SB2027 103RD GENERAL ASSEMBLY

LRB103 29543 HLH 55938 b

103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB2027

Introduced 2/9/2023, by Sen. Laura M. Murphy

SYNOPSIS AS INTRODUCED:

New Act

Creates the Vacancy Fraud Act. Provides that the board of review in a county with 3,000,000 or more inhabitants has the power to review complaints of vacancy fraud related to property in that county. Provides that a property owner, or the agent of a property owner, commits vacancy fraud when he or she knowingly makes one or more false statements or representations to a chief county assessment officer, the board of review, or any other trier of fact, for the purpose of obtaining an enhanced vacancy reduction. Provides that an enhanced vacancy reduction means an enhanced abatement of taxes or a reduction in property taxes by a chief county assessment officer, the board of review, or a taxing district, based on full or partial vacancy of the property, under an ordinance of the county or taxing district, a resolution of the county or taxing district, or a policy of the county or taxing district. Effective immediately.

A BILL FOR

AN ACT concerning revenue.

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

Section 1. Short title. This Act may be cited as the Vacancy Fraud Act.

Section 5. Public policy. There is a practice in Cook County that allows commercial properties to receive an enhanced reduction in their property taxes based on full or partial vacancy. The abuse of this practice can have a devastating impact on neighborhood business districts and local communities. In recognition of the crucial need to reduce commercial vacancies in local communities and the economic circumstances of taxpayers and taxing districts, the General Assembly finds that property owners that make false statements to procure or attempt to procure enhanced reductions in property taxes, on a specific property, should be precluded from seeking future reductions for that property and should be required to pay the civil penalties set forth in this Act. Adopting this policy, which will discourage property owners from making false statements to obtain enhanced reductions in their property taxes based on vacancy, will foster economic development in disadvantaged communities, reduce blight, and support commercial corridors.

Section 10. Applicability. This Act applies to property located in a county with 3,000,000 or more inhabitants.

Section 15. Definitions. As used in this Act:

"Board of review" means the board of review of the county in which the property is located.

"Enhanced vacancy reduction" means an enhanced abatement of taxes or a reduction in property taxes by a chief county assessment officer, the board of review, or a taxing district, based on full or partial vacancy of the property, under an ordinance of the county or taxing district, a resolution of the county or taxing district, or a policy of the county or taxing district.

"Taxing district" means any unit of local government that has the power to levy property taxes, any school district, or any community college district.

"Unit of local government has the meaning given to that term in Section 1 of Article VII of the Constitution of the State of Illinois.

"Vacancy fraud" means any instance of an action that constitutes vacancy fraud under Section 25.

"Vacant property" means property that is receiving an enhanced vacancy reduction.

Section 20. Vacancy fraud complaints.

(a) The board of review has the power to review complaints of vacancy fraud if the vacancy fraud is alleged to have occurred within 5 years before the filing of the complaint.

(b) Any taxing district in which the vacant property is located, or any representative of that taxing district, any chief county assessment officer, or the owner of any property that is located in the same taxing district as the vacant property may file a complaint alleging that the owner of the vacant property, or an agent of the owner, engaged in vacancy fraud or attempted to engage in vacancy fraud. The complaint shall be in writing and shall comply with the rules adopted by the board of review for the purpose of submitting vacancy fraud complaints.

(c) Prior to filing a vacancy fraud complaint, the party alleging vacancy fraud shall serve on the titleholder of record a notice of intent to file a vacancy fraud complaint on a form prescribed by rule of the board of review. The notice shall disclose the common name and address of the property and shall provide a short statement of the nature of the evidence that will be submitted in support of the allegation of vacancy fraud. This notice shall be served by first class mail, postage prepaid.

(d) A vacancy fraud complaint must include a certificate of service of the notice of intent to file a vacancy fraud complaint required under this Section. The certificate of service shall be made on a form prescribed by rule of the board of review.

(e) If a complaint is filed by an attorney on behalf of a taxpayer, all notices and correspondence from the board shall be directed to the attorney. The board may require proof of the attorney's authority to represent the taxpayer. If the attorney fails to provide proof of authority within the compliance period granted by the board, the board of review may dismiss the complaint. The board of review shall send, electronically or by mail, notice of the dismissal to the attorney and taxpayer.

(f) Upon receipt of a written complaint that is timely filed, the board of review shall docket the complaint. If the complaint does not comply with the board of review rules entitling the complainant to a hearing, the board or review shall send, electronically or by mail, notification acknowledging receipt of the complaint. The notification must identify which rules have not been complied with and provide the complainant with not less than 10 business days to bring the complaint into compliance with those rules. If the complainant complies with the board of review rules either upon the initial filing of a complaint or within the time as extended by the board of review for compliance, then the board of review shall send, electronically or by mail, a notice of hearing and the board of review shall hear the complaint and shall issue and send, electronically or by mail, a decision. Except as otherwise provided, if the complainant has not complied with the rules within the time as extended by the board of review, the board or review shall dismiss the complaint without prejudice. The board of review may adopt rules allowing any party to attend and participate in a hearing virtually, by phone or electronically. The party alleging vacancy fraud shall cause duplicate notice of the hearing date to be provided to the titleholder of record.

(g) The board of review may consolidate validly docketed complaints related to the same property for the same time period, provided that each complainant shall have an opportunity to separately address the board of review in the course of resolving the complaint. No complainant in a consolidated complaint shall have their complaint dismissed on the basis of actions taken or statements made by another complainant.

Section 25. Actions constituting vacancy fraud. Statements or representations that are knowingly made by an owner, or an agent of an owner, to a chief county assessment officer, board of review, or other trier of fact during the process of requesting an enhanced vacancy reduction that are (i) demonstrably false or (ii) contradict statements or representations made by or on behalf of the same owner or agent of an owner, to an actual or prospective lender to, investor in, or insurer of the property about the value or condition of the same property constitute vacancy fraud.

Section 30. Adjudication of vacancy fraud complaints.

(a) No board of review shall make a declaration or issue a decision about vacancy fraud until the owner and the chief county assessment officer have been notified of the complaint and have been given an opportunity to address the board of review in response to the complaint.

(b) If the majority of the members of the board of review agree that a specific statement, representation, or act by an owner of a property or an owner's agent constitutes vacancy fraud, then those members of the board or review shall declare which specific statement, statements, representations, representations, act, or acts in the complaint constitute vacancy fraud. If the property owner obtained an enhanced reduction of their property tax bill as a result of such vacancy fraud, or attempted to obtain an enhanced reduction of their property tax bill as a result of said vacancy fraud, then the board of review shall declare that the owner has committed vacancy fraud.

(c) A decision by the board of review that an owner committed vacancy fraud may be appealed to the circuit court of the county in which the board of review has jurisdiction in the same manner as other determinations by the board of review.

Section 35. Penalties.

(a) A person who is found by the board of review to have committed vacancy fraud is subject to the following penalties:

(1) a civil penalty equaling 2 times the total amount of a reduction in property taxes received because of the vacancy fraud; and

(2) a 3-year prohibition on the property owner receiving an enhanced vacancy reduction for the subject property.

(b) These penalties shall first be paid to the appropriate taxing districts. The remaining funds shall be split equally between the board of review and the chief county assessment officer's office to pay for the costs of administering claims of vacancy fraud.

Section 99. Effective date. This Act takes effect upon becoming law.