HB5425 103RD GENERAL ASSEMBLY

LRB103 38587 HLH 68723 b

103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB5425

Introduced 2/9/2024, by Rep. Jennifer Sanalitro

SYNOPSIS AS INTRODUCED:

35 ILCS 200/15-172.1 new

Amends the Property Tax Code. Creates a senior citizens homestead school levy exemption for property that is improved with a permanent structure that is occupied as a primary residence by an applicant who (i) is 65 years of age or older during the taxable year, (ii) has a household income that does not exceed the maximum income limitation, (iii) is liable for paying real property taxes on the property, (iv) is an owner of record of the property or has a legal or equitable interest in the property as evidenced by a written instrument, if no individual residing at the real property is or will be enrolled in a public school. 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 adding Section 15-172.1 as follows:

(35 ILCS 200/15-172.1 new)

Sec. 15-172.1. Senior Citizens Homestead Exemption School Levy Cap Law.

(a) This Section may be cited as the Senior Citizens Homestead Exemption School Levy Cap Law.

(b) As used in this Section:

"Applicant" means an individual who has filed an application under this Section.

"Base year" means the taxable year for which the applicant first qualifies and applies for the exemption, provided that, in the taxable year immediately preceding that taxable year, the property was improved with a permanent structure that was occupied as the primary residence by an applicant who was liable for paying real property taxes on the property and who was either (i) an owner of record of the property or had a legal or equitable interest in the property as evidenced by a written instrument or (ii) had a legal or equitable interest as a lessee in the parcel of property that was a single-family residence and that lease obligates the lessee to pay property taxes on the parcel.

"Base year applicable K-12 school salary levy" means the aggregate tax levy share applied to the property in the base year pursuant to Section 17-2 of the School Code that derives from: (i) faculty salaries and benefits; (ii) administrator salaries and benefits; and (iii) classified staff salaries and benefits.

"Chief county assessment officer" means the County Assessor or Supervisor of Assessments of the county in which the property is located.

"Consumer Price Index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100.

"Equalized assessed value" means the assessed value of the property as equalized by the Department of Revenue.

"Household" means the applicant, the spouse of the applicant, and all persons using the residence of the applicant as their principal place of residence.

"Household income" means the combined income of the members of a household for the calendar year preceding the taxable year.

"Income" has the same meaning as provided in Section 3.07 of the Senior Citizens and Persons with Disabilities Property Tax Relief Act, except that "income" does not include veteran's benefits.

"Incremental K-12 school salary levy" means for any year after the base year, the aggregate tax levy share applied to the property pursuant to Section 17-2 that exceeds the base year applicable K-12 school salary levy and derives from: (i) faculty salaries and benefits; (ii) administrator salaries and benefits; and (iii) classified staff salaries and benefits.

"Incremental K-12 school salary levy exemption amount" means the incremental K-12 school salary levy exemption calculated for that tax year.

"Internal Revenue Code of 1986" means the United States Internal Revenue Code of 1986 or any successor law or laws relating to federal income taxes in effect for the year preceding the taxable year.

"Life care facility that qualifies as a cooperative" means a facility as defined in Section 2 of the Life Care Facilities Act.

"Maximum income limitation" means, for taxable year 2025, $100,000. "Maximum income limitation" means, for taxable year 2026 and each taxable year thereafter, the maximum income limitation for the immediately preceding taxable year, multiplied by one plus the lesser of (i) the percentage increase, if any, in the Consumer Price Index-u during the immediately preceding taxable year or (ii) 2%. The product generated when determining the maximum income limitation for taxable year 2026 and each taxable year thereafter shall be rounded to the nearest whole dollar.

"Qualified applicant" means a person who:

(1) is 65 years of age or older during the taxable year;

(2) has a household income that does not exceed the maximum income limitation for the applicable taxable year;

(3) is liable for paying real property taxes on the property; and

(4) is an owner of record of the property or has a legal, equitable, or leasehold interest in the property, as evidenced by a written instrument.

"Qualified property: means real property that is improved with a permanent structure and:

(1) is not occupied as a permanent residence by a person who is or will be enrolled in a school district that is eligible to place a levy on the property pursuant to Section 17-2 of the School Code; and

(2) is occupied as a primary residence by a qualified applicant.

"Residence" means a principal dwelling place and appurtenant structures used for residential purposes in this State that is occupied on January 1 of the taxable year by a household, and so much of the surrounding land constituting the parcel upon which the dwelling place is situated as is used for residential purposes. If the chief county assessment officer has established a specific legal description for a portion of property constituting the residence, then that portion of property shall be deemed the residence for the purposes of this Section.

"Retirement age base amount" means the base year equalized assessed value of a residence as of the year the first homeowner of the residence, who has resided in the residence as a primary residence for a period of at least 5 years, turns age 65.

"Taxable year" means the calendar year during which ad valorem property taxes payable in the next succeeding year are levied.

(c) Beginning in taxable year 2025, a senior citizens homestead school levy exemption is granted for qualified property.

(d) In counties with 3,000,000 or more inhabitants, the amount of the exemption for all taxable years for qualifying property is the incremental K-12 school salary levy exemption amount, which may be reduced by an amount not to exceed the percentage increase, if any, in the Consumer Price Index-u for the immediately preceding taxable year. In all other counties, the amount of the exemption for qualifying residents is the Incremental K-12 school salary levy exemption amount, provided that the Incremental K-12 school salary levy exemption amount may be reduced by 1% per year, provided that the total Incremental K-12 school salary levy does not exceed 2% of the fair market value of the property.

(e) If the applicant is the surviving spouse of a person who dies on or after January 1, 2025, and if the deceased spouse was a qualified applicant at the time of his or her death, then the exemption shall carry over to the benefit of the surviving spouse if (i) the surviving spouse meets the definition of a qualified applicant in the current taxable year, without regard to whether the surviving spouse has reached the age of 65, (ii) the surviving spouse continues to occupy the property as a primary residence in the current taxable year, and (iii) no individual residing at the real property is or will be enrolled in a school district that is eligible to place a levy on the property pursuant to Section 17-2 of the School Code.

(f) Each year at the time the assessment books are certified to the county clerk, the board of review shall give to the county clerk a list of the assessed values of improvements on each parcel qualifying for this exemption that were added after the base year for this parcel and that increased the assessed value of the property. In the case of land improved with an apartment building owned and operated as a cooperative or a building that is a life care facility that qualifies as a cooperative, the maximum reduction from the equalized assessed value of the property is limited to the sum of the reductions calculated for each unit that (i) is occupied as a residence by a qualified applicant or by the surviving spouse of qualified applicant who is eligible for the exemption under this Section as provided in subsection (e) and (ii) is not occupied as a permanent residence by a person who is or will be enrolled in a school district that is eligible to place a levy on the property pursuant to Section 17-2 of the School Code. In the case of a cooperative where a homestead exemption has been granted under this Section, the cooperative association or its management firm shall credit the savings resulting from that exemption only to the apportioned tax liability of the owner who qualified for the exemption. Any person who willfully refuses to credit that savings to an owner who qualifies for the exemption is guilty of a Class B misdemeanor. When a homestead exemption has been granted under this Section and an applicant then becomes a resident of a facility licensed under the Assisted Living and Shared Housing Act, the Nursing Home Care Act, the Specialized Mental Health Rehabilitation Act of 2013, the ID/DD Community Care Act, or the MC/DD Act, the exemption shall be granted in subsequent years so long as the residence (i) continues to be occupied by the qualified applicant's spouse or (ii) if remaining unoccupied, is still owned by the qualified applicant for the homestead exemption, and no individual residing at the real property is or will be enrolled in a school district that is eligible to place a levy on the property pursuant to Section 17-2 of the School Code.

When married persons maintain separate residences, the exemption provided for in this Section may be claimed by only one of such persons and for only one residence, and provided that no individual residing at the real property is or will be enrolled in a school district that is eligible to place a levy on the property pursuant to Section 17-2 of the School Code. For taxable year 2025, in counties having less than 3,000,000 inhabitants, to receive the exemption, a person shall submit an application by February 15, 2025 to the chief county assessment officer of the county in which the property is located. In counties having 3,000,000 or more inhabitants, for taxable year 2026 and all subsequent taxable years, to receive the exemption, a person may submit an application to the Chief County Assessment Officer of the county in which the property is located during such period as may be specified by the Chief County Assessment officer. The Chief County Assessment Officer in counties of 3,000,000 or more inhabitants shall annually give notice of the application period by mail or by publication. In counties having less than 3,000,000 inhabitants, beginning with taxable year 2026 and thereafter, a county may, by ordinance, establish a date for submission of applications that is different than February 15. The applicant shall submit with the application an affidavit of the applicant's total household income, age, marital status (and if married the name and address of the applicant's spouse, if known), confirmation that no individual residing at the real property is or will be enrolled in a tax levying body eligible to place a levy on the property pursuant to Section 17-2 of the School Code for the full taxable year, and principal dwelling place of members of the household on January 1 of the taxable year. The Department shall establish, by rule, a method for verifying the accuracy of affidavits filed by applicants under this Section, and the chief county assessment officer may conduct audits of any taxpayer claiming an exemption under this Section to verify that the taxpayer is eligible to receive the exemption. Each application shall contain or be verified by a written declaration that it is made under the penalties of perjury. A taxpayer's signing a fraudulent application under this Act is perjury, as defined in Section 32-2 of the Criminal Code of 2012. The applications shall be clearly marked as applications for the Senior Citizens Homestead Exemption School Levy Cap and must contain a notice that any taxpayer who receives the exemption is subject to an audit by the Chief County Assessment Officer.

Beginning January 1, 2026, notwithstanding any other provision to the contrary, in counties having fewer than 3,000,000 inhabitants, if an applicant fails to file the application required by this Section in a timely manner and this failure to file is due to a mental or physical condition sufficiently severe to render the applicant incapable of filing the application in a timely manner, the chief county assessment officer may extend the filing deadline for a period of 3 months. In order to receive the extension provided in this paragraph, the applicant shall provide the chief county assessment officer with a signed statement from the applicant's physician, advanced practice registered nurse, or physician assistant stating the nature and extent of the condition, and that, in the physician's, advanced practice registered nurse's, or physician assistant's opinion, the condition was so severe that it rendered the applicant incapable of filing the application in a timely manner.

For purposes of this Section, a person who will be 65 years of age during the current taxable year shall be eligible to apply for the Senior Citizens Homestead Exemption School Levy Cap during that taxable year. Application shall be made during the application period in effect for the county of his or her residence.

The chief county assessment officer may determine the eligibility of a life care facility that qualifies as a cooperative to receive the benefits provided by this Section by use of an affidavit, application, visual inspection, questionnaire, or other reasonable method in order to ensure that the tax savings resulting from the exemption are credited by the management firm to the apportioned tax liability of each qualifying resident. The chief county assessment officer may request reasonable proof that the management firm has so credited that exemption. Except as provided in this Section, all information received by the chief county assessment officer or the Department from applications filed under this Section, or from any investigation conducted under the provisions of this Section, shall be confidential, except for official purposes or pursuant to official procedures for collection of any State or local tax or enforcement of any civil or criminal penalty or sanction imposed by this Act or by any statute or ordinance imposing a State or local tax. Any person who divulges any such information in any manner, except in accordance with a proper judicial order, is guilty of a class A misdemeanor. Nothing contained in this Section shall prevent the Director or chief county assessment officer from publishing or making available reasonable statistics concerning the operation of the exemption contained in this Section in which the contents of claims are grouped into aggregates in such a way that information contained in any individual claim shall not be disclosed.

(g) Each chief county assessment officer shall annually publish a notice of availability of the exemption provided under this Section. The notice shall be published at least 60 days but no more than 75 days prior to the date on which the application must be submitted to the chief county assessment officer of the county in which the property is located. The notice shall appear in a newspaper of general circulation in the county.

Notwithstanding Sections 6 and 8 of the State Mandates Act, no reimbursement by the State is required for the implementation of any mandate created by this Section.

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