Summary as Introduced
Creates the Property Justice Act. Provides that no interest shall be paid on any sale-in-error refund arising from an error or omission of a county assessor, county treasurer, sheriff, or other county office. Provides that, if interest on a sale-in-error refund is permitted, then the interest shall not exceed 6% annually. Provides that a tax purchaser may not receive more than $2,000,000 in cumulative sale-in-error refunds in a year. Provides that a tax purchaser shall be responsible for not less than 10% of the purchase amount in any sale-in-error arising from conditions discoverable upon ordinary due diligence at the time of sale. Provides that, before an annual tax sale or scavenger sale is conducted, specified officials must each execute a presale certification stating that the parcels are legally eligible for sale, that notices have been properly served, and that assessed and delinquent amounts are accurate. Creates the Community Revitalization Property Trust. Provides that the Trust shall acquire parcels that (1) receive no bids in a scavenger sale or (2) are located in a distressed municipality. Provides that the Trust shall (1) clear title on any property acquired by the Trust; (2) extinguish liens on any property acquired by the Trust; (3) package parcels acquired by the Trust for redevelopment; (4) convey parcels owned by the Trust for $1 to qualified local purchasers, including residents, nonprofits, faith-based organizations, or small developers; and (5) prioritize community-driven redevelopment. Provides that, if the State and local delinquent taxes on a parcel exceed 125% of the assessed market value of a parcel, then all amounts in excess of 125% are extinguished. Provides that the State Treasurer shall publish quarterly reports containing: (1) all sale-in-error refunds issued because of an error or omission by a county assessor, county treasurer, sheriff, or other county office; (2) the county office that caused the error or omission; and (3) the payments made because of the error or omission. Limits home rule powers. Effective immediately.
Staff Analysis
The proposed Property Justice Act would significantly reform how delinquent property tax sales are conducted and how errors in those sales are handled, with direct implications for county governments. The legislation limits the financial liability associated with “sale-in-error” refunds by prohibiting the payment of interest when the error is caused by a county office and capping interest at 6 percent when it is allowed. It also places new restrictions on tax purchasers by capping the total amount of refunds they can receive annually and requiring them to absorb a portion of the loss when issues could have been identified through reasonable due diligence. At the same time, the bill increases accountability for counties by requiring multiple officials to certify, prior to tax sales, that properties are eligible for sale, notices have been properly issued, and delinquent tax amounts are accurate. To further enhance transparency, the State Treasurer would be required to publish quarterly reports identifying sale-in-error refunds caused by county offices, including the responsible office and associated costs.
Beyond changes to the tax sale process, the legislation establishes a Community Revitalization Property Trust to take control of unsold or distressed properties, clear title and liens, and transfer those properties for redevelopment at minimal cost to qualified local entities. The bill also seeks to address excessive tax burdens by extinguishing delinquent tax amounts that exceed 125 percent of a property’s assessed market value, potentially facilitating the return of such properties to productive use. However, the legislation limits home rule authority, thereby preempting local discretion in these areas. Overall, the bill shifts more risk to tax buyers, increases procedural and reporting responsibilities for county officials, and introduces a state-driven mechanism for addressing vacant and distressed properties, while also raising concerns related to administrative burden, local control, and potential impacts on county revenues.