103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB1377

 

Introduced 1/31/2023, by Rep. Norma Hernandez

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 200/9-275
35 ILCS 200/15-179 new

    Amends the Property Tax Code. Creates a residential new construction homestead exemption. Provides that the county board of a county with more than 3,000,000 inhabitants, or any other county that elects to be a qualified county, may designate one or more geographic areas within the county as eligible areas. Sets forth certain requirements for an area to be designated as an eligible area. Provides that newly constructed homestead property that is located in an eligible area is entitled to a residential new construction homestead exemption equal to 50% of the assessed value of the property in the current taxable year. Provides that the exemption shall continue for a period of 10 consecutive taxable years or until the property is sold, transferred, or conveyed to a subsequent owner (other than a subsequent owner that meets certain specified conditions), whichever is earlier. Effective immediately.


LRB103 04775 HLH 49784 b

 

 

A BILL FOR

 

HB1377LRB103 04775 HLH 49784 b

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 and by adding Section 15-179 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 (low-income senior citizens
5assessment freeze), 15-175 (general homestead), 15-176
6(alternative general homestead), or 15-177 (long-time
7occupant), or 15-179 (residential new construction).
8    "Erroneous exemption principal amount" means the total
9difference between the property taxes actually billed to a
10property index number and the amount of property taxes that
11would have been billed but for the erroneous exemption or
12exemptions.
13    "Taxpayer" means the property owner or leasehold owner
14that erroneously received a homestead exemption upon property.
15    (b) Notwithstanding any other provision of law, in
16counties with 3,000,000 or more inhabitants, the chief county
17assessment officer shall include the following information
18with each assessment notice sent in a general assessment year:
19(1) a list of each homestead exemption available under Article
2015 of this Code and a description of the eligibility criteria
21for that exemption, including the number of assessment years
22of automatic renewal remaining on a current senior citizens
23homestead exemption if such an exemption has been applied to
24the property; (2) a list of each homestead exemption applied
25to the property in the current assessment year; (3)
26information regarding penalties and interest that may be

 

 

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

 

 

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1homestead exemptions if, upon determination of the chief
2county assessment officer, the taxpayer received: (A) one or 2
3erroneous homestead exemptions for real property, including at
4least one erroneous homestead exemption granted for the
5property against which the lien is sought, during any of the 3
6collection years immediately prior to the current collection
7year in which the notice of discovery is served; or (B) 3 or
8more 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
24for which 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,

 

 

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1interest, penalties, and administrative costs including, but
2not limited to, recording fees described in subsection (f);
3(3) inform the taxpayer that he or she will be served with a
4notice of intent to record a lien within 3 years from the date
5of service of the notice of discovery; (4) inform the taxpayer
6that he or she may pay the outstanding amount, plus interest,
7penalties, and administrative costs at any time prior to being
8served with the notice of intent to record a lien or within 30
9days after the notice of intent to record a lien is served; and
10(5) inform the taxpayer that, if the taxpayer provided notice
11to the chief county assessment officer as provided in
12subsection (d-1) of Section 15-175 of this Code, upon
13submission by the taxpayer of evidence of timely notice and
14receipt thereof by the chief county assessment officer, the
15chief county assessment officer will withdraw the notice of
16discovery and reissue a notice of discovery in compliance with
17this Section in which the taxpayer is not liable for interest
18and penalties for the current tax year in which the notice was
19received.
20    For the purposes of this subsection (c-5):
21    "Collection year" means the year in which the first and
22second installment of the current tax year is billed.
23    "Current tax year" means the year prior to the collection
24year.
25    (d) The notice of intent to record a 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 erroneous exemption
5principal amount due and the interest amount and any penalty
6and administrative costs due; (4) inform the taxpayer that he
7or she may request a hearing within 30 days after service and
8may appeal the hearing officer's ruling to the circuit court;
9(5) inform the taxpayer that he or she may pay the erroneous
10exemption principal amount, plus interest and penalties,
11within 30 days after service; and (6) inform the taxpayer
12that, if the lien is recorded against the property, the amount
13of the lien will be adjusted to include the applicable
14recording fee and that fees for recording a release of the lien
15shall be incurred by the taxpayer. A lien shall not be filed
16pursuant to this Section if the taxpayer pays the erroneous
17exemption principal amount, plus penalties and interest,
18within 30 days of service of the notice of intent to record a
19lien.
20    (e) The notice of intent to record a lien shall also
21include a form that the taxpayer may return to the chief county
22assessment officer to request a hearing. The taxpayer may
23request a hearing by returning the form within 30 days after
24service. The hearing shall be held within 90 days after the
25taxpayer is served. The chief county assessment officer shall
26promulgate rules of service and procedure for the hearing. The

 

 

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

 

 

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110% interest per annum or portion thereof from the date the
2erroneous exemption principal amount would have become due if
3properly included in the tax bill, shall be charged against
4the property by the chief county assessment officer. However,
5if a lien is filed pursuant to this Section and the taxpayer
6received 3 or more erroneous homestead exemptions during any
7of the 6 collection years immediately prior to the current
8collection year in which the notice of discovery is served,
9the erroneous exemption principal amount, plus a penalty of
1050% of the total amount of the erroneous exemption principal
11amount for that property and 10% interest per annum or portion
12thereof from the date the erroneous exemption principal amount
13would have become due if properly included in the tax bill,
14shall be charged against the property by the chief county
15assessment officer. If a lien is filed pursuant to this
16Section, the taxpayer shall not be liable for interest that
17accrues between the date the notice of discovery is served and
18the date the lien is filed. Before recording the lien with the
19county recorder of deeds, the chief county assessment officer
20shall adjust the amount of the lien to add administrative
21costs, including but not limited to the applicable recording
22fee, to the total lien amount.
23    (g) If a person received an erroneous homestead exemption
24under Section 15-170 and: (1) the person was the spouse,
25child, grandchild, brother, sister, niece, or nephew of the
26previous taxpayer; and (2) the person received the property by

 

 

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1bequest or inheritance; then the person is not liable for the
2penalties imposed under this Section for any year or years
3during which the chief county assessment officer did not
4require an annual application for the exemption or, in a
5county with 3,000,000 or more inhabitants, an application for
6renewal of a multi-year exemption pursuant to subsection (i)
7of Section 15-170, as the case may be. However, that person is
8responsible for any interest owed under subsection (f).
9    (h) If the erroneous homestead exemption was granted as a
10result of a clerical error or omission on the part of the chief
11county assessment officer, and if the taxpayer has paid the
12tax bills as received for the year in which the error occurred,
13then the interest and penalties authorized by this Section
14with respect to that homestead exemption shall not be
15chargeable to the taxpayer. However, nothing in this Section
16shall prevent the collection of the erroneous exemption
17principal amount due and owing.
18    (i) A lien under this Section is not valid as to (1) any
19bona fide purchaser for value without notice of the erroneous
20homestead exemption whose rights in and to the underlying
21parcel arose after the erroneous homestead exemption was
22granted but before the filing of the notice of lien; or (2) any
23mortgagee, judgment creditor, or other lienor whose rights in
24and to the underlying parcel arose before the filing of the
25notice of lien. A title insurance policy for the property that
26is issued by a title company licensed to do business in the

 

 

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

 

 

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1    (k) The county treasurer shall pay collected erroneous
2exemption principal amounts, pro rata, to the taxing
3districts, or their legal successors, that levied upon the
4subject property in the taxable year or years for which the
5erroneous homestead exemptions were granted, except as set
6forth in this Section. The county treasurer shall deposit
7collected penalties and interest into a special fund
8established by the county treasurer to offset the costs of
9administration of the provisions of this Section by the chief
10county assessment officer's office, as appropriated by the
11county board. If the costs of administration of this Section
12exceed the amount of interest and penalties collected in the
13special fund, the chief county assessor shall be reimbursed by
14each taxing district or their legal successors for those
15costs. Such costs shall be paid out of the funds collected by
16the county treasurer on behalf of each taxing district
17pursuant to this Section.
18    (l) The chief county assessment officer in a county with
193,000,000 or more inhabitants shall establish an amnesty
20period for all taxpayers owing any tax due to an erroneous
21homestead exemption granted in a tax year prior to the 2013 tax
22year. The amnesty period shall begin on the effective date of
23this amendatory Act of the 98th General Assembly and shall run
24through December 31, 2013. If, during the amnesty period, the
25taxpayer pays the entire arrearage of taxes due for tax years
26prior to 2013, the county clerk shall abate and not seek to

 

 

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1collect any interest or penalties that may be applicable and
2shall not seek civil or criminal prosecution for any taxpayer
3for tax years prior to 2013. Failure to pay all such taxes due
4during the amnesty period established under this Section shall
5invalidate the amnesty period for that taxpayer.
6    The chief county assessment officer in a county with
73,000,000 or more inhabitants shall (i) mail notice of the
8amnesty period with the tax bills for the second installment
9of taxes for the 2012 assessment year and (ii) as soon as
10possible after the effective date of this amendatory Act of
11the 98th General Assembly, publish notice of the amnesty
12period in a newspaper of general circulation in the county.
13Notices shall include information on the amnesty period, its
14purpose, and the method by which to make payment.
15    Taxpayers who are a party to any criminal investigation or
16to any civil or criminal litigation that is pending in any
17circuit court or appellate court, or in the Supreme Court of
18this State, for nonpayment, delinquency, or fraud in relation
19to any property tax imposed by any taxing district located in
20the State on the effective date of this amendatory Act of the
2198th General Assembly may not take advantage of the amnesty
22period.
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    (m) Notwithstanding any other provision of law, for

 

 

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1taxable years 2019 through 2023, in counties with 3,000,000 or
2more inhabitants, the chief county assessment officer shall,
3if he or she learns that a taxpayer who has been granted a
4senior citizens homestead exemption has died during the period
5to which the exemption applies, send a notice to the address on
6record for the owner of record of the property notifying the
7owner that the exemption will be terminated unless, within 90
8days after the notice is sent, the chief county assessment
9officer is provided with a basis to continue the exemption.
10The notice shall be sent by first-class mail, in an envelope
11that bears on its front, in boldface red lettering that is at
12least one inch in size, the words "Notice of Exemption
13Termination"; however, if the taxpayer elects to receive the
14notice by email and provides an email address, then the notice
15shall be sent by email.
16(Source: P.A. 101-453, eff. 8-23-19; 101-622, eff. 1-14-20;
17102-895, eff. 5-23-22.)
 
18    (35 ILCS 200/15-179 new)
19    Sec. 15-179. Residential new construction homestead
20exemption.
21    (a) The county board of a qualified county may, by
22ordinance, designate one or more geographic areas within the
23county as eligible areas. Newly constructed homestead property
24that is located in an eligible area is entitled to a
25residential new construction homestead exemption equal to a

 

 

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1reduction in the property's equalized assessed value, as
2calculated under subsection (c).
3    (b) A geographic area may be designated as an eligible
4area under this Section only if both of the following
5conditions are met:
6        (1) as of the date on which the ordinance designating
7    the area as an eligible area is adopted:
8            (A) the area is considered a conservation area, a
9        blighted area, or a renewal area under federal, State,
10        or local law;
11            (B) the area encompasses a rehabilitation or
12        redevelopment plan or project adopted under the Urban
13        Renewal Consolidation Act of 1961; or
14            (C) the area is located in an enterprise zone
15        certified under the Illinois Enterprise Zone Act; and
16        (2) designation of the area as an eligible area will
17    materially assist development, redevelopment, or
18    rehabilitation of the area, and that development,
19    redevelopment, or rehabilitation will not go forward
20    without the incentive offered under this Section.
21    (c) The amount of the reduction in assessed value for
22qualified newly constructed homestead property shall be 50% of
23the assessed value of the property in the current taxable
24year, as determined prior to the application of the exemption
25under this Section or any other exemption under this Code. The
26reduction under this Section shall continue for a period of 10

 

 

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1consecutive taxable years or until the property is sold,
2transferred, or conveyed to a subsequent owner, whichever
3occurs first. A sale, transfer, or conveyance to a subsequent
4owner does not include (i) a sale, transfer, or conveyance to
5an immediate family member of the original owner or to a
6beneficiary in the administration of the original owner's
7estate, (ii) a sale, transfer, or conveyance to an owner that
8will continue to use the property as homestead property, or
9(iii) a transfer or conveyance to a revocable trust where the
10transferor is the grantor of the trust.
11    (d) Application for a homestead exemption under this
12Section must be made during the application period in effect
13for the county in which the residence is located. The assessor
14or chief county assessment officer may determine the
15eligibility of residential property to receive the homestead
16exemption by application, visual inspection, questionnaire, or
17other reasonable methods.
18    (e) As used in this Section:
19        "Current taxable year" means the assessment year for
20    which the exemption under this Section is sought.
21        "Newly constructed homestead property" means homestead
22    property, as defined in Section 15-175, containing a
23    single family residence that was originally constructed
24    and ready for occupancy not earlier than one year prior to
25    the first year for which the property receives an
26    exemption under this Section.

 

 

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1        "Qualified county" means a county with more than
2    3,000,000 inhabitants and any other county that elects, by
3    ordinance, to be a qualified county for the purposes of
4    this Section.
 
5    Section 99. Effective date. This Act takes effect upon
6becoming law.