Cook County Statue of Limitations Bill
There is pending legislation (SB 2854) that is on the Governor’s desk for signature which we were actively involved in pushing and finding a sponsor for the bill. If signed, the legislation will change the Cook County refund statute of limitations from 5 years to 20 years. Currently Cook County has 20 years to pursue property owners for unpaid property tax bills. This legislation will level the playing field for property owners who are owed refunds, giving them 20 years to pursue any refund owed to them.
SENATE BILL 2854 (Senator Jones/Representative Rita)
SB 2854 extends the time a Cook County taxpayer may file a claim for a refund of overpaid property taxes from five to twenty years and limits the amount of refunds for taxes overpaid prior to 2009.
Background Information and Prior Legislation
Property taxes are overpaid for various reasons, and refunds due for these over-payments often are unclaimed. This was particularly the case in Cook County until 2010 when the Treasurer implemented a program designed to reduce the instance of double payments and significantly reduce the number of refund claims. Under current law, taxpayers must make a refund request within five years of the overpayment.
Several companies, including Kensington Research and Recovery, assist taxpayers with obtaining refunds. To properly identify and locate these taxpayers, companies request information (research requests) from the County Treasurer. In 2005, the Cook County Treasurer ceased processing research requests submitted by Kensington. The Company subsequently filed suit seeking to compel the Treasurer to process its requests. In 2007, The Cook County Circuit Court ruled that Kensington was entitled to make 400 research requests per month. The Court also waived the statutory time limit for those refund claims pending during the litigation process. In 2008, the Appellate Court affirmed the ruling with respect to the number of monthly research requests, but vacated the Circuit Court’s order that the time limit be extended for those refund claims that expired during the course of the litigation.
The denial of research requests by the Treasurer coupled with the length of the litigation resulted in the expiration of the refund claims for approximately 1,000 taxpayers because the five-year period for requesting those refunds had lapsed. In 2010 and 2011, Kensington pursued legislation to lengthen the statute of limitations from five to twenty years to accommodate those taxpayers and the processing of their refunds and to make the refund claim period consistent with the twenty-year tax collection period. Due to the Treasurer’s concerns over the cost of the change, compromise legislation was enacted in 2011 permitting the Cook County Treasurer to grant refunds for claims dating back to January, 2000 (PA 97-521). The legislation limited the total refund amount to $350,000 and required refunds to be paid in the order in which the claims were received.
Kensington again is requesting that the time period for refund claims be extended permanently from five to twenty years. Pursuant to the 2011 legislation, 231 applications for taxpayers with sufficient proof for a refund were submitted, but only 111 taxpayers received refunds. 120 taxpayers were not able to recover their overpaid taxes due, in part, to the County’s decision to conduct a lottery instead of paying the refunds in the order in which the claims were received. This process permitted the awarding of refunds to taxpayers who did not have claims pending while the refund litigation was pending. The change proposed in SB 2854 would allow the 120 taxpayers with outstanding claims to receive their refunds, and the extension would afford the same 20-year period for claiming a refund as is allowed for taxes to be collected by the County. The legislation limits the amount of refunds for taxes overpaid prior to January 1, 2009 to $2.5 million dollars per year.