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.


LRB098 12569 HLH 46997 b

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 adding
5Section 9-275.5 as follows:
 
6    (35 ILCS 200/9-275.5 new)
7    Sec. 9-275.5. Erroneous homestead exemptions; counties
8with fewer than 3,000,000 inhabitants.
9    (a) For purposes of this Section:
10    "Erroneous homestead exemption" means a homestead
11exemption that was granted for real property in a taxable year
12if the property was not eligible for that exemption in that
13taxable year. If the taxpayer receives an erroneous homestead
14exemption under a single Section of this Code for the same
15property in multiple years, that exemption is considered a
16single erroneous homestead exemption for purposes of this
17Section. However, if the taxpayer receives erroneous homestead
18exemptions under multiple Sections of this Code for the same
19property, or if the taxpayer receives erroneous homestead
20exemptions under the same Section of this Code for multiple
21properties, then each of those exemptions is considered a
22separate erroneous homestead exemption for purposes of this
23Section.

 

 

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1    "Homestead exemption" means an exemption under Section
215-165 (disabled veterans), 15-167 (returning veterans),
315-168 (disabled persons), 15-169 (disabled veterans standard
4homestead), 15-170 (senior citizens), 15-172 (senior citizens
5assessment freeze), 15-175 (general homestead), 15-176
6(alternative general homestead), or 15-177 (long-time
7occupant).
8    (b) Notwithstanding any other provision of law, in counties
9with fewer than 3,000,000 inhabitants, the chief county
10assessment officer shall include the following information
11with each assessment notice sent in a general assessment year:
12(1) a list of each homestead exemption available under Article
1315 of this Code and a description of the eligibility criteria
14for that exemption; (2) a list of each homestead exemption
15applied to the property in the current assessment year; (3)
16information regarding penalties and interest that may be
17incurred under this Section if the property owner received an
18erroneous homestead exemption in a previous taxable year; and
19(4) notice of the 60-day grace period available under this
20subsection. If, within 60 days after receiving his or her
21assessment notice, the property owner notifies the chief county
22assessment officer that he or she received an erroneous
23homestead exemption in a previous assessment year, and if the
24property owner pays the principal amount of back taxes due and
25owing with respect to that exemption, plus interest as provided
26in subsection (f), then the property owner shall not be liable

 

 

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1for the penalties provided in subsection (f) with respect to
2that exemption.
3    (c) The chief county assessment officer in a county with
4fewer than 3,000,000 inhabitants may cause a lien to be
5recorded against property that (1) is located in the county and
6(2) received one or more erroneous homestead exemptions if,
7upon determination of the chief county assessment officer, the
8property owner received: (A) one or 2 erroneous homestead
9exemptions for real property, including at least one erroneous
10homestead exemption granted for the property against which the
11lien is sought, during any of the 3 assessment years
12immediately prior to the assessment year in which the notice of
13intent to record at tax lien is served; or (B) 3 or more
14erroneous homestead exemptions for real property, including at
15least one erroneous homestead exemption granted for the
16property against which the lien is sought, during any of the 6
17assessment years immediately prior to the assessment year in
18which the notice of intent to record at tax lien is served.
19Prior to recording the lien against the property, the chief
20county assessment officer shall cause to be served, by both
21regular mail and certified mail, return receipt requested, on
22the person to whom the most recent tax bill was mailed and the
23owner of record, a notice of intent to record a tax lien
24against the property.
25    (d) The notice of intent to record a tax lien described in
26subsection (c) shall: (1) identify, by property index number,

 

 

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1the property against which the lien is being sought; (2)
2identify each specific homestead exemption that was
3erroneously granted and the year or years in which each
4exemption was granted; (3) set forth the arrearage of taxes
5that would have been due if not for the erroneous homestead
6exemptions; (4) inform the property owner that he or she may
7request a hearing within 30 days after service and may appeal
8the hearing officer's ruling to the circuit court; and (5)
9inform the property owner that he or she may pay the amount
10due, plus interest and penalties, within 30 days after service.
11    (e) The notice must also include a form that the property
12owner may return to the chief county assessment officer to
13request a hearing. The property owner may request a hearing by
14returning the form within 30 days after service. The hearing
15shall be held within 90 days after the property owner is
16served. The chief county assessment officer shall promulgate
17rules of service and procedure for the hearing. The chief
18county assessment officer must generally follow rules of
19evidence and practices that prevail in the county circuit
20courts, but, because of the nature of these proceedings, the
21chief county assessment officer is not bound by those rules in
22all particulars. The chief county assessment officer shall
23appoint a hearing officer to oversee the hearing. The property
24owner shall be allowed to present evidence to the hearing
25officer at the hearing. After taking into consideration all the
26relevant testimony and evidence, the hearing officer shall make

 

 

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1an administrative decision on whether the property owner was
2erroneously granted a homestead exemption for the assessment
3year in question. The property owner may appeal the hearing
4officer's ruling to the circuit court of the county where the
5property is located as a final administrative decision under
6the Administrative Review Law.
7    (f) A lien against the property imposed under this Section
8shall be filed with the county recorder of deeds, but may not
9be filed sooner than 60 days after the notice was delivered to
10the property owner if the property owner does not request a
11hearing, or until the conclusion of the hearing and all appeals
12if the property owner does request a hearing. If a lien is
13filed pursuant to this Section and the property owner received
14one or 2 erroneous homestead exemptions during any of the 3
15assessment years immediately prior to the assessment year in
16which the notice of intent to record at tax lien is served,
17then the arrearages of taxes that might have been assessed for
18that property, plus 10% interest per annum, shall be charged
19against the property by the county treasurer. However, if a
20lien is filed pursuant to this Section and the property owner
21received 3 or more erroneous homestead exemptions during any of
22the 6 assessment years immediately prior to the assessment year
23in which the notice of intent to record at tax lien is served,
24the arrearages of taxes that might have been assessed for that
25property, plus a penalty of 50% of the total amount of unpaid
26taxes for each year for that property and 10% interest per

 

 

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

 

 

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1notice of lien. A title insurance policy for the property that
2is issued by a title company licensed to do business in the
3State showing that the property is free and clear of any liens
4imposed under this Section shall be prima facie evidence that
5the property owner is without notice of the erroneous homestead
6exemption. Nothing in this Section shall be deemed to impair
7the rights of subsequent creditors and subsequent purchasers
8under Section 30 of the Conveyances Act.
9    (j) When a lien is filed against the property pursuant to
10this Section, the chief county assessment officer shall mail a
11copy of the lien to the person to whom the most recent tax bill
12was mailed and to the owner of record, and the outstanding
13liability created by such a lien is due and payable within 30
14days after the mailing of the lien by the chief county
15assessment officer. Payment shall be made to the chief county
16assessment officer who shall, upon receipt of the full amount
17due, provide in reasonable form a release of the lien and shall
18transmit the funds received to the county treasurer for
19distribution as provided in subsection (k) of this Section.
20This liability is deemed delinquent and shall bear interest
21beginning on the day after the due date.
22    (k) The unpaid taxes shall be paid to the appropriate
23taxing districts. Interest shall be paid to the county where
24the property is located. The penalty shall be paid to the chief
25county assessment officer's office for the administration of
26the provisions of this amendatory Act of the 98th General

 

 

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1Assembly.
2    (l) The chief county assessment officer in a county with
3fewer than 3,000,000 inhabitants shall establish an amnesty
4period for all taxpayers owing any tax due to an erroneous
5homestead exemption granted in a tax year prior to the 2013 tax
6year. The amnesty period shall begin on the effective date of
7this amendatory Act of the 98th General Assembly and shall
8continue through the last business day of the fifth month after
9the effective date of this amendatory Act of the 98th General
10Assembly. If, during the amnesty period, the taxpayer pays the
11entire arrearage of taxes due for tax years prior to 2013, the
12county clerk shall abate and not seek to collect any interest
13or penalties that may be applicable and shall not seek civil or
14criminal prosecution for any taxpayer for tax years prior to
152013. Failure to pay all such taxes due during the amnesty
16period established under this Section shall invalidate the
17amnesty period for that taxpayer.
18    In each county with fewer than 3,000,000 inhabitants: (1)
19the collector shall provide written notice of the amnesty
20period to each owner of record of property located in the
21county; that notice may be included with the tax bill for the
22first installment of taxes due on or after the effective date
23of this amendatory Act of the 98th General Assembly, or it may
24be mailed separately; and (2) as soon as possible after the
25effective date of this amendatory Act of the 98th General
26Assembly, the chief county assessment officer shall publish

 

 

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1notice of the amnesty period in a newspaper of general
2circulation in the county. Each notice shall include
3information on the amnesty period, its purpose, and the method
4in which to make payment. If the taxpayer receives his or her
5tax bill via e-mail, as provided in Section 20-20 of this Code,
6then the collector may comply with this subsection (l) by
7sending notice of the amnesty period to the e-mail address
8provided by the taxpayer.
9    Taxpayers who are a party to any criminal investigation or
10to any civil or criminal litigation that is pending in any
11circuit court or appellate court, or in the Supreme Court of
12this State, for nonpayment, delinquency, or fraud in relation
13to any property tax imposed by any taxing district located in
14the State on the effective date of this amendatory Act of the
1598th General Assembly may not take advantage of the amnesty
16period.
17    A taxpayer who has claimed 3 or more homestead exemptions
18in error shall not be eligible for the amnesty period
19established under this subsection.
 
20    Section 99. Effective date. This Act takes effect upon
21becoming law.