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IL - Alternative homestead exemption survives constitutional challenge
Enactment of the Illinois alternative general homestead exemption from property
tax did not violate the state constitutional provisions relating to separation of
powers, uniformity of taxation, exemptions, equal protection, or due process, according
to the state appellate court. Although the challenge was aimed at the exemption
as enacted in 2004, the court noted that the exemption subsequently was substantially
reenacted.
Initially, the court noted that complaining taxpayers' multiple instances of noncompliance
with rules of appellate procedure could have made dismissal an appropriate consideration.
However, the issues raised were of significant public interest, the incomplete record
was sufficient to allow evaluation of the taxpayers' claims, and the manifest efforts
of the parties otherwise demonstrated serious thought and treatment. The issues
raised were considered on their merits.
The Illinois General Assembly did not violate the state's constitutional separation
of powers principle by permitting each county in the state to elect whether to adopt
the exemption. The General Assembly's authority to incrementally delegate its own
authority in furtherance of its enacted legislation was part and parcel of its ability
to pass any law on any given subject. There was no designation of any rule-making
authority, i.e., authority to formulate and draft a rule. Rather, the delegation
was only a "take it or leave it option" of a fully drafted and fully formulated
piece of legislation. The local option gave full reflection of the design and intent
of the legislature with regard to the exercise of its constitutional authority to
provide homestead exemptions. There was no reason to expect that allowing the local
option for the exemption would permit the legislature to make further delegations
of an unconstitutional nature. Finally, a county's selection of the alternative
general homestead exemption would not impermissibly have extraterritorial effect
in the form of resulting different tax rates in other counties.
Uniformity of Taxation
There was no violation of the uniformity of taxation clause in permitting each county
to adopt the exemption. The assumption that exemptions remained subject to the strictures
of uniformity was not well founded, and even if they were, those requirements were
not absolute and would flex to accommodate the disunity inherent in the constitutional
grant of the power to exempt. To exempt property, in its statutory context, means
to except it from the general strictures of the assessment process, which would
include the strictures of uniformity, as well. To harness exemptions to the uniformity
requirements of the constitution would undermine and defeat the basic policy, purpose,
and function of the constitutional power to exempt, as articulated on the constitutional
convention floor and the Illinois Supreme Court.
Ultra Vires Assessment Cap
There was no support for a contention that the exemption was an unconstitutional
ultra vires assessment cap, as opposed to a constitutionally authorized homestead
exemption. The term "homestead exemption" was flexible and did not hinge on formal
structure. There was no readily discernible basis on which to insist that homestead
exemptions follow any particular form in order to be considered an exemption, so
long as they comported with the purpose of reducing the tax burden on homesteads.
Equal Protection
The exemption did not violate complaining taxpayers' equal protection under the
law, including their right to not be disadvantaged by special legislation that is
passed exclusively for the benefit of a different set of persons or entities because
there was no invidious discrimination in their tax treatment. If the exemption itself
created irrational discriminations against non-homesteaders, then there could never
be a valid homestead exemption; equal protection would necessarily trump the homestead
exemption otherwise specifically provided for in the state constitution. Even if
the exemption were enacted in order to address issues in Cook County, a law could
be general and yet operative in a single place, and the exemption law allowed any
other county to opt into the alternative exemption. Even though no county other
than Cook County had a triennial assessment process, that process already had been
judicially approved.
Due Process
Enactment of the exemption six months after the end of the 2003 tax year did not
have the effect of retroactively increasing real property taxes on non-homestead
properties in a harsh and oppressive manner so as to constitute a due process violation.
The exemption did not embody any improper purpose or constitute a means of retribution,
and complaining commercial, industrial, and non-homestead property owners could
not demonstrate any lack of substantial notice or detrimental reliance. Complaining
organizational taxpayers were actively involved in the fight against the exemption,
and all the taxpayers were aware that the exemption would have an impact on their
share of the tax burden, even if they did not know to what extent.
Chicago Chamber of Commerce v. Pappas, Treasurer and Collector of Cook County, Illinois,
Illinois Appellate Court, First District, No. 1-05-1488, December 14, 2007
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