100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB4770

 

Introduced , by Rep. Ryan Spain

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 200/9-275

    Amends the Property Tax Code. Provides that, if the county board of a county with fewer than 3,000,000 inhabitants passes an ordinance providing that provisions of the Code concerning erroneous homestead exemptions shall apply in that county, then those provisions shall apply in that county beginning in the first tax year to occur after the effective date of the ordinance. Contains provisions concerning an amnesty period for those counties.


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FISCAL NOTE ACT MAY APPLY
HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Property Tax Code is amended by changing
5Section 9-275 as follows:
 
6    (35 ILCS 200/9-275)
7    Sec. 9-275. Erroneous homestead exemptions.
8    (a) For purposes of this Section:
9    "Erroneous homestead exemption" means a homestead
10exemption that was granted for real property in a taxable year
11if the property was not eligible for that exemption in that
12taxable year. If the taxpayer receives an erroneous homestead
13exemption under a single Section of this Code for the same
14property in multiple years, that exemption is considered a
15single erroneous homestead exemption for purposes of this
16Section. However, if the taxpayer receives erroneous homestead
17exemptions under multiple Sections of this Code for the same
18property, or if the taxpayer receives erroneous homestead
19exemptions under the same Section of this Code for multiple
20properties, then each of those exemptions is considered a
21separate erroneous homestead exemption for purposes of this
22Section.
23    "Homestead exemption" means an exemption under Section

 

 

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115-165 (veterans with disabilities), 15-167 (returning
2veterans), 15-168 (persons with disabilities), 15-169
3(standard homestead for veterans with disabilities), 15-170
4(senior citizens), 15-172 (senior citizens assessment freeze),
515-175 (general homestead), 15-176 (alternative general
6homestead), or 15-177 (long-time occupant).
7    "Erroneous exemption principal amount" means the total
8difference between the property taxes actually billed to a
9property index number and the amount of property taxes that
10would have been billed but for the erroneous exemption or
11exemptions.
12    "Qualified county" means a county with 3,000,000 or more
13inhabitants and each county with fewer than 3,000,000
14inhabitants for which an ordinance was passed in accordance
15with subsection (k-5) of this Section.
16    "Taxpayer" means the property owner or leasehold owner that
17erroneously received a homestead exemption upon property.
18    (b) Notwithstanding any other provision of law, in
19qualified counties with 3,000,000 or more inhabitants, the
20chief county assessment officer shall include the following
21information with each assessment notice sent in a general
22assessment year: (1) a list of each homestead exemption
23available under Article 15 of this Code and a description of
24the eligibility criteria for that exemption; (2) a list of each
25homestead exemption applied to the property in the current
26assessment year; (3) information regarding penalties and

 

 

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1interest that may be incurred under this Section if the
2taxpayer received an erroneous homestead exemption in a
3previous taxable year; and (4) notice of the 60-day grace
4period available under this subsection. If, within 60 days
5after receiving his or her assessment notice, the taxpayer
6notifies the chief county assessment officer that he or she
7received an erroneous homestead exemption in a previous taxable
8year, and if the taxpayer pays the erroneous exemption
9principal amount, plus interest as provided in subsection (f),
10then the taxpayer shall not be liable for the penalties
11provided in subsection (f) with respect to that exemption.
12    (c) In qualified counties with 3,000,000 or more
13inhabitants, when the chief county assessment officer
14determines that one or more erroneous homestead exemptions was
15applied to the property, the erroneous exemption principal
16amount, together with all applicable interest and penalties as
17provided in subsections (f) and (j), shall constitute a lien in
18the name of the people of the county People of Cook County on
19the property receiving the erroneous homestead exemption. Upon
20becoming aware of the existence of one or more erroneous
21homestead exemptions, the chief county assessment officer
22shall cause to be served, by both regular mail and certified
23mail, a notice of discovery as set forth in subsection (c-5).
24The chief county assessment officer in a county with 3,000,000
25or more inhabitants may cause a lien to be recorded against
26property that (1) is located in the county and (2) received one

 

 

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1or more erroneous homestead exemptions if, upon determination
2of the chief county assessment officer, the taxpayer received:
3(A) one or 2 erroneous homestead exemptions for real property,
4including at least one erroneous homestead exemption granted
5for the property against which the lien is sought, during any
6of the 3 collection years immediately prior to the current
7collection year in which the notice of discovery is served; or
8(B) 3 or more erroneous homestead exemptions for real property,
9including at least one erroneous homestead exemption granted
10for the property against which the lien is sought, during any
11of the 6 collection years immediately prior to the current
12collection year in which the notice of discovery is served.
13Prior to recording the lien against the property, the chief
14county assessment officer shall cause to be served, by both
15regular mail and certified mail, return receipt requested, on
16the person to whom the most recent tax bill was mailed and the
17owner of record, a notice of intent to record a lien against
18the property. The chief county assessment officer shall cause
19the notice of intent to record a lien to be served within 3
20years from the date on which the notice of discovery was
21served.
22    (c-5) The notice of discovery described in subsection (c)
23shall: (1) identify, by property index number, the property for
24which the chief county assessment officer has knowledge
25indicating the existence of an erroneous homestead exemption;
26(2) set forth the taxpayer's liability for principal, interest,

 

 

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1penalties, and administrative costs including, but not limited
2to, recording fees described in subsection (f); (3) inform the
3taxpayer that he or she will be served with a notice of intent
4to record a lien within 3 years from the date of service of the
5notice of discovery; (4) inform the taxpayer that he or she may
6pay the outstanding amount, plus interest, penalties, and
7administrative costs at any time prior to being served with the
8notice of intent to record a lien or within 30 days after the
9notice of intent to record a lien is served; and (5) inform the
10taxpayer that, if the taxpayer provided notice to the chief
11county assessment officer as provided in subsection (d-1) of
12Section 15-175 of this Code, upon submission by the taxpayer of
13evidence of timely notice and receipt thereof by the chief
14county assessment officer, the chief county assessment officer
15will withdraw the notice of discovery and reissue a notice of
16discovery in compliance with this Section in which the taxpayer
17is not liable for interest and penalties for the current tax
18year in which the notice was received.
19    For the purposes of this subsection (c-5):
20    "Collection year" means the year in which the first and
21second installment of the current tax year is billed.
22    "Current tax year" means the year prior to the collection
23year.
24    (d) The notice of intent to record a lien described in
25subsection (c) shall: (1) identify, by property index number,
26the property against which the lien is being sought; (2)

 

 

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1identify each specific homestead exemption that was
2erroneously granted and the year or years in which each
3exemption was granted; (3) set forth the erroneous exemption
4principal amount due and the interest amount and any penalty
5and administrative costs due; (4) inform the taxpayer that he
6or she may request a hearing within 30 days after service and
7may appeal the hearing officer's ruling to the circuit court;
8(5) inform the taxpayer that he or she may pay the erroneous
9exemption principal amount, plus interest and penalties,
10within 30 days after service; and (6) inform the taxpayer that,
11if the lien is recorded against the property, the amount of the
12lien will be adjusted to include the applicable recording fee
13and that fees for recording a release of the lien shall be
14incurred by the taxpayer. A lien shall not be filed pursuant to
15this Section if the taxpayer pays the erroneous exemption
16principal amount, plus penalties and interest, within 30 days
17of service of the notice of intent to record a lien.
18    (e) The notice of intent to record a lien shall also
19include a form that the taxpayer may return to the chief county
20assessment officer to request a hearing. The taxpayer may
21request a hearing by returning the form within 30 days after
22service. The hearing shall be held within 90 days after the
23taxpayer is served. The chief county assessment officer shall
24promulgate rules of service and procedure for the hearing. The
25chief county assessment officer must generally follow rules of
26evidence and practices that prevail in the county circuit

 

 

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1courts, but, because of the nature of these proceedings, the
2chief county assessment officer is not bound by those rules in
3all particulars. The chief county assessment officer shall
4appoint a hearing officer to oversee the hearing. The taxpayer
5shall be allowed to present evidence to the hearing officer at
6the hearing. After taking into consideration all the relevant
7testimony and evidence, the hearing officer shall make an
8administrative decision on whether the taxpayer was
9erroneously granted a homestead exemption for the taxable year
10in question. The taxpayer may appeal the hearing officer's
11ruling to the circuit court of the county where the property is
12located as a final administrative decision under the
13Administrative Review Law.
14    (f) A lien against the property imposed under this Section
15shall be filed with the county recorder of deeds, but may not
16be filed sooner than 60 days after the notice of intent to
17record a lien was delivered to the taxpayer if the taxpayer
18does not request a hearing, or until the conclusion of the
19hearing and all appeals if the taxpayer does request a hearing.
20If a lien is filed pursuant to this Section and the taxpayer
21received one or 2 erroneous homestead exemptions during any of
22the 3 collection years immediately prior to the current
23collection year in which the notice of discovery is served,
24then the erroneous exemption principal amount, plus 10%
25interest per annum or portion thereof from the date the
26erroneous exemption principal amount would have become due if

 

 

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1properly included in the tax bill, shall be charged against the
2property by the chief county assessment officer. However, if a
3lien is filed pursuant to this Section and the taxpayer
4received 3 or more erroneous homestead exemptions during any of
5the 6 collection years immediately prior to the current
6collection year in which the notice of discovery is served, the
7erroneous exemption principal amount, plus a penalty of 50% of
8the total amount of the erroneous exemption principal amount
9for that property and 10% interest per annum or portion thereof
10from the date the erroneous exemption principal amount would
11have become due if properly included in the tax bill, shall be
12charged against the property by the chief county assessment
13officer. If a lien is filed pursuant to this Section, the
14taxpayer shall not be liable for interest that accrues between
15the date the notice of discovery is served and the date the
16lien is filed. Before recording the lien with the county
17recorder of deeds, the chief county assessment officer shall
18adjust the amount of the lien to add administrative costs,
19including but not limited to the applicable recording fee, to
20the total lien amount.
21    (g) If a person received an erroneous homestead exemption
22under Section 15-170 and: (1) the person was the spouse, child,
23grandchild, brother, sister, niece, or nephew of the previous
24taxpayer; and (2) the person received the property by bequest
25or inheritance; then the person is not liable for the penalties
26imposed under this Section for any year or years during which

 

 

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1the chief county assessment officer did not require an annual
2application for the exemption. However, that person is
3responsible for any interest owed under subsection (f).
4    (h) If the erroneous homestead exemption was granted as a
5result of a clerical error or omission on the part of the chief
6county assessment officer, and if the taxpayer has paid the tax
7bills as received for the year in which the error occurred,
8then the interest and penalties authorized by this Section with
9respect to that homestead exemption shall not be chargeable to
10the taxpayer. However, nothing in this Section shall prevent
11the collection of the erroneous exemption principal amount due
12and owing.
13    (i) A lien under this Section is not valid as to (1) any
14bona fide purchaser for value without notice of the erroneous
15homestead exemption whose rights in and to the underlying
16parcel arose after the erroneous homestead exemption was
17granted but before the filing of the notice of lien; or (2) any
18mortgagee, judgment creditor, or other lienor whose rights in
19and to the underlying parcel arose before the filing of the
20notice of lien. A title insurance policy for the property that
21is issued by a title company licensed to do business in the
22State showing that the property is free and clear of any liens
23imposed under this Section shall be prima facie evidence that
24the taxpayer is without notice of the erroneous homestead
25exemption. Nothing in this Section shall be deemed to impair
26the rights of subsequent creditors and subsequent purchasers

 

 

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1under Section 30 of the Conveyances Act.
2    (j) When a lien is filed against the property pursuant to
3this Section, the chief county assessment officer shall mail a
4copy of the lien to the person to whom the most recent tax bill
5was mailed and to the owner of record, and the outstanding
6liability created by such a lien is due and payable within 30
7days after the mailing of the lien by the chief county
8assessment officer. This liability is deemed delinquent and
9shall bear interest beginning on the day after the due date at
10a rate of 1.5% per month or portion thereof. Payment shall be
11made to the county treasurer. Upon receipt of the full amount
12due, as determined by the chief county assessment officer, the
13county treasurer shall distribute the amount paid as provided
14in subsection (k). Upon presentment by the taxpayer to the
15chief county assessment officer of proof of payment of the
16total liability, the chief county assessment officer shall
17provide in reasonable form a release of the lien. The release
18of the lien provided shall clearly inform the taxpayer that it
19is the responsibility of the taxpayer to record the lien
20release form with the county recorder of deeds and to pay any
21applicable recording fees.
22    (k) The county treasurer shall pay collected erroneous
23exemption principal amounts, pro rata, to the taxing districts,
24or their legal successors, that levied upon the subject
25property in the taxable year or years for which the erroneous
26homestead exemptions were granted, except as set forth in this

 

 

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1Section. The county treasurer shall deposit collected
2penalties and interest into a special fund established by the
3county treasurer to offset the costs of administration of the
4provisions of this Section by the chief county assessment
5officer's office, as appropriated by the county board. If the
6costs of administration of this Section exceed the amount of
7interest and penalties collected in the special fund, the chief
8county assessor shall be reimbursed by each taxing district or
9their legal successors for those costs. Such costs shall be
10paid out of the funds collected by the county treasurer on
11behalf of each taxing district pursuant to this Section.
12    (k-5) If the county board of a county with fewer than
133,000,000 inhabitants passes an ordinance providing that the
14provisions of this Section shall apply in that county, then
15this Section shall apply in that county beginning in the first
16tax year to occur after the effective date of the ordinance.
17    (l) The chief county assessment officer in a county with
183,000,000 or more inhabitants shall establish an amnesty period
19for all taxpayers owing any tax due to an erroneous homestead
20exemption granted in a tax year prior to the 2013 tax year. The
21amnesty period shall begin on the effective date of this
22amendatory Act of the 98th General Assembly and shall run
23through December 31, 2013. If, during the amnesty period, the
24taxpayer pays the entire arrearage of taxes due for tax years
25prior to 2013, the county clerk shall abate and not seek to
26collect any interest or penalties that may be applicable and

 

 

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1shall not seek civil or criminal prosecution for any taxpayer
2for tax years prior to 2013. Failure to pay all such taxes due
3during the amnesty period established under this Section shall
4invalidate the amnesty period for that taxpayer.
5    The chief county assessment officer in a county that passes
6an ordinance under subsection (k-5) shall establish an amnesty
7period for all taxpayers owing any tax due to an erroneous
8homestead exemption granted in a tax year prior to the first
9tax year in which this Section applies in that county. The
10amnesty period shall begin on January 1 of the first tax year
11for which this Section applies to the county and shall run
12through December 31 of that tax year. If, during the amnesty
13period, the taxpayer pays the entire arrearage of taxes, the
14county clerk shall abate and not seek to collect any interest
15or penalties that may be applicable and shall not seek civil or
16criminal prosecution for any taxpayer for those tax years.
17Failure to pay all such taxes due during the amnesty period
18established under this Section shall invalidate the amnesty
19period for that taxpayer.
20    The chief county assessment officer in a county with
213,000,000 or more inhabitants shall (i) mail notice of the
22amnesty period with the tax bills for the second installment of
23taxes for the 2012 assessment year and (ii) as soon as possible
24after the effective date of this amendatory Act of the 98th
25General Assembly, publish notice of the amnesty period in a
26newspaper of general circulation in the county. Notices shall

 

 

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1include information on the amnesty period, its purpose, and the
2method by which to make payment.
3    The chief county assessment officer in a county that passes
4an ordinance under subsection (k-5) shall (i) mail notice of
5the amnesty period with the tax bills for the next installment
6of taxes due after the ordinance is passed and (ii) as soon as
7possible after the effective date of the ordinance, publish
8notice of the amnesty period in a newspaper of general
9circulation in the county. Notices shall include information on
10the amnesty period, its purpose, and the method by which to
11make payment.
12    Taxpayers who are a party to any criminal investigation or
13to any civil or criminal litigation that is pending in any
14circuit court or appellate court, or in the Supreme Court of
15this State, for nonpayment, delinquency, or fraud in relation
16to any property tax imposed by any taxing district located in
17the State on the effective date of this amendatory Act of the
1898th General Assembly (if the property is located in a county
19with 3,000,000 or more inhabitants) or on the effective date of
20the ordinance (if the property is subject to this Section by
21operation of subsection (k-5)) may not take advantage of the
22amnesty period.
23    A taxpayer who has claimed 3 or more homestead exemptions
24in error shall not be eligible for the amnesty period
25established under this subsection.
26(Source: P.A. 98-93, eff. 7-16-13; 98-756, eff. 7-16-14;

 

 

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198-811, eff. 1-1-15; 98-1143, eff. 1-1-15; 99-143, eff.
27-27-15; 99-851, eff. 8-19-16.)