From State Rep. Dan Ugaste:
Federal judge’s opinion this week makes tax sale reform urgent
Under current law, Illinois counties are required to seize and sell off properties that are multi-year delinquent in their property taxes.
A facet of the auctioning-off process required by statutory law in Illinois was, however, declared unconstitutional in Minnesota in the case of Tyler v. Hennepin County (2023).
The U.S. Supreme Court decision placed an order on all the states where counties sell off, for their own benefit, tax-delinquent properties.
The order holds that the counties must, going forward, sequester all the proceeds of the sale (if any) that surpass the total sum owed by the previous property owner to the county.
The Tyler v. Hennepin County decision requires that this surplus must be returned to the prior owner.
Attorneys say that no money can change hands, including under the circumstances set forth in Tyler v. Hennepin, except through proper procedure.
This, in turn, mandates the Illinois General Assembly to enact a statutory law to set forth the required procedure to enable the return of this money.
Until this legal change is enacted and a procedure set forth, local counties cannot return these moneys to their proper owners even though they have been required to do so by the U.S. Supreme Court.
This creates a substantial and growing legal liability for Illinois counties and their taxpayers. They are potentially liable for damage suits filed by affected property owners claiming damages and seeking enforcement and compensation.
A federal judge’s opinion, filed this week, makes clear that these claims for damages have standing to be considered valid. Illinois taxpayers could soon be on the hook for many millions of dollars because of the Illinois General Assembly’s failure to act. Illinois House Republicans made numerous attempts, in 2024 and again in 2025, to get their colleagues to enact a law to create this procedure.
Draft language to deal with this situation and create the required procedure has been on the table for more than twelve months.
A new window for emergency action will open on Tuesday, October 14, when the General Assembly convenes for its fall veto session.
