SB1740 EnrolledLRB098 10538 HLH 40776 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 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 (disabled veterans), 15-167 (returning veterans),
215-168 (disabled persons), 15-169 (disabled veterans standard
3homestead), 15-170 (senior citizens), 15-172 (senior citizens
4assessment freeze), 15-175 (general homestead), 15-176
5(alternative general homestead), or 15-177 (long-time
6occupant).
7    "Erroneous exemption principal amount" means the total
8difference between the property taxes actually billed to a
9property index number and the amount of property taxes that
10would have been billed but for the erroneous exemption or
11exemptions amount of property tax principal that would have
12been billed to a property index number but for the erroneous
13homestead exemption or exemptions a taxpayer received.
14    "Taxpayer" means the property owner or leasehold owner that
15erroneously received a homestead exemption upon property.
16    (b) Notwithstanding any other provision of law, in counties
17with 3,000,000 or more inhabitants, the chief county assessment
18officer shall include the following information with each
19assessment notice sent in a general assessment year: (1) a list
20of each homestead exemption available under Article 15 of this
21Code and a description of the eligibility criteria for that
22exemption; (2) a list of each homestead exemption applied to
23the property in the current assessment year; (3) information
24regarding penalties and interest that may be incurred under
25this Section if the taxpayer property owner received an
26erroneous homestead exemption in a previous taxable year; and

 

 

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

 

 

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1taxpayer property owner received: (A) one or 2 erroneous
2homestead exemptions for real property, including at least one
3erroneous homestead exemption granted for the property against
4which the lien is sought, during any of the 3 collection
5assessment years immediately prior to the current collection
6assessment year in which the notice of discovery intent to
7record a lien is served; or (B) 3 or more erroneous homestead
8exemptions for real property, including at least one erroneous
9homestead exemption granted for the property against which the
10lien is sought, during any of the 6 collection assessment years
11immediately prior to the current collection assessment year in
12which the notice of discovery intent to record a lien is
13served. Prior to recording the lien against the property, the
14chief county assessment officer shall cause to be served, by
15both regular mail and certified mail, return receipt requested,
16on the person to whom the most recent tax bill was mailed and
17the owner of record, a notice of intent to record a lien
18against the property. The chief county assessment officer shall
19cause the notice of intent to record a lien to be served within
203 years 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 for
24which 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, interest,

 

 

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1penalties, and administrative costs including, but not limited
2to, recording fees described in subsection (f); (3) inform the
3taxpayer that he or she will be served with a notice of intent
4to record a lien within 3 years from the date of service of the
5notice of discovery; and (4) inform the taxpayer that he or she
6may pay the outstanding amount, plus interest, penalties, and
7administrative costs at any time prior to being served with the
8notice of intent to record a lien or within 30 days after the
9notice of intent to record a lien is served.
10    (d) The notice of intent to record a lien described in
11subsection (c) shall: (1) identify, by property index number,
12the property against which the lien is being sought; (2)
13identify each specific homestead exemption that was
14erroneously granted and the year or years in which each
15exemption was granted; (3) set forth the erroneous exemption
16principal amount due and the interest amount and any penalty
17and administrative costs due; (4) inform the taxpayer that he
18or she may request a hearing within 30 days after service and
19may appeal the hearing officer's ruling to the circuit court;
20and (5) inform the taxpayer that he or she may pay the
21erroneous exemption principal amount, plus interest and
22penalties, within 30 days after service; and (6) inform the
23taxpayer that, if the lien is recorded against the property,
24the amount of the lien will be adjusted to include the
25applicable recording fee and that fees for recording a release
26of the lien shall be incurred by the taxpayer. A lien shall not

 

 

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1be filed pursuant to this Section if the taxpayer property
2owner pays the erroneous exemption principal amount, plus
3penalties and interest, within 30 days of service of the notice
4of intent to record a lien.
5    (e) The notice of intent to record a lien shall also
6include a form that the taxpayer property owner may return to
7the chief county assessment officer to request a hearing. The
8taxpayer property owner may request a hearing by returning the
9form within 30 days after service. The hearing shall be held
10within 90 days after the taxpayer property owner is served. The
11chief county assessment officer shall promulgate rules of
12service and procedure for the hearing. The chief county
13assessment officer must generally follow rules of evidence and
14practices that prevail in the county circuit courts, but,
15because of the nature of these proceedings, the chief county
16assessment officer is not bound by those rules in all
17particulars. The chief county assessment officer shall appoint
18a hearing officer to oversee the hearing. The taxpayer property
19owner shall be allowed to present evidence to the hearing
20officer at the hearing. After taking into consideration all the
21relevant testimony and evidence, the hearing officer shall make
22an administrative decision on whether the taxpayer property
23owner was erroneously granted a homestead exemption for the
24taxable assessment year in question. The taxpayer property
25owner may appeal the hearing officer's ruling to the circuit
26court of the county where the property is located as a final

 

 

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1administrative decision under the Administrative Review Law.
2    (f) A lien against the property imposed under this Section
3shall be filed with the county recorder of deeds, but may not
4be filed sooner than 60 days after the notice of intent to
5record a lien was delivered to the taxpayer property owner if
6the taxpayer property owner does not request a hearing, or
7until the conclusion of the hearing and all appeals if the
8taxpayer property owner does request a hearing. If a lien is
9filed pursuant to this Section and the taxpayer property owner
10received one or 2 erroneous homestead exemptions during any of
11the 3 collection assessment years immediately prior to the
12current collection assessment year in which the notice of
13discovery intent to record a lien is served, then the erroneous
14exemption principal amount, plus 10% interest per annum or
15portion thereof from the date the erroneous exemption principal
16amount would have become due if properly included in the tax
17bill, shall be charged against the property by the chief county
18assessment officer. However, if a lien is filed pursuant to
19this Section and the taxpayer property owner received 3 or more
20erroneous homestead exemptions during any of the 6 collection
21assessment years immediately prior to the current collection
22assessment year in which the notice of discovery intent to
23record a lien is served, the erroneous exemption principal
24amount, plus a penalty of 50% of the total amount of the
25erroneous exemption principal amount for that property and 10%
26interest per annum or portion thereof from the date the

 

 

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1erroneous exemption principal amount would have become due if
2properly included in the tax bill, shall be charged against the
3property by the chief county assessment officer. If a lien is
4filed pursuant to this Section, the taxpayer shall not be
5liable for interest that accrues between the date the notice of
6discovery is served and the date the lien is filed. Before
7recording the lien with the county recorder of deeds, the chief
8county assessment officer shall adjust the amount of the lien
9to add administrative costs, including but not limited to the
10applicable recording fee, to the total lien amount.
11    (g) If a person received an erroneous homestead exemption
12under Section 15-170 and: (1) the person was the spouse, child,
13grandchild, brother, sister, niece, or nephew of the previous
14taxpayer property owner; and (2) the person received the
15property by bequest or inheritance; then the person is not
16liable for the penalties imposed under this Section for any
17year or years during which the chief county assessment officer
18did not require an annual application for the exemption.
19However, that person is responsible for any interest owed under
20subsection (f).
21    (h) If the erroneous homestead exemption was granted as a
22result of a clerical error or omission on the part of the chief
23county assessment officer, and if the taxpayer property owner
24has paid the tax bills as received for the year in which the
25error occurred, then the interest and penalties authorized by
26this Section with respect to that homestead exemption shall not

 

 

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1be chargeable to the taxpayer property owner. However, nothing
2in this Section shall prevent the collection of the erroneous
3exemption principal amount due and owing.
4    (i) A lien under this Section is not valid as to (1) any
5bona fide purchaser for value without notice of the erroneous
6homestead exemption whose rights in and to the underlying
7parcel arose after the erroneous homestead exemption was
8granted but before the filing of the notice of lien; or (2) any
9mortgagee, judgment creditor, or other lienor whose rights in
10and to the underlying parcel arose before the filing of the
11notice of lien. A title insurance policy for the property that
12is issued by a title company licensed to do business in the
13State showing that the property is free and clear of any liens
14imposed under this Section shall be prima facie evidence that
15the taxpayer property owner is without notice of the erroneous
16homestead exemption. Nothing in this Section shall be deemed to
17impair the rights of subsequent creditors and subsequent
18purchasers under Section 30 of the Conveyances Act.
19    (j) When a lien is filed against the property pursuant to
20this Section, the chief county assessment officer shall mail a
21copy of the lien to the person to whom the most recent tax bill
22was mailed and to the owner of record, and the outstanding
23liability created by such a lien is due and payable within 30
24days after the mailing of the lien by the chief county
25assessment officer. This liability is deemed delinquent and
26shall bear interest beginning on the day after the due date at

 

 

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1a rate of 1.5% per month or portion thereof. Payment shall be
2made to the county treasurer. Upon receipt of the full amount
3due, as determined by the chief county assessment officer, the
4county treasurer shall distribute the amount paid as provided
5in subsection (k). Upon presentment by the taxpayer property
6owner to the chief county assessment officer of proof of
7payment of the total liability, the chief county assessment
8officer shall provide in reasonable form a release of the lien.
9The release of the lien provided shall clearly inform the
10taxpayer that it is the responsibility of the taxpayer to
11record the lien release form with the county recorder of deeds
12and to pay any applicable recording fees. This liability is
13deemed delinquent and shall bear interest beginning on the day
14after the due date at a rate of 1.5% per month or portion
15thereof.
16    (k) The county treasurer shall pay collected erroneous
17exemption principal amounts, pro rata, to the taxing districts,
18or their legal successors, that levied upon the subject
19property in the taxable assessment year or years for which the
20erroneous homestead exemptions were granted, except as set
21forth in this Section. The county treasurer shall pay collected
22interest to the county where the property is located. The
23county treasurer shall deposit collected penalties and
24interest into a special fund established by the county
25treasurer to offset the costs of administration of the
26provisions of this Section amendatory Act of the 98th General

 

 

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1Assembly by the chief county assessment officer's office, as
2appropriated by the county board. If the costs of
3administration of this Section exceed the amount of interest
4and penalties collected in the special fund, the chief county
5assessor shall be reimbursed by each taxing district or their
6legal successors for those costs. Such costs shall be paid out
7of the funds collected by the county treasurer on behalf of
8each taxing district pursuant to this Section.
9    (l) The chief county assessment officer in a county with
103,000,000 or more inhabitants shall establish an amnesty period
11for all taxpayers owing any tax due to an erroneous homestead
12exemption granted in a tax year prior to the 2013 tax year. The
13amnesty period shall begin on the effective date of this
14amendatory Act of the 98th General Assembly and shall run
15through December 31, 2013. If, during the amnesty period, the
16taxpayer pays the entire arrearage of taxes due for tax years
17prior to 2013, the county clerk shall abate and not seek to
18collect any interest or penalties that may be applicable and
19shall not seek civil or criminal prosecution for any taxpayer
20for tax years prior to 2013. Failure to pay all such taxes due
21during the amnesty period established under this Section shall
22invalidate the amnesty period for that taxpayer.
23    The chief county assessment officer in a county with
243,000,000 or more inhabitants shall (i) mail notice of the
25amnesty period with the tax bills for the second installment of
26taxes for the 2012 assessment year and (ii) as soon as possible

 

 

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1after the effective date of this amendatory Act of the 98th
2General Assembly, publish notice of the amnesty period in a
3newspaper of general circulation in the county. Notices shall
4include information on the amnesty period, its purpose, and the
5method by which to make payment.
6    Taxpayers who are a party to any criminal investigation or
7to any civil or criminal litigation that is pending in any
8circuit court or appellate court, or in the Supreme Court of
9this State, for nonpayment, delinquency, or fraud in relation
10to any property tax imposed by any taxing district located in
11the State on the effective date of this amendatory Act of the
1298th General Assembly may not take advantage of the amnesty
13period.
14    A taxpayer who has claimed 3 or more homestead exemptions
15in error shall not be eligible for the amnesty period
16established under this subsection.
17(Source: P.A. 98-93, eff. 7-16-13; 98-756, eff. 7-16-14;
1898-811, eff. 1-1-15.)
 
19    Section 99. Effective date. This Act takes effect January
201, 2015.