093_SB1883ham002











                                     LRB093 08674 SJM 17143 a

 1                    AMENDMENT TO SENATE BILL 1883

 2        AMENDMENT NO.     .  Amend Senate Bill 1883, AS  AMENDED,
 3    by  replacing  everything  after the enacting clause with the
 4    following:

 5        "Section 5.  The Property Tax Code is amended by changing
 6    Sections 31-5, 31-10, 31-20, and 31-25 and by adding  Section
 7    3-46 as follows:

 8        (35 ILCS 200/31-5)
 9        Sec.  31-5.   Definitions.   "Recordation"  includes  the
10    issuance  of  certificates  of  title  by Registrars of Title
11    under the Registered Titles (Torrens)  Act  pursuant  to  the
12    filing  of deeds or trust documents for that purpose, as well
13    as the recording of deeds or trust documents by recorders.
14        "Department" means the Department of Revenue.
15        "Person" means any natural individual, firm, partnership,
16    association, joint stock company, joint adventure, public  or
17    private   corporation,   limited   liability  company,  or  a
18    receiver, executor, trustee, guardian or other representative
19    appointed by order of any court.
20        "Value" means the amount of the full actual consideration
21    for the real property, including the amount of  any  lien  on
22    the real property assumed by the buyer.
 
                            -2-      LRB093 08674 SJM 17143 a
 1        "Trust document" means a document required to be recorded
 2    under the Land Trust Recordation and Transfer Tax Act.
 3        "Beneficial interest" includes, but is not limited to:
 4             (1)  the  beneficial  interest  in  an Illinois land
 5        trust;
 6             (2)  the  lessee  interest   in   a   ground   lease
 7        (including  any  interest  of  the  lessee in the related
 8        improvements) that provides for a  term  of  30  or  more
 9        years  when  all options to renew or extend are included,
10        whether or not any portion of the term has expired; or
11             (3)  the  indirect  interest  in  real  property  as
12        reflected by a controlling  interest  in  a  real  estate
13        entity.
14        "Controlling  interest"  means  more than 50% of the fair
15    market  value  of  all  ownership  interests  or   beneficial
16    interests in a real estate entity.
17        "Real  estate entity" means any person including, but not
18    limited to, any partnership, corporation,  limited  liability
19    company,  trust,  other  entity, or multi-tiered entity, that
20    exists or acts  substantially  for  the  purpose  of  holding
21    directly  or  indirectly  title  to or beneficial interest in
22    real property. There is  a  rebuttable  presumption  that  an
23    entity  is  a  real  estate  entity  if  it owns, directly or
24    indirectly, real property having a fair market value  greater
25    than  75%  of  the  total  fair  market  value  of all of the
26    entity's  assets,  determined  without  deduction   for   any
27    mortgage, lien, or encumbrance.
28    (Source: P.A. 92-651, eff. 7-11-02.)

29        (35 ILCS 200/31-10)
30        Sec.  31-10.   Imposition of tax. A tax is imposed on the
31    privilege of transferring title to  real  estate  located  in
32    Illinois,  as  represented  by  the  deed  that  is filed for
33    recordation,  and  on  the  privilege   of   transferring   a
 
                            -3-      LRB093 08674 SJM 17143 a
 1    beneficial interest in real property located in Illinois that
 2    is  the  subject  of a land trust as represented by the trust
 3    document that is filed for recordation, and on the  privilege
 4    of  transferring  a  controlling  interest  in  a real estate
 5    entity owning property located in Illinois, at  the  rate  of
 6    50¢  for each $500 of value or fraction of $500 stated in the
 7    declaration required by Section 31-25.  If, however, the deed
 8    or trust document states that  the  real  estate,  beneficial
 9    interest, or controlling interest is transferred subject to a
10    mortgage, the amount of the mortgage remaining outstanding at
11    the  time  of  transfer shall not be included in the basis of
12    computing the tax. The tax is due if the transfer is made  by
13    one  or  more  related  transactions  or involves one or more
14    persons  or  entities  and  whether  or  not  a  document  is
15    recorded.
16    (Source:  P.A.  86-624;  86-925;  86-1028;  86-1475;  87-543;
17    88-455.)

18        (35 ILCS 200/31-20)
19        Sec. 31-20.  Affixing of stamps. Payment of the tax shall
20    be evidenced by revenue stamps in the amount required to show
21    full payment of the tax imposed by Section 31-10.  Except  as
22    provided  in  Section  31-45, a deed, document transferring a
23    controlling interest in  real  property,  or  trust  document
24    shall not be accepted for filing by any recorder or registrar
25    of  titles  unless revenue stamps in the required amount have
26    been purchased from the recorder or registrar  of  titles  of
27    the   county   where   the   deed,  document  transferring  a
28    controlling interest in real property, or trust  document  is
29    being  filed  for  recordation.   The revenue stamps shall be
30    affixed to the  deed,  document  transferring  a  controlling
31    interest  in real property, or trust document by the recorder
32    or the registrar of titles either before or  after  recording
33    as  requested  by  the  grantee. A person using or affixing a
 
                            -4-      LRB093 08674 SJM 17143 a
 1    revenue stamp shall cancel it and so deface it as  to  render
 2    it unfit for reuse by marking it with his or her initials and
 3    the  day,  month  and  year  when  the affixing  occurs.  The
 4    marking shall be made by writing or stamping in indelible ink
 5    or by perforating with  a  machine  or  punch.  However,  the
 6    revenue  stamp  shall  not  be so defaced as to prevent ready
 7    determination of its denomination and genuineness.
 8    (Source:  P.A.  86-624;  86-925;  86-1028;  86-1475;  87-543;
 9    88-455.)

10        (35 ILCS 200/31-25)
11        Sec. 31-25.  Transfer declaration. At the time a deed,  a
12    document   transferring   a   controlling  interest  in  real
13    property, or trust document is presented for recordation,  or
14    within  3  business  days  after  the  transfer  is effected,
15    whichever is earlier, there shall also be  presented  to  the
16    recorder  or registrar of titles a  declaration, signed by at
17    least one of the sellers and also signed by at least  one  of
18    the  buyers  in the transaction or by the attorneys or agents
19    for the sellers  or  buyers.   The  declaration  shall  state
20    information  including,  but not limited to: (a) the value of
21    the real property or beneficial  interest  in  real  property
22    located  in  Illinois the full consideration for the property
23    so transferred; (b) the  parcel  identifying  number  of  the
24    property;  (c) the legal description of the property; (d) the
25    date of the deed, the date the transfer was effected, or  the
26    date  of  the trust document; (e) the type of deed, transfer,
27    or trust document; (f) the address of the property;  (g)  the
28    type of improvement, if any, on the property; (h) information
29    as  to whether the transfer is between related individuals or
30    corporate affiliates or is a compulsory transaction; (i)  the
31    lot  size or acreage; (j) the value of personal property sold
32    with the real estate; (k) the year the contract was initiated
33    if an installment  sale;  and  (l)  the  name,  address,  and
 
                            -5-      LRB093 08674 SJM 17143 a
 1    telephone  number  of  the  person preparing the declaration.
 2    Except as provided in  Section  31-45,  a  deed,  a  document
 3    transferring  a  controlling  interest  in  real property, or
 4    trust document shall not be accepted for  recordation  unless
 5    it  is  accompanied  by  a  declaration  containing  all  the
 6    information   requested   in   the   declaration.   When  the
 7    declaration is  signed by an attorney or agent on  behalf  of
 8    sellers  or  buyers  who  have the power of direction to deal
 9    with the  title  to  the  real  estate  under  a  land  trust
10    agreement,  the  trustee  being the mere repository of record
11    legal title with a duty of conveying  the  real  estate  only
12    when  and  if  directed  in  writing  by  the  beneficiary or
13    beneficiaries having the power of direction, the attorneys or
14    agents executing the declaration on behalf of the sellers  or
15    buyers  need  identify  only  the  land  trust  that  is  the
16    repository  of  record legal title and not the beneficiary or
17    beneficiaries having the power of direction  under  the  land
18    trust  agreement. The declaration form shall be prescribed by
19    the Department and shall contain sales information questions.
20    For sales occurring during a period in which  the  provisions
21    of Section 17-10 require the Department to adjust sale prices
22    for  seller  paid  points  and  prevailing cost of cash,  the
23    declaration  form  shall  contain  questions  regarding   the
24    financing   of  the  sale.   The  subject  of  the  financing
25    questions shall include any direct  seller  participation  in
26    the financing of the sale or information on financing that is
27    unconventional  so  as to affect the fair cash value received
28    by the  seller.   The  intent  of  the  sales  and  financing
29    questions  is to aid in the reduction in the number of buyers
30    required to provide financing information necessary  for  the
31    adjustment  outlined  in  Section 17-10.  For sales occurring
32    during a period in which  the  provisions  of  Section  17-10
33    require  the Department to adjust sale prices for seller paid
34    points and prevailing cost  of  cash,  the  declaration  form
 
                            -6-      LRB093 08674 SJM 17143 a
 1    shall  include, at a minimum, the following data:  (a) seller
 2    paid points, (b) the  sales  price,  (c)  type  of  financing
 3    (conventional,  VA, FHA, seller-financed, or other), (d) down
 4    payment,  (e)  term,  (f)  interest  rate,   (g)   type   and
 5    description   of   interest   rate   (fixed,   adjustable  or
 6    renegotiable), and (h) an appropriate place for the inclusion
 7    of special facts or circumstances,  if  any.  The  Department
 8    shall  provide  an  adequate supply of forms to each recorder
 9    and registrar of titles in the State.
10    (Source: P.A. 91-555, eff. 1-1-00.)

11        (35 ILCS 200/31-46 new)
12        Sec.  31-46.  Exemption  from  tax  equal  to   corporate
13    franchise taxes paid. If a transfer of a controlling interest
14    in  a  real estate entity is taxed under this Article and the
15    real estate entity liable for the tax under this  Article  is
16    also  liable for corporate franchise taxes under the Business
17    Corporation Act of 1983 as a result of the transfer, then the
18    real estate entity is exempt  from  paying  the  tax  imposed
19    under  this  Article to the extent of the corporate franchise
20    tax paid by the  real  estate  entity  as  a  result  of  the
21    transfer.  The  exemption  shall  not  reduce the real estate
22    entity's tax liability under this Article to less than zero.

23        Section 10.  The Stock, Commodity, or Options Transaction
24    Tax Exemption Act is amended by adding Section 3 as follows:

25        (35 ILCS 820/3 new)
26        Sec. 3.  Construction of Act. Nothing in this  Act  shall
27    be  construed  as  prohibiting  or otherwise invalidating any
28    real estate transfer tax or fee authorized  or  permitted  by
29    Section  31-10  of the Property Tax Code, Section 5-1031.1 of
30    the  Counties  Code,  or  Section  8-3-19  of  the   Illinois
31    Municipal  Code.  This Section is intended as a clarification
 
                            -7-      LRB093 08674 SJM 17143 a
 1    and not as a change to existing law.

 2        Section 15.  The Counties Code  is  amended  by  changing
 3    Section 5-1031.1 as follows:

 4        (55 ILCS 5/5-1031.1)
 5        Sec. 5-1031.1. Home rule real estate transfer taxes.
 6        (a)  After  the  effective date of this amendatory Act of
 7    the 93rd General Assembly 1996 and subject to this Section, a
 8    home rule county may impose or increase a tax or other fee on
 9    the privilege  of  transferring  title  to  real  estate,  as
10    represented by the deed that is filed for recordation, and on
11    the privilege of transferring a beneficial interest in a land
12    trust  holding  legal  title  to  real  property,  and on the
13    privilege of transferring a controlling interest  in  a  real
14    estate   entity,   as   the   terms   "beneficial  interest",
15    "controlling interest", and "real estate entity" are  defined
16    in  Article 31 of the Property Tax Code as represented by the
17    trust document that is filed for recordation.  Such a tax  or
18    other  fee  on  the  privilege  of transferring title to real
19    estate,  as  represented  by  the  deed  that  is  filed  for
20    recordation,  and  on  the  privilege   of   transferring   a
21    beneficial  interest  in  a land trust holding legal title to
22    real property, as represented by the trust document  that  is
23    filed  for  recordation,  shall hereafter be referred to as a
24    real estate transfer tax.
25        (b)  Before adopting a resolution to submit the  question
26    of  imposing  or  increasing  a  real  estate transfer tax to
27    referendum,  the  corporate  authorities  shall  give  public
28    notice of and hold a public hearing on the intent  to  submit
29    the  question  to  referendum.  This hearing may be part of a
30    regularly scheduled meeting  of  the  corporate  authorities.
31    The  notice shall be published not more than 30 nor less than
32    10 days prior to  the  hearing  in  a  newspaper  of  general
 
                            -8-      LRB093 08674 SJM 17143 a
 1    circulation within the county.  The notice shall be published
 2    in the following form:
 3             Notice  of Proposed (Increased) Real Estate Transfer
 4        Tax for (commonly known name of county).
 5             A public  hearing  on  a  resolution  to  submit  to
 6        referendum  the  question  of a proposed (increased) real
 7        estate transfer tax for (legal name of the county) in  an
 8        amount  of (rate) to be paid by the buyer (seller) of the
 9        real estate transferred will be held on (date) at  (time)
10        at  (location).  The current rate of real estate transfer
11        tax imposed by (name of county) is (rate).
12             Any person desiring to appear at the public  hearing
13        and present testimony to the taxing district may do so.
14        (c)  A notice that includes any information not specified
15    and  required  by  this  Section  is  an invalid notice.  All
16    hearings shall be open to the public.  At the public hearing,
17    the corporate authorities of the  county  shall  explain  the
18    reasons  for  the  proposed or increased real estate transfer
19    tax  and  shall  permit  persons  desiring  to  be  heard  an
20    opportunity  to  present  testimony  within  reasonable  time
21    limits determined by the corporate authorities.   A  copy  of
22    the proposed ordinance shall be made available to the general
23    public for inspection before the public hearing.
24        (d)  No  home  rule county shall impose a new real estate
25    transfer tax after the effective date of this amendatory  Act
26    of  1996  without prior approval by referendum.  No home rule
27    county shall impose an increase of the rate of a current real
28    estate transfer tax without prior approval by referendum.   A
29    home rule county may impose a new real estate transfer tax or
30    may  increase an existing real estate transfer tax with prior
31    referendum approval.  The referendum shall  be  conducted  as
32    provided   in   subsection  (e).  An  existing  ordinance  or
33    resolution imposing a real estate transfer tax may be amended
34    without approval by referendum  if  the  amendment  does  not
 
                            -9-      LRB093 08674 SJM 17143 a
 1    increase the rate of the tax or add transactions on which the
 2    tax is imposed.
 3        (e)  The  home  rule county shall, by resolution, provide
 4    for submission of the proposition to the  voters.   The  home
 5    rule  county shall certify the resolution and the proposition
 6    to the proper  election  officials  in  accordance  with  the
 7    general  election law.  If the proposition is to impose a new
 8    real estate transfer tax, it shall be  in  substantially  the
 9    following form:  "Shall (name of county) impose a real estate
10    transfer  tax  at  a  rate  of (rate) to be paid by the buyer
11    (seller) of the real estate transferred, with the revenue  of
12    the proposed transfer tax to be used for (purpose)?".  If the
13    proposition  is  to increase an existing real estate transfer
14    tax, it shall be in the  following  form:   "Shall  (name  of
15    county)  impose  a  real  estate  transfer  tax  increase  of
16    (percent  increase)  to  establish a new real estate transfer
17    tax rate of (rate) to be paid by the buyer  (seller)  of  the
18    real estate transferred?  The current rate of the real estate
19    transfer   tax  is  (rate),  and  the  revenue  is  used  for
20    (purpose).  The revenue from the increase is to be  used  for
21    (purpose).".
22        If  a  majority of the electors voting on the proposition
23    vote in favor of it, the county may impose  or  increase  the
24    real estate transfer tax.
25        (f)  Nothing  in  this amendatory Act of 1996 shall limit
26    the purposes for which real estate transfer tax revenues  may
27    be collected or expended.
28        (g)  A  home  rule  county  may  not  impose  real estate
29    transfer taxes other than as authorized by this Section. This
30    Section is a denial and limitation of home  rule  powers  and
31    functions under subsection (g) of Section 6 of Article VII of
32    the Illinois Constitution.
33        (h)  Notwithstanding  subsection (g) of this Section, any
34    real estate transfer taxes adopted by a county  at  any  time
 
                            -10-     LRB093 08674 SJM 17143 a
 1    prior  to  January 17, 1997 (the effective date of Public Act
 2    89-701) and  any  amendments  to  any  existing  real  estate
 3    transfer tax ordinance adopted after that date, in accordance
 4    with  the  law  in  effect at the time of the adoption of the
 5    amendments, are not preempted by this amendatory Act  of  the
 6    93rd General Assembly.
 7    (Source: P.A. 89-701, eff. 1-17-97; 90-14, eff. 7-1-97.)

 8        Section  20.   The  Illinois Municipal Code is amended by
 9    changing Section 8-3-19 as follows:

10        (65 ILCS 5/8-3-19)
11        Sec. 8-3-19.  Home rule real estate transfer taxes.
12        (a)  After the effective date of this amendatory  Act  of
13    the 93rd General Assembly 1996 and subject to this Section, a
14    home  rule municipality may impose or increase a tax or other
15    fee on the privilege of transferring title to real estate, as
16    represented by the deed that is filed for recordation, and on
17    the privilege of transferring a beneficial interest in a land
18    trust holding legal  title  to  real  property,  and  on  the
19    privilege  of  transferring  a controlling interest in a real
20    estate  entity,   as   the   terms   "beneficial   interest",
21    "controlling  interest", and "real estate entity" are defined
22    in Article 31 of the Property Tax Code as represented by  the
23    trust  document that is filed for recordation.  Such a tax or
24    other fee on the privilege  of  transferring  title  to  real
25    estate,  as  represented  by  the  deed  that  is  filed  for
26    recordation,   and   on   the  privilege  of  transferring  a
27    beneficial interest in a land trust holding  legal  title  to
28    real  property,  as represented by the trust document that is
29    filed for recordation, shall hereafter be referred  to  as  a
30    real estate transfer tax.
31        (b)  Before  adopting a resolution to submit the question
32    of imposing or increasing  a  real  estate  transfer  tax  to
 
                            -11-     LRB093 08674 SJM 17143 a
 1    referendum,  the  corporate  authorities  shall  give  public
 2    notice  of  and hold a public hearing on the intent to submit
 3    the question to referendum.  This hearing may be  part  of  a
 4    regularly  scheduled  meeting  of  the corporate authorities.
 5    The notice shall be published not more than 30 nor less  than
 6    10  days  prior  to  the  hearing  in  a newspaper of general
 7    circulation within the municipality.   The  notice  shall  be
 8    published in the following form:
 9             Notice  of Proposed (Increased) Real Estate Transfer
10        Tax for (commonly known name of municipality).
11             A public  hearing  on  a  resolution  to  submit  to
12        referendum  the  question  of a proposed (increased) real
13        estate transfer tax for (legal name of the  municipality)
14        in  an  amount of (rate) to be paid by the buyer (seller)
15        of the real estate transferred will be held on (date)  at
16        (time)  at  (location).  The  current rate of real estate
17        transfer tax imposed by (name of municipality) is (rate).
18             Any person desiring to appear at the public  hearing
19        and present testimony to the taxing district may do so.
20        (c)  A notice that includes any information not specified
21    and  required  by  this  Section  is  an  invalid notice. All
22    hearings shall be open to the public. At the public  hearing,
23    the  corporate  authorities of the municipality shall explain
24    the  reasons  for  the  proposed  or  increased  real  estate
25    transfer tax and shall permit persons desiring to be heard an
26    opportunity  to  present  testimony  within  reasonable  time
27    limits determined by the corporate authorities. A copy of the
28    proposed ordinance shall be made  available  to  the  general
29    public for inspection before the public hearing.
30        (d)  No  home  rule  municipality shall impose a new real
31    estate  transfer  tax  after  the  effective  date  of   this
32    amendatory  Act of 1996 without prior approval by referendum.
33    No home rule municipality shall impose  an  increase  of  the
34    rate  of  a  current  real  estate transfer tax without prior
 
                            -12-     LRB093 08674 SJM 17143 a
 1    approval by referendum.  A home rule municipality may  impose
 2    a  new  real  estate transfer tax or may increase an existing
 3    real estate transfer tax with prior referendum approval.  The
 4    referendum shall be conducted as provided in subsection  (e).
 5    An  existing  ordinance  or resolution imposing a real estate
 6    transfer tax may be amended without approval by referendum if
 7    the amendment does not increase the rate of the  tax  or  add
 8    transactions on which the tax is imposed.
 9        (e)  The  home  rule  municipality  shall, by resolution,
10    provide for submission of the proposition to the voters.  The
11    home rule municipality shall certify the resolution  and  the
12    proposition  to  the  proper election officials in accordance
13    with the general election law.   If  the  proposition  is  to
14    impose  a  new  real  estate  transfer  tax,  it  shall be in
15    substantially  the   following   form:    "Shall   (name   of
16    municipality)  impose a real estate transfer tax at a rate of
17    (rate) to be paid by the buyer (seller) of  the  real  estate
18    transferred, with the revenue of the proposed transfer tax to
19    be  used  for (purpose)?".  If the proposition is to increase
20    an existing real estate transfer tax,  it  shall  be  in  the
21    following  form:  "Shall (name of municipality) impose a real
22    estate  transfer  tax  increase  of  (percent  increase)   to
23    establish a new transfer tax rate of (rate) to be paid by the
24    buyer  (seller)  of the real estate transferred?  The current
25    rate of the real estate  transfer  tax  is  (rate),  and  the
26    revenue is used for (purpose).  The revenue from the increase
27    is to be used for (purpose).".
28        If  a  majority of the electors voting on the proposition
29    vote in favor of it, the municipality may impose or  increase
30    the municipal real estate transfer tax or fee.
31        (f)  Nothing  in  this amendatory Act of 1996 shall limit
32    the purposes for which real estate transfer tax revenues  may
33    be collected or expended.
34        (g)  A  home rule municipality may not impose real estate
 
                            -13-     LRB093 08674 SJM 17143 a
 1    transfer taxes other than as authorized by this Section. This
 2    Section is a denial and limitation of home  rule  powers  and
 3    functions under subsection (g) of Section 6 of Article VII of
 4    the Illinois Constitution.
 5        (h)  Notwithstanding  subsection (g) of this Section, any
 6    real estate transfer taxes adopted by a municipality  at  any
 7    time  prior to January 17, 1997 (the effective date of Public
 8    Act 89-701) and any amendments to any  existing  real  estate
 9    transfer tax ordinance adopted after that date, in accordance
10    with  the  law  in  effect at the time of the adoption of the
11    amendments, are not preempted by this amendatory Act  of  the
12    93rd  General Assembly.
13    (Source: P.A. 89-701, eff. 1-17-97.)

14        Section  99.  Effective  date.   This  Act  takes  effect
15    October 1, 2003.".