HB3569 amends the Illinois Property Tax Code to create a new “excess proceeds sale” process in tax deed cases. The bill allows any owner who had an interest in the property when a tax deed petition was filed to request that, if the property is not redeemed, the certificate of purchase be sold in a court-supervised sale designed to capture and distribute any equity above the tax debt and related costs. It also requires standardized request forms, notice to interested parties, publication requirements, and deadlines for making the request.
The bill further sets out how the excess proceeds sale would work, including who may conduct the sale, how bids and credit bids are handled, how sale proceeds are applied, and how any surplus is held and later claimed through court order. It extends the time to record a tax deed when an excess proceeds sale is requested and limits certain post-deed remedies once such a sale occurs. The bill also adds and revises indemnity-fund surcharges and fees tied to tax deeds, recordings, and excess proceeds sales, with revenues directed to county indemnity funds.
Impact
HB3569 would substantially revise the tax deed and tax sale framework in the Property Tax Code by adding new Sections 22-100 through 22-120 and amending multiple existing sections governing notice, deed issuance, deed challenges, recording deadlines, and indemnity fund financing. It creates a new mechanism for owners to seek a sale of the certificate of purchase so that any surplus value in the property can be realized and distributed rather than lost entirely through the tax deed process. It also imposes new fees and surcharges on tax deed-related transactions and directs those revenues to county indemnity funds, affecting county treasurers, clerks, tax deed purchasers, title companies, attorneys, and property owners facing tax foreclosure.
Sentiment
The bill’s text and caption suggest a consumer- and homeowner-protection orientation, aimed at preserving equity for owners in tax delinquency cases. Because there are no committee transcripts or recorded votes provided, there is no direct evidence of legislative debate or formal support/opposition in the available materials. On its face, the proposal appears to favor owners by creating a new avenue to recover surplus value while also preserving existing indemnity remedies in some circumstances.
Contention
The main points of potential contention are likely to be the added procedural complexity, the new fees and surcharges, and the shift in rights among owners, tax deed purchasers, and county officials. Tax purchasers and title companies may object to the mandatory excess proceeds sale process, the extended recording timeline, and the possibility that their recovery is delayed or altered by a court-supervised sale. Counties may also be concerned about administrative burden and the mechanics of funding indemnity accounts, while homeowner advocates would likely support the bill’s effort to protect equity and provide notice and a claim process for surplus proceeds.