Illinois General Assembly - Full Text of HB3642
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Full Text of HB3642  100th General Assembly




State of Illinois
2017 and 2018


Introduced , by Rep. Emily McAsey


35 ILCS 200/15-65

    Amends the Property Tax Code. In a Section regarding property tax exemptions for charitable purposes, provides that property held by a charitable organization for the purpose of constructing or rehabilitating residences for eventual transfer to qualified low-income families through sale, lease, or contract for deed is exempt from property tax as a charitable purpose. Provides that the exemption commences on the day title to the property is transferred to the organization and continues to the end of the levy year in which the organization transfers title to the property to a qualified low-income family. Effective immediately.

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HB3642LRB100 11424 HLH 21845 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 changing
5Section 15-65 as follows:
6    (35 ILCS 200/15-65)
7    Sec. 15-65. Charitable purposes. All property of the
8following is exempt when actually and exclusively used for
9charitable or beneficent purposes, and not leased or otherwise
10used with a view to profit:
11        (a) Institutions of public charity.
12        (b) Beneficent and charitable organizations
13    incorporated in any state of the United States, including
14    organizations whose owner, and no other person, uses the
15    property exclusively for the distribution, sale, or resale
16    of donated goods and related activities and uses all the
17    income from those activities to support the charitable,
18    religious or beneficent activities of the owner, whether or
19    not such activities occur on the property.
20        (c) Old people's homes, facilities for persons with a
21    developmental disability, and not-for-profit organizations
22    providing services or facilities related to the goals of
23    educational, social and physical development, if, upon



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



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1        (d) Not-for-profit health maintenance organizations
2    certified by the Director of the Illinois Department of
3    Insurance under the Health Maintenance Organization Act,
4    including any health maintenance organization that
5    provides services to members at prepaid rates approved by
6    the Illinois Department of Insurance if the membership of
7    the organization is sufficiently large or of indefinite
8    classes so that the community is benefited by its
9    operation. No exemption shall apply to any hospital or
10    health maintenance organization which has been adjudicated
11    by a court of competent jurisdiction to have denied
12    admission to any person because of race, color, creed, sex
13    or national origin.
14        (e) All free public libraries.
15        (f) Historical societies.
16        (g) Property held by a charitable organization for the
17    purpose of constructing or rehabilitating residences for
18    eventual transfer to qualified low-income families through
19    sale, lease, or contract for deed. The exemption shall
20    commence on the day title to the property is transferred to
21    the organization and shall continue to the end of the levy
22    year in which the organization transfers title to the
23    property to a qualified low-income family. For the purposes
24    of this paragraph (g), "qualified low-income family" means
25    a family whose adjusted income is less than 80% of the
26    median income of the area of residence, adjusted for family



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1    size, as such adjusted income and median income for the
2    area are determined from time to time by the United States
3    Department of Housing and Urban Development for purposes of
4    Section 8 of the United States Housing Act of 1937.
5    Property otherwise qualifying for an exemption under this
6Section shall not lose its exemption because the legal title is
7held (i) by an entity that is organized solely to hold that
8title and that qualifies under paragraph (2) of Section 501(c)
9of the Internal Revenue Code or its successor, whether or not
10that entity receives rent from the charitable organization for
11the repair and maintenance of the property, (ii) by an entity
12that is organized as a partnership or limited liability
13company, in which the charitable organization, or an affiliate
14or subsidiary of the charitable organization, is a general
15partner of the partnership or managing member of the limited
16liability company, for the purposes of owning and operating a
17residential rental property that has received an allocation of
18Low Income Housing Tax Credits for 100% of the dwelling units
19under Section 42 of the Internal Revenue Code of 1986, as
20amended, or (iii) for any assessment year including and
21subsequent to January 1, 1996 for which an application for
22exemption has been filed and a decision on which has not become
23final and nonappealable, by a limited liability company
24organized under the Limited Liability Company Act provided that
25(A) the limited liability company's sole member or members, as
26that term is used in Section 1-5 of the Limited Liability



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1Company Act, are the institutions of public charity that
2actually and exclusively use the property for charitable and
3beneficent purposes; (B) the limited liability company is a
4disregarded entity for federal and Illinois income tax purposes
5and, as a result, the limited liability company is deemed
6exempt from income tax liability by virtue of the Internal
7Revenue Code Section 501(c)(3) status of its sole member or
8members; and (C) the limited liability company does not lease
9the property or otherwise use it with a view to profit.
10(Source: P.A. 96-763, eff. 8-25-09.)
11    Section 99. Effective date. This Act takes effect upon
12becoming law.