103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB2020

 

Introduced 2/9/2023, by Sen. Ram Villivalam

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 200/21-240
35 ILCS 200/21-310
35 ILCS 200/21-330
35 ILCS 200/22-35
35 ILCS 200/22-50

    Amends the Property Tax Code. Makes various changes concerning sales in error. In provisions allowing a sale in error if the assessor, chief county assessment officer, board of review, board of appeals, or other county official has made an error, provides that the error must be material to the tax sale at issue and may not be an error in the description of the physical characteristics, location, or picture of the property. Removes provisions allowing a sale in error when a bankruptcy petition has been filed after the tax sale and before the issuance of the tax deed. Provides that, if the bankruptcy petition is filed prior to the tax sale, then a sale in error is allowed if the property is subject to an automatic stay and the stay is active on the date of the date of that sale. Provides that the $100 fee paid by a tax purchaser for a certificate of purchase is non-refundable. Makes other changes.


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A BILL FOR

 

SB2020LRB103 29196 HLH 55583 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
5Sections 21-240, 21-310, 21-330, 22-35, and 22-50 as follows:
 
6    (35 ILCS 200/21-240)
7    Sec. 21-240. Payment for property purchased at tax sale;
8reoffering for sale. Except as otherwise provided below, the
9person purchasing any property, or any part thereof, shall be
10liable to the county for the amount due and shall forthwith pay
11to the county collector the amount charged on the property.
12Upon failure to do so, the amount due shall be recoverable in a
13civil action brought in the name of the People of the State of
14Illinois in any court of competent jurisdiction. The person so
15purchasing shall be relieved of liability only by payment of
16the amount due together with interest and costs thereon, or if
17the property is reoffered at the sale, purchased and paid for.
18Reoffering of the property for sale shall be at the discretion
19of the collector. The sale shall not be closed until payment is
20made or the property again offered for sale. In counties with
213,000,000 or more inhabitants, only the taxes, special
22assessments, interest and costs as advertised in the sale
23shall be required to be paid forthwith. The general taxes

 

 

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1charged on the land remaining due and unpaid, including
2amounts subject to certificates of error, not included in the
3advertisement, shall be paid by the purchaser within 10 days
4after the sale, except that upon payment of the fee provided by
5law to the County Clerk (which fee shall be deemed part of the
6costs of sale) the purchaser may make written application,
7within the 10 day period, to the county clerk for a statement
8of all taxes, interest and costs due and an estimate of the
9cost of redemption of all forfeited general taxes, which were
10not included in the advertisement. After obtaining such
11statement and estimate and an order on the county collector to
12receive the amount of forfeited general taxes, if any, the
13purchaser shall pay to the county collector all the remaining
14taxes, interest and costs, and the amount necessary to redeem
15the forfeited general taxes. The county collector shall issue
16the purchaser a receipt therefor. Any delay in providing the
17statement or in accepting payment, and delivering receipt
18therefor, shall not be counted as a part of the 10 days. When
19the receipt of the collector is issued, a copy shall be filed
20with the county clerk and the county clerk shall include the
21amount shown in such receipt in the amount of the purchase
22price of the property in the certificate of purchase. The
23purchaser then shall be entitled to a certificate of purchase.
24If a purchaser fails to complete his or her purchase as
25provided in this Section, the purchase shall become void, and
26be of no effect, but the collector shall not refund the amount

 

 

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1paid in cash at the time of the sale, except in cases of sale
2in error under subsection (a) of Section 21-310. That amount
3shall be treated as a payment and distributed to the taxing
4bodies as other collections are distributed. The lien for
5taxes for the amount paid shall remain on the property, in
6favor of the purchaser, his or her heirs or assigns, until paid
7with 5% interest per year on that amount from the date the
8purchaser paid it. The amount and fact of such ineffective
9purchase shall be entered in the tax judgment, sale,
10redemption and forfeiture record opposite the property upon
11which the lien remains. No redemption shall be made without
12payment of this amount for the benefit of the purchaser, and no
13future sale of the property shall be made except subject to the
14lien of such purchaser. This section shall not apply to any
15purchase by any city, village or incorporated town in default
16of other bidders at any sale for delinquent special
17assessments.
18(Source: P.A. 84-1308; 88-455.)
 
19    (35 ILCS 200/21-310)
20    Sec. 21-310. Sales in error.
21    (a) When, upon application of the county collector, the
22owner of the certificate of purchase, or a municipality which
23owns or has owned the property ordered sold, it appears to the
24satisfaction of the court which ordered the property sold that
25any of the following subsections are applicable, the court

 

 

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1shall declare the sale to be a sale in error:
2        (1) the property was not subject to taxation, or all
3    or any part of the lien of taxes sold has become null and
4    void pursuant to Section 21-95 or unenforceable pursuant
5    to subsection (c) of Section 18-250 or subsection (b) of
6    Section 22-40; ,
7        (2) the taxes or special assessments had been paid
8    prior to the sale of the property; ,
9        (3) there is a double assessment; ,
10        (4) the description is void for uncertainty; ,
11        (5) the assessor, chief county assessment officer,
12    board of review, board of appeals, or other county
13    official has made an error material to the tax sale at
14    issue (other than an error of judgment as to the value of
15    any property or an error in the description of the
16    physical characteristics, location, or picture of the
17    property); ,
18        (5.5) the owner of the homestead property had tendered
19    timely and full payment to the county collector that the
20    owner reasonably believed was due and owing on the
21    homestead property, and the county collector did not apply
22    the payment to the homestead property; provided that this
23    provision applies only to homeowners, not their agents or
24    third-party payors; ,
25        (6) prior to the tax sale a voluntary or involuntary
26    petition has been filed by or against the legal or

 

 

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1    beneficial owner of the property requesting relief under
2    the provisions of 11 U.S.C. Chapter 7, 11, 12, or 13, the
3    property is subject to an automatic stay pursuant to that
4    petition, and that stay is active on the date of the date
5    of that sale;
6        (7) the property is owned by the United States, the
7    State of Illinois, a municipality, or a taxing district; ,
8    or
9        (8) the owner of the property is a reservist or
10    guardsperson who is granted an extension of his or her due
11    date under Sections 21-15, 21-20, and 21-25 of this Act.
12    (b) When, upon application of the owner of the certificate
13of purchase only, it appears to the satisfaction of the court
14which ordered the property sold that any of the following
15subsections are applicable, the court shall declare the sale
16to be a sale in error:
17        (1) (Blank). A voluntary or involuntary petition under
18    the provisions of 11 U.S.C. Chapter 7, 11, 12, or 13 has
19    been filed subsequent to the tax sale and prior to the
20    issuance of the tax deed.
21        (2) The improvements upon the property sold have been
22    substantially destroyed or rendered uninhabitable or
23    otherwise unfit for occupancy subsequent to the tax sale
24    and prior to the issuance of the tax deed; however, if the
25    court declares a sale in error under this paragraph (2),
26    the court may order the holder of the certificate of

 

 

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1    purchase to assign the certificate to the county collector
2    if requested by the county collector. The county collector
3    may, upon request of the county, as trustee, or upon
4    request of a taxing district having an interest in the
5    taxes sold, further assign any certificate of purchase
6    received pursuant to this paragraph (2) to the county
7    acting as trustee for taxing districts pursuant to Section
8    21-90 of this Code or to the taxing district having an
9    interest in the taxes sold.
10        (3) There is an interest held by the United States in
11    the property sold which could not be extinguished by the
12    tax deed.
13        (4) The real property contains a hazardous substance,
14    hazardous waste, or underground storage tank that would
15    require cleanup or other removal under any federal, State,
16    or local law, ordinance, or regulation, only if the tax
17    purchaser purchased the property without actual knowledge
18    of the hazardous substance, hazardous waste, or
19    underground storage tank. This paragraph (4) applies only
20    if the owner of the certificate of purchase has made
21    application for a sale in error at any time before the
22    issuance of a tax deed. If the court declares a sale in
23    error under this paragraph (4), the court may order the
24    holder of the certificate of purchase to assign the
25    certificate to the county collector if requested by the
26    county collector. The county collector may, upon request

 

 

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1    of the county, as trustee, or upon request of a taxing
2    district having an interest in the taxes sold, further
3    assign any certificate of purchase received pursuant to
4    this paragraph (4) to the county acting as trustee for
5    taxing districts pursuant to Section 21-90 of this Code or
6    to the taxing district having an interest in the taxes
7    sold.
8    Whenever a court declares a sale in error under this
9subsection (b), the court shall promptly notify the county
10collector in writing. Every such declaration pursuant to any
11provision of this subsection (b) shall be made within the
12proceeding in which the tax sale was authorized.
13    (c) When the county collector discovers, prior to the
14expiration of the period of redemption, that a tax sale should
15not have occurred for one or more of the reasons set forth in
16subdivision (a)(1), (a)(2), (a)(6), or (a)(7) of this Section,
17the county collector shall notify the last known owner of the
18certificate of purchase by certified and regular mail, or
19other means reasonably calculated to provide actual notice,
20that the county collector intends to declare an administrative
21sale in error and of the reasons therefor, including
22documentation sufficient to establish the reason why the sale
23should not have occurred. The owner of the certificate of
24purchase may object in writing within 28 days after the date of
25the mailing by the county collector. If an objection is filed,
26the county collector shall not administratively declare a sale

 

 

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1in error, but may apply to the circuit court for a sale in
2error as provided in subsection (a) of this Section. Thirty
3days following the receipt of notice by the last known owner of
4the certificate of purchase, or within a reasonable time
5thereafter, the county collector shall make a written
6declaration, based upon clear and convincing evidence, that
7the taxes were sold in error and shall deliver a copy thereof
8to the county clerk within 30 days after the date the
9declaration is made for entry in the tax judgment, sale,
10redemption, and forfeiture record pursuant to subsection (d)
11of this Section. The county collector shall promptly notify
12the last known owner of the certificate of purchase of the
13declaration by regular mail and shall promptly pay the amount
14of the tax sale, together with interest and costs as provided
15in Section 21-315, upon surrender of the original certificate
16of purchase.
17    (d) If a sale is declared to be a sale in error, the county
18clerk shall make entry in the tax judgment, sale, redemption
19and forfeiture record, that the property was erroneously sold,
20and the county collector shall, on demand of the owner of the
21certificate of purchase, refund the amount paid, except for
22the nonrefundable $80 fee paid, pursuant to Section 21-295,
23for each item purchased at the tax sale, pay any interest and
24costs as may be ordered under Sections 21-315 through 21-335,
25and cancel the certificate so far as it relates to the
26property. The county collector shall deduct from the accounts

 

 

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1of the appropriate taxing bodies their pro rata amounts paid.
2Alternatively, for sales in error declared under subsection
3(b)(2) or (b)(4), the county collector may request the circuit
4court to direct the county clerk to record any assignment of
5the tax certificate to or from the county collector without
6charging a fee for the assignment. The owner of the
7certificate of purchase shall receive all statutory refunds
8and payments. The county collector shall deduct costs and
9payments in the same manner as if a sale in error had occurred.
10(Source: P.A. 100-890, eff. 1-1-19; 101-379, eff. 1-1-20;
11101-659, eff. 3-23-21.)
 
12    (35 ILCS 200/21-330)
13    Sec. 21-330. Fund for payment of interest. In all counties
14of less than 3,000,000 inhabitants, the county board, by
15resolution, may impose a fee for payment of interest and
16costs. Each person purchasing any property at a sale under
17this Code shall pay to the county collector, prior to the
18issuance of any certificate of purchase, a fee of up to $60 for
19each item purchased. Each person purchasing any property at a
20sale held under this Code in a county with 3,000,000 or more
21inhabitants shall pay to the county collector, prior to the
22issuance of any certificate of purchase, a nonrefundable fee
23of $100 for each item purchased. That amount shall be included
24in the price paid for the certificate of purchase and the
25amount required to redeem under Section 21-355.

 

 

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1    All sums of money received under this Section shall be
2paid by the collector to the county treasurer of the county in
3which the property is situated for deposit into a special
4fund. It shall be the duty of the county treasurer, as trustee
5of the fund, to invest the principal and income of the fund
6from time to time, if not immediately required for payments
7under this Section, in investments as are authorized by
8Sections 3-10009 and 3-11002 of the Counties Code. The fund
9shall be held to pay interest and costs by the county treasurer
10as trustee of the fund. No payment shall be made from the fund
11except by order of the court declaring a sale in error under
12Section 21-310, 22-35, or 22-50 or by declaration of the
13county collector under subsection (c) of Section 21-310. Any
14moneys accumulated in the fund by the county treasurer in
15excess of (i) $100,000 in counties with 250,000 or less
16inhabitants or (ii) $500,000 in counties with more than
17250,000 inhabitants shall be paid each year prior to the
18commencement of the annual tax sale, first to satisfy any
19existing unpaid judgments entered pursuant to Section 21-295,
20and any funds remaining thereafter shall be paid to the
21general fund of the county.
22(Source: P.A. 100-1070, eff. 1-1-19.)
 
23    (35 ILCS 200/22-35)
24    Sec. 22-35. Reimbursement of a county or municipality
25before issuance of tax deed. Except in any proceeding in which

 

 

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1the tax purchaser is a county acting as a trustee for taxing
2districts as provided in Section 21-90, an order for the
3issuance of a tax deed under this Code shall not be entered
4affecting the title to or interest in any property in which a
5county, city, village or incorporated town has an interest
6under the police and welfare power by advancements made from
7public funds, until the purchaser or assignee makes
8reimbursement to the county, city, village or incorporated
9town of the money so advanced or the county, city, village, or
10town waives its lien on the property for the money so advanced.
11However, in lieu of reimbursement or waiver, the purchaser or
12his or her assignee may make application for and the court
13shall order that the tax purchase be set aside as a sale in
14error, except in cases where the tax purchaser holds a lien
15that shall remain on the property until paid with 5% interest
16per year as provided in Section 21-240. A sale in error may not
17be granted under this Section if the lien has been released,
18satisfied, discharged, or waived. A filing or appearance fee
19shall not be required of a county, city, village or
20incorporated town seeking to enforce its claim under this
21Section in a tax deed proceeding.
22(Source: P.A. 101-379, eff. 1-1-20.)
 
23    (35 ILCS 200/22-50)
24    Sec. 22-50. Denial of deed. If the court refuses to enter
25an order directing the county clerk to execute and deliver the

 

 

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1tax deed, because of the failure of the purchaser to fulfill
2any of the above provisions, and if the purchaser, or his or
3her assignee has made a bona fide attempt to comply with the
4statutory requirements for the issuance of the tax deed, then
5upon application of the owner of the certificate of purchase
6the court shall declare the sale to be a sale in error, unless
7the purchaser failed to comply with any of the above
8provisions for obtaining a tax deed because the purchaser made
9a reasonably avoidable error.
10(Source: P.A. 92-224, eff. 1-1-02.)