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Proviso Twp. High School Dist. v. Hynes

OPINION FILED NOVEMBER 13, 1980.

PROVISO TOWNSHIP HIGH SCHOOL DISTRICT NO. 209 ET AL., APPELLEES AND CROSS-APPELLANTS,

v.

THOMAS C. HYNES, ASSESSOR, ET AL., APPELLANTS AND CROSS-APPELLEES.



Appeal from the Circuit Court of Cook County, the Hon. James C. Murray, Judge, presiding.

MR. JUSTICE WARD DELIVERED THE OPINION OF THE COURT:

The subject of this appeal is the validity under article IX, section 6, of the Illinois Constitution of two recently enacted provisions of the Revenue Act of 1939 which grant exemptions from real estate taxes: section 19.23-1a, as amended and effective January 31, 1980 (Pub. Act 81-1223), referred to hereafter as the "annual homestead exemption," and section 19.23-4, which was enacted September 26, 1979, and became effective July 1, 1980 (Ill. Rev. Stat. 1979, ch. 120, par. 500.23-4), referred to hereafter as the "homestead improvement exemption."

Plaintiff Proviso Township High School District No. 209 filed a class action in the circuit court of Cook County against the defendants Thomas C. Hynes, Edward J. Rosewell, and Stanley J. Kusper, who are respectively the assessor, the treasurer and ex officio collector, and the clerk of Cook County, seeking a declaration that the provision for the homestead-improvement exemption was unconstitutional and that the provision for the annual homestead exemption was unconstitutional as applied in Cook County.

The circuit court rendered a judgment adverse to the defendants. They brought an appeal under Rule 302(a) (73 Ill.2d R. 302(a)), and the plaintiffs cross-appealed from a portion of the judgment.

Section 19.23-1a, the annual homestead exemption, is applicable to real estate taxes both for 1978 and 1979, but only the taxes for the latter year are involved in this proceeding. On August 4 we entered an order staying the judgment of the circuit court pending final determination of this appeal, and authorizing the defendants to collect the second installment of the real estate taxes for 1979 on the same basis that was used for the 1978 taxes, subject to any later adjustment which might be required if our decision should be in favor of the plaintiffs.

The complaint alleges that the named plaintiff receives a portion of the proceeds of real property taxes collected in Cook County. The plaintiff filed its action individually and on behalf of all other governmental bodies in Cook County which are similarly situated. The circuit court certified a class of all school districts in the county, and allowed 34 of these to be made additional parties plaintiff, but the court declined to include other taxing bodies in the class, since there was no record that the latter had been given notice of the action. While there may be a question as to the plaintiff's standing to maintain this action, the defendants have not raised it, and we elect to consider the case on its merits.

We turn first to the annual homestead exemption provision, section 19.23-1a, which is described as follows:

"An annual homestead exemption limited, except as hereinafter provided with relation to cooperatives, to a reduction in the equalized assessed value of homestead property equal to the increase in such value for 1978 and subsequent years above the equalized assessed value of such property for 1977, up to a maximum of $1,500 for 1978 and $3,000 for 1979 and subsequent years.

`Homestead property' shall include residential property that is occupied by the owner or owners thereof as his or their principal dwelling place or, in counties where real property is classified for purposes of taxation in accordance with Section 4 of Article IX of the Constitution, residential properties classified in the lowest assessment classification. In the case of land improved with an apartment building owned and operated as a cooperative, the maximum reduction from the equalized assessed value shall be limited to the increase in such value for 1978 and subsequent years above the equalized assessed value of such property for 1977, up to a maximum of $1,500 for 1978 and $3,000 for 1979 and subsequent years, multiplied by the number of apartments occupied by a person or persons who is liable, by contract with the owner or owners of record, for paying real estate taxes on the property and is an owner of record of a legal or equitable interest in the cooperative apartment building, other than a leasehold interest.

Where married persons maintain and reside in separate residences qualifying as homestead property under this Section, each residence shall receive 50% of the total reduction in equalized assessed valuation provided by this Section.

In lieu of procedures for exemptions required elsewhere in this Act, the assessor, county assessor, supervisor of assessments or board of assessors may determine the eligibility of residential property to receive the homestead exemption provided by this Section by application, visual inspection, questionnaire or other reasonable methods. Such determination shall be made in accordance with guidelines established by the Department of Revenue." Pub. Act. 81-1223.

The language italicized in the above quotation was added by the amendment of 1980.

Section 19.23-1a was enacted in 1978. (1978 Ill. Laws 1969.) The definition in the second paragraph of the term homestead then read: "`Homestead property' shall include property that is owned and used exclusively for a residential purpose." An amendment in the following year (1979 Ill. Laws 1562) replaced that definition with the following: "`Homestead property' shall include residential property that is occupied by the owner or owners thereof as his or their principal dwelling place." This amendment also added the third paragraph of the section.

Cook County has a population of more than 200,000, and is thus empowered by article IX, section 4(b), of the Constitution to classify real property for purposes of taxation. It was stipulated by the parties that an ordinance of Cook County presently in effect divides real property into six assessment classifications, in each of which property is to be assessed at a specified percentage of market value, ranging from 16% to 40%.

One of the two classes which fall in the 16% bracket is class 2, which includes "real estate used as a farm, or real estate used for residential purposes when improved with a house, an apartment building of not more than six living units, or residential condominium, a residential co-operative or a government-subsidized housing project if required by statute to be assessed in the lowest assessment category."

It appears from the stipulation that the assessor has established some 99 subclasses within class 2 based on the physical characteristics of improvements on property. These subclasses are not mentioned in the county ordinance, but are apparently an administrative creation, and the stipulation does not disclose the purpose for which they were devised. It was stipulated that the assessor will only consider eligible for the annual homestead exemption property which falls within certain of these subclasses, 17 in number, which are enumerated in the stipulation. The subclasses which will not be considered eligible are listed in the defendants' answer. These include farm buildings not used as residences, such as silos.

It was also stipulated that the defendants do not maintain records which indicate the ownership and occupancy of all units or parcels within the county, that the assessor will not endeavor to ascertain occupancy by requiring an application or by inspection, questionnaire, or otherwise, and that he will make his determination of eligibility without regard to ...


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