Bill Text: IL HB0826 | 2009-2010 | 96th General Assembly | Introduced

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Bill Title: Amends the Property Tax Code. In a provision concerning tax exemptions for charitable purposes, sets forth requirements that a hospital must meet to be deemed to be actually and exclusively used for charitable purposes. Effective immediately.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2009-03-13 - Rule 19(a) / Re-referred to Rules Committee [HB0826 Detail]

Download: Illinois-2009-HB0826-Introduced.html

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96TH GENERAL ASSEMBLY State of Illinois 2009 and 2010 HB0826 Introduced 2/9/2009, by Rep. William B. Black SYNOPSIS AS INTRODUCED:
35 ILCS 200/15-65
Amends the Property Tax Code. In a provision concerning tax exemptions for charitable purposes, sets forth requirements that a hospital must meet to be deemed to be actually and exclusively used for charitable purposes. Effective immediately.
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FISCAL NOTE ACT MAY APPLY HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY
A BILL FOR
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AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Property Tax Code is amended by changing
Section 15-65 as follows:
(35 ILCS 200/15-65)
Sec. 15-65. Charitable purposes. All property of the
following is exempt when actually and exclusively used for
charitable or beneficent purposes, and not leased or otherwise
used with a view to profit:
(a) Institutions of public charity.
(b) Beneficent and charitable organizations
incorporated in any state of the United States, including
organizations whose owner, and no other person, uses the
property exclusively for the distribution, sale, or resale
of donated goods and related activities and uses all the
income from those activities to support the charitable,
religious or beneficent activities of the owner, whether or
not such activities occur on the property.
(c) Old people's homes, facilities for persons with a
developmental disability, and not-for-profit organizations
providing services or facilities related to the goals of
educational, social and physical development, if, upon

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making application for the exemption, the applicant
provides affirmative evidence that the home or facility or
organization is an exempt organization under paragraph (3)
of Section 501(c) of the Internal Revenue Code or its
successor, and either: (i) the bylaws of the home or
facility or not-for-profit organization provide for a
waiver or reduction, based on an individual's ability to
pay, of any entrance fee, assignment of assets, or fee for
services, or (ii) the home or facility is qualified, built
or financed under Section 202 of the National Housing Act
of 1959, as amended.
An applicant that has been granted an exemption under
this subsection on the basis that its bylaws provide for a
waiver or reduction, based on an individual's ability to
pay, of any entrance fee, assignment of assets, or fee for
services may be periodically reviewed by the Department to
determine if the waiver or reduction was a past policy or
is a current policy. The Department may revoke the
exemption if it finds that the policy for waiver or
reduction is no longer current.
If a not-for-profit organization leases property that
is otherwise exempt under this subsection to an
organization that conducts an activity on the leased
premises that would entitle the lessee to an exemption from
real estate taxes if the lessee were the owner of the
property, then the leased property is exempt.

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(d) Not-for-profit health maintenance organizations
certified by the Director of the Illinois Department of
Insurance under the Health Maintenance Organization Act,
including any health maintenance organization that
provides services to members at prepaid rates approved by
the Illinois Department of Insurance if the membership of
the organization is sufficiently large or of indefinite
classes so that the community is benefited by its
operation. No exemption shall apply to any hospital or
health maintenance organization which has been adjudicated
by a court of competent jurisdiction to have denied
admission to any person because of race, color, creed, sex
or national origin.
(e) All free public libraries.
(f) Historical societies.
(g) Notwithstanding any other provision of law, for any
assessment year for which an application has been filed and
a decision on which has not become final and nonappealable
as of the effective date of this amendatory Act of the 96th
General Assembly, real property that is used in furtherance
of the establishment, operation, administration,
preservation, security, repair, or maintenance of a
not-for-profit hospital is deemed to be actually and
exclusively used for charitable purposes if all of the
following requirements are satisfied:
(1) The hospital benefits the general welfare of an

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indefinite number of persons by providing health care
to persons in its community in a way that does not
discriminate based on race, religion, gender, or
national origin.
(2) The hospital does not have capital stock or
shareholders and none of the hospital's net earnings
inure to the benefit of private individuals, as the
private inurement standard is interpreted under
Section 501(c)(3) of the Internal Revenue Code.
(3) The majority of the hospital's operating funds
are derived from and used for the provision of health
care services or donations.
(4) The hospital dispenses charity to all who need
and apply for it and does not place obstacles in the
way of those who need and would avail themselves of its
charitable benefits. This standard is satisfied if:
(A) The hospital provides emergency services,
as required under the Hospital Licensing Act, to
patients regardless of their ability to pay;
(B) The hospital provides financial assistance
to patients in accordance with a written policy
that is based on community need, the available
resources of the hospital, and other factors that
may be unique to the hospital, such as the
hospital's volume of Medicare and Medicaid
patients; and

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(C) The hospital provides notice of the
availability of financial assistance to patients
by posting signs that are visible to the public in
the hospital and by including such a statement on
or with the bill that is sent to uninsured
patients.
Notwithstanding any other provision of law, a
hospital does not fail to satisfy the requirements of
this item (4) by requiring verification of a patient's
financial condition before providing financial
assistance or by pursuing collection from a patient who
does not apply or qualify for financial assistance
under the hospital's written financial assistance
policy.
(5) The hospital's property is actually and
factually used in furtherance of providing health
care, including but not limited to gift shops,
cafeterias, and parking facilities that are used by
patients, visitors, and staff, and facilities for
staff and community education. A hospital does not fail
to satisfy this standard by entering into independent
contracts with providers of services to the hospital or
its patients, provided that such contracts are entered
into on an arm's length basis. If a hospital leases
property that is otherwise exempt under this
subsection to an organization that conducts an

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activity on the leased premises that is in furtherance
of the establishment, operation, administration,
preservation, security, repair, or maintenance of the
hospital, then the leased property is exempt. If a
not-for-profit organization leases property that is
otherwise exempt under this subsection to an
organization that conducts an activity on the leased
premises that would entitle the lessee to an exemption
from real estate taxes if the lessee were the owner of
the property, then the leased property is exempt.
(6) The hospital's property is primarily used in
furtherance of providing health care. This standard is
satisfied if the use of the hospital's property for
health care is not simply an incidental or secondary
use.
Property otherwise qualifying for an exemption under this
Section shall not lose its exemption because the legal title is
held (i) by an entity that is organized solely to hold that
title and that qualifies under paragraph (2) of Section 501(c)
of the Internal Revenue Code or its successor, whether or not
that entity receives rent from the charitable organization for
the repair and maintenance of the property, (ii) by an entity
that is organized as a partnership, in which the charitable
organization, or an affiliate or subsidiary of the charitable
organization, is a general partner, for the purposes of owning
and operating a residential rental property that has received

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an allocation of Low Income Housing Tax Credits for 100% of the
dwelling units under Section 42 of the Internal Revenue Code of
1986, or (iii) for any assessment year including and subsequent
to January 1, 1996 for which an application for exemption has
been filed and a decision on which has not become final and
nonappealable, by a limited liability company organized under
the Limited Liability Company Act provided that (A) the limited
liability company receives a notification from the Internal
Revenue Service that it qualifies under paragraph (2) or (3) of
Section 501(c) of the Internal Revenue Code; (B) the limited
liability company's sole members, as that term is used in
Section 1-5 of the Limited Liability Company Act, are the
institutions of public charity that actually and exclusively
use the property for charitable and beneficent purposes; and
(C) the limited liability company does not lease the property
or otherwise use it with a view to profit.
(Source: P.A. 91-416, eff. 8-6-99; 92-382, eff. 8-16-01.)
Section 99. Effective date. This Act takes effect upon