SB0041 98TH GENERAL ASSEMBLY

LRB098 04285 HLH 35244 b

98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
SB0041

Introduced 1/16/2013, by Sen. Antonio Muñoz

SYNOPSIS AS INTRODUCED:

35 ILCS 200/9-275 new

Amends the Property Tax Code. Allows the chief county assessment officer to record a tax lien against property that was granted one or more erroneous homestead exemptions. Contains provisions concerning notice, hearings, and penalties. Effective June 1, 2013.

FISCAL NOTE ACT MAY APPLY

HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY

A BILL FOR

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 adding Section 9-275 as follows:

(35 ILCS 200/9-275 new)

Sec. 9-275. Erroneous homestead exemptions.

(a) If, upon determination by the chief county assessment officer, any person or entity that was not eligible to receive a homestead exemption under Article 15 of this Code was granted one homestead exemption in error for real property in any year or years not to exceed the 3 assessment years prior to the assessment year in which the determination is made, then the chief county assessment officer may 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 tax lien against the property with respect to which the erroneous homestead exemption was granted.

(b) If, upon determination by the chief county assessment officer, any person or entity that was not eligible to receive a homestead exemption under Article 15 of this Code was granted 2 homestead exemptions in error for real property in any year or years not to exceed the 3 assessment years prior to the assessment year in which the determination is made, then the chief county assessment officer may 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 tax lien against the property with respect to which the erroneous homestead exemption was granted.

(c) If, upon determination by the chief county assessment officer, any person or entity that was not eligible to receive a homestead exemption under Article 15 of this Code was granted 3 or more homestead exemptions in error for real property in any year or years not to exceed the 6 assessment years prior to the assessment year in which the determination is made, then the chief county assessment officer may 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 tax lien against the property with respect to which the erroneous homestead exemption was granted.

(d) The notice of intent to record a tax lien described in subsections (a), (b), and (c) of this Section shall identify the property against which the lien is being sought and shall identify the assessment years in which the erroneous homestead exemption was granted.

In counties with 3,000,000 or more inhabitants, the notice must also include a form that the property owner may return to the chief county assessment officer to request a hearing. The 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 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 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 property owner was erroneously granted a homestead exemption for the assessment year or years in question. The property owner may appeal the hearing officer's ruling to the circuit court of the county where the property is located under the Administrative Review Law.

In counties with less than 3,000,000 inhabitants, the notice must also include a form that the property owner may return to the board of review to request a hearing. The 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 property owner is served. The board of review shall follow its normal practices and procedures in conducting the hearing. The property owner shall be allowed to present evidence to the board of review. After taking into consideration all of the relevant testimony and evidence, the board of review shall issue a decision on whether the property owner was erroneously granted a homestead exemption for the assessment year or years in question. The property owner may appeal the board of review's ruling to the circuit court of the county where the property is located under the Administrative Review Law.

(e) A lien against the property imposed under this Section shall be filed with the county clerk and the county recorder of deeds, but may not be filed sooner than 60 days after the notice was delivered to the property owner if the property owner does not request a hearing, or, until the conclusion of the hearing and all appeals if the property owner does request a hearing.

(1) When a lien is filed pursuant to subsection (a) of this Section, the arrearages of taxes that might have been assessed, plus 5% interest per annum, shall be charged against the property by the county clerk.

(2) When a lien is filed pursuant to subsection (b) of this Section, the arrearages of taxes that might have been assessed, plus a penalty of 25% of the total amount of unpaid taxes for each year and 10% interest per annum, shall be charged against the property by the county clerk.

(3) When a lien is filed pursuant to subsection (c) of this Section, the arrearages of taxes that might have been assessed, plus a penalty of 40% of the total amount of unpaid taxes for each year and 15% interest per annum, shall be charged against the property by the county clerk.

A person who received an erroneous homestead exemption under Section 15-170 in a county that did not require an annual application for that exemption at the time the erroneous homestead exemption was granted is not liable for the penalties and interest imposed under this subsection (e) for those assessment years if: (i) the person was the spouse, child, grandchild, brother, sister, niece, or nephew of the previous owner; and (ii) the person received the property by bequest or inheritance. However, that person is responsible for any interest owed under subsection (h) of this Section.

(f) 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 owner has paid its tax bills as received for the year or years in which the error occurred, then the interest and penalties authorized by this Section shall not be chargeable to the owner. However, nothing in this Section shall prevent the collection of the principal amount of back taxes due and owing.

(g) If, at the hearing, the property owner establishes that it is a bona fide purchaser of the property for value, and without notice of the erroneous homestead exemption, the property owner shall not be liable for any unpaid back taxes, interest, or penalties for the period of time prior to the date that the property owner purchased the property. A certified title to the property that is issued by a title company licensed to do business in the State and is free and clear of any liens imposed under subsections (a), (b), or (c) of this Section, shall be prima facie evidence that the property owner is without notice of the erroneous homestead exemption.

(h) When a lien is filed against the property pursuant to subsection (e) of 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. Payment shall be made to the chief county assessment officer who shall, upon receipt of the full amount due, provide in reasonable form a release of the lien and shall transmit the funds received to the county treasurer for distribution as provided in subsection (i) of this Section. This liability is deemed delinquent and shall bear interest beginning on the day after the due date. Any such liability deemed delinquent after that due date shall bear interest at the rate of 1.5% per month or portion thereof until paid.

(i) The unpaid taxes shall be paid to the appropriate taxing districts. Interest shall be paid to the county where the property is located. The penalty shall be paid to the chief county assessment officer's office for the administration of the provisions of this amendatory Act of the 98th General Assembly.

(j) 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).

Section 99. Effective date. This Act takes effect June 1, 2013.