Municipal land banks passed

Senators passed a bill May 29 that allows the establishment of land banks in metropolitan class cities or counties that have at least three first class cities–currently only Douglas and Sarpy. Land banks are tax-exempt political subdivisions that acquire, manage and develop vacant and tax-delinquent properties.

Under LB97, introduced by Omaha Sen. Heath Mello, the land banks can be created by passing a city ordinance or by way of interlocal agreements. Each land bank is required to have a seven-member board of directors appointed by the mayor and confirmed by a two-thirds vote of the governing body.

The bill also allows land banks to borrow money, issue bonds, procure insurance, enter into both private and public contracts, have priority over other bidders in tax foreclosure proceedings and sell property to private entities in which they will receive 50 percent of the collected property tax amount for five years after the sale.

Additionally, the bill caps a land bank’s legal title holdings at 7 percent of the total number of parcels of real property located in the municipality. Land banks are prohibited from exercising eminent domain rights to acquire private property and from collecting property taxes on a property that has been redeveloped under the Community Development Law, unless the authority enters into an agreement for the remittance of such funds to the land bank.

The bill passed on a 47-0 vote.