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.


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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,
3represented in the General Assembly:
 
4    Section 5. The Property Tax Code is amended by changing
5Section 15-185 as follows:
 
6    (35 ILCS 200/15-185)
7    Sec. 15-185. Exemption for leaseback property and
8qualified leased property.
9    (a) Notwithstanding anything in this Code to the contrary,
10all property owned by a municipality with a population of over
11500,000 inhabitants, a unit of local government whose
12jurisdiction includes territory located in whole or in part
13within a municipality with a population of over 500,000
14inhabitants, or a municipality with home rule powers that is
15contiguous to a municipality with a population of over 500,000
16inhabitants, shall remain exempt from taxation and any
17leasehold interest in that property shall not be subject to
18taxation under Section 9-195 if the property is directly or
19indirectly leased, sold, or otherwise transferred to another
20entity whose property is not exempt and immediately thereafter
21is the subject of a leaseback or other agreement that directly
22or indirectly gives the municipality or unit of local
23government (i) a right to use, control, and possess the

 

 

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1property or (ii) a right to require the other entity, or the
2other entity's designee or assignee, to use the property in the
3performance of services for the municipality or unit of local
4government. Property shall no longer be exempt under this
5subsection as of the date when the right of the municipality or
6unit of local government to use, control, and possess the
7property or to require the performance of services is
8terminated and the municipality or unit of local government no
9longer has any option to purchase or otherwise reacquire the
10interest in the property which was transferred by the
11municipality or unit of local government.
12    (b) Notwithstanding anything in this Code to the contrary,
13all property owned by a municipality with a population of over
14500,000 inhabitants, a unit of local government whose
15jurisdiction includes territory located in whole or in part
16within a municipality with a population of over 500,000
17inhabitants, or a municipality with home rule powers that is
18contiguous to a municipality with a population of over 500,000
19inhabitants, shall remain exempt from taxation and any
20leasehold interest in that property is not subject to taxation
21under Section 9-195 if the property, including dedicated public
22property, is used by a municipality or other unit of local
23government for the purpose of an airport or parking or for
24waste disposal or processing and is leased for continued use
25for the same purpose to another entity whose property is not
26exempt.

 

 

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1    For the purposes of this subsection (b), "airport" does not
2include any airport property, as defined under Section 10 of
3the O'Hare Modernization Act.
4    Any transaction described under this subsection must be
5undertaken in accordance with all appropriate federal laws and
6regulations.
7    (c) For purposes of this Section, "municipality" means a
8municipality as defined in Section 1-1-2 of the Illinois
9Municipal Code, and "unit of local government" means a unit of
10local government as defined in Article VII, Section 1 of the
11Constitution of the State of Illinois. The provisions of this
12Section supersede and control over any conflicting provisions
13of this Code.
14    (d) Notwithstanding anything in this Code to the contrary,
15all property owned by a private entity that is exempt from real
16estate taxes under Section 15-40 or 15-65 shall remain exempt
17as provided in this subsection (d), and that exemption is not
18affected by (i) any transaction in which the private entity,
19directly or indirectly, on or after the effective date of this
20amendatory Act of the 97th General Assembly, leases, sells, or
21otherwise transfers the property to another entity for which or
22for whom the property is not exempt, with or without a right to
23repurchase that property, and immediately after the lease or
24transfer enters into a leaseback or other agreement that
25directly or indirectly gives the initial entity a right to use,
26control, and possess the property for purposes that would

 

 

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1qualify the property for an exemption pursuant to Section 15-40
2or 15-65 by virtue of its use or (ii) any lease executed on or
3after the effective date of this amendatory Act of the 97th
4General Assembly of new or existing property from another
5entity for purposes that would be exempt under Section 15-40 or
615-65. Property exempted under this subsection (d) shall remain
7exempt from real estate taxes for the term of the lease, or any
8extension thereof, without regard to the nature or character of
9ownership, and the lessee shall be treated for purposes of this
10Article 15 as if it were the owner of the property, as long as
11the property on which the leased improvements are or will be
12located is used for school, religious, or charitable purposes
13pursuant to that lease or any renewal thereof.
14    (e) Property is not eligible for an exemption under
15subsection (d) of this Section unless substantially all of the
16funds received from the conveyance of property subject to the
17leaseback agreement are used for capital improvement projects
18and related capital expenditures and all funds raised are used
19within the State of Illinois.
20    (f) To the extent allowable by law, all construction
21projects using the provisions of subsection (d) above shall be
22subject to the provisions of the Illinois Prevailing Wage Act
23for the initial construction of the improvements and all
24bidders for those projects shall comply with the provisions of
25Section 30-22 of the Illinois Procurement Code.
26    (g) Project labor agreements for the construction projects

 

 

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1referenced in subsection (f) above shall be required.
2(Source: P.A. 96-779, eff. 8-28-09.)
 
3    Section 97. Savings clause. If any provision of this Act or
4its application to any person or circumstance is held invalid
5by any Court of competent jurisdiction or any federal or State
6government agency having jurisdiction over the subject matter
7of this Act, the invalidity of that provision or application
8does not affect any other provisions or applications of this
9Act that can be given effect without the invalid provision or
10application which are severable under Section 1.31 of the
11Statute on Statutes.
 
12    Section 99. Effective date. This Act takes effect upon
13becoming law.