Bills

HB4537 - SURPLUS EQUITY AND TAX DEED REFORM

The bill would fundamentally restructure the Illinois Property Tax Code to end the practice of "absolute forfeiture." The bill was approved as a response to the U.S. Supreme Court’s landmark Tyler v. Hennepin County ruling. Under the bill, local governments and tax buyers can no longer absorb a property's total equity to satisfy a smaller tax debt. Instead, the historical system will be replaced by a mandatory Judicial Tax Deed Auction designed to establish a property's true market value through public bidding. Any auction proceeds that exceed the underlying tax debt, interest, and administrative costs must be deposited with the County Treasurer and returned to the former owner. Additionally, the bill establishes county-level, fee-funded Surplus Equity Funds to protect former owners if a public auction fails to draw private bids, while significantly upgrading bilingual due process and notification requirements to ensure property owners understand their equity rights. 

Additional information is available via an ISACo Policy Brief.