HB4142 97TH GENERAL ASSEMBLY

LRB097 16890 HLH 62078 b

97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB4142

Introduced 1/30/2012, by Rep. Jehan A. Gordon

SYNOPSIS AS INTRODUCED:

35 ILCS 200/15-185

Amends the Property Tax Code. Provides that a Section of the Code concerning exemptions for leaseback property also applies to property that is (i) owned by a private entity and (ii) eligible for a religious or charitable exemption under the Code. Provides that, for purposes of the exemption, the lessee shall be treated as if it were the owner of the property as long as the property is used for school, religious, or charitable purposes. Contains provisions requiring that the funds received from the conveyance of the property must be used for certain purposes. Provides that projects using funds from the sale of certain property that is subject to a leaseback are subject to the provisions of the Illinois Prevailing Wage Act for the initial construction of the improvements and all bidders for those projects shall comply with the Illinois Procurement Code. Effective immediately.

FISCAL NOTE ACT MAY APPLY

HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning revenue.

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

Section 5. The Property Tax Code is amended by changing Section 15-185 as follows:

(35 ILCS 200/15-185)

Sec. 15-185. Exemption for leaseback property and qualified leased property.

(a) Notwithstanding anything in this Code to the contrary, all property owned by a municipality with a population of over 500,000 inhabitants, a unit of local government whose jurisdiction includes territory located in whole or in part within a municipality with a population of over 500,000 inhabitants, or a municipality with home rule powers that is contiguous to a municipality with a population of over 500,000 inhabitants, shall remain exempt from taxation and any leasehold interest in that property shall not be subject to taxation under Section 9-195 if the property is directly or indirectly leased, sold, or otherwise transferred to another entity whose property is not exempt and immediately thereafter is the subject of a leaseback or other agreement that directly or indirectly gives the municipality or unit of local government (i) a right to use, control, and possess the property or (ii) a right to require the other entity, or the other entity's designee or assignee, to use the property in the performance of services for the municipality or unit of local government. Property shall no longer be exempt under this subsection as of the date when the right of the municipality or unit of local government to use, control, and possess the property or to require the performance of services is terminated and the municipality or unit of local government no longer has any option to purchase or otherwise reacquire the interest in the property which was transferred by the municipality or unit of local government.

(b) Notwithstanding anything in this Code to the contrary, all property owned by a municipality with a population of over 500,000 inhabitants, a unit of local government whose jurisdiction includes territory located in whole or in part within a municipality with a population of over 500,000 inhabitants, or a municipality with home rule powers that is contiguous to a municipality with a population of over 500,000 inhabitants, shall remain exempt from taxation and any leasehold interest in that property is not subject to taxation under Section 9-195 if the property, including dedicated public property, is used by a municipality or other unit of local government for the purpose of an airport or parking or for waste disposal or processing and is leased for continued use for the same purpose to another entity whose property is not exempt.

For the purposes of this subsection (b), "airport" does not include any airport property, as defined under Section 10 of the O'Hare Modernization Act.

Any transaction described under this subsection must be undertaken in accordance with all appropriate federal laws and regulations.

(c) For purposes of this Section, "municipality" means a municipality as defined in Section 1-1-2 of the Illinois Municipal Code, and "unit of local government" means a unit of local government as defined in Article VII, Section 1 of the Constitution of the State of Illinois. The provisions of this Section supersede and control over any conflicting provisions of this Code.

(d) Notwithstanding anything in this Code to the contrary, all property owned by a private entity that is exempt from real estate taxes under Section 15-40 or 15-65 shall remain exempt as provided in this subsection (d), and that exemption is not affected by (i) any transaction in which the private entity, directly or indirectly, on or after the effective date of this amendatory Act of the 97th General Assembly, leases, sells, or otherwise transfers the property to another entity for which or for whom the property is not exempt, with or without a right to repurchase that property, and immediately after the lease or transfer enters into a leaseback or other agreement that directly or indirectly gives the initial entity a right to use, control, and possess the property for purposes that would qualify the property for an exemption pursuant to Section 15-40 or 15-65 by virtue of its use or (ii) any lease executed on or after the effective date of this amendatory Act of the 97th General Assembly of new or existing property from another entity for purposes that would be exempt under Section 15-40 or 15-65. Property exempted under this subsection (d) shall remain exempt from real estate taxes for the term of the lease, or any extension thereof, without regard to the nature or character of ownership, and the lessee shall be treated for purposes of this Article 15 as if it were the owner of the property, as long as the property on which the leased improvements are or will be located is used for school, religious, or charitable purposes pursuant to that lease or any renewal thereof.

(e) Property is not eligible for an exemption under subsection (d) of this Section unless substantially all of the funds received from the conveyance of property subject to the leaseback agreement are used for capital improvement projects and related capital expenditures and all funds raised are used within the State of Illinois.

(f) To the extent allowable by law, all construction projects using the provisions of subsection (d) above shall be subject to the provisions of the Illinois Prevailing Wage Act for the initial construction of the improvements and all bidders for those projects shall comply with the provisions of Section 30-22 of the Illinois Procurement Code.

(g) Project labor agreements for the construction projects referenced in subsection (f) above shall be required.

(Source: P.A. 96-779, eff. 8-28-09.)

Section 97. Savings clause. If any provision of this Act or its application to any person or circumstance is held invalid by any Court of competent jurisdiction or any federal or State government agency having jurisdiction over the subject matter of this Act, the invalidity of that provision or application does not affect any other provisions or applications of this Act that can be given effect without the invalid provision or application which are severable under Section 1.31 of the Statute on Statutes.

Section 99. Effective date. This Act takes effect upon becoming law.