SB1791 100TH GENERAL ASSEMBLY

LRB100 05852 HLH 15877 b

100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB1791

Introduced 2/9/2017, by Sen. Steve Stadelman

SYNOPSIS AS INTRODUCED:

35 ILCS 200/16-180
35 ILCS 200/16-181 new

Amends the Property Tax Code. Provides that in all cases where a change in assessed valuation greater than $300,000 is sought, the Property Tax Appeal Board shall make an independent determination of valuation. Provides criteria for determining which comparable properties are to be used, together with requirements and criteria for making the independent determination of valuation. Makes a conforming change. Effective immediately.

FISCAL NOTE ACT MAY APPLY

HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY

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 Section 16-180 and by adding Section 16-181 as follows:

(35 ILCS 200/16-180)

Sec. 16-180. Procedure for determination of correct assessment. The Property Tax Appeal Board shall establish by rules an informal procedure for the determination of the correct assessment of property which is the subject of an appeal, subject to the requirements of Section 16-181. The procedure, to the extent that the Board considers practicable, shall eliminate formal rules of pleading, practice and evidence, and except for any reasonable filing fee determined by the Board, may provide that costs shall be in the discretion of the Board. A copy of the appellant's petition shall be mailed or sent by electronic means by the clerk of the Property Tax Appeal Board to the board of review whose decision is being appealed. In all cases where a change in assessed valuation of $100,000 or more is sought, the board of review shall serve a copy of the petition on all taxing districts as shown on the last available tax bill. The chairman of the Property Tax Appeal Board shall provide for the speedy hearing of all such appeals. Each appeal shall be limited to the grounds listed in the petition filed with the Property Tax Appeal Board. All appeals shall be considered de novo and the Property Tax Appeal Board shall not be limited to the evidence presented to the board of review of the county. A party participating in the hearing before the Property Tax Appeal Board is entitled to introduce evidence that is otherwise proper and admissible without regard to whether that evidence has previously been introduced at a hearing before the board of review of the county. Where no complaint has been made to the board of review of the county where the property is located and the appeal is based solely on the effect of an equalizing factor assigned to all property or to a class of property by the board of review, the Property Tax Appeal Board shall not grant a reduction in assessment greater than the amount that was added as the result of the equalizing factor.

The provisions added to this Section by this amendatory Act of the 93rd General Assembly shall be construed as declaratory of existing law and not as a new enactment.

(Source: P.A. 99-626, eff. 7-22-16.)

(35 ILCS 200/16-181 new)

Sec. 16-181. Property Tax Appeal Board; determinations.

(a) Subject to subsection (b), in all cases where a change in assessed valuation greater than $300,000 is sought, the Property Tax Appeal Board shall make an independent determination of and separately state its findings of fact and conclusions of law as to all of the following, in the following order:

(1) the market in which the property subject to assessment competes, the supply and demand for the property, the demand for potential uses of the property, and the economic viability of the property at the specific location within the market in which it competes;

(2) The reasonably probable use to which the property subject to assessment can be put in the immediate future and the present use of the property that results in the highest and best use, subject to all of the following:

(A) the Board shall state its findings of fact and conclusions of law as to the uses that are physically possible;

(B) the Board shall state its findings of fact and conclusions of law as to the uses that are legally permissible under applicable land use legislation, regulations, easements, ordinances, or other encumbrances existing on the tax day;

(C) the Board shall state its findings of fact and conclusions of law as to the uses that are financially feasible; for the purposes of this subparagraph (C), a use is financially feasible if it will produce income from or value to the property after considering all risks and costs necessary to create and maintain the use; in determining financial feasibility, the Board shall determine the value of the land in the market area, the value of all improvements to the land, the cost to convert or renovate the land, and existing improvements to support the use; and

(D) the Board shall state its findings of fact and conclusions of law as to the maximally productive use that meets the requirements of subparagraphs (A) to (C) of this paragraph (2) and results in the highest value that can be appropriately supported.

(3) The calculation of a replacement or reproduction construction cost for property that has the same highest and best use and the same utility, features, and age as the property subject to assessment.

(4) The comparable properties in the market in which the property subject to assessment competes that have the same highest and best use as the property subject to assessment; in determining comparable properties, the Board shall do all of the following:

(A) Determine that the information for each property considered to be comparable has been verified and accurately and completely discloses all private restrictions and covenants on the use of the property, the impact of those private restrictions and covenants, the terms of the sale, the method of financing, and market information.

(B) Include only property considered to be comparable with a use that is the same as the highest and best use of the property subject to assessment in accordance with paragraph (2) of subsection (a).

(C) Include property considered to be comparable only if the sale or rental of the property occurred under economic conditions that were not substantially different from the highest and best use of the property subject to assessment unless there is substantial evidence that the economic conditions are common at the location of the property subject to assessment.

(D) Include property considered to be comparable that was vacant at the time of sale only if there is substantial evidence to support all of the following:

(i) The cause of the vacancy is typical for marketing properties of the same class or there is substantial evidence to support a method of adjusting the value of the vacant comparable property, to support the extent of the adjustment, and to support a conclusion that the final adjusted value for the vacant property is not speculative.

(ii) The time of the vacancy is within the marketing exposure time period typical for properties of the same class or there is substantial evidence to support a method of adjusting the value of the vacant comparable property, to support the extent of the adjustment, and to support a conclusion that the final adjusted value for the vacant property is not speculative.

(iii) The vacancy does not reflect a use different from the highest and best use of the property subject to assessment.

(iv) The vacancy is not the result of economic or market conditions that are different from the property subject to assessment or there is substantial evidence to support a method of adjusting the value of the vacant comparable property, to support the extent of the adjustment, and to support a conclusion that the final adjusted value for the vacant property is not speculative.

(E) Exclude property considered to be comparable that was made subject to a private restriction or covenant in connection with the sale or rental of the property if that private restriction or covenant causes the comparable property to have a substantially impaired highest and best use as compared to the property subject to assessment or if that private restriction or covenant does not assist in the economic development of the property, does not provide a continuing benefit to the property, or materially increases the likelihood of vacancy or inactivity on the property.

(5) The basis for all of the following:

(A) Selecting the most relevant units and basis for comparison consistent with the treatment in the market of comparable property.

(B) Adjusting the comparable properties for differences in location, age, size, physical condition and characteristics, function, rental terms, financing and other income use, economic characteristics, legal characteristics, and other components that influence the value.

(C) Excluding any comparable property pursuant to paragraph of (4) of this subsection (a).

(6) The method of valuation, subject to all of the following:

(A) In determining the method of valuation, the Board shall use, weigh, and reconcile:

(i) the method of valuation used by the assessor; and

(ii) all of the following methods of valuation: comparable sales; capitalization of income; and cost less depreciation.

(B) In using, weighing, and reconciling the methods of valuation under subparagraph (A) of this paragraph (6), the Board shall state whether the information supporting each method of valuation is accurate and reliable and shall, as it considers necessary, require additional information from the parties to determine a value that is credible and not speculative.

(C) The Board shall not disregard any method of valuation identified in subparagraph (A) of this paragraph (6) absent a reasonable justification supported by substantial evidence or a stipulation that complies with the requirements of paragraph (1) of subsection (b).

(b) The Board's determinations under subsection (a) are subject to all of the following:

(1) The Board may consider the parties' stipulation to a finding of fact or conclusion of law under subsection (a) only if the parties further provide a stipulated explanation of the evidentiary basis for that finding of fact or conclusion of law that comports with the evidentiary basis required for an independent Board determination under subsection (a).

(2) For each finding of fact under subsection (a), the Board shall separately identify supporting evidence that is substantial and reliable and has been verified.

(3) If the evidence on the record does not constitute substantial evidence, the Board shall require additional evidence from the parties sufficient to support a conclusion that the Board has reached an independent determination.

(4) All of the Board's determinations under subsection (a) shall be made in accordance with generally accepted appraisal principles, including the "Uniform Standards of Professional Appraisal Practice" promulgated by the Appraisal Foundation.

(c) As used in this Section, "private restriction or covenant" means a requirement, provision, or statement in a deed, lease, or contract that restrains or limits the use of the property or requires a use of the property.

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