SB3494 104TH GENERAL ASSEMBLY

LRB104 20290 HLH 33741 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB3494

Introduced 2/5/2026, by Sen. Willie Preston

SYNOPSIS AS INTRODUCED:

35 ILCS 200/21-350
35 ILCS 200/22-30

Amends the Property Tax Code. In provisions concerning tax sales, provides that, for tax sales that occur on or after the effective date of the amendatory Act, the redemption period shall be 5 years (instead of 2.5 years). Provides that a tax deed grantee may file a petition in the circuit court of the county in which the property is located forcing a judicial sale of the property. Contains provisions concerning the distribution of surplus funds. Effective immediately.

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 changing Sections 21-350 and 22-30 as follows:

(35 ILCS 200/21-350)

Sec. 21-350. Period of redemption.

(a) Property sold under this Code may be redeemed at any time before the expiration of the redemption period 2.5 years from the date of sale, except that:

(1) (a) If on the date of sale the property is vacant non-farm property or property containing an improvement consisting of a structure or structures with 7 or more residential units or that is commercial or industrial property, it may be redeemed at any time before the expiration of 1 year from the date of sale.

(2) (b) (Blank).

(3) (c) If the period of redemption has been extended by the certificate holder as provided in Section 21-385 or Section 22-5, the property may be redeemed on or before the extended redemption date. The changes made to this Section by Public Act 103-555 this amendatory Act of the 103rd General Assembly apply to matters concerning tax certificates issued on or after January 1, 2024.

(b) As used in this Section, "redemption period" or "period of redemption" means (i) 2.5 years from the date of sale if the tax sale occurred before the effective date of this amendatory Act of the 104th General Assembly or (ii) 5 years from the date of sale if the tax sale occurred on or after the effective date of this amendatory Act of the 104th General Assembly.

(Source: P.A. 103-555, eff. 1-1-24.)

(35 ILCS 200/22-30)

Sec. 22-30. Petition for deed. At any time within 6 months but not less than 3 months prior to the expiration of the redemption period for property sold pursuant to judgment and order of sale under Sections 21-110 through 21-120 or 21-260 or otherwise acquired by the county pursuant to Section 21-90, the purchaser, or the agent pursuant to Section 21-90, may file a petition in the circuit court in the same proceeding in which the judgment and order of sale were entered, asking that the court direct the county clerk to issue a tax deed if the property is not redeemed from the sale. The petition shall be accompanied by the statutory filing fee.

Notice of filing the petition and a date for redemption, after which the petitioner intends to apply for an order to issue a tax deed if the taxes are not redeemed, shall be given to occupants, owners and persons interested in the property as part of the notice provided in Sections 22-10 through 22-25, except that only one publication is required. The county clerk shall be notified of the filing of the petition and any person owning or interested in the property may, if he or she desires, appear in the proceeding.

The changes to this Section made by this amendatory Act of the 95th General Assembly apply only to matters in which a petition for tax deed is filed on or after the effective date of this amendatory Act of the 95th General Assembly.

The owner of the tax deed may file a petition in the circuit court of the county in which the property is located forcing the sale of the property in the same manner as a mortgagee pursuant to Sections 15-1501 through 15-1512 of the Code of Civil Procedure. Statutory provisions governing the sale of tax deeds are in addition to any statutory provisions governing judicial foreclosure sales.

The judicial sale of property under this Section shall be made through an online bidding process in which bids are received electronically over the Internet in a real time, competitive bidding event.

The online sale shall be advertised through a multiple listing service website regularly advertising real estate for sale no later than 30 days before the date of the bidding event. The property shall be sold to the highest eligible bidder.

A seller under this Section may enter into a contract with a private party to operate and advertise the bidding event and to advertise the property. The contract may provide that, if the property sells for more than the amount of the taxes, penalties, interest and costs charged against the property, the private party operating and advertising the auction and advertising the property may receive up to 3% of the amount of the selling price of a property that is more than the amount of the taxes, penalties, interest and costs charged against the property.

Proceeds of judicial sales under this Section shall be distributed in the following order of priority:

(1) for payment of delinquent taxes and satisfaction of existing tax liens, plus reasonable penalties, interest, and fees;

(2) to governmental units holding a lien of record against the payment, including any tax debts not giving rise to the tax sale; and

(3) after the distributions have been made under (1) and (2), to the owner of the property prior to the tax sale for prompt return to the owner or the owner's heirs or assigns.

The county collector shall notify the owner of the surplus. The owner of the surplus may claim it by contacting the tax collector and providing proof of ownership of the parcel.

If the owner or the owner's heirs or assigns fail to claim the surplus, or if there are multiple claims for the surplus, within 120 days after the sale, the county collector shall file an interpleader action in circuit court or pay the surplus funds according to the tax collector's determination of the priority of claims. Fees and costs incurred by the tax collector related to the disbursement of the surplus, including fees and costs related to an interpleader action, shall be paid from the surplus funds. If the county collector files an interpleader action, the court shall determine the distribution of funds based upon the priority of liens filed. The court shall award reasonable fees and costs from the interpleaded funds. An action to require payment of surplus funds is not ripe until the claim and review periods expire.

The failure of any person, other than the owner or the owner's heirs or assigns, to file a claim for surplus funds within 120 days after the sale or the filing of an interpleader action, whichever is later, constitutes a waiver of interest in the surplus funds, and all claims thereto are forever barred. Any surplus that remains unclaimed after 120 days shall be administered by the state pursuant to the provisions of the Revised Uniform Unclaimed Property Act.

(Source: P.A. 103-555, eff. 1-1-24.)

Section 99. Effective date. This Act takes effect upon becoming law.