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HB 3146

PROP TX-SURPLUS SALE

104th Regular Session Introduced by Dee Avelar and 5 co-sponsors

HB 3146 streamlines county tax-delinquent property sales, requires a 120-day public auction after tax deeds, and provides owners an indemnity for lost surplus equity.

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Bill Summary · HB 3146

Summary — HB 3146 (PROP TX‑SURPLUS SALE)

Status: Passed by the 104th General Assembly; signed by the Governor 6/20/2025. Effective date: September 1, 2025. Added co‑sponsors: Rep. Dagmara Avelar, Rep. Stephanie Kifowit, Rep. Rita Mayfield, Rep. Kelly M. Cassidy, Rep. Laura Faver Dias. Introduced by Rep. Will Guzzardi (filed 2/21/2025).

Purpose / Intent

HB 3146 amends the Illinois Property Tax Code and the Mortgage Rescue Fraud Act to streamline how counties acquire and resell tax‑delinquent or forfeited property, require county auctions following county tax deeds, protect owners’ rights to recover lost surplus equity, and add disclosure requirements to certain distressed‑property conveyance contracts.

Key provisions

  • County petitions and tax deeds

    • Permits a county (as trustee for taxing districts) to file a single petition covering multiple delinquent tax liens or certificates.
    • Authorizes the county to request issuance of a tax deed without holding a judicial tax‑deed auction when filing one petition for more than one parcel.

  • Post‑deed public auction requirement

    • Requires the county to offer each parcel for public sale/auction within 120 days of recording the tax deed.
    • The court’s Order for Issuance of Tax Deed must identify total delinquent taxes, penalties, municipal advancements, pro rata county costs, and posted costs for each parcel, and must order the county to hold the public auction within 120 days.
    • Auctions must follow statutory notice and procedural requirements (e.g., property identification, notice content, auction rules) as specified in the amended statute.

  • County powers and disposition of proceeds

    • Clarifies county authority to acquire, manage, repair, demolish, or otherwise maintain tax‑forfeited property and to sell or assign tax certificates to entities (including municipalities, land banks, nonprofit affordable housing developers).
    • Specifies that proceeds, less county costs (acquisition, maintenance, sale, staff overhead) and surplus payments to owners, are distributed pro rata to taxing districts.

  • Assigned tax certificates

    • An assigned tax certificate is void if no tax deed is recorded within 4 years of assignment unless a court extends or tolls the deadline for reasons such as injunction, municipal refusal to issue transfer approvals, or clerk refusal to execute deed.

  • Owner indemnity for lost surplus equity

    • Provides that any property owner who sustains loss or damage because a tax deed was issued has a right to recover lost surplus equity through an award of indemnity.

  • Mortgage Rescue Fraud Act amendment

    • Requires distressed property conveyance contracts to include a statement informing the property owner they may have a right to obtain money for any equity lost if a tax deed is issued.

Who is affected

  • County governments and county officials (broader authority to obtain title and conduct auctions)
  • Property owners with delinquent taxes or forfeited property (new indemnity remedy; auction timing impacts)
  • Assignees and tax purchasers (assignment timing rules; 4‑year recording deadline)
  • Taxing districts (receipt of sale proceeds after county costs)
  • Municipalities, land banks, affordable housing developers (potential purchasers)
  • Buyers at county auctions and parties to distressed‑property conveyances (new disclosure obligation)

Procedural / timeline notes

  • Enacted: governor signed 6/20/2025.
  • Effective: 9/1/2025 (statutory effective date recorded in legislative actions). (The bill text synopsis included “Effective immediately,” but the enrolled legislation’s effective date is 9/1/2025.)

Statutes amended / added

  • Amends: 35 ILCS 200/21‑90, 35 ILCS 200/22‑10, 35 ILCS 200/22‑40, 35 ILCS 200/22‑65
  • Adds: 35 ILCS 200/21‑302
  • Amends: Mortgage Rescue Fraud Act (765 ILCS 940/5 and 765 ILCS 940/30)

Potential impacts / considerations

  • Streamlines counties’ ability to clear tax‑forfeited inventories and accelerate resale, which could reduce holding/maintenance costs for counties.
  • Shorter timelines to auction may affect owners’ redemption opportunities; indemnity provision creates a post‑deed remedy for lost surplus equity.
  • The 4‑year assignment limitation and required disclosures in distressed‑property contracts aim to protect owners and clarify purchaser/assignee responsibilities.

This summary highlights principal changes and practical effects; specific procedural details for auctions and notice content are contained in the amended statutory language.

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

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