97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB3602

 

Introduced 2/24/2011, by Rep. Harry Osterman

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 200/15-176
35 ILCS 200/15-177

    Amends the Property Tax Code. In a Section concerning the alternative general homestead exemption, provides that the maximum amount of the exemption is $40,000 for taxable year 2011 and thereafter. Provides that the alternative general homestead exemption applies on a permanent basis. In a Section concerning the long-time occupant homestead exemption, expands the definition of "adjusted homestead value". Beginning with taxable year 2011 and thereafter, "adjusted homestead value" means a property's base homestead value increased by 7% for each taxable year after the base year through and including the current tax year for qualified taxpayers with a household income of $100,000 or less. Makes other changes. Effective immediately.


LRB097 08737 HLH 48866 b

FISCAL NOTE ACT MAY APPLY
HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB3602LRB097 08737 HLH 48866 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Property Tax Code is amended by changing
5Sections 15-176 and 15-177 as follows:
 
6    (35 ILCS 200/15-176)
7    Sec. 15-176. Alternative general homestead exemption.
8    (a) For the assessment years as determined under subsection
9(j), in any county that has elected, by an ordinance in
10accordance with subsection (k), to be subject to the provisions
11of this Section in lieu of the provisions of Section 15-175,
12homestead property is entitled to an annual homestead exemption
13equal to a reduction in the property's equalized assessed value
14calculated as provided in this Section.
15    (b) As used in this Section:
16        (1) "Assessor" means the supervisor of assessments or
17    the chief county assessment officer of each county.
18        (2) "Adjusted homestead value" means the lesser of the
19    following values:
20            (A) The property's base homestead value increased
21        by 7% for each tax year after the base year through and
22        including the current tax year, or, if the property is
23        sold or ownership is otherwise transferred, the

 

 

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1        property's base homestead value increased by 7% for
2        each tax year after the year of the sale or transfer
3        through and including the current tax year. The
4        increase by 7% each year is an increase by 7% over the
5        prior year.
6            (B) The property's equalized assessed value for
7        the current tax year minus: (i) $4,500 in Cook County
8        or $3,500 in all other counties in tax year 2003; (ii)
9        $5,000 in all counties in tax years 2004 and 2005; and
10        (iii) the lesser of the amount of the general homestead
11        exemption under Section 15-175 or an amount equal to
12        the increase in the equalized assessed value for the
13        current tax year above the equalized assessed value for
14        1977 in tax year 2006 and thereafter.
15        (3) "Base homestead value".
16            (A) Except as provided in subdivision (b)(3)(A-5)
17        or (b)(3)(B), "base homestead value" means the
18        equalized assessed value of the property for the base
19        year prior to exemptions, minus (i) $4,500 in Cook
20        County or $3,500 in all other counties in tax year
21        2003, (ii) $5,000 in all counties in tax years 2004 and
22        2005, or (iii) the lesser of the amount of the general
23        homestead exemption under Section 15-175 or an amount
24        equal to the increase in the equalized assessed value
25        for the current tax year above the equalized assessed
26        value for 1977 in tax year 2006 and thereafter,

 

 

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1        provided that it was assessed for that year as
2        residential property qualified for any of the
3        homestead exemptions under Sections 15-170 through
4        15-175 of this Code, then in force, and further
5        provided that the property's assessment was not based
6        on a reduced assessed value resulting from a temporary
7        irregularity in the property for that year. Except as
8        provided in subdivision (b)(3)(B), if the property did
9        not have a residential equalized assessed value for the
10        base year, then "base homestead value" means the base
11        homestead value established by the assessor under
12        subsection (c).
13            (A-5) On or before September 1, 2007, in Cook
14        County, the base homestead value, as set forth under
15        subdivision (b)(3)(A) and except as provided under
16        subdivision (b) (3) (B), must be recalculated as the
17        equalized assessed value of the property for the base
18        year, prior to exemptions, minus:
19                (1) if the general assessment year for the
20            property was 2003, the lesser of (i) $4,500 or (ii)
21            the amount equal to the increase in equalized
22            assessed value for the 2002 tax year above the
23            equalized assessed value for 1977;
24                (2) if the general assessment year for the
25            property was 2004, the lesser of (i) $4,500 or (ii)
26            the amount equal to the increase in equalized

 

 

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1            assessed value for the 2003 tax year above the
2            equalized assessed value for 1977;
3                (3) if the general assessment year for the
4            property was 2005, the lesser of (i) $5,000 or (ii)
5            the amount equal to the increase in equalized
6            assessed value for the 2004 tax year above the
7            equalized assessed value for 1977.
8            (B) If the property is sold or ownership is
9        otherwise transferred, other than sales or transfers
10        between spouses or between a parent and a child, "base
11        homestead value" means the equalized assessed value of
12        the property at the time of the sale or transfer prior
13        to exemptions, minus: (i) $4,500 in Cook County or
14        $3,500 in all other counties in tax year 2003; (ii)
15        $5,000 in all counties in tax years 2004 and 2005; and
16        (iii) the lesser of the amount of the general homestead
17        exemption under Section 15-175 or an amount equal to
18        the increase in the equalized assessed value for the
19        current tax year above the equalized assessed value for
20        1977 in tax year 2006 and thereafter, provided that it
21        was assessed as residential property qualified for any
22        of the homestead exemptions under Sections 15-170
23        through 15-175 of this Code, then in force, and further
24        provided that the property's assessment was not based
25        on a reduced assessed value resulting from a temporary
26        irregularity in the property.

 

 

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1        (3.5) "Base year" means (i) tax year 2002 in Cook
2    County or (ii) tax year 2008 or 2009 in all other counties
3    in accordance with the designation made by the county as
4    provided in subsection (k).
5        (4) "Current tax year" means the tax year for which the
6    exemption under this Section is being applied.
7        (5) "Equalized assessed value" means the property's
8    assessed value as equalized by the Department.
9        (6) "Homestead" or "homestead property" means:
10            (A) Residential property that as of January 1 of
11        the tax year is occupied by its owner or owners as his,
12        her, or their principal dwelling place, or that is a
13        leasehold interest on which a single family residence
14        is situated, that is occupied as a residence by a
15        person who has a legal or equitable interest therein
16        evidenced by a written instrument, as an owner or as a
17        lessee, and on which the person is liable for the
18        payment of property taxes. Residential units in an
19        apartment building owned and operated as a
20        cooperative, or as a life care facility, which are
21        occupied by persons who hold a legal or equitable
22        interest in the cooperative apartment building or life
23        care facility as owners or lessees, and who are liable
24        by contract for the payment of property taxes, shall be
25        included within this definition of homestead property.
26            (B) A homestead includes the dwelling place,

 

 

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1        appurtenant structures, and so much of the surrounding
2        land constituting the parcel on which the dwelling
3        place is situated as is used for residential purposes.
4        If the assessor has established a specific legal
5        description for a portion of property constituting the
6        homestead, then the homestead shall be limited to the
7        property within that description.
8        (7) "Life care facility" means a facility as defined in
9    Section 2 of the Life Care Facilities Act.
10    (c) If the property did not have a residential equalized
11assessed value for the base year as provided in subdivision
12(b)(3)(A) of this Section, then the assessor shall first
13determine an initial value for the property by comparison with
14assessed values for the base year of other properties having
15physical and economic characteristics similar to those of the
16subject property, so that the initial value is uniform in
17relation to assessed values of those other properties for the
18base year. The product of the initial value multiplied by the
19equalized factor for the base year for homestead properties in
20that county, less: (i) $4,500 in Cook County or $3,500 in all
21other counties in tax years 2003; (ii) $5,000 in all counties
22in tax year 2004 and 2005; and (iii) the lesser of the amount
23of the general homestead exemption under Section 15-175 or an
24amount equal to the increase in the equalized assessed value
25for the current tax year above the equalized assessed value for
261977 in tax year 2006 and thereafter, is the base homestead

 

 

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1value.
2    For any tax year for which the assessor determines or
3adjusts an initial value and hence a base homestead value under
4this subsection (c), the initial value shall be subject to
5review by the same procedures applicable to assessed values
6established under this Code for that tax year.
7    (d) The base homestead value shall remain constant, except
8that the assessor may revise it under the following
9circumstances:
10        (1) If the equalized assessed value of a homestead
11    property for the current tax year is less than the previous
12    base homestead value for that property, then the current
13    equalized assessed value (provided it is not based on a
14    reduced assessed value resulting from a temporary
15    irregularity in the property) shall become the base
16    homestead value in subsequent tax years.
17        (2) For any year in which new buildings, structures, or
18    other improvements are constructed on the homestead
19    property that would increase its assessed value, the
20    assessor shall adjust the base homestead value as provided
21    in subsection (c) of this Section with due regard to the
22    value added by the new improvements.
23        (3) If the property is sold or ownership is otherwise
24    transferred, the base homestead value of the property shall
25    be adjusted as provided in subdivision (b)(3)(B). This item
26    (3) does not apply to sales or transfers between spouses or

 

 

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1    between a parent and a child.
2        (4) the recalculation required in Cook County under
3    subdivision (b)(3)(A-5).
4    (e) The amount of the exemption under this Section is the
5equalized assessed value of the homestead property for the
6current tax year, minus the adjusted homestead value, with the
7following exceptions:
8        (1) In Cook County, the exemption under this Section
9    shall not exceed $20,000 for any taxable year through tax
10    year:
11            (i) 2005, if the general assessment year for the
12        property is 2003;
13            (ii) 2006, if the general assessment year for the
14        property is 2004; or
15            (iii) 2007, if the general assessment year for the
16        property is 2005.
17        (1.1) Thereafter, in Cook County, and in all other
18    counties, the exemption is as follows:
19            (i) if the general assessment year for the property
20        is 2006, then the exemption may not exceed: $33,000 for
21        taxable year 2006; $26,000 for taxable year 2007;
22        $20,000 for taxable years 2008 and 2009; $16,000 for
23        taxable year 2010; and $40,000 $12,000 for taxable year
24        2011 and thereafter;
25            (ii) if the general assessment year for the
26        property is 2007, then the exemption may not exceed:

 

 

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1        $33,000 for taxable year 2007; $26,000 for taxable year
2        2008; $20,000 for taxable years 2009 and 2010; and
3        $40,000 $16,000 for taxable year 2011 and thereafter;
4        and $12,000 for taxable year 2012; and
5            (iii) if the general assessment year for the
6        property is 2008, then the exemption may not exceed:
7        $33,000 for taxable year 2008; $26,000 for taxable year
8        2009; $20,000 for taxable year years 2010; and $40,000
9        for taxable year 2011 and thereafter ; $16,000 for
10        taxable year 2012; and $12,000 for taxable year 2013.
11    (1.5) In Cook County, for the 2006 taxable year only, the
12maximum amount of the exemption set forth under subsection
13(e)(1.1)(i) of this Section may be increased: (i) by $7,000 if
14the equalized assessed value of the property in that taxable
15year exceeds the equalized assessed value of that property in
162002 by 100% or more; or (ii) by $2,000 if the equalized
17assessed value of the property in that taxable year exceeds the
18equalized assessed value of that property in 2002 by more than
1980% but less than 100%.
20        (2) In the case of homestead property that also
21    qualifies for the exemption under Section 15-172, the
22    property is entitled to the exemption under this Section,
23    limited to the amount of (i) $4,500 in Cook County or
24    $3,500 in all other counties in tax year 2003, (ii) $5,000
25    in all counties in tax years 2004 and 2005, or (iii) the
26    lesser of the amount of the general homestead exemption

 

 

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1    under Section 15-175 or an amount equal to the increase in
2    the equalized assessed value for the current tax year above
3    the equalized assessed value for 1977 in tax year 2006 and
4    thereafter.
5    (f) In the case of an apartment building owned and operated
6as a cooperative, or as a life care facility, that contains
7residential units that qualify as homestead property under this
8Section, the maximum cumulative exemption amount attributed to
9the entire building or facility shall not exceed the sum of the
10exemptions calculated for each qualified residential unit. The
11cooperative association, management firm, or other person or
12entity that manages or controls the cooperative apartment
13building or life care facility shall credit the exemption
14attributable to each residential unit only to the apportioned
15tax liability of the owner or other person responsible for
16payment of taxes as to that unit. Any person who willfully
17refuses to so credit the exemption is guilty of a Class B
18misdemeanor.
19    (g) When married persons maintain separate residences, the
20exemption provided under this Section shall be claimed by only
21one such person and for only one residence.
22    (h) In the event of a sale or other transfer in ownership
23of the homestead property, the exemption under this Section
24shall remain in effect for the remainder of the tax year and be
25calculated using the same base homestead value in which the
26sale or transfer occurs, but (other than for sales or transfers

 

 

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1between spouses or between a parent and a child) shall be
2calculated for any subsequent tax year using the new base
3homestead value as provided in subdivision (b)(3)(B). The
4assessor may require the new owner of the property to apply for
5the exemption in the following year.
6    (i) The assessor may determine whether property qualifies
7as a homestead under this Section by application, visual
8inspection, questionnaire, or other reasonable methods. Each
9year, at the time the assessment books are certified to the
10county clerk by the board of review, the assessor shall furnish
11to the county clerk a list of the properties qualified for the
12homestead exemption under this Section. The list shall note the
13base homestead value of each property to be used in the
14calculation of the exemption for the current tax year.
15    (j) In counties with 3,000,000 or more inhabitants, the
16provisions of this Section apply as follows:
17        (1) If the general assessment year for the property is
18    2003, this Section applies for assessment years 2003 and
19    thereafter through 2011. Thereafter, the provisions of
20    Section 15-175 apply.
21        (2) If the general assessment year for the property is
22    2004, this Section applies for assessment years 2004 and
23    thereafter through 2012. Thereafter, the provisions of
24    Section 15-175 apply.
25        (3) If the general assessment year for the property is
26    2005, this Section applies for assessment years 2005 and

 

 

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1    thereafter through 2013. Thereafter, the provisions of
2    Section 15-175 apply.
3    In counties with less than 3,000,000 inhabitants, this
4Section applies for assessment years (i) 2009, 2010, 2011, and
5thereafter 2012 if tax year 2008 is the designated base year or
6(ii) 2010, 2011, 2012, and thereafter 2013 if tax year 2009 is
7the designated base year. Thereafter, the provisions of Section
815-175 apply.
9    (k) To be subject to the provisions of this Section in lieu
10of Section 15-175, a county must adopt an ordinance to subject
11itself to the provisions of this Section within 6 months after
12the effective date of this amendatory Act of the 96th General
13Assembly. In a county other than Cook County, the ordinance
14must designate either tax year 2008 or tax year 2009 as the
15base year.
16    (l) Notwithstanding Sections 6 and 8 of the State Mandates
17Act, no reimbursement by the State is required for the
18implementation of any mandate created by this Section.
19(Source: P.A. 95-644, eff. 10-12-07; 96-1418, eff. 8-2-10.)
 
20    (35 ILCS 200/15-177)
21    Sec. 15-177. The long-time occupant homestead exemption.
22    (a) If the county has elected, under Section 15-176, to be
23subject to the provisions of the alternative general homestead
24exemption, then, for taxable years 2007 and thereafter,
25regardless of whether the exemption under Section 15-176

 

 

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1applies, qualified homestead property is entitled to an annual
2homestead exemption equal to a reduction in the property's
3equalized assessed value calculated as provided in this
4Section.
5    (b) As used in this Section:
6    "Adjusted homestead value" means the lesser of the
7following values:
8        (1) The property's base homestead value increased by:
9    (i) 10% for each taxable year after the base year through
10    and including the current tax year for qualified taxpayers
11    with a household income of more than $75,000 but not
12    exceeding $100,000; or (ii) 7% for each taxable year after
13    the base year through and including the current tax year
14    for qualified taxpayers with a household income of $75,000
15    or less. The increase each year is an increase over the
16    prior year; or
17        (1.5) Beginning with taxable year 2011 and thereafter,
18    the property's base homestead value increased by 7% for
19    each taxable year after the base year through and including
20    the current tax year for qualified taxpayers with a
21    household income of $100,000 or less. The increase each
22    year is an increase over the prior year; or
23        (2) The property's equalized assessed value for the
24    current tax year minus the general homestead deduction.
25    "Base homestead value" means:
26        (1) if the property did not have an adjusted homestead

 

 

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1    value under Section 15-176 for the base year, then an
2    amount equal to the equalized assessed value of the
3    property for the base year prior to exemptions, minus the
4    general homestead deduction, provided that the property's
5    assessment was not based on a reduced assessed value
6    resulting from a temporary irregularity in the property for
7    that year; or
8        (2) if the property had an adjusted homestead value
9    under Section 15-176 for the base year, then an amount
10    equal to the adjusted homestead value of the property under
11    Section 15-176 for the base year.
12    "Base year" means the taxable year prior to the taxable
13year in which the taxpayer first qualifies for the exemption
14under this Section.
15    "Current taxable year" means the taxable year for which the
16exemption under this Section is being applied.
17    "Equalized assessed value" means the property's assessed
18value as equalized by the Department.
19    "Homestead" or "homestead property" means residential
20property that as of January 1 of the tax year is occupied by a
21qualified taxpayer as his or her principal dwelling place, or
22that is a leasehold interest on which a single family residence
23is situated, that is occupied as a residence by a qualified
24taxpayer who has a legal or equitable interest therein
25evidenced by a written instrument, as an owner or as a lessee,
26and on which the person is liable for the payment of property

 

 

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1taxes. Residential units in an apartment building owned and
2operated as a cooperative, or as a life care facility, which
3are occupied by persons who hold a legal or equitable interest
4in the cooperative apartment building or life care facility as
5owners or lessees, and who are liable by contract for the
6payment of property taxes, are included within this definition
7of homestead property. A homestead includes the dwelling place,
8appurtenant structures, and so much of the surrounding land
9constituting the parcel on which the dwelling place is situated
10as is used for residential purposes. If the assessor has
11established a specific legal description for a portion of
12property constituting the homestead, then the homestead is
13limited to the property within that description.
14    "Household income" has the meaning set forth under Section
1515-172 of this Code.
16    "General homestead deduction" means the amount of the
17general homestead exemption under Section 15-175.
18    "Life care facility" means a facility defined in Section 2
19of the Life Care Facilities Act.
20    "Qualified homestead property" means homestead property
21owned by a qualified taxpayer.
22    "Qualified taxpayer" means any individual:
23        (1) who, for at least 10 continuous years as of January
24    1 of the taxable year, has occupied the same homestead
25    property as a principal residence and domicile or who, for
26    at least 5 continuous years as of January 1 of the taxable

 

 

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1    year, has occupied the same homestead property as a
2    principal residence and domicile if that person received
3    assistance in the acquisition of the property as part of a
4    government or nonprofit housing program; and
5        (2) who has a household income of $100,000 or less.
6    (c) The base homestead value must remain constant, except
7that the assessor may revise it under any of the following
8circumstances:
9        (1) If the equalized assessed value of a homestead
10    property for the current tax year is less than the previous
11    base homestead value for that property, then the current
12    equalized assessed value (provided it is not based on a
13    reduced assessed value resulting from a temporary
14    irregularity in the property) becomes the base homestead
15    value in subsequent tax years.
16        (2) For any year in which new buildings, structures, or
17    other improvements are constructed on the homestead
18    property that would increase its assessed value, the
19    assessor shall adjust the base homestead value with due
20    regard to the value added by the new improvements.
21    (d) The amount of the exemption under this Section is the
22greater of: (i) the equalized assessed value of the homestead
23property for the current tax year minus the adjusted homestead
24value; or (ii) the general homestead deduction.
25    (e) In the case of an apartment building owned and operated
26as a cooperative, or as a life care facility, that contains

 

 

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1residential units that qualify as homestead property of a
2qualified taxpayer under this Section, the maximum cumulative
3exemption amount attributed to the entire building or facility
4shall not exceed the sum of the exemptions calculated for each
5unit that is a qualified homestead property. The cooperative
6association, management firm, or other person or entity that
7manages or controls the cooperative apartment building or life
8care facility shall credit the exemption attributable to each
9residential unit only to the apportioned tax liability of the
10qualified taxpayer as to that unit. Any person who willfully
11refuses to so credit the exemption is guilty of a Class B
12misdemeanor.
13    (f) When married persons maintain separate residences, the
14exemption provided under this Section may be claimed by only
15one such person and for only one residence. No person who
16receives an exemption under Section 15-172 of this Code may
17receive an exemption under this Section. No person who receives
18an exemption under this Section may receive an exemption under
19Section 15-175 or 15-176 of this Code.
20    (g) In the event of a sale or other transfer in ownership
21of the homestead property between spouses or between a parent
22and a child, the exemption under this Section remains in effect
23if the new owner has a household income of $100,000 or less.
24    (h) In the event of a sale or other transfer in ownership
25of the homestead property other than subsection (g) of this
26Section, the exemption under this Section shall remain in

 

 

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1effect for the remainder of the tax year and be calculated
2using the same base homestead value in which the sale or
3transfer occurs.
4    (i) To receive the exemption, a person must submit an
5application to the county assessor during the period specified
6by the county assessor.
7    The county assessor shall annually give notice of the
8application period by mail or by publication.
9    The taxpayer must submit, with the application, an
10affidavit of the taxpayer's total household income, marital
11status (and if married the name and address of the applicant's
12spouse, if known), and principal dwelling place of members of
13the household on January 1 of the taxable year. The Department
14shall establish, by rule, a method for verifying the accuracy
15of affidavits filed by applicants under this Section, and the
16Chief County Assessment Officer may conduct audits of any
17taxpayer claiming an exemption under this Section to verify
18that the taxpayer is eligible to receive the exemption. Each
19application shall contain or be verified by a written
20declaration that it is made under the penalties of perjury. A
21taxpayer's signing a fraudulent application under this Act is
22perjury, as defined in Section 32-2 of the Criminal Code of
231961. The applications shall be clearly marked as applications
24for the Long-time Occupant Homestead Exemption and must contain
25a notice that any taxpayer who receives the exemption is
26subject to an audit by the Chief County Assessment Officer.

 

 

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1    (j) Notwithstanding Sections 6 and 8 of the State Mandates
2Act, no reimbursement by the State is required for the
3implementation of any mandate created by this Section.
4(Source: P.A. 95-644, eff. 10-12-07.)
 
5    Section 99. Effective date. This Act takes effect upon
6becoming law.