HB3538 103RD GENERAL ASSEMBLY

LRB103 29865 HLH 56274 b

103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB3538

Introduced 2/17/2023, by Rep. Amy L. Grant

SYNOPSIS AS INTRODUCED:

35 ILCS 200/15-165
35 ILCS 200/15-169

Amends the Property Tax Code. Provides that a veteran may submit an application for the homestead exemptions for veterans with disabilities to the chief county assessment officer with respect to a specific property before the veteran purchases the property. Effective immediately.

A BILL FOR

AN ACT concerning revenue.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Property Tax Code is amended by changing Sections 15-165 and 15-169 as follows:

(35 ILCS 200/15-165)

Sec. 15-165. Veterans with disabilities. Property up to an assessed value of $100,000, owned and used exclusively by a veteran with a disability, or the spouse or unmarried surviving spouse of the veteran, as a home, is exempt. As used in this Section, a "veteran with a disability" means a person who has served in the Armed Forces of the United States and whose disability is of such a nature that the Federal Government has authorized payment for purchase or construction of Specially Adapted Housing as set forth in the United States Code, Title 38, Chapter 21, Section 2101.

The exemption applies to housing where Federal funds have been used to purchase or construct special adaptations to suit the veteran's disability.

The exemption also applies to housing that is specially adapted to suit the veteran's disability, and purchased entirely or in part by the proceeds of a sale, casualty loss reimbursement, or other transfer of a home for which the Federal Government had previously authorized payment for purchase or construction as Specially Adapted Housing.

However, the entire proceeds of the sale, casualty loss reimbursement, or other transfer of that housing shall be applied to the acquisition of subsequent specially adapted housing to the extent that the proceeds equal the purchase price of the subsequently acquired housing.

Beginning with the 2015 tax year, the exemption also applies to housing that is specifically constructed or adapted to suit a qualifying veteran's disability if the housing or adaptations are donated by a charitable organization, the veteran has been approved to receive funds for the purchase or construction of Specially Adapted Housing under Title 38, Chapter 21, Section 2101 of the United States Code, and the home has been inspected and certified by a licensed home inspector to be in compliance with applicable standards set forth in U.S. Department of Veterans Affairs, Veterans Benefits Administration Pamphlet 26-13 Handbook for Design of Specially Adapted Housing.

For purposes of this Section, "charitable organization" means any benevolent, philanthropic, patriotic, or eleemosynary entity that solicits and collects funds for charitable purposes and includes each local, county, or area division of that charitable organization.

For purposes of this Section, "unmarried surviving spouse" means the surviving spouse of the veteran at any time after the death of the veteran during which such surviving spouse is not married.

This exemption must be reestablished on an annual basis by certification from the Illinois Department of Veterans' Affairs to the Department, which shall forward a copy of the certification to local assessing officials.

Notwithstanding any other provision of law, a veteran may submit an application for the exemption under this Section to the chief county assessment officer with respect to a specific property before the veteran purchases the property. The chief county assessment officer shall process the application under this subsection within 15 days after receipt of the application and shall notify the applicant of the approval or denial of the application.

A taxpayer who claims an exemption under Section 15-168 or 15-169 may not claim an exemption under this Section.

(Source: P.A. 98-1145, eff. 12-30-14; 99-143, eff. 7-27-15.)

(35 ILCS 200/15-169)

Sec. 15-169. Homestead exemption for veterans with disabilities.

(a) Beginning with taxable year 2007, an annual homestead exemption, limited to the amounts set forth in subsections (b) and (b-3), is granted for property that is used as a qualified residence by a veteran with a disability.

(b) For taxable years prior to 2015, the amount of the exemption under this Section is as follows:

(1) for veterans with a service-connected disability of at least (i) 75% for exemptions granted in taxable years 2007 through 2009 and (ii) 70% for exemptions granted in taxable year 2010 and each taxable year thereafter, as certified by the United States Department of Veterans Affairs, the annual exemption is $5,000; and

(2) for veterans with a service-connected disability of at least 50%, but less than (i) 75% for exemptions granted in taxable years 2007 through 2009 and (ii) 70% for exemptions granted in taxable year 2010 and each taxable year thereafter, as certified by the United States Department of Veterans Affairs, the annual exemption is $2,500.

(b-3) For taxable years 2015 and thereafter:

(1) if the veteran has a service connected disability of 30% or more but less than 50%, as certified by the United States Department of Veterans Affairs, then the annual exemption is $2,500;

(2) if the veteran has a service connected disability of 50% or more but less than 70%, as certified by the United States Department of Veterans Affairs, then the annual exemption is $5,000;

(3) if the veteran has a service connected disability of 70% or more, as certified by the United States Department of Veterans Affairs, then the property is exempt from taxation under this Code; and

(4) for taxable year 2023 and thereafter, if the taxpayer is the surviving spouse of a veteran whose death was determined to be service-connected and who is certified by the United States Department of Veterans Affairs as a recipient of dependency and indemnity compensation under federal law, then the property is also exempt from taxation under this Code.

(b-5) If a homestead exemption is granted under this Section and the person awarded the exemption subsequently becomes a resident of a facility licensed under the Nursing Home Care Act or a facility operated by the United States Department of Veterans Affairs, then the exemption shall continue (i) so long as the residence continues to be occupied by the qualifying person's spouse or (ii) if the residence remains unoccupied but is still owned by the person who qualified for the homestead exemption.

(c) The tax exemption under this Section carries over to the benefit of the veteran's surviving spouse as long as the spouse holds the legal or beneficial title to the homestead, permanently resides thereon, and does not remarry. If the surviving spouse sells the property, an exemption not to exceed the amount granted from the most recent ad valorem tax roll may be transferred to his or her new residence as long as it is used as his or her primary residence and he or she does not remarry.

As used in this subsection (c):

(1) for taxable years prior to 2015, "surviving spouse" means the surviving spouse of a veteran who obtained an exemption under this Section prior to his or her death;

(2) for taxable years 2015 through 2022, "surviving spouse" means (i) the surviving spouse of a veteran who obtained an exemption under this Section prior to his or her death and (ii) the surviving spouse of a veteran who was killed in the line of duty at any time prior to the expiration of the application period in effect for the exemption for the taxable year for which the exemption is sought; and

(3) for taxable year 2023 and thereafter, "surviving spouse" means: (i) the surviving spouse of a veteran who obtained the exemption under this Section prior to his or her death; (ii) the surviving spouse of a veteran who was killed in the line of duty at any time prior to the expiration of the application period in effect for the exemption for the taxable year for which the exemption is sought; (iii) the surviving spouse of a veteran who did not obtain an exemption under this Section before death, but who would have qualified for the exemption under this Section in the taxable year for which the exemption is sought if he or she had survived, and whose surviving spouse has been a resident of Illinois from the time of the veteran's death through the taxable year for which the exemption is sought; and (iv) the surviving spouse of a veteran whose death was determined to be service-connected, but who would not otherwise qualify under item items (i), (ii), or (iii), if the spouse (A) is certified by the United States Department of Veterans Affairs as a recipient of dependency and indemnity compensation under federal law at any time prior to the expiration of the application period in effect for the exemption for the taxable year for which the exemption is sought and (B) remains eligible for that dependency and indemnity compensation as of January 1 of the taxable year for which the exemption is sought.

(c-1) Beginning with taxable year 2015, nothing in this Section shall require the veteran to have qualified for or obtained the exemption before death if the veteran was killed in the line of duty.

(d) The exemption under this Section applies for taxable year 2007 and thereafter. A taxpayer who claims an exemption under Section 15-165 or 15-168 may not claim an exemption under this Section.

(e) Except as otherwise provided in this subsection (e), each taxpayer who has been granted an exemption under this Section must reapply on an annual basis. Application must be made during the application period in effect for the county of his or her residence. The assessor or chief county assessment officer may determine the eligibility of residential property to receive the homestead exemption provided by this Section by application, visual inspection, questionnaire, or other reasonable methods. The determination must be made in accordance with guidelines established by the Department.

On and after May 23, 2022 (the effective date of Public Act 102-895) this amendatory Act of the 102nd General Assembly, if a veteran has a combined service connected disability rating of 100% and is deemed to be permanently and totally disabled, as certified by the United States Department of Veterans Affairs, the taxpayer who has been granted an exemption under this Section shall no longer be required to reapply for the exemption on an annual basis, and the exemption shall be in effect for as long as the exemption would otherwise be permitted under this Section.

(e-1) If the person qualifying for the exemption does not occupy the qualified residence as of January 1 of the taxable year, the exemption granted under this Section shall be prorated on a monthly basis. The prorated exemption shall apply beginning with the first complete month in which the person occupies the qualified residence.

(e-5) Notwithstanding any other provision of law, each chief county assessment officer may approve this exemption for the 2020 taxable year, without application, for any property that was approved for this exemption for the 2019 taxable year, provided that:

(1) the county board has declared a local disaster as provided in the Illinois Emergency Management Agency Act related to the COVID-19 public health emergency;

(2) the owner of record of the property as of January 1, 2020 is the same as the owner of record of the property as of January 1, 2019;

(3) the exemption for the 2019 taxable year has not been determined to be an erroneous exemption as defined by this Code; and

(4) the applicant for the 2019 taxable year has not asked for the exemption to be removed for the 2019 or 2020 taxable years.

Nothing in this subsection shall preclude a veteran whose service connected disability rating has changed since the 2019 exemption was granted from applying for the exemption based on the subsequent service connected disability rating.

(e-10) Notwithstanding any other provision of law, each chief county assessment officer may approve this exemption for the 2021 taxable year, without application, for any property that was approved for this exemption for the 2020 taxable year, if:

(1) the county board has declared a local disaster as provided in the Illinois Emergency Management Agency Act related to the COVID-19 public health emergency;

(2) the owner of record of the property as of January 1, 2021 is the same as the owner of record of the property as of January 1, 2020;

(3) the exemption for the 2020 taxable year has not been determined to be an erroneous exemption as defined by this Code; and

(4) the taxpayer for the 2020 taxable year has not asked for the exemption to be removed for the 2020 or 2021 taxable years.

Nothing in this subsection shall preclude a veteran whose service connected disability rating has changed since the 2020 exemption was granted from applying for the exemption based on the subsequent service connected disability rating.

(e-15) Notwithstanding any other provision of law, a veteran may submit an application for the exemption under this Section to the chief county assessment officer with respect to a specific property before the veteran purchases the property. The chief county assessment officer shall process the application under this subsection within 15 days after receipt of the application and shall notify the applicant of the approval or denial of the application.

(f) For the purposes of this Section:

"Qualified residence" means real property, but less any portion of that property that is used for commercial purposes, with an equalized assessed value of less than $250,000 that is the primary residence of a veteran with a disability. Property rented for more than 6 months is presumed to be used for commercial purposes.

"Veteran" means an Illinois resident who has served as a member of the United States Armed Forces on active duty or State active duty, a member of the Illinois National Guard, or a member of the United States Reserve Forces and who has received an honorable discharge.

(Source: P.A. 101-635, eff. 6-5-20; 102-136, eff. 7-23-21; 102-895, eff. 5-23-22; revised 9-6-22.)

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