SB2427 EngrossedLRB099 15844 HLH 42102 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 9-275 and 15-175 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. "Erroneous homestead exemption" does not mean an
23exemption granted under Section 15-175 of this Code for which

 

 

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1the taxpayer provided notice to the chief county assessment
2officer, as required by Section 15-175, that the property owner
3did not occupy the property as a principal residence on January
41 of the current tax year.
5    "Homestead exemption" means an exemption under Section
615-165 (veterans with disabilities), 15-167 (returning
7veterans), 15-168 (persons with disabilities), 15-169
8(standard homestead for veterans with disabilities), 15-170
9(senior citizens), 15-172 (senior citizens assessment freeze),
1015-175 (general homestead), 15-176 (alternative general
11homestead), or 15-177 (long-time occupant).
12    "Erroneous exemption principal amount" means the total
13difference between the property taxes actually billed to a
14property index number and the amount of property taxes that
15would have been billed but for the erroneous exemption or
16exemptions.
17    "Taxpayer" means the property owner or leasehold owner that
18erroneously received a homestead exemption upon property.
19    (b) Notwithstanding any other provision of law, in counties
20with 3,000,000 or more inhabitants, the chief county assessment
21officer shall include the following information with each
22assessment notice sent in a general assessment year: (1) a list
23of each homestead exemption available under Article 15 of this
24Code and a description of the eligibility criteria for that
25exemption; (2) a list of each homestead exemption applied to
26the property in the current assessment year; (3) information

 

 

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

 

 

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1upon determination of the chief county assessment officer, the
2taxpayer received: (A) one or 2 erroneous homestead exemptions
3for real property, including at least one erroneous homestead
4exemption granted for the property against which the lien is
5sought, during any of the 3 collection years immediately prior
6to the current collection year in which the notice of discovery
7is served; or (B) 3 or more erroneous homestead exemptions for
8real property, including at least one erroneous homestead
9exemption granted for the property against which the lien is
10sought, during any of the 6 collection years immediately prior
11to the current collection year in which the notice of discovery
12is served. Prior to recording the lien against the property,
13the chief county assessment officer shall cause to be served,
14by both regular mail and certified mail, return receipt
15requested, on the person to whom the most recent tax bill was
16mailed and the owner of record, a notice of intent to record a
17lien against the property. The chief county assessment officer
18shall cause the notice of intent to record a lien to be served
19within 3 years from the date on which the notice of discovery
20was served.
21    (c-5) The notice of discovery described in subsection (c)
22shall: (1) identify, by property index number, the property for
23which the chief county assessment officer has knowledge
24indicating the existence of an erroneous homestead exemption;
25(2) set forth the taxpayer's liability for principal, interest,
26penalties, and administrative costs including, but not limited

 

 

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

 

 

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

 

 

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

 

 

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1lien is filed. Before recording the lien with the county
2recorder of deeds, the chief county assessment officer shall
3adjust the amount of the lien to add administrative costs,
4including but not limited to the applicable recording fee, to
5the total lien amount.
6    (g) If a person received an erroneous homestead exemption
7under Section 15-170 and: (1) the person was the spouse, child,
8grandchild, brother, sister, niece, or nephew of the previous
9taxpayer; and (2) the person received the property by bequest
10or inheritance; then the person is not liable for the penalties
11imposed under this Section for any year or years during which
12the chief county assessment officer did not require an annual
13application for the exemption. However, that person is
14responsible for any interest owed under subsection (f).
15    (h) If the erroneous homestead exemption was granted as a
16result of a clerical error or omission on the part of the chief
17county assessment officer, and if the taxpayer has paid the tax
18bills as received for the year in which the error occurred,
19then the interest and penalties authorized by this Section with
20respect to that homestead exemption shall not be chargeable to
21the taxpayer. However, nothing in this Section shall prevent
22the collection of the erroneous exemption principal amount due
23and owing.
24    (i) A lien under this Section is not valid as to (1) any
25bona fide purchaser for value without notice of the erroneous
26homestead exemption whose rights in and to the underlying

 

 

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1parcel arose after the erroneous homestead exemption was
2granted but before the filing of the notice of lien; or (2) any
3mortgagee, judgment creditor, or other lienor whose rights in
4and to the underlying parcel arose before the filing of the
5notice of lien. A title insurance policy for the property that
6is issued by a title company licensed to do business in the
7State showing that the property is free and clear of any liens
8imposed under this Section shall be prima facie evidence that
9the taxpayer is without notice of the erroneous homestead
10exemption. Nothing in this Section shall be deemed to impair
11the rights of subsequent creditors and subsequent purchasers
12under Section 30 of the Conveyances Act.
13    (j) When a lien is filed against the property pursuant to
14this Section, the chief county assessment officer shall mail a
15copy of the lien to the person to whom the most recent tax bill
16was mailed and to the owner of record, and the outstanding
17liability created by such a lien is due and payable within 30
18days after the mailing of the lien by the chief county
19assessment officer. This liability is deemed delinquent and
20shall bear interest beginning on the day after the due date at
21a rate of 1.5% per month or portion thereof. Payment shall be
22made to the county treasurer. Upon receipt of the full amount
23due, as determined by the chief county assessment officer, the
24county treasurer shall distribute the amount paid as provided
25in subsection (k). Upon presentment by the taxpayer to the
26chief county assessment officer of proof of payment of the

 

 

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1total liability, the chief county assessment officer shall
2provide in reasonable form a release of the lien. The release
3of the lien provided shall clearly inform the taxpayer that it
4is the responsibility of the taxpayer to record the lien
5release form with the county recorder of deeds and to pay any
6applicable recording fees.
7    (k) The county treasurer shall pay collected erroneous
8exemption principal amounts, pro rata, to the taxing districts,
9or their legal successors, that levied upon the subject
10property in the taxable year or years for which the erroneous
11homestead exemptions were granted, except as set forth in this
12Section. The county treasurer shall deposit collected
13penalties and interest into a special fund established by the
14county treasurer to offset the costs of administration of the
15provisions of this Section by the chief county assessment
16officer's office, as appropriated by the county board. If the
17costs of administration of this Section exceed the amount of
18interest and penalties collected in the special fund, the chief
19county assessor shall be reimbursed by each taxing district or
20their legal successors for those costs. Such costs shall be
21paid out of the funds collected by the county treasurer on
22behalf of each taxing district pursuant to this Section.
23    (l) The chief county assessment officer in a county with
243,000,000 or more inhabitants shall establish an amnesty period
25for all taxpayers owing any tax due to an erroneous homestead
26exemption granted in a tax year prior to the 2013 tax year. The

 

 

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1amnesty period shall begin on the effective date of this
2amendatory Act of the 98th General Assembly and shall run
3through December 31, 2013. If, during the amnesty period, the
4taxpayer pays the entire arrearage of taxes due for tax years
5prior to 2013, the county clerk shall abate and not seek to
6collect any interest or penalties that may be applicable and
7shall not seek civil or criminal prosecution for any taxpayer
8for tax years prior to 2013. Failure to pay all such taxes due
9during the amnesty period established under this Section shall
10invalidate the amnesty period for that taxpayer.
11    The chief county assessment officer in a county with
123,000,000 or more inhabitants shall (i) mail notice of the
13amnesty period with the tax bills for the second installment of
14taxes for the 2012 assessment year and (ii) as soon as possible
15after the effective date of this amendatory Act of the 98th
16General Assembly, publish notice of the amnesty period in a
17newspaper of general circulation in the county. Notices shall
18include information on the amnesty period, its purpose, and the
19method by which to make payment.
20    Taxpayers who are a party to any criminal investigation or
21to any civil or criminal litigation that is pending in any
22circuit court or appellate court, or in the Supreme Court of
23this State, for nonpayment, delinquency, or fraud in relation
24to any property tax imposed by any taxing district located in
25the State on the effective date of this amendatory Act of the
2698th General Assembly may not take advantage of the amnesty

 

 

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1period.
2    A taxpayer who has claimed 3 or more homestead exemptions
3in error shall not be eligible for the amnesty period
4established under this subsection.
5(Source: P.A. 98-93, eff. 7-16-13; 98-756, eff. 7-16-14;
698-811, eff. 1-1-15; 98-1143, eff. 1-1-15; 99-143, eff.
77-27-15.)
 
8    (35 ILCS 200/15-175)
9    Sec. 15-175. General homestead exemption.
10    (a) Except as provided in Sections 15-176 and 15-177,
11homestead property is entitled to an annual homestead exemption
12limited, except as described here with relation to
13cooperatives, to a reduction in the equalized assessed value of
14homestead property equal to the increase in equalized assessed
15value for the current assessment year above the equalized
16assessed value of the property for 1977, up to the maximum
17reduction set forth below. If however, the 1977 equalized
18assessed value upon which taxes were paid is subsequently
19determined by local assessing officials, the Property Tax
20Appeal Board, or a court to have been excessive, the equalized
21assessed value which should have been placed on the property
22for 1977 shall be used to determine the amount of the
23exemption.
24    (b) Except as provided in Section 15-176, the maximum
25reduction before taxable year 2004 shall be $4,500 in counties

 

 

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1with 3,000,000 or more inhabitants and $3,500 in all other
2counties. Except as provided in Sections 15-176 and 15-177, for
3taxable years 2004 through 2007, the maximum reduction shall be
4$5,000, for taxable year 2008, the maximum reduction is $5,500,
5and, for taxable years 2009 through 2011, the maximum reduction
6is $6,000 in all counties. For taxable years 2012 and
7thereafter, the maximum reduction is $7,000 in counties with
83,000,000 or more inhabitants and $6,000 in all other counties.
9If a county has elected to subject itself to the provisions of
10Section 15-176 as provided in subsection (k) of that Section,
11then, for the first taxable year only after the provisions of
12Section 15-176 no longer apply, for owners who, for the taxable
13year, have not been granted a senior citizens assessment freeze
14homestead exemption under Section 15-172 or a long-time
15occupant homestead exemption under Section 15-177, there shall
16be an additional exemption of $5,000 for owners with a
17household income of $30,000 or less.
18    (c) In counties with fewer than 3,000,000 inhabitants, if,
19based on the most recent assessment, the equalized assessed
20value of the homestead property for the current assessment year
21is greater than the equalized assessed value of the property
22for 1977, the owner of the property shall automatically receive
23the exemption granted under this Section in an amount equal to
24the increase over the 1977 assessment up to the maximum
25reduction set forth in this Section.
26    (d) If in any assessment year beginning with the 2000

 

 

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1assessment year, homestead property has a pro-rata valuation
2under Section 9-180 resulting in an increase in the assessed
3valuation, a reduction in equalized assessed valuation equal to
4the increase in equalized assessed value of the property for
5the year of the pro-rata valuation above the equalized assessed
6value of the property for 1977 shall be applied to the property
7on a proportionate basis for the period the property qualified
8as homestead property during the assessment year. The maximum
9proportionate homestead exemption shall not exceed the maximum
10homestead exemption allowed in the county under this Section
11divided by 365 and multiplied by the number of days the
12property qualified as homestead property.
13    (d-1) In counties with 3,000,000 or more inhabitants, if a
14property is not occupied by its owner as a principal residence
15as of January 1 of the current tax year, then the property
16owner shall notify the chief county assessment officer by April
171 of the current tax year, on a form prescribed by that
18official, that the property was not occupied by the owner as a
19principal residence as of January 1 of the current tax year.
20    (e) The chief county assessment officer may, when
21considering whether to grant a leasehold exemption under this
22Section, require the following conditions to be met:
23        (1) that a notarized application for the exemption,
24    signed by both the owner and the lessee of the property,
25    must be submitted each year during the application period
26    in effect for the county in which the property is located;

 

 

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1        (2) that a copy of the lease must be filed with the
2    chief county assessment officer by the owner of the
3    property at the time the notarized application is
4    submitted;
5        (3) that the lease must expressly state that the lessee
6    is liable for the payment of property taxes; and
7        (4) that the lease must include the following language
8    in substantially the following form:
9            "Lessee shall be liable for the payment of real
10        estate taxes with respect to the residence in
11        accordance with the terms and conditions of Section
12        15-175 of the Property Tax Code (35 ILCS 200/15-175).
13        The permanent real estate index number for the premises
14        is (insert number), and, according to the most recent
15        property tax bill, the current amount of real estate
16        taxes associated with the premises is (insert amount)
17        per year. The parties agree that the monthly rent set
18        forth above shall be increased or decreased pro rata
19        (effective January 1 of each calendar year) to reflect
20        any increase or decrease in real estate taxes. Lessee
21        shall be deemed to be satisfying Lessee's liability for
22        the above mentioned real estate taxes with the monthly
23        rent payments as set forth above (or increased or
24        decreased as set forth herein).".
25    In addition, if there is a change in lessee, or if the
26lessee vacates the property, then the chief county assessment

 

 

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1officer may require the owner of the property to notify the
2chief county assessment officer of that change.
3    This subsection (e) does not apply to leasehold interests
4in property owned by a municipality.
5    (f) "Homestead property" under this Section includes
6residential property that is occupied by its owner or owners as
7his or their principal dwelling place, or that is a leasehold
8interest on which a single family residence is situated, which
9is occupied as a residence by a person who has an ownership
10interest therein, legal or equitable or as a lessee, and on
11which the person is liable for the payment of property taxes.
12For land improved with an apartment building owned and operated
13as a cooperative or a building which is a life care facility as
14defined in Section 15-170 and considered to be a cooperative
15under Section 15-170, the maximum reduction from the equalized
16assessed value shall be limited to the increase in the value
17above the equalized assessed value of the property for 1977, up
18to the maximum reduction set forth above, multiplied by the
19number of apartments or units occupied by a person or persons
20who is liable, by contract with the owner or owners of record,
21for paying property taxes on the property and is an owner of
22record of a legal or equitable interest in the cooperative
23apartment building, other than a leasehold interest. For
24purposes of this Section, the term "life care facility" has the
25meaning stated in Section 15-170.
26    "Household", as used in this Section, means the owner, the

 

 

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1spouse of the owner, and all persons using the residence of the
2owner as their principal place of residence.
3    "Household income", as used in this Section, means the
4combined income of the members of a household for the calendar
5year preceding the taxable year.
6    "Income", as used in this Section, has the same meaning as
7provided in Section 3.07 of the Senior Citizens and Persons
8with Disabilities Property Tax Relief Act, except that "income"
9does not include veteran's benefits.
10    (g) In a cooperative where a homestead exemption has been
11granted, the cooperative association or its management firm
12shall credit the savings resulting from that exemption only to
13the apportioned tax liability of the owner who qualified for
14the exemption. Any person who willfully refuses to so credit
15the savings shall be guilty of a Class B misdemeanor.
16    (h) Where married persons maintain and reside in separate
17residences qualifying as homestead property, each residence
18shall receive 50% of the total reduction in equalized assessed
19valuation provided by this Section.
20    (i) In all counties, the assessor or chief county
21assessment officer may determine the eligibility of
22residential property to receive the homestead exemption and the
23amount of the exemption by application, visual inspection,
24questionnaire or other reasonable methods. The determination
25shall be made in accordance with guidelines established by the
26Department, provided that the taxpayer applying for an

 

 

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1additional general exemption under this Section shall submit to
2the chief county assessment officer an application with an
3affidavit of the applicant's total household income, age,
4marital status (and, if married, the name and address of the
5applicant's spouse, if known), and principal dwelling place of
6members of the household on January 1 of the taxable year. The
7Department shall issue guidelines establishing a method for
8verifying the accuracy of the affidavits filed by applicants
9under this paragraph. The applications shall be clearly marked
10as applications for the Additional General Homestead
11Exemption.
12    (i-5) This subsection (i-5) applies to counties with
133,000,000 or more inhabitants. In the event of a sale of
14homestead property, the homestead exemption shall remain in
15effect for the remainder of the assessment year of the sale.
16Upon receipt of a transfer declaration transmitted by the
17recorder pursuant to Section 31-30 of the Real Estate Transfer
18Tax Law for property receiving an exemption under this Section,
19the assessor shall mail a notice and forms to the new owner of
20the property providing information pertaining to the rules and
21applicable filing periods for applying or reapplying for
22homestead exemptions under this Code for which the property may
23be eligible. If the new owner fails to apply or reapply for a
24homestead exemption during the applicable filing period or the
25property no longer qualifies for an existing homestead
26exemption, the assessor shall cancel such exemption for any

 

 

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1ensuing assessment year.
2    (j) In counties with fewer than 3,000,000 inhabitants, in
3the event of a sale of homestead property the homestead
4exemption shall remain in effect for the remainder of the
5assessment year of the sale. The assessor or chief county
6assessment officer may require the new owner of the property to
7apply for the homestead exemption for the following assessment
8year.
9    (k) Notwithstanding Sections 6 and 8 of the State Mandates
10Act, no reimbursement by the State is required for the
11implementation of any mandate created by this Section.
12(Source: P.A. 98-7, eff. 4-23-13; 98-463, eff. 8-16-13; 99-143,
13eff. 7-27-15; 99-164, eff. 7-28-15; revised 8-25-15.)
 
14    Section 99. Effective date. This Act takes effect upon
15becoming law.