96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB5663

 

Introduced 2/9/2010, by Rep. Arthur L. Turner

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 200/15-65

    Amends the Property Tax Code. Provides that property that qualifies for a charitable exemption shall not lose its exemption because the property is owned by a partnership or limited liability company that is organized for the purposes of owning and operating residential rental property if (i) the charitable organization is a general partner of the partnership or a managing member of the limited liability company and (ii) the partnership or limited liability company has received an allocation of Low Income Housing Tax Credits for at least 50% of the dwelling units (instead of 100%). Effective immediately.


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

 

 

A BILL FOR

 

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

 

 

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

 

 

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

 

 

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1 liability company, for the purposes of owning and operating a
2 residential rental property that has received an allocation of
3 Low Income Housing Tax Credits for at least 50% 100% of the
4 dwelling units under Section 42 of the Internal Revenue Code of
5 1986, as amended, or (iii) for any assessment year including
6 and subsequent to January 1, 1996 for which an application for
7 exemption has been filed and a decision on which has not become
8 final and nonappealable, by a limited liability company
9 organized under the Limited Liability Company Act provided that
10 (A) the limited liability company's sole member or members, as
11 that term is used in Section 1-5 of the Limited Liability
12 Company Act, are the institutions of public charity that
13 actually and exclusively use the property for charitable and
14 beneficent purposes; (B) the limited liability company is a
15 disregarded entity for federal and Illinois income tax purposes
16 and, as a result, the limited liability company is deemed
17 exempt from income tax liability by virtue of the Internal
18 Revenue Code Section 501(c)(3) status of its sole member or
19 members; and (C) the limited liability company does not lease
20 the property or otherwise use it with a view to profit.
21 (Source: P.A. 96-763, eff. 8-25-09.)
 
22     Section 99. Effective date. This Act takes effect upon
23 becoming law.