SB0665sam003 102ND GENERAL ASSEMBLY

Sen. Bill Cunningham

Filed: 4/9/2021

10200SB0665sam003 LRB102 15453 AWJ 24952 a

AMENDMENT TO SENATE BILL 665

AMENDMENT NO. ______. Amend Senate Bill 665 by replacing everything after the enacting clause with the following:

"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 The Department may revoke the exemption if it finds that the policy for waiver or reduction is no longer current.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 or sale of property for cultivation and sale of fresh fruits and vegetables.

(a) The General Assembly finds:

(1) There exists in certain older, urban municipalities an excess of vacant property that is not needed for public use.

(2) Vacant properties present numerous problems for these municipalities, such as: presenting the opportunity for criminal activity; deterring neighboring property owners from improving their properties and prospective purchasers and renters from locating into these areas; and serving as a location to dispose of unwanted items.

(3) These municipalities are often centers of high and increasing populations and population densities comprised, in part, of lower-income families.

(4) Due, in part, to increasing population densities, the deterioration of infrastructure, and fiscal constraints, these municipalities have been challenged to offer residents opportunities to enhance the quality of their lives.

(5) Due to the scarcity of full service supermarkets and farmer's markets within these municipalities, municipal residents often suffer from a shortage of fresh fruits and vegetables.

(6) The shortages of sources of fresh fruits and vegetables have contributed to alarming increases in childhood obesity and other adverse health consequences for municipal residents.

(7) It would be beneficial to enlist nonprofit corporations or associations to develop these properties for public purposes that could enhance the nutritional needs of local residents.

(8) Authorization for municipalities to lease and sell vacant land to nonprofit entities to cultivate these lands can provide a source of fresh, locally-grown fruits and vegetables for local residents.

(9) The nonprofit cultivation of previously vacant land by nonprofit entities is a public purpose for which the long term lease and sale of these properties, and exemption from property taxation, is warranted, even in those instances when produce is sold to further the mission of these nonprofit corporations or associations.

(b) A leasehold for a term not in excess of 25 years may be made with a nonprofit corporation or association, 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 vacant lots for gardening fruits and vegetables.

(2) The use of vacant lots 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, provided, that 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) When the city council of a municipality determines that all or any part of a municipal-owned tract of land, with or without improvements, is not then needed for municipal purposes, the city council may, by resolution or ordinance, authorize a private sale and conveyance of the same, 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 of vacant lots for gardening fruits and vegetables.

(2) The use of vacant lots to sell fresh fruits and vegetables. Any conveyance 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, provided, that 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.

Such conveyance shall contain a limitation that the lands or buildings shall be used only for the purposes of such organization or association, and to render such services or to provide such facilities as may be agreed upon and, if said lands or buildings are not used in accordance with the limitation, 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) If the nonprofit organization or association uses the property leased or purchased under this Section for the cultivation, sale, or cultivation and sale of fresh fruits and vegetables on a tract of land, the nonprofit organization or association may not be controlled, directly or indirectly, by any agricultural, commercial, or other business. The nonprofit organization or association is authorized to sell fresh fruits and vegetables either on the land that was leased or conveyed, off that 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.

(e) Property leased or conveyed under this Section is exempt from property taxation under the Property Tax Code if the property is actually used for the cultivation, sale, or cultivation and sale of fresh fruits and vegetables and owned by a nonprofit organization or association that includes among its principal purposes the cultivation, sale, or cultivation and sale of fresh fruits and vegetables. Before property may be leased or conveyed under this Section, the nonprofit organization or association shall provide to the municipality proof of exemption issued under Section 15-65 of the Property Tax Code.".