97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB3210

 

Introduced 2/1/2012, by Sen. James F. Clayborne, Jr.

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 200/15-185

    Amends the Property Tax Code. In a Section concerning exemptions for leaseback property, provides that the Section applies to all property that is exempt under Article 15 of the Property Tax Code. Provides that, for exemption purposes, the property shall be treated as though the lessee were the owner of the property as long as the property on which the leased improvements is located is used for school, religious, or charitable purposes pursuant to that lease or any renewal of that lease. 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,
15(i) all property owned by an entity using the property in such
16a manner that it is not subject to real estate taxes pursuant
17to this Article 15 is exempt from real estate taxes, and such
18exemption is not affected by any transaction in which the
19entity, directly or indirectly, on or after the effective date
20of this amendatory Act of the 97th General Assembly, leases,
21sells, or otherwise transfers the property to another entity
22for which or for whom property is not exempt, with or without a
23right to repurchase that property, and immediately after the
24lease or transfer enters into a leaseback or other agreement
25that directly or indirectly gives the initial entity a right to
26use, control, and possess the property for purposes that would

 

 

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1qualify the property for a non-homestead real estate tax
2exemption pursuant to this Article 15 by virtue of its use or
3(ii) where, on or after the effective date of this amendatory
4Act of the 97th General Assembly, an entity leases new or
5existing property from another for purposes that would be
6exempt under this Article 15, that property shall be exempt
7from real estate taxes for the term of the lease, or any
8extension thereof, without regard to the nature or character of
9ownership and shall be treated for purposes of this Article 15
10as if the lessee were the owner of the property, as long as the
11property 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) Substantially all of the funds received from the
15conveyance of property subject to a leaseback agreement as
16described in subsection (d) of this Section must be used for
17capital improvement projects and related capital expenditures
18and all funds raised shall be used within the State of
19Illinois.
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.