Illinois General Assembly - Full Text of HB1108
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Full Text of HB1108  97th General Assembly


Rep. Karen A. Yarbrough

Filed: 3/8/2011





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2    AMENDMENT NO. ______. Amend House Bill 1108 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 create a land
8bank authority with the powers and restrictions specified in
9this Act. In creating an authority, the municipality shall
10provide for all of the following:
11        (1) Articles of incorporation for the authority, that
12    shall be filed with the Secretary of State and shall
13    include, in addition to other required and permissible
14    articles, an article specifying that the purpose of the
15    land bank authority is to stabilize communities by:
16            (A) Acquiring property that is vacant or abandoned
17        and in the foreclosure process or is otherwise
18        nonrevenue-generating or nontax-producing.
19            (B) Facilitating the reclamation, rehabilitation,
20        and reutilization of property that is vacant,
21        abandoned, in process of foreclosure, or is otherwise
22        nonrevenue-generating or nontax-producing.
23            (C) Efficiently holding and managing property that
24        is vacant, abandoned, in process of foreclosure, or is
25        otherwise nonrevenue-generating or nontax-producing



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



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1serve as a board member.
2    The board of the authority shall meet from time to time as
3required, and the presence of a majority of the board of
4directors shall constitute a quorum. A chairperson shall be
5elected from among the members, and he or she shall execute all
6deeds, leases, and contracts of the authority when authorized
7by the board. The board of the authority shall conduct meetings
8in accordance with the Open Meetings Act. The board of the
9authority shall adopt a code of ethics for its directors,
10officers, and employees. The board of the authority shall
11establish policies and procedures requiring the disclosure of
12relationships that may give rise to a conflict of interest.
13    Members of a board shall not be liable personally for the
14obligations of the land bank, and the rights of creditors shall
15be solely against the land bank.
16    Members of the board must file written statements of
17economic interest in accordance with Section 4A-101 of the
18Illinois Governmental Ethics Act.
19    The board of the authority shall require that any member of
20the board with a direct or indirect interest in any matter
21disclose the member's interest to the board before the board
22takes any action on that matter.
23    Members of the board of directors of an authority shall
24serve without compensation.
25    It shall be unlawful for a member of the board, the spouse
26of a member of the board, or an immediate family member of a



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1member of the board to have or acquire a contract or have or
2acquire a direct pecuniary interest in a contract with the
3authority that relates to the authority. Any of these contracts
4shall be deemed null and void. The limitations shall remain in
5force for one year after the conclusion of the person's term of
7    If a member of the board, the spouse of a member of the
8board, or an immediate family member of a member of the board
9is entitled to receive distributable income of a partnership,
10association, corporation, or other business entity, then it is
11unlawful for that partnership, association, corporation, or
12other business entity to have or acquire a contract or a direct
13pecuniary interest in a contract with the authority that
14relates to the authority. Any of these contracts shall be
15deemed null and void. The limitations shall remain in force for
16one year after the conclusion of the person's term of office.
17    Section 20. Powers. The authority may perform any or all
18of the powers enumerated in this Section, subject to any
19conditions, restrictions, or limitations of the governmental
20unit, including the power to:
21        (a) Acquire property pursuant to Section 25 of this
22    Act.
23        (b) Adopt, amend, and repeal bylaws for the regulation
24    of its affairs and the conduct of its business.
25        (c) Sue and be sued in its own name and plead and be



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1    impleaded, including, but not limited to, defending the
2    authority in an action to clear title to property conveyed
3    by the authority.
4        (d) Take any action, provide any notice, or instate any
5    proceeding required to clear or quiet title to property
6    held by the authority in order to establish ownership by
7    and vest title to property in the authority.
8        (e) Be made party to and defend any action or
9    proceeding concerning title claims against property held
10    by the authority.
11        (f) Subject to the written approval of the board of
12    directors and the municipality that created the authority
13    under this Act, borrow money and issue bonds and notes.
14        (g) Enter into contracts and other instruments
15    necessary, incidental, or convenient to the performance of
16    its duties and the exercise of its powers, including, but
17    not limited to, intergovernmental agreements, for the
18    joint exercise of power under this Act.
19        (h) Enter into contracts for the management of, the
20    collection of rent from, and the sale of real property held
21    by an authority.
22        (i) Enter into contracts with other entities, public or
23    private, for the provision of all or a portion of the
24    services necessary for the management and operation of the
25    authority.
26        (j) Solicit and accept gifts, grants, labor, loans, and



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1    other aid from any person, the federal government, this
2    State, a political subdivision of this State or any agency
3    of the federal government, or an intergovernmental entity
4    created under the laws of this State or participate in any
5    other way in a program of the federal government, this
6    State, a political subdivision of this State, or an
7    intergovernmental entity created under the laws of this
8    State.
9        (k) Procure insurance against loss in connection with
10    the property, assets, or activities of the authority.
11        (l) Control, hold, manage, maintain, operate, repair,
12    lease as lessor, secure, prevent the waste or deterioration
13    of, demolish, and take all other actions necessary to
14    preserve the value of the property it holds or owns.
15        (m) Remediate environmental contamination on any
16    property held by the authority.
17        (n) Fix, charge, and collect rents, fees, and charges
18    for use of property under the control of the authority or
19    for services provided by the authority.
20        (o) Grant or acquire a license, easement, or option
21    with respect to property as the authority determines is
22    reasonably necessary to achieve the purposes of the Act.
23        (p) Pay any tax or special assessment due on property
24    acquired or owned by the authority.
25        (q) Subject to the Public Funds Investment Act, invest
26    money of the authority, at the discretion of the board of



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1    directors of the authority, in instruments, obligations,
2    securities, or property determined proper by the board of
3    directors of the authority, and name and use depositories
4    for its money.
5        (r) Employ its own employees or use employees of the
6    authorizing municipality or employees of the parties to
7    intergovernmental agreements.
8        (s) Employ legal and technical experts, other
9    officers, agents, or employees and pay them from the funds
10    of the authority and determine the qualifications, duties,
11    and compensation of those it employs.
12        (t) The board of directors of an authority may delegate
13    to one or more of its members, officers, agents, or
14    employees any powers or duties it considers proper.
15        (u) Reimburse members of the board of directors of the
16    authority for actual and necessary expenses subject to
17    available appropriations.
18        (v) Contract for goods and services and engage
19    personnel as necessary and engage the services of private
20    consultants, managers, legal counsel, engineers, accounts,
21    and auditors for rendering professional financial
22    assistance and advice payable out of any money available to
23    the authority.
24        (w) Prepare the reports or plans the authority
25    considers necessary to assist it in the exercise of its
26    powers under this Act and to monitor and evaluate progress



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1    under this Act.
2        (x) Extinguish taxes pursuant to Section 35 of this
3    Act.
4        (y) Convey, sell, transfer, exchange, lease as lessor,
5    or otherwise dispose of property, rights, or interests in
6    property to which the authority holds a legal interest to
7    any public or private person for value determined by the
8    authority.
9    An authority shall not exercise the power of eminent
11    The powers granted by this Act are in addition to the
12powers granted by any other law, statute, or charter.
13    Section 25. Acquisition of property. The authority may
14acquire real property or rights or interests in real property
15by gift, devise, transfer, exchange, foreclosure, purchase,
16purchase contracts, lease purchase agreements, installment
17sales contracts, land contracts, or otherwise on terms and
18conditions and in a manner the authority considers proper.
19    The authority may hold and own in its name any property
20acquired by it or conveyed to it by this State, a foreclosing
21governmental unit, a unit of local government, an
22intergovernmental entity created under the laws of this State,
23or any other public or private person, including, but not
24limited to, property without clear title.
25    The authority may only acquire property within the



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1jurisdiction of one of the municipalities granting the
2authority power under this Act or within the jurisdiction of a
3governmental entity pursuant to an intergovernmental agreement
4with that governmental entity. A property outside the corporate
5limits of a municipality is not considered within the
6jurisdiction of the municipality until annexation is completed
7pursuant to Section 7-1-1 of the Illinois Municipal Code.
8    All deeds, mortgages, contracts, leases, purchases, or
9other agreements regarding property of an authority, including
10agreements to acquire or dispose of real property, shall be
11approved by and executed in the name of the authority.
12    The authority shall have the right to purchase properties
13at tax sales conducted in accordance with Division 3.5 of the
14Property Tax Code.
15        (1) The authority may tender a bid at a tax sale that
16    is a credit bid, consisting of the obligation of the
17    authority to satisfy the component parts of the bid by
18    payments to the respective political subdivisions.
19        (2) A bid by the authority at a tax sale for the
20    minimum amount shall take priority over all other bids for
21    the same property.
22    Section 30. Financing of land bank operations. A land bank
23may receive funding through grants and loans from the
24governmental unit that created the land bank, from other
25municipalities, from the State of Illinois, from the federal



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1government, and from other public and private sources.
2    A land bank may receive and retain payments for services
3rendered, for rents and leasehold payments received, for
4consideration for disposition of real and personal property,
5for proceeds of insurance coverage for losses incurred, for
6income from investments, and for any other asset and activity
7lawfully permitted to a land bank under this Act
8    A municipality may authorize the remittance of a portion of
9the real property taxes collected on real property conveyed by
10a land bank authority. Up to 50% of those taxes may be remitted
11to the land bank authority for up to 5 years after the land
12bank has completed the conveyance of the property.
13    A land bank shall have power to issue bonds for any of its
14corporate purposes, the principal and interest of which are
15payable from its revenues generally. Any of the bonds may be
16secured by a pledge of any revenues, including grants or
17contributions, or by a mortgage of any property of the land
19    Bonds issued by the land bank shall be authorized by
20resolution of the board and shall be limited obligations of the
21land bank; the principal and interest, costs of issuance, and
22other costs incidental thereto shall be payable solely from the
23income and revenue derived from the sale, lease, or other
24disposition of the assets of the land bank. In the discretion
25of the land bank, the bonds may be additionally secured by
26mortgage or other security device covering all or part of the



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1project from which the revenues so pledged may be derived. Any
2refunding bonds issued shall be payable from any source
3described in this Section or from the investment of any of the
4proceeds of the refunding bonds and shall not constitute an
5indebtedness or pledge of the general credit of any
6governmental unit or municipality within the meaning of any
7constitutional or statutory limitation of indebtedness, and
8each bond shall state that requirement.
9    Section 35. Taxes. When real property is acquired by the
10authority, and that real property is encumbered by a lien or
11claim for real property taxes owed to the governmental unit or
12units that created the land bank, the land bank shall have the
13power, by resolution of the board, to discharge and extinguish
14any and all liens and claims. Whenever any real property is
15acquired by a land bank, and that real property is encumbered
16by a lien or claim for real property taxes owed to the school
17district, or to a municipality other than the governmental unit
18or units that created the land bank, the land bank shall have
19the power, by resolution of the board, to discharge and
20extinguish any and all such liens or claims if and only if the
21school district, or municipality other than the governmental
22unit or units that created the land bank, and the land bank,
23have entered into an agreement authorizing such discharge and
24extinguishment. To the extent necessary and appropriate, the
25land bank shall file in appropriate public records evidence of



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1the extinguishment and dissolution of the liens or claims.
2    All moneys received by an authority as payment of taxes,
3penalties, or interest, or from the redemption or sale of
4property subject to a tax lien of any taxing unit shall be
5returned to the appropriate local tax collecting unit in which
6the property is located.
7    Property of an authority is public property devoted to an
8essential public and governmental function and purpose. Income
9of the authority is considered to be for a public and
10governmental purpose. The property of the authority and its
11income and operation are exempt from all taxes and special
12assessments of this State and all units of local government.
13Bonds or notes issued by the authority, and the interest on and
14income from those bonds and notes, are exempt from all taxation
15of this State or a unit of local government.
16    Section 40. Proceeds. Except as otherwise provided in this
17Act, as required by other law, as required under the provisions
18of a deed, or as an authority otherwise agrees, any proceeds
19received by the authority may be retained by the authority for
20the purposes of this Act.
21    Section 45. Record maintenance. The authority shall
22maintain a written inventory of all property held by the
23authority. The property shall be inventoried and classified by
24the authority according to title status and suitability for



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1use. The inventory shall be available for public inspection
2during regular business hours.
3    For each property held, the authority shall establish and
4maintain itemized records and accounts reflecting all
5transactions, expenditures, and revenues relating to all
6property held by the authority.
7    Section 50. Dissolution. The articles of incorporation
8shall specify the procedure under which a land bank authority
9may be dissolved. Upon dissolution of the land bank all real
10property, personal property, and other assets of the land bank
11shall become the assets of the governmental unit or units that
12created the land bank. In the event that 2 or more governmental
13units create a land bank authority, the withdrawal of one or
14more governmental units shall not result in the dissolution of
15the land bank unless the intergovernmental agreement so
16provides, and there is no governmental unit that desires to
17continue the existence of the land bank.
18    Section 99. Effective date. This Act takes effect upon
19becoming law.".