96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB3704

 

Introduced 2/25/2009, 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 if the general assessment year for the property is 2006 or later. 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 2008 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.


LRB096 11442 HLH 21917 b

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

 

 

A BILL FOR

 

HB3704 LRB096 11442 HLH 21917 b

1     AN ACT concerning revenue.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Property Tax Code is amended by changing
5 Sections 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
10 accordance with subsection (k), to be subject to the provisions
11 of this Section in lieu of the provisions of Section 15-175,
12 homestead property is entitled to an annual homestead exemption
13 equal to a reduction in the property's equalized assessed value
14 calculated 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

 

 

HB3704 - 2 - LRB096 11442 HLH 21917 b

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,

 

 

HB3704 - 3 - LRB096 11442 HLH 21917 b

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

 

 

HB3704 - 4 - LRB096 11442 HLH 21917 b

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.

 

 

HB3704 - 5 - LRB096 11442 HLH 21917 b

1         (3.5) "Base year" means (i) tax year 2002 in Cook
2     County or (ii) tax year 2005 or 2006 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,

 

 

HB3704 - 6 - LRB096 11442 HLH 21917 b

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
11 assessed value for the base year as provided in subdivision
12 (b)(3)(A) of this Section, then the assessor shall first
13 determine an initial value for the property by comparison with
14 assessed values for the base year of other properties having
15 physical and economic characteristics similar to those of the
16 subject property, so that the initial value is uniform in
17 relation to assessed values of those other properties for the
18 base year. The product of the initial value multiplied by the
19 equalized factor for the base year for homestead properties in
20 that county, less: (i) $4,500 in Cook County or $3,500 in all
21 other counties in tax years 2003; (ii) $5,000 in all counties
22 in tax year 2004 and 2005; and (iii) the lesser of the amount
23 of the general homestead exemption under Section 15-175 or an
24 amount equal to the increase in the equalized assessed value
25 for the current tax year above the equalized assessed value for
26 1977 in tax year 2006 and thereafter, is the base homestead

 

 

HB3704 - 7 - LRB096 11442 HLH 21917 b

1 value.
2     For any tax year for which the assessor determines or
3 adjusts an initial value and hence a base homestead value under
4 this subsection (c), the initial value shall be subject to
5 review by the same procedures applicable to assessed values
6 established under this Code for that tax year.
7     (d) The base homestead value shall remain constant, except
8 that the assessor may revise it under the following
9 circumstances:
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

 

 

HB3704 - 8 - LRB096 11442 HLH 21917 b

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
5 equalized assessed value of the homestead property for the
6 current tax year, minus the adjusted homestead value, with the
7 following 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; and
22         $40,000 for taxable year 2008 and thereafter $20,000
23         for taxable year 2008;
24             (ii) if the general assessment year for the
25         property is 2007, then the exemption may not exceed:
26         $33,000 for taxable year 2007; $40,000 for taxable year

 

 

HB3704 - 9 - LRB096 11442 HLH 21917 b

1         2008 and thereafter $26,000 for taxable year 2008; and
2         $20,000 for taxable year 2009; and
3             (iii) if the general assessment year for the
4         property is 2008, then the exemption may not exceed:
5         $40,000 for taxable year 2008 and thereafter $33,000
6         for taxable year 2008; $26,000 for taxable year 2009;
7         and $20,000 for taxable year 2010.
8     (1.5) In Cook County, for the 2006 taxable year only, the
9 maximum amount of the exemption set forth under subsection
10 (e)(1.1)(i) of this Section may be increased: (i) by $7,000 if
11 the equalized assessed value of the property in that taxable
12 year exceeds the equalized assessed value of that property in
13 2002 by 100% or more; or (ii) by $2,000 if the equalized
14 assessed value of the property in that taxable year exceeds the
15 equalized assessed value of that property in 2002 by more than
16 80% but less than 100%.
17         (2) In the case of homestead property that also
18     qualifies for the exemption under Section 15-172, the
19     property is entitled to the exemption under this Section,
20     limited to the amount of (i) $4,500 in Cook County or
21     $3,500 in all other counties in tax year 2003, (ii) $5,000
22     in all counties in tax years 2004 and 2005, or (iii) the
23     lesser of the amount of the general homestead exemption
24     under Section 15-175 or an amount equal to the increase in
25     the equalized assessed value for the current tax year above
26     the equalized assessed value for 1977 in tax year 2006 and

 

 

HB3704 - 10 - LRB096 11442 HLH 21917 b

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

 

 

HB3704 - 11 - LRB096 11442 HLH 21917 b

1 assessor may require the new owner of the property to apply for
2 the exemption in the following year.
3     (i) The assessor may determine whether property qualifies
4 as a homestead under this Section by application, visual
5 inspection, questionnaire, or other reasonable methods. Each
6 year, at the time the assessment books are certified to the
7 county clerk by the board of review, the assessor shall furnish
8 to the county clerk a list of the properties qualified for the
9 homestead exemption under this Section. The list shall note the
10 base homestead value of each property to be used in the
11 calculation of the exemption for the current tax year.
12     (j) In counties with 3,000,000 or more inhabitants, the
13 provisions of this Section apply as follows:
14         (1) If the general assessment year for the property is
15     2003, this Section applies for assessment years 2003 and
16     thereafter , 2004, 2005, 2006, 2007, and 2008. Thereafter,
17     the provisions of Section 15-175 apply.
18         (2) If the general assessment year for the property is
19     2004, this Section applies for assessment years 2004 and
20     thereafter , 2005, 2006, 2007, 2008, and 2009. Thereafter,
21     the provisions of Section 15-175 apply.
22         (3) If the general assessment year for the property is
23     2005, this Section applies for assessment years 2005 and
24     thereafter , 2006, 2007, 2008, 2009, and 2010. Thereafter,
25     the provisions of Section 15-175 apply.
26     In counties with less than 3,000,000 inhabitants, this

 

 

HB3704 - 12 - LRB096 11442 HLH 21917 b

1 Section applies for assessment years (i) 2008 and thereafter
2 2006, 2007, and 2008, and 2009 if tax year 2007 2005 is the
3 designated base year or (ii) 2009 and thereafter 2007, 2008,
4 2009, and 2010 if tax year 2008 2006 is the designated base
5 year. Thereafter, the provisions of Section 15-175 apply.
6     (k) To be subject to the provisions of this Section in lieu
7 of Section 15-175, a county must adopt an ordinance to subject
8 itself to the provisions of this Section within 6 months after
9 the effective date of this amendatory Act of the 95th General
10 Assembly. In a county other than Cook County, the ordinance
11 must designate either tax year 2007 2005 or tax year 2008 2006
12 as the base year.
13     (l) Notwithstanding Sections 6 and 8 of the State Mandates
14 Act, no reimbursement by the State is required for the
15 implementation of any mandate created by this Section.
16 (Source: P.A. 95-644, eff. 10-12-07.)
 
17     (35 ILCS 200/15-177)
18     Sec. 15-177. The long-time occupant homestead exemption.
19     (a) If the county has elected, under Section 15-176, to be
20 subject to the provisions of the alternative general homestead
21 exemption, then, for taxable years 2007 and thereafter,
22 regardless of whether the exemption under Section 15-176
23 applies, qualified homestead property is entitled to an annual
24 homestead exemption equal to a reduction in the property's
25 equalized assessed value calculated as provided in this

 

 

HB3704 - 13 - LRB096 11442 HLH 21917 b

1 Section.
2     (b) As used in this Section:
3     "Adjusted homestead value" means the lesser of the
4 following values:
5         (1) The property's base homestead value increased by:
6     (i) 10% for each taxable year after the base year through
7     and including the current tax year for qualified taxpayers
8     with a household income of more than $75,000 but not
9     exceeding $100,000; or (ii) 7% for each taxable year after
10     the base year through and including the current tax year
11     for qualified taxpayers with a household income of $75,000
12     or less. The increase each year is an increase over the
13     prior year; or
14         (1.5) Beginning with taxable year 2008 and thereafter,
15     the property's base homestead value increased by 7% for
16     each taxable year after the base year through and including
17     the current tax year for qualified taxpayers with a
18     household income of $100,00 or less. The increase each year
19     is an increase over the prior year; or
20         (2) The property's equalized assessed value for the
21     current tax year minus the general homestead deduction.
22     "Base homestead value" means:
23         (1) if the property did not have an adjusted homestead
24     value under Section 15-176 for the base year, then an
25     amount equal to the equalized assessed value of the
26     property for the base year prior to exemptions, minus the

 

 

HB3704 - 14 - LRB096 11442 HLH 21917 b

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

 

 

HB3704 - 15 - LRB096 11442 HLH 21917 b

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

 

 

HB3704 - 16 - LRB096 11442 HLH 21917 b

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

 

 

HB3704 - 17 - LRB096 11442 HLH 21917 b

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

 

 

HB3704 - 18 - LRB096 11442 HLH 21917 b

1     (i) To receive the exemption, a person must submit an
2 application to the county assessor during the period specified
3 by the county assessor.
4     The county assessor shall annually give notice of the
5 application period by mail or by publication.
6     The taxpayer must submit, with the application, an
7 affidavit of the taxpayer's total household income, marital
8 status (and if married the name and address of the applicant's
9 spouse, if known), and principal dwelling place of members of
10 the household on January 1 of the taxable year. The Department
11 shall establish, by rule, a method for verifying the accuracy
12 of affidavits filed by applicants under this Section, and the
13 Chief County Assessment Officer may conduct audits of any
14 taxpayer claiming an exemption under this Section to verify
15 that the taxpayer is eligible to receive the exemption. Each
16 application shall contain or be verified by a written
17 declaration that it is made under the penalties of perjury. A
18 taxpayer's signing a fraudulent application under this Act is
19 perjury, as defined in Section 32-2 of the Criminal Code of
20 1961. The applications shall be clearly marked as applications
21 for the Long-time Occupant Homestead Exemption and must contain
22 a notice that any taxpayer who receives the exemption is
23 subject to an audit by the Chief County Assessment Officer.
24     (j) Notwithstanding Sections 6 and 8 of the State Mandates
25 Act, no reimbursement by the State is required for the
26 implementation of any mandate created by this Section.

 

 

HB3704 - 19 - LRB096 11442 HLH 21917 b

1 (Source: P.A. 95-644, eff. 10-12-07.)
 
2     Section 99. Effective date. This Act takes effect upon
3 becoming law.