Bill Text: IL SB3396 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Amends the Property Tax Code. Provides that a property owner who sustains loss or damage by reason of the issuance of a tax deed is entitled to payment from the indemnity fund in the amount of the equity in the property described in the tax deed. Provides that a claim for equity must be filed within 90 days after the tax deed is recorded, except that, if the tax deed was issued on or after May 24, 2021 but before the effective date of the amendatory Act, then the petition for a claim for equity must be filed within 90 days after the effective date of the amendatory Act.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2024-03-15 - Rule 3-9(a) / Re-referred to Assignments [SB3396 Detail]

Download: Illinois-2023-SB3396-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB3396 Introduced 2/8/2024, by Sen. Celina Villanueva SYNOPSIS AS INTRODUCED:
35 ILCS 200/21-90
35 ILCS 200/21-295
35 ILCS 200/21-305
35 ILCS 200/21-306
Amends the Property Tax Code. Provides that a property owner who sustains loss or damage by reason of the issuance of a tax deed is entitled to payment from the indemnity fund in the amount of the equity in the property described in the tax deed. Provides that a claim for equity must be filed within 90 days after the tax deed is recorded, except that, if the tax deed was issued on or after May 24, 2021 but before the effective date of the amendatory Act, then the petition for a claim for equity must be filed within 90 days after the effective date of the amendatory Act.
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A BILL FOR
SB3396 LRB103 39258 HLH 69410 b
AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Property Tax Code is amended by changing
Sections 21-90, 21-295, 21-305, and 21-306 as follows:
(35 ILCS 200/21-90)
Sec. 21-90. Purchase and sale by county; distribution of
proceeds.
(a) When any property is offered for sale under any of the
provisions of this Code, the county board of the county in
which the property is located, in its discretion, may bid, or,
in the case of forfeited property, may apply to purchase it or
otherwise acquire the tax lien or certificate in the name of
the county as trustee for all taxing districts having an
interest in the property's taxes or special assessments for
the nonpayment of which the property is sold. The presiding
officer of the county board, with the advice and consent of the
board, may appoint on its behalf some officer, person, or
entity to attend such sales, bid on tax liens or certificates,
and act on behalf of the county when exercising its authority
under this Section. The county shall apply on the bid or
purchase the unpaid taxes and special assessments due upon the
property. No cash need be paid.

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(b) The county, as trustee for all taxing districts having
an interest in the property's taxes or special assessments,
shall be the designated holder of all tax liens or
certificates that are forfeited to the State or county. No
cash need be paid for the forfeited tax lien or certificate.
(c) For any tax lien or certificate acquired under
subsection (a) or (b) of this Section, the county may take
steps necessary to acquire title to the property and may
manage and operate the property, including, but not limited
to, mowing of grass, removal of nuisance greenery, removal of
garbage, waste, debris or other materials, or the demolition,
repair, or remediation of unsafe structures. When a county, or
other taxing district within the county, is a petitioner for a
tax deed, no filing fee shall be required. When a county or
other taxing district within the county is the petitioner for
a tax deed, one petition may be filed including all parcels
that are tax delinquent within the county or taxing district,
and any publication made under Section 22-20 of this Code may
combine all such parcels within a single notice. The notice
may include the street address as listed on the most recent
available tax bills, if available, and shall list the Property
Index Number of the parcels for informational purposes. The
county, as tax creditor and as trustee for other tax
creditors, or other taxing district within the county, shall
not be required to allege and prove that all taxes and special
assessments which become due and payable after the sale or

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forfeiture to the county have been paid nor shall the county be
required to pay the subsequently accruing taxes or special
assessments at any time. The county board or its designee may
prohibit the county collector from including the property in
the tax sale of one or more subsequent years. The lien of taxes
and special assessments which become due and payable after a
sale to a county shall merge in the fee title of the county, or
other taxing district within the county, on the issuance of a
deed.
The county may sell any property acquired with authority
provided in this Section, or assign any tax certificate to any
party, including, but not limited to, taxing districts,
municipalities, land banks created pursuant to Illinois law,
or non-profit developers focused on constructing affordable
housing.
The assigned tax certificate shall be void with no further
rights given to the assignee, including no right to refund or
reimbursement, if a tax deed has not been recorded within 4
years after the date of the assignment unless a court extends
the assignment period as provided in this Section. Upon a
motion by the assignee, a court may toll the 4-year deadline
for a specified period of time if the court finds the assignee
is prevented from obtaining or recording a deed by injunction
or order of any court, by the refusal or inability of any court
to act upon the application for a tax deed, by a municipality's
refusal to issue necessary transfer stamps or approvals for

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recording, or by the refusal of the clerk to execute the deed.
If an assigned tax certificate is void under this Section, it
shall be forfeited to the county and held as a valid
certificate of sale in the county's name pursuant to this
Section 21-90. The proceeds of any sale or assignment under
this Section, less all costs of the county incurred in the
acquisition, operation, maintenance, and sale of the property
or assignment of the tax certificate, including all costs
associated with county staff and overhead used to perform the
duties of the trustee set forth in this Section, shall be
distributed to the taxing districts in proportion to their
respective interests therein.
Under Sections 21-110, 21-115, 21-120, and 21-190, a
county may bid or purchase only in the absence of other
bidders.
(d) Any owner of property that is sold under any provision
of this Code who sustains loss or damage by reason of the
issuance of a tax deed to any county, municipality, or county
land bank under Section 21-445 or 22-40, if that tax deed is
issued to the county, municipality, or land bank, shall be
entitled to the equity in the property described in the tax
deed. For purposes of this subsection, equity shall be
calculated as follows: (i) the fair cash value of the subject
property on the date the tax deed is issued, less (ii) the
amount that would have been needed to redeem such property,
less (iii) any other taxes paid by the tax deed grantee to

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obtain the tax deed, less (iv) the amount needed to pay any
mortgages or liens on the property, and less (v) an
administrative fee of $500 for the county conducting the tax
sale and issuing the tax deed.
If the tax deed is issued on or after the effective date of
this amendatory Act of the 103rd General Assembly, then the
petition for a claim for equity under this subsection (d) must
be filed within 90 days after the tax deed is recorded. If the
tax deed is issued on or after May 24, 2021 but before the
effective date of this amendatory Act of the 103rd General
Assembly, then the petition for a claim for equity under this
subsection (d) must be filed within 90 days after the
effective date of this amendatory Act of the 103rd General
Assembly.
The county, municipality, or county land bank shall pay
all equity claims under this subsection (d) from its general
fund, and no moneys shall be paid to the owner under this
subsection (d) from any county indemnity fund established by
Section 21-295 for any claim brought under this subsection
(d).
(Source: P.A. 102-363, eff. 1-1-22; 103-555, eff. 1-1-24.)
(35 ILCS 200/21-295)
Sec. 21-295. Creation of indemnity fund.
(a) In counties of less than 3,000,000 inhabitants, each
person purchasing any property at a sale under this Code shall

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pay to the County Collector, prior to the issuance of any
certificate of purchase, an indemnity fee set by the county
collector of not more than $20 for each item purchased. A like
sum shall be paid for each year that all or a portion of
subsequent taxes are paid by the tax purchaser and posted to
the tax judgment, sale, redemption and forfeiture record where
the underlying certificate of purchase is recorded.
(a-5) In counties of 3,000,000 or more inhabitants, each
person purchasing property at a sale under this Code shall pay
to the County Collector a nonrefundable fee of $80 for each
item purchased plus an additional sum equal to 5% of the taxes,
interest, and penalties paid under Section 21-240. In these
counties, the certificate holder shall also pay to the County
Collector a fee of $80 for each year that all or a portion of
subsequent taxes are paid by the tax purchaser and posted to
the tax judgment, sale, redemption, and forfeiture record. The
changes to this subsection made by this amendatory Act of the
91st General Assembly are not a new enactment, but declaratory
of existing law.
(b) The amount paid prior to issuance of the certificate
of purchase pursuant to subsection (a) or (a-5) shall be
included in the purchase price of the property in the
certificate of purchase and all amounts paid under this
Section shall be included in the amount required to redeem
under Section 21-355, except for the nonrefundable $80 fee for
each item purchased at the tax sale as provided in this

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Section. Except as otherwise provided in subsection (b) of
Section 21-300, all money received under subsection (a) or
(a-5) shall be paid by the Collector to the County Treasurer of
the County in which the land is situated, for the purpose of an
indemnity fund. The County Treasurer, as trustee of that fund,
shall invest all of that fund, principal and income, in his or
her hands from time to time, if not immediately required for
payments of indemnities under subsection (a) of Section
21-305, in investments permitted by the Illinois State Board
of Investment under Article 22A of the Illinois Pension Code.
The county collector shall report annually to the county clerk
on the condition and income of the fund. The indemnity fund
shall be held to satisfy judgments obtained against the County
Treasurer, as trustee of the fund. No payment shall be made
from the fund, except upon a judgment of the court which
ordered the issuance of a tax deed.
(Source: P.A. 100-1070, eff. 1-1-19; 101-659, eff. 3-23-21.)
(35 ILCS 200/21-305)
Sec. 21-305. Payments from Indemnity Fund.
(a) Any owner of property that is sold under any provision
of this Code who sustains loss or damage by reason of the
issuance of a tax deed on or after May 24, 2021 under Section
21-445 or 22-40 shall be entitled to the equity in the property
described in the tax deed. For purposes of this subsection,
equity shall be calculated as follows: (i) the fair cash value

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of the subject property on the date the tax deed is issued,
less (ii) the amount that would have been needed to redeem such
property, less (iii) any other taxes paid by the tax deed
grantee to obtain the tax deed, less (iv) the amount needed to
pay any mortgages or liens on the property, and less (v) an
administrative fee of $500 for the county conducting the tax
sale and issuing the tax deed.
If the tax deed is issued on or after the effective date of
this amendatory Act of the 103rd General Assembly, then the
petition for a claim for equity under this subsection (a) must
be filed within 90 days after the tax deed is recorded. If the
tax deed is issued on or after May 24, 2021 but before the
effective date of this amendatory Act of the 103rd General
Assembly, then the petition for a claim for equity under this
subsection (a) must be filed within 90 days after the
effective date of this amendatory Act of the 103rd General
Assembly.
(a-5) (a) Any owner of property sold under any provision
of this Code who sustains loss or damage by reason of the
issuance of a tax deed under Section 21-445 or 22-40 and who is
barred or is in any way precluded from bringing an action for
the recovery of the property and who fails to bring a petition
to recover the equity within the time frame provided in
subsection (a) shall have the right to indemnity for the loss
or damage sustained, limited as follows:
(1) An owner who resided on property that contained 4

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or less dwelling units on the last day of the period of
redemption and who is equitably entitled to compensation
for the loss or damage sustained has the right to
indemnity. An equitable indemnity award shall be limited
to the fair cash value of the property as of the date the
tax deed was issued less any mortgages or liens on the
property, and the award will not exceed $99,000. The Court
shall liberally construe this equitable entitlement
standard to provide compensation wherever, in the
discretion of the Court, the equities warrant the action.
An owner of a property that contained 4 or less
dwelling units who requests an award in excess of $99,000
must prove that the loss of his or her property was not
attributable to his or her own fault or negligence before
an award in excess of $99,000 will be granted.
(2) An owner who sustains the loss or damage of any
property occasioned by reason of the issuance of a tax
deed, without fault or negligence of his or her own, has
the right to indemnity limited to the fair cash value of
the property less any mortgages or liens on the property.
In determining the existence of fault or negligence, the
court shall consider whether the owner exercised ordinary
reasonable diligence under all of the relevant
circumstances.
(3) In determining the fair cash value of property
less any mortgages or liens on the property, the fair cash

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value shall be reduced by the principal amount of all
taxes paid by the tax purchaser or his or her assignee
before the issuance of the tax deed.
(4) If an award made under paragraph (1) or (2) is
subject to a reduction by the amount of an outstanding
mortgage or lien on the property, other than the principal
amount of all taxes paid by the tax purchaser or his or her
assignee before the issuance of the tax deed and the
petitioner would be personally liable to the mortgagee or
lienholder for all or part of that reduction amount, the
court shall order an additional indemnity award to be paid
directly to the mortgagee or lienholder sufficient to
discharge the petitioner's personal liability. The court,
in its discretion, may order the joinder of the mortgagee
or lienholder as an additional party to the indemnity
action.
A petition of indemnity under this subsection (a-5) must
be filed within 10 years after the date the tax deed was
issued.
(b) Indemnity fund; subrogation.
(1) Any person filing a claim under subsection (a) or
(a-5) claiming indemnity hereunder shall petition the
Court which ordered the tax deed to issue, shall name the
County Treasurer, as Trustee of the indemnity fund, as
defendant to the petition, and shall ask that judgment be
entered against the County Treasurer, as Trustee, in the

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amount of the equity or indemnity sought. The provisions
of the Civil Practice Law shall apply to proceedings under
the petition, except that neither the petitioner nor
County Treasurer shall be entitled to trial by jury on the
issues presented in the petition. The Court shall
liberally construe this Section to provide compensation
wherever in the discretion of the Court the equities
warrant such action.
(2) The County Treasurer, as Trustee of the indemnity
fund, shall be subrogated to all parties in whose favor
judgment may be rendered against him or her, and by third
party complaint may bring in as a defendant any person,
other than the tax deed grantee and its successors in
title, not a party to the action who is or may be liable to
him or her, as subrogee, for all or part of the
petitioner's claim against him or her.
(c) Any contract involving the proceeds of a judgment for
equity or indemnity under this Section, between the tax deed
grantee or its successors in title and the indemnity
petitioner or his or her successors, shall be in writing. In
any action brought under Section 21-305, the Collector shall
be entitled to discovery regarding, but not limited to, the
following:
(1) the identity of all persons beneficially
interested in the contract, directly or indirectly,
including at least the following information: the names

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and addresses of any natural persons; the place of
incorporation of any corporation and the names and
addresses of its shareholders unless it is publicly held;
the names and addresses of all general and limited
partners of any partnership; the names and addresses of
all persons having an ownership interest in any entity
doing business under an assumed name, and the county in
which the assumed business name is registered; and the
nature and extent of the interest in the contract of each
person identified;
(2) the time period during which the contract was
negotiated and agreed upon, from the date of the first
direct or indirect contact between any of the contracting
parties to the date of its execution;
(3) the name and address of each natural person who
took part in negotiating the contract, and the identity
and relationship of the party that the person represented
in the negotiations; and
(4) the existence of an agreement for payment of
attorney's fees by or on behalf of each party.
Any information disclosed during discovery may be subject
to protective order as deemed appropriate by the court. The
terms of the contract shall not be used as evidence of value.
(d) (Blank). A petition of indemnity under this Section
must be filed within 10 years after the date the tax deed was
issued.

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(Source: P.A. 97-557, eff. 7-1-12.)
(35 ILCS 200/21-306)
Sec. 21-306. Indemnity fund fraud.
(a) A person commits the offense of indemnity fund fraud
when that person knowingly:
(1) offers or agrees to become a party to, or to
acquire an interest in, a contract involving the proceeds
of a judgment for indemnity under Section 21-305 before
the end of the period of redemption from the tax sale to
which the judgment relates;
(2) fraudulently induces a party to forego bringing an
action for the recovery of the property;
(3) makes a deceptive misrepresentation during the
course of negotiating an agreement under subsection (c) of
Section 21-305; or
(4) conspires to violate any of the provisions of this
subsection.
(b) Commission of any one act described in subsection (a)
is a Class A misdemeanor. Commission of more than one act
described in subsection (a) during a single course of conduct
is a Class 4 felony. A second or subsequent conviction for
violation of any portion of this Section is a Class 4 felony.
(c) The State's Attorney of the county in which a judgment
for equity or indemnity under Section 21-305 is entered may
bring a civil action in the name of the People of the State of

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