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Illinois House Bill HB5136

Illinois 2023-2024 Regular Session

Illinois House Bill HB5136 Compare Versions

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11 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB5136 Introduced 2/8/2024, by Rep. Steven Reick SYNOPSIS AS INTRODUCED: 35 ILCS 200/21-31035 ILCS 200/21-315 Amends the Property Tax Code. Provides that the court shall declare the sale of a property under the Property Tax Code to be a sale in error if the improvements upon the property sold have been rendered unfit for occupancy subsequent to the tax sale and prior to the issuance of the tax deed. Provides for the refund of an $80 fee paid in certain situations. Removes specified exceptions when certain interest shall not be paid when the sale is in error. Effective immediately. LRB103 38139 HLH 68271 b A BILL FOR 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB5136 Introduced 2/8/2024, by Rep. Steven Reick SYNOPSIS AS INTRODUCED: 35 ILCS 200/21-31035 ILCS 200/21-315 35 ILCS 200/21-310 35 ILCS 200/21-315 Amends the Property Tax Code. Provides that the court shall declare the sale of a property under the Property Tax Code to be a sale in error if the improvements upon the property sold have been rendered unfit for occupancy subsequent to the tax sale and prior to the issuance of the tax deed. Provides for the refund of an $80 fee paid in certain situations. Removes specified exceptions when certain interest shall not be paid when the sale is in error. Effective immediately. LRB103 38139 HLH 68271 b LRB103 38139 HLH 68271 b A BILL FOR
22 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB5136 Introduced 2/8/2024, by Rep. Steven Reick SYNOPSIS AS INTRODUCED:
33 35 ILCS 200/21-31035 ILCS 200/21-315 35 ILCS 200/21-310 35 ILCS 200/21-315
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66 Amends the Property Tax Code. Provides that the court shall declare the sale of a property under the Property Tax Code to be a sale in error if the improvements upon the property sold have been rendered unfit for occupancy subsequent to the tax sale and prior to the issuance of the tax deed. Provides for the refund of an $80 fee paid in certain situations. Removes specified exceptions when certain interest shall not be paid when the sale is in error. Effective immediately.
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1212 1 AN ACT concerning revenue.
1313 2 Be it enacted by the People of the State of Illinois,
1414 3 represented in the General Assembly:
1515 4 Section 5. The Property Tax Code is amended by changing
1616 5 Sections 21-310 and 21-315 as follows:
1717 6 (35 ILCS 200/21-310)
1818 7 Sec. 21-310. Sales in error.
1919 8 (a) When, upon application of the county collector, the
2020 9 owner of the certificate of purchase, the holder of a 5% lien
2121 10 issued pursuant to Section 21-240, or a municipality which
2222 11 owns or has owned the property ordered sold, it appears to the
2323 12 satisfaction of the court which ordered the property sold that
2424 13 any of the following subsections are applicable, the court
2525 14 shall declare the sale to be a sale in error:
2626 15 (1) the property was not subject to taxation, or all
2727 16 or any part of the lien of taxes sold has become null and
2828 17 void pursuant to Section 21-95 or unenforceable pursuant
2929 18 to subsection (c) of Section 18-250 or subsection (b) of
3030 19 Section 22-40;
3131 20 (2) the taxes or special assessments had been paid
3232 21 prior to the sale of the property;
3333 22 (3) there is a double assessment;
3434 23 (4) the description is void for uncertainty;
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3838 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB5136 Introduced 2/8/2024, by Rep. Steven Reick SYNOPSIS AS INTRODUCED:
3939 35 ILCS 200/21-31035 ILCS 200/21-315 35 ILCS 200/21-310 35 ILCS 200/21-315
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4141 35 ILCS 200/21-315
4242 Amends the Property Tax Code. Provides that the court shall declare the sale of a property under the Property Tax Code to be a sale in error if the improvements upon the property sold have been rendered unfit for occupancy subsequent to the tax sale and prior to the issuance of the tax deed. Provides for the refund of an $80 fee paid in certain situations. Removes specified exceptions when certain interest shall not be paid when the sale is in error. Effective immediately.
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7171 1 (5) the assessor, chief county assessment officer,
7272 2 board of review, board of appeals, or other county
7373 3 official has made an error material to the tax certificate
7474 4 at issue (other than an error of judgment as to the value
7575 5 of any property), provided, however, that a sale in error
7676 6 may not be declared upon application of the owner of the
7777 7 certificate of purchase under this paragraph (5) if the
7878 8 county collector provided notice in accordance with
7979 9 Section 21-118 that the same property received a previous
8080 10 sale in error on the same facts;
8181 11 (5.5) the owner of the homestead property had tendered
8282 12 timely and full payment to the county collector that the
8383 13 owner reasonably believed was due and owing on the
8484 14 homestead property, and the county collector did not apply
8585 15 the payment to the homestead property; provided that this
8686 16 provision applies only to homeowners, not their agents or
8787 17 third-party payors;
8888 18 (6) a voluntary or involuntary petition was filed by
8989 19 or against the legal or beneficial owner of the property
9090 20 requesting relief under the provisions of 11 U.S.C.
9191 21 Chapter 7, 11, 12, or 13, and the bankruptcy case was open
9292 22 on the date the collector's application for judgment was
9393 23 filed pursuant to Section 21-150 or 21-155 or the date of
9494 24 the tax sale;
9595 25 (7) the property is owned by the United States, the
9696 26 State of Illinois, a municipality, or a taxing district;
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107107 1 or
108108 2 (8) the owner of the property is a reservist or
109109 3 guardsperson who is granted an extension of his or her due
110110 4 date under Sections 21-15, 21-20, and 21-25 of this Act.
111111 5 (b) When, upon application of the owner of the certificate
112112 6 of purchase only, it appears to the satisfaction of the court
113113 7 which ordered the property sold that any of the following
114114 8 subsections are applicable, the court shall declare the sale
115115 9 to be a sale in error:
116116 10 (1) A voluntary or involuntary petition under the
117117 11 provisions of 11 U.S.C. Chapter 7, 11, 12, or 13 has been
118118 12 filed subsequent to the tax sale and prior to the issuance
119119 13 of the tax deed, and the bankruptcy case was open on the
120120 14 date the petition for a sale in error was filed.
121121 15 (2) The improvements upon the property sold have been
122122 16 substantially destroyed or rendered unfit for occupancy
123123 17 subsequent to the tax sale and prior to the issuance of the
124124 18 tax deed; however, if the court declares a sale in error
125125 19 under this paragraph (2), the court may order the holder
126126 20 of the certificate of purchase to assign the certificate
127127 21 to the county collector if requested by the county
128128 22 collector. The county collector may, upon request of the
129129 23 county, as trustee, or upon request of a taxing district
130130 24 having an interest in the taxes sold, further assign any
131131 25 certificate of purchase received pursuant to this
132132 26 paragraph (2) to the county acting as trustee for taxing
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143143 1 districts pursuant to Section 21-90 of this Code or to the
144144 2 taxing district having an interest in the taxes sold.
145145 3 (3) There is an interest held by the United States in
146146 4 the property sold which could not be extinguished by the
147147 5 tax deed.
148148 6 (4) The real property contains a hazardous substance,
149149 7 hazardous waste, or underground storage tank that would
150150 8 require cleanup or other removal under any federal, State,
151151 9 or local law, ordinance, or regulation, only if the tax
152152 10 purchaser purchased the property without actual knowledge
153153 11 of the hazardous substance, hazardous waste, or
154154 12 underground storage tank. The presence of a grease trap on
155155 13 the property is not grounds for a sale in error under this
156156 14 paragraph (4). This paragraph (4) applies only if the
157157 15 owner of the certificate of purchase has made application
158158 16 for a sale in error at any time before the issuance of a
159159 17 tax deed. If the court declares a sale in error under this
160160 18 paragraph (4), the court may order the holder of the
161161 19 certificate of purchase to assign the certificate to the
162162 20 county collector if requested by the county collector. The
163163 21 county collector may, upon request of the county, as
164164 22 trustee, or upon request of a taxing district having an
165165 23 interest in the taxes sold, further assign any certificate
166166 24 of purchase received pursuant to this paragraph (4) to the
167167 25 county acting as trustee for taxing districts pursuant to
168168 26 Section 21-90 of this Code or to the taxing district
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179179 1 having an interest in the taxes sold.
180180 2 Whenever a court declares a sale in error under this
181181 3 subsection (b), the State's attorney shall promptly notify the
182182 4 county collector in writing.
183183 5 (c) When the county collector discovers, prior to the
184184 6 expiration of the period of redemption, that a tax sale should
185185 7 not have occurred for one or more of the reasons set forth in
186186 8 subdivision (a)(1), (a)(2), (a)(3), (a)(4), (a)(5.5), (a)(6),
187187 9 (a)(7), or (a)(8) of this Section, the county collector shall
188188 10 notify the last known owner of the tax certificate by
189189 11 certified and regular mail, or other means reasonably
190190 12 calculated to provide actual notice, that the county collector
191191 13 intends to declare an administrative sale in error and of the
192192 14 reasons therefor, including documentation sufficient to
193193 15 establish the reason why the sale should not have occurred.
194194 16 The owner of the certificate of purchase may object in writing
195195 17 within 28 days after the date of the mailing by the county
196196 18 collector. If an objection is filed, the county collector
197197 19 shall not administratively declare a sale in error, but may
198198 20 apply to the circuit court for a sale in error as provided in
199199 21 subsection (a) of this Section. Thirty days following the
200200 22 receipt of notice by the last known owner of the certificate of
201201 23 purchase, or within a reasonable time thereafter, the county
202202 24 collector shall make a written declaration, based upon clear
203203 25 and convincing evidence, that the taxes were sold in error and
204204 26 shall deliver a copy thereof to the county clerk within 30 days
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215215 1 after the date the declaration is made for entry in the tax
216216 2 judgment, sale, redemption, and forfeiture record pursuant to
217217 3 subsection (d) of this Section. The county collector shall
218218 4 promptly notify the last known owner of the certificate of
219219 5 purchase of the declaration by regular mail and shall, except
220220 6 if the certificate was issued pursuant to a no-cash bid,
221221 7 promptly pay the amount of the tax sale, together with
222222 8 interest and costs as provided in Section 21-315, upon
223223 9 surrender of the original certificate of purchase.
224224 10 (d) If a sale is declared to be a sale in error for any
225225 11 reason set forth in Section 22-35, Section 22-50, or
226226 12 subdivision (a)(5), (b)(2), or (b)(4) of this Section, the tax
227227 13 certificate shall be forfeited to the county as trustee
228228 14 pursuant to Section 21-90 of this Code, unless the county
229229 15 collector informs the county and the county clerk in writing
230230 16 that the tax certificate shall not be forfeited to the county
231231 17 as trustee. The county clerk shall make entry in the tax
232232 18 judgment, sale, redemption and forfeiture record, that the
233233 19 property was erroneously sold and that the tax certificate is
234234 20 forfeited to the county pursuant to Section 21-90, and the
235235 21 county collector shall, on demand of the owner of the
236236 22 certificate of purchase, refund the amount paid, except for
237237 23 the nonrefundable $80 fee paid, pursuant to Section 21-295,
238238 24 for each item purchased at the tax sale, pay any interest and
239239 25 costs as may be ordered under Sections 21-315 through 21-335,
240240 26 and cancel the certificate so far as it relates to the
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251251 1 property. The county collector shall deduct from the accounts
252252 2 of the appropriate taxing bodies their pro rata amounts paid.
253253 3 (e) Whenever the collector declares an administrative sale
254254 4 in error under this Section, the collector must send a copy of
255255 5 the declaration of the administrative sale in error, and
256256 6 documentation sufficient to establish the reason why the sale
257257 7 should not have occurred, to the government entity responsible
258258 8 for maintaining assessment books and property record cards for
259259 9 the subject property. That entity must review the
260260 10 documentation sent by the collector, make a determination as
261261 11 to whether an update to the assessment books or property
262262 12 record cards is necessary to prevent a recurrence of the sale
263263 13 in error, and update the assessment books or property record
264264 14 cards as appropriate.
265265 15 (f) Whenever a court declares a sale in error under this
266266 16 Section, the State's attorney must send a copy of the
267267 17 application and order declaring the sale in error to the
268268 18 county collector, the county clerk, and the government entity
269269 19 responsible for maintaining the assessment books and property
270270 20 record cards for the subject property. The collector, the
271271 21 county clerk, and the other government entity must each review
272272 22 the application and order sent by the State's attorney and
273273 23 make a determination as to whether an update to its respective
274274 24 records is necessary to prevent a recurrence of the sale in
275275 25 error, and update its records as appropriate.
276276 26 The changes made to this Section by this amendatory Act of
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287287 1 the 103rd General Assembly apply to matters concerning tax
288288 2 certificates issued on or after the effective date of this
289289 3 amendatory Act of the 103rd General Assembly.
290290 4 (Source: P.A. 103-555, eff. 1-1-24.)
291291 5 (35 ILCS 200/21-315)
292292 6 Sec. 21-315. Refund of costs; interest on refund.
293293 7 (a) If a sale in error under Section 21-310, 22-35, or
294294 8 22-50 is declared, the amount refunded shall also include all
295295 9 costs paid by the owner of the certificate of purchase or his
296296 10 or her assignor which were posted to the tax judgment, sale,
297297 11 redemption and forfeiture record, except that if the sale in
298298 12 error is declared under Section 22-50, in counties of
299299 13 3,000,000 or more inhabitants the amount refunded shall not
300300 14 include the $100 fee paid in accordance with Section 21-330.
301301 15 (b) In those cases which arise solely under grounds set
302302 16 forth in Section 21-310, the amount refunded shall also
303303 17 include interest on the refund of the amount paid for the
304304 18 certificate of purchase, except as otherwise provided in this
305305 19 Section. Interest shall be awarded and paid to the tax
306306 20 purchaser at the rate of 1% per month from the date of sale to
307307 21 the date of payment, or in an amount equivalent to the penalty
308308 22 interest which would be recovered on a redemption at the time
309309 23 of payment pursuant to the order for sale in error, whichever
310310 24 is less. Interest shall not be paid when the sale in error is
311311 25 made pursuant to Section 22-35, Section 22-50, subdivision
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322322 1 (a)(5), (b)(1), (b)(2), or (b)(4) of Section 21-310, any
323323 2 ground not enumerated in Section 21-310, or in any other case
324324 3 where the court determines that the tax purchaser had actual
325325 4 knowledge prior to the sale of the grounds on which the sale is
326326 5 declared to be erroneous.
327327 6 (c) When the county collector files a petition for sale in
328328 7 error under Section 21-310 and mails a notice thereof by
329329 8 certified or registered mail to the last known owner of the
330330 9 certificate of purchase, any interest otherwise payable under
331331 10 this Section shall cease to accrue as of the date the petition
332332 11 is filed, unless the tax purchaser agrees to an order for sale
333333 12 in error upon the presentation of the petition to the court.
334334 13 Notices under this subsection may be mailed to the last known
335335 14 owner of the certificate of purchase. When the owner of the
336336 15 certificate of purchase contests the collector's petition
337337 16 solely to determine whether the grounds for sale in error are
338338 17 such as to support a claim for interest, the court may direct
339339 18 that the principal amount of the refund be paid to the owner of
340340 19 the certificate of purchase forthwith. If the court thereafter
341341 20 determines that a claim for interest lies under this Section,
342342 21 it shall award such interest from the date of sale to the date
343343 22 the principal amount was paid. If the owner of the certificate
344344 23 of purchase files an objection to the county collector's
345345 24 intention to declare an administrative sale in error, as
346346 25 provided under subsection (c) of Section 21-310, and,
347347 26 thereafter, the county collector elects to apply to the
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358358 1 circuit court for a sale in error under subsection (a) of
359359 2 Section 21-310, then, if the circuit court grants the county
360360 3 collector's application for a sale in error, the court may not
361361 4 award interest to the owner of the certificate of purchase for
362362 5 the period after the mailing date of the county collector's
363363 6 notice of intention to declare an administrative sale in
364364 7 error.
365365 8 (Source: P.A. 103-555, eff. 1-1-24.)
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