99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
SB1290

 

Introduced 2/18/2015, by Sen. David Koehler

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 200/9-275

    Amends the Property Tax Code. Provides that the provisions of a section relating to erroneous homestead exemptions applies to all counties (currently, only counties with 3,000,000 or more inhabitants).


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FISCAL NOTE ACT MAY APPLY
HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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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
5Section 9-275 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.
23    "Homestead exemption" means an exemption under Section

 

 

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115-165 (disabled veterans), 15-167 (returning veterans),
215-168 (disabled persons), 15-169 (disabled veterans standard
3homestead), 15-170 (senior citizens), 15-172 (senior citizens
4assessment freeze), 15-175 (general homestead), 15-176
5(alternative general homestead), or 15-177 (long-time
6occupant).
7    "Erroneous exemption principal amount" means the total
8difference between the property taxes actually billed to a
9property index number and the amount of property taxes that
10would have been billed but for the erroneous exemption or
11exemptions.
12    "Taxpayer" means the property owner or leasehold owner that
13erroneously received a homestead exemption upon property.
14    (b) Notwithstanding any other provision of law, in counties
15with 3,000,000 or more inhabitants, the chief county assessment
16officer shall include the following information with each
17assessment notice sent in a general assessment year: (1) a list
18of each homestead exemption available under Article 15 of this
19Code and a description of the eligibility criteria for that
20exemption; (2) a list of each homestead exemption applied to
21the property in the current assessment year; (3) information
22regarding penalties and interest that may be incurred under
23this Section if the taxpayer received an erroneous homestead
24exemption in a previous taxable year; and (4) notice of the
2560-day grace period available under this subsection. If, within
2660 days after receiving his or her assessment notice, the

 

 

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1taxpayer notifies the chief county assessment officer that he
2or she received an erroneous homestead exemption in a previous
3taxable year, and if the taxpayer pays the erroneous exemption
4principal amount, plus interest as provided in subsection (f),
5then the taxpayer shall not be liable for the penalties
6provided in subsection (f) with respect to that exemption.
7    (c) When In counties with 3,000,000 or more inhabitants,
8when the chief county assessment officer determines that one or
9more erroneous homestead exemptions was applied to the
10property, the erroneous exemption principal amount, together
11with all applicable interest and penalties as provided in
12subsections (f) and (j), shall constitute a lien in the name of
13the people of that county People of Cook County on the property
14receiving the erroneous homestead exemption. Upon becoming
15aware of the existence of one or more erroneous homestead
16exemptions, the chief county assessment officer shall cause to
17be served, by both regular mail and certified mail, a notice of
18discovery as set forth in subsection (c-5). The chief county
19assessment officer in a county with 3,000,000 or more
20inhabitants may cause a lien to be recorded against property
21that (1) is located in the county and (2) received one or more
22erroneous homestead exemptions if, upon determination of the
23chief county assessment officer, the taxpayer received: (A) one
24or 2 erroneous homestead exemptions for real property,
25including at least one erroneous homestead exemption granted
26for the property against which the lien is sought, during any

 

 

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

 

 

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

 

 

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1assessment officer to request a hearing. The taxpayer may
2request a hearing by returning the form within 30 days after
3service. The hearing shall be held within 90 days after the
4taxpayer is served. The chief county assessment officer shall
5promulgate rules of service and procedure for the hearing. The
6chief county assessment officer must generally follow rules of
7evidence and practices that prevail in the county circuit
8courts, but, because of the nature of these proceedings, the
9chief county assessment officer is not bound by those rules in
10all particulars. The chief county assessment officer shall
11appoint a hearing officer to oversee the hearing. The taxpayer
12shall be allowed to present evidence to the hearing officer at
13the hearing. After taking into consideration all the relevant
14testimony and evidence, the hearing officer shall make an
15administrative decision on whether the taxpayer was
16erroneously granted a homestead exemption for the taxable year
17in question. The taxpayer may appeal the hearing officer's
18ruling to the circuit court of the county where the property is
19located as a final administrative decision under the
20Administrative Review Law.
21    (f) A lien against the property imposed under this Section
22shall be filed with the county recorder of deeds, but may not
23be filed sooner than 60 days after the notice of intent to
24record a lien was delivered to the taxpayer if the taxpayer
25does not request a hearing, or until the conclusion of the
26hearing and all appeals if the taxpayer does request a hearing.

 

 

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1If a lien is filed pursuant to this Section and the taxpayer
2received one or 2 erroneous homestead exemptions during any of
3the 3 collection years immediately prior to the current
4collection year in which the notice of discovery is served,
5then the erroneous exemption principal amount, plus 10%
6interest per annum or portion thereof from the date the
7erroneous exemption principal amount would have become due if
8properly included in the tax bill, shall be charged against the
9property by the chief county assessment officer. However, if a
10lien is filed pursuant to this Section and the taxpayer
11received 3 or more erroneous homestead exemptions during any of
12the 6 collection years immediately prior to the current
13collection year in which the notice of discovery is served, the
14erroneous exemption principal amount, plus a penalty of 50% of
15the total amount of the erroneous exemption principal amount
16for that property and 10% interest per annum or portion thereof
17from the date the erroneous exemption principal amount would
18have become due if properly included in the tax bill, shall be
19charged against the property by the chief county assessment
20officer. If a lien is filed pursuant to this Section, the
21taxpayer shall not be liable for interest that accrues between
22the date the notice of discovery is served and the date the
23lien is filed. Before recording the lien with the county
24recorder of deeds, the chief county assessment officer shall
25adjust the amount of the lien to add administrative costs,
26including but not limited to the applicable recording fee, to

 

 

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

 

 

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

 

 

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1release form with the county recorder of deeds and to pay any
2applicable recording fees.
3    (k) The county treasurer shall pay collected erroneous
4exemption principal amounts, pro rata, to the taxing districts,
5or their legal successors, that levied upon the subject
6property in the taxable year or years for which the erroneous
7homestead exemptions were granted, except as set forth in this
8Section. The county treasurer shall deposit collected
9penalties and interest into a special fund established by the
10county treasurer to offset the costs of administration of the
11provisions of this Section by the chief county assessment
12officer's office, as appropriated by the county board. If the
13costs of administration of this Section exceed the amount of
14interest and penalties collected in the special fund, the chief
15county assessor shall be reimbursed by each taxing district or
16their legal successors for those costs. Such costs shall be
17paid out of the funds collected by the county treasurer on
18behalf of each taxing district pursuant to this Section.
19    (l) The chief county assessment officer in a county with
203,000,000 or more inhabitants shall establish an amnesty period
21for all taxpayers owing any tax due to an erroneous homestead
22exemption granted in a tax year prior to the 2013 tax year. The
23amnesty period shall begin on the effective date of this
24amendatory Act of the 98th General Assembly and shall run
25through December 31, 2013. If, during the amnesty period, the
26taxpayer pays the entire arrearage of taxes due for tax years

 

 

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1prior to 2013, the county clerk shall abate and not seek to
2collect any interest or penalties that may be applicable and
3shall not seek civil or criminal prosecution for any taxpayer
4for tax years prior to 2013. Failure to pay all such taxes due
5during the amnesty period established under this Section shall
6invalidate the amnesty period for that taxpayer.
7    The chief county assessment officer in a county with
83,000,000 or more inhabitants shall (i) mail notice of the
9amnesty period with the tax bills for the second installment of
10taxes for the 2012 assessment year and (ii) as soon as possible
11after the effective date of this amendatory Act of the 98th
12General Assembly, publish notice of the amnesty period in a
13newspaper of general circulation in the county. Notices shall
14include information on the amnesty period, its purpose, and the
15method by which to make payment.
16    Taxpayers who are a party to any criminal investigation or
17to any civil or criminal litigation that is pending in any
18circuit court or appellate court, or in the Supreme Court of
19this State, for nonpayment, delinquency, or fraud in relation
20to any property tax imposed by any taxing district located in
21the State on the effective date of this amendatory Act of the
2298th General Assembly may not take advantage of the amnesty
23period.
24    A taxpayer who has claimed 3 or more homestead exemptions
25in error shall not be eligible for the amnesty period
26established under this subsection.

 

 

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1(Source: P.A. 98-93, eff. 7-16-13; 98-756, eff. 7-16-14;
298-811, eff. 1-1-15; 98-1143, eff. 1-1-15.)