HB3654 98TH GENERAL ASSEMBLY

LRB098 12569 HLH 46997 b

98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB3654

Introduced , by Rep. Jack D. Franks

SYNOPSIS AS INTRODUCED:

35 ILCS 200/9-275.5 new

Amends the Property Tax Code. Allows the chief county assessment officer in a county with fewer than 3,000,000 inhabitants to record a tax lien against property that was granted one or more erroneous homestead exemptions. Provides that those chief county assessment officers shall include certain information concerning homestead exemptions with each assessment notice sent in a general assessment year. Provides that if, within 60 days after receiving the notice, the property owner notifies the chief county assessment officer that he or she received a homestead exemption in error in a previous assessment year and pays the principal amount of back taxes with interest, then the property owner shall not be liable for the penalties. Provides for an amnesty period beginning on the effective date of the amendatory Act and running for a period of 5 months after the effective date of the amendatory Act. Effective immediately.

FISCAL NOTE ACT MAY APPLY

HOUSING AFFORDABILITY IMPACT 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:

Section 5. The Property Tax Code is amended by adding Section 9-275.5 as follows:

(35 ILCS 200/9-275.5 new)

Sec. 9-275.5. Erroneous homestead exemptions; counties with fewer than 3,000,000 inhabitants.

(a) For purposes of this Section:

"Erroneous homestead exemption" means a homestead exemption that was granted for real property in a taxable year if the property was not eligible for that exemption in that taxable year. If the taxpayer receives an erroneous homestead exemption under a single Section of this Code for the same property in multiple years, that exemption is considered a single erroneous homestead exemption for purposes of this Section. However, if the taxpayer receives erroneous homestead exemptions under multiple Sections of this Code for the same property, or if the taxpayer receives erroneous homestead exemptions under the same Section of this Code for multiple properties, then each of those exemptions is considered a separate erroneous homestead exemption for purposes of this Section.

"Homestead exemption" means an exemption under Section 15-165 (disabled veterans), 15-167 (returning veterans), 15-168 (disabled persons), 15-169 (disabled veterans standard homestead), 15-170 (senior citizens), 15-172 (senior citizens assessment freeze), 15-175 (general homestead), 15-176 (alternative general homestead), or 15-177 (long-time occupant).

(b) Notwithstanding any other provision of law, in counties with fewer than 3,000,000 inhabitants, the chief county assessment officer shall include the following information with each assessment notice sent in a general assessment year: (1) a list of each homestead exemption available under Article 15 of this Code and a description of the eligibility criteria for that exemption; (2) a list of each homestead exemption applied to the property in the current assessment year; (3) information regarding penalties and interest that may be incurred under this Section if the property owner received an erroneous homestead exemption in a previous taxable year; and (4) notice of the 60-day grace period available under this subsection. If, within 60 days after receiving his or her assessment notice, the property owner notifies the chief county assessment officer that he or she received an erroneous homestead exemption in a previous assessment year, and if the property owner pays the principal amount of back taxes due and owing with respect to that exemption, plus interest as provided in subsection (f), then the property owner shall not be liable for the penalties provided in subsection (f) with respect to that exemption.

(c) The chief county assessment officer in a county with fewer than 3,000,000 inhabitants may cause a lien to be recorded against property that (1) is located in the county and (2) received one or more erroneous homestead exemptions if, upon determination of the chief county assessment officer, the property owner received: (A) one or 2 erroneous homestead exemptions for real property, including at least one erroneous homestead exemption granted for the property against which the lien is sought, during any of the 3 assessment years immediately prior to the assessment year in which the notice of intent to record at tax lien is served; or (B) 3 or more erroneous homestead exemptions for real property, including at least one erroneous homestead exemption granted for the property against which the lien is sought, during any of the 6 assessment years immediately prior to the assessment year in which the notice of intent to record at tax lien is served. Prior to recording the lien against the property, the chief county assessment officer shall cause to be served, by both regular mail and certified mail, return receipt requested, on the person to whom the most recent tax bill was mailed and the owner of record, a notice of intent to record a tax lien against the property.

(d) The notice of intent to record a tax lien described in subsection (c) shall: (1) identify, by property index number, the property against which the lien is being sought; (2) identify each specific homestead exemption that was erroneously granted and the year or years in which each exemption was granted; (3) set forth the arrearage of taxes that would have been due if not for the erroneous homestead exemptions; (4) inform the property owner that he or she may request a hearing within 30 days after service and may appeal the hearing officer's ruling to the circuit court; and (5) inform the property owner that he or she may pay the amount due, plus interest and penalties, within 30 days after service.

(e) The notice must also include a form that the property owner may return to the chief county assessment officer to request a hearing. The property owner may request a hearing by returning the form within 30 days after service. The hearing shall be held within 90 days after the property owner is served. The chief county assessment officer shall promulgate rules of service and procedure for the hearing. The chief county assessment officer must generally follow rules of evidence and practices that prevail in the county circuit courts, but, because of the nature of these proceedings, the chief county assessment officer is not bound by those rules in all particulars. The chief county assessment officer shall appoint a hearing officer to oversee the hearing. The property owner shall be allowed to present evidence to the hearing officer at the hearing. After taking into consideration all the relevant testimony and evidence, the hearing officer shall make an administrative decision on whether the property owner was erroneously granted a homestead exemption for the assessment year in question. The property owner may appeal the hearing officer's ruling to the circuit court of the county where the property is located as a final administrative decision under the Administrative Review Law.

(f) A lien against the property imposed under this Section shall be filed with the county recorder of deeds, but may not be filed sooner than 60 days after the notice was delivered to the property owner if the property owner does not request a hearing, or until the conclusion of the hearing and all appeals if the property owner does request a hearing. If a lien is filed pursuant to this Section and the property owner received one or 2 erroneous homestead exemptions during any of the 3 assessment years immediately prior to the assessment year in which the notice of intent to record at tax lien is served, then the arrearages of taxes that might have been assessed for that property, plus 10% interest per annum, shall be charged against the property by the county treasurer. However, if a lien is filed pursuant to this Section and the property owner received 3 or more erroneous homestead exemptions during any of the 6 assessment years immediately prior to the assessment year in which the notice of intent to record at tax lien is served, the arrearages of taxes that might have been assessed for that property, plus a penalty of 50% of the total amount of unpaid taxes for each year for that property and 10% interest per annum, shall be charged against the property by the county treasurer.

(g) If a person received an erroneous homestead exemption under Section 15-170 and: (1) the person was the spouse, child, grandchild, brother, sister, niece, or nephew of the previous owner; and (2) the person received the property by bequest or inheritance; then the person is not liable for the penalties imposed under this subsection for any year or years during which the county did not require an annual application for the exemption. However, that person is responsible for any interest owed under subsection (f).

(h) If the erroneous homestead exemption was granted as a result of a clerical error or omission on the part of the chief county assessment officer, and if the owner has paid its tax bills as received for the year in which the error occurred, then the interest and penalties authorized by this Section with respect to that homestead exemption 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.

(i) A lien under this Section is not valid as to (1) any bona fide purchaser for value without notice of the erroneous homestead exemption whose rights in and to the underlying parcel arose after the erroneous homestead exemption was granted but before the filing of the notice of lien; or (2) any mortgagee, judgment creditor, or other lienor whose rights in and to the underlying parcel arose before the filing of the notice of lien. A title insurance policy for the property that is issued by a title company licensed to do business in the State showing that the property is free and clear of any liens imposed under this Section shall be prima facie evidence that the property owner is without notice of the erroneous homestead exemption. Nothing in this Section shall be deemed to impair the rights of subsequent creditors and subsequent purchasers under Section 30 of the Conveyances Act.

(j) When a lien is filed against the property pursuant to this Section, the chief county assessment officer shall mail a copy of the lien to the person to whom the most recent tax bill was mailed and to the owner of record, and the outstanding liability created by such a lien is due and payable within 30 days after the mailing of the lien by the chief county assessment officer. Payment shall be made to the chief county assessment officer who shall, upon receipt of the full amount due, provide in reasonable form a release of the lien and shall transmit the funds received to the county treasurer for distribution as provided in subsection (k) of this Section. This liability is deemed delinquent and shall bear interest beginning on the day after the due date.

(k) The unpaid taxes shall be paid to the appropriate taxing districts. Interest shall be paid to the county where the property is located. The penalty shall be paid to the chief county assessment officer's office for the administration of the provisions of this amendatory Act of the 98th General Assembly.

(l) The chief county assessment officer in a county with fewer than 3,000,000 inhabitants shall establish an amnesty period for all taxpayers owing any tax due to an erroneous homestead exemption granted in a tax year prior to the 2013 tax year. The amnesty period shall begin on the effective date of this amendatory Act of the 98th General Assembly and shall continue through the last business day of the fifth month after the effective date of this amendatory Act of the 98th General Assembly. If, during the amnesty period, the taxpayer pays the entire arrearage of taxes due for tax years prior to 2013, the county clerk shall abate and not seek to collect any interest or penalties that may be applicable and shall not seek civil or criminal prosecution for any taxpayer for tax years prior to 2013. Failure to pay all such taxes due during the amnesty period established under this Section shall invalidate the amnesty period for that taxpayer.

In each county with fewer than 3,000,000 inhabitants: (1) the collector shall provide written notice of the amnesty period to each owner of record of property located in the county; that notice may be included with the tax bill for the first installment of taxes due on or after the effective date of this amendatory Act of the 98th General Assembly, or it may be mailed separately; and (2) as soon as possible after the effective date of this amendatory Act of the 98th General Assembly, the chief county assessment officer shall publish notice of the amnesty period in a newspaper of general circulation in the county. Each notice shall include information on the amnesty period, its purpose, and the method in which to make payment. If the taxpayer receives his or her tax bill via e-mail, as provided in Section 20-20 of this Code, then the collector may comply with this subsection (l) by sending notice of the amnesty period to the e-mail address provided by the taxpayer.

Taxpayers who are a party to any criminal investigation or to any civil or criminal litigation that is pending in any circuit court or appellate court, or in the Supreme Court of this State, for nonpayment, delinquency, or fraud in relation to any property tax imposed by any taxing district located in the State on the effective date of this amendatory Act of the 98th General Assembly may not take advantage of the amnesty period.

A taxpayer who has claimed 3 or more homestead exemptions in error shall not be eligible for the amnesty period established under this subsection.

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