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91_HB1261enr
HB1261 Enrolled LRB9102284PTpk
1 AN ACT concerning property valuation.
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 adding
5 Division 11 to Article 10 as follows:
6 (35 ILCS 200/Art. 10, Div. 11 heading new)
7 DIVISION 11. LOW-INCOME HOUSING PROJECTS
8 (35 ILCS 200/10-235 new)
9 Sec. 10-235. Section 515 low-income housing project
10 valuation policy; intent. It is the policy of this State
11 that, except in counties with a population of more than
12 200,000 that classify property for the purposes of taxation,
13 low-income housing projects under Section 515 of the federal
14 Housing Act shall be valued at 33 and one-third percent of
15 the fair market value of their economic productivity to the
16 owners of the projects to help insure that their valuation
17 for property taxation does not result in taxes so high that
18 rent levels must be raised to cover this project expense,
19 which can cause excess vacancies, project loan defaults, and
20 eventual loss of rental housing facilities for those most in
21 need of them, low-income families and the elderly. It is the
22 intent of this State that the valuation required by this
23 Division is the closest representation of cash value required
24 by law and is the method established as proper and fair.
25 (35 ILCS 200/10-240 new)
26 Sec. 10-240. Definition of Section 515 low-income housing
27 projects. "Section 515 low-income housing projects" mean
28 rental apartment facilities (i) developed and managed under a
29 United States Department of Agriculture Rural Rental Housing
HB1261 Enrolled -2- LRB9102284PTpk
1 Program designed to provide affordable housing to low to
2 moderate income families and seniors in rural communities
3 with populations under 20,000, (ii) that receive a subsidy in
4 the form of a 1% loan interest rate and a 50-year
5 amortization of the mortgage, (iii) that would not have been
6 built without a Section 515 interest credit subsidy, and (iv)
7 where the owners of the projects are limited to an annual
8 profit of an 8% return on a 5% equity investment, which may
9 result in a modest cash flow to owners of the projects unless
10 actual expenses, including property taxes, exceed budget
11 projections, in which case no profit may be realized.
12 (35 ILCS 200/10-245 new)
13 Sec. 10-245. Method of valuation of Section 515
14 low-income housing projects. Notwithstanding Section 1-55
15 and except in counties with a population of more than 200,000
16 that classify property for the purposes of taxation, to
17 determine 33 and one-third percent of the fair cash value of
18 any Section 515 low-income housing project, in assessing the
19 project, local assessment officers must consider the actual
20 or probable net operating income attributable to the project,
21 capitalized at normal market values. The interest rate to be
22 used in developing the normal market value capitalization
23 rate shall be one that reflects the prevailing cost of cash
24 for other types of commercial real estate in the geographic
25 market in which the Section 515 project is located.
26 (35 ILCS 200/10-250 new)
27 Sec. 10-250. Certification procedure. After (i) an
28 application for a Section 515 low-income housing project
29 certificate is filed with the State Director of the United
30 States Department of Agriculture Rural Development Office in
31 a manner and form prescribed in regulations issued by the
32 office and (ii) the certificate is issued certifying that the
HB1261 Enrolled -3- LRB9102284PTpk
1 housing is a Section 515 low-income housing project as
2 defined in Section 2 of this Act, the certificate must be
3 presented to the appropriate local assessment officer to
4 receive the property assessment valuation under this
5 Division. The local assessment officer must assess the
6 property according to this Act. The effective date of a
7 certificate is the date of application for the certificate or
8 the date of the construction of the project, whichever is
9 later.
10 (35 ILCS 200/10-255 new)
11 Sec. 10-255. Rules. The Department of Revenue may adopt
12 rules to implement and administer this Division.
13 Section 90. The State Mandates Act is amended by adding
14 Section 8.23 as follows:
15 (30 ILCS 805/8.23 new)
16 Sec. 8.23. Exempt mandate. Notwithstanding Sections 6
17 and 8 of this Act, no reimbursement by the State is required
18 for the implementation of any mandate created by this
19 amendatory Act of the 91st General Assembly.
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