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Public Act 91-0564
HB2180 Enrolled LRB9103277PTpk
AN ACT to amend the Property Tax Code by changing
Sections 21-295, 21-305, 21-345, and 22-40 and adding
Sections 21-306 and 21-397.
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
Sections 21-295, 21-305, 21-345, and 22-40 and adding
Sections 21-306 and 21-397 as follows:
(35 ILCS 200/21-295)
Sec. 21-295. Creation of indemnity fund.
(a) In counties of less than 3,000,000 inhabitants, each
person purchasing any property at a sale under this Code
shall pay to the County Collector, prior to the issuance of
any certificate of purchase, a fee of $20 for each item
purchased in counties of less than 3,000,000 inhabitants and
$80 in counties of 3,000,000 or more inhabitants. In all
counties, A like sum shall be paid for each year that all or
a portion of an installment of subsequent taxes, or portion
thereof is are paid by the tax purchaser and posted to the
tax judgment, sale, redemption and forfeiture record where
the underlying certificate of purchase is recorded. The
amount paid prior to issuance of the certificate of purchase
shall be included in the purchase price of the property in
the certificate of purchase and all amounts paid under this
subsection shall be included in the amount required to redeem
under Section 21-355.
(a-5) In counties of 3,000,000 or more inhabitants, each
person purchasing property at a sale under this Code shall
pay to the County Collector a fee of $80 for each item
purchased plus an additional sum equal to 5% of total taxes,
interest, and penalties, including the taxes, interest, and
penalties paid under Section 21-240. In these counties, the
certificate holder shall also pay to the County Collector a
fee of $80 for each year that all or a portion of subsequent
taxes are paid by the tax purchaser and posted to the tax
judgment, sale, redemption, and forfeiture record, plus an
additional sum equal to 5% of all subsequent taxes, interest,
and penalties. The additional 5% fee is not required after
December 31, 2006.
(b) The amount paid prior to issuance of the certificate
of purchase pursuant to subsection (a) or (a-5) shall be
included in the purchase price of the property in the
certificate of purchase and all amounts paid under this
Section shall be included in the amount required to redeem
under Section 21-355. Except as otherwise provided in
subsection (b) of Section 21-300, all money received under
subsection (a) or (a-5) shall be paid by the Collector to the
County Treasurer of the County in which the land is situated,
for the purpose of an indemnity fund. The County Treasurer,
as trustee of that fund, shall invest all of that fund,
principal and income, in his or her hands from time to time,
if not immediately required for payments of indemnities under
subsection (a) of Section 21-305, in investments permitted by
the Illinois State Board of Investment under Article 22A of
the Illinois Pension Code. The county collector shall report
annually to the Circuit Court on the condition and income of
the fund. The indemnity fund shall be held to satisfy
judgments obtained against the County Treasurer, as trustee
of the fund. No payment shall be made from the fund, except
upon a judgment of the court which ordered the issuance of a
tax deed.
(Source: P.A. 86-1028; 86-1431; 88-455.)
(35 ILCS 200/21-305)
Sec. 21-305. Payments from Indemnity Fund.
(a) Any owner of property sold under any provision of
this Code who sustains loss or damage by reason of the
issuance of a tax deed under Section 21-445 or 22-40 and who
is barred or is in any way precluded from bringing an action
for the recovery of the property shall have the right to
indemnity for the loss or damage sustained, limited as
follows:
(1) An owner who resided on property that contained
4 or less dwelling units on the last day of the period of
redemption and who is equitably entitled to compensation
for the loss or damage sustained has the right to
indemnity. An equitable indemnity award shall be limited
to the fair cash value of the property as of the date the
tax deed was issued less any mortgages or liens on the
property, and the award will not exceed $99,000. The
Court shall liberally construe this equitable entitlement
standard to provide compensation wherever, in the
discretion of the Court, the equities warrant the action.
An owner of a property that contained 4 or less
dwelling units who requests an award in excess of $99,000
must prove that the loss of his or her property was not
attributable to his or her own fault or negligence before
an award in excess of $99,000 will be granted.
(2) An owner who sustains the loss or damage of any
property occasioned by reason of the issuance of a tax
deed, without fault or negligence of his or her own, has
the right to indemnity limited to the fair cash value of
the property less any mortgages or liens on the
property. In determining the existence of fault or
negligence, the court shall consider whether the owner
exercised ordinary reasonable diligence under all of the
relevant circumstances.
(3) In determining the fair cash value of property
less any mortgages or liens on the property, the fair
cash value shall be reduced by the principal amount of
all taxes paid by the tax purchaser or his or her
assignee before the issuance of the tax deed.
(4) If an award made under paragraph (1) or (2) is
subject to a reduction by the amount of an outstanding
mortgage or lien on the property, other than the
principal amount of all taxes paid by the tax purchaser
or his or her assignee before the issuance of the tax
deed and the petitioner would be personally liable to the
mortgagee or lienholder for all or part of that reduction
amount, the court shall order an additional indemnity
award to be paid directly to the mortgagee or lienholder
sufficient to discharge the petitioner's personal
liability. The court, in its discretion, may order the
joinder of the mortgagee or lienholder as an additional
party to the indemnity action. Any owner of property sold
under any provision of this Code, who without fault or
negligence of his or her own sustains loss or damage by
reason of the issuance of a tax deed under Sections 22-40
or 21-445 and who is barred or in any way precluded from
bringing an action for the recovery of the property or
any owner of property containing 4 or less dwelling units
who resided thereon the last day of the period of
redemption who, in the opinion of the Court which issued
the tax deed order, is equitably entitled to just
compensation, has the right to indemnity for the loss or
damage sustained. Indemnity shall be limited to the fair
cash value of the property as of the date that the tax
deed was issued, less any mortgages or liens thereon.
(b) Indemnity fund; subrogation.
(1) Any person claiming indemnity hereunder shall
petition the Court which ordered the tax deed to issue,
shall name the County Treasurer, as Trustee of the
indemnity fund, as defendant to the petition, and shall
ask that judgment be entered against the County
Treasurer, as Trustee, in the amount of the indemnity
sought. The provisions of the Civil Practice Law shall
apply to proceedings under the petition, except that
neither the petitioner nor County Treasurer shall be
entitled to trial by jury on the issues presented in the
petition. The Court shall liberally construe this Section
to provide compensation wherever in the discretion of the
Court the equities warrant such action.
(2) The County Treasurer, as Trustee of the
indemnity fund, shall be subrogated to all parties in
whose favor judgment may be rendered against him or her,
and by third party complaint may bring in as a defendant
any a person, other than the tax deed grantee and its
successors in title, not a party to the action who is or
may be liable to him or her, as subrogee, for all or part
of the petitioner's claim against him or her.
(c) Any contract involving the proceeds of a judgment
for indemnity under this Section, between the tax deed
grantee or its successors in title and the indemnity
petitioner or his or her successors, shall be in writing. In
any action brought under Section 21-305, the Collector shall
be entitled to discovery regarding, but not limited to, the
following:
(1) the identity of all persons beneficially
interested in the contract, directly or indirectly,
including at least the following information: the names
and addresses of any natural persons; the place of
incorporation of any corporation and the names and
addresses of its shareholders unless it is publicly held;
the names and addresses of all general and limited
partners of any partnership; the names and addresses of
all persons having an ownership interest in any entity
doing business under an assumed name, and the county in
which the assumed business name is registered; and the
nature and extent of the interest in the contract of each
person identified;
(2) the time period during which the contract was
negotiated and agreed upon, from the date of the first
direct or indirect contact between any of the contracting
parties to the date of its execution;
(3) the name and address of each natural person who
took part in negotiating the contract, and the identity
and relationship of the party that the person represented
in the negotiations; and
(4) the existence of an agreement for payment of
attorney's fees by or on behalf of each party.
Any information disclosed during discovery may be subject
to protective order as deemed appropriate by the court. The
terms of the contract shall not be used as evidence of value.
(Source: P.A. 86-1028; 86-1431; 88-455.)
(35 ILCS 200/21-306 new)
Sec. 21-306. Indemnity fund fraud.
(a) A person commits the offense of indemnity fund fraud
when that person knowingly:
(1) offers or agrees to become a party to, or to
acquire an interest in, a contract involving the proceeds
of a judgment for indemnity under Section 21-305 before
the end of the period of redemption from the tax sale to
which the judgment relates;
(2) fraudulently induces a party to forego bringing
an action for the recovery of the property;
(3) makes a deceptive misrepresentation during the
course of negotiating an agreement under subsection (c)
of Section 21-305; or
(4) conspires to violate any of the provisions of
this subsection.
(b) Commission of any one act described in subsection
(a) is a Class A misdemeanor. Commission of more than one act
described in subsection (a) during a single course of conduct
is a Class 4 felony. A second or subsequent conviction for
violation of any portion of this Section is a Class 4 felony.
(c) The State's Attorney of the county in which a
judgment for indemnity under Section 21-305 is entered may
bring a civil action in the name of the People of the State
of Illinois against a person who violates paragraph (1), (2),
or (3) of subsection (a). Upon a finding of liability in the
action the court shall enter judgment in favor of the People
in a sum equal to three times the amount of the judgment for
indemnity, together with costs of the action and reasonable
attorney's fees. The proceeds of any judgment under this
subsection shall be paid into the general fund of the county.
(35 ILCS 200/21-345)
Sec. 21-345. Right of redemption.
(a) Property sold under this Code may be redeemed only
by those persons having a right of redemption as defined in
this Section and only in accordance with this Code.
A right to redeem property from any sale under this Code
shall exist in any owner or person interested in that
property, other than an undisclosed beneficiary of an
Illinois land trust, whether or not the interest in the
property sold is recorded or filed. Any redemption shall be
presumed to have been made by or on behalf of the owners and
persons interested in the property and shall inure to the
benefit of the persons having the legal or equitable title to
the property redeemed, subject to the right of the person
making the redemption to be reimbursed by the persons
benefited. No redemption shall be held invalid by reason of
the failure of the person redeeming to have recorded or filed
the document evidencing an interest in the property prior to
redemption, other than an undisclosed beneficiary of an
Illinois land trust.
(b) Any person who desires to redeem and does not desire
to contest the validity of a petition for tax deed may redeem
pursuant to this Section and related Sections of this Code
without submitting a written protest under Section 21-380.
This subsection (b) shall be construed as declarative of
existing law and not as a new enactment.
(Source: P.A. 86-286; 86-413; 86-418; 86-949; 86-1028;
86-1158; 86-1481; 87-145; 87-236; 87-435; 87-895; 87-1189;
88-455.)
(35 ILCS 200/21-397 new)
Sec. 21-397. Notice of order setting aside redemption. In
counties with 3,000,000 or more inhabitants, if an order is
entered setting aside a redemption made within the time
allowed by law after a petition for tax deed has been filed,
the holder of the certificate of purchase shall mail a copy
of the order within 7 days of entry of the order by
registered or certified mail to the county clerk, to the
person who made the redemption, and to all parties entitled
to notice of the petition under Section 22-10, 22-15, or
22-25. The order shall provide that any person who was
entitled to redeem may pay to the county clerk within 30 days
after the entry of the order the amount necessary to redeem
the property from the sale as of the last day of the period
of redemption. The county clerk shall make an entry in the
annual tax judgment, sale, redemption, and forfeiture record
reflecting the entry of the order and shall immediately upon
request provide an estimate of the amount required to effect
a redemption as of the last date of the period of redemption.
If the amount is paid within 30 days after entry of the
order, then the court shall enter an order declaring the
taxes to be paid as if the property had been redeemed within
the time required by law and dismissing the petition for tax
deed. A tax deed shall not be issued within the 30-day
period. Upon surrender of the certificate of purchase, the
county clerk shall distribute the funds deposited as if a
timely redemption had been made. This Section applies to all
redemptions that occur after the effective date of this
amendatory Act of the 91st General Assembly.
(35 ILCS 200/22-40)
Sec. 22-40. Issuance of deed; possession.
(a) If the redemption period expires and the property
has not been redeemed and all taxes and special assessments
which became due and payable subsequent to the sale have been
paid and all forfeitures and sales which occur subsequent to
the sale have been redeemed and the notices required by law
have been given and all advancements of public funds under
the police power made by a city, village or town under
Section 22-35 have been paid and the petitioner has complied
with all the provisions of law entitling him or her to a
deed, the court shall so find and shall enter an order
directing the county clerk on the production of the
certificate of purchase and a certified copy of the order, to
issue to the purchaser or his or her assignee a tax deed.
The court shall insist on strict compliance with Section
22-10 through 22-25. Prior to the entry of an order
directing the issuance of a tax deed, the petitioner shall
furnish the court with a report of proceedings of the
evidence received on the application for tax deed and the
report of proceedings shall be filed and made a part of the
court record.
(b) If taxes for years prior to the year sold remain
delinquent at the time of the tax deed hearing, those
delinquent taxes may be merged into the tax deed if the court
determines that all other requirements for receiving an order
directing the issuance of the tax deed are fulfilled and
makes a further determination under either paragraph (1) or
(2).
(1) Incomplete estimate.
(A) The property in question was purchased at
an annual sale; and
(B) the statement and estimate of forfeited
general taxes furnished by the county clerk pursuant
to Section 21-240 failed to include all delinquent
taxes as of the date of that estimate's issuance.
(2) Vacating order.
(A) The petitioner furnishes the court with a
certified copy of an order vacating a prior sale for
the subject property;
(B) the order vacating the sale was entered
after the date of purchase for the subject taxes;
(C) the sale in error was granted pursuant to
paragraphs (1), (2), or (4) of subsection (b) of
Section 21-310 or Section 22-35; and
(D) the tax purchaser who received the sale in
error has no affiliation, direct or indirect, with
the petitioner in the present proceeding and that
petitioner has signed an affidavit attesting to the
lack of affiliation.
If delinquent taxes are merged into the tax deed pursuant to
this subsection, a declaration to that effect shall be
included in the order directing issuance of the tax deed.
Nothing contained in this Section shall relieve any owner
liable for delinquent property taxes under this Code from the
payment of the taxes that have been merged into the title
upon issuance of the tax deed.
(c) The county clerk is entitled to a fee of $10 in
counties of 3,000,000 or more inhabitants and $5 in counties
with less than 3,000,000 inhabitants for the issuance of the
tax deed. The clerk may not include in a tax deed more than
one property as listed, assessed and sold in one
description, except in cases where several properties are
owned by one person.
Upon application the court shall, enter an order to place
the tax deed grantee in possession of the property and may
enter orders and grant relief as may be necessary or
desirable to maintain the grantee in possession.
(Source: P.A. 86-1158; 86-1431; 86-1475; 87-145; 87-669;
87-671; 87-895; 87-1189; 88-455.)
Section 99. Effective date. This Act takes effect upon
becoming law.
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