Legal/Legislative Scene

Governor Edgar Proposes Tax Limitation Measure By Peter M. Murphy IAPD Legal Counsel

Gov. Jim Edgar took the opportunity in his State of the State message to call for a special session of the Illinois General Assembly in order to address the issue of rapidly rising property taxes. In doing so, he stated that, "Local government for too long has had the power to raise property taxes with abandon and without accountability.

"Between 1983 and 1989 property taxes in Cook County, in the collar counties, in Madison County, in Winnebago County, in Sangamon County, and in other counties shot up well above the rate of inflation.

"In Dupage County, taxes grew by 68 percent, while inflation was only 23 percent. Statewide, taxes collected by local government jumped 52 percent, more than double the rate of inflation.

"I am asking the legislature to act swiftly so that our homcowners can see our action reflected in the tax bills they receive this summer.

"Under my proposal beginning this year, increase in property taxes will be limited to 5 percent, or the rate of inflation, whichever is less."

In addition, Edgar said, "As Governor I will not sign any bills that allow property tax increases of any kind without referendum."

The special session which Edgar called began March 5 and its only subject matter was the Property Tax Extension Limitation Act.

In a nut shell, the Property Tax Extension Limitation Act would provide for the following:

Beginning with property taxes paid in 1991, the Act limits an increase in property tax extensions to 5 percent.  Beginning with property taxes paid in 1992, the Act limits an increase in property tax extensions to 5 percent or the percentage increase in the national Consumer Price Index (CPI), whichever is less.  Beginning with property taxes paid in 1992, the act allows for additional growth in extensions beyond the limit proportionate to the amount of new property developed.  Debt service on general obligation bonds approved by referendum or issued prior to the effective date of the Act are excluded from the limitation.

 The property tax limitation currently applies to all taxing districts and can only be modified by voter approved local referendum.

Note that the Consumer Price Index has been increasing at an amount of not more than 4.1 percent and not less than 1.9 percent between the years 1983 through 1988. The total increase for this period of time is 22.7 percent which shows that the 5 percent cap can only be considered a best case scenario since this proposal would use thelesser of 5 percent or the Consumer Price Index.

State of the State Message

In addition to calling for reform of the property tax, Gov. Edgar called for lllinois to join other states in reforming its product liability laws to prevent excessive and irrational awards. In doing so, he also recommended setting limits on noneconomic damages for medical malpractice actions.

He indicated that he will be issuing an Executive Order directing the expansion of recycling efforts in state facilities and will be establishing a task force to take the lead in accomplishing the basic planning

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and decision-making in the areas of Illinois' water resources and land use priorities.

In doing so, he said, "Illinois is a state rich in natural resources, but we have seen much or our natural areas lost. Prairie lands, which once covered the state, have all but disappeared. We have lost 90 percent of our wetland resources in the 173 years since Illinois became a state. We have increasing demands for expanded recreational areas, but our efforts to respond all too often conflict with other interests."

Edgar plans to bring together all of the groups which are concerned about this state's natural resources and ask them to help us prepare an agenda for the '90s.

He further stated, "We all want a state richer in wildlife, a state with water protected and pure, a state with increased recreational opportunities for all, and a state with our natural history preserved."

We commend Gov. Edgar on his proactive stance on natural resource protection and the enhancement of recreational opportunities for all Illinoisans.

Attention IMRF Employers

House Bill 3406 (Public Act 86-1444) was passed by the Illinois General Assembly on Nov. 29, 1990, and took effect on Jan. 1,1991.

It requires IMRF employers who offer health insurance to their active employees to offer the same health insurance to retirees, disabled members and surviving spouses at the same premium rate for active employees.

Note, however, that as a general rule, Public Act 86-1444 does not require IMRF employers to pay any portion of the premium for this group. Consequently, a retiree, disabled member or surviving spouse may be required to pay both the employer and employee portions of the premium.

Employees not eligible to participate in IMRF (those working less than the 600 hour or 1,000 hour standard) are not affected.

In addition, any IMRF member who quits work, but is not entitled to an immediate receipt of an IMRF pension, is not entitled to continued insurance coverage.

Note that if the IMRF member had dependent coverage the day before he or she was removed from your payroll due to retirement or disability, then such continued insurance coverage must be offered to such dependents.

Note that continued insurance coverage is not required once the retiree becomes eligible for Medicare unless your policy provides for a Medicare supplement.

Once an IMRF member is removed from your payroll due to retirement or disability, you have 15 days to give your insurance carrier notice by certified mail, return receipt requested, that the employee is eligible to elect continued insurance coverage.

Within 15 days after you notify your insurance company, the company is required to notify the retiree, disabled member or surviving spouse of his or her eligibility for continued insurance coverage.

President Bush Announces Volunteer Protection Initiative

President Bush has announced three new initiatives to protect volunteers from unwarranted exposure to legal liability and to make insurance to protect against such liability more affordable and easily available.

Fear of potential liability is a leading cause of the cutbacks in volunteer activities. The specter of lawsuits and the high cost of insurance have led a number of schools and governmental entities to reduce extracurricular activities relying on volunteer help including the elimination of sports activities and field trips.

According to the President, the three components of the initiative will include establishment of a privately funded, nongovernment controlled center to address the concerns of volunteer organizations about tort law liability. The Center would perform numerous functions, including the following:

1) Act as a national clearinghouse for liability-related information;

2) Analyze and propose means of addressing insurance needs;

3) Assist nonprofits in reducing their exposure to legal liability;

4) Act as an advocate for nonprofits in negotiating with the insurance industry and educating Congress and state legislatures about the need for reform; and

5) Establish insurance programs and risk retention or purchasing groups to reduce costs and increase insurance availability.

Volunteers Defined

The term "volunteer" covers people engaged in a wide range of activities. It includes direct service providers, directors and officers of volunteer organizations and certain state and local governmental officials.

Model State Statute

While a number of states have already adopted some form of legislation protecting volunteers and/or volunteer organizations, the statutes vary widely in scope and effect. The adoption of a model state statute, according to the Administration, "would provide a degree of rationality and uniformity to the nationwide tort law regime."

The model state statute proposed by the President would bring nationwide protection to volunteers working with 50(c) organizations and governmental entities that use volunteers in carrying out their official functions.

This statute would also continue to permit recovery against volunteer organizations and governmental entities, to the extent permitted by law. According to the White House, such a statute would strike a balance between the need to protect those performing voluntary community service from personal liability, and the need to provide a source of recovery for those who are genuinely harmed by such activities.

Amendments to the Risk Retention Act

The President is also sending to Congress amendments to the Federal Risk Retention Act. That statute was intended to enable organizations to form purchasing groups that would help them obtain liability insurance at affordable rates. But actions by some states have inhibited such efforts.

These amendments would:

1) Assure that risk retention groups and purchasing groups are controlled by their members;

2) Specifically regulate the provision of insurance to purchasing groups; and

3) Strengthen notice and reporting requirements for risk retention groups, purchasing groups and purchasing group insurers.

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According to the President, these three initiatives will ensure that those who engage in voluntary service activities can do so without fear of legal liability and the burden of costly insurance.

The Bush initiative comes only months after the U.S. House unanimously passed a model volunteer protection act, which was later unceremoniously killed in a Senate/ House conference committee. Enactment of a model volunteer protection statute remains a top legislative priority for the National Coalition for Volunteer Protection.

Budget Address

On March 6 Gov. Edgar proposed a $216.2 million budget for the Illinois Department of Conservation (DOC) in FY92. The request represents an 8 percent decrease from the current fiscal year's appropriation. The general funds budget for the DOC is $45 million, a 10 percent decrease from this year.

Dedicated funds from the real estate transfer tax will continue to provide $1.7 million in fiscal year 1992.

Kids for Conservation will continue, but at a reduced level of $699,000.

It is expected that these funds, coupled with private monies will enable 185,000 children to participate in the program.

DOC will also continue its current grants to local governments and nonprofit organizations which will provide $2 million for the development of bicycle paths, $4.9 million for open space, $ 1 million for boat access areas, $500,000 for urban forestry, $400,000 for waterfowl habitat, and $140,000 for snowmobiling. Another $500,000 will go to private landowners for timber growers assistance.

DOC will be eliminating 77 full-time employees in its administrative offices.

In addition, DOC will be eliminating the urban fishing program which had been a joint effort between DOC and the Chicago Park District.

Costs of site management will also be cut and will be reflected in reduced months, days and hours of operation and the transfer of management responsibilities to the local level where applicable.

The FY92 budget request for the Illinois Historic Preservation Agency (IHPA) is $15 million, a 7 percent reduction from the FY91 appropriation of $ 16.5 million. The FY92 general revenue fund budget request is $ 11.8 million, 10 percent less than the FY91 appropriation of $13.1 million.

New Bill Introductions

HOUSE

HB 161 Parke — Amends the Truth in Taxation Act to require that if there is a 10 percent or more increase in a taxing district's current levy over the preceding year, then it must mail to each taxpayer upon whose real property it levies taxes a notice identical to the published notice already required under the Act for a 5 percent levy increase.

HB 220 Olson, Myron — Amends the Downstate Forest Preserve District Act. Authorizes forest preserve districts of less than 3,000,000 population (now, 100,000 or more but less than 3,000,000) to levy taxes for constructing improvements and other specified purposes.

HB 246 Stern — Amends the Park District Code. Allows a board to grant free lifetime park privileges to former board members.

SENATE

SB 85 Dudycz — Enacts the Tax Freedom Act. Provides that no taxing district, including home rule units, may adopt a property tax levy in excess of its levy in 1987, excluding a levy for bonded indebtedness incurred prior to the effective date of the Act.

Also restricts user fees and taxes other than property taxes to the 19 88 level. These limitations may be exceeded by referendum approval of 60 percent of the voters in a taxing district. Repeals the Truth in Taxation Act. Amends the Revenue Act to change the due dates for tax bills and to provide that property taxes be paid in two installments in all counties, the first installment being an estimated installment based on 50 percent of the prior year's tax bill and the second installment being the balance of the amount of taxes actually due.

Terminates equalization of assessments by the Department of Revenue. Establishes the assessed valuation of property in 1987 as the permanent assessed valuation unless the property was unimproved in 1987 in which case the property is reassessed when it is improved with a structure.

Amends the Election Code to remove the limit of the number of referenda appearing on the ballot. Effective immediately.

SB 89 Welch — Amends the Open Meetings Act. Provides that meetings of all public bodies (rather than only school boards) discussing the acquisition or sale of real estate may be closed meetings.

SSHB1/SSSB1 House Minority Leader Daniels, Senate Minority Leader Philip— Enacts the Property Tax Limitation Act which limits property tax extensions to an annual increase which is 5 percent for the 1990 levy year and for subsequent levy years is the lesser of 5 percent, or the annual increase in the Consumer Price Index unless the voters approve a greater increase. Makes certain exceptions to the limitation.

Also amends the Revenue Act of 1939 and exempts from the State Mandates Act. Also amends numerous other Acts to change the levy certification date to the last Tuesday in December. Effective Immediately.

Bill Deadlines Set

House Speaker Michael Madigan and Senate President Philip Rock have set tentative deadlines for the introduction and flow of bills in their respective chambers as follows:

Introduction of Bills

April 5 House April 12 Senate

Bills reported by committees in chamber of origin

April 26 House May 10 Senate

Third reading deadlines in chamber of origin

May 24 Both Chambers

Illinois Parks and Recreation 14 March/April 1991