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Senate Bill 1682 PA 94-976

2. Introduction of Speakers. Kathy Thomas, Senior Vice-President Public Finance, Oppenheimer Susan Ericson, Director of Tax Office, Kane County Clerk's Office.Lynda Given, Partner, Chapman and Cutler LLP.Todd Drafall, Director of Benefits

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Senate Bill 1682 PA 94-976

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    1. 3/27/2012 2007691 1 Senate Bill 1682 PA 94-976 PTELL and Tax Rate Increase Elections

    2. 2 Introduction of Speakers Kathy Thomas, Senior Vice-President Public Finance, Oppenheimer Susan Ericson, Director of Tax Office, Kane County Clerk’s Office. Lynda Given, Partner, Chapman and Cutler LLP. Todd Drafall, Director of Benefits & Planning, West Aurora School District 129.

    3. 3 Review of PTELL “Tax Cap”

    4. 4 Basic Tax Extension Terms EAV= Equalized Assessed Value Max Rate= Maximum Rate approved by voters for a fund Statutory Max Rate= The absolute maximum rate allowed by law for a fund. Levy Rate= Levy / EAV

    5. 5 Property Extension Limitation Law PTELL limits Tax Extension to CPI plus new growth Requires voter approval to issue debt Exceptions for Limited Tax Bonds PTELL creates a limiting rate that can not be exceeded. Lim. Rate = (Aggregate Extension X(1+CPI)) /Base EAV Base EAV = Total EAV- New Property

    6. 6 2005 Tax Levy Units of local government were allowed to levy to a voter approved maximum rate in funds that had limits. Referendums were based on single fund increases. Funds levied previously but not currently can be levied in the future.

    7. 7 2006 Tax Levy Units of local government are allowed to levy at the statutory maximum rate. Referendums are based on increasing limiting rate. Funds levied previously but not currently can be levied in the future.

    8. 8 SB 1682 or PA 94-976 What’s my new Rate?

    9. 9 Sample Maximum Rates Funds have statutory maximum rates Unit school district education fund $4.00 Non-home rule municipality corporate fund 0.4375. Fire district corporate fund 0.4000 Township road & bridge fund 0.66 Refer to the 2006 Illinois property tax rate and levy manual

    10. 10 The Problem PTELL unchanged Property Tax Code, Election Code and School Code unchanged Tax rates continue to erode Tax rate increase referendum needed to generate additional revenues Daily Herald articles question the 4 or 5 year phase in.

    11. 11 The Solution: SB 1682 Improves referendum process Retains tax rate increase phase in   for pre-March 22, 2006 referendums

    12. 12 What does SB 1682 do?

    13. 13 1. Eliminates Particular Fund Referendum Approved Tax Rate Ceilings Effective for levy year 2005 and all subsequent years Maximum rate is that set by statute Tax rates that may be increased pursuant to the General Revenue Law are unlimited Increases flexibility for tax levies Total extensions cannot exceed limiting rate

    14. 14 2. New Forms for Tax Rate Increase Propositions Beginning with November, 2006 election

    15. 15 A. Proposition to Authorize a New Tax Rate Shall _____________________ (insert legal name, number, if any, and county or counties of taxing district and geographic or other common name by which a school or community college district is known and referred to), Illinois, be authorized to levy a new tax for ______________________ purposes and have an additional tax of ____% of the equalized assessed value of the taxable property therein extended for such purposes?

    16. 16 Shall the limiting rate under the Property Tax Extension Limitation Law for ____________________ (insert the legal name, number, if any, and county or counties of taxing district and geographic or other common name by which a school or community college district is known and referred to), Illinois, be increased by an additional amount equal to ____% above the limiting rate for levy year ____ (insert the most recent levy year for which the limiting rate of the taxing district is known at the time the submission of the proposition is initiated by the taxing district) and be equal to ____% of the equalized assessed value of the taxable property therein for levy year(s) (insert each levy year for which the increase will be applicable, which years must be consecutive and not exceed 4)? B. Proposition to Increase the Limiting Rate

    17. 17 Shall the extension limitation under the Property Tax Extension Limitation Law for _____________________ (insert the legal name, number, if any, and county or counties of the taxing district and geographic or other common name by which a school or community college district is known and referred to), Illinois, be increased from the lesser of 5% or the percentage increase in the Consumer Price Index over the prior levy year to ____% (insert the percentage of the proposed increase) per year for 20__ (insert each levy year for which the increased extension limitation will apply)?

    18. 18 Uniform Supplemental Information Required to Appear on the Ballot and in Election Notices—For a New Tax Rate and Limiting Rate Increase The ballot shall have printed thereon, but not as a part of the proposition submitted, only the following supplemental information:

    19. 19 (1) The approximate amount of taxes extendable at the most recently extended limiting rate is $__________, and the approximate amount of taxes extendable if the proposition is approved is $__________.

    20. 20 (2) For the ____ (insert the first levy year for which the new rate or increased limiting rate will be applicable) levy year the approximate amount of the additional tax extendable against property containing a single family residence and having a fair market value at the time of the referendum of $100,000 is estimated to be $__________.

    21. 21 Based upon an average annual percentage increase (or decrease) in the market value of such property of ____% (insert percentage equal to the average annual percentage increase or decrease for the prior three levy years, at the time the submission of the proposition is initiated by the taxing district, in the amount of (A) the equalized assessed value of the taxable property in the taxing district less (B) the new property included in the equalized assessed value), the approximate amount of the additional tax extendable against such property for the ____ levy year is estimated to be $__________ and for the ____ levy year is estimated to be $__________.

    22. 22 (4) If the proposition is approved, the aggregate extension for ____ (insert each levy year for which the increase will apply) will be determined by the limiting rate set forth in the proposition, rather than the otherwise applicable limiting rate calculated under the provisions of the Property Tax Extension Limitation Law (commonly known as the Property Tax Cap Law).

    23. 23 The ballot shall have printed thereon, but not as a part of the proposition submitted, only the following supplemental information:

    24. 24 (1) For the ____ (insert the first levy year for which the increased extension limitation will be applicable) levy year the approximate amount of the additional tax extendable against property containing a single family residence and having a fair market value at the time of the referendum of $100,000 is estimated to be $__________.

    25. 25 (2) Based upon an average annual percentage increase (or decrease) in the market value of such property of ______% ((insert percentage equal to the average annual percentage increase or decrease for the prior three levy years (at the time the submission of the question is initiated by the taxing district) in the amount of (A) the equalized assessed value of the taxable property in the taxing district less (B) the new property included in the equalized assessed value)), the approximate amount of the additional tax extendable against such property for the ____ levy year is estimated to be $__________ and for the levy year ______ is estimated to be $__________.

    26. 26 5. Uniform Operating Rules New Tax Rates first effective for levy year during which the referendum is held cannot be levied until after the canvass

    27. 27 B. Increased Limiting Rates may be effective for the levy year prior to the year of the referendum if canvassed more than 30 days before the extension in all counties notify county clerks within 2 days after canvass may not be necessary to adopt a new levy if previously approved levy is large enough to utilize the new limiting rate

    28. 28 6. Tax Rate Increases Approved Prior to March 22, 2006 Still governed by 5-year phase in

    29. 29 7. Tax Rate Increases Approved After March 21, 2006 For a New Tax Rate Step 1: The limiting rate is calculated as though there had not been a referendum. Step 2: The amount of the voted increase is then added to that amount to produce the applicable limiting rate. For subsequent years, the limiting rate is calculated in the usual manner.

    30. 30 For an increase in the Limiting Rate Limiting Rate x EAV

    31. 31 Example of Limiting Rate Referendum Increase Limiting Rate by 30 cents

    32. 32 Shall the limiting rate under the Property Tax Extension Limitation Law for Aurora West School District Number 129, Kane County, Illinois, be increased by an additional amount equal to .30 % above the limiting rate for levy year 2005 and be equal to 3.32739% of the equalized assessed value of the taxable property therein for levy years 2006, 2007, 2008 and 2009? Ballot question example

    33. 33 The approximate amount of taxes extendable at the most recently extended limiting rate is $45,897,052.98, and the approximate amount of taxes extendable if the proposition is approved is $50,445,233.39. (2) For the 2006 levy year the approximate amount of the additional tax extendable against property containing a single family residence and having a fair market value at the time of the referendum of $100,000 is estimated to be $100. Supplemental Information

    34. 34 Calculations for example Fair market Value $100,000 EAV $33,333 2005 Limiting Rate 3.02739% 2005 Extension for $100,000 home $1,009.12 2006 Extension at new Limiting Rate $1,109.12 Increase from 2005 to 2006

    35. 35 EAV Calculation

    36. 36 Based upon an average annual percentage increase in the market value of such property of 6.31%, the approximate amount of the additional tax extendable against such property for the 2007 levy year is estimated to be $ 169.97 and for the 2008 levy year is estimated to be $244.37, and for the 2009 levy year is estimated to be $ 323.47.

    37. 37 Example Math

    38. 38 (4) If the proposition is approved, the aggregate extension for 2006, 2007, 2008, 2009 will be determined by the limiting rate set forth in the proposition, rather than the otherwise applicable limiting rate calculated under the provisions of the Property Tax Extension Limitation Law (commonly known as the Property Tax Cap Law).

    39. 39 Questions & Answers

    40. 40 Lunch provided by: Chapman and Cutler, LLP and Oppenheimer

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