Senate Bill 0508 was signed into law as Public Act 102-0519 on August 20, 2021. The legislation amended the Property Tax Extension Limitation Law (“PTELL”) to add Section 18-233, which provides that the county treasurer shall certify, on or before November 15th, the amount of refunds paid by a taxing district from certificates of error, a court order in a tax valuation objection, or from a PTAB appeal in the preceding 12-month period.  This amount will automatically be added to the subject taxing district’s total extension for the following levy, commencing with the 2021 levy year. This adjustment to the taxing district’s extension is automatic and does not impact the aggregate extension base for purposes of calculating the taxing district’s limiting rate under PTELL.

For several years, taxing districts have argued that they should be granted the authority to levy for those amounts lost due to refunds from certificates of error, tax valuation objections and PTAB appeals. This legislation does not require the taxing district to levy for said amount; instead, it simply adds a dollar for dollar addition to the taxing district’s extension for the amount of the refunds repaid in the preceding 12-month period.

It should be noted that there is pending legislation that would repeal Section 18-233 and would add a new Section 18-53 of PTELL.  Under this legislation, the refunds would not be automatically granted to taxing districts as part of the extension process; instead, a taxing district would have to levy for the lost revenue due to the refunds. The levy for the prior year’s refunds could be done over a 3-year successive period in installments. Each “recapture levy” would have to designate which year the installment was being applied to, such that a taxing district could have multiple recapture levy line items applying to different refund years. However, the aggregate all of recapture levies could never exceed 5% of the taxing district’s total levy for said year, excluding any portion of the levy for debt service. The county treasurer would not be mandated to calculate the refunds in the prior 12-month cycle as with Section 18-233, but rather taxing districts could request the county treasurer certify said amounts in connection with the recapture levy. The proposed legislation also would afford taxpayers who had obtained refunds that are the subject of a recapture levy to apply for an abatement of the property taxes applied to their property as a result of the recapture levy.

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