State of Illinois
92nd General Assembly

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 1        AN ACT in relation to taxes.

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

 4        Section 5.  The Property Tax Code is amended by  changing
 5    Section 21-305 as follows:

 6        (35 ILCS 200/21-305)
 7        Sec. 21-305.  Payments from Indemnity Fund.
 8        (a)  Any  owner  of  property sold under any provision of
 9    this Code who sustains  loss  or  damage  by  reason  of  the
10    issuance  of a tax deed under Section 21-445 or 22-40 of this
11    Code and who is barred  or  is  in  any  way  precluded  from
12    bringing  an  action  for  the recovery of the property shall
13    have the right to indemnity for the loss or damage sustained,
14    limited as follows:
15             (1)  An owner who resided on property that contained
16        4 or less dwelling units on the last day of the period of
17        redemption and who is equitably entitled to  compensation
18        for  the  loss  or  damage  sustained  has  the  right to
19        indemnity.  An equitable indemnity award shall be limited
20        to the fair cash value of the property as of the date the
21        tax deed was issued less any mortgages or  liens  on  the
22        property,  and  the  award  will  not exceed $99,000. The
23        Court shall liberally construe this equitable entitlement
24        standard  to  provide  compensation  wherever,   in   the
25        discretion of the Court, the equities warrant the action.
26             An  owner  of  a  property  that contained 4 or less
27        dwelling units who requests an award in excess of $99,000
28        must prove that the loss of his or her property  was  not
29        attributable to his or her own fault or negligence before
30        an award in excess of $99,000 will be granted.
31             (2)  An owner who sustains the loss or damage of any
                            -2-                LRB9214973SMsb
 1        property  occasioned  by  reason of the issuance of a tax
 2        deed, without fault or negligence of his or her own,  has
 3        the  right to indemnity limited to the fair cash value of
 4        the  property   less  any  mortgages  or  liens  on   the
 5        property.    In  determining  the  existence  of fault or
 6        negligence, the court shall consider  whether  the  owner
 7        exercised  ordinary reasonable diligence under all of the
 8        relevant circumstances.
 9             (3)  In determining the fair cash value of  property
10        less  any  mortgages  or  liens on the property, the fair
11        cash value shall be reduced by the  principal  amount  of
12        all  taxes  paid  by  the  tax  purchaser  or  his or her
13        assignee before the issuance of the tax deed.
14             (4)  If an award made under paragraph (1) or (2)  is
15        subject  to  a  reduction by the amount of an outstanding
16        mortgage  or  lien  on  the  property,  other  than   the
17        principal  amount  of all taxes paid by the tax purchaser
18        or his or her assignee before the  issuance  of  the  tax
19        deed and the petitioner would be personally liable to the
20        mortgagee or lienholder for all or part of that reduction
21        amount,  the  court  shall  order an additional indemnity
22        award to be paid directly to the mortgagee or  lienholder
23        sufficient   to   discharge   the  petitioner's  personal
24        liability. The court, in its discretion,  may  order  the
25        joinder  of  the mortgagee or lienholder as an additional
26        party to the indemnity action.
27        (b)  Indemnity fund; subrogation.
28             (1)  Any person claiming indemnity  hereunder  shall
29        petition  the  Court which ordered the tax deed to issue,
30        shall name  the  County  Treasurer,  as  Trustee  of  the
31        indemnity  fund,  as defendant to the petition, and shall
32        ask  that  judgment  be  entered   against   the   County
33        Treasurer,  as  Trustee,  in  the amount of the indemnity
34        sought.  The provisions of the Civil Practice  Law  shall
                            -3-                LRB9214973SMsb
 1        apply  to  proceedings  under  the  petition, except that
 2        neither the petitioner  nor  County  Treasurer  shall  be
 3        entitled  to trial by jury on the issues presented in the
 4        petition. The Court shall liberally construe this Section
 5        to provide compensation wherever in the discretion of the
 6        Court the equities warrant such action.
 7             (2)  The  County  Treasurer,  as  Trustee   of   the
 8        indemnity  fund,  shall  be  subrogated to all parties in
 9        whose favor judgment may be rendered against him or  her,
10        and  by third party complaint may bring in as a defendant
11        any person, other than  the  tax  deed  grantee  and  its
12        successors  in title, not a party to the action who is or
13        may be liable to him or her, as subrogee, for all or part
14        of the petitioner's claim against him or her.
15        (c)  Any contract involving the proceeds  of  a  judgment
16    for  indemnity  under  this  Section,  between  the  tax deed
17    grantee  or  its  successors  in  title  and  the   indemnity
18    petitioner or his or her successors, shall be in writing.  In
19    any  action brought under Section 21-305, the Collector shall
20    be entitled to discovery regarding, but not limited  to,  the
21    following:
22             (1)  the   identity   of  all  persons  beneficially
23        interested  in  the  contract,  directly  or  indirectly,
24        including at least the following information:  the  names
25        and  addresses  of  any  natural  persons;  the  place of
26        incorporation  of  any  corporation  and  the  names  and
27        addresses of its shareholders unless it is publicly held;
28        the names  and  addresses  of  all  general  and  limited
29        partners  of  any partnership; the names and addresses of
30        all persons having an ownership interest  in  any  entity
31        doing  business  under an assumed name, and the county in
32        which the assumed business name is  registered;  and  the
33        nature and extent of the interest in the contract of each
34        person identified;
                            -4-                LRB9214973SMsb
 1             (2)  the  time  period during which the contract was
 2        negotiated and agreed upon, from the date  of  the  first
 3        direct or indirect contact between any of the contracting
 4        parties to the date of its execution;
 5             (3)  the name and address of each natural person who
 6        took  part  in negotiating the contract, and the identity
 7        and relationship of the party that the person represented
 8        in the negotiations; and
 9             (4)  the existence of an agreement  for  payment  of
10        attorney's fees by or on behalf of each party.
11        Any information disclosed during discovery may be subject
12    to  protective  order as deemed appropriate by the court. The
13    terms of the contract shall not be used as evidence of value.
14    (Source: P.A. 91-564, eff. 8-14-99.)

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