<< Back04.04.2010Commercial State Legislative Report

• Prepared for the Northern Illinois Commercial Association of REALTORS The 2010 spring session of the Illinois General Assembly is under way and there are several bills that affect Commercial Real Estate, including the following: Senate Bill 3334 deals with the issue of property tax valuation of foreclosed properties. Under current law, distressed property sales-like short sales and foreclosures--are not counted in determining assessed values in calculating the property tax multiplier.
  
  IAR supports amending the Property Tax Code to provide that the impact that distressed sales have on property values is reflected in the assessment of property for tax purposes. This bill states that boards of review and the Property Tax Appeal Board shall consider "compulsory sales" of comparable properties for the purpose of revising and correcting assessments. The bill does not apply to Cook County as it has a unique and complex system that classifies property for tax purposes. As introduced, this bill only applied to residential properties. At IAR's urging, the bill was amended to include ALL properties. This bill has passed the Senate and is currently assigned to the House Cities and Villages Committee.
  
  Senate Bill 2572 would have allowed the Illinois Department of Public Health to order the evacuation and sealing of commercial and public buildings, the immediate suspension of licensed persons involved in improper removal of asbestos, and the authority to order persons to immediately cease activities--ALL WITHOUT NOTICE OR HEARING. This new power would be used if the Department determined that asbestos is being removed improperly. It was troubling that this proposal granted Public Health such sweeping powers since their regulatory statute is intended to only license and regulate persons/firms who perform asbestos inspection and abatement work. The IEPA is the agency with powers for regulation of asbestos during demolition, renovation and disposal. This legislation, if it had been advanced, would have created confusion and duplication and overreaching regulatory powers. IAR expressed these concerns to the chief sponsor of the bill and the bill was held in Committee. Senate Bill 3001 would have allowed all counties to do a transfer fee of $5, the proceeds of which would go for affordable housing programs.
  
  In a Senate Committee where the bill was heard on February 24th, IAR pointed out in testimony that there already exists an allocation for affordable housing programs in the state transfer tax of $1 per thousand, with which 25 percent of those proceeds go to affordable housing. AND there’s a 10 dollar transfer fee already in effect (collected on all transfers in Illinois) that goes for an affordable rental housing program in Illinois. On Thursday, March 11th, this bill was defeated in the full Senate on a vote of 30No and 20Yes, the rest voting present or were absent. SB 3747 is the “Transfer Fee Covenant Act” and it’s intended to deal with a new concept taking shape on the West Coast whereby a property developer records a covenant requiring all future buyers of the property to pay a fee on the transfer of the property. IAR opposes that kind of practice. This bill, drafted and introduced by IAR, would essentially prohibit that practice. IAR is pleased to report that on March 15th, the bill passed the Senate on a vote of 46-0. The bill is currently assigned to the House Judiciary Committee.
  
  Senate Bill 2575 would amend the Property Tax Extension Limitation Law in the Property Tax Code. This law is otherwise known as the “Property Tax Caps” law. The bill would exempt, from the definition of "aggregate extension", all contributions to a pension fund created under the Illinois Pension Code. IAR usually opposes new exemptions to the Tax Caps law because it will mean that property tax payers would ultimately pay for a larger share of the cost of that function. This bill has not moved out of Senate Committee. On April 22nd, The Senate approved Senate Bill 2505 on a roll call vote of 37-11-1. This measure, sponsored by Senator Michael Frerichs, adds language to the Illinois Property Tax Code to allow the creation of a new type of Special Service Area. A municipality or county would be permitted to establish a “green energy special service area” for the purpose of financing energy efficiency improvements, renewable energy improvements or water use improvements (defined in the legislation).
  
  The Illinois Finance Authority is permitted to assist local governments by establishing and implementing a program to issue its bonds secured by the SSA agreements for funding the projects. A green energy SSA can ONLY include property for which each owner has executed a contract or agreement consenting to the inclusion of the property within the green energy SSA and to the amount of special tax to be levied and extended against the property for such improvements. These contracts or agreements must be recorded in the county recorder’s office. Each owner within the green energy SSA is permitted to arrange for specific energy efficiency or renewable energy improvements and may obtain financing for those improvements through a specified process. The assessments levied on those participating property owners serves as the revenue stream for the bonds issued by the local government or the Authority. The IAR is NEUTRAL on this initiative which will now be considered by the House.
  
  
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