SB1469ham001 100TH GENERAL ASSEMBLY

Rep. Gregory Harris

Filed: 11/28/2018

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 1469

2    AMENDMENT NO. ______. Amend Senate Bill 1469 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Administrative Procedure Act is
5amended by changing Section 5-45 as follows:
 
6    (5 ILCS 100/5-45)  (from Ch. 127, par. 1005-45)
7    Sec. 5-45. Emergency rulemaking.
8    (a) "Emergency" means the existence of any situation that
9any agency finds reasonably constitutes a threat to the public
10interest, safety, or welfare.
11    (b) If any agency finds that an emergency exists that
12requires adoption of a rule upon fewer days than is required by
13Section 5-40 and states in writing its reasons for that
14finding, the agency may adopt an emergency rule without prior
15notice or hearing upon filing a notice of emergency rulemaking
16with the Secretary of State under Section 5-70. The notice

 

 

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1shall include the text of the emergency rule and shall be
2published in the Illinois Register. Consent orders or other
3court orders adopting settlements negotiated by an agency may
4be adopted under this Section. Subject to applicable
5constitutional or statutory provisions, an emergency rule
6becomes effective immediately upon filing under Section 5-65 or
7at a stated date less than 10 days thereafter. The agency's
8finding and a statement of the specific reasons for the finding
9shall be filed with the rule. The agency shall take reasonable
10and appropriate measures to make emergency rules known to the
11persons who may be affected by them.
12    (c) An emergency rule may be effective for a period of not
13longer than 150 days, but the agency's authority to adopt an
14identical rule under Section 5-40 is not precluded. No
15emergency rule may be adopted more than once in any 24-month
16period, except that this limitation on the number of emergency
17rules that may be adopted in a 24-month period does not apply
18to (i) emergency rules that make additions to and deletions
19from the Drug Manual under Section 5-5.16 of the Illinois
20Public Aid Code or the generic drug formulary under Section
213.14 of the Illinois Food, Drug and Cosmetic Act, (ii)
22emergency rules adopted by the Pollution Control Board before
23July 1, 1997 to implement portions of the Livestock Management
24Facilities Act, (iii) emergency rules adopted by the Illinois
25Department of Public Health under subsections (a) through (i)
26of Section 2 of the Department of Public Health Act when

 

 

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1necessary to protect the public's health, (iv) emergency rules
2adopted pursuant to subsection (n) of this Section, (v)
3emergency rules adopted pursuant to subsection (o) of this
4Section, or (vi) emergency rules adopted pursuant to subsection
5(c-5) of this Section. Two or more emergency rules having
6substantially the same purpose and effect shall be deemed to be
7a single rule for purposes of this Section.
8    (c-5) To facilitate the maintenance of the program of group
9health benefits provided to annuitants, survivors, and retired
10employees under the State Employees Group Insurance Act of
111971, rules to alter the contributions to be paid by the State,
12annuitants, survivors, retired employees, or any combination
13of those entities, for that program of group health benefits,
14shall be adopted as emergency rules. The adoption of those
15rules shall be considered an emergency and necessary for the
16public interest, safety, and welfare.
17    (d) In order to provide for the expeditious and timely
18implementation of the State's fiscal year 1999 budget,
19emergency rules to implement any provision of Public Act 90-587
20or 90-588 or any other budget initiative for fiscal year 1999
21may be adopted in accordance with this Section by the agency
22charged with administering that provision or initiative,
23except that the 24-month limitation on the adoption of
24emergency rules and the provisions of Sections 5-115 and 5-125
25do not apply to rules adopted under this subsection (d). The
26adoption of emergency rules authorized by this subsection (d)

 

 

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1shall be deemed to be necessary for the public interest,
2safety, and welfare.
3    (e) In order to provide for the expeditious and timely
4implementation of the State's fiscal year 2000 budget,
5emergency rules to implement any provision of Public Act 91-24
6or any other budget initiative for fiscal year 2000 may be
7adopted in accordance with this Section by the agency charged
8with administering that provision or initiative, except that
9the 24-month limitation on the adoption of emergency rules and
10the provisions of Sections 5-115 and 5-125 do not apply to
11rules adopted under this subsection (e). The adoption of
12emergency rules authorized by this subsection (e) shall be
13deemed to be necessary for the public interest, safety, and
14welfare.
15    (f) In order to provide for the expeditious and timely
16implementation of the State's fiscal year 2001 budget,
17emergency rules to implement any provision of Public Act 91-712
18or any other budget initiative for fiscal year 2001 may be
19adopted in accordance with this Section by the agency charged
20with administering that provision or initiative, except that
21the 24-month limitation on the adoption of emergency rules and
22the provisions of Sections 5-115 and 5-125 do not apply to
23rules adopted under this subsection (f). The adoption of
24emergency rules authorized by this subsection (f) shall be
25deemed to be necessary for the public interest, safety, and
26welfare.

 

 

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1    (g) In order to provide for the expeditious and timely
2implementation of the State's fiscal year 2002 budget,
3emergency rules to implement any provision of Public Act 92-10
4or any other budget initiative for fiscal year 2002 may be
5adopted in accordance with this Section by the agency charged
6with administering that provision or initiative, except that
7the 24-month limitation on the adoption of emergency rules and
8the provisions of Sections 5-115 and 5-125 do not apply to
9rules adopted under this subsection (g). The adoption of
10emergency rules authorized by this subsection (g) shall be
11deemed to be necessary for the public interest, safety, and
12welfare.
13    (h) In order to provide for the expeditious and timely
14implementation of the State's fiscal year 2003 budget,
15emergency rules to implement any provision of Public Act 92-597
16or any other budget initiative for fiscal year 2003 may be
17adopted in accordance with this Section by the agency charged
18with administering that provision or initiative, except that
19the 24-month limitation on the adoption of emergency rules and
20the provisions of Sections 5-115 and 5-125 do not apply to
21rules adopted under this subsection (h). The adoption of
22emergency rules authorized by this subsection (h) shall be
23deemed to be necessary for the public interest, safety, and
24welfare.
25    (i) In order to provide for the expeditious and timely
26implementation of the State's fiscal year 2004 budget,

 

 

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1emergency rules to implement any provision of Public Act 93-20
2or any other budget initiative for fiscal year 2004 may be
3adopted in accordance with this Section by the agency charged
4with administering that provision or initiative, except that
5the 24-month limitation on the adoption of emergency rules and
6the provisions of Sections 5-115 and 5-125 do not apply to
7rules adopted under this subsection (i). The adoption of
8emergency rules authorized by this subsection (i) shall be
9deemed to be necessary for the public interest, safety, and
10welfare.
11    (j) In order to provide for the expeditious and timely
12implementation of the provisions of the State's fiscal year
132005 budget as provided under the Fiscal Year 2005 Budget
14Implementation (Human Services) Act, emergency rules to
15implement any provision of the Fiscal Year 2005 Budget
16Implementation (Human Services) Act may be adopted in
17accordance with this Section by the agency charged with
18administering that provision, except that the 24-month
19limitation on the adoption of emergency rules and the
20provisions of Sections 5-115 and 5-125 do not apply to rules
21adopted under this subsection (j). The Department of Public Aid
22may also adopt rules under this subsection (j) necessary to
23administer the Illinois Public Aid Code and the Children's
24Health Insurance Program Act. The adoption of emergency rules
25authorized by this subsection (j) shall be deemed to be
26necessary for the public interest, safety, and welfare.

 

 

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1    (k) In order to provide for the expeditious and timely
2implementation of the provisions of the State's fiscal year
32006 budget, emergency rules to implement any provision of
4Public Act 94-48 or any other budget initiative for fiscal year
52006 may be adopted in accordance with this Section by the
6agency charged with administering that provision or
7initiative, except that the 24-month limitation on the adoption
8of emergency rules and the provisions of Sections 5-115 and
95-125 do not apply to rules adopted under this subsection (k).
10The Department of Healthcare and Family Services may also adopt
11rules under this subsection (k) necessary to administer the
12Illinois Public Aid Code, the Senior Citizens and Persons with
13Disabilities Property Tax Relief Act, the Senior Citizens and
14Disabled Persons Prescription Drug Discount Program Act (now
15the Illinois Prescription Drug Discount Program Act), and the
16Children's Health Insurance Program Act. The adoption of
17emergency rules authorized by this subsection (k) shall be
18deemed to be necessary for the public interest, safety, and
19welfare.
20    (l) In order to provide for the expeditious and timely
21implementation of the provisions of the State's fiscal year
222007 budget, the Department of Healthcare and Family Services
23may adopt emergency rules during fiscal year 2007, including
24rules effective July 1, 2007, in accordance with this
25subsection to the extent necessary to administer the
26Department's responsibilities with respect to amendments to

 

 

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1the State plans and Illinois waivers approved by the federal
2Centers for Medicare and Medicaid Services necessitated by the
3requirements of Title XIX and Title XXI of the federal Social
4Security Act. The adoption of emergency rules authorized by
5this subsection (l) shall be deemed to be necessary for the
6public interest, safety, and welfare.
7    (m) In order to provide for the expeditious and timely
8implementation of the provisions of the State's fiscal year
92008 budget, the Department of Healthcare and Family Services
10may adopt emergency rules during fiscal year 2008, including
11rules effective July 1, 2008, in accordance with this
12subsection to the extent necessary to administer the
13Department's responsibilities with respect to amendments to
14the State plans and Illinois waivers approved by the federal
15Centers for Medicare and Medicaid Services necessitated by the
16requirements of Title XIX and Title XXI of the federal Social
17Security Act. The adoption of emergency rules authorized by
18this subsection (m) shall be deemed to be necessary for the
19public interest, safety, and welfare.
20    (n) In order to provide for the expeditious and timely
21implementation of the provisions of the State's fiscal year
222010 budget, emergency rules to implement any provision of
23Public Act 96-45 or any other budget initiative authorized by
24the 96th General Assembly for fiscal year 2010 may be adopted
25in accordance with this Section by the agency charged with
26administering that provision or initiative. The adoption of

 

 

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1emergency rules authorized by this subsection (n) shall be
2deemed to be necessary for the public interest, safety, and
3welfare. The rulemaking authority granted in this subsection
4(n) shall apply only to rules promulgated during Fiscal Year
52010.
6    (o) In order to provide for the expeditious and timely
7implementation of the provisions of the State's fiscal year
82011 budget, emergency rules to implement any provision of
9Public Act 96-958 or any other budget initiative authorized by
10the 96th General Assembly for fiscal year 2011 may be adopted
11in accordance with this Section by the agency charged with
12administering that provision or initiative. The adoption of
13emergency rules authorized by this subsection (o) is deemed to
14be necessary for the public interest, safety, and welfare. The
15rulemaking authority granted in this subsection (o) applies
16only to rules promulgated on or after July 1, 2010 (the
17effective date of Public Act 96-958) through June 30, 2011.
18    (p) In order to provide for the expeditious and timely
19implementation of the provisions of Public Act 97-689,
20emergency rules to implement any provision of Public Act 97-689
21may be adopted in accordance with this subsection (p) by the
22agency charged with administering that provision or
23initiative. The 150-day limitation of the effective period of
24emergency rules does not apply to rules adopted under this
25subsection (p), and the effective period may continue through
26June 30, 2013. The 24-month limitation on the adoption of

 

 

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1emergency rules does not apply to rules adopted under this
2subsection (p). The adoption of emergency rules authorized by
3this subsection (p) is deemed to be necessary for the public
4interest, safety, and welfare.
5    (q) In order to provide for the expeditious and timely
6implementation of the provisions of Articles 7, 8, 9, 11, and
712 of Public Act 98-104, emergency rules to implement any
8provision of Articles 7, 8, 9, 11, and 12 of Public Act 98-104
9may be adopted in accordance with this subsection (q) by the
10agency charged with administering that provision or
11initiative. The 24-month limitation on the adoption of
12emergency rules does not apply to rules adopted under this
13subsection (q). The adoption of emergency rules authorized by
14this subsection (q) is deemed to be necessary for the public
15interest, safety, and welfare.
16    (r) In order to provide for the expeditious and timely
17implementation of the provisions of Public Act 98-651,
18emergency rules to implement Public Act 98-651 may be adopted
19in accordance with this subsection (r) by the Department of
20Healthcare and Family Services. The 24-month limitation on the
21adoption of emergency rules does not apply to rules adopted
22under this subsection (r). The adoption of emergency rules
23authorized by this subsection (r) is deemed to be necessary for
24the public interest, safety, and welfare.
25    (s) In order to provide for the expeditious and timely
26implementation of the provisions of Sections 5-5b.1 and 5A-2 of

 

 

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1the Illinois Public Aid Code, emergency rules to implement any
2provision of Section 5-5b.1 or Section 5A-2 of the Illinois
3Public Aid Code may be adopted in accordance with this
4subsection (s) by the Department of Healthcare and Family
5Services. The rulemaking authority granted in this subsection
6(s) shall apply only to those rules adopted prior to July 1,
72015. Notwithstanding any other provision of this Section, any
8emergency rule adopted under this subsection (s) shall only
9apply to payments made for State fiscal year 2015. The adoption
10of emergency rules authorized by this subsection (s) is deemed
11to be necessary for the public interest, safety, and welfare.
12    (t) In order to provide for the expeditious and timely
13implementation of the provisions of Article II of Public Act
1499-6, emergency rules to implement the changes made by Article
15II of Public Act 99-6 to the Emergency Telephone System Act may
16be adopted in accordance with this subsection (t) by the
17Department of State Police. The rulemaking authority granted in
18this subsection (t) shall apply only to those rules adopted
19prior to July 1, 2016. The 24-month limitation on the adoption
20of emergency rules does not apply to rules adopted under this
21subsection (t). The adoption of emergency rules authorized by
22this subsection (t) is deemed to be necessary for the public
23interest, safety, and welfare.
24    (u) In order to provide for the expeditious and timely
25implementation of the provisions of the Burn Victims Relief
26Act, emergency rules to implement any provision of the Act may

 

 

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1be adopted in accordance with this subsection (u) by the
2Department of Insurance. The rulemaking authority granted in
3this subsection (u) shall apply only to those rules adopted
4prior to December 31, 2015. The adoption of emergency rules
5authorized by this subsection (u) is deemed to be necessary for
6the public interest, safety, and welfare.
7    (v) In order to provide for the expeditious and timely
8implementation of the provisions of Public Act 99-516,
9emergency rules to implement Public Act 99-516 may be adopted
10in accordance with this subsection (v) by the Department of
11Healthcare and Family Services. The 24-month limitation on the
12adoption of emergency rules does not apply to rules adopted
13under this subsection (v). The adoption of emergency rules
14authorized by this subsection (v) is deemed to be necessary for
15the public interest, safety, and welfare.
16    (w) In order to provide for the expeditious and timely
17implementation of the provisions of Public Act 99-796,
18emergency rules to implement the changes made by Public Act
1999-796 may be adopted in accordance with this subsection (w) by
20the Adjutant General. The adoption of emergency rules
21authorized by this subsection (w) is deemed to be necessary for
22the public interest, safety, and welfare.
23    (x) In order to provide for the expeditious and timely
24implementation of the provisions of Public Act 99-906,
25emergency rules to implement subsection (i) of Section 16-115D,
26subsection (g) of Section 16-128A, and subsection (a) of

 

 

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1Section 16-128B of the Public Utilities Act may be adopted in
2accordance with this subsection (x) by the Illinois Commerce
3Commission. The rulemaking authority granted in this
4subsection (x) shall apply only to those rules adopted within
5180 days after June 1, 2017 (the effective date of Public Act
699-906). The adoption of emergency rules authorized by this
7subsection (x) is deemed to be necessary for the public
8interest, safety, and welfare.
9    (y) In order to provide for the expeditious and timely
10implementation of the provisions of Public Act 100-23 this
11amendatory Act of the 100th General Assembly, emergency rules
12to implement the changes made by Public Act 100-23 this
13amendatory Act of the 100th General Assembly to Section 4.02 of
14the Illinois Act on the Aging, Sections 5.5.4 and 5-5.4i of the
15Illinois Public Aid Code, Section 55-30 of the Alcoholism and
16Other Drug Abuse and Dependency Act, and Sections 74 and 75 of
17the Mental Health and Developmental Disabilities
18Administrative Act may be adopted in accordance with this
19subsection (y) by the respective Department. The adoption of
20emergency rules authorized by this subsection (y) is deemed to
21be necessary for the public interest, safety, and welfare.
22    (z) In order to provide for the expeditious and timely
23implementation of the provisions of Public Act 100-554 this
24amendatory Act of the 100th General Assembly, emergency rules
25to implement the changes made by Public Act 100-554 this
26amendatory Act of the 100th General Assembly to Section 4.7 of

 

 

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1the Lobbyist Registration Act may be adopted in accordance with
2this subsection (z) by the Secretary of State. The adoption of
3emergency rules authorized by this subsection (z) is deemed to
4be necessary for the public interest, safety, and welfare.
5    (aa) In order to provide for the expeditious and timely
6initial implementation of the changes made to Articles 5, 5A,
712, and 14 of the Illinois Public Aid Code under the provisions
8of Public Act 100-581 this amendatory Act of the 100th General
9Assembly, the Department of Healthcare and Family Services may
10adopt emergency rules in accordance with this subsection (aa).
11The 24-month limitation on the adoption of emergency rules does
12not apply to rules to initially implement the changes made to
13Articles 5, 5A, 12, and 14 of the Illinois Public Aid Code
14adopted under this subsection (aa). The adoption of emergency
15rules authorized by this subsection (aa) is deemed to be
16necessary for the public interest, safety, and welfare.
17    (bb) In order to provide for the expeditious and timely
18implementation of the provisions of Public Act 100-587 this
19amendatory Act of the 100th General Assembly, emergency rules
20to implement the changes made by Public Act 100-587 this
21amendatory Act of the 100th General Assembly to Section 4.02 of
22the Illinois Act on the Aging, Sections 5.5.4 and 5-5.4i of the
23Illinois Public Aid Code, subsection (b) of Section 55-30 of
24the Alcoholism and Other Drug Abuse and Dependency Act, Section
255-104 of the Specialized Mental Health Rehabilitation Act of
262013, and Section 75 and subsection (b) of Section 74 of the

 

 

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1Mental Health and Developmental Disabilities Administrative
2Act may be adopted in accordance with this subsection (bb) by
3the respective Department. The adoption of emergency rules
4authorized by this subsection (bb) is deemed to be necessary
5for the public interest, safety, and welfare.
6    (cc) (bb) In order to provide for the expeditious and
7timely implementation of the provisions of Public Act 100-587
8this amendatory Act of the 100th General Assembly, emergency
9rules may be adopted in accordance with this subsection (cc)
10(bb) to implement the changes made by Public Act 100-587 this
11amendatory Act of the 100th General Assembly to: Sections
1214-147.5 and 14-147.6 of the Illinois Pension Code by the Board
13created under Article 14 of the Code; Sections 15-185.5 and
1415-185.6 of the Illinois Pension Code by the Board created
15under Article 15 of the Code; and Sections 16-190.5 and
1616-190.6 of the Illinois Pension Code by the Board created
17under Article 16 of the Code. The adoption of emergency rules
18authorized by this subsection (cc) (bb) is deemed to be
19necessary for the public interest, safety, and welfare.
20    (dd) (aa) In order to provide for the expeditious and
21timely implementation of the provisions of Public Act 100-864
22this amendatory Act of the 100th General Assembly, emergency
23rules to implement the changes made by Public Act 100-864 this
24amendatory Act of the 100th General Assembly to Section 3.35 of
25the Newborn Metabolic Screening Act may be adopted in
26accordance with this subsection (dd) (aa) by the Secretary of

 

 

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1State. The adoption of emergency rules authorized by this
2subsection (dd) (aa) is deemed to be necessary for the public
3interest, safety, and welfare.
4    (ee) In order to provide for the expeditious and timely
5initial implementation of the changes made to Articles 5A and
614 of the Illinois Public Aid Code under the provisions of this
7amendatory Act of the 100th General Assembly, the Department of
8Healthcare and Family Services may on a one-time-only basis
9adopt emergency rules in accordance with this subsection (ee).
10The 24-month limitation on the adoption of emergency rules does
11not apply to rules to initially implement the changes made to
12Articles 5A and 14 of the Illinois Public Aid Code adopted
13under this subsection (ee). The adoption of emergency rules
14authorized by this subsection (ee) is deemed to be necessary
15for the public interest, safety, and welfare.
16(Source: P.A. 99-2, eff. 3-26-15; 99-6, eff. 1-1-16; 99-143,
17eff. 7-27-15; 99-455, eff. 1-1-16; 99-516, eff. 6-30-16;
1899-642, eff. 7-28-16; 99-796, eff. 1-1-17; 99-906, eff. 6-1-17;
19100-23, eff. 7-6-17; 100-554, eff. 11-16-17; 100-581, eff.
203-12-18; 100-587, Article 95, Section 95-5, eff. 6-4-18;
21100-587, Article 110, Section 110-5, eff. 6-4-18; 100-864, eff.
228-14-18; revised 10-18-18.)
 
23    Section 15. The Use Tax Act is amended by changing Section
243-8 as follows:
 

 

 

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1    (35 ILCS 105/3-8)
2    Sec. 3-8. Hospital exemption.
3    (a) Until July 1, 2022, tangible Tangible personal property
4sold to or used by a hospital owner that owns one or more
5hospitals licensed under the Hospital Licensing Act or operated
6under the University of Illinois Hospital Act, or a hospital
7affiliate that is not already exempt under another provision of
8this Act and meets the criteria for an exemption under this
9Section, is exempt from 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 purpose 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

 

 

10000SB1469ham001- 21 -LRB100 09786 KTG 43635 a

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, Medicare patients with disabilities
14    under age 65, and dual-eligible Medicare/Medicaid patients
15    and dividing that total by the relevant hospital entity's
16    total costs. Such costs for the numerator and denominator
17    shall be determined by multiplying gross charges by the
18    cost to charge ratio taken from the hospital's most
19    recently filed Medicare cost report (CMS 2252-10
20    Worksheet, Part I). In the case of emergency services, the
21    ratio shall be calculated using costs (gross charges
22    multiplied by the cost to charge ratio taken from the
23    hospital's most recently filed Medicare cost report (CMS
24    2252-10 Worksheet, Part I)) of patients treated in the
25    relevant hospital entity's emergency department.
26        (7) Any other activity by the relevant hospital entity

 

 

10000SB1469ham001- 22 -LRB100 09786 KTG 43635 a

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.

 

 

10000SB1469ham001- 23 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 24 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 25 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 26 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 27 -LRB100 09786 KTG 43635 a

1    hospital affiliate that files an application for an
2    exemption or renewal of exemption under this Section.
3        (7) "Relevant hospital entity" means (A) the hospital
4    owner, in the case of a hospital applicant that is a
5    hospital owner, and (B) at the election of a hospital
6    applicant that is a hospital affiliate, either (i) the
7    hospital affiliate or (ii) the hospital system to which the
8    hospital applicant belongs, including any hospitals or
9    hospital affiliates that are related by common control or
10    ownership.
11        (8) "Subject property" means property used for the
12    calculation under subsection (b) of this Section.
13        (9) "Hospital year" means the fiscal year of the
14    relevant hospital entity, or the fiscal year of one of the
15    hospital owners in the hospital system if the relevant
16    hospital entity is a hospital system with members with
17    different fiscal years, that ends in the year for which the
18    exemption is sought.
19    (i) It is the intent of the General Assembly that any
20exemptions taken, granted, or renewed under this Section prior
21to the effective date of this amendatory Act of the 100th
22General Assembly are hereby validated.
23(Source: P.A. 98-463, eff. 8-16-13; 99-143, eff. 7-27-15.)
 
24    Section 20. The Service Use Tax Act is amended by changing
25Section 3-8 as follows:
 

 

 

10000SB1469ham001- 28 -LRB100 09786 KTG 43635 a

1    (35 ILCS 110/3-8)
2    Sec. 3-8. Hospital exemption.
3    (a) Until July 1, 2022, tangible Tangible personal property
4sold to or used by a hospital owner that owns one or more
5hospitals licensed under the Hospital Licensing Act or operated
6under the University of Illinois Hospital Act, or a hospital
7affiliate that is not already exempt under another provision of
8this Act and meets the criteria for an exemption under this
9Section, is exempt from 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

 

 

10000SB1469ham001- 29 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 30 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 31 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 32 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 33 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 34 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 35 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 36 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 37 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 38 -LRB100 09786 KTG 43635 a

1        (6) "Hospital applicant" means a hospital owner or
2    hospital affiliate that files an application for an
3    exemption or renewal of exemption under this Section.
4        (7) "Relevant hospital entity" means (A) the hospital
5    owner, in the case of a hospital applicant that is a
6    hospital owner, and (B) at the election of a hospital
7    applicant that is a hospital affiliate, either (i) the
8    hospital affiliate or (ii) the hospital system to which the
9    hospital applicant belongs, including any hospitals or
10    hospital affiliates that are related by common control or
11    ownership.
12        (8) "Subject property" means property used for the
13    calculation under subsection (b) of this Section.
14        (9) "Hospital year" means the fiscal year of the
15    relevant hospital entity, or the fiscal year of one of the
16    hospital owners in the hospital system if the relevant
17    hospital entity is a hospital system with members with
18    different fiscal years, that ends in the year for which the
19    exemption is sought.
20    (i) It is the intent of the General Assembly that any
21exemptions taken, granted, or renewed under this Section prior
22to the effective date of this amendatory Act of the 100th
23General Assembly are hereby validated.
24(Source: P.A. 98-463, eff. 8-16-13; 99-143, eff. 7-27-15.)
 
25    Section 25. The Service Occupation Tax Act is amended by

 

 

10000SB1469ham001- 39 -LRB100 09786 KTG 43635 a

1changing Section 3-8 as follows:
 
2    (35 ILCS 115/3-8)
3    Sec. 3-8. Hospital exemption.
4    (a) Until July 1, 2022, tangible Tangible personal property
5sold to or used by a hospital owner that owns one or more
6hospitals licensed under the Hospital Licensing Act or operated
7under the University of Illinois Hospital Act, or a hospital
8affiliate that is not already exempt under another provision of
9this Act and meets the criteria for an exemption under this
10Section, is exempt from taxation under this Act.
11    (b) A hospital owner or hospital affiliate satisfies the
12conditions for an exemption under this Section if the value of
13qualified services or activities listed in subsection (c) of
14this Section for the hospital year equals or exceeds the
15relevant hospital entity's estimated property tax liability,
16without regard to any property tax exemption granted under
17Section 15-86 of the Property Tax Code, for the calendar year
18in which exemption or renewal of exemption is sought. For
19purposes of making the calculations required by this subsection
20(b), if the relevant hospital entity is a hospital owner that
21owns more than one hospital, the value of the services or
22activities listed in subsection (c) shall be calculated on the
23basis of only those services and activities relating to the
24hospital that includes the subject property, and the relevant
25hospital entity's estimated property tax liability shall be

 

 

10000SB1469ham001- 40 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 41 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 42 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 43 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 44 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 45 -LRB100 09786 KTG 43635 a

1    contributions deductible under Section 170(a) of the
2    Internal Revenue Code.
3    (f) (Blank).
4    (g) Estimation of Exempt Property Tax Liability. The
5estimated property tax liability used for the determination in
6subsection (b) shall be calculated as follows:
7        (1) "Estimated property tax liability" means the
8    estimated dollar amount of property tax that would be owed,
9    with respect to the exempt portion of each of the relevant
10    hospital entity's properties that are already fully or
11    partially exempt, or for which an exemption in whole or in
12    part is currently being sought, and then aggregated as
13    applicable, as if the exempt portion of those properties
14    were subject to tax, calculated with respect to each such
15    property by multiplying:
16            (A) the lesser of (i) the actual assessed value, if
17        any, of the portion of the property for which an
18        exemption is sought or (ii) an estimated assessed value
19        of the exempt portion of such property as determined in
20        item (2) of this subsection (g), by
21            (B) the applicable State equalization rate
22        (yielding the equalized assessed value), by
23            (C) the applicable tax rate.
24        (2) The estimated assessed value of the exempt portion
25    of the property equals the sum of (i) the estimated fair
26    market value of buildings on the property, as determined in

 

 

10000SB1469ham001- 46 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 47 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 48 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 49 -LRB100 09786 KTG 43635 a

1    voting or governance rights, by contract or otherwise.
2        (6) "Hospital applicant" means a hospital owner or
3    hospital affiliate that files an application for an
4    exemption or renewal of exemption under this Section.
5        (7) "Relevant hospital entity" means (A) the hospital
6    owner, in the case of a hospital applicant that is a
7    hospital owner, and (B) at the election of a hospital
8    applicant that is a hospital affiliate, either (i) the
9    hospital affiliate or (ii) the hospital system to which the
10    hospital applicant belongs, including any hospitals or
11    hospital affiliates that are related by common control or
12    ownership.
13        (8) "Subject property" means property used for the
14    calculation under subsection (b) of this Section.
15        (9) "Hospital year" means the fiscal year of the
16    relevant hospital entity, or the fiscal year of one of the
17    hospital owners in the hospital system if the relevant
18    hospital entity is a hospital system with members with
19    different fiscal years, that ends in the year for which the
20    exemption is sought.
21    (i) It is the intent of the General Assembly that any
22exemptions taken, granted, or renewed under this Section prior
23to the effective date of this amendatory Act of the 100th
24General Assembly are hereby validated.
25(Source: P.A. 98-463, eff. 8-16-13; 99-143, eff. 7-27-15.)
 

 

 

10000SB1469ham001- 50 -LRB100 09786 KTG 43635 a

1    Section 30. The Retailers' Occupation Tax Act is amended by
2changing Section 2-9 as follows:
 
3    (35 ILCS 120/2-9)
4    Sec. 2-9. Hospital exemption.
5    (a) Until July 1, 2022, tangible Tangible personal property
6sold to or used by a hospital owner that owns one or more
7hospitals licensed under the Hospital Licensing Act or operated
8under the University of Illinois Hospital Act, or a hospital
9affiliate that is not already exempt under another provision of
10this Act and meets the criteria for an exemption under this
11Section, is exempt from taxation under this Act.
12    (b) A hospital owner or hospital affiliate satisfies the
13conditions for an exemption under this Section if the value of
14qualified services or activities listed in subsection (c) of
15this Section for the hospital year equals or exceeds the
16relevant hospital entity's estimated property tax liability,
17without regard to any property tax exemption granted under
18Section 15-86 of the Property Tax Code, for the calendar year
19in which exemption or renewal of exemption is sought. For
20purposes of making the calculations required by this subsection
21(b), if the relevant hospital entity is a hospital owner that
22owns more than one hospital, the value of the services or
23activities listed in subsection (c) shall be calculated on the
24basis of only those services and activities relating to the
25hospital that includes the subject property, and the relevant

 

 

10000SB1469ham001- 51 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 52 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 53 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 54 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 55 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 56 -LRB100 09786 KTG 43635 a

1    payments received by the relevant hospital entity as
2    contributions deductible under Section 170(a) of the
3    Internal Revenue Code.
4    (f) (Blank).
5    (g) Estimation of Exempt Property Tax Liability. The
6estimated property tax liability used for the determination in
7subsection (b) shall be calculated as follows:
8        (1) "Estimated property tax liability" means the
9    estimated dollar amount of property tax that would be owed,
10    with respect to the exempt portion of each of the relevant
11    hospital entity's properties that are already fully or
12    partially exempt, or for which an exemption in whole or in
13    part is currently being sought, and then aggregated as
14    applicable, as if the exempt portion of those properties
15    were subject to tax, calculated with respect to each such
16    property by multiplying:
17            (A) the lesser of (i) the actual assessed value, if
18        any, of the portion of the property for which an
19        exemption is sought or (ii) an estimated assessed value
20        of the exempt portion of such property as determined in
21        item (2) of this subsection (g), by
22            (B) the applicable State equalization rate
23        (yielding the equalized assessed value), by
24            (C) the applicable tax rate.
25        (2) The estimated assessed value of the exempt portion
26    of the property equals the sum of (i) the estimated fair

 

 

10000SB1469ham001- 57 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 58 -LRB100 09786 KTG 43635 a

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

 

 

10000SB1469ham001- 59 -LRB100 09786 KTG 43635 a

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

 

 

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1    through ownership of assets, membership interest, other
2    voting or governance rights, by contract or otherwise.
3        (6) "Hospital applicant" means a hospital owner or
4    hospital affiliate that files an application for an
5    exemption or renewal of exemption under this Section.
6        (7) "Relevant hospital entity" means (A) the hospital
7    owner, in the case of a hospital applicant that is a
8    hospital owner, and (B) at the election of a hospital
9    applicant that is a hospital affiliate, either (i) the
10    hospital affiliate or (ii) the hospital system to which the
11    hospital applicant belongs, including any hospitals or
12    hospital affiliates that are related by common control or
13    ownership.
14        (8) "Subject property" means property used for the
15    calculation under subsection (b) of this Section.
16        (9) "Hospital year" means the fiscal year of the
17    relevant hospital entity, or the fiscal year of one of the
18    hospital owners in the hospital system if the relevant
19    hospital entity is a hospital system with members with
20    different fiscal years, that ends in the year for which the
21    exemption is sought.
22    (i) It is the intent of the General Assembly that any
23exemptions taken, granted, or renewed under this Section prior
24to the effective date of this amendatory Act of the 100th
25General Assembly are hereby validated.
26(Source: P.A. 98-463, eff. 8-16-13; 99-143, eff. 7-27-15.)
 

 

 

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1    Section 35. The Specialized Mental Health Rehabilitation
2Act of 2013 is amended by changing Sections 2-101 and 4-102 as
3follows:
 
4    (210 ILCS 49/2-101)
5    Sec. 2-101. Standards for facilities.
6    (a) The Department shall, by rule, prescribe minimum
7standards for each level of care for facilities to be in place
8during the provisional licensure period and thereafter. These
9standards shall include, but are not limited to, the following:
10        (1) life safety standards that will ensure the health,
11    safety and welfare of residents and their protection from
12    hazards;
13        (2) number and qualifications of all personnel,
14    including management and clinical personnel, having
15    responsibility for any part of the care given to consumers;
16    specifically, the Department shall establish staffing
17    ratios for facilities which shall specify the number of
18    staff hours per consumer of care that are needed for each
19    level of care offered within the facility;
20        (3) all sanitary conditions within the facility and its
21    surroundings, including water supply, sewage disposal,
22    food handling, and general hygiene which shall ensure the
23    health and comfort of consumers;
24        (4) a program for adequate maintenance of physical

 

 

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1    plant and equipment;
2        (5) adequate accommodations, staff, and services for
3    the number and types of services being offered to consumers
4    for whom the facility is licensed to care;
5        (6) development of evacuation and other appropriate
6    safety plans for use during weather, health, fire, physical
7    plant, environmental, and national defense emergencies;
8        (7) maintenance of minimum financial or other
9    resources necessary to meet the standards established
10    under this Section, and to operate and conduct the facility
11    in accordance with this Act; and
12        (8) standards for coercive free environment,
13    restraint, and therapeutic separation.
14    (b) Any requirement contained in administrative rule
15concerning a percentage of single occupancy rooms shall be
16calculated based on the total number of licensed or
17provisionally licensed beds under this Act on January 1, 2019
18and shall not be calculated on a per-facility basis.
19(Source: P.A. 98-104, eff. 7-22-13.)
 
20    (210 ILCS 49/4-102)
21    Sec. 4-102. Necessity of license. No person may establish,
22operate, maintain, offer, or advertise a facility within this
23State unless and until he or she obtains a valid license
24therefor as hereinafter provided, which license remains
25unsuspended, unrevoked, and unexpired. No public official or

 

 

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1employee may place any person in, or recommend that any person
2be in, or directly or indirectly cause any person to be placed
3in any facility that is being operated without a valid license.
4All licenses and licensing procedures established under
5Article III of the Nursing Home Care Act, except those
6contained in Section 3-202, shall be deemed valid under this
7Act until the Department establishes licensure. The Department
8is granted the authority under this Act to establish
9provisional licensure and licensing procedures under this Act
10by emergency rule and shall do so within 120 days of the
11effective date of this Act. The Department shall not grant a
12provisional license to any facility that does not possess a
13provisional license on November 30, 2018 and is licensed under
14the Nursing Home Care Act on or before November 30, 2018. The
15Department shall not grant a license to any facility that has
16not first received a provisional license. The changes made by
17this amendatory Act of the 100th General Assembly do not apply
18to the provisions of subsection (c) of Section 1-101.5
19concerning facility closure and relocation.
20(Source: P.A. 98-104, eff. 7-22-13.)
 
21    Section 40. The Illinois Public Aid Code is amended by
22changing Sections 5-5.07, 5A-4, 5A-13, and 14-12 as follows:
 
23    (305 ILCS 5/5-5.07)
24    (Section scheduled to be repealed on January 27, 2019)

 

 

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1    Sec. 5-5.07. Inpatient psychiatric stay; DCFS per diem
2rate. The Department of Children and Family Services shall pay
3the DCFS per diem rate for inpatient psychiatric stay at a
4free-standing psychiatric hospital effective the 11th day when
5a child is in the hospital beyond medical necessity, and the
6parent or caregiver has denied the child access to the home and
7has refused or failed to make provisions for another living
8arrangement for the child or the child's discharge is being
9delayed due to a pending inquiry or investigation by the
10Department of Children and Family Services. This Section is
11repealed on July 1, 2019 6 months after the effective date of
12this amendatory Act of the 100th General Assembly.
13(Source: P.A. 100-646, eff. 7-27-18.)
 
14    (305 ILCS 5/5A-4)  (from Ch. 23, par. 5A-4)
15    Sec. 5A-4. Payment of assessment; penalty.
16    (a) The assessment imposed by Section 5A-2 for State fiscal
17year 2009 through State fiscal year 2018 or as provided in
18Section 5A-16, shall be due and payable in monthly
19installments, each equaling one-twelfth of the assessment for
20the year, on the fourteenth State business day of each month.
21No installment payment of an assessment imposed by Section 5A-2
22shall be due and payable, however, until after the Comptroller
23has issued the payments required under this Article.
24    Except as provided in subsection (a-5) of this Section, the
25assessment imposed by subsection (b-5) of Section 5A-2 for the

 

 

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1portion of State fiscal year 2012 beginning June 10, 2012
2through June 30, 2012, and for State fiscal year 2013 through
3State fiscal year 2018 or as provided in Section 5A-16, shall
4be due and payable in monthly installments, each equaling
5one-twelfth of the assessment for the year, on the 17th 14th
6State business day of each month. No installment payment of an
7assessment imposed by subsection (b-5) of Section 5A-2 shall be
8due and payable, however, until after: (i) the Department
9notifies the hospital provider, in writing, that the payment
10methodologies to hospitals required under Section 5A-12.4,
11have been approved by the Centers for Medicare and Medicaid
12Services of the U.S. Department of Health and Human Services,
13and the waiver under 42 CFR 433.68 for the assessment imposed
14by subsection (b-5) of Section 5A-2, if necessary, has been
15granted by the Centers for Medicare and Medicaid Services of
16the U.S. Department of Health and Human Services; and (ii) the
17Comptroller has issued the payments required under Section
185A-12.4. Upon notification to the Department of approval of the
19payment methodologies required under Section 5A-12.4 and the
20waiver granted under 42 CFR 433.68, if necessary, all
21installments otherwise due under subsection (b-5) of Section
225A-2 prior to the date of notification shall be due and payable
23to the Department upon written direction from the Department
24and issuance by the Comptroller of the payments required under
25Section 5A-12.4.
26    Except as provided in subsection (a-5) of this Section, the

 

 

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1assessment imposed under Section 5A-2 for State fiscal year
22019 and each subsequent State fiscal year shall be due and
3payable in monthly installments, each equaling one-twelfth of
4the assessment for the year, on the 14th State business day of
5each month. No installment payment of an assessment imposed by
6Section 5A-2 shall be due and payable, however, until after:
7(i) the Department notifies the hospital provider, in writing,
8that the payment methodologies to hospitals required under
9Section 5A-12.6 have been approved by the Centers for Medicare
10and Medicaid Services of the U.S. Department of Health and
11Human Services, and the waiver under 42 CFR 433.68 for the
12assessment imposed by Section 5A-2, if necessary, has been
13granted by the Centers for Medicare and Medicaid Services of
14the U.S. Department of Health and Human Services; and (ii) the
15Comptroller has issued the payments required under Section
165A-12.6. Upon notification to the Department of approval of the
17payment methodologies required under Section 5A-12.6 and the
18waiver granted under 42 CFR 433.68, if necessary, all
19installments otherwise due under Section 5A-2 prior to the date
20of notification shall be due and payable to the Department upon
21written direction from the Department and issuance by the
22Comptroller of the payments required under Section 5A-12.6.
23    (a-5) The Illinois Department may accelerate the schedule
24upon which assessment installments are due and payable by
25hospitals with a payment ratio greater than or equal to one.
26Such acceleration of due dates for payment of the assessment

 

 

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1may be made only in conjunction with a corresponding
2acceleration in access payments identified in Section 5A-12.2,
3Section 5A-12.4, or Section 5A-12.6 to the same hospitals. For
4the purposes of this subsection (a-5), a hospital's payment
5ratio is defined as the quotient obtained by dividing the total
6payments for the State fiscal year, as authorized under Section
75A-12.2, Section 5A-12.4, or Section 5A-12.6, by the total
8assessment for the State fiscal year imposed under Section 5A-2
9or subsection (b-5) of Section 5A-2.
10    (b) The Illinois Department is authorized to establish
11delayed payment schedules for hospital providers that are
12unable to make installment payments when due under this Section
13due to financial difficulties, as determined by the Illinois
14Department.
15    (c) If a hospital provider fails to pay the full amount of
16an installment when due (including any extensions granted under
17subsection (b)), there shall, unless waived by the Illinois
18Department for reasonable cause, be added to the assessment
19imposed by Section 5A-2 a penalty assessment equal to the
20lesser of (i) 5% of the amount of the installment not paid on
21or before the due date plus 5% of the portion thereof remaining
22unpaid on the last day of each 30-day period thereafter or (ii)
23100% of the installment amount not paid on or before the due
24date. For purposes of this subsection, payments will be
25credited first to unpaid installment amounts (rather than to
26penalty or interest), beginning with the most delinquent

 

 

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1installments.
2    (d) Any assessment amount that is due and payable to the
3Illinois Department more frequently than once per calendar
4quarter shall be remitted to the Illinois Department by the
5hospital provider by means of electronic funds transfer. The
6Illinois Department may provide for remittance by other means
7if (i) the amount due is less than $10,000 or (ii) electronic
8funds transfer is unavailable for this purpose.
9(Source: P.A. 100-581, eff. 3-12-18.)
 
10    (305 ILCS 5/5A-13)
11    Sec. 5A-13. Emergency rulemaking.
12    (a) The Department of Healthcare and Family Services
13(formerly Department of Public Aid) may adopt rules necessary
14to implement this amendatory Act of the 94th General Assembly
15through the use of emergency rulemaking in accordance with
16Section 5-45 of the Illinois Administrative Procedure Act. For
17purposes of that Act, the General Assembly finds that the
18adoption of rules to implement this amendatory Act of the 94th
19General Assembly is deemed an emergency and necessary for the
20public interest, safety, and welfare.
21    (b) The Department of Healthcare and Family Services may
22adopt rules necessary to implement this amendatory Act of the
2397th General Assembly through the use of emergency rulemaking
24in accordance with Section 5-45 of the Illinois Administrative
25Procedure Act. For purposes of that Act, the General Assembly

 

 

10000SB1469ham001- 69 -LRB100 09786 KTG 43635 a

1finds that the adoption of rules to implement this amendatory
2Act of the 97th General Assembly is deemed an emergency and
3necessary for the public interest, safety, and welfare.
4    (c) The Department of Healthcare and Family Services may
5adopt rules necessary to initially implement the changes to
6Articles 5, 5A, 12, and 14 of this Code under this amendatory
7Act of the 100th General Assembly through the use of emergency
8rulemaking in accordance with subsection (aa) of Section 5-45
9of the Illinois Administrative Procedure Act. For purposes of
10that Act, the General Assembly finds that the adoption of rules
11to implement the changes to Articles 5, 5A, 12, and 14 of this
12Code under this amendatory Act of the 100th General Assembly is
13deemed an emergency and necessary for the public interest,
14safety, and welfare. The 24-month limitation on the adoption of
15emergency rules does not apply to rules adopted to initially
16implement the changes to Articles 5, 5A, 12, and 14 of this
17Code under this amendatory Act of the 100th General Assembly.
18For purposes of this subsection, "initially" means any
19emergency rules necessary to immediately implement the changes
20authorized to Articles 5, 5A, 12, and 14 of this Code under
21this amendatory Act of the 100th General Assembly; however,
22emergency rulemaking authority shall not be used to make
23changes that could otherwise be made following the process
24established in the Illinois Administrative Procedure Act.
25    (d) The Department of Healthcare and Family Services may on
26a one-time-only basis adopt rules necessary to initially

 

 

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1implement the changes to Articles 5A and 14 of this Code under
2this amendatory Act of the 100th General Assembly through the
3use of emergency rulemaking in accordance with subsection (ee)
4of Section 5-45 of the Illinois Administrative Procedure Act.
5For purposes of that Act, the General Assembly finds that the
6adoption of rules on a one-time-only basis to implement the
7changes to Articles 5A and 14 of this Code under this
8amendatory Act of the 100th General Assembly is deemed an
9emergency and necessary for the public interest, safety, and
10welfare. The 24-month limitation on the adoption of emergency
11rules does not apply to rules adopted to initially implement
12the changes to Articles 5A and 14 of this Code under this
13amendatory Act of the 100th General Assembly.
14(Source: P.A. 100-581, eff. 3-12-18.)
 
15    (305 ILCS 5/14-12)
16    Sec. 14-12. Hospital rate reform payment system. The
17hospital payment system pursuant to Section 14-11 of this
18Article shall be as follows:
19    (a) Inpatient hospital services. Effective for discharges
20on and after July 1, 2014, reimbursement for inpatient general
21acute care services shall utilize the All Patient Refined
22Diagnosis Related Grouping (APR-DRG) software, version 30,
23distributed by 3MTM Health Information System.
24        (1) The Department shall establish Medicaid weighting
25    factors to be used in the reimbursement system established

 

 

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1    under this subsection. Initial weighting factors shall be
2    the weighting factors as published by 3M Health Information
3    System, associated with Version 30.0 adjusted for the
4    Illinois experience.
5        (2) The Department shall establish a
6    statewide-standardized amount to be used in the inpatient
7    reimbursement system. The Department shall publish these
8    amounts on its website no later than 10 calendar days prior
9    to their effective date.
10        (3) In addition to the statewide-standardized amount,
11    the Department shall develop adjusters to adjust the rate
12    of reimbursement for critical Medicaid providers or
13    services for trauma, transplantation services, perinatal
14    care, and Graduate Medical Education (GME).
15        (4) The Department shall develop add-on payments to
16    account for exceptionally costly inpatient stays,
17    consistent with Medicare outlier principles. Outlier fixed
18    loss thresholds may be updated to control for excessive
19    growth in outlier payments no more frequently than on an
20    annual basis, but at least triennially. Upon updating the
21    fixed loss thresholds, the Department shall be required to
22    update base rates within 12 months.
23        (5) The Department shall define those hospitals or
24    distinct parts of hospitals that shall be exempt from the
25    APR-DRG reimbursement system established under this
26    Section. The Department shall publish these hospitals'

 

 

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1    inpatient rates on its website no later than 10 calendar
2    days prior to their effective date.
3        (6) Beginning July 1, 2014 and ending on June 30, 2024,
4    in addition to the statewide-standardized amount, the
5    Department shall develop an adjustor to adjust the rate of
6    reimbursement for safety-net hospitals defined in Section
7    5-5e.1 of this Code excluding pediatric hospitals.
8        (7) Beginning July 1, 2014 and ending on June 30, 2020,
9    or upon implementation of inpatient psychiatric rate
10    increases as described in subsection (n) of Section
11    5A-12.6, in addition to the statewide-standardized amount,
12    the Department shall develop an adjustor to adjust the rate
13    of reimbursement for Illinois freestanding inpatient
14    psychiatric hospitals that are not designated as
15    children's hospitals by the Department but are primarily
16    treating patients under the age of 21.
17        (7.5) Beginning July 1, 2020, the reimbursement for
18    inpatient psychiatric services shall be so that base claims
19    projected reimbursement is increased by an amount equal to
20    the funds allocated in paragraph (2) of subsection (b) of
21    Section 5A-12.6, less the amount allocated under
22    paragraphs (8) and (9) of this subsection and paragraphs
23    (3) and (4) of subsection (b) multiplied by 13%. Beginning
24    July 1, 2022, the reimbursement for inpatient psychiatric
25    services shall be so that base claims projected
26    reimbursement is increased by an amount equal to the funds

 

 

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1    allocated in paragraph (3) of subsection (b) of Section
2    5A-12.6, less the amount allocated under paragraphs (8) and
3    (9) of this subsection and paragraphs (3) and (4) of
4    subsection (b) multiplied by 13%. Beginning July 1, 2024,
5    the reimbursement for inpatient psychiatric services shall
6    be so that base claims projected reimbursement is increased
7    by an amount equal to the funds allocated in paragraph (4)
8    of subsection (b) of Section 5A-12.6, less the amount
9    allocated under paragraphs (8) and (9) of this subsection
10    and paragraphs (3) and (4) of subsection (b) multiplied by
11    13%.
12        (8) Beginning July 1, 2018, in addition to the
13    statewide-standardized amount, the Department shall adjust
14    the rate of reimbursement for hospitals designated by the
15    Department of Public Health as a Perinatal Level II or II+
16    center by applying the same adjustor that is applied to
17    Perinatal and Obstetrical care cases for Perinatal Level
18    III centers, as of December 31, 2017.
19        (9) Beginning July 1, 2018, in addition to the
20    statewide-standardized amount, the Department shall apply
21    the same adjustor that is applied to trauma cases as of
22    December 31, 2017 to inpatient claims to treat patients
23    with burns, including, but not limited to, APR-DRGs 841,
24    842, 843, and 844.
25        (10) Beginning July 1, 2018, the
26    statewide-standardized amount for inpatient general acute

 

 

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1    care services shall be uniformly increased so that base
2    claims projected reimbursement is increased by an amount
3    equal to the funds allocated in paragraph (1) of subsection
4    (b) of Section 5A-12.6, less the amount allocated under
5    paragraphs (8) and (9) of this subsection and paragraphs
6    (3) and (4) of subsection (b) multiplied by 40%. Beginning
7    July 1, 2020, the statewide-standardized amount for
8    inpatient general acute care services shall be uniformly
9    increased so that base claims projected reimbursement is
10    increased by an amount equal to the funds allocated in
11    paragraph (2) of subsection (b) of Section 5A-12.6, less
12    the amount allocated under paragraphs (8) and (9) of this
13    subsection and paragraphs (3) and (4) of subsection (b)
14    multiplied by 40%. Beginning July 1, 2022, the
15    statewide-standardized amount for inpatient general acute
16    care services shall be uniformly increased so that base
17    claims projected reimbursement is increased by an amount
18    equal to the funds allocated in paragraph (3) of subsection
19    (b) of Section 5A-12.6, less the amount allocated under
20    paragraphs (8) and (9) of this subsection and paragraphs
21    (3) and (4) of subsection (b) multiplied by 40%. Beginning
22    July 1, 2023 the statewide-standardized amount for
23    inpatient general acute care services shall be uniformly
24    increased so that base claims projected reimbursement is
25    increased by an amount equal to the funds allocated in
26    paragraph (4) of subsection (b) of Section 5A-12.6, less

 

 

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1    the amount allocated under paragraphs (8) and (9) of this
2    subsection and paragraphs (3) and (4) of subsection (b)
3    multiplied by 40%.
4        (11) Beginning July 1, 2018, the reimbursement for
5    inpatient rehabilitation services shall be increased by
6    the addition of a $96 per day add-on.
7        Beginning July 1, 2020, the reimbursement for
8    inpatient rehabilitation services shall be uniformly
9    increased so that the $96 per day add-on is increased by an
10    amount equal to the funds allocated in paragraph (2) of
11    subsection (b) of Section 5A-12.6, less the amount
12    allocated under paragraphs (8) and (9) of this subsection
13    and paragraphs (3) and (4) of subsection (b) multiplied by
14    0.9%.
15        Beginning July 1, 2022, the reimbursement for
16    inpatient rehabilitation services shall be uniformly
17    increased so that the $96 per day add-on as adjusted by the
18    July 1, 2020 increase, is increased by an amount equal to
19    the funds allocated in paragraph (3) of subsection (b) of
20    Section 5A-12.6, less the amount allocated under
21    paragraphs (8) and (9) of this subsection and paragraphs
22    (3) and (4) of subsection (b) multiplied by 0.9%.
23        Beginning July 1, 2023, the reimbursement for
24    inpatient rehabilitation services shall be uniformly
25    increased so that the $96 per day add-on as adjusted by the
26    July 1, 2022 increase, is increased by an amount equal to

 

 

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1    the funds allocated in paragraph (4) of subsection (b) of
2    Section 5A-12.6, less the amount allocated under
3    paragraphs (8) and (9) of this subsection and paragraphs
4    (3) and (4) of subsection (b) multiplied by 0.9%.
5    (b) Outpatient hospital services. Effective for dates of
6service on and after July 1, 2014, reimbursement for outpatient
7services shall utilize the Enhanced Ambulatory Procedure
8Grouping (EAPG E-APG) software, version 3.7 distributed by 3MTM
9Health Information System.
10        (1) The Department shall establish Medicaid weighting
11    factors to be used in the reimbursement system established
12    under this subsection. The initial weighting factors shall
13    be the weighting factors as published by 3M Health
14    Information System, associated with Version 3.7.
15        (2) The Department shall establish service specific
16    statewide-standardized amounts to be used in the
17    reimbursement system.
18            (A) The initial statewide standardized amounts,
19        with the labor portion adjusted by the Calendar Year
20        2013 Medicare Outpatient Prospective Payment System
21        wage index with reclassifications, shall be published
22        by the Department on its website no later than 10
23        calendar days prior to their effective date.
24            (B) The Department shall establish adjustments to
25        the statewide-standardized amounts for each Critical
26        Access Hospital, as designated by the Department of

 

 

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1        Public Health in accordance with 42 CFR 485, Subpart F.
2        For outpatient services provided on or before June 30,
3        2018, the The EAPG standardized amounts are determined
4        separately for each critical access hospital such that
5        simulated EAPG payments using outpatient base period
6        paid claim data plus payments under Section 5A-12.4 of
7        this Code net of the associated tax costs are equal to
8        the estimated costs of outpatient base period claims
9        data with a rate year cost inflation factor applied.
10        (3) In addition to the statewide-standardized amounts,
11    the Department shall develop adjusters to adjust the rate
12    of reimbursement for critical Medicaid hospital outpatient
13    providers or services, including outpatient high volume or
14    safety-net hospitals. Beginning July 1, 2018, the
15    outpatient high volume adjustor shall be increased to
16    increase annual expenditures associated with this adjustor
17    by $79,200,000, based on the State Fiscal Year 2015 base
18    year data and this adjustor shall apply to public
19    hospitals, except for large public hospitals, as defined
20    under 89 Ill. Adm. Code 148.25(a).
21        (4) Beginning July 1, 2018, in addition to the
22    statewide standardized amounts, the Department shall make
23    an add-on payment for outpatient expensive devices and
24    drugs. This add-on payment shall at least apply to claim
25    lines that: (i) are assigned with one of the following
26    EAPGs: 490, 1001 to 1020, and coded with one of the

 

 

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1    following revenue codes: 0274 to 0276, 0278; or (ii) are
2    assigned with one of the following EAPGs: 430 to 441, 443,
3    444, 460 to 465, 495, 496, 1090. The add-on payment shall
4    be calculated as follows: the claim line's covered charges
5    multiplied by the hospital's total acute cost to charge
6    ratio, less the claim line's EAPG payment plus $1,000,
7    multiplied by 0.8.
8        (5) Beginning July 1, 2018, the statewide-standardized
9    amounts for outpatient services shall be increased by a
10    uniform percentage so that base claims projected
11    reimbursement is increased by an amount equal to no less
12    than the funds allocated in paragraph (1) of subsection (b)
13    of Section 5A-12.6, less the amount allocated under
14    paragraphs (8) and (9) of subsection (a) and paragraphs (3)
15    and (4) of this subsection multiplied by 46%. Beginning
16    July 1, 2020, the statewide-standardized amounts for
17    outpatient services shall be increased by a uniform
18    percentage so that base claims projected reimbursement is
19    increased by an amount equal to no less than the funds
20    allocated in paragraph (2) of subsection (b) of Section
21    5A-12.6, less the amount allocated under paragraphs (8) and
22    (9) of subsection (a) and paragraphs (3) and (4) of this
23    subsection multiplied by 46%. Beginning July 1, 2022, the
24    statewide-standardized amounts for outpatient services
25    shall be increased by a uniform percentage so that base
26    claims projected reimbursement is increased by an amount

 

 

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1    equal to the funds allocated in paragraph (3) of subsection
2    (b) of Section 5A-12.6, less the amount allocated under
3    paragraphs (8) and (9) of subsection (a) and paragraphs (3)
4    and (4) of this subsection multiplied by 46%. Beginning
5    July 1, 2023, the statewide-standardized amounts for
6    outpatient services shall be increased by a uniform
7    percentage so that base claims projected reimbursement is
8    increased by an amount equal to no less than the funds
9    allocated in paragraph (4) of subsection (b) of Section
10    5A-12.6, less the amount allocated under paragraphs (8) and
11    (9) of subsection (a) and paragraphs (3) and (4) of this
12    subsection multiplied by 46%.
13        (6) Effective for dates of service on or after July 1,
14    2018, the Department shall establish adjustments to the
15    statewide-standardized amounts for each Critical Access
16    Hospital, as designated by the Department of Public Health
17    in accordance with 42 CFR 485, Subpart F, such that each
18    Critical Access Hospital's standardized amount for
19    outpatient services shall be increased by the applicable
20    uniform percentage determined pursuant to paragraph (5) of
21    this subsection. It is the intent of the General Assembly
22    that the adjustments required under this paragraph (6) by
23    this amendatory Act of the 100th General Assembly shall be
24    applied retroactively to claims for dates of service
25    provided on or after July 1, 2018.
26        (7) Effective for dates of service on or after the

 

 

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1    effective date of this amendatory Act of the 100th General
2    Assembly, the Department shall recalculate and implement
3    an updated statewide-standardized amount for outpatient
4    services provided by hospitals that are not Critical Access
5    Hospitals to reflect the applicable uniform percentage
6    determined pursuant to paragraph (5).
7            (1) Any recalculation to the
8        statewide-standardized amounts for outpatient services
9        provided by hospitals that are not Critical Access
10        Hospitals shall be the amount necessary to achieve the
11        increase in the statewide-standardized amounts for
12        outpatient services increased by a uniform percentage,
13        so that base claims projected reimbursement is
14        increased by an amount equal to no less than the funds
15        allocated in paragraph (1) of subsection (b) of Section
16        5A-12.6, less the amount allocated under paragraphs
17        (8) and (9) of subsection (a) and paragraphs (3) and
18        (4) of this subsection, for all hospitals that are not
19        Critical Access Hospitals, multiplied by 46%.
20            (2) It is the intent of the General Assembly that
21        the recalculations required under this paragraph (7)
22        by this amendatory Act of the 100th General Assembly
23        shall be applied prospectively to claims for dates of
24        service provided on or after the effective date of this
25        amendatory Act of the 100th General Assembly and that
26        no recoupment or repayment by the Department or an MCO,

 

 

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1        of payments attributable to recalculation under this
2        paragraph (7), issued to the hospital for dates of
3        service on or after July 1, 2018 and before the
4        effective date of this amendatory Act of the 100th
5        General Assembly shall be permitted.
6        (8) The Department shall ensure that all necessary
7    adjustments to the managed care organization capitation
8    base rates necessitated by the adjustments under
9    subparagraph (6) or (7) of this subsection are completed
10    and applied retroactively in accordance with Section
11    5-30.8 of this Code within 90 days of the effective date of
12    this amendatory Act of the 100th General Assembly.
13    (c) In consultation with the hospital community, the
14Department is authorized to replace 89 Ill. Admin. Code 152.150
15as published in 38 Ill. Reg. 4980 through 4986 within 12 months
16of June 16, 2014 (the effective date of Public Act 98-651) this
17amendatory Act of the 98th General Assembly. If the Department
18does not replace these rules within 12 months of June 16, 2014
19(the effective date of Public Act 98-651) this amendatory Act
20of the 98th General Assembly, the rules in effect for 152.150
21as published in 38 Ill. Reg. 4980 through 4986 shall remain in
22effect until modified by rule by the Department. Nothing in
23this subsection shall be construed to mandate that the
24Department file a replacement rule.
25    (d) Transition period. There shall be a transition period
26to the reimbursement systems authorized under this Section that

 

 

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1shall begin on the effective date of these systems and continue
2until June 30, 2018, unless extended by rule by the Department.
3To help provide an orderly and predictable transition to the
4new reimbursement systems and to preserve and enhance access to
5the hospital services during this transition, the Department
6shall allocate a transitional hospital access pool of at least
7$290,000,000 annually so that transitional hospital access
8payments are made to hospitals.
9        (1) After the transition period, the Department may
10    begin incorporating the transitional hospital access pool
11    into the base rate structure; however, the transitional
12    hospital access payments in effect on June 30, 2018 shall
13    continue to be paid, if continued under Section 5A-16.
14        (2) After the transition period, if the Department
15    reduces payments from the transitional hospital access
16    pool, it shall increase base rates, develop new adjustors,
17    adjust current adjustors, develop new hospital access
18    payments based on updated information, or any combination
19    thereof by an amount equal to the decreases proposed in the
20    transitional hospital access pool payments, ensuring that
21    the entire transitional hospital access pool amount shall
22    continue to be used for hospital payments.
23    (d-5) Hospital transformation program. The Department, in
24conjunction with the Hospital Transformation Review Committee
25created under subsection (d-5), shall develop a hospital
26transformation program to provide financial assistance to

 

 

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1hospitals in transforming their services and care models to
2better align with the needs of the communities they serve. The
3payments authorized in this Section shall be subject to
4approval by the federal government.
5        (1) Phase 1. In State fiscal years 2019 through 2020,
6    the Department shall allocate funds from the transitional
7    access hospital pool to create a hospital transformation
8    pool of at least $262,906,870 annually and make hospital
9    transformation payments to hospitals. Subject to Section
10    5A-16, in State fiscal years 2019 and 2020, an Illinois
11    hospital that received either a transitional hospital
12    access payment under subsection (d) or a supplemental
13    payment under subsection (f) of this Section in State
14    fiscal year 2018, shall receive a hospital transformation
15    payment as follows:
16            (A) If the hospital's Rate Year 2017 Medicaid
17        inpatient utilization rate is equal to or greater than
18        45%, the hospital transformation payment shall be
19        equal to 100% of the sum of its transitional hospital
20        access payment authorized under subsection (d) and any
21        supplemental payment authorized under subsection (f).
22            (B) If the hospital's Rate Year 2017 Medicaid
23        inpatient utilization rate is equal to or greater than
24        25% but less than 45%, the hospital transformation
25        payment shall be equal to 75% of the sum of its
26        transitional hospital access payment authorized under

 

 

10000SB1469ham001- 84 -LRB100 09786 KTG 43635 a

1        subsection (d) and any supplemental payment authorized
2        under subsection (f).
3            (C) If the hospital's Rate Year 2017 Medicaid
4        inpatient utilization rate is less than 25%, the
5        hospital transformation payment shall be equal to 50%
6        of the sum of its transitional hospital access payment
7        authorized under subsection (d) and any supplemental
8        payment authorized under subsection (f).
9        (2) Phase 2. During State fiscal years 2021 and 2022,
10    the Department shall allocate funds from the transitional
11    access hospital pool to create a hospital transformation
12    pool annually and make hospital transformation payments to
13    hospitals participating in the transformation program. Any
14    hospital may seek transformation funding in Phase 2. Any
15    hospital that seeks transformation funding in Phase 2 to
16    update or repurpose the hospital's physical structure to
17    transition to a new delivery model, must submit to the
18    Department in writing a transformation plan, based on the
19    Department's guidelines, that describes the desired
20    delivery model with projections of patient volumes by
21    service lines and projected revenues, expenses, and net
22    income that correspond to the new delivery model. In Phase
23    2, subject to the approval of rules, the Department may use
24    the hospital transformation pool to increase base rates,
25    develop new adjustors, adjust current adjustors, or
26    develop new access payments in order to support and

 

 

10000SB1469ham001- 85 -LRB100 09786 KTG 43635 a

1    incentivize hospitals to pursue such transformation. In
2    developing such methodologies, the Department shall ensure
3    that the entire hospital transformation pool continues to
4    be expended to ensure access to hospital services or to
5    support organizations that had received hospital
6    transformation payments under this Section.
7            (A) Any hospital participating in the hospital
8        transformation program shall provide an opportunity
9        for public input by local community groups, hospital
10        workers, and healthcare professionals and assist in
11        facilitating discussions about any transformations or
12        changes to the hospital.
13            (B) As provided in paragraph (9) of Section 3 of
14        the Illinois Health Facilities Planning Act, any
15        hospital participating in the transformation program
16        may be excluded from the requirements of the Illinois
17        Health Facilities Planning Act for those projects
18        related to the hospital's transformation. To be
19        eligible, the hospital must submit to the Health
20        Facilities and Services Review Board certification
21        from the Department, approved by the Hospital
22        Transformation Review Committee, that the project is a
23        part of the hospital's transformation.
24            (C) As provided in subsection (a-20) of Section
25        32.5 of the Emergency Medical Services (EMS) Systems
26        Act, a hospital that received hospital transformation

 

 

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1        payments under this Section may convert to a
2        freestanding emergency center. To be eligible for such
3        a conversion, the hospital must submit to the
4        Department of Public Health certification from the
5        Department, approved by the Hospital Transformation
6        Review Committee, that the project is a part of the
7        hospital's transformation.
8        (3) By April 1, 2019 Within 6 months after the
9    effective date of this amendatory Act of the 100th General
10    Assembly, the Department, in conjunction with the Hospital
11    Transformation Review Committee, shall develop and file as
12    an administrative rule with the Secretary of State adopt,
13    by rule, the goals, objectives, policies, standards,
14    payment models, or criteria to be applied in Phase 2 of the
15    program to allocate the hospital transformation funds. The
16    goals, objectives, and policies to be considered may
17    include, but are not limited to, achieving unmet needs of a
18    community that a hospital serves such as behavioral health
19    services, outpatient services, or drug rehabilitation
20    services; attaining certain quality or patient safety
21    benchmarks for health care services; or improving the
22    coordination, effectiveness, and efficiency of care
23    delivery. Notwithstanding any other provision of law, any
24    rule adopted in accordance with this subsection (d-5) may
25    be submitted to the Joint Committee on Administrative Rules
26    for approval only if the rule has first been approved by 9

 

 

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1    of the 14 members of the Hospital Transformation Review
2    Committee.
3        (4) Hospital Transformation Review Committee. There is
4    created the Hospital Transformation Review Committee. The
5    Committee shall consist of 14 members. No later than 30
6    days after March 12, 2018 (the effective date of Public Act
7    100-581) this amendatory Act of the 100th General Assembly,
8    the 4 legislative leaders shall each appoint 3 members; the
9    Governor shall appoint the Director of Healthcare and
10    Family Services, or his or her designee, as a member; and
11    the Director of Healthcare and Family Services shall
12    appoint one member. Any vacancy shall be filled by the
13    applicable appointing authority within 15 calendar days.
14    The members of the Committee shall select a Chair and a
15    Vice-Chair from among its members, provided that the Chair
16    and Vice-Chair cannot be appointed by the same appointing
17    authority and must be from different political parties. The
18    Chair shall have the authority to establish a meeting
19    schedule and convene meetings of the Committee, and the
20    Vice-Chair shall have the authority to convene meetings in
21    the absence of the Chair. The Committee may establish its
22    own rules with respect to meeting schedule, notice of
23    meetings, and the disclosure of documents; however, the
24    Committee shall not have the power to subpoena individuals
25    or documents and any rules must be approved by 9 of the 14
26    members. The Committee shall perform the functions

 

 

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1    described in this Section and advise and consult with the
2    Director in the administration of this Section. In addition
3    to reviewing and approving the policies, procedures, and
4    rules for the hospital transformation program, the
5    Committee shall consider and make recommendations related
6    to qualifying criteria and payment methodologies related
7    to safety-net hospitals and children's hospitals. Members
8    of the Committee appointed by the legislative leaders shall
9    be subject to the jurisdiction of the Legislative Ethics
10    Commission, not the Executive Ethics Commission, and all
11    requests under the Freedom of Information Act shall be
12    directed to the applicable Freedom of Information officer
13    for the General Assembly. The Department shall provide
14    operational support to the Committee as necessary. The
15    Committee is dissolved on April 1, 2019.
16    (e) Beginning 36 months after initial implementation, the
17Department shall update the reimbursement components in
18subsections (a) and (b), including standardized amounts and
19weighting factors, and at least triennially and no more
20frequently than annually thereafter. The Department shall
21publish these updates on its website no later than 30 calendar
22days prior to their effective date.
23    (f) Continuation of supplemental payments. Any
24supplemental payments authorized under Illinois Administrative
25Code 148 effective January 1, 2014 and that continue during the
26period of July 1, 2014 through December 31, 2014 shall remain

 

 

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1in effect as long as the assessment imposed by Section 5A-2
2that is in effect on December 31, 2017 remains in effect.
3    (g) Notwithstanding subsections (a) through (f) of this
4Section and notwithstanding the changes authorized under
5Section 5-5b.1, any updates to the system shall not result in
6any diminishment of the overall effective rates of
7reimbursement as of the implementation date of the new system
8(July 1, 2014). These updates shall not preclude variations in
9any individual component of the system or hospital rate
10variations. Nothing in this Section shall prohibit the
11Department from increasing the rates of reimbursement or
12developing payments to ensure access to hospital services.
13Nothing in this Section shall be construed to guarantee a
14minimum amount of spending in the aggregate or per hospital as
15spending may be impacted by factors including but not limited
16to the number of individuals in the medical assistance program
17and the severity of illness of the individuals.
18    (h) The Department shall have the authority to modify by
19rulemaking any changes to the rates or methodologies in this
20Section as required by the federal government to obtain federal
21financial participation for expenditures made under this
22Section.
23    (i) Except for subsections (g) and (h) of this Section, the
24Department shall, pursuant to subsection (c) of Section 5-40 of
25the Illinois Administrative Procedure Act, provide for
26presentation at the June 2014 hearing of the Joint Committee on

 

 

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1Administrative Rules (JCAR) additional written notice to JCAR
2of the following rules in order to commence the second notice
3period for the following rules: rules published in the Illinois
4Register, rule dated February 21, 2014 at 38 Ill. Reg. 4559
5(Medical Payment), 4628 (Specialized Health Care Delivery
6Systems), 4640 (Hospital Services), 4932 (Diagnostic Related
7Grouping (DRG) Prospective Payment System (PPS)), and 4977
8(Hospital Reimbursement Changes), and published in the
9Illinois Register dated March 21, 2014 at 38 Ill. Reg. 6499
10(Specialized Health Care Delivery Systems) and 6505 (Hospital
11Services).
12    (j) Out-of-state hospitals. Beginning July 1, 2018, for
13purposes of determining for State fiscal years 2019 and 2020
14the hospitals eligible for the payments authorized under
15subsections (a) and (b) of this Section, the Department shall
16include out-of-state hospitals that are designated a Level I
17pediatric trauma center or a Level I trauma center by the
18Department of Public Health as of December 1, 2017.
19    (k) The Department shall notify each hospital and managed
20care organization, in writing, of the impact of the updates
21under this Section at least 30 calendar days prior to their
22effective date.
23(Source: P.A. 99-2, eff. 3-26-15; 100-581, eff. 3-12-18;
24revised 10-3-18.)
 
25    Section 97. Severability. The provisions of this Act are

 

 

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1severable under Section 1.31 of the Statute on Statutes.
 
2    Section 99. Effective date. This Act takes effect upon
3becoming law.".