Illinois-2023-SB2814-Introduced

103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB2814

Introduced 1/17/2024, by Sen. Patrick J. Joyce

SYNOPSIS AS INTRODUCED:

35 ILCS 200/9-265

Amends the Property Tax Code. In counties with fewer than 3,000,000 inhabitants, provides that property that receives an erroneous homestead exemption for the current assessment year or for any of the 3 prior assessment years may be considered omitted property. Provides for penalties and interest to be imposed on that omitted property. Provides that any arrearage of taxes or interest that might have been assessed against that omitted property shall not be chargeable to certain bona fide purchasers of the property. Effective immediately.

LRB103 35597 HLH 65670 b

A BILL FOR

SB2814

LRB103 35597 HLH 65670 b

1 AN ACT concerning revenue.

2 Be it enacted by the People of the State of Illinois,

3 represented in the General Assembly:

4 Section 5. The Property Tax Code is amended by changing

5 Section 9-265 as follows:

6 (35 ILCS 200/9-265)

7 Sec. 9-265. Omitted property; interest; change in exempt

8 use or ownership.

9 (a) If any property is omitted in the assessment of any

10 year or years, not to exceed the current assessment year and 3

11 prior years, so that the taxes, for which the property was

12 liable, have not been paid, or if by reason of defective

13 description or assessment, taxes on any property for any year

14 or years have not been paid, or if any taxes are refunded under

15 subsection (b) of Section 14-5 because the taxes were assessed

16 in the wrong person's name, the property, when discovered,

17 shall be listed and assessed by the board of review or, in

18 counties with 3,000,000 or more inhabitants, by the county

19 assessor either on his or her own initiative or when so

20 directed by the board of appeals or board of review.

21 (b) The board of review in counties with less than

22 3,000,000 inhabitants or the county assessor in counties with

23 3,000,000 or more inhabitants may develop reasonable

SB2814

- 2 -

LRB103 35597 HLH 65670 b

1 procedures for contesting the listing of omitted property

2 under this Division.

3 (c) For purposes of this Section, "defective description

4 or assessment" includes a description or assessment which

5 omits all the improvements thereon as a result of which part of

6 the taxes on the total value of the property as improved remain

7 unpaid. In the case of property subject to assessment by the

8 Department, the property shall be listed and assessed by the

9 Department. All such property shall be placed on the

10 assessment and tax books.

11 (d) The arrearages of taxes which might have been

12 assessed, with 10% interest thereon for each year or portion

13 thereof from 2 years after the time the first correct tax bill

14 ought to have been received, shall be charged against the

15 property by the county clerk.

16 (e) When property or acreage omitted by either incorrect

17 survey or other ministerial assessor error is discovered and

18 the owner has paid its tax bills as received for the year or

19 years of omission of the parcel, then the interest authorized

20 by this Section shall not be chargeable to the owner. However,

21 nothing in this Section shall prevent the collection of the

22 principal amount of back taxes due and owing.

23 (f) If any property listed as exempt by the chief county

24 assessment officer has a change in use, a change in leasehold

25 estate, or a change in titleholder of record by purchase,

26 grant, taking or transfer, it shall be the obligation of the

SB2814

- 3 -

LRB103 35597 HLH 65670 b

1 transferee to notify the chief county assessment officer in

2 writing within 90 days of the change. If mailed, the notice

3 shall be sent by certified mail, return receipt requested, and

4 shall include the name and address of the taxpayer, the legal

5 description of the property, and the property index number of

6 the property when an index number exists. If notice is

7 provided in person, it shall be provided on a form prescribed

8 by the chief county assessment officer, and the chief county

9 assessment officer shall provide a date stamped copy of the

10 notice. Except as provided in item (6) of subsection (a) of

11 Section 9-260, item (6) of Section 16-135, and item (6) of

12 Section 16-140 of this Code, if the failure to give the

13 notification results in the assessing official continuing to

14 list the property as exempt in subsequent years, the property

15 shall be considered omitted property for purposes of this

16 Code.

17 (g) In counties with fewer than 3,000,000 inhabitants, if

18 a chief county assessment officer discovers at any time before

19 judgment that a property has been granted a homestead

20 exemption under Article 15 of this Code to which it was not

21 entitled for the current assessment year or for any of the 3

22 prior assessment years, the chief county assessment officer

23 may consider the erroneously exempt portion of the property as

24 omitted property under this Section for the assessment year in

25 which the erroneous homestead exemption was applied to the

26 property, but not including any assessment year that occurred

SB2814

- 4 -

LRB103 35597 HLH 65670 b

1 more than 3 years prior to the current assessment year. The

2 county or its designated agent may use any remedy allowed by

3 law to collect the taxes due on property that is omitted

4 property under this subsection, plus interest in the amount of

5 10% per annum on those amounts, as well as any additional fees

6 or costs incurred in identifying and collecting the unpaid

7 taxes ~~that taxable year only~~.

8 Any arrearage of taxes that might have been assessed

9 against the omitted property but for the erroneous homestead

10 exemption, as well as any interest, fees, or costs imposed on

11 that property under this Section, shall not be chargeable to

12 any bona fide purchaser for value who acquires the property

13 without notice of the erroneous homestead exemption and whose

14 rights in and to the underlying parcel arose after the

15 erroneous homestead exemption was granted but before the

16 erroneously exempt portion of the property was listed as

17 omitted pursuant to this subsection. Nor shall those amounts

18 be chargeable to any mortgagee, tax buyer, judgment creditor,

19 or other lienor whose rights in and to the underlying parcel

20 arose after the erroneous homestead exemption was granted but

21 before the erroneously exempt portion of the property was

22 listed as omitted.

23 A title insurance policy for the property that is issued

24 by a title company licensed to do business in the State and

25 that shows that the property is free and clear of any liens or

26 arrearages imposed under this Section shall be prima facie

SB2814

- 5 -

LRB103 35597 HLH 65670 b

1 evidence that the person acquiring an interest in the property

2 is without notice of the erroneous homestead exemption.

3 (Source: P.A. 98-615, eff. 6-1-14.)