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1 | AN ACT concerning revenue.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 1. Short title. This Act may be referred to as the | ||||||||||||||||||||||||||||
5 | Acquisition-Based Assessment Law or the ABA Law. | ||||||||||||||||||||||||||||
6 | Section 5. Legislative findings. The General Assembly | ||||||||||||||||||||||||||||
7 | finds that: | ||||||||||||||||||||||||||||
8 | (a) Portions of the State and, in particular, Cook County | ||||||||||||||||||||||||||||
9 | have experienced redevelopment and gentrification that have | ||||||||||||||||||||||||||||
10 | significantly increased real property values in some | ||||||||||||||||||||||||||||
11 | neighborhoods in unpredictable ways and beyond the rate of | ||||||||||||||||||||||||||||
12 | increase in many established residents' income, while real | ||||||||||||||||||||||||||||
13 | property values in other neighborhoods have increased less | ||||||||||||||||||||||||||||
14 | rapidly or even declined, creating large and unpredictable | ||||||||||||||||||||||||||||
15 | changes in real property assessments and property tax bills. | ||||||||||||||||||||||||||||
16 | (b) The creation of property tax classifications pursuant | ||||||||||||||||||||||||||||
17 | to Section 9-144 of the Property Tax Code will promote local | ||||||||||||||||||||||||||||
18 | neighborhood preservation, continuity, and stability by | ||||||||||||||||||||||||||||
19 | ensuring that the taxes associated with increased sale prices | ||||||||||||||||||||||||||||
20 | in an area do not harm established residents and other property | ||||||||||||||||||||||||||||
21 | owners, or effectively force them to sell their property and | ||||||||||||||||||||||||||||
22 | thereby destabilize or erode the historic character of those | ||||||||||||||||||||||||||||
23 | areas. |
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1 | (c) By minimizing assessment changes for current owners of | ||||||
2 | real property and basing the assessment for new purchasers on | ||||||
3 | the actual purchase price, the creation of property tax | ||||||
4 | classifications pursuant to Section 9-144 of the Property Tax | ||||||
5 | Code will promote transparency in assessments and fair and | ||||||
6 | predictable taxes on real property, thereby improving | ||||||
7 | relationships between property owners and their government, | ||||||
8 | reducing distrust and resentment engendered by large and | ||||||
9 | unpredictable increases in assessments or property tax bills, | ||||||
10 | and promoting support for governmental programs. | ||||||
11 | (d) Because real estate that has recently sold is | ||||||
12 | significantly different from other real estate in that (i) its | ||||||
13 | fair cash value may be determined with precision and (ii) the | ||||||
14 | purchasers of property in appreciating areas often have a | ||||||
15 | greater ability to pay taxes based on the actual price paid | ||||||
16 | than other owners have to pay taxes based on appreciated | ||||||
17 | prices, the creation of property tax classifications pursuant | ||||||
18 | to Section 9-144 of the Property Tax Code will facilitate the | ||||||
19 | treatment of like properties on a uniform basis. | ||||||
20 | (e) Basing assessments directly on recent purchase prices, | ||||||
21 | with predictable maximum changes thereafter, is fair to buyers | ||||||
22 | because (i) new owners at the time of acquiring their property | ||||||
23 | do not have the same reliance interest warranting protection | ||||||
24 | against higher taxes as do existing owners and (ii) it enables | ||||||
25 | buyers to reliably forecast the tax component of their | ||||||
26 | ownership costs and to avoid future financial difficulties |
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1 | caused by large and unpredictable assessment changes. | ||||||
2 | (f) Cook County, because of the great diversity of its tax | ||||||
3 | base, which causes extreme differences among property owners in | ||||||
4 | the rates of change of assessments and taxes, would benefit | ||||||
5 | from acquisition-based assessment because acquisition-based | ||||||
6 | assessment will significantly reduce differences in rates of | ||||||
7 | tax change resulting from, among other reasons, redevelopment | ||||||
8 | and gentrification in portions of that county and relative | ||||||
9 | stability or stagnation in other parts. | ||||||
10 | (g) In counties other than Cook, due to each county board's | ||||||
11 | familiarity with the extent to which its county would benefit | ||||||
12 | from acquisition-based assessment pursuant to Section 9-144 as | ||||||
13 | a result of changes in values of real property in the county | ||||||
14 | and the extent to which the county would experience the | ||||||
15 | benefits of acquisition-based assessment, it is preferable to | ||||||
16 | give each county board, other than the Cook County Board, the | ||||||
17 | ability to decide whether to adopt acquisition-based | ||||||
18 | assessment for its own county rather than mandating | ||||||
19 | acquisition-based assessment statewide. | ||||||
20 | Section 10. The Property Tax Code is amended by changing | ||||||
21 | Section 1-50 and by adding Section 9-144 as follows:
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22 | (35 ILCS 200/1-50)
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23 | Sec. 1-50. Fair cash value. In a county with 3,000,000 or | ||||||
24 | more inhabitants, except as otherwise provided in this Code, |
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1 | fair cash value shall be determined as set forth in Section | ||||||
2 | 9-144. In a county with less than 3,000,000 inhabitants, except | ||||||
3 | as otherwise provided in this Code, fair cash value shall be | ||||||
4 | determined as set forth in Section 9-144 if the county adopts, | ||||||
5 | by ordinance, the method of determining fair cash value set | ||||||
6 | forth in Section 9-144. Except as otherwise provided in this | ||||||
7 | Code or pursuant to this Section and Section 9-144, "fair cash | ||||||
8 | value" means the The amount for which a property can be
sold in | ||||||
9 | the due course of business and trade, not under duress, between | ||||||
10 | a
willing buyer and a willing seller.
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11 | (Source: P.A. 88-455.)
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12 | (35 ILCS 200/9-144 new) | ||||||
13 | Sec. 9-144. Determination of fair cash value. | ||||||
14 | (a) Fair cash value shall be determined in accordance with | ||||||
15 | this Section for properties to which this Section applies | ||||||
16 | pursuant to Section 1-50. | ||||||
17 | (b) The words and phrases used in this Section, when used | ||||||
18 | in this Section, are defined as follows: | ||||||
19 | (1) Nominal assessable value. The amount, as | ||||||
20 | determined by the assessor and adjusted by any subsequent | ||||||
21 | appeals or judicial review, for which a property can be | ||||||
22 | sold in the due course of business and trade, not under | ||||||
23 | duress, between a willing buyer and a willing seller. | ||||||
24 | (2) Addition. Any new or added buildings, structures, | ||||||
25 | or other improvements of any kind. |
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1 | (3) Addition value. With respect to each addition (i) | ||||||
2 | that is not already being taxed in the year this Section | ||||||
3 | becomes effective in that county and (ii) that became fit | ||||||
4 | for occupancy or intended customary use any time after the | ||||||
5 | last title transfer and before the current assessment year, | ||||||
6 | the increase in the nominal assessable value attributable | ||||||
7 | to that addition when it became fit for occupancy or | ||||||
8 | intended customary use; provided that the increase for each | ||||||
9 | addition shall be phased in at the rate of 20% per year | ||||||
10 | over 5 years. | ||||||
11 | (4) Homestead property. Residential property that, as | ||||||
12 | of January 1 of the tax year, is occupied by its owner or | ||||||
13 | owners as his, her, or their principal dwelling place, or | ||||||
14 | that is a leasehold interest on which a single family | ||||||
15 | residence is situated, that is occupied as a residence by a | ||||||
16 | person who has a legal or equitable interest therein | ||||||
17 | evidenced by a written instrument, as an owner or as a | ||||||
18 | lessee, and on which the person is liable for the payment | ||||||
19 | of property taxes. Residential units in an apartment | ||||||
20 | building owned and operated as a cooperative, or as a life | ||||||
21 | care facility, which are occupied by persons who hold a | ||||||
22 | legal or equitable interest in the cooperative apartment | ||||||
23 | building or life care facility as owners or lessees, and | ||||||
24 | who are liable by contract for the payment of property | ||||||
25 | taxes, shall be included within this definition of | ||||||
26 | homestead property. |
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1 | Homestead property includes the dwelling place, | ||||||||||||||||||||||||||||||||
2 | appurtenant structures, and so much of the surrounding land | ||||||||||||||||||||||||||||||||
3 | constituting the parcel on which the dwelling place is | ||||||||||||||||||||||||||||||||
4 | situated as is used for residential purposes. If the | ||||||||||||||||||||||||||||||||
5 | assessor has established a specific legal description for a | ||||||||||||||||||||||||||||||||
6 | portion of property constituting homestead property, then | ||||||||||||||||||||||||||||||||
7 | the homestead property shall be limited to the property | ||||||||||||||||||||||||||||||||
8 | within that description. | ||||||||||||||||||||||||||||||||
9 | (5) Change factor. The annual percentage rate as | ||||||||||||||||||||||||||||||||
10 | determined in accordance with the following table: | ||||||||||||||||||||||||||||||||
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18 | (6) Title transfer. A transaction, other than solely | ||||||||||||||||||||||||||||||||
19 | between spouses, for which a transfer declaration is | ||||||||||||||||||||||||||||||||
20 | required pursuant to Section 31-25. | ||||||||||||||||||||||||||||||||
21 | (7) Transfer declaration. The real estate transfer | ||||||||||||||||||||||||||||||||
22 | declaration required by Section 31-25. | ||||||||||||||||||||||||||||||||
23 | (8) Declared value. The value of the real property or | ||||||||||||||||||||||||||||||||
24 | beneficial interest in real property stated on the transfer |
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1 | declaration. If a transfer declaration is not filed or | ||||||
2 | there is an exemption from the filing of a transfer | ||||||
3 | declaration, the "declared value" is the amount paid for | ||||||
4 | the real property or beneficial interest in real property, | ||||||
5 | as determined by the assessor and adjusted by any | ||||||
6 | subsequent appeals or judicial review. | ||||||
7 | (9) Purchase price. If a title transfer involves a 100% | ||||||
8 | interest in real property, the "purchase price" is the | ||||||
9 | declared value or the nominal assessable value, whichever | ||||||
10 | is higher. If a title transfer involves less than a 100% | ||||||
11 | interest in real property, the transfer declaration shall | ||||||
12 | include or be accompanied by a sworn declaration of the | ||||||
13 | percentage interest transferred, signed by both parties. | ||||||
14 | The "purchase price" shall be the value of a 100% interest, | ||||||
15 | as determined by the greater of the nominal assessable | ||||||
16 | value or on a pro rata basis by reference to the declared | ||||||
17 | value for the lesser percentage interest. | ||||||
18 | (10) Assessment year. The 12 months beginning with the | ||||||
19 | statutory assessment date in any year and continuing | ||||||
20 | through the day before the assessment date in the following | ||||||
21 | calendar year. | ||||||
22 | (11) Current assessment year. The assessment year | ||||||
23 | beginning with the statutory assessment date for the | ||||||
24 | assessment then in progress. | ||||||
25 | (12) Base year. The latest of (A) assessment year 2008, | ||||||
26 | (B) the assessment year prior to the year in which the |
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1 | county government, in counties with a population of less | ||||||
2 | than 3,000,000, chose to assess according to this Section, | ||||||
3 | (C) the most recent assessment year before the current | ||||||
4 | assessment year in which there was a title transfer, (D) | ||||||
5 | the most recent assessment year before the current | ||||||
6 | assessment year in which the adjusted base value, after an | ||||||
7 | increase, equals the nominal assessable value, excluding | ||||||
8 | any reduction due to temporary conditions, or (E) the most | ||||||
9 | recent assessment year before the current assessment year | ||||||
10 | in which the adjusted base value, after a decrease, equals | ||||||
11 | the nominal assessable value, excluding any reduction due | ||||||
12 | to temporary conditions. | ||||||
13 | (13) Base value. For real estate that had a title | ||||||
14 | transfer during the base year, the purchase price | ||||||
15 | associated with the last such title transfer, plus 20% of | ||||||
16 | the addition value attributable to any additions that | ||||||
17 | became fit for occupancy or intended customary use during | ||||||
18 | the base year but after the transfer. | ||||||
19 | For all homestead property that did not have a title | ||||||
20 | transfer during the base year and for which the base year | ||||||
21 | is either (A) or (B) in paragraph 12, "base value" is: (A) | ||||||
22 | the amount, if any, of the general homestead exemption in | ||||||
23 | the base year, found in Section 15-175, plus the amount, if | ||||||
24 | any, of the alternative general homestead exemption in that | ||||||
25 | year, found in Section 15-176, plus the amount, if any, of | ||||||
26 | the long-time occupant homestead exemption in that year, |
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1 | found in Section 15-177, divided by the final state | ||||||
2 | equalizer for the county in which the property is located, | ||||||
3 | and (B) dividing that result by the percentage of market | ||||||
4 | value used by the assessor for determining the assessed | ||||||
5 | value pursuant to State law and the county classification | ||||||
6 | ordinance, if any, and (C) subtracting that amount, if any, | ||||||
7 | from the nominal assessable value, excluding any reduction | ||||||
8 | due to temporary conditions. | ||||||
9 | For all other real estate, "base value" is the nominal | ||||||
10 | assessable value for the base year, excluding any reduction | ||||||
11 | due to temporary conditions. | ||||||
12 | (14) Adjusted base value. For the assessment year | ||||||
13 | immediately following the base year, the base value plus | ||||||
14 | the portion of the addition value phased in during the | ||||||
15 | assessment year. For each succeeding assessment year, | ||||||
16 | "adjusted base value" is the adjusted base value of the | ||||||
17 | preceding assessment year changed as follows: | ||||||
18 | (A) if the nominal assessable value exceeds the | ||||||
19 | adjusted base value of the preceding assessment year, | ||||||
20 | by adding an amount equal to the change factor times | ||||||
21 | the adjusted base value of the preceding year, provided | ||||||
22 | that the result shall not exceed the nominal assessable | ||||||
23 | value; or | ||||||
24 | (B) if the nominal assessable value is less than | ||||||
25 | the adjusted base value of the preceding assessment | ||||||
26 | year, by subtracting an amount equal to the change |
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1 | factor times the adjusted base value of the preceding | ||||||
2 | year, provided that the result shall not be less than | ||||||
3 | the nominal assessable value; and | ||||||
4 | (C) in either case, adding the portion of any | ||||||
5 | addition value phased in during the assessment year. | ||||||
6 | (c) All real estate is divided into the following classes: | ||||||
7 | Class A: All real estate that was the subject of a | ||||||
8 | title transfer in the previous assessment year. | ||||||
9 | Class B: All real estate other than that included in | ||||||
10 | Class A. | ||||||
11 | In counties that classify real estate for assessment | ||||||
12 | purposes and that are subject to this Section either by reason | ||||||
13 | of their size or election by county government, the county | ||||||
14 | classifications shall be subclasses within these Classes A and | ||||||
15 | B. | ||||||
16 | (d) Fair cash value shall be determined as follows: | ||||||
17 | (1) With respect to real estate in Class A, the base | ||||||
18 | value of the real estate. | ||||||
19 | (2) With respect to real estate in Class B, the | ||||||
20 | adjusted base value. | ||||||
21 | (e) In any county that is or becomes subject to the | ||||||
22 | provisions of this Section, the provisions of this Section | ||||||
23 | shall operate in lieu of the provisions in Section 15-175 | ||||||
24 | (general homestead exemption), Section 15-176 (alternative | ||||||
25 | general homestead exemption), Section 15-177 (long-time | ||||||
26 | occupant homestead exemption), and Section 15-180 (homestead |
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1 | improvements). | ||||||
2 | (f) Notwithstanding Sections 6 and 8 of the State Mandates | ||||||
3 | Act, no reimbursement by the State is required for the | ||||||
4 | implementation of any mandate created by this Section or this | ||||||
5 | amendatory Act of the 96th General Assembly. | ||||||
6 | (g) All portions of this Section and this amendatory Act of | ||||||
7 | the 96th General Assembly are severable, and if any provision | ||||||
8 | or any sentence, clause, or paragraph is held unconstitutional | ||||||
9 | by any court of competent jurisdiction, the decision of that | ||||||
10 | court shall not affect or impair any of the remaining | ||||||
11 | provisions.
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12 | Section 95. The State Mandates Act is amended by adding | ||||||
13 | Section 8.34 as follows: | ||||||
14 | (30 ILCS 805/8.34 new) | ||||||
15 | Sec. 8.34. Exempt mandate. Notwithstanding Sections 6 and 8 | ||||||
16 | of this Act, no reimbursement by the State is required for the | ||||||
17 | implementation of any mandate created by this amendatory Act of | ||||||
18 | the 96th General Assembly. | ||||||
19 | Section 99. Effective date. This Act takes effect upon | ||||||
20 | becoming law.
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