THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY J. TAYLOR, PERZEL, GEIST, BEYER, DERMODY, FREEMAN, HARPER, HESS, W. KELLER, KILLION, KORTZ, MANN, MARSHALL, MILLER, MURT, M. O'BRIEN, REICHLEY, SAYLOR, SIPTROTH, K. SMITH, SWANGER, THOMAS, WALKO AND YUDICHAK, MARCH 4, 2009

REFERRED TO COMMITTEE ON URBAN AFFAIRS, MARCH 4, 2009  

AN ACT

Providing for the creation of land banks for the conversion of

vacant or tax-delinquent properties into productive use.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Short title.

This act shall be known and may be cited as the Land Banks

Authorities Act.

Section 2.  Legislative findings and purpose.

The General Assembly finds and declares as follows:

(1)  Pennsylvania's communities are important to the

social and economic vitality of this Commonwealth. Whether

rural, suburban or urban, many communities are struggling to

cope with vacant or tax-delinquent properties.

(2)  Citizens of this Commonwealth are affected adversely

by vacant or tax-delinquent properties, including properties

that have been vacated due to foreclosure brought about by

the national foreclosure crisis.

(3)  Substandard, deteriorating or vacant structures are

a public safety threat and nuisance, and their blighting

effect diminishes property values in the communities in which

these properties are located.

(4)  If these buildings remain vacant and further

deteriorate, the result will be increased costs to the

Commonwealth, municipalities and taxpayers to secure and

ultimately demolish them.

(5)  Providing a mechanism to transform vacant or tax-

delinquent buildings into productive reuse is an opportunity

for communities to modernize, revitalize and grow and to

improve the quality of life for residents.

(6)  Developers who wish to acquire vacant or tax-

delinquent properties and return them to productive use

confront a confusing array of agencies and entities that hold

property and have unique disposition policies.

(7)  Land banks provide for the acquisition, management

and transferral of ownership of tax-foreclosed properties not

reclaimed or redeveloped by market forces, and land banks

facilitate the properties' productive reuse through sales and

transfers to local government agencies, community development

corporations, private developers and adjacent property

owners.

(8)  It is in the best interest of this Commonwealth to

authorize the establishment of local land banks to provide an

effective and efficient system for communities to convert

vacant or tax-delinquent properties into community assets

that are consistent with local plans for growth and

development.

Section 3.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Agreement."  An agreement entered into by parties pursuant

to this act.

"Authority."  A land bank authority established pursuant to

this act.

"Board of directors" or "board."  The board of a land bank

authority established in section 5.

"Municipality."  A city of the first, second, second class A

or third class, township of the first or second class, borough,

incorporated town or county.

"Parties."  The parties to an agreement, which may include a

municipality, school district or taxing authority of the

Commonwealth.

"Property."  Real property, including any improvements

thereon.

"Tax delinquent property."  A property on which the taxes

levied and assessed by any party remain in whole or in part

unpaid on the date due.

"Vacant."  A property that is not occupied legally.

Section 4.  Land bank authorities.

(a)  Establishment.--A municipality, school district or

taxing authority may enter into an agreement to establish a land

bank authority pursuant to this act or may act on its own to

establish a land bank authority by charter.

(b)  Powers.--An authority shall:

(1)  Be a public body, corporate and politic with the

power to sue and be sued, issue deeds in its name and any

other powers necessary and proper to carry out these powers

or that may be granted to the authority by the parties.

(2)  Have all powers assigned to it in the agreement or

charter.

(3)  Have the power to adopt, amend and repeal bylaws for

the regulation of its affairs and the conduct of its

business.

(4)  Have the power to acquire vacant or tax-delinquent

properties within the jurisdiction of the parties in order to

foster the public purpose of returning property that is

nontax producing to effective reuse in the provision of

housing, business, industry or public purposes.

Section 5.  Board of directors.

(a)  Establishment.--An authority shall be governed by a

board of directors comprised of one member appointed by each

party to the agreement or charter. In the event that there are

only two parties to the agreement, each party shall appoint two

members so that the board has at least three members. In the

event that a party acts on its own to establish an authority, it

shall appoint at least three members to the board.

(b)  Term of office.--Board members shall be appointed within

30 days of the signing of the agreement or adoption of the

charter. Each member shall serve at the pleasure of the

respective appointing authority for a term of four years. No

member may serve more than two consecutive terms.

(c)  Qualifications.--Each board member shall be a resident

or employee of its appointing party and shall have experience or

education in urban planning, real estate, community development,

finance, economic development or related areas.

(d)  Vacancy.--If a board member vacancy occurs, the

appointing party shall appoint a successor within 45 days of the

vacancy. A person appointed to fill a vacant board member

position shall serve for the remainder of the unexpired term.

(e)  Compensation.--Board members shall receive no

compensation for services.

(f)  Chairperson.--The board shall elect a chairperson from

among its members. The chairperson shall execute all deeds,

leases and contracts of the authority when authorized by the

board.

(g)  Meetings.--The board shall meet as specified in the

agreement or charter, but not less than four times per year. The

meetings of the authority shall be subject to the provision of

65 Pa.C.S. Ch. 7 (relating to open meetings).

(h)  Quorum.--A majority of the board members shall

constitute a quorum. An affirmative vote of the majority of the

board members present shall be necessary for any action to be

taken by the board.

(i)  Staff.--The authority may employ its own staff or may

utilize employees of the parties, as determined by the agreement

or charter.

Section 6.  Mailing list of interested entities.

Upon the establishment of an authority, the authority shall

maintain a list of city, county or regional housing authorities,

redevelopment authorities and community development corporations

that have requested to be notified prior to any action by the

authority to dispose of property in its inventory. An interested

housing authority, redevelopment authority and community

development corporation must provide the authority with the

following information:

(1)  Name of the organization.

(2)  Postal or electronic address for the organization.

(3)  The name and title of a contact person for the

organization.

Section 7.  Acquisition and management of property.

(a)  General rule.--The acquisition of property by an

authority shall not be governed or controlled by any

regulations, ordinances or laws of the parties, unless

specifically provided in the agreement or charter.

(b)  Authority deemed to be successful bidder at tax sale.--

(1)  If any party obtains a judgment against a tax-

delinquent property within the county for the taxes, and to

satisfy the judgment, the property is ordered sold at a tax

sale, and if no person bids an amount equal to the full

amount of all tax bills, interest and costs owing on the

property at the sale, the authority shall be deemed to have

bid the full amount of all tax bills, interest and costs due

regardless of whether all parties of the authority are

parties to the lawsuit.

(2)  The authority shall not be required to make actual

payment to the court for the amount deemed to have been bid.

(3)  The court, notwithstanding any other provision of

law, shall treat the amount deemed to have been bid as cash

received. Upon proper motion by the authority, the court

shall make a deed of the property to the authority. The title

to the property shall be an absolute estate in fee simple,

free and clear of all liens, claims and encumbrances.

(c)  No accrual of taxes.--When a property is acquired by the

authority, all State, county, city and school district taxes

shall be extinguished and no taxes shall accrue while the

property is owned by the authority.

(d)  Title held by authority.--An authority shall hold in its

own name, for the benefit of the parties, all properties

conveyed to it by the parties, all tax-delinquent properties

acquired by it pursuant to this section and all properties

otherwise acquired.

(e)  Administration of properties.--An authority shall

administer the properties acquired by it, as follows:

(1)  All property acquired by the authority shall be

inventoried and appraised and the inventory shall be

maintained as a public record.

(2)  The authority shall organize and classify the

property on the basis of suitability for use.

(3)  The authority shall maintain all property held by it

in accordance with applicable laws and codes.

(4)  The authority shall have the power to manage,

maintain, protect, rent, lease, repair, insure, alter, sell,

transfer, trade, exchange or otherwise dispose of any

property on terms and conditions as determined by the board.

Section 8.  Disposition of property.

(a)  General rule.--The disposition of property by an

authority shall not be governed or controlled by any regulations

or laws of the parties, unless specifically provided in the

agreement or charter.

(b)  Prerequisites.--Before an authority may rent, lease,

sell, transfer, trade, exchange or otherwise dispose of any

property it shall establish:

(1)  a price for rent or lease purposes;

(2)  a purchase price for sale purposes; or

(3)  the conditions for transfer, trade, exchange or

other disposition of the property.

(c)  Public notice.--

(1)  An authority shall publish the information required

pursuant to subsection (b) on a publicly available Internet

website at least 30 days before any property may be disposed

of from the inventory.

(2)  The authority shall also notify by mail or

electronic mail all entities on the mailing list established

in section 6 of the authority's intent to dispose of a

specified property and the established price to rent, lease

or purchase the property or the conditions for transfer,

trade, exchange or other disposition of the property.

(d)  Restriction.--

(1)  No property shall be acquired for investment

purposes only and with no intent to use the property other

than to transfer the property at a future date for monetary

gain.

(2)  The authority may, at its option, require a

purchaser to enter into a written agreement to rehabilitate

or otherwise develop the property and may specify the type of

development and other terms, including the length of time

allowed for development.

(e)  Specific board member approval.--No property may be

sold, transferred, traded, exchanged or otherwise disposed of,

unless the transaction is approved by the board member appointed

by the affected municipality in which the property is located.

(f)  Distribution of sale proceeds.--At the time that an

authority sells or otherwise disposes of property as part of its

land bank program, the proceeds from the sale shall be

distributed as follows:

(1)  The party or parties bringing the action that

resulted in the acquisition of the property by the authority

shall be reimbursed, to the extent proceeds are available,

for all costs incurred.

(2)  Any remaining proceeds shall be distributed to the

parties in proportion to their respective tax bills as they

existed just prior to the time the property was acquired by

the authority.

(g)  Amount of consideration.--Conveyance of a property may

be for less than market value or for no consideration.

Section 9.  Dissolution.

Upon the approval of the parties, the board, by a two-thirds

vote, may provide for the dissolution of the authority. Upon the

dissolution of the authority, any funds within its control shall

be paid to any party under section 8(d) to satisfy any written

agreement extended under this section. All remaining funds shall

be transferred to the parties to the agreement or charter.

Section 10.  Effective date.

This act shall take effect immediately.