Full Text of SB2951 102nd General Assembly
SB2951eng 102ND GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning revenue.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Income Tax Act is amended by | 5 | | changing Section 223 as follows: | 6 | | (35 ILCS 5/223) | 7 | | Sec. 223. Hospital credit. | 8 | | (a) For tax years ending on or after December 31, 2012 and | 9 | | ending on or before December 31, 2027 December 31, 2022 , a | 10 | | taxpayer that is the owner of a hospital licensed under the | 11 | | Hospital Licensing Act, but not including an organization that | 12 | | is exempt from federal income taxes under the Internal Revenue | 13 | | Code, is entitled to a credit against the taxes imposed under | 14 | | subsections (a) and (b) of Section 201 of this Act in an amount | 15 | | equal to the lesser of the amount of real property taxes paid | 16 | | during the tax year on real property used for hospital | 17 | | purposes during the prior tax year or the cost of free or | 18 | | discounted services provided during the tax year pursuant to | 19 | | the hospital's charitable financial assistance policy, | 20 | | measured at cost. | 21 | | (b) If the taxpayer is a partnership or Subchapter S | 22 | | corporation, the credit is allowed to the partners or | 23 | | shareholders in accordance with the determination of income |
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| 1 | | and distributive share of income under Sections 702 and 704 | 2 | | and Subchapter S of the Internal Revenue Code. A transfer of | 3 | | this credit may be made by the taxpayer earning the credit | 4 | | within one year after the credit is earned in accordance with | 5 | | rules adopted by the Department. The Department shall | 6 | | prescribe rules to enforce and administer provisions of this | 7 | | Section. If the amount of the credit exceeds the tax liability | 8 | | for the year, then the excess credit may be carried forward and | 9 | | applied to the tax liability of the 5 taxable years following | 10 | | the excess credit year. The credit shall be applied to the | 11 | | earliest year for which there is a tax liability. If there are | 12 | | credits from more than one tax year that are available to | 13 | | offset a liability, the earlier credit shall be applied first. | 14 | | In no event shall a credit under this Section reduce the | 15 | | taxpayer's liability to less than zero.
| 16 | | (Source: P.A. 100-587, eff. 6-4-18.) | 17 | | Section 10. The Use Tax Act is amended by changing Section | 18 | | 3-8 as follows: | 19 | | (35 ILCS 105/3-8) | 20 | | Sec. 3-8. Hospital exemption. | 21 | | (a) Tangible Until July 1, 2022, tangible personal | 22 | | property sold to or used by a hospital owner that owns one or | 23 | | more hospitals licensed under the Hospital Licensing Act or | 24 | | operated under the University of Illinois Hospital Act, or a |
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| 1 | | hospital affiliate that is not already exempt under another | 2 | | provision of this Act and meets the criteria for an exemption | 3 | | under this Section, is exempt from taxation under this Act. | 4 | | (b) A hospital owner or hospital affiliate satisfies the | 5 | | conditions for an exemption under this Section if the value of | 6 | | qualified services or activities listed in subsection (c) of | 7 | | this Section for the hospital year equals or exceeds the | 8 | | relevant hospital entity's estimated property tax liability, | 9 | | without regard to any property tax exemption granted under | 10 | | Section 15-86 of the Property Tax Code, for the calendar year | 11 | | in which exemption or renewal of exemption is sought. For | 12 | | purposes of making the calculations required by this | 13 | | subsection (b), if the relevant hospital entity is a hospital | 14 | | owner that owns more than one hospital, the value of the | 15 | | services or activities listed in subsection (c) shall be | 16 | | calculated on the basis of only those services and activities | 17 | | relating to the hospital that includes the subject property, | 18 | | and the relevant hospital entity's estimated property tax | 19 | | liability shall be calculated only with respect to the | 20 | | properties comprising that hospital. In the case of a | 21 | | multi-state hospital system or hospital affiliate, the value | 22 | | of the services or activities listed in subsection (c) shall | 23 | | be calculated on the basis of only those services and | 24 | | activities that occur in Illinois and the relevant hospital | 25 | | entity's estimated property tax liability shall be calculated | 26 | | only with respect to its property located in Illinois. |
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| 1 | | (c) The following services and activities shall be | 2 | | considered for purposes of making the calculations required by | 3 | | subsection (b): | 4 | | (1) Charity care. Free or discounted services provided | 5 | | pursuant to the relevant hospital entity's financial | 6 | | assistance policy, measured at cost, including discounts | 7 | | provided under the Hospital Uninsured Patient Discount | 8 | | Act. | 9 | | (2) Health services to low-income and underserved | 10 | | individuals. Other unreimbursed costs of the relevant | 11 | | hospital entity for providing without charge, paying for, | 12 | | or subsidizing goods, activities, or services for the | 13 | | purpose of addressing the health of low-income or | 14 | | underserved individuals. Those activities or services may | 15 | | include, but are not limited to: financial or in-kind | 16 | | support to affiliated or unaffiliated hospitals, hospital | 17 | | affiliates, community clinics, or programs that treat | 18 | | low-income or underserved individuals; paying for or | 19 | | subsidizing health care professionals who care for | 20 | | low-income or underserved individuals; providing or | 21 | | subsidizing outreach or educational services to low-income | 22 | | or underserved individuals for disease management and | 23 | | prevention; free or subsidized goods, supplies, or | 24 | | services needed by low-income or underserved individuals | 25 | | because of their medical condition; and prenatal or | 26 | | childbirth outreach to low-income or underserved persons. |
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| 1 | | (3) Subsidy of State or local governments. Direct or | 2 | | indirect financial or in-kind subsidies of State or local | 3 | | governments by the relevant hospital entity that pay for | 4 | | or subsidize activities or programs related to health care | 5 | | for low-income or underserved individuals. | 6 | | (4) Support for State health care programs for | 7 | | low-income individuals. At the election of the hospital | 8 | | applicant for each applicable year, either (A) 10% of | 9 | | payments to the relevant hospital entity and any hospital | 10 | | affiliate designated by the relevant hospital entity | 11 | | (provided that such hospital affiliate's operations | 12 | | provide financial or operational support for or receive | 13 | | financial or operational support from the relevant | 14 | | hospital entity) under Medicaid or other means-tested | 15 | | programs, including, but not limited to, General | 16 | | Assistance, the Covering ALL KIDS Health Insurance Act, | 17 | | and the State Children's Health Insurance Program or (B) | 18 | | the amount of subsidy provided by the relevant hospital | 19 | | entity and any hospital affiliate designated by the | 20 | | relevant hospital entity (provided that such hospital | 21 | | affiliate's operations provide financial or operational | 22 | | support for or receive financial or operational support | 23 | | from the relevant hospital entity) to State or local | 24 | | government in treating Medicaid recipients and recipients | 25 | | of means-tested programs, including but not limited to | 26 | | General Assistance, the Covering ALL KIDS Health Insurance |
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| 1 | | Act, and the State Children's Health Insurance Program. | 2 | | The amount of subsidy for purpose of this item (4) is | 3 | | calculated in the same manner as unreimbursed costs are | 4 | | calculated for Medicaid and other means-tested government | 5 | | programs in the Schedule H of IRS Form 990 in effect on the | 6 | | effective date of this amendatory Act of the 97th General | 7 | | Assembly. | 8 | | (5) Dual-eligible subsidy. The amount of subsidy | 9 | | provided to government by treating dual-eligible | 10 | | Medicare/Medicaid patients. The amount of subsidy for | 11 | | purposes of this item (5) is calculated by multiplying the | 12 | | relevant hospital entity's unreimbursed costs for | 13 | | Medicare, calculated in the same manner as determined in | 14 | | the Schedule H of IRS Form 990 in effect on the effective | 15 | | date of this amendatory Act of the 97th General Assembly, | 16 | | by the relevant hospital entity's ratio of dual-eligible | 17 | | patients to total Medicare patients. | 18 | | (6) Relief of the burden of government related to | 19 | | health care. Except to the extent otherwise taken into | 20 | | account in this subsection, the portion of unreimbursed | 21 | | costs of the relevant hospital entity attributable to | 22 | | providing, paying for, or subsidizing goods, activities, | 23 | | or services that relieve the burden of government related | 24 | | to health care for low-income individuals. Such activities | 25 | | or services shall include, but are not limited to, | 26 | | providing emergency, trauma, burn, neonatal, psychiatric, |
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| 1 | | rehabilitation, or other special services; providing | 2 | | medical education; and conducting medical research or | 3 | | training of health care professionals. The portion of | 4 | | those unreimbursed costs attributable to benefiting | 5 | | low-income individuals shall be determined using the ratio | 6 | | calculated by adding the relevant hospital entity's costs | 7 | | attributable to charity care, Medicaid, other means-tested | 8 | | government programs, Medicare patients with disabilities | 9 | | under age 65, and dual-eligible Medicare/Medicaid patients | 10 | | and dividing that total by the relevant hospital entity's | 11 | | total costs. Such costs for the numerator and denominator | 12 | | shall be determined by multiplying gross charges by the | 13 | | cost to charge ratio taken from the hospital's most | 14 | | recently filed Medicare cost report (CMS 2252-10 | 15 | | Worksheet, Part I). In the case of emergency services, the | 16 | | ratio shall be calculated using costs (gross charges | 17 | | multiplied by the cost to charge ratio taken from the | 18 | | hospital's most recently filed Medicare cost report (CMS | 19 | | 2252-10 Worksheet, Part I)) of patients treated in the | 20 | | relevant hospital entity's emergency department. | 21 | | (7) Any other activity by the relevant hospital entity | 22 | | that the Department determines relieves the burden of | 23 | | government or addresses the health of low-income or | 24 | | underserved individuals. | 25 | | (d) The hospital applicant shall include information in | 26 | | its exemption application establishing that it satisfies the |
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| 1 | | requirements of subsection (b). For purposes of making the | 2 | | calculations required by subsection (b), the hospital | 3 | | applicant may for each year elect to use either (1) the value | 4 | | of the services or activities listed in subsection (e) for the | 5 | | hospital year or (2) the average value of those services or | 6 | | activities for the 3 fiscal years ending with the hospital | 7 | | year. If the relevant hospital entity has been in operation | 8 | | for less than 3 completed fiscal years, then the latter | 9 | | calculation, if elected, shall be performed on a pro rata | 10 | | basis. | 11 | | (e) For purposes of making the calculations required by | 12 | | this Section: | 13 | | (1) particular services or activities eligible for | 14 | | consideration under any of the paragraphs (1) through (7) | 15 | | of subsection (c) may not be counted under more than one of | 16 | | those paragraphs; and | 17 | | (2) the amount of unreimbursed costs and the amount of | 18 | | subsidy shall not be reduced by restricted or unrestricted | 19 | | payments received by the relevant hospital entity as | 20 | | contributions deductible under Section 170(a) of the | 21 | | Internal Revenue Code. | 22 | | (f) (Blank). | 23 | | (g) Estimation of Exempt Property Tax Liability. The | 24 | | estimated property tax liability used for the determination in | 25 | | subsection (b) shall be calculated as follows: | 26 | | (1) "Estimated property tax liability" means the |
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| 1 | | estimated dollar amount of property tax that would be | 2 | | owed, with respect to the exempt portion of each of the | 3 | | relevant hospital entity's properties that are already | 4 | | fully or partially exempt, or for which an exemption in | 5 | | whole or in part is currently being sought, and then | 6 | | aggregated as applicable, as if the exempt portion of | 7 | | those properties were subject to tax, calculated with | 8 | | respect to each such property by multiplying: | 9 | | (A) the lesser of (i) the actual assessed value, | 10 | | if any, of the portion of the property for which an | 11 | | exemption is sought or (ii) an estimated assessed | 12 | | value of the exempt portion of such property as | 13 | | determined in item (2) of this subsection (g), by | 14 | | (B) the applicable State equalization rate | 15 | | (yielding the equalized assessed value), by | 16 | | (C) the applicable tax rate. | 17 | | (2) The estimated assessed value of the exempt portion | 18 | | of the property equals the sum of (i) the estimated fair | 19 | | market value of buildings on the property, as determined | 20 | | in accordance with subparagraphs (A) and (B) of this item | 21 | | (2), multiplied by the applicable assessment factor, and | 22 | | (ii) the estimated assessed value of the land portion of | 23 | | the property, as determined in accordance with | 24 | | subparagraph (C). | 25 | | (A) The "estimated fair market value of buildings | 26 | | on the property" means the replacement value of any |
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| 1 | | exempt portion of buildings on the property, minus | 2 | | depreciation, determined utilizing the cost | 3 | | replacement method whereby the exempt square footage | 4 | | of all such buildings is multiplied by the replacement | 5 | | cost per square foot for Class A Average building | 6 | | found in the most recent edition of the Marshall & | 7 | | Swift Valuation Services Manual, adjusted by any | 8 | | appropriate current cost and local multipliers. | 9 | | (B) Depreciation, for purposes of calculating the | 10 | | estimated fair market value of buildings on the | 11 | | property, is applied by utilizing a weighted mean life | 12 | | for the buildings based on original construction and | 13 | | assuming a 40-year life for hospital buildings and the | 14 | | applicable life for other types of buildings as | 15 | | specified in the American Hospital Association | 16 | | publication "Estimated Useful Lives of Depreciable | 17 | | Hospital Assets". In the case of hospital buildings, | 18 | | the remaining life is divided by 40 and this ratio is | 19 | | multiplied by the replacement cost of the buildings to | 20 | | obtain an estimated fair market value of buildings. If | 21 | | a hospital building is older than 35 years, a | 22 | | remaining life of 5 years for residual value is | 23 | | assumed; and if a building is less than 8 years old, a | 24 | | remaining life of 32 years is assumed. | 25 | | (C) The estimated assessed value of the land | 26 | | portion of the property shall be determined by |
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| 1 | | multiplying (i) the per square foot average of the | 2 | | assessed values of three parcels of land (not | 3 | | including farm land, and excluding the assessed value | 4 | | of the improvements thereon) reasonably comparable to | 5 | | the property, by (ii) the number of square feet | 6 | | comprising the exempt portion of the property's land | 7 | | square footage. | 8 | | (3) The assessment factor, State equalization rate, | 9 | | and tax rate (including any special factors such as | 10 | | Enterprise Zones) used in calculating the estimated | 11 | | property tax liability shall be for the most recent year | 12 | | that is publicly available from the applicable chief | 13 | | county assessment officer or officers at least 90 days | 14 | | before the end of the hospital year. | 15 | | (4) The method utilized to calculate estimated | 16 | | property tax liability for purposes of this Section 15-86 | 17 | | shall not be utilized for the actual valuation, | 18 | | assessment, or taxation of property pursuant to the | 19 | | Property Tax Code. | 20 | | (h) For the purpose of this Section, the following terms | 21 | | shall have the meanings set forth below: | 22 | | (1) "Hospital" means any institution, place, building, | 23 | | buildings on a campus, or other health care facility | 24 | | located in Illinois that is licensed under the Hospital | 25 | | Licensing Act and has a hospital owner. | 26 | | (2) "Hospital owner" means a not-for-profit |
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| 1 | | corporation that is the titleholder of a hospital, or the | 2 | | owner of the beneficial interest in an Illinois land trust | 3 | | that is the titleholder of a hospital. | 4 | | (3) "Hospital affiliate" means any corporation, | 5 | | partnership, limited partnership, joint venture, limited | 6 | | liability company, association or other organization, | 7 | | other than a hospital owner, that directly or indirectly | 8 | | controls, is controlled by, or is under common control | 9 | | with one or more hospital owners and that supports, is | 10 | | supported by, or acts in furtherance of the exempt health | 11 | | care purposes of at least one of those hospital owners' | 12 | | hospitals. | 13 | | (4) "Hospital system" means a hospital and one or more | 14 | | other hospitals or hospital affiliates related by common | 15 | | control or ownership. | 16 | | (5) "Control" relating to hospital owners, hospital | 17 | | affiliates, or hospital systems means possession, direct | 18 | | or indirect, of the power to direct or cause the direction | 19 | | of the management and policies of the entity, whether | 20 | | through ownership of assets, membership interest, other | 21 | | voting or governance rights, by contract or otherwise. | 22 | | (6) "Hospital applicant" means a hospital owner or | 23 | | hospital affiliate that files an application for an | 24 | | exemption or renewal of exemption under this Section. | 25 | | (7) "Relevant hospital entity" means (A) the hospital | 26 | | owner, in the case of a hospital applicant that is a |
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| 1 | | hospital owner, and (B) at the election of a hospital | 2 | | applicant that is a hospital affiliate, either (i) the | 3 | | hospital affiliate or (ii) the hospital system to which | 4 | | the hospital applicant belongs, including any hospitals or | 5 | | hospital affiliates that are related by common control or | 6 | | ownership. | 7 | | (8) "Subject property" means property used for the | 8 | | calculation under subsection (b) of this Section. | 9 | | (9) "Hospital year" means the fiscal year of the | 10 | | relevant hospital entity, or the fiscal year of one of the | 11 | | hospital owners in the hospital system if the relevant | 12 | | hospital entity is a hospital system with members with | 13 | | different fiscal years, that ends in the year for which | 14 | | the exemption is sought.
| 15 | | (i) It is the intent of the General Assembly that any | 16 | | exemptions taken, granted, or renewed under this Section prior | 17 | | to the effective date of this amendatory Act of the 100th | 18 | | General Assembly are hereby validated. | 19 | | (j) It is the intent of the General Assembly that the | 20 | | exemption under this Section applies on a continuous basis. If | 21 | | this amendatory Act of the 102nd General Assembly takes effect | 22 | | after July 1, 2022, any exemptions taken, granted, or renewed | 23 | | under this Section on or after July 1, 2022 and prior to the | 24 | | effective date of this amendatory Act of the 102nd General | 25 | | Assembly are hereby validated. | 26 | | (k) This Section is exempt from the provisions of Section |
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| 1 | | 3-90. | 2 | | (Source: P.A. 99-143, eff. 7-27-15; 100-1181, eff. 3-8-19.) | 3 | | Section 15. The Service Use Tax Act is amended by changing | 4 | | Section 3-8 as follows: | 5 | | (35 ILCS 110/3-8) | 6 | | Sec. 3-8. Hospital exemption. | 7 | | (a) Tangible Until July 1, 2022, tangible personal | 8 | | property sold to or used by a hospital owner that owns one or | 9 | | more hospitals licensed under the Hospital Licensing Act or | 10 | | operated under the University of Illinois Hospital Act, or a | 11 | | hospital affiliate that is not already exempt under another | 12 | | provision of this Act and meets the criteria for an exemption | 13 | | under this Section, is exempt from taxation under this Act. | 14 | | (b) A hospital owner or hospital affiliate satisfies the | 15 | | conditions for an exemption under this Section if the value of | 16 | | qualified services or activities listed in subsection (c) of | 17 | | this Section for the hospital year equals or exceeds the | 18 | | relevant hospital entity's estimated property tax liability, | 19 | | without regard to any property tax exemption granted under | 20 | | Section 15-86 of the Property Tax Code, for the calendar year | 21 | | in which exemption or renewal of exemption is sought. For | 22 | | purposes of making the calculations required by this | 23 | | subsection (b), if the relevant hospital entity is a hospital | 24 | | owner that owns more than one hospital, the value of the |
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| 1 | | services or activities listed in subsection (c) shall be | 2 | | calculated on the basis of only those services and activities | 3 | | relating to the hospital that includes the subject property, | 4 | | and the relevant hospital entity's estimated property tax | 5 | | liability shall be calculated only with respect to the | 6 | | properties comprising that hospital. In the case of a | 7 | | multi-state hospital system or hospital affiliate, the value | 8 | | of the services or activities listed in subsection (c) shall | 9 | | be calculated on the basis of only those services and | 10 | | activities that occur in Illinois and the relevant hospital | 11 | | entity's estimated property tax liability shall be calculated | 12 | | only with respect to its property located in Illinois. | 13 | | (c) The following services and activities shall be | 14 | | considered for purposes of making the calculations required by | 15 | | subsection (b): | 16 | | (1) Charity care. Free or discounted services provided | 17 | | pursuant to the relevant hospital entity's financial | 18 | | assistance policy, measured at cost, including discounts | 19 | | provided under the Hospital Uninsured Patient Discount | 20 | | Act. | 21 | | (2) Health services to low-income and underserved | 22 | | individuals. Other unreimbursed costs of the relevant | 23 | | hospital entity for providing without charge, paying for, | 24 | | or subsidizing goods, activities, or services for the | 25 | | purpose of addressing the health of low-income or | 26 | | underserved individuals. Those activities or services may |
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| 1 | | include, but are not limited to: financial or in-kind | 2 | | support to affiliated or unaffiliated hospitals, hospital | 3 | | affiliates, community clinics, or programs that treat | 4 | | low-income or underserved individuals; paying for or | 5 | | subsidizing health care professionals who care for | 6 | | low-income or underserved individuals; providing or | 7 | | subsidizing outreach or educational services to low-income | 8 | | or underserved individuals for disease management and | 9 | | prevention; free or subsidized goods, supplies, or | 10 | | services needed by low-income or underserved individuals | 11 | | because of their medical condition; and prenatal or | 12 | | childbirth outreach to low-income or underserved persons. | 13 | | (3) Subsidy of State or local governments. Direct or | 14 | | indirect financial or in-kind subsidies of State or local | 15 | | governments by the relevant hospital entity that pay for | 16 | | or subsidize activities or programs related to health care | 17 | | for low-income or underserved individuals. | 18 | | (4) Support for State health care programs for | 19 | | low-income individuals. At the election of the hospital | 20 | | applicant for each applicable year, either (A) 10% of | 21 | | payments to the relevant hospital entity and any hospital | 22 | | affiliate designated by the relevant hospital entity | 23 | | (provided that such hospital affiliate's operations | 24 | | provide financial or operational support for or receive | 25 | | financial or operational support from the relevant | 26 | | hospital entity) under Medicaid or other means-tested |
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| 1 | | programs, including, but not limited to, General | 2 | | Assistance, the Covering ALL KIDS Health Insurance Act, | 3 | | and the State Children's Health Insurance Program or (B) | 4 | | the amount of subsidy provided by the relevant hospital | 5 | | entity and any hospital affiliate designated by the | 6 | | relevant hospital entity (provided that such hospital | 7 | | affiliate's operations provide financial or operational | 8 | | support for or receive financial or operational support | 9 | | from the relevant hospital entity) to State or local | 10 | | government in treating Medicaid recipients and recipients | 11 | | of means-tested programs, including but not limited to | 12 | | General Assistance, the Covering ALL KIDS Health Insurance | 13 | | Act, and the State Children's Health Insurance Program. | 14 | | The amount of subsidy for purposes of this item (4) is | 15 | | calculated in the same manner as unreimbursed costs are | 16 | | calculated for Medicaid and other means-tested government | 17 | | programs in the Schedule H of IRS Form 990 in effect on the | 18 | | effective date of this amendatory Act of the 97th General | 19 | | Assembly. | 20 | | (5) Dual-eligible subsidy. The amount of subsidy | 21 | | provided to government by treating dual-eligible | 22 | | Medicare/Medicaid patients. The amount of subsidy for | 23 | | purposes of this item (5) is calculated by multiplying the | 24 | | relevant hospital entity's unreimbursed costs for | 25 | | Medicare, calculated in the same manner as determined in | 26 | | the Schedule H of IRS Form 990 in effect on the effective |
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| 1 | | date of this amendatory Act of the 97th General Assembly, | 2 | | by the relevant hospital entity's ratio of dual-eligible | 3 | | patients to total Medicare patients. | 4 | | (6) Relief of the burden of government related to | 5 | | health care. Except to the extent otherwise taken into | 6 | | account in this subsection, the portion of unreimbursed | 7 | | costs of the relevant hospital entity attributable to | 8 | | providing, paying for, or subsidizing goods, activities, | 9 | | or services that relieve the burden of government related | 10 | | to health care for low-income individuals. Such activities | 11 | | or services shall include, but are not limited to, | 12 | | providing emergency, trauma, burn, neonatal, psychiatric, | 13 | | rehabilitation, or other special services; providing | 14 | | medical education; and conducting medical research or | 15 | | training of health care professionals. The portion of | 16 | | those unreimbursed costs attributable to benefiting | 17 | | low-income individuals shall be determined using the ratio | 18 | | calculated by adding the relevant hospital entity's costs | 19 | | attributable to charity care, Medicaid, other means-tested | 20 | | government programs, Medicare patients with disabilities | 21 | | under age 65, and dual-eligible Medicare/Medicaid patients | 22 | | and dividing that total by the relevant hospital entity's | 23 | | total costs. Such costs for the numerator and denominator | 24 | | shall be determined by multiplying gross charges by the | 25 | | cost to charge ratio taken from the hospital's most | 26 | | recently filed Medicare cost report (CMS 2252-10 |
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| 1 | | Worksheet, Part I). In the case of emergency services, the | 2 | | ratio shall be calculated using costs (gross charges | 3 | | multiplied by the cost to charge ratio taken from the | 4 | | hospital's most recently filed Medicare cost report (CMS | 5 | | 2252-10 Worksheet, Part I)) of patients treated in the | 6 | | relevant hospital entity's emergency department. | 7 | | (7) Any other activity by the relevant hospital entity | 8 | | that the Department determines relieves the burden of | 9 | | government or addresses the health of low-income or | 10 | | underserved individuals. | 11 | | (d) The hospital applicant shall include information in | 12 | | its exemption application establishing that it satisfies the | 13 | | requirements of subsection (b). For purposes of making the | 14 | | calculations required by subsection (b), the hospital | 15 | | applicant may for each year elect to use either (1) the value | 16 | | of the services or activities listed in subsection (e) for the | 17 | | hospital year or (2) the average value of those services or | 18 | | activities for the 3 fiscal years ending with the hospital | 19 | | year. If the relevant hospital entity has been in operation | 20 | | for less than 3 completed fiscal years, then the latter | 21 | | calculation, if elected, shall be performed on a pro rata | 22 | | basis. | 23 | | (e) For purposes of making the calculations required by | 24 | | this Section: | 25 | | (1) particular services or activities eligible for | 26 | | consideration under any of the paragraphs (1) through (7) |
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| 1 | | of subsection (c) may not be counted under more than one of | 2 | | those paragraphs; and | 3 | | (2) the amount of unreimbursed costs and the amount of | 4 | | subsidy shall not be reduced by restricted or unrestricted | 5 | | payments received by the relevant hospital entity as | 6 | | contributions deductible under Section 170(a) of the | 7 | | Internal Revenue Code. | 8 | | (f) (Blank). | 9 | | (g) Estimation of Exempt Property Tax Liability. The | 10 | | estimated property tax liability used for the determination in | 11 | | subsection (b) shall be calculated as follows: | 12 | | (1) "Estimated property tax liability" means the | 13 | | estimated dollar amount of property tax that would be | 14 | | owed, with respect to the exempt portion of each of the | 15 | | relevant hospital entity's properties that are already | 16 | | fully or partially exempt, or for which an exemption in | 17 | | whole or in part is currently being sought, and then | 18 | | aggregated as applicable, as if the exempt portion of | 19 | | those properties were subject to tax, calculated with | 20 | | respect to each such property by multiplying: | 21 | | (A) the lesser of (i) the actual assessed value, | 22 | | if any, of the portion of the property for which an | 23 | | exemption is sought or (ii) an estimated assessed | 24 | | value of the exempt portion of such property as | 25 | | determined in item (2) of this subsection (g), by | 26 | | (B) the applicable State equalization rate |
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| 1 | | (yielding the equalized assessed value), by | 2 | | (C) the applicable tax rate. | 3 | | (2) The estimated assessed value of the exempt portion | 4 | | of the property equals the sum of (i) the estimated fair | 5 | | market value of buildings on the property, as determined | 6 | | in accordance with subparagraphs (A) and (B) of this item | 7 | | (2), multiplied by the applicable assessment factor, and | 8 | | (ii) the estimated assessed value of the land portion of | 9 | | the property, as determined in accordance with | 10 | | subparagraph (C). | 11 | | (A) The "estimated fair market value of buildings | 12 | | on the property" means the replacement value of any | 13 | | exempt portion of buildings on the property, minus | 14 | | depreciation, determined utilizing the cost | 15 | | replacement method whereby the exempt square footage | 16 | | of all such buildings is multiplied by the replacement | 17 | | cost per square foot for Class A Average building | 18 | | found in the most recent edition of the Marshall & | 19 | | Swift Valuation Services Manual, adjusted by any | 20 | | appropriate current cost and local multipliers. | 21 | | (B) Depreciation, for purposes of calculating the | 22 | | estimated fair market value of buildings on the | 23 | | property, is applied by utilizing a weighted mean life | 24 | | for the buildings based on original construction and | 25 | | assuming a 40-year life for hospital buildings and the | 26 | | applicable life for other types of buildings as |
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| 1 | | specified in the American Hospital Association | 2 | | publication "Estimated Useful Lives of Depreciable | 3 | | Hospital Assets". In the case of hospital buildings, | 4 | | the remaining life is divided by 40 and this ratio is | 5 | | multiplied by the replacement cost of the buildings to | 6 | | obtain an estimated fair market value of buildings. If | 7 | | a hospital building is older than 35 years, a | 8 | | remaining life of 5 years for residual value is | 9 | | assumed; and if a building is less than 8 years old, a | 10 | | remaining life of 32 years is assumed. | 11 | | (C) The estimated assessed value of the land | 12 | | portion of the property shall be determined by | 13 | | multiplying (i) the per square foot average of the | 14 | | assessed values of three parcels of land (not | 15 | | including farm land, and excluding the assessed value | 16 | | of the improvements thereon) reasonably comparable to | 17 | | the property, by (ii) the number of square feet | 18 | | comprising the exempt portion of the property's land | 19 | | square footage. | 20 | | (3) The assessment factor, State equalization rate, | 21 | | and tax rate (including any special factors such as | 22 | | Enterprise Zones) used in calculating the estimated | 23 | | property tax liability shall be for the most recent year | 24 | | that is publicly available from the applicable chief | 25 | | county assessment officer or officers at least 90 days | 26 | | before the end of the hospital year. |
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| 1 | | (4) The method utilized to calculate estimated | 2 | | property tax liability for purposes of this Section 15-86 | 3 | | shall not be utilized for the actual valuation, | 4 | | assessment, or taxation of property pursuant to the | 5 | | Property Tax Code. | 6 | | (h) For the purpose of this Section, the following terms | 7 | | shall have the meanings set forth below: | 8 | | (1) "Hospital" means any institution, place, building, | 9 | | buildings on a campus, or other health care facility | 10 | | located in Illinois that is licensed under the Hospital | 11 | | Licensing Act and has a hospital owner. | 12 | | (2) "Hospital owner" means a not-for-profit | 13 | | corporation that is the titleholder of a hospital, or the | 14 | | owner of the beneficial interest in an Illinois land trust | 15 | | that is the titleholder of a hospital. | 16 | | (3) "Hospital affiliate" means any corporation, | 17 | | partnership, limited partnership, joint venture, limited | 18 | | liability company, association or other organization, | 19 | | other than a hospital owner, that directly or indirectly | 20 | | controls, is controlled by, or is under common control | 21 | | with one or more hospital owners and that supports, is | 22 | | supported by, or acts in furtherance of the exempt health | 23 | | care purposes of at least one of those hospital owners' | 24 | | hospitals. | 25 | | (4) "Hospital system" means a hospital and one or more | 26 | | other hospitals or hospital affiliates related by common |
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| 1 | | control or ownership. | 2 | | (5) "Control" relating to hospital owners, hospital | 3 | | affiliates, or hospital systems means possession, direct | 4 | | or indirect, of the power to direct or cause the direction | 5 | | of the management and policies of the entity, whether | 6 | | through ownership of assets, membership interest, other | 7 | | voting or governance rights, by contract or otherwise. | 8 | | (6) "Hospital applicant" means a hospital owner or | 9 | | hospital affiliate that files an application for an | 10 | | exemption or renewal of exemption under this Section. | 11 | | (7) "Relevant hospital entity" means (A) the hospital | 12 | | owner, in the case of a hospital applicant that is a | 13 | | hospital owner, and (B) at the election of a hospital | 14 | | applicant that is a hospital affiliate, either (i) the | 15 | | hospital affiliate or (ii) the hospital system to which | 16 | | the hospital applicant belongs, including any hospitals or | 17 | | hospital affiliates that are related by common control or | 18 | | ownership. | 19 | | (8) "Subject property" means property used for the | 20 | | calculation under subsection (b) of this Section. | 21 | | (9) "Hospital year" means the fiscal year of the | 22 | | relevant hospital entity, or the fiscal year of one of the | 23 | | hospital owners in the hospital system if the relevant | 24 | | hospital entity is a hospital system with members with | 25 | | different fiscal years, that ends in the year for which | 26 | | the exemption is sought.
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| 1 | | (i) It is the intent of the General Assembly that any | 2 | | exemptions taken, granted, or renewed under this Section prior | 3 | | to the effective date of this amendatory Act of the 100th | 4 | | General Assembly are hereby validated. | 5 | | (j) It is the intent of the General Assembly that the | 6 | | exemption under this Section applies on a continuous basis. If | 7 | | this amendatory Act of the 102nd General Assembly takes effect | 8 | | after July 1, 2022, any exemptions taken, granted, or renewed | 9 | | under this Section on or after July 1, 2022 and prior to the | 10 | | effective date of this amendatory Act of the 102nd General | 11 | | Assembly are hereby validated. | 12 | | (k) This Section is exempt from the provisions of Section | 13 | | 3-75. | 14 | | (Source: P.A. 99-143, eff. 7-27-15; 100-1181, eff. 3-8-19.) | 15 | | Section 20. The Service Occupation Tax Act is amended by | 16 | | changing Section 3-8 as follows: | 17 | | (35 ILCS 115/3-8) | 18 | | Sec. 3-8. Hospital exemption. | 19 | | (a) Tangible Until July 1, 2022, tangible personal | 20 | | property sold to or used by a hospital owner that owns one or | 21 | | more hospitals licensed under the Hospital Licensing Act or | 22 | | operated under the University of Illinois Hospital Act, or a | 23 | | hospital affiliate that is not already exempt under another | 24 | | provision of this Act and meets the criteria for an exemption |
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| 1 | | under this Section, is exempt from taxation under this Act. | 2 | | (b) A hospital owner or hospital affiliate satisfies the | 3 | | conditions for an exemption under this Section if the value of | 4 | | qualified services or activities listed in subsection (c) of | 5 | | this Section for the hospital year equals or exceeds the | 6 | | relevant hospital entity's estimated property tax liability, | 7 | | without regard to any property tax exemption granted under | 8 | | Section 15-86 of the Property Tax Code, for the calendar year | 9 | | in which exemption or renewal of exemption is sought. For | 10 | | purposes of making the calculations required by this | 11 | | subsection (b), if the relevant hospital entity is a hospital | 12 | | owner that owns more than one hospital, the value of the | 13 | | services or activities listed in subsection (c) shall be | 14 | | calculated on the basis of only those services and activities | 15 | | relating to the hospital that includes the subject property, | 16 | | and the relevant hospital entity's estimated property tax | 17 | | liability shall be calculated only with respect to the | 18 | | properties comprising that hospital. In the case of a | 19 | | multi-state hospital system or hospital affiliate, the value | 20 | | of the services or activities listed in subsection (c) shall | 21 | | be calculated on the basis of only those services and | 22 | | activities that occur in Illinois and the relevant hospital | 23 | | entity's estimated property tax liability shall be calculated | 24 | | only with respect to its property located in Illinois. | 25 | | (c) The following services and activities shall be | 26 | | considered for purposes of making the calculations required by |
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| 1 | | subsection (b): | 2 | | (1) Charity care. Free or discounted services provided | 3 | | pursuant to the relevant hospital entity's financial | 4 | | assistance policy, measured at cost, including discounts | 5 | | provided under the Hospital Uninsured Patient Discount | 6 | | Act. | 7 | | (2) Health services to low-income and underserved | 8 | | individuals. Other unreimbursed costs of the relevant | 9 | | hospital entity for providing without charge, paying for, | 10 | | or subsidizing goods, activities, or services for the | 11 | | purpose of addressing the health of low-income or | 12 | | underserved individuals. Those activities or services may | 13 | | include, but are not limited to: financial or in-kind | 14 | | support to affiliated or unaffiliated hospitals, hospital | 15 | | affiliates, community clinics, or programs that treat | 16 | | low-income or underserved individuals; paying for or | 17 | | subsidizing health care professionals who care for | 18 | | low-income or underserved individuals; providing or | 19 | | subsidizing outreach or educational services to low-income | 20 | | or underserved individuals for disease management and | 21 | | prevention; free or subsidized goods, supplies, or | 22 | | services needed by low-income or underserved individuals | 23 | | because of their medical condition; and prenatal or | 24 | | childbirth outreach to low-income or underserved persons. | 25 | | (3) Subsidy of State or local governments. Direct or | 26 | | indirect financial or in-kind subsidies of State or local |
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| 1 | | governments by the relevant hospital entity that pay for | 2 | | or subsidize activities or programs related to health care | 3 | | for low-income or underserved individuals. | 4 | | (4) Support for State health care programs for | 5 | | low-income individuals. At the election of the hospital | 6 | | applicant for each applicable year, either (A) 10% of | 7 | | payments to the relevant hospital entity and any hospital | 8 | | affiliate designated by the relevant hospital entity | 9 | | (provided that such hospital affiliate's operations | 10 | | provide financial or operational support for or receive | 11 | | financial or operational support from the relevant | 12 | | hospital entity) under Medicaid or other means-tested | 13 | | programs, including, but not limited to, General | 14 | | Assistance, the Covering ALL KIDS Health Insurance Act, | 15 | | and the State Children's Health Insurance Program or (B) | 16 | | the amount of subsidy provided by the relevant hospital | 17 | | entity and any hospital affiliate designated by the | 18 | | relevant hospital entity (provided that such hospital | 19 | | affiliate's operations provide financial or operational | 20 | | support for or receive financial or operational support | 21 | | from the relevant hospital entity) to State or local | 22 | | government in treating Medicaid recipients and recipients | 23 | | of means-tested programs, including but not limited to | 24 | | General Assistance, the Covering ALL KIDS Health Insurance | 25 | | Act, and the State Children's Health Insurance Program. | 26 | | The amount of subsidy for purposes of this item (4) is |
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| 1 | | calculated in the same manner as unreimbursed costs are | 2 | | calculated for Medicaid and other means-tested government | 3 | | programs in the Schedule H of IRS Form 990 in effect on the | 4 | | effective date of this amendatory Act of the 97th General | 5 | | Assembly. | 6 | | (5) Dual-eligible subsidy. The amount of subsidy | 7 | | provided to government by treating dual-eligible | 8 | | Medicare/Medicaid patients. The amount of subsidy for | 9 | | purposes of this item (5) is calculated by multiplying the | 10 | | relevant hospital entity's unreimbursed costs for | 11 | | Medicare, calculated in the same manner as determined in | 12 | | the Schedule H of IRS Form 990 in effect on the effective | 13 | | date of this amendatory Act of the 97th General Assembly, | 14 | | by the relevant hospital entity's ratio of dual-eligible | 15 | | patients to total Medicare patients. | 16 | | (6) Relief of the burden of government related to | 17 | | health care. Except to the extent otherwise taken into | 18 | | account in this subsection, the portion of unreimbursed | 19 | | costs of the relevant hospital entity attributable to | 20 | | providing, paying for, or subsidizing goods, activities, | 21 | | or services that relieve the burden of government related | 22 | | to health care for low-income individuals. Such activities | 23 | | or services shall include, but are not limited to, | 24 | | providing emergency, trauma, burn, neonatal, psychiatric, | 25 | | rehabilitation, or other special services; providing | 26 | | medical education; and conducting medical research or |
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| 1 | | training of health care professionals. The portion of | 2 | | those unreimbursed costs attributable to benefiting | 3 | | low-income individuals shall be determined using the ratio | 4 | | calculated by adding the relevant hospital entity's costs | 5 | | attributable to charity care, Medicaid, other means-tested | 6 | | government programs, Medicare patients with disabilities | 7 | | under age 65, and dual-eligible Medicare/Medicaid patients | 8 | | and dividing that total by the relevant hospital entity's | 9 | | total costs. Such costs for the numerator and denominator | 10 | | shall be determined by multiplying gross charges by the | 11 | | cost to charge ratio taken from the hospital's most | 12 | | recently filed Medicare cost report (CMS 2252-10 | 13 | | Worksheet, Part I). In the case of emergency services, the | 14 | | ratio shall be calculated using costs (gross charges | 15 | | multiplied by the cost to charge ratio taken from the | 16 | | hospital's most recently filed Medicare cost report (CMS | 17 | | 2252-10 Worksheet, Part I)) of patients treated in the | 18 | | relevant hospital entity's emergency department. | 19 | | (7) Any other activity by the relevant hospital entity | 20 | | that the Department determines relieves the burden of | 21 | | government or addresses the health of low-income or | 22 | | underserved individuals. | 23 | | (d) The hospital applicant shall include information in | 24 | | its exemption application establishing that it satisfies the | 25 | | requirements of subsection (b). For purposes of making the | 26 | | calculations required by subsection (b), the hospital |
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| 1 | | applicant may for each year elect to use either (1) the value | 2 | | of the services or activities listed in subsection (e) for the | 3 | | hospital year or (2) the average value of those services or | 4 | | activities for the 3 fiscal years ending with the hospital | 5 | | year. If the relevant hospital entity has been in operation | 6 | | for less than 3 completed fiscal years, then the latter | 7 | | calculation, if elected, shall be performed on a pro rata | 8 | | basis. | 9 | | (e) For purposes of making the calculations required by | 10 | | this Section: | 11 | | (1) particular services or activities eligible for | 12 | | consideration under any of the paragraphs (1) through (7) | 13 | | of subsection (c) may not be counted under more than one of | 14 | | those paragraphs; and | 15 | | (2) the amount of unreimbursed costs and the amount of | 16 | | subsidy shall not be reduced by restricted or unrestricted | 17 | | payments received by the relevant hospital entity as | 18 | | contributions deductible under Section 170(a) of the | 19 | | Internal Revenue Code. | 20 | | (f) (Blank). | 21 | | (g) Estimation of Exempt Property Tax Liability. The | 22 | | estimated property tax liability used for the determination in | 23 | | subsection (b) shall be calculated as follows: | 24 | | (1) "Estimated property tax liability" means the | 25 | | estimated dollar amount of property tax that would be | 26 | | owed, with respect to the exempt portion of each of the |
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| 1 | | relevant hospital entity's properties that are already | 2 | | fully or partially exempt, or for which an exemption in | 3 | | whole or in part is currently being sought, and then | 4 | | aggregated as applicable, as if the exempt portion of | 5 | | those properties were subject to tax, calculated with | 6 | | respect to each such property by multiplying: | 7 | | (A) the lesser of (i) the actual assessed value, | 8 | | if any, of the portion of the property for which an | 9 | | exemption is sought or (ii) an estimated assessed | 10 | | value of the exempt portion of such property as | 11 | | determined in item (2) of this subsection (g), by | 12 | | (B) the applicable State equalization rate | 13 | | (yielding the equalized assessed value), by | 14 | | (C) the applicable tax rate. | 15 | | (2) The estimated assessed value of the exempt portion | 16 | | of the property equals the sum of (i) the estimated fair | 17 | | market value of buildings on the property, as determined | 18 | | in accordance with subparagraphs (A) and (B) of this item | 19 | | (2), multiplied by the applicable assessment factor, and | 20 | | (ii) the estimated assessed value of the land portion of | 21 | | the property, as determined in accordance with | 22 | | subparagraph (C). | 23 | | (A) The "estimated fair market value of buildings | 24 | | on the property" means the replacement value of any | 25 | | exempt portion of buildings on the property, minus | 26 | | depreciation, determined utilizing the cost |
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| 1 | | replacement method whereby the exempt square footage | 2 | | of all such buildings is multiplied by the replacement | 3 | | cost per square foot for Class A Average building | 4 | | found in the most recent edition of the Marshall & | 5 | | Swift Valuation Services Manual, adjusted by any | 6 | | appropriate current cost and local multipliers. | 7 | | (B) Depreciation, for purposes of calculating the | 8 | | estimated fair market value of buildings on the | 9 | | property, is applied by utilizing a weighted mean life | 10 | | for the buildings based on original construction and | 11 | | assuming a 40-year life for hospital buildings and the | 12 | | applicable life for other types of buildings as | 13 | | specified in the American Hospital Association | 14 | | publication "Estimated Useful Lives of Depreciable | 15 | | Hospital Assets". In the case of hospital buildings, | 16 | | the remaining life is divided by 40 and this ratio is | 17 | | multiplied by the replacement cost of the buildings to | 18 | | obtain an estimated fair market value of buildings. If | 19 | | a hospital building is older than 35 years, a | 20 | | remaining life of 5 years for residual value is | 21 | | assumed; and if a building is less than 8 years old, a | 22 | | remaining life of 32 years is assumed. | 23 | | (C) The estimated assessed value of the land | 24 | | portion of the property shall be determined by | 25 | | multiplying (i) the per square foot average of the | 26 | | assessed values of three parcels of land (not |
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| 1 | | including farm land, and excluding the assessed value | 2 | | of the improvements thereon) reasonably comparable to | 3 | | the property, by (ii) the number of square feet | 4 | | comprising the exempt portion of the property's land | 5 | | square footage. | 6 | | (3) The assessment factor, State equalization rate, | 7 | | and tax rate (including any special factors such as | 8 | | Enterprise Zones) used in calculating the estimated | 9 | | property tax liability shall be for the most recent year | 10 | | that is publicly available from the applicable chief | 11 | | county assessment officer or officers at least 90 days | 12 | | before the end of the hospital year. | 13 | | (4) The method utilized to calculate estimated | 14 | | property tax liability for purposes of this Section 15-86 | 15 | | shall not be utilized for the actual valuation, | 16 | | assessment, or taxation of property pursuant to the | 17 | | Property Tax Code. | 18 | | (h) For the purpose of this Section, the following terms | 19 | | shall have the meanings set forth below: | 20 | | (1) "Hospital" means any institution, place, building, | 21 | | buildings on a campus, or other health care facility | 22 | | located in Illinois that is licensed under the Hospital | 23 | | Licensing Act and has a hospital owner. | 24 | | (2) "Hospital owner" means a not-for-profit | 25 | | corporation that is the titleholder of a hospital, or the | 26 | | owner of the beneficial interest in an Illinois land trust |
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| 1 | | that is the titleholder of a hospital. | 2 | | (3) "Hospital affiliate" means any corporation, | 3 | | partnership, limited partnership, joint venture, limited | 4 | | liability company, association or other organization, | 5 | | other than a hospital owner, that directly or indirectly | 6 | | controls, is controlled by, or is under common control | 7 | | with one or more hospital owners and that supports, is | 8 | | supported by, or acts in furtherance of the exempt health | 9 | | care purposes of at least one of those hospital owners' | 10 | | hospitals. | 11 | | (4) "Hospital system" means a hospital and one or more | 12 | | other hospitals or hospital affiliates related by common | 13 | | control or ownership. | 14 | | (5) "Control" relating to hospital owners, hospital | 15 | | affiliates, or hospital systems means possession, direct | 16 | | or indirect, of the power to direct or cause the direction | 17 | | of the management and policies of the entity, whether | 18 | | through ownership of assets, membership interest, other | 19 | | voting or governance rights, by contract or otherwise. | 20 | | (6) "Hospital applicant" means a hospital owner or | 21 | | hospital affiliate that files an application for an | 22 | | exemption or renewal of exemption under this Section. | 23 | | (7) "Relevant hospital entity" means (A) the hospital | 24 | | owner, in the case of a hospital applicant that is a | 25 | | hospital owner, and (B) at the election of a hospital | 26 | | applicant that is a hospital affiliate, either (i) the |
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| 1 | | hospital affiliate or (ii) the hospital system to which | 2 | | the hospital applicant belongs, including any hospitals or | 3 | | hospital affiliates that are related by common control or | 4 | | ownership. | 5 | | (8) "Subject property" means property used for the | 6 | | calculation under subsection (b) of this Section. | 7 | | (9) "Hospital year" means the fiscal year of the | 8 | | relevant hospital entity, or the fiscal year of one of the | 9 | | hospital owners in the hospital system if the relevant | 10 | | hospital entity is a hospital system with members with | 11 | | different fiscal years, that ends in the year for which | 12 | | the exemption is sought.
| 13 | | (i) It is the intent of the General Assembly that any | 14 | | exemptions taken, granted, or renewed under this Section prior | 15 | | to the effective date of this amendatory Act of the 100th | 16 | | General Assembly are hereby validated. | 17 | | (j) It is the intent of the General Assembly that the | 18 | | exemption under this Section applies on a continuous basis. If | 19 | | this amendatory Act of the 102nd General Assembly takes effect | 20 | | after July 1, 2022, any exemptions taken, granted, or renewed | 21 | | under this Section on or after July 1, 2022 and prior to the | 22 | | effective date of this amendatory Act of the 102nd General | 23 | | Assembly are hereby validated. | 24 | | (k) This Section is exempt from the provisions of Section | 25 | | 3-55. | 26 | | (Source: P.A. 99-143, eff. 7-27-15; 100-1181, eff. 3-8-19.) |
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| 1 | | Section 25. The Retailers' Occupation Tax Act is amended | 2 | | by changing Section 2-9 as follows: | 3 | | (35 ILCS 120/2-9) | 4 | | Sec. 2-9. Hospital exemption. | 5 | | (a) Tangible Until July 1, 2022, tangible personal | 6 | | property sold to or used by a hospital owner that owns one or | 7 | | more hospitals licensed under the Hospital Licensing Act or | 8 | | operated under the University of Illinois Hospital Act, or a | 9 | | hospital affiliate that is not already exempt under another | 10 | | provision of this Act and meets the criteria for an exemption | 11 | | under this Section, is exempt from taxation under this Act. | 12 | | (b) A hospital owner or hospital affiliate satisfies the | 13 | | conditions for an exemption under this Section if the value of | 14 | | qualified services or activities listed in subsection (c) of | 15 | | this Section for the hospital year equals or exceeds the | 16 | | relevant hospital entity's estimated property tax liability, | 17 | | without regard to any property tax exemption granted under | 18 | | Section 15-86 of the Property Tax Code, for the calendar year | 19 | | in which exemption or renewal of exemption is sought. For | 20 | | purposes of making the calculations required by this | 21 | | subsection (b), if the relevant hospital entity is a hospital | 22 | | owner that owns more than one hospital, the value of the | 23 | | services or activities listed in subsection (c) shall be | 24 | | calculated on the basis of only those services and activities |
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| 1 | | relating to the hospital that includes the subject property, | 2 | | and the relevant hospital entity's estimated property tax | 3 | | liability shall be calculated only with respect to the | 4 | | properties comprising that hospital. In the case of a | 5 | | multi-state hospital system or hospital affiliate, the value | 6 | | of the services or activities listed in subsection (c) shall | 7 | | be calculated on the basis of only those services and | 8 | | activities that occur in Illinois and the relevant hospital | 9 | | entity's estimated property tax liability shall be calculated | 10 | | only with respect to its property located in Illinois. | 11 | | (c) The following services and activities shall be | 12 | | considered for purposes of making the calculations required by | 13 | | subsection (b): | 14 | | (1) Charity care. Free or discounted services provided | 15 | | pursuant to the relevant hospital entity's financial | 16 | | assistance policy, measured at cost, including discounts | 17 | | provided under the Hospital Uninsured Patient Discount | 18 | | Act. | 19 | | (2) Health services to low-income and underserved | 20 | | individuals. Other unreimbursed costs of the relevant | 21 | | hospital entity for providing without charge, paying for, | 22 | | or subsidizing goods, activities, or services for the | 23 | | purpose of addressing the health of low-income or | 24 | | underserved individuals. Those activities or services may | 25 | | include, but are not limited to: financial or in-kind | 26 | | support to affiliated or unaffiliated hospitals, hospital |
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| 1 | | affiliates, community clinics, or programs that treat | 2 | | low-income or underserved individuals; paying for or | 3 | | subsidizing health care professionals who care for | 4 | | low-income or underserved individuals; providing or | 5 | | subsidizing outreach or educational services to low-income | 6 | | or underserved individuals for disease management and | 7 | | prevention; free or subsidized goods, supplies, or | 8 | | services needed by low-income or underserved individuals | 9 | | because of their medical condition; and prenatal or | 10 | | childbirth outreach to low-income or underserved persons. | 11 | | (3) Subsidy of State or local governments. Direct or | 12 | | indirect financial or in-kind subsidies of State or local | 13 | | governments by the relevant hospital entity that pay for | 14 | | or subsidize activities or programs related to health care | 15 | | for low-income or underserved individuals. | 16 | | (4) Support for State health care programs for | 17 | | low-income individuals. At the election of the hospital | 18 | | applicant for each applicable year, either (A) 10% of | 19 | | payments to the relevant hospital entity and any hospital | 20 | | affiliate designated by the relevant hospital entity | 21 | | (provided that such hospital affiliate's operations | 22 | | provide financial or operational support for or receive | 23 | | financial or operational support from the relevant | 24 | | hospital entity) under Medicaid or other means-tested | 25 | | programs, including, but not limited to, General | 26 | | Assistance, the Covering ALL KIDS Health Insurance Act, |
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| 1 | | and the State Children's Health Insurance Program or (B) | 2 | | the amount of subsidy provided by the relevant hospital | 3 | | entity and any hospital affiliate designated by the | 4 | | relevant hospital entity (provided that such hospital | 5 | | affiliate's operations provide financial or operational | 6 | | support for or receive financial or operational support | 7 | | from the relevant hospital entity) to State or local | 8 | | government in treating Medicaid recipients and recipients | 9 | | of means-tested programs, including but not limited to | 10 | | General Assistance, the Covering ALL KIDS Health Insurance | 11 | | Act, and the State Children's Health Insurance Program. | 12 | | The amount of subsidy for purposes of this item (4) is | 13 | | calculated in the same manner as unreimbursed costs are | 14 | | calculated for Medicaid and other means-tested government | 15 | | programs in the Schedule H of IRS Form 990 in effect on the | 16 | | effective date of this amendatory Act of the 97th General | 17 | | Assembly. | 18 | | (5) Dual-eligible subsidy. The amount of subsidy | 19 | | provided to government by treating dual-eligible | 20 | | Medicare/Medicaid patients. The amount of subsidy for | 21 | | purposes of this item (5) is calculated by multiplying the | 22 | | relevant hospital entity's unreimbursed costs for | 23 | | Medicare, calculated in the same manner as determined in | 24 | | the Schedule H of IRS Form 990 in effect on the effective | 25 | | date of this amendatory Act of the 97th General Assembly, | 26 | | by the relevant hospital entity's ratio of dual-eligible |
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| 1 | | patients to total Medicare patients. | 2 | | (6) Relief of the burden of government related to | 3 | | health care. Except to the extent otherwise taken into | 4 | | account in this subsection, the portion of unreimbursed | 5 | | costs of the relevant hospital entity attributable to | 6 | | providing, paying for, or subsidizing goods, activities, | 7 | | or services that relieve the burden of government related | 8 | | to health care for low-income individuals. Such activities | 9 | | or services shall include, but are not limited to, | 10 | | providing emergency, trauma, burn, neonatal, psychiatric, | 11 | | rehabilitation, or other special services; providing | 12 | | medical education; and conducting medical research or | 13 | | training of health care professionals. The portion of | 14 | | those unreimbursed costs attributable to benefiting | 15 | | low-income individuals shall be determined using the ratio | 16 | | calculated by adding the relevant hospital entity's costs | 17 | | attributable to charity care, Medicaid, other means-tested | 18 | | government programs, Medicare patients with disabilities | 19 | | under age 65, and dual-eligible Medicare/Medicaid patients | 20 | | and dividing that total by the relevant hospital entity's | 21 | | total costs. Such costs for the numerator and denominator | 22 | | shall be determined by multiplying gross charges by the | 23 | | cost to charge ratio taken from the hospital's most | 24 | | recently filed Medicare cost report (CMS 2252-10 | 25 | | Worksheet, Part I). In the case of emergency services, the | 26 | | ratio shall be calculated using costs (gross charges |
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| 1 | | multiplied by the cost to charge ratio taken from the | 2 | | hospital's most recently filed Medicare cost report (CMS | 3 | | 2252-10 Worksheet, Part I)) of patients treated in the | 4 | | relevant hospital entity's emergency department. | 5 | | (7) Any other activity by the relevant hospital entity | 6 | | that the Department determines relieves the burden of | 7 | | government or addresses the health of low-income or | 8 | | underserved individuals. | 9 | | (d) The hospital applicant shall include information in | 10 | | its exemption application establishing that it satisfies the | 11 | | requirements of subsection (b). For purposes of making the | 12 | | calculations required by subsection (b), the hospital | 13 | | applicant may for each year elect to use either (1) the value | 14 | | of the services or activities listed in subsection (e) for the | 15 | | hospital year or (2) the average value of those services or | 16 | | activities for the 3 fiscal years ending with the hospital | 17 | | year. If the relevant hospital entity has been in operation | 18 | | for less than 3 completed fiscal years, then the latter | 19 | | calculation, if elected, shall be performed on a pro rata | 20 | | basis. | 21 | | (e) For purposes of making the calculations required by | 22 | | this Section: | 23 | | (1) particular services or activities eligible for | 24 | | consideration under any of the paragraphs (1) through (7) | 25 | | of subsection (c) may not be counted under more than one of | 26 | | those paragraphs; and |
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| 1 | | (2) the amount of unreimbursed costs and the amount of | 2 | | subsidy shall not be reduced by restricted or unrestricted | 3 | | payments received by the relevant hospital entity as | 4 | | contributions deductible under Section 170(a) of the | 5 | | Internal Revenue Code. | 6 | | (f) (Blank). | 7 | | (g) Estimation of Exempt Property Tax Liability. The | 8 | | estimated property tax liability used for the determination in | 9 | | subsection (b) shall be calculated as follows: | 10 | | (1) "Estimated property tax liability" means the | 11 | | estimated dollar amount of property tax that would be | 12 | | owed, with respect to the exempt portion of each of the | 13 | | relevant hospital entity's properties that are already | 14 | | fully or partially exempt, or for which an exemption in | 15 | | whole or in part is currently being sought, and then | 16 | | aggregated as applicable, as if the exempt portion of | 17 | | those properties were subject to tax, calculated with | 18 | | respect to each such property by multiplying: | 19 | | (A) the lesser of (i) the actual assessed value, | 20 | | if any, of the portion of the property for which an | 21 | | exemption is sought or (ii) an estimated assessed | 22 | | value of the exempt portion of such property as | 23 | | determined in item (2) of this subsection (g), by | 24 | | (B) the applicable State equalization rate | 25 | | (yielding the equalized assessed value), by | 26 | | (C) the applicable tax rate. |
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| 1 | | (2) The estimated assessed value of the exempt portion | 2 | | of the property equals the sum of (i) the estimated fair | 3 | | market value of buildings on the property, as determined | 4 | | in accordance with subparagraphs (A) and (B) of this item | 5 | | (2), multiplied by the applicable assessment factor, and | 6 | | (ii) the estimated assessed value of the land portion of | 7 | | the property, as determined in accordance with | 8 | | subparagraph (C). | 9 | | (A) The "estimated fair market value of buildings | 10 | | on the property" means the replacement value of any | 11 | | exempt portion of buildings on the property, minus | 12 | | depreciation, determined utilizing the cost | 13 | | replacement method whereby the exempt square footage | 14 | | of all such buildings is multiplied by the replacement | 15 | | cost per square foot for Class A Average building | 16 | | found in the most recent edition of the Marshall & | 17 | | Swift Valuation Services Manual, adjusted by any | 18 | | appropriate current cost and local multipliers. | 19 | | (B) Depreciation, for purposes of calculating the | 20 | | estimated fair market value of buildings on the | 21 | | property, is applied by utilizing a weighted mean life | 22 | | for the buildings based on original construction and | 23 | | assuming a 40-year life for hospital buildings and the | 24 | | applicable life for other types of buildings as | 25 | | specified in the American Hospital Association | 26 | | publication "Estimated Useful Lives of Depreciable |
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| 1 | | Hospital Assets". In the case of hospital buildings, | 2 | | the remaining life is divided by 40 and this ratio is | 3 | | multiplied by the replacement cost of the buildings to | 4 | | obtain an estimated fair market value of buildings. If | 5 | | a hospital building is older than 35 years, a | 6 | | remaining life of 5 years for residual value is | 7 | | assumed; and if a building is less than 8 years old, a | 8 | | remaining life of 32 years is assumed. | 9 | | (C) The estimated assessed value of the land | 10 | | portion of the property shall be determined by | 11 | | multiplying (i) the per square foot average of the | 12 | | assessed values of three parcels of land (not | 13 | | including farm land, and excluding the assessed value | 14 | | of the improvements thereon) reasonably comparable to | 15 | | the property, by (ii) the number of square feet | 16 | | comprising the exempt portion of the property's land | 17 | | square footage. | 18 | | (3) The assessment factor, State equalization rate, | 19 | | and tax rate (including any special factors such as | 20 | | Enterprise Zones) used in calculating the estimated | 21 | | property tax liability shall be for the most recent year | 22 | | that is publicly available from the applicable chief | 23 | | county assessment officer or officers at least 90 days | 24 | | before the end of the hospital year. | 25 | | (4) The method utilized to calculate estimated | 26 | | property tax liability for purposes of this Section 15-86 |
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| 1 | | shall not be utilized for the actual valuation, | 2 | | assessment, or taxation of property pursuant to the | 3 | | Property Tax Code. | 4 | | (h) For the purpose of this Section, the following terms | 5 | | shall have the meanings set forth below: | 6 | | (1) "Hospital" means any institution, place, building, | 7 | | buildings on a campus, or other health care facility | 8 | | located in Illinois that is licensed under the Hospital | 9 | | Licensing Act and has a hospital owner. | 10 | | (2) "Hospital owner" means a not-for-profit | 11 | | corporation that is the titleholder of a hospital, or the | 12 | | owner of the beneficial interest in an Illinois land trust | 13 | | that is the titleholder of a hospital. | 14 | | (3) "Hospital affiliate" means any corporation, | 15 | | partnership, limited partnership, joint venture, limited | 16 | | liability company, association or other organization, | 17 | | other than a hospital owner, that directly or indirectly | 18 | | controls, is controlled by, or is under common control | 19 | | with one or more hospital owners and that supports, is | 20 | | supported by, or acts in furtherance of the exempt health | 21 | | care purposes of at least one of those hospital owners' | 22 | | hospitals. | 23 | | (4) "Hospital system" means a hospital and one or more | 24 | | other hospitals or hospital affiliates related by common | 25 | | control or ownership. | 26 | | (5) "Control" relating to hospital owners, hospital |
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| 1 | | affiliates, or hospital systems means possession, direct | 2 | | or indirect, of the power to direct or cause the direction | 3 | | of the management and policies of the entity, whether | 4 | | through ownership of assets, membership interest, other | 5 | | voting or governance rights, by contract or otherwise. | 6 | | (6) "Hospital applicant" means a hospital owner or | 7 | | hospital affiliate that files an application for an | 8 | | exemption or renewal of exemption under this Section. | 9 | | (7) "Relevant hospital entity" means (A) the hospital | 10 | | owner, in the case of a hospital applicant that is a | 11 | | hospital owner, and (B) at the election of a hospital | 12 | | applicant that is a hospital affiliate, either (i) the | 13 | | hospital affiliate or (ii) the hospital system to which | 14 | | the hospital applicant belongs, including any hospitals or | 15 | | hospital affiliates that are related by common control or | 16 | | ownership. | 17 | | (8) "Subject property" means property used for the | 18 | | calculation under subsection (b) of this Section. | 19 | | (9) "Hospital year" means the fiscal year of the | 20 | | relevant hospital entity, or the fiscal year of one of the | 21 | | hospital owners in the hospital system if the relevant | 22 | | hospital entity is a hospital system with members with | 23 | | different fiscal years, that ends in the year for which | 24 | | the exemption is sought.
| 25 | | (i) It is the intent of the General Assembly that any | 26 | | exemptions taken, granted, or renewed under this Section prior |
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| 1 | | to the effective date of this amendatory Act of the 100th | 2 | | General Assembly are hereby validated. | 3 | | (j) It is the intent of the General Assembly that the | 4 | | exemption under this Section applies on a continuous basis. If | 5 | | this amendatory Act of the 102nd General Assembly takes effect | 6 | | after July 1, 2022, any exemptions taken, granted, or renewed | 7 | | under this Section on or after July 1, 2022 and prior to the | 8 | | effective date of this amendatory Act of the 102nd General | 9 | | Assembly are hereby validated. | 10 | | (k) This Section is exempt from the provisions of Section | 11 | | 2-70. | 12 | | (Source: P.A. 99-143, eff. 7-27-15; 100-1181, eff. 3-8-19.)
| 13 | | Section 99. Effective date. This Act takes effect upon | 14 | | becoming law.
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