Governor Quinn Signs SB3638, Creates Taxpayer Action Boards and Expands Exemptions

By: Ares G. Dalianis and Scott R. Metcalf

Most people have seen the television or newspaper coverage of Governor Quinn signing the legislation extending the Alternative General Homestead Exemption for another three years. The new law includes additional provisions worth examining. What are the other provisions included in the bill? And what does the Alternative General Homestead Exemption really do?

Perhaps the most interesting provision of Public Act 96-1418 creates Taxpayer Action Boards in Cook, DuPage, Kane, Kendall, Lake, McHenry and Will Counties. The purpose of the Taxpayer Action Boards is to promote “sunshine in assessments.” The Governor is given the power to appoint seven people to each Board. These members will serve two-year terms and receive no compensation, unless they are employees of the Department of Revenue. According to the legislation, these boards shall exist and function at no additional cost to the State, however, based upon their mandated responsibilities, it seems as though some funding will be necessary. The Boards are tasked with the following responsibilities:

• Conduct a study and issue a report within six months analyzing the mass assessment of residential property in each county;
• Maintain a website cataloguing taxpayer assistance information in each county; and
• Oversee implementation of P.A. 96-122, which requires counties other than Cook to (1) post the board of review’s rules of procedures online, (2) post an explanation of equalization factors online and (3) include a wide range of information on reassessment notices mailed taxpayers.

P.A. 96-1418 also affects a number of exemptions, including the Returning Veteran’s Exemption, the Disabled Veteran’s Exemption and the Senior Citizen’s Homestead Exemption. The Equalized Assessed Value (EAV) of the homes of veterans returning from a conflict will be reduced by $5,000 for an additional year. Veteran’s suffering a 70% disability will be entitled to a $5,000 reduction in the EAV of their homes, while veterans suffering a 50% to 70% disability will be entitled to a $2,500 reduction in EAV. Finally, senior citizens in Cook County will now be required to apply annually for their homestead exemption, which reduces the EAV of their homes by an additional $4,000.

Like these other exemptions, the Alternative General Homestead Exemption reduces the taxable value of property. For the exemption to be applicable, a county must adopt an ordinance implementing the exemption. To date only Cook County has adopted such an ordinance. The Alternative General Homestead Exemption limits the growth in EAV since tax year 2002. The limit is the lesser of the actual growth or 7% per year, up to a maximum amount. P.A. 96-1418 extends this exemption for an additional three years. The exemption is phased out between tax years 2009 and 2011 in the City of Chicago, with the maximum exemption amount declining from $20,000 in EAV, to $16,000 in EAV, to $12,000 in EAV in each respective year. In the north suburbs, the exemption is phased out between tax years 2010 and 2012 at the same amounts. And in the south suburbs, the exemption is phased out between tax years 2011 and 2013 at the same amounts. The maximum General Homestead Exemption in all counties beginning with tax year 2009 is $6,000 in EAV.

The changes to the various homeowner exemptions are not likely to have a significant impact on the levying ability of school districts and other taxing agencies. They will, however, add a further level of complexity to the property tax system and may lead to the issuance of additional certificates of error as both taxing authorities and taxpayers learn of these new exemptions and see that they are fully implemented. We will monitor the creation of the Taxpayer Action Boards to determine what affect, if any, they will have on the property tax assessment process.