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Public Act 91-0651
HB1261 Enrolled LRB9102284PTpk
AN ACT concerning property valuation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Property Tax Code is amended by adding
Division 11 to Article 10 as follows:
(35 ILCS 200/Art. 10, Div. 11 heading new)
DIVISION 11. LOW-INCOME HOUSING PROJECTS
(35 ILCS 200/10-235 new)
Sec. 10-235. Section 515 low-income housing project
valuation policy; intent. It is the policy of this State
that, except in counties with a population of more than
200,000 that classify property for the purposes of taxation,
low-income housing projects under Section 515 of the federal
Housing Act shall be valued at 33 and one-third percent of
the fair market value of their economic productivity to the
owners of the projects to help insure that their valuation
for property taxation does not result in taxes so high that
rent levels must be raised to cover this project expense,
which can cause excess vacancies, project loan defaults, and
eventual loss of rental housing facilities for those most in
need of them, low-income families and the elderly. It is the
intent of this State that the valuation required by this
Division is the closest representation of cash value required
by law and is the method established as proper and fair.
(35 ILCS 200/10-240 new)
Sec. 10-240. Definition of Section 515 low-income housing
projects. "Section 515 low-income housing projects" mean
rental apartment facilities (i) developed and managed under a
United States Department of Agriculture Rural Rental Housing
Program designed to provide affordable housing to low to
moderate income families and seniors in rural communities
with populations under 20,000, (ii) that receive a subsidy in
the form of a 1% loan interest rate and a 50-year
amortization of the mortgage, (iii) that would not have been
built without a Section 515 interest credit subsidy, and (iv)
where the owners of the projects are limited to an annual
profit of an 8% return on a 5% equity investment, which may
result in a modest cash flow to owners of the projects unless
actual expenses, including property taxes, exceed budget
projections, in which case no profit may be realized.
(35 ILCS 200/10-245 new)
Sec. 10-245. Method of valuation of Section 515
low-income housing projects. Notwithstanding Section 1-55
and except in counties with a population of more than 200,000
that classify property for the purposes of taxation, to
determine 33 and one-third percent of the fair cash value of
any Section 515 low-income housing project, in assessing the
project, local assessment officers must consider the actual
or probable net operating income attributable to the project,
capitalized at normal market values. The interest rate to be
used in developing the normal market value capitalization
rate shall be one that reflects the prevailing cost of cash
for other types of commercial real estate in the geographic
market in which the Section 515 project is located.
(35 ILCS 200/10-250 new)
Sec. 10-250. Certification procedure. After (i) an
application for a Section 515 low-income housing project
certificate is filed with the State Director of the United
States Department of Agriculture Rural Development Office in
a manner and form prescribed in regulations issued by the
office and (ii) the certificate is issued certifying that the
housing is a Section 515 low-income housing project as
defined in Section 2 of this Act, the certificate must be
presented to the appropriate local assessment officer to
receive the property assessment valuation under this
Division. The local assessment officer must assess the
property according to this Act. The effective date of a
certificate is the date of application for the certificate or
the date of the construction of the project, whichever is
later.
(35 ILCS 200/10-255 new)
Sec. 10-255. Rules. The Department of Revenue may adopt
rules to implement and administer this Division.
Section 90. The State Mandates Act is amended by adding
Section 8.23 as follows:
(30 ILCS 805/8.23 new)
Sec. 8.23. Exempt mandate. Notwithstanding Sections 6
and 8 of this Act, no reimbursement by the State is required
for the implementation of any mandate created by this
amendatory Act of the 91st General Assembly.
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