HB2450 100TH GENERAL ASSEMBLY

LRB100 06026 HLH 16057 b

100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB2450

Introduced , by Rep. Michael J. Zalewski

SYNOPSIS AS INTRODUCED:

New Act
35 ILCS 5/1102	from Ch. 120, par. 11-1102
35 ILCS 5/1103	from Ch. 120, par. 11-1103
35 ILCS 5/1105	from Ch. 120, par. 11-1105
35 ILCS 120/5a	from Ch. 120, par. 444a
35 ILCS 120/5b	from Ch. 120, par. 444b
35 ILCS 120/5c	from Ch. 120, par. 444c
35 ILCS 520/16	from Ch. 120, par. 2166
35 ILCS 520/17	from Ch. 120, par. 2167
35 ILCS 520/19	from Ch. 120, par. 2169
65 ILCS 5/8-3-15	from Ch. 24, par. 8-3-15
215 ILCS 155/22	from Ch. 73, par. 1422

Creates the State Tax Lien Registration Act. Provides that the Department of Revenue shall establish and maintain a public database known as the State Tax Lien Registry. Provides that, if any person neglects or refuses to pay any final tax liability, the Department of Revenue may file in the registry a notice of tax lien within 3 years from the date of the final tax liability. Provides that the tax lien is perfected upon inclusion in the registry and shall be attached to all of the existing and after-acquired property of the debtor. Provides that the Department of Revenue may impose filing fees and fees to release the lien. Provides that the Department of Revenue may sell at bulk the information appearing on the tax lien registry; however, that information may not be used by any party for survey, marketing, or solicitation purposes. Amends the Illinois Income Tax Act, the Retailers' Occupation Tax Act, the Cannabis and Controlled Substances Tax Act, and the Title Insurance Act to make conforming changes. Effective January 1, 2018.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning revenue.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

ARTICLE 1. STATE TAX LIEN REGISTRATION ACT

Section 1. Short title. This Act may be cited as the State Tax Lien Registration Act.

Section 1-5. Purpose.

(a) The purpose of this Act is to provide a uniform statewide system for filing notices of tax liens that are in favor of or enforced by the Department. The Department shall maintain the system.

(b) The scope of this Act is limited to tax liens in real property and personal property, tangible and intangible, of taxpayers or other persons against whom the Department has liens pursuant to law for unpaid final tax liabilities administered by the Department.

(c) Nothing in this Act shall be construed to invalidate any lien filed by the Department with a county recorder of deeds prior to the effective date of this Act.

Section 1-10. Definitions.

"Debtor" means a taxpayer or other person against whom there is an unpaid final tax liability collectible by the Department.

"Department" means the Department of Revenue.

"Final tax liability" means any State tax, fee, penalty, or interest owed by a person to the Department where the assessment of the liability is not subject to any further timely filed administrative or judicial review.

"Last-known address of the debtor" means the address of the debtor appearing in the records of the Department at the time the notice of tax lien is filed in the registry.

"Person" means any natural individual, firm, partnership, association, joint stock company, joint adventure, public or private corporation, limited liability company, or a receiver, executor, trustee, guardian or other representative appointed by order of any court.

"Registry" or "State Tax Lien Registry" means the public database maintained by the Department wherein tax liens are filed in favor of and enforced by the Department.

Section 1-15. Registry established.

(a) The Department shall establish and maintain a public database known as the State Tax Lien Registry. If any person neglects or refuses to pay any final tax liability, the Department may file in the registry a notice of tax lien within 3 years from the date of the final tax liability.

(b) The notice of tax lien file shall include:

(1) the name and last-known address of the debtor;

(2) the name and address of the Department;

(3) the tax lien number assigned to the lien by the Department; and

(4) the basis for the tax lien, including, but not limited to, the amount owed by the debtor as of the date of filing in the tax lien registry.

Section 1-20. Tax lien perfected.

(a) When a notice of tax lien is filed by the Department in the registry, the tax lien is perfected and shall be attached to all of the existing and after-acquired property of the debtor, both real and personal, tangible and intangible, which is located in any and all counties within the State of Illinois.

(b) The amount of the tax lien shall be a debt due the State of Illinois and shall remain a lien upon all property and rights to property belonging to the debtor, both real and personal, tangible and intangible, which is located in any and all counties within the State of Illinois. Interest and penalty shall accrue on the tax lien at the same rate and with the same restrictions, if any, as specified by statute for the accrual of interest and penalty for the type of tax or taxes for which the tax lien was issued.

Section 1-25. Time period of lien.

(a) A notice of tax lien shall be a lien upon the debtor's property located anywhere in the State for a period of 20 years from the date of filing unless it is sooner released by the Department.

(b) A notice of release of tax lien filed in the registry shall constitute a release of the tax lien within the Department, the registry, and the county in which the tax lien was previously filed. The information contained on the registry shall be controlling, and the registry shall supersede the records of any county.

Section 1-30. Registry format.

(a) The Department shall maintain notices of tax liens filed in the registry after the effective date of this Act in its information management system in a form that permits the information to be readily accessible in an electronic form through the Internet and to be reduced to printed form. The electronic and printed form shall include the following information:

(1) the name of the taxpayer;

(2) the name and address of the Department;

(3) the tax lien number assigned to the lien by the Department;

(4) the amount of the taxes, penalties, interest, and fees indicated due on the notice of tax lien received from the Department; and

(5) the date and time of filing.

(b) Information in the registry shall be searchable by name of debtor or by tax lien number. The Department shall not charge for access to information in the registry.

(c) The Department is authorized to sell at bulk the information appearing on the tax lien registry. In selling the information, the Department shall adopt rules governing the process by which the information will be sold and the media or method by which it will be available to the purchaser and shall set a price for the information that will at least cover the cost of producing the information. The proceeds from the sale of bulk information shall be retained by the Department and used to cover its cost to produce the information sold and to maintain the registry.

(d) Registry information, whether accessed by name of debtor or by tax lien number at no charge, through a bulk sale of information, or by other means, shall not be used for survey, marketing, or solicitation purposes. Survey, marketing, or solicitation purpose does not include any action by the Department or its authorized agent to collect a debt represented by a tax lien appearing in the registry. The Attorney General may bring an action in any court of competent jurisdiction to enjoin the unlawful use of registry information for survey, marketing, or solicitation purposes and to recover the cost of such action, including reasonable attorney's fees.

Section 1-35. Rulemaking. The Department may adopt rules in accordance with the Illinois Administrative Procedure Act to enforce the provisions of this Act.

Section 1-40. Conflicts. In the event of conflict between this Act and any other law, this Act shall control.

ARTICLE 5. AMENDATORY PROVISIONS

Section 5-5. The Illinois Income Tax Act is amended by changing Sections 1102, 1103, and 1105 as follows:

(35 ILCS 5/1102) (from Ch. 120, par. 11-1102)

Sec. 1102. Jeopardy Assessments.

(a) Jeopardy assessment and lien.

(1) Assessment. If the Department finds that a taxpayer is about to depart from the State, or to conceal himself or his property, or to do any other act tending to prejudice or to render wholly or partly ineffectual proceedings to collect any amount of tax or penalties imposed under this Act unless court proceedings are brought without delay, or if the Department finds that the collection of such amount will be jeopardized by delay, the Department shall give the taxpayer notice of such findings and shall make demand for immediate return and payment of such amount, whereupon such amount shall be deemed assessed and shall become immediately due and payable.

(2) Filing of lien. If the taxpayer, within 5 days after such notice (or within such extension of time as the Department may grant), does not comply with such notice or show to the Department that the findings in such notice are erroneous, the Department may file a notice of jeopardy assessment lien in the State Tax Lien Registry office of the recorder of the county in which any property of the taxpayer may be located and shall notify the taxpayer of such filing. Such jeopardy assessment lien shall have the same scope and effect as a statutory lien under this Act. The taxpayer is liable for any administrative fee imposed by the Department by rule in connection with the State Tax Lien Registry the filing fee incurred by the Department for filing the lien and the filing fee incurred by the Department to file the release of that lien. The filing fees shall be paid to the Department in addition to payment of the tax, penalty, and interest included in the amount of the lien.

(b) Termination of taxable year. In the case of a tax for a current taxable year, the Director shall declare the taxable period of the taxpayer immediately terminated and his notice and demand for a return and immediate payment of the tax shall relate to the period declared terminated, including therein income accrued and deductions incurred up to the date of termination if not otherwise properly includible or deductible in respect of such taxable year.

(c) Protest. If the taxpayer believes that he does not owe some or all of the amount for which the jeopardy assessment lien against him has been filed, or that no jeopardy to the revenue in fact exists, he may protest within 20 days after being notified by the Department of the filing of such jeopardy assessment lien and request a hearing, whereupon the Department shall hold a hearing in conformity with the provisions of section 908 and, pursuant thereto, shall notify the taxpayer of its decision as to whether or not such jeopardy assessment lien will be released.

(Source: P.A. 92-826, eff. 1-1-03.)

(35 ILCS 5/1103) (from Ch. 120, par. 11-1103)

Sec. 1103. Filing and Priority of Liens.

(a) Filing in the State Tax Lien Registry with Recorder. Nothing in this Article shall be construed to give the Department a preference over the rights of any bona fide purchaser, holder of a security interest, mechanics lienor, mortgagee, or judgment lien creditor arising prior to the filing of a regular notice of lien or a notice of jeopardy assessment lien in the State Tax Lien Registry office of the recorder in the county in which the property subject to the lien is located. For purposes of this Section section, the term "bona fide," shall not include any mortgage of real or personal property or any other credit transaction that results in the mortgagee or the holder of the security acting as trustee for unsecured creditors of the taxpayer mentioned in the notice of lien who executed such chattel or real property mortgage or the document evidencing such credit transaction. Such lien shall be inferior to the lien of general taxes, special assessments and special taxes heretofore or hereafter levied by any political subdivision of this State.

(b) Filing in the State Tax Lien Registry with Registrar. In case title to land to be affected by the notice of lien or notice of jeopardy assessment lien is registered under the provisions of "An Act concerning land titles," approved May 1, 1897, as amended, such notice shall also be filed in the State Tax Lien Registry office of the Registrar of Titles of the county within which the property subject to the lien is situated and shall be entered upon the register of titles as a memorial of charge upon each folium of the register of titles affected by such notice, and the Department shall not have a preference over the rights of any bona fide purchaser, mortgagee, judgment creditor or other lien holder arising prior to the registration of such notice.

(c) Index. The Department of Revenue shall maintain a State Tax Lien Index of all tax liens filed in the State Tax Lien Registry as provided for by the State Tax Lien Registration Act. The recorder of each county shall procure a file labeled "State Tax Lien Notices" and an index book labeled "State Tax Lien Index." When notice of any lien or jeopardy assessment lien is presented to him for filing, he shall file it in numerical order in the file and shall enter it alphabetically in the index. The entry shall show the name and last known address of the person named in the notice, the serial number of the notice, the date and hour of filing, whether it is a regular lien or a jeopardy assessment lien, and the amount of tax and penalty due and unpaid, plus the amount of interest due at the time when the notice of lien or jeopardy assessment is filed.

(d) (Blank). No recorder or registrar of titles of any county shall require that the Department pay any costs or fees in connection with recordation of any notice or other document filed by the Department under this Act at the time such notice or other document is presented for recordation. The recorder or registrar of each county, in order to receive payment for fees or costs incurred by the Department, shall present the Department with monthly statements indicating the amount of fees and costs incurred by the Department and for which no payment has been received. This amendatory Act of 1987 applies to all liens heretofore or hereafter filed.

(e) The taxpayer is liable for any the filing fees imposed fee incurred by the Department for filing the lien in the State Tax Lien Registry and any the filing fees imposed fee incurred by the Department for to file the release of that lien. The filing fees shall be paid to the Department in addition to payment of the tax, penalty, and interest included in the amount of the lien.

(Source: P.A. 92-826, eff. 1-1-03.)

(35 ILCS 5/1105) (from Ch. 120, par. 11-1105)

Sec. 1105. Release of Liens.

(a) In general. Upon payment by the taxpayer to the Department in cash or by guaranteed remittance of an amount representing the filing fees and charges for the lien and the filing fees and charges for the release of that lien, the Department shall release all or any portion of the property subject to any lien provided for in this Act and file that complete or partial release of lien in the State Tax Lien Registry with the recorder of the county where that lien was filed if it determines that the release will not endanger or jeopardize the collection of the amount secured thereby.

(b) Judicial determination. If on judicial review the final judgment of the court is that the taxpayer does not owe some or all of the amount secured by the lien against him, or that no jeopardy to the revenue exists, the Department shall release its lien to the extent of such finding of nonliability, or to the extent of such finding of no jeopardy to the revenue. The taxpayer shall, however, be liable for the filing fee imposed paid by the Department to file the lien and the filing fee imposed to release required to file a release of the lien. The filing fees shall be paid to the Department.

(c) Payment. The Department shall also release its jeopardy assessment lien against the taxpayer whenever the tax and penalty covered by such lien, plus any interest which may be due and an amount representing the filing fee to file the lien and the filing fee imposed to release required to file a release of that lien, are paid by the taxpayer to the Department in cash or by guaranteed remittance.

(d) Certificate of release. The Department shall issue a certificate of complete or partial release of the lien upon payment by the taxpayer to the Department in cash or by guaranteed remittance of an amount representing the filing fee imposed paid by the Department to file the lien and the filing fee imposed to release required to file the release of that lien:

(1) to the extent that the fair market value of any property subject to the lien exceeds the amount of the lien plus the amount of all prior liens upon such property;

(2) to the extent that such lien shall become unenforceable;

(3) to the extent that the amount of such lien is paid by the person whose property is subject to such lien, together with any interest and penalty which may become due under this Act between the date when the notice of lien is filed and the date when the amount of such lien is paid;

(4) to the extent that there is furnished to the Department on a form to be approved and with a surety or sureties satisfactory to the Department a bond that is conditioned upon the payment of the amount of such lien, together with any interest which may become due under this Act after the notice of lien is filed, but before the amount thereof is fully paid;

(5) to the extent and under the circumstances specified in this Section.

A certificate of complete or partial release of any lien shall be held conclusive that the lien upon the property covered by the certificate is extinguished to the extent indicated by such certificate.

Such release of lien shall be issued to the person, or his agent, against whom the lien was obtained and shall contain in legible letters a statement as follows:

FOR THE PROTECTION OF THE OWNER, THIS RELEASE SHALL

BE FILED IN THE STATE TAX LIEN REGISTRY WITH THE RECORDER OR THE REGISTRAR OF TITLES, IN WHOSE OFFICE, THE LIEN WAS FILED.

(e) Filing. When a certificate of complete or partial release of lien issued by the Department is filed in the State Tax Lien Registry, the Department presented for filing in the office of the recorder or Registrar of Titles where a notice of lien or notice of jeopardy assessment lien was filed:

(1) the recorder, in the case of nonregistered property, shall permanently attach the certificate of release to the notice of lien or notice of jeopardy assessment lien and shall enter the certificate of release and the date in the "State Tax Lien Index" on the line where the notice of lien or notice of jeopardy assessment lien is entered. ; and

(2) in the case of registered property, the Registrar of Titles shall file and enter upon each folium of the register of titles affected thereby a memorial of the certificate of release which memorial when so entered shall act as a release pro tanto of any memorial of such notice of lien or notice of jeopardy assessment lien previously filed and registered.

(Source: P.A. 92-826, eff. 1-1-03.)

Section 5-10. The Retailers' Occupation Tax Act is amended by changing Sections 5a, 5b, and 5c as follows:

(35 ILCS 120/5a) (from Ch. 120, par. 444a)

Sec. 5a. The Department shall have a lien for the tax herein imposed or any portion thereof, or for any penalty provided for in this Act, or for any amount of interest which may be due as provided for in Section 5 of this Act, upon all the real and personal property of any person to whom a final assessment or revised final assessment has been issued as provided in this Act, or whenever a return is filed without payment of the tax or penalty shown therein to be due, including all such property of such persons acquired after receipt of such assessment or filing of such return. The taxpayer is liable for the filing fee imposed incurred by the Department for filing the lien and the filing fee imposed incurred by the Department to file the release the of that lien. The filing fees shall be paid to the Department in addition to payment of the tax, penalty, and interest included in the amount of the lien.

However, where the lien arises because of the issuance of a final assessment or revised final assessment by the Department, such lien shall not attach and the notice hereinafter referred to in this Section shall not be filed until all proceedings in court for review of such final assessment or revised final assessment have terminated or the time for the taking thereof has expired without such proceedings being instituted.

Upon the granting of a rehearing or departmental review pursuant to Section 4 or Section 5 of this Act after a lien has attached, such lien shall remain in full force except to the extent to which the final assessment may be reduced by a revised final assessment following such rehearing or review.

The lien created by the issuance of a final assessment shall terminate unless a notice of lien is filed, as provided in Section 5b hereof, within 3 years from the date all proceedings in court for the review of such final assessment have terminated or the time for the taking thereof has expired without such proceedings being instituted, or (in the case of a revised final assessment issued pursuant to a rehearing or departmental review) within 3 years from the date all proceedings in court for the review of such revised final assessment have terminated or the time for the taking thereof has expired without such proceedings being instituted; and where the lien results from the filing of a return without payment of the tax or penalty shown therein to be due, the lien shall terminate unless a notice of lien is filed, as provided in Section 5b hereof, within 3 years from the date when such return is filed with the Department: Provided that the time limitation period on the Department's right to file a notice of lien shall not run (1) during any period of time in which the order of any court has the effect of enjoining or restraining the Department from filing such notice of lien, or (2) during the term of a repayment plan that taxpayer has entered into with the Department, as long as taxpayer remains in compliance with the terms of the repayment plan.

If the Department finds that a taxpayer is about to depart from the State, or to conceal himself or his property, or to do any other act tending to prejudice or to render wholly or partly ineffectual proceedings to collect such tax unless such proceedings are brought without delay, or if the Department finds that the collection of the amount due from any taxpayer will be jeopardized by delay, the Department shall give the taxpayer notice of such findings and shall make demand for immediate return and payment of such tax, whereupon such tax shall become immediately due and payable. If the taxpayer, within 5 days after such notice (or within such extension of time as the Department may grant), does not comply with such notice or show to the Department that the findings in such notice are erroneous, the Department may file a notice of jeopardy assessment lien in the State Tax Lien Registry office of the recorder of the county in which any property of the taxpayer may be located and shall notify the taxpayer of such filing. Such jeopardy assessment lien shall have the same scope and effect as the statutory lien hereinbefore provided for in this Section.

If the taxpayer believes that he does not owe some or all of the tax for which the jeopardy assessment lien against him has been filed, or that no jeopardy to the revenue in fact exists, he may protest within 20 days after being notified by the Department of the filing of such jeopardy assessment lien and request a hearing, whereupon the Department shall hold a hearing in conformity with the provisions of this Act and, pursuant thereto, shall notify the taxpayer of its findings as to whether or not such jeopardy assessment lien will be released. If not, and if the taxpayer is aggrieved by this decision, he may file an action for judicial review of such final determination of the Department in accordance with Section 12 of this Act and the Administrative Review Law.

On and after July 1, 2013, protests concerning matters that are subject to the jurisdiction of the Illinois Independent Tax Tribunal shall be filed with the Tribunal, and hearings on those matters shall be held before the Tribunal in accordance with the Illinois Independent Tax Tribunal Act of 2012. The Tribunal shall notify the taxpayer of its findings as to whether or not such jeopardy assessment lien will be released. If not, and if the taxpayer is aggrieved by this decision, he may file an action for judicial review of such final determination of the Department in accordance with Section 12 of this Act and the Illinois Independent Tax Tribunal Act of 2012.

With respect to protests filed with the Department prior to July 1, 2013 that would otherwise be subject to the jurisdiction of the Illinois Independent Tax Tribunal, the taxpayer may elect to be subject to the provisions of the Illinois Independent Tax Tribunal Act of 2012 at any time on or after July 1, 2013, but not later than 30 days after the date on which the protest was filed. If made, the election shall be irrevocable.

If, pursuant to such hearing (or after an independent determination of the facts by the Department without a hearing), the Department or the Tribunal determines that some or all of the tax covered by the jeopardy assessment lien is not owed by the taxpayer, or that no jeopardy to the revenue exists, or if on judicial review the final judgment of the court is that the taxpayer does not owe some or all of the tax covered by the jeopardy assessment lien against him, or that no jeopardy to the revenue exists, the Department shall release its jeopardy assessment lien to the extent of such finding of nonliability for the tax, or to the extent of such finding of no jeopardy to the revenue.

The Department shall also release its jeopardy assessment lien against the taxpayer whenever the tax and penalty covered by such lien, plus any interest which may be due, are paid and the taxpayer has paid the Department in cash or by guaranteed remittance an amount representing the filing fee for the lien and the filing fee for the release of that lien. The Department shall file that release of lien in the State Tax Lien Registry with the recorder of the county where that lien was filed.

Nothing in this Section shall be construed to give the Department a preference over the rights of any bona fide purchaser, holder of a security interest, mechanics lienholder, mortgagee, or judgment lien creditor arising prior to the filing of a regular notice of lien or a notice of jeopardy assessment lien in the State Tax Lien Registry office of the recorder in the county in which the property subject to the lien is located: Provided, however, that the word "bona fide", as used in this Section shall not include any mortgage of real or personal property or any other credit transaction that results in the mortgagee or the holder of the security acting as trustee for unsecured creditors of the taxpayer mentioned in the notice of lien who executed such chattel or real property mortgage or the document evidencing such credit transaction. Such lien shall be inferior to the lien of general taxes, special assessments and special taxes heretofore or hereafter levied by any political subdivision of this State.

In case title to land to be affected by the notice of lien or notice of jeopardy assessment lien is registered under the provisions of "An Act concerning land titles", approved May 1, 1897, as amended, such notice shall also be filed in the State Tax Lien Registry office of the Registrar of Titles of the county within which the property subject to the lien is situated and shall be entered upon the register of titles as a memorial or charge upon each folium of the register of titles affected by such notice, and the Department shall not have a preference over the rights of any bona fide purchaser, mortgagee, judgment creditor or other lien holder arising prior to the registration of such notice: Provided, however, that the word "bona fide" shall not include any mortgage of real or personal property or any other credit transaction that results in the mortgagee or the holder of the security acting as trustee for unsecured creditors of the taxpayer mentioned in the notice of lien who executed such chattel or real property mortgage or the document evidencing such credit transaction.

Such regular lien or jeopardy assessment lien shall not be effective against any purchaser with respect to any item in a retailer's stock in trade purchased from the retailer in the usual course of such retailer's business.

(Source: P.A. 97-1129, eff. 8-28-12; 98-446, eff. 8-16-13.)

(35 ILCS 120/5b) (from Ch. 120, par. 444b)

Sec. 5b. State Tax Lien Index. The Department of Revenue shall maintain a State Tax Lien Index of all tax liens filed in the State Tax Lien Registry as provided for by the State Tax Lien Registration Act. The recorder of each county shall procure a file labeled "State Tax Lien Notices" and an index book labeled "State Tax Lien Index". When notice of any lien or jeopardy assessment lien is presented to him for filing, he shall file it in numerical order in the file and shall enter it alphabetically in the index. The entry shall show the name and last known business address of the person named in the notice, the serial number of the notice, the date and hour of filing, whether it is a regular lien or a jeopardy assessment lien, and the amount of tax and penalty due and unpaid, plus the amount of interest due under Section 5 of this Act at the time when the notice of lien or jeopardy assessment lien is filed.

No recorder or registrar of titles of any county shall require that the Department pay any costs or fees in connection with recordation of any notice or other document filed by the Department under this Act at the time such notice or other document is presented for recordation. The recorder or registrar of each county, in order to receive payment for fees or costs incurred by the Department, shall present the Department with monthly statements indicating the amount of fees and costs incurred by the Department and for which no payment has been received.

A notice of lien may be filed after the issuance of a revised final assessment pursuant to a rehearing or departmental review under Section 4 or Section 5 of this Act.

When the lien obtained pursuant to this Act has been satisfied and the taxpayer has paid the Department in cash or by guaranteed remittance an amount representing the filing fee for the lien and the filing fee for the release of that lien, the Department shall issue a release of lien and file that release of lien in the State Tax Lien Registry with the recorder of the county where that lien was filed. The release of lien shall contain in legible letters a statement as follows:

FOR THE PROTECTION OF THE OWNER, THIS RELEASE SHALL

BE FILED IN THE STATE TAX LIEN REGISTRY WITH THE RECORDER OR THE REGISTRAR OF TITLES, IN WHOSE OFFICE, THE LIEN WAS FILED.

When a certificate of complete or partial release of lien issued by the Department is filed in the State Tax Lien Registry, the Department of Revenue presented for filing in the office of the recorder or Registrar of Titles where a notice of lien or notice of jeopardy assessment lien was filed, the recorder, in the case of nonregistered property, shall permanently attach the certificate of release to the notice of lien or notice of jeopardy assessment lien and shall enter the certificate of release and the date in the "State Tax Lien Index" on the line where the notice of lien or notice of jeopardy assessment lien is entered.

In the case of registered property, the Registrar of Titles shall file and enter upon each folium of the register of titles affected thereby a memorial of the certificate of release which memorial when so entered shall act as a release pro tanto of any memorial of such notice of lien or notice of jeopardy assessment lien previously filed and registered.

(Source: P.A. 92-826, eff. 1-1-03.)

(35 ILCS 120/5c) (from Ch. 120, par. 444c)

Sec. 5c. Upon payment by the taxpayer to the Department in cash or by guaranteed remittance of an amount representing the filing fee for the lien and the filing fee for the release of that lien, the Department shall issue a certificate of complete or partial release of the lien and file that complete or partial release of lien in the State Tax Lien Registry with the recorder of the county where the lien was filed:

(a) to the extent that the fair market value of any property subject to the lien exceeds the amount of the lien plus the amount of all prior liens upon such property;

(b) to the extent that such lien shall become unenforceable;

(c) to the extent that the amount of such lien is paid by the retailer whose property is subject to such lien, together with any interest which may become due under Section 5 of this Act between the date when the notice of lien is filed and the date when the amount of such lien is paid;

(d) to the extent that there is furnished to the Department on a form to be approved and with a surety or sureties satisfactory to the Department a bond that is conditioned upon the payment of the amount of such lien, together with any interest which may become due under Section 5 of this Act after the notice of lien is filed, but before the amount thereof is fully paid;

(e) to the extent and under the circumstances specified in Section 5a of this Act in the case of jeopardy assessment liens;

(f) to the extent to which an assessment is reduced pursuant to a rehearing or departmental review under Section 4 or Section 5 of this Act.

A certificate of complete or partial release of any lien shall be held conclusive that the lien upon the property covered by the certificate is extinguished to the extent indicated by such certificate.

(Source: P.A. 92-826, eff. 1-1-03.)

Section 5-15. The Cannabis and Controlled Substances Tax Act is amended by changing Sections 16, 17, and 19 as follows:

(35 ILCS 520/16) (from Ch. 120, par. 2166)

Sec. 16. All assessments are Jeopardy Assessments - lien.

(a) Assessment. An assessment for a dealer not possessing valid stamps or other official indicia showing that the tax has been paid shall be considered a jeopardy assessment or collection, as provided by Section 1102 of the Illinois Income Tax Act. The Department shall determine and assess a tax and applicable penalties and interest according to the best judgment and information available to the Department, which amount so fixed by the Department shall be prima facie correct and shall be prima facie evidence of the correctness of the amount of tax due, as shown in such determination. When, according to the best judgment and information available to the Department with regard to all real and personal property and rights to property of the dealer, there is no reasonable expectation of collection of the amount of tax and penalty to be assessed, the Department may issue an assessment under this Section for the amount of tax without penalty.

(b) Filing of Lien. Upon issuance of a jeopardy assessment as provided by subsection (a) of this Section, the Department may file a notice of jeopardy assessment lien in the State Tax Lien Registry office of the recorder of the county in which any property of the taxpayer may be located and shall notify the taxpayer of such filing.

(c) Protest. If the taxpayer believes that he does not owe some or all of the amount for which the jeopardy assessment lien against him has been filed, he may protest within 20 days after being notified by the Department of the filing of such jeopardy assessment lien and request a hearing, whereupon the Department shall hold a hearing in conformity with the provisions of Section 908 of the Illinois Income Tax Act and, pursuant thereto, shall notify the taxpayer of its decision as to whether or not such jeopardy assessment lien will be released.

After the expiration of the period within which the person assessed may file an action for judicial review without such action being filed, a certified copy of the final assessment or revised final assessment of the Department may be filed with the Circuit Court of the county in which the dealer resides, or of Cook County in the case of a dealer who does not reside in this State, or in the county where the violation of this Act took place. The certified copy of the final assessment or revised final assessment shall be accompanied by a certification which recites facts that are sufficient to show that the Department complied with the jurisdictional requirements of the Act in arriving at its final assessment or its revised final assessment and that the dealer had this opportunity for an administrative hearing and for judicial review, whether he availed himself or herself of either or both of these opportunities or not. If the court is satisfied that the Department complied with the jurisdictional requirements of the Act in arriving at its final assessment or its revised final assessment and that the taxpayer had his opportunity for an administrative hearing and for judicial review, whether he availed himself of either or both of these opportunities or not, the court shall render judgment in favor of the Department and against the taxpayer for the amount shown to be due by the final assessment or the revised final assessment, plus any interest which may be due, and such judgment shall be entered in the judgment docket of the court. Such judgment shall bear the same rate of interest and shall have the same effect as other judgments. The judgment may be enforced, and all laws applicable to sales for the enforcement of a judgment shall be applicable to sales made under such judgments. The Department shall file the certified copy of its assessment, as herein provided, with the Circuit Court within 2 years after such assessment becomes final except when the taxpayer consents in writing to an extension of such filing period, and except that the time limitation period on the Department's right to file the certified copy of its assessment with the Circuit Court shall not run during any period of time in which the order of any court has the effect of enjoining or restraining the Department from filing such certified copy of its assessment with the Circuit Court.

If, when the cause of action for a proceeding in court accrues against a person, he or she is out of the State, the action may be commenced within the times herein limited, after his or her coming into or returning to the State; and if, after the cause of action accrues, he or she departs from and remains out of the State, the time of his or her absence from the State, the time of his or her absence is no part of the time limited for the commencement of the action; but the foregoing provisions concerning absence from the State shall not apply to any case in which, at the time the cause of action accrues, the party against whom the cause of action accrues is not a resident of this State. The time within which a court action is to be commenced by the Department hereunder shall not run from the date the taxpayer files a petition in bankruptcy under the Federal Bankruptcy Act until 30 days after notice of termination or expiration of the automatic stay imposed by the Federal Bankruptcy Act.

No claim shall be filed against the estate of any deceased person or any person under legal disability for any tax or penalty or part of either, or interest, except in the manner prescribed and within the time limited by the Probate Act of 1975, as amended.

The collection of tax or penalty or interest by any means provided for herein shall not be a bar to any prosecution under this Act.

In addition to any penalty provided for in this Act, any amount of tax which is not paid when due shall bear interest at the rate determined in accordance with the Uniform Penalty and Interest Act, per month or fraction thereof from the date when such tax becomes past due until such tax is paid or a judgment therefor is obtained by the Department. If the time for making or completing an audit of a taxpayer's books and records is extended with the taxpayer's consent, at the request of and for the convenience of the Department, beyond the date on which the statute of limitations upon the issuance of a notice of tax liability by the Department otherwise run, no interest shall accrue during the period of such extension. Interest shall be collected in the same manner and as part of the tax.

If the Department determines that an amount of tax or penalty or interest was incorrectly assessed, whether as the result of a mistake of fact or an error of law, the Department shall waive the amount of tax or penalty or interest that accrued due to the incorrect assessment.

(Source: P.A. 97-1129, eff. 8-28-12.)

(35 ILCS 520/17) (from Ch. 120, par. 2167)

Sec. 17. Filing and Priority of Liens. (a) Filing in the State Tax Lien Registry with Recorder. Nothing in this Act shall be construed to give the Department a preference over the rights of any bona fide purchaser, holder of a security interest, mechanics lienholder, mortgagee, or judgment lien creditor arising prior to the filing of a regular notice of lien or a notice of jeopardy assessment lien in the State Tax Lien Registry office of the recorder in the county in which the property subject to the lien is located. For purposes of this section, the term "bona fide," shall not include any mortgage of real or personal property or any other credit transaction that results in the mortgagee or the holder of the security acting as trustee for unsecured creditors of the taxpayer mentioned in the notice of lien who executed such chattel or real property mortgage or the document evidencing such credit transaction. Such lien shall be inferior to the lien of general taxes, special assessments and special taxes heretofore or hereafter levied by any political subdivision of this State.

(b) Filing with Registrar. In case title to land to be affected by the notice of lien or notice of jeopardy assessment lien is registered under the provisions of "An Act concerning land titles," approved May 1, 1897, as amended, such notice shall also be filed in the State Tax Lien Registry office of the Registrar of Titles of the county within which the property subject to the lien is situated and shall be entered upon the register of titles as a memorial of charge upon each folium of the register of titles affected by such notice, and the Department shall not have a preference over the rights of any bona fide purchaser, mortgagee, judgment creditor or other lien holder arising prior to the registration of such notice.

(c) (Blank). No recorder or registrar of titles of any county shall require that the Department pay any costs or fees in connection with recordation of any notice or other document filed by the Department under this Act at the time such notice or other document is presented for recordation.

(Source: P.A. 86-905.)

(35 ILCS 520/19) (from Ch. 120, par. 2169)

Sec. 19. Release of Liens.

(a) In general. The Department shall release all or any portion of the property subject to any lien provided for in this Act if it determines that the release will not endanger or jeopardize the collection of the amount secured thereby. The Department shall release its lien on property which is the subject of forfeiture proceedings under the Narcotics Profit Forfeiture Act, the Criminal Code of 2012, or the Drug Asset Forfeiture Procedure Act until all forfeiture proceedings are concluded. Property forfeited shall not be subject to a lien under this Act.

(b) Judicial determination. If on judicial review the final judgment of the court is that the taxpayer does not owe some or all of the amount secured by the lien against him, or that no jeopardy to the revenue exists, the Department shall release its lien to the extent of such finding of nonliability, or to the extent of such finding of no jeopardy to the revenue.

(c) Payment. The Department shall also release its jeopardy assessment lien against the taxpayer whenever the tax and penalty covered by such lien, plus any interest which may be due, are paid.

(d) Certificate of release. The Department shall issue a certificate of complete or partial release of the lien:

(1) To the extent that the fair market value of any property subject to the lien exceeds the amount of the lien plus the amount of all prior liens upon such property;

(2) To the extent that such lien shall become unenforceable;

(3) To the extent that the amount of such lien is paid by the person whose property is subject to such lien, together with any interest and penalty which may become due under this Act between the date when the notice of lien is filed and the date when the amount of such lien is paid;

(4) To the extent and under the circumstances specified in this Section. A certificate of complete or partial release of any lien shall be held conclusive that the lien upon the property covered by the certificate is extinguished to the extent indicated by such certificate.

Such release of lien shall be issued to the person, or his agent, against whom the lien was obtained and shall contain in legible letters a statement as follows:

FOR THE PROTECTION OF THE OWNER, THIS RELEASE SHALL

BE FILED IN THE STATE TAX LIEN REGISTRY WITH THE RECORDER OR THE REGISTRAR OF TITLES, IN WHOSE OFFICE, THE LIEN WAS FILED.

(e) Filing. When a certificate of complete or partial release of lien issued by the Department is filed in the State Tax Lien Registry, the Department presented for filing in the office of the recorder or Registrar of Titles where a notice of lien or notice of jeopardy assessment lien was filed:

(1) The recorder, in the case of nonregistered property, shall permanently attach the certificate of release to the notice of lien or notice of jeopardy assessment lien and shall enter the certificate of release and the date in the "State Tax Lien Index" on the line where the notice of lien or notice of jeopardy assessment lien is entered. ; and

(2) In the case of registered property, the Registrar of Titles shall file and enter upon each folium of the register of titles affected thereby a memorial of the certificate of release which memorial when so entered shall act as a release pro tanto of any memorial of such notice of lien or notice of jeopardy assessment lien previously filed and registered.

(Source: P.A. 97-1150, eff. 1-25-13.)

Section 5-20. The Illinois Municipal Code is amended by changing Section 8-3-15 as follows:

(65 ILCS 5/8-3-15) (from Ch. 24, par. 8-3-15)

Sec. 8-3-15. The corporate authorities of each municipality shall have all powers necessary to enforce the collection of any tax imposed and collected by such municipality, whether such tax was imposed pursuant to its home rule powers or statutory authorization, including but not limited to subpoena power and the power to create and enforce liens. No such lien shall affect the rights of bona fide purchasers, mortgagees, judgment creditors or other lienholders who acquire their interests in such property prior to the time a notice of such lien is placed on record in the office of the recorder or the registrar of titles of the county in which the property is located. However, nothing in this Section shall permit a municipality to place a lien upon property not located or found within its corporate boundaries. A municipality creating a lien may provide that the procedures for its notice and enforcement shall be the same as that provided in the Retailers' Occupation Tax Act, as that Act existed prior to the adoption of the State Tax Lien Registration Act now or hereafter amended, for State tax liens, and any recorder or registrar of titles with whom a notice of such lien is filed shall treat such lien as a State tax lien for recording purposes.

(Source: P.A. 86-680.)

Section 5-25. The Title Insurance Act is amended by changing Section 22 as follows:

(215 ILCS 155/22) (from Ch. 73, par. 1422)

Sec. 22. Tax indemnity; notice. A corporation authorized to do business under this Act shall notify the Director of Revenue of the State of Illinois, by notice directed to his office in the City of Chicago, of each trust account or similar account established which relates to title exceptions due to a judgment lien or any other lien arising under any tax Act administered by the Illinois Department of Revenue, when notice of such lien has been filed with the registrar of titles or recorder or in the State Tax Lien Registry, as the case may be, in the manner prescribed by law. Such notice shall contain the name, address, and tax identification number of the debtor, the permanent real estate index numbers, if any, and the address and legal description of the property, the type of lien claimed by the Department and identification of any trust fund or similar account held by such corporation or any agent thereof relating to such lien. Any trust fund or similar account established by such corporation or agent relating to any such lien shall include provisions requiring such corporation or agent to apply such fund in satisfaction or release of such lien upon written demand therefor by the Department of Revenue.

(Source: P.A. 94-893, eff. 6-20-06.)

ARTICLE 99. EFFECTIVE DATE

Section 99-999. Effective date. This Act takes effect January 1, 2018.