SB1740ham003 98TH GENERAL ASSEMBLY

Rep. John E. Bradley

Filed: 11/17/2014

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 1740

2    AMENDMENT NO. ______. Amend Senate Bill 1740, AS AMENDED,
3by replacing everything after the enacting clause with the
4following:
 
5    "Section 5. The Property Tax Code is amended by changing
6Section 9-275 as follows:
 
7    (35 ILCS 200/9-275)
8    Sec. 9-275. Erroneous homestead exemptions.
9    (a) For purposes of this Section:
10    "Erroneous homestead exemption" means a homestead
11exemption that was granted for real property in a taxable year
12if the property was not eligible for that exemption in that
13taxable year. If the taxpayer receives an erroneous homestead
14exemption under a single Section of this Code for the same
15property in multiple years, that exemption is considered a
16single erroneous homestead exemption for purposes of this

 

 

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1Section. However, if the taxpayer receives erroneous homestead
2exemptions under multiple Sections of this Code for the same
3property, or if the taxpayer receives erroneous homestead
4exemptions under the same Section of this Code for multiple
5properties, then each of those exemptions is considered a
6separate erroneous homestead exemption for purposes of this
7Section.
8    "Homestead exemption" means an exemption under Section
915-165 (disabled veterans), 15-167 (returning veterans),
1015-168 (disabled persons), 15-169 (disabled veterans standard
11homestead), 15-170 (senior citizens), 15-172 (senior citizens
12assessment freeze), 15-175 (general homestead), 15-176
13(alternative general homestead), or 15-177 (long-time
14occupant).
15    "Erroneous exemption principal amount" means the total
16difference between the property taxes actually billed to a
17property index number and the amount of property taxes that
18would have been billed but for the erroneous exemption or
19exemptions amount of property tax principal that would have
20been billed to a property index number but for the erroneous
21homestead exemption or exemptions a taxpayer received.
22    "Taxpayer" means the property owner or leasehold owner that
23erroneously received a homestead exemption upon property.
24    (b) Notwithstanding any other provision of law, in counties
25with 3,000,000 or more inhabitants, the chief county assessment
26officer shall include the following information with each

 

 

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1assessment notice sent in a general assessment year: (1) a list
2of each homestead exemption available under Article 15 of this
3Code and a description of the eligibility criteria for that
4exemption; (2) a list of each homestead exemption applied to
5the property in the current assessment year; (3) information
6regarding penalties and interest that may be incurred under
7this Section if the taxpayer property owner received an
8erroneous homestead exemption in a previous taxable year; and
9(4) notice of the 60-day grace period available under this
10subsection. If, within 60 days after receiving his or her
11assessment notice, the taxpayer property owner notifies the
12chief county assessment officer that he or she received an
13erroneous homestead exemption in a previous taxable assessment
14year, and if the taxpayer property owner pays the erroneous
15exemption principal amount, plus interest as provided in
16subsection (f), then the taxpayer property owner shall not be
17liable for the penalties provided in subsection (f) with
18respect to that exemption.
19    (c) In counties with 3,000,000 or more inhabitants, when
20the chief county assessment officer determines that one or more
21erroneous homestead exemptions was applied to the property, the
22erroneous exemption principal amount, together with all
23applicable interest and penalties as provided in subsections
24(f) and (j), shall constitute a lien in the name of the People
25of Cook County on the property receiving the erroneous
26homestead exemption. Upon becoming aware of the existence of

 

 

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1one or more erroneous homestead exemptions, the chief county
2assessment officer shall cause to be served, by both regular
3mail and certified mail, a notice of discovery as set forth in
4subsection (c-5). The chief county assessment officer in a
5county with 3,000,000 or more inhabitants may cause a lien to
6be recorded against property that (1) is located in the county
7and (2) received one or more erroneous homestead exemptions if,
8upon determination of the chief county assessment officer, the
9taxpayer property owner received: (A) one or 2 erroneous
10homestead exemptions for real property, including at least one
11erroneous homestead exemption granted for the property against
12which the lien is sought, during any of the 3 collection
13assessment years immediately prior to the current collection
14assessment year in which the notice of discovery intent to
15record a lien is served; or (B) 3 or more erroneous homestead
16exemptions for real property, including at least one erroneous
17homestead exemption granted for the property against which the
18lien is sought, during any of the 6 collection assessment years
19immediately prior to the current collection assessment year in
20which the notice of discovery intent to record a lien is
21served. Prior to recording the lien against the property, the
22chief county assessment officer shall cause to be served, by
23both regular mail and certified mail, return receipt requested,
24on the person to whom the most recent tax bill was mailed and
25the owner of record, a notice of intent to record a lien
26against the property. The chief county assessment officer shall

 

 

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1cause the notice of intent to record a lien to be served within
23 years from the date on which the notice of discovery was
3served.
4    (c-5) The notice of discovery described in subsection (c)
5shall: (1) identify, by property index number, the property for
6which the chief county assessment officer has knowledge
7indicating the existence of an erroneous homestead exemption;
8(2) set forth the taxpayer's liability for principal, interest,
9penalties, and administrative costs including, but not limited
10to, recording fees described in subsection (f); (3) inform the
11taxpayer that he or she will be served with a notice of intent
12to record a lien within 3 years from the date of service of the
13notice of discovery; and (4) inform the taxpayer that he or she
14may pay the outstanding amount, plus interest, penalties, and
15administrative costs at any time prior to being served with the
16notice of intent to record a lien or within 30 days after the
17notice of intent to record a lien is served.
18    (d) The notice of intent to record a lien described in
19subsection (c) shall: (1) identify, by property index number,
20the property against which the lien is being sought; (2)
21identify each specific homestead exemption that was
22erroneously granted and the year or years in which each
23exemption was granted; (3) set forth the erroneous exemption
24principal amount due and the interest amount and any penalty
25and administrative costs due; (4) inform the taxpayer that he
26or she may request a hearing within 30 days after service and

 

 

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1may appeal the hearing officer's ruling to the circuit court;
2and (5) inform the taxpayer that he or she may pay the
3erroneous exemption principal amount, plus interest and
4penalties, within 30 days after service; and (6) inform the
5taxpayer that, if the lien is recorded against the property,
6the amount of the lien will be adjusted to include the
7applicable recording fee and that fees for recording a release
8of the lien shall be incurred by the taxpayer. A lien shall not
9be filed pursuant to this Section if the taxpayer property
10owner pays the erroneous exemption principal amount, plus
11penalties and interest, within 30 days of service of the notice
12of intent to record a lien.
13    (e) The notice of intent to record a lien shall also
14include a form that the taxpayer property owner may return to
15the chief county assessment officer to request a hearing. The
16taxpayer property owner may request a hearing by returning the
17form within 30 days after service. The hearing shall be held
18within 90 days after the taxpayer property owner is served. The
19chief county assessment officer shall promulgate rules of
20service and procedure for the hearing. The chief county
21assessment officer must generally follow rules of evidence and
22practices that prevail in the county circuit courts, but,
23because of the nature of these proceedings, the chief county
24assessment officer is not bound by those rules in all
25particulars. The chief county assessment officer shall appoint
26a hearing officer to oversee the hearing. The taxpayer property

 

 

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1owner shall be allowed to present evidence to the hearing
2officer at the hearing. After taking into consideration all the
3relevant testimony and evidence, the hearing officer shall make
4an administrative decision on whether the taxpayer property
5owner was erroneously granted a homestead exemption for the
6taxable assessment year in question. The taxpayer property
7owner may appeal the hearing officer's ruling to the circuit
8court of the county where the property is located as a final
9administrative decision under the Administrative Review Law.
10    (f) A lien against the property imposed under this Section
11shall be filed with the county recorder of deeds, but may not
12be filed sooner than 60 days after the notice of intent to
13record a lien was delivered to the taxpayer property owner if
14the taxpayer property owner does not request a hearing, or
15until the conclusion of the hearing and all appeals if the
16taxpayer property owner does request a hearing. If a lien is
17filed pursuant to this Section and the taxpayer property owner
18received one or 2 erroneous homestead exemptions during any of
19the 3 collection assessment years immediately prior to the
20current collection assessment year in which the notice of
21discovery intent to record a lien is served, then the erroneous
22exemption principal amount, plus 10% interest per annum or
23portion thereof from the date the erroneous exemption principal
24amount would have become due if properly included in the tax
25bill, shall be charged against the property by the chief county
26assessment officer. However, if a lien is filed pursuant to

 

 

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1this Section and the taxpayer property owner received 3 or more
2erroneous homestead exemptions during any of the 6 collection
3assessment years immediately prior to the current collection
4assessment year in which the notice of discovery intent to
5record a lien is served, the erroneous exemption principal
6amount, plus a penalty of 50% of the total amount of the
7erroneous exemption principal amount for that property and 10%
8interest per annum or portion thereof from the date the
9erroneous exemption principal amount would have become due if
10properly included in the tax bill, shall be charged against the
11property by the chief county assessment officer. If a lien is
12filed pursuant to this Section, the taxpayer shall not be
13liable for interest that accrues between the date the notice of
14discovery is served and the date the lien is filed. Before
15recording the lien with the county recorder of deeds, the chief
16county assessment officer shall adjust the amount of the lien
17to add administrative costs, including but not limited to the
18applicable recording fee, to the total lien amount.
19    (g) If a person received an erroneous homestead exemption
20under Section 15-170 and: (1) the person was the spouse, child,
21grandchild, brother, sister, niece, or nephew of the previous
22taxpayer property owner; and (2) the person received the
23property by bequest or inheritance; then the person is not
24liable for the penalties imposed under this Section for any
25year or years during which the chief county assessment officer
26did not require an annual application for the exemption.

 

 

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1However, that person is responsible for any interest owed under
2subsection (f).
3    (h) If the erroneous homestead exemption was granted as a
4result of a clerical error or omission on the part of the chief
5county assessment officer, and if the taxpayer property owner
6has paid the tax bills as received for the year in which the
7error occurred, then the interest and penalties authorized by
8this Section with respect to that homestead exemption shall not
9be chargeable to the taxpayer property owner. However, nothing
10in this Section shall prevent the collection of the erroneous
11exemption principal amount due and owing.
12    (i) A lien under this Section is not valid as to (1) any
13bona fide purchaser for value without notice of the erroneous
14homestead exemption whose rights in and to the underlying
15parcel arose after the erroneous homestead exemption was
16granted but before the filing of the notice of lien; or (2) any
17mortgagee, judgment creditor, or other lienor whose rights in
18and to the underlying parcel arose before the filing of the
19notice of lien. A title insurance policy for the property that
20is issued by a title company licensed to do business in the
21State showing that the property is free and clear of any liens
22imposed under this Section shall be prima facie evidence that
23the taxpayer property owner is without notice of the erroneous
24homestead exemption. Nothing in this Section shall be deemed to
25impair the rights of subsequent creditors and subsequent
26purchasers under Section 30 of the Conveyances Act.

 

 

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1    (j) When a lien is filed against the property pursuant to
2this Section, the chief county assessment officer shall mail a
3copy of the lien to the person to whom the most recent tax bill
4was mailed and to the owner of record, and the outstanding
5liability created by such a lien is due and payable within 30
6days after the mailing of the lien by the chief county
7assessment officer. This liability is deemed delinquent and
8shall bear interest beginning on the day after the due date at
9a rate of 1.5% per month or portion thereof. Payment shall be
10made to the county treasurer. Upon receipt of the full amount
11due, as determined by the chief county assessment officer, the
12county treasurer shall distribute the amount paid as provided
13in subsection (k). Upon presentment by the taxpayer property
14owner to the chief county assessment officer of proof of
15payment of the total liability, the chief county assessment
16officer shall provide in reasonable form a release of the lien.
17The release of the lien provided shall clearly inform the
18taxpayer that it is the responsibility of the taxpayer to
19record the lien release form with the county recorder of deeds
20and to pay any applicable recording fees. This liability is
21deemed delinquent and shall bear interest beginning on the day
22after the due date at a rate of 1.5% per month or portion
23thereof.
24    (k) The county treasurer shall pay collected erroneous
25exemption principal amounts, pro rata, to the taxing districts,
26or their legal successors, that levied upon the subject

 

 

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1property in the taxable assessment year or years for which the
2erroneous homestead exemptions were granted, except as set
3forth in this Section. The county treasurer shall pay collected
4interest to the county where the property is located. The
5county treasurer shall deposit collected penalties and
6interest into a special fund established by the county
7treasurer to offset the costs of administration of the
8provisions of this Section amendatory Act of the 98th General
9Assembly by the chief county assessment officer's office, as
10appropriated by the county board. If the costs of
11administration of this Section exceed the amount of interest
12and penalties collected in the special fund, the chief county
13assessor shall be reimbursed by each taxing district or their
14legal successors for those costs. Such costs shall be paid out
15of the funds the taxing districts received from its pro rata
16share of the collected erroneous exemption principal amounts
17pursuant to this Section.
18    (l) The chief county assessment officer in a county with
193,000,000 or more inhabitants shall establish an amnesty period
20for all taxpayers owing any tax due to an erroneous homestead
21exemption granted in a tax year prior to the 2013 tax year. The
22amnesty period shall begin on the effective date of this
23amendatory Act of the 98th General Assembly and shall run
24through December 31, 2013. If, during the amnesty period, the
25taxpayer pays the entire arrearage of taxes due for tax years
26prior to 2013, the county clerk shall abate and not seek to

 

 

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1collect any interest or penalties that may be applicable and
2shall not seek civil or criminal prosecution for any taxpayer
3for tax years prior to 2013. Failure to pay all such taxes due
4during the amnesty period established under this Section shall
5invalidate the amnesty period for that taxpayer.
6    The chief county assessment officer in a county with
73,000,000 or more inhabitants shall (i) mail notice of the
8amnesty period with the tax bills for the second installment of
9taxes for the 2012 assessment year and (ii) as soon as possible
10after the effective date of this amendatory Act of the 98th
11General Assembly, publish notice of the amnesty period in a
12newspaper of general circulation in the county. Notices shall
13include information on the amnesty period, its purpose, and the
14method by which to make payment.
15    Taxpayers who are a party to any criminal investigation or
16to any civil or criminal litigation that is pending in any
17circuit court or appellate court, or in the Supreme Court of
18this State, for nonpayment, delinquency, or fraud in relation
19to any property tax imposed by any taxing district located in
20the State on the effective date of this amendatory Act of the
2198th General Assembly may not take advantage of the amnesty
22period.
23    A taxpayer who has claimed 3 or more homestead exemptions
24in error shall not be eligible for the amnesty period
25established under this subsection.
26(Source: P.A. 98-93, eff. 7-16-13; 98-756, eff. 7-16-14;

 

 

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198-811, eff. 1-1-15.)
 
2    Section 99. Effective date. This Act takes effect January
31, 2015.".