Illinois General Assembly - Full Text of SB0665
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Full Text of SB0665  102nd General Assembly


Sen. Bill Cunningham

Filed: 4/9/2021





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2    AMENDMENT NO. ______. Amend Senate Bill 665 by replacing
3everything after the enacting clause with the following:
4    "Section 5. The Property Tax Code is amended by changing
5Section 15-65 as follows:
6    (35 ILCS 200/15-65)
7    Sec. 15-65. Charitable purposes. All property of the
8following is exempt when actually and exclusively used for
9charitable or beneficent purposes, and not leased or otherwise
10used with a view to profit:
11        (a) Institutions of public charity.
12        (b) Beneficent and charitable organizations
13    incorporated in any state of the United States, including
14    organizations whose owner, and no other person, uses the
15    property exclusively for the distribution, sale, or resale
16    of donated goods and related activities and uses all the



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1    income from those activities to support the charitable,
2    religious or beneficent activities of the owner, whether
3    or not such activities occur on the property.
4        (c) Old people's homes, facilities for persons with a
5    developmental disability, and not-for-profit
6    organizations providing services or facilities related to
7    the goals of educational, social and physical development,
8    if, upon making application for the exemption, the
9    applicant provides affirmative evidence that the home or
10    facility or organization is an exempt organization under
11    paragraph (3) of Section 501(c) of the Internal Revenue
12    Code or its successor, and either: (i) the bylaws of the
13    home or facility or not-for-profit organization provide
14    for a waiver or reduction, based on an individual's
15    ability to pay, of any entrance fee, assignment of assets,
16    or fee for services, or (ii) the home or facility is
17    qualified, built or financed under Section 202 of the
18    National Housing Act of 1959, as amended.
19        An applicant that has been granted an exemption under
20    this subsection on the basis that its bylaws provide for a
21    waiver or reduction, based on an individual's ability to
22    pay, of any entrance fee, assignment of assets, or fee for
23    services may be periodically reviewed by the Department to
24    determine if the waiver or reduction was a past policy or
25    is a current policy. The Department may revoke the
26    exemption if it finds that the policy for waiver or



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1    reduction is no longer current.
2        If a not-for-profit organization leases property that
3    is otherwise exempt under this subsection to an
4    organization that conducts an activity on the leased
5    premises that would entitle the lessee to an exemption
6    from real estate taxes if the lessee were the owner of the
7    property, then the leased property is exempt.
8        (d) Not-for-profit health maintenance organizations
9    certified by the Director of the Illinois Department of
10    Insurance under the Health Maintenance Organization Act,
11    including any health maintenance organization that
12    provides services to members at prepaid rates approved by
13    the Illinois Department of Insurance if the membership of
14    the organization is sufficiently large or of indefinite
15    classes so that the community is benefited by its
16    operation. No exemption shall apply to any hospital or
17    health maintenance organization which has been adjudicated
18    by a court of competent jurisdiction to have denied
19    admission to any person because of race, color, creed, sex
20    or national origin.
21        (e) All free public libraries.
22        (f) Historical societies.
23        (g) Cultivation and sale of fresh fruits and
24    vegetables. A vacant lot that is leased from a
25    municipality or owned by a nonprofit corporation or
26    association for the cultivation, sale, or cultivation and



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1    sale of fresh fruits and vegetables under Section 11-11-4
2    of the Illinois Municipal Code is exempt when actually and
3    exclusively used for such purposes. To qualify for the
4    exemption, the nonprofit corporation or association must
5    verify that it is not controlled, directly or indirectly,
6    by any agricultural, commercial, or other business. The
7    nonprofit corporation or association must also verify
8    that, if the fresh fruits or vegetables are sold, any
9    profits are used to further the mission of the exempt
10    organization.
11    Property otherwise qualifying for an exemption under this
12Section shall not lose its exemption because the legal title
13is held (i) by an entity that is organized solely to hold that
14title and that qualifies under paragraph (2) of Section 501(c)
15of the Internal Revenue Code or its successor, whether or not
16that entity receives rent from the charitable organization for
17the repair and maintenance of the property, (ii) by an entity
18that is organized as a partnership or limited liability
19company, in which the charitable organization, or an affiliate
20or subsidiary of the charitable organization, is a general
21partner of the partnership or managing member of the limited
22liability company, for the purposes of owning and operating a
23residential rental property that has received an allocation of
24Low Income Housing Tax Credits for 100% of the dwelling units
25under Section 42 of the Internal Revenue Code of 1986, as
26amended, or (iii) for any assessment year including and



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1subsequent to January 1, 1996 for which an application for
2exemption has been filed and a decision on which has not become
3final and nonappealable, by a limited liability company
4organized under the Limited Liability Company Act provided
5that (A) the limited liability company's sole member or
6members, as that term is used in Section 1-5 of the Limited
7Liability Company Act, are the institutions of public charity
8that actually and exclusively use the property for charitable
9and beneficent purposes; (B) the limited liability company is
10a disregarded entity for federal and Illinois income tax
11purposes and, as a result, the limited liability company is
12deemed exempt from income tax liability by virtue of the
13Internal Revenue Code Section 501(c)(3) status of its sole
14member or members; and (C) the limited liability company does
15not lease the property or otherwise use it with a view to
17(Source: P.A. 96-763, eff. 8-25-09.)
18    Section 10. The Illinois Municipal Code is amended by
19adding Section 11-11-4 as follows:
20    (65 ILCS 5/11-11-4 new)
21    Sec. 11-11-4. Lease or sale of property for cultivation
22and sale of fresh fruits and vegetables.
23    (a) The General Assembly finds:
24        (1) There exists in certain older, urban



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1    municipalities an excess of vacant property that is not
2    needed for public use.
3        (2) Vacant properties present numerous problems for
4    these municipalities, such as: presenting the opportunity
5    for criminal activity; deterring neighboring property
6    owners from improving their properties and prospective
7    purchasers and renters from locating into these areas; and
8    serving as a location to dispose of unwanted items.
9        (3) These municipalities are often centers of high and
10    increasing populations and population densities comprised,
11    in part, of lower-income families.
12        (4) Due, in part, to increasing population densities,
13    the deterioration of infrastructure, and fiscal
14    constraints, these municipalities have been challenged to
15    offer residents opportunities to enhance the quality of
16    their lives.
17        (5) Due to the scarcity of full service supermarkets
18    and farmer's markets within these municipalities,
19    municipal residents often suffer from a shortage of fresh
20    fruits and vegetables.
21        (6) The shortages of sources of fresh fruits and
22    vegetables have contributed to alarming increases in
23    childhood obesity and other adverse health consequences
24    for municipal residents.
25        (7) It would be beneficial to enlist nonprofit
26    corporations or associations to develop these properties



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1    for public purposes that could enhance the nutritional
2    needs of local residents.
3        (8) Authorization for municipalities to lease and sell
4    vacant land to nonprofit entities to cultivate these lands
5    can provide a source of fresh, locally-grown fruits and
6    vegetables for local residents.
7        (9) The nonprofit cultivation of previously vacant
8    land by nonprofit entities is a public purpose for which
9    the long term lease and sale of these properties, and
10    exemption from property taxation, is warranted, even in
11    those instances when produce is sold to further the
12    mission of these nonprofit corporations or associations.
13    (b) A leasehold for a term not in excess of 25 years may be
14made with a nonprofit corporation or association, and extended
15in increments of no more than 25 years, by ordinance or
16resolution thereafter for one or more of the following
18        (1) The cultivation or use of vacant lots for
19    gardening fruits and vegetables.
20        (2) The use of vacant lots to sell fresh fruits and
21    vegetables. Any lease entered into pursuant to this
22    paragraph may permit the nonprofit corporation or
23    association to sell fresh fruits and vegetables on the
24    leased land, off the leased land, or both, provided, that
25    the sales are related and incidental to the nonprofit
26    purposes of the corporation or association and the net



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1    proceeds received by the nonprofit corporation or
2    association are used to further the nonprofit purposes of
3    the corporation or association.
4    (c) When the city council of a municipality determines
5that all or any part of a municipal-owned tract of land, with
6or without improvements, is not then needed for municipal
7purposes, the city council may, by resolution or ordinance,
8authorize a private sale and conveyance of the same, or any
9part thereof, for nominal consideration, without compliance
10with any other law governing disposal of lands by
11municipalities requiring adequate consideration, to a
12nonprofit corporation or association for use for one or more
13of the following purposes:
14        (1) The cultivation of vacant lots for gardening
15    fruits and vegetables.
16        (2) The use of vacant lots to sell fresh fruits and
17    vegetables. Any conveyance entered into pursuant to this
18    paragraph may permit the nonprofit corporation or
19    association to sell fresh fruits and vegetables on the
20    leased land, off the leased land, or both, provided, that
21    the sales are related and incidental to the nonprofit
22    purposes of the corporation or association and the net
23    proceeds received by the nonprofit corporation or
24    association are used to further the nonprofit purposes of
25    the corporation or association.
26        Such conveyance shall contain a limitation that the



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1    lands or buildings shall be used only for the purposes of
2    such organization or association, and to render such
3    services or to provide such facilities as may be agreed
4    upon and, if said lands or buildings are not used in
5    accordance with the limitation, title shall revert back to
6    the municipality without any entry or reentry made on the
7    property on behalf of the municipality.
8    Whenever a sale of property is proposed pursuant to this
9subsection, the municipality shall give at least 10 days'
10notice of such sale prior to a public hearing where an
11ordinance or resolution approving the sale is adopted.
12    Property subject to an unexpired lease under subsection
13(b) is not eligible to be sold under this subsection, unless
14the lease would allow such a sale.
15    (d) If the nonprofit organization or association uses the
16property leased or purchased under this Section for the
17cultivation, sale, or cultivation and sale of fresh fruits and
18vegetables on a tract of land, the nonprofit organization or
19association may not be controlled, directly or indirectly, by
20any agricultural, commercial, or other business. The nonprofit
21organization or association is authorized to sell fresh fruits
22and vegetables either on the land that was leased or conveyed,
23off that land, or both, and the sales must be related and
24incidental to the nonprofit purposes of the organization or
25association and the net proceeds received by the nonprofit
26organization or association must be used to further the



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1nonprofit purposes of the organization or association.
2    (e) Property leased or conveyed under this Section is
3exempt from property taxation under the Property Tax Code if
4the property is actually used for the cultivation, sale, or
5cultivation and sale of fresh fruits and vegetables and owned
6by a nonprofit organization or association that includes among
7its principal purposes the cultivation, sale, or cultivation
8and sale of fresh fruits and vegetables. Before property may
9be leased or conveyed under this Section, the nonprofit
10organization or association shall provide to the municipality
11proof of exemption issued under Section 15-65 of the Property
12Tax Code.".