101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB4947

 

Introduced 2/18/2020, by Rep. William Davis

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 200/Art. 9 Div. 6 heading new
35 ILCS 200/9-280 new
35 ILCS 200/9-281 new

    Amends the Property Tax Code. Provides that, in counties with 3,000,000 or more inhabitants, taxpayers of income producing property shall submit income and expense data annually to the chief county assessment officer on or before July 1 of each year. Provides that, in counties of fewer than 3,000,000 inhabitants, the county board may provide by ordinance or resolution that taxpayers of income-producing property shall submit income and expense data annually to the chief county assessment officer on or before March 31 of each year. Contains certain exceptions. Effective immediately.


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FISCAL NOTE ACT MAY APPLY
HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB4947LRB101 18864 HLH 68322 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Property Tax Code is amended by adding
5Division 6 to Article 9 as follows:
 
6    (35 ILCS 200/Art. 9 Div. 6 heading new)
7
Division 6. Income-producing property

 
8    (35 ILCS 200/9-280 new)
9    Sec. 9-280. Definitions. As used in this Division 6:
10    "Expense" or "expenses" means expenditures necessitated by
11the operation of the real property itself that reduce the
12income to the property owner or lessee and includes management
13fees, reserves for replacement, maintenance, property taxes,
14and insurance, but does not include debt service, reserves for
15building additions, or income tax.
16    "Income" means real property revenue that is directed to or
17received by the property owner in the form of rent from
18unrelated persons or entities and ancillary revenue to the
19owner from unrelated persons or entities that is generated
20exclusively from the operation of the real property itself,
21such as revenue from parking or other amenities provided to or
22for the benefit of the property's tenants. "Income" does not

 

 

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1include revenue generated from personal property, including
2but not limited to, revenue from a business enterprise that is
3operated on the real property or improvements made to the
4property by a tenant.
5    "Income and expense data" means data that identifies income
6and expenses as defined in this Section. This data may be found
7in annual reports, income and expense statements, and Internal
8Revenue Service Schedule E or Schedule 8825 tax forms for
9income producing property for the immediately preceding year.
10It also includes data from rent rolls for the current and
11immediately preceding year. Data may be based on a calendar or
12fiscal year.
13    "Income producing property" means property that is not
14owner-occupied, as defined in this Section, and is owned for
15the purpose of generating income from the property itself,
16whether or not such property actually generates income in a
17particular year. "Income producing property" does not include:
18        (1) property with a market value of $500,000 or less in
19    the most recent assessment year for which an assessment is
20    certified exclusive of any adjustments to assessed value by
21    a board of review, the Property Tax Appeal Board, or the
22    circuit court;
23        (2) residential property containing 6 or fewer
24    dwelling units;
25        (3) property assessed under Article 10 of this Code and
26    stadiums that are not qualified property under Section

 

 

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1    10-215 that have a seating capacity of 20,000 or more and
2    host major professional sporting events;
3        (4) property that is assessed by the Department under
4    Article 11 of this Code;
5        (5) property that is owned or leased by a hospital
6    licensed under the Hospital Licensing Act or operated under
7    the University of Illinois Hospital Act, including any
8    hospital affiliate that directly or indirectly controls,
9    is controlled by, or is under common control with a
10    hospital; or
11        (6) property that is owned or leased by a facility
12    licensed under the Nursing Home Care Act that is an
13    intermediate or skilled facility.
14    "Net rentable area" means the square footage of an
15improvement that may be leased or rented to tenants and
16excludes common areas such as elevators, stairways, and
17atriums.
18    "Owner-occupied" means real property that is used or
19occupied exclusively by a record owner or related entity, or
20real property where 80% or more of the net rentable area of the
21property is occupied or held for future use by the record owner
22of the property or a related person or entity as described in
23subsection (b) of Section 267 of the Internal Revenue Code. If
24more than 20% of the net rentable area of a property is subject
25to an existing lease or is subject to short term rental of the
26property by an unrelated entity, the property is not considered

 

 

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1owner-occupied for purposes of this Division.
2    "Property" has the meaning set forth in Section 1-130 of
3this Code and includes contiguous parcels or property index
4numbers that comprise one functional property location.
5    "Taxpayer" means the record owner of income producing
6property. The owner or lessee, whoever is contractually
7obligated to pay property taxes directly to the County
8Treasurer, shall be required under this Article to submit
9income and expense data that is within its possession and
10control to the chief county assessment officer for the relevant
11portion of the property over which it exercises control.
12    
 
13    (35 ILCS 200/9-281 new)
14    Sec. 9-281. Income producing properties.
15    (a) In counties with 3,000,000 or more inhabitants,
16taxpayers or lessees who are contractually obligated to pay
17property taxes of income producing property shall submit income
18and expense data annually to the chief county assessment
19officer on or before July 1 of each year, except as otherwise
20provided in this Division. In the first year following the
21effective date of this amendatory Act of the 101st General
22Assembly, income and expense data shall be submitted by
23September 1. If a taxpayer or party who is contractually
24obligated to pay property taxes is required to submit income
25and expense data under this Article in accordance with Section

 

 

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19-280, the chief county assessment officer shall notify, by
2certified mail, the record owner of income-producing property
3at least 60 days prior to the date for submission of the
4obligation to submit income and expense data. Notice shall
5include the deadline for submission. If an owner of record
6claims that another party is obligated to pay property taxes
7directly to the county treasurer for all or a portion of the
8property, then the owner shall send to the obligated party a
9copy of the notice received from the chief county assessment
10officer of the obligation to submit income and expense data.
11The taxpayer or obligated party shall submit income and expense
12data to the chief county assessment officer in accordance with
13this Section for the relevant portion of the property for which
14the taxpayer or obligated party is required to pay the property
15taxes and exercises control over such property, identified by
16parcel and area.
17    The chief county assessment officer may extend the time
18within which taxpayers are required to submit income and
19expense data under this Section.
20    Where the taxpayer's books and records reflecting the
21operation of the property are maintained on a calendar year
22basis, the statement of income and expense data shall be for
23the last full calendar year preceding the date that the
24statement is submitted. Where the taxpayer's books and records
25reflecting the operation of the property are maintained on a
26fiscal year basis for federal income tax purposes, the

 

 

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1statement of income and expense data shall be the last full
2fiscal year preceding the date when the statement is submitted.
3    The taxpayer or obligated party shall certify under oath in
4a signed attestation that the statements set forth in income
5and expense data submitted under this Article are true,
6accurate, and complete to the best of his or her knowledge
7except as to matters stated to be upon information and belief
8and, as to such matters, the taxpayer or obligated party shall
9certify that he or she believes the same to be true, accurate,
10and complete.
11    (b) In counties of fewer than 3,000,000 inhabitants, the
12county board may provide by ordinance or resolution that
13taxpayers of income-producing property shall submit income and
14expense data annually to the chief county assessment officer on
15or before March 31 of each year. If a taxpayer or party who is
16contractually obligated to pay taxes is required to submit
17income and expense data under this Article, the chief county
18assessment officer shall notify the taxpayer of that fact by
19certified mail within 60 days of the due date for income and
20expense data. Notice shall include the deadline for such
21submission. If an owner of record claims that another party is
22obligated to pay property taxes directly to the county
23treasurer, then the owner shall send to the obligated party a
24copy of any notice received from the chief county assessment
25officer of the obligation to submit income and expense data.
26The taxpayer or obligated party shall submit income and expense

 

 

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1data to the chief county assessment officer in accordance with
2this Division for the relevant portion of the property for
3which the taxpayer or obligated party is required to pay the
4property taxes and exercises control over such property,
5identified by parcel and area.
6    The chief county assessment officer may extend the time
7within which taxpayers are required to submit income and
8expense data under this section.
9    Where the taxpayer's books and records reflecting the
10operation of the property are maintained on a calendar year
11basis, the statement of income and expense data shall be for
12the last full calendar year preceding the date that the
13statement is submitted. Where the taxpayer's books and records
14reflecting the operation of the property are maintained on a
15fiscal year basis for federal income tax purposes, the
16statement of income and expense data shall be the last full
17fiscal year preceding the date when the statement is submitted.
18    The taxpayer or obligated party shall certify under oath in
19a signed attestation that the statements set forth in income
20and expense data submitted under this Article are true,
21accurate, and complete, to the best of his or her knowledge
22except as to matters stated to be upon information and belief
23and, as to such matters, the taxpayer or obligated party shall
24certify that he or she believes the same to be true, accurate,
25and complete.
26    Subsections (c) through (i) of this Section shall also

 

 

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1apply in counties that have adopted by ordinance or resolution
2the requirements of this Section.
3    (c) The chief county assessment officer of a county that is
4subject to this Section shall establish rules that specify the
5manner of submission of income and expense data and provide for
6the administration of the provisions of this Section in the
7county. Income and expense data shall be submitted in
8electronic form unless waived by the chief county assessment
9officer.
10    The chief county assessment officer shall maintain a copy
11of its rules for public review and shall place a copy of those
12rules and any amended rules on his or her website.
13    (d) If a taxpayer or obligated party fails to submit income
14and expense data as required under this Section or as required
15after the adoption of a county board ordinance or resolution
16under this Section, within the time prescribed, or within an
17extended period as permitted by the chief county assessment
18officer, the assessor shall send notice by certified mail to
19such taxpayer of the failure to comply. If the taxpayer or
20obligated party fails to submit the required data within 60
21days after such notice is sent, fails to provide documentation
22of another taxpayer's obligation to submit income and expense
23data, or fails to adequately explain why no submission is
24required, the taxpayer or obligated party shall pay a penalty
25to the chief county assessment officer of 0.025% of the prior
26year's market value as indicated by the most recent certified

 

 

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1assessed value for the property at issue, but in no case shall
2the taxpayer or obligated party be required to pay more than
3its proportional share of a maximum penalty of $10,000 per
4property. A taxpayer or obligated party who fails to submit
5income and expense data in accordance with this provision shall
6only be required to pay a penalty on the portion of the
7property's value for which the taxpayer or obligated party is
8required to pay taxes.
9    A taxpayer or obligated party may contest the penalty and
10requirement to report income and expense data in a particular
11year and submit evidence to the chief county assessment officer
12in support of a contention that the taxpayer or obligated party
13was not required to submit income and expense data, that
14another party was required to submit income and expense data
15for such property, or that the submission of income and expense
16data complies with this requirement based on available
17documentation. The chief county assessment officer shall
18review the taxpayer or obligated party's submission and other
19submissions for the property for the tax year at issue, and
20determine whether the taxpayer or obligated party provided
21sufficient evidence that he or she was not required to report
22income and expense data or that the submission complies based
23on available documentation.
24    If a taxpayer or obligated party is dissatisfied with a
25decision of the chief county assessment officer of the
26requirement to submit income and expense data, the taxpayer or

 

 

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1obligated party may request review of that decision. Upon such
2request, at least 30 days' notice shall be provided to the
3taxpayer or obligated party of a hearing to be conducted by a
4hearing officer designated by the chief county assessment
5officer. If dissatisfied with a hearing officer's decision, the
6taxpayer or obligated party may appeal such decision to the
7circuit court of the county where the property is located as a
8final administrative decision under Administrative Review Law.
9If a party is unsuccessful at hearing, the penalty imposed
10under this Section shall bear interest at 0.05% per month
11thereafter, beginning 21 days after the date of decision, or 21
12days after the date of the issuance of a final decision on
13administrative review.
14    The State's Attorney of the county in which the property is
15located shall have power to act on behalf of the people and the
16chief county assessment officer to enforce the provisions of
17this Section, including the power to compel by subpoena the
18production of taxpayer income and expense data that is required
19to be produced under this Section.
20    The chief county assessment officer may audit the income
21and expense data submitted by taxpayers to verify its accuracy
22by requesting documentation in support of submissions.
23    (e) Penalty and interest collected by the chief county
24assessment officer under this Section for a taxpayer's or
25obligated party's failure to timely submit income and expense
26data shall be collected in the same manner as other fees

 

 

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1collected by the chief county assessment officer. Such revenue
2shall be deposited with the county treasurer in the county
3general fund of the county in which the property is located,
4with 75% of the revenue to be used for the benefit of the
5office of the chief county assessment officer and 25% to be
6used for the benefit of the county.
7    (f) Any personal data such as federal identification or
8social security numbers and income tax forms or data that are
9included in income and expense data produced under this Section
10shall be deemed private information and exempt from disclosure
11under the Freedom of Information Act. Income and expense data
12submitted pursuant to this Article shall not be subject to
13disclosure by the chief county assessment officer in accordance
14with the Freedom of Information Act and other applicable law,
15or pursuant to court order in a tax or other matter. Nothing in
16this Section prohibits a chief county assessment officer from
17disclosing compiled and anonymized income and expense data as
18provided in this Section.
19    (g) The income and expense data submitted pursuant to this
20Section shall be processed and used as follows:
21        (1)Income and expense data in its original form in
22    which the taxpayer, obligated party and the property in
23    question is identified shall not be used for purposes of
24    assessing individual properties. The chief county
25    assessment officer shall compile and anonymize income and
26    expense data that is collected under this Division and

 

 

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1    shall cause such information to be published annually.
2    Compiled and anonymized data may be used in the mass
3    appraisal or assessment of property.
4        The chief county assessment officer shall cause the
5    income and expense data to be compiled and anonymized in
6    accordance with statistical disclosure controls accepted
7    in the field that account for control of microdata and
8    quantitative and frequency tables in a manner that
9    considers individual property characteristics but prevents
10    the disclosure of individual property identity. Such
11    compilation and anonymization shall be performed by staff
12    who are not directly involved in the valuation of the type
13    of property for which the data has been submitted. The
14    chief county assessment officer shall publish the
15    procedures followed in compiling and anonymizing data.
16        (2)If a particular property is so unique in
17    characteristics, features, or location that the property
18    or its owner could be identified if the property's income
19    and expense data are included in compiled and anonymized
20    data that is made available to the public, township
21    assessors, or boards of review under this Section, the
22    income and expense data for that particular property shall
23    not be included in compiled and anonymized data.
24        (3)Notwithstanding any other provision of this
25    Section, the taxpayer or obligated party of any property
26    for which income and expense data has been submitted shall

 

 

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1    have the right at all times to: (i) obtain a copy of such
2    income and expense data as submitted, in its original form,
3    from the chief county assessment officer; (ii) file such
4    income and expense data in any public forum; or (iii)
5    authorize such filing or publication of the income and
6    expense data in any other manner that the owner may choose.
7        The chief county assessment officer shall establish
8    and maintain reasonable security measures consistent with
9    state and local law and the Federal Information Security
10    Management Act to protect income and expense data.
11    (h) All information received by the chief county assessment
12officer from income and expense data filed under this Article
13shall be used only for official purposes. Any person who
14divulges income and expense data submitted under this Article
15other than as permitted in this Article, in accordance with a
16proper judicial order, or as otherwise provided by law, shall
17be guilty of a Class B misdemeanor and subject to a fine not to
18exceed $7,500.
19    (i) The chief county assessment officer shall prepare a
20summary report within 60 days of the completion of the first
21assessment cycle in which income expense data is compiled under
22this Section and used in the assessment process, and report
23findings to the Revenue committees of the Illinois Senate and
24House of Representatives within 45 days thereafter. The report
25shall document income and expense data collection, changes in
26assessed or equalized assessed values that followed the

 

 

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1collection and use of compiled and anonymized income and
2expense data for properties subject to reassessment, shall
3compare reassessment year assessed or equalized assessed
4values with values or equalized assessed values from the
5immediately preceding reassessment cycle. The report shall
6document any shifts in the percentage of commercial or
7residential properties that comprise a portion of the total
8assessed value or equalized assessed value of property within
9the county. This report shall be produced annually following
10the effective date of this amendatory Act of the 101st General
11Assembly until all property located within a county subject to
12this Section has been reassessed.
 
13    Section 99. Effective date. This Act takes effect upon
14becoming law.