HB3480 103RD GENERAL ASSEMBLY

LRB103 26852 HLH 53216 b

103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB3480

Introduced 2/17/2023, by Rep. Kam Buckner

SYNOPSIS AS INTRODUCED:

35 ILCS 200/21-240
35 ILCS 200/21-310
35 ILCS 200/21-330
35 ILCS 200/22-10
35 ILCS 200/22-35
35 ILCS 200/22-50

Amends the Property Tax Code. Makes various changes concerning sales in error. In provisions allowing a sale in error if the assessor, chief county assessment officer, board of review, board of appeals, or other county official has made an error, provides that the error must be material to the tax sale at issue and may not be an error in the description of the physical characteristics, location, or picture of the property. Removes provisions allowing a sale in error when a bankruptcy petition has been filed after the tax sale and before the issuance of the tax deed. Provides that, if the bankruptcy petition is filed prior to the tax sale, then a sale in error is allowed if the property is subject to an automatic stay and the stay is active on the date of the date of that sale. Provides that the $100 fee paid by a tax purchaser for a certificate of purchase is non-refundable. Provides that the notice of the expiration of the period of redemption shall be delivered to the sheriff (or to the coroner or private detective, as applicable) for service not less than 5 months prior to the expiration of the period of redemption. Makes other changes

A BILL FOR

AN ACT concerning revenue.

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

Section 5. The Property Tax Code is amended by changing Sections 21-240, 21-310, 21-330, 22-10, 22-35, and 22-50 as follows:

(35 ILCS 200/21-240)

Sec. 21-240. Payment for property purchased at tax sale; reoffering for sale. Except as otherwise provided below, the person purchasing any property, or any part thereof, shall be liable to the county for the amount due and shall forthwith pay to the county collector the amount charged on the property. Upon failure to do so, the amount due shall be recoverable in a civil action brought in the name of the People of the State of Illinois in any court of competent jurisdiction. The person so purchasing shall be relieved of liability only by payment of the amount due together with interest and costs thereon, or if the property is reoffered at the sale, purchased and paid for. Reoffering of the property for sale shall be at the discretion of the collector. The sale shall not be closed until payment is made or the property again offered for sale. In counties with 3,000,000 or more inhabitants, only the taxes, special assessments, interest and costs as advertised in the sale shall be required to be paid forthwith. The general taxes charged on the land remaining due and unpaid, including amounts subject to certificates of error, not included in the advertisement, shall be paid by the purchaser within 10 days after the sale, except that upon payment of the fee provided by law to the County Clerk (which fee shall be deemed part of the costs of sale) the purchaser may make written application, within the 10 day period, to the county clerk for a statement of all taxes, interest and costs due and an estimate of the cost of redemption of all forfeited general taxes, which were not included in the advertisement. After obtaining such statement and estimate and an order on the county collector to receive the amount of forfeited general taxes, if any, the purchaser shall pay to the county collector all the remaining taxes, interest and costs, and the amount necessary to redeem the forfeited general taxes. The county collector shall issue the purchaser a receipt therefor. Any delay in providing the statement or in accepting payment, and delivering receipt therefor, shall not be counted as a part of the 10 days. When the receipt of the collector is issued, a copy shall be filed with the county clerk and the county clerk shall include the amount shown in such receipt in the amount of the purchase price of the property in the certificate of purchase. The purchaser then shall be entitled to a certificate of purchase. If a purchaser fails to complete his or her purchase as provided in this Section, the purchase shall become void, and be of no effect, but the collector shall not refund the amount paid in cash at the time of the sale, except in cases of sale in error under subsection (a) of Section 21-310. That amount shall be treated as a payment and distributed to the taxing bodies as other collections are distributed. The lien for taxes for the amount paid shall remain on the property, in favor of the purchaser, his or her heirs or assigns, until paid with 5% interest per year on that amount from the date the purchaser paid it. The amount and fact of such ineffective purchase shall be entered in the tax judgment, sale, redemption and forfeiture record opposite the property upon which the lien remains. No redemption shall be made without payment of this amount for the benefit of the purchaser, and no future sale of the property shall be made except subject to the lien of such purchaser. This section shall not apply to any purchase by any city, village or incorporated town in default of other bidders at any sale for delinquent special assessments.

(Source: P.A. 84-1308; 88-455.)

(35 ILCS 200/21-310)

Sec. 21-310. Sales in error.

(a) When, upon application of the county collector, the owner of the certificate of purchase, or a municipality which owns or has owned the property ordered sold, it appears to the satisfaction of the court which ordered the property sold that any of the following subsections are applicable, the court shall declare the sale to be a sale in error:

(1) the property was not subject to taxation, or all or any part of the lien of taxes sold has become null and void pursuant to Section 21-95 or unenforceable pursuant to subsection (c) of Section 18-250 or subsection (b) of Section 22-40; ,

(2) the taxes or special assessments had been paid prior to the sale of the property; ,

(3) there is a double assessment; ,

(4) the description is void for uncertainty; ,

(5) the assessor, chief county assessment officer, board of review, board of appeals, or other county official has made an error material to the tax sale at issue (other than an error of judgment as to the value of any property or an error in the description of the physical characteristics, location, or picture of the property); ,

(5.5) the owner of the homestead property had tendered timely and full payment to the county collector that the owner reasonably believed was due and owing on the homestead property, and the county collector did not apply the payment to the homestead property; provided that this provision applies only to homeowners, not their agents or third-party payors; ,

(6) prior to the tax sale a voluntary or involuntary petition has been filed by or against the legal or beneficial owner of the property requesting relief under the provisions of 11 U.S.C. Chapter 7, 11, 12, or 13, the property is subject to an automatic stay pursuant to that petition, and that stay is active on the date of the date of that sale;

(7) the property is owned by the United States, the State of Illinois, a municipality, or a taxing district; , or

(8) the owner of the property is a reservist or guardsperson who is granted an extension of his or her due date under Sections 21-15, 21-20, and 21-25 of this Act.

(b) When, upon application of the owner of the certificate of purchase only, it appears to the satisfaction of the court which ordered the property sold that any of the following subsections are applicable, the court shall declare the sale to be a sale in error:

(1) (Blank). A voluntary or involuntary petition under the provisions of 11 U.S.C. Chapter 7, 11, 12, or 13 has been filed subsequent to the tax sale and prior to the issuance of the tax deed.

(2) The improvements upon the property sold have been substantially destroyed or rendered uninhabitable or otherwise unfit for occupancy subsequent to the tax sale and prior to the issuance of the tax deed; however, if the court declares a sale in error under this paragraph (2), the court may order the holder of the certificate of purchase to assign the certificate to the county collector if requested by the county collector. The county collector may, upon request of the county, as trustee, or upon request of a taxing district having an interest in the taxes sold, further assign any certificate of purchase received pursuant to this paragraph (2) to the county acting as trustee for taxing districts pursuant to Section 21-90 of this Code or to the taxing district having an interest in the taxes sold.

(3) There is an interest held by the United States in the property sold which could not be extinguished by the tax deed.

(4) The real property contains a hazardous substance, hazardous waste, or underground storage tank that would require cleanup or other removal under any federal, State, or local law, ordinance, or regulation, only if the tax purchaser purchased the property without actual knowledge of the hazardous substance, hazardous waste, or underground storage tank. This paragraph (4) applies only if the owner of the certificate of purchase has made application for a sale in error at any time before the issuance of a tax deed. If the court declares a sale in error under this paragraph (4), the court may order the holder of the certificate of purchase to assign the certificate to the county collector if requested by the county collector. The county collector may, upon request of the county, as trustee, or upon request of a taxing district having an interest in the taxes sold, further assign any certificate of purchase received pursuant to this paragraph (4) to the county acting as trustee for taxing districts pursuant to Section 21-90 of this Code or to the taxing district having an interest in the taxes sold.

Whenever a court declares a sale in error under this subsection (b), the court shall promptly notify the county collector in writing. Every such declaration pursuant to any provision of this subsection (b) shall be made within the proceeding in which the tax sale was authorized.

(c) When the county collector discovers, prior to the expiration of the period of redemption, that a tax sale should not have occurred for one or more of the reasons set forth in subdivision (a)(1), (a)(2), (a)(6), or (a)(7) of this Section, the county collector shall notify the last known owner of the certificate of purchase by certified and regular mail, or other means reasonably calculated to provide actual notice, that the county collector intends to declare an administrative sale in error and of the reasons therefor, including documentation sufficient to establish the reason why the sale should not have occurred. The owner of the certificate of purchase may object in writing within 28 days after the date of the mailing by the county collector. If an objection is filed, the county collector shall not administratively declare a sale in error, but may apply to the circuit court for a sale in error as provided in subsection (a) of this Section. Thirty days following the receipt of notice by the last known owner of the certificate of purchase, or within a reasonable time thereafter, the county collector shall make a written declaration, based upon clear and convincing evidence, that the taxes were sold in error and shall deliver a copy thereof to the county clerk within 30 days after the date the declaration is made for entry in the tax judgment, sale, redemption, and forfeiture record pursuant to subsection (d) of this Section. The county collector shall promptly notify the last known owner of the certificate of purchase of the declaration by regular mail and shall promptly pay the amount of the tax sale, together with interest and costs as provided in Section 21-315, upon surrender of the original certificate of purchase.

(d) If a sale is declared to be a sale in error, the county clerk shall make entry in the tax judgment, sale, redemption and forfeiture record, that the property was erroneously sold, and the county collector shall, on demand of the owner of the certificate of purchase, refund the amount paid, except for the nonrefundable $80 fee paid, pursuant to Section 21-295, for each item purchased at the tax sale, pay any interest and costs as may be ordered under Sections 21-315 through 21-335, and cancel the certificate so far as it relates to the property. The county collector shall deduct from the accounts of the appropriate taxing bodies their pro rata amounts paid. Alternatively, for sales in error declared under subsection (b)(2) or (b)(4), the county collector may request the circuit court to direct the county clerk to record any assignment of the tax certificate to or from the county collector without charging a fee for the assignment. The owner of the certificate of purchase shall receive all statutory refunds and payments. The county collector shall deduct costs and payments in the same manner as if a sale in error had occurred.

(Source: P.A. 100-890, eff. 1-1-19; 101-379, eff. 1-1-20; 101-659, eff. 3-23-21.)

(35 ILCS 200/21-330)

Sec. 21-330. Fund for payment of interest. In all counties of less than 3,000,000 inhabitants, the county board, by resolution, may impose a fee for payment of interest and costs. Each person purchasing any property at a sale under this Code shall pay to the county collector, prior to the issuance of any certificate of purchase, a fee of up to $60 for each item purchased. Each person purchasing any property at a sale held under this Code in a county with 3,000,000 or more inhabitants shall pay to the county collector, prior to the issuance of any certificate of purchase, a nonrefundable fee of $100 for each item purchased. That amount shall be included in the price paid for the certificate of purchase and the amount required to redeem under Section 21-355.

All sums of money received under this Section shall be paid by the collector to the county treasurer of the county in which the property is situated for deposit into a special fund. It shall be the duty of the county treasurer, as trustee of the fund, to invest the principal and income of the fund from time to time, if not immediately required for payments under this Section, in investments as are authorized by Sections 3-10009 and 3-11002 of the Counties Code. The fund shall be held to pay interest and costs by the county treasurer as trustee of the fund. No payment shall be made from the fund except by order of the court declaring a sale in error under Section 21-310, 22-35, or 22-50 or by declaration of the county collector under subsection (c) of Section 21-310. Any moneys accumulated in the fund by the county treasurer in excess of (i) $100,000 in counties with 250,000 or less inhabitants or (ii) $500,000 in counties with more than 250,000 inhabitants shall be paid each year prior to the commencement of the annual tax sale, first to satisfy any existing unpaid judgments entered pursuant to Section 21-295, and any funds remaining thereafter shall be paid to the general fund of the county.

(Source: P.A. 100-1070, eff. 1-1-19.)

(35 ILCS 200/22-10)

Sec. 22-10. Notice of expiration of period of redemption. A purchaser or assignee shall not be entitled to a tax deed to the property sold unless, not less than 3 months nor more than 6 months prior to the expiration of the period of redemption, he or she gives notice of the sale and the date of expiration of the period of redemption to the owners, occupants, and parties interested in the property, including any mortgagee of record, as provided below. The purchaser or assignee shall deliver the notice of the expiration of the period of redemption to the sheriff of the county in which the property is located not less than 5 months prior to the expiration of the period of redemption. If service is made by the coroner or by a person who is licensed or registered as a private detective under the Private Detective, Private Alarm, Private Security, Fingerprint Vendor, and Locksmith Act of 2004 under the circumstances described in Section 22-15 for service by those persons, then the notice of expiration of the period of redemption shall be delivered to the coroner or the private detective, as applicable, instead of to the sheriff. the

The Notice to be given to the parties shall be in at least 10-point 10 point type in the following form completely filled in:

TAX DEED NO. .................... FILED ....................

TAKE NOTICE

County of ...............................................

Date Premises Sold ......................................

Certificate No. ........................................

Sold for General Taxes of (year) ........................

Sold for Special Assessment of (Municipality)

and special assessment number ...........................

Warrant No. ................ Inst. No. .................

THIS PROPERTY HAS BEEN SOLD FOR

DELINQUENT TAXES

Property located at .........................................

Legal Description or Property Index No. .....................

.............................................................

.............................................................

This notice is to advise you that the above property has been sold for delinquent taxes and that the period of redemption from the sale will expire on .....................

.............................................................

The amount to redeem is subject to increase at 6 month intervals from the date of sale and may be further increased if the purchaser at the tax sale or his or her assignee pays any subsequently accruing taxes or special assessments to redeem the property from subsequent forfeitures or tax sales. Check with the county clerk as to the exact amount you owe before redeeming.

This notice is also to advise you that a petition has been filed for a tax deed which will transfer title and the right to possession of this property if redemption is not made on or before ......................................................

This matter is set for hearing in the Circuit Court of this county in ...., Illinois on .....

You may be present at this hearing but your right to redeem will already have expired at that time.

YOU ARE URGED TO REDEEM IMMEDIATELY

TO PREVENT LOSS OF PROPERTY

Redemption can be made at any time on or before .... by applying to the County Clerk of ...., County, Illinois at the Office of the County Clerk in ...., Illinois.

For further information contact the County Clerk

ADDRESS:.................... TELEPHONE:..................

..........................

Purchaser or Assignee.

Dated (insert date).

In counties with 3,000,000 or more inhabitants, the notice shall also state the address, room number, and time at which the matter is set for hearing.

The changes to this Section made by Public Act 97-557 apply only to matters in which a petition for tax deed is filed on or after July 1, 2012 (the effective date of Public Act 97-557).

The changes to this Section made by Public Act 102-1003 this amendatory Act of the 102nd General Assembly apply to matters in which a petition for tax deed is filed on or after May 27, 2022 (the effective date of Public Act 102-1003) this amendatory Act of the 102nd General Assembly. Failure of any party or any public official to comply with the changes made to this Section by Public Act 102-528 does not invalidate any tax deed issued prior to May 27, 2022 (the effective date of Public Act 102-1003) this amendatory Act of the 102nd General Assembly.

(Source: P.A. 102-528, eff. 1-1-22; 102-813, eff. 5-13-22; 102-1003, eff. 5-27-22; revised 9-1-22.)

(35 ILCS 200/22-35)

Sec. 22-35. Reimbursement of a county or municipality before issuance of tax deed. Except in any proceeding in which the tax purchaser is a county acting as a trustee for taxing districts as provided in Section 21-90, an order for the issuance of a tax deed under this Code shall not be entered affecting the title to or interest in any property in which a county, city, village or incorporated town has an interest under the police and welfare power by advancements made from public funds, until the purchaser or assignee makes reimbursement to the county, city, village or incorporated town of the money so advanced or the county, city, village, or town waives its lien on the property for the money so advanced. However, in lieu of reimbursement or waiver, the purchaser or his or her assignee may make application for and the court shall order that the tax purchase be set aside as a sale in error, except in cases where the tax purchaser holds a lien that shall remain on the property until paid with 5% interest per year as provided in Section 21-240. A sale in error may not be granted under this Section if the lien has been released, satisfied, discharged, or waived. A filing or appearance fee shall not be required of a county, city, village or incorporated town seeking to enforce its claim under this Section in a tax deed proceeding.

(Source: P.A. 101-379, eff. 1-1-20.)

(35 ILCS 200/22-50)

Sec. 22-50. Denial of deed. If the court refuses to enter an order directing the county clerk to execute and deliver the tax deed, because of the failure of the purchaser to fulfill any of the above provisions, and if the purchaser, or his or her assignee has made a bona fide attempt to comply with the statutory requirements for the issuance of the tax deed, then upon application of the owner of the certificate of purchase the court shall declare the sale to be a sale in error, unless the purchaser failed to comply with any of the above provisions for obtaining a tax deed because the purchaser made a reasonably avoidable error.

(Source: P.A. 92-224, eff. 1-1-02.)