SC0037 96TH GENERAL ASSEMBLY

LRB096 10928 HLH 21180 e

96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
SENATE JOINT RESOLUTION
CONSTITUTIONAL AMENDMENT
SC0037

Introduced 2/25/2009, by Sen. Chris Lauzen

SYNOPSIS AS INTRODUCED:

ILCON Art. IX, Sec. 11

ILCON Art. IX, Sec. 12

Proposes to amend the Revenue Article of the Illinois Constitution. Limits the maximum amount of any ad valorem tax on real property to 2% of the fair cash value of such property, to be collected by the counties and apportioned according to law to the districts within the counties. Sets forth various definitions and requirements with respect to the administration of property taxation. Effective upon being declared adopted.

A BILL FOR

SENATE JOINT RESOLUTION

CONSTITUTIONAL AMENDMENT

RESOLVED, BY THE SENATE OF THE NINETY-SIXTH GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, THE HOUSE OF REPRESENTATIVES CONCURRING HEREIN, that there shall be submitted to the electors of the State for adoption or rejection at the general election next occurring at least 6 months after the adoption of this resolution a proposition to add Sections 11 and 12 to Article IX of the Illinois Constitution as follows:

ARTICLE IX

REVENUE

(ILCON Art. IX, Sec. 11) Section 11. LIMITATION ON PROPERTY TAXATION

(a) The maximum amount of any ad valorem tax on real property shall not exceed 2% of the fair cash value of such property, to be collected by the counties and apportioned according to law to the districts within the counties.

The limitation provided for in subsection (a) does not apply to ad valorem taxes or special assessments to pay the principal and interest on:

(1) Bonded indebtedness issued prior July 1, 2008; or

(2) Bonded indebtedness issued on or after July 1, 2008, approved by two-thirds of the votes cast by the voters voting on the proposition.

(ILCON Art. IX, Sec. 12) Section 12. PROPERTY TAX DEFINITIONS AND REQUIREMENTS

(a) The "fair cash value" means either (i) the county assessor's valuation of real property for the 2005 tax year, or (ii) thereafter, the actual acquisition price of real property when purchased, newly constructed, or a change in ownership has occurred after the 2005 assessment. For purposes of this Section, "newly constructed" does not include real property that is reconstructed after a disaster, as declared by the Governor, where the fair market value of the real property, as reconstructed, is comparable to its fair market value prior to the disaster.

However, the General Assembly may provide that, pursuant to definitions and procedures established by the General Assembly, any person 65 years of age or older who resides in property that is eligible for a homestead exemption may transfer the base year value of the property entitled to exemption, with the adjustments authorized by subsection (b), to any replacement dwelling of equal or lesser value located within the same county and purchased or newly constructed by that person as his or her principal residence within two years of the sale of the original property. For purposes of this Section, "any person 65 years of age or older" includes a married couple one member of which is 65 years of age or older.

In addition, the General Assembly may authorize each county board of supervisors to adopt an ordinance making the provisions of this subsection relating to transfer of base year value also applicable to situations in which the replacement dwellings are located in that county and the original properties are located in another county within this State.

(b) The full cash value base may be either (i) increased each year by the lesser of 2% or the rate of inflation, or (ii) reduced as shown in the consumer price index, or to reflect substantial damage, destruction, or other factors causing a decline in value.

(c) For purposes of subsection (a), the General Assembly may provide for exemptions from the term "newly constructed".

(d) For purposes of this Section, the term "change in ownership" does not include the acquisition of real property as a replacement for comparable property if the person acquiring the real property has been displaced from the property replaced by eminent domain proceedings, by acquisition by a public entity, or governmental action that has resulted in a judgment of inverse condemnation. The real property acquired shall be deemed comparable to the property replaced if it is similar in size, utility, and function, or if it conforms to state regulations defined by the General Assembly governing the relocation of persons displaced by governmental actions.

(e)(1) Notwithstanding any other provision of this Section, the General Assembly shall provide that the base year value of property that is substantially damaged or destroyed by a disaster, as declared by the Governor, may be transferred to comparable property within the same county that is acquired or newly constructed as a replacement for the substantially damaged or destroyed property.

(2) Except as provided in paragraph (3), this subsection shall apply to any comparable replacement property acquired or newly constructed on or after July 1, 1985, and to the determination of base year values for the 1985-86 fiscal year and fiscal years thereafter.

(3) In addition to the transfer of base year value of property within the same county that is permitted by paragraph (1), the General Assembly may authorize each county board of supervisors to adopt, after consultation with affected local agencies within the county, an ordinance allowing the transfer of the base year value of property that is located within another county in the State and is substantially damaged or destroyed by a disaster, as declared by the Governor, to comparable replacement property of equal or lesser value that is located within the adopting county and is acquired or newly constructed within three years of the substantial damage or destruction of the original property as a replacement for that property. The scope and amount of the benefit provided to a property owner by the transfer of base year value of property pursuant to this paragraph shall not exceed the scope and amount of the benefit provided to a property owner by the transfer of base year value of property pursuant to subsection (a). For purposes of this paragraph, "affected local agency" means any city, special district, school district, or community college district that receives an annual allocation of ad valorem property tax revenues. This paragraph shall apply to any comparable replacement property that is acquired or newly constructed as a replacement for property substantially damaged or destroyed by a disaster, as declared by the Governor, occurring on or after October 20, 1991, and to the determination of base year values for the 1991-92 fiscal year and fiscal years thereafter.

(f) For the purposes of subsection (e):

(1) Property is substantially damaged or destroyed if it sustains physical damage amounting to more than 50 percent of its value immediately before the disaster. Damage includes a diminution in the value of property as a result of restricted access caused by the disaster.

(2) Replacement property is comparable to the property substantially damaged or destroyed if it is similar in size, utility, and function to the property that it replaces, and if the fair market value of the acquired property is comparable to the fair market value of the replaced property prior to the disaster.

(g) For purposes of subsection (a), the terms "purchased" and "change in ownership" do not include the purchase or transfer of real property between spouses, including, but not limited to, all of the following:

(1) Transfers to a trustee for the beneficial use of a spouse, or the surviving spouse of a deceased transferor, or by a trustee of such a trust to the spouse of the trustor.

(2) Transfers to a spouse that take effect upon the death of a spouse.

(3) Transfers to a spouse or former spouse in connection with a property settlement agreement or decree of dissolution of a marriage or legal separation.

(4) The creation, transfer, or termination, solely between spouses, of any co-owner's interest.

(5) The distribution of a legal entity's property to a spouse or former spouse in exchange for the interest of the spouse in the legal entity in connection with a property settlement agreement or a decree of dissolution of a marriage or legal separation.

(h) For purposes of subsection (a), the terms "purchased" and "change in ownership" do not include the purchase or transfer of the principal residence of the transferor in the case of a purchase or transfer between parents and their children, as defined by the General Assembly, and the purchase or transfer of the first $1,000,000 of the fair cash value of all other real property between parents and their children, as defined by the General Assembly. This subsection shall apply to both voluntary transfers and transfers resulting from a court order or judicial decree.

(i) The General Assembly may provide with respect to a qualified contaminated property.

SCHEDULE

This Constitutional Amendment takes effect upon being declared adopted in accordance with Section 7 of the Illinois Constitutional Amendment Act.