98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB5521

 

Introduced , by Rep. Michael J. Zalewski

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 200/9-275

    Amends the Property Tax Code. In a Section concerning erroneous homestead exemptions, provides for the collection of and imposes penalties and interest on the erroneous exemption principal amount (instead of the back taxes due an owing). Defines "erroneous exemption principal amount" as the total amount of property tax principal that would have been billed to a property index number but for the erroneous homestead exemption or exemptions a taxpayer received. Makes changes concerning the collection and distribution of the erroneous exemption principal amount, penalties, and interest, to provide that the county treasurer shall collect and distribute those proceeds. Makes other changes.


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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 (disabled veterans), 15-167 (returning veterans),
215-168 (disabled persons), 15-169 (disabled veterans standard
3homestead), 15-170 (senior citizens), 15-172 (senior citizens
4assessment freeze), 15-175 (general homestead), 15-176
5(alternative general homestead), or 15-177 (long-time
6occupant).
7    "Erroneous exemption principal amount" means the total
8amount of property tax principal that would have been billed to
9a property index number but for the erroneous homestead
10exemption or exemptions a taxpayer received.
11    (b) Notwithstanding any other provision of law, in counties
12with 3,000,000 or more inhabitants, the chief county assessment
13officer shall include the following information with each
14assessment notice sent in a general assessment year: (1) a list
15of each homestead exemption available under Article 15 of this
16Code and a description of the eligibility criteria for that
17exemption; (2) a list of each homestead exemption applied to
18the property in the current assessment year; (3) information
19regarding penalties and interest that may be incurred under
20this Section if the property owner received an erroneous
21homestead exemption in a previous taxable year; and (4) notice
22of the 60-day grace period available under this subsection. If,
23within 60 days after receiving his or her assessment notice,
24the property owner notifies the chief county assessment officer
25that he or she received an erroneous homestead exemption in a
26previous assessment year, and if the property owner pays the

 

 

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1erroneous exemption principal amount of back taxes due and
2owing with respect to that exemption, plus interest as provided
3in subsection (f), then the property owner shall not be liable
4for the penalties provided in subsection (f) with respect to
5that exemption.
6    (c) In counties with 3,000,000 or more inhabitants, when
7the chief county assessment officer determines that one or more
8erroneous homestead exemptions was applied to the property, the
9erroneous exemption principal amount, together with all
10applicable interest and penalties as provided in subsections
11(f) and (j), shall constitute a lien in the name of the People
12of the State of Illinois on the property receiving the
13erroneous homestead exemption. The chief county assessment
14officer in a county with 3,000,000 or more inhabitants may
15cause a lien to be recorded against property that (1) is
16located in the county and (2) received one or more erroneous
17homestead exemptions if, upon determination of the chief county
18assessment officer, the property owner received: (A) one or 2
19erroneous homestead exemptions for real property, including at
20least one erroneous homestead exemption granted for the
21property against which the lien is sought, during any of the 3
22assessment years immediately prior to the assessment year in
23which the notice of intent to record a at tax lien is served;
24or (B) (2) 3 or more erroneous homestead exemptions for real
25property, including at least one erroneous homestead exemption
26granted for the property against which the lien is sought,

 

 

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1during any of the 6 assessment years immediately prior to the
2assessment year in which the notice of intent to record a at
3tax lien is served. Prior to recording the lien against the
4property, the chief county assessment officer shall cause to be
5served, by both regular mail and certified mail, return receipt
6requested, on the person to whom the most recent tax bill was
7mailed and the owner of record, a notice of intent to record a
8tax lien against the property.
9    (d) The notice of intent to record a tax lien described in
10subsection (c) shall: (1) identify, by property index number,
11the property against which the lien is being sought; (2)
12identify each specific homestead exemption that was
13erroneously granted and the year or years in which each
14exemption was granted; (3) set forth the erroneous exemption
15principal amount due and the interest amount and any penalty
16due the arrearage of taxes that would have been due if not for
17the erroneous homestead exemptions; (4) inform the property
18owner that he or she may request a hearing within 30 days after
19service and may appeal the hearing officer's ruling to the
20circuit court; and (5) inform the property owner that he or she
21may pay the erroneous exemption principal amount due, plus
22interest and penalties, within 30 days after service. A lien
23shall not be filed pursuant to this Section if the property
24owner pays the erroneous exemption principal amount, plus
25penalties and interest, within 30 days of service of the notice
26of intent to record a lien.

 

 

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1    (e) The notice shall must also include a form that the
2property owner may return to the chief county assessment
3officer to request a hearing. The property owner may request a
4hearing by returning the form within 30 days after service. The
5hearing shall be held within 90 days after the property owner
6is served. The chief county assessment officer shall promulgate
7rules of service and procedure for the hearing. The chief
8county assessment officer must generally follow rules of
9evidence and practices that prevail in the county circuit
10courts, but, because of the nature of these proceedings, the
11chief county assessment officer is not bound by those rules in
12all particulars. The chief county assessment officer shall
13appoint a hearing officer to oversee the hearing. The property
14owner shall be allowed to present evidence to the hearing
15officer at the hearing. After taking into consideration all the
16relevant testimony and evidence, the hearing officer shall make
17an administrative decision on whether the property owner was
18erroneously granted a homestead exemption for the assessment
19year in question. The property owner may appeal the hearing
20officer's ruling to the circuit court of the county where the
21property is located as a final administrative decision under
22the Administrative Review Law.
23    (f) A lien against the property imposed under this Section
24shall be filed with the county recorder of deeds, but may not
25be filed sooner than 60 days after the notice was delivered to
26the property owner if the property owner does not request a

 

 

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1hearing, or until the conclusion of the hearing and all appeals
2if the property owner does request a hearing. If a lien is
3filed pursuant to this Section and the property owner received
4one or 2 erroneous homestead exemptions during any of the 3
5assessment years immediately prior to the assessment year in
6which the notice of intent to record a at tax lien is served,
7then the erroneous exemption principal amount arrearages of
8taxes that might have been assessed for that property, plus 10%
9interest per annum or portion thereof from the date the
10erroneous exemption principal amount would have become due if
11properly included in the tax bill, shall be charged against the
12property by the chief county assessment officer treasurer.
13However, if a lien is filed pursuant to this Section and the
14property owner received 3 or more erroneous homestead
15exemptions during any of the 6 assessment years immediately
16prior to the assessment year in which the notice of intent to
17record a at tax lien is served, the erroneous exemption
18principal amount arrearages of taxes that might have been
19assessed for that property, plus a penalty of 50% of the total
20amount of the erroneous exemption principal amount unpaid taxes
21for each year for that property and 10% interest per annum or
22portion thereof from the date the erroneous exemption principal
23amount would have become due if properly included in the tax
24bill, shall be charged against the property by the chief county
25assessment officer treasurer.
26    (g) If a person received an erroneous homestead exemption

 

 

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1under Section 15-170 and: (1) the person was the spouse, child,
2grandchild, brother, sister, niece, or nephew of the previous
3property owner; and (2) the person received the property by
4bequest or inheritance; then the person is not liable for the
5penalties imposed under this Section subsection for any year or
6years during which the chief county assessment officer did not
7require an annual application for the exemption. However, that
8person is responsible for any interest owed under subsection
9(f).
10    (h) If the erroneous homestead exemption was granted as a
11result of a clerical error or omission on the part of the chief
12county assessment officer, and if the property owner has paid
13the its tax bills as received for the year in which the error
14occurred, then the interest and penalties authorized by this
15Section with respect to that homestead exemption shall not be
16chargeable to the property owner. However, nothing in this
17Section shall prevent the collection of the erroneous exemption
18principal amount of back taxes due and owing.
19    (i) A lien under this Section is not valid as to (1) any
20bona fide purchaser for value without notice of the erroneous
21homestead exemption whose rights in and to the underlying
22parcel arose after the erroneous homestead exemption was
23granted but before the filing of the notice of lien; or (2) any
24mortgagee, judgment creditor, or other lienor whose rights in
25and to the underlying parcel arose before the filing of the
26notice of lien. A title insurance policy for the property that

 

 

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1is issued by a title company licensed to do business in the
2State showing that the property is free and clear of any liens
3imposed under this Section shall be prima facie evidence that
4the property owner is without notice of the erroneous homestead
5exemption. Nothing in this Section shall be deemed to impair
6the rights of subsequent creditors and subsequent purchasers
7under Section 30 of the Conveyances Act.
8    (j) When a lien is filed against the property pursuant to
9this Section, the chief county assessment officer shall mail a
10copy of the lien to the person to whom the most recent tax bill
11was mailed and to the owner of record, and the outstanding
12liability created by such a lien is due and payable within 30
13days after the mailing of the lien by the chief county
14assessment officer. Payment shall be made to the chief county
15treasurer. Upon assessment officer who shall, upon receipt of
16the full amount due, as determined by the chief county
17assessment officer, the county treasurer shall distribute the
18amount paid as provided in subsection (k). Upon presentment by
19the property owner to the chief county assessment officer of
20proof of payment of the total liability, the chief county
21assessment officer shall provide in reasonable form a release
22of the lien and shall transmit the funds received to the county
23treasurer for distribution as provided in subsection (i) of
24this Section. This liability is deemed delinquent and shall
25bear interest beginning on the day after the due date at a rate
26of 1.5 % per month or portion thereof.

 

 

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1    (k) The county treasurer shall pay collected erroneous
2exemption principal amounts, pro rata, unpaid taxes shall be
3paid to the appropriate taxing districts, or their legal
4successors, that levied upon the subject property in the
5assessment year or years for which the erroneous homestead
6exemptions were granted. The county treasurer shall pay
7collected interest . Interest shall be paid to the county where
8the property is located. The county treasurer shall deposit
9collected penalties into a special fund established by the
10county treasurer to offset The penalty shall be paid to the
11chief county assessment officer's office for the costs of
12administration of the provisions of this amendatory Act of the
1398th General Assembly by the chief county assessment officer's
14office, as appropriated by the county board.
15    (l) The chief county assessment officer in a county with
163,000,000 or more inhabitants shall establish an amnesty period
17for all taxpayers owing any tax due to an erroneous homestead
18exemption granted in a tax year prior to the 2013 tax year. The
19amnesty period shall begin on the effective date of this
20amendatory Act of the 98th General Assembly and shall run
21through December 31, 2013. If, during the amnesty period, the
22taxpayer pays the entire arrearage of taxes due for tax years
23prior to 2013, the county clerk shall abate and not seek to
24collect any interest or penalties that may be applicable and
25shall not seek civil or criminal prosecution for any taxpayer
26for tax years prior to 2013. Failure to pay all such taxes due

 

 

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1during the amnesty period established under this Section shall
2invalidate the amnesty period for that taxpayer.
3    The chief county assessment officer in a county with
43,000,000 or more inhabitants shall (i) mail notice of the
5amnesty period with the tax bills for the second installment of
6taxes for the 2012 assessment year and (ii) as soon as possible
7after the effective date of this amendatory Act of the 98th
8General Assembly, publish notice of the amnesty period in a
9newspaper of general circulation in the county. Notices shall
10include information on the amnesty period, its purpose, and the
11method by in which to make 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 may not take advantage of the amnesty
19period.
20    A taxpayer who has claimed 3 or more homestead exemptions
21in error shall not be eligible for the amnesty period
22established under this subsection.
23(Source: P.A. 98-93, eff. 7-16-13; revised 9-11-13.)