STATE OF OKLAHOMA

1st Session of the 53rd Legislature (2011)

HOUSE BILL 1893	By:	Scott

AS INTRODUCED

An Act relating to cities and towns; creating the Abandoned and Neglected Properties Rehabilitation Act; stating legislative findings; defining terms; providing for determination of abandoned and neglected property; providing for determination of nuisance property; providing for property that was purchased by certain tax sale; allowing municipality to bring certain action to district court; providing for filing of complaint; providing for defense to complaint; authorizing municipality to submit certain plan; authorizing municipality to exercise certain rights; designating certain ownership interest to municipality; authorizing owner to petition for reinstatement; providing for contents of petition for reinstatement; requiring owner to post bond; authorizing court to grant certain rights to municipality if owner fails to take certain actions; providing for municipality to purchase property for fair market value; providing priority for distribution of proceeds; authorizing certain persons to place a lien on property; authorizing court to deny certain rights and remedies; providing recourse for municipality as to lien filed against property; authorizing municipality to hold special tax sales; providing for eminent domain proceeding; providing for certain property to be removed from list; providing for codification; and declaring an emergency.

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 56-101 of Title 11, unless there is created a duplication in numbering, reads as follows:
This act shall be known and may be cited as the "Abandoned and Neglected Properties Rehabilitation Act".
SECTION 2.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 56-102 of Title 11, unless there is created a duplication in numbering, reads as follows:
The Legislature finds and declares that: 
1.  Abandoned and neglected properties, particularly those located within urban areas or in close proximity to occupied residences and businesses, create a wide range of problems for the communities in which the properties are located, fostering criminal activity, creating public health problems and otherwise diminishing the quality of life for residents and business operators in those areas;
2.  Abandoned and neglected properties diminish the property values of neighboring properties and have a negative effect on the quality of life of adjacent property owners, increasing the risk of property damage through arson and vandalism and discouraging neighborhood stability and revitalization;
3.  For these reasons, abandoned and neglected properties are presumptively considered to be nuisances, in view of their negative effects on nearby properties and the residents or users of those properties;
4.  The continued presence of abandoned and neglected properties in Oklahoma's communities acts as a significant barrier to urban revitalization and to the regeneration of the state's urban centers;
5.  Abandonment is a local problem that must be addressed locally and the most important role of state government is to provide local governments, local community organizations, citizens, and residents with the tools to address the problem;
6.  The responsibility of a property owner to maintain a property in sound condition and prevent it from becoming a nuisance to others extends to properties which are not in use and "demolition by neglect", leading to the deterioration and loss of the property, or failure by an owner to comply with legitimate orders to demolish, stabilize or otherwise repair his or her property creates a presumption that the owner has abandoned and neglected the property; and
7.  Many abandoned and neglected buildings still have potential value for residential and other uses and such buildings should be preserved rather than demolished, wherever feasible, particularly buildings that have historic or architectural value, or contribute to maintaining the character of neighborhoods or streetscapes, or both, as the case may be.
SECTION 3.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 56-103 of Title 11, unless there is created a duplication in numbering, reads as follows:
As used in the Abandoned and Neglected Properties Rehabilitation Act: 
1.  "Department" means the Oklahoma Department of Commerce;
2.  “Agency” means the Oklahoma Housing Finance Agency;
3.  "Lienholder" or "mortgage holder" means any person or entity holding a note, mortgage or other interest secured by the building or any part thereof;
4.  "Municipality" means any city, town or township situated within the boundaries of this state and shall include a qualified rehabilitation entity that may be designated by the municipality pursuant to Section 13 of the Abandoned and Neglected Properties Rehabilitation Act;
5.  "Owner" means the holder or holders of title to an abandoned and neglected property;
6.  "Property" means any building or structure and the land appurtenant thereto;
7.  "Officer”, “official” or “employee” means a person employed, designated or otherwise assigned by a municipality to enforce provisions of Section 22-111 of Title 11 and Title 50 of the Oklahoma Statutes; and
8.  "Qualified rehabilitation entity" means an entity organized or authorized to do business under the Oklahoma Statutes which shall have as one of its purposes the construction or rehabilitation of residential or nonresidential buildings, the provision of affordable housing, the restoration of abandoned and neglected property, the revitalization and improvement of urban neighborhoods, or similar purpose, and which shall be well qualified by virtue of its staff, professional consultants, financial resources, and prior activities set forth in the Abandoned and Neglected Properties Rehabilitation Act to carry out the rehabilitation of vacant buildings in urban areas.
SECTION 4.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 56-104 of Title 11, unless there is created a duplication in numbering, reads as follows:
Except as provided in Section 6 of the Abandoned and Neglected Properties Rehabilitation Act, any property that has not been legally occupied for a period of twelve (12) months and which meets any one of the following additional criteria may be deemed to be abandoned and neglected property upon a determination by the officer, official or employee that: 
1.  The property is in need of rehabilitation in the reasonable judgment of the officer, official or employee, and no rehabilitation has taken place during that twelve-month period; 
2.  Construction was initiated on the property and was discontinued prior to completion, leaving the building unsuitable for occupancy, and no construction has taken place for at least twelve (12) months as of the date of a determination by the officer, official or employee pursuant to this section; 
3.  At least one installment of property tax remains unpaid and delinquent on that property in accordance with Section 6 as of the date of a determination by the officer, official or employee pursuant to this section; or 
4.  The property has been determined to be a nuisance by the officer, official or employee in accordance with Section 5 of the Abandoned and Neglected Properties Rehabilitation Act. 
SECTION 5.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 56-105 of Title 11, unless there is created a duplication in numbering, reads as follows:
A property may be determined to be a nuisance if: 
1.  The property has been found to be unfit for human habitation, occupancy or use; 
2.  The condition and vacancy of the property materially increases the risk of fire to the property and adjacent properties; 
3.  The property is subject to unauthorized entry leading to potential health and safety hazards; the owner has failed to take reasonable and necessary measures to secure the property; or the municipality has secured the property in order to prevent such hazards after the owner has failed to do so; 
4.  The presence of vermin or the accumulation of debris, uncut vegetation or physical deterioration of the structure or grounds has created potential health and safety hazards and the owner has failed to take reasonable and necessary measures to remove the hazards; or 
5.  The dilapidated appearance or other condition of the property materially affects the welfare, including the economic welfare, of the residents of the area in close proximity to the property, and the owner has failed to take reasonable and necessary measures to remedy the conditions. 
An officer, official or employee who determines a property to be a nuisance pursuant to this section shall follow the notification procedures set forth in Sections 22-111 and 22-112 of Title 11 of the Oklahoma Statutes. 
SECTION 6.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 56-106 of Title 11, unless there is created a duplication in numbering, reads as follows:
A.  If an entity other than the municipality has purchased or taken assignment from the municipality of a tax sale certificate on an unoccupied property, that property shall not be deemed to be abandoned and neglected if:
1.  The owner of the certificate has continued to pay all municipal taxes and liens on the property in the tax year when due; and 
2.  The owner of the certificate takes action to initiate foreclosure proceedings within six (6) months after the property is eligible for foreclosure.
B.  The condition and vacancy of the property which is used on a seasonal basis shall be deemed to be abandoned and neglected only if the property meets any two of the additional criteria set forth in Section 4 of the Abandoned and Neglected Properties Rehabilitation Act. 
C.  A determination that a property is abandoned and neglected property under the provisions of the Abandoned and Neglected Properties Rehabilitation Act shall not constitute a finding that the use of the property has been abandoned and neglected for purposes of municipal zoning or land-use regulation. 
SECTION 7.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 56-107 of Title 11, unless there is created a duplication in numbering, reads as follows:
A summary action or otherwise to transfer possession and control of abandoned and neglected property in need of rehabilitation to a municipality may be brought by a municipality in the district court in the county in which the property is situated.  If the court shall find that the property is abandoned and neglected pursuant to Section 4 of the Abandoned and Neglected Properties Rehabilitation Act and the owner or party in interest has failed to submit and initiate a rehabilitation plan, then the court may authorize the municipality to take possession and control of the property and develop a rehabilitation plan. 
The municipality granted possession and control may commence and maintain those further proceedings for the conservation, protection or disposal of the property or any part thereof that are required to rehabilitate the property, necessary to recoup the cost and expenses of rehabilitation and for the sale of the property; provided, however, that the court shall not direct the sale of the property if the owner applies to the court for reinstatement of control of the property as provided in Section 15 of the Abandoned and Neglected Properties Rehabilitation Act. 
Failure by the owner, mortgage holder or lienholder to submit plans for rehabilitation to the municipality, obtain appropriate construction permits for rehabilitation or, in the alternative, submit formal applications for funding the cost of rehabilitation to local, state or federal agencies providing such funding within that six-month period shall be deemed prima facie evidence that the owner has failed to take any action to further the rehabilitation of the property. 
SECTION 8.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 56-108 of Title 11, unless there is created a duplication in numbering, reads as follows:
A complaint filed pursuant to Section 7 of the Abandoned and Neglected Properties Rehabilitation Act shall include: 
1.  Documentation that the property is on the municipal abandoned and neglected property list or a certification by the officer, official or employee that the property is abandoned; and 
2.  A statement by an individual holding appropriate professional qualifications that there are sound reasons that the building should be rehabilitated rather than demolished based upon the physical, aesthetic or historical character of the building or the relationship of the building to other buildings and lands within its immediate vicinity. 
SECTION 9.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 56-109 of Title 11, unless there is created a duplication in numbering, reads as follows:
A.  Within ten (10) days of filing a complaint pursuant to the Abandoned and Neglected Properties Rehabilitation Act, the plaintiff shall file a notice of lis pendens with the county recording officer of the county within which the building is located. 
B.  At least thirty (30) days before filing the complaint, the municipality shall serve a notice of intention to take possession of an abandoned and neglected building.  The notice shall inform the owner and interested parties that the property has not been legally occupied for twelve (12) months and of those criteria that led to a determination of abandonment pursuant to Section 4 of the Abandoned and Neglected Properties Rehabilitation Act.  The notice shall provide that unless the owner or a party in interest prepares and submits a rehabilitation plan to the appropriate municipal officials, the municipality will seek to gain possession of the building to rehabilitate the property and the associated cost shall be a lien against the property, which may be satisfied by the sale of the property, unless the owner applies to the court for reinstatement of control of the property as provided in Section 15 of the Abandoned and Neglected Properties Rehabilitation Act. 
After the complaint is filed, the complaint shall be served on the parties in interest in accordance with the Oklahoma Rules of Court. 
SECTION 10.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 56-110 of Title 11, unless there is created a duplication in numbering, reads as follows:
A.  Any owner may defend against a complaint filed pursuant to Section 7 of the Abandoned and Neglected Properties Rehabilitation Act by submitting a plan for the rehabilitation and reuse of the property which is the subject of the complaint and by posting a bond equal to one hundred twenty-five percent (125%) of the amount determined by the officer, official or employee or the court to be the projected cost of rehabilitation. 
B.  A plan submitted by an owner pursuant to this section shall include, but not be limited to: 
1.  A detailed financial feasibility analysis, including documentation of the economic feasibility of the proposed reuse, including operating budgets or resale prices, or both, as appropriate; 
2.  A budget for the rehabilitation of the property, including sources and uses of funds, based on the terms and conditions of realistically available financing, including grants and loans; 
3.  A timetable for the completion of rehabilitation and reuse of the property, including milestones for performance of major steps leading to and encompassing the rehabilitation and reuse of the property; and 
4.  Documentation of the qualifications of the individuals and firms that will be engaged to carry out the planning, design, financial packaging, construction, and marketing or rental of the property. 
C.  1.  The court shall approve any plan that, in the judgment of the court, is realistic and likely to result in the expeditious rehabilitation and reuse of the property which is the subject of the complaint. 
2.  If the court approves the owner's plan, then it may appoint the officer, official or employee to act as monitor of the owner's compliance.  If the owner fails to carry out any step in the approved plan, then the municipality may apply to the court to have the owner's bond forfeited, possession of the building transferred to the municipality to complete the rehabilitation plan and authorization to use the bond proceeds for rehabilitation of the property. 
3.  The owner shall provide quarterly reports to the municipality on its activities and progress toward rehabilitation and reuse of the property.  The owner shall provide those reports to the court on its activities that the court determines are necessary. 
D.  The court may reject a plan and bond if it finds that the plan does not represent a realistic and expeditious means of ensuring the rehabilitation of the property or that the owner or his representatives or agents, or both, lack the qualifications, background or other criteria necessary to ensure that the plan will be carried out successfully. 
SECTION 11.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 56-111 of Title 11, unless there is created a duplication in numbering, reads as follows:
A.  If an owner is unsuccessful in defending against a complaint filed pursuant to Section 7 of the Abandoned and Neglected Properties Rehabilitation Act, the mortgage holder or lienholder may seek to be designated in possession of the property by submitting a plan and posting a bond meeting the same conditions as set forth in Section 10 of the Abandoned and Neglected Properties Rehabilitation Act.  If the court approves any such mortgage holder or lienholder's plan, it shall designate that party to be in possession of the property for purposes of ensuring its rehabilitation and reuse and may appoint the officer, official or employee to act as monitor of the party's compliance.
The mortgage holder or lienholder, as the case may be, shall provide quarterly reports to the court and the municipality on its activities and progress toward rehabilitation and reuse of the property.
B.  If the mortgage holder or lienholder fails to carry out any material step in the approved plan, then the officer, official or employee shall notify the court, which may order the bond forfeit, grant the municipality possession of the property, and authorize the municipality to use the proceeds of the bond for rehabilitation of the property. 
C.  Any sums incurred or advanced for the purpose of rehabilitating the property by a mortgage holder or lienholder granted possession of a property pursuant to subsection A of this section, including court costs and reasonable attorney fees, may be added to the unpaid balance due that mortgage holder or lienholder, with interest calculated at the same rate set forth in the note or security agreement; or, in the case of a tax lienholder, at the statutory interest rate for subsequent liens. 
SECTION 12.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 56-112 of Title 11, unless there is created a duplication in numbering, reads as follows:
A.  If no mortgage holder or lienholder meets the conditions of Section 11 of the Abandoned and Neglected Properties Rehabilitation Act, then the municipality shall submit a plan to the court which conforms with the provisions of subsection B of Section 10 of the Abandoned and Neglected Properties Rehabilitation Act.  The plan shall designate the entity which shall implement the plan, which may be the municipality or that entity designated in accordance with the provisions of Section 13 of the Abandoned and Neglected Properties Rehabilitation Act. 
B.  The court shall grant the municipality possession of the property if it finds that: 
1.  The proposed rehabilitation and reuse of the property is appropriate and beneficial; 
2.  The municipality is qualified to undertake the rehabilitation and reuse of the property; and 
3.  The plan submitted by the municipality represents a realistic and timely plan for the rehabilitation and reuse of the property. 
The municipality shall take all steps necessary and appropriate to further the rehabilitation and reuse of the property consistent with the plan submitted to the court.  In making its findings pursuant to this section, the court may consult with qualified parties, including the Oklahoma Department of Commerce, and, upon request by a party in interest, may hold a hearing on the plan. 
C.  Where either a redevelopment plan pursuant to Section 40-104 of Title 11 of the Oklahoma Statutes or a neighborhood revitalization plan has been adopted or approved by the Oklahoma Department of Commerce, as appropriate, encompassing the property which is the subject of a complaint, the court shall make a further finding that the proposed rehabilitation and reuse of the property are not inconsistent with any provision of either plan. 
SECTION 13.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 56-113 of Title 11, unless there is created a duplication in numbering, reads as follows:
A municipality may exercise its rights under the Abandoned and Neglected Properties Rehabilitation Act directly, or may designate a qualified rehabilitation entity to act as its designee for the purpose of exercising the municipality's rights where that designation will further the rehabilitation and reuse of the property consistent with municipal plans and objectives.  This designation shall be made by resolution of the municipal governing body, or mayor, as the case may be, and may delegate this authority to the officer, official or employee. 
Regardless of whether a municipality exercises its rights directly or designates a qualified rehabilitation entity pursuant to this section, while in possession of a property pursuant to the Abandoned and Neglected Properties Rehabilitation Act, a municipality shall maintain, safeguard, and maintain insurance on the property.  Notwithstanding the municipality's possession of the property, nothing in the Abandoned and Neglected Properties Rehabilitation Act shall be deemed to relieve the owner of the property of any civil or criminal liability or any duty imposed by reason of acts or omissions of the owner. 
SECTION 14.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 56-114 of Title 11, unless there is created a duplication in numbering, reads as follows:
A.  If a municipality has been granted possession of a property pursuant to Section 12 of the Abandoned and Neglected Properties Rehabilitation Act, that municipality shall be deemed to have an ownership interest in the property for the purpose of filing plans with public agencies and boards, seeking and obtaining construction permits and other approvals, and submitting applications for financing or other assistance to public or private entities. 
B.  For the purposes of any state program of grants or loans, including but not limited to programs of the Oklahoma Department of Commerce and the Oklahoma Housing Finance Agency, possession of a property under this section shall be considered legal control of the property. 
C.  Notwithstanding the granting of possession to a municipality, nothing in the Abandoned and Neglected Properties Rehabilitation Act shall be deemed to relieve the owner of the property of any obligation the owner or any other person may have for the payment of taxes or other municipal liens and charges, or mortgages or liens to any party, whether those taxes, charges or liens are incurred before or after the granting of possession. 
D.  The granting of possession shall not suspend any obligation the owner may have as of the date of the granting of possession for payment of any operating or maintenance expense associated with the property, whether or not billed at the time of the granting of possession. 
E.  The court may approve the borrowing of funds by a municipality to rehabilitate the property and may grant a lien or security interest with priority over all other liens or mortgages other than municipal liens.  Prior to granting this lien priority, the court shall find that:
1.  The municipality sought to obtain the necessary financing from the senior lienholder, which declined to provide such financing on reasonable terms; 
2.  The municipality sought to obtain a voluntary subordination from the senior lienholder, which refused to provide such subordination; and
3.  Lien priority is necessary in order to induce another lender to provide financing on reasonable terms. 
F.  No lien authorized by the court shall take effect unless recorded in the office of the clerk of the county in which the property is located.  For the purposes of this section, the cost of rehabilitation shall include reasonable nonconstruction costs such as architectural fees or construction permit fees customarily included in the financing of the rehabilitation of residential property. 
G.  Where the municipality has been granted possession by the court in the name of the municipality, the municipality may seek the approval of the court to assign its rights to another entity, which approval shall be granted by the court when it finds that: 
1.  The entity to which the municipality's rights will be assigned is a qualified rehabilitation entity; and 
2.  The assignment will further the purposes of this section. 
H.  Where a municipality has designated a qualified rehabilitation entity to act on its behalf, the qualified rehabilitation entity shall provide quarterly reports to the municipality on its activities and progress toward rehabilitation and reuse of the property.  The municipality or qualified rehabilitation entity, as the case may be, shall provide such reports to the court as the court determines to be necessary.  If the court finds that the municipality or its designee has failed to take diligent action toward rehabilitation of the property within one (1) year from the grant of possession, then the court may request the municipality to designate another qualified rehabilitation entity to exercise its rights, or if the municipality fails to do so, may terminate the order of possession and return the property to its owner. 
I.  The municipality shall file a Notice of Completion with the court, and shall also serve a copy on the owner and any mortgage holder or lienholder, at such time as the municipality has determined that no more than six (6) months remain to the anticipated date on which rehabilitation will be complete.  This notice shall include an affidavit of the officer, official or employee attesting that rehabilitation can realistically be anticipated to be complete within that time period, and a statement setting forth such actions as it plans to undertake to ensure that reuse of the property takes place consistent with the plan. 
SECTION 15.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 56-115 of Title 11, unless there is created a duplication in numbering, reads as follows:
A.  An owner may petition for reinstatement of the owner's control and possession of the property at any time after one (1) year from the grant of possession, but no later than thirty (30) days after the municipality has filed a Notice of Completion with the court or, in the event the Notice of Completion is filed within less than one (1) year of the grant of possession, within thirty (30) days after the municipality has filed notice. 
B.  The court may allow additional time for good cause if that additional time does not materially delay completion of the rehabilitation, place undue hardship on the municipality, or affect any of the terms or conditions under which the municipality has applied for or received financing for the rehabilitation of the property.
SECTION 16.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 56-116 of Title 11, unless there is created a duplication in numbering, reads as follows:
Any petition for reinstatement of the owner's control and possession of the property filed pursuant to Section 15 of the Abandoned and Neglected Properties Rehabilitation Act shall: 
1.  Include a plan for completion of the rehabilitation and reuse of the property consistent with the plan previously approved by the court; 
2.  Provide legally binding assurances that the owner will comply with all conditions of any grant or loan secured by the municipality or repay those grants or loans in full, at the discretion of the maker of the loan or grant; and 
3.  Be accompanied by payment equal to the sum of: 
a.	all municipal liens outstanding on the property, 
b.	all costs incurred by the municipality in bringing action with respect to the property, 
c.	any costs incurred by the municipality not covered by grants or loans to be assumed or repaid pursuant to this section, and 
d.	any costs remaining to complete rehabilitation and reuse of the property, as determined by the officer, official or employee, which payment shall be placed in escrow with the Clerk of the Court pending disposition of the petition. 
SECTION 17.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 56-117 of Title 11, unless there is created a duplication in numbering, reads as follows:
A.  Prior to the granting of a petition on the part of the owner by the court pursuant to Section 15 of the Abandoned and Neglected Properties Rehabilitation Act, the owner may be required to post a bond or other security in an amount determined by the court, after consultation with the officer, official or employee, as likely to ensure that the owner will continue to maintain the property in sound condition.  That bond or other security shall be made available to the municipality to make any repair on the property in the event of a code violation which is not corrected in timely fashion by the owner.  The bond or other security may be forfeit in full in the event that the owner fails to comply with any requirement imposed as a condition of the reinstatement petition filed pursuant to Section 15 of the Abandoned and Neglected Properties Rehabilitation Act. 
B.  The owner may seek approval of the court to be relieved of this requirement after five (5) years, which shall be granted if the court finds that the owner has maintained the property in good repair during that period, that no material violations affecting the health and safety of the tenants have occurred during that period, and that the owner has remedied other violations in a timely and expeditious fashion. 
SECTION 18.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 56-118 of Title 11, unless there is created a duplication in numbering, reads as follows:
If the owner fails to petition for the reinstatement of control and possession of the property within thirty (30) days after the entity in possession has filed a Notice of Completion or in any event within two (2) years after the initial grant of possession, or if the owner fails to meet any conditions that may be set by the court in granting a reinstatement petition filed pursuant to Section 15 of the Abandoned and Neglected Properties Rehabilitation Act, upon petition from the entity in possession, the court may grant the municipality title or authorize the municipality to sell the property, subject to the provisions of Section 19 of the Abandoned and Neglected Properties Rehabilitation Act. 
SECTION 19.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 56-119 of Title 11, unless there is created a duplication in numbering, reads as follows:
A.  Where the municipality seeks to gain title to the property, it shall purchase the property for fair market value on such terms as the court shall approve, and may place the proceeds of sale in escrow with the court. 
B.  The court may authorize the municipality to sell the building free and clear of liens, claims and encumbrances, in which event all such liens, claims and encumbrances shall be transferred to the proceeds of sale with the same priority as existed prior to resale in accordance with the provisions of this section, except that municipal liens shall be paid at settlement. 
C.  The proceeds of the purchase of the property shall be distributed as set forth in Section 20 of the Abandoned and Neglected Properties Rehabilitation Act. 
D.  The municipality may seek approval of the court to sell the property to a third party when the court finds that such conveyance will further the effective and timely rehabilitation and reuse of the property. 
E.  Upon approval by the court the municipality shall sell the property on such terms and at such price as the court shall approve, and may place the proceeds of sale in escrow with the court.  The court shall order a distribution of the proceeds of sale after paying court costs in the order of priority set forth in Section 20 of the Abandoned and Neglected Properties Rehabilitation Act. 
SECTION 20.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 56-120 of Title 11, unless there is created a duplication in numbering, reads as follows:
The proceeds paid pursuant to subsection C of Section 19 of the Abandoned and Neglected Properties Rehabilitation Act shall be distributed in the following order of priority: 
1.  The costs and expenses of sale; 
2.  Other governmental liens; 
3.  Repayment of principal and interest on any borrowing or indebtedness incurred by the municipality and granted priority lien status pursuant to subsection A of Section 21 of the Abandoned and Neglected Properties Rehabilitation Act; 
4.  A reasonable development fee to the municipality consistent with the standards for development fees established for rehabilitation programs by the Oklahoma Department of Commerce or the Oklahoma Housing Finance Agency; 
5.  Other valid liens and security interests, in accordance with their priority; and 
6.  The owner. 
SECTION 21.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 56-121 of Title 11, unless there is created a duplication in numbering, reads as follows:
A.  The officer, official or employee, with the approval of the court, may place a lien on the property to cover any costs of the municipality in connection with a proceeding under the Abandoned and Neglected Properties Rehabilitation Act incurred prior to the grant by the court of an order of possession under the Abandoned and Neglected Properties Rehabilitation Act, which may include costs incurred to stabilize or secure the property to ensure that it can be rehabilitated in a cost-effective manner.  Any such lien shall be considered a municipal lien for the purposes of Section 22-112 of Title 11 of the Oklahoma Statutes with the rights and status of a municipal lien pursuant thereto. 
B.  With the exception of the holding of special tax sales pursuant to Section 24 of the Abandoned and Neglected Properties Rehabilitation Act, the remedies available under the Abandoned and Neglected Properties Rehabilitation Act shall be available to any municipality with respect to any abandoned and neglected property, whether or not the municipality has established an abandoned and neglected property list as provided in Section 26 of the Abandoned and Neglected Properties Rehabilitation Act and whether or not the property has been included on any such list. 
SECTION 22.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 56-122 of Title 11, unless there is created a duplication in numbering, reads as follows:
Notwithstanding any provision to the contrary in the Abandoned and Neglected Properties Rehabilitation Act, a court may in its discretion deny a lienholder or mortgage holder of any or all rights or remedies afforded lienholders and mortgage holders under the Abandoned and Neglected Properties Rehabilitation Act, if the court finds that the owner of a property subject to any of the provisions of the Abandoned and Neglected Properties Rehabilitation Act owns or controls more than a fifty-percent interest in, or effective control of, the lienholder or mortgage holder or that the familial or business relationship between the lienholder or mortgage holder and the owner precludes a separate interest on the part of the lienholder or mortgage holder. 
SECTION 23.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 56-123 of Title 11, unless there is created a duplication in numbering, reads as follows:
With respect to any lien placed against any real property pursuant to the provisions of Section 22-112 of Title 11 of the Oklahoma Statutes the municipality shall have recourse with respect to the lien against any asset of the owner of the property if an individual, against any asset of any partner if a partnership, and against any asset of any owner of a ten-percent interest or greater if a corporation. 
SECTION 24.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 56-124 of Title 11, unless there is created a duplication in numbering, reads as follows:
A.  Municipalities may hold special tax sales with respect to those properties eligible for tax sale pursuant to Section 3105 of Title 68 of the Oklahoma Statutes which are also on an abandoned and neglected property list established by the municipality pursuant to Section 22-112 of Title 11 of the Oklahoma Statutes.  Municipalities electing to hold a special tax sale shall conduct that sale subject to the following provisions.
B.  The municipality shall establish criteria for eligibility to bid on properties at the sale, which may include, but shall not be limited to: documentation of the bidder's ability to rehabilitate or otherwise reuse the property consistent with municipal plans and regulations; commitments by the bidder to rehabilitate or otherwise reuse the property, consistent with municipal plans and regulations; commitments by the bidder to take action to foreclose on the tax lien by a date certain; and such other criteria as the municipality may determine are necessary to ensure that the properties to be sold will be rehabilitated or otherwise reused in a manner consistent with the public interest.
C.  The municipality may establish minimum bid requirements consistent with the provisions of Section 3105 of Title 68 of the Oklahoma Statutes for a special tax sale that may be less than the full amount of the taxes, interest and penalties due, the amount of such minimum bid to be at the sole discretion of the municipality, in order to ensure that the properties to be sold will be rehabilitated or otherwise reused in a manner consistent with the public interest.
D.  The municipality may combine properties into bid packages, and require that bidders place a single bid on each package, and reject any and all bids on individual properties that have been included in bid packages.
E.  The municipality may sell properties subject to provisions that, if the purchaser fails to carry out any commitment that has been set forth as a condition of sale pursuant to subsection A of this section or misrepresents any material qualification that has been established as a condition of eligibility to bid pursuant thereto, then the properties and any interest thereto acquired by the purchaser shall revert to the municipality, and any amount paid by the purchaser to the municipality at the special tax sale shall be forfeit to the municipality.
F.  In the event there are two or more qualified bidders for any property or bid package in a special tax sale, the municipality may designate the unsuccessful but qualified bidder whose bid was closest to the successful bid as an eligible purchaser.
G.  In the event that the purchaser of that property or bid package fails to meet any of the conditions of sale established by the municipality pursuant to this section, and their interest in the property or properties reverts to the municipality, the municipality may subsequently designate the entity previously designated as an eligible purchaser as the winning bidder for the property or properties, and assign the tax sale certificates to that entity of the basis of that entity's bid at the special tax sale, subject to the terms and conditions of the special tax sale. 
SECTION 25.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 56-125 of Title 11, unless there is created a duplication in numbering, reads as follows:
With respect to any eminent domain proceeding carried out under the laws of this state, the fair market value of the property shall be established on the basis of an analysis which determines independently: 
1.  The cost to rehabilitate and reuse the property for such purpose as is appropriate under existing planning and zoning regulations governing its reuse or to demolish the existing property and construct a new building on the site, including all costs ancillary to rehabilitation such as, but not limited to, marketing and legal costs; 
2.  The realistic market value of the reused property after rehabilitation or new construction, taking into account the market conditions particular to the neighborhood or subarea of the municipality in which the property is located; and 
3.  The extent to which the cost exceeds or does not exceed the market value after rehabilitation, or demolition and new construction, and the extent to which any "as is" value of the property prior to rehabilitation can be added to the cost of rehabilitation or demolition and new construction without the resulting combined cost exceeding the market value as separately determined.  If the appraisal finds that the cost of rehabilitation or demolition and new construction, as appropriate, exceeds the realistic market value after rehabilitation or demolition and new construction, there shall be a rebuttable presumption in all proceedings under this section that the fair market value of the abandoned and neglected property is Zero Dollars ($0.00), and that no compensation is due the owner. 
SECTION 26.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 56-126 of Title 11, unless there is created a duplication in numbering, reads as follows:
If a property, which an entity other than the municipality has purchased or taken assignment from the municipality of a tax sale certificate, is placed on the abandoned and neglected property list, the property shall be removed from the list if the owner of the certificate pays all municipal taxes and liens due on the property within thirty (30) days after the property is placed on the list; provided, however, that if the owner of the certificate fails to initiate foreclosure proceedings within six (6) months after the property was first placed on the list, the property shall be restored to the abandoned and neglected property list. 
SECTION 27.  It being immediately necessary for the preservation of the public peace, health and safety, an emergency is hereby declared to exist, by reason whereof this act shall take effect and be in full force from and after its passage and approval.

53-1-6082	LRB	01/17/11