Full Text of HB3569

LRB104 10280 HLH 20354 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB3569

Introduced 2/18/2025, by Rep. Jaime M. Andrade, Jr.

SYNOPSIS AS INTRODUCED:

35 ILCS 200/21-305
35 ILCS 200/22-10
35 ILCS 200/22-30
35 ILCS 200/22-40
35 ILCS 200/22-45
35 ILCS 200/22-55
35 ILCS 200/22-60
35 ILCS 200/22-75
35 ILCS 200/22-80
35 ILCS 200/22-85
35 ILCS 200/22-100 new
35 ILCS 200/22-105 new
35 ILCS 200/22-110 new
35 ILCS 200/22-115 new
35 ILCS 200/22-120 new

Amends the Property Tax Code. Provides that any owner who has an interest in the property on the date a tax deed petition is filed with the clerk of the circuit court may request an excess proceeds sale. Sets forth the form of the request for excess proceeds and the notice requirements for the excess proceeds sale. Provides for certain indemnity fund surcharges and fees. Makes other changes. Effective immediately.

A BILL FOR

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 21-305 22-10, 22-30, 22-35, 22-40, 22-45, 22-55, 22-60, 22-75, 22-80, and 22-85 and by adding Sections 22-100, 22-105, 22-110, 22-115, and 22-120 as follows:

(35 ILCS 200/21-305)

Sec. 21-305. Payments from Indemnity Fund.

(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 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 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 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.

(b) Indemnity fund; subrogation.

(1) Any person 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 amount of the 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 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 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 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) A petition of indemnity under this Section must be filed within 10 years after the date the tax deed was issued.

(e) Any owner who requests an excess proceeds sale pursuant to Section 22-100 that results in a sale pursuant to Section 22-105 shall not be entitled to any award under this Section, regardless of whether any surplus was generated.

(Source: P.A. 97-557, eff. 7-1-12.)

(35 ILCS 200/22-10)

Sec. 22-10. Notice of expiration of period of redemption. A purchaser or assignee shall not be entitled to a tax deed to the property sold unless, not less than 3 months nor more than 6 months prior to the expiration of the period of redemption, he or she gives notice of the sale and the date of expiration of the period of redemption to the owners, occupants, and parties interested in the property, including any mortgagee of record, as provided below. For counties or taxing districts holding certificates pursuant to Section 21-90, the date of expiration of the period of redemption shall be designated by the county or taxing district in its petition for tax deed and identified in the notice below, which shall be filed with the county clerk.

The Notice to be given to the parties shall be in at least 10-point type in the following form completely filled in: TAX DEED NO. .................... FILED ....................

TAKE NOTICE

County of ...........................................

Date Premises Sold or Forfeited .....................

Certificate No. .....................................

Sold or Forfeited for General Taxes of (year) .......

Sold for Special Assessment of (Municipality)

and special assessment number .......................

Warrant No. ................ Inst. No. .................

THIS PROPERTY HAS BEEN SOLD FOR

DELINQUENT TAXES Property Address (as identified on the most recent tax bill, if available) .... Legal Description or Property Index No. .......... .......... ..............................

This notice is to advise you that the above property has been sold for delinquent taxes and that the period of redemption from the sale will expire on .......... ..........

Check with the county clerk as to the exact amount you owe before redeeming.

This notice is also to advise you that a petition has been filed for a tax deed which will transfer title and the right to possession of this property if redemption is not made on or before ..................................................

This matter is set for hearing in the Circuit Court of this county in ...., Illinois on .....

You may be present at this hearing but your right to redeem will already have expired at that time.

YOU ARE URGED TO REDEEM IMMEDIATELY

TO PREVENT LOSS OF PROPERTY

Redemption can be made at any time on or before .... by applying to the County Clerk of ...., County, Illinois at the Office of the County Clerk in ...., Illinois.

For further information contact the County Clerk

IF YOU BELIEVE THAT YOUR PROPERTY HAS VALUE THAT EXCEEDS THE TAX BURDEN ON THE PROPERTY, AND YOU DO NOT WANT TO LOSE EQUITY YOU MAY HAVE IN THE PROPERTY, YOU MAY REQUEST AN EXCESS PROCEEDS SALE BY NOTIFYING THE COUNTY CLERK OF YOUR REQUEST IN WRITING. THE COUNTY CLERK SHALL PROVIDE THE FORM. ADDRESS:.................... TELEPHONE AND/OR EMAIL ADDRESS:..................

..........................

Purchaser or Assignee.

Dated (insert date).

In counties with 3,000,000 or more inhabitants, the notice shall also state the address, room number, and time at which the matter is set for hearing.

The changes to this Section made by Public Act 97-557 apply only to matters in which a petition for tax deed is filed on or after July 1, 2012 (the effective date of Public Act 97-557).

The changes to this Section made by Public Act 102-1003 apply to matters in which a petition for tax deed is filed on or after May 27, 2022 (the effective date of Public Act 102-1003). Failure of any party or any public official to comply with the changes made to this Section by Public Act 102-528 does not invalidate any tax deed issued prior to May 27, 2022 (the effective date of Public Act 102-1003).

The changes made to this Section by this amendatory Act of the 103rd General Assembly apply to matters concerning tax certificates issued on or after the effective date of this amendatory Act of the 103rd General Assembly.

(Source: P.A. 102-528, eff. 1-1-22; 102-813, eff. 5-13-22; 102-1003, eff. 5-27-22; 103-154, eff. 6-30-23; 103-555, eff. 1-1-24.)

(35 ILCS 200/22-30)

Sec. 22-30. Petition for deed. At any time within 6 months but not less than 3 months prior to the expiration of the redemption period for property sold pursuant to judgment and order of sale under Sections 21-110 through 21-120 or 21-260 or otherwise acquired by the county pursuant to Section 21-90, the purchaser, or the agent pursuant to Section 21-90, may file a petition in the circuit court in the same proceeding in which the judgment and order of sale were entered, asking that the court direct the county clerk to issue a tax deed if the property is not redeemed from the sale. The petition shall be accompanied by the statutory filing fee.

Notice of filing the petition and a date for redemption, after which the petitioner intends to apply for an order to issue a tax deed if the taxes are not redeemed, shall be given to occupants, owners and persons interested in the property as part of the notice provided in Sections 22-10 through 22-25, except that only one publication is required. The county clerk shall be notified of the filing of the petition and any person owning or interested in the property may, if he or she desires, appear in the proceeding.

Any owner may appear and object to the tax deed petitioner's request for an order directing the county clerk to issue the tax deed notwithstanding that a request for an excess proceeds sale was made by any owner pursuant to Section 22-100.

The changes to this Section made by this amendatory Act of the 95th General Assembly apply only to matters in which a petition for tax deed is filed on or after the effective date of this amendatory Act of the 95th General Assembly.

(Source: P.A. 103-555, eff. 1-1-24.)

(35 ILCS 200/22-40)

Sec. 22-40. Issuance of deed; possession.

(a) To obtain an order for issuance of tax deed, the petitioner must provide sufficient evidence that:

(1) the redemption period has expired and the property has not been redeemed;

(2) all taxes and special assessments which became due and payable subsequent to the sale have been paid, unless the county or its agent, as trustee pursuant to Section 21-90, is the petitioner;

(3) all forfeitures and sales which occur subsequent to the sale are paid or redeemed, unless the county or its agent, as trustee pursuant to Section 21-90, is the petitioner;

(4) the notices required by law have been given, and all advancements of public funds under the police power made by a county, city, village, or town under Section 22-35 have been paid; and

(5) the petitioner has complied with all the provisions of law entitling him or her to a deed.

Upon receipt of sufficient evidence of the requirements under this subsection (a), the court shall find that the petitioner complied with those requirements and shall enter an order directing the county clerk, on the production of the tax certificate and a certified copy of the order, to issue to the purchaser or its assignee a tax deed. The court shall insist on strict compliance with Section 22-10 through 22-25. Prior to the entry of an order directing the issuance of a tax deed, the petitioner shall furnish the court with a report of proceedings of the evidence received on the application for tax deed and the report of proceedings shall be filed and made a part of the court record.

(a-5) If, at the time the order directing issuance of tax deed is entered, no request for an excess proceeds sale has been made pursuant to subsections (a) or (b) of Section 22-100, the order shall require the tax deed petitioner to send via first-class mail to all parties that were named in the tax deed proceeding and to any party entitled to receive notice pursuant to Section 22-5, a copy of the order along with a request for an excess proceeds sale form as set forth in Section 22-100. The order and the request for excess proceeds sale form shall be sent within 14 days after the order directing issuance of tax deed is entered. The form shall list the final date upon which a person may request an excess proceeds sale under subsection (c) of Section 22-100. The tax deed petitioner must file a notice of filing and certificate of mailing in the tax deed proceeding that verifies that the mailing occurred. The county clerk shall not issue any tax deed prior to the ninety-first day after the entry of the order unless proof is presented to the county clerk that the notice required by this Section was timely mailed, except in cases where a request for an excess proceeds sale was made pursuant to subsection (a) or (b) of Section 22-100. If the notice set forth in this Section is not mailed within 14 days after the order is entered, the county clerk shall not issue a tax deed until proof is presented to the clerk that the mailing occurred. In that case, the county clerk shall issue a tax deed only after 90 days have passed from the date the notice was mailed. A copy of the file stamped notice of filing and certificate of mailing filed in the tax deed proceeding is satisfactory proof that the mailing occurred on the date listed in the notice.

(a-10) Every order directing issuance of tax deed shall list the total amount owed to the holder of the certificate of purchase at the time the order is entered, which shall be paid to the holder of the certificate of purchase if an excess proceeds sale is held pursuant to Section 22-105. The total amount due to the holder of the certificate of purchase shall include the following amounts:

(1) the amount necessary to redeem the property from the sale as of the last day of the period of redemption plus interest of 16%;

(2) all taxes and special assessments paid or redeemed by the tax purchaser or the purchaser's assignee that are not included in the redemption amount, plus any indemnity fund fees paid as required by subsection (e-5);

(3) court reporter fees for the hearing on the application for tax deed and transcript of the hearing;

(4) amounts in satisfaction of municipal liens paid by the tax purchaser or the tax purchaser's assignee; and

(5) reasonable attorney's fees.

(b) Except as provided in subsection (e), if taxes for years prior to the year or years sold are or become delinquent subsequent to the date of sale, the court shall find that the lien of those delinquent taxes has been or will be merged into the tax deed grantee's title if the court determines that the tax deed grantee or any prior holder of the certificate of purchase, or any person or entity under common ownership or control with any such grantee or prior holder of the certificate of purchase, was at no time the holder of any certificate of purchase for the years sought to be merged. If delinquent taxes are merged into the tax deed pursuant to this subsection, the court shall enter an order declaring which specific taxes have been or will be merged into the tax deed title and directing the county treasurer and county clerk to reflect that declaration in the warrant and judgment records; provided, that no such order shall be effective until a tax deed has been issued and timely recorded. Nothing contained in this Section shall relieve any owner liable for delinquent property taxes under this Code from the payment of the taxes that have been merged into the title upon issuance of the tax deed.

(c) The county clerk is entitled to a fee of $10 in counties of 3,000,000 or more inhabitants and $5 in counties with less than 3,000,000 inhabitants for the issuance of the tax deed, with the exception of deeds issued to the county pursuant to its authority under Section 21-90. The clerk may not include in a tax deed more than one property as listed, assessed and sold in one description, except in cases where several properties are owned by one person. The fee paid to the county clerk for the issuance of the tax deed shall be accompanied by a $300 indemnity fund fee in counties of 3,000,000 or more inhabitants and a $100 indemnity fund fee in counties with less than 3,000,000 inhabitants, with the exception of deeds issued to the county pursuant to its authority under Section 21-90. All fees received under this subsection shall be paid by the county clerk to the county treasurer of the county in which the land is situated for the purpose of funding the county's indemnity fund established under Section 21-295.

Upon application, the court shall, enter an order to place the tax deed grantee or the grantee's successor in interest in possession of the property and may enter orders and grant relief as may be necessary or desirable to maintain the grantee or the grantee's successor in interest in possession.

(d) The court shall retain jurisdiction to enter orders pursuant to subsections (b) and (c) of this Section. Public Act 92-223 This amendatory Act of the 92nd General Assembly and Public Act 95-477 this amendatory Act of the 95th General Assembly shall be construed as being declarative of existing law and not as a new enactment.

(e) Prior to the issuance of any tax deed under this Section, the petitioner must redeem all taxes and special assessments on the property that are subject to a pending tax petition filed by a county or its assignee pursuant to Section 21-90.

(e-5) Following the expiration of the period of redemption, the petitioner's payment of (i) any subsequent tax and special assessment and (ii) any redemption of any sale of subsequent taxes or forfeiture shall be accompanied by a 10% indemnity fund fee to be paid by the petitioner. All fees received under this subsection shall be paid by the collector and county clerk to the county treasurer of the county in which the land is situated for the purpose of funding the county's indemnity fund established by Section 21-295. No fees incurred under this subsection shall be posted to the subject tax sale pursuant to Section 21-355.

(f) If, for any reason, a purchaser fails to obtain an order for tax deed within the required time period and no sale in error was granted or redemption paid, then the certificate shall be forfeited to the county, as trustee, pursuant to Section 21-90.

(Source: P.A. 103-555, eff. 1-1-24; revised 8-5-24.)

(35 ILCS 200/22-45)

Sec. 22-45. Tax deed incontestable unless order appealed or relief petitioned.

(a) Tax deeds issued under Section 22-40 are incontestable except by appeal from the order of the court directing the county clerk to issue the tax deed. However, relief from such order may be had under Sections 2-1203 or 2-1401 of the Code of Civil Procedure in the same manner and to the same extent as may be had under those Sections with respect to final orders and judgments in other proceedings. The grounds for relief under Section 2-1401 shall be limited to:

(1) proof that the taxes were paid prior to sale;

(2) proof that the property was exempt from taxation;

(3) proof by clear and convincing evidence that the tax deed had been procured by fraud or deception by the tax purchaser or his or her assignee; or

(4) proof by a person or party holding a recorded ownership or other recorded interest in the property that he or she was not named as a party in the publication notice as set forth in Section 22-20, and that the tax purchaser or his or her assignee did not make a diligent inquiry and effort to serve that person or party with the notices required by Sections 22-10 through 22-30.

(b) In cases of the sale of homestead property in counties with 3,000,000 or more inhabitants, a tax deed may also be voided by the court upon petition, filed not more than 3 months after an order for tax deed was entered, if the court finds that the property was owner occupied on the expiration date of the period of redemption and that the order for deed was effectuated pursuant to a negligent or willful error made by an employee of the county clerk or county collector during the period of redemption from the sale that was reasonably relied upon to the detriment of any person having a redeemable interest. In such a case, the tax purchaser shall be entitled to the original amount required to redeem the property plus interest from the sale as of the last date of redemption together with costs actually expended subsequent to the expiration of the period of redemption and reasonable attorney's fees, all of which shall be dispensed from the fund created by Section 21-295. If an excess proceeds sale has occurred pursuant to Section 22-105, the successful purchaser shall be entitled to the following amounts, all of which shall be dispensed from the fund created by Section 21-295:

(1) the amount owed to the holder of the certificate listed in the order directing issuance of tax deed, with interest at the rate of 1% per month from the date the successful purchaser paid his or her winning excess proceeds sale bid until the date of payment pursuant to this Section;

(2) all taxes and special assessments paid or redeemed by the successful purchaser, the tax deed grantee, or or the tax deed grantee's successors and assigns, after the excess proceeds sale, with interest at the rate of 1% per month from the date any such payment was made until the date of payment pursuant to this Section;

(3) the cost of certification of tax deed order, the cost of issuance of the tax deed, and the cost of recording of the tax deed, which shall include any indemnity fund fees as required by subsection (c) of Section 22-40;

(4) the total amount of any excess surplus paid by the winning bidder at any excess proceeds sale, provided that the amount bid was in excess of the total amount owed to the holder of the certificate as listed in the order directing issuance of tax deed; and

(5) reasonable attorney's fees and court costs actually expended.

(c) The treasurer, as trustee of the county indemnity fund, may file a motion with the court for the release of any surplus funds held by the clerk of the circuit court as provided in Section 22-120, and the court shall enter an order requiring the clerk of the circuit court to release any surplus funds from the excess proceeds sale to the treasurer as trustee of the county indemnity fund.

(d) In those cases of error where the court vacates the tax deed, it may award the petitioner reasonable attorney's fees and court costs actually expended, payable from that fund. The court hearing a petition filed under this Section or Section 2-1401 of the Code of Civil Procedure may concurrently hear a petition filed under Section 21-295 and may grant relief under any Section.

(e) Any owner who requests an excess proceeds sale pursuant to Section 22-100 shall not be limited to any relief from the order directing the county clerk to issue the tax deed as provided in this Section and under and any motion filed under Sections 2-1203 or 2-1401 of the Code of Civil Procedure unless an excess proceeds sale occurs. Once the excess proceeds sale occurs, any owner who made such a request shall be limited to the results of any excess proceeds sale regardless if any surplus funds exist. Any surplus funds shall be recovered only pursuant to the requirements of Section 22-120.

This amendatory Act of the 95th General Assembly shall be construed as being declarative of existing law and not as a new enactment.

(Source: P.A. 95-477, eff. 6-1-08.)

(35 ILCS 200/22-55)

Sec. 22-55. Tax deeds to convey merchantable title.

(a) This Section shall be liberally construed so that tax deeds shall convey merchantable title. In the event the property has been taken by eminent domain under the Eminent Domain Act, the tax purchaser shall be entitled to the award which is the substitute for the property. Tax deeds issued pursuant to this Section are subject to Section 22-70.

(b) Any conveyance from any tax deed grantee, including any deed issued to the county, a specific county agency, or a municipality, to a bona fide purchaser shall include a county indemnity fund charge in the amount of 2.5% of the purchase price, which shall be paid by the tax deed grantee. The indemnity fund charge shall be collected by the Illinois licensed title insurance company that issues an owner's policy of title insurance from the tax deed grantee to the purchaser and shall thereafter be paid by the title insurance company to the county treasurer of the county in which the property is located, as trustee of the indemnity fund established by Section 21-295. The title insurance company may charge a reasonable fee for the collection and turnover of those charges. This subsection applies to conveyances that occur on or after the effective date of this amendatory Act of the 104th General Assembly.

(c) In counties of 3,000,000 or more inhabitants, any conveyance from any tax deed grantee, including any deed that is issued to the county, to a specific county agency, or to a municipality, that is not covered in subsection (b) shall include an indemnity fund fee of $500 upon recording of the deed from the tax deed grantee to any grantee. The $500 indemnity fee received under this subsection shall be paid by the county recorder or the county clerk to the county treasurer of the county in which the land is situated and shall be used for the purpose of funding the county's indemnity fund established by Section 21-295.

(Source: P.A. 94-1055, eff. 1-1-07.)

(35 ILCS 200/22-60)

Sec. 22-60. Contents of deed; recording.

(a) Every tax deed shall contain the full names and the true post office address and residence of the grantee. A county receiving a tax deed pursuant to Section 21-90 may designate a specific county agency to be named as the deed grantee. It shall not be of any force or effect, and the recipient shall not take title to the property, until after the deed has been recorded in the office of the recorder.

(b) The cost of recording a tax deed, including, but not limited to, a tax deed issued to a county, a specific county agency, or a municipality, shall include a $200 indemnity fund surcharge fee. All surcharge fees received under this subsection shall be paid by the county recorder or the county clerk to the county treasurer of the county in which the land is situated and shall be used for the purpose of funding the county's indemnity fund established by Section 21-295.

(Source: P.A. 103-555, eff. 1-1-24.)

(35 ILCS 200/22-75)

Sec. 22-75. Deed; prima facie evidence of regularity of sale.

(a) As to the property conveyed therein, tax deeds executed by the county clerk are prima facie evidence of the following facts in all controversies and suits in relation to the rights of the tax deed grantee and his or her heirs or assigns:

(1) the property conveyed was subject to taxation at the time it was assessed, and was listed and assessed in the time and manner required by law;

(2) the taxes or special assessments were not paid at any time before the sale;

(3) the property was advertised for sale in the manner and for the length of time required by law;

(4) the property was sold for taxes or special assessments as stated in the deed;

(5) the sale was conducted in the manner required by law;

(6) the property conveyed was not redeemed from the sale within the time permitted by law;

(7) the grantee in the deed was the purchaser or assignee of the purchaser.

(a-5) No conveyance from a tax deed grantee to a bona fide purchaser may be challenged on the basis that the former owner may have suffered a loss of equity. Any such claim must be adjudicated pursuant to the provisions of Sections 22-100 through 22-120 or 21-305, which provisions shall be the exclusive remedy for any alleged loss of equity.

(b) Any order for the sale of property for delinquent taxes, except as otherwise provided in this Section, shall estop all parties from raising any objections to the order or to a tax title based thereon, which existed at or before the rendition of the order, and which could have been presented as a defense to the application for the order. The order itself is conclusive evidence of its regularity and validity in all collateral proceedings, except in cases where the tax or special assessments were paid prior to the sale or the property was exempt from general taxes or was not subject to special assessment.

(Source: P.A. 88-455; 89-342, eff. 1-1-96.)

(35 ILCS 200/22-80)

Sec. 22-80. Order of court setting aside tax deed; payments to holder of deed.

(a) Any order of court vacating an order directing the county clerk to issue a tax deed based upon a finding that the property was not subject to taxation or special assessment, or that the taxes or special assessments had been paid prior to the sale of the property, or that the tax sale was otherwise void, shall declare the tax sale to be a sale in error pursuant to Section 21-310 of this Act. The order shall direct the county collector to refund to the tax deed grantee or his or her successors and assigns (or, if a tax deed has not yet issued, the holder of the certificate) the following amounts:

(1) all taxes and special assessments purchased, paid, or redeemed by the tax purchaser or his or her assignee, or by the tax deed grantee or his or her successors and assigns, whether before or after entry of the order for tax deed, with interest at the rate of 1% per month from the date each amount was paid until the date of payment pursuant to this Section;

(2) all costs paid and posted to the judgment record and not included in paragraph (1) of this subsection (a); and

(3) court reporter fees for the hearing on the application for tax deed and transcript thereof, the cost of certification of tax deed order, the cost of issuance of tax deed, and the cost of recording of tax deed, and any indemnity fund fees as required by subsection (c) of Section 22-40, subsection (e-5) of Section 22-40, subsection (b) of 22-50, and subsection (b) of Section 22-60.

(a-5) If an excess proceeds sale has occurred pursuant to Section 22-105, the county collector shall refund to the tax deed grantee, or to the grantee's successors and assigns, or, if a tax deed has not yet issued, to the holder of the certificate of purchase, the following amounts:

(1) the amount owed to the holder of the certificate, which is listed in the order directing issuance of tax deed, with interest at the rate of 1% per month from the date the order directing issuance of tax deed was entered until the date of payment under this Section;

(2) all taxes and special assessments paid or redeemed by the tax purchaser or the tax purchaser's assignee, or by the tax deed grantee or the grantee's successors and assigns, after the excess proceeds sale, with interest at the rate of 1% per month from the date each amount was paid until the date of payment pursuant to this Section;

(3) the cost of certification of tax deed order, the cost of issuance of tax deed, the cost of recording of tax deed, and any indemnity fund fees as required by subsection (d) of Section 22-40, subsection (e-5) of Section 22-40, subsection (b) of 22-50, subsection (b) of and 22-60; and

(4) the total amount of any excess surplus paid by the winning bidder at any excess proceeds sale, provided that the amount bid was in excess of the total amount owed to the holder of the certificate as listed in the order directing issuance of tax deed with interest at the rate of 1% per month from the date the winning bidder paid the amount due at the excess surplus sale until the date of payment pursuant to this Section. The collector may file a motion with the court for release of any surplus funds held by the clerk of the circuit court as provided in Section 22-120, and the court shall enter an order requiring the clerk of the circuit court to release any remaining surplus funds to the collector from that excess proceeds sale.

(b) Except in those cases described in subsection (a) and (a-5) of this Section, and unless the court on motion of the tax deed petitioner extends the redemption period to a date not later than 3 years from the date of sale, any order of court finding that an order directing the county clerk to issue a tax deed should be vacated shall direct the party who successfully contested the entry of the order to pay to the tax deed grantee or his or her successors and assigns (or, if a tax deed has not yet issued, the holder of the certificate) within 90 days after the date of the finding:

(1) the amount necessary to redeem the property from the sale as of the last day of the period of redemption, except that, if the sale is a scavenger sale pursuant to Section 21-260 of this Act, the redemption amount shall not include an amount equal to all delinquent taxes on such property which taxes were delinquent at the time of sale; and

(2) amounts in satisfaction of municipal liens paid by the tax purchaser or his or her assignee, and the amounts specified in paragraphs (1) and (3) of subsection (a) of this Section, to the extent the amounts are not included in paragraph (1) of this subsection (b).

If the payment is not made within the 90-day period, the petition to vacate the order directing the county clerk to issue a tax deed shall be denied with prejudice, and the order directing the county clerk to issue a tax deed shall remain in full force and effect. No final order vacating any order directing the county clerk to issue a tax deed shall be entered pursuant to this subsection (b) until the payment has been made.

(c) Except as described in subsection (a), (a-5), or (b), any order of the court finding that an order directing the county clerk to issue a tax deed shall be vacated when an excess proceeds sale has occurred shall direct the party who successfully contested the entry of the order to pay to the tax deed grantee or the grantee's successors and assigns (or, if a tax deed has not yet issued, to the holder of the certificate) within 90 days after the date of the finding the following amounts:

(1) the amount owed to the holder of the certificate that is listed in the order directing issuance of tax deed, with interest at the rate of 1% per month from the date the order directing issuance of tax deed was entered until the date of payment pursuant to this Section;

(2) all taxes and special assessments paid or redeemed by the tax purchaser or his or her assignee, or by the tax deed grantee or his or her successors and assigns, after the excess proceeds sale, with interest at the rate of 1% per month from the date each amount was paid until the date of payment pursuant to this Section; and

(3) the cost of certification of tax deed order, the cost of issuance of tax deed, the cost of recording of tax deed, and any indemnity fund surcharge fees as required by subsection (c) of Sections 22-40, subsection (e-5) of Section 22-40, subsection (b) of Section 22-50, and subsection (b) of Section 22-60.

If the payment is not made within the 90-day period, the petition to vacate the order directing the county clerk to issue a tax deed shall be denied with prejudice, and the order directing the county clerk to issue a tax deed shall remain in full force and effect. No final order vacating any order directing the county clerk to issue a tax deed shall be entered pursuant to this subsection (c) until the payment has been made.

(d) If the total amount from any excess proceeds sale exceeds the total amount owed to the holder of the certificate as listed in the order directing issuance of tax deed. The tax deed grantee or his or her successors and assigns (or, if a tax deed has not yet issued, the holder of the certificate) may file a motion with the court for release of any surplus funds held by the clerk of the circuit court as provided in Section 22-120 and the court shall order the clerk of the circuit court to release any remaining surplus funds from said sale to the movant.

(Source: P.A. 91-357, eff. 7-29-99.)

(35 ILCS 200/22-85)

Sec. 22-85. Failure to timely take out and record deed; deed is void. Unless the holder of the certificate purchased at any tax sale under this Code takes out the deed in the time provided by law, and records the same within one year from and after the time for redemption expires, the certificate or deed, and the sale on which it is based, shall, after the expiration of the one-year period one year period, be absolutely void with no right to reimbursement. If the holder of the certificate is prevented from obtaining or recording a deed by injunction or order of any court, or by the refusal or inability of any court to act upon the application for a tax deed, or by the refusal of the clerk to execute the same deed, or by the refusal, inability, or delay of any county, city, village, or incorporated town to issue transfer stamps, the time he or she is so prevented shall be excluded from computation of the one-year period one year period. Certificates of purchase and deeds executed by the clerk shall recite the qualifications required in this Section. The court shall retain jurisdiction to enter orders pursuant to this Section.

If any owner of the property sold requests an excess proceeds sale, the time for recording any tax deed shall be extended pursuant to the requirement of subsection (g) of Section 22-105.

(Source: P.A. 87-669; 88-455.)

(35 ILCS 200/22-100 new)

Sec. 22-100. Request for excess proceeds sale. Any owner who has an interest in the property on the date a tax deed petition is filed with the clerk of the circuit court may request an excess proceeds sale by:

(1) filing a request for an excess proceeds sale with the county clerk before the final date of redemption; the clerk shall provide the request form to the person making the request and, upon completion of the form, shall immediately mark the request on the tax judgment, sale, redemption, and forfeiture record; the county clerk may charge a reasonable fee for such a request and shall provide a receipt to the person making such request;

(2) filing a request for an excess proceeds sale with the clerk of the circuit court for which the tax deed proceeding is pending before the entry of any tax deed order; or

(3) filing a request for an excess proceeds sale with the clerk of the circuit court for which the tax deed proceeding is pending within 90 days after date the tax deed order is entered or the date the notice required under Section 22-40 is mailed, whichever is later.

An owner's failure to request an excess proceeds sale shall not affect any rights the owner may have for indemnification pursuant to Section 21-305.

The request for an excess proceeds sale shall be completed in its entirety by the owner in the following form:

REQUEST FOR AN EXCESS PROCEEDS SALE

Name of Owner:...........................................

Property Address:........................................

Property Index Number:...................................

Sold or Forfeited for General Taxes of (year) Tax Deed Case Number:.................................................

I, [insert name], am an owner of the above property. If I cannot redeem my property from the above tax sale, I hereby request that the court order an excess proceeds sale, and that I be given an opportunity to claim any surplus funds that may be collected in excess of the amounts due for taxes, penalties, costs, and other encumbrances on the property.

Date:....................................................

Owner:...................................................

If no request for an excess proceeds sale has been made by any owner prior to the entry of the tax deed order, the holder of the certificate of purchase as listed in the tax deed order shall mail the form for a request for an excess proceeds sale as set forth in this Section to the persons listed in subsection (a-5) of Section 22-40 as required by that Section. The form shall include the date on which the excess proceeds sale is to be held.

(35 ILCS 200/22-105 new)

Sec. 22-105. Excess proceeds sale.

(a) If an owner makes a written request for an excess proceeds sale, as set forth in Section 22-100, upon entry of an order directing the county clerk to issue a tax deed (tax deed order), the certificate of purchase that is the subject of the tax deed order shall be sold at an excess proceeds sale in accordance with this Section.

(b) The certificate of purchase shall be sold as provided in this Section, on such terms and conditions as shall be specified by the court in the tax deed order. The sale may be conducted by any licensed title insurance company in the State of Illinois or by the law firm or attorney who obtained the tax deed order.

(c) The title insurance company, law firm, attorney, or such other party as is designated by the court shall give public notice of the sale as follows:

(1) The notice of sale shall include at least the following information, but an immaterial error in the information shall not invalidate the legal effect of the notice:

(A) the name, address, and telephone number of the person to contact for information regarding the certificate of purchase and the real estate to which it pertains;

(B) the property address (as identified on the most recent tax bill, if available); the Property Index Number listed on the certificate of purchase, and any other common description, if any, of the real estate;

(C) a legal description of the real estate sufficient to identify it with reasonable certainty;

(D) a description of the improvements on the real estate;

(E) the time and place of the sale;

(F) the terms of the sale;

(G) the case title, case number, and court in which the tax deed order was entered;

(H) such other information as is ordered by the court.

(2) The notice of sale shall be published once each week for at least 3 consecutive calendar weeks (Sunday through Saturday). The first such notice shall be published not more than 45 days before the sale, and the last such notice shall be published not less than 7 days before the sale. Notice shall be in the following manner:

(A) by advertisement in a newspaper circulated to the general public in the county in which the real estate is located, in the section of that newspaper where legal notices are commonly placed;

(B) by separate advertisements in the section of such a newspaper, which (except in counties with a population in excess of 3,000,000) may be the same newspaper, in which real estate other than real estate being sold as part of legal proceedings is commonly advertised to the general public; provided that the separate advertisements in the real estate section need not include a legal description and that, if both advertisements could be published in the same newspaper and that newspaper does not have separate legal notices and real estate advertisement sections, a single advertisement with the legal description shall be sufficient; and

(C) by such other publications as may be further ordered by the court.

(3) The party who gives notice of public sale in accordance with this subsection (c) shall also give notice to all interested parties who were named in the tax deed proceeding via first-class mail at the addresses used in the tax deed proceeding and to any attorney or person who appeared in the proceeding to receive notice. After notice is given as required in this Section, a copy of the notice shall be filed in the office of the clerk of the court entering the tax deed order, together with a certificate of counsel or other proof that notice has been served in compliance with this Section.

(4) The party who gives notice of public sale in accordance with this subsection (c) shall again give notice in accordance with this Section of any canceled sale; provided, however, that, if the canceled sale is to occur less than 30 days after the last scheduled sale, notice of any canceled sale need not be given pursuant to this Section. In the event of cancellation, the person conducting the sale shall, upon cancellation, announce the date, time, and place upon which the adjourned sale shall be held. Notwithstanding any language to the contrary, for any canceled sale that is to be conducted more than 60 days after the date on which it was to first be held, the party giving notice of the sale shall again give notice in accordance with this Section.

(5) No other notice by publication or posting is necessary unless required by order or rule of the court.

(d) Upon and at the sale of the certificate of purchase, the person conducting the sale shall give to the purchaser a receipt of sale. The receipt shall describe the real estate purchased and shall show the amount bid, the amount paid, the total amount paid to date and the amount still to be paid for it. An additional receipt shall be given at the time of each subsequent payment. The holder of the certificate of purchase identified in the tax deed order may place a credit bid equal to the total amount as listed in the tax deed order.

(e) Upon payment in full of the amount bid, the person conducting the sale shall assign and deliver the original certificate of purchase to the winning bidder who shall become the holder of the certificate of purchase. The sale amount of the certificate of purchase is prima facia evidence of the fair market value of the real estate as of the date of the excess proceeds sale. Any certificate of purchase following a sale under this Section shall be freely assignable by endorsement as set forth in Section 21-250.

(f) Following a sale as set forth in this Section, the holder of the certificate of purchase, or the holder's assignee, shall present the certificate of purchase to the county clerk in order to obtain a tax deed for the property.

(g) Notwithstanding the provisions of Section 22-85, if a sale occurs under this Section, the winning bidder or the bidder's assignee shall have one year from the date of the sale under this Section to take out and record the tax deed. If the bidder or the bidder's assignee fails to record the tax deed within one year after the sale under this Section, the certificate or deed, and the sale on which it is based, shall be absolutely void with no right to reimbursement. If the holder of the certificate 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 the refusal of the clerk to execute the same deed, or by the refusal, inability, or delay of any county, city, village, or incorporated town to issue transfer stamps, then the time during which the holder is so prevented shall be excluded from computation of the one-year period. The court shall retain jurisdiction to enter orders pursuant to this Section.

(35 ILCS 200/22-110 new)

Sec. 22-110. Excess Proceeds Sale; Indemnity Fund.

(a) Upon and at the excess proceeds sale under Section 22-105, the purchaser shall pay to the person conducting the sale a fee for deposit into the county indemnity fund established by Section 21-295. The fee shall be $500 and shall be paid by the purchaser to the person conducting the sale, as reflected in the receipt of sale issued to the purchaser. This fee shall also be paid by the holder of the certificate of purchase pursuant to any credit bid at the sale. Upon the completion of the sale, the person conducting the sale shall remit the fee to the county treasurer as trustee of the county indemnity fund for the county in which the sale occurred.

(b) All fees paid by purchasers under this Section shall be disbursed within 60 days after receipt by the person conducting the sale as follows: (i) 95% to the county treasurer, as trustee of the county indemnity fund for deposit into the indemnity fund; and (ii) 5% to be retained by the person conducting the sale to defray administrative expenses related to implementation of this Section.

(c) Not later than March 1 of each year, the county treasurer, as trustee of the indemnity fund, shall submit to the county clerk a report of the funds collected and remitted during the preceding year.

(35 ILCS 200/22-115 new)

Sec. 22-115. Application of proceeds of sale. The proceeds resulting from a sale of a certificate of purchase under Section 22-105 shall be applied in the following order:

(1) an amount equal to the cost of facilitating the excess proceeds sale, including the costs of providing all notices required by Section 22-105, to the person appointed by the court to conduct the sale;

(2) a reasonable fee for conducting the sale, which shall not exceed $1,500, to the person appointed by the court to conduct the sale; and

(3) the amount set forth in the tax deed order to be paid to the holder of the certificate of purchase at the time the order was entered.

(35 ILCS 200/22-120 new)

Sec. 22-120. Surplus distribution.

(a) Within 30 days after the completion of the sale, if there is a surplus following the distributions made pursuant to Section 22-115, the person conducting the sale shall deposit all surplus proceeds with the clerk of the circuit court in the county in which the sale was held until further order of the court. The surplus shall be held until a person obtains a court order for its distribution or until, in the absence of an order, the surplus is forfeited to the State.

(b) Within 14 days after any surplus deposit is made to the clerk of the circuit court, the person appointed by the court to conduct the sale shall file a notice of deposit of surplus with the clerk of the circuit court in the same case in which the tax deed order was entered. The notice shall list the amount of the surplus and the date on which the surplus was deposited with the clerk of the circuit court, together with a certificate of counsel or other proof that notice has been mailed to the person who made the written request for an excess proceeds sale and to all persons named in the tax deed proceeding, via first-class mail at the addresses used in the tax deed proceeding, and to any attorney or person who appeared in the proceeding. In addition to the notice of surplus, a form motion and petition for turnover of surplus funds must be included.

(c) Any owner desiring to make a claim for any surplus proceeds must file a motion and petition for turnover of surplus funds in the circuit court and obtain a court order requiring the circuit court to release any surplus funds. The circuit court shall retain jurisdiction over the matter and enter any surplus order requiring the circuit court to release funds to satisfy all claims in the order of priority.

(d) Any owner who requested an Excess Proceeds Sale need not pay an appearance fee in order to make a motion to claim any surplus.

(e) The county treasurer, as trustee of the county indemnity fund, may file a motion and petition for turnover of surplus funds in the circuit court and obtain a court order requiring the circuit court to release any surplus funds as authorized by subsection (c) of Section 22-45.

(f) The county collector may file a motion and petition for turnover of surplus funds in the circuit court and obtain a court order requiring the circuit court to release any surplus funds as authorized by Section subsection (a-5) of Section 22-80.

(g) The tax deed grantee or the grantee's successors and assigns (or, if a tax deed has not yet issued, the holder of the certificate) may file a motion and petition for turnover of surplus funds in the circuit court and obtain a court order requiring the circuit court to release any surplus funds as authorized by subsection (d) of Section 22-80.

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