Summary as Introduced
Amends the Property Tax Code. Provides that a county, as trustee, may elect to acquire or sell tax delinquent property. Provides that the owner of property who sustains loss or damage by reason of the issuance of a deed at a tax deed auction shall have the right to recover surplus equity which was lost in the property through an award of indemnity. Provides that, in counties with 3,000,000 or more inhabitants, the period of redemption is 3 years from the date of sale.
Staff Analysis
Bill as Introduced
Amends the Property Tax Code. Provides that a county, as trustee, may elect to acquire or sell tax delinquent property. Provides that the owner of property who sustains loss or damage by reason of the issuance of a deed at a tax deed auction shall have the right to recover surplus equity which was lost in the property through an award of indemnity. Provides that, in counties with 3,000,000 or more inhabitants, the period of redemption is 3 years from the date of sale.
Senate Committee Amendment 2
The amendment would make significant changes to the property tax sale process, particularly in Cook County. Under the proposal, beginning with the sixth tax sale conducted after the bill’s effective date, the county would be required to exercise its authority to purchase or otherwise acquire all properties offered at tax sale for the total taxes due if no private buyer purchases them. The bill also modifies provisions related to abandoned property, changes the applicable penalty bid structure for county-acquired properties, creates a surplus equity fund supported through new fees, and delays the filing deadline associated with Cook County’s 2024 annual tax sale until April 1, 2027.
From a county government perspective, the legislation could create substantial administrative, operational, and financial impacts for Cook County. By requiring the county to acquire unsold tax-delinquent properties, the proposal could significantly expand county involvement in property management, foreclosure administration, title issues, property maintenance responsibilities and eventual property disposition efforts. The county may also experience increased staffing, legal and administrative costs associated with managing larger inventories of tax-delinquent or abandoned properties.
The bill’s reduction of the penalty bid from 9% annually to 0.75% per month for county-purchased properties could affect the financial dynamics of delinquent tax collections and potentially reduce the revenue incentives traditionally associated with tax sale purchases. At the same time, the creation of a surplus equity fund and associated fees appears intended to address concerns about excess equity remaining after tax foreclosure sales, an issue that has received increased legal and policy attention following recent court decisions involving property rights and tax foreclosure proceeds.
Although many provisions are directed specifically at Cook County, the legislation also establishes statewide surplus equity fund fees, including a $500 fee in counties with populations under 3 million. As a result, county clerks, treasurers, collectors, and court systems in counties statewide could experience new administrative responsibilities related to fee collection, notice requirements, and surplus equity procedures.
The proposal may also require counties to revise tax sale procedures, update public notice practices, and coordinate among treasurers, clerks, collectors, courts, and legal counsel to ensure compliance with the revised statutory framework.