SB3995 101ST GENERAL ASSEMBLY

LRB101 21368 HLH 71993 b

101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB3995

Introduced 5/21/2020, by Sen. Melinda Bush

SYNOPSIS AS INTRODUCED:

35 ILCS 200/15-170
35 ILCS 200/15-175

Amends the Property Tax Code. Provides that, for taxable year 2020 and thereafter, the maximum reductions under the senior citizens homestead exemption and the general homestead exemption that apply in counties with more than 3,000,000 inhabitants apply in counties with 300,000 or more inhabitants. Effective immediately.

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 Property Tax Code is amended by changing Sections 15-170 and 15-175 as follows:

(35 ILCS 200/15-170)

Sec. 15-170. Senior citizens homestead exemption.

(a) An annual homestead exemption limited, except as described here with relation to cooperatives or life care facilities, to a maximum reduction set forth below from the property's value, as equalized or assessed by the Department, is granted for property that is occupied as a residence by a person 65 years of age or older who is liable for paying real estate taxes on the property and is an owner of record of the property or has a legal or equitable interest therein as evidenced by a written instrument, except for a leasehold interest, other than a leasehold interest of land on which a single family residence is located, which is occupied as a residence by a person 65 years or older who has an ownership interest therein, legal, equitable or as a lessee, and on which he or she is liable for the payment of property taxes. Before taxable year 2004, the maximum reduction shall be $2,500 in counties with 3,000,000 or more inhabitants and $2,000 in all other counties. For taxable years 2004 through 2005, the maximum reduction shall be $3,000 in all counties. For taxable years 2006 and 2007, the maximum reduction shall be $3,500. For taxable years 2008 through 2011, the maximum reduction is $4,000 in all counties. For taxable year 2012, the maximum reduction is $5,000 in counties with 3,000,000 or more inhabitants and $4,000 in all other counties. For taxable years 2013 through 2016, the maximum reduction is $5,000 in all counties. For taxable years 2017 through 2019 and thereafter, the maximum reduction is $8,000 in counties with 3,000,000 or more inhabitants and $5,000 in all other counties. For taxable years 2020 and thereafter, the maximum reduction is is $8,000 in counties with 300,000 or more inhabitants and $5,000 in all other counties.

(b) For land improved with an apartment building owned and operated as a cooperative, the maximum reduction from the value of the property, as equalized by the Department, shall be multiplied by the number of apartments or units occupied by a person 65 years of age or older who is liable, by contract with the owner or owners of record, for paying property taxes on the property and is an owner of record of a legal or equitable interest in the cooperative apartment building, other than a leasehold interest. For land improved with a life care facility, the maximum reduction from the value of the property, as equalized by the Department, shall be multiplied by the number of apartments or units occupied by persons 65 years of age or older, irrespective of any legal, equitable, or leasehold interest in the facility, who are liable, under a contract with the owner or owners of record of the facility, for paying property taxes on the property. In a cooperative or a life care facility where a homestead exemption has been granted, the cooperative association or the management firm of the cooperative or facility shall credit the savings resulting from that exemption only to the apportioned tax liability of the owner or resident who qualified for the exemption. Any person who willfully refuses to so credit the savings shall be guilty of a Class B misdemeanor. Under this Section and Sections 15-175, 15-176, and 15-177, "life care facility" means a facility, as defined in Section 2 of the Life Care Facilities Act, with which the applicant for the homestead exemption has a life care contract as defined in that Act.

(c) When a homestead exemption has been granted under this Section and the person qualifying subsequently becomes a resident of a facility licensed under the Assisted Living and Shared Housing Act, the Nursing Home Care Act, the Specialized Mental Health Rehabilitation Act of 2013, the ID/DD Community Care Act, or the MC/DD Act, the exemption shall continue so long as the residence continues to be occupied by the qualifying person's spouse if the spouse is 65 years of age or older, or if the residence remains unoccupied but is still owned by the person qualified for the homestead exemption.

(d) A person who will be 65 years of age during the current assessment year shall be eligible to apply for the homestead exemption during that assessment year. Application shall be made during the application period in effect for the county of his residence.

(e) Beginning with assessment year 2003, for taxes payable in 2004, property that is first occupied as a residence after January 1 of any assessment year by a person who is eligible for the senior citizens homestead exemption under this Section must be granted a pro-rata exemption for the assessment year. The amount of the pro-rata exemption is the exemption allowed in the county under this Section divided by 365 and multiplied by the number of days during the assessment year the property is occupied as a residence by a person eligible for the exemption under this Section. The chief county assessment officer must adopt reasonable procedures to establish eligibility for this pro-rata exemption.

(f) The assessor or chief county assessment officer may determine the eligibility of a life care facility to receive the benefits provided by this Section, by affidavit, application, visual inspection, questionnaire or other reasonable methods in order to insure that the tax savings resulting from the exemption are credited by the management firm to the apportioned tax liability of each qualifying resident. The assessor may request reasonable proof that the management firm has so credited the exemption.

(g) The chief county assessment officer of each county with less than 3,000,000 inhabitants shall provide to each person allowed a homestead exemption under this Section a form to designate any other person to receive a duplicate of any notice of delinquency in the payment of taxes assessed and levied under this Code on the property of the person receiving the exemption. The duplicate notice shall be in addition to the notice required to be provided to the person receiving the exemption, and shall be given in the manner required by this Code. The person filing the request for the duplicate notice shall pay a fee of $5 to cover administrative costs to the supervisor of assessments, who shall then file the executed designation with the county collector. Notwithstanding any other provision of this Code to the contrary, the filing of such an executed designation requires the county collector to provide duplicate notices as indicated by the designation. A designation may be rescinded by the person who executed such designation at any time, in the manner and form required by the chief county assessment officer.

(h) The assessor or chief county assessment officer may determine the eligibility of residential property to receive the homestead exemption provided by this Section by application, visual inspection, questionnaire or other reasonable methods. The determination shall be made in accordance with guidelines established by the Department.

(i) In counties with 3,000,000 or more inhabitants, for taxable years 2010 through 2018, and beginning again in taxable year 2024, each taxpayer who has been granted an exemption under this Section must reapply on an annual basis.

If a reapplication is required, then the chief county assessment officer shall mail the application to the taxpayer at least 60 days prior to the last day of the application period for the county.

For taxable years 2019 through 2023, in counties with 3,000,000 or more inhabitants, a taxpayer who has been granted an exemption under this Section need not reapply. However, if the property ceases to be qualified for the exemption under this Section in any year for which a reapplication is not required under this Section, then the owner of record of the property shall notify the chief county assessment officer that the property is no longer qualified. In addition, for taxable years 2019 through 2023, the chief county assessment officer of a county with 3,000,000 or more inhabitants shall enter into an intergovernmental agreement with the county clerk of that county and the Department of Public Health, as well as any other appropriate governmental agency, to obtain information that documents the death of a taxpayer who has been granted an exemption under this Section. Notwithstanding any other provision of law, the county clerk and the Department of Public Health shall provide that information to the chief county assessment officer. The Department of Public Health shall supply this information no less frequently than every calendar quarter. Information concerning the death of a taxpayer may be shared with the county treasurer. The chief county assessment officer shall also enter into a data exchange agreement with the Social Security Administration or its agent to obtain access to the information regarding deaths in possession of the Social Security Administration. The chief county assessment officer shall, subject to the notice requirements under subsection (m) of Section 9-275, terminate the exemption under this Section if the information obtained indicates that the property is no longer qualified for the exemption. In counties with 3,000,000 or more inhabitants, the assessor and the county recorder of deeds shall establish policies and practices for the regular exchange of information for the purpose of alerting the assessor whenever the transfer of ownership of any property receiving an exemption under this Section has occurred. When such a transfer occurs, the assessor shall mail a notice to the new owner of the property (i) informing the new owner that the exemption will remain in place through the year of the transfer, after which it will be canceled, and (ii) providing information pertaining to the rules for reapplying for the exemption if the owner qualifies. In counties with 3,000,000 or more inhabitants, the chief county assessment official shall conduct audits of all exemptions granted under this Section no later than December 31, 2022 and no later than December 31, 2024. The audit shall be designed to ascertain whether any senior homestead exemptions have been granted erroneously. If it is determined that a senior homestead exemption has been erroneously applied to a property, the chief county assessment officer shall make use of the appropriate provisions of Section 9-275 in relation to the property that received the erroneous homestead exemption.

(j) In counties with less than 3,000,000 inhabitants, the county board may by resolution provide that if a person has been granted a homestead exemption under this Section, the person qualifying need not reapply for the exemption.

In counties with less than 3,000,000 inhabitants, if the assessor or chief county assessment officer requires annual application for verification of eligibility for an exemption once granted under this Section, the application shall be mailed to the taxpayer.

(l) The assessor or chief county assessment officer shall notify each person who qualifies for an exemption under this Section that the person may also qualify for deferral of real estate taxes under the Senior Citizens Real Estate Tax Deferral Act. The notice shall set forth the qualifications needed for deferral of real estate taxes, the address and telephone number of county collector, and a statement that applications for deferral of real estate taxes may be obtained from the county collector.

(m) Notwithstanding Sections 6 and 8 of the State Mandates Act, no reimbursement by the State is required for the implementation of any mandate created by this Section.

(Source: P.A. 100-401, eff. 8-25-17; 101-453, eff. 8-23-19; 101-622, eff. 1-14-20.)

(35 ILCS 200/15-175)

Sec. 15-175. General homestead exemption.

(a) Except as provided in Sections 15-176 and 15-177, homestead property is entitled to an annual homestead exemption limited, except as described here with relation to cooperatives or life care facilities, to a reduction in the equalized assessed value of homestead property equal to the increase in equalized assessed value for the current assessment year above the equalized assessed value of the property for 1977, up to the maximum reduction set forth below. If however, the 1977 equalized assessed value upon which taxes were paid is subsequently determined by local assessing officials, the Property Tax Appeal Board, or a court to have been excessive, the equalized assessed value which should have been placed on the property for 1977 shall be used to determine the amount of the exemption.

(b) Except as provided in Section 15-176, the maximum reduction before taxable year 2004 shall be $4,500 in counties with 3,000,000 or more inhabitants and $3,500 in all other counties. Except as provided in Sections 15-176 and 15-177, for taxable years 2004 through 2007, the maximum reduction shall be $5,000, for taxable year 2008, the maximum reduction is $5,500, and, for taxable years 2009 through 2011, the maximum reduction is $6,000 in all counties. For taxable years 2012 through 2016, the maximum reduction is $7,000 in counties with 3,000,000 or more inhabitants and $6,000 in all other counties. For taxable years 2017 through 2019 and thereafter, the maximum reduction is $10,000 in counties with 3,000,000 or more inhabitants and $6,000 in all other counties. For taxable years 2020 and thereafter, the maximum reduction is $10,000 in counties with 300,000 or more inhabitants and $6,000 in all other counties. If a county has elected to subject itself to the provisions of Section 15-176 as provided in subsection (k) of that Section, then, for the first taxable year only after the provisions of Section 15-176 no longer apply, for owners who, for the taxable year, have not been granted a senior citizens assessment freeze homestead exemption under Section 15-172 or a long-time occupant homestead exemption under Section 15-177, there shall be an additional exemption of $5,000 for owners with a household income of $30,000 or less.

(c) In counties with fewer than 3,000,000 inhabitants, if, based on the most recent assessment, the equalized assessed value of the homestead property for the current assessment year is greater than the equalized assessed value of the property for 1977, the owner of the property shall automatically receive the exemption granted under this Section in an amount equal to the increase over the 1977 assessment up to the maximum reduction set forth in this Section.

(d) If in any assessment year beginning with the 2000 assessment year, homestead property has a pro-rata valuation under Section 9-180 resulting in an increase in the assessed valuation, a reduction in equalized assessed valuation equal to the increase in equalized assessed value of the property for the year of the pro-rata valuation above the equalized assessed value of the property for 1977 shall be applied to the property on a proportionate basis for the period the property qualified as homestead property during the assessment year. The maximum proportionate homestead exemption shall not exceed the maximum homestead exemption allowed in the county under this Section divided by 365 and multiplied by the number of days the property qualified as homestead property.

(d-1) In counties with 3,000,000 or more inhabitants, where the chief county assessment officer provides a notice of discovery, if a property is not occupied by its owner as a principal residence as of January 1 of the current tax year, then the property owner shall notify the chief county assessment officer of that fact on a form prescribed by the chief county assessment officer. That notice must be received by the chief county assessment officer on or before March 1 of the collection year. If mailed, the form shall be sent by certified mail, return receipt requested. If the form is provided in person, the chief county assessment officer shall provide a date stamped copy of the notice. Failure to provide timely notice pursuant to this subsection (d-1) shall result in the exemption being treated as an erroneous exemption. Upon timely receipt of the notice for the current tax year, no exemption shall be applied to the property for the current tax year. If the exemption is not removed upon timely receipt of the notice by the chief assessment officer, then the error is considered granted as a result of a clerical error or omission on the part of the chief county assessment officer as described in subsection (h) of Section 9-275, and the property owner shall not be liable for the payment of interest and penalties due to the erroneous exemption for the current tax year for which the notice was filed after the date that notice was timely received pursuant to this subsection. Notice provided under this subsection shall not constitute a defense or amnesty for prior year erroneous exemptions.

For the purposes of this subsection (d-1):

"Collection year" means the year in which the first and second installment of the current tax year is billed.

"Current tax year" means the year prior to the collection year.

(e) The chief county assessment officer may, when considering whether to grant a leasehold exemption under this Section, require the following conditions to be met:

(1) that a notarized application for the exemption, signed by both the owner and the lessee of the property, must be submitted each year during the application period in effect for the county in which the property is located;

(2) that a copy of the lease must be filed with the chief county assessment officer by the owner of the property at the time the notarized application is submitted;

(3) that the lease must expressly state that the lessee is liable for the payment of property taxes; and

(4) that the lease must include the following language in substantially the following form:

"Lessee shall be liable for the payment of real estate taxes with respect to the residence in accordance with the terms and conditions of Section 15-175 of the Property Tax Code (35 ILCS 200/15-175). The permanent real estate index number for the premises is (insert number), and, according to the most recent property tax bill, the current amount of real estate taxes associated with the premises is (insert amount) per year. The parties agree that the monthly rent set forth above shall be increased or decreased pro rata (effective January 1 of each calendar year) to reflect any increase or decrease in real estate taxes. Lessee shall be deemed to be satisfying Lessee's liability for the above mentioned real estate taxes with the monthly rent payments as set forth above (or increased or decreased as set forth herein).".

In addition, if there is a change in lessee, or if the lessee vacates the property, then the chief county assessment officer may require the owner of the property to notify the chief county assessment officer of that change.

This subsection (e) does not apply to leasehold interests in property owned by a municipality.

(f) "Homestead property" under this Section includes residential property that is occupied by its owner or owners as his or their principal dwelling place, or that is a leasehold interest on which a single family residence is situated, which is occupied as a residence by a person who has an ownership interest therein, legal or equitable or as a lessee, and on which the person is liable for the payment of property taxes. For land improved with an apartment building owned and operated as a cooperative, the maximum reduction from the equalized assessed value shall be limited to the increase in the value above the equalized assessed value of the property for 1977, up to the maximum reduction set forth above, multiplied by the number of apartments or units occupied by a person or persons who is liable, by contract with the owner or owners of record, for paying property taxes on the property and is an owner of record of a legal or equitable interest in the cooperative apartment building, other than a leasehold interest. For land improved with a life care facility, the maximum reduction from the value of the property, as equalized by the Department, shall be multiplied by the number of apartments or units occupied by a person or persons, irrespective of any legal, equitable, or leasehold interest in the facility, who are liable, under a life care contract with the owner or owners of record of the facility, for paying property taxes on the property. For purposes of this Section, the term "life care facility" has the meaning stated in Section 15-170.

"Household", as used in this Section, means the owner, the spouse of the owner, and all persons using the residence of the owner as their principal place of residence.

"Household income", as used in this Section, means the combined income of the members of a household for the calendar year preceding the taxable year.

"Income", as used in this Section, has the same meaning as provided in Section 3.07 of the Senior Citizens and Persons with Disabilities Property Tax Relief Act, except that "income" does not include veteran's benefits.

(g) In a cooperative or life care facility where a homestead exemption has been granted, the cooperative association or the management of the cooperative or life care facility shall credit the savings resulting from that exemption only to the apportioned tax liability of the owner or resident who qualified for the exemption. Any person who willfully refuses to so credit the savings shall be guilty of a Class B misdemeanor.

(h) Where married persons maintain and reside in separate residences qualifying as homestead property, each residence shall receive 50% of the total reduction in equalized assessed valuation provided by this Section.

(i) In all counties, the assessor or chief county assessment officer may determine the eligibility of residential property to receive the homestead exemption and the amount of the exemption by application, visual inspection, questionnaire or other reasonable methods. The determination shall be made in accordance with guidelines established by the Department, provided that the taxpayer applying for an additional general exemption under this Section shall submit to the chief county assessment officer an application with an affidavit of the applicant's total household income, age, marital status (and, if married, the name and address of the applicant's spouse, if known), and principal dwelling place of members of the household on January 1 of the taxable year. The Department shall issue guidelines establishing a method for verifying the accuracy of the affidavits filed by applicants under this paragraph. The applications shall be clearly marked as applications for the Additional General Homestead Exemption.

(i-5) This subsection (i-5) applies to counties with 3,000,000 or more inhabitants. In the event of a sale of homestead property, the homestead exemption shall remain in effect for the remainder of the assessment year of the sale. Upon receipt of a transfer declaration transmitted by the recorder pursuant to Section 31-30 of the Real Estate Transfer Tax Law for property receiving an exemption under this Section, the assessor shall mail a notice and forms to the new owner of the property providing information pertaining to the rules and applicable filing periods for applying or reapplying for homestead exemptions under this Code for which the property may be eligible. If the new owner fails to apply or reapply for a homestead exemption during the applicable filing period or the property no longer qualifies for an existing homestead exemption, the assessor shall cancel such exemption for any ensuing assessment year.

(j) In counties with fewer than 3,000,000 inhabitants, in the event of a sale of homestead property the homestead exemption shall remain in effect for the remainder of the assessment year of the sale. The assessor or chief county assessment officer may require the new owner of the property to apply for the homestead exemption for the following assessment year.

(k) Notwithstanding Sections 6 and 8 of the State Mandates Act, no reimbursement by the State is required for the implementation of any mandate created by this Section.

(l) The changes made to this Section by this amendatory Act of the 100th General Assembly are effective for the 2018 tax year and thereafter.

(Source: P.A. 99-143, eff. 7-27-15; 99-164, eff. 7-28-15; 99-642, eff. 7-28-16; 99-851, eff. 8-19-16; 100-401, eff. 8-25-17; 100-1077, eff. 1-1-19.)

Section 99. Effective date. This Act takes effect upon becoming law.