HB0277eng 102ND GENERAL ASSEMBLY

HB0277 Engrossed LRB102 10043 RJF 15363 b

AN ACT concerning finance.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The State Property Control Act is amended by changing Section 7.1 as follows:

(30 ILCS 605/7.1) (from Ch. 127, par. 133b10.1)

Sec. 7.1. (a) Except as otherwise provided by law, all surplus real property held by the State of Illinois shall be disposed of by the administrator as provided in this Section. "Surplus real property," as used in this Section, means any real property to which the State holds fee simple title or lesser interest, and is vacant, unoccupied or unused and which has no foreseeable use by the owning agency.

(b) All responsible officers shall submit an Annual Real Property Utilization Report to the Administrator, or annual update of such report, on forms required by the Administrator, by July 31 of each year. The Administrator may require such documentation as he deems reasonably necessary in connection with this Report, and shall require that such Report include the following information:

(1) A legal description of all real property owned by the State under the control of the responsible officer.

(2) A description of the use of the real property listed under (1).

(3) A list of any improvements made to such real property during the previous year.

(4) The dates on which the State first acquired its interest in such real property, and the purchase price and source of the funds used to acquire the property.

(5) Plans for the future use of currently unused real property.

(6) A declaration of any surplus real property. On or before October 31 of each year the Administrator shall furnish copies of each responsible officer's report along with a list of surplus property indexed by legislative district to the General Assembly.

This report shall be filed with the Speaker, the Minority Leader and the Clerk of the House of Representatives and the President, the Minority Leader and the Secretary of the Senate and shall be duplicated and made available to the members of the General Assembly for evaluation by such members for possible liquidation of unused public property at public sale.

(c) Following receipt of the Annual Real Property Utilization Report required under paragraph (b), the Administrator shall notify all State agencies by October 31 of all declared surplus real property. Any State agency may submit a written request to the Administrator, within 60 days of the date of such notification, to have control of surplus real property transferred to that agency. Such request must indicate the reason for the transfer and the intended use to be made of such surplus real property. The Administrator may deny any or all such requests by a State agency or agencies if the Administrator determines that it is more advantageous to the State to dispose of the surplus real property under paragraph (d). In case requests for the same surplus real property are received from more than one State agency, the Administrator shall weigh the benefits to the State and determine to which agency, if any, to transfer control of such property. The Administrator shall coordinate the use and disposal of State surplus real property with any State space utilization program.

(d) Any surplus real property which is not transferred to the control of another State agency under paragraph (c) shall be disposed of by the Administrator. No appraisal is required if during his initial survey of surplus real property the Administrator determines such property has a fair market value of less than $5,000. If the value of such property is determined by the Administrator in his initial survey to be $5,000 or more, then the Administrator shall obtain 3 appraisals of such real property, one of which shall be performed by an appraiser residing in the county in which said surplus real property is located. The average of these 3 appraisals, plus the costs of obtaining the appraisals, shall represent the fair market value of the surplus real property. No surplus real property may be conveyed by the Administrator for less than the fair market value. Prior to offering the surplus real property for sale to the public the Administrator shall give notice in writing of the existence and fair market value of the surplus real property to the governing bodies of the county and of all cities, villages and incorporated towns in the county in which such real property is located. Any such governing body may exercise its option to acquire the surplus real property for the fair market value within 60 days of the notice. After the 60 day period has passed, the Administrator may sell the surplus real property by public auction following notice of such sale by publication on 3 separate days not less than 15 nor more than 30 days prior to the sale in the State newspaper and in a newspaper having general circulation in the county in which the surplus real property is located. The Administrator shall post "For Sale" signs of a conspicuous nature on such surplus real property offered for sale to the public. If no acceptable offers for the surplus real property are received, the Administrator may have new appraisals of such property made. The Administrator shall have all power necessary to convey surplus real property under this Section. All moneys received for the sale of surplus real property shall be deposited in the General Revenue Fund, except that:

(1) Where moneys expended for the acquisition of such real property were from a special fund which is still a special fund in the State treasury, this special fund shall be reimbursed in the amount of the original expenditure and any amount in excess thereof shall be deposited in the General Revenue Fund.

(2) Whenever a State mental health facility operated by the Department of Human Services is closed and the real estate on which the facility is located is sold by the State, the net proceeds of the sale of the real estate shall be deposited into the Community Mental Health Medicaid Trust Fund.

(3) Whenever a State developmental disabilities facility operated by the Department of Human Services is closed and the real estate on which the facility is located is sold by the State, the net proceeds of the sale of the real estate shall be deposited into the Community Developmental Disability Services Medicaid Trust Fund.

The Administrator shall have authority to order such surveys, abstracts of title, or commitments for title insurance as may, in his reasonable discretion, be deemed necessary to demonstrate to prospective purchasers or bidders good and marketable title in any property offered for sale pursuant to this Section. Unless otherwise specifically authorized by the General Assembly, all conveyances of property made by the Administrator shall be by quit claim deed.

(d-5) Notwithstanding any other provision of this Act, the Administrator may convey any surplus real property covered by this Act, by sale or lease, to a duly incorporated, charitable, non-profit organization or association for the cultivation and sale of fresh fruits and vegetables on a tract of land of less than 5 acres within any unit of local government, provided that the non-profit organization or association is not controlled, directly or indirectly, by any agricultural, commercial, or other business. The non-profit organization or association under this subsection (d-5) shall be authorized to sell fresh fruits and vegetables either on the land that was conveyed, off that land, or both, provided, that the sales are related or incidental to the non-profit purposes of the organization or association, and the net proceeds received by the non-profit organization or association are used to further the non-profit purposes of the organization or association. The lease of any real property to any duly incorporated non-profit organization or association shall be in accordance with the Illinois Procurement Code.

(e) The Administrator shall submit an annual report on or before February 1 to the Governor and the General Assembly containing a detailed statement of surplus real property either transferred or conveyed under this Section.

(Source: P.A. 96-527, eff. 1-1-10; 96-660, eff. 8-25-09; 96-1000, eff. 7-2-10.)

Section 10. The Property Tax Code is amended by changing Section 15-55 as follows:

(35 ILCS 200/15-55)

Sec. 15-55. State property.

(a) All property belonging to the State of Illinois is exempt. However, the State agency holding title shall file the certificate of ownership and use required by Section 15-10, together with a copy of any written lease or agreement, in effect on March 30 of the assessment year, concerning parcels of 1 acre or more, or an explanation of the terms of any oral agreement under which the property is leased, subleased or rented.

The leased property shall be assessed to the lessee and the taxes thereon extended and billed to the lessee, and collected in the same manner as for property which is not exempt. The lessee shall be liable for the taxes and no lien shall attach to the property of the State.

For the purposes of this Section, the word "leases" includes licenses, franchises, operating agreements and other arrangements under which private individuals, associations or corporations are granted the right to use property of the Illinois State Toll Highway Authority and includes all property of the Authority used by others without regard to the size of the leased parcel.

(b) However, all property of every kind belonging to the State of Illinois, which is or may hereafter be leased to the Illinois Prairie Path Corporation, shall be exempt from all assessments, taxation or collection, despite the making of any such lease, if it is used for:

(1) conservation, nature trail or any other charitable, scientific, educational or recreational purposes with public benefit, including the preserving and aiding in the preservation of natural areas, objects, flora, fauna or biotic communities;

(2) the establishment of footpaths, trails and other protected areas;

(3) the conservation of the proper use of natural resources or the promotion of the study of plant and animal communities and of other phases of ecology, natural history and conservation;

(4) the promotion of education in the fields of nature, preservation and conservation; or

(5) similar public recreational activities conducted by the Illinois Prairie Path Corporation.

No lien shall attach to the property of the State. No tax liability shall become the obligation of or be enforceable against Illinois Prairie Path Corporation.

(b-5) However, all property of every kind belonging to the State of Illinois, which is or may be sold or leased to a non-profit organization specified under subsection (d-5) of Section 7.1 of the State Property Control Act, shall be exempt from all assessments, taxation, or collection, despite the making of any such sale or lease, if it is used for the cultivation and sale of fresh fruits and vegetables, and the net proceeds received by the non-profit organization or association are used to further the non-profit purposes of the organization or association.

(c) If the State sells the James R. Thompson Center or the Elgin Mental Health Center and surrounding land located at 750 S. State Street, Elgin, Illinois, as provided in subdivision (a)(2) of Section 7.4 of the State Property Control Act, to another entity whose property is not exempt and immediately thereafter enters into a leaseback or other agreement that directly or indirectly gives the State a right to use, control, and possess the property, that portion of the property leased and occupied exclusively by the State shall remain exempt under this Section. For the property to remain exempt under this subsection (c), the State must retain an option to purchase the property at a future date or, within the limitations period for reverters, the property must revert back to the State.

If the property has been conveyed as described in this subsection (c), the property is no longer exempt pursuant to this Section as of the date when:

(1) the right of the State to use, control, and possess the property has been terminated; or

(2) the State no longer has an option to purchase or otherwise acquire the property and there is no provision for a reverter of the property to the State within the limitations period for reverters.

Pursuant to Sections 15-15 and 15-20 of this Code, the State shall notify the chief county assessment officer of any transaction under this subsection (c). The chief county assessment officer shall determine initial and continuing compliance with the requirements of this Section for tax exemption. Failure to notify the chief county assessment officer of a transaction under this subsection (c) or to otherwise comply with the requirements of Sections 15-15 and 15-20 of this Code shall, in the discretion of the chief county assessment officer, constitute cause to terminate the exemption, notwithstanding any other provision of this Code.

(c-1) If the Illinois State Toll Highway Authority sells the Illinois State Toll Highway Authority headquarters building and surrounding land, located at 2700 Ogden Avenue, Downers Grove, Illinois as provided in subdivision (a)(2) of Section 7.5 of the State Property Control Act, to another entity whose property is not exempt and immediately thereafter enters into a leaseback or other agreement that directly or indirectly gives the State or the Illinois State Toll Highway Authority a right to use, control, and possess the property, that portion of the property leased and occupied exclusively by the State or the Authority shall remain exempt under this Section. For the property to remain exempt under this subsection (c), the Authority must retain an option to purchase the property at a future date or, within the limitations period for reverters, the property must revert back to the Authority.

If the property has been conveyed as described in this subsection (c), the property is no longer exempt pursuant to this Section as of the date when:

(1) the right of the State or the Authority to use, control, and possess the property has been terminated; or

(2) the Authority no longer has an option to purchase or otherwise acquire the property and there is no provision for a reverter of the property to the Authority within the limitations period for reverters.

Pursuant to Sections 15-15 and 15-20 of this Code, the Authority shall notify the chief county assessment officer of any transaction under this subsection (c). The chief county assessment officer shall determine initial and continuing compliance with the requirements of this Section for tax exemption. Failure to notify the chief county assessment officer of a transaction under this subsection (c) or to otherwise comply with the requirements of Sections 15-15 and 15-20 of this Code shall, in the discretion of the chief county assessment officer, constitute cause to terminate the exemption, notwithstanding any other provision of this Code.

(d) For tax years prior to 2019, the fair market rent of each parcel of real property in Will County owned by the State of Illinois for the purpose of developing an airport by the Department of Transportation shall include the assessed value of leasehold tax. The lessee of each parcel of real property in Will County owned by the State of Illinois for the purpose of developing an airport by the Department of Transportation shall not be liable for the taxes thereon. In order for the State to compensate taxing districts for the loss of revenue under this paragraph, the Will County Supervisor of Assessments shall annually certify, in writing, to the Department of Transportation, the following amounts: (1) for tax years prior to 2019, the amount of leasehold taxes extended for the 2002 property tax year for each such exempt parcel; and (2) for tax years 2019 through 2030, the amount of taxes that would have been extended for the current tax year for each such exempt parcel if those parcels had been owned by a person whose property is not exempt. The Department of Transportation shall pay to the Will County Treasurer, from the Tax Recovery Fund, on or before July 1 of each year, the amount certified by the Will County Supervisor of Assessments. The tax compensation shall terminate on December 31, 2030. It is the duty of the Department of Transportation to file with the Office of the Will County Supervisor of Assessments an affidavit stating the termination date for rental of each such parcel due to airport construction. The affidavit shall include the property identification number for each such parcel. In no instance shall tax compensation for property owned by the State be deemed delinquent or bear interest. In no instance shall a lien attach to the property of the State. In no instance shall the State be required to pay compensation under this subsection in excess of the lesser of (i) the Tax Recovery Fund's balance or (ii) $600,000 in any tax year.

(e) Public Act 81-1026 applies to all leases or agreements entered into or renewed on or after September 24, 1979.

(f) Notwithstanding anything to the contrary in this Code, all property owned by the State that is the Illiana Expressway, as defined in the Public Private Agreements for the Illiana Expressway Act, and that is used for transportation purposes and that is leased for those purposes to another entity whose property is not exempt shall remain exempt, and any leasehold interest in the property shall not be subject to taxation under Section 9-195 of this Act.

(g) Notwithstanding anything to the contrary in this Section, all property owned by the State or the Illinois State Toll Highway Authority that is defined as a transportation project under the Public-Private Partnerships for Transportation Act and that is used for transportation purposes and that is leased for those purposes to another entity whose property is not exempt shall remain exempt, and any leasehold interest in the property shall not be subject to taxation under Section 9-195 of this Act.

(h) Notwithstanding anything to the contrary in this Code, all property owned by the State that is the South Suburban Airport, as defined in the Public-Private Agreements for the South Suburban Airport Act, and that is used for airport purposes and that is leased for those purposes to another entity whose property is not exempt shall remain exempt, and any leasehold interest in the property shall not be subject to taxation under Section 9-195 of this Act.

(Source: P.A. 101-532, eff. 8-23-19.)