SB2814 103RD GENERAL ASSEMBLY

LRB103 35597 HLH 65670 b

103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB2814

Introduced 1/17/2024, by Sen. Patrick J. Joyce

SYNOPSIS AS INTRODUCED:

35 ILCS 200/9-265

Amends the Property Tax Code. In counties with fewer than 3,000,000 inhabitants, provides that property that receives an erroneous homestead exemption for the current assessment year or for any of the 3 prior assessment years may be considered omitted property. Provides for penalties and interest to be imposed on that omitted property. Provides that any arrearage of taxes or interest that might have been assessed against that omitted property shall not be chargeable to certain bona fide purchasers of the property. 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 5. The Property Tax Code is amended by changing Section 9-265 as follows:

(35 ILCS 200/9-265)

Sec. 9-265. Omitted property; interest; change in exempt use or ownership.

(a) If any property is omitted in the assessment of any year or years, not to exceed the current assessment year and 3 prior years, so that the taxes, for which the property was liable, have not been paid, or if by reason of defective description or assessment, taxes on any property for any year or years have not been paid, or if any taxes are refunded under subsection (b) of Section 14-5 because the taxes were assessed in the wrong person's name, the property, when discovered, shall be listed and assessed by the board of review or, in counties with 3,000,000 or more inhabitants, by the county assessor either on his or her own initiative or when so directed by the board of appeals or board of review.

(b) The board of review in counties with less than 3,000,000 inhabitants or the county assessor in counties with 3,000,000 or more inhabitants may develop reasonable procedures for contesting the listing of omitted property under this Division.

(c) For purposes of this Section, "defective description or assessment" includes a description or assessment which omits all the improvements thereon as a result of which part of the taxes on the total value of the property as improved remain unpaid. In the case of property subject to assessment by the Department, the property shall be listed and assessed by the Department. All such property shall be placed on the assessment and tax books.

(d) The arrearages of taxes which might have been assessed, with 10% interest thereon for each year or portion thereof from 2 years after the time the first correct tax bill ought to have been received, shall be charged against the property by the county clerk.

(e) When property or acreage omitted by either incorrect survey or other ministerial assessor error is discovered and the owner has paid its tax bills as received for the year or years of omission of the parcel, then the interest authorized by this Section shall not be chargeable to the owner. However, nothing in this Section shall prevent the collection of the principal amount of back taxes due and owing.

(f) If any property listed as exempt by the chief county assessment officer has a change in use, a change in leasehold estate, or a change in titleholder of record by purchase, grant, taking or transfer, it shall be the obligation of the transferee to notify the chief county assessment officer in writing within 90 days of the change. If mailed, the notice shall be sent by certified mail, return receipt requested, and shall include the name and address of the taxpayer, the legal description of the property, and the property index number of the property when an index number exists. If notice is provided in person, it shall be provided on a form prescribed by the chief county assessment officer, and the chief county assessment officer shall provide a date stamped copy of the notice. Except as provided in item (6) of subsection (a) of Section 9-260, item (6) of Section 16-135, and item (6) of Section 16-140 of this Code, if the failure to give the notification results in the assessing official continuing to list the property as exempt in subsequent years, the property shall be considered omitted property for purposes of this Code.

(g) In counties with fewer than 3,000,000 inhabitants, if a chief county assessment officer discovers at any time before judgment that a property has been granted a homestead exemption under Article 15 of this Code to which it was not entitled for the current assessment year or for any of the 3 prior assessment years, the chief county assessment officer may consider the erroneously exempt portion of the property as omitted property under this Section for the assessment year in which the erroneous homestead exemption was applied to the property, but not including any assessment year that occurred more than 3 years prior to the current assessment year. The county or its designated agent may use any remedy allowed by law to collect the taxes due on property that is omitted property under this subsection, plus interest in the amount of 10% per annum on those amounts, as well as any additional fees or costs incurred in identifying and collecting the unpaid taxes that taxable year only.

Any arrearage of taxes that might have been assessed against the omitted property but for the erroneous homestead exemption, as well as any interest, fees, or costs imposed on that property under this Section, shall not be chargeable to any bona fide purchaser for value who acquires the property without notice of the erroneous homestead exemption and whose rights in and to the underlying parcel arose after the erroneous homestead exemption was granted but before the erroneously exempt portion of the property was listed as omitted pursuant to this subsection. Nor shall those amounts be chargeable to any mortgagee, tax buyer, judgment creditor, or other lienor whose rights in and to the underlying parcel arose after the erroneous homestead exemption was granted but before the erroneously exempt portion of the property was listed as omitted.

A title insurance policy for the property that is issued by a title company licensed to do business in the State and that shows that the property is free and clear of any liens or arrearages imposed under this Section shall be prima facie evidence that the person acquiring an interest in the property is without notice of the erroneous homestead exemption.

(Source: P.A. 98-615, eff. 6-1-14.)

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