SB2194 EnrolledLRB097 10235 HLH 50431 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4
ARTICLE 1. CIGARETTE MACHINE OPERATORS' OCCUPATION TAX ACT

 
5    Section 1-1. Short title. This Act may be cited as the
6Cigarette Machine Operators' Occupation Tax Act.
 
7    Section 1-5. Definitions. As used in this Act:
8    "Business" means any trade, occupation, activity or
9enterprise engaged in for the purpose of selling cigarettes in
10this State.
11    "Cigarette" means any roll for smoking made wholly or in
12part of tobacco, irrespective of size or shape and whether or
13not such tobacco is flavored, adulterated or mixed with any
14other ingredient, and the wrapper or cover of which is made of
15paper or any other substance or material except tobacco.
16    "Cigarette machine" means any machine, equipment or device
17used to make or fabricate cigarettes.
18    "Cigarette machine" shall not include a handheld manually
19operated device used by consumers to make roll-your-own
20cigarettes for personal consumption.
21    "Cigarette machine operator" means any person who is
22engaged in the business of operating a cigarette machine in

 

 

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1this State and is licensed by the Department as a cigarette
2machine operator under Section 1-15 of this Act.
3    "Contraband cigarettes" means:
4        (1) cigarettes for which any required federal taxes
5    have not been paid;
6        (2) cigarettes that do not meet the requirements of
7    this Act;
8        (3) cigarettes that are made or fabricated by a person
9    holding a cigarette machine operator license under Section
10    1-15 of this Act and that are in the possession of
11    manufacturers, distributors, secondary distributors,
12    manufacturer representatives, or retailers, all as defined
13    by the Cigarette Tax Act, for the purpose of resale;
14        (4) cigarettes that are in the possession of a
15    cigarette machine operator and that are made or fabricated
16    with cigarette tubes that do not meet the requirements of
17    Section 1-30 of this Act;
18        (5) cigarettes that are in the possession of an
19    individual and that are made or fabricated with cigarette
20    tubes that do not meet the requirements of Section 1-30 of
21    this Act, unless the cigarettes were made or fabricated by
22    an individual for the individual's own use and consumption
23    without the aid or use of a cigarette machine in the
24    possession of a cigarette machine operator holding a
25    license under Section 1-15 of this Act; or
26        (6) cigarettes that (i) are made or fabricated by a

 

 

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1    person holding a cigarette machine operator license under
2    Section 1-15 of this Act, (ii) are in the possession of a
3    person, and (iii) contain tobacco of a brand family and
4    manufacturer that are not identified on the State of
5    Illinois Directory of Participating Manufacturers or the
6    Illinois Directory of Compliant Non-Participating
7    Manufacturers maintained by the Office of the Attorney
8    General.
9    "Department" means the Department of Revenue.
10    "Operate or operating a cigarette machine" means to possess
11a cigarette machine for the purpose of engaging in the business
12of making the cigarette machine available to individuals who
13use the cigarette machine to make or fabricate cigarettes for
14their own use or consumption, and not for resale. For purposes
15of this Act, the cigarette machine is operated by the person
16possessing the cigarette machine. For purposes of this Act,
17cigarettes made or fabricated by the use of a cigarette machine
18in the possession of a cigarette machine operator holding a
19license under Section 1-15 of this Act are considered to be
20made or fabricated by the person holding the cigarette machine
21operator license and not the individual.
22    "Original package" means the individual packet, box, or
23other container used to contain and convey cigarettes to the
24consumer.
25    "Person" means any natural individual, firm, partnership,
26association, joint stock company, joint adventure, public or

 

 

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1private corporation, however formed, limited liability
2company, or a receiver, executor, administrator, trustee,
3guardian, or other representative appointed by order of any
4court.
5    "Place of business" means any place where cigarettes are
6made or fabricated by a cigarette machine operator holding a
7license under Section 1-15 of this Act.
8    "Possess or possessing a cigarette machine" means to own,
9lease, rent or have on one's premises a cigarette machine for
10the purpose of engaging in the business of making the cigarette
11machine available to individuals who use the cigarette machine
12to make or fabricate cigarettes for their own use or
13consumption, and not for resale.
14    "Prior continuous compliance taxpayer" means any person
15who is licensed under this Act and who, having been a licensee
16for a continuous period of 5 years, is determined by the
17Department not to have been either delinquent or deficient in
18the payment of tax liability during that period or otherwise in
19violation of this Act. "Prior continuous compliance taxpayer"
20also means any taxpayer who has, as verified by the Department,
21continuously complied with the condition of his bond or other
22security under provisions of this Act for a period of 5
23consecutive years.
24    "Retailer" means any person who engages in the making of
25transfers of the ownership of, or title to, tobacco or
26cigarettes to a purchaser for use or consumption and not for

 

 

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1resale in any form, for a valuable consideration.
2    "Sale" means any transfer, exchange, or barter in any
3manner or by any means whatsoever for a consideration, and
4includes and means all sales made by any person.
 
5    Section 1-10. Tax imposed.
6    (a) Beginning August 1, 2012, a tax is imposed upon all
7persons engaged in the business of operating a cigarette
8machine. The tax is imposed at the rate of 99 mills per
9cigarette made or fabricated by a cigarette machine possessed
10by a cigarette machine operator.
11    (b) If, after July 1, 2012, the General Assembly increases
12the rate of tax imposed under Section 2 of the Cigarette Tax
13Act, then the tax imposed under subsection (a) of this Section
14shall be increased by the same amount beginning on the
15effective date of the Cigarette Tax increase, but not earlier
16than August 1, 2012.
17    (c) The tax herein imposed shall be in addition to all
18other occupation or privilege taxes imposed by the State of
19Illinois or by any municipal corporation or political
20subdivision thereof.
21    (d) Persons subject to the tax imposed by this Act may
22reimburse themselves for their tax liability under this Act by
23separately stating such tax, less any credit the machine
24operator claims under subsection (b) of Section 1-40 of this
25Act on tobacco sold to and used by users of a cigarette machine

 

 

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1to make or fabricate cigarettes, as an additional charge to
2users of cigarette machines.
3    (e) If any cigarette machine operator collects an amount
4(however designated) which purports to reimburse such operator
5for his or her cigarette machine operators' occupation tax
6liability under this Act with respect to cigarettes that are
7not subject to cigarette machine operators' occupation tax
8under this Act, or if any cigarette machine operator, in
9collecting an amount (however designated) which purports to
10reimburse such operator for his or her cigarette machine
11operators' occupation tax liability measured by cigarettes
12made or fabricated by a cigarette machine that are subject to
13tax under this Act, collects more from the customer than the
14cigarette machine operators' cigarette machine operators'
15occupation tax liability in the transaction, the customer shall
16have a legal right to claim a refund of that amount from the
17cigarette machine operator. However, if such amount is not
18refunded to the customer for any reason, the cigarette machine
19operator is liable to pay such amount to the Department.
 
20    Section 1-15. Cigarette machine operator license. No
21person may engage in the business of operating a cigarette
22machine in this State on or after August 1, 2012 without first
23having obtained a license from the Department. Application for
24a license shall be made to the Department on a form furnished
25and prescribed by the Department. Each applicant for a license

 

 

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1under this Section shall furnish the following information to
2the Department on a form signed and verified by the applicant
3under penalty of perjury:
4        (1) the name and address of the applicant;
5        (2) the address of the location at which the applicant
6    proposes to engage in the business of operating a cigarette
7    machine in this State; and
8        (3) any other additional information the Department
9    may reasonably require.
10    The annual license fee payable to the Department for each
11cigarette machine operator license is $250. Each applicant for
12a license shall pay that fee to the Department at the time of
13submitting an application for license to the Department.
14    Every applicant who is required to procure a cigarette
15machine operator license shall file with his or her application
16a joint and several bond. Such bond shall be executed to the
17Department of Revenue, with good and sufficient surety or
18sureties residing or licensed to do business within the State
19of Illinois, in the amount of $2,500, conditioned upon the true
20and faithful compliance by the licensee with all of the
21provisions of this Act. Such bond, or a reissue thereof, or a
22substitute therefore, shall be kept in effect during the entire
23period covered by the license. A separate application for
24license shall be made, a separate annual license fee paid, and
25a separate bond filed, for each place of business at which a
26person who is required to procure a cigarette machine operator

 

 

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1license under this Section proposes to engage in business as a
2cigarette machine operator in Illinois under this Act.
3    The following are ineligible to receive a cigarette machine
4operator license under this Act:
5        (1) a person who is not of good character and
6    reputation in the community in which he resides;
7        (2) a person who has been convicted of a felony under
8    any federal or State law, if the Department, after
9    investigation and a hearing, if requested by the applicant,
10    determines that such person has not been sufficiently
11    rehabilitated to warrant the public trust;
12        (3) a corporation, if any officer, manager, or director
13    thereof, or any stockholder or stockholders owning in the
14    aggregate more than 5% of the stock of such corporation,
15    would not be eligible to receive a license under this Act
16    for any reason; or
17        (4) a person, or any person who owns more than 15% of
18    the ownership interests in an entity or a related party,
19    who:
20            (A) owes, at the time of application, any
21        delinquent cigarette taxes or tobacco taxes that have
22        been determined by law to be due and unpaid, unless the
23        license applicant has entered into an agreement
24        approved by the Department to pay the amount due;
25            (B) has had a license under this Act, the Cigarette
26        Tax Act, the Cigarette Use Tax Act, or the Tobacco

 

 

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1        Products Tax Act of 1995 revoked within the past 2
2        years by the Department for misconduct relating to
3        stolen or contraband cigarettes or has been convicted
4        of a State or federal crime, punishable by imprisonment
5        of one year or more, relating to stolen or contraband
6        cigarettes;
7            (C) has been found by the Department, after notice
8        and a hearing, to have imported or caused to be
9        imported into the United States for sale or
10        distribution any cigarette in violation of 19 U.S.C.
11        1681a;
12            (D) has been found by the Department, after notice
13        and a hearing, to have imported or caused to be
14        imported into the United States for sale or
15        distribution, or manufactured for sale or distribution
16        in the United States, any cigarette that does not fully
17        comply with the Federal Cigarette Labeling and
18        Advertising Act (15 U.S.C. 1331, et seq.); or
19            (E) has been found by the Department, after notice
20        and a hearing, to have made a material false statement
21        in the application or has failed to produce records
22        required to be maintained by this Act.
23     The Department, upon receipt of an application, license
24fee, and bond in proper form from a person who is eligible to
25receive a cigarette machine operator license under this Act,
26shall issue to such applicant a license in a form as prescribed

 

 

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1by the Department. That license shall permit the applicant to
2whom it is issued to engage in business as a cigarette machine
3operator at the place shown in his or her application. All
4licenses issued by the Department under this Section shall be
5valid for a period not to exceed one year after issuance unless
6sooner revoked, canceled, or suspended as provided in this Act.
7No license issued under this Section is transferable or
8assignable. Such license shall be conspicuously displayed in
9the place of business conducted by the licensee in Illinois
10under such license. No cigarette machine operator acquires any
11vested interest or compensable property right in a license
12issued under this Act.
13    A cigarette machine operator shall notify the Department of
14any change in the information contained on the application
15form, including any change in ownership, and shall do so within
1630 days after that change.
17    Every prior continuous compliance taxpayer shall be exempt
18from all requirements under this Section concerning the
19furnishing of bond as a condition precedent to his being
20authorized to engage in the business licensed under this Act.
21This exemption shall continue for each prior continuous
22compliance taxpayer until such time as he may be determined by
23the Department to be delinquent in the filing of any returns,
24or is determined by the Department (either through the
25Department's issuance of a final assessment which has become
26final under the Act, or by the taxpayer's filing of a return

 

 

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1which admits tax to be due that is not paid) to be delinquent
2or deficient in the paying of any tax under this Act, at which
3time that taxpayer shall become subject to the bond
4requirements of this Section and, as a condition of being
5allowed to continue to engage in the business licensed under
6this Act, shall be required to furnish bond to the Department
7in such form as provided in this Section. The taxpayer shall
8furnish such bond for a period of 2 years, after which, if the
9taxpayer has not been delinquent in the filing of any returns,
10or delinquent or deficient in the paying of any tax under this
11Act, the Department may reinstate that person as a prior
12continuance compliance taxpayer. Any taxpayer who fails to pay
13an admitted or established liability under this Act may also be
14required by the Department to post bond or other acceptable
15security with the Department guaranteeing the payment of that
16admitted or established liability.
17    The Department shall discharge any surety and shall release
18and return any bond or security deposited, assigned, pledged,
19or otherwise provided to it by a taxpayer under this Section
20within 30 days after:
21        (1) that taxpayer becomes a prior continuous
22    compliance taxpayer; or
23        (2) that taxpayer has ceased to collect receipts on
24    which he is required to remit tax to the Department, has
25    filed a final tax return, and has paid to the Department an
26    amount sufficient to discharge his remaining tax liability

 

 

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1    as determined by the Department under this Act. The
2    Department shall make a final determination of the
3    taxpayer's outstanding tax liability as expeditiously as
4    possible after his final tax return has been filed. If the
5    Department cannot make the final determination within 45
6    days after receiving the final tax return, it shall so
7    notify the taxpayer within that period, stating its reasons
8    therefore.
9    Any person aggrieved by any decision of the Department
10under this Section may, within 20 days after receiving notice
11of the decision, protest and request a hearing. Upon receiving
12a written request for a hearing, the Department shall give
13notice to the person requesting the hearing of the time and
14place fixed for the hearing and shall hold a hearing in
15conformity with the provisions of this Act and then issue its
16final administrative decision in the matter to that person. In
17the absence of a protest and request for a hearing within 20
18days, the Department's decision shall become final without any
19further determination being made or notice given.
 
20    Section 1-20. Revocation, cancellation, or suspension of
21license. The Department may, after notice and hearing as
22provided for by this Act, revoke, cancel, or suspend the
23license of any cigarette machine operator for the violation of
24any provision of this Act, or for noncompliance with the
25provisions of this Act, or for any noncompliance with any

 

 

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1lawful rule or regulation promulgated by the Department under
2this Act, or because the licensee is determined to be
3ineligible for a cigarette machine operator's license for any
4one or more of the reasons provided for in Section 1-15 of this
5Act.
6    Any cigarette machine operator aggrieved by any decision of
7the Department under this Section may, within 20 days after
8notice of the decision, protest and request a hearing. Upon
9receiving a written request for a hearing, the Department shall
10give notice in writing to the cigarette machine operator
11requesting the hearing that contains a statement of the charges
12preferred against the cigarette machine operator and that
13states the time and place fixed for the hearing. The Department
14shall hold the hearing in conformity with the provisions of
15this Act and then issue its final administrative decision in
16the matter to the cigarette machine operator. In the absence of
17a written protest and request for a hearing within 20 days, the
18Department's decision shall become final without any further
19determination being made or notice given.
20    No license so revoked shall be reissued to any cigarette
21machine operator for a period of 6 months after the date of the
22final determination of such revocation. No license shall be
23reissued at all so long as the person who would receive the
24license is ineligible to receive a cigarette machine operator's
25license under this Act for any one or more of the reasons
26provided for in Section 1-15 of this Act.

 

 

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1    The Department, upon complaint filed in the circuit court,
2may, by injunction, restrain any person who fails or refuses to
3comply with any of the provisions of this Act from acting as a
4cigarette machine operator in this State.
 
5    Section 1-25. Restriction on tobacco used in cigarette
6machines.
7    (a) Only roll-your-own tobacco products of a brand family
8and manufacturer identified on the State of Illinois Directory
9of Participating Manufacturers or the Illinois Directory of
10Compliant Non-Participating Manufacturers maintained by the
11Office of the Attorney General may be sold by cigarette machine
12operators to customers for use in cigarette machines possessed
13by the cigarette machine operator.
14    (b) Only roll-your-own tobacco products meeting the
15requirements of subsection (a) and purchased at the place of
16business of the cigarette machine operator may be used in a
17cigarette machine at that location.
 
18    Section 1-30. Cigarette tubes used in cigarette machines.
19    (a) All cigarette tubes used in cigarette machines in the
20possession of cigarette machine operators licensed under
21Section 1-15 of this Act shall be constructed of paper of a
22type determined by the Attorney General, pursuant to rules
23promulgated by the Attorney General under the provisions of the
24Administrative Procedure Act, to reduce the likely ignition

 

 

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1propensity of cigarettes made by those tubes.
2    (b) A cigarette machine operator is not required to comply
3with subsection (a) of this Section until the Attorney General
4has promulgated rules implementing subsection (a) and the rules
5have become effective. The effective date for such rules shall
6be no earlier than January 1, 2014.
 
7    Section 1-35. Cigarette machine operators; sale of
8cigarettes.
9    (a) The cigarette machine operator is responsible for
10complying with all State and federal laws and regulations
11regarding packaging and labeling of original packages of
12cigarettes.
13    (b) A person possessing a cigarette machine operator
14license may not purchase unstamped cigarettes from an in-State
15or out-of-State manufacturer or distributor of cigarettes.
16    (c) Cigarettes made or fabricated by a cigarette machine
17may not be sold or distributed to, or possessed by,
18manufacturers, distributors, secondary distributors,
19manufacturer representatives, or retailers, except the
20cigarette machine operator.
21    (d) A cigarette machine possessed by a cigarette machine
22operator shall have a secure meter that counts the number of
23cigarettes made or fabricated by the cigarette machine and that
24cannot be accessed, altered, or reset by the machine operator,
25except for the sole purpose of taking meter readings.
 

 

 

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1    Section 1-40. Returns.
2    (a) Cigarette machine operators shall file a return and
3remit the tax imposed by Section 1-10 by the 15th day of each
4month covering the preceding calendar month. Each such return
5shall show: the quantity of cigarettes made or fabricated
6during the period covered by the return; the beginning and
7ending meter reading for each cigarette machine for the period
8covered by the return; the quantity of such cigarettes sold or
9otherwise disposed of during the period covered by the return;
10the brand family and manufacturer and quantity of tobacco
11products used to make or fabricate cigarettes by use of a
12cigarette machine; the license number of each distributor from
13whom tobacco products are purchased; the type and quantity of
14cigarette tubes purchased for use in a cigarette machine; the
15type and quantity of cigarette tubes used in a cigarette
16machine; and such other information as the Department may
17require. Such returns shall be filed on forms prescribed and
18furnished by the Department. The Department may promulgate
19rules to require that the cigarette machine operator's return
20be accompanied by appropriate computer-generated magnetic
21media supporting schedule data in the format required by the
22Department, unless, as provided by rule, the Department grants
23an exception upon petition of a cigarette machine operator.
24    Cigarette machine operators shall send a copy of those
25returns, together with supporting schedule data, to the

 

 

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1Attorney General's Office by the 15th day of each month for the
2period covering the preceding calendar month.
3    (b) Cigarette machine operators may take a credit against
4any tax due under Section 1-10 of this Act for taxes imposed
5and paid under the Tobacco Products Tax Act of 1995 on tobacco
6products sold to a customer and used in a rolling machine
7located at the cigarette machine operator's place of business.
8To be eligible for such credit, the tobacco product must meet
9the requirements of subsection (a) of Section 1-25 of this Act.
10This subsection (b) is exempt from the provisions of Section
111-155 of this Act.
 
12    Section 1-45. Examination and correction of returns.
13    (a) As soon as practicable after any return is filed, the
14Department shall examine that return and shall correct the
15return according to its best judgment and information, which
16return so corrected by the Department shall be prima facie
17correct and shall be prima facie evidence of the correctness of
18the amount of tax due, as shown on the corrected return.
19Instead of requiring the cigarette machine operator to file an
20amended return, the Department may simply notify the cigarette
21machine operator of the correction or corrections it has made.
22Proof of the correction by the Department may be made at any
23hearing before the Department or in any legal proceeding by a
24reproduced copy of the Department's record relating thereto in
25the name of the Department under the certificate of the

 

 

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1Director of Revenue. Such reproduced copy shall, without
2further proof, be admitted into evidence before the Department
3or in any legal proceeding and shall be prima facie proof of
4the correctness of the amount of tax due, as shown on the
5reproduced copy. If the Department finds that any amount of tax
6is due from the cigarette machine operator, the Department
7shall issue the cigarette machine operator a notice of tax
8liability for the amount of tax claimed by the Department to be
9due, together with a penalty in an amount determined in
10accordance with Sections 3-3, 3-5 and 3-6 of the Uniform
11Penalty and Interest Act. If, in administering the provisions
12of this Act, comparison of a return or returns of a cigarette
13machine operator with the books, records, and inventories of
14such cigarette machine operator discloses a deficiency that
15cannot be allocated by the Department to a particular month or
16months, the Department shall issue the cigarette machine
17operator a notice of tax liability for the amount of tax
18claimed by the Department to be due for a given period, but
19without any obligation upon the Department to allocate that
20deficiency to any particular month or months, together with a
21penalty in an amount determined in accordance with Sections
223-3, 3-5, and 3-6 of the Uniform Penalty and Interest Act,
23under which circumstances the aforesaid notice of tax liability
24shall be prima facie correct and shall be prima facie evidence
25of the correctness of the amount of tax due, as shown therein;
26and proof of such correctness may be made in accordance with,

 

 

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1and the admissibility of a reproduced copy of such notice of
2tax liability shall be governed by, all the provisions of this
3Act applicable to corrected returns. If any cigarette machine
4operator filing any return dies or becomes a person under legal
5disability at any time before the Department issues its notice
6of tax liability, such notice shall be issued to the
7administrator, executor, or other legal representative of the
8cigarette machine operator.
9    (b) If, within 60 days after such notice of tax liability,
10the cigarette machine operator or his or her legal
11representative files a written protest to such notice of tax
12liability and requests a hearing thereon, the Department shall
13give notice to such cigarette machine operator or legal
14representative of the time and place fixed for such hearing,
15and shall hold a hearing in conformity with the provisions of
16this Act, and pursuant thereto shall issue a final assessment
17to such cigarette machine operator or legal representative for
18the amount found to be due as a result of such hearing. If a
19written protest to the notice of tax liability and a request
20for a hearing thereon is not filed within 60 days after such
21notice of tax liability, such notice of tax liability shall
22become final without the necessity of a final assessment being
23issued and shall be deemed to be a final assessment.
24    (c) In case of failure to pay the tax, or any portion
25thereof, or any penalty provided for in this Act, when due, the
26Department may bring suit to recover the amount of such tax, or

 

 

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1portion thereof, or penalty; or, if the taxpayer dies or
2becomes incompetent, by filing claim therefore against his or
3her estate; provided that no such action with respect to any
4tax, or portion thereof, or penalty, shall be instituted more
5than 2 years after the cause of action accrues, except with the
6consent of the person from whom such tax or penalty is due.
7    After the expiration of the period within which the person
8assessed may file an action for judicial review under the
9Administrative Review Law without such an action being filed, a
10certified copy of the final assessment or revised final
11assessment of the Department may be filed with the circuit
12court of the county in which the taxpayer has his or her
13principal place of business, or of Sangamon County in those
14cases in which the taxpayer does not have his or her principal
15place of business in this State. The certified copy of the
16final assessment or revised final assessment shall be
17accompanied by a certification which recites facts that are
18sufficient to show that the Department complied with the
19jurisdictional requirements of the law in arriving at its final
20assessment or its revised final assessment and that the
21taxpayer had his or her opportunity for an administrative
22hearing and for judicial review, whether he or she availed
23himself or herself of either or both of these opportunities or
24not. If the court is satisfied that the Department complied
25with the jurisdictional requirements of the law in arriving at
26its final assessment or its revised final assessment and that

 

 

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1the taxpayer had his or her opportunity for an administrative
2hearing and for judicial review, whether he or she availed
3himself or herself of either or both of these opportunities or
4not, the court shall enter judgment in favor of the Department
5and against the taxpayer for the amount shown to be due by the
6final assessment or the revised final assessment, and such
7judgment shall be filed of record in the court. Such judgment
8shall bear the rate of interest set in the Uniform Penalty and
9Interest Act, but otherwise shall have the same effect as other
10judgments. The judgment may be enforced, and all laws
11applicable to sales for the enforcement of a judgment shall be
12applicable to sales made under such judgments. The Department
13shall file the certified copy of its assessment, as herein
14provided, with the circuit court within 2 years after such
15assessment becomes final except when the taxpayer consents in
16writing to an extension of such filing period.
17    If, when the cause of action for a proceeding in court
18accrues against a person, he or she is out of the State, the
19action may be commenced within the times herein limited, after
20his or her coming into or returning to the State; and if, after
21the cause of action accrues, he or she departs from and remains
22out of the State, the time of his or her absence is no part of
23the time limited for the commencement of the action; but the
24foregoing provisions concerning absence from the State shall
25not apply to any case in which, at the time the cause of action
26accrues, the party against whom the cause of action accrues is

 

 

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1not a resident of this State. The time within which a court
2action is to be commenced by the Department hereunder shall not
3run while the taxpayer is a debtor in any proceeding under the
4federal Bankruptcy Code nor thereafter until 90 days after the
5Department is notified by such debtor of being discharged in
6bankruptcy.
7    No claim shall be filed against the estate of any deceased
8person or a person under legal disability for any tax or
9penalty or part of either except in the manner prescribed and
10within the time limited by the Probate Act of 1975.
11    The remedies provided for herein shall not be exclusive,
12but all remedies available to creditors for the collection of
13debts shall be available for the collection of any tax or
14penalty due hereunder.
15    The collection of tax or penalty by any means provided for
16herein shall not be a bar to any prosecution under this Act.
17    The certificate of the Director of the Department to the
18effect that a tax or amount required to be paid by this Act has
19not been paid, that a return has not been filed, or that
20information has not been supplied pursuant to the provisions of
21this Act, shall be prima facie evidence thereof.
22    All of the provisions of Sections 5a, 5b, 5c, 5d, 5e, 5f,
235g, 5i and 5j of the Retailers' Occupation Tax Act, which are
24not inconsistent with this Act, shall apply, as far as
25practicable, to the subject matter of this Act to the same
26extent as if such provisions were included herein. References

 

 

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1in such incorporated Sections of the Retailers' Occupation Tax
2Act to retailers, to sellers, or to persons engaged in the
3business of selling tangible personal property shall mean
4cigarette machine operator when used in this Act.
 
5    Section 1-50. Failure to file return or pay tax; penalty;
6protest.
7    In case any person who is required to file a return under
8this Act fails to file a return, or files a return and fails to
9remit the correct amount of tax, the Department shall determine
10the amount of tax due from him according to its best judgment
11and information, which amount so fixed by the Department shall
12be prima facie correct and shall be prima facie evidence of the
13correctness of the amount of tax due, as shown in such
14determination. Proof of such determination by the Department
15may be made at any hearing before the Department or in any
16legal proceeding by a reproduced copy of the Department's
17record relating thereto in the name of the Department under the
18certificate of the Director of Revenue. Such reproduced copy
19shall, without further proof, be admitted into evidence before
20the Department or in any legal proceeding and shall be prima
21facie proof of the correctness of the amount of tax due, as
22shown therein. The Department shall issue such person a notice
23of tax liability for the amount of tax claimed by the
24Department to be due, together with a penalty in an amount
25determined in accordance with Sections 3-3, 3-5 and 3-6 of the

 

 

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1Uniform Penalty and Interest Act. If such person or the legal
2representative of such person, within 60 days after such
3notice, files a written protest to such notice of tax liability
4and requests a hearing thereon, the Department shall give
5notice to such person or the legal representative of such
6person of the time and place fixed for such hearing and shall
7hold a hearing in conformity with the provisions of this Act,
8and pursuant thereto shall issue a final assessment to such
9person or to the legal representative of such person for the
10amount found to be due as a result of such hearing. If a
11written protest to the notice of tax liability and a request
12for a hearing thereon is not filed within 60 days after such
13notice of tax liability, such notice of tax liability shall
14become final without the necessity of a final assessment being
15issued and shall be deemed to be a final assessment.
 
16    Section 1-55. Claims; credit memorandum or refunds. If it
17appears, after claim is filed with the Department, that an
18amount of tax or penalty has been paid which was not due under
19this Act, whether as the result of a mistake of fact or an
20error of law, except as hereinafter provided, then the
21Department shall issue a credit memorandum or refund to the
22person who made the erroneous payment or, if that person has
23died or become a person under legal disability, to his or her
24legal representative.
25    If it is determined that the Department should issue a

 

 

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1credit or refund under this Act, the Department may first apply
2the amount thereof against any amount of tax or penalty due
3under this Act, the Cigarette Tax Act, the Cigarette Use Tax
4Act, or the Tobacco Products Act of 1995 from the person
5entitled to that credit or refund. For this purpose, if
6proceedings are pending to determine whether or not any tax or
7penalty is due under this Act or under the Cigarette Tax Act,
8Cigarette Use Tax Act, or the Tobacco Products Act of 1995 from
9the person, the Department may withhold issuance of the credit
10or refund pending the final disposition of such proceedings and
11may apply such credit or refund against any amount found to be
12due to the Department under this Act, the Cigarette Tax Act,
13the Cigarette Use Tax Act, or the Tobacco Products Act of 1995
14as a result of such proceedings. The balance, if any, of the
15credit or refund shall be issued to the person entitled
16thereto.
17    If no tax or penalty is due and no proceeding is pending to
18determine whether such taxpayer is indebted to the Department
19for the payment of a tax or penalty, the credit memorandum or
20refund shall be issued to the claimant; or (in the case of a
21credit memorandum) the credit memorandum may be assigned and
22set over by the lawful holder thereof, subject to reasonable
23rules of the Department, to any other person who is subject to
24this Act, the Cigarette Tax Act, the Cigarette Use Tax Act, or
25the Tobacco Products Act of 1995, and the amount thereof shall
26be applied by the Department against any tax or penalty due or

 

 

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1to become due under this Act, the Cigarette Tax Act, the
2Cigarette Use Tax Act, or the Tobacco Products Act of 1995 from
3such assignee.
4    As to any claim filed hereunder with the Department on and
5after each January 1 and July 1, no amount of tax or penalty
6erroneously paid (either in total or partial liquidation of a
7tax or penalty under this Act) more than 3 years prior to such
8January 1 and July 1, respectively, shall be credited or
9refunded, except that, if both the Department and the taxpayer
10have agreed to an extension of time to issue a notice of tax
11liability under this Act, the claim may be filed at any time
12prior to the expiration of the period agreed upon.
13    Any credit or refund that is allowed under this Act shall
14bear interest at the rate and in the manner set forth in the
15Uniform Penalty and Interest Act.
16    In case the Department determines that the claimant is
17entitled to a refund, such refund shall be made only from
18appropriations available for that purpose. If it appears
19unlikely that the amount appropriated would permit everyone
20having a claim allowed during the period covered by such
21appropriation to elect to receive a cash refund, the
22Department, by rule or regulation, shall provide for the
23payment of refunds in hardship cases and shall define what
24types of cases qualify as hardship cases.
25    The provisions of Sections 6a, 6b, and 6c of the Retailers'
26Occupation Tax Act which are not inconsistent with this Act

 

 

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1shall apply, as far as practicable, to the subject matter of
2this Act to the same extent as if such provisions were included
3herein.
 
4    Section 1-60. Investigations and hearings. The Department,
5or any officer or employee designated in writing by the
6Director thereof, for the purpose of administering and
7enforcing the provisions of this Act, may hold investigations
8and hearings concerning any matters covered by this Act, and
9may examine books, papers, records, or memoranda bearing upon
10the sale or other disposition of cigarettes or tobacco products
11by a cigarette machine operator, and may issue subpoenas
12requiring the attendance of a cigarette machine operator, or
13any officer or employee of a cigarette machine operator, or any
14person having knowledge of the facts, and may take testimony
15and require proof, and may issue subpoenas duces tecum to
16compel the production of relevant books, papers, records, and
17memoranda, for the information of the Department.
18    In the conduct of any investigation or hearing provided for
19by this Act, neither the Department, nor any officer or
20employee thereof, shall be bound by the technical rules of
21evidence, and no informality in the proceedings nor in the
22manner of taking testimony shall invalidate any rule, order,
23decision, or regulation made, approved, or confirmed by the
24Department.
25    The Director of Revenue, or any duly authorized officer or

 

 

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1employee of the Department, shall have the power to administer
2oaths to such persons required by this Act to give testimony
3before the Department.
4    The books, papers, records, and memoranda of the
5Department, or parts thereof, may be proved in any hearing,
6investigation or legal proceeding by a reproduced copy thereof
7under the certificate of the Director of Revenue. Such
8reproduced copy shall, without further proof, be admitted into
9evidence before the Department or in any legal proceeding.
 
10    Section 1-65. Testimony and production of documents;
11immunity. No person shall be excused from testifying or from
12producing any books, papers, records, or memoranda in any
13investigation or upon any hearing, when ordered to do so by the
14Department or any officer or employee thereof, upon the ground
15that the testimony or evidence, documentary or otherwise, may
16tend to incriminate him or subject him to a criminal penalty,
17but no person shall be prosecuted or subjected to any criminal
18penalty for or on account of the subject matter of his or her
19testimony or the evidence produced before the Department or an
20officer or employee of the Department; provided that such
21immunity shall extend only to a natural person who, in
22obedience to a subpoena, gives testimony under oath or produces
23evidence under oath. No person so testifying shall be exempt
24from prosecution and punishment for perjury committed in so
25testifying.
 

 

 

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1    Section 1-70. Confidentiality; official purposes. All
2information received by the Department from returns or reports
3filed under this Act, or from any investigation conducted under
4this Act, shall be confidential, except for official purposes,
5and any person who divulges any such information in any manner,
6except in accordance with a proper judicial order or as
7otherwise provided by law, shall be guilty of a Class A
8misdemeanor.
9    Nothing in this Act prevents the Director of Revenue from
10publishing or making available to the public the names and
11addresses of persons filing returns or reports under this Act,
12or reasonable statistics concerning the operation of the tax by
13grouping the contents of returns or reports so that the
14information in any individual return or report is not
15disclosed.
16    Nothing in this Act prevents the Director of Revenue from
17divulging to the United States government or the government of
18any other state, or any officer or agency thereof, for
19exclusively official purposes, information received by the
20Department in administering this Act, provided that such other
21governmental agency agrees to divulge requested tax
22information to the Department.
23    The furnishing upon request of the Auditor General, or his
24authorized agents, for official use, of returns or reports
25filed and information related thereto under this Act is deemed

 

 

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1to be an official purpose within the meaning of this Section.
2    The furnishing of financial information to a home rule unit
3with a population in excess of 2,000,000 that has imposed a tax
4similar to that imposed by this Act under its home rule powers,
5upon request of the Chief Executive of the home rule unit, is
6an official purpose within the meaning of this Section,
7provided the home rule unit agrees in writing to the
8requirements of this Section. Information so provided is
9subject to all confidentiality provisions of this Section. The
10written agreement shall provide for reciprocity, limitations
11on access, disclosure, and procedures for requesting
12information.
13    The Director may make available to any State agency,
14including the Illinois Supreme Court, that licenses persons to
15engage in any occupation, information that a person licensed by
16such agency has failed to file returns under this Act or pay
17the tax, penalty, and interest shown therein, or has failed to
18pay any final assessment of tax, penalty, or interest due under
19this Act or has failed to file reports under this Act. An
20assessment is final when all proceedings in court for review of
21such assessment have terminated or the time for the taking
22thereof has expired without such proceedings being instituted.
23    The Director shall make available for public inspection in
24the Department's principal office and for publication, at cost,
25administrative decisions issued on or after January 1, 2013.
26These decisions are to be made available in a manner so that

 

 

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1the following taxpayer or licensee information is not
2disclosed:
3        (1) The names, addresses, and identification numbers
4    of the taxpayer or licensee, related entities, and
5    employees.
6        (2) At the sole discretion of the Director, trade
7    secrets or other confidential information identified as
8    such by the taxpayer or licensee no later than 30 days
9    after receipt of an administrative decision, by such means
10    as the Department shall provide by rule.
11    The Director shall determine the appropriate extent of the
12deletions allowed in paragraph (2). In the event the taxpayer
13or licensee does not submit deletions, the Director shall make
14only the deletions specified in paragraph (1).
15    The Director shall make available for public inspection and
16publication each administrative decision within 180 days after
17the issuance of the administrative decision. The term
18"administrative decision" has the same meaning as defined in
19Section 3-101 of the Code of Civil Procedure. Costs collected
20under this Section shall be paid into the Tax Compliance and
21Administration Fund.
22    Nothing contained in this Act shall prevent the Director
23from divulging information to any person pursuant to a request
24or authorization made by the taxpayer or licensee or by an
25authorized representative of the taxpayer or licensee.
 

 

 

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1    Section 1-75. Records. Every cigarette machine operator
2who is required to procure a license under this Act shall keep
3within Illinois, at his licensed address: complete and accurate
4records of the quantity of such cigarettes made or fabricated;
5meter readings for each cigarette machine; the quantity of such
6cigarettes sold or otherwise disposed of; the brand family and
7manufacturer and quantity of tobacco products purchased and the
8brand family and manufacturer and quantity of tobacco products
9used to make or fabricate cigarettes by use of a cigarette
10machine; the name, address, and license number of each
11distributor from whom the cigarette machine operator purchases
12tobacco products; the type and quantity of cigarette tubes
13purchased for use in a cigarette machine; the type and quantity
14of cigarette tubes used in a cigarette machine; and such other
15information as the Department may require, and shall preserve
16and keep within Illinois at his licensed address all invoices,
17bills of lading, sales records, copies of bills of sale,
18inventory at the close of each period for which a return is
19required of all cigarettes, tobacco products and cigarette
20tubes on hand, and other pertinent papers and documents
21relating to the manufacture, purchase, sale, or disposition of
22cigarettes and tobacco products. All books and records and
23other papers and documents that are required by this Act to be
24kept shall be kept in the English language, and shall, at all
25times during the usual business hours of the day, be subject to
26inspection by the Department or its duly authorized agents and

 

 

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1employees. The Department may adopt rules that establish
2requirements, including record forms and formats, for records
3required to be kept and maintained by taxpayers. For purposes
4of this Section, "records" means all data maintained by the
5taxpayer, including data on paper, microfilm, microfiche or any
6type of machine-sensible data compilation. Those books,
7records, papers and documents shall be preserved for a period
8of at least 3 years after the date of the documents, or the
9date of the entries appearing in the records, unless the
10Department, in writing, authorizes their destruction or
11disposal at an earlier date. At all times during the usual
12business hours of the day, any duly authorized agent or
13employee of the Department may enter any place of business of
14the cigarette machine operator, without a search warrant, and
15inspect the premises and the stock or packages of cigarettes,
16tobacco products, cigarette tubes, and the cigarette machines
17therein contained, to determine whether any of the provisions
18of this Act are being violated. If such agent or employee is
19denied free access or is hindered or interfered with in making
20such examination as herein provided, the license of the
21cigarette machine operator at such premises shall be subject to
22revocation by the Department.
 
23    Section 1-80. Subpoenas and witnesses; depositions. The
24Department, or any officer or employee of the Department
25designated in writing by the Director, shall, at its, his, or

 

 

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1her own instance, or on the written request of any cigarette
2machine operator or other interested party to the proceeding,
3issue subpoenas requiring the attendance of and the giving of
4testimony by witnesses, and subpoenas duces tecum requiring the
5production of books, papers, records or memoranda. All
6subpoenas and subpoenas duces tecum issued under the terms of
7this Act may be served by any person of full age. The fees of
8witnesses for attendance and travel shall be the same as the
9fees of witnesses before the circuit court of this State; such
10fees to be paid when the witness is excused from further
11attendance. When the witness is subpoenaed at the instance of
12the Department or any officer or employee thereof, such fees
13shall be paid in the same manner as other expenses of the
14Department, and when the witness is subpoenaed at the instance
15of any other party to any such proceeding, the cost of service
16of the subpoena or subpoena duces tecum and the fee of the
17witness shall be borne by the party at whose instance the
18witness is summoned. In such case, the Department, in its
19discretion, may require a deposit to cover the cost of such
20service and witness fees. A subpoena or subpoena duces tecum so
21issued shall be served in the same manner as a subpoena or
22subpoena duces tecum issued out of a court.
23    Any circuit court of this State, upon the application of
24the Department or any officer or employee thereof, or upon the
25application of any other party to the proceeding, may, in its
26discretion, compel the attendance of witnesses, the production

 

 

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1of books, papers, records or memoranda and the giving of
2testimony before the Department or any officer or employee
3thereof conducting an investigation or holding a hearing
4authorized by this Act, by an attachment for contempt, or
5otherwise, in the same manner as production of evidence may be
6compelled before the court.
7    The Department or any officer or employee thereof, or any
8other party in an investigation or hearing before the
9Department, may cause the depositions of witnesses within the
10State to be taken in the manner prescribed by law for like
11depositions, or depositions for discovery in civil actions in
12courts of this State, and to that end compel the attendance of
13witnesses and the production of books, papers, records or
14memoranda, in the same manner provided herein.
 
15    Section 1-85. Regulations and rules; notice; hearings. The
16Department may adopt and enforce such reasonable rules and
17regulations relating to the administration and enforcement of
18this Act as may be deemed expedient.
19    Whenever notice is required by this Act, such notice may be
20given by United States certified or registered mail, addressed
21to the person concerned at his last known address, and proof of
22such mailing shall be sufficient for the purposes of this Act.
23Notice of any hearing provided for by this Act shall be so
24given not less than 7 days prior to the day fixed for the
25hearing.

 

 

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1    Hearings provided for in this Act shall be held:
2        (1) in Cook County, if the taxpayer's or licensee's
3    principal place of business is in that county;
4        (2) at the Department's office nearest the taxpayer's
5    or licensee's principal place of business, if the
6    taxpayer's or licensee's principal place of business is in
7    Illinois but outside Cook County; or
8        (3) in Sangamon County, if the taxpayer's or licensee's
9    principal place of business is outside Illinois.
10    The circuit court of the county wherein the hearing is held
11has power to review all final administrative decisions of the
12Department in administering this Act. The provisions of the
13Administrative Review Law, and all amendments and
14modifications thereof, and the rules adopted pursuant thereto,
15shall apply to and govern all proceedings for the judicial
16review of final administrative decisions of the Department
17under this Act. The term "administrative decision" is defined
18as in Section 3-101 of the Code of Civil Procedure.
19    Service upon the Director of Revenue or Assistant Director
20of Revenue of summons issued in any action to review a final
21administrative decision shall be service upon the Department.
22The Department shall certify the record of its proceedings if
23the cigarette machine operator pays to it the sum of 75 per
24page of testimony taken before the Department and 25 per page
25of all other matters contained in such record, except that
26these charges may be waived where the Department is satisfied

 

 

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1that the aggrieved party is an indigent person who cannot
2afford to pay such charges. Before the delivery of such record
3to the person applying for it, payment of these charges must be
4made, and if the record is not paid for within 30 days after
5notice that such record is available, the complaint may be
6dismissed by the court upon motion of the Department.
7    No stay order shall be entered by the circuit court unless
8the cigarette machine operator files with the court a bond, in
9an amount fixed and approved by the court, to indemnify the
10State against all loss and injury which may be sustained by it
11on account of the review proceedings and to secure all costs
12which may be occasioned by such proceedings.
13    Whenever any proceeding provided by this Act is begun
14before the Department, either by the Department or by a person
15subject to this Act, and such person thereafter dies or becomes
16a person under legal disability before such proceeding is
17concluded, the legal representative of the deceased person or
18of the person under legal disability shall notify the
19Department of such death or legal disability. Such legal
20representative, as such, shall then be substituted by the
21Department for such person. If the legal representative fails
22to notify the Department of his or her appointment as such
23legal representative, the Department may, upon its own motion,
24substitute such legal representative in the proceeding pending
25before the Department for the person who died or became a
26person under legal disability.
 

 

 

SB2194 Enrolled- 38 -LRB097 10235 HLH 50431 b

1    Section 1-90. The Illinois Administrative Procedure Act.
2The Illinois Administrative Procedure Act is hereby expressly
3adopted and shall apply to all administrative rules and
4procedures of the Department of Revenue under this Act, except
5that: (1) paragraph (b) of Section 5-10 of the Illinois
6Administrative Procedure Act does not apply to final orders,
7decisions and opinions of the Department; (2) subparagraph
8(a)(ii) of Section 5-10 of the Illinois Administrative
9Procedure Act does not apply to forms established by the
10Department for use under this Act; and (3) the provisions of
11Section 10-45 of the Illinois Administrative Procedure Act
12regarding proposals for decision are excluded and not
13applicable to the Department under this Act.
 
14    Section 1-95. Legal proceedings. All legal proceedings
15under this Act, whether civil or criminal, shall be instituted
16and prosecuted by the Attorney General or by the State's
17Attorney for the county in which an offense under this Act is
18committed, and all civil actions may be brought in the name of
19the Department of Revenue.
 
20    Section 1-100. Arrest and seizure. Any duly authorized
21employee of the Department may: arrest without warrant any
22person committing in his presence a violation of any of the
23provisions of this Act; may without a search warrant inspect

 

 

SB2194 Enrolled- 39 -LRB097 10235 HLH 50431 b

1all cigarettes and cigarette machines located in any place of
2business; and may seize any contraband cigarettes and any
3cigarette machines in which such contraband cigarettes may be
4found or may be made, and such packages or cigarette machines
5so seized shall be subject to confiscation and forfeiture as
6provided in Section 1-105 of this Act.
 
7    Section 1-105. Hearings regarding seized cigarettes and
8cigarette machines. After seizing any cigarettes or cigarette
9machines, as provided in Section 1-100 of this Act, the
10Department shall hold a hearing and shall determine whether
11such cigarettes, at the time of their seizure by the
12Department, were contraband cigarettes, or whether such
13cigarette machines, at the time of their seizure by the
14Department, contained or made contraband cigarettes. The
15Department shall give not less than 7 days' notice of the time
16and place of such hearing to the owner of such property, if he
17is known, and also to the person in whose possession the
18property so taken was found, if such person is known and if
19such person in possession is not the owner of said property. In
20case neither the owner nor the person in possession of such
21property is known, the Department shall cause publication of
22the time and place of such hearing to be made at least once in
23each week for 3 weeks successively in a newspaper of general
24circulation in the county where such hearing is to be held.
25    If, as the result of such hearing, the Department

 

 

SB2194 Enrolled- 40 -LRB097 10235 HLH 50431 b

1determines that the cigarettes seized were, at the time of
2seizure, contraband cigarettes, or that any cigarette machine
3at the time of its seizure contained or made contraband
4cigarettes, the Department shall enter an order declaring such
5cigarettes or such cigarette machine confiscated and forfeited
6to the State, and to be held by the Department for disposal as
7provided in this Section. The Department shall give notice of
8such order to the owner of such property if he is known, and
9also to the person in whose possession the property so taken
10was found, if such person is known, and if such person in
11possession is not the owner of the property. In case neither
12the owner nor the person in possession of such property is
13known, the Department shall cause publication of such order to
14be made at least once in each week for 3 weeks successively in
15a newspaper of general circulation in the county where such
16hearing was held.
17    When any cigarettes or any cigarette machine shall have
18been declared forfeited to the State by the Department, as
19provided hereunder, and when all proceedings for the judicial
20review of the Department's decision have terminated, the
21Department shall, to the extent that its decision is sustained
22on review, destroy or maintain and use such property in an
23undercover capacity.
 
24    Section 1-110. Filing of a complaint.
25    Whenever any peace officer of the State or any duly

 

 

SB2194 Enrolled- 41 -LRB097 10235 HLH 50431 b

1authorized officer or employee of the Department shall have
2reason to believe that any violation of this Act has occurred
3and that the person so violating the Act has in that person's
4possession contraband cigarettes, or any cigarette machine
5containing or making contraband cigarettes, he or she may file
6or cause to be filed his complaint in writing, verified by
7affidavit, with any court within whose jurisdiction the
8premises to be searched are situated, stating the facts upon
9which such belief is founded, the premises to be searched, and
10the property to be seized, and procure a search warrant and
11execute the same. Upon the execution of such search warrant,
12the peace officer, or officer or employee of the Department,
13executing such search warrant shall make due return thereof to
14the court issuing the same, together with an inventory of the
15property taken thereunder. The court shall thereupon issue
16process against the owner of such property if he is known;
17otherwise, such process shall be issued against the person in
18whose possession the property so taken is found, if such person
19is known. In case of inability to serve such process upon the
20owner or the person in possession of the property at the time
21of its seizure, notice of the proceedings before the court
22shall be given as required by the statutes of the State
23governing cases of attachment. Upon the return of the process
24duly served or upon the posting or publishing of notice made,
25as herein provided, the court or jury, if a jury shall be
26demanded, shall proceed to determine whether or not such

 

 

SB2194 Enrolled- 42 -LRB097 10235 HLH 50431 b

1property so seized was held or possessed in violation of this
2Act, or whether, if a cigarette machine has been so seized, it
3contained or was making at the time of its seizure contraband
4cigarettes. In case of a finding that any cigarette machine so
5seized contained or was making at the time of its seizure
6contraband cigarettes, judgment shall be entered confiscating
7and forfeiting the property to the State and ordering its
8delivery to the Department, and, in addition thereto, the court
9shall have power to tax and assess the costs of the
10proceedings.
11    When any cigarettes or any cigarette machine is declared
12forfeited to the State by any court, and when such confiscated
13and forfeited property is delivered to the Department as
14provided in this Act, the Department shall destroy or maintain
15and use such property in an undercover capacity.
 
16    Section 1-115. False or fraudulent reports. Any person
17required by this Act to make, file, render, sign, or verify any
18report or return, or any officer, agent, or employee of that
19person, who makes any false or fraudulent report or return or
20files any false or fraudulent report or return, or who fails to
21make such report or return or file such report or return when
22due, is guilty of a Class 4 felony.
 
23    Section 1-120. Possession of more than 200 contraband
24cigarettes; penalty. Any person possessing more than 200

 

 

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1contraband cigarettes is liable to pay, to the Department, for
2deposit into the Tax Compliance and Administration Fund, a
3penalty of $1 for each such cigarette in excess of 200, unless
4reasonable cause can be established by the person upon whom the
5penalty is imposed. This penalty is in addition to the taxes
6imposed by this Act. Reasonable cause shall be determined in
7each situation in accordance with rules adopted by the
8Department. The provisions of the Uniform Penalty and Interest
9Act do not apply to this Section.
 
10    Section 1-125. Possession of not less than 20 and not more
11than 200 contraband cigarettes; penalty. Any person possessing
12not less than 20 and not more than 200 contraband cigarettes is
13liable to pay to the Department, for deposit into the Tax
14Compliance and Administration Fund, a penalty of $0.50 for each
15such cigarette, unless reasonable cause can be established by
16the person upon whom the penalty is imposed. Reasonable cause
17shall be determined in each situation in accordance with rules
18adopted by the Department. The provisions of the Uniform
19Penalty and Interest Act do not apply to this Section.
 
20    Section 1-130. Punishment for sale or possession of
21contraband cigarettes.
22    (a) Possession or sale of 200 or less contraband
23cigarettes. Any person who has in his or her possession or
24sells 200 or less contraband cigarettes is guilty of a Class A

 

 

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1misdemeanor.
2    (b) Possession or sale of more than 200 and not more 1000
3contraband cigarettes. Any person who has in his or her
4possession or sells more than 200 and not more than 1000
5contraband cigarettes is guilty of a Class A misdemeanor for a
6first offense and a Class 4 felony for each subsequent offense.
7    (c) Possession or sale of more than 1000 contraband
8cigarettes. Any person who has in his or her possession or
9sells more than 1000 contraband cigarettes is guilty of a Class
104 felony.
 
11    Section 1-135. Unlawful operation of cigarette machines.
12Whoever operates a cigarette machine without a license is
13guilty of a Class 4 felony. Notwithstanding this Section, and
14any other provisions of this Act, an individual may own a
15cigarette machine for that individual's own use, and not for
16the purpose of resale of cigarettes.
 
17    Section 1-140. Failure to keep records; penalty. Any person
18required by this Act to keep records of any kind, who fails to
19keep the required records or falsifies those records, is guilty
20of a Class 4 felony.
 
21    Section 1-145. Failure to preserve records; penalty. Any
22person who fails to safely preserve the records required by
23Section 1-75 of this Act for the period of 3 years, as required

 

 

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1by that Section, in such manner as to insure permanency and
2accessibility for inspection by the Department, shall be guilty
3of a business offense and may be fined up to $5,000.
 
4    Section 1-150. Forfeit of bond. If a cigarette machine
5operator is convicted of the violation of any of the provisions
6of this Act, or if his or her license is revoked and no review
7is had of the order or revocation, or if on review thereof the
8decision is adverse to the cigarette machine operator, or if a
9cigarette machine operator fails to pay an assessment as to
10which no judicial review is sought and which has become final,
11or pursuant to which, upon review thereof, the circuit court
12has entered a judgment that is in favor of the Department and
13that has become final, the bond filed pursuant to this Act
14shall thereupon be forfeited, and the Department may institute
15a suit upon such bond in its own name for the entire amount of
16such bond and costs. Such suit upon the bond shall be in
17addition to any other remedy provided for herein.
 
18    Section 1-155. Sunset of exemptions, credits, and
19deductions. The application of every exemption, credit, and
20deduction against tax imposed by this Act that becomes law
21after the effective date of this Act shall be limited by a
22reasonable and appropriate sunset date. A taxpayer is not
23entitled to take the exemption, credit, or deduction beginning
24on the sunset date and thereafter. If a reasonable and

 

 

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1appropriate sunset date is not specified in the Public Act that
2creates the exemption, credit, or deduction, a taxpayer shall
3not be entitled to take the exemption, credit, or deduction
4beginning 5 years after the effective date of the Public Act
5creating the exemption, credit, or deduction and thereafter.
 
6    Section 1-160. Distribution of receipts by the Department.
7All moneys received by the Department under this Act shall be
8deposited into the Healthcare Provider Relief Fund.
 
9    Section 1-165. Exemption. Persons who are not operating
10cigarette machines as defined in this Act and are engaged in
11the business of renting, leasing or selling cigarette machines
12to persons are exempt from the provisions of this Act.
 
13    Section 1-170. Notice. Any person who distributes or offers
14for sale or rent a cigarette machine in this State shall
15provide notice to any potential purchaser, lessee, or lessor of
16that cigarette machine or any retail space containing a
17cigarette machine. The notice shall contain information about
18this Act, including: (i) licensure requirements for cigarette
19machine operators; (ii) tax collection and remittance duties of
20cigarette machine operators; (iii) any product limitations
21imposed on cigarette machines by this Act; and (iv) packaging
22and labeling requirements.
 

 

 

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1
ARTICLE 5. AMENDATORY PROVISIONS

 
2    Section 5-5. The Illinois Income Tax Act is amended by
3adding Section 223 as follows:
 
4    (35 ILCS 5/223 new)
5    Sec. 223. Hospital credit.
6    (a) For tax years ending on or after December 31, 2012, a
7taxpayer that is the owner of a hospital licensed under the
8Hospital Licensing Act, but not including an organization that
9is exempt from federal income taxes under the Internal Revenue
10Code, is entitled to a credit against the taxes imposed under
11subsections (a) and (b) of Section 201 of this Act in an amount
12equal to the lesser of the amount of real property taxes paid
13during the tax year on real property used for hospital purposes
14during the prior tax year or the cost of free or discounted
15services provided during the tax year pursuant to the
16hospital's charitable financial assistance policy, measured at
17cost.
18    (b) If the taxpayer is a partnership or Subchapter S
19corporation, the credit is allowed to the partners or
20shareholders in accordance with the determination of income and
21distributive share of income under Sections 702 and 704 and
22Subchapter S of the Internal Revenue Code. A transfer of this
23credit may be made by the taxpayer earning the credit within
24one year after the credit is earned in accordance with rules

 

 

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1adopted by the Department. The Department shall prescribe rules
2to enforce and administer provisions of this Section. If the
3amount of the credit exceeds the tax liability for the year,
4then the excess credit may be carried forward and applied to
5the tax liability of the 5 taxable years following the excess
6credit year. The credit shall be applied to the earliest year
7for which there is a tax liability. If there are credits from
8more than one tax year that are available to offset a
9liability, the earlier credit shall be applied first. In no
10event shall a credit under this Section reduce the taxpayer's
11liability to less than zero.
 
12    Section 5-10. The Use Tax Act is amended by adding Section
133-8 as follows:
 
14    (35 ILCS 105/3-8 new)
15    Sec. 3-8. Hospital exemption.
16    (a) Tangible personal property sold to or used by a
17hospital owner that owns one or more hospitals licensed under
18the Hospital Licensing Act or operated under the University of
19Illinois Hospital Act, or a hospital affiliate that is not
20already exempt under another provision of this Act and meets
21the criteria for an exemption under this Section, is exempt
22from taxation under this Act.
23    (b) A hospital owner or hospital affiliate satisfies the
24conditions for an exemption under this Section if the value of

 

 

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1qualified services or activities listed in subsection (c) of
2this Section for the hospital year equals or exceeds the
3relevant hospital entity's estimated property tax liability,
4without regard to any property tax exemption granted under
5Section 15-86 of the Property Tax Code, for the calendar year
6in which exemption or renewal of exemption is sought. For
7purposes of making the calculations required by this subsection
8(b), if the relevant hospital entity is a hospital owner that
9owns more than one hospital, the value of the services or
10activities listed in subsection (c) shall be calculated on the
11basis of only those services and activities relating to the
12hospital that includes the subject property, and the relevant
13hospital entity's estimated property tax liability shall be
14calculated only with respect to the properties comprising that
15hospital. In the case of a multi-state hospital system or
16hospital affiliate, the value of the services or activities
17listed in subsection (c) shall be calculated on the basis of
18only those services and activities that occur in Illinois and
19the relevant hospital entity's estimated property tax
20liability shall be calculated only with respect to its property
21located in Illinois.
22    (c) The following services and activities shall be
23considered for purposes of making the calculations required by
24subsection (b):
25        (1) Charity care. Free or discounted services provided
26    pursuant to the relevant hospital entity's financial

 

 

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1    assistance policy, measured at cost, including discounts
2    provided under the Hospital Uninsured Patient Discount
3    Act.
4        (2) Health services to low-income and underserved
5    individuals. Other unreimbursed costs of the relevant
6    hospital entity for providing without charge, paying for,
7    or subsidizing goods, activities, or services for the
8    purpose of addressing the health of low-income or
9    underserved individuals. Those activities or services may
10    include, but are not limited to: financial or in-kind
11    support to affiliated or unaffiliated hospitals, hospital
12    affiliates, community clinics, or programs that treat
13    low-income or underserved individuals; paying for or
14    subsidizing health care professionals who care for
15    low-income or underserved individuals; providing or
16    subsidizing outreach or educational services to low-income
17    or underserved individuals for disease management and
18    prevention; free or subsidized goods, supplies, or
19    services needed by low-income or underserved individuals
20    because of their medical condition; and prenatal or
21    childbirth outreach to low-income or underserved persons.
22        (3) Subsidy of State or local governments. Direct or
23    indirect financial or in-kind subsidies of State or local
24    governments by the relevant hospital entity that pay for or
25    subsidize activities or programs related to health care for
26    low-income or underserved individuals.

 

 

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1        (4) Support for State health care programs for
2    low-income individuals. At the election of the hospital
3    applicant for each applicable year, either (A) 10% of
4    payments to the relevant hospital entity and any hospital
5    affiliate designated by the relevant hospital entity
6    (provided that such hospital affiliate's operations
7    provide financial or operational support for or receive
8    financial or operational support from the relevant
9    hospital entity) under Medicaid or other means-tested
10    programs, including, but not limited to, General
11    Assistance, the Covering ALL KIDS Health Insurance Act, and
12    the State Children's Health Insurance Program or (B) the
13    amount of subsidy provided by the relevant hospital entity
14    and any hospital affiliate designated by the relevant
15    hospital entity (provided that such hospital affiliate's
16    operations provide financial or operational support for or
17    receive financial or operational support from the relevant
18    hospital entity) to State or local government in treating
19    Medicaid recipients and recipients of means-tested
20    programs, including but not limited to General Assistance,
21    the Covering ALL KIDS Health Insurance Act, and the State
22    Children's Health Insurance Program. The amount of subsidy
23    for purpose of this item (4) is calculated in the same
24    manner as unreimbursed costs are calculated for Medicaid
25    and other means-tested government programs in the Schedule
26    H of IRS Form 990 in effect on the effective date of this

 

 

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1    amendatory Act of the 97th General Assembly.
2        (5) Dual-eligible subsidy. The amount of subsidy
3    provided to government by treating dual-eligible
4    Medicare/Medicaid patients. The amount of subsidy for
5    purposes of this item (5) is calculated by multiplying the
6    relevant hospital entity's unreimbursed costs for
7    Medicare, calculated in the same manner as determined in
8    the Schedule H of IRS Form 990 in effect on the effective
9    date of this amendatory Act of the 97th General Assembly,
10    by the relevant hospital entity's ratio of dual-eligible
11    patients to total Medicare patients.
12        (6) Relief of the burden of government related to
13    health care. Except to the extent otherwise taken into
14    account in this subsection, the portion of unreimbursed
15    costs of the relevant hospital entity attributable to
16    providing, paying for, or subsidizing goods, activities,
17    or services that relieve the burden of government related
18    to health care for low-income individuals. Such activities
19    or services shall include, but are not limited to,
20    providing emergency, trauma, burn, neonatal, psychiatric,
21    rehabilitation, or other special services; providing
22    medical education; and conducting medical research or
23    training of health care professionals. The portion of those
24    unreimbursed costs attributable to benefiting low-income
25    individuals shall be determined using the ratio calculated
26    by adding the relevant hospital entity's costs

 

 

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1    attributable to charity care, Medicaid, other means-tested
2    government programs, disabled Medicare patients under age
3    65, and dual-eligible Medicare/Medicaid patients and
4    dividing that total by the relevant hospital entity's total
5    costs. Such costs for the numerator and denominator shall
6    be determined by multiplying gross charges by the cost to
7    charge ratio taken from the hospital's most recently filed
8    Medicare cost report (CMS 2252-10 Worksheet, Part I). In
9    the case of emergency services, the ratio shall be
10    calculated using costs (gross charges multiplied by the
11    cost to charge ratio taken from the hospital's most
12    recently filed Medicare cost report (CMS 2252-10
13    Worksheet, Part I)) of patients treated in the relevant
14    hospital entity's emergency department.
15        (7) Any other activity by the relevant hospital entity
16    that the Department determines relieves the burden of
17    government or addresses the health of low-income or
18    underserved individuals.
19    (d) The hospital applicant shall include information in its
20exemption application establishing that it satisfies the
21requirements of subsection (b). For purposes of making the
22calculations required by subsection (b), the hospital
23applicant may for each year elect to use either (1) the value
24of the services or activities listed in subsection (e) for the
25hospital year or (2) the average value of those services or
26activities for the 3 fiscal years ending with the hospital

 

 

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1year. If the relevant hospital entity has been in operation for
2less than 3 completed fiscal years, then the latter
3calculation, if elected, shall be performed on a pro rata
4basis.
5    (e) For purposes of making the calculations required by
6this Section:
7        (1) particular services or activities eligible for
8    consideration under any of the paragraphs (1) through (7)
9    of subsection (c) may not be counted under more than one of
10    those paragraphs; and
11        (2) the amount of unreimbursed costs and the amount of
12    subsidy shall not be reduced by restricted or unrestricted
13    payments received by the relevant hospital entity as
14    contributions deductible under Section 170(a) of the
15    Internal Revenue Code.
16    (g) Estimation of Exempt Property Tax Liability. The
17estimated property tax liability used for the determination in
18subsection (b) shall be calculated as follows:
19        (1) "Estimated property tax liability" means the
20    estimated dollar amount of property tax that would be owed,
21    with respect to the exempt portion of each of the relevant
22    hospital entity's properties that are already fully or
23    partially exempt, or for which an exemption in whole or in
24    part is currently being sought, and then aggregated as
25    applicable, as if the exempt portion of those properties
26    were subject to tax, calculated with respect to each such

 

 

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1    property by multiplying:
2            (A) the lesser of (i) the actual assessed value, if
3        any, of the portion of the property for which an
4        exemption is sought or (ii) an estimated assessed value
5        of the exempt portion of such property as determined in
6        item (2) of this subsection (g), by
7            (B) the applicable State equalization rate
8        (yielding the equalized assessed value), by
9            (C) the applicable tax rate.
10        (2) The estimated assessed value of the exempt portion
11    of the property equals the sum of (i) the estimated fair
12    market value of buildings on the property, as determined in
13    accordance with subparagraphs (A) and (B) of this item (2),
14    multiplied by the applicable assessment factor, and (ii)
15    the estimated assessed value of the land portion of the
16    property, as determined in accordance with subparagraph
17    (C).
18            (A) The "estimated fair market value of buildings
19        on the property" means the replacement value of any
20        exempt portion of buildings on the property, minus
21        depreciation, determined utilizing the cost
22        replacement method whereby the exempt square footage
23        of all such buildings is multiplied by the replacement
24        cost per square foot for Class A Average building found
25        in the most recent edition of the Marshall & Swift
26        Valuation Services Manual, adjusted by any appropriate

 

 

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1        current cost and local multipliers.
2            (B) Depreciation, for purposes of calculating the
3        estimated fair market value of buildings on the
4        property, is applied by utilizing a weighted mean life
5        for the buildings based on original construction and
6        assuming a 40-year life for hospital buildings and the
7        applicable life for other types of buildings as
8        specified in the American Hospital Association
9        publication "Estimated Useful Lives of Depreciable
10        Hospital Assets". In the case of hospital buildings,
11        the remaining life is divided by 40 and this ratio is
12        multiplied by the replacement cost of the buildings to
13        obtain an estimated fair market value of buildings. If
14        a hospital building is older than 35 years, a remaining
15        life of 5 years for residual value is assumed; and if a
16        building is less than 8 years old, a remaining life of
17        32 years is assumed.
18            (C) The estimated assessed value of the land
19        portion of the property shall be determined by
20        multiplying (i) the per square foot average of the
21        assessed values of three parcels of land (not including
22        farm land, and excluding the assessed value of the
23        improvements thereon) reasonably comparable to the
24        property, by (ii) the number of square feet comprising
25        the exempt portion of the property's land square
26        footage.

 

 

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1        (3) The assessment factor, State equalization rate,
2    and tax rate (including any special factors such as
3    Enterprise Zones) used in calculating the estimated
4    property tax liability shall be for the most recent year
5    that is publicly available from the applicable chief county
6    assessment officer or officers at least 90 days before the
7    end of the hospital year.
8        (4) The method utilized to calculate estimated
9    property tax liability for purposes of this Section 15-86
10    shall not be utilized for the actual valuation, assessment,
11    or taxation of property pursuant to the Property Tax Code.
12    (h) For the purpose of this Section, the following terms
13shall have the meanings set forth below:
14        (1) "Hospital" means any institution, place, building,
15    buildings on a campus, or other health care facility
16    located in Illinois that is licensed under the Hospital
17    Licensing Act and has a hospital owner.
18        (2) "Hospital owner" means a not-for-profit
19    corporation that is the titleholder of a hospital, or the
20    owner of the beneficial interest in an Illinois land trust
21    that is the titleholder of a hospital.
22        (3) "Hospital affiliate" means any corporation,
23    partnership, limited partnership, joint venture, limited
24    liability company, association or other organization,
25    other than a hospital owner, that directly or indirectly
26    controls, is controlled by, or is under common control with

 

 

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1    one or more hospital owners and that supports, is supported
2    by, or acts in furtherance of the exempt health care
3    purposes of at least one of those hospital owners'
4    hospitals.
5        (4) "Hospital system" means a hospital and one or more
6    other hospitals or hospital affiliates related by common
7    control or ownership.
8        (5) "Control" relating to hospital owners, hospital
9    affiliates, or hospital systems means possession, direct
10    or indirect, of the power to direct or cause the direction
11    of the management and policies of the entity, whether
12    through ownership of assets, membership interest, other
13    voting or governance rights, by contract or otherwise.
14        (6) "Hospital applicant" means a hospital owner or
15    hospital affiliate that files an application for an
16    exemption or renewal of exemption under this Section.
17        (7) "Relevant hospital entity" means (A) the hospital
18    owner, in the case of a hospital applicant that is a
19    hospital owner, and (B) at the election of a hospital
20    applicant that is a hospital affiliate, either (i) the
21    hospital affiliate or (ii) the hospital system to which the
22    hospital applicant belongs, including any hospitals or
23    hospital affiliates that are related by common control or
24    ownership.
25        (8) "Subject property" means property used for the
26    calculation under subsection (b) of this Section.

 

 

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1        (9) "Hospital year" means the fiscal year of the
2    relevant hospital entity, or the fiscal year of one of the
3    hospital owners in the hospital system if the relevant
4    hospital entity is a hospital system with members with
5    different fiscal years, that ends in the year for which the
6    exemption is sought.
 
7    Section 5-15. The Service Use Tax Act is amended by adding
8Section 3-8 as follows:
 
9    (35 ILCS 110/3-8 new)
10    Sec. 3-8. Hospital exemption.
11    (a) Tangible personal property sold to or used by a
12hospital owner that owns one or more hospitals licensed under
13the Hospital Licensing Act or operated under the University of
14Illinois Hospital Act, or a hospital affiliate that is not
15already exempt under another provision of this Act and meets
16the criteria for an exemption under this Section, is exempt
17from taxation under this Act.
18    (b) A hospital owner or hospital affiliate satisfies the
19conditions for an exemption under this Section if the value of
20qualified services or activities listed in subsection (c) of
21this Section for the hospital year equals or exceeds the
22relevant hospital entity's estimated property tax liability,
23without regard to any property tax exemption granted under
24Section 15-86 of the Property Tax Code, for the calendar year

 

 

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1in which exemption or renewal of exemption is sought. For
2purposes of making the calculations required by this subsection
3(b), if the relevant hospital entity is a hospital owner that
4owns more than one hospital, the value of the services or
5activities listed in subsection (c) shall be calculated on the
6basis of only those services and activities relating to the
7hospital that includes the subject property, and the relevant
8hospital entity's estimated property tax liability shall be
9calculated only with respect to the properties comprising that
10hospital. In the case of a multi-state hospital system or
11hospital affiliate, the value of the services or activities
12listed in subsection (c) shall be calculated on the basis of
13only those services and activities that occur in Illinois and
14the relevant hospital entity's estimated property tax
15liability shall be calculated only with respect to its property
16located in Illinois.
17    (c) The following services and activities shall be
18considered for purposes of making the calculations required by
19subsection (b):
20        (1) Charity care. Free or discounted services provided
21    pursuant to the relevant hospital entity's financial
22    assistance policy, measured at cost, including discounts
23    provided under the Hospital Uninsured Patient Discount
24    Act.
25        (2) Health services to low-income and underserved
26    individuals. Other unreimbursed costs of the relevant

 

 

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1    hospital entity for providing without charge, paying for,
2    or subsidizing goods, activities, or services for the
3    purpose of addressing the health of low-income or
4    underserved individuals. Those activities or services may
5    include, but are not limited to: financial or in-kind
6    support to affiliated or unaffiliated hospitals, hospital
7    affiliates, community clinics, or programs that treat
8    low-income or underserved individuals; paying for or
9    subsidizing health care professionals who care for
10    low-income or underserved individuals; providing or
11    subsidizing outreach or educational services to low-income
12    or underserved individuals for disease management and
13    prevention; free or subsidized goods, supplies, or
14    services needed by low-income or underserved individuals
15    because of their medical condition; and prenatal or
16    childbirth outreach to low-income or underserved persons.
17        (3) Subsidy of State or local governments. Direct or
18    indirect financial or in-kind subsidies of State or local
19    governments by the relevant hospital entity that pay for or
20    subsidize activities or programs related to health care for
21    low-income or underserved individuals.
22        (4) Support for State health care programs for
23    low-income individuals. At the election of the hospital
24    applicant for each applicable year, either (A) 10% of
25    payments to the relevant hospital entity and any hospital
26    affiliate designated by the relevant hospital entity

 

 

SB2194 Enrolled- 62 -LRB097 10235 HLH 50431 b

1    (provided that such hospital affiliate's operations
2    provide financial or operational support for or receive
3    financial or operational support from the relevant
4    hospital entity) under Medicaid or other means-tested
5    programs, including, but not limited to, General
6    Assistance, the Covering ALL KIDS Health Insurance Act, and
7    the State Children's Health Insurance Program or (B) the
8    amount of subsidy provided by the relevant hospital entity
9    and any hospital affiliate designated by the relevant
10    hospital entity (provided that such hospital affiliate's
11    operations provide financial or operational support for or
12    receive financial or operational support from the relevant
13    hospital entity) to State or local government in treating
14    Medicaid recipients and recipients of means-tested
15    programs, including but not limited to General Assistance,
16    the Covering ALL KIDS Health Insurance Act, and the State
17    Children's Health Insurance Program. The amount of subsidy
18    for purposes of this item (4) is calculated in the same
19    manner as unreimbursed costs are calculated for Medicaid
20    and other means-tested government programs in the Schedule
21    H of IRS Form 990 in effect on the effective date of this
22    amendatory Act of the 97th General Assembly.
23        (5) Dual-eligible subsidy. The amount of subsidy
24    provided to government by treating dual-eligible
25    Medicare/Medicaid patients. The amount of subsidy for
26    purposes of this item (5) is calculated by multiplying the

 

 

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1    relevant hospital entity's unreimbursed costs for
2    Medicare, calculated in the same manner as determined in
3    the Schedule H of IRS Form 990 in effect on the effective
4    date of this amendatory Act of the 97th General Assembly,
5    by the relevant hospital entity's ratio of dual-eligible
6    patients to total Medicare patients.
7        (6) Relief of the burden of government related to
8    health care. Except to the extent otherwise taken into
9    account in this subsection, the portion of unreimbursed
10    costs of the relevant hospital entity attributable to
11    providing, paying for, or subsidizing goods, activities,
12    or services that relieve the burden of government related
13    to health care for low-income individuals. Such activities
14    or services shall include, but are not limited to,
15    providing emergency, trauma, burn, neonatal, psychiatric,
16    rehabilitation, or other special services; providing
17    medical education; and conducting medical research or
18    training of health care professionals. The portion of those
19    unreimbursed costs attributable to benefiting low-income
20    individuals shall be determined using the ratio calculated
21    by adding the relevant hospital entity's costs
22    attributable to charity care, Medicaid, other means-tested
23    government programs, disabled Medicare patients under age
24    65, and dual-eligible Medicare/Medicaid patients and
25    dividing that total by the relevant hospital entity's total
26    costs. Such costs for the numerator and denominator shall

 

 

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1    be determined by multiplying gross charges by the cost to
2    charge ratio taken from the hospital's most recently filed
3    Medicare cost report (CMS 2252-10 Worksheet, Part I). In
4    the case of emergency services, the ratio shall be
5    calculated using costs (gross charges multiplied by the
6    cost to charge ratio taken from the hospital's most
7    recently filed Medicare cost report (CMS 2252-10
8    Worksheet, Part I)) of patients treated in the relevant
9    hospital entity's emergency department.
10        (7) Any other activity by the relevant hospital entity
11    that the Department determines relieves the burden of
12    government or addresses the health of low-income or
13    underserved individuals.
14    (d) The hospital applicant shall include information in its
15exemption application establishing that it satisfies the
16requirements of subsection (b). For purposes of making the
17calculations required by subsection (b), the hospital
18applicant may for each year elect to use either (1) the value
19of the services or activities listed in subsection (e) for the
20hospital year or (2) the average value of those services or
21activities for the 3 fiscal years ending with the hospital
22year. If the relevant hospital entity has been in operation for
23less than 3 completed fiscal years, then the latter
24calculation, if elected, shall be performed on a pro rata
25basis.
26    (e) For purposes of making the calculations required by

 

 

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1this Section:
2        (1) particular services or activities eligible for
3    consideration under any of the paragraphs (1) through (7)
4    of subsection (c) may not be counted under more than one of
5    those paragraphs; and
6        (2) the amount of unreimbursed costs and the amount of
7    subsidy shall not be reduced by restricted or unrestricted
8    payments received by the relevant hospital entity as
9    contributions deductible under Section 170(a) of the
10    Internal Revenue Code.
11    (g) Estimation of Exempt Property Tax Liability. The
12estimated property tax liability used for the determination in
13subsection (b) shall be calculated as follows:
14        (1) "Estimated property tax liability" means the
15    estimated dollar amount of property tax that would be owed,
16    with respect to the exempt portion of each of the relevant
17    hospital entity's properties that are already fully or
18    partially exempt, or for which an exemption in whole or in
19    part is currently being sought, and then aggregated as
20    applicable, as if the exempt portion of those properties
21    were subject to tax, calculated with respect to each such
22    property by multiplying:
23            (A) the lesser of (i) the actual assessed value, if
24        any, of the portion of the property for which an
25        exemption is sought or (ii) an estimated assessed value
26        of the exempt portion of such property as determined in

 

 

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1        item (2) of this subsection (g), by
2            (B) the applicable State equalization rate
3        (yielding the equalized assessed value), by
4            (C) the applicable tax rate.
5        (2) The estimated assessed value of the exempt portion
6    of the property equals the sum of (i) the estimated fair
7    market value of buildings on the property, as determined in
8    accordance with subparagraphs (A) and (B) of this item (2),
9    multiplied by the applicable assessment factor, and (ii)
10    the estimated assessed value of the land portion of the
11    property, as determined in accordance with subparagraph
12    (C).
13            (A) The "estimated fair market value of buildings
14        on the property" means the replacement value of any
15        exempt portion of buildings on the property, minus
16        depreciation, determined utilizing the cost
17        replacement method whereby the exempt square footage
18        of all such buildings is multiplied by the replacement
19        cost per square foot for Class A Average building found
20        in the most recent edition of the Marshall & Swift
21        Valuation Services Manual, adjusted by any appropriate
22        current cost and local multipliers.
23            (B) Depreciation, for purposes of calculating the
24        estimated fair market value of buildings on the
25        property, is applied by utilizing a weighted mean life
26        for the buildings based on original construction and

 

 

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1        assuming a 40-year life for hospital buildings and the
2        applicable life for other types of buildings as
3        specified in the American Hospital Association
4        publication "Estimated Useful Lives of Depreciable
5        Hospital Assets". In the case of hospital buildings,
6        the remaining life is divided by 40 and this ratio is
7        multiplied by the replacement cost of the buildings to
8        obtain an estimated fair market value of buildings. If
9        a hospital building is older than 35 years, a remaining
10        life of 5 years for residual value is assumed; and if a
11        building is less than 8 years old, a remaining life of
12        32 years is assumed.
13            (C) The estimated assessed value of the land
14        portion of the property shall be determined by
15        multiplying (i) the per square foot average of the
16        assessed values of three parcels of land (not including
17        farm land, and excluding the assessed value of the
18        improvements thereon) reasonably comparable to the
19        property, by (ii) the number of square feet comprising
20        the exempt portion of the property's land square
21        footage.
22        (3) The assessment factor, State equalization rate,
23    and tax rate (including any special factors such as
24    Enterprise Zones) used in calculating the estimated
25    property tax liability shall be for the most recent year
26    that is publicly available from the applicable chief county

 

 

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1    assessment officer or officers at least 90 days before the
2    end of the hospital year.
3        (4) The method utilized to calculate estimated
4    property tax liability for purposes of this Section 15-86
5    shall not be utilized for the actual valuation, assessment,
6    or taxation of property pursuant to the Property Tax Code.
7    (h) For the purpose of this Section, the following terms
8shall have the meanings set forth below:
9        (1) "Hospital" means any institution, place, building,
10    buildings on a campus, or other health care facility
11    located in Illinois that is licensed under the Hospital
12    Licensing Act and has a hospital owner.
13        (2) "Hospital owner" means a not-for-profit
14    corporation that is the titleholder of a hospital, or the
15    owner of the beneficial interest in an Illinois land trust
16    that is the titleholder of a hospital.
17        (3) "Hospital affiliate" means any corporation,
18    partnership, limited partnership, joint venture, limited
19    liability company, association or other organization,
20    other than a hospital owner, that directly or indirectly
21    controls, is controlled by, or is under common control with
22    one or more hospital owners and that supports, is supported
23    by, or acts in furtherance of the exempt health care
24    purposes of at least one of those hospital owners'
25    hospitals.
26        (4) "Hospital system" means a hospital and one or more

 

 

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1    other hospitals or hospital affiliates related by common
2    control or ownership.
3        (5) "Control" relating to hospital owners, hospital
4    affiliates, or hospital systems means possession, direct
5    or indirect, of the power to direct or cause the direction
6    of the management and policies of the entity, whether
7    through ownership of assets, membership interest, other
8    voting or governance rights, by contract or otherwise.
9        (6) "Hospital applicant" means a hospital owner or
10    hospital affiliate that files an application for an
11    exemption or renewal of exemption under this Section.
12        (7) "Relevant hospital entity" means (A) the hospital
13    owner, in the case of a hospital applicant that is a
14    hospital owner, and (B) at the election of a hospital
15    applicant that is a hospital affiliate, either (i) the
16    hospital affiliate or (ii) the hospital system to which the
17    hospital applicant belongs, including any hospitals or
18    hospital affiliates that are related by common control or
19    ownership.
20        (8) "Subject property" means property used for the
21    calculation under subsection (b) of this Section.
22        (9) "Hospital year" means the fiscal year of the
23    relevant hospital entity, or the fiscal year of one of the
24    hospital owners in the hospital system if the relevant
25    hospital entity is a hospital system with members with
26    different fiscal years, that ends in the year for which the

 

 

SB2194 Enrolled- 70 -LRB097 10235 HLH 50431 b

1    exemption is sought.
 
2    Section 5-20. The Service Occupation Tax Act is amended by
3adding Section 3-8 as follows:
 
4    (35 ILCS 115/3-8 new)
5    Sec. 3-8. Hospital exemption.
6    (a) Tangible personal property sold to or used by a
7hospital owner that owns one or more hospitals licensed under
8the Hospital Licensing Act or operated under the University of
9Illinois Hospital Act, or a hospital affiliate that is not
10already exempt under another provision of this Act and meets
11the criteria for an exemption under this Section, is exempt
12from taxation under this Act.
13    (b) A hospital owner or hospital affiliate satisfies the
14conditions for an exemption under this Section if the value of
15qualified services or activities listed in subsection (c) of
16this Section for the hospital year equals or exceeds the
17relevant hospital entity's estimated property tax liability,
18without regard to any property tax exemption granted under
19Section 15-86 of the Property Tax Code, for the calendar year
20in which exemption or renewal of exemption is sought. For
21purposes of making the calculations required by this subsection
22(b), if the relevant hospital entity is a hospital owner that
23owns more than one hospital, the value of the services or
24activities listed in subsection (c) shall be calculated on the

 

 

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1basis of only those services and activities relating to the
2hospital that includes the subject property, and the relevant
3hospital entity's estimated property tax liability shall be
4calculated only with respect to the properties comprising that
5hospital. In the case of a multi-state hospital system or
6hospital affiliate, the value of the services or activities
7listed in subsection (c) shall be calculated on the basis of
8only those services and activities that occur in Illinois and
9the relevant hospital entity's estimated property tax
10liability shall be calculated only with respect to its property
11located in Illinois.
12    (c) The following services and activities shall be
13considered for purposes of making the calculations required by
14subsection (b):
15        (1) Charity care. Free or discounted services provided
16    pursuant to the relevant hospital entity's financial
17    assistance policy, measured at cost, including discounts
18    provided under the Hospital Uninsured Patient Discount
19    Act.
20        (2) Health services to low-income and underserved
21    individuals. Other unreimbursed costs of the relevant
22    hospital entity for providing without charge, paying for,
23    or subsidizing goods, activities, or services for the
24    purpose of addressing the health of low-income or
25    underserved individuals. Those activities or services may
26    include, but are not limited to: financial or in-kind

 

 

SB2194 Enrolled- 72 -LRB097 10235 HLH 50431 b

1    support to affiliated or unaffiliated hospitals, hospital
2    affiliates, community clinics, or programs that treat
3    low-income or underserved individuals; paying for or
4    subsidizing health care professionals who care for
5    low-income or underserved individuals; providing or
6    subsidizing outreach or educational services to low-income
7    or underserved individuals for disease management and
8    prevention; free or subsidized goods, supplies, or
9    services needed by low-income or underserved individuals
10    because of their medical condition; and prenatal or
11    childbirth outreach to low-income or underserved persons.
12        (3) Subsidy of State or local governments. Direct or
13    indirect financial or in-kind subsidies of State or local
14    governments by the relevant hospital entity that pay for or
15    subsidize activities or programs related to health care for
16    low-income or underserved individuals.
17        (4) Support for State health care programs for
18    low-income individuals. At the election of the hospital
19    applicant for each applicable year, either (A) 10% of
20    payments to the relevant hospital entity and any hospital
21    affiliate designated by the relevant hospital entity
22    (provided that such hospital affiliate's operations
23    provide financial or operational support for or receive
24    financial or operational support from the relevant
25    hospital entity) under Medicaid or other means-tested
26    programs, including, but not limited to, General

 

 

SB2194 Enrolled- 73 -LRB097 10235 HLH 50431 b

1    Assistance, the Covering ALL KIDS Health Insurance Act, and
2    the State Children's Health Insurance Program or (B) the
3    amount of subsidy provided by the relevant hospital entity
4    and any hospital affiliate designated by the relevant
5    hospital entity (provided that such hospital affiliate's
6    operations provide financial or operational support for or
7    receive financial or operational support from the relevant
8    hospital entity) to State or local government in treating
9    Medicaid recipients and recipients of means-tested
10    programs, including but not limited to General Assistance,
11    the Covering ALL KIDS Health Insurance Act, and the State
12    Children's Health Insurance Program. The amount of subsidy
13    for purposes of this item (4) is calculated in the same
14    manner as unreimbursed costs are calculated for Medicaid
15    and other means-tested government programs in the Schedule
16    H of IRS Form 990 in effect on the effective date of this
17    amendatory Act of the 97th General Assembly.
18        (5) Dual-eligible subsidy. The amount of subsidy
19    provided to government by treating dual-eligible
20    Medicare/Medicaid patients. The amount of subsidy for
21    purposes of this item (5) is calculated by multiplying the
22    relevant hospital entity's unreimbursed costs for
23    Medicare, calculated in the same manner as determined in
24    the Schedule H of IRS Form 990 in effect on the effective
25    date of this amendatory Act of the 97th General Assembly,
26    by the relevant hospital entity's ratio of dual-eligible

 

 

SB2194 Enrolled- 74 -LRB097 10235 HLH 50431 b

1    patients to total Medicare patients.
2        (6) Relief of the burden of government related to
3    health care. Except to the extent otherwise taken into
4    account in this subsection, the portion of unreimbursed
5    costs of the relevant hospital entity attributable to
6    providing, paying for, or subsidizing goods, activities,
7    or services that relieve the burden of government related
8    to health care for low-income individuals. Such activities
9    or services shall include, but are not limited to,
10    providing emergency, trauma, burn, neonatal, psychiatric,
11    rehabilitation, or other special services; providing
12    medical education; and conducting medical research or
13    training of health care professionals. The portion of those
14    unreimbursed costs attributable to benefiting low-income
15    individuals shall be determined using the ratio calculated
16    by adding the relevant hospital entity's costs
17    attributable to charity care, Medicaid, other means-tested
18    government programs, disabled Medicare patients under age
19    65, and dual-eligible Medicare/Medicaid patients and
20    dividing that total by the relevant hospital entity's total
21    costs. Such costs for the numerator and denominator shall
22    be determined by multiplying gross charges by the cost to
23    charge ratio taken from the hospital's most recently filed
24    Medicare cost report (CMS 2252-10 Worksheet, Part I). In
25    the case of emergency services, the ratio shall be
26    calculated using costs (gross charges multiplied by the

 

 

SB2194 Enrolled- 75 -LRB097 10235 HLH 50431 b

1    cost to charge ratio taken from the hospital's most
2    recently filed Medicare cost report (CMS 2252-10
3    Worksheet, Part I)) of patients treated in the relevant
4    hospital entity's emergency department.
5        (7) Any other activity by the relevant hospital entity
6    that the Department determines relieves the burden of
7    government or addresses the health of low-income or
8    underserved individuals.
9    (d) The hospital applicant shall include information in its
10exemption application establishing that it satisfies the
11requirements of subsection (b). For purposes of making the
12calculations required by subsection (b), the hospital
13applicant may for each year elect to use either (1) the value
14of the services or activities listed in subsection (e) for the
15hospital year or (2) the average value of those services or
16activities for the 3 fiscal years ending with the hospital
17year. If the relevant hospital entity has been in operation for
18less than 3 completed fiscal years, then the latter
19calculation, if elected, shall be performed on a pro rata
20basis.
21    (e) For purposes of making the calculations required by
22this Section:
23        (1) particular services or activities eligible for
24    consideration under any of the paragraphs (1) through (7)
25    of subsection (c) may not be counted under more than one of
26    those paragraphs; and

 

 

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1        (2) the amount of unreimbursed costs and the amount of
2    subsidy shall not be reduced by restricted or unrestricted
3    payments received by the relevant hospital entity as
4    contributions deductible under Section 170(a) of the
5    Internal Revenue Code.
6    (g) Estimation of Exempt Property Tax Liability. The
7estimated property tax liability used for the determination in
8subsection (b) shall be calculated as follows:
9        (1) "Estimated property tax liability" means the
10    estimated dollar amount of property tax that would be owed,
11    with respect to the exempt portion of each of the relevant
12    hospital entity's properties that are already fully or
13    partially exempt, or for which an exemption in whole or in
14    part is currently being sought, and then aggregated as
15    applicable, as if the exempt portion of those properties
16    were subject to tax, calculated with respect to each such
17    property by multiplying:
18            (A) the lesser of (i) the actual assessed value, if
19        any, of the portion of the property for which an
20        exemption is sought or (ii) an estimated assessed value
21        of the exempt portion of such property as determined in
22        item (2) of this subsection (g), by
23            (B) the applicable State equalization rate
24        (yielding the equalized assessed value), by
25            (C) the applicable tax rate.
26        (2) The estimated assessed value of the exempt portion

 

 

SB2194 Enrolled- 77 -LRB097 10235 HLH 50431 b

1    of the property equals the sum of (i) the estimated fair
2    market value of buildings on the property, as determined in
3    accordance with subparagraphs (A) and (B) of this item (2),
4    multiplied by the applicable assessment factor, and (ii)
5    the estimated assessed value of the land portion of the
6    property, as determined in accordance with subparagraph
7    (C).
8            (A) The "estimated fair market value of buildings
9        on the property" means the replacement value of any
10        exempt portion of buildings on the property, minus
11        depreciation, determined utilizing the cost
12        replacement method whereby the exempt square footage
13        of all such buildings is multiplied by the replacement
14        cost per square foot for Class A Average building found
15        in the most recent edition of the Marshall & Swift
16        Valuation Services Manual, adjusted by any appropriate
17        current cost and local multipliers.
18            (B) Depreciation, for purposes of calculating the
19        estimated fair market value of buildings on the
20        property, is applied by utilizing a weighted mean life
21        for the buildings based on original construction and
22        assuming a 40-year life for hospital buildings and the
23        applicable life for other types of buildings as
24        specified in the American Hospital Association
25        publication "Estimated Useful Lives of Depreciable
26        Hospital Assets". In the case of hospital buildings,

 

 

SB2194 Enrolled- 78 -LRB097 10235 HLH 50431 b

1        the remaining life is divided by 40 and this ratio is
2        multiplied by the replacement cost of the buildings to
3        obtain an estimated fair market value of buildings. If
4        a hospital building is older than 35 years, a remaining
5        life of 5 years for residual value is assumed; and if a
6        building is less than 8 years old, a remaining life of
7        32 years is assumed.
8            (C) The estimated assessed value of the land
9        portion of the property shall be determined by
10        multiplying (i) the per square foot average of the
11        assessed values of three parcels of land (not including
12        farm land, and excluding the assessed value of the
13        improvements thereon) reasonably comparable to the
14        property, by (ii) the number of square feet comprising
15        the exempt portion of the property's land square
16        footage.
17        (3) The assessment factor, State equalization rate,
18    and tax rate (including any special factors such as
19    Enterprise Zones) used in calculating the estimated
20    property tax liability shall be for the most recent year
21    that is publicly available from the applicable chief county
22    assessment officer or officers at least 90 days before the
23    end of the hospital year.
24        (4) The method utilized to calculate estimated
25    property tax liability for purposes of this Section 15-86
26    shall not be utilized for the actual valuation, assessment,

 

 

SB2194 Enrolled- 79 -LRB097 10235 HLH 50431 b

1    or taxation of property pursuant to the Property Tax Code.
2    (h) For the purpose of this Section, the following terms
3shall have the meanings set forth below:
4        (1) "Hospital" means any institution, place, building,
5    buildings on a campus, or other health care facility
6    located in Illinois that is licensed under the Hospital
7    Licensing Act and has a hospital owner.
8        (2) "Hospital owner" means a not-for-profit
9    corporation that is the titleholder of a hospital, or the
10    owner of the beneficial interest in an Illinois land trust
11    that is the titleholder of a hospital.
12        (3) "Hospital affiliate" means any corporation,
13    partnership, limited partnership, joint venture, limited
14    liability company, association or other organization,
15    other than a hospital owner, that directly or indirectly
16    controls, is controlled by, or is under common control with
17    one or more hospital owners and that supports, is supported
18    by, or acts in furtherance of the exempt health care
19    purposes of at least one of those hospital owners'
20    hospitals.
21        (4) "Hospital system" means a hospital and one or more
22    other hospitals or hospital affiliates related by common
23    control or ownership.
24        (5) "Control" relating to hospital owners, hospital
25    affiliates, or hospital systems means possession, direct
26    or indirect, of the power to direct or cause the direction

 

 

SB2194 Enrolled- 80 -LRB097 10235 HLH 50431 b

1    of the management and policies of the entity, whether
2    through ownership of assets, membership interest, other
3    voting or governance rights, by contract or otherwise.
4        (6) "Hospital applicant" means a hospital owner or
5    hospital affiliate that files an application for an
6    exemption or renewal of exemption under this Section.
7        (7) "Relevant hospital entity" means (A) the hospital
8    owner, in the case of a hospital applicant that is a
9    hospital owner, and (B) at the election of a hospital
10    applicant that is a hospital affiliate, either (i) the
11    hospital affiliate or (ii) the hospital system to which the
12    hospital applicant belongs, including any hospitals or
13    hospital affiliates that are related by common control or
14    ownership.
15        (8) "Subject property" means property used for the
16    calculation under subsection (b) of this Section.
17        (9) "Hospital year" means the fiscal year of the
18    relevant hospital entity, or the fiscal year of one of the
19    hospital owners in the hospital system if the relevant
20    hospital entity is a hospital system with members with
21    different fiscal years, that ends in the year for which the
22    exemption is sought.
 
23    Section 5-25. The Retailers' Occupation Tax Act is amended
24by adding Section 2-9 as follows:
 

 

 

SB2194 Enrolled- 81 -LRB097 10235 HLH 50431 b

1    (35 ILCS 120/2-9 new)
2    Sec. 2-9. Hospital exemption.
3    (a) Tangible personal property sold to or used by a
4hospital owner that owns one or more hospitals licensed under
5the Hospital Licensing Act or operated under the University of
6Illinois Hospital Act, or a hospital affiliate that is not
7already exempt under another provision of this Act and meets
8the criteria for an exemption under this Section, is exempt
9from taxation under this Act.
10    (b) A hospital owner or hospital affiliate satisfies the
11conditions for an exemption under this Section if the value of
12qualified services or activities listed in subsection (c) of
13this Section for the hospital year equals or exceeds the
14relevant hospital entity's estimated property tax liability,
15without regard to any property tax exemption granted under
16Section 15-86 of the Property Tax Code, for the calendar year
17in which exemption or renewal of exemption is sought. For
18purposes of making the calculations required by this subsection
19(b), if the relevant hospital entity is a hospital owner that
20owns more than one hospital, the value of the services or
21activities listed in subsection (c) shall be calculated on the
22basis of only those services and activities relating to the
23hospital that includes the subject property, and the relevant
24hospital entity's estimated property tax liability shall be
25calculated only with respect to the properties comprising that
26hospital. In the case of a multi-state hospital system or

 

 

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1hospital affiliate, the value of the services or activities
2listed in subsection (c) shall be calculated on the basis of
3only those services and activities that occur in Illinois and
4the relevant hospital entity's estimated property tax
5liability shall be calculated only with respect to its property
6located in Illinois.
7    (c) The following services and activities shall be
8considered for purposes of making the calculations required by
9subsection (b):
10        (1) Charity care. Free or discounted services provided
11    pursuant to the relevant hospital entity's financial
12    assistance policy, measured at cost, including discounts
13    provided under the Hospital Uninsured Patient Discount
14    Act.
15        (2) Health services to low-income and underserved
16    individuals. Other unreimbursed costs of the relevant
17    hospital entity for providing without charge, paying for,
18    or subsidizing goods, activities, or services for the
19    purpose of addressing the health of low-income or
20    underserved individuals. Those activities or services may
21    include, but are not limited to: financial or in-kind
22    support to affiliated or unaffiliated hospitals, hospital
23    affiliates, community clinics, or programs that treat
24    low-income or underserved individuals; paying for or
25    subsidizing health care professionals who care for
26    low-income or underserved individuals; providing or

 

 

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1    subsidizing outreach or educational services to low-income
2    or underserved individuals for disease management and
3    prevention; free or subsidized goods, supplies, or
4    services needed by low-income or underserved individuals
5    because of their medical condition; and prenatal or
6    childbirth outreach to low-income or underserved persons.
7        (3) Subsidy of State or local governments. Direct or
8    indirect financial or in-kind subsidies of State or local
9    governments by the relevant hospital entity that pay for or
10    subsidize activities or programs related to health care for
11    low-income or underserved individuals.
12        (4) Support for State health care programs for
13    low-income individuals. At the election of the hospital
14    applicant for each applicable year, either (A) 10% of
15    payments to the relevant hospital entity and any hospital
16    affiliate designated by the relevant hospital entity
17    (provided that such hospital affiliate's operations
18    provide financial or operational support for or receive
19    financial or operational support from the relevant
20    hospital entity) under Medicaid or other means-tested
21    programs, including, but not limited to, General
22    Assistance, the Covering ALL KIDS Health Insurance Act, and
23    the State Children's Health Insurance Program or (B) the
24    amount of subsidy provided by the relevant hospital entity
25    and any hospital affiliate designated by the relevant
26    hospital entity (provided that such hospital affiliate's

 

 

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1    operations provide financial or operational support for or
2    receive financial or operational support from the relevant
3    hospital entity) to State or local government in treating
4    Medicaid recipients and recipients of means-tested
5    programs, including but not limited to General Assistance,
6    the Covering ALL KIDS Health Insurance Act, and the State
7    Children's Health Insurance Program. The amount of subsidy
8    for purposes of this item (4) is calculated in the same
9    manner as unreimbursed costs are calculated for Medicaid
10    and other means-tested government programs in the Schedule
11    H of IRS Form 990 in effect on the effective date of this
12    amendatory Act of the 97th General Assembly.
13        (5) Dual-eligible subsidy. The amount of subsidy
14    provided to government by treating dual-eligible
15    Medicare/Medicaid patients. The amount of subsidy for
16    purposes of this item (5) is calculated by multiplying the
17    relevant hospital entity's unreimbursed costs for
18    Medicare, calculated in the same manner as determined in
19    the Schedule H of IRS Form 990 in effect on the effective
20    date of this amendatory Act of the 97th General Assembly,
21    by the relevant hospital entity's ratio of dual-eligible
22    patients to total Medicare patients.
23        (6) Relief of the burden of government related to
24    health care. Except to the extent otherwise taken into
25    account in this subsection, the portion of unreimbursed
26    costs of the relevant hospital entity attributable to

 

 

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1    providing, paying for, or subsidizing goods, activities,
2    or services that relieve the burden of government related
3    to health care for low-income individuals. Such activities
4    or services shall include, but are not limited to,
5    providing emergency, trauma, burn, neonatal, psychiatric,
6    rehabilitation, or other special services; providing
7    medical education; and conducting medical research or
8    training of health care professionals. The portion of those
9    unreimbursed costs attributable to benefiting low-income
10    individuals shall be determined using the ratio calculated
11    by adding the relevant hospital entity's costs
12    attributable to charity care, Medicaid, other means-tested
13    government programs, disabled Medicare patients under age
14    65, and dual-eligible Medicare/Medicaid patients and
15    dividing that total by the relevant hospital entity's total
16    costs. Such costs for the numerator and denominator shall
17    be determined by multiplying gross charges by the cost to
18    charge ratio taken from the hospital's most recently filed
19    Medicare cost report (CMS 2252-10 Worksheet, Part I). In
20    the case of emergency services, the ratio shall be
21    calculated using costs (gross charges multiplied by the
22    cost to charge ratio taken from the hospital's most
23    recently filed Medicare cost report (CMS 2252-10
24    Worksheet, Part I)) of patients treated in the relevant
25    hospital entity's emergency department.
26        (7) Any other activity by the relevant hospital entity

 

 

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1    that the Department determines relieves the burden of
2    government or addresses the health of low-income or
3    underserved individuals.
4    (d) The hospital applicant shall include information in its
5exemption application establishing that it satisfies the
6requirements of subsection (b). For purposes of making the
7calculations required by subsection (b), the hospital
8applicant may for each year elect to use either (1) the value
9of the services or activities listed in subsection (e) for the
10hospital year or (2) the average value of those services or
11activities for the 3 fiscal years ending with the hospital
12year. If the relevant hospital entity has been in operation for
13less than 3 completed fiscal years, then the latter
14calculation, if elected, shall be performed on a pro rata
15basis.
16    (e) For purposes of making the calculations required by
17this Section:
18        (1) particular services or activities eligible for
19    consideration under any of the paragraphs (1) through (7)
20    of subsection (c) may not be counted under more than one of
21    those paragraphs; and
22        (2) the amount of unreimbursed costs and the amount of
23    subsidy shall not be reduced by restricted or unrestricted
24    payments received by the relevant hospital entity as
25    contributions deductible under Section 170(a) of the
26    Internal Revenue Code.

 

 

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1    (g) Estimation of Exempt Property Tax Liability. The
2estimated property tax liability used for the determination in
3subsection (b) shall be calculated as follows:
4        (1) "Estimated property tax liability" means the
5    estimated dollar amount of property tax that would be owed,
6    with respect to the exempt portion of each of the relevant
7    hospital entity's properties that are already fully or
8    partially exempt, or for which an exemption in whole or in
9    part is currently being sought, and then aggregated as
10    applicable, as if the exempt portion of those properties
11    were subject to tax, calculated with respect to each such
12    property by multiplying:
13            (A) the lesser of (i) the actual assessed value, if
14        any, of the portion of the property for which an
15        exemption is sought or (ii) an estimated assessed value
16        of the exempt portion of such property as determined in
17        item (2) of this subsection (g), by
18            (B) the applicable State equalization rate
19        (yielding the equalized assessed value), by
20            (C) the applicable tax rate.
21        (2) The estimated assessed value of the exempt portion
22    of the property equals the sum of (i) the estimated fair
23    market value of buildings on the property, as determined in
24    accordance with subparagraphs (A) and (B) of this item (2),
25    multiplied by the applicable assessment factor, and (ii)
26    the estimated assessed value of the land portion of the

 

 

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1    property, as determined in accordance with subparagraph
2    (C).
3            (A) The "estimated fair market value of buildings
4        on the property" means the replacement value of any
5        exempt portion of buildings on the property, minus
6        depreciation, determined utilizing the cost
7        replacement method whereby the exempt square footage
8        of all such buildings is multiplied by the replacement
9        cost per square foot for Class A Average building found
10        in the most recent edition of the Marshall & Swift
11        Valuation Services Manual, adjusted by any appropriate
12        current cost and local multipliers.
13            (B) Depreciation, for purposes of calculating the
14        estimated fair market value of buildings on the
15        property, is applied by utilizing a weighted mean life
16        for the buildings based on original construction and
17        assuming a 40-year life for hospital buildings and the
18        applicable life for other types of buildings as
19        specified in the American Hospital Association
20        publication "Estimated Useful Lives of Depreciable
21        Hospital Assets". In the case of hospital buildings,
22        the remaining life is divided by 40 and this ratio is
23        multiplied by the replacement cost of the buildings to
24        obtain an estimated fair market value of buildings. If
25        a hospital building is older than 35 years, a remaining
26        life of 5 years for residual value is assumed; and if a

 

 

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1        building is less than 8 years old, a remaining life of
2        32 years is assumed.
3            (C) The estimated assessed value of the land
4        portion of the property shall be determined by
5        multiplying (i) the per square foot average of the
6        assessed values of three parcels of land (not including
7        farm land, and excluding the assessed value of the
8        improvements thereon) reasonably comparable to the
9        property, by (ii) the number of square feet comprising
10        the exempt portion of the property's land square
11        footage.
12        (3) The assessment factor, State equalization rate,
13    and tax rate (including any special factors such as
14    Enterprise Zones) used in calculating the estimated
15    property tax liability shall be for the most recent year
16    that is publicly available from the applicable chief county
17    assessment officer or officers at least 90 days before the
18    end of the hospital year.
19        (4) The method utilized to calculate estimated
20    property tax liability for purposes of this Section 15-86
21    shall not be utilized for the actual valuation, assessment,
22    or taxation of property pursuant to the Property Tax Code.
23    (h) For the purpose of this Section, the following terms
24shall have the meanings set forth below:
25        (1) "Hospital" means any institution, place, building,
26    buildings on a campus, or other health care facility

 

 

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1    located in Illinois that is licensed under the Hospital
2    Licensing Act and has a hospital owner.
3        (2) "Hospital owner" means a not-for-profit
4    corporation that is the titleholder of a hospital, or the
5    owner of the beneficial interest in an Illinois land trust
6    that is the titleholder of a hospital.
7        (3) "Hospital affiliate" means any corporation,
8    partnership, limited partnership, joint venture, limited
9    liability company, association or other organization,
10    other than a hospital owner, that directly or indirectly
11    controls, is controlled by, or is under common control with
12    one or more hospital owners and that supports, is supported
13    by, or acts in furtherance of the exempt health care
14    purposes of at least one of those hospital owners'
15    hospitals.
16        (4) "Hospital system" means a hospital and one or more
17    other hospitals or hospital affiliates related by common
18    control or ownership.
19        (5) "Control" relating to hospital owners, hospital
20    affiliates, or hospital systems means possession, direct
21    or indirect, of the power to direct or cause the direction
22    of the management and policies of the entity, whether
23    through ownership of assets, membership interest, other
24    voting or governance rights, by contract or otherwise.
25        (6) "Hospital applicant" means a hospital owner or
26    hospital affiliate that files an application for an

 

 

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1    exemption or renewal of exemption under this Section.
2        (7) "Relevant hospital entity" means (A) the hospital
3    owner, in the case of a hospital applicant that is a
4    hospital owner, and (B) at the election of a hospital
5    applicant that is a hospital affiliate, either (i) the
6    hospital affiliate or (ii) the hospital system to which the
7    hospital applicant belongs, including any hospitals or
8    hospital affiliates that are related by common control or
9    ownership.
10        (8) "Subject property" means property used for the
11    calculation under subsection (b) of this Section.
12        (9) "Hospital year" means the fiscal year of the
13    relevant hospital entity, or the fiscal year of one of the
14    hospital owners in the hospital system if the relevant
15    hospital entity is a hospital system with members with
16    different fiscal years, that ends in the year for which the
17    exemption is sought.
 
18    Section 5-30. The Cigarette Tax Act is amended by changing
19Sections 1 and 2 as follows:
 
20    (35 ILCS 130/1)  (from Ch. 120, par. 453.1)
21    Sec. 1. For the purposes of this Act:
22    "Brand Style" means a variety of cigarettes distinguished
23by the tobacco used, tar and nicotine content, flavoring used,
24size of the cigarette, filtration on the cigarette or

 

 

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1packaging.
2    Until July 1, 2012, "cigarette" "Cigarette", means any roll
3for smoking made wholly or in part of tobacco irrespective of
4size or shape and whether or not such tobacco is flavored,
5adulterated or mixed with any other ingredient, and the wrapper
6or cover of which is made of paper or any other substance or
7material except tobacco.
8    "Cigarette", beginning on and after July 1, 2012, means any
9roll for smoking made wholly or in part of tobacco irrespective
10of size or shape and whether or not such tobacco is flavored,
11adulterated, or mixed with any other ingredient, and the
12wrapper or cover of which is made of paper.
13    "Cigarette", beginning on and after July 1, 2012, also
14shall mean: Any roll for smoking made wholly or in part of
15tobacco labeled as anything other than a cigarette or not
16bearing a label, if it meets two or more of the following
17criteria:
18        (a) the product is sold in packs similar to cigarettes;
19        (b) the product is available for sale in cartons of ten
20    packs;
21        (c) the product is sold in soft packs, hard packs,
22    flip-top boxes, clam shells, or other cigarette-type
23    boxes;
24        (d) the product is of a length and diameter similar to
25    commercially manufactured cigarettes;
26        (e) the product has a cellulose acetate or other

 

 

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1    integrated filter;
2        (f) the product is marketed or advertised to consumers
3    as a cigarette or cigarette substitute; or
4        (g) other evidence that the product fits within the
5    definition of cigarette.
6    "Contraband cigarettes" means:
7        (a) cigarettes that do not bear a required tax stamp
8    under this Act;
9        (b) cigarettes for which any required federal taxes
10    have not been paid;
11        (c) cigarettes that bear a counterfeit tax stamp;
12        (d) cigarettes that are manufactured, fabricated,
13    assembled, processed, packaged, or labeled by any person
14    other than (i) the owner of the trademark rights in the
15    cigarette brand or (ii) a person that is directly or
16    indirectly authorized by such owner;
17        (e) cigarettes imported into the United States, or
18    otherwise distributed, in violation of the federal
19    Imported Cigarette Compliance Act of 2000 (Title IV of
20    Public Law 106-476);
21        (f) cigarettes that have false manufacturing labels;
22        (g) cigarettes identified in Section 3-10(a)(1) of
23    this Act; or
24        (h) cigarettes that are improperly tax stamped,
25    including cigarettes that bear a tax stamp of another state
26    or taxing jurisdiction; or .

 

 

SB2194 Enrolled- 94 -LRB097 10235 HLH 50431 b

1        (i) cigarettes made or fabricated by a person holding a
2    cigarette machine operator license under Section 1-20 of
3    the Cigarette Machine Operators' Occupation Tax Act in the
4    possession of manufacturers, distributors, secondary
5    distributors, manufacturer representatives or other
6    retailers for the purpose of resale, regardless of whether
7    the tax has been paid on such cigarettes.
8    "Person" means any natural individual, firm, partnership,
9association, joint stock company, joint adventure, public or
10private corporation, however formed, limited liability
11company, or a receiver, executor, administrator, trustee,
12guardian or other representative appointed by order of any
13court.
14    "Prior Continuous Compliance Taxpayer" means any person
15who is licensed under this Act and who, having been a licensee
16for a continuous period of 5 years, is determined by the
17Department not to have been either delinquent or deficient in
18the payment of tax liability during that period or otherwise in
19violation of this Act. Also, any taxpayer who has, as verified
20by the Department, continuously complied with the condition of
21his bond or other security under provisions of this Act for a
22period of 5 consecutive years shall be considered to be a
23"Prior continuous compliance taxpayer". In calculating the
24consecutive period of time described herein for qualification
25as a "prior continuous compliance taxpayer", a consecutive
26period of time of qualifying compliance immediately prior to

 

 

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1the effective date of this amendatory Act of 1987 shall be
2credited to any licensee who became licensed on or before the
3effective date of this amendatory Act of 1987.
4    "Department" means the Department of Revenue.
5    "Sale" means any transfer, exchange or barter in any manner
6or by any means whatsoever for a consideration, and includes
7and means all sales made by any person.
8    "Original Package" means the individual packet, box or
9other container whatsoever used to contain and to convey
10cigarettes to the consumer.
11    "Distributor" means any and each of the following:
12        (1) Any person engaged in the business of selling
13    cigarettes in this State who brings or causes to be brought
14    into this State from without this State any original
15    packages of cigarettes, on which original packages there is
16    no authorized evidence underneath a sealed transparent
17    wrapper showing that the tax liability imposed by this Act
18    has been paid or assumed by the out-of-State seller of such
19    cigarettes, for sale or other disposition in the course of
20    such business.
21        (2) Any person who makes, manufactures or fabricates
22    cigarettes in this State for sale in this State, except a
23    person who makes, manufactures or fabricates cigarettes as
24    a part of a correctional industries program for sale to
25    residents incarcerated in penal institutions or resident
26    patients of a State-operated mental health facility.

 

 

SB2194 Enrolled- 96 -LRB097 10235 HLH 50431 b

1        (3) Any person who makes, manufactures or fabricates
2    cigarettes outside this State, which cigarettes are placed
3    in original packages contained in sealed transparent
4    wrappers, for delivery or shipment into this State, and who
5    elects to qualify and is accepted by the Department as a
6    distributor under Section 4b of this Act.
7    "Place of business" shall mean and include any place where
8cigarettes are sold or where cigarettes are manufactured,
9stored or kept for the purpose of sale or consumption,
10including any vessel, vehicle, airplane, train or vending
11machine.
12    "Manufacturer representative" means a director, officer,
13or employee of a manufacturer who has obtained authority from
14the Department under Section 4f to maintain representatives in
15Illinois that provide or sell original packages of cigarettes
16made, manufactured, or fabricated by the manufacturer to
17retailers in compliance with Section 4f of this Act to promote
18cigarettes made, manufactured, or fabricated by the
19manufacturer.
20    "Business" means any trade, occupation, activity or
21enterprise engaged in for the purpose of selling cigarettes in
22this State.
23    "Retailer" means any person who engages in the making of
24transfers of the ownership of, or title to, cigarettes to a
25purchaser for use or consumption and not for resale in any
26form, for a valuable consideration. "Retailer" does not include

 

 

SB2194 Enrolled- 97 -LRB097 10235 HLH 50431 b

1a person:
2        (1) who transfers to residents incarcerated in penal
3    institutions or resident patients of a State-operated
4    mental health facility ownership of cigarettes made,
5    manufactured, or fabricated as part of a correctional
6    industries program; or
7        (2) who transfers cigarettes to a not-for-profit
8    research institution that conducts tests concerning the
9    health effects of tobacco products and who does not offer
10    the cigarettes for resale.
11    "Retailer" shall be construed to include any person who
12engages in the making of transfers of the ownership of, or
13title to, cigarettes to a purchaser, for use or consumption by
14any other person to whom such purchaser may transfer the
15cigarettes without a valuable consideration, except a person
16who transfers to residents incarcerated in penal institutions
17or resident patients of a State-operated mental health facility
18ownership of cigarettes made, manufactured or fabricated as
19part of a correctional industries program.
20    "Secondary distributor" means any person engaged in the
21business of selling cigarettes who purchases stamped original
22packages of cigarettes from a licensed distributor under this
23Act or the Cigarette Use Tax Act, sells 75% or more of those
24cigarettes to retailers for resale, and maintains an
25established business where a substantial stock of cigarettes is
26available to retailers for resale.

 

 

SB2194 Enrolled- 98 -LRB097 10235 HLH 50431 b

1    "Stamp" or "stamps" mean the indicia required to be affixed
2on a pack of cigarettes that evidence payment of the tax on
3cigarettes under Section 2 of this Act.
4    "Related party" means any person that is associated with
5any other person because he or she:
6        (a) is an officer or director of a business; or
7        (b) is legally recognized as a partner in business.
8(Source: P.A. 96-782, eff. 1-1-10; 96-1027, eff. 7-12-10;
997-587, eff. 8-26-11.)
 
10    (35 ILCS 130/2)  (from Ch. 120, par. 453.2)
11    Sec. 2. Tax imposed; rate; collection, payment, and
12distribution; discount.
13    (a) A tax is imposed upon any person engaged in business as
14a retailer of cigarettes in this State at the rate of 5 1/2
15mills per cigarette sold, or otherwise disposed of in the
16course of such business in this State. In addition to any other
17tax imposed by this Act, a tax is imposed upon any person
18engaged in business as a retailer of cigarettes in this State
19at a rate of 1/2 mill per cigarette sold or otherwise disposed
20of in the course of such business in this State on and after
21January 1, 1947, and shall be paid into the Metropolitan Fair
22and Exposition Authority Reconstruction Fund or as otherwise
23provided in Section 29. On and after December 1, 1985, in
24addition to any other tax imposed by this Act, a tax is imposed
25upon any person engaged in business as a retailer of cigarettes

 

 

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1in this State at a rate of 4 mills per cigarette sold or
2otherwise disposed of in the course of such business in this
3State. Of the additional tax imposed by this amendatory Act of
41985, $9,000,000 of the moneys received by the Department of
5Revenue pursuant to this Act shall be paid each month into the
6Common School Fund. On and after the effective date of this
7amendatory Act of 1989, in addition to any other tax imposed by
8this Act, a tax is imposed upon any person engaged in business
9as a retailer of cigarettes at the rate of 5 mills per
10cigarette sold or otherwise disposed of in the course of such
11business in this State. On and after the effective date of this
12amendatory Act of 1993, in addition to any other tax imposed by
13this Act, a tax is imposed upon any person engaged in business
14as a retailer of cigarettes at the rate of 7 mills per
15cigarette sold or otherwise disposed of in the course of such
16business in this State. On and after December 15, 1997, in
17addition to any other tax imposed by this Act, a tax is imposed
18upon any person engaged in business as a retailer of cigarettes
19at the rate of 7 mills per cigarette sold or otherwise disposed
20of in the course of such business of this State. All of the
21moneys received by the Department of Revenue pursuant to this
22Act and the Cigarette Use Tax Act from the additional taxes
23imposed by this amendatory Act of 1997, shall be paid each
24month into the Common School Fund. On and after July 1, 2002,
25in addition to any other tax imposed by this Act, a tax is
26imposed upon any person engaged in business as a retailer of

 

 

SB2194 Enrolled- 100 -LRB097 10235 HLH 50431 b

1cigarettes at the rate of 20.0 mills per cigarette sold or
2otherwise disposed of in the course of such business in this
3State. Beginning on June 24, 2012, in addition to any other tax
4imposed by this Act, a tax is imposed upon any person engaged
5in business as a retailer of cigarettes at the rate of 50 mills
6per cigarette sold or otherwise disposed of in the course of
7such business in this State. All moneys received by the
8Department of Revenue under this Act and the Cigarette Use Tax
9Act from the additional taxes imposed by this amendatory Act of
10the 97th General Assembly shall be paid each month into the
11Healthcare Provider Relief Fund. The payment of such taxes
12shall be evidenced by a stamp affixed to each original package
13of cigarettes, or an authorized substitute for such stamp
14imprinted on each original package of such cigarettes
15underneath the sealed transparent outside wrapper of such
16original package, as hereinafter provided. However, such taxes
17are not imposed upon any activity in such business in
18interstate commerce or otherwise, which activity may not under
19the Constitution and statutes of the United States be made the
20subject of taxation by this State.
21    Beginning on the effective date of this amendatory Act of
22the 92nd General Assembly and through June 30, 2006, all of the
23moneys received by the Department of Revenue pursuant to this
24Act and the Cigarette Use Tax Act, other than the moneys that
25are dedicated to the Common School Fund, shall be distributed
26each month as follows: first, there shall be paid into the

 

 

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1General Revenue Fund an amount which, when added to the amount
2paid into the Common School Fund for that month, equals
3$33,300,000, except that in the month of August of 2004, this
4amount shall equal $83,300,000; then, from the moneys
5remaining, if any amounts required to be paid into the General
6Revenue Fund in previous months remain unpaid, those amounts
7shall be paid into the General Revenue Fund; then, beginning on
8April 1, 2003, from the moneys remaining, $5,000,000 per month
9shall be paid into the School Infrastructure Fund; then, if any
10amounts required to be paid into the School Infrastructure Fund
11in previous months remain unpaid, those amounts shall be paid
12into the School Infrastructure Fund; then the moneys remaining,
13if any, shall be paid into the Long-Term Care Provider Fund. To
14the extent that more than $25,000,000 has been paid into the
15General Revenue Fund and Common School Fund per month for the
16period of July 1, 1993 through the effective date of this
17amendatory Act of 1994 from combined receipts of the Cigarette
18Tax Act and the Cigarette Use Tax Act, notwithstanding the
19distribution provided in this Section, the Department of
20Revenue is hereby directed to adjust the distribution provided
21in this Section to increase the next monthly payments to the
22Long Term Care Provider Fund by the amount paid to the General
23Revenue Fund and Common School Fund in excess of $25,000,000
24per month and to decrease the next monthly payments to the
25General Revenue Fund and Common School Fund by that same excess
26amount.

 

 

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1    Beginning on July 1, 2006, all of the moneys received by
2the Department of Revenue pursuant to this Act and the
3Cigarette Use Tax Act, other than the moneys that are dedicated
4to the Common School Fund and, beginning on the effective date
5of this amendatory Act of the 97th General Assembly, other than
6the moneys from the additional taxes imposed by this amendatory
7Act of the 97th General Assembly that must be paid each month
8into the Healthcare Provider Relief Fund, shall be distributed
9each month as follows: first, there shall be paid into the
10General Revenue Fund an amount that, when added to the amount
11paid into the Common School Fund for that month, equals
12$29,200,000; then, from the moneys remaining, if any amounts
13required to be paid into the General Revenue Fund in previous
14months remain unpaid, those amounts shall be paid into the
15General Revenue Fund; then from the moneys remaining,
16$5,000,000 per month shall be paid into the School
17Infrastructure Fund; then, if any amounts required to be paid
18into the School Infrastructure Fund in previous months remain
19unpaid, those amounts shall be paid into the School
20Infrastructure Fund; then the moneys remaining, if any, shall
21be paid into the Long-Term Care Provider Fund.
22    When any tax imposed herein terminates or has terminated,
23distributors who have bought stamps while such tax was in
24effect and who therefore paid such tax, but who can show, to
25the Department's satisfaction, that they sold the cigarettes to
26which they affixed such stamps after such tax had terminated

 

 

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1and did not recover the tax or its equivalent from purchasers,
2shall be allowed by the Department to take credit for such
3absorbed tax against subsequent tax stamp purchases from the
4Department by such distributor.
5    The impact of the tax levied by this Act is imposed upon
6the retailer and shall be prepaid or pre-collected by the
7distributor for the purpose of convenience and facility only,
8and the amount of the tax shall be added to the price of the
9cigarettes sold by such distributor. Collection of the tax
10shall be evidenced by a stamp or stamps affixed to each
11original package of cigarettes, as hereinafter provided.
12    Each distributor shall collect the tax from the retailer at
13or before the time of the sale, shall affix the stamps as
14hereinafter required, and shall remit the tax collected from
15retailers to the Department, as hereinafter provided. Any
16distributor who fails to properly collect and pay the tax
17imposed by this Act shall be liable for the tax. Any
18distributor having cigarettes to which stamps have been affixed
19in his possession for sale on the effective date of this
20amendatory Act of 1989 shall not be required to pay the
21additional tax imposed by this amendatory Act of 1989 on such
22stamped cigarettes. Any distributor having cigarettes to which
23stamps have been affixed in his or her possession for sale at
2412:01 a.m. on the effective date of this amendatory Act of
251993, is required to pay the additional tax imposed by this
26amendatory Act of 1993 on such stamped cigarettes. This

 

 

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1payment, less the discount provided in subsection (b), shall be
2due when the distributor first makes a purchase of cigarette
3tax stamps after the effective date of this amendatory Act of
41993, or on the first due date of a return under this Act after
5the effective date of this amendatory Act of 1993, whichever
6occurs first. Any distributor having cigarettes to which stamps
7have been affixed in his possession for sale on December 15,
81997 shall not be required to pay the additional tax imposed by
9this amendatory Act of 1997 on such stamped cigarettes.
10    Any distributor having cigarettes to which stamps have been
11affixed in his or her possession for sale on July 1, 2002 shall
12not be required to pay the additional tax imposed by this
13amendatory Act of the 92nd General Assembly on those stamped
14cigarettes.
15    Any retailer having cigarettes in his or her possession on
16June 24, 2012 to which tax stamps have been affixed is not
17required to pay the additional tax that begins on June 24, 2012
18imposed by this amendatory Act of the 97th General Assembly on
19those stamped cigarettes. Any distributor having cigarettes in
20his or her possession on June 24, 2012 to which tax stamps have
21been affixed, and any distributor having stamps in his or her
22possession on June 24, 2012 that have not been affixed to
23packages of cigarettes before June 24, 2012, is required to pay
24the additional tax that begins on June 24, 2012 imposed by this
25amendatory Act of the 97th General Assembly to the extent the
26calendar year 2012 average monthly volume of cigarette stamps

 

 

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1in the distributor's possession exceeds the average monthly
2volume of cigarette stamps purchased by the distributor in
3calendar year 2011. This payment, less the discount provided in
4subsection (b), is due when the distributor first makes a
5purchase of cigarette stamps on or after June 24, 2012 or on
6the first due date of a return under this Act occurring on or
7after June 24, 2012, whichever occurs first. Those distributors
8may elect to pay the additional tax on packages of cigarettes
9to which stamps have been affixed and on any stamps in the
10distributor's possession that have not been affixed to packages
11of cigarettes over a period not to exceed 12 months from the
12due date of the additional tax by notifying the Department in
13writing. The first payment for distributors making such
14election is due when the distributor first makes a purchase of
15cigarette tax stamps on or after June 24, 2012 or on the first
16due date of a return under this Act occurring on or after June
1724, 2012, whichever occurs first. Distributors making such an
18election are not entitled to take the discount provided in
19subsection (b) on such payments.
20    Distributors making sales of cigarettes to secondary
21distributors shall add the amount of the tax to the price of
22the cigarettes sold by the distributors. Secondary
23distributors making sales of cigarettes to retailers shall
24include the amount of the tax in the price of the cigarettes
25sold to retailers. The amount of tax shall not be less than the
26amount of taxes imposed by the State and all local

 

 

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1jurisdictions. The amount of local taxes shall be calculated
2based on the location of the retailer's place of business shown
3on the retailer's certificate of registration or
4sub-registration issued to the retailer pursuant to Section 2a
5of the Retailers' Occupation Tax Act. The original packages of
6cigarettes sold to the retailer shall bear all the required
7stamps, or other indicia, for the taxes included in the price
8of cigarettes.
9    The amount of the Cigarette Tax imposed by this Act shall
10be separately stated, apart from the price of the goods, by
11distributors, manufacturer representatives, secondary
12distributors, and retailers, in all bills and sales invoices.
13    (b) The distributor shall be required to collect the taxes
14provided under paragraph (a) hereof, and, to cover the costs of
15such collection, shall be allowed a discount during any year
16commencing July 1st and ending the following June 30th in
17accordance with the schedule set out hereinbelow, which
18discount shall be allowed at the time of purchase of the stamps
19when purchase is required by this Act, or at the time when the
20tax is remitted to the Department without the purchase of
21stamps from the Department when that method of paying the tax
22is required or authorized by this Act. Prior to December 1,
231985, a discount equal to 1 2/3% of the amount of the tax up to
24and including the first $700,000 paid hereunder by such
25distributor to the Department during any such year; 1 1/3% of
26the next $700,000 of tax or any part thereof, paid hereunder by

 

 

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1such distributor to the Department during any such year; 1% of
2the next $700,000 of tax, or any part thereof, paid hereunder
3by such distributor to the Department during any such year, and
42/3 of 1% of the amount of any additional tax paid hereunder by
5such distributor to the Department during any such year shall
6apply. On and after December 1, 1985, a discount equal to 1.75%
7of the amount of the tax payable under this Act up to and
8including the first $3,000,000 paid hereunder by such
9distributor to the Department during any such year and 1.5% of
10the amount of any additional tax paid hereunder by such
11distributor to the Department during any such year shall apply.
12    Two or more distributors that use a common means of
13affixing revenue tax stamps or that are owned or controlled by
14the same interests shall be treated as a single distributor for
15the purpose of computing the discount.
16    (c) The taxes herein imposed are in addition to all other
17occupation or privilege taxes imposed by the State of Illinois,
18or by any political subdivision thereof, or by any municipal
19corporation.
20(Source: P.A. 96-1027, eff. 7-12-10; 97-587, eff. 8-26-11.)
 
21    Section 5-45. The Cigarette Use Tax Act is amended by
22changing Sections 1 and 2 as follows:
 
23    (35 ILCS 135/1)  (from Ch. 120, par. 453.31)
24    Sec. 1. For the purpose of this Act, unless otherwise

 

 

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1required by the context:
2    "Use" means the exercise by any person of any right or
3power over cigarettes incident to the ownership or possession
4thereof, other than the making of a sale thereof in the course
5of engaging in a business of selling cigarettes and shall
6include the keeping or retention of cigarettes for use, except
7that "use" does not include the use of cigarettes by a
8not-for-profit research institution conducting tests
9concerning the health effects of tobacco products, provided the
10cigarettes are not offered for resale.
11    "Brand Style" means a variety of cigarettes distinguished
12by the tobacco used, tar and nicotine content, flavoring used,
13size of the cigarette, filtration on the cigarette or
14packaging.
15    Until July 1, 2012, "cigarette" "Cigarette" means any roll
16for smoking made wholly or in part of tobacco irrespective of
17size or shape and whether or not such tobacco is flavored,
18adulterated or mixed with any other ingredient, and the wrapper
19or cover of which is made of paper or any other substance or
20material except tobacco.
21    "Cigarette", beginning on and after July 1, 2012, means any
22roll for smoking made wholly or in part of tobacco irrespective
23of size or shape and whether or not such tobacco is flavored,
24adulterated or mixed with any other ingredient, and the wrapper
25or cover of which is made of paper.
26    "Cigarette", beginning on and after July 1, 2012, also

 

 

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1shall mean: Any roll for smoking made wholly or in part of
2tobacco labeled as anything other than a cigarette or not
3bearing a label, if it meets two or more of the following
4criteria:
5        (a) the product is sold in packs similar to cigarettes;
6        (b) the product is available for sale in cartons of ten
7    packs;
8        (c) the product is sold in soft packs, hard packs,
9    flip-top boxes, clam shells, or other cigarette-type
10    boxes;
11        (d) the product is of a length and diameter similar to
12    commercially manufactured cigarettes;
13        (e) the product has a cellulose acetate or other
14    integrated filter;
15        (f) the product is marketed or advertised to consumers
16    as a cigarette or cigarette substitute; or
17        (g) other evidence that the product fits within the
18    definition of cigarette.
19    "Contraband cigarettes" means:
20        (a) cigarettes that do not bear a required tax stamp
21    under this Act;
22        (b) cigarettes for which any required federal taxes
23    have not been paid;
24        (c) cigarettes that bear a counterfeit tax stamp;
25        (d) cigarettes that are manufactured, fabricated,
26    assembled, processed, packaged, or labeled by any person

 

 

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1    other than (i) the owner of the trademark rights in the
2    cigarette brand or (ii) a person that is directly or
3    indirectly authorized by such owner;
4        (e) cigarettes imported into the United States, or
5    otherwise distributed, in violation of the federal
6    Imported Cigarette Compliance Act of 2000 (Title IV of
7    Public Law 106-476);
8        (f) cigarettes that have false manufacturing labels;
9        (g) cigarettes identified in Section 3-10(a)(1) of
10    this Act; or
11        (h) cigarettes that are improperly tax stamped,
12    including cigarettes that bear a tax stamp of another state
13    or taxing jurisdiction; or .
14        (i) cigarettes made or fabricated by a person holding a
15    cigarette machine operator license under Section 1-20 of
16    the Cigarette Machine Operators' Occupation Tax Act in the
17    possession of manufacturers, distributors, secondary
18    distributors, manufacturer representatives or other
19    retailers for the purpose of resale, regardless of whether
20    the tax has been paid on such cigarettes.
21    "Person" means any natural individual, firm, partnership,
22association, joint stock company, joint adventure, public or
23private corporation, however formed, limited liability
24company, or a receiver, executor, administrator, trustee,
25guardian or other representative appointed by order of any
26court.

 

 

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1    "Department" means the Department of Revenue.
2    "Sale" means any transfer, exchange or barter in any manner
3or by any means whatsoever for a consideration, and includes
4and means all sales made by any person.
5    "Original Package" means the individual packet, box or
6other container whatsoever used to contain and to convey
7cigarettes to the consumer.
8    "Distributor" means any and each of the following:
9        a. Any person engaged in the business of selling
10    cigarettes in this State who brings or causes to be brought
11    into this State from without this State any original
12    packages of cigarettes, on which original packages there is
13    no authorized evidence underneath a sealed transparent
14    wrapper showing that the tax liability imposed by this Act
15    has been paid or assumed by the out-of-State seller of such
16    cigarettes, for sale in the course of such business.
17        b. Any person who makes, manufactures or fabricates
18    cigarettes in this State for sale, except a person who
19    makes, manufactures or fabricates cigarettes for sale to
20    residents incarcerated in penal institutions or resident
21    patients or a State-operated mental health facility.
22        c. Any person who makes, manufactures or fabricates
23    cigarettes outside this State, which cigarettes are placed
24    in original packages contained in sealed transparent
25    wrappers, for delivery or shipment into this State, and who
26    elects to qualify and is accepted by the Department as a

 

 

SB2194 Enrolled- 112 -LRB097 10235 HLH 50431 b

1    distributor under Section 7 of this Act.
2    "Distributor" does not include any person who transfers
3cigarettes to a not-for-profit research institution that
4conducts tests concerning the health effects of tobacco
5products and who does not offer the cigarettes for resale.
6    "Distributor maintaining a place of business in this
7State", or any like term, means any distributor having or
8maintaining within this State, directly or by a subsidiary, an
9office, distribution house, sales house, warehouse or other
10place of business, or any agent operating within this State
11under the authority of the distributor or its subsidiary,
12irrespective of whether such place of business or agent is
13located here permanently or temporarily, or whether such
14distributor or subsidiary is licensed to transact business
15within this State.
16    "Business" means any trade, occupation, activity or
17enterprise engaged in or conducted in this State for the
18purpose of selling cigarettes.
19    "Prior Continuous Compliance Taxpayer" means any person
20who is licensed under this Act and who, having been a licensee
21for a continuous period of 5 years, is determined by the
22Department not to have been either delinquent or deficient in
23the payment of tax liability during that period or otherwise in
24violation of this Act. Also, any taxpayer who has, as verified
25by the Department, continuously complied with the condition of
26his bond or other security under provisions of this Act of a

 

 

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1period of 5 consecutive years shall be considered to be a
2"prior continuous compliance taxpayer". In calculating the
3consecutive period of time described herein for qualification
4as a "prior continuous compliance taxpayer", a consecutive
5period of time of qualifying compliance immediately prior to
6the effective date of this amendatory Act of 1987 shall be
7credited to any licensee who became licensed on or before the
8effective date of this amendatory Act of 1987.
9    "Secondary distributor" means any person engaged in the
10business of selling cigarettes who purchases stamped original
11packages of cigarettes from a licensed distributor under this
12Act or the Cigarette Tax Act, sells 75% or more of those
13cigarettes to retailers for resale, and maintains an
14established business where a substantial stock of cigarettes is
15available to retailers for resale.
16    "Secondary distributor maintaining a place of business in
17this State", or any like term, means any secondary distributor
18having or maintaining within this State, directly or by a
19subsidiary, an office, distribution house, sales house,
20warehouse, or other place of business, or any agent operating
21within this State under the authority of the secondary
22distributor or its subsidiary, irrespective of whether such
23place of business or agent is located here permanently or
24temporarily, or whether such secondary distributor or
25subsidiary is licensed to transact business within this State.
26    "Stamp" or "stamps" mean the indicia required to be affixed

 

 

SB2194 Enrolled- 114 -LRB097 10235 HLH 50431 b

1on a pack of cigarettes that evidence payment of the tax on
2cigarettes under Section 2 of this Act.
3    "Related party" means any person that is associated with
4any other person because he or she:
5        (a) is an officer or director of a business; or
6        (b) is legally recognized as a partner in business.
7(Source: P.A. 95-462, eff. 8-27-07; 95-1053, eff. 1-1-10;
896-782, eff. 1-1-10; 96-1027, eff. 7-12-10.)
 
9    (35 ILCS 135/2)  (from Ch. 120, par. 453.32)
10    Sec. 2. A tax is imposed upon the privilege of using
11cigarettes in this State, at the rate of 6 mills per cigarette
12so used. On and after December 1, 1985, in addition to any
13other tax imposed by this Act, a tax is imposed upon the
14privilege of using cigarettes in this State at a rate of 4
15mills per cigarette so used. On and after the effective date of
16this amendatory Act of 1989, in addition to any other tax
17imposed by this Act, a tax is imposed upon the privilege of
18using cigarettes in this State at the rate of 5 mills per
19cigarette so used. On and after the effective date of this
20amendatory Act of 1993, in addition to any other tax imposed by
21this Act, a tax is imposed upon the privilege of using
22cigarettes in this State at a rate of 7 mills per cigarette so
23used. On and after December 15, 1997, in addition to any other
24tax imposed by this Act, a tax is imposed upon the privilege of
25using cigarettes in this State at a rate of 7 mills per

 

 

SB2194 Enrolled- 115 -LRB097 10235 HLH 50431 b

1cigarette so used. On and after July 1, 2002, in addition to
2any other tax imposed by this Act, a tax is imposed upon the
3privilege of using cigarettes in this State at a rate of 20.0
4mills per cigarette so used. Beginning on June 24, 2012, in
5addition to any other tax imposed by this Act, a tax is imposed
6upon the privilege of using cigarettes in this State at a rate
7of 50 mills per cigarette so used. The taxes herein imposed
8shall be in addition to all other occupation or privilege taxes
9imposed by the State of Illinois or by any political
10subdivision thereof or by any municipal corporation.
11    When any tax imposed herein terminates or has terminated,
12distributors who have bought stamps while such tax was in
13effect and who therefore paid such tax, but who can show, to
14the Department's satisfaction, that they sold the cigarettes to
15which they affixed such stamps after such tax had terminated
16and did not recover the tax or its equivalent from purchasers,
17shall be allowed by the Department to take credit for such
18absorbed tax against subsequent tax stamp purchases from the
19Department by such distributors.
20    When the word "tax" is used in this Act, it shall include
21any tax or tax rate imposed by this Act and shall mean the
22singular of "tax" or the plural "taxes" as the context may
23require.
24    Any distributor having cigarettes to which stamps have been
25affixed in his possession for sale on the effective date of
26this amendatory Act of 1989 shall not be required to pay the

 

 

SB2194 Enrolled- 116 -LRB097 10235 HLH 50431 b

1additional tax imposed by this amendatory Act of 1989 on such
2stamped cigarettes. Any distributor having cigarettes to which
3stamps have been affixed in his or her possession for sale at
412:01 a.m. on the effective date of this amendatory Act of
51993, is required to pay the additional tax imposed by this
6amendatory Act of 1993 on such stamped cigarettes. This payment
7shall be due when the distributor first makes a purchase of
8cigarette tax stamps after the effective date of this
9amendatory Act of 1993, or on the first due date of a return
10under this Act after the effective date of this amendatory Act
11of 1993, whichever occurs first. Once a distributor tenders
12payment of the additional tax to the Department, the
13distributor may purchase stamps from the Department. Any
14distributor having cigarettes to which stamps have been affixed
15in his possession for sale on December 15, 1997 shall not be
16required to pay the additional tax imposed by this amendatory
17Act of 1997 on such stamped cigarettes.
18    Any distributor having cigarettes to which stamps have been
19affixed in his or her possession for sale on July 1, 2002 shall
20not be required to pay the additional tax imposed by this
21amendatory Act of the 92nd General Assembly on those stamped
22cigarettes.
23    Any retailer having cigarettes in his or her possession on
24June 24, 2012 to which tax stamps have been affixed is not
25required to pay the additional tax that begins on June 24, 2012
26imposed by this amendatory Act of the 97th General Assembly on

 

 

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1those stamped cigarettes. Any distributor having cigarettes in
2his or her possession on June 24, 2012 to which tax stamps have
3been affixed, and any distributor having stamps in his or her
4possession on June 24, 2012 that have not been affixed to
5packages of cigarettes before June 24, 2012, is required to pay
6the additional tax that begins on June 24, 2012 imposed by this
7amendatory Act of the 97th General Assembly to the extent the
8calendar year 2012 average monthly volume of cigarette stamps
9in the distributor's possession exceeds the average monthly
10volume of cigarette stamps purchased by the distributor in
11calendar year 2011. This payment, less the discount provided in
12Section 3, is due when the distributor first makes a purchase
13of cigarette stamps on or after June 24, 2012 or on the first
14due date of a return under this Act occurring on or after June
1524, 2012, whichever occurs first. Those distributors may elect
16to pay the additional tax on packages of cigarettes to which
17stamps have been affixed and on any stamps in the distributor's
18possession that have not been affixed to packages of cigarettes
19over a period not to exceed 12 months from the due date of the
20additional tax by notifying the Department in writing. The
21first payment for distributors making such election is due when
22the distributor first makes a purchase of cigarette tax stamps
23on or after June 24, 2012 or on the first due date of a return
24under this Act occurring on or after June 24, 2012, whichever
25occurs first. Distributors making such an election are not
26entitled to take the discount provided in Section 3 on such

 

 

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1payments.
2(Source: P.A. 92-536, eff. 6-6-02.)
 
3    Section 5-50. The Tobacco Products Tax Act of 1995 is
4amended by changing Sections 10-5, 10-10, and 10-30 as follows:
 
5    (35 ILCS 143/10-5)
6    Sec. 10-5. Definitions. For purposes of this Act:
7    "Business" means any trade, occupation, activity, or
8enterprise engaged in, at any location whatsoever, for the
9purpose of selling tobacco products.
10    "Cigarette" has the meaning ascribed to the term in Section
111 of the Cigarette Tax Act.
12    "Correctional Industries program" means a program run by a
13State penal institution in which residents of the penal
14institution produce tobacco products for sale to persons
15incarcerated in penal institutions or resident patients of a
16State operated mental health facility.
17    "Department" means the Illinois Department of Revenue.
18    "Distributor" means any of the following:
19        (1) Any manufacturer or wholesaler in this State
20    engaged in the business of selling tobacco products who
21    sells, exchanges, or distributes tobacco products to
22    retailers or consumers in this State.
23        (2) Any manufacturer or wholesaler engaged in the
24    business of selling tobacco products from without this

 

 

SB2194 Enrolled- 119 -LRB097 10235 HLH 50431 b

1    State who sells, exchanges, distributes, ships, or
2    transports tobacco products to retailers or consumers
3    located in this State, so long as that manufacturer or
4    wholesaler has or maintains within this State, directly or
5    by subsidiary, an office, sales house, or other place of
6    business, or any agent or other representative operating
7    within this State under the authority of the person or
8    subsidiary, irrespective of whether the place of business
9    or agent or other representative is located here
10    permanently or temporarily.
11        (3) Any retailer who receives tobacco products on which
12    the tax has not been or will not be paid by another
13    distributor.
14    "Distributor" does not include any person, wherever
15resident or located, who makes, manufactures, or fabricates
16tobacco products as part of a Correctional Industries program
17for sale to residents incarcerated in penal institutions or
18resident patients of a State operated mental health facility.
19    "Manufacturer" means any person, wherever resident or
20located, who manufactures and sells tobacco products, except a
21person who makes, manufactures, or fabricates tobacco products
22as a part of a Correctional Industries program for sale to
23persons incarcerated in penal institutions or resident
24patients of a State operated mental health facility.
25    Beginning on January 1, 2013, "moist snuff" means any
26finely cut, ground, or powdered tobacco that is not intended to

 

 

SB2194 Enrolled- 120 -LRB097 10235 HLH 50431 b

1be smoked, but shall not include any finely cut, ground, or
2powdered tobacco that is intended to be placed in the nasal
3cavity.
4    "Person" means any natural individual, firm, partnership,
5association, joint stock company, joint venture, limited
6liability company, or public or private corporation, however
7formed, or a receiver, executor, administrator, trustee,
8conservator, or other representative appointed by order of any
9court.
10    "Place of business" means and includes any place where
11tobacco products are sold or where tobacco products are
12manufactured, stored, or kept for the purpose of sale or
13consumption, including any vessel, vehicle, airplane, train,
14or vending machine.
15    "Retailer" means any person in this State engaged in the
16business of selling tobacco products to consumers in this
17State, regardless of quantity or number of sales.
18    "Sale" means any transfer, exchange, or barter in any
19manner or by any means whatsoever for a consideration and
20includes all sales made by persons.
21    "Tobacco products" means any cigars; cheroots; stogies;
22periques; granulated, plug cut, crimp cut, ready rubbed, and
23other smoking tobacco; snuff (including moist snuff) or snuff
24flour; cavendish; plug and twist tobacco; fine-cut and other
25chewing tobaccos; shorts; refuse scraps, clippings, cuttings,
26and sweeping of tobacco; and other kinds and forms of tobacco,

 

 

SB2194 Enrolled- 121 -LRB097 10235 HLH 50431 b

1prepared in such manner as to be suitable for chewing or
2smoking in a pipe or otherwise, or both for chewing and
3smoking; but does not include cigarettes or tobacco purchased
4for the manufacture of cigarettes by cigarette distributors and
5manufacturers defined in the Cigarette Tax Act and persons who
6make, manufacture, or fabricate cigarettes as a part of a
7Correctional Industries program for sale to residents
8incarcerated in penal institutions or resident patients of a
9State operated mental health facility.
10    "Wholesale price" means the established list price for
11which a manufacturer sells tobacco products to a distributor,
12before the allowance of any discount, trade allowance, rebate,
13or other reduction. In the absence of such an established list
14price, the manufacturer's invoice price at which the
15manufacturer sells the tobacco product to unaffiliated
16distributors, before any discounts, trade allowances, rebates,
17or other reductions, shall be presumed to be the wholesale
18price.
19    "Wholesaler" means any person, wherever resident or
20located, engaged in the business of selling tobacco products to
21others for the purpose of resale.
22(Source: P.A. 92-231, eff. 8-2-01.)
 
23    (35 ILCS 143/10-10)
24    Sec. 10-10. Tax imposed. On the first day of the third
25month after the month in which this Act becomes law, a tax is

 

 

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1imposed on any person engaged in business as a distributor of
2tobacco products, as defined in Section 10-5, at the rate of
3(i) 18% of the wholesale price of tobacco products sold or
4otherwise disposed of to retailers or consumers located in this
5State prior to July 1, 2012 and (ii) 36% of the wholesale price
6of tobacco products sold or otherwise disposed of to retailers
7or consumers located in this State beginning on July 1, 2012;
8except that, beginning on January 1, 2013, the tax on moist
9snuff shall be imposed at a rate of $0.30 per ounce, and a
10proportionate tax at the like rate on all fractional parts of
11an ounce, sold or otherwise disposed of to retailers or
12consumers located in this State. The tax is in addition to all
13other occupation or privilege taxes imposed by the State of
14Illinois, by any political subdivision thereof, or by any
15municipal corporation. However, the tax is not imposed upon any
16activity in that business in interstate commerce or otherwise,
17to the extent to which that activity may not, under the
18Constitution and Statutes of the United States, be made the
19subject of taxation by this State. The tax is also not imposed
20on sales made to the United States or any entity thereof.
21    Beginning on January 1, 2013, the tax rate imposed per
22ounce of moist snuff may not exceed 15% of the tax imposed upon
23a package of 20 cigarettes pursuant to the Cigarette Tax Act.
24    All moneys received by the Department under this Act from
25sales occurring prior to July 1, 2012 shall be paid into the
26Long-Term Care Provider Fund of the State Treasury. Of the

 

 

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1moneys received by the Department from sales occurring on or
2after July 1, 2012, 50% shall be paid into the Long-Term Care
3Provider Fund and 50% shall be paid into the Healthcare
4Provider Relief Fund.
5(Source: P.A. 92-231, eff. 8-2-01.)
 
6    (35 ILCS 143/10-30)
7    Sec. 10-30. Returns. Every distributor shall, on or before
8the 15th day of each month, file a return with the Department
9covering the preceding calendar month. The return shall
10disclose the wholesale price for all tobacco products and the
11quantity of moist snuff sold or otherwise disposed of and other
12information that the Department may reasonably require. The
13return shall be filed upon a form prescribed and furnished by
14the Department.
15    At the time when any return of any distributor is due to be
16filed with the Department, the distributor shall also remit to
17the Department the tax liability that the distributor has
18incurred for transactions occurring in the preceding calendar
19month.
20(Source: P.A. 89-21, eff. 6-6-95.)
 
21    Section 5-55. The Property Tax Code is amended by changing
22Section 15-10 and by adding Section 15-86 as follows:
 
23    (35 ILCS 200/15-10)

 

 

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1    Sec. 15-10. Exempt property; procedures for certification.
2    (a) All property granted an exemption by the Department
3pursuant to the requirements of Section 15-5 and described in
4the Sections following Section 15-30 and preceding Section
516-5, to the extent therein limited, is exempt from taxation.
6In order to maintain that exempt status, the titleholder or the
7owner of the beneficial interest of any property that is exempt
8must file with the chief county assessment officer, on or
9before January 31 of each year (May 31 in the case of property
10exempted by Section 15-170), an affidavit stating whether there
11has been any change in the ownership or use of the property, or
12the status of the owner-resident, the satisfaction by a
13relevant hospital entity of the condition for an exemption
14under Section 15-86, or that a disabled veteran who qualifies
15under Section 15-165 owned and used the property as of January
161 of that year. The nature of any change shall be stated in the
17affidavit. Failure to file an affidavit shall, in the
18discretion of the assessment officer, constitute cause to
19terminate the exemption of that property, notwithstanding any
20other provision of this Code. Owners of 5 or more such exempt
21parcels within a county may file a single annual affidavit in
22lieu of an affidavit for each parcel. The assessment officer,
23upon request, shall furnish an affidavit form to the owners, in
24which the owner may state whether there has been any change in
25the ownership or use of the property or status of the owner or
26resident as of January 1 of that year. The owner of 5 or more

 

 

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1exempt parcels shall list all the properties giving the same
2information for each parcel as required of owners who file
3individual affidavits.
4    (b) However, titleholders or owners of the beneficial
5interest in any property exempted under any of the following
6provisions are not required to submit an annual filing under
7this Section:
8        (1) Section 15-45 (burial grounds) in counties of less
9    than 3,000,000 inhabitants and owned by a not-for-profit
10    organization.
11        (2) Section 15-40.
12        (3) Section 15-50 (United States property).
13    (c) If there is a change in use or ownership, however,
14notice must be filed pursuant to Section 15-20.
15    (d) An application for homestead exemptions shall be filed
16as provided in Section 15-170 (senior citizens homestead
17exemption), Section 15-172 (senior citizens assessment freeze
18homestead exemption), and Sections 15-175 (general homestead
19exemption), 15-176 (general alternative homestead exemption),
20and 15-177 (long-time occupant homestead exemption),
21respectively.
22    (e) For purposes of determining satisfaction of the
23condition for an exemption under Section 15-86:
24        (1) The "year for which exemption is sought" is the
25    year prior to the year in which the affidavit is due.
26        (2) The "hospital year" is the fiscal year of the

 

 

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1    relevant hospital entity, or the fiscal year of one of the
2    hospitals in the hospital system if the relevant hospital
3    entity is a hospital system with members with different
4    fiscal years, that ends in the year prior to the year in
5    which the affidavit is due. However, if that fiscal year
6    ends 3 months or less before the date on which the
7    affidavit is due, the relevant hospital entity shall file
8    an interim affidavit based on the currently available
9    information, and shall file a supplemental affidavit
10    within 90 days of date on which the application was due, if
11    the information in the relevant hospital entity's audited
12    financial statements changes the interim affidavit's
13    statement concerning the entity's compliance with the
14    calculation required by Section 15-86.
15        (3) The affidavit shall be accompanied by an exhibit
16    prepared by the relevant hospital entity showing (A) the
17    value of the relevant hospital entity's services and
18    activities, if any, under items (1) through (7) of
19    subsection (e) of Section 15-86, stated separately for each
20    item, and (B) the value relating to the relevant hospital
21    entity's estimated property tax liability under paragraphs
22    (A), (B), and (C) of item (1) of subsection (g) of Section
23    15-86; under paragraphs (A), (B), and (C) of item (2) of
24    subsection (g) of Section 15-86; and under item (3) of
25    subsection (g) of Section 15-86.
26(Source: P.A. 95-644, eff. 10-12-07.)
 

 

 

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1    (35 ILCS 200/15-86 new)
2    Sec. 15-86. Exemptions related to access to hospital and
3health care services by low-income and underserved
4individuals.
5    (a) The General Assembly finds:
6        (1) Despite the Supreme Court's decision in Provena
7    Covenant Medical Center v. Dept. of Revenue, 236 Ill.2d
8    368, there is considerable uncertainty surrounding the
9    test for charitable property tax exemption, especially
10    regarding the application of a quantitative or monetary
11    threshold. In Provena, the Department stated that the
12    primary basis for its decision was the hospital's
13    inadequate amount of charitable activity, but the
14    Department has not articulated what constitutes an
15    adequate amount of charitable activity. After Provena, the
16    Department denied property tax exemption applications of 3
17    more hospitals, and, on the effective date of this
18    amendatory Act of the 97th General Assembly, at least 20
19    other hospitals are awaiting rulings on applications for
20    property tax exemption.
21        (2) In Provena, two Illinois Supreme Court justices
22    opined that "setting a monetary or quantum standard is a
23    complex decision which should be left to our legislature,
24    should it so choose". The Appellate Court in Provena
25    stated: "The language we use in the State of Illinois to

 

 

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1    determine whether real property is used for a charitable
2    purpose has its genesis in our 1870 Constitution. It is
3    obvious that such language may be difficult to apply to the
4    modern face of our nation's health care delivery systems".
5    The court noted the many significant changes in the health
6    care system since that time, but concluded that taking
7    these changes into account is a matter of public policy,
8    and "it is the legislature's job, not ours, to make public
9    policy".
10        (3) It is essential to ensure that tax exemption law
11    relating to hospitals accounts for the complexities of the
12    modern health care delivery system. Health care is moving
13    beyond the walls of the hospital. In addition to treating
14    individual patients, hospitals are assuming responsibility
15    for improving the health status of communities and
16    populations. Low-income and underserved communities
17    benefit disproportionately by these activities.
18        (4) The Supreme Court has explained that: "the
19    fundamental ground upon which all exemptions in favor of
20    charitable institutions are based is the benefit conferred
21    upon the public by them, and a consequent relief, to some
22    extent, of the burden upon the state to care for and
23    advance the interests of its citizens". Hospitals relieve
24    the burden of government in many ways, but most
25    significantly through their participation in and
26    substantial financial subsidization of the Illinois

 

 

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1    Medicaid program, which could not operate without the
2    participation and partnership of Illinois hospitals.
3        (5) Working with the Illinois hospital community and
4    other interested parties, the General Assembly has
5    developed a comprehensive combination of related
6    legislation that addresses hospital property tax
7    exemption, significantly increases access to free health
8    care for indigent persons, and strengthens the Medical
9    Assistance program. It is the intent of the General
10    Assembly to establish a new category of ownership for
11    charitable property tax exemption to be applied to
12    not-for-profit hospitals and hospital affiliates in lieu
13    of the existing ownership category of "institutions of
14    public charity". It is also the intent of the General
15    Assembly to establish quantifiable standards for the
16    issuance of charitable exemptions for such property. It is
17    not the intent of the General Assembly to declare any
18    property exempt ipso facto, but rather to establish
19    criteria to be applied to the facts on a case-by-case
20    basis.
21    (b) For the purpose of this Section and Section 15-10, the
22following terms shall have the meanings set forth below:
23        (1) "Hospital" means any institution, place, building,
24    buildings on a campus, or other health care facility
25    located in Illinois that is licensed under the Hospital
26    Licensing Act and has a hospital owner.

 

 

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1        (2) "Hospital owner" means a not-for-profit
2    corporation that is the titleholder of a hospital, or the
3    owner of the beneficial interest in an Illinois land trust
4    that is the titleholder of a hospital.
5        (3) "Hospital affiliate" means any corporation,
6    partnership, limited partnership, joint venture, limited
7    liability company, association or other organization,
8    other than a hospital owner, that directly or indirectly
9    controls, is controlled by, or is under common control with
10    one or more hospital owners and that supports, is supported
11    by, or acts in furtherance of the exempt health care
12    purposes of at least one of those hospital owners'
13    hospitals.
14        (4) "Hospital system" means a hospital and one or more
15    other hospitals or hospital affiliates related by common
16    control or ownership.
17        (5) "Control" relating to hospital owners, hospital
18    affiliates, or hospital systems means possession, direct
19    or indirect, of the power to direct or cause the direction
20    of the management and policies of the entity, whether
21    through ownership of assets, membership interest, other
22    voting or governance rights, by contract or otherwise.
23        (6) "Hospital applicant" means a hospital owner or
24    hospital affiliate that files an application for a property
25    tax exemption pursuant to Section 15-5 and this Section.
26        (7) "Relevant hospital entity" means (A) the hospital

 

 

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1    owner, in the case of a hospital applicant that is a
2    hospital owner, and (B) at the election of a hospital
3    applicant that is a hospital affiliate, either (i) the
4    hospital affiliate or (ii) the hospital system to which the
5    hospital applicant belongs, including any hospitals or
6    hospital affiliates that are related by common control or
7    ownership.
8        (8) "Subject property" means property for which a
9    hospital applicant files an application for an exemption
10    pursuant to Section 15-5 and this Section.
11        (9) "Hospital year" means the fiscal year of the
12    relevant hospital entity, or the fiscal year of one of the
13    hospital owners in the hospital system if the relevant
14    hospital entity is a hospital system with members with
15    different fiscal years, that ends in the year for which the
16    exemption is sought.
17    (c) A hospital applicant satisfies the conditions for an
18exemption under this Section with respect to the subject
19property, and shall be issued a charitable exemption for that
20property, if the value of services or activities listed in
21subsection (e) for the hospital year equals or exceeds the
22relevant hospital entity's estimated property tax liability,
23as determined under subsection (g), for the year for which
24exemption is sought. For purposes of making the calculations
25required by this subsection (c), if the relevant hospital
26entity is a hospital owner that owns more than one hospital,

 

 

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1the value of the services or activities listed in subsection
2(e) shall be calculated on the basis of only those services and
3activities relating to the hospital that includes the subject
4property, and the relevant hospital entity's estimated
5property tax liability shall be calculated only with respect to
6the properties comprising that hospital. In the case of a
7multi-state hospital system or hospital affiliate, the value of
8the services or activities listed in subsection (e) shall be
9calculated on the basis of only those services and activities
10that occur in Illinois and the relevant hospital entity's
11estimated property tax liability shall be calculated only with
12respect to its property located in Illinois.
13    Notwithstanding any other provisions of this Act, any
14parcel or portion thereof, that is owned by a for-profit entity
15whether part of the hospital system or not, or that is leased,
16licensed or operated by a for-profit entity regardless of
17whether healthcare services are provided on that parcel shall
18not qualify for exemption. If a parcel has both exempt and
19non-exempt uses, an exemption may be granted for the qualifying
20portion of that parcel. In the case of parking lots and common
21areas serving both exempt and non-exempt uses those parcels or
22portions thereof may qualify for an exemption in proportion to
23the amount of qualifying use.
24    (d) The hospital applicant shall include information in its
25exemption application establishing that it satisfies the
26requirements of subsection (c). For purposes of making the

 

 

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1calculations required by subsection (c), the hospital
2applicant may for each year elect to use either (1) the value
3of the services or activities listed in subsection (e) for the
4hospital year or (2) the average value of those services or
5activities for the 3 fiscal years ending with the hospital
6year. If the relevant hospital entity has been in operation for
7less than 3 completed fiscal years, then the latter
8calculation, if elected, shall be performed on a pro rata
9basis.
10    (e) Services that address the health care needs of
11low-income or underserved individuals or relieve the burden of
12government with regard to health care services. The following
13services and activities shall be considered for purposes of
14making the calculations required by subsection (c):
15        (1) Charity care. Free or discounted services provided
16    pursuant to the relevant hospital entity's financial
17    assistance policy, measured at cost, including discounts
18    provided under the Hospital Uninsured Patient Discount
19    Act.
20        (2) Health services to low-income and underserved
21    individuals. Other unreimbursed costs of the relevant
22    hospital entity for providing without charge, paying for,
23    or subsidizing goods, activities, or services for the
24    purpose of addressing the health of low-income or
25    underserved individuals. Those activities or services may
26    include, but are not limited to: financial or in-kind

 

 

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1    support to affiliated or unaffiliated hospitals, hospital
2    affiliates, community clinics, or programs that treat
3    low-income or underserved individuals; paying for or
4    subsidizing health care professionals who care for
5    low-income or underserved individuals; providing or
6    subsidizing outreach or educational services to low-income
7    or underserved individuals for disease management and
8    prevention; free or subsidized goods, supplies, or
9    services needed by low-income or underserved individuals
10    because of their medical condition; and prenatal or
11    childbirth outreach to low-income or underserved persons.
12        (3) Subsidy of State or local governments. Direct or
13    indirect financial or in-kind subsidies of State or local
14    governments by the relevant hospital entity that pay for or
15    subsidize activities or programs related to health care for
16    low-income or underserved individuals.
17        (4) Support for State health care programs for
18    low-income individuals. At the election of the hospital
19    applicant for each applicable year, either (A) 10% of
20    payments to the relevant hospital entity and any hospital
21    affiliate designated by the relevant hospital entity
22    (provided that such hospital affiliate's operations
23    provide financial or operational support for or receive
24    financial or operational support from the relevant
25    hospital entity) under Medicaid or other means-tested
26    programs, including, but not limited to, General

 

 

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1    Assistance, the Covering ALL KIDS Health Insurance Act, and
2    the State Children's Health Insurance Program or (B) the
3    amount of subsidy provided by the relevant hospital entity
4    and any hospital affiliate designated by the relevant
5    hospital entity (provided that such hospital affiliate's
6    operations provide financial or operational support for or
7    receive financial or operational support from the relevant
8    hospital entity) to State or local government in treating
9    Medicaid recipients and recipients of means-tested
10    programs, including but not limited to General Assistance,
11    the Covering ALL KIDS Health Insurance Act, and the State
12    Children's Health Insurance Program. The amount of subsidy
13    for purposes of this item (4) is calculated in the same
14    manner as unreimbursed costs are calculated for Medicaid
15    and other means-tested government programs in the Schedule
16    H of IRS Form 990 in effect on the effective date of this
17    amendatory Act of the 97th General Assembly; provided,
18    however, that in any event unreimbursed costs shall be net
19    of fee-for-services payments, payments pursuant to an
20    assessment, quarterly payments, and all other payments
21    included on the schedule H of the IRS form 990.
22        (5) Dual-eligible subsidy. The amount of subsidy
23    provided to government by treating dual-eligible
24    Medicare/Medicaid patients. The amount of subsidy for
25    purposes of this item (5) is calculated by multiplying the
26    relevant hospital entity's unreimbursed costs for

 

 

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1    Medicare, calculated in the same manner as determined in
2    the Schedule H of IRS Form 990 in effect on the effective
3    date of this amendatory Act of the 97th General Assembly,
4    by the relevant hospital entity's ratio of dual-eligible
5    patients to total Medicare patients.
6        (6) Relief of the burden of government related to
7    health care of low-income individuals. Except to the extent
8    otherwise taken into account in this subsection, the
9    portion of unreimbursed costs of the relevant hospital
10    entity attributable to providing, paying for, or
11    subsidizing goods, activities, or services that relieve
12    the burden of government related to health care for
13    low-income individuals. Such activities or services shall
14    include, but are not limited to, providing emergency,
15    trauma, burn, neonatal, psychiatric, rehabilitation, or
16    other special services; providing medical education; and
17    conducting medical research or training of health care
18    professionals. The portion of those unreimbursed costs
19    attributable to benefiting low-income individuals shall be
20    determined using the ratio calculated by adding the
21    relevant hospital entity's costs attributable to charity
22    care, Medicaid, other means-tested government programs,
23    disabled Medicare patients under age 65, and dual-eligible
24    Medicare/Medicaid patients and dividing that total by the
25    relevant hospital entity's total costs. Such costs for the
26    numerator and denominator shall be determined by

 

 

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1    multiplying gross charges by the cost to charge ratio taken
2    from the hospitals' most recently filed Medicare cost
3    report (CMS 2252-10 Worksheet C, Part I). In the case of
4    emergency services, the ratio shall be calculated using
5    costs (gross charges multiplied by the cost to charge ratio
6    taken from the hospitals' most recently filed Medicare cost
7    report (CMS 2252-10 Worksheet C, Part I)) of patients
8    treated in the relevant hospital entity's emergency
9    department.
10        (7) Any other activity by the relevant hospital entity
11    that the Department determines relieves the burden of
12    government or addresses the health of low-income or
13    underserved individuals.
14    (f) For purposes of making the calculations required by
15subsections (c) and (e):
16        (1) particular services or activities eligible for
17    consideration under any of the paragraphs (1) through (7)
18    of subsection (e) may not be counted under more than one of
19    those paragraphs; and
20        (2) the amount of unreimbursed costs and the amount of
21    subsidy shall not be reduced by restricted or unrestricted
22    payments received by the relevant hospital entity as
23    contributions deductible under Section 170(a) of the
24    Internal Revenue Code.
25    (g) Estimation of Exempt Property Tax Liability. The
26estimated property tax liability used for the determination in

 

 

SB2194 Enrolled- 138 -LRB097 10235 HLH 50431 b

1subsection (c) shall be calculated as follows:
2        (1) "Estimated property tax liability" means the
3    estimated dollar amount of property tax that would be owed,
4    with respect to the exempt portion of each of the relevant
5    hospital entity's properties that are already fully or
6    partially exempt, or for which an exemption in whole or in
7    part is currently being sought, and then aggregated as
8    applicable, as if the exempt portion of those properties
9    were subject to tax, calculated with respect to each such
10    property by multiplying:
11            (A) the lesser of (i) the actual assessed value, if
12        any, of the portion of the property for which an
13        exemption is sought or (ii) an estimated assessed value
14        of the exempt portion of such property as determined in
15        item (2) of this subsection (g), by:
16            (B) the applicable State equalization rate
17        (yielding the equalized assessed value), by
18            (C) the applicable tax rate.
19        (2) The estimated assessed value of the exempt portion
20    of the property equals the sum of (i) the estimated fair
21    market value of buildings on the property, as determined in
22    accordance with subparagraphs (A) and (B) of this item (2),
23    multiplied by the applicable assessment factor, and (ii)
24    the estimated assessed value of the land portion of the
25    property, as determined in accordance with subparagraph
26    (C).

 

 

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1            (A) The "estimated fair market value of buildings
2        on the property" means the replacement value of any
3        exempt portion of buildings on the property, minus
4        depreciation, determined utilizing the cost
5        replacement method whereby the exempt square footage
6        of all such buildings is multiplied by the replacement
7        cost per square foot for Class A Average building found
8        in the most recent edition of the Marshall & Swift
9        Valuation Services Manual, adjusted by any appropriate
10        current cost and local multipliers.
11            (B) Depreciation, for purposes of calculating the
12        estimated fair market value of buildings on the
13        property, is applied by utilizing a weighted mean life
14        for the buildings based on original construction and
15        assuming a 40-year life for hospital buildings and the
16        applicable life for other types of buildings as
17        specified in the American Hospital Association
18        publication "Estimated Useful Lives of Depreciable
19        Hospital Assets". In the case of hospital buildings,
20        the remaining life is divided by 40 and this ratio is
21        multiplied by the replacement cost of the buildings to
22        obtain an estimated fair market value of buildings. If
23        a hospital building is older than 35 years, a remaining
24        life of 5 years for residual value is assumed; and if a
25        building is less than 8 years old, a remaining life of
26        32 years is assumed.

 

 

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1            (C) The estimated assessed value of the land
2        portion of the property shall be determined by
3        multiplying (i) the per square foot average of the
4        assessed values of three parcels of land (not including
5        farm land, and excluding the assessed value of the
6        improvements thereon) reasonably comparable to the
7        property, by (ii) the number of square feet comprising
8        the exempt portion of the property's land square
9        footage.
10        (3) The assessment factor, State equalization rate,
11    and tax rate (including any special factors such as
12    Enterprise Zones) used in calculating the estimated
13    property tax liability shall be for the most recent year
14    that is publicly available from the applicable chief county
15    assessment officer or officers at least 90 days before the
16    end of the hospital year.
17        (4) The method utilized to calculate estimated
18    property tax liability for purposes of this Section 15-86
19    shall not be utilized for the actual valuation, assessment,
20    or taxation of property pursuant to the Property Tax Code.
21    (h) Application. Each hospital applicant applying for a
22property tax exemption pursuant to Section 15-5 and this
23Section shall use an application form provided by the
24Department. The application form shall specify the records
25required in support of the application and those records shall
26be submitted to the Department with the application form. Each

 

 

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1application or affidavit shall contain a verification by the
2Chief Executive Officer of the hospital applicant under oath or
3affirmation stating that each statement in the application or
4affidavit and each document submitted with the application or
5affidavit are true and correct. The records submitted with the
6application pursuant to this Section shall include an exhibit
7prepared by the relevant hospital entity showing (A) the value
8of the relevant hospital entity's services and activities, if
9any, under paragraphs (1) through (7) of subsection (e) of this
10Section stated separately for each paragraph, and (B) the value
11relating to the relevant hospital entity's estimated property
12tax liability under subsections (g)(1)(A), (B), and (C),
13subsections (g)(2)(A), (B), and (C), and subsection (g)(3) of
14this Section stated separately for each item. Such exhibit will
15be made available to the public by the chief county assessment
16officer. Nothing in this Section shall be construed as limiting
17the Attorney General's authority under the Illinois False
18Claims Act.
19    (i) Nothing in this Section shall be construed to limit the
20ability of otherwise eligible hospitals, hospital owners,
21hospital affiliates, or hospital systems to obtain or maintain
22property tax exemptions pursuant to a provision of the Property
23Tax Code other than this Section.
 
24    Section 5-60. The Illinois Public Aid Code is amended by
25changing Sections 5A-1, 5A-2, 5A-4, 5A-5, 5A-8, 5A-10, 5A-13,

 

 

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1and 5A-14 and by adding Sections 5A-12.4 and 5A-15 as follows:
 
2    (305 ILCS 5/5A-1)  (from Ch. 23, par. 5A-1)
3    Sec. 5A-1. Definitions. As used in this Article, unless
4the context requires otherwise:
5    "Adjusted gross hospital revenue" shall be determined
6separately for inpatient and outpatient services for each
7hospital conducted, operated or maintained by a hospital
8provider, and means the hospital provider's total gross
9revenues less: (i) gross revenue attributable to non-hospital
10based services including home dialysis services, durable
11medical equipment, ambulance services, outpatient clinics and
12any other non-hospital based services as determined by the
13Illinois Department by rule; and (ii) gross revenues
14attributable to the routine services provided to persons
15receiving skilled or intermediate long-term care services
16within the meaning of Title XVIII or XIX of the Social Security
17Act; and (iii) Medicare gross revenue (excluding the Medicare
18gross revenue attributable to clauses (i) and (ii) of this
19paragraph and the Medicare gross revenue attributable to the
20routine services provided to patients in a psychiatric
21hospital, a rehabilitation hospital, a distinct part
22psychiatric unit, a distinct part rehabilitation unit, or swing
23beds). Adjusted gross hospital revenue shall be determined
24using the most recent data available from each hospital's 2003
25Medicare cost report as contained in the Healthcare Cost Report

 

 

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1Information System file, for the quarter ending on December 31,
22004, without regard to any subsequent adjustments or changes
3to such data. If a hospital's 2003 Medicare cost report is not
4contained in the Healthcare Cost Report Information System, the
5hospital provider shall furnish such cost report or the data
6necessary to determine its adjusted gross hospital revenue as
7required by rule by the Illinois Department.
8    "Fund" means the Hospital Provider Fund.
9    "Hospital" means an institution, place, building, or
10agency located in this State that is subject to licensure by
11the Illinois Department of Public Health under the Hospital
12Licensing Act, whether public or private and whether organized
13for profit or not-for-profit.
14    "Hospital provider" means a person licensed by the
15Department of Public Health to conduct, operate, or maintain a
16hospital, regardless of whether the person is a Medicaid
17provider. For purposes of this paragraph, "person" means any
18political subdivision of the State, municipal corporation,
19individual, firm, partnership, corporation, company, limited
20liability company, association, joint stock association, or
21trust, or a receiver, executor, trustee, guardian, or other
22representative appointed by order of any court.
23    "Medicare bed days" means, for each hospital, the sum of
24the number of days that each bed was occupied by a patient who
25was covered by Title XVIII of the Social Security Act,
26excluding days attributable to the routine services provided to

 

 

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1persons receiving skilled or intermediate long term care
2services. Medicare bed days shall be computed separately for
3each hospital operated or maintained by a hospital provider.
4    "Occupied bed days" means the sum of the number of days
5that each bed was occupied by a patient for all beds, excluding
6days attributable to the routine services provided to persons
7receiving skilled or intermediate long term care services.
8Occupied bed days shall be computed separately for each
9hospital operated or maintained by a hospital provider.
10    "Outpatient gross revenue" means, for each hospital, its
11total gross charges attributed to outpatient services as
12reported on the Medicare cost report at Worksheet C, Part I,
13Column 7, line 101, less the sum of lines 45, 60, 63, 64, 65,
1466, 67, and 68 (and any subsets of those lines).
15    "Proration factor" means a fraction, the numerator of which
16is 53 and the denominator of which is 365.
17(Source: P.A. 94-242, eff. 7-18-05; 95-859, eff. 8-19-08.)
 
18    (305 ILCS 5/5A-2)  (from Ch. 23, par. 5A-2)
19    (Section scheduled to be repealed on July 1, 2014)
20    Sec. 5A-2. Assessment.
21    (a) Subject to Sections 5A-3 and 5A-10, an annual
22assessment on inpatient services is imposed on each hospital
23provider in an amount equal to the hospital's occupied bed days
24multiplied by $84.19 multiplied by the proration factor for
25State fiscal year 2004 and the hospital's occupied bed days

 

 

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1multiplied by $84.19 for State fiscal year 2005.
2    For State fiscal years 2004 and 2005, the Department of
3Healthcare and Family Services shall use the number of occupied
4bed days as reported by each hospital on the Annual Survey of
5Hospitals conducted by the Department of Public Health to
6calculate the hospital's annual assessment. If the sum of a
7hospital's occupied bed days is not reported on the Annual
8Survey of Hospitals or if there are data errors in the reported
9sum of a hospital's occupied bed days as determined by the
10Department of Healthcare and Family Services (formerly
11Department of Public Aid), then the Department of Healthcare
12and Family Services may obtain the sum of occupied bed days
13from any source available, including, but not limited to,
14records maintained by the hospital provider, which may be
15inspected at all times during business hours of the day by the
16Department of Healthcare and Family Services or its duly
17authorized agents and employees.
18    Subject to Sections 5A-3 and 5A-10, for the privilege of
19engaging in the occupation of hospital provider, beginning
20August 1, 2005, an annual assessment is imposed on each
21hospital provider for State fiscal years 2006, 2007, and 2008,
22in an amount equal to 2.5835% of the hospital provider's
23adjusted gross hospital revenue for inpatient services and
242.5835% of the hospital provider's adjusted gross hospital
25revenue for outpatient services. If the hospital provider's
26adjusted gross hospital revenue is not available, then the

 

 

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1Illinois Department may obtain the hospital provider's
2adjusted gross hospital revenue from any source available,
3including, but not limited to, records maintained by the
4hospital provider, which may be inspected at all times during
5business hours of the day by the Illinois Department or its
6duly authorized agents and employees.
7    Subject to Sections 5A-3 and 5A-10, for State fiscal years
82009 through 2014, and from July 1, 2014 through December 31,
92014, an annual assessment on inpatient services is imposed on
10each hospital provider in an amount equal to $218.38 multiplied
11by the difference of the hospital's occupied bed days less the
12hospital's Medicare bed days.
13    For State fiscal years 2009 through 2014, and after a
14hospital's occupied bed days and Medicare bed days shall be
15determined using the most recent data available from each
16hospital's 2005 Medicare cost report as contained in the
17Healthcare Cost Report Information System file, for the quarter
18ending on December 31, 2006, without regard to any subsequent
19adjustments or changes to such data. If a hospital's 2005
20Medicare cost report is not contained in the Healthcare Cost
21Report Information System, then the Illinois Department may
22obtain the hospital provider's occupied bed days and Medicare
23bed days from any source available, including, but not limited
24to, records maintained by the hospital provider, which may be
25inspected at all times during business hours of the day by the
26Illinois Department or its duly authorized agents and

 

 

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1employees.
2    (b) (Blank).
3    (b-5) Subject to Sections 5A-3 and 5A-10, for State fiscal
4years 2013 through 2014, and July 1, 2014 through December 31,
52014, an annual assessment on outpatient services is imposed on
6each hospital provider in an amount equal to .008766 multiplied
7by the hospital's outpatient gross revenue.
8    For State fiscal years 2013 through 2014, and July 1, 2014
9through December 31, 2014, a hospital's outpatient gross
10revenue shall be determined using the most recent data
11available from each hospital's 2009 Medicare cost report as
12contained in the Healthcare Cost Report Information System
13file, for the quarter ending on June 30, 2011, without regard
14to any subsequent adjustments or changes to such data. If a
15hospital's 2009 Medicare cost report is not contained in the
16Healthcare Cost Report Information System, then the Department
17may obtain the hospital provider's outpatient gross revenue
18from any source available, including, but not limited to,
19records maintained by the hospital provider, which may be
20inspected at all times during business hours of the day by the
21Department or its duly authorized agents and employees.
22    (c) (Blank).
23    (d) Notwithstanding any of the other provisions of this
24Section, the Department is authorized, during this 94th General
25Assembly, to adopt rules to reduce the rate of any annual
26assessment imposed under this Section, as authorized by Section

 

 

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15-46.2 of the Illinois Administrative Procedure Act.
2    (e) Notwithstanding any other provision of this Section,
3any plan providing for an assessment on a hospital provider as
4a permissible tax under Title XIX of the federal Social
5Security Act and Medicaid-eligible payments to hospital
6providers from the revenues derived from that assessment shall
7be reviewed by the Illinois Department of Healthcare and Family
8Services, as the Single State Medicaid Agency required by
9federal law, to determine whether those assessments and
10hospital provider payments meet federal Medicaid standards. If
11the Department determines that the elements of the plan may
12meet federal Medicaid standards and a related State Medicaid
13Plan Amendment is prepared in a manner and form suitable for
14submission, that State Plan Amendment shall be submitted in a
15timely manner for review by the Centers for Medicare and
16Medicaid Services of the United States Department of Health and
17Human Services and subject to approval by the Centers for
18Medicare and Medicaid Services of the United States Department
19of Health and Human Services. No such plan shall become
20effective without approval by the Illinois General Assembly by
21the enactment into law of related legislation. Notwithstanding
22any other provision of this Section, the Department is
23authorized to adopt rules to reduce the rate of any annual
24assessment imposed under this Section. Any such rules may be
25adopted by the Department under Section 5-50 of the Illinois
26Administrative Procedure Act.

 

 

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1(Source: P.A. 95-859, eff. 8-19-08; 96-1530, eff. 2-16-11.)
 
2    (305 ILCS 5/5A-4)  (from Ch. 23, par. 5A-4)
3    Sec. 5A-4. Payment of assessment; penalty.
4    (a) The annual assessment imposed by Section 5A-2 for State
5fiscal year 2004 shall be due and payable on June 18 of the
6year. The assessment imposed by Section 5A-2 for State fiscal
7year 2005 shall be due and payable in quarterly installments,
8each equalling one-fourth of the assessment for the year, on
9July 19, October 19, January 18, and April 19 of the year. The
10assessment imposed by Section 5A-2 for State fiscal years 2006
11through 2008 shall be due and payable in quarterly
12installments, each equaling one-fourth of the assessment for
13the year, on the fourteenth State business day of September,
14December, March, and May. Except as provided in subsection
15(a-5) of this Section, the assessment imposed by Section 5A-2
16for State fiscal year 2009 and each subsequent State fiscal
17year shall be due and payable in monthly installments, each
18equaling one-twelfth of the assessment for the year, on the
19fourteenth State business day of each month. No installment
20payment of an assessment imposed by Section 5A-2 shall be due
21and payable, however, until after the Comptroller has issued
22the payments required under this Article : (i) the Department
23notifies the hospital provider, in writing, that the payment
24methodologies to hospitals required under Section 5A-12,
25Section 5A-12.1, or Section 5A-12.2, whichever is applicable

 

 

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1for that fiscal year, have been approved by the Centers for
2Medicare and Medicaid Services of the U.S. Department of Health
3and Human Services and the waiver under 42 CFR 433.68 for the
4assessment imposed by Section 5A-2, if necessary, has been
5granted by the Centers for Medicare and Medicaid Services of
6the U.S. Department of Health and Human Services; and (ii) the
7Comptroller has issued the payments required under Section
85A-12, Section 5A-12.1, or Section 5A-12.2, whichever is
9applicable for that fiscal year. Upon notification to the
10Department of approval of the payment methodologies required
11under Section 5A-12, Section 5A-12.1, or Section 5A-12.2,
12whichever is applicable for that fiscal year, and the waiver
13granted under 42 CFR 433.68, all installments otherwise due
14under Section 5A-2 prior to the date of notification shall be
15due and payable to the Department upon written direction from
16the Department and issuance by the Comptroller of the payments
17required under Section 5A-12.1 or Section 5A-12.2, whichever is
18applicable for that fiscal year.
19    Except as provided in subsection (a-5) of this Section, the
20assessment imposed by subsection (b-5) of Section 5A-2 for
21State fiscal year 2013 and each subsequent State fiscal year
22shall be due and payable in monthly installments, each equaling
23one-twelfth of the assessment for the year, on the 14th State
24business day of each month. No installment payment of an
25assessment imposed by subsection (b-5) of Section 5A-2 shall be
26due and payable, however, until after: (i) the Department

 

 

SB2194 Enrolled- 151 -LRB097 10235 HLH 50431 b

1notifies the hospital provider, in writing, that the payment
2methodologies to hospitals required under Section 5A-12.4,
3have been approved by the Centers for Medicare and Medicaid
4Services of the U.S. Department of Health and Human Services,
5and the waiver under 42 CFR 433.68 for the assessment imposed
6by subsection (b-5) of Section 5A-2, if necessary, has been
7granted by the Centers for Medicare and Medicaid Services of
8the U.S. Department of Health and Human Services; and (ii) the
9Comptroller has issued the payments required under Section
105A-12.4. Upon notification to the Department of approval of the
11payment methodologies required under Section 5A-12.4 and the
12waiver granted under 42 CFR 433.68, if necessary, all
13installments otherwise due under subsection (b-5) of Section
145A-2 prior to the date of notification shall be due and payable
15to the Department upon written direction from the Department
16and issuance by the Comptroller of the payments required under
17Section 5A-12.4.
18    (a-5) The Illinois Department may, for the purpose of
19maximizing federal revenue, accelerate the schedule upon which
20assessment installments are due and payable by hospitals with a
21payment ratio greater than or equal to one. Such acceleration
22of due dates for payment of the assessment may be made only in
23conjunction with a corresponding acceleration in access
24payments identified in Section 5A-12.2 or Section 5A-12.4 to
25the same hospitals. For the purposes of this subsection (a-5),
26a hospital's payment ratio is defined as the quotient obtained

 

 

SB2194 Enrolled- 152 -LRB097 10235 HLH 50431 b

1by dividing the total payments for the State fiscal year, as
2authorized under Section 5A-12.2 or Section 5A-12.4, by the
3total assessment for the State fiscal year imposed under
4Section 5A-2 or subsection (b-5) of Section 5A-2.
5    (b) The Illinois Department is authorized to establish
6delayed payment schedules for hospital providers that are
7unable to make installment payments when due under this Section
8due to financial difficulties, as determined by the Illinois
9Department.
10    (c) If a hospital provider fails to pay the full amount of
11an installment when due (including any extensions granted under
12subsection (b)), there shall, unless waived by the Illinois
13Department for reasonable cause, be added to the assessment
14imposed by Section 5A-2 a penalty assessment equal to the
15lesser of (i) 5% of the amount of the installment not paid on
16or before the due date plus 5% of the portion thereof remaining
17unpaid on the last day of each 30-day period thereafter or (ii)
18100% of the installment amount not paid on or before the due
19date. For purposes of this subsection, payments will be
20credited first to unpaid installment amounts (rather than to
21penalty or interest), beginning with the most delinquent
22installments.
23    (d) Any assessment amount that is due and payable to the
24Illinois Department more frequently than once per calendar
25quarter shall be remitted to the Illinois Department by the
26hospital provider by means of electronic funds transfer. The

 

 

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1Illinois Department may provide for remittance by other means
2if (i) the amount due is less than $10,000 or (ii) electronic
3funds transfer is unavailable for this purpose.
4(Source: P.A. 95-331, eff. 8-21-07; 95-859, eff. 8-19-08;
596-821, eff. 11-20-09.)
 
6    (305 ILCS 5/5A-5)  (from Ch. 23, par. 5A-5)
7    Sec. 5A-5. Notice; penalty; maintenance of records.
8    (a) The Illinois Department of Healthcare and Family
9Services shall send a notice of assessment to every hospital
10provider subject to assessment under this Article. The notice
11of assessment shall notify the hospital of its assessment and
12shall be sent after receipt by the Department of notification
13from the Centers for Medicare and Medicaid Services of the U.S.
14Department of Health and Human Services that the payment
15methodologies required under this Article Section 5A-12,
16Section 5A-12.1, or Section 5A-12.2, whichever is applicable
17for that fiscal year, and, if necessary, the waiver granted
18under 42 CFR 433.68 have been approved. The notice shall be on
19a form prepared by the Illinois Department and shall state the
20following:
21        (1) The name of the hospital provider.
22        (2) The address of the hospital provider's principal
23    place of business from which the provider engages in the
24    occupation of hospital provider in this State, and the name
25    and address of each hospital operated, conducted, or

 

 

SB2194 Enrolled- 154 -LRB097 10235 HLH 50431 b

1    maintained by the provider in this State.
2        (3) The occupied bed days, occupied bed days less
3    Medicare days, or adjusted gross hospital revenue, or
4    outpatient gross revenue of the hospital provider
5    (whichever is applicable), the amount of assessment
6    imposed under Section 5A-2 for the State fiscal year for
7    which the notice is sent, and the amount of each
8    installment to be paid during the State fiscal year.
9        (4) (Blank).
10        (5) Other reasonable information as determined by the
11    Illinois Department.
12    (b) If a hospital provider conducts, operates, or maintains
13more than one hospital licensed by the Illinois Department of
14Public Health, the provider shall pay the assessment for each
15hospital separately.
16    (c) Notwithstanding any other provision in this Article, in
17the case of a person who ceases to conduct, operate, or
18maintain a hospital in respect of which the person is subject
19to assessment under this Article as a hospital provider, the
20assessment for the State fiscal year in which the cessation
21occurs shall be adjusted by multiplying the assessment computed
22under Section 5A-2 by a fraction, the numerator of which is the
23number of days in the year during which the provider conducts,
24operates, or maintains the hospital and the denominator of
25which is 365. Immediately upon ceasing to conduct, operate, or
26maintain a hospital, the person shall pay the assessment for

 

 

SB2194 Enrolled- 155 -LRB097 10235 HLH 50431 b

1the year as so adjusted (to the extent not previously paid).
2    (d) Notwithstanding any other provision in this Article, a
3provider who commences conducting, operating, or maintaining a
4hospital, upon notice by the Illinois Department, shall pay the
5assessment computed under Section 5A-2 and subsection (e) in
6installments on the due dates stated in the notice and on the
7regular installment due dates for the State fiscal year
8occurring after the due dates of the initial notice.
9    (e) Notwithstanding any other provision in this Article,
10for State fiscal years 2004 and 2005, in the case of a hospital
11provider that did not conduct, operate, or maintain a hospital
12throughout calendar year 2001, the assessment for that State
13fiscal year shall be computed on the basis of hypothetical
14occupied bed days for the full calendar year as determined by
15the Illinois Department. Notwithstanding any other provision
16in this Article, for State fiscal years 2006 through 2008, in
17the case of a hospital provider that did not conduct, operate,
18or maintain a hospital in 2003, the assessment for that State
19fiscal year shall be computed on the basis of hypothetical
20adjusted gross hospital revenue for the hospital's first full
21fiscal year as determined by the Illinois Department (which may
22be based on annualization of the provider's actual revenues for
23a portion of the year, or revenues of a comparable hospital for
24the year, including revenues realized by a prior provider of
25the same hospital during the year). Notwithstanding any other
26provision in this Article, for State fiscal years 2009 through

 

 

SB2194 Enrolled- 156 -LRB097 10235 HLH 50431 b

12014, in the case of a hospital provider that did not conduct,
2operate, or maintain a hospital in 2005, the assessment for
3that State fiscal year shall be computed on the basis of
4hypothetical occupied bed days for the full calendar year as
5determined by the Illinois Department. Notwithstanding any
6other provision in this Article, for State fiscal years 2013
7through 2014, and for July 1, 2014 through December 31, 2014,
8in the case of a hospital provider that did not conduct,
9operate, or maintain a hospital in 2009, the assessment under
10subsection (b-5) of Section 5A-2 for that State fiscal year
11shall be computed on the basis of hypothetical gross outpatient
12revenue for the full calendar year as determined by the
13Illinois Department.
14    (f) Every hospital provider subject to assessment under
15this Article shall keep sufficient records to permit the
16determination of adjusted gross hospital revenue for the
17hospital's fiscal year. All such records shall be kept in the
18English language and shall, at all times during regular
19business hours of the day, be subject to inspection by the
20Illinois Department or its duly authorized agents and
21employees.
22    (g) The Illinois Department may, by rule, provide a
23hospital provider a reasonable opportunity to request a
24clarification or correction of any clerical or computational
25errors contained in the calculation of its assessment, but such
26corrections shall not extend to updating the cost report

 

 

SB2194 Enrolled- 157 -LRB097 10235 HLH 50431 b

1information used to calculate the assessment.
2    (h) (Blank).
3(Source: P.A. 95-331, eff. 8-21-07; 95-859, eff. 8-19-08;
496-1530, eff. 2-16-11.)
 
5    (305 ILCS 5/5A-8)  (from Ch. 23, par. 5A-8)
6    Sec. 5A-8. Hospital Provider Fund.
7    (a) There is created in the State Treasury the Hospital
8Provider Fund. Interest earned by the Fund shall be credited to
9the Fund. The Fund shall not be used to replace any moneys
10appropriated to the Medicaid program by the General Assembly.
11    (b) The Fund is created for the purpose of receiving moneys
12in accordance with Section 5A-6 and disbursing moneys only for
13the following purposes, notwithstanding any other provision of
14law:
15        (1) For making payments to hospitals as required under
16    Articles V, V-A, VI, and XIV of this Code, under the
17    Children's Health Insurance Program Act, under the
18    Covering ALL KIDS Health Insurance Act, and under the Long
19    Term Acute Care Hospital Quality Improvement Transfer
20    Program Senior Citizens and Disabled Persons Property Tax
21    Relief and Pharmaceutical Assistance Act.
22        (2) For the reimbursement of moneys collected by the
23    Illinois Department from hospitals or hospital providers
24    through error or mistake in performing the activities
25    authorized under this Article and Article V of this Code.

 

 

SB2194 Enrolled- 158 -LRB097 10235 HLH 50431 b

1        (3) For payment of administrative expenses incurred by
2    the Illinois Department or its agent in performing the
3    activities authorized by this Code, under the Children's
4    Health Insurance Program Act, under the Covering ALL KIDS
5    Health Insurance Act, and under the Long Term Acute Care
6    Hospital Quality Improvement Transfer Program Act.
7    Article.
8        (4) For payments of any amounts which are reimbursable
9    to the federal government for payments from this Fund which
10    are required to be paid by State warrant.
11        (5) For making transfers, as those transfers are
12    authorized in the proceedings authorizing debt under the
13    Short Term Borrowing Act, but transfers made under this
14    paragraph (5) shall not exceed the principal amount of debt
15    issued in anticipation of the receipt by the State of
16    moneys to be deposited into the Fund.
17        (6) For making transfers to any other fund in the State
18    treasury, but transfers made under this paragraph (6) shall
19    not exceed the amount transferred previously from that
20    other fund into the Hospital Provider Fund.
21        (6.5) For making transfers to the Healthcare Provider
22    Relief Fund, except that transfers made under this
23    paragraph (6.5) shall not exceed $60,000,000 in the
24    aggregate.
25        (7) For making transfers not exceeding the following
26    amounts, in State fiscal years 2013 and 2014, to the

 

 

SB2194 Enrolled- 159 -LRB097 10235 HLH 50431 b

1    following designated funds:
2            Health and Human Services Medicaid Trust
3                Fund..............................$20,000,000
4            Long-Term Care Provider Fund..........$30,000,000
5            General Revenue Fund.................$80,000,000.
6    Transfers under this paragraph shall be made within 7 days
7    after the payments have been received pursuant to the
8    schedule of payments provided in subsection (a) of Section
9    5A-4.
10        (7.1) For making transfers not exceeding the following
11    amounts, in State fiscal year 2015, to the following
12    designated funds:
13            Health and Human Services Medicaid Trust
14                 Fund..............................$10,000,000
15            Long-Term Care Provider Fund..........$15,000,000
16            General Revenue Fund.................$40,000,000.
17    Transfers under this paragraph shall be made within 7 days
18    after the payments have been received pursuant to the
19    schedule of payments provided in subsection (a) of Section
20    5A-4. For State fiscal years 2004 and 2005 for making
21    transfers to the Health and Human Services Medicaid Trust
22    Fund, including 20% of the moneys received from hospital
23    providers under Section 5A-4 and transferred into the
24    Hospital Provider Fund under Section 5A-6. For State fiscal
25    year 2006 for making transfers to the Health and Human
26    Services Medicaid Trust Fund of up to $130,000,000 per year

 

 

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1    of the moneys received from hospital providers under
2    Section 5A-4 and transferred into the Hospital Provider
3    Fund under Section 5A-6. Transfers under this paragraph
4    shall be made within 7 days after the payments have been
5    received pursuant to the schedule of payments provided in
6    subsection (a) of Section 5A-4.
7        (7.5) (Blank). For State fiscal year 2007 for making
8    transfers of the moneys received from hospital providers
9    under Section 5A-4 and transferred into the Hospital
10    Provider Fund under Section 5A-6 to the designated funds
11    not exceeding the following amounts in that State fiscal
12    year:
13        Health and Human Services
14            Medicaid Trust Fund................. $20,000,000
15        Long-Term Care Provider Fund............ $30,000,000
16        General Revenue Fund................... $80,000,000.
17        Transfers under this paragraph shall be made within 7
18    days after the payments have been received pursuant to the
19    schedule of payments provided in subsection (a) of Section
20    5A-4.
21        (7.8) (Blank). For State fiscal year 2008, for making
22    transfers of the moneys received from hospital providers
23    under Section 5A-4 and transferred into the Hospital
24    Provider Fund under Section 5A-6 to the designated funds
25    not exceeding the following amounts in that State fiscal
26    year:

 

 

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1        Health and Human Services
2            Medicaid Trust Fund...................$40,000,000
3        Long-Term Care Provider Fund..............$60,000,000
4        General Revenue Fund....................$160,000,000.
5        Transfers under this paragraph shall be made within 7
6    days after the payments have been received pursuant to the
7    schedule of payments provided in subsection (a) of Section
8    5A-4.
9        (7.9) (Blank). For State fiscal years 2009 through
10    2014, for making transfers of the moneys received from
11    hospital providers under Section 5A-4 and transferred into
12    the Hospital Provider Fund under Section 5A-6 to the
13    designated funds not exceeding the following amounts in
14    that State fiscal year:
15        Health and Human Services
16            Medicaid Trust Fund...................$20,000,000
17        Long Term Care Provider Fund..............$30,000,000
18        General Revenue Fund.....................$80,000,000.
19        Except as provided under this paragraph, transfers
20    under this paragraph shall be made within 7 business days
21    after the payments have been received pursuant to the
22    schedule of payments provided in subsection (a) of Section
23    5A-4. For State fiscal year 2009, transfers to the General
24    Revenue Fund under this paragraph shall be made on or
25    before June 30, 2009, as sufficient funds become available
26    in the Hospital Provider Fund to both make the transfers

 

 

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1    and continue hospital payments.
2        (7.10) For State fiscal years 2013 and 2014, for making
3    transfers of the moneys resulting from the assessment under
4    subsection (b-5) of Section 5A-2 and received from hospital
5    providers under Section 5A-4 and transferred into the
6    Hospital Provider Fund under Section 5A-6 to the designated
7    funds not exceeding the following amounts in that State
8    fiscal year:
9            Health Care Provider Relief Fund......$50,000,000
10        Transfers under this paragraph shall be made within 7
11    days after the payments have been received pursuant to the
12    schedule of payments provided in subsection (a) of Section
13    5A-4.
14        (7.11) For State fiscal year 2015, for making transfers
15    of the moneys resulting from the assessment under
16    subsection (b-5) of Section 5A-2 and received from hospital
17    providers under Section 5A-4 and transferred into the
18    Hospital Provider Fund under Section 5A-6 to the designated
19    funds not exceeding the following amounts in that State
20    fiscal year:
21            Health Care Provider Relief Fund......$25,000,000
22        Transfers under this paragraph shall be made within 7
23    days after the payments have been received pursuant to the
24    schedule of payments provided in subsection (a) of Section
25    5A-4.
26        (8) For making refunds to hospital providers pursuant

 

 

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1    to Section 5A-10.
2    Disbursements from the Fund, other than transfers
3authorized under paragraphs (5) and (6) of this subsection,
4shall be by warrants drawn by the State Comptroller upon
5receipt of vouchers duly executed and certified by the Illinois
6Department.
7    (c) The Fund shall consist of the following:
8        (1) All moneys collected or received by the Illinois
9    Department from the hospital provider assessment imposed
10    by this Article.
11        (2) All federal matching funds received by the Illinois
12    Department as a result of expenditures made by the Illinois
13    Department that are attributable to moneys deposited in the
14    Fund.
15        (3) Any interest or penalty levied in conjunction with
16    the administration of this Article.
17        (4) Moneys transferred from another fund in the State
18    treasury.
19        (5) All other moneys received for the Fund from any
20    other source, including interest earned thereon.
21    (d) (Blank).
22(Source: P.A. 95-707, eff. 1-11-08; 95-859, eff. 8-19-08; 96-3,
23eff. 2-27-09; 96-45, eff. 7-15-09; 96-821, eff. 11-20-09;
2496-1530, eff. 2-16-11.)
 
25    (305 ILCS 5/5A-10)  (from Ch. 23, par. 5A-10)

 

 

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1    Sec. 5A-10. Applicability.
2    (a) The assessment imposed by subsection (a) of Section
35A-2 shall not take effect or shall cease to be imposed, and
4any moneys remaining in the Fund shall be refunded to hospital
5providers in proportion to the amounts paid by them, if:
6        (1) The payments to hospitals required under this
7    Article are not eligible for federal matching funds under
8    Title XIX or XXI of the Social Security Act; The sum of the
9    appropriations for State fiscal years 2004 and 2005 from
10    the General Revenue Fund for hospital payments under the
11    medical assistance program is less than $4,500,000,000 or
12    the appropriation for each of State fiscal years 2006, 2007
13    and 2008 from the General Revenue Fund for hospital
14    payments under the medical assistance program is less than
15    $2,500,000,000 increased annually to reflect any increase
16    in the number of recipients, or the annual appropriation
17    for State fiscal years 2009, 2010, 2011, 2013, and 2014,
18    from the General Revenue Fund combined with the Hospital
19    Provider Fund as authorized in Section 5A-8 for hospital
20    payments under the medical assistance program, is less than
21    the amount appropriated for State fiscal year 2009,
22    adjusted annually to reflect any change in the number of
23    recipients, excluding State fiscal year 2009 supplemental
24    appropriations made necessary by the enactment of the
25    American Recovery and Reinvestment Act of 2009; or
26        (2) For State fiscal years prior to State fiscal year

 

 

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1    2009, the Department of Healthcare and Family Services
2    (formerly Department of Public Aid) makes changes in its
3    rules that reduce the hospital inpatient or outpatient
4    payment rates, including adjustment payment rates, in
5    effect on October 1, 2004, except for hospitals described
6    in subsection (b) of Section 5A-3 and except for changes in
7    the methodology for calculating outlier payments to
8    hospitals for exceptionally costly stays, so long as those
9    changes do not reduce aggregate expenditures below the
10    amount expended in State fiscal year 2005 for such
11    services; or
12        (2) (2.1) For State fiscal years 2009 through 2014, and
13    July 1, 2014 through December 31, 2014, the Department of
14    Healthcare and Family Services adopts any administrative
15    rule change to reduce payment rates or alters any payment
16    methodology that reduces any payment rates made to
17    operating hospitals under the approved Title XIX or Title
18    XXI State plan in effect January 1, 2008 except for:
19            (A) any changes for hospitals described in
20        subsection (b) of Section 5A-3; or
21            (B) any rates for payments made under this Article
22        V-A; or
23            (C) any changes proposed in State plan amendment
24        transmittal numbers 08-01, 08-02, 08-04, 08-06, and
25        08-07; or
26            (D) in relation to any admissions on or after

 

 

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1        January 1, 2011, a modification in the methodology for
2        calculating outlier payments to hospitals for
3        exceptionally costly stays, for hospitals reimbursed
4        under the diagnosis-related grouping methodology in
5        effect on July 1, 2011; provided that the Department
6        shall be limited to one such modification during the
7        36-month period after the effective date of this
8        amendatory Act of the 96th General Assembly; or
9        (3) The payments to hospitals required under Section
10    5A-12 or Section 5A-12.2 are changed or are not eligible
11    for federal matching funds under Title XIX or XXI of the
12    Social Security Act.
13    (b) The assessment imposed by Section 5A-2 shall not take
14effect or shall cease to be imposed, and the Department's
15obligation to make payments shall immediately cease, if the
16assessment is determined to be an impermissible tax under Title
17XIX of the Social Security Act. Moneys in the Hospital Provider
18Fund derived from assessments imposed prior thereto shall be
19disbursed in accordance with Section 5A-8 to the extent federal
20financial participation is not reduced due to the
21impermissibility of the assessments, and any remaining moneys
22shall be refunded to hospital providers in proportion to the
23amounts paid by them.
24    (c) The assessments imposed by subsection (b-5) of Section
255A-2 shall not take effect or shall cease to be imposed, the
26Department's obligation to make payments shall immediately

 

 

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1cease, and any moneys remaining in the Fund shall be refunded
2to hospital providers in proportion to the amounts paid by
3them, if the payments to hospitals required under Section
45A-12.4 are not eligible for federal matching funds under Title
5XIX of the Social Security Act.
6    (d) The assessments imposed by Section 5A-2 shall not take
7effect or shall cease to be imposed, the Department's
8obligation to make payments shall immediately cease, and any
9moneys remaining in the Fund shall be refunded to hospital
10providers in proportion to the amounts paid by them, if:
11        (1) for State fiscal years 2013 through 2014, and July
12    1, 2014 through December 31, 2014, the Department reduces
13    any payment rates to hospitals as in effect on May 1, 2012,
14    or alters any payment methodology as in effect on May 1,
15    2012, that has the effect of reducing payment rates to
16    hospitals, except for any changes affecting hospitals
17    authorized in Senate Bill 2840 of the 97th General Assembly
18    in the form in which it becomes law, and except for any
19    changes authorized under Section 5A-15; or
20        (2) for State fiscal years 2013 through 2014, and July
21    1, 2014 through December 31, 2014, the Department reduces
22    any supplemental payments made to hospitals below the
23    amounts paid for services provided in State fiscal year
24    2011 as implemented by administrative rules adopted and in
25    effect on or prior to June 30, 2011, except for any changes
26    affecting hospitals authorized in Senate Bill 2840 of the

 

 

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1    97th General Assembly in the form in which it becomes law,
2    and except for any changes authorized under Section 5A-15.
3(Source: P.A. 96-8, eff. 4-28-09; 96-1530, eff. 2-16-11; 97-72,
4eff. 7-1-11; 97-74, eff. 6-30-11.)
 
5    (305 ILCS 5/5A-12.4 new)
6    Sec. 5A-12.4. Hospital access improvement payments on or
7after July 1, 2012.
8    (a) Hospital access improvement payments. To preserve and
9improve access to hospital services, for hospital and physician
10services rendered on or after July 1, 2012, the Illinois
11Department shall, except for hospitals described in subsection
12(b) of Section 5A-3, make payments to hospitals as set forth in
13this Section. These payments shall be paid in 12 equal
14installments on or before the 7th State business day of each
15month, except that no payment shall be due within 100 days
16after the later of the date of notification of federal approval
17of the payment methodologies required under this Section or any
18waiver required under 42 CFR 433.68, at which time the sum of
19amounts required under this Section prior to the date of
20notification is due and payable. Payments under this Section
21are not due and payable, however, until (i) the methodologies
22described in this Section are approved by the federal
23government in an appropriate State Plan amendment and (ii) the
24assessment imposed under subsection (b-5) of Section 5A-2 of
25this Article is determined to be a permissible tax under Title

 

 

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1XIX of the Social Security Act. The Illinois Department shall
2take all actions necessary to implement the payments under this
3Section effective July 1, 2012, including but not limited to
4providing public notice pursuant to federal requirements, the
5filing of a State Plan amendment, and the adoption of
6administrative rules.
7    (a-5) Accelerated schedule. The Illinois Department may,
8when practicable, accelerate the schedule upon which payments
9authorized under this Section are made.
10    (b) Magnet and perinatal hospital adjustment. In addition
11to rates paid for inpatient hospital services, the Department
12shall pay to each Illinois general acute care hospital that, as
13of August 25, 2011, was recognized as a Magnet hospital by the
14American Nurses Credentialing Center and that, as of September
1514, 2011, was designated as a level III perinatal center
16amounts as follows:
17        (1) For hospitals with a case mix index equal to or
18    greater than the 80th percentile of case mix indices for
19    all Illinois hospitals, $470 for each Medicaid general
20    acute care inpatient day of care provided by the hospital
21    during State fiscal year 2009.
22        (2) For all other hospitals, $170 for each Medicaid
23    general acute care inpatient day of care provided by the
24    hospital during State fiscal year 2009.
25    (c) Trauma level II adjustment. In addition to rates paid
26for inpatient hospital services, the Department shall pay to

 

 

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1each Illinois general acute care hospital that, as of July 1,
22011, was designated as a level II trauma center amounts as
3follows:
4        (1) For hospitals with a case mix index equal to or
5    greater than the 50th percentile of case mix indices for
6    all Illinois hospitals, $470 for each Medicaid general
7    acute care inpatient day of care provided by the hospital
8    during State fiscal year 2009.
9        (2) For all other hospitals, $170 for each Medicaid
10    general acute care inpatient day of care provided by the
11    hospital during State fiscal year 2009.
12        (3) For the purposes of this adjustment, hospitals
13    located in the same city that alternate their trauma center
14    designation as defined in 89 Ill. Adm. Code 148.295(a)(2)
15    shall have the adjustment provided under this Section
16    divided between the 2 hospitals.
17    (d) Dual-eligible adjustment. In addition to rates paid for
18inpatient services, the Department shall pay each Illinois
19general acute care hospital that had a ratio of crossover days
20to total inpatient days for programs under Title XIX of the
21Social Security Act administered by the Department (utilizing
22information from 2009 paid claims) greater than 50%, and a case
23mix index equal to or greater than the 75th percentile of case
24mix indices for all Illinois hospitals, a rate of $400 for each
25Medicaid inpatient day during State fiscal year 2009 including
26crossover days.

 

 

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1    (e) Medicaid volume adjustment. In addition to rates paid
2for inpatient hospital services, the Department shall pay to
3each Illinois general acute care hospital that provided more
4than 10,000 Medicaid inpatient days of care in State fiscal
5year 2009, has a Medicaid inpatient utilization rate of at
6least 29.05% as calculated by the Department for the Rate Year
72011 Disproportionate Share determination, and is not eligible
8for Medicaid Percentage Adjustment payments in rate year 2011
9an amount equal to $135 for each Medicaid inpatient day of care
10provided during State fiscal year 2009.
11    (f) Outpatient service adjustment. In addition to the rates
12paid for outpatient hospital services, the Department shall pay
13each Illinois hospital an amount at least equal to $100
14multiplied by the hospital's outpatient ambulatory procedure
15listing services (excluding categories 3B and 3C) and by the
16hospital's end stage renal disease treatment services provided
17for State fiscal year 2009.
18    (g) Ambulatory service adjustment.
19        (1) In addition to the rates paid for outpatient
20    hospital services provided in the emergency department,
21    the Department shall pay each Illinois hospital an amount
22    equal to $105 multiplied by the hospital's outpatient
23    ambulatory procedure listing services for categories 3A,
24    3B, and 3C for State fiscal year 2009.
25        (2) In addition to the rates paid for outpatient
26    hospital services, the Department shall pay each Illinois

 

 

SB2194 Enrolled- 172 -LRB097 10235 HLH 50431 b

1    freestanding psychiatric hospital an amount equal to $200
2    multiplied by the hospital's ambulatory procedure listing
3    services for category 5A for State fiscal year 2009.
4    (h) Specialty hospital adjustment. In addition to the rates
5paid for outpatient hospital services, the Department shall pay
6each Illinois long term acute care hospital and each Illinois
7hospital devoted exclusively to the treatment of cancer, an
8amount equal to $700 multiplied by the hospital's outpatient
9ambulatory procedure listing services and by the hospital's end
10stage renal disease treatment services (including services
11provided to individuals eligible for both Medicaid and
12Medicare) provided for State fiscal year 2009.
13    (h-1) ER Safety Net Payments. In addition to rates paid for
14outpatient services, the Department shall pay to each Illinois
15general acute care hospital with an emergency room ratio equal
16to or greater than 55%, that is not eligible for Medicaid
17percentage adjustments payments in rate year 2011, with a case
18mix index equal to or greater than the 20th percentile, and
19that is not designated as a trauma center by the Illinois
20Department of Public Health on July 1, 2011, as follows:
21        (1) Each hospital with an emergency room ratio equal to
22    or greater than 74% shall receive a rate of $225 for each
23    outpatient ambulatory procedure listing and end-stage
24    renal disease treatment service provided for State fiscal
25    year 2009.
26        (2) For all other hospitals, $65 shall be paid for each

 

 

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1    outpatient ambulatory procedure listing and end-stage
2    renal disease treatment service provided for State fiscal
3    year 2009.
4    (i) Physician supplemental adjustment. In addition to the
5rates paid for physician services, the Department shall make an
6adjustment payment for services provided by physicians as
7follows:
8        (1) Physician services eligible for the adjustment
9    payment are those provided by physicians employed by or who
10    have a contract to provide services to patients of the
11    following hospitals: (i) Illinois general acute care
12    hospitals that provided at least 17,000 Medicaid inpatient
13    days of care in State fiscal year 2009 and are eligible for
14    Medicaid Percentage Adjustment Payments in rate year 2011;
15    and (ii) Illinois freestanding children's hospitals, as
16    defined in 89 Ill. Adm. Code 149.50(c)(3)(A).
17        (2) The amount of the adjustment for each eligible
18    hospital under this subsection (i) shall be determined by
19    rule by the Department to spend a total pool of at least
20    $6,960,000 annually. This pool shall be allocated among the
21    eligible hospitals based on the difference between the
22    upper payment limit for what could have been paid under
23    Medicaid for physician services provided during State
24    fiscal year 2009 by physicians employed by or who had a
25    contract with the hospital and the amount that was paid
26    under Medicaid for such services, provided however, that in

 

 

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1    no event shall physicians at any individual hospital
2    collectively receive an annual, aggregate adjustment in
3    excess of $435,000, except that any amount that is not
4    distributed to a hospital because of the upper payment
5    limit shall be reallocated among the remaining eligible
6    hospitals that are below the upper payment limitation, on a
7    proportionate basis.
8    (i-5) For any children's hospital which did not charge for
9its services during the base period, the Department shall use
10data supplied by the hospital to determine payments using
11similar methodologies for freestanding children's hospitals
12under this Section or Section 12.2.
13    (j) For purposes of this Section, a hospital that is
14enrolled to provide Medicaid services during State fiscal year
152009 shall have its utilization and associated reimbursements
16annualized prior to the payment calculations being performed
17under this Section.
18    (k) For purposes of this Section, the terms "Medicaid
19days", "ambulatory procedure listing services", and
20"ambulatory procedure listing payments" do not include any
21days, charges, or services for which Medicare or a managed care
22organization reimbursed on a capitated basis was liable for
23payment, except where explicitly stated otherwise in this
24Section.
25    (l) Definitions. Unless the context requires otherwise or
26unless provided otherwise in this Section, the terms used in

 

 

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1this Section for qualifying criteria and payment calculations
2shall have the same meanings as those terms have been given in
3the Illinois Department's administrative rules as in effect on
4October 1, 2011. Other terms shall be defined by the Illinois
5Department by rule.
6    As used in this Section, unless the context requires
7otherwise:
8    "Case mix index" means, for a given hospital, the sum of
9the per admission (DRG) relative weighting factors in effect on
10January 1, 2005, for all general acute care admissions for
11State fiscal year 2009, excluding Medicare crossover
12admissions and transplant admissions reimbursed under 89 Ill.
13Adm. Code 148.82, divided by the total number of general acute
14care admissions for State fiscal year 2009, excluding Medicare
15crossover admissions and transplant admissions reimbursed
16under 89 Ill. Adm. Code 148.82.
17    "Emergency room ratio" means, for a given hospital, a
18fraction, the denominator of which is the number of the
19hospital's outpatient ambulatory procedure listing and
20end-stage renal disease treatment services provided for State
21fiscal year 2009 and the numerator of which is the hospital's
22outpatient ambulatory procedure listing services for
23categories 3A, 3B, and 3C for State fiscal year 2009.
24    "Medicaid inpatient day" means, for a given hospital, the
25sum of days of inpatient hospital days provided to recipients
26of medical assistance under Title XIX of the federal Social

 

 

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1Security Act, excluding days for individuals eligible for
2Medicare under Title XVIII of that Act (Medicaid/Medicare
3crossover days), as tabulated from the Department's paid claims
4data for admissions occurring during State fiscal year 2009
5that was adjudicated by the Department through June 30, 2010.
6    "Outpatient ambulatory procedure listing services" means,
7for a given hospital, ambulatory procedure listing services, as
8described in 89 Ill. Adm. Code 148.140(b), provided to
9recipients of medical assistance under Title XIX of the federal
10Social Security Act, excluding services for individuals
11eligible for Medicare under Title XVIII of the Act
12(Medicaid/Medicare crossover days), as tabulated from the
13Department's paid claims data for services occurring in State
14fiscal year 2009 that were adjudicated by the Department
15through September 2, 2010.
16    "Outpatient end-stage renal disease treatment services"
17means, for a given hospital, the services, as described in 89
18Ill. Adm. Code 148.140(c), provided to recipients of medical
19assistance under Title XIX of the federal Social Security Act,
20excluding payments for individuals eligible for Medicare under
21Title XVIII of the Act (Medicaid/Medicare crossover days), as
22tabulated from the Department's paid claims data for services
23occurring in State fiscal year 2009 that were adjudicated by
24the Department through September 2, 2010.
25    (m) The Department may adjust payments made under this
26Section 5A-12.4 to comply with federal law or regulations

 

 

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1regarding hospital-specific payment limitations on
2government-owned or government-operated hospitals.
3    (n) Notwithstanding any of the other provisions of this
4Section, the Department is authorized to adopt rules that
5change the hospital access improvement payments specified in
6this Section, but only to the extent necessary to conform to
7any federally approved amendment to the Title XIX State plan.
8Any such rules shall be adopted by the Department as authorized
9by Section 5-50 of the Illinois Administrative Procedure Act.
10Notwithstanding any other provision of law, any changes
11implemented as a result of this subsection (n) shall be given
12retroactive effect so that they shall be deemed to have taken
13effect as of the effective date of this Section.
14    (o) The Department of Healthcare and Family Services must
15submit a State Medicaid Plan Amendment to the Centers of
16Medicare and Medicaid Services to implement the payments under
17this Section within 30 days of the effective date of this Act.
 
18    (305 ILCS 5/5A-13)
19    Sec. 5A-13. Emergency rulemaking.
20    (a) The Department of Healthcare and Family Services
21(formerly Department of Public Aid) may adopt rules necessary
22to implement this amendatory Act of the 94th General Assembly
23through the use of emergency rulemaking in accordance with
24Section 5-45 of the Illinois Administrative Procedure Act. For
25purposes of that Act, the General Assembly finds that the

 

 

SB2194 Enrolled- 178 -LRB097 10235 HLH 50431 b

1adoption of rules to implement this amendatory Act of the 94th
2General Assembly is deemed an emergency and necessary for the
3public interest, safety, and welfare.
4    (b) The Department of Healthcare and Family Services may
5adopt rules necessary to implement this amendatory Act of the
697th General Assembly through the use of emergency rulemaking
7in accordance with Section 5-45 of the Illinois Administrative
8Procedure Act. For purposes of that Act, the General Assembly
9finds that the adoption of rules to implement this amendatory
10Act of the 97th General Assembly is deemed an emergency and
11necessary for the public interest, safety, and welfare.
12(Source: P.A. 94-242, eff. 7-18-05; 95-331, eff. 8-21-07.)
 
13    (305 ILCS 5/5A-14)
14    Sec. 5A-14. Repeal of assessments and disbursements.
15    (a) Section 5A-2 is repealed on January 1, 2015 July 1,
162014.
17    (b) Section 5A-12 is repealed on July 1, 2005.
18    (c) Section 5A-12.1 is repealed on July 1, 2008.
19    (d) Section 5A-12.2 and Section 5A-12.4 are is repealed on
20January 1, 2015 July 1, 2014.
21    (e) Section 5A-12.3 is repealed on July 1, 2011.
22(Source: P.A. 95-859, eff. 8-19-08; 96-821, eff. 11-20-09;
2396-1530, eff. 2-16-11.)
 
24    (305 ILCS 5/5A-15 new)

 

 

SB2194 Enrolled- 179 -LRB097 10235 HLH 50431 b

1    Sec. 5A-15. Protection of federal revenue.
2    (a) If the federal Centers for Medicare and Medicaid
3Services finds that any federal upper payment limit applicable
4to the payments under this Article is exceeded then:
5        (1) the payments under this Article that exceed the
6    applicable federal upper payment limit shall be reduced
7    uniformly to the extent necessary to comply with the
8    applicable federal upper payment limit; and
9        (2) any assessment rate imposed under this Article
10    shall be reduced such that the aggregate assessment is
11    reduced by the same percentage reduction applied in
12    paragraph (1); and
13        (3) any transfers from the Hospital Provider Fund under
14    Section 5A-8 shall be reduced by the same percentage
15    reduction applied in paragraph (1).
16    (b) Any payment reductions made under the authority granted
17in this Section are exempt from the requirements and actions
18under Section 5A-10.
 
19    Section 5-65. The Cigarette Fire Safety Standard Act is
20amended by adding Section 65 as follows:
 
21    (425 ILCS 8/65 new)
22    Sec. 65. Cigarette Machine Operators. Cigarettes made or
23fabricated by cigarette machine operators possessing valid
24licenses under Section 20 of the Cigarette Machine Operators'

 

 

SB2194 Enrolled- 180 -LRB097 10235 HLH 50431 b

1Occupation Tax Act are exempt from the provisions of this Act.
 
2
ARTICLE 99. APPLICABILITY, SEVERABILITY, AND EFFECTIVE DATE

 
3    Section 90. Applicability. The changes made by this
4amendatory Act of the 97th General Assembly to the Property Tax
5Code, the Illinois Income Tax Act, the Use Tax Act, the Service
6Occupation Tax Act, and the Retailers' Occupation Tax Act shall
7apply to: (1) all decisions by the Department on or after the
8effective date of this amendatory Act of the 97th General
9Assembly regarding entitlement or continued entitlement by
10hospitals, hospital owners, hospital affiliates, or hospital
11systems to charitable property tax exemptions; (2) all
12applications for property tax exemption filed by hospitals,
13hospital owners, hospital affiliates, or hospital systems on or
14after the effective date of this amendatory Act of the 97th
15General Assembly; (3) all applications for property tax
16exemption filed by hospitals, hospital owners, hospital
17affiliates, or hospital systems that have either not been
18decided by the Department before the effective date of this
19amendatory Act of the 97th General Assembly, or for which any
20such Department decisions are not final and non-appealable as
21of that date; (4) all decisions by the Department, on or after
22the effective date of this amendatory Act of the 97th General
23Assembly, regarding entitlement by hospitals, hospital owners
24or hospital affiliates to an exemption or renewal of exemption

 

 

SB2194 Enrolled- 181 -LRB097 10235 HLH 50431 b

1from the Use Tax Act, the Service Use Tax Act, the Service
2Occupation Tax Act, and the Retailers' Occupation Tax Act; (5)
3all applications for exemption or renewal of exemption from the
4Use Tax Act, the Service Use Tax Act, the Service Occupation
5Tax Act, and the Retailers' Occupation Tax Act filed by
6hospitals, hospital owners or hospital affiliates on or after
7the effective date of this amendatory Act of the 97th General
8Assembly; and (6) all applications for exemption or renewal of
9exemption from the Use Tax Act, the Service Use Tax Act, the
10Service Occupation Tax Act, and the Retailers' Occupation Tax
11Act filed by hospitals, hospital owners, or hospital affiliates
12that have either not been decided by the Department before the
13effective date of this amendatory Act of the 97th General
14Assembly or for which any such Department decisions are not
15final and non-appealable as of that date.
 
16    Section 95. No acceleration or delay. Where this Act makes
17changes in a statute that is represented in this Act by text
18that is not yet or no longer in effect (for example, a Section
19represented by multiple versions), the use of that text does
20not accelerate or delay the taking effect of (i) the changes
21made by this Act or (ii) provisions derived from any other
22Public Act.
 
23    Section 97. Severability. The provisions of this Act are
24severable under Section 1.31 of the Statute on Statutes.
 

 

 

SB2194 Enrolled- 182 -LRB097 10235 HLH 50431 b

1    Section 99. Effective date. This Act takes effect upon
2becoming law.