SB0665eng 102ND GENERAL ASSEMBLY

SB0665 Engrossed LRB102 15453 AWJ 20816 b

AN ACT concerning local government.

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 15-65 as follows:

(35 ILCS 200/15-65)

Sec. 15-65. Charitable purposes. All property of the following is exempt when actually and exclusively used for charitable or beneficent purposes, and not leased or otherwise used with a view to profit:

(a) Institutions of public charity.

(b) Beneficent and charitable organizations incorporated in any state of the United States, including organizations whose owner, and no other person, uses the property exclusively for the distribution, sale, or resale of donated goods and related activities and uses all the income from those activities to support the charitable, religious or beneficent activities of the owner, whether or not such activities occur on the property.

(c) Old people's homes, facilities for persons with a developmental disability, and not-for-profit organizations providing services or facilities related to the goals of educational, social and physical development, if, upon making application for the exemption, the applicant provides affirmative evidence that the home or facility or organization is an exempt organization under paragraph (3) of Section 501(c) of the Internal Revenue Code or its successor, and either: (i) the bylaws of the home or facility or not-for-profit organization provide for a waiver or reduction, based on an individual's ability to pay, of any entrance fee, assignment of assets, or fee for services, or (ii) the home or facility is qualified, built or financed under Section 202 of the National Housing Act of 1959, as amended.

An applicant that has been granted an exemption under this subsection on the basis that its bylaws provide for a waiver or reduction, based on an individual's ability to pay, of any entrance fee, assignment of assets, or fee for services may be periodically reviewed by the Department to determine if the waiver or reduction was a past policy or is a current policy. The Department may revoke the exemption if it finds that the policy for waiver or reduction is no longer current.

If a not-for-profit organization leases property that is otherwise exempt under this subsection to an organization that conducts an activity on the leased premises that would entitle the lessee to an exemption from real estate taxes if the lessee were the owner of the property, then the leased property is exempt.

(d) Not-for-profit health maintenance organizations certified by the Director of the Illinois Department of Insurance under the Health Maintenance Organization Act, including any health maintenance organization that provides services to members at prepaid rates approved by the Illinois Department of Insurance if the membership of the organization is sufficiently large or of indefinite classes so that the community is benefited by its operation. No exemption shall apply to any hospital or health maintenance organization which has been adjudicated by a court of competent jurisdiction to have denied admission to any person because of race, color, creed, sex or national origin.

(e) All free public libraries.

(f) Historical societies.

(g) Cultivation and sale of fresh fruits and vegetables. A vacant lot that is leased from a municipality or owned by a nonprofit corporation or association for the cultivation, sale, or cultivation and sale of fresh fruits and vegetables under Section 11-11-4 of the Illinois Municipal Code is exempt when actually and exclusively used for such purposes. To qualify for the exemption, the nonprofit corporation or association must verify that it is not controlled, directly or indirectly, by any agricultural, commercial, or other business. The nonprofit corporation or association must also verify that, if the fresh fruits or vegetables are sold, any profits are used to further the mission of the exempt organization.

Property otherwise qualifying for an exemption under this Section shall not lose its exemption because the legal title is held (i) by an entity that is organized solely to hold that title and that qualifies under paragraph (2) of Section 501(c) of the Internal Revenue Code or its successor, whether or not that entity receives rent from the charitable organization for the repair and maintenance of the property, (ii) by an entity that is organized as a partnership or limited liability company, in which the charitable organization, or an affiliate or subsidiary of the charitable organization, is a general partner of the partnership or managing member of the limited liability company, for the purposes of owning and operating a residential rental property that has received an allocation of Low Income Housing Tax Credits for 100% of the dwelling units under Section 42 of the Internal Revenue Code of 1986, as amended, or (iii) for any assessment year including and subsequent to January 1, 1996 for which an application for exemption has been filed and a decision on which has not become final and nonappealable, by a limited liability company organized under the Limited Liability Company Act provided that (A) the limited liability company's sole member or members, as that term is used in Section 1-5 of the Limited Liability Company Act, are the institutions of public charity that actually and exclusively use the property for charitable and beneficent purposes; (B) the limited liability company is a disregarded entity for federal and Illinois income tax purposes and, as a result, the limited liability company is deemed exempt from income tax liability by virtue of the Internal Revenue Code Section 501(c)(3) status of its sole member or members; and (C) the limited liability company does not lease the property or otherwise use it with a view to profit.

(Source: P.A. 96-763, eff. 8-25-09.)

Section 10. The Illinois Municipal Code is amended by adding Section 11-11-4 as follows:

(65 ILCS 5/11-11-4 new)

Sec. 11-11-4. Lease, conveyance, or sale of property for cultivation and sale of fresh fruits and vegetables.

(a) As used in this Section, "vacant lot" means all or any part of municipal-owned property, with or without improvements, not then needed for municipal purposes, as determined by the city council of a municipality.

(b) A city council may, by resolution or ordinance, authorize a leasehold to be made with a nonprofit corporation or association for a term not in excess of 25 years, and extended in increments of no more than 25 years, by ordinance or resolution thereafter for one or more of the following purposes:

(1) The cultivation or use of a vacant lot for gardening fruits and vegetables.

(2) The use of a vacant lot to sell fresh fruits and vegetables. Any lease entered into pursuant to this paragraph may permit the nonprofit corporation or association to sell fresh fruits and vegetables on the leased land, off the leased land, or both, if the sales are related and incidental to the nonprofit purposes of the corporation or association and the net proceeds received by the nonprofit corporation or association are used to further the nonprofit purposes of the corporation or association.

(c) A city council may, by resolution or ordinance, authorize a private sale or conveyance of a vacant lot, or any part thereof, for nominal consideration, without compliance with any other law governing disposal of lands by municipalities requiring adequate consideration, to a nonprofit corporation or association for use for one or more of the following purposes:

(1) The cultivation or use of the lot for gardening fruits and vegetables.

(2) The use of the lot to sell fresh fruits and vegetables. Any sale or conveyance entered into pursuant to this paragraph may permit the nonprofit corporation or association to sell fresh fruits and vegetables on the lot, off the lot, or both, provided, that: (i) the sales are related and incidental to the purpose of the nonprofit corporation or association and (ii) the net proceeds received by the nonprofit corporation or association are used to further the purposes of the nonprofit corporation or association.

Any conveyance or sale of property pursuant to this subsection shall contain a limitation that the property shall only be used by the nonprofit corporation or association for one or more of the following purposes: (i) the cultivation of land for gardening fruits and vegetables; or (ii) the sale of fresh fruits and vegetables. If it is determined by the city council of the municipality that the property is being used for any purpose other than the purposes set forth in this subsection, its full right and title shall revert back to the municipality without any entry or reentry made on the property on behalf of the municipality.

Whenever a sale of property is proposed pursuant to this subsection, the municipality shall give at least 10 days' notice of such sale prior to a public hearing where an ordinance or resolution approving the sale is adopted.

Property subject to an unexpired lease under subsection (b) is not eligible to be sold under this subsection, unless the lease would allow such a sale.

(d) A nonprofit organization or association leasing, conveyed, or sold a lot under this Section may not be controlled, directly or indirectly, by any agricultural, commercial, or other business. The nonprofit organization or association must also include among its principal purposes the cultivation, sale, or cultivation and sale of fresh fruits and vegetables.

(e) A nonprofit organization or association leasing, conveyed, or sold a lot under this Section is authorized to sell fresh fruits and vegetables either on the land, off the land, or both, and the sales must be related and incidental to the nonprofit purposes of the organization or association and the net proceeds received by the nonprofit organization or association must be used to further the nonprofit purposes of the organization or association.

(f) Property leased, conveyed, or sold under this Section may be exempt from property taxation if the requirements of subsection (g) of Section 15-65 of the Property Tax Code are sufficiently met and the property is actually and exclusively used for the cultivation, sale, or cultivation and sale of fresh fruits and vegetables.