HB3514 99TH GENERAL ASSEMBLY

LRB099 09599 HLH 29808 b

99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB3514

Introduced , by Rep. Robert F. Martwick

SYNOPSIS AS INTRODUCED:

New Act

Creates the Vacancy Fraud Investigative Unit Act. Grants the county board of a county the power to establish, by ordinance or resolution, a vacancy fraud investigative unit to investigate whether the owner of any vacant property is actively attempting to lease, sell, or alter the vacant property. Provides that the vacancy fraud investigative unit (i) may not investigate a vacant property unless that property has received vacancy relief for 2 consecutive tax years and the first of those tax years is no more than 5 years prior to the current tax year and (ii) must notify the owner of the vacant property that an investigation has been initiated and must give the owner an opportunity to be heard and to present relevant evidence. Contains provisions concerning notice requirements; certain powers the vacancy fraud investigative unit shall have during the course of an investigation; determinations as to whether the owner of the vacant property is actively attempting to lease, sell, or alter the vacant property; the time period by which the vacancy fraud investigative unit must conclude all investigations; the authority of the chief county assessment officer upon receiving an investigative report from the vacancy fraud investigative unit that an owner of vacant property is not actively attempting to sell, lease, or alter the vacant property; and other matters. Effective immediately.

FISCAL NOTE ACT MAY APPLY

HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning local government.

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

Section 1. Short title. This Act may be cited as the Vacancy Fraud Investigative Unit Act.

Section 5. Public policy. In recognition of the severe economic circumstances of taxpayers and taxing districts across the State of Illinois, the General Assembly finds it necessary to curb the use of property tax relief enacted by several counties which lowers a property's assessment due to it being vacant. Several owners of vacant properties do not actively seek tenants, yet continue to receive property tax relief for the term of the property's vacancy. This practice has led to neighborhoods blighted with vacant commercial or industrial properties. The General Assembly finds that this practice is against public policy, burdens homeowners and actively operating businesses, and lessens taxing districts' tax base.

Section 10. Definitions. As used in this Act:

"Vacancy relief" means a decrease in assessed value, a decrease in market value, or an abatement of taxes by a chief county assessment officer, a board of review, or a taxing district under any county or taxing district ordinance, resolution, or policy granting such a decrease to property that is vacant.

"Vacant property" means property that is receiving vacancy relief. A property that receives vacancy relief on only a portion of the property is still considered "vacant property."

Section 15. Vacancy fraud investigative unit; authority; factors to consider.

(a) The county board shall have the power to establish, by ordinance or resolution, a vacancy fraud investigative unit. The vacancy fraud investigative unit shall have the power to investigate whether the owner of any vacant property is actively attempting to lease, sell, or alter the vacant property.

(b) The vacancy fraud investigative unit may not investigate a vacant property unless that property has received vacancy relief for 2 consecutive tax years and the first of those tax years is no more than 5 years prior to the current tax year.

(c) The vacancy fraud investigative unit must notify the owner of the vacant property that an investigation has been initiated and must give the owner an opportunity to be heard and to present relevant evidence. Notice shall be provided by first class mail, postage prepaid, and shall be mailed to the same address that the vacant property's property tax bill is mailed.

(d) During the course of an investigation, the vacancy fraud investigative unit shall have the following powers:

(1) To interview any relevant person that the vacancy fraud investigative unit determines would be helpful in its investigation. This paragraph shall not be construed to grant the vacancy fraud investigative unit the power to subpoena or depose any real person.

(2) To subpoena any relevant documents from public and private sources that the vacancy fraud investigative unit determines would be helpful in its investigation.

(3) To inspect the vacant property if the vacancy fraud investigative unit determines an inspection would be helpful in its investigation. The vacancy fraud investigative unit may not inspect the vacant property unless a notice is sent to the same address where the vacant property's property tax bill is mailed. The notice must be sent at least 10 business days prior to the inspection, but no more than 50 business days prior to the inspection. The notice shall include the date and time of the inspection. The notice shall direct the owner of the vacant property, or his or her designee, to appear at the vacant property at the designated date and time, or to contact the vacancy fraud investigative unit to reschedule the inspection.

(e) In determining whether the owner of vacant property is actively attempting to sell, lease, or alter the vacant property, the vacancy fraud investigative unit may use the following factors:

(1) whether there is a sign on the vacant property advertising that it is for sale or for lease;

(2) whether the vacant property is advertised for sale or for lease in a newspaper of general circulation where the vacant property is located;

(3) whether the vacant property is advertised for sale or for lease on the internet, and whether potential buyers or tenants are reasonably able to access the internet listing;

(4) whether the owner of the vacant property has contracted for the services of an Illinois licensed real estate professional for the purpose of selling or leasing the vacant property;

(5) whether any advertised sale price or advertised rental price is at a reasonable market level;

(6) whether a contract for sale or lease is pending;

(7) whether the vacant property is subsequently sold or leased, and the amount of time that passed from the original vacancy to the sale or lease date;

(8) whether the owner has applied for and received demolition or construction permits for the vacant property; and

(9) any other factors the vacancy fraud investigative unit deems necessary to determine if the owner of any vacant property is actively attempting to lease, sell, or alter the vacant property.

For purposes of paragraphs (1), (2), and (3) of this subsection (e), any signs, newspaper advertisements, or internet advertisements shall contain a phone number. If the phone number does not connect to a person who can facilitate the purchase or lease of the vacant property, the vacancy fraud investigative unit may determine that the sign, newspaper advertisement, or internet advertisement does not exist.

(f) After concluding an investigation, the vacancy fraud investigative unit shall make a determination as to whether the owner of the vacant property is actively attempting to lease, sell, or alter the vacant property. Such a determination shall take into consideration all the evidence collected by the vacancy fraud investigative unit. If the evidence shows, by a preponderance of the evidence, that the owner of the vacant property is not actively attempting to sell, lease, or alter the vacant property, then the vacancy fraud investigative unit shall notify the chief county assessment officer of its determination. The vacancy fraud investigative unit shall notify the owner of the vacant property of its determination in either case.

(g) The vacancy fraud investigative unit must conclude all investigations under this Act within one year from the date the original notice required under subsection (c) of this Section was mailed.

Section 20. Chief county assessment officer's authority.

(a) Upon receiving an investigative report from the vacancy fraud investigative unit with a determination that an owner of vacant property is not actively attempting to sell, lease, or alter the vacant property, the chief county assessment officer may do any of the following:

(1) prohibit the vacant property from receiving any vacancy relief until it is subsequently sold or leased;

(2) require the payment of back taxes for any vacancy relief the vacant property received while the owner of the vacant property was not actively attempting to sell, lease, or alter the vacant property;

(3) require the payment of interest on any back taxes sought under paragraph (2); any interest imposed shall not exceed 10% per annum; and

(4) in the case of a property owner who has been penalized under this Section 2 times or more within the past 5 years, impose a penalty not to exceed 25% of the amount of back taxes sought under paragraph (2).

(b) The unpaid taxes shall be paid to the appropriate taxing districts. Interest and penalties shall be paid to the chief county assessment officer's office to cover the costs associated with administering the provisions of this Act and with educating the public on the provisions of this Act.

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