Background
Illinois has substantially changed its property-tax sale laws following the 2023 U.S. Supreme Court decision in Tyler v. Hennepin County. The Court held that while government may take property to satisfy a legitimate tax debt, it cannot retain the property’s surplus value above the amount owed without providing constitutionally required compensation.
Illinois continued operating under a system that did not fully address this requirement for several years. In fact, Illinois was identified as the last state still operating under a system that allowed the potential forfeiture of a property owner’s surplus equity. House Bill 4537 was enacted to bring Illinois’ tax-sale system into compliance with the constitutional requirements established by Tyler. (Capitol News Illinois)
The new law creates additional protections for property owners and substantially changes the process for dealing with property that has sufficient value to create equity above the delinquent tax debt. Among other changes, it establishes public auction procedures and a surplus-equity fund and provides mechanisms for owners to recover surplus equity or, in certain circumstances, obtain an award of indemnity. (Illinois General Assembly)
What This Means for White County
The County must now ensure that:
● Property owners’ surplus equity is protected;
● Surplus proceeds are properly accounted for and distributed;
● Required notices and procedures are followed;
● Tax-deed and public-auction procedures comply with the new law;
● Appropriate records and accounting procedures are maintained; and
● County personnel understand the additional responsibilities created by the legislation.
This is considerably more than simply collecting delinquent property taxes. The new process involves tax-sale administration, real estate, title issues, public auctions, surplus-equity accounting, legal proceedings and constitutional property-right protections.
TWO OPTIONS FOR WHITE COUNTY
OPTION 1 — Treasurer’s Office Performs the Additional Duties
White County could administer the expanded tax-deed and surplus-equity responsibilities through the Treasurer’s Office.
This would require the County to establish procedures for receiving and accounting for surplus proceeds, providing notices, processing claims, maintaining records, conducting or coordinating required auctions, and working with the State’s Attorney and courts on disputed matters.
Advantages
● Maximum direct County control.
● Continuity within the Treasurer’s Office.
Disadvantages
● Significant additional workload for County employees.
● Potential need for additional staff, software and procedures.
● Increased legal and administrative responsibilities.
● Requires the County to develop expertise in an increasingly complicated area of property and tax law.
OPTION 2 — Utilize Joseph E. Meyer & Associates
White County has utilized Joseph E. Meyer & Associates as its county tax agent/trustee for many years. The firm specializes in delinquent property taxes, tax sales, tax deeds, title work, property disposition and related legal and administrative matters.
Meyer currently identifies itself as the Illinois County Trustee for 81 counties, demonstrating extensive statewide experience with the Illinois tax-sale system. (Jem-A)
Under this option, White County would continue utilizing its established relationship with Meyer and, subject to legal review, authorize the firm to perform the specialized tax-deed and property-disposition functions permitted under the new law. The Treasurer’s Office would continue performing the responsibilities specifically assigned to the County Treasurer, including the proper receipt, accounting and distribution of surplus funds.
Advantages
● Utilizes an established White County relationship.
● Avoids creating an entirely new in-house tax-deed operation.
● Provides specialized legal and administrative resources.
● Reduces additional workload on County employees.
● Provides continuity with White County’s existing tax-sale process.
● Utilizes a firm with extensive statewide experience.
● Joseph Meyer has informed us there will be no charge to the county for these services. Their financial reward is at the back-end if/when properties sell.
Disadvantages
● The County must clearly define responsibilities and oversight through an updated agreement and Board authorization.
TREASURER’S RECOMMENDATION
I recommend Option 2 — continuing to utilize Joseph E. Meyer & Associates.
White County already has an experienced trustee/tax agent in place. Rather than creating a new in-house operation to administer a highly specialized area of Illinois property and tax law, the County can utilize the expertise, personnel and legal resources of an organization that performs these functions for counties throughout Illinois.
This approach allows the Treasurer’s Office to remain focused on its core statutory responsibilities while ensuring that the new surplus-equity and tax-deed requirements are administered by personnel with specialized experience.
White County does not need to reinvent the wheel. We already have an established relationship with an experienced organization capable of handling these specialized responsibilities.
The State’s Attorney should review and approve the final structure and agreement to ensure that all statutory responsibilities remain properly assigned and that the County’s interests and property owners’ surplus-equity rights are fully protected.
Mike Baxley
White County Treasurer
(618)382-8122
