HB0506eng 97TH GENERAL ASSEMBLY

HB0506 Engrossed LRB097 03334 HLH 43371 b

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 9-195, 10-380, and 15-35 and by adding Sections 9-275, 15-57, and 16-181 as follows:

(35 ILCS 200/9-195)

Sec. 9-195. Leasing of exempt property.

(a) Except as provided in Sections 15-35, 15-55, 15-57, 15-60, 15-100, 15-103, and 15-185, when property which is exempt from taxation is leased to another whose property is not exempt, and the leasing of which does not make the property taxable, the leasehold estate and the appurtenances shall be listed as the property of the lessee thereof, or his or her assignee. Taxes on that property shall be collected in the same manner as on property that is not exempt, and the lessee shall be liable for those taxes. However, no tax lien shall attach to the exempt real estate. The changes made by this amendatory Act of 1997 and by this amendatory Act of the 91st General Assembly are declaratory of existing law and shall not be construed as a new enactment. The changes made by Public Acts 88-221 and 88-420 that are incorporated into this Section by this amendatory Act of 1993 are declarative of existing law and are not a new enactment.

(b) The provisions of this Section regarding taxation of leasehold interests in exempt property do not apply to any leasehold interest created pursuant to any transaction described in subsection (e) of Section 15-35, item (a) of Section 15-35, Section 15-57, subsection (c-5) of Section 15-60, subsection (b) of Section 15-100, Section 15-103, or Section 15-185.

(Source: P.A. 92-844, eff. 8-23-02; 92-846, eff. 8-23-02; 93-19, eff. 6-20-03.)

(35 ILCS 200/9-275 new)

Sec. 9-275. Erroneous homestead exemptions.

(a) If, upon determination by the chief county assessment officer, any person or entity that was not eligible to receive a homestead exemption under Article 15 of this Code was granted one homestead exemption in error for real property in any year or years not to exceed the 3 assessment years prior to the assessment year in which the determination is made, then the chief county assessment officer may cause to be served on the person to whom the most recent tax bill was mailed a notice of intent to record a tax lien against the property with respect to which the erroneous homestead exemption was granted.

(b) If, upon determination by the chief county assessment officer, any person or entity that was not eligible to receive a homestead exemption under Article 15 of this Code was granted 2 homestead exemptions in error for real property in any year or years not to exceed the 3 assessment years prior to the assessment year in which the determination is made, then the chief county assessment officer may cause to be served on the person to whom the most recent tax bill was mailed a notice of intent to record a tax lien against the property with respect to which the erroneous homestead exemption was granted.

(c) If, upon determination by the chief county assessment officer, any person or entity that was not eligible to receive a homestead exemption under Article 15 of this Code was granted 3 or more homestead exemptions in error for real property in any year or years not to exceed the 6 assessment years prior to the assessment year in which the determination is made, then the chief county assessment officer may cause to be served on the person to whom the most recent tax bill was mailed a notice of intent to record a tax lien against the property with respect to which the erroneous homestead exemption was granted.

(d) The notice of intent to record a tax lien described in subsections (a), (b), and (c) of this Section shall identify the property against which the lien is being sought and shall identify the assessment years in which the erroneous homestead exemption was granted.

In counties with 3,000,000 or more inhabitants, the notice must also include a form that the property owner may return to the chief county assessment officer to request a hearing. The property owner may request a hearing by returning the form within 30 days after service. The hearing shall be held within 90 days after the property owner is served. The chief county assessment officer shall promulgate rules of service and procedure for the hearing. The chief county assessment officer must generally follow rules of evidence and practices that prevail in the county circuit courts, but, because of the nature of these proceedings, the chief county assessment officer is not bound by those rules in all particulars. The chief county assessment officer shall appoint a hearing officer to oversee the hearing. The property owner shall be allowed to present evidence to the hearing officer at the hearing. After taking into consideration all the relevant testimony and evidence, the hearing officer shall make an administrative decision on whether the property owner was erroneously granted a homestead exemption for the assessment year or years in question. The property owner may appeal the hearing officer's ruling to the circuit court of the county where the property is located under the Administrative Review Law.

In counties with less than 3,000,000 inhabitants, the notice must also include a form that the property owner may return to the board of review to request a hearing. The property owner may request a hearing by returning the form within 30 days after service. The hearing shall be held within 90 days after the property owner is served. The board of review shall follow its normal practices and procedures in conducting the hearing. The property owner shall be allowed to present evidence to the board of review. After taking into consideration all of the relevant testimony and evidence, the board of review shall issue a decision on whether the property owner was erroneously granted a homestead exemption for the assessment year or years in question. The property owner may appeal the board of review's ruling to the circuit court of the county where the property is located under the Administrative Review Law.

(e) A lien imposed under this Section shall be filed with the county clerk and the county recorder of deeds, but may not be filed sooner than 45 days after the notice was delivered to the property owner if the property owner does not request a hearing, or, until the conclusion of the hearing and all appeals if the property owner does request a hearing.

(1) When a lien is filed pursuant to subsection (a) of this Section, the arrearages of taxes that might have been assessed, plus 5% interest per annum, shall be charged against the property by the county clerk.

(2) When a lien is filed pursuant to subsection (b) of this Section, the arrearages of taxes that might have been assessed, plus a penalty of 25% of the total amount of unpaid taxes for each year and 10% interest per annum, shall be charged against the property by the county clerk.

(3) When a lien is filed pursuant to subsection (c) of this Section, the arrearages of taxes that might have been assessed, plus a penalty of 40% of the total amount of unpaid taxes for each year and 15% interest per annum, shall be charged against the property by the county clerk.

(f) If the erroneous homestead exemption was granted as a result of a clerical error or omission on the part of the chief county assessment officer, and if the owner has paid its tax bills as received for the year or years in which the error occurred, then the interest and penalties authorized by this Section shall not be chargeable to the owner. However, nothing in this Section shall prevent the collection of the principal amount of back taxes due and owing.

(g) If, at the hearing, the property owner establishes that it is a bona fide purchaser of the property for value, and without notice of the erroneous homestead exemption, the property owner shall not be liable for any unpaid back taxes, interest, or penalties for the period of time prior to the date that the property owner purchased the property. A certified title to the property that is issued by the county clerk or county recorder of deeds and is free and clear of any liens imposed under subsections (a), (b), or (c) of this Section, shall be prima facie evidence that the property owner is without notice of the erroneous homestead exemption.

(h) When a lien is filed pursuant to subsection (e) of this Section, the chief county assessment officer shall mail a copy of the lien to the person to whom the most recent tax bill was mailed and the outstanding liability created by such a lien is due and payable within 30 days after the mailing of the lien by the chief county assessment officer. This liability is deemed delinquent and shall bear interest beginning on the day after the due date. Any such liability deemed delinquent after that due date shall bear interest at the rate of 1.5% per month or portion thereof until paid.

(i) The unpaid taxes shall be paid to the appropriate taxing districts. Interest shall be paid to the county where the property is located. The penalty shall be paid to the chief county assessment officer's office for the administration of the provisions of this amendatory Act of the 97th General Assembly.

(j) For purposes of this Section, "homestead exemption" means an exemption under Section 15-165 (disabled veterans), 15-167 (returning veterans), 15-168 (disabled persons), 15-169 (disabled veterans standard homestead), 15-170 (senior citizens), 15-172 (senior citizens assessment freeze), 15-175 (general homestead), 15-176 (alternative general homestead), or 15-177 (long-time occupant).

(35 ILCS 200/10-380)

Sec. 10-380. For the taxable years 2006 and thereafter , 2007, 2008, and 2009, the chief county assessment officer in the county in which property subject to a PPV Lease is located shall apply the provisions of 10-370(b)(i) and 10-375(c)(i) of this Division 14 in assessing and determining the value of any PPV Lease for purposes of the property tax laws of this State.

(Source: P.A. 94-974, eff. 6-30-06.)

(35 ILCS 200/15-35)

Sec. 15-35. Schools. All property donated by the United States for school purposes, and all property of schools, not sold or leased or otherwise used with a view to profit, is exempt, whether owned by a resident or non-resident of this State or by a corporation incorporated in any state of the United States. Also exempt is:

(a) property, along with the leasehold interest in that property, of schools which is leased to the State, a unit of local government, or school district municipality to be used for governmental municipal purposes on a not-for-profit basis;

(b) property of schools on which the schools are located and any other property of schools used by the schools exclusively for school purposes, including, but not limited to, student residence halls, dormitories and other housing facilities for students and their spouses and children, staff housing facilities, and school-owned and operated dormitory or residence halls occupied in whole or in part by students who belong to fraternities, sororities, or other campus organizations;

(c) property donated, granted, received or used for public school, college, theological seminary, university, or other educational purposes, whether held in trust or absolutely;

(d) in counties with more than 200,000 inhabitants which classify property, property (including interests in land and other facilities) on or adjacent to (even if separated by a public street, alley, sidewalk, parkway or other public way) the grounds of a school, if that property is used by an academic, research or professional society, institute, association or organization which serves the advancement of learning in a field or fields of study taught by the school and which property is not used with a view to profit;

(e) property owned by a school district. The exemption under this subsection is not affected by any transaction in which, for the purpose of obtaining financing, the school district, directly or indirectly, leases or otherwise transfers the property to another for which or whom property is not exempt and immediately after the lease or transfer enters into a leaseback or other agreement that directly or indirectly gives the school district a right to use, control, and possess the property. In the case of a conveyance of the property, the school district must retain an option to purchase the property at a future date or, within the limitations period for reverters, the property must revert back to the school district.

(1) If the property has been conveyed as described in this subsection, the property is no longer exempt under this Section as of the date when:

(A) the right of the school district to use, control, and possess the property is terminated;

(B) the school district no longer has an option to purchase or otherwise acquire the property; and

(C) there is no provision for a reverter of the property to the school district within the limitations period for reverters.

(2) Pursuant to Sections 15-15 and 15-20 of this Code, the school district shall notify the chief county assessment officer of any transaction under this subsection. The chief county assessment officer shall determine initial and continuing compliance with the requirements of this subsection for tax exemption. Failure to notify the chief county assessment officer of a transaction under this subsection or to otherwise comply with the requirements of Sections 15-15 and 15-20 of this Code shall, in the discretion of the chief county assessment officer, constitute cause to terminate the exemption, notwithstanding any other provision of this Code.

(3) No provision of this subsection shall be construed to affect the obligation of the school district to which an exemption certificate has been issued under this Section from its obligation under Section 15-10 of this Code to file an annual certificate of status or to notify the chief county assessment officer of transfers of interest or other changes in the status of the property as required by this Code.

(4) The changes made by this amendatory Act of the 91st General Assembly are declarative of existing law and shall not be construed as a new enactment; and

(f) in counties with more than 200,000 inhabitants which classify property, property of a corporation, which is an exempt entity under paragraph (3) of Section 501(c) of the Internal Revenue Code or its successor law, used by the corporation for the following purposes: (1) conducting continuing education for professional development of personnel in energy-related industries; (2) maintaining a library of energy technology information available to students and the public free of charge; and (3) conducting research in energy and environment, which research results could be ultimately accessible to persons involved in education.

(Source: P.A. 91-513, eff. 8-13-99; 91-578, eff. 8-14-99; 92-16, eff. 6-28-01.)

(35 ILCS 200/15-57 new)

Sec. 15-57. Government property leased to another government entity. If property is owned by the State, a unit of local government, or a school district and that property is leased to the State, a unit of local government, or a school district, then the property is exempt from taxation under this Code and the leasehold interest is exempt from taxation under this Code or under any other law. The provisions of this Section apply notwithstanding any other provision of law.

(35 ILCS 200/16-181 new)

Sec. 16-181. Stipulation to revised assessment. The board of review whose decision is being appealed may, at its discretion, enter into discussions with a taxpayer aimed at achieving a stipulated revised assessment upon the property, either prior to or after receipt of the taxpayer's petition from the Property Tax Appeal Board. If such discussions commence prior to the board of review's receipt of the taxpayer's petition from the Property Tax Appeal Board, the taxpayer shall provide the board of review with such evidence of the taxpayer's timely filing of its appeal before the Property Tax Appeal Board as the board of review may request, including but not limited to a copy of the taxpayer's petition as filed with the Property Tax Appeal Board. If, after discussions have been entered into, the taxpayer and the board of review propose to stipulate to a revised assessment of the property, and if the original complaint requested a reduction in assessed value of more than $100,000, then the board of review shall first serve a copy of the proposed stipulation or assessment agreement on all taxing districts as shown on the last available property tax bill, along with a copy of the taxpayer's petition as provided to the board of review and all other evidence used to reach the settlement. The taxing districts so served shall have a period of 45 days after the postmark date of the notice from the board of review to file a written objection to the proposal, stating the reasons for the objection, with the board of review. Failure of a taxing district to object to the proposed assessment within the 45-day objection period shall be considered acceptance of the proposed assessment. Upon the later of (i) the expiration of the 45-day objection period or (ii) written resolution of any timely filed written objection received from a taxing district, the board of review shall provide the proposed stipulation or assessment agreement to the Property Tax Appeal Board along with a certificate of service affirming that all taxing districts have been notified of the proposed stipulation or assessment agreement, and that no timely written objections to the stipulation or assessment agreement have been received or that any such objections have been fully resolved. The certificate of service shall be signed by a member of the board of review or the clerk of the board of review. Within 120 days after the Property Tax Appeal Board's receipt of the stipulation or assessment agreement and certificate of service, the Property Tax Appeal Board shall issue a decision in accordance with the stipulation or assessment agreement, unless it finds that the Property Tax Appeal Board lacks jurisdiction over the appeal or that the stipulation or assessment agreement is against the manifest weight of the evidence.

If the board of review provides notice to the affected taxing districts of the proposed stipulation or assessment agreement, and a taxing district (i) does not respond to the notice, (ii) accepts the proposed assessment, or (iii) reaches a written resolution with the board of review and the taxpayer, then the board of review is not required to otherwise send notice as required by Section 16-180 of the Property Tax Code to that taxing district, and that taxing district is precluded from intervening or otherwise participating in the appeal pending before the Property Tax Appeal Board challenging the assessment. If a taxing district files a written objection to the proposal to the board of review which is not followed by a written resolution, then the appeal shall proceed as provided by law, the board of review must notify that taxing district as required by Section 16-180, and any proposed stipulation or assessment agreement shall not be considered or introduced as evidence in any proceeding before the Property Tax Appeal Board.

Section 90. The State Mandates Act is amended by adding Section 8.35 as follows:

(30 ILCS 805/8.35 new)

Sec. 8.35. Exempt mandate. Notwithstanding Sections 6 and 8 of this Act, no reimbursement by the State is required for the implementation of any mandate created by this amendatory Act of the 97th General Assembly.

Section 95. Applicability. The changes made by this amendatory Act of the 97th General Assembly to the Property Tax Code by changing Sections 9-195 and 15-35 and by adding Section 15-57 and to the State Mandates Act by adding Section 8.35 apply to taxable years 2010 and thereafter. In addition, those changes and additions also apply to taxable years prior to 2010, but no such taxes paid for any taxable year prior to 2010 need be refunded.

Section 97. Severability. The provisions of this Act are severable under Section 1.31 of the Statute on Statutes.