SB 524

Generally under current law, and subject to a number of exceptions, a city,

village, town, or county (political subdivision) may not increase its levy by a

percentage that exceeds its "valuation factor," which is defined as the greater of

either zero percent or the percentage change in the political subdivision's equalized

value due to new construction, less improvements removed. The base amount of a

political subdivision's levy, on which the levy limit is imposed, is the actual levy for

the immediately preceding year.

In 2011, the assessor for the city of Fox Lake made an error in reporting the

valuation of a tax incremental district in the city. Under current law, the error is

corrected by adjusting the taxation district's equalized value in the year after the

year in which the error was made. Because of the 2011 valuation error, should the

city impose its intended 2012 levy, the resulting tax rate would be different from

what the city intended. If the city reduces its levy, however, the levy will be less than

initially intended and the levy limit for 2013 would be based on the reduced levy for

2012. Under this bill, the levy limits applicable to the city of Fox Lake for 2013 are

increased by the amount by which the city reduces its levy from the amount it would

have levied in 2012, if not for the valuation error, to compensate for that error. The

actual levy limit increase amount is determined by the Department of Revenue.