2024 -- S 2760

========

LC005188

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2024

____________

A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- DEPARTMENT OF HOUSING

LAND BANK PROGRAM

     Introduced By: Senators Kallman, Bissaillon, Gu, Miller, Acosta, McKenney, Mack, and
Murray

     Date Introduced: March 08, 2024

     Referred To: Senate Housing & Municipal Government

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 42 of the General Laws entitled "STATE AFFAIRS AND

GOVERNMENT" is hereby amended by adding thereto the following chapter:

CHAPTER 64.35

DEPARTMENT OF HOUSING LAND BANK PROGRAM

     42-64.35-1. Establishment of housing land bank program.

     (a) As used herein:

     (1) "Department" means the department of housing established pursuant to chapter 64.34

of title 42, except where another department is clearly indicated; and

     (2) "Housing land bank" or "land bank" means the housing land bank program operated by

the department of housing, and established pursuant to this chapter.

     (b) There is hereby established a program to be operated by the department of housing (the

"department") called the "housing land bank" in furtherance of the goal to create affordable housing

in the State of Rhode Island. The housing land bank is intended for the purpose of buying, receiving,

and holding real property for the development of housing. Real estate assets held by the land bank

shall be donated or sold for housing to be developed and owned by a public housing authority or

an organization that qualifies under section 501(c)(3) of the Internal Revenue Code (the "code")

and also meets the "public support" test of section 509(a)(2) of the code, except where the

department is disposing of a parcel for the purposes of acquiring a different parcel with the approval

of the Rhode Island housing resources commission established in chapter 128 of title 42 ("Rhode

Island housing resources act of 1998").

     42-64.35-2. Establishment of account.

     The department shall establish an account into which title to real estate assets shall be

deposited and held for disposal according to the purposes described in §42-64.35-1.

     42-64.35-3. Acquisition of property and deposit into the land bank.

     (a) The department may acquire real property or interests in real property by gift, transfer,

exchange, foreclosure, purchase, or otherwise on terms and conditions and in a manner the

department considers proper and deposit such property into the land bank.

     (b) The department may use its own funds or funds that it controls to acquire real property

by purchase contracts, lease purchase agreements, installment sales contracts, and/or land contracts,

and may accept donations and transfers from municipalities, other quasi-public entities, nonprofit

entities, or the state upon such terms and conditions as agreed to by the department and the

respective municipality, entity or state. Nothing herein shall prevent the department from accepting

donations from private entities.

     (c) Notwithstanding any other law to the contrary, any municipality may freely transfer to

the land bank real property and interests in real property of the municipality on such terms and

conditions and according to such procedures as determined jointly by the municipality in which the

property is located and the department.

     (d) The acquisition of real property by the department pursuant to this section, from entities

other than political subdivisions, shall be limited to real property that is tax delinquent, tax

foreclosed, subject to municipal receivership, vacant or abandoned, or unimproved land or taken

via eminent domain; provided, however, that the land bank shall have authority to enter into

agreements to purchase other real property with the approval of the Rhode Island housing resources

commission established in chapter 128 of title 42 ("Rhode Island housing resources act of 1998").

     42-64.35-4. Public inspection of records.

     (a) The department shall maintain and make available for public review and inspection a

complete inventory of all property received by the department for deposit into the land bank. Such

inventory shall include:

     (1) The location of the parcel; the purchase price, if any, for each parcel received;

     (2) The current value assigned to the property for purposes of real property taxation;

     (3) The amount, if any, owed to the locality for real property taxation or as a payment in

lieu of taxes;

     (4) The identity of the transferor; and

LC005188 - Page 2 of 7

     (5) Any conditions or restrictions applicable to the property.

     (b) All parcels received by the department and deposited into the land bank shall be listed

on the received inventory established pursuant to subsection (a) of this section within ten (10)

business days of the acquisition and shall remain in such inventory for at least five (5) business

days prior to disposition. Such inventory shall be listed on a website for the department accessible

to the public, including at least the street where the property is located, the size and type of any

structure upon it, and condition of remediation as defined in §23-19.14-3, if applicable, within

twenty (20) business days of acquisition into the land bank.

     42-64.35-5. Departmental authority to reject proposed transfers of property.

     The department is hereby allowed to reject any proposed transfer of any real estate asset in

control of the land bank for any reason including, but not limited to, polluted, contaminated or

problematic parcels which would, in the judgment of the department, create a harm to the finances,

operations or interests for the land bank, the department or the state.

     42-64.35-6. Property in the land bank exempt from legal process.

     (a) Any land deposited into the land bank inventory shall not be subject to attachment,

execution or any judicial or administrative process during the period it is held by the department,

unless that parcel or asset is pledged as security for any loan agreement made for funding

improvements related to that parcel in which case such process shall be available against that asset

only, and no liens, fines, penalties, assessments or other charges shall be made against the property,

the land bank, the department or the state for any reason during the period it is held in the land

bank.

     (b) In the event there is a division in the freehold interest where only a portion of the rights

related to the property is located in the land bank, the remainder may be made subject to legal

process as long as such process does not act to divest the land bank of any of its attributes of

ownership or ability to develop the property.

     (c) In the event of a divided ownership where a portion of the fee or property interest is

held by the land bank or any other conflict in ownership which may arise under this section, the

department may petition the superior court for partition in which after the required notice and

service of process is completed upon confirmatory motion, the land bank shall be awarded and

receive the whole fee simple interest by way of an interim order or a final judgment. An interim

order or a final judgment constitutes a recordable order which shall be considered binding in the

chain of title and any of the remainder portion claimed by another owner or creditor shall be subject

to owelty under the law or in equity based on the value of the interest transferred to the land bank.

Neither the department nor any land subject to such a partition action shall be restrained nor

LC005188 - Page 3 of 7

enjoined and no equitable order shall issue to prevent the development of the property by the

department or its applicant or assignee.

     42-64.35-7. Required review of surplus land by state and municipal entities.

     (a) Required property review. The state properties committee and all municipal public

bodies and quasi-public entities shall conduct a review of real estate assets owned by or under the

control of the body or quasi-public entity and determine which real estate assets are not under

current use or planned use by June 30, 2025. After that date, the state properties committee shall

provide an updated inventory to the department of housing on December 1 annually. Thereafter,

municipalities and quasi-public entities shall provide an updated inventory to the department of

housing and the state properties committee by August 15, 2026 and every year thereafter.

     (b) Real estate asset planning. (1) The state properties committee and all municipal public

body and quasi-public entity shall create a long-term plan for those real estate assets not in current

use. Such a plan shall provide an estimated date when each real estate asset will be employed for

use by the agency, what the proposed use will be, and if known, the estimated costs to develop the

land for the proposed use. All vacant school building identified by a municipality shall comply with

the provisions set forth in §45-53-10.

     (2) A list of all real estate assets, except for school buildings, which are not in use shall be

submitted to the department along with a list of those parcels for which there are plans to put said

parcel to use within ten (10) years and evidence of what that use will be. Evidence may include,

but is not limited to, architectural plans, capital improvement plan budgeting documents, and

comprehensive planning documents.

     (3) The department shall evaluate each parcel submitted to the department, along with the

proposed use for each parcel so denominated by each public body, for the appropriateness for

development into residential housing units.

     (c) Notice to the department. If the department determines that a particular parcel listed on

any list required in subsection (b) of this section is appropriate for residential real estate

development, the department shall provide notice to the state or municipal public body or quasi-

public agency that is in control of or owns the parcel.

     (d) Required donation or sale to land bank. Upon a determination by the department that a

particular real estate asset listed pursuant to subsection (b)(3) of this section is suitable for

residential real estate development and the department has determined that it desires to acquire the

real estate asset for the land bank, if said parcel is not listed as being planned for use within the

next ten (10) years, the state or municipal public body or quasi-public agency, as applicable, shall

be required, upon notice by the department, to enter into a negotiation with the department for the

LC005188 - Page 4 of 7

transfer of the parcel to the land bank. If the department and the state or municipal public body or

quasi-public agency cannot agree on a transfer value, then establishment of a value through binding

arbitration by a panel comprising of three (3) licensed real estate appraisers licensed to appraise the

particular type of property at issue shall be required with one appointed by the department, one by

the owner of the parcel and one ("the neutral appraiser") chosen by the two (2) previously identified

appraisers. The neutral appraiser shall determine the final purchase price subject to acceptance by

the department. If the value is such that the department desires to continue with the purchase, then

the state or municipal public body or quasi-public agency shall be required to consummate the sale.

     (e) Parcels exempt from the required donation or sale. The following real estate assets shall

be exempt from the required sale procedure in subsection (f) of this section:

     (1) All real estate assets under the control of the Quonset Development Corporation within

the Quonset business park;

     (2) All real estate assets under the control of the I-195 redevelopment district commission

within the I-195 redevelopment district;

     (3) All real estate assets under the control of the Rhode Island airport corporation;

     (4) All real estate assets under the control of the department of transportation held for

proposed roads, highways, railways or other transportation infrastructure;

     (5) All real estate assets under the control of the Rhode Island public transit authority;

     (6) All real estate assets in the immediate vicinity of the state house and state offices in the

capitol district as bounded westerly by Interstate 95, southerly by Memorial Boulevard, northerly

by Orms Street and easterly (from north to south) by Charles Street then by Mill Street and then by

the Moshassuck River;

     (7) All real estate assets connected with judicial branch activities;

     (8) All real estate assets controlled by the department of corrections;

     (9) All real estate assets controlled by the University of Rhode Island;

     (10) All real estate assets controlled by Rhode Island College that are located in

Providence;

     (11) All real estate assets controlled by the Community College of Rhode Island;

     (12) All real estate assets located in Cranston at the John O. Pastore center or in its

immediate vicinity;

     (13) All real estate assets controlled by the office of veterans' services in the vicinity of the

Rhode Island veterans' cemetery and the Rhode Island veterans' home;

     (14) All real estate assets related to Eleanor Slater hospital including, but not limited to,

facilities in Cranston and Burrillville;

LC005188 - Page 5 of 7

     (15) All assets located in a flood zone;

     (16) All assets located in a wetland designated by the department of environmental

management;

     (17) All real estate assets which are subject to any farm, forest or open space restriction

against building through the department of environmental management, any agricultural

conservancy trust, or any not-for-profit entity or trust;

     (18) All state or municipal parks, conservation areas, management areas, beaches, fishing

areas and other sites subject to the management and/or control of the department of environmental

management;

     (19) All parcels designated by the director of the Rhode Island emergency management

agency as necessary for emergency preparation purposes;

     (20) Real estate assets owned, controlled or overseen by the Rhode Island historical

preservation & heritage commission; and

     (21) Any property being operated as a farm, for recreational purposes, open space, or as a

water supply or for the provision of utilities or serves as a buffer to any watershed, water supply or

utility.

     (f) Donation or sale prior to disposition. Prior to any transfer of ownership of any real estate

asset by any state or municipal public body or quasi-public agency through sale, long-term lease of

more than five (5) years, surplus of property, auction, donation or other method, notice shall be

provided to the department along with the opportunity to timely evaluate the property and decide

whether to exercise an option to purchase or decline to purchase the parcel which shall not be less

than thirty (30) days. Notice of the proposed auction date, sale date or the date of the transfer of

ownership shall be provided to the department. Unless a public auction or sale is required pursuant

to other law or judicial order, the department shall have the right of first refusal for purchase of the

real estate asset by the land bank at:

     (1) The advertised price, or, if none, then;

     (2) At the price offered by an alternative buyer, or, if none, then;

     (3) At the lowest price acceptable to the selling entity if acceptable to the department. The

department shall inform the selling agency of its decision to exercise its right of first refusal prior

to the auction date, sale date or disposition date contained in the original notice.

     SECTION 2. This act shall take effect upon passage.

========

LC005188

========

LC005188 - Page 6 of 7

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- DEPARTMENT OF HOUSING

LAND BANK PROGRAM

***

     This act would establish a program to be operated by the department of housing called the

"housing land bank" in furtherance of the goal to create affordable housing in the State of Rhode

Island. The housing land bank would have authority to buy, receive, and hold real property for the

development of housing.

     This act would take effect upon passage.

========

LC005188

========

LC005188 - Page 7 of 7