House committee backs bill to let qualified nonprofits acquire tax-delinquent properties for redevelopment

The House State Government Committee recommended Senate Bill 129 favorably after sponsor Senator Rocky Adams described the bill as a tool to address vacant and abandoned properties and expand affordable housing opportunities, particularly in Metro Louisville.

Adams said the bill grew from the interim housing task force and would allow qualified nonprofits to acquire tax-delinquent properties that local governments have been holding. Under the bill, a qualified nonprofit can be certified by the Department of Revenue and, after a 90-day waiting period, submit a proposal to acquire delinquent lots for rehabilitation or revitalization. Adams said the goal is to give nonprofits access to properties they otherwise cannot acquire so they can restore them for rental or ownership.

The bill also contains provisions addressing density and development in single-family neighborhoods, accessory dwelling unit rules that require an owner to reside on the lot if they rent an accessory dwelling, incentives for projects that are more than 50% residential, a mechanism to recover fire and emergency response costs for neglected properties, and protections that require elected officials to vote to change binding elements of approved developments.

Representative Johnson and Representative Watkins asked whether the statute would specify the sales mechanism and whether the proposal would circumvent local land banks; Adams said the measure sets eligibility criteria adjudicated by the Department of Revenue and is intended as an additional pathway for nonprofits to gain access to properties but not to block existing land-bank processes. Representative Watkins with land-bank experience raised concerns about bad actors and whether the process would screen out nonprofits with outstanding code or enforcement issues; Adams said the certification process would aim to weed out bad actors but did not describe specific vetting criteria in committee.

The committee adopted the committee substitute and recommended the bill favorably by recorded vote. The recorded committee vote was 13 yes, 1 no, 1 pass; Representative Maddox cast the single no vote and Representative Watkins recorded a pass in the committee roll call.

Action summary: Senate Bill 129 (tax-delinquent property acquisition by qualified nonprofits) — committee recommendation: favorable; committee vote: 13 yes, 1 no, 1 pass. The bill establishes a Department of Revenue certification process and a 90-day pathway for qualified nonprofits to propose purchases of tax-delinquent parcels for rehabilitation.