Bill Text: IL SB3209 | 2023-2024 | 103rd General Assembly | Chaptered

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Bill Title: Amends the Property Tax Code. In provisions concerning charitable exemptions granted to limited liability companies, removes a requirement that the limited liability company must be a disregarded entity for federal and Illinois income tax purposes. Effective immediately.

Spectrum: Strong Partisan Bill (Democrat 28-2)

Status: (Passed) 2024-08-09 - Public Act . . . . . . . . . 103-0954 [SB3209 Detail]

Download: Illinois-2023-SB3209-Chaptered.html

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Public Act 103-0954
SB3209 Enrolled LRB103 37226 HLH 67345 b
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 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.

(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.
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 or limited liability
company, in which the charitable organization, or an affiliate
or subsidiary of the charitable organization, is a general
partner of the partnership or managing member of the limited

liability company, for the purposes of owning and operating a
residential rental property that has received an allocation of
Low Income Housing Tax Credits for 100% of the dwelling units
under Section 42 of the Internal Revenue Code of 1986, as
amended, 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's sole member or
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 (B) the limited liability company
is a disregarded entity for federal and Illinois income tax
purposes and, as a result, the limited liability company is
deemed exempt from income tax liability by virtue of the
Internal Revenue Code Section 501(c)(3) status of its sole
member or members; and (C) the limited liability company does
not lease the property or otherwise use it with a view to
profit.
(Source: P.A. 96-763, eff. 8-25-09.)