Illinois General Assembly - Full Text of SB2397
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Full Text of SB2397  102nd General Assembly

SB2397 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB2397

 

Introduced 2/26/2021, by Sen. Cristina Castro

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 200/Art. 9 Div. 6 heading new
35 ILCS 200/9-280 new
35 ILCS 200/9-281 new

    Amends the Property Tax Code. Provides that, in counties with 3,000,000 or more inhabitants, taxpayers of income producing property shall submit income and expense data annually to the chief county assessment officer on or before July 1 of each year. Provides that, in counties of fewer than 3,000,000 inhabitants, the county board may provide by ordinance or resolution that taxpayers of income-producing property shall submit income and expense data annually to the chief county assessment officer on or before March 31 of each year. Contains certain exceptions. Effective immediately.


LRB102 09947 HLH 15265 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB2397LRB102 09947 HLH 15265 b

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 adding
5Division 6 to Article 9 as follows:
 
6    (35 ILCS 200/Art. 9 Div. 6 heading new)
7
Division 6. Income-producing property

 
8    (35 ILCS 200/9-280 new)
9    Sec. 9-280. Definitions. As used in this Division 6:
10    "Expense" or "expenses" means expenditures necessitated by
11the operation of the real property itself that reduce the
12income to the property owner or lessee and includes management
13fees, reserves for replacement, maintenance, property taxes,
14and insurance, but does not include debt service, reserves for
15building additions, or income tax.
16    "Income" means real property revenue that is directed to
17or received by the property owner in the form of rent from
18unrelated persons or entities and ancillary revenue to the
19owner from unrelated persons or entities that is generated
20exclusively from the operation of the real property itself,
21such as revenue from parking or other amenities provided to or
22for the benefit of the property's tenants. "Income" does not

 

 

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1include revenue generated from personal property, including
2but not limited to, revenue from a business enterprise that is
3operated on the real property or improvements made to the
4property by a tenant.
5    "Income and expense data" means data that identifies
6income and expenses as defined in this Section. This data may
7be found in annual reports, income and expense statements, and
8Internal Revenue Service Schedule E or Schedule 8825 tax forms
9for income producing property for the immediately preceding
10year. It also includes data from rent rolls for the current and
11immediately preceding year. Data may be based on a calendar or
12fiscal year.
13    "Income producing property" means property that is not
14owner-occupied, as defined in this Section, and is owned for
15the purpose of generating income from the property itself,
16whether or not such property actually generates income in a
17particular year. "Income producing property" does not include:
18        (1) property with a market value of $500,000 or less
19    in the most recent assessment year for which an assessment
20    is certified exclusive of any adjustments to assessed
21    value by a board of review, the Property Tax Appeal Board,
22    or the circuit court;
23        (2) residential property containing 6 or fewer
24    dwelling units;
25        (3) property assessed under Article 10 of this Code
26    and stadiums that are not qualified property under Section

 

 

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1    10-215 that have a seating capacity of 20,000 or more and
2    host major professional sporting events;
3        (4) property that is assessed by the Department under
4    Article 11 of this Code;
5        (5) property that is owned or leased by a hospital
6    licensed under the Hospital Licensing Act or operated
7    under the University of Illinois Hospital Act, including
8    any hospital affiliate that directly or indirectly
9    controls, is controlled by, or is under common control
10    with a hospital; or
11        (6) property that is owned or leased by a facility
12    licensed under the Nursing Home Care Act that is an
13    intermediate or skilled facility.
14    "Net rentable area" means the square footage of an
15improvement that may be leased or rented to tenants and
16excludes common areas such as elevators, stairways, and
17atriums.
18    "Owner-occupied" means real property that is used or
19occupied exclusively by a record owner or related entity, or
20real property where 80% or more of the net rentable area of the
21property is occupied or held for future use by the record owner
22of the property or a related person or entity as described in
23subsection (b) of Section 267 of the Internal Revenue Code. If
24more than 20% of the net rentable area of a property is subject
25to an existing lease or is subject to short term rental of the
26property by an unrelated entity, the property is not

 

 

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1considered owner-occupied for purposes of this Division.
2    "Property" has the meaning set forth in Section 1-130 of
3this Code and includes contiguous parcels or property index
4numbers that comprise one functional property location.
5    "Taxpayer" means the record owner of income producing
6property. The owner or lessee, whoever is contractually
7obligated to pay property taxes directly to the County
8Treasurer, shall be required under this Article to submit
9income and expense data that is within its possession and
10control to the chief county assessment officer for the
11relevant portion of the property over which it exercises
12control.
13    
 
14    (35 ILCS 200/9-281 new)
15    Sec. 9-281. Income producing properties.
16    (a) In counties with 3,000,000 or more inhabitants,
17taxpayers or lessees who are contractually obligated to pay
18property taxes of income producing property shall submit
19income and expense data annually to the chief county
20assessment officer on or before July 1 of each year, except as
21otherwise provided in this Division. In the first year
22following the effective date of this amendatory Act of the
23102nd General Assembly, income and expense data shall be
24submitted by September 1. If a taxpayer or party who is
25contractually obligated to pay property taxes is required to

 

 

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1submit income and expense data under this Article in
2accordance with Section 9-280, the chief county assessment
3officer shall notify, by certified mail, the record owner of
4income-producing property at least 60 days prior to the date
5for submission of the obligation to submit income and expense
6data. Notice shall include the deadline for submission. If an
7owner of record claims that another party is obligated to pay
8property taxes directly to the county treasurer for all or a
9portion of the property, then the owner shall send to the
10obligated party a copy of the notice received from the chief
11county assessment officer of the obligation to submit income
12and expense data. The taxpayer or obligated party shall submit
13income and expense data to the chief county assessment officer
14in accordance with this Section for the relevant portion of
15the property for which the taxpayer or obligated party is
16required to pay the property taxes and exercises control over
17such property, identified by parcel and area.
18    The chief county assessment officer may extend the time
19within which taxpayers are required to submit income and
20expense data under this Section.
21    Where the taxpayer's books and records reflecting the
22operation of the property are maintained on a calendar year
23basis, the statement of income and expense data shall be for
24the last full calendar year preceding the date that the
25statement is submitted. Where the taxpayer's books and records
26reflecting the operation of the property are maintained on a

 

 

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1fiscal year basis for federal income tax purposes, the
2statement of income and expense data shall be the last full
3fiscal year preceding the date when the statement is
4submitted.
5    The taxpayer or obligated party shall certify under oath
6in a signed attestation that the statements set forth in
7income and expense data submitted under this Article are true,
8accurate, and complete to the best of his or her knowledge
9except as to matters stated to be upon information and belief
10and, as to such matters, the taxpayer or obligated party shall
11certify that he or she believes the same to be true, accurate,
12and complete.
13    (b) In counties of fewer than 3,000,000 inhabitants, the
14county board may provide by ordinance or resolution that
15taxpayers of income-producing property shall submit income and
16expense data annually to the chief county assessment officer
17on or before March 31 of each year. If a taxpayer or party who
18is contractually obligated to pay taxes is required to submit
19income and expense data under this Article, the chief county
20assessment officer shall notify the taxpayer of that fact by
21certified mail within 60 days of the due date for income and
22expense data. Notice shall include the deadline for such
23submission. If an owner of record claims that another party is
24obligated to pay property taxes directly to the county
25treasurer, then the owner shall send to the obligated party a
26copy of any notice received from the chief county assessment

 

 

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1officer of the obligation to submit income and expense data.
2The taxpayer or obligated party shall submit income and
3expense data to the chief county assessment officer in
4accordance with this Division for the relevant portion of the
5property for which the taxpayer or obligated party is required
6to pay the property taxes and exercises control over such
7property, identified by parcel and area.
8    The chief county assessment officer may extend the time
9within which taxpayers are required to submit income and
10expense data under this Section.
11    Where the taxpayer's books and records reflecting the
12operation of the property are maintained on a calendar year
13basis, the statement of income and expense data shall be for
14the last full calendar year preceding the date that the
15statement is submitted. Where the taxpayer's books and records
16reflecting the operation of the property are maintained on a
17fiscal year basis for federal income tax purposes, the
18statement of income and expense data shall be the last full
19fiscal year preceding the date when the statement is
20submitted.
21    The taxpayer or obligated party shall certify under oath
22in a signed attestation that the statements set forth in
23income and expense data submitted under this Article are true,
24accurate, and complete, to the best of his or her knowledge
25except as to matters stated to be upon information and belief
26and, as to such matters, the taxpayer or obligated party shall

 

 

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1certify that he or she believes the same to be true, accurate,
2and complete.
3    Subsections (c) through (i) of this Section shall also
4apply in counties that have adopted by ordinance or resolution
5the requirements of this Section.
6    (c) The chief county assessment officer of a county that
7is subject to this Section shall establish rules that specify
8the manner of submission of income and expense data and
9provide for the administration of the provisions of this
10Section in the county. Income and expense data shall be
11submitted in electronic form unless waived by the chief county
12assessment officer.
13    The chief county assessment officer shall maintain a copy
14of its rules for public review and shall place a copy of those
15rules and any amended rules on his or her website.
16    (d) If a taxpayer or obligated party fails to submit
17income and expense data as required under this Section or as
18required after the adoption of a county board ordinance or
19resolution under this Section, within the time prescribed, or
20within an extended period as permitted by the chief county
21assessment officer, the assessor shall send notice by
22certified mail to such taxpayer of the failure to comply. If
23the taxpayer or obligated party fails to submit the required
24data within 60 days after such notice is sent, fails to provide
25documentation of another taxpayer's obligation to submit
26income and expense data, or fails to adequately explain why no

 

 

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1submission is required, the taxpayer or obligated party shall
2pay a penalty to the chief county assessment officer of 0.025%
3of the prior year's market value as indicated by the most
4recent certified assessed value for the property at issue, but
5in no case shall the taxpayer or obligated party be required to
6pay more than its proportional share of a maximum penalty of
7$10,000 per property. A taxpayer or obligated party who fails
8to submit income and expense data in accordance with this
9provision shall only be required to pay a penalty on the
10portion of the property's value for which the taxpayer or
11obligated party is required to pay taxes.
12    A taxpayer or obligated party may contest the penalty and
13requirement to report income and expense data in a particular
14year and submit evidence to the chief county assessment
15officer in support of a contention that the taxpayer or
16obligated party was not required to submit income and expense
17data, that another party was required to submit income and
18expense data for such property, or that the submission of
19income and expense data complies with this requirement based
20on available documentation. The chief county assessment
21officer shall review the taxpayer or obligated party's
22submission and other submissions for the property for the tax
23year at issue, and determine whether the taxpayer or obligated
24party provided sufficient evidence that he or she was not
25required to report income and expense data or that the
26submission complies based on available documentation.

 

 

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1    If a taxpayer or obligated party is dissatisfied with a
2decision of the chief county assessment officer of the
3requirement to submit income and expense data, the taxpayer or
4obligated party may request review of that decision. Upon such
5request, at least 30 days' notice shall be provided to the
6taxpayer or obligated party of a hearing to be conducted by a
7hearing officer designated by the chief county assessment
8officer. If dissatisfied with a hearing officer's decision,
9the taxpayer or obligated party may appeal such decision to
10the circuit court of the county where the property is located
11as a final administrative decision under Administrative Review
12Law. If a party is unsuccessful at hearing, the penalty
13imposed under this Section shall bear interest at 0.05% per
14month thereafter, beginning 21 days after the date of
15decision, or 21 days after the date of the issuance of a final
16decision on administrative review.
17    The State's Attorney of the county in which the property
18is located shall have power to act on behalf of the people and
19the chief county assessment officer to enforce the provisions
20of this Section, including the power to compel by subpoena the
21production of taxpayer income and expense data that is
22required to be produced under this Section.
23    The chief county assessment officer may audit the income
24and expense data submitted by taxpayers to verify its accuracy
25by requesting documentation in support of submissions.
26    (e) Penalty and interest collected by the chief county

 

 

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1assessment officer under this Section for a taxpayer's or
2obligated party's failure to timely submit income and expense
3data shall be collected in the same manner as other fees
4collected by the chief county assessment officer. Such revenue
5shall be deposited with the county treasurer in the county
6general fund of the county in which the property is located,
7with 75% of the revenue to be used for the benefit of the
8office of the chief county assessment officer and 25% to be
9used for the benefit of the county.
10    (f) Any personal data such as federal identification or
11social security numbers and income tax forms or data that are
12included in income and expense data produced under this
13Section shall be deemed private information and exempt from
14disclosure under the Freedom of Information Act. Income and
15expense data submitted pursuant to this Article shall not be
16subject to disclosure by the chief county assessment officer
17in accordance with the Freedom of Information Act and other
18applicable law, or pursuant to court order in a tax or other
19matter. Nothing in this Section prohibits a chief county
20assessment officer from disclosing compiled and anonymized
21income and expense data as provided in this Section.
22    (g) The income and expense data submitted pursuant to this
23Section shall be processed and used as follows:
24        (1)Income and expense data in its original form in
25    which the taxpayer, obligated party and the property in
26    question is identified shall not be used for purposes of

 

 

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1    assessing individual properties. The chief county
2    assessment officer shall compile and anonymize income and
3    expense data that is collected under this Division and
4    shall cause such information to be published annually.
5    Compiled and anonymized data may be used in the mass
6    appraisal or assessment of property.
7        The chief county assessment officer shall cause the
8    income and expense data to be compiled and anonymized in
9    accordance with statistical disclosure controls accepted
10    in the field that account for control of microdata and
11    quantitative and frequency tables in a manner that
12    considers individual property characteristics but prevents
13    the disclosure of individual property identity. Such
14    compilation and anonymization shall be performed by staff
15    who are not directly involved in the valuation of the type
16    of property for which the data has been submitted. The
17    chief county assessment officer shall publish the
18    procedures followed in compiling and anonymizing data.
19        (2)If a particular property is so unique in
20    characteristics, features, or location that the property
21    or its owner could be identified if the property's income
22    and expense data are included in compiled and anonymized
23    data that is made available to the public, township
24    assessors, or boards of review under this Section, the
25    income and expense data for that particular property shall
26    not be included in compiled and anonymized data.

 

 

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1        (3)Notwithstanding any other provision of this
2    Section, the taxpayer or obligated party of any property
3    for which income and expense data has been submitted shall
4    have the right at all times to: (i) obtain a copy of such
5    income and expense data as submitted, in its original
6    form, from the chief county assessment officer; (ii) file
7    such income and expense data in any public forum; or (iii)
8    authorize such filing or publication of the income and
9    expense data in any other manner that the owner may
10    choose.
11        The chief county assessment officer shall establish
12    and maintain reasonable security measures consistent with
13    state and local law and the Federal Information Security
14    Management Act to protect income and expense data.
15    (h) All information received by the chief county
16assessment officer from income and expense data filed under
17this Article shall be used only for official purposes. Any
18person who divulges income and expense data submitted under
19this Article other than as permitted in this Article, in
20accordance with a proper judicial order, or as otherwise
21provided by law, shall be guilty of a Class B misdemeanor and
22subject to a fine not to exceed $7,500.
23    (i) The chief county assessment officer shall prepare a
24summary report within 60 days of the completion of the first
25assessment cycle in which income expense data is compiled
26under this Section and used in the assessment process, and

 

 

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1report findings to the Revenue committees of the Illinois
2Senate and House of Representatives within 45 days thereafter.
3The report shall document income and expense data collection,
4changes in assessed or equalized assessed values that followed
5the collection and use of compiled and anonymized income and
6expense data for properties subject to reassessment, shall
7compare reassessment year assessed or equalized assessed
8values with values or equalized assessed values from the
9immediately preceding reassessment cycle. The report shall
10document any shifts in the percentage of commercial or
11residential properties that comprise a portion of the total
12assessed value or equalized assessed value of property within
13the county. This report shall be produced annually following
14the effective date of this amendatory Act of the 102nd General
15Assembly until all property located within a county subject to
16this Section has been reassessed.
 
17    Section 99. Effective date. This Act takes effect upon
18becoming law.