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91_HB1261enr HB1261 Enrolled LRB9102284PTpk 1 AN ACT concerning property valuation. 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 11 to Article 10 as follows: 6 (35 ILCS 200/Art. 10, Div. 11 heading new) 7 DIVISION 11. LOW-INCOME HOUSING PROJECTS 8 (35 ILCS 200/10-235 new) 9 Sec. 10-235. Section 515 low-income housing project 10 valuation policy; intent. It is the policy of this State 11 that, except in counties with a population of more than 12 200,000 that classify property for the purposes of taxation, 13 low-income housing projects under Section 515 of the federal 14 Housing Act shall be valued at 33 and one-third percent of 15 the fair market value of their economic productivity to the 16 owners of the projects to help insure that their valuation 17 for property taxation does not result in taxes so high that 18 rent levels must be raised to cover this project expense, 19 which can cause excess vacancies, project loan defaults, and 20 eventual loss of rental housing facilities for those most in 21 need of them, low-income families and the elderly. It is the 22 intent of this State that the valuation required by this 23 Division is the closest representation of cash value required 24 by law and is the method established as proper and fair. 25 (35 ILCS 200/10-240 new) 26 Sec. 10-240. Definition of Section 515 low-income housing 27 projects. "Section 515 low-income housing projects" mean 28 rental apartment facilities (i) developed and managed under a 29 United States Department of Agriculture Rural Rental Housing HB1261 Enrolled -2- LRB9102284PTpk 1 Program designed to provide affordable housing to low to 2 moderate income families and seniors in rural communities 3 with populations under 20,000, (ii) that receive a subsidy in 4 the form of a 1% loan interest rate and a 50-year 5 amortization of the mortgage, (iii) that would not have been 6 built without a Section 515 interest credit subsidy, and (iv) 7 where the owners of the projects are limited to an annual 8 profit of an 8% return on a 5% equity investment, which may 9 result in a modest cash flow to owners of the projects unless 10 actual expenses, including property taxes, exceed budget 11 projections, in which case no profit may be realized. 12 (35 ILCS 200/10-245 new) 13 Sec. 10-245. Method of valuation of Section 515 14 low-income housing projects. Notwithstanding Section 1-55 15 and except in counties with a population of more than 200,000 16 that classify property for the purposes of taxation, to 17 determine 33 and one-third percent of the fair cash value of 18 any Section 515 low-income housing project, in assessing the 19 project, local assessment officers must consider the actual 20 or probable net operating income attributable to the project, 21 capitalized at normal market values. The interest rate to be 22 used in developing the normal market value capitalization 23 rate shall be one that reflects the prevailing cost of cash 24 for other types of commercial real estate in the geographic 25 market in which the Section 515 project is located. 26 (35 ILCS 200/10-250 new) 27 Sec. 10-250. Certification procedure. After (i) an 28 application for a Section 515 low-income housing project 29 certificate is filed with the State Director of the United 30 States Department of Agriculture Rural Development Office in 31 a manner and form prescribed in regulations issued by the 32 office and (ii) the certificate is issued certifying that the HB1261 Enrolled -3- LRB9102284PTpk 1 housing is a Section 515 low-income housing project as 2 defined in Section 2 of this Act, the certificate must be 3 presented to the appropriate local assessment officer to 4 receive the property assessment valuation under this 5 Division. The local assessment officer must assess the 6 property according to this Act. The effective date of a 7 certificate is the date of application for the certificate or 8 the date of the construction of the project, whichever is 9 later. 10 (35 ILCS 200/10-255 new) 11 Sec. 10-255. Rules. The Department of Revenue may adopt 12 rules to implement and administer this Division. 13 Section 90. The State Mandates Act is amended by adding 14 Section 8.23 as follows: 15 (30 ILCS 805/8.23 new) 16 Sec. 8.23. Exempt mandate. Notwithstanding Sections 6 17 and 8 of this Act, no reimbursement by the State is required 18 for the implementation of any mandate created by this 19 amendatory Act of the 91st General Assembly.