98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB5444

 

Introduced , by Rep. Michael Unes

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 200/15-65

    Amends the Property Tax Code. Provides that property that is leased by a charitable organization for a period of at least one year is exempt from taxation.


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

 

 

A BILL FOR

 

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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 changing
5Section 15-65 as follows:
 
6    (35 ILCS 200/15-65)
7    Sec. 15-65. Charitable purposes. All property owned by of
8the following, or leased by the following for a period of at
9least one year, is exempt when actually and exclusively used
10for charitable or beneficent purposes, and not leased or
11otherwise used with a view to profit:
12        (a) Institutions of public charity.
13        (b) Beneficent and charitable organizations
14    incorporated in any state of the United States, including
15    organizations whose owner, and no other person, uses the
16    property exclusively for the distribution, sale, or resale
17    of donated goods and related activities and uses all the
18    income from those activities to support the charitable,
19    religious or beneficent activities of the owner, whether or
20    not such activities occur on the property.
21        (c) Old people's homes, facilities for persons with a
22    developmental disability, and not-for-profit organizations
23    providing services or facilities related to the goals of

 

 

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1    educational, social and physical development, if, upon
2    making application for the exemption, the applicant
3    provides affirmative evidence that the home or facility or
4    organization is an exempt organization under paragraph (3)
5    of Section 501(c) of the Internal Revenue Code or its
6    successor, and either: (i) the bylaws of the home or
7    facility or not-for-profit organization provide for a
8    waiver or reduction, based on an individual's ability to
9    pay, of any entrance fee, assignment of assets, or fee for
10    services, or (ii) the home or facility is qualified, built
11    or financed under Section 202 of the National Housing Act
12    of 1959, as amended.
13        An applicant that has been granted an exemption under
14    this subsection on the basis that its bylaws provide for a
15    waiver or reduction, based on an individual's ability to
16    pay, of any entrance fee, assignment of assets, or fee for
17    services may be periodically reviewed by the Department to
18    determine if the waiver or reduction was a past policy or
19    is a current policy. The Department may revoke the
20    exemption if it finds that the policy for waiver or
21    reduction is no longer current.
22        If a not-for-profit organization leases property that
23    is otherwise exempt under this subsection to an
24    organization that conducts an activity on the leased
25    premises that would entitle the lessee to an exemption from
26    real estate taxes if the lessee were the owner of the

 

 

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1    property, then the leased property is exempt.
2        (d) Not-for-profit health maintenance organizations
3    certified by the Director of the Illinois Department of
4    Insurance under the Health Maintenance Organization Act,
5    including any health maintenance organization that
6    provides services to members at prepaid rates approved by
7    the Illinois Department of Insurance if the membership of
8    the organization is sufficiently large or of indefinite
9    classes so that the community is benefited by its
10    operation. No exemption shall apply to any hospital or
11    health maintenance organization which has been adjudicated
12    by a court of competent jurisdiction to have denied
13    admission to any person because of race, color, creed, sex
14    or national origin.
15        (e) All free public libraries.
16        (f) Historical societies.
17    Property otherwise qualifying for an exemption under this
18Section shall not lose its exemption because the legal title is
19held (i) by an entity that is organized solely to hold that
20title and that qualifies under paragraph (2) of Section 501(c)
21of the Internal Revenue Code or its successor, whether or not
22that entity receives rent from the charitable organization for
23the repair and maintenance of the property, (ii) by an entity
24that is organized as a partnership or limited liability
25company, in which the charitable organization, or an affiliate
26or subsidiary of the charitable organization, is a general

 

 

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1partner of the partnership or managing member of the limited
2liability company, for the purposes of owning and operating a
3residential rental property that has received an allocation of
4Low Income Housing Tax Credits for 100% of the dwelling units
5under Section 42 of the Internal Revenue Code of 1986, as
6amended, or (iii) for any assessment year including and
7subsequent to January 1, 1996 for which an application for
8exemption has been filed and a decision on which has not become
9final and nonappealable, by a limited liability company
10organized under the Limited Liability Company Act provided that
11(A) the limited liability company's sole member or members, as
12that term is used in Section 1-5 of the Limited Liability
13Company Act, are the institutions of public charity that
14actually and exclusively use the property for charitable and
15beneficent purposes; (B) the limited liability company is a
16disregarded entity for federal and Illinois income tax purposes
17and, as a result, the limited liability company is deemed
18exempt from income tax liability by virtue of the Internal
19Revenue Code Section 501(c)(3) status of its sole member or
20members; and (C) the limited liability company does not lease
21the property or otherwise use it with a view to profit.
22(Source: P.A. 96-763, eff. 8-25-09.)