SB1682 94TH GENERAL ASSEMBLY

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94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
SB1682

Introduced 2/24/2005, by Sen. Don Harmon

SYNOPSIS AS INTRODUCED:

35 ILCS 200/18-190
35 ILCS 200/18-205
35 ILCS 200/18-230

Amends the Property Tax Extension Limitation Law of the Property Tax Code. Sets forth procedures that taxing districts must follow when seeking referendum approval after April 5, 2005 to increase (i) the maximum authorized tax rate for any fund for which the taxing district is authorized by statute to levy taxes and which rate is limited by prior referendum or statutory authorization and which rate is authorized by statute to be increased for a limited or unlimited number of years by direct (and not back door) referendum, except for increases that require an equal corresponding tax rate decrease for another fund or (ii) the maximum extended tax rate applicable only to the next taxes to be either levied or extended for any fund notwithstanding the limiting rate that would otherwise be applicable for such taxing district, which maximum extended tax rate applicable to the next taxes shall not exceed the tax rate for such fund. Sets forth requirements for form of ballot propositions and referendum notices. Sets forth procedures for setting the new tax rates. Provides that a taxing district is limited to an extension limitation (instead of "extension increase") of 5% or the percentage increase in the Consumer Price Index during the 12-month calendar year preceding the levy year, whichever is less.

FISCAL NOTE ACT MAY APPLY

HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning taxes.

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

Section 1. This Amendatory Act shall be known as the PTELL Required Referendum Procedures Act.

Section 3. Findings.

(a) Approximately 80% of the State's population lives in a county in which the Property Tax Extension Limitation Law is applicable. This Law has been in effect for over 13 years, and the provisions of the Election Code, the Property Tax Code, and the various local government statutes governing tax rate increase referenda have not been updated to take into account this Law.

(b) In many circumstances there is no easily understood proposition that can be presented to a taxing district's voters to authorize a tax rate increase. Both voters and local government officials are confused and frustrated by referendum propositions that do not accurately reflect the way the Property Tax Extension Limitation Law works.

(c) This Amendatory Act requires the use of ballots that accurately tell the voter what the result of approving the proposition will be and requires all ballots and notices at tax rate increase elections to contain meaningful and consistent information about the impact of the referendum.

(d) This Amendatory Act impacts only elections held after April 5, 2005. It does not change the way prior voted increases were authorized. This Amendatory Act does not authorize any non-referendum tax rate increases. Tax rate increases beyond the limitations of the Property Tax Extension Limitation Law must continue to be approved by referendum, and this Amendatory Act applies only to taxing districts subject to the Property Tax Extension Limitation Law.

Section 5. The Property Tax Code is amended by changing Sections 18-190, 18-205, and 18-230 as follows:

(35 ILCS 200/18-190)

Sec. 18-190. Direct referendum; new rate or increased rate.

(a) If a new rate or a rate increase is authorized by statute to be imposed without referendum or is subject to a backdoor referendum, as defined in Section 28-2 of the Election Code, the governing body of the affected taxing district before levying the new rate or rate increase shall submit the new rate or rate increase to direct referendum under the provisions of Article 28 of the Election Code. Notwithstanding the requirements of any other law, all taxing districts subject to this Law shall follow the provisions of this Section whenever seeking referendum approval after April 5, 2005 to increase (i) the maximum authorized tax rate for any fund for which the taxing district is authorized by statute to levy taxes and which rate is limited by prior referendum or statutory authorization and which rate is authorized by statute to be increased for a limited or unlimited number of years by direct (and not back door) referendum, except for increases that require an equal corresponding tax rate decrease for another fund or (ii) the maximum extended tax rate applicable only to the next taxes to be either levied or extended for any fund notwithstanding the limiting rate that would otherwise be applicable for such taxing district, which maximum extended tax rate applicable to the next taxes shall not exceed the tax rate for such fund.

The proposition seeking to obtain such referendum approval for the increase described in clause (i) shall be in substantially the following form:

Shall the maximum tax rate for the ... fund of ... [insert legal name, number, if any, and county or counties of taxing district], Illinois, be increased for the ... levy year[s] [and all subsequent levy years] to ...% of the equalized assessed value of the taxable property therein instead of ...%, the otherwise applicable maximum tax rate for such fund? The votes must be recorded as "Yes" or "No".

The proposition seeking to obtain such referendum approval for the increase described in clause (ii) shall be in substantially the following form:

Shall the maximum tax rate for the ... fund of ... [insert legal name, number, if any, and county or counties of taxing district], Illinois, for the ... levy year be equal to ...% of the equalized assessed value of the taxable property therein notwithstanding the otherwise applicable limitations set forth in the Property Tax Extension Limitation Law on such tax rate? The votes must be recorded as "Yes" or "No".

The ballot for any proposition submitted pursuant to this Section shall have printed thereon, but not as a part of the proposition submitted, the following information; provided, however, that any error, miscalculation or inaccuracy in computing any amount set forth on the ballot shall not invalidate or affect the validity of any proposition approved:

(1) if the taxing district is a school district or a community college district, the geographic or other common name by which the district is known and referred to;

(2) the amount, if any, of the proposed increase in the maximum authorized tax rate for the fund referred to in the proposition;

(3) the rate at which taxes for the fund was most recently extended (at the time the submission of the proposition is initiated by the taxing district);

(4) the amount by which the proposed rate for the fund exceeds the most recently extended rate for the fund;

(5) the dollar amount of the last known aggregate extension base of the taxing district (at the time the submission of the proposition is initiated by the taxing district);

(6) the estimated dollar amount of the aggregate extension base of the taxing district if the proposition is approved, such amount computed by multiplying the amount of the last known equalized assessed value of the taxing district at the time the submission of the proposition is initiated by the taxing district by the amount from paragraph (4) and adding the product to the amount from paragraph (5); and

(7) the percentage increase proposed in the aggregate extension base of the taxing district based on the dollar amount of the last known aggregate extension base of the taxing district and the estimated dollar amount of the aggregate extension base of the taxing district if the proposition is approved. Any notice required to be published in connection with the submission of the proposition shall also contain this information and shall not be required to contain any other information. Notice of the referendum shall be published and posted as otherwise required by law, and the submission of the proposition shall be initiated as provided by law.

If a majority of all ballots cast on the proposition are in favor of the proposition, the following provisions shall be applicable to the extension of taxes for the taxing district:

(A) the tax rate approved at the referendum may be effective for the extension of taxes accruing more than 30 days after the canvass of the results of the referendum by the taxing district and shall not be effective for the extension of taxes occurring 30 days or less after such canvass;

(B) if the proposition provides for an increase in the maximum authorized tax rate, (i) the new maximum authorized tax rate for the fund shall be the rate set forth in the proposition for the levy years set forth therein regardless of whether the proposition is approved before or after the taxing district adopts or files its levy for any levy year set forth in the proposition; and (ii) the aggregate extension base of the taxing district shall be adjusted as a result of the approval of the proposition as set forth in Section 18-230;

(C) if the proposition does not provide for an increase in the maximum authorized tax rate, but provides for an increase in the maximum extended tax rate for a single levy year, (A) the maximum authorized tax rate for the fund shall not be affected, but the rate extended for the fund shall be equal to the rate set forth in the proposition for the levy year set forth in the proposition regardless of whether the proposition is approved before or after the taxing district adopts or files its levy for that levy year; and (B) the aggregate extension base of the taxing district shall be adjusted as a result of the approval of the proposition as set forth in Section 18-230.

Rates required to extend taxes for a fund on levies subject to a backdoor referendum in each year there is a levy are not new rates or rate increases under this Section if a levy has been made for the fund in one or more of the preceding 3 levy years prior to this law becoming applicable to the taxing district. Changes made by this amendatory Act of 1997 to this Section in reference to rates required to extend taxes on levies subject to a backdoor referendum in each year there is a levy are declarative of existing law and not a new enactment.

(b) Whenever other applicable law authorizes a taxing district subject to the limitation with respect to its aggregate extension provided for in this Law to issue bonds or other obligations either without referendum or subject to backdoor referendum, the taxing district may elect for each separate bond issuance to submit the question of the issuance of the bonds or obligations directly to the voters of the taxing district, and if the referendum passes the taxing district is not required to comply with any backdoor referendum procedures or requirements set forth in the other applicable law. The direct referendum shall be initiated by ordinance or resolution of the governing body of the taxing district, and the question shall be certified to the proper election authorities in accordance with the provisions of the Election Code.

(Source: P.A. 88-455; 88-670, eff. 12-2-94; 89-385, eff. 8-18-95; 89-718, eff. 3-7-97.)

(35 ILCS 200/18-205)

Sec. 18-205. Referendum to increase the extension limitation. A taxing district is limited to an extension limitation increase of 5% or the percentage increase in the Consumer Price Index during the 12-month calendar year preceding the levy year, whichever is less. A taxing district may increase its extension limitation for a current levy year if that taxing district holds a referendum before the levy date at which a majority of voters voting on the issue approves adoption of a higher extension limitation. Referenda shall be conducted at a regularly scheduled election in accordance with the Election Code provided that notice of the referendum, if held before July 1, 1999, has been given in accordance with the provisions of Section 12-5 of the Election Code in effect at the time of the bond referendum, at least 10 and not more than 45 days before the date of the election, notwithstanding the time for publication otherwise imposed by Section 12-5. Notices required in connection with the submission of public questions on or after July 1, 1999 shall be as set forth in Section 12-5 of the Election Code. The question shall be presented in substantially the following manner:

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Shall the extension limitation under the Property Tax Extension Limitation Law for ...(taxing YES district name)... be increased from ...(the lesser of 5% or the increase -----------------

in the Consumer Price Index over the prior levy year)...% to ...(percentage NO of proposed increase)...% for the ...(levy year)... levy year?

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If a majority of voters voting on the issue approves the adoption of the increase, the increase shall be applicable for the levy year specified.

(Source: P.A. 90-812, eff. 1-26-99; 91-57, eff. 6-30-99.)

(35 ILCS 200/18-230)

Sec. 18-230. Rate increase or decrease factor. When a new rate or a rate increase as described in subsection (a) of Section 18-190 or decrease first effective for the current levy year has been approved by referendum, the aggregate extension base, as adjusted in Sections 18-215 and 18-220, shall be multiplied by a rate increase (or decrease) factor. The numerator of the rate increase (or decrease) factor is the total combined rate for the funds that made up the aggregate extension for the taxing district for the prior year plus the difference between the rate set forth in the proposition approved by referendum and the rate extended for the prior year for the fund set forth in the proposition rate increase approved or minus the rate decrease approved. The denominator of the rate increase or decrease factor is the total combined rate for the funds that made up the aggregate extension for the prior year. For those taxing districts for which a new rate or a rate increase has been approved by referendum held after December 31, 1988, and that did not increase their rate to the new maximum rate for that fund, the rate increase factor shall be adjusted for 4 levy years after the year of the referendum by a factor the numerator of which is the portion of the new or increased rate for which taxes were not extended plus the aggregate rate in effect for the levy year prior to the levy year in which the referendum was passed and the denominator of which is the aggregate rate in effect for the levy year prior to the levy year in which the referendum was passed.

(Source: P.A. 87-17; 88-455.)