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HB 3421

PROP TX-EQUITY FUND

104th Regular Session Introduced by Sonya Harper and 1 co-sponsor

Establishes the Equity Fund to pay equity surplus to property owners divested by tax deeds and tightens indemnity fees and tax‑forfeit property rules.

House Floor Amendment No. 1 Rule 19(c) / Re-referred to Rules Committee
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Bill Summary · HB 3421

Summary — HB 3421 (PROP TX‑EQUITY FUND)

Status: Enacted — signed by Governor 6/20/2025; effective 9/1/2025
Primary sponsor: Rep. Sonya M. Harper; Co‑sponsor: Rep. Camille Y. Lilly
Companion bill: SB 1448

Main purpose

HB 3421 creates an Equity Fund and revises parts of the Illinois Property Tax Code governing tax sales, county purchases/assignments of tax certificates, indemnity fees, and payment of equity surplus amounts to owners whose property was divested by recorded tax deed. The bill establishes funding, fee changes, and procedures to pay equity surplus amounts and clarifies county authority over tax‑forfeited property.

Key provisions

  • Establishes the “Equity Fund” in the State Finance Act (new 30 ILCS 105/5.1030). Moneys in the fund are to be used exclusively to pay ordered equity surplus payments to Illinois property owners who lost property by recorded tax deed.
  • Authorizes the State Treasurer to transfer amounts in the Equity Fund that exceed the amount required for equity surplus payments to the General Revenue Fund.
  • Creates an irrevocable, continuing appropriation from Illinois tax lien purchasers to the Equity Fund to enable payment of equity surplus amounts upon order of the State Treasurer.
  • Revises indemnity fee rules (35 ILCS 200/21‑295):
    • Makes indemnity fees nonrefundable.
    • In counties of fewer than 3,000,000 inhabitants: retains a county‑set indemnity fee not to exceed $20 (now explicitly nonrefundable).
    • In counties of 3,000,000 or more inhabitants (Cook County): changes purchaser fees to a nonrefundable $80 per item (replacing prior $200), adds an additional nonrefundable fee equal to 5% (amended from 3%) of taxes/interest/penalties paid, and sets the annual posting fee for subsequent taxes at $80 (replacing $150).
  • Adds provisions governing calculation of the equity surplus, an application process for surplus claims, and related conforming changes to Property Tax Code sections (some text truncated in available copy).
  • Clarifies county authority to acquire, maintain, sell, or assign forfeited/tax‑acquired property, including sale/assignment to municipalities, land banks, or non‑profit affordable‑housing developers; assigns rules on voiding assigned tax certificates if a tax deed is not recorded within four years (with limited court tolling).

Who is affected

  • Property owners divested by tax deed — eligible to receive equity surplus payments under the new fund/process.
  • Tax lien purchasers — subject to revised nonrefundable fees and the continuing appropriation mechanism for equity payments.
  • Counties (notably Cook County, the 3,000,000+ jurisdiction) — implement fee collection and manage indemnity funds; exercise clarified duties when acquiring and disposing of tax‑forfeited properties.
  • State Treasurer and General Revenue Fund — Treasurer administers Equity Fund disbursements and may transfer excess to General Revenue.

Procedural timeline and effective date

  • Introduced: Feb 18, 2025 (filed Feb 26, 2025).
  • Passed both chambers in May 2025; enrolled May 24, 2025; sent to Governor May 26, 2025.
  • Signed by Governor: June 20, 2025. Effective date: September 1, 2025.

Note: The legislative text available is partially truncated. The summary reflects provisions shown in the enrolled bill and House Floor Amendment No. 1.

Compiled from official sources — confirm details with the bill’s official record.

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