SB2219 100TH GENERAL ASSEMBLY

LRB100 13161 HLH 27557 b

100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB2219

Introduced 6/23/2017, by Sen. Daniel Biss - Jacqueline Y. Collins - Bill Cunningham

SYNOPSIS AS INTRODUCED:

10 ILCS 5/9-50 new
35 ILCS 200/1-50
35 ILCS 200/4-35 new
35 ILCS 200/8-11 new
35 ILCS 200/17-10

Amends the Election Code. Provides that it is unlawful for any individual who is engaged in the business of providing legal representation in real estate tax assessment appeals to make campaign contributions of more than $750, in the aggregate, to any political committee established to promote the candidacy of a candidate for township or multi-township assessor, county assessor, county supervisor of assessments, or member of the board of review in any jurisdiction where that individual provides such legal representation. Provides that it is unlawful for any candidate, political committee, or other person to knowingly accept or receive such a contribution. Amends the Property Tax Code. Requires assessment officials to transmit to the chief county assessment officer valuation models for the assessor's jurisdiction, and requires the chief county assessment officer to post that information on his or her Internet website. Makes changes to the definition of "fair cash value". Makes changes concerning sales ratio studies. Requires the Department of Revenue to conduct audits of assessment practices. Provides that, if the county or township is deemed to be persistently non-compliant with the audit, then the assessment official shall be removed from office, and the vacancy shall be filled by the county board.

FISCAL NOTE ACT MAY APPLY

HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning revenue.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Election Code is amended by adding Section 9-50 as follows:

(10 ILCS 5/9-50 new)

Sec. 9-50. Property tax appeal contributions. It is unlawful for any individual who is engaged in the business of providing legal representation in real estate tax assessment appeals to make campaign contributions of more than $750, in the aggregate, to any political committee established to promote the candidacy of a candidate for township or multi-township assessor, county assessor, county supervisor of assessments, or member of the board of review in any jurisdiction where that individual provides such legal representation. It is unlawful for any candidate, political committee, or other person to knowingly accept or receive any contribution prohibited by this Section.

Section 10. The Property Tax Code is amended by changing Sections 1-50 and 17-10 and by adding Sections 4-35 and 8-11 as follows:

(35 ILCS 200/1-50)

Sec. 1-50. Fair cash value.

(a) "Fair cash value" means the amount in terms of money that a well-informed buyer is justified in paying and a well-informed seller is justified in accepting for property in an open and competitive market, assuming that the parties are acting without undue compulsion. In determining the fair cash value of any real property which is subject to any special assessment, such value shall not be determined by adding the present value of the special assessment to the sales price.

(b) Sales in and of themselves shall not be the sole criteria of fair cash value, but shall be used in connection with cost, income, and other factors, including, but not limited to:

(1) the proper classification of lands and improvements;

(2) the size thereof;

(3) the effect of location on value;

(4) depreciation, including physical deterioration or functional, economic, or social obsolescence;

(5) cost of reproduction of improvements;

(6) productivity, taking into account all restrictions imposed by the State, the federal government, or units of local government, including, but not limited to, restrictions on property rented or leased to low income individuals and families as authorized by Section 42 of the federal Internal Revenue Code;

(7) earning capacity as indicated by lease price, by capitalization of net income, or by absorption or sell-out period;

(8) rental or reasonable rental values or rental values restricted by the State, the federal government, or a unit of local government, including, but not limited to, restrictions on property rented or leased to low income individuals and families, as authorized by Section 42 of the federal Internal Revenue Code;

(9) sale value on open market with due allowance to abnormal inflationary factors influencing such values;

(10) restrictions or requirements imposed upon the use of real estate by the State, the federal government, or a unit of local government, including zoning and planning boards or commissions, and including, but not limited to, restrictions or requirements imposed upon the use of real estate rented or leased to low income individuals and families, as authorized by Section 42 of the federal Internal Revenue Code; and

(11) comparison with values of other property of known or recognized value; sales ratio studies shall not be used as an appraisal for appraisal purposes. The amount for which a property can be sold in the due course of business and trade, not under duress, between a willing buyer and a willing seller.

(Source: P.A. 88-455.)

(35 ILCS 200/4-35 new)

Sec. 4-35. Publication of valuation models. Each assessment official, including each township or multi-township assessor, shall, on an annual basis, transmit to the chief county assessment officer valuation models for his or her jurisdiction, including methodologies, assumptions, and property values themselves. The chief county assessment officer shall post that information on his or her office's Internet website.

(35 ILCS 200/8-11 new)

Sec. 8-11. Department audits. Each year, the Department shall conduct an audit of each county, township, or multi-township assessment office to develop an accurate and credible mass appraisal system. The audit shall examine the following components of each office:

(1) each office's organizational plan; each county, township, or multi-township assessment official shall produce for his or her jurisdiction a plan for the current and next assessment cycle, including an organizational chart and budget;

(2) independently-validated sales data;

(3) detailed parcel information, including, but not limited to:

(A) market factors;

(B) classification requirements; and

(C) use of the property;

(4) the valuation model or models used by the assessor;

(5) each officer's internal review process; and

(6) whether or not the assessor's office is in compliance with the factors set forth in subsections (d), (e), and (f) of Section 17-10.

Upon completion of the audit, the Department shall weigh each of the preceding components and shall make public a compliance list, detailing whether counties and townships are substantially compliant, partially compliant, or non-compliant. If a county or township is found to be non-compliant for a period of 6 consecutive years, then the county or township shall be deemed to be persistently non-compliant. If a county or township is persistently non-compliant, then the assessment official shall be removed from office, and the office shall be vacant. The county board, by an affirmative majority vote, shall appoint a replacement assessment official to serve for the remainder of the former assessment official's unexpired term.

(35 ILCS 200/17-10)

Sec. 17-10. Sales ratio studies.

(a) The Department shall monitor the quality of local assessments by designing, preparing and using ratio studies, and shall use the results as the basis for equalization decisions. In compiling sales ratio studies, the Department shall exclude from the reported sales price of any property any amounts included for personal property and, for sales occurring through December 31, 1999, shall exclude seller paid points. The Department shall not include in its sales ratio studies sales of property which have been platted and for which an increase in the assessed valuation is restricted by Section 10-30. The Department shall not include in its sales ratio studies the initial sale of residential property that has been converted to condominium property. The Department shall include compulsory sales occurring on or after January 1, 2011 in its sales ratio studies. The Department shall also consider whether the compulsory sale would otherwise be considered an arm's length transaction, based on existing sales ratio study standards.

(b) When the declaration required under the Real Estate Transfer Tax Law contains financing information required under Section 31-25, the Department shall adjust sales prices to exclude seller-paid points and shall adjust sales prices to "cash value" when seller related financing is used that is different than the prevailing cost of cash. The prevailing cost of cash for sales occurring on or after January 1, 1992 shall be established as the monthly average 30-year fixed Primary Mortgage Market Survey rate for the North Central Region as published weekly by the Federal Home Loan Mortgage Corporation, as computed by the Department, or such other rate as determined by the Department. This rate shall be known as the survey rate. For sales occurring on or after January 1, 1992, through December 31, 1999, adjustments in the prevailing cost of cash shall be made only after the survey rate has been at or above 13% for 12 consecutive months and will continue until the survey rate has been below 13% for 12 consecutive months. For sales occurring on or after January 1, 2000, adjustments for seller paid points and adjustments in the prevailing cost of cash shall be made only after the survey rate has been at or above 13% for 12 consecutive months and will continue until the survey rate has been below 13% for 12 consecutive months. The Department shall make public its adjustment procedure upon request.

(c) The sales ratio studies shall conform with the most recent standards and statistical measures developed by the International Association of Assessing Officers. All data used to develop the sales ratio studies shall be made public.

(d) The median ratio measure for each township must fall between 0.9 and 1.1. If the median ratio measure does not fall within that range, then the appraisal level shall be found to be out of compliance unless, at a 95% level of confidence, the range estimate overlaps 1.

(e) The average deviation of ratios from the median level shall be measured by the coefficient of dispersion. A deviation that does not exceed the following value for each property type shall be considered in compliance:

(1) for single family residential, 20;

(2) for commercial or industrial property in a county with a population of 500,000 or more, 15; and

(3) for commercial or industrial property in a county with a population of less than 500,000, 25.

If, at a 95% level of confidence, the range estimate overlaps the maximum, then the appraisal level shall be found to be in compliance.

(f) The Department shall also determine the coefficient of the price-related bias for each township, which shall fall between -0.05 and 0.05. If, at a 95% level of confidence, the range estimate falls between -0.01 or 0.01, then the appraisal level shall be found to be in compliance.

(g) The sample size for each sales ratio study shall be not less than (i) 30 parcels or (ii) 10% of parcels in each property class within the jurisdiction, whichever is lower.

(h) The sales ratio study shall be subjected to a test of distribution such as Shapiro-Wilk, D'Agostino-Pearson K², or Anderson-Darling A².

(Source: P.A. 96-1083, eff. 7-16-10.)