Public Act 098-1143
 
SB1740 EnrolledLRB098 10538 HLH 40776 b

    AN ACT concerning revenue.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Property Tax Code is amended by changing
Section 9-275 as follows:
 
    (35 ILCS 200/9-275)
    Sec. 9-275. Erroneous homestead exemptions.
    (a) For purposes of this Section:
    "Erroneous homestead exemption" means a homestead
exemption that was granted for real property in a taxable year
if the property was not eligible for that exemption in that
taxable year. If the taxpayer receives an erroneous homestead
exemption under a single Section of this Code for the same
property in multiple years, that exemption is considered a
single erroneous homestead exemption for purposes of this
Section. However, if the taxpayer receives erroneous homestead
exemptions under multiple Sections of this Code for the same
property, or if the taxpayer receives erroneous homestead
exemptions under the same Section of this Code for multiple
properties, then each of those exemptions is considered a
separate erroneous homestead exemption for purposes of this
Section.
    "Homestead exemption" means an exemption under Section
15-165 (disabled veterans), 15-167 (returning veterans),
15-168 (disabled persons), 15-169 (disabled veterans standard
homestead), 15-170 (senior citizens), 15-172 (senior citizens
assessment freeze), 15-175 (general homestead), 15-176
(alternative general homestead), or 15-177 (long-time
occupant).
    "Erroneous exemption principal amount" means the total
difference between the property taxes actually billed to a
property index number and the amount of property taxes that
would have been billed but for the erroneous exemption or
exemptions amount of property tax principal that would have
been billed to a property index number but for the erroneous
homestead exemption or exemptions a taxpayer received.
    "Taxpayer" means the property owner or leasehold owner that
erroneously received a homestead exemption upon property.
    (b) Notwithstanding any other provision of law, in counties
with 3,000,000 or more inhabitants, the chief county assessment
officer shall include the following information with each
assessment notice sent in a general assessment year: (1) a list
of each homestead exemption available under Article 15 of this
Code and a description of the eligibility criteria for that
exemption; (2) a list of each homestead exemption applied to
the property in the current assessment year; (3) information
regarding penalties and interest that may be incurred under
this Section if the taxpayer property owner received an
erroneous homestead exemption in a previous taxable year; and
(4) notice of the 60-day grace period available under this
subsection. If, within 60 days after receiving his or her
assessment notice, the taxpayer property owner notifies the
chief county assessment officer that he or she received an
erroneous homestead exemption in a previous taxable assessment
year, and if the taxpayer property owner pays the erroneous
exemption principal amount, plus interest as provided in
subsection (f), then the taxpayer property owner shall not be
liable for the penalties provided in subsection (f) with
respect to that exemption.
    (c) In counties with 3,000,000 or more inhabitants, when
the chief county assessment officer determines that one or more
erroneous homestead exemptions was applied to the property, the
erroneous exemption principal amount, together with all
applicable interest and penalties as provided in subsections
(f) and (j), shall constitute a lien in the name of the People
of Cook County on the property receiving the erroneous
homestead exemption. Upon becoming aware of the existence of
one or more erroneous homestead exemptions, the chief county
assessment officer shall cause to be served, by both regular
mail and certified mail, a notice of discovery as set forth in
subsection (c-5). The chief county assessment officer in a
county with 3,000,000 or more inhabitants may cause a lien to
be recorded against property that (1) is located in the county
and (2) received one or more erroneous homestead exemptions if,
upon determination of the chief county assessment officer, the
taxpayer property owner received: (A) one or 2 erroneous
homestead exemptions for real property, including at least one
erroneous homestead exemption granted for the property against
which the lien is sought, during any of the 3 collection
assessment years immediately prior to the current collection
assessment year in which the notice of discovery intent to
record a lien is served; or (B) 3 or more erroneous homestead
exemptions for real property, including at least one erroneous
homestead exemption granted for the property against which the
lien is sought, during any of the 6 collection assessment years
immediately prior to the current collection assessment year in
which the notice of discovery intent to record a lien is
served. Prior to recording the lien against the property, the
chief county assessment officer shall cause to be served, by
both regular mail and certified mail, return receipt requested,
on the person to whom the most recent tax bill was mailed and
the owner of record, a notice of intent to record a lien
against the property. The chief county assessment officer shall
cause the notice of intent to record a lien to be served within
3 years from the date on which the notice of discovery was
served.
    (c-5) The notice of discovery described in subsection (c)
shall: (1) identify, by property index number, the property for
which the chief county assessment officer has knowledge
indicating the existence of an erroneous homestead exemption;
(2) set forth the taxpayer's liability for principal, interest,
penalties, and administrative costs including, but not limited
to, recording fees described in subsection (f); (3) inform the
taxpayer that he or she will be served with a notice of intent
to record a lien within 3 years from the date of service of the
notice of discovery; and (4) inform the taxpayer that he or she
may pay the outstanding amount, plus interest, penalties, and
administrative costs at any time prior to being served with the
notice of intent to record a lien or within 30 days after the
notice of intent to record a lien is served.
    (d) The notice of intent to record a lien described in
subsection (c) shall: (1) identify, by property index number,
the property against which the lien is being sought; (2)
identify each specific homestead exemption that was
erroneously granted and the year or years in which each
exemption was granted; (3) set forth the erroneous exemption
principal amount due and the interest amount and any penalty
and administrative costs due; (4) inform the taxpayer that he
or she may request a hearing within 30 days after service and
may appeal the hearing officer's ruling to the circuit court;
and (5) inform the taxpayer that he or she may pay the
erroneous exemption principal amount, plus interest and
penalties, within 30 days after service; and (6) inform the
taxpayer that, if the lien is recorded against the property,
the amount of the lien will be adjusted to include the
applicable recording fee and that fees for recording a release
of the lien shall be incurred by the taxpayer. A lien shall not
be filed pursuant to this Section if the taxpayer property
owner pays the erroneous exemption principal amount, plus
penalties and interest, within 30 days of service of the notice
of intent to record a lien.
    (e) The notice of intent to record a lien shall also
include a form that the taxpayer property owner may return to
the chief county assessment officer to request a hearing. The
taxpayer property owner may request a hearing by returning the
form within 30 days after service. The hearing shall be held
within 90 days after the taxpayer property owner is served. The
chief county assessment officer shall promulgate rules of
service and procedure for the hearing. The chief county
assessment officer must generally follow rules of evidence and
practices that prevail in the county circuit courts, but,
because of the nature of these proceedings, the chief county
assessment officer is not bound by those rules in all
particulars. The chief county assessment officer shall appoint
a hearing officer to oversee the hearing. The taxpayer property
owner shall be allowed to present evidence to the hearing
officer at the hearing. After taking into consideration all the
relevant testimony and evidence, the hearing officer shall make
an administrative decision on whether the taxpayer property
owner was erroneously granted a homestead exemption for the
taxable assessment year in question. The taxpayer property
owner may appeal the hearing officer's ruling to the circuit
court of the county where the property is located as a final
administrative decision under the Administrative Review Law.
    (f) A lien against the property imposed under this Section
shall be filed with the county recorder of deeds, but may not
be filed sooner than 60 days after the notice of intent to
record a lien was delivered to the taxpayer property owner if
the taxpayer property owner does not request a hearing, or
until the conclusion of the hearing and all appeals if the
taxpayer property owner does request a hearing. If a lien is
filed pursuant to this Section and the taxpayer property owner
received one or 2 erroneous homestead exemptions during any of
the 3 collection assessment years immediately prior to the
current collection assessment year in which the notice of
discovery intent to record a lien is served, then the erroneous
exemption principal amount, plus 10% interest per annum or
portion thereof from the date the erroneous exemption principal
amount would have become due if properly included in the tax
bill, shall be charged against the property by the chief county
assessment officer. However, if a lien is filed pursuant to
this Section and the taxpayer property owner received 3 or more
erroneous homestead exemptions during any of the 6 collection
assessment years immediately prior to the current collection
assessment year in which the notice of discovery intent to
record a lien is served, the erroneous exemption principal
amount, plus a penalty of 50% of the total amount of the
erroneous exemption principal amount for that property and 10%
interest per annum or portion thereof from the date the
erroneous exemption principal amount would have become due if
properly included in the tax bill, shall be charged against the
property by the chief county assessment officer. If a lien is
filed pursuant to this Section, the taxpayer shall not be
liable for interest that accrues between the date the notice of
discovery is served and the date the lien is filed. Before
recording the lien with the county recorder of deeds, the chief
county assessment officer shall adjust the amount of the lien
to add administrative costs, including but not limited to the
applicable recording fee, to the total lien amount.
    (g) If a person received an erroneous homestead exemption
under Section 15-170 and: (1) the person was the spouse, child,
grandchild, brother, sister, niece, or nephew of the previous
taxpayer property owner; and (2) the person received the
property by bequest or inheritance; then the person is not
liable for the penalties imposed under this Section for any
year or years during which the chief county assessment officer
did not require an annual application for the exemption.
However, that person is responsible for any interest owed under
subsection (f).
    (h) If the erroneous homestead exemption was granted as a
result of a clerical error or omission on the part of the chief
county assessment officer, and if the taxpayer property owner
has paid the tax bills as received for the year in which the
error occurred, then the interest and penalties authorized by
this Section with respect to that homestead exemption shall not
be chargeable to the taxpayer property owner. However, nothing
in this Section shall prevent the collection of the erroneous
exemption principal amount due and owing.
    (i) A lien under this Section is not valid as to (1) any
bona fide purchaser for value without notice of the erroneous
homestead exemption whose rights in and to the underlying
parcel arose after the erroneous homestead exemption was
granted but before the filing of the notice of lien; or (2) any
mortgagee, judgment creditor, or other lienor whose rights in
and to the underlying parcel arose before the filing of the
notice of lien. A title insurance policy for the property that
is issued by a title company licensed to do business in the
State showing that the property is free and clear of any liens
imposed under this Section shall be prima facie evidence that
the taxpayer property owner is without notice of the erroneous
homestead exemption. Nothing in this Section shall be deemed to
impair the rights of subsequent creditors and subsequent
purchasers under Section 30 of the Conveyances Act.
    (j) When a lien is filed against the property pursuant to
this Section, the chief county assessment officer shall mail a
copy of the lien to the person to whom the most recent tax bill
was mailed and to the owner of record, and the outstanding
liability created by such a lien is due and payable within 30
days after the mailing of the lien by the chief county
assessment officer. This liability is deemed delinquent and
shall bear interest beginning on the day after the due date at
a rate of 1.5% per month or portion thereof. Payment shall be
made to the county treasurer. Upon receipt of the full amount
due, as determined by the chief county assessment officer, the
county treasurer shall distribute the amount paid as provided
in subsection (k). Upon presentment by the taxpayer property
owner to the chief county assessment officer of proof of
payment of the total liability, the chief county assessment
officer shall provide in reasonable form a release of the lien.
The release of the lien provided shall clearly inform the
taxpayer that it is the responsibility of the taxpayer to
record the lien release form with the county recorder of deeds
and to pay any applicable recording fees. This liability is
deemed delinquent and shall bear interest beginning on the day
after the due date at a rate of 1.5% per month or portion
thereof.
    (k) The county treasurer shall pay collected erroneous
exemption principal amounts, pro rata, to the taxing districts,
or their legal successors, that levied upon the subject
property in the taxable assessment year or years for which the
erroneous homestead exemptions were granted, except as set
forth in this Section. The county treasurer shall pay collected
interest to the county where the property is located. The
county treasurer shall deposit collected penalties and
interest into a special fund established by the county
treasurer to offset the costs of administration of the
provisions of this Section amendatory Act of the 98th General
Assembly by the chief county assessment officer's office, as
appropriated by the county board. If the costs of
administration of this Section exceed the amount of interest
and penalties collected in the special fund, the chief county
assessor shall be reimbursed by each taxing district or their
legal successors for those costs. Such costs shall be paid out
of the funds collected by the county treasurer on behalf of
each taxing district pursuant to this Section.
    (l) The chief county assessment officer in a county with
3,000,000 or more inhabitants shall establish an amnesty period
for all taxpayers owing any tax due to an erroneous homestead
exemption granted in a tax year prior to the 2013 tax year. The
amnesty period shall begin on the effective date of this
amendatory Act of the 98th General Assembly and shall run
through December 31, 2013. If, during the amnesty period, the
taxpayer pays the entire arrearage of taxes due for tax years
prior to 2013, the county clerk shall abate and not seek to
collect any interest or penalties that may be applicable and
shall not seek civil or criminal prosecution for any taxpayer
for tax years prior to 2013. Failure to pay all such taxes due
during the amnesty period established under this Section shall
invalidate the amnesty period for that taxpayer.
    The chief county assessment officer in a county with
3,000,000 or more inhabitants shall (i) mail notice of the
amnesty period with the tax bills for the second installment of
taxes for the 2012 assessment year and (ii) as soon as possible
after the effective date of this amendatory Act of the 98th
General Assembly, publish notice of the amnesty period in a
newspaper of general circulation in the county. Notices shall
include information on the amnesty period, its purpose, and the
method by which to make payment.
    Taxpayers who are a party to any criminal investigation or
to any civil or criminal litigation that is pending in any
circuit court or appellate court, or in the Supreme Court of
this State, for nonpayment, delinquency, or fraud in relation
to any property tax imposed by any taxing district located in
the State on the effective date of this amendatory Act of the
98th General Assembly may not take advantage of the amnesty
period.
    A taxpayer who has claimed 3 or more homestead exemptions
in error shall not be eligible for the amnesty period
established under this subsection.
(Source: P.A. 98-93, eff. 7-16-13; 98-756, eff. 7-16-14;
98-811, eff. 1-1-15.)
 
    Section 99. Effective date. This Act takes effect January
1, 2015.