensure that vacant properties are adequately maintained and
9secured. Land banks are one of the tools that can be used by
10communities to facilitate the return of vacant, abandoned, and
11tax-delinquent properties to productive use. Local governments
12should be empowered to create land banks to acquire, develop,
13maintain, and dispose of vacant and abandoned properties that
14present a threat to communities around the State. Abandoned
15properties may remain in the foreclosure process for a year or
16more, which harms both communities and financial institutions
17with a legal interest in the property. The foreclosure process
18for abandoned properties should be expedited to help return the
19properties to productive use.
 
20    Section 3. Short title. This Act may be cited as the
21Illinois Land Banking Act.
 
22    Section 5. Definitions.
23    "Authority" means the land bank authority created pursuant
24to this Act.

 

 

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1    "Governmental unit" means a county or municipality.
2    "Intergovernmental agreement" means a contractual
3agreement between 2 or more governmental agencies, including,
4but not limited to, an agreement to jointly exercise any power,
5privilege, or authority that agencies share in common and that
6each might exercise separately under this Act.
 
7    Section 10. Authorization. A municipality may elect to
8create a land bank authority with the powers and restrictions
9specified in this Act. In creating an authority, the
10municipality shall adopt an ordinance subject to the approval
11of the chief executive of the municipality and provide for all
12of the following:
13        (1) Articles of incorporation for the authority, that
14    shall be filed with the Secretary of State and shall
15    include, in addition to other required and permissible
16    articles, an article specifying that the purpose of the
17    land bank authority is to stabilize communities by:
18            (A) Acquiring property that is vacant or abandoned
19        and in the foreclosure process or is otherwise
20        nonrevenue-generating or nontax-producing.
21            (B) Facilitating the reclamation, rehabilitation,
22        and reutilization of property that is vacant,
23        abandoned, in process of foreclosure, or is otherwise
24        nonrevenue-generating or nontax-producing.
25            (C) Efficiently holding and managing property that

 

 

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1        is vacant, abandoned, in process of foreclosure, or is
2        otherwise nonrevenue-generating or nontax-producing
3        pending its reclamation, rehabilitation, and
4        reutilization.
5        (2) The size of the board of directors for the
6    authority, which shall be composed of an odd number of
7    members.
8        (3) The qualifications, methods of selection, and
9    terms of office of the board members.
10    Two or more governmental units may elect to enter into an
11intergovernmental agreement that creates a single land bank to
12act on behalf of the governmental units, and the agreement
13shall be authorized by and be in accordance with the provisions
14of this Section.
 
15    Section 15. Board of directors; conflicts of interest. The
16authority shall be governed by a board of directors. The board
17shall consist of 3 or more directors. The board of directors
18shall be composed of an odd number of members. The size of the
19board may be adjusted in accordance with the land bank's
20by-laws.
21    Notwithstanding any law to the contrary, any public officer
22shall be eligible to serve as a board member and the acceptance
23of the appointment shall neither terminate nor impair such
24public office. For the purposes of this Section, "public
25officer" means a person who is elected to a State or local

 

 

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1government office.
2    Any State or local government employee shall be eligible to
3serve as a board member.
4    The board of the authority shall meet from time to time as
5required, and the presence of a majority of the board of
6directors shall constitute a quorum. A chairperson shall be
7elected from among the members, and he or she shall execute all
8deeds, leases, and contracts of the authority when authorized
9by the board. The board of the authority shall conduct meetings
10in accordance with the Open Meetings Act. The board of the
11authority shall adopt a code of ethics for its directors,
12officers, and employees. The board of the authority shall
13establish policies and procedures requiring the disclosure of
14relationships that may give rise to a conflict of interest.
15    Members of a board shall not be liable personally for the
16obligations of the land bank, and the rights of creditors shall
17be solely against the land bank and not the municipalities that
18created it. In lawsuits for injury occasioned by an actionable
19wrong to persons or property by land bank employees or board
20members acting in their official capacity, the rights of
21plaintiffs shall be solely against the land bank and not the
22municipalities that created it.
23    Members of the board must file written statements of
24economic interest in accordance with Section 4A-101 of the
25Illinois Governmental Ethics Act.
26    The board of the authority shall require that any member of

 

 

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1the board with a direct or indirect interest in any matter
2disclose the member's interest to the board before the board
3takes any action on that matter.
4    Members of the board of directors of an authority shall
5serve without compensation.
6    It shall be unlawful for a member of the board, the spouse
7of a member of the board, or an immediate family member of a
8member of the board to have or acquire a contract or have or
9acquire a direct pecuniary interest in a contract with the
10authority that relates to the authority. Any of these contracts
11shall be deemed null and void. The limitations shall remain in
12force for one year after the conclusion of the person's term of
13office.
14    If a member of the board, the spouse of a member of the
15board, or an immediate family member of a member of the board
16is entitled to receive distributable income of a partnership,
17association, corporation, or other business entity, then it is
18unlawful for that partnership, association, corporation, or
19other business entity to have or acquire a contract or a direct
20pecuniary interest in a contract with the authority that
21relates to the authority. Any of these contracts shall be
22deemed null and void. The limitations shall remain in force for
23one year after the conclusion of the person's term of office.
24    A municipality that creates an authority may develop an
25additional code of ethics for the authority and may establish
26additional policies and procedures requiring the disclosure of

 

 

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1relationships that may give rise to a conflict of interest.
2    The board of the authority may develop an additional code
3of ethics for its directors, officers, and employees and may
4establish additional policies and procedures requiring the
5disclosure of relationships that may give rise to a conflict of
6interest.
 
7    Section 20. Powers. The authority may perform any or all
8of the powers enumerated in this Section, subject to any
9conditions, restrictions, or limitations of the governmental
10unit, including the power to:
11        (a) Acquire property pursuant to Section 25 of this
12    Act.
13        (b) Adopt, amend, and repeal bylaws for the regulation
14    of its affairs and the conduct of its business.
15        (c) Sue and be sued in its own name and plead and be
16    impleaded, including, but not limited to, defending the
17    authority in an action to clear title to property conveyed
18    by the authority.
19        (d) Take any action, provide any notice, or instate any
20    proceeding required to clear or quiet title to property
21    held by the authority in order to establish ownership by
22    and vest title to property in the authority.
23        (e) Be made party to and defend any action or
24    proceeding concerning title claims against property held
25    by the authority.

 

 

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1        (f) Subject to the written approval of the board of
2    directors and the municipality that created the authority
3    under this Act, borrow money and issue bonds and notes.
4        (g) Enter into contracts and other instruments
5    necessary, incidental, or convenient to the performance of
6    its duties and the exercise of its powers, including, but
7    not limited to, intergovernmental agreements, for the
8    joint exercise of power under this Act.
9        (h) Enter into contracts for the management of, the
10    collection of rent from, and the sale of real property held
11    by an authority.
12        (i) Enter into contracts with other entities, public or
13    private, for the provision of all or a portion of the
14    services necessary for the management and operation of the
15    authority.
16        (j) Solicit and accept gifts, grants, labor, loans, and
17    other aid from any person, the federal government, this
18    State, a political subdivision of this State or any agency
19    of the federal government, or an intergovernmental entity
20    created under the laws of this State or participate in any
21    other way in a program of the federal government, this
22    State, a political subdivision of this State, or an
23    intergovernmental entity created under the laws of this
24    State.
25        (k) Procure insurance against loss in connection with
26    the property, assets, or activities of the authority.

 

 

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1        (l) Control, hold, manage, maintain, operate, repair,
2    lease as lessor, secure, prevent the waste or deterioration
3    of, demolish, and take all other actions necessary to
4    preserve the value of the property it holds or owns.
5        (m) Remediate environmental contamination on any
6    property held by the authority.
7        (n) Fix, charge, and collect rents, fees, and charges
8    for use of property under the control of the authority or
9    for services provided by the authority.
10        (o) Grant or acquire a license, easement, or option
11    with respect to property as the authority determines is
12    reasonably necessary to achieve the purposes of the Act.
13        (p) Pay any tax or special assessment due on property
14    acquired or owned by the authority.
15        (q) Subject to the Public Funds Investment Act, invest
16    money of the authority, at the discretion of the board of
17    directors of the authority, in instruments, obligations,
18    securities, or property determined proper by the board of
19    directors of the authority, and name and use depositories
20    for its money.
21        (r) Employ its own employees or use employees of the
22    authorizing municipality or employees of the parties to
23    intergovernmental agreements.
24        (s) Employ legal and technical experts, other
25    officers, agents, or employees and pay them from the funds
26    of the authority and determine the qualifications, duties,

 

 

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1    and compensation of those it employs.
2        (t) The board of directors of an authority may delegate
3    to one or more of its members, officers, agents, or
4    employees any powers or duties it considers proper.
5        (u) Reimburse members of the board of directors of the
6    authority for actual and necessary expenses subject to
7    available appropriations.
8        (v) Contract for goods and services and engage
9    personnel as necessary and engage the services of private
10    consultants, managers, legal counsel, engineers, accounts,
11    and auditors for rendering professional financial
12    assistance and advice payable out of any money available to
13    the authority.
14        (w) Prepare the reports or plans the authority
15    considers necessary to assist it in the exercise of its
16    powers under this Act and to monitor and evaluate progress
17    under this Act.
18        (x) Extinguish taxes pursuant to Section 35 of this
19    Act.
20        (y) Convey, sell, transfer, exchange, lease as lessor,
21    or otherwise dispose of property, rights, or interests in
22    property to which the authority holds a legal interest to
23    any public or private person for value determined by the
24    authority.
25    An authority shall not exercise the power of eminent
26domain.

 

 

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1    The powers granted by this Act are in addition to the
2powers granted by any other law, statute, or charter.
 
3    Section 25. Acquisition of property. The authority may
4acquire real property or rights or interests in real property
5by gift, devise, transfer, exchange, foreclosure, purchase,
6purchase contracts, lease purchase agreements, installment
7sales contracts, land contracts, or otherwise on terms and
8conditions and in a manner the authority considers proper.
9    The authority may hold and own in its name any property
10acquired by it or conveyed to it by this State, a foreclosing
11governmental unit, a unit of local government, an
12intergovernmental entity created under the laws of this State,
13or any other public or private person, including, but not
14limited to, property without clear title.
15    The authority may only acquire property within the
16jurisdiction of one of the municipalities granting the
17authority power under this Act or within the jurisdiction of a
18governmental entity pursuant to an intergovernmental agreement
19with that governmental entity. A property outside the corporate
20limits of a municipality is not considered within the
21jurisdiction of the municipality until annexation is completed
22pursuant to Section 7-1-1 of the Illinois Municipal Code.
23    All deeds, mortgages, contracts, leases, purchases, or
24other agreements regarding property of an authority, including
25agreements to acquire or dispose of real property, shall be

 

 

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1approved by and executed in the name of the authority.
2    The authority shall have the right to purchase properties
3at tax sales conducted in accordance with Division 3.5 of the
4Property Tax Code.
5        (1) The authority may tender a bid at a tax sale that
6    is a credit bid, consisting of the obligation of the
7    authority to satisfy the component parts of the bid by
8    payments to the respective political subdivisions.
9        (2) A bid by the authority at a tax sale for the
10    minimum amount shall take priority over all other bids for
11    the same property.
 
12    Section 30. Financing of land bank operations. A land bank
13may receive funding through grants and loans from the
14governmental unit that created the land bank, from other
15municipalities, from the State of Illinois, from the federal
16government, and from other public and private sources.
17    A land bank may receive and retain payments for services
18rendered, for rents and leasehold payments received, for
19consideration for disposition of real and personal property,
20for proceeds of insurance coverage for losses incurred, for
21income from investments, and for any other asset and activity
22lawfully permitted to a land bank under this Act
23    Subject to the written approval of the County Board
24President, County Chairman, or County Executive of the county
25where a property is located, a municipality may authorize the

 

 

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1remittance of a portion of the real property taxes collected on
2real property conveyed by a land bank authority. Up to 50% of
3those taxes may be remitted to the land bank authority for up
4to 5 years after the land bank has completed the conveyance of
5the property.
6    A land bank shall have power to issue bonds for any of its
7corporate purposes, the principal and interest of which are
8payable from its revenues generally. Any of the bonds may be
9secured by a pledge of any revenues, including grants or
10contributions, or by a mortgage of any property of the land
11bank.
12    Bonds issued by the land bank shall be authorized by
13resolution of the board and shall be limited obligations of the
14land bank; the principal and interest, costs of issuance, and
15other costs incidental thereto shall be payable solely from the
16income and revenue derived from the sale, lease, or other
17disposition of the assets of the land bank. In the discretion
18of the land bank, the bonds may be additionally secured by
19mortgage or other security device covering all or part of the
20project from which the revenues so pledged may be derived. Any
21refunding bonds issued shall be payable from any source
22described in this Section or from the investment of any of the
23proceeds of the refunding bonds and shall not constitute an
24indebtedness or pledge of the general credit of any
25governmental unit or municipality within the meaning of any
26constitutional or statutory limitation of indebtedness, and

 

 

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1each bond shall state that requirement.
 
2    Section 35. Taxes. When real property is acquired by the
3authority, and that real property is encumbered by a lien or
4claim for real property taxes owed to the governmental unit or
5units that created the land bank, the land bank shall have the
6power, by resolution of the board, to discharge and extinguish
7any and all liens and claims. Whenever any real property is
8acquired by a land bank, and that real property is encumbered
9by a lien or claim for real property taxes owed to the school
10district, or to a municipality other than the governmental unit
11or units that created the land bank, the land bank shall have
12the power, by resolution of the board, to discharge and
13extinguish any and all such liens or claims if and only if the
14school district, or municipality other than the governmental
15unit or units that created the land bank, and the land bank,
16have entered into an agreement authorizing such discharge and
17extinguishment. To the extent necessary and appropriate, the
18land bank shall file in appropriate public records evidence of
19the extinguishment and dissolution of the liens or claims.
20    All moneys received by an authority as payment of taxes,
21penalties, or interest, or from the redemption or sale of
22property subject to a tax lien of any taxing unit shall be
23returned to the appropriate local tax collecting unit in which
24the property is located.
25    Property of an authority is public property devoted to an

 

 

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1essential public and governmental function and purpose. Income
2of the authority is considered to be for a public and
3governmental purpose. The property of the authority and its
4income and operation are exempt from all taxes and special
5assessments of this State and all units of local government.
6Bonds or notes issued by the authority, and the interest on and
7income from those bonds and notes, are exempt from all taxation
8of this State or a unit of local government.
 
9    Section 40. Proceeds. Except as otherwise provided in this
10Act, as required by other law, as required under the provisions
11of a deed, or as an authority otherwise agrees, any proceeds
12received by the authority may be retained by the authority for
13the purposes of this Act.
 
14    Section 45. Record maintenance. The authority shall
15maintain a written inventory of all property held by the
16authority. The property shall be inventoried and classified by
17the authority according to title status and suitability for
18use. The inventory shall be available for public inspection
19during regular business hours.
20    For each property held, the authority shall establish and
21maintain itemized records and accounts reflecting all
22transactions, expenditures, and revenues relating to all
23property held by the authority.
24    The board shall cause minutes and a record to be kept of

 

 

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1all its proceedings.
 
2    Section 50. Dissolution. The articles of incorporation
3shall specify the procedure under which a land bank authority
4may be dissolved. Upon dissolution of the land bank all real
5property, personal property, and other assets of the land bank
6shall become the assets of the governmental unit or units that
7created the land bank. In the event that 2 or more governmental
8units create a land bank authority, the withdrawal of one or
9more governmental units shall not result in the dissolution of
10the land bank unless the intergovernmental agreement so
11provides, and there is no governmental unit that desires to
12continue the existence of the land bank.
 
13    Section 99. Effective date. This Act takes effect upon
14becoming law.".