SB0202 103RD GENERAL ASSEMBLY

LRB103 26070 HLH 52425 b

103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB0202

Introduced 1/31/2023, by Sen. Laura M. Murphy

SYNOPSIS AS INTRODUCED:

New Act

Creates the Vacancy Fraud Act. Provides that, on or after January 1, 2024, any owner of real property located in a county with 3,000,000 or more inhabitants may file a written vacancy fraud complaint alleging that: (i) certain real property in that county has received a decrease in assessed value, a decrease in market value, or an abatement of taxes because the property is vacant; and (ii) the owner of that vacant property is not actively attempting to sell or lease the property or actively attempting to alter or modify the property to prepare it for sale or lease. Sets forth factors for determining vacancy fraud. Provides that the owner of the vacant property may be subject to the following penalties: (1) the payment of 3 times the amount of back taxes owed for any vacancy reduction the subject property received for the period in which the subject property received the reduction but was found to have engaged vacancy fraud; and (2) the payment of interest on any back taxes. Effective immediately.

A BILL FOR

AN ACT concerning revenue.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Vacancy Fraud Act.

Section 5. Public policy. Certain commercial properties in Cook County receive a vacancy reduction because they are partly or completely vacant. In order to revitalize struggling commercial corridors and foster economic development in Cook County commercial corridors, it is imperative that owners of commercial properties that receive a vacancy reduction attempt to lease or sell those properties or make the alterations or modifications necessary to lease or sell those properties.

The General Assembly finds that it is against public policy for commercial property owners to receive a vacancy reduction without attempting to lease or sell those properties or make the modifications or alterations necessary to lease or sell those properties because it burdens homeowners and actively operating businesses, lessens the taxing districts' tax bases, and causes blight in commercial corridors.

Section 10. Definitions. As used in this Act:

"Subject property" means real property located in a county with 3,000,000 or more inhabitants, or a portion of that property, that is designated or zoned for commercial or business use and receives a vacancy reduction. With respect to real property that is zoned or designated as mixed-use property, this Act applies only to that portion designated or zoned for commercial or business use.

"Vacancy reduction" means a decrease in assessed value, a decrease in market value, or an abatement of taxes by the chief county assessment officer, a board of review, a county, or a taxing district, which is permitted by ordinance, resolution, or policy granting such a decrease in assessed value to property that is vacant.

Section 15. Vacancy fraud complaints.

(a) The board of review in a county with 3,000,000 or more inhabitants is authorized to hear vacancy fraud complaints brought no more than 5 years after the vacancy fraud occurred. No vacancy fraud complaints may be brought for vacancy reductions that were granted prior to the effective date of this Act. If there is no actively installed or operating board of review, the chief county assessment officer is authorized to designate a department or official to hear those complaints. If the chief county assessment officer designates a department or official to hear complaints because there is no actively installed or operating board of review, then references to the board of review in this Act shall mean the designated department or official.

(b) Beginning on January 1, 2024, any owner of real property located in a county with 3,000,000 or more inhabitants may file a written vacancy fraud complaint with the appropriately designated board of review within the applicable filing period set forth in subsection (a) alleging that the subject property has received a vacancy reduction and that the owner of the subject property is not actively attempting to lease, sell, alter, or modify the property to prepare it for sale or lease. The board of review shall determine the process by which a vacancy fraud complaint may be filed.

(c) Only one vacancy fraud complaint shall be considered and heard by the board of review for each instance a property received a vacancy reduction. The decision of the board of review shall be binding on future complaints based on the same vacancy fraud reduction in the same year. If more than one vacancy fraud complaint is pending concurrently, those complaints shall be consolidated.

(d) The party alleging vacancy fraud shall file the appropriate notice and documents, as prescribed by the board of review, in the manner determined by the board of review. Vacancy fraud complaints may be filed by the party alleging vacancy fraud or an attorney acting on that party's behalf.

(e) Upon receipt of a written complaint that is timely filed, the board of review shall process the complaint and provide the appropriate notice to the property that is the subject of the complaint. The board of review that will hear the vacancy fraud complaint shall establish the process by which notice shall be provided and by which complaints shall be heard.

Section 20. Factors in determining vacancy fraud.

(a) In determining whether the owner of a subject property is actively attempting to sell or lease the subject property or actively attempting to modify or alter the subject property for sale or lease, the board may consider the following factors:

(1) whether there is a sign on the subject property advertising that it is for sale or for lease;

(2) whether the subject property is advertised for sale or for lease in a newspaper of general circulation where the property is located;

(3) whether the subject property is advertised for sale or for lease on the internet, and whether potential buyers or tenants are reasonably able to access the internet listing;

(4) whether the owner of the subject property has contracted for the services of an Illinois licensed real estate professional for the purpose of selling or leasing the subject property;

(5) whether any advertised sale price or advertised rental price for the subject property is excessive;

(6) whether a contract for sale or lease of the subject property is pending;

(7) whether the subject property is subsequently sold or leased and the amount of time that passed from the original vacancy until the sale or lease date;

(8) whether the owner has applied for and received demolition or construction permits for the subject property;

(9) whether the owner has responded to inquiries to lease or sell the property;

(10) whether the property has been altered or modified for the purpose of leasing or selling the property;

(11) whether the property owner has attempted to lease, sell, or alter or modify the subject property but has not been able to proceed because of the inability to obtain permits or because court proceedings involving prior renters have precluded such action; and

(12) any other factors the board deems necessary to determine if the owner of the subject property is actively attempting to lease or sell the subject property or actively attempting to modify or alter the subject property for sale or lease.

(b) For purposes of paragraphs (1), (2), and (3) of subsection (a), any signs, newspaper advertisements, or internet advertisements shall contain valid contact information for the owner or agent of the property. If the contact information does not connect potential tenants or buyers to a person who can facilitate the purchase or lease of the subject property, or if the owner or agent does not respond to the inquiry within 30 days, the signs, newspaper advertisements, or internet advertisements may be disregarded in the determination of whether a property owner was actively attempting to sell or lease the subject property or actively attempting to modify or alter the subject property for sale or lease.

Section 25. Penalties.

(a) Before assessing any penalties under this Act, the board of review shall give notice of the complaint to the chief county assessment officer who certified the vacancy relief and give the chief county assessment officer an opportunity to be heard on the matter.

(b) Upon determining that an owner of a subject property is not actively attempting to sell or lease the subject property, or actively attempting to alter or modify the subject property for sale or lease, the board of review may direct the chief county assessment officer to do any of the following:

(1) require from the owner of the subject property the payment of up to 3 times the amount of back taxes owed for any vacancy reduction the subject property received for the period in which the subject property received the reduction but was found to have engaged in vacancy fraud as defined in this Act; and

(2) require from the owner of the subject property the payment of interest of up to 10% per annum on any back taxes sought under paragraph (1).

(c) The unpaid taxes shall be paid to the appropriate taxing districts in the manner provided for the payment of property taxes under the Property Tax Code and allocated to fund the implementation of this Act. Interest and penalties shall be paid to the chief county assessment officer's office to cover the costs associated with educating the public on the provisions of this Act.

(d) No penalties shall be assessed until the person to be affected has been notified and given an opportunity to be heard.

Section 99. Effective date. This Act takes effect upon becoming law.