Full Text of HB1288 103rd General Assembly
HB1288 103RD GENERAL ASSEMBLY |
| | 103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024 HB1288 Introduced 1/31/2023, by Rep. William "Will" Davis SYNOPSIS AS INTRODUCED: |
| 35 ILCS 200/Art. 9 Div. 6 heading new | | 35 ILCS 200/9-280 new | | 35 ILCS 200/9-281 new | |
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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.
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| | A BILL FOR |
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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 Property Tax Code is amended by adding | 5 | | Division 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 | 11 | | the operation of the real property itself that reduce the | 12 | | income to the property owner or lessee and includes management | 13 | | fees, reserves for replacement, maintenance, property taxes, | 14 | | and insurance, but does not include debt service, reserves for | 15 | | building additions, or income tax. | 16 | | "Income" means real property revenue that is directed to | 17 | | or received by the property owner in the form of rent from | 18 | | unrelated persons or entities and ancillary revenue to the | 19 | | owner from unrelated persons or entities that is generated | 20 | | exclusively from the operation of the real property itself, | 21 | | such as revenue from parking or other amenities provided to or | 22 | | for the benefit of the property's tenants. "Income" does not |
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| 1 | | include revenue generated from personal property, including | 2 | | but not limited to, revenue from a business enterprise that is | 3 | | operated on the real property or improvements made to the | 4 | | property by a tenant. | 5 | | "Income and expense data" means data that identifies | 6 | | income and expenses as defined in this Section. This data may | 7 | | be found in annual reports, income and expense statements, and | 8 | | Internal Revenue Service Schedule E or Schedule 8825 tax forms | 9 | | for income-producing property for the immediately preceding | 10 | | year. It also includes data from rent rolls for the current and | 11 | | immediately preceding year. Data may be based on a calendar or | 12 | | fiscal year. | 13 | | "Income-producing property" means property that is not | 14 | | owner-occupied, as defined in this Section, and is owned for | 15 | | the purpose of generating income from the property itself, | 16 | | whether or not such property actually generates income in a | 17 | | particular 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 | 15 | | improvement that may be leased or rented to tenants and | 16 | | excludes common areas such as elevators, stairways, and | 17 | | atriums. | 18 | | "Owner-occupied" means real property that is used or | 19 | | occupied exclusively by a record owner or related entity, or | 20 | | real property where 80% or more of the net rentable area of the | 21 | | property is occupied or held for future use by the record owner | 22 | | of the property or a related person or entity as described in | 23 | | subsection (b) of Section 267 of the Internal Revenue Code. If | 24 | | more than 20% of the net rentable area of a property is subject | 25 | | to an existing lease or is subject to short term rental of the | 26 | | property by an unrelated entity, the property is not |
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| 1 | | considered owner-occupied for purposes of this Division. | 2 | | "Property" has the meaning set forth in Section 1-130 of | 3 | | this Code and includes contiguous parcels or property index | 4 | | numbers that comprise one functional property location. | 5 | | "Taxpayer" means the record owner of income-producing | 6 | | property. The owner or lessee, whoever is contractually | 7 | | obligated to pay property taxes directly to the county | 8 | | treasurer, shall be required under this Article to submit | 9 | | income and expense data that is within its possession and | 10 | | control to the chief county assessment officer for the | 11 | | relevant portion of the property over which it exercises | 12 | | control. | 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, | 17 | | taxpayers or lessees who are contractually obligated to pay | 18 | | property taxes of income-producing property shall submit | 19 | | income and expense data annually to the chief county | 20 | | assessment officer on or before July 1 of each year, except as | 21 | | otherwise provided in this Division. In the first year | 22 | | following the effective date of this amendatory Act of the | 23 | | 103rd General Assembly, income and expense data shall be | 24 | | submitted by September 1. If a taxpayer or party who is | 25 | | contractually obligated to pay property taxes is required to |
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| 1 | | submit income and expense data under this Article in | 2 | | accordance with Section 9-280, the chief county assessment | 3 | | officer shall notify, by certified mail, the record owner of | 4 | | income-producing property at least 60 days prior to the date | 5 | | for submission of the obligation to submit income and expense | 6 | | data. Notice shall include the deadline for submission. If an | 7 | | owner of record claims that another party is obligated to pay | 8 | | property taxes directly to the county treasurer for all or a | 9 | | portion of the property, then the owner shall send to the | 10 | | obligated party a copy of the notice received from the chief | 11 | | county assessment officer of the obligation to submit income | 12 | | and expense data. The taxpayer or obligated party shall submit | 13 | | income and expense data to the chief county assessment officer | 14 | | in accordance with this Section for the relevant portion of | 15 | | the property for which the taxpayer or obligated party is | 16 | | required to pay the property taxes and exercises control over | 17 | | such property, identified by parcel and area. | 18 | | The chief county assessment officer may extend the time | 19 | | within which taxpayers are required to submit income and | 20 | | expense data under this Section. | 21 | | If the taxpayer's books and records reflecting the | 22 | | operation of the property are maintained on a calendar year | 23 | | basis, the statement of income and expense data shall be for | 24 | | the last full calendar year preceding the date that the | 25 | | statement is submitted. If the taxpayer's books and records | 26 | | reflecting the operation of the property are maintained on a |
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| 1 | | fiscal year basis for federal income tax purposes, the | 2 | | statement of income and expense data shall be the last full | 3 | | fiscal year preceding the date when the statement is | 4 | | submitted. | 5 | | The taxpayer or obligated party shall certify under oath | 6 | | in a signed attestation that the statements set forth in | 7 | | income and expense data submitted under this Article are true, | 8 | | accurate, and complete to the best of his or her knowledge | 9 | | except as to matters stated to be upon information and belief | 10 | | and, as to such matters, the taxpayer or obligated party shall | 11 | | certify that he or she believes the same to be true, accurate, | 12 | | and complete. | 13 | | (b) In counties of fewer than 3,000,000 inhabitants, the | 14 | | county board may provide by ordinance or resolution that | 15 | | taxpayers of income-producing property shall submit income and | 16 | | expense data annually to the chief county assessment officer | 17 | | on or before March 31 of each year. If a taxpayer or party who | 18 | | is contractually obligated to pay taxes is required to submit | 19 | | income and expense data under this Article, the chief county | 20 | | assessment officer shall notify the taxpayer of that fact by | 21 | | certified mail within 60 days of the due date for income and | 22 | | expense data. Notice shall include the deadline for such | 23 | | submission. If an owner of record claims that another party is | 24 | | obligated to pay property taxes directly to the county | 25 | | treasurer, then the owner shall send to the obligated party a | 26 | | copy of any notice received from the chief county assessment |
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| 1 | | officer of the obligation to submit income and expense data. | 2 | | The taxpayer or obligated party shall submit income and | 3 | | expense data to the chief county assessment officer in | 4 | | accordance with this Division for the relevant portion of the | 5 | | property for which the taxpayer or obligated party is required | 6 | | to pay the property taxes and exercises control over such | 7 | | property, identified by parcel and area. | 8 | | The chief county assessment officer may extend the time | 9 | | within which taxpayers are required to submit income and | 10 | | expense data under this Section. | 11 | | If the taxpayer's books and records reflecting the | 12 | | operation of the property are maintained on a calendar year | 13 | | basis, the statement of income and expense data shall be for | 14 | | the last full calendar year preceding the date that the | 15 | | statement is submitted. If the taxpayer's books and records | 16 | | reflecting the operation of the property are maintained on a | 17 | | fiscal year basis for federal income tax purposes, the | 18 | | statement of income and expense data shall be the last full | 19 | | fiscal year preceding the date when the statement is | 20 | | submitted. | 21 | | The taxpayer or obligated party shall certify under oath | 22 | | in a signed attestation that the statements set forth in | 23 | | income and expense data submitted under this Article are true, | 24 | | accurate, and complete, to the best of his or her knowledge | 25 | | except as to matters stated to be upon information and belief | 26 | | and, as to such matters, the taxpayer or obligated party shall |
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| 1 | | certify that he or she believes the same to be true, accurate, | 2 | | and complete. | 3 | | Subsections (c) through (i) of this Section shall also | 4 | | apply in counties that have adopted by ordinance or resolution | 5 | | the requirements of this Section. | 6 | | (c) The chief county assessment officer of a county that | 7 | | is subject to this Section shall establish rules that specify | 8 | | the manner of submission of income and expense data and | 9 | | provide for the administration of the provisions of this | 10 | | Section in the county. Income and expense data shall be | 11 | | submitted in electronic form unless waived by the chief county | 12 | | assessment officer. | 13 | | The chief county assessment officer shall maintain a copy | 14 | | of its rules for public review and shall place a copy of those | 15 | | rules and any amended rules on his or her website. | 16 | | (d) If a taxpayer or obligated party fails to submit | 17 | | income and expense data as required under this Section or as | 18 | | required after the adoption of a county board ordinance or | 19 | | resolution under this Section, within the time prescribed, or | 20 | | within an extended period as permitted by the chief county | 21 | | assessment officer, the assessor shall send notice by | 22 | | certified mail to such taxpayer of the failure to comply. If | 23 | | the taxpayer or obligated party fails to submit the required | 24 | | data within 60 days after such notice is sent, fails to provide | 25 | | documentation of another taxpayer's obligation to submit | 26 | | income and expense data, or fails to adequately explain why no |
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| 1 | | submission is required, the taxpayer or obligated party shall | 2 | | pay a penalty to the chief county assessment officer of 0.025% | 3 | | of the prior year's market value as indicated by the most | 4 | | recent certified assessed value for the property at issue, but | 5 | | in no case shall the taxpayer or obligated party be required to | 6 | | pay more than its proportional share of a maximum penalty of | 7 | | $10,000 per property. A taxpayer or obligated party who fails | 8 | | to submit income and expense data in accordance with this | 9 | | provision shall only be required to pay a penalty on the | 10 | | portion of the property's value for which the taxpayer or | 11 | | obligated party is required to pay taxes. | 12 | | A taxpayer or obligated party may contest the penalty and | 13 | | requirement to report income and expense data in a particular | 14 | | year and submit evidence to the chief county assessment | 15 | | officer in support of a contention that the taxpayer or | 16 | | obligated party was not required to submit income and expense | 17 | | data, that another party was required to submit income and | 18 | | expense data for such property, or that the submission of | 19 | | income and expense data complies with this requirement based | 20 | | on available documentation. The chief county assessment | 21 | | officer shall review the taxpayer or obligated party's | 22 | | submission and other submissions for the property for the tax | 23 | | year at issue, and determine whether the taxpayer or obligated | 24 | | party provided sufficient evidence that he or she was not | 25 | | required to report income and expense data or that the | 26 | | submission complies based on available documentation. |
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| 1 | | If a taxpayer or obligated party is dissatisfied with a | 2 | | decision of the chief county assessment officer of the | 3 | | requirement to submit income and expense data, the taxpayer or | 4 | | obligated party may request review of that decision. Upon such | 5 | | request, at least 30 days' notice shall be provided to the | 6 | | taxpayer or obligated party of a hearing to be conducted by a | 7 | | hearing officer designated by the chief county assessment | 8 | | officer. If dissatisfied with a hearing officer's decision, | 9 | | the taxpayer or obligated party may appeal such decision to | 10 | | the circuit court of the county where the property is located | 11 | | as a final administrative decision under the Administrative | 12 | | Review Law. If a party is unsuccessful at the hearing, the | 13 | | penalty imposed under this Section shall bear interest at | 14 | | 0.05% per month thereafter, beginning 21 days after the date | 15 | | of decision, or 21 days after the date of the issuance of a | 16 | | final decision on administrative review. | 17 | | The State's Attorney of the county in which the property | 18 | | is located shall have power to act on behalf of the People and | 19 | | the chief county assessment officer to enforce the provisions | 20 | | of this Section, including the power to compel by subpoena the | 21 | | production of taxpayer income and expense data that is | 22 | | required to be produced under this Section. | 23 | | The chief county assessment officer may audit the income | 24 | | and expense data submitted by taxpayers to verify its accuracy | 25 | | by requesting documentation in support of submissions. | 26 | | (e) Penalty and interest collected by the chief county |
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| 1 | | assessment officer under this Section for a taxpayer's or | 2 | | obligated party's failure to timely submit income and expense | 3 | | data shall be collected in the same manner as other fees | 4 | | collected by the chief county assessment officer. Such revenue | 5 | | shall be deposited with the county treasurer in the county | 6 | | general fund of the county in which the property is located, | 7 | | with 75% of the revenue to be used for the benefit of the | 8 | | office of the chief county assessment officer and 25% to be | 9 | | used for the benefit of the county. | 10 | | (f) Any personal data such as federal identification or | 11 | | social security numbers and income tax forms or data that are | 12 | | included in income and expense data produced under this | 13 | | Section shall be deemed private information and exempt from | 14 | | disclosure under the Freedom of Information Act. Income and | 15 | | expense data submitted pursuant to this Article shall not be | 16 | | subject to disclosure by the chief county assessment officer | 17 | | in accordance with the Freedom of Information Act and other | 18 | | applicable law, or pursuant to court order in a tax or other | 19 | | matter. Nothing in this Section prohibits a chief county | 20 | | assessment officer from disclosing compiled and anonymized | 21 | | income and expense data as provided in this Section. | 22 | | (g) The income and expense data submitted pursuant to this | 23 | | Section 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 | 16 | | assessment officer from income and expense data filed under | 17 | | this Article shall be used only for official purposes. Any | 18 | | person who divulges income and expense data submitted under | 19 | | this Article other than as permitted in this Article, in | 20 | | accordance with a proper judicial order, or as otherwise | 21 | | provided by law, shall be guilty of a Class B misdemeanor and | 22 | | subject to a fine not to exceed $7,500. | 23 | | (i) The chief county assessment officer shall prepare a | 24 | | summary report within 60 days of the completion of the first | 25 | | assessment cycle in which income expense data is compiled | 26 | | under this Section and used in the assessment process, and |
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| 1 | | report findings to the Revenue committees of the Illinois | 2 | | Senate and House of Representatives within 45 days thereafter. | 3 | | The report shall document income and expense data collection, | 4 | | changes in assessed or equalized assessed values that followed | 5 | | the collection and use of compiled and anonymized income and | 6 | | expense data for properties subject to reassessment, shall | 7 | | compare reassessment year assessed or equalized assessed | 8 | | values with values or equalized assessed values from the | 9 | | immediately preceding reassessment cycle. The report shall | 10 | | document any shifts in the percentage of commercial or | 11 | | residential properties that comprise a portion of the total | 12 | | assessed value or equalized assessed value of property within | 13 | | the county. This report shall be produced annually following | 14 | | the effective date of this amendatory Act of the 103rd General | 15 | | Assembly until all property located within a county subject to | 16 | | this Section has been reassessed.
| 17 | | Section 99. Effective date. This Act takes effect upon | 18 | | becoming law.
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