Illinois-2023-HB5015-Introduced

103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB5015

Introduced , by Rep. Mark L. Walker

SYNOPSIS AS INTRODUCED:

See Index

Amends the Property Tax Code. Provides that certain property may be certified by the Department of Revenue as containing a megaproject. Provides that a "megaproject" is a project with respect to which a company makes a specified investment during a specified investment period. Provides that the megaproject property is eligible for an assessment freeze. Provides that megaproject property may be granted an abatement. Provides that a company that operates a megaproject shall enter into an agreement with an oversight board established by the local municipality and local taxing districts to make certain special payments. Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that qualified tangible personal property used in the construction or operation of a megaproject is exempt from the taxes imposed under those Acts. Effective June 1, 2024.

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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 1. This Act may be referred to as the Megaproject

5 Tax Stability Act.

6 Section 5. The Use Tax Act is amended by changing Section

7 3-5 as follows:

8 (35 ILCS 105/3-5)

9 Sec. 3-5. Exemptions. Use of the following tangible

10 personal property is exempt from the tax imposed by this Act:

11 (1) Personal property purchased from a corporation,

12 society, association, foundation, institution, or

13 organization, other than a limited liability company, that is

14 organized and operated as a not-for-profit service enterprise

15 for the benefit of persons 65 years of age or older if the

16 personal property was not purchased by the enterprise for the

17 purpose of resale by the enterprise.

18 (2) Personal property purchased by a not-for-profit

19 Illinois county fair association for use in conducting,

20 operating, or promoting the county fair.

21 (3) Personal property purchased by a not-for-profit arts

22 or cultural organization that establishes, by proof required

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1 by the Department by rule, that it has received an exemption

2 under Section 501(c)(3) of the Internal Revenue Code and that

3 is organized and operated primarily for the presentation or

4 support of arts or cultural programming, activities, or

5 services. These organizations include, but are not limited to,

6 music and dramatic arts organizations such as symphony

7 orchestras and theatrical groups, arts and cultural service

8 organizations, local arts councils, visual arts organizations,

9 and media arts organizations. On and after July 1, 2001 (the

10 effective date of Public Act 92-35), however, an entity

11 otherwise eligible for this exemption shall not make tax-free

12 purchases unless it has an active identification number issued

13 by the Department.

14 (4) Personal property purchased by a governmental body, by

15 a corporation, society, association, foundation, or

16 institution organized and operated exclusively for charitable,

17 religious, or educational purposes, or by a not-for-profit

18 corporation, society, association, foundation, institution, or

19 organization that has no compensated officers or employees and

20 that is organized and operated primarily for the recreation of

21 persons 55 years of age or older. A limited liability company

22 may qualify for the exemption under this paragraph only if the

23 limited liability company is organized and operated

24 exclusively for educational purposes. On and after July 1,

25 1987, however, no entity otherwise eligible for this exemption

26 shall make tax-free purchases unless it has an active

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1 exemption identification number issued by the Department.

2 (5) Until July 1, 2003, a passenger car that is a

3 replacement vehicle to the extent that the purchase price of

4 the car is subject to the Replacement Vehicle Tax.

5 (6) Until July 1, 2003 and beginning again on September 1,

6 2004 through August 30, 2014, graphic arts machinery and

7 equipment, including repair and replacement parts, both new

8 and used, and including that manufactured on special order,

9 certified by the purchaser to be used primarily for graphic

10 arts production, and including machinery and equipment

11 purchased for lease. Equipment includes chemicals or chemicals

12 acting as catalysts but only if the chemicals or chemicals

13 acting as catalysts effect a direct and immediate change upon

14 a graphic arts product. Beginning on July 1, 2017, graphic

15 arts machinery and equipment is included in the manufacturing

16 and assembling machinery and equipment exemption under

17 paragraph (18).

18 (7) Farm chemicals.

19 (8) Legal tender, currency, medallions, or gold or silver

20 coinage issued by the State of Illinois, the government of the

21 United States of America, or the government of any foreign

22 country, and bullion.

23 (9) Personal property purchased from a teacher-sponsored

24 student organization affiliated with an elementary or

25 secondary school located in Illinois.

26 (10) A motor vehicle that is used for automobile renting,

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1 as defined in the Automobile Renting Occupation and Use Tax

2 Act.

3 (11) Farm machinery and equipment, both new and used,

4 including that manufactured on special order, certified by the

5 purchaser to be used primarily for production agriculture or

6 State or federal agricultural programs, including individual

7 replacement parts for the machinery and equipment, including

8 machinery and equipment purchased for lease, and including

9 implements of husbandry defined in Section 1-130 of the

10 Illinois Vehicle Code, farm machinery and agricultural

11 chemical and fertilizer spreaders, and nurse wagons required

12 to be registered under Section 3-809 of the Illinois Vehicle

13 Code, but excluding other motor vehicles required to be

14 registered under the Illinois Vehicle Code. Horticultural

15 polyhouses or hoop houses used for propagating, growing, or

16 overwintering plants shall be considered farm machinery and

17 equipment under this item (11). Agricultural chemical tender

18 tanks and dry boxes shall include units sold separately from a

19 motor vehicle required to be licensed and units sold mounted

20 on a motor vehicle required to be licensed if the selling price

21 of the tender is separately stated.

22 Farm machinery and equipment shall include precision

23 farming equipment that is installed or purchased to be

24 installed on farm machinery and equipment including, but not

25 limited to, tractors, harvesters, sprayers, planters, seeders,

26 or spreaders. Precision farming equipment includes, but is not

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1 limited to, soil testing sensors, computers, monitors,

2 software, global positioning and mapping systems, and other

3 such equipment.

4 Farm machinery and equipment also includes computers,

5 sensors, software, and related equipment used primarily in the

6 computer-assisted operation of production agriculture

7 facilities, equipment, and activities such as, but not limited

8 to, the collection, monitoring, and correlation of animal and

9 crop data for the purpose of formulating animal diets and

10 agricultural chemicals. This item (11) is exempt from the

11 provisions of Section 3-90.

12 (12) Until June 30, 2013, fuel and petroleum products sold

13 to or used by an air common carrier, certified by the carrier

14 to be used for consumption, shipment, or storage in the

15 conduct of its business as an air common carrier, for a flight

16 destined for or returning from a location or locations outside

17 the United States without regard to previous or subsequent

18 domestic stopovers.

19 Beginning July 1, 2013, fuel and petroleum products sold

20 to or used by an air carrier, certified by the carrier to be

21 used for consumption, shipment, or storage in the conduct of

22 its business as an air common carrier, for a flight that (i) is

23 engaged in foreign trade or is engaged in trade between the

24 United States and any of its possessions and (ii) transports

25 at least one individual or package for hire from the city of

26 origination to the city of final destination on the same

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1 aircraft, without regard to a change in the flight number of

2 that aircraft.

3 (13) Proceeds of mandatory service charges separately

4 stated on customers' bills for the purchase and consumption of

5 food and beverages purchased at retail from a retailer, to the

6 extent that the proceeds of the service charge are in fact

7 turned over as tips or as a substitute for tips to the

8 employees who participate directly in preparing, serving,

9 hosting or cleaning up the food or beverage function with

10 respect to which the service charge is imposed.

11 (14) Until July 1, 2003, oil field exploration, drilling,

12 and production equipment, including (i) rigs and parts of

13 rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)

14 pipe and tubular goods, including casing and drill strings,

15 (iii) pumps and pump-jack units, (iv) storage tanks and flow

16 lines, (v) any individual replacement part for oil field

17 exploration, drilling, and production equipment, and (vi)

18 machinery and equipment purchased for lease; but excluding

19 motor vehicles required to be registered under the Illinois

20 Vehicle Code.

21 (15) Photoprocessing machinery and equipment, including

22 repair and replacement parts, both new and used, including

23 that manufactured on special order, certified by the purchaser

24 to be used primarily for photoprocessing, and including

25 photoprocessing machinery and equipment purchased for lease.

26 (16) Until July 1, 2028, coal and aggregate exploration,

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1 mining, off-highway hauling, processing, maintenance, and

2 reclamation equipment, including replacement parts and

3 equipment, and including equipment purchased for lease, but

4 excluding motor vehicles required to be registered under the

5 Illinois Vehicle Code. The changes made to this Section by

6 Public Act 97-767 apply on and after July 1, 2003, but no claim

7 for credit or refund is allowed on or after August 16, 2013

8 (the effective date of Public Act 98-456) for such taxes paid

9 during the period beginning July 1, 2003 and ending on August

10 16, 2013 (the effective date of Public Act 98-456).

11 (17) Until July 1, 2003, distillation machinery and

12 equipment, sold as a unit or kit, assembled or installed by the

13 retailer, certified by the user to be used only for the

14 production of ethyl alcohol that will be used for consumption

15 as motor fuel or as a component of motor fuel for the personal

16 use of the user, and not subject to sale or resale.

17 (18) Manufacturing and assembling machinery and equipment

18 used primarily in the process of manufacturing or assembling

19 tangible personal property for wholesale or retail sale or

20 lease, whether that sale or lease is made directly by the

21 manufacturer or by some other person, whether the materials

22 used in the process are owned by the manufacturer or some other

23 person, or whether that sale or lease is made apart from or as

24 an incident to the seller's engaging in the service occupation

25 of producing machines, tools, dies, jigs, patterns, gauges, or

26 other similar items of no commercial value on special order

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1 for a particular purchaser. The exemption provided by this

2 paragraph (18) includes production related tangible personal

3 property, as defined in Section 3-50, purchased on or after

4 July 1, 2019. The exemption provided by this paragraph (18)

5 does not include machinery and equipment used in (i) the

6 generation of electricity for wholesale or retail sale; (ii)

7 the generation or treatment of natural or artificial gas for

8 wholesale or retail sale that is delivered to customers

9 through pipes, pipelines, or mains; or (iii) the treatment of

10 water for wholesale or retail sale that is delivered to

11 customers through pipes, pipelines, or mains. The provisions

12 of Public Act 98-583 are declaratory of existing law as to the

13 meaning and scope of this exemption. Beginning on July 1,

14 2017, the exemption provided by this paragraph (18) includes,

15 but is not limited to, graphic arts machinery and equipment,

16 as defined in paragraph (6) of this Section.

17 (19) Personal property delivered to a purchaser or

18 purchaser's donee inside Illinois when the purchase order for

19 that personal property was received by a florist located

20 outside Illinois who has a florist located inside Illinois

21 deliver the personal property.

22 (20) Semen used for artificial insemination of livestock

23 for direct agricultural production.

24 (21) Horses, or interests in horses, registered with and

25 meeting the requirements of any of the Arabian Horse Club

26 Registry of America, Appaloosa Horse Club, American Quarter

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1 Horse Association, United States Trotting Association, or

2 Jockey Club, as appropriate, used for purposes of breeding or

3 racing for prizes. This item (21) is exempt from the

4 provisions of Section 3-90, and the exemption provided for

5 under this item (21) applies for all periods beginning May 30,

6 1995, but no claim for credit or refund is allowed on or after

7 January 1, 2008 for such taxes paid during the period

8 beginning May 30, 2000 and ending on January 1, 2008.

9 (22) Computers and communications equipment utilized for

10 any hospital purpose and equipment used in the diagnosis,

11 analysis, or treatment of hospital patients purchased by a

12 lessor who leases the equipment, under a lease of one year or

13 longer executed or in effect at the time the lessor would

14 otherwise be subject to the tax imposed by this Act, to a

15 hospital that has been issued an active tax exemption

16 identification number by the Department under Section 1g of

17 the Retailers' Occupation Tax Act. If the equipment is leased

18 in a manner that does not qualify for this exemption or is used

19 in any other non-exempt manner, the lessor shall be liable for

20 the tax imposed under this Act or the Service Use Tax Act, as

21 the case may be, based on the fair market value of the property

22 at the time the non-qualifying use occurs. No lessor shall

23 collect or attempt to collect an amount (however designated)

24 that purports to reimburse that lessor for the tax imposed by

25 this Act or the Service Use Tax Act, as the case may be, if the

26 tax has not been paid by the lessor. If a lessor improperly

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1 collects any such amount from the lessee, the lessee shall

2 have a legal right to claim a refund of that amount from the

3 lessor. If, however, that amount is not refunded to the lessee

4 for any reason, the lessor is liable to pay that amount to the

5 Department.

6 (23) Personal property purchased by a lessor who leases

7 the property, under a lease of one year or longer executed or

8 in effect at the time the lessor would otherwise be subject to

9 the tax imposed by this Act, to a governmental body that has

10 been issued an active sales tax exemption identification

11 number by the Department under Section 1g of the Retailers'

12 Occupation Tax Act. If the property is leased in a manner that

13 does not qualify for this exemption or used in any other

14 non-exempt manner, the lessor shall be liable for the tax

15 imposed under this Act or the Service Use Tax Act, as the case

16 may be, based on the fair market value of the property at the

17 time the non-qualifying use occurs. No lessor shall collect or

18 attempt to collect an amount (however designated) that

19 purports to reimburse that lessor for the tax imposed by this

20 Act or the Service Use Tax Act, as the case may be, if the tax

21 has not been paid by the lessor. If a lessor improperly

22 collects any such amount from the lessee, the lessee shall

23 have a legal right to claim a refund of that amount from the

24 lessor. If, however, that amount is not refunded to the lessee

25 for any reason, the lessor is liable to pay that amount to the

26 Department.

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1 (24) Beginning with taxable years ending on or after

2 December 31, 1995 and ending with taxable years ending on or

3 before December 31, 2004, personal property that is donated

4 for disaster relief to be used in a State or federally declared

5 disaster area in Illinois or bordering Illinois by a

6 manufacturer or retailer that is registered in this State to a

7 corporation, society, association, foundation, or institution

8 that has been issued a sales tax exemption identification

9 number by the Department that assists victims of the disaster

10 who reside within the declared disaster area.

11 (25) Beginning with taxable years ending on or after

12 December 31, 1995 and ending with taxable years ending on or

13 before December 31, 2004, personal property that is used in

14 the performance of infrastructure repairs in this State,

15 including but not limited to municipal roads and streets,

16 access roads, bridges, sidewalks, waste disposal systems,

17 water and sewer line extensions, water distribution and

18 purification facilities, storm water drainage and retention

19 facilities, and sewage treatment facilities, resulting from a

20 State or federally declared disaster in Illinois or bordering

21 Illinois when such repairs are initiated on facilities located

22 in the declared disaster area within 6 months after the

23 disaster.

24 (26) Beginning July 1, 1999, game or game birds purchased

25 at a "game breeding and hunting preserve area" as that term is

26 used in the Wildlife Code. This paragraph is exempt from the

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1 provisions of Section 3-90.

2 (27) A motor vehicle, as that term is defined in Section

3 1-146 of the Illinois Vehicle Code, that is donated to a

4 corporation, limited liability company, society, association,

5 foundation, or institution that is determined by the

6 Department to be organized and operated exclusively for

7 educational purposes. For purposes of this exemption, "a

8 corporation, limited liability company, society, association,

9 foundation, or institution organized and operated exclusively

10 for educational purposes" means all tax-supported public

11 schools, private schools that offer systematic instruction in

12 useful branches of learning by methods common to public

13 schools and that compare favorably in their scope and

14 intensity with the course of study presented in tax-supported

15 schools, and vocational or technical schools or institutes

16 organized and operated exclusively to provide a course of

17 study of not less than 6 weeks duration and designed to prepare

18 individuals to follow a trade or to pursue a manual,

19 technical, mechanical, industrial, business, or commercial

20 occupation.

21 (28) Beginning January 1, 2000, personal property,

22 including food, purchased through fundraising events for the

23 benefit of a public or private elementary or secondary school,

24 a group of those schools, or one or more school districts if

25 the events are sponsored by an entity recognized by the school

26 district that consists primarily of volunteers and includes

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1 parents and teachers of the school children. This paragraph

2 does not apply to fundraising events (i) for the benefit of

3 private home instruction or (ii) for which the fundraising

4 entity purchases the personal property sold at the events from

5 another individual or entity that sold the property for the

6 purpose of resale by the fundraising entity and that profits

7 from the sale to the fundraising entity. This paragraph is

8 exempt from the provisions of Section 3-90.

9 (29) Beginning January 1, 2000 and through December 31,

10 2001, new or used automatic vending machines that prepare and

11 serve hot food and beverages, including coffee, soup, and

12 other items, and replacement parts for these machines.

13 Beginning January 1, 2002 and through June 30, 2003, machines

14 and parts for machines used in commercial, coin-operated

15 amusement and vending business if a use or occupation tax is

16 paid on the gross receipts derived from the use of the

17 commercial, coin-operated amusement and vending machines. This

18 paragraph is exempt from the provisions of Section 3-90.

19 (30) Beginning January 1, 2001 and through June 30, 2016,

20 food for human consumption that is to be consumed off the

21 premises where it is sold (other than alcoholic beverages,

22 soft drinks, and food that has been prepared for immediate

23 consumption) and prescription and nonprescription medicines,

24 drugs, medical appliances, and insulin, urine testing

25 materials, syringes, and needles used by diabetics, for human

26 use, when purchased for use by a person receiving medical

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1 assistance under Article V of the Illinois Public Aid Code who

2 resides in a licensed long-term care facility, as defined in

3 the Nursing Home Care Act, or in a licensed facility as defined

4 in the ID/DD Community Care Act, the MC/DD Act, or the

5 Specialized Mental Health Rehabilitation Act of 2013.

6 (31) Beginning on August 2, 2001 (the effective date of

7 Public Act 92-227), computers and communications equipment

8 utilized for any hospital purpose and equipment used in the

9 diagnosis, analysis, or treatment of hospital patients

10 purchased by a lessor who leases the equipment, under a lease

11 of one year or longer executed or in effect at the time the

12 lessor would otherwise be subject to the tax imposed by this

13 Act, to a hospital that has been issued an active tax exemption

14 identification number by the Department under Section 1g of

15 the Retailers' Occupation Tax Act. If the equipment is leased

16 in a manner that does not qualify for this exemption or is used

17 in any other nonexempt manner, the lessor shall be liable for

18 the tax imposed under this Act or the Service Use Tax Act, as

19 the case may be, based on the fair market value of the property

20 at the time the nonqualifying use occurs. No lessor shall

21 collect or attempt to collect an amount (however designated)

22 that purports to reimburse that lessor for the tax imposed by

23 this Act or the Service Use Tax Act, as the case may be, if the

24 tax has not been paid by the lessor. If a lessor improperly

25 collects any such amount from the lessee, the lessee shall

26 have a legal right to claim a refund of that amount from the

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1 lessor. If, however, that amount is not refunded to the lessee

2 for any reason, the lessor is liable to pay that amount to the

3 Department. This paragraph is exempt from the provisions of

4 Section 3-90.

5 (32) Beginning on August 2, 2001 (the effective date of

6 Public Act 92-227), personal property purchased by a lessor

7 who leases the property, under a lease of one year or longer

8 executed or in effect at the time the lessor would otherwise be

9 subject to the tax imposed by this Act, to a governmental body

10 that has been issued an active sales tax exemption

11 identification number by the Department under Section 1g of

12 the Retailers' Occupation Tax Act. If the property is leased

13 in a manner that does not qualify for this exemption or used in

14 any other nonexempt manner, the lessor shall be liable for the

15 tax imposed under this Act or the Service Use Tax Act, as the

16 case may be, based on the fair market value of the property at

17 the time the nonqualifying use occurs. No lessor shall collect

18 or attempt to collect an amount (however designated) that

19 purports to reimburse that lessor for the tax imposed by this

20 Act or the Service Use Tax Act, as the case may be, if the tax

21 has not been paid by the lessor. If a lessor improperly

22 collects any such amount from the lessee, the lessee shall

23 have a legal right to claim a refund of that amount from the

24 lessor. If, however, that amount is not refunded to the lessee

25 for any reason, the lessor is liable to pay that amount to the

26 Department. This paragraph is exempt from the provisions of

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1 Section 3-90.

2 (33) On and after July 1, 2003 and through June 30, 2004,

3 the use in this State of motor vehicles of the second division

4 with a gross vehicle weight in excess of 8,000 pounds and that

5 are subject to the commercial distribution fee imposed under

6 Section 3-815.1 of the Illinois Vehicle Code. Beginning on

7 July 1, 2004 and through June 30, 2005, the use in this State

8 of motor vehicles of the second division: (i) with a gross

9 vehicle weight rating in excess of 8,000 pounds; (ii) that are

10 subject to the commercial distribution fee imposed under

11 Section 3-815.1 of the Illinois Vehicle Code; and (iii) that

12 are primarily used for commercial purposes. Through June 30,

13 2005, this exemption applies to repair and replacement parts

14 added after the initial purchase of such a motor vehicle if

15 that motor vehicle is used in a manner that would qualify for

16 the rolling stock exemption otherwise provided for in this

17 Act. For purposes of this paragraph, the term "used for

18 commercial purposes" means the transportation of persons or

19 property in furtherance of any commercial or industrial

20 enterprise, whether for-hire or not.

21 (34) Beginning January 1, 2008, tangible personal property

22 used in the construction or maintenance of a community water

23 supply, as defined under Section 3.145 of the Environmental

24 Protection Act, that is operated by a not-for-profit

25 corporation that holds a valid water supply permit issued

26 under Title IV of the Environmental Protection Act. This

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1 paragraph is exempt from the provisions of Section 3-90.

2 (35) Beginning January 1, 2010 and continuing through

3 December 31, 2024, materials, parts, equipment, components,

4 and furnishings incorporated into or upon an aircraft as part

5 of the modification, refurbishment, completion, replacement,

6 repair, or maintenance of the aircraft. This exemption

7 includes consumable supplies used in the modification,

8 refurbishment, completion, replacement, repair, and

9 maintenance of aircraft, but excludes any materials, parts,

10 equipment, components, and consumable supplies used in the

11 modification, replacement, repair, and maintenance of aircraft

12 engines or power plants, whether such engines or power plants

13 are installed or uninstalled upon any such aircraft.

14 "Consumable supplies" include, but are not limited to,

15 adhesive, tape, sandpaper, general purpose lubricants,

16 cleaning solution, latex gloves, and protective films. This

17 exemption applies only to the use of qualifying tangible

18 personal property by persons who modify, refurbish, complete,

19 repair, replace, or maintain aircraft and who (i) hold an Air

20 Agency Certificate and are empowered to operate an approved

21 repair station by the Federal Aviation Administration, (ii)

22 have a Class IV Rating, and (iii) conduct operations in

23 accordance with Part 145 of the Federal Aviation Regulations.

24 The exemption does not include aircraft operated by a

25 commercial air carrier providing scheduled passenger air

26 service pursuant to authority issued under Part 121 or Part

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1 129 of the Federal Aviation Regulations. The changes made to

2 this paragraph (35) by Public Act 98-534 are declarative of

3 existing law. It is the intent of the General Assembly that the

4 exemption under this paragraph (35) applies continuously from

5 January 1, 2010 through December 31, 2024; however, no claim

6 for credit or refund is allowed for taxes paid as a result of

7 the disallowance of this exemption on or after January 1, 2015

8 and prior to February 5, 2020 (the effective date of Public Act

9 101-629) ~~this amendatory Act of the 101st General Assembly~~.

10 (36) Tangible personal property purchased by a

11 public-facilities corporation, as described in Section

12 11-65-10 of the Illinois Municipal Code, for purposes of

13 constructing or furnishing a municipal convention hall, but

14 only if the legal title to the municipal convention hall is

15 transferred to the municipality without any further

16 consideration by or on behalf of the municipality at the time

17 of the completion of the municipal convention hall or upon the

18 retirement or redemption of any bonds or other debt

19 instruments issued by the public-facilities corporation in

20 connection with the development of the municipal convention

21 hall. This exemption includes existing public-facilities

22 corporations as provided in Section 11-65-25 of the Illinois

23 Municipal Code. This paragraph is exempt from the provisions

24 of Section 3-90.

25 (37) Beginning January 1, 2017 and through December 31,

26 2026, menstrual pads, tampons, and menstrual cups.

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1 (38) Merchandise that is subject to the Rental Purchase

2 Agreement Occupation and Use Tax. The purchaser must certify

3 that the item is purchased to be rented subject to a rental

4 purchase agreement, as defined in the Rental Purchase

5 Agreement Act, and provide proof of registration under the

6 Rental Purchase Agreement Occupation and Use Tax Act. This

7 paragraph is exempt from the provisions of Section 3-90.

8 (39) Tangible personal property purchased by a purchaser

9 who is exempt from the tax imposed by this Act by operation of

10 federal law. This paragraph is exempt from the provisions of

11 Section 3-90.

12 (40) Qualified tangible personal property used in the

13 construction or operation of a data center that has been

14 granted a certificate of exemption by the Department of

15 Commerce and Economic Opportunity, whether that tangible

16 personal property is purchased by the owner, operator, or

17 tenant of the data center or by a contractor or subcontractor

18 of the owner, operator, or tenant. Data centers that would

19 have qualified for a certificate of exemption prior to January

20 1, 2020 had Public Act 101-31 been in effect may apply for and

21 obtain an exemption for subsequent purchases of computer

22 equipment or enabling software purchased or leased to upgrade,

23 supplement, or replace computer equipment or enabling software

24 purchased or leased in the original investment that would have

25 qualified.

26 The Department of Commerce and Economic Opportunity shall

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1 grant a certificate of exemption under this item (40) to

2 qualified data centers as defined by Section 605-1025 of the

3 Department of Commerce and Economic Opportunity Law of the

4 Civil Administrative Code of Illinois.

5 For the purposes of this item (40):

6 "Data center" means a building or a series of

7 buildings rehabilitated or constructed to house working

8 servers in one physical location or multiple sites within

9 the State of Illinois.

10 "Qualified tangible personal property" means:

11 electrical systems and equipment; climate control and

12 chilling equipment and systems; mechanical systems and

13 equipment; monitoring and secure systems; emergency

14 generators; hardware; computers; servers; data storage

15 devices; network connectivity equipment; racks; cabinets;

16 telecommunications cabling infrastructure; raised floor

17 systems; peripheral components or systems; software;

18 mechanical, electrical, or plumbing systems; battery

19 systems; cooling systems and towers; temperature control

20 systems; other cabling; and other data center

21 infrastructure equipment and systems necessary to operate

22 qualified tangible personal property, including fixtures;

23 and component parts of any of the foregoing, including

24 installation, maintenance, repair, refurbishment, and

25 replacement of qualified tangible personal property to

26 generate, transform, transmit, distribute, or manage

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1 electricity necessary to operate qualified tangible

2 personal property; and all other tangible personal

3 property that is essential to the operations of a computer

4 data center. The term "qualified tangible personal

5 property" also includes building materials physically

6 incorporated in to the qualifying data center. To document

7 the exemption allowed under this Section, the retailer

8 must obtain from the purchaser a copy of the certificate

9 of eligibility issued by the Department of Commerce and

10 Economic Opportunity.

11 This item (40) is exempt from the provisions of Section

12 3-90.

13 (41) Beginning July 1, 2022, breast pumps, breast pump

14 collection and storage supplies, and breast pump kits. This

15 item (41) is exempt from the provisions of Section 3-90. As

16 used in this item (41):

17 "Breast pump" means an electrically controlled or

18 manually controlled pump device designed or marketed to be

19 used to express milk from a human breast during lactation,

20 including the pump device and any battery, AC adapter, or

21 other power supply unit that is used to power the pump

22 device and is packaged and sold with the pump device at the

23 time of sale.

24 "Breast pump collection and storage supplies" means

25 items of tangible personal property designed or marketed

26 to be used in conjunction with a breast pump to collect

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1 milk expressed from a human breast and to store collected

2 milk until it is ready for consumption.

3 "Breast pump collection and storage supplies"

4 includes, but is not limited to: breast shields and breast

5 shield connectors; breast pump tubes and tubing adapters;

6 breast pump valves and membranes; backflow protectors and

7 backflow protector adaptors; bottles and bottle caps

8 specific to the operation of the breast pump; and breast

9 milk storage bags.

10 "Breast pump collection and storage supplies" does not

11 include: (1) bottles and bottle caps not specific to the

12 operation of the breast pump; (2) breast pump travel bags

13 and other similar carrying accessories, including ice

14 packs, labels, and other similar products; (3) breast pump

15 cleaning supplies; (4) nursing bras, bra pads, breast

16 shells, and other similar products; and (5) creams,

17 ointments, and other similar products that relieve

18 breastfeeding-related symptoms or conditions of the

19 breasts or nipples, unless sold as part of a breast pump

20 kit that is pre-packaged by the breast pump manufacturer

21 or distributor.

22 "Breast pump kit" means a kit that: (1) contains no

23 more than a breast pump, breast pump collection and

24 storage supplies, a rechargeable battery for operating the

25 breast pump, a breastmilk cooler, bottle stands, ice

26 packs, and a breast pump carrying case; and (2) is

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1 pre-packaged as a breast pump kit by the breast pump

2 manufacturer or distributor.

3 (42) ~~(41)~~ Tangible personal property sold by or on behalf

4 of the State Treasurer pursuant to the Revised Uniform

5 Unclaimed Property Act. This item (42) ~~(41)~~ is exempt from the

6 provisions of Section 3-90.

7 (43) Qualified tangible personal property used in the

8 construction or operation of a megaproject for which a

9 certificate has been issued by the Department under Division

10 22 of Article 10 of the Property Tax Code, whether that

11 tangible personal property is purchased by the owner,

12 operator, or tenant of the megaproject or by a contractor or

13 subcontractor of the owner, operator, or tenant.

14 As used in this item (43):

15 "Facility" means a building or series of buildings.

16 "Megaproject" means a facility that is rehabilitated or

17 constructed as described in Division 22 of Article 10 of the

18 Property Tax Code.

19 "Qualified tangible personal property" means: electrical

20 systems and equipment; climate control and chilling equipment

21 and systems; mechanical systems and equipment; monitoring and

22 secure systems; emergency generators; hardware; computers;

23 servers; data storage devices; network connectivity equipment;

24 racks; cabinets; telecommunications cabling infrastructure;

25 raised floor systems; peripheral components or systems;

26 software; mechanical, electrical, or plumbing systems; battery

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1 systems; cooling systems and towers; temperature control

2 systems; other cabling; and other data center infrastructure

3 equipment and systems necessary to operate qualified tangible

4 personal property, including fixtures; and component parts of

5 those items, including installation, maintenance, repair,

6 refurbishment, and replacement of qualified tangible personal

7 property to generate, transform, transmit, distribute, or

8 manage electricity necessary to operate qualified tangible

9 personal property; and all other tangible personal property

10 that is essential to the operations of a megaproject. The term

11 "qualified tangible personal property" also includes building

12 materials to be incorporated into the megaproject. To document

13 the exemption allowed under this Section, the retailer,

14 contractor or subcontractor or supplier must obtain from the

15 purchaser a copy of the certificate issued by the Department

16 of Revenue for the megaproject as described and defined in

17 Division 22 of Article 10 of the Property Tax Code.

18 This item (43) is exempt from the provisions of Section

19 3-90.

20 (Source: P.A. 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;

21 101-81, eff. 7-12-19; 101-629, eff. 2-5-20; 102-16, eff.

22 6-17-21; 102-700, Article 70, Section 70-5, eff. 4-19-22;

23 102-700, Article 75, Section 75-5, eff. 4-19-22; 102-1026,

24 eff. 5-27-22; revised 8-1-22.)

25 Section 10. The Service Use Tax Act is amended by changing

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1 Section 3-5 as follows:

2 (35 ILCS 110/3-5)

3 Sec. 3-5. Exemptions. Use of the following tangible

4 personal property is exempt from the tax imposed by this Act:

5 (1) Personal property purchased from a corporation,

6 society, association, foundation, institution, or

7 organization, other than a limited liability company, that is

8 organized and operated as a not-for-profit service enterprise

9 for the benefit of persons 65 years of age or older if the

10 personal property was not purchased by the enterprise for the

11 purpose of resale by the enterprise.

12 (2) Personal property purchased by a non-profit Illinois

13 county fair association for use in conducting, operating, or

14 promoting the county fair.

15 (3) Personal property purchased by a not-for-profit arts

16 or cultural organization that establishes, by proof required

17 by the Department by rule, that it has received an exemption

18 under Section 501(c)(3) of the Internal Revenue Code and that

19 is organized and operated primarily for the presentation or

20 support of arts or cultural programming, activities, or

21 services. These organizations include, but are not limited to,

22 music and dramatic arts organizations such as symphony

23 orchestras and theatrical groups, arts and cultural service

24 organizations, local arts councils, visual arts organizations,

25 and media arts organizations. On and after July 1, 2001 (the

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1 effective date of Public Act 92-35), however, an entity

2 otherwise eligible for this exemption shall not make tax-free

3 purchases unless it has an active identification number issued

4 by the Department.

5 (4) Legal tender, currency, medallions, or gold or silver

6 coinage issued by the State of Illinois, the government of the

7 United States of America, or the government of any foreign

8 country, and bullion.

9 (5) Until July 1, 2003 and beginning again on September 1,

10 2004 through August 30, 2014, graphic arts machinery and

11 equipment, including repair and replacement parts, both new

12 and used, and including that manufactured on special order or

13 purchased for lease, certified by the purchaser to be used

14 primarily for graphic arts production. Equipment includes

15 chemicals or chemicals acting as catalysts but only if the

16 chemicals or chemicals acting as catalysts effect a direct and

17 immediate change upon a graphic arts product. Beginning on

18 July 1, 2017, graphic arts machinery and equipment is included

19 in the manufacturing and assembling machinery and equipment

20 exemption under Section 2 of this Act.

21 (6) Personal property purchased from a teacher-sponsored

22 student organization affiliated with an elementary or

23 secondary school located in Illinois.

24 (7) Farm machinery and equipment, both new and used,

25 including that manufactured on special order, certified by the

26 purchaser to be used primarily for production agriculture or

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1 State or federal agricultural programs, including individual

2 replacement parts for the machinery and equipment, including

3 machinery and equipment purchased for lease, and including

4 implements of husbandry defined in Section 1-130 of the

5 Illinois Vehicle Code, farm machinery and agricultural

6 chemical and fertilizer spreaders, and nurse wagons required

7 to be registered under Section 3-809 of the Illinois Vehicle

8 Code, but excluding other motor vehicles required to be

9 registered under the Illinois Vehicle Code. Horticultural

10 polyhouses or hoop houses used for propagating, growing, or

11 overwintering plants shall be considered farm machinery and

12 equipment under this item (7). Agricultural chemical tender

13 tanks and dry boxes shall include units sold separately from a

14 motor vehicle required to be licensed and units sold mounted

15 on a motor vehicle required to be licensed if the selling price

16 of the tender is separately stated.

17 Farm machinery and equipment shall include precision

18 farming equipment that is installed or purchased to be

19 installed on farm machinery and equipment including, but not

20 limited to, tractors, harvesters, sprayers, planters, seeders,

21 or spreaders. Precision farming equipment includes, but is not

22 limited to, soil testing sensors, computers, monitors,

23 software, global positioning and mapping systems, and other

24 such equipment.

25 Farm machinery and equipment also includes computers,

26 sensors, software, and related equipment used primarily in the

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1 computer-assisted operation of production agriculture

2 facilities, equipment, and activities such as, but not limited

3 to, the collection, monitoring, and correlation of animal and

4 crop data for the purpose of formulating animal diets and

5 agricultural chemicals. This item (7) is exempt from the

6 provisions of Section 3-75.

7 (8) Until June 30, 2013, fuel and petroleum products sold

8 to or used by an air common carrier, certified by the carrier

9 to be used for consumption, shipment, or storage in the

10 conduct of its business as an air common carrier, for a flight

11 destined for or returning from a location or locations outside

12 the United States without regard to previous or subsequent

13 domestic stopovers.

14 Beginning July 1, 2013, fuel and petroleum products sold

15 to or used by an air carrier, certified by the carrier to be

16 used for consumption, shipment, or storage in the conduct of

17 its business as an air common carrier, for a flight that (i) is

18 engaged in foreign trade or is engaged in trade between the

19 United States and any of its possessions and (ii) transports

20 at least one individual or package for hire from the city of

21 origination to the city of final destination on the same

22 aircraft, without regard to a change in the flight number of

23 that aircraft.

24 (9) Proceeds of mandatory service charges separately

25 stated on customers' bills for the purchase and consumption of

26 food and beverages acquired as an incident to the purchase of a

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1 service from a serviceman, to the extent that the proceeds of

2 the service charge are in fact turned over as tips or as a

3 substitute for tips to the employees who participate directly

4 in preparing, serving, hosting or cleaning up the food or

5 beverage function with respect to which the service charge is

6 imposed.

7 (10) Until July 1, 2003, oil field exploration, drilling,

8 and production equipment, including (i) rigs and parts of

9 rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)

10 pipe and tubular goods, including casing and drill strings,

11 (iii) pumps and pump-jack units, (iv) storage tanks and flow

12 lines, (v) any individual replacement part for oil field

13 exploration, drilling, and production equipment, and (vi)

14 machinery and equipment purchased for lease; but excluding

15 motor vehicles required to be registered under the Illinois

16 Vehicle Code.

17 (11) Proceeds from the sale of photoprocessing machinery

18 and equipment, including repair and replacement parts, both

19 new and used, including that manufactured on special order,

20 certified by the purchaser to be used primarily for

21 photoprocessing, and including photoprocessing machinery and

22 equipment purchased for lease.

23 (12) Until July 1, 2028, coal and aggregate exploration,

24 mining, off-highway hauling, processing, maintenance, and

25 reclamation equipment, including replacement parts and

26 equipment, and including equipment purchased for lease, but

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1 excluding motor vehicles required to be registered under the

2 Illinois Vehicle Code. The changes made to this Section by

3 Public Act 97-767 apply on and after July 1, 2003, but no claim

4 for credit or refund is allowed on or after August 16, 2013

5 (the effective date of Public Act 98-456) for such taxes paid

6 during the period beginning July 1, 2003 and ending on August

7 16, 2013 (the effective date of Public Act 98-456).

8 (13) Semen used for artificial insemination of livestock

9 for direct agricultural production.

10 (14) Horses, or interests in horses, registered with and

11 meeting the requirements of any of the Arabian Horse Club

12 Registry of America, Appaloosa Horse Club, American Quarter

13 Horse Association, United States Trotting Association, or

14 Jockey Club, as appropriate, used for purposes of breeding or

15 racing for prizes. This item (14) is exempt from the

16 provisions of Section 3-75, and the exemption provided for

17 under this item (14) applies for all periods beginning May 30,

18 1995, but no claim for credit or refund is allowed on or after

19 January 1, 2008 (the effective date of Public Act 95-88) for

20 such taxes paid during the period beginning May 30, 2000 and

21 ending on January 1, 2008 (the effective date of Public Act

22 95-88).

23 (15) Computers and communications equipment utilized for

24 any hospital purpose and equipment used in the diagnosis,

25 analysis, or treatment of hospital patients purchased by a

26 lessor who leases the equipment, under a lease of one year or

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1 longer executed or in effect at the time the lessor would

2 otherwise be subject to the tax imposed by this Act, to a

3 hospital that has been issued an active tax exemption

4 identification number by the Department under Section 1g of

5 the Retailers' Occupation Tax Act. If the equipment is leased

6 in a manner that does not qualify for this exemption or is used

7 in any other non-exempt manner, the lessor shall be liable for

8 the tax imposed under this Act or the Use Tax Act, as the case

9 may be, based on the fair market value of the property at the

10 time the non-qualifying use occurs. No lessor shall collect or

11 attempt to collect an amount (however designated) that

12 purports to reimburse that lessor for the tax imposed by this

13 Act or the Use Tax Act, as the case may be, if the tax has not

14 been paid by the lessor. If a lessor improperly collects any

15 such amount from the lessee, the lessee shall have a legal

16 right to claim a refund of that amount from the lessor. If,

17 however, that amount is not refunded to the lessee for any

18 reason, the lessor is liable to pay that amount to the

19 Department.

20 (16) Personal property purchased by a lessor who leases

21 the property, under a lease of one year or longer executed or

22 in effect at the time the lessor would otherwise be subject to

23 the tax imposed by this Act, to a governmental body that has

24 been issued an active tax exemption identification number by

25 the Department under Section 1g of the Retailers' Occupation

26 Tax Act. If the property is leased in a manner that does not

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1 qualify for this exemption or is used in any other non-exempt

2 manner, the lessor shall be liable for the tax imposed under

3 this Act or the Use Tax Act, as the case may be, based on the

4 fair market value of the property at the time the

5 non-qualifying use occurs. No lessor shall collect or attempt

6 to collect an amount (however designated) that purports to

7 reimburse that lessor for the tax imposed by this Act or the

8 Use Tax Act, as the case may be, if the tax has not been paid

9 by the lessor. If a lessor improperly collects any such amount

10 from the lessee, the lessee shall have a legal right to claim a

11 refund of that amount from the lessor. If, however, that

12 amount is not refunded to the lessee for any reason, the lessor

13 is liable to pay that amount to the Department.

14 (17) Beginning with taxable years ending on or after

15 December 31, 1995 and ending with taxable years ending on or

16 before December 31, 2004, personal property that is donated

17 for disaster relief to be used in a State or federally declared

18 disaster area in Illinois or bordering Illinois by a

19 manufacturer or retailer that is registered in this State to a

20 corporation, society, association, foundation, or institution

21 that has been issued a sales tax exemption identification

22 number by the Department that assists victims of the disaster

23 who reside within the declared disaster area.

24 (18) Beginning with taxable years ending on or after

25 December 31, 1995 and ending with taxable years ending on or

26 before December 31, 2004, personal property that is used in

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1 the performance of infrastructure repairs in this State,

2 including but not limited to municipal roads and streets,

3 access roads, bridges, sidewalks, waste disposal systems,

4 water and sewer line extensions, water distribution and

5 purification facilities, storm water drainage and retention

6 facilities, and sewage treatment facilities, resulting from a

7 State or federally declared disaster in Illinois or bordering

8 Illinois when such repairs are initiated on facilities located

9 in the declared disaster area within 6 months after the

10 disaster.

11 (19) Beginning July 1, 1999, game or game birds purchased

12 at a "game breeding and hunting preserve area" as that term is

13 used in the Wildlife Code. This paragraph is exempt from the

14 provisions of Section 3-75.

15 (20) A motor vehicle, as that term is defined in Section

16 1-146 of the Illinois Vehicle Code, that is donated to a

17 corporation, limited liability company, society, association,

18 foundation, or institution that is determined by the

19 Department to be organized and operated exclusively for

20 educational purposes. For purposes of this exemption, "a

21 corporation, limited liability company, society, association,

22 foundation, or institution organized and operated exclusively

23 for educational purposes" means all tax-supported public

24 schools, private schools that offer systematic instruction in

25 useful branches of learning by methods common to public

26 schools and that compare favorably in their scope and

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1 intensity with the course of study presented in tax-supported

2 schools, and vocational or technical schools or institutes

3 organized and operated exclusively to provide a course of

4 study of not less than 6 weeks duration and designed to prepare

5 individuals to follow a trade or to pursue a manual,

6 technical, mechanical, industrial, business, or commercial

7 occupation.

8 (21) Beginning January 1, 2000, personal property,

9 including food, purchased through fundraising events for the

10 benefit of a public or private elementary or secondary school,

11 a group of those schools, or one or more school districts if

12 the events are sponsored by an entity recognized by the school

13 district that consists primarily of volunteers and includes

14 parents and teachers of the school children. This paragraph

15 does not apply to fundraising events (i) for the benefit of

16 private home instruction or (ii) for which the fundraising

17 entity purchases the personal property sold at the events from

18 another individual or entity that sold the property for the

19 purpose of resale by the fundraising entity and that profits

20 from the sale to the fundraising entity. This paragraph is

21 exempt from the provisions of Section 3-75.

22 (22) Beginning January 1, 2000 and through December 31,

23 2001, new or used automatic vending machines that prepare and

24 serve hot food and beverages, including coffee, soup, and

25 other items, and replacement parts for these machines.

26 Beginning January 1, 2002 and through June 30, 2003, machines

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1 and parts for machines used in commercial, coin-operated

2 amusement and vending business if a use or occupation tax is

3 paid on the gross receipts derived from the use of the

4 commercial, coin-operated amusement and vending machines. This

5 paragraph is exempt from the provisions of Section 3-75.

6 (23) Beginning August 23, 2001 and through June 30, 2016,

7 food for human consumption that is to be consumed off the

8 premises where it is sold (other than alcoholic beverages,

9 soft drinks, and food that has been prepared for immediate

10 consumption) and prescription and nonprescription medicines,

11 drugs, medical appliances, and insulin, urine testing

12 materials, syringes, and needles used by diabetics, for human

13 use, when purchased for use by a person receiving medical

14 assistance under Article V of the Illinois Public Aid Code who

15 resides in a licensed long-term care facility, as defined in

16 the Nursing Home Care Act, or in a licensed facility as defined

17 in the ID/DD Community Care Act, the MC/DD Act, or the

18 Specialized Mental Health Rehabilitation Act of 2013.

19 (24) Beginning on August 2, 2001 (the effective date of

20 Public Act 92-227), computers and communications equipment

21 utilized for any hospital purpose and equipment used in the

22 diagnosis, analysis, or treatment of hospital patients

23 purchased by a lessor who leases the equipment, under a lease

24 of one year or longer executed or in effect at the time the

25 lessor would otherwise be subject to the tax imposed by this

26 Act, to a hospital that has been issued an active tax exemption

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1 identification number by the Department under Section 1g of

2 the Retailers' Occupation Tax Act. If the equipment is leased

3 in a manner that does not qualify for this exemption or is used

4 in any other nonexempt manner, the lessor shall be liable for

5 the tax imposed under this Act or the Use Tax Act, as the case

6 may be, based on the fair market value of the property at the

7 time the nonqualifying use occurs. No lessor shall collect or

8 attempt to collect an amount (however designated) that

9 purports to reimburse that lessor for the tax imposed by this

10 Act or the Use Tax Act, as the case may be, if the tax has not

11 been paid by the lessor. If a lessor improperly collects any

12 such amount from the lessee, the lessee shall have a legal

13 right to claim a refund of that amount from the lessor. If,

14 however, that amount is not refunded to the lessee for any

15 reason, the lessor is liable to pay that amount to the

16 Department. This paragraph is exempt from the provisions of

17 Section 3-75.

18 (25) Beginning on August 2, 2001 (the effective date of

19 Public Act 92-227), personal property purchased by a lessor

20 who leases the property, under a lease of one year or longer

21 executed or in effect at the time the lessor would otherwise be

22 subject to the tax imposed by this Act, to a governmental body

23 that has been issued an active tax exemption identification

24 number by the Department under Section 1g of the Retailers'

25 Occupation Tax Act. If the property is leased in a manner that

26 does not qualify for this exemption or is used in any other

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1 nonexempt manner, the lessor shall be liable for the tax

2 imposed under this Act or the Use Tax Act, as the case may be,

3 based on the fair market value of the property at the time the

4 nonqualifying use occurs. No lessor shall collect or attempt

5 to collect an amount (however designated) that purports to

6 reimburse that lessor for the tax imposed by this Act or the

7 Use Tax Act, as the case may be, if the tax has not been paid

8 by the lessor. If a lessor improperly collects any such amount

9 from the lessee, the lessee shall have a legal right to claim a

10 refund of that amount from the lessor. If, however, that

11 amount is not refunded to the lessee for any reason, the lessor

12 is liable to pay that amount to the Department. This paragraph

13 is exempt from the provisions of Section 3-75.

14 (26) Beginning January 1, 2008, tangible personal property

15 used in the construction or maintenance of a community water

16 supply, as defined under Section 3.145 of the Environmental

17 Protection Act, that is operated by a not-for-profit

18 corporation that holds a valid water supply permit issued

19 under Title IV of the Environmental Protection Act. This

20 paragraph is exempt from the provisions of Section 3-75.

21 (27) Beginning January 1, 2010 and continuing through

22 December 31, 2024, materials, parts, equipment, components,

23 and furnishings incorporated into or upon an aircraft as part

24 of the modification, refurbishment, completion, replacement,

25 repair, or maintenance of the aircraft. This exemption

26 includes consumable supplies used in the modification,

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1 refurbishment, completion, replacement, repair, and

2 maintenance of aircraft, but excludes any materials, parts,

3 equipment, components, and consumable supplies used in the

4 modification, replacement, repair, and maintenance of aircraft

5 engines or power plants, whether such engines or power plants

6 are installed or uninstalled upon any such aircraft.

7 "Consumable supplies" include, but are not limited to,

8 adhesive, tape, sandpaper, general purpose lubricants,

9 cleaning solution, latex gloves, and protective films. This

10 exemption applies only to the use of qualifying tangible

11 personal property transferred incident to the modification,

12 refurbishment, completion, replacement, repair, or maintenance

13 of aircraft by persons who (i) hold an Air Agency Certificate

14 and are empowered to operate an approved repair station by the

15 Federal Aviation Administration, (ii) have a Class IV Rating,

16 and (iii) conduct operations in accordance with Part 145 of

17 the Federal Aviation Regulations. The exemption does not

18 include aircraft operated by a commercial air carrier

19 providing scheduled passenger air service pursuant to

20 authority issued under Part 121 or Part 129 of the Federal

21 Aviation Regulations. The changes made to this paragraph (27)

22 by Public Act 98-534 are declarative of existing law. It is the

23 intent of the General Assembly that the exemption under this

24 paragraph (27) applies continuously from January 1, 2010

25 through December 31, 2024; however, no claim for credit or

26 refund is allowed for taxes paid as a result of the

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1 disallowance of this exemption on or after January 1, 2015 and

2 prior to February 5, 2020 (the effective date of Public Act

3 101-629) ~~this amendatory Act of the 101st General Assembly~~.

4 (28) Tangible personal property purchased by a

5 public-facilities corporation, as described in Section

6 11-65-10 of the Illinois Municipal Code, for purposes of

7 constructing or furnishing a municipal convention hall, but

8 only if the legal title to the municipal convention hall is

9 transferred to the municipality without any further

10 consideration by or on behalf of the municipality at the time

11 of the completion of the municipal convention hall or upon the

12 retirement or redemption of any bonds or other debt

13 instruments issued by the public-facilities corporation in

14 connection with the development of the municipal convention

15 hall. This exemption includes existing public-facilities

16 corporations as provided in Section 11-65-25 of the Illinois

17 Municipal Code. This paragraph is exempt from the provisions

18 of Section 3-75.

19 (29) Beginning January 1, 2017 and through December 31,

20 2026, menstrual pads, tampons, and menstrual cups.

21 (30) Tangible personal property transferred to a purchaser

22 who is exempt from the tax imposed by this Act by operation of

23 federal law. This paragraph is exempt from the provisions of

24 Section 3-75.

25 (31) Qualified tangible personal property used in the

26 construction or operation of a data center that has been

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1 granted a certificate of exemption by the Department of

2 Commerce and Economic Opportunity, whether that tangible

3 personal property is purchased by the owner, operator, or

4 tenant of the data center or by a contractor or subcontractor

5 of the owner, operator, or tenant. Data centers that would

6 have qualified for a certificate of exemption prior to January

7 1, 2020 had Public Act 101-31 ~~this amendatory Act of the 101st~~

8 ~~General Assembly~~ been in effect, may apply for and obtain an

9 exemption for subsequent purchases of computer equipment or

10 enabling software purchased or leased to upgrade, supplement,

11 or replace computer equipment or enabling software purchased

12 or leased in the original investment that would have

13 qualified.

14 The Department of Commerce and Economic Opportunity shall

15 grant a certificate of exemption under this item (31) to

16 qualified data centers as defined by Section 605-1025 of the

17 Department of Commerce and Economic Opportunity Law of the

18 Civil Administrative Code of Illinois.

19 For the purposes of this item (31):

20 "Data center" means a building or a series of

21 buildings rehabilitated or constructed to house working

22 servers in one physical location or multiple sites within

23 the State of Illinois.

24 "Qualified tangible personal property" means:

25 electrical systems and equipment; climate control and

26 chilling equipment and systems; mechanical systems and

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1 equipment; monitoring and secure systems; emergency

2 generators; hardware; computers; servers; data storage

3 devices; network connectivity equipment; racks; cabinets;

4 telecommunications cabling infrastructure; raised floor

5 systems; peripheral components or systems; software;

6 mechanical, electrical, or plumbing systems; battery

7 systems; cooling systems and towers; temperature control

8 systems; other cabling; and other data center

9 infrastructure equipment and systems necessary to operate

10 qualified tangible personal property, including fixtures;

11 and component parts of any of the foregoing, including

12 installation, maintenance, repair, refurbishment, and

13 replacement of qualified tangible personal property to

14 generate, transform, transmit, distribute, or manage

15 electricity necessary to operate qualified tangible

16 personal property; and all other tangible personal

17 property that is essential to the operations of a computer

18 data center. The term "qualified tangible personal

19 property" also includes building materials physically

20 incorporated in to the qualifying data center. To document

21 the exemption allowed under this Section, the retailer

22 must obtain from the purchaser a copy of the certificate

23 of eligibility issued by the Department of Commerce and

24 Economic Opportunity.

25 This item (31) is exempt from the provisions of Section

26 3-75.

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1 (32) Beginning July 1, 2022, breast pumps, breast pump

2 collection and storage supplies, and breast pump kits. This

3 item (32) is exempt from the provisions of Section 3-75. As

4 used in this item (32):

5 "Breast pump" means an electrically controlled or

6 manually controlled pump device designed or marketed to be

7 used to express milk from a human breast during lactation,

8 including the pump device and any battery, AC adapter, or

9 other power supply unit that is used to power the pump

10 device and is packaged and sold with the pump device at the

11 time of sale.

12 "Breast pump collection and storage supplies" means

13 items of tangible personal property designed or marketed

14 to be used in conjunction with a breast pump to collect

15 milk expressed from a human breast and to store collected

16 milk until it is ready for consumption.

17 "Breast pump collection and storage supplies"

18 includes, but is not limited to: breast shields and breast

19 shield connectors; breast pump tubes and tubing adapters;

20 breast pump valves and membranes; backflow protectors and

21 backflow protector adaptors; bottles and bottle caps

22 specific to the operation of the breast pump; and breast

23 milk storage bags.

24 "Breast pump collection and storage supplies" does not

25 include: (1) bottles and bottle caps not specific to the

26 operation of the breast pump; (2) breast pump travel bags

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1 and other similar carrying accessories, including ice

2 packs, labels, and other similar products; (3) breast pump

3 cleaning supplies; (4) nursing bras, bra pads, breast

4 shells, and other similar products; and (5) creams,

5 ointments, and other similar products that relieve

6 breastfeeding-related symptoms or conditions of the

7 breasts or nipples, unless sold as part of a breast pump

8 kit that is pre-packaged by the breast pump manufacturer

9 or distributor.

10 "Breast pump kit" means a kit that: (1) contains no

11 more than a breast pump, breast pump collection and

12 storage supplies, a rechargeable battery for operating the

13 breast pump, a breastmilk cooler, bottle stands, ice

14 packs, and a breast pump carrying case; and (2) is

15 pre-packaged as a breast pump kit by the breast pump

16 manufacturer or distributor.

17 (33) ~~(32)~~ Tangible personal property sold by or on behalf

18 of the State Treasurer pursuant to the Revised Uniform

19 Unclaimed Property Act. This item (33) ~~(32)~~ is exempt from the

20 provisions of Section 3-75.

21 (34) Qualified tangible personal property used in the

22 construction or operation of a megaproject for which a

23 certificate has been issued by the Department of Revenue as

24 described and defined in Division 22 of Article 10 of the

25 Property Tax Code, whether that tangible personal property is

26 purchased by the owner, operator, or tenant of the megaproject

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1 or by a contractor or subcontractor of the owner, operator, or

2 tenant.

3 For the purposes of this item (34):

4 "Facility" means a building or series of buildings.

5 "Megaproject" means a facility that is rehabilitated or

6 constructed as described in Division 22 of Article 10 of the

7 Property Tax Code.

8 "Qualified tangible personal property" means: electrical

9 systems and equipment; climate control and chilling equipment

10 and systems; mechanical systems and equipment; monitoring and

11 secure systems; emergency generators; hardware; computers;

12 servers; data storage devices; network connectivity equipment;

13 racks; cabinets; telecommunications cabling infrastructure;

14 raised floor systems; peripheral components or systems;

15 software; mechanical, electrical, or plumbing systems; battery

16 systems; cooling systems and towers; temperature control

17 systems; other cabling; and other data center infrastructure

18 equipment and systems necessary to operate qualified tangible

19 personal property, including fixtures; and component parts of

20 any of the foregoing, including installation, maintenance,

21 repair, refurbishment, and replacement of qualified tangible

22 personal property to generate, transform, transmit,

23 distribute, or manage electricity necessary to operate

24 qualified tangible personal property; and all other tangible

25 personal property that is essential to the operations of a

26 megaproject. The term "qualified tangible personal property"

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1 also includes building materials to be incorporated into the

2 megaproject. To document the exemption allowed under this

3 Section, the retailer, contractor or subcontractor or supplier

4 must obtain from the purchaser a copy of the certificate

5 issued by the Department of Revenue for the megaproject as

6 described and defined in Division 22 of Article 10 of the

7 Property Tax Code.

8 This item (34) is exempt from the provisions of Section

9 3-75.

10 (Source: P.A. 101-31, eff. 6-28-19; 101-81, eff. 7-12-19;

11 101-629, eff. 2-5-20; 102-16, eff. 6-17-21; 102-700, Article

12 70, Section 70-10, eff. 4-19-22; 102-700, Article 75, Section

13 75-10, eff. 4-19-22; 102-1026, eff. 5-27-22; revised 8-3-22.)

14 Section 15. The Service Occupation Tax Act is amended by

15 changing Section 3-5 as follows:

16 (35 ILCS 115/3-5)

17 Sec. 3-5. Exemptions. The following tangible personal

18 property is exempt from the tax imposed by this Act:

19 (1) Personal property sold by a corporation, society,

20 association, foundation, institution, or organization, other

21 than a limited liability company, that is organized and

22 operated as a not-for-profit service enterprise for the

23 benefit of persons 65 years of age or older if the personal

24 property was not purchased by the enterprise for the purpose

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1 of resale by the enterprise.

2 (2) Personal property purchased by a not-for-profit

3 Illinois county fair association for use in conducting,

4 operating, or promoting the county fair.

5 (3) Personal property purchased by any not-for-profit arts

6 or cultural organization that establishes, by proof required

7 by the Department by rule, that it has received an exemption

8 under Section 501(c)(3) of the Internal Revenue Code and that

9 is organized and operated primarily for the presentation or

10 support of arts or cultural programming, activities, or

11 services. These organizations include, but are not limited to,

12 music and dramatic arts organizations such as symphony

13 orchestras and theatrical groups, arts and cultural service

14 organizations, local arts councils, visual arts organizations,

15 and media arts organizations. On and after July 1, 2001 (the

16 effective date of Public Act 92-35), however, an entity

17 otherwise eligible for this exemption shall not make tax-free

18 purchases unless it has an active identification number issued

19 by the Department.

20 (4) Legal tender, currency, medallions, or gold or silver

21 coinage issued by the State of Illinois, the government of the

22 United States of America, or the government of any foreign

23 country, and bullion.

24 (5) Until July 1, 2003 and beginning again on September 1,

25 2004 through August 30, 2014, graphic arts machinery and

26 equipment, including repair and replacement parts, both new

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1 and used, and including that manufactured on special order or

2 purchased for lease, certified by the purchaser to be used

3 primarily for graphic arts production. Equipment includes

4 chemicals or chemicals acting as catalysts but only if the

5 chemicals or chemicals acting as catalysts effect a direct and

6 immediate change upon a graphic arts product. Beginning on

7 July 1, 2017, graphic arts machinery and equipment is included

8 in the manufacturing and assembling machinery and equipment

9 exemption under Section 2 of this Act.

10 (6) Personal property sold by a teacher-sponsored student

11 organization affiliated with an elementary or secondary school

12 located in Illinois.

13 (7) Farm machinery and equipment, both new and used,

14 including that manufactured on special order, certified by the

15 purchaser to be used primarily for production agriculture or

16 State or federal agricultural programs, including individual

17 replacement parts for the machinery and equipment, including

18 machinery and equipment purchased for lease, and including

19 implements of husbandry defined in Section 1-130 of the

20 Illinois Vehicle Code, farm machinery and agricultural

21 chemical and fertilizer spreaders, and nurse wagons required

22 to be registered under Section 3-809 of the Illinois Vehicle

23 Code, but excluding other motor vehicles required to be

24 registered under the Illinois Vehicle Code. Horticultural

25 polyhouses or hoop houses used for propagating, growing, or

26 overwintering plants shall be considered farm machinery and

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1 equipment under this item (7). Agricultural chemical tender

2 tanks and dry boxes shall include units sold separately from a

3 motor vehicle required to be licensed and units sold mounted

4 on a motor vehicle required to be licensed if the selling price

5 of the tender is separately stated.

6 Farm machinery and equipment shall include precision

7 farming equipment that is installed or purchased to be

8 installed on farm machinery and equipment including, but not

9 limited to, tractors, harvesters, sprayers, planters, seeders,

10 or spreaders. Precision farming equipment includes, but is not

11 limited to, soil testing sensors, computers, monitors,

12 software, global positioning and mapping systems, and other

13 such equipment.

14 Farm machinery and equipment also includes computers,

15 sensors, software, and related equipment used primarily in the

16 computer-assisted operation of production agriculture

17 facilities, equipment, and activities such as, but not limited

18 to, the collection, monitoring, and correlation of animal and

19 crop data for the purpose of formulating animal diets and

20 agricultural chemicals. This item (7) is exempt from the

21 provisions of Section 3-55.

22 (8) Until June 30, 2013, fuel and petroleum products sold

23 to or used by an air common carrier, certified by the carrier

24 to be used for consumption, shipment, or storage in the

25 conduct of its business as an air common carrier, for a flight

26 destined for or returning from a location or locations outside

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1 the United States without regard to previous or subsequent

2 domestic stopovers.

3 Beginning July 1, 2013, fuel and petroleum products sold

4 to or used by an air carrier, certified by the carrier to be

5 used for consumption, shipment, or storage in the conduct of

6 its business as an air common carrier, for a flight that (i) is

7 engaged in foreign trade or is engaged in trade between the

8 United States and any of its possessions and (ii) transports

9 at least one individual or package for hire from the city of

10 origination to the city of final destination on the same

11 aircraft, without regard to a change in the flight number of

12 that aircraft.

13 (9) Proceeds of mandatory service charges separately

14 stated on customers' bills for the purchase and consumption of

15 food and beverages, to the extent that the proceeds of the

16 service charge are in fact turned over as tips or as a

17 substitute for tips to the employees who participate directly

18 in preparing, serving, hosting or cleaning up the food or

19 beverage function with respect to which the service charge is

20 imposed.

21 (10) Until July 1, 2003, oil field exploration, drilling,

22 and production equipment, including (i) rigs and parts of

23 rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)

24 pipe and tubular goods, including casing and drill strings,

25 (iii) pumps and pump-jack units, (iv) storage tanks and flow

26 lines, (v) any individual replacement part for oil field

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1 exploration, drilling, and production equipment, and (vi)

2 machinery and equipment purchased for lease; but excluding

3 motor vehicles required to be registered under the Illinois

4 Vehicle Code.

5 (11) Photoprocessing machinery and equipment, including

6 repair and replacement parts, both new and used, including

7 that manufactured on special order, certified by the purchaser

8 to be used primarily for photoprocessing, and including

9 photoprocessing machinery and equipment purchased for lease.

10 (12) Until July 1, 2028, coal and aggregate exploration,

11 mining, off-highway hauling, processing, maintenance, and

12 reclamation equipment, including replacement parts and

13 equipment, and including equipment purchased for lease, but

14 excluding motor vehicles required to be registered under the

15 Illinois Vehicle Code. The changes made to this Section by

16 Public Act 97-767 apply on and after July 1, 2003, but no claim

17 for credit or refund is allowed on or after August 16, 2013

18 (the effective date of Public Act 98-456) for such taxes paid

19 during the period beginning July 1, 2003 and ending on August

20 16, 2013 (the effective date of Public Act 98-456).

21 (13) Beginning January 1, 1992 and through June 30, 2016,

22 food for human consumption that is to be consumed off the

23 premises where it is sold (other than alcoholic beverages,

24 soft drinks and food that has been prepared for immediate

25 consumption) and prescription and non-prescription medicines,

26 drugs, medical appliances, and insulin, urine testing

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1 materials, syringes, and needles used by diabetics, for human

2 use, when purchased for use by a person receiving medical

3 assistance under Article V of the Illinois Public Aid Code who

4 resides in a licensed long-term care facility, as defined in

5 the Nursing Home Care Act, or in a licensed facility as defined

6 in the ID/DD Community Care Act, the MC/DD Act, or the

7 Specialized Mental Health Rehabilitation Act of 2013.

8 (14) Semen used for artificial insemination of livestock

9 for direct agricultural production.

10 (15) Horses, or interests in horses, registered with and

11 meeting the requirements of any of the Arabian Horse Club

12 Registry of America, Appaloosa Horse Club, American Quarter

13 Horse Association, United States Trotting Association, or

14 Jockey Club, as appropriate, used for purposes of breeding or

15 racing for prizes. This item (15) is exempt from the

16 provisions of Section 3-55, and the exemption provided for

17 under this item (15) applies for all periods beginning May 30,

18 1995, but no claim for credit or refund is allowed on or after

19 January 1, 2008 (the effective date of Public Act 95-88) for

20 such taxes paid during the period beginning May 30, 2000 and

21 ending on January 1, 2008 (the effective date of Public Act

22 95-88).

23 (16) Computers and communications equipment utilized for

24 any hospital purpose and equipment used in the diagnosis,

25 analysis, or treatment of hospital patients sold to a lessor

26 who leases the equipment, under a lease of one year or longer

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1 executed or in effect at the time of the purchase, to a

2 hospital that has been issued an active tax exemption

3 identification number by the Department under Section 1g of

4 the Retailers' Occupation Tax Act.

5 (17) Personal property sold to a lessor who leases the

6 property, under a lease of one year or longer executed or in

7 effect at the time of the purchase, to a governmental body that

8 has been issued an active tax exemption identification number

9 by the Department under Section 1g of the Retailers'

10 Occupation Tax Act.

11 (18) Beginning with taxable years ending on or after

12 December 31, 1995 and ending with taxable years ending on or

13 before December 31, 2004, personal property that is donated

14 for disaster relief to be used in a State or federally declared

15 disaster area in Illinois or bordering Illinois by a

16 manufacturer or retailer that is registered in this State to a

17 corporation, society, association, foundation, or institution

18 that has been issued a sales tax exemption identification

19 number by the Department that assists victims of the disaster

20 who reside within the declared disaster area.

21 (19) Beginning with taxable years ending on or after

22 December 31, 1995 and ending with taxable years ending on or

23 before December 31, 2004, personal property that is used in

24 the performance of infrastructure repairs in this State,

25 including but not limited to municipal roads and streets,

26 access roads, bridges, sidewalks, waste disposal systems,

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1 water and sewer line extensions, water distribution and

2 purification facilities, storm water drainage and retention

3 facilities, and sewage treatment facilities, resulting from a

4 State or federally declared disaster in Illinois or bordering

5 Illinois when such repairs are initiated on facilities located

6 in the declared disaster area within 6 months after the

7 disaster.

8 (20) Beginning July 1, 1999, game or game birds sold at a

9 "game breeding and hunting preserve area" as that term is used

10 in the Wildlife Code. This paragraph is exempt from the

11 provisions of Section 3-55.

12 (21) A motor vehicle, as that term is defined in Section

13 1-146 of the Illinois Vehicle Code, that is donated to a

14 corporation, limited liability company, society, association,

15 foundation, or institution that is determined by the

16 Department to be organized and operated exclusively for

17 educational purposes. For purposes of this exemption, "a

18 corporation, limited liability company, society, association,

19 foundation, or institution organized and operated exclusively

20 for educational purposes" means all tax-supported public

21 schools, private schools that offer systematic instruction in

22 useful branches of learning by methods common to public

23 schools and that compare favorably in their scope and

24 intensity with the course of study presented in tax-supported

25 schools, and vocational or technical schools or institutes

26 organized and operated exclusively to provide a course of

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1 study of not less than 6 weeks duration and designed to prepare

2 individuals to follow a trade or to pursue a manual,

3 technical, mechanical, industrial, business, or commercial

4 occupation.

5 (22) Beginning January 1, 2000, personal property,

6 including food, purchased through fundraising events for the

7 benefit of a public or private elementary or secondary school,

8 a group of those schools, or one or more school districts if

9 the events are sponsored by an entity recognized by the school

10 district that consists primarily of volunteers and includes

11 parents and teachers of the school children. This paragraph

12 does not apply to fundraising events (i) for the benefit of

13 private home instruction or (ii) for which the fundraising

14 entity purchases the personal property sold at the events from

15 another individual or entity that sold the property for the

16 purpose of resale by the fundraising entity and that profits

17 from the sale to the fundraising entity. This paragraph is

18 exempt from the provisions of Section 3-55.

19 (23) Beginning January 1, 2000 and through December 31,

20 2001, new or used automatic vending machines that prepare and

21 serve hot food and beverages, including coffee, soup, and

22 other items, and replacement parts for these machines.

23 Beginning January 1, 2002 and through June 30, 2003, machines

24 and parts for machines used in commercial, coin-operated

25 amusement and vending business if a use or occupation tax is

26 paid on the gross receipts derived from the use of the

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1 commercial, coin-operated amusement and vending machines. This

2 paragraph is exempt from the provisions of Section 3-55.

3 (24) Beginning on August 2, 2001 (the effective date of

4 Public Act 92-227), computers and communications equipment

5 utilized for any hospital purpose and equipment used in the

6 diagnosis, analysis, or treatment of hospital patients sold to

7 a lessor who leases the equipment, under a lease of one year or

8 longer executed or in effect at the time of the purchase, to a

9 hospital that has been issued an active tax exemption

10 identification number by the Department under Section 1g of

11 the Retailers' Occupation Tax Act. This paragraph is exempt

12 from the provisions of Section 3-55.

13 (25) Beginning on August 2, 2001 (the effective date of

14 Public Act 92-227), personal property sold to a lessor who

15 leases the property, under a lease of one year or longer

16 executed or in effect at the time of the purchase, to a

17 governmental body that has been issued an active tax exemption

18 identification number by the Department under Section 1g of

19 the Retailers' Occupation Tax Act. This paragraph is exempt

20 from the provisions of Section 3-55.

21 (26) Beginning on January 1, 2002 and through June 30,

22 2016, tangible personal property purchased from an Illinois

23 retailer by a taxpayer engaged in centralized purchasing

24 activities in Illinois who will, upon receipt of the property

25 in Illinois, temporarily store the property in Illinois (i)

26 for the purpose of subsequently transporting it outside this

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1 State for use or consumption thereafter solely outside this

2 State or (ii) for the purpose of being processed, fabricated,

3 or manufactured into, attached to, or incorporated into other

4 tangible personal property to be transported outside this

5 State and thereafter used or consumed solely outside this

6 State. The Director of Revenue shall, pursuant to rules

7 adopted in accordance with the Illinois Administrative

8 Procedure Act, issue a permit to any taxpayer in good standing

9 with the Department who is eligible for the exemption under

10 this paragraph (26). The permit issued under this paragraph

11 (26) shall authorize the holder, to the extent and in the

12 manner specified in the rules adopted under this Act, to

13 purchase tangible personal property from a retailer exempt

14 from the taxes imposed by this Act. Taxpayers shall maintain

15 all necessary books and records to substantiate the use and

16 consumption of all such tangible personal property outside of

17 the State of Illinois.

18 (27) Beginning January 1, 2008, tangible personal property

19 used in the construction or maintenance of a community water

20 supply, as defined under Section 3.145 of the Environmental

21 Protection Act, that is operated by a not-for-profit

22 corporation that holds a valid water supply permit issued

23 under Title IV of the Environmental Protection Act. This

24 paragraph is exempt from the provisions of Section 3-55.

25 (28) Tangible personal property sold to a

26 public-facilities corporation, as described in Section

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1 11-65-10 of the Illinois Municipal Code, for purposes of

2 constructing or furnishing a municipal convention hall, but

3 only if the legal title to the municipal convention hall is

4 transferred to the municipality without any further

5 consideration by or on behalf of the municipality at the time

6 of the completion of the municipal convention hall or upon the

7 retirement or redemption of any bonds or other debt

8 instruments issued by the public-facilities corporation in

9 connection with the development of the municipal convention

10 hall. This exemption includes existing public-facilities

11 corporations as provided in Section 11-65-25 of the Illinois

12 Municipal Code. This paragraph is exempt from the provisions

13 of Section 3-55.

14 (29) Beginning January 1, 2010 and continuing through

15 December 31, 2024, materials, parts, equipment, components,

16 and furnishings incorporated into or upon an aircraft as part

17 of the modification, refurbishment, completion, replacement,

18 repair, or maintenance of the aircraft. This exemption

19 includes consumable supplies used in the modification,

20 refurbishment, completion, replacement, repair, and

21 maintenance of aircraft, but excludes any materials, parts,

22 equipment, components, and consumable supplies used in the

23 modification, replacement, repair, and maintenance of aircraft

24 engines or power plants, whether such engines or power plants

25 are installed or uninstalled upon any such aircraft.

26 "Consumable supplies" include, but are not limited to,

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1 adhesive, tape, sandpaper, general purpose lubricants,

2 cleaning solution, latex gloves, and protective films. This

3 exemption applies only to the transfer of qualifying tangible

4 personal property incident to the modification, refurbishment,

5 completion, replacement, repair, or maintenance of an aircraft

6 by persons who (i) hold an Air Agency Certificate and are

7 empowered to operate an approved repair station by the Federal

8 Aviation Administration, (ii) have a Class IV Rating, and

9 (iii) conduct operations in accordance with Part 145 of the

10 Federal Aviation Regulations. The exemption does not include

11 aircraft operated by a commercial air carrier providing

12 scheduled passenger air service pursuant to authority issued

13 under Part 121 or Part 129 of the Federal Aviation

14 Regulations. The changes made to this paragraph (29) by Public

15 Act 98-534 are declarative of existing law. It is the intent of

16 the General Assembly that the exemption under this paragraph

17 (29) applies continuously from January 1, 2010 through

18 December 31, 2024; however, no claim for credit or refund is

19 allowed for taxes paid as a result of the disallowance of this

20 exemption on or after January 1, 2015 and prior to February 5,

21 2020 (the effective date of Public Act 101-629) ~~this~~

22 ~~amendatory Act of the 101st General Assembly~~.

23 (30) Beginning January 1, 2017 and through December 31,

24 2026, menstrual pads, tampons, and menstrual cups.

25 (31) Tangible personal property transferred to a purchaser

26 who is exempt from tax by operation of federal law. This

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1 paragraph is exempt from the provisions of Section 3-55.

2 (32) Qualified tangible personal property used in the

3 construction or operation of a data center that has been

4 granted a certificate of exemption by the Department of

5 Commerce and Economic Opportunity, whether that tangible

6 personal property is purchased by the owner, operator, or

7 tenant of the data center or by a contractor or subcontractor

8 of the owner, operator, or tenant. Data centers that would

9 have qualified for a certificate of exemption prior to January

10 1, 2020 had Public Act 101-31 ~~this amendatory Act of the 101st~~

11 ~~General Assembly~~ been in effect, may apply for and obtain an

12 exemption for subsequent purchases of computer equipment or

13 enabling software purchased or leased to upgrade, supplement,

14 or replace computer equipment or enabling software purchased

15 or leased in the original investment that would have

16 qualified.

17 The Department of Commerce and Economic Opportunity shall

18 grant a certificate of exemption under this item (32) to

19 qualified data centers as defined by Section 605-1025 of the

20 Department of Commerce and Economic Opportunity Law of the

21 Civil Administrative Code of Illinois.

22 For the purposes of this item (32):

23 "Data center" means a building or a series of

24 buildings rehabilitated or constructed to house working

25 servers in one physical location or multiple sites within

26 the State of Illinois.

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1 "Qualified tangible personal property" means:

2 electrical systems and equipment; climate control and

3 chilling equipment and systems; mechanical systems and

4 equipment; monitoring and secure systems; emergency

5 generators; hardware; computers; servers; data storage

6 devices; network connectivity equipment; racks; cabinets;

7 telecommunications cabling infrastructure; raised floor

8 systems; peripheral components or systems; software;

9 mechanical, electrical, or plumbing systems; battery

10 systems; cooling systems and towers; temperature control

11 systems; other cabling; and other data center

12 infrastructure equipment and systems necessary to operate

13 qualified tangible personal property, including fixtures;

14 and component parts of any of the foregoing, including

15 installation, maintenance, repair, refurbishment, and

16 replacement of qualified tangible personal property to

17 generate, transform, transmit, distribute, or manage

18 electricity necessary to operate qualified tangible

19 personal property; and all other tangible personal

20 property that is essential to the operations of a computer

21 data center. The term "qualified tangible personal

22 property" also includes building materials physically

23 incorporated in to the qualifying data center. To document

24 the exemption allowed under this Section, the retailer

25 must obtain from the purchaser a copy of the certificate

26 of eligibility issued by the Department of Commerce and

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1 Economic Opportunity.

2 This item (32) is exempt from the provisions of Section

3 3-55.

4 (33) Beginning July 1, 2022, breast pumps, breast pump

5 collection and storage supplies, and breast pump kits. This

6 item (33) is exempt from the provisions of Section 3-55. As

7 used in this item (33):

8 "Breast pump" means an electrically controlled or

9 manually controlled pump device designed or marketed to be

10 used to express milk from a human breast during lactation,

11 including the pump device and any battery, AC adapter, or

12 other power supply unit that is used to power the pump

13 device and is packaged and sold with the pump device at the

14 time of sale.

15 "Breast pump collection and storage supplies" means

16 items of tangible personal property designed or marketed

17 to be used in conjunction with a breast pump to collect

18 milk expressed from a human breast and to store collected

19 milk until it is ready for consumption.

20 "Breast pump collection and storage supplies"

21 includes, but is not limited to: breast shields and breast

22 shield connectors; breast pump tubes and tubing adapters;

23 breast pump valves and membranes; backflow protectors and

24 backflow protector adaptors; bottles and bottle caps

25 specific to the operation of the breast pump; and breast

26 milk storage bags.

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1 "Breast pump collection and storage supplies" does not

2 include: (1) bottles and bottle caps not specific to the

3 operation of the breast pump; (2) breast pump travel bags

4 and other similar carrying accessories, including ice

5 packs, labels, and other similar products; (3) breast pump

6 cleaning supplies; (4) nursing bras, bra pads, breast

7 shells, and other similar products; and (5) creams,

8 ointments, and other similar products that relieve

9 breastfeeding-related symptoms or conditions of the

10 breasts or nipples, unless sold as part of a breast pump

11 kit that is pre-packaged by the breast pump manufacturer

12 or distributor.

13 "Breast pump kit" means a kit that: (1) contains no

14 more than a breast pump, breast pump collection and

15 storage supplies, a rechargeable battery for operating the

16 breast pump, a breastmilk cooler, bottle stands, ice

17 packs, and a breast pump carrying case; and (2) is

18 pre-packaged as a breast pump kit by the breast pump

19 manufacturer or distributor.

20 (34) ~~(33)~~ Tangible personal property sold by or on behalf

21 of the State Treasurer pursuant to the Revised Uniform

22 Unclaimed Property Act. This item (34) ~~(33)~~ is exempt from the

23 provisions of Section 3-55.

24 (35) Qualified tangible personal property used in the

25 construction or operation of a megaproject for which a

26 certificate has been issued by the Department of Revenue as

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1 described and defined in Division 22 of Article 10 of the

2 Property Tax Code, whether that tangible personal property is

3 purchased by the owner, operator, or tenant of the megaproject

4 or by a contractor or subcontractor of the owner, operator, or

5 tenant.

6 For the purposes of this item (35):

7 "Facility" means a building or series of buildings.

8 "Megaproject" means a facility that is rehabilitated or

9 constructed as described in Division 22 of Article 10 of the

10 Property Tax Code.

11 "Qualified tangible personal property" means: electrical

12 systems and equipment; climate control and chilling equipment

13 and systems; mechanical systems and equipment; monitoring and

14 secure systems; emergency generators; hardware; computers;

15 servers; data storage devices; network connectivity equipment;

16 racks; cabinets; telecommunications cabling infrastructure;

17 raised floor systems; peripheral components or systems;

18 software; mechanical, electrical, or plumbing systems; battery

19 systems; cooling systems and towers; temperature control

20 systems; other cabling; and other data center infrastructure

21 equipment and systems necessary to operate qualified tangible

22 personal property, including fixtures; and component parts of

23 any of the foregoing, including installation, maintenance,

24 repair, refurbishment, and replacement of qualified tangible

25 personal property to generate, transform, transmit,

26 distribute, or manage electricity necessary to operate

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1 qualified tangible personal property; and all other tangible

2 personal property that is essential to the operations of a

3 megaproject. The term "qualified tangible personal property"

4 also includes building materials to be incorporated into the

5 megaproject. To document the exemption allowed under this

6 Section, the retailer, contractor or subcontractor or supplier

7 must obtain from the purchaser a copy of the certificate

8 issued by the Department of Revenue for the megaproject as

9 described and defined in Division 22 of Article 10 of the

10 Property Tax Code.

11 This item (35) is exempt from the provisions of Section

12 3-55.

13 (Source: P.A. 101-31, eff. 6-28-19; 101-81, eff. 7-12-19;

14 101-629, eff. 2-5-20; 102-16, eff. 6-17-21; 102-700, Article

15 70, Section 70-15, eff. 4-19-22; 102-700, Article 75, Section

16 75-15, eff. 4-19-22; 102-1026, eff. 5-27-22; revised 8-9-22.)

17 Section 20. The Retailers' Occupation Tax Act is amended

18 by changing Section 2-5 as follows:

19 (35 ILCS 120/2-5)

20 Sec. 2-5. Exemptions. Gross receipts from proceeds from

21 the sale of the following tangible personal property are

22 exempt from the tax imposed by this Act:

23 (1) Farm chemicals.

24 (2) Farm machinery and equipment, both new and used,

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1 including that manufactured on special order, certified by

2 the purchaser to be used primarily for production

3 agriculture or State or federal agricultural programs,

4 including individual replacement parts for the machinery

5 and equipment, including machinery and equipment purchased

6 for lease, and including implements of husbandry defined

7 in Section 1-130 of the Illinois Vehicle Code, farm

8 machinery and agricultural chemical and fertilizer

9 spreaders, and nurse wagons required to be registered

10 under Section 3-809 of the Illinois Vehicle Code, but

11 excluding other motor vehicles required to be registered

12 under the Illinois Vehicle Code. Horticultural polyhouses

13 or hoop houses used for propagating, growing, or

14 overwintering plants shall be considered farm machinery

15 and equipment under this item (2). Agricultural chemical

16 tender tanks and dry boxes shall include units sold

17 separately from a motor vehicle required to be licensed

18 and units sold mounted on a motor vehicle required to be

19 licensed, if the selling price of the tender is separately

20 stated.

21 Farm machinery and equipment shall include precision

22 farming equipment that is installed or purchased to be

23 installed on farm machinery and equipment including, but

24 not limited to, tractors, harvesters, sprayers, planters,

25 seeders, or spreaders. Precision farming equipment

26 includes, but is not limited to, soil testing sensors,

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1 computers, monitors, software, global positioning and

2 mapping systems, and other such equipment.

3 Farm machinery and equipment also includes computers,

4 sensors, software, and related equipment used primarily in

5 the computer-assisted operation of production agriculture

6 facilities, equipment, and activities such as, but not

7 limited to, the collection, monitoring, and correlation of

8 animal and crop data for the purpose of formulating animal

9 diets and agricultural chemicals. This item (2) is exempt

10 from the provisions of Section 2-70.

11 (3) Until July 1, 2003, distillation machinery and

12 equipment, sold as a unit or kit, assembled or installed

13 by the retailer, certified by the user to be used only for

14 the production of ethyl alcohol that will be used for

15 consumption as motor fuel or as a component of motor fuel

16 for the personal use of the user, and not subject to sale

17 or resale.

18 (4) Until July 1, 2003 and beginning again September

19 1, 2004 through August 30, 2014, graphic arts machinery

20 and equipment, including repair and replacement parts,

21 both new and used, and including that manufactured on

22 special order or purchased for lease, certified by the

23 purchaser to be used primarily for graphic arts

24 production. Equipment includes chemicals or chemicals

25 acting as catalysts but only if the chemicals or chemicals

26 acting as catalysts effect a direct and immediate change

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1 upon a graphic arts product. Beginning on July 1, 2017,

2 graphic arts machinery and equipment is included in the

3 manufacturing and assembling machinery and equipment

4 exemption under paragraph (14).

5 (5) A motor vehicle that is used for automobile

6 renting, as defined in the Automobile Renting Occupation

7 and Use Tax Act. This paragraph is exempt from the

8 provisions of Section 2-70.

9 (6) Personal property sold by a teacher-sponsored

10 student organization affiliated with an elementary or

11 secondary school located in Illinois.

12 (7) Until July 1, 2003, proceeds of that portion of

13 the selling price of a passenger car the sale of which is

14 subject to the Replacement Vehicle Tax.

15 (8) Personal property sold to an Illinois county fair

16 association for use in conducting, operating, or promoting

17 the county fair.

18 (9) Personal property sold to a not-for-profit arts or

19 cultural organization that establishes, by proof required

20 by the Department by rule, that it has received an

21 exemption under Section 501(c)(3) of the Internal Revenue

22 Code and that is organized and operated primarily for the

23 presentation or support of arts or cultural programming,

24 activities, or services. These organizations include, but

25 are not limited to, music and dramatic arts organizations

26 such as symphony orchestras and theatrical groups, arts

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1 and cultural service organizations, local arts councils,

2 visual arts organizations, and media arts organizations.

3 On and after July 1, 2001 (the effective date of Public Act

4 92-35), however, an entity otherwise eligible for this

5 exemption shall not make tax-free purchases unless it has

6 an active identification number issued by the Department.

7 (10) Personal property sold by a corporation, society,

8 association, foundation, institution, or organization,

9 other than a limited liability company, that is organized

10 and operated as a not-for-profit service enterprise for

11 the benefit of persons 65 years of age or older if the

12 personal property was not purchased by the enterprise for

13 the purpose of resale by the enterprise.

14 (11) Personal property sold to a governmental body, to

15 a corporation, society, association, foundation, or

16 institution organized and operated exclusively for

17 charitable, religious, or educational purposes, or to a

18 not-for-profit corporation, society, association,

19 foundation, institution, or organization that has no

20 compensated officers or employees and that is organized

21 and operated primarily for the recreation of persons 55

22 years of age or older. A limited liability company may

23 qualify for the exemption under this paragraph only if the

24 limited liability company is organized and operated

25 exclusively for educational purposes. On and after July 1,

26 1987, however, no entity otherwise eligible for this

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1 exemption shall make tax-free purchases unless it has an

2 active identification number issued by the Department.

3 (12) (Blank).

4 (12-5) On and after July 1, 2003 and through June 30,

5 2004, motor vehicles of the second division with a gross

6 vehicle weight in excess of 8,000 pounds that are subject

7 to the commercial distribution fee imposed under Section

8 3-815.1 of the Illinois Vehicle Code. Beginning on July 1,

9 2004 and through June 30, 2005, the use in this State of

10 motor vehicles of the second division: (i) with a gross

11 vehicle weight rating in excess of 8,000 pounds; (ii) that

12 are subject to the commercial distribution fee imposed

13 under Section 3-815.1 of the Illinois Vehicle Code; and

14 (iii) that are primarily used for commercial purposes.

15 Through June 30, 2005, this exemption applies to repair

16 and replacement parts added after the initial purchase of

17 such a motor vehicle if that motor vehicle is used in a

18 manner that would qualify for the rolling stock exemption

19 otherwise provided for in this Act. For purposes of this

20 paragraph, "used for commercial purposes" means the

21 transportation of persons or property in furtherance of

22 any commercial or industrial enterprise whether for-hire

23 or not.

24 (13) Proceeds from sales to owners, lessors, or

25 shippers of tangible personal property that is utilized by

26 interstate carriers for hire for use as rolling stock

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1 moving in interstate commerce and equipment operated by a

2 telecommunications provider, licensed as a common carrier

3 by the Federal Communications Commission, which is

4 permanently installed in or affixed to aircraft moving in

5 interstate commerce.

6 (14) Machinery and equipment that will be used by the

7 purchaser, or a lessee of the purchaser, primarily in the

8 process of manufacturing or assembling tangible personal

9 property for wholesale or retail sale or lease, whether

10 the sale or lease is made directly by the manufacturer or

11 by some other person, whether the materials used in the

12 process are owned by the manufacturer or some other

13 person, or whether the sale or lease is made apart from or

14 as an incident to the seller's engaging in the service

15 occupation of producing machines, tools, dies, jigs,

16 patterns, gauges, or other similar items of no commercial

17 value on special order for a particular purchaser. The

18 exemption provided by this paragraph (14) does not include

19 machinery and equipment used in (i) the generation of

20 electricity for wholesale or retail sale; (ii) the

21 generation or treatment of natural or artificial gas for

22 wholesale or retail sale that is delivered to customers

23 through pipes, pipelines, or mains; or (iii) the treatment

24 of water for wholesale or retail sale that is delivered to

25 customers through pipes, pipelines, or mains. The

26 provisions of Public Act 98-583 are declaratory of

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1 existing law as to the meaning and scope of this

2 exemption. Beginning on July 1, 2017, the exemption

3 provided by this paragraph (14) includes, but is not

4 limited to, graphic arts machinery and equipment, as

5 defined in paragraph (4) of this Section.

6 (15) Proceeds of mandatory service charges separately

7 stated on customers' bills for purchase and consumption of

8 food and beverages, to the extent that the proceeds of the

9 service charge are in fact turned over as tips or as a

10 substitute for tips to the employees who participate

11 directly in preparing, serving, hosting or cleaning up the

12 food or beverage function with respect to which the

13 service charge is imposed.

14 (16) Tangible personal property sold to a purchaser if

15 the purchaser is exempt from use tax by operation of

16 federal law. This paragraph is exempt from the provisions

17 of Section 2-70.

18 (17) Tangible personal property sold to a common

19 carrier by rail or motor that receives the physical

20 possession of the property in Illinois and that transports

21 the property, or shares with another common carrier in the

22 transportation of the property, out of Illinois on a

23 standard uniform bill of lading showing the seller of the

24 property as the shipper or consignor of the property to a

25 destination outside Illinois, for use outside Illinois.

26 (18) Legal tender, currency, medallions, or gold or

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1 silver coinage issued by the State of Illinois, the

2 government of the United States of America, or the

3 government of any foreign country, and bullion.

4 (19) Until July 1, 2003, oil field exploration,

5 drilling, and production equipment, including (i) rigs and

6 parts of rigs, rotary rigs, cable tool rigs, and workover

7 rigs, (ii) pipe and tubular goods, including casing and

8 drill strings, (iii) pumps and pump-jack units, (iv)

9 storage tanks and flow lines, (v) any individual

10 replacement part for oil field exploration, drilling, and

11 production equipment, and (vi) machinery and equipment

12 purchased for lease; but excluding motor vehicles required

13 to be registered under the Illinois Vehicle Code.

14 (20) Photoprocessing machinery and equipment,

15 including repair and replacement parts, both new and used,

16 including that manufactured on special order, certified by

17 the purchaser to be used primarily for photoprocessing,

18 and including photoprocessing machinery and equipment

19 purchased for lease.

20 (21) Until July 1, 2028, coal and aggregate

21 exploration, mining, off-highway hauling, processing,

22 maintenance, and reclamation equipment, including

23 replacement parts and equipment, and including equipment

24 purchased for lease, but excluding motor vehicles required

25 to be registered under the Illinois Vehicle Code. The

26 changes made to this Section by Public Act 97-767 apply on

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1 and after July 1, 2003, but no claim for credit or refund

2 is allowed on or after August 16, 2013 (the effective date

3 of Public Act 98-456) for such taxes paid during the

4 period beginning July 1, 2003 and ending on August 16,

5 2013 (the effective date of Public Act 98-456).

6 (22) Until June 30, 2013, fuel and petroleum products

7 sold to or used by an air carrier, certified by the carrier

8 to be used for consumption, shipment, or storage in the

9 conduct of its business as an air common carrier, for a

10 flight destined for or returning from a location or

11 locations outside the United States without regard to

12 previous or subsequent domestic stopovers.

13 Beginning July 1, 2013, fuel and petroleum products

14 sold to or used by an air carrier, certified by the carrier

15 to be used for consumption, shipment, or storage in the

16 conduct of its business as an air common carrier, for a

17 flight that (i) is engaged in foreign trade or is engaged

18 in trade between the United States and any of its

19 possessions and (ii) transports at least one individual or

20 package for hire from the city of origination to the city

21 of final destination on the same aircraft, without regard

22 to a change in the flight number of that aircraft.

23 (23) A transaction in which the purchase order is

24 received by a florist who is located outside Illinois, but

25 who has a florist located in Illinois deliver the property

26 to the purchaser or the purchaser's donee in Illinois.

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1 (24) Fuel consumed or used in the operation of ships,

2 barges, or vessels that are used primarily in or for the

3 transportation of property or the conveyance of persons

4 for hire on rivers bordering on this State if the fuel is

5 delivered by the seller to the purchaser's barge, ship, or

6 vessel while it is afloat upon that bordering river.

7 (25) Except as provided in item (25-5) of this

8 Section, a motor vehicle sold in this State to a

9 nonresident even though the motor vehicle is delivered to

10 the nonresident in this State, if the motor vehicle is not

11 to be titled in this State, and if a drive-away permit is

12 issued to the motor vehicle as provided in Section 3-603

13 of the Illinois Vehicle Code or if the nonresident

14 purchaser has vehicle registration plates to transfer to

15 the motor vehicle upon returning to his or her home state.

16 The issuance of the drive-away permit or having the

17 out-of-state registration plates to be transferred is

18 prima facie evidence that the motor vehicle will not be

19 titled in this State.

20 (25-5) The exemption under item (25) does not apply if

21 the state in which the motor vehicle will be titled does

22 not allow a reciprocal exemption for a motor vehicle sold

23 and delivered in that state to an Illinois resident but

24 titled in Illinois. The tax collected under this Act on

25 the sale of a motor vehicle in this State to a resident of

26 another state that does not allow a reciprocal exemption

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1 shall be imposed at a rate equal to the state's rate of tax

2 on taxable property in the state in which the purchaser is

3 a resident, except that the tax shall not exceed the tax

4 that would otherwise be imposed under this Act. At the

5 time of the sale, the purchaser shall execute a statement,

6 signed under penalty of perjury, of his or her intent to

7 title the vehicle in the state in which the purchaser is a

8 resident within 30 days after the sale and of the fact of

9 the payment to the State of Illinois of tax in an amount

10 equivalent to the state's rate of tax on taxable property

11 in his or her state of residence and shall submit the

12 statement to the appropriate tax collection agency in his

13 or her state of residence. In addition, the retailer must

14 retain a signed copy of the statement in his or her

15 records. Nothing in this item shall be construed to

16 require the removal of the vehicle from this state

17 following the filing of an intent to title the vehicle in

18 the purchaser's state of residence if the purchaser titles

19 the vehicle in his or her state of residence within 30 days

20 after the date of sale. The tax collected under this Act in

21 accordance with this item (25-5) shall be proportionately

22 distributed as if the tax were collected at the 6.25%

23 general rate imposed under this Act.

24 (25-7) Beginning on July 1, 2007, no tax is imposed

25 under this Act on the sale of an aircraft, as defined in

26 Section 3 of the Illinois Aeronautics Act, if all of the

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1 following conditions are met:

2 (1) the aircraft leaves this State within 15 days

3 after the later of either the issuance of the final

4 billing for the sale of the aircraft, or the

5 authorized approval for return to service, completion

6 of the maintenance record entry, and completion of the

7 test flight and ground test for inspection, as

8 required by 14 CFR ~~C.F.R.~~ 91.407;

9 (2) the aircraft is not based or registered in

10 this State after the sale of the aircraft; and

11 (3) the seller retains in his or her books and

12 records and provides to the Department a signed and

13 dated certification from the purchaser, on a form

14 prescribed by the Department, certifying that the

15 requirements of this item (25-7) are met. The

16 certificate must also include the name and address of

17 the purchaser, the address of the location where the

18 aircraft is to be titled or registered, the address of

19 the primary physical location of the aircraft, and

20 other information that the Department may reasonably

21 require.

22 For purposes of this item (25-7):

23 "Based in this State" means hangared, stored, or

24 otherwise used, excluding post-sale customizations as

25 defined in this Section, for 10 or more days in each

26 12-month period immediately following the date of the sale

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1 of the aircraft.

2 "Registered in this State" means an aircraft

3 registered with the Department of Transportation,

4 Aeronautics Division, or titled or registered with the

5 Federal Aviation Administration to an address located in

6 this State.

7 This paragraph (25-7) is exempt from the provisions of

8 Section 2-70.

9 (26) Semen used for artificial insemination of

10 livestock for direct agricultural production.

11 (27) Horses, or interests in horses, registered with

12 and meeting the requirements of any of the Arabian Horse

13 Club Registry of America, Appaloosa Horse Club, American

14 Quarter Horse Association, United States Trotting

15 Association, or Jockey Club, as appropriate, used for

16 purposes of breeding or racing for prizes. This item (27)

17 is exempt from the provisions of Section 2-70, and the

18 exemption provided for under this item (27) applies for

19 all periods beginning May 30, 1995, but no claim for

20 credit or refund is allowed on or after January 1, 2008

21 (the effective date of Public Act 95-88) for such taxes

22 paid during the period beginning May 30, 2000 and ending

23 on January 1, 2008 (the effective date of Public Act

24 95-88).

25 (28) Computers and communications equipment utilized

26 for any hospital purpose and equipment used in the

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1 diagnosis, analysis, or treatment of hospital patients

2 sold to a lessor who leases the equipment, under a lease of

3 one year or longer executed or in effect at the time of the

4 purchase, to a hospital that has been issued an active tax

5 exemption identification number by the Department under

6 Section 1g of this Act.

7 (29) Personal property sold to a lessor who leases the

8 property, under a lease of one year or longer executed or

9 in effect at the time of the purchase, to a governmental

10 body that has been issued an active tax exemption

11 identification number by the Department under Section 1g

12 of this Act.

13 (30) Beginning with taxable years ending on or after

14 December 31, 1995 and ending with taxable years ending on

15 or before December 31, 2004, personal property that is

16 donated for disaster relief to be used in a State or

17 federally declared disaster area in Illinois or bordering

18 Illinois by a manufacturer or retailer that is registered

19 in this State to a corporation, society, association,

20 foundation, or institution that has been issued a sales

21 tax exemption identification number by the Department that

22 assists victims of the disaster who reside within the

23 declared disaster area.

24 (31) Beginning with taxable years ending on or after

25 December 31, 1995 and ending with taxable years ending on

26 or before December 31, 2004, personal property that is

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1 used in the performance of infrastructure repairs in this

2 State, including but not limited to municipal roads and

3 streets, access roads, bridges, sidewalks, waste disposal

4 systems, water and sewer line extensions, water

5 distribution and purification facilities, storm water

6 drainage and retention facilities, and sewage treatment

7 facilities, resulting from a State or federally declared

8 disaster in Illinois or bordering Illinois when such

9 repairs are initiated on facilities located in the

10 declared disaster area within 6 months after the disaster.

11 (32) Beginning July 1, 1999, game or game birds sold

12 at a "game breeding and hunting preserve area" as that

13 term is used in the Wildlife Code. This paragraph is

14 exempt from the provisions of Section 2-70.

15 (33) A motor vehicle, as that term is defined in

16 Section 1-146 of the Illinois Vehicle Code, that is

17 donated to a corporation, limited liability company,

18 society, association, foundation, or institution that is

19 determined by the Department to be organized and operated

20 exclusively for educational purposes. For purposes of this

21 exemption, "a corporation, limited liability company,

22 society, association, foundation, or institution organized

23 and operated exclusively for educational purposes" means

24 all tax-supported public schools, private schools that

25 offer systematic instruction in useful branches of

26 learning by methods common to public schools and that

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1 compare favorably in their scope and intensity with the

2 course of study presented in tax-supported schools, and

3 vocational or technical schools or institutes organized

4 and operated exclusively to provide a course of study of

5 not less than 6 weeks duration and designed to prepare

6 individuals to follow a trade or to pursue a manual,

7 technical, mechanical, industrial, business, or commercial

8 occupation.

9 (34) Beginning January 1, 2000, personal property,

10 including food, purchased through fundraising events for

11 the benefit of a public or private elementary or secondary

12 school, a group of those schools, or one or more school

13 districts if the events are sponsored by an entity

14 recognized by the school district that consists primarily

15 of volunteers and includes parents and teachers of the

16 school children. This paragraph does not apply to

17 fundraising events (i) for the benefit of private home

18 instruction or (ii) for which the fundraising entity

19 purchases the personal property sold at the events from

20 another individual or entity that sold the property for

21 the purpose of resale by the fundraising entity and that

22 profits from the sale to the fundraising entity. This

23 paragraph is exempt from the provisions of Section 2-70.

24 (35) Beginning January 1, 2000 and through December

25 31, 2001, new or used automatic vending machines that

26 prepare and serve hot food and beverages, including

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1 coffee, soup, and other items, and replacement parts for

2 these machines. Beginning January 1, 2002 and through June

3 30, 2003, machines and parts for machines used in

4 commercial, coin-operated amusement and vending business

5 if a use or occupation tax is paid on the gross receipts

6 derived from the use of the commercial, coin-operated

7 amusement and vending machines. This paragraph is exempt

8 from the provisions of Section 2-70.

9 (35-5) Beginning August 23, 2001 and through June 30,

10 2016, food for human consumption that is to be consumed

11 off the premises where it is sold (other than alcoholic

12 beverages, soft drinks, and food that has been prepared

13 for immediate consumption) and prescription and

14 nonprescription medicines, drugs, medical appliances, and

15 insulin, urine testing materials, syringes, and needles

16 used by diabetics, for human use, when purchased for use

17 by a person receiving medical assistance under Article V

18 of the Illinois Public Aid Code who resides in a licensed

19 long-term care facility, as defined in the Nursing Home

20 Care Act, or a licensed facility as defined in the ID/DD

21 Community Care Act, the MC/DD Act, or the Specialized

22 Mental Health Rehabilitation Act of 2013.

23 (36) Beginning August 2, 2001, computers and

24 communications equipment utilized for any hospital purpose

25 and equipment used in the diagnosis, analysis, or

26 treatment of hospital patients sold to a lessor who leases

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1 the equipment, under a lease of one year or longer

2 executed or in effect at the time of the purchase, to a

3 hospital that has been issued an active tax exemption

4 identification number by the Department under Section 1g

5 of this Act. This paragraph is exempt from the provisions

6 of Section 2-70.

7 (37) Beginning August 2, 2001, personal property sold

8 to a lessor who leases the property, under a lease of one

9 year or longer executed or in effect at the time of the

10 purchase, to a governmental body that has been issued an

11 active tax exemption identification number by the

12 Department under Section 1g of this Act. This paragraph is

13 exempt from the provisions of Section 2-70.

14 (38) Beginning on January 1, 2002 and through June 30,

15 2016, tangible personal property purchased from an

16 Illinois retailer by a taxpayer engaged in centralized

17 purchasing activities in Illinois who will, upon receipt

18 of the property in Illinois, temporarily store the

19 property in Illinois (i) for the purpose of subsequently

20 transporting it outside this State for use or consumption

21 thereafter solely outside this State or (ii) for the

22 purpose of being processed, fabricated, or manufactured

23 into, attached to, or incorporated into other tangible

24 personal property to be transported outside this State and

25 thereafter used or consumed solely outside this State. The

26 Director of Revenue shall, pursuant to rules adopted in

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1 accordance with the Illinois Administrative Procedure Act,

2 issue a permit to any taxpayer in good standing with the

3 Department who is eligible for the exemption under this

4 paragraph (38). The permit issued under this paragraph

5 (38) shall authorize the holder, to the extent and in the

6 manner specified in the rules adopted under this Act, to

7 purchase tangible personal property from a retailer exempt

8 from the taxes imposed by this Act. Taxpayers shall

9 maintain all necessary books and records to substantiate

10 the use and consumption of all such tangible personal

11 property outside of the State of Illinois.

12 (39) Beginning January 1, 2008, tangible personal

13 property used in the construction or maintenance of a

14 community water supply, as defined under Section 3.145 of

15 the Environmental Protection Act, that is operated by a

16 not-for-profit corporation that holds a valid water supply

17 permit issued under Title IV of the Environmental

18 Protection Act. This paragraph is exempt from the

19 provisions of Section 2-70.

20 (40) Beginning January 1, 2010 and continuing through

21 December 31, 2024, materials, parts, equipment,

22 components, and furnishings incorporated into or upon an

23 aircraft as part of the modification, refurbishment,

24 completion, replacement, repair, or maintenance of the

25 aircraft. This exemption includes consumable supplies used

26 in the modification, refurbishment, completion,

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1 replacement, repair, and maintenance of aircraft, but

2 excludes any materials, parts, equipment, components, and

3 consumable supplies used in the modification, replacement,

4 repair, and maintenance of aircraft engines or power

5 plants, whether such engines or power plants are installed

6 or uninstalled upon any such aircraft. "Consumable

7 supplies" include, but are not limited to, adhesive, tape,

8 sandpaper, general purpose lubricants, cleaning solution,

9 latex gloves, and protective films. This exemption applies

10 only to the sale of qualifying tangible personal property

11 to persons who modify, refurbish, complete, replace, or

12 maintain an aircraft and who (i) hold an Air Agency

13 Certificate and are empowered to operate an approved

14 repair station by the Federal Aviation Administration,

15 (ii) have a Class IV Rating, and (iii) conduct operations

16 in accordance with Part 145 of the Federal Aviation

17 Regulations. The exemption does not include aircraft

18 operated by a commercial air carrier providing scheduled

19 passenger air service pursuant to authority issued under

20 Part 121 or Part 129 of the Federal Aviation Regulations.

21 The changes made to this paragraph (40) by Public Act

22 98-534 are declarative of existing law. It is the intent

23 of the General Assembly that the exemption under this

24 paragraph (40) applies continuously from January 1, 2010

25 through December 31, 2024; however, no claim for credit or

26 refund is allowed for taxes paid as a result of the

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1 disallowance of this exemption on or after January 1, 2015

2 and prior to February 5, 2020 (the effective date of

3 Public Act 101-629) ~~this amendatory Act of the 101st~~

4 ~~General Assembly~~.

5 (41) Tangible personal property sold to a

6 public-facilities corporation, as described in Section

7 11-65-10 of the Illinois Municipal Code, for purposes of

8 constructing or furnishing a municipal convention hall,

9 but only if the legal title to the municipal convention

10 hall is transferred to the municipality without any

11 further consideration by or on behalf of the municipality

12 at the time of the completion of the municipal convention

13 hall or upon the retirement or redemption of any bonds or

14 other debt instruments issued by the public-facilities

15 corporation in connection with the development of the

16 municipal convention hall. This exemption includes

17 existing public-facilities corporations as provided in

18 Section 11-65-25 of the Illinois Municipal Code. This

19 paragraph is exempt from the provisions of Section 2-70.

20 (42) Beginning January 1, 2017 and through December

21 31, 2026, menstrual pads, tampons, and menstrual cups.

22 (43) Merchandise that is subject to the Rental

23 Purchase Agreement Occupation and Use Tax. The purchaser

24 must certify that the item is purchased to be rented

25 subject to a rental purchase agreement, as defined in the

26 Rental Purchase Agreement Act, and provide proof of

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1 registration under the Rental Purchase Agreement

2 Occupation and Use Tax Act. This paragraph is exempt from

3 the provisions of Section 2-70.

4 (44) Qualified tangible personal property used in the

5 construction or operation of a data center that has been

6 granted a certificate of exemption by the Department of

7 Commerce and Economic Opportunity, whether that tangible

8 personal property is purchased by the owner, operator, or

9 tenant of the data center or by a contractor or

10 subcontractor of the owner, operator, or tenant. Data

11 centers that would have qualified for a certificate of

12 exemption prior to January 1, 2020 had Public Act 101-31

13 ~~this amendatory Act of the 101st General Assembly~~ been in

14 effect, may apply for and obtain an exemption for

15 subsequent purchases of computer equipment or enabling

16 software purchased or leased to upgrade, supplement, or

17 replace computer equipment or enabling software purchased

18 or leased in the original investment that would have

19 qualified.

20 The Department of Commerce and Economic Opportunity

21 shall grant a certificate of exemption under this item

22 (44) to qualified data centers as defined by Section

23 605-1025 of the Department of Commerce and Economic

24 Opportunity Law of the Civil Administrative Code of

25 Illinois.

26 For the purposes of this item (44):

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1 "Data center" means a building or a series of

2 buildings rehabilitated or constructed to house

3 working servers in one physical location or multiple

4 sites within the State of Illinois.

5 "Qualified tangible personal property" means:

6 electrical systems and equipment; climate control and

7 chilling equipment and systems; mechanical systems and

8 equipment; monitoring and secure systems; emergency

9 generators; hardware; computers; servers; data storage

10 devices; network connectivity equipment; racks;

11 cabinets; telecommunications cabling infrastructure;

12 raised floor systems; peripheral components or

13 systems; software; mechanical, electrical, or plumbing

14 systems; battery systems; cooling systems and towers;

15 temperature control systems; other cabling; and other

16 data center infrastructure equipment and systems

17 necessary to operate qualified tangible personal

18 property, including fixtures; and component parts of

19 any of the foregoing, including installation,

20 maintenance, repair, refurbishment, and replacement of

21 qualified tangible personal property to generate,

22 transform, transmit, distribute, or manage electricity

23 necessary to operate qualified tangible personal

24 property; and all other tangible personal property

25 that is essential to the operations of a computer data

26 center. The term "qualified tangible personal

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1 property" also includes building materials physically

2 incorporated into the qualifying data center. To

3 document the exemption allowed under this Section, the

4 retailer must obtain from the purchaser a copy of the

5 certificate of eligibility issued by the Department of

6 Commerce and Economic Opportunity.

7 This item (44) is exempt from the provisions of

8 Section 2-70.

9 (45) Beginning January 1, 2020 and through December

10 31, 2020, sales of tangible personal property made by a

11 marketplace seller over a marketplace for which tax is due

12 under this Act but for which use tax has been collected and

13 remitted to the Department by a marketplace facilitator

14 under Section 2d of the Use Tax Act are exempt from tax

15 under this Act. A marketplace seller claiming this

16 exemption shall maintain books and records demonstrating

17 that the use tax on such sales has been collected and

18 remitted by a marketplace facilitator. Marketplace sellers

19 that have properly remitted tax under this Act on such

20 sales may file a claim for credit as provided in Section 6

21 of this Act. No claim is allowed, however, for such taxes

22 for which a credit or refund has been issued to the

23 marketplace facilitator under the Use Tax Act, or for

24 which the marketplace facilitator has filed a claim for

25 credit or refund under the Use Tax Act.

26 (46) Beginning July 1, 2022, breast pumps, breast pump

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1 collection and storage supplies, and breast pump kits.

2 This item (46) is exempt from the provisions of Section

3 2-70. As used in this item (46):

4 "Breast pump" means an electrically controlled or

5 manually controlled pump device designed or marketed to be

6 used to express milk from a human breast during lactation,

7 including the pump device and any battery, AC adapter, or

8 other power supply unit that is used to power the pump

9 device and is packaged and sold with the pump device at the

10 time of sale.

11 "Breast pump collection and storage supplies" means

12 items of tangible personal property designed or marketed

13 to be used in conjunction with a breast pump to collect

14 milk expressed from a human breast and to store collected

15 milk until it is ready for consumption.

16 "Breast pump collection and storage supplies"

17 includes, but is not limited to: breast shields and breast

18 shield connectors; breast pump tubes and tubing adapters;

19 breast pump valves and membranes; backflow protectors and

20 backflow protector adaptors; bottles and bottle caps

21 specific to the operation of the breast pump; and breast

22 milk storage bags.

23 "Breast pump collection and storage supplies" does not

24 include: (1) bottles and bottle caps not specific to the

25 operation of the breast pump; (2) breast pump travel bags

26 and other similar carrying accessories, including ice

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1 packs, labels, and other similar products; (3) breast pump

2 cleaning supplies; (4) nursing bras, bra pads, breast

3 shells, and other similar products; and (5) creams,

4 ointments, and other similar products that relieve

5 breastfeeding-related symptoms or conditions of the

6 breasts or nipples, unless sold as part of a breast pump

7 kit that is pre-packaged by the breast pump manufacturer

8 or distributor.

9 "Breast pump kit" means a kit that: (1) contains no

10 more than a breast pump, breast pump collection and

11 storage supplies, a rechargeable battery for operating the

12 breast pump, a breastmilk cooler, bottle stands, ice

13 packs, and a breast pump carrying case; and (2) is

14 pre-packaged as a breast pump kit by the breast pump

15 manufacturer or distributor.

16 (47) ~~(46)~~ Tangible personal property sold by or on

17 behalf of the State Treasurer pursuant to the Revised

18 Uniform Unclaimed Property Act. This item (47) ~~(46)~~ is

19 exempt from the provisions of Section 2-70.

20 (48) Qualified tangible personal property used in the

21 construction or operation of a megaproject for which a

22 certificate has been issued by the Department of Revenue

23 as described and defined in Division 22 of Article 10 of

24 the Property Tax Code, whether that tangible personal

25 property is purchased by the owner, operator, or tenant of

26 the megaproject or by a contractor or subcontractor of the

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1 owner, operator, or tenant. For the purposes of this item

2 (48):

3 "Facility" means a building or series of buildings.

4 "Megaproject" means a facility that is rehabilitated

5 or constructed as described in Division 22 of Article 10

6 of the Property Tax Code.

7 "Qualified tangible personal property" means:

8 electrical systems and equipment; climate control and

9 chilling equipment and systems; mechanical systems and

10 equipment; monitoring and secure systems; emergency

11 generators; hardware; computers; servers; data storage

12 devices; network connectivity equipment; racks; cabinets;

13 telecommunications cabling infrastructure; raised floor

14 systems; peripheral components or systems; software;

15 mechanical, electrical, or plumbing systems; battery

16 systems; cooling systems and towers; temperature control

17 systems; other cabling; and other data center

18 infrastructure equipment and systems necessary to operate

19 qualified tangible personal property, including fixtures;

20 and component parts of any of the foregoing, including

21 installation, maintenance, repair, refurbishment, and

22 replacement of qualified tangible personal property to

23 generate, transform, transmit, distribute, or manage

24 electricity necessary to operate qualified tangible

25 personal property; and all other tangible personal

26 property that is essential to the operations of a

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1 megaproject. The term "qualified tangible personal

2 property" also includes building materials to be

3 incorporated into the megaproject. To document the

4 exemption allowed under this Section, the retailer,

5 contractor or subcontractor or supplier must obtain from

6 the purchaser a copy of the certificate issued by the

7 Department of Revenue for the megaproject as described and

8 defined in Division 22 of Article 10 of the Property Tax

9 Code.

10 This item (48) is exempt from the provisions of

11 Section 2-70.

12 (Source: P.A. 101-31, eff. 6-28-19; 101-81, eff. 7-12-19;

13 101-629, eff. 2-5-20; 102-16, eff. 6-17-21; 102-634, eff.

14 8-27-21; 102-700, Article 70, Section 70-20, eff. 4-19-22;

15 102-700, Article 75, Section 75-20, eff. 4-19-22; 102-813,

16 eff. 5-13-22; 102-1026, eff. 5-27-22; revised 8-15-22.)

17 Section 25. The Property Tax Code is amended by adding

18 Division 22 to Article 10 as follows:

19 (35 ILCS 200/Art. 10 Div. 22 heading new)

20 Division 22. Megaprojects

21 (35 ILCS 200/10-900 new)

22 Sec. 10-900. Findings. The State's economy is highly

23 vulnerable to other states that have major financial incentive

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1 programs and competitive tax incentives. Certain businesses

2 and commercial operations that generate significant economic

3 activity bear a disproportionately high property tax burden

4 compared to their impact on government services and compared

5 to their positive economic benefits to the State and the local

6 economy and their derivative benefits to taxing districts. To

7 incentivize the significant capital investment and economic

8 activity of certain large-scale businesses and industrial and

9 commercial operations, the State finds that a valuation

10 procedure for real property taxes on special properties, known

11 as megaprojects, will reduce barriers to investment and

12 economic activity in Illinois. The General Assembly finds that

13 it is in the best interest of Illinois to establish a new

14 category of valuation for megaprojects that recognizes their

15 complexity and encourages local development at underutilized

16 properties.

17 (35 ILCS 200/10-910 new)

18 Sec. 10-910. Megaproject Assessment Freeze and Payment

19 Law; definitions. This Division 22 may be cited as the

20 Megaproject Assessment Freeze and Payment Law.

21 As used in this Division:

22 "Assessment officer" means the chief county assessment

23 officer of the county in which the megaproject is located.

24 "Assessment period" means the period beginning on the

25 first day of the calendar year after the calendar year in which

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1 a megaproject is placed in service and ending on the date when

2 the megaproject no longer qualifies as a megaproject under

3 this Division.

4 "Base tax year" means the tax year prior to the first

5 calendar year during which the Department issues a megaproject

6 certificate under this Division.

7 "Base year" means:

8 (1) the calendar year prior to the calendar year in

9 which the Department issues the megaproject certificate,

10 if the Department issues a megaproject certificate for a

11 project located on the property without granting

12 preliminary approval for the project pursuant to Section

13 10-940; or

14 (2) the calendar year prior to the calendar year in

15 which the Department grants that preliminary approval, if

16 the Department grants preliminary approval pursuant to

17 Section 10-940 for a megaproject located on the property.

18 "Base year valuation" means the assessed value, in the

19 base year, of the property comprising the megaproject.

20 "Company" means one or more entities whose aggregate

21 investment in the megaproject meets the minimum investment

22 required under this Division. The term company includes a

23 company affiliate unless the context clearly indicates

24 otherwise.

25 "Company affiliate" means an entity that joins with or is

26 an affiliate of a company and that participates in the

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1 investment in, or financing of, a megaproject.

2 "Consumer Price Index" means the index published by the

3 Bureau of Labor Statistics of the United States Department of

4 Labor that measures the average change in prices of goods and

5 services purchased by all urban consumers, United States city

6 average, all items, 1982-84 = 100.

7 "Department" means the Department of Revenue.

8 "Eligible costs" means all costs incurred by or on behalf

9 of, or allocated to, a company, prior to the Department's

10 issuance of the megaproject certificate or during the

11 investment period, to create or construct a megaproject.

12 "Eligible costs" includes, without limitation:

13 (1) the purchase, site preparation, renovation,

14 rehabilitation and construction of land, buildings,

15 structures, equipment and furnishings used for or in the

16 megaproject;

17 (2) any goods or services for the megaproject that are

18 purchased and capitalized under generally accepted

19 accounting principles, including any organizational costs

20 and research and development costs incurred in Illinois;

21 (3) capitalized lease costs for land, buildings,

22 structures and equipment valued at their present value

23 using the interest rate at which the company borrows funds

24 prevailing at the time the company entered into the lease;

25 (4) infrastructure development costs;

26 (5) debt service and project financing costs;

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1 (6) non-capitalized research and development costs;

2 (7) job training and education costs;

3 (8) lease and relocation costs; and

4 (9) amounts expended by a company or company affiliate

5 as a non-responsible party pursuant to a voluntary program

6 of site remediation, including amounts expended to obtain

7 a certification of completion, if completion of

8 remediation is certified by the Illinois Environmental

9 Protection Agency.

10 "Entity" means a sole proprietor, partnership, firm,

11 corporation, limited liability company, association, or other

12 business enterprise.

13 "Incentive agreement" means an agreement between a company

14 and an oversight board obligating the company to make the

15 special payment under this Division, in addition to paying

16 property taxes, during the incentive period for a megaproject.

17 "Incentive period" means the period beginning on the first

18 day of the calendar year after the calendar year in which the

19 megaproject is placed in service and each calendar year

20 thereafter until the earlier of (i) the expiration or

21 termination of the incentive agreement or (ii) the revocation

22 of the megaproject certificate.

23 "Inducement resolution" means a resolution adopted by the

24 local municipality setting forth the commitment of the local

25 municipality to enter into an incentive agreement.

26 "Investment period" means the period ending 7 years after

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1 the date on which the Department issues the megaproject

2 certificate, or such other longer period of time as the

3 oversight board and the company may agree to, not to exceed an

4 initial period of 10 years.

5 "Local municipality" means the city, village, or

6 incorporated town in which the megaproject is located or, if

7 the megaproject is located in an unincorporated area, the

8 county in which the megaproject is located.

9 "Local taxing district means a taxing district that levies

10 taxes for the levy year prior to the year in which the

11 application is submitted under Section 10-920 totaling 5% or

12 more of the total property tax bill for the property on which

13 the megaproject is located.

14 "Megaproject" means a project that satisfies the minimum

15 investment, investment period, and other requirements of this

16 Division.

17 "Megaproject certificate" means a certificate issued by

18 the Department that authorizes an assessment freeze as

19 provided in this Division.

20 "Minimum investment" means an investment in the

21 megaproject of at least $250,000,000 in eligible costs within

22 the investment period.

23 "Minority person" means a person who is a citizen or

24 lawful permanent resident of the United States and who is any

25 of the following:

26 (1) American Indian or Alaska Native (a person having

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1 origins in any of the original peoples of North and South

2 America, including Central America, and who maintains

3 tribal affiliation or community attachment).

4 (2) Asian (a person having origins in any of the

5 original peoples of the Far East, Southeast Asia, or the

6 Indian subcontinent, including, but not limited to,

7 Cambodia, China, India, Japan, Korea, Malaysia, Pakistan,

8 the Philippine Islands, Thailand, and Vietnam).

9 (3) Black or African American (a person having origins

10 in any of the black racial groups of Africa).

11 (4) Hispanic or Latino (a person of Cuban, Mexican,

12 Puerto Rican, South or Central American, or other Spanish

13 culture or origin, regardless of race).

14 (5) Native Hawaiian or Other Pacific Islander (a

15 person having origins in any of the original peoples of

16 Hawaii, Guam, Samoa, or other Pacific Islands).

17 "Minority-owned business" means a business that is at

18 least 51% owned by one or more minority persons, or in the case

19 of a corporation, at least 51% of the stock in which is owned

20 by one or more minority persons; and the management and daily

21 business operations of which are controlled by one or more of

22 the minority individuals who own it.

23 "Oversight board" means the board established under

24 Section 10-920.

25 "Placed in service" means that construction of the

26 megaproject is substantially complete, which may be evidenced

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1 by issuance of a certificate of occupancy for the megaproject

2 by the local municipality or any other governmental body

3 having jurisdiction over construction of the megaproject or,

4 if no certificate of occupancy is required as to the

5 megaproject, commencement of operations at the megaproject

6 site.

7 "Project" means land, buildings, and other improvements on

8 the land, including water, sewage treatment and disposal

9 facilities, air pollution control facilities, and all other

10 machinery, apparatus, equipment, office facilities, related

11 infrastructure, and furnishings which are considered

12 necessary, suitable, or useful by a company and comprise the

13 megaproject, including all such property subject to assessment

14 under the Property Tax Code.

15 "Special payment" means the annual amount paid in addition

16 to property taxes paid during the incentive period as provided

17 in the incentive agreement.

18 "Taxing district" has the meaning set forth in Section

19 1-150.

20 "Termination date" means the last day of a calendar year

21 that is no later than the 23rd year following the first

22 calendar year in which a megaproject is placed in service. A

23 company may apply to the oversight board prior to the

24 termination date for an extension of the termination date

25 beyond the 23rd year for up to 17 additional years, for a total

26 of 40 years. The oversight board shall approve an extension by

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1 resolution upon a finding of substantial public benefit. A

2 copy of the resolution must be delivered to the Department

3 within 30 days of the date the resolution was adopted. If the

4 incentive agreement is terminated under Section 10-937, then

5 the termination date is the date the agreement is terminated.

6 (35 ILCS 200/10-915 new)

7 Sec. 10-915. Valuation during incentive period;

8 eligibility.

9 (a) Property certified by the Department as megaproject

10 property pursuant to this Division is eligible for an

11 assessment freeze, as provided in this Division, eliminating

12 from consideration, for assessment purposes during the

13 incentive period, the value added to the property by the

14 project and limiting the total valuation of the property

15 during the incentive period to the base year valuation. If the

16 company does not anticipate completing the project within the

17 investment period, then the oversight board may approve one or

18 more extensions of time to complete the project. However, the

19 oversight board may not extend the project for a period that

20 exceeds 5 years after the last day of the investment period.

21 Unless approved as part of the original incentive agreement,

22 the oversight board may approve an extension under this

23 subsection by resolution, a copy of which must be delivered to

24 the Department within 30 days after the date the resolution is

25 adopted.

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1 (b) To qualify for a megaproject certificate, the company

2 must:

3 (1) make the minimum investment in the megaproject

4 during the investment period; minimum investment

5 requirements shall be construed broadly for purposes of

6 this Division;

7 (2) enter into an incentive agreement with the

8 oversight board as described in this Division;

9 (3) enter into a project labor agreement with the

10 applicable local building trades council prior to the

11 commencement of any demolition, building construction, or

12 building renovation related to the project; and

13 (4) establish the goal of awarding 20% of the total

14 dollar amount of contracts that are related to the project

15 and are awarded by the company during each calendar year

16 to minority-owned businesses.

17 (c) For purposes of this Division, if a single company

18 enters into a financing arrangement of the type described in

19 subsection (b) of Section 10-950, the investment in or

20 financing of the property by a developer, lessor, financing

21 entity, or other third party in accordance with this

22 arrangement is considered investment by the company.

23 Investment by a related person to the company is considered

24 investment by the company.

25 (35 ILCS 200/10-920 new)

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1 Sec. 10-920. Incentive agreement; assessment freeze for

2 megaprojects; incentive period; inducement resolution;

3 location of the project; criteria to qualify.

4 (a) To obtain the benefits provided in this Division, the

5 company shall apply in writing to the local municipality to

6 enter into an incentive agreement with the local municipality

7 and the local taxing districts, in the form and manner

8 required by the local municipality, and shall certify to the

9 facts asserted in the application.

10 (b) Upon receipt of the application, the local

11 municipality shall notify each local taxing district that the

12 local municipality has received a megaproject application, and

13 the local municipality and the local taxing districts shall

14 establish an oversight board. The membership of the oversight

15 board and the terms of office of its members shall be

16 determined by the local municipality and the local taxing

17 districts, provided that at least 50% of the voting members of

18 the board shall represent local taxing districts that are

19 school districts.

20 (c) The oversight board, prior to entering into an

21 incentive agreement under this Section, shall hold a public

22 hearing to consider the application. The amount and terms of

23 the proposed special payment and the duration of the incentive

24 agreement shall be considered at the public hearing.

25 (d) Copies of the completed application shall be provided

26 to each local taxing district. Those copies shall be provided

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1 at least 30 days prior to the scheduled public hearing under

2 subsection (c).

3 (e) The company and the oversight board shall enter into

4 an incentive agreement requiring the special payment described

5 in Section 10-925. That agreement shall not take effect unless

6 the corporate authorities of the local municipality and each

7 local taxing district each adopt an ordinance approving the

8 incentive agreement.

9 (f) If an incentive agreement is not executed within 5

10 years after the local municipality's adoption of an inducement

11 resolution, expenditures incurred by the company more than 5

12 years prior to the execution of the incentive agreement shall

13 not qualify as part of the minimum investment.

14 (g) To be eligible to enter into an incentive agreement

15 under this Division, the company must commit to a project that

16 meets the minimum investment set forth in this Division.

17 (35 ILCS 200/10-925 new)

18 Sec. 10-925. Contents of incentive agreement.

19 (a) The incentive agreement under Section 10-920 must

20 require the company to pay, or be responsible for the payment

21 of, annual special payments to the local municipality and each

22 local taxing district, beginning with the first tax year for

23 which the assessment freeze under this Division is applied to

24 the megaproject. The amount of the special payment shall be

25 set forth in the incentive agreement and shall be increased

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1 annually by the lesser of (i) 5% or (ii) the percentage

2 increase, if any, in the Consumer Price Index for the 12 months

3 ending in September of the immediately preceding calendar

4 year, and may be further increased or decreased every 5 years

5 upon renegotiation by the parties as provided in subsection

6 (e).

7 (b) The incentive agreement shall obligate the company to

8 operate the megaproject at the designated project location for

9 a minimum of 20 years or until the termination of the agreement

10 as provided in Section 10-937, whichever occurs earlier.

11 (c) The incentive agreement may contain such other terms

12 and conditions as are mutually agreeable to the oversight

13 board and the company and are consistent with the requirements

14 of this Division, including, without limitation, operational

15 and job creation requirements.

16 (d) In addition, all incentive agreements entered into

17 pursuant to Section 10-920 must include, as the first portion

18 of the document, a recapitulation of the remaining contents of

19 the document which includes, but is not limited to, the

20 following:

21 (1) the legal name of each party to the agreement;

22 (2) the street address of the project and the property

23 subject to the agreement;

24 (3) the agreed minimum investment;

25 (4) the term of the agreement;

26 (5) a schedule showing the amount of the special

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1 payment and its calculation for each year of the

2 agreement;

3 (6) a schedule showing the amount to be distributed

4 annually to the local municipality and each local taxing

5 district;

6 (7) any other feature or aspect of the agreement which

7 may affect the calculation of items (5) and (6) of this

8 subsection; and

9 (8) the party or parties to the agreement who are

10 responsible for updating the information contained in the

11 summary document.

12 (e) The incentive agreement shall also contain a

13 renegotiation clause that requires the parties to the

14 agreement to renegotiate the terms of the agreement no less

15 often than once every 5 years.

16 (35 ILCS 200/10-930 new)

17 Sec. 10-930. Installment bills; distribution of special

18 payments.

19 (a) The county collector shall prepare a bill for each

20 installment of the special payment according to the schedule

21 set forth in paragraph (5) of subsection (d) of Section

22 10-925, or as modified pursuant to paragraph (7) of subsection

23 (d) of Section 10-925, and that payment must be distributed to

24 the local taxing entities according to the schedule in

25 paragraph (6) of subsection (d) of Section 10-925 or as

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1 modified in paragraph (7) of subsection (d) of Section 10-925.

2 (b) Distribution to the local municipality and local

3 taxing districts of the special payments associated with a

4 megaproject must be made within 30 days after receipt by the

5 county collector of the special payment amounts.

6 (c) Misallocations of the distribution of the special

7 payments may be corrected by adjusting later distributions,

8 but these adjustments must be made in the next succeeding year

9 following identification and resolution of the misallocation.

10 To the extent that distributions have been made improperly in

11 previous years, claims for adjustment must be made within one

12 year of the distribution.

13 (35 ILCS 200/10-932 new)

14 Sec. 10-932. Revenue sharing agreements. The local taxing

15 districts, including the local municipality, may enter into

16 revenue sharing agreements among themselves. Those agreements

17 must be based on the results of an impact study including, but

18 not limited to, an analysis of environmental impacts, housing

19 costs, traffic impacts, and police and fire costs.

20 (35 ILCS 200/10-935 new)

21 Sec. 10-935. Use of revenues. A taxing district that

22 receives and retains revenues from a special payment under

23 this Division may use all or a portion of the revenues for the

24 purposes of financing the issuance of revenue bonds.

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1 (35 ILCS 200/10-937 new)

2 Sec. 10-937. Termination of incentive agreement; automatic

3 termination; minimum level of investment required to remain

4 qualified for assessment freeze.

5 (a) The oversight board and the company may mutually agree

6 to terminate the incentive agreement at any time. From the

7 date of termination, the megaproject is subject to assessment

8 on the basis of the then current fair cash value.

9 (b) An incentive agreement shall be terminated if the

10 company fails to satisfy the minimum investment level provided

11 in this Division. If the incentive agreement is terminated

12 under this subsection, the megaproject is subject to

13 assessment on the basis of the then current fair cash value

14 beginning in the tax year during which the termination occurs.

15 (c) An incentive agreement shall terminate if, at any

16 time, the company no longer has the minimum level of

17 investment as provided in this Division, without regard to

18 depreciation.

19 (35 ILCS 200/10-940 new)

20 Sec. 10-940. Megaproject applications; certification as a

21 megaproject and revocation of certification.

22 (a) The Department shall receive applications for

23 megaproject certificates under this Division in a form and

24 manner provided by the Department by rule. The Department

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1 shall promptly notify the chief county assessment officer when

2 the Department receives an application under this Section. The

3 Department's rules shall provide that an applicant may request

4 preliminary approval of the megaproject before the project

5 begins, before the applicant has entered into a fully executed

6 incentive agreement with the oversight board, or before the

7 project has been placed in service.

8 (b) An applicant for a megaproject certificate under this

9 Division must provide evidence to the Department of a fully

10 executed incentive agreement between the company and the

11 oversight board as described in this Division.

12 (c) An applicant for a megaproject certificate under this

13 Division must provide evidence to the Department of a fully

14 executed project labor agreement entered into with the

15 applicable local building trades council prior to the

16 commencement of any demolition, building construction, or

17 building renovation at the project. If the demolition,

18 building construction, or building renovation begins after the

19 application is approved, then the applicant must transmit a

20 copy of the fully executed project labor agreement to the

21 Department as soon as possible after the agreement is

22 executed.

23 (d) An applicant for a megaproject certificate under this

24 Division must provide evidence to the Department that the

25 company has established the goal of awarding 20% of the total

26 dollar amount of contracts awarded during each calendar year

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1 by the company, that are related to the project, to

2 minority-owned businesses.

3 (e) The Department shall approve an application for a

4 megaproject certificate if the Department finds that the

5 project meets the requirements of this Division.

6 (f) Upon approval of the application, the Department shall

7 issue a megaproject certificate to the applicant and transmit

8 a copy to the chief county assessment officer. The certificate

9 shall identify the property on which the megaproject is

10 located.

11 (g) For each calendar year following issuance of the

12 megaproject certificate, until the minimum investment

13 requirements have been met and the megaproject has been placed

14 in service, the company shall deliver a report to the

15 Department on the status of construction or creation of the

16 megaproject and the amount of minimum investment made in the

17 megaproject during the preceding calendar year. If the

18 Department determines, in accordance with the Administrative

19 Review Law and the Illinois Administrative Procedure Act, that

20 a project for which a certificate has been issued has not met

21 the minimum investment requirements of this Division within

22 the investment period, the Department shall revoke the

23 certificate by written notice to the taxpayer of record and

24 transmit a copy of the revocation to the assessment officer.

25 (h) If the oversight board notifies the Department that

26 the incentive agreement has been terminated, the Department

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1 shall revoke the certificate by written notice to the taxpayer

2 of record and transmit a copy of the revocation to the

3 assessment officer.

4 (35 ILCS 200/10-945 new)

5 Sec. 10-945. Computation of valuation.

6 (a) Upon receipt of the megaproject certificate from the

7 Department, the chief county assessment officer shall

8 determine the base year valuation and shall make a notation on

9 each statement of assessment during the assessment period that

10 the valuation of the project is based upon the issuance of a

11 megaproject certificate.

12 (b) Upon revocation of a megaproject certificate, the

13 chief county assessment officer shall compute the assessed

14 valuation of the project on the basis of the then current fair

15 cash value of the property.

16 (35 ILCS 200/10-950 new)

17 Sec. 10-950. Transfers of interest in a megaproject;

18 sale-leaseback arrangement; requirements.

19 (a) Subject to the terms of the incentive agreement

20 between the company and the oversight board, ownership of or

21 any interest in the megaproject and any and all related

22 project property, including, without limitation, transfers of

23 indirect beneficial interests and equity interests in a

24 company owning a megaproject, shall not affect the assessment

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1 freeze or the validity of the megaproject certificate issued

2 under this Division. Notwithstanding the provisions of this

3 subsection, the incentive agreement shall be a covenant

4 running with the land.

5 (b) A company may enter into lending, financing, security,

6 leasing, or similar arrangements, or a succession of such

7 arrangements, with a financing entity concerning all or part

8 of a project including, without limitation, a sale-leaseback

9 arrangement, equipment lease, build-to-suit lease, synthetic

10 lease, nordic lease, defeased tax benefit, or transfer lease,

11 an assignment, sublease, or similar arrangement, or succession

12 of those arrangements, with one or more financing entities

13 concerning all or part of a project, regardless of the

14 identity of the income tax or fee owner of the megaproject.

15 Neither the original transfer to the financing entity nor the

16 later transfer from the financing entity back to the company,

17 pursuant to terms in the sale-leaseback agreement, shall

18 affect the assessment freeze or the validity of the

19 megaproject certificate issued under this Division, regardless

20 of whether the income tax basis is changed for income tax

21 purposes.

22 (c) The Department must receive notice of all transfers

23 undertaken with respect to other projects to effect a

24 financing. Notice shall be made in writing within 60 days

25 after the transfer, identifying each transferee and containing

26 other information required by the Department with the

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1 appropriate returns. Failure to meet this notice requirement

2 does not adversely affect the assessment freeze.

3 (35 ILCS 200/10-955 new)

4 Sec. 10-955. Minimum investment by company affiliates. To

5 be eligible for the benefits of this Division, a company must

6 make the minimum investment. Investments by company affiliates

7 during the investment period may be applied toward the minimum

8 investment under this Division regardless of whether the

9 company affiliate was part of the project. To qualify for the

10 assessment freeze, the minimum investments must be made at the

11 megaproject site.

12 (35 ILCS 200/10-960 new)

13 Sec. 10-960. Projects to be valued at fair cash value for

14 purposes of bonded indebtedness and limitations on property

15 tax extensions. Projects to which an assessment freeze applies

16 pursuant to this Division shall be valued at their fair cash

17 value for purposes of calculating a municipality's general

18 obligation bond limits and a taxing district's limitation on

19 tax extensions.

20 (35 ILCS 200/10-965 new)

21 Sec. 10-965. Abatements. Any local taxing district, upon a

22 majority vote of its governing authority, may, after the

23 determination of the assessed valuation as set forth in this

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1 Division, order the clerk of the appropriate municipality or

2 county to abate any portion of real property taxes otherwise

3 levied or extended by the taxing district on a megaproject.

4 (35 ILCS 200/10-970 new)

5 Sec. 10-970. Filing of returns, contracts, and other

6 information; due date of payments and returns.

7 (a) The company and the oversight board shall file

8 notices, reports, and other information as required by the

9 Department.

10 (b) Special payments are due at the same time as property

11 tax payments and property tax returns are due for the

12 megaproject property.

13 (c) Failure to make a timely special payment results in

14 the assessment of penalties as if the payment were a

15 delinquent property tax payment or return.

16 (d) Within 30 days after the date of execution of an

17 incentive agreement, a copy of the incentive agreement must be

18 filed with the Department, the county assessor, and the county

19 auditor for the county in which the megaproject is located.

20 (35 ILCS 200/10-980 new)

21 Sec. 10-980. Rules. The Department may issue rulings and

22 adopt rules as necessary to carry out the purpose of this

23 Division.

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1 (35 ILCS 200/10-990 new)

2 Sec. 10-990. Invalidity. If all or any part of this

3 Division is determined to be unconstitutional or otherwise

4 unenforceable by a court of competent jurisdiction, a company

5 has 180 days from the date of the determination to transfer

6 title to a megaproject to an authorized economic development

7 authority, which may qualify for property tax assessment under

8 this Division or which may be exempt from property taxes.

9 Section 97. Severability. The provisions of this Act are

10 severable under Section 1.31 of the Statute on Statutes.

11 Section 99. Effective date. This Act takes effect June 1,

12 2024.

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1 INDEX

2 Statutes amended in order of appearance

3 35 ILCS 105/3-5

4 35 ILCS 110/3-5

5 35 ILCS 115/3-5

6 35 ILCS 120/2-5

7 35 ILCS 200/Art. 10 Div.

8 22 heading new

9 35 ILCS 200/10-900 new

10 35 ILCS 200/10-910 new

11 35 ILCS 200/10-915 new

12 35 ILCS 200/10-920 new

13 35 ILCS 200/10-925 new

14 35 ILCS 200/10-930 new

15 35 ILCS 200/10-932 new

16 35 ILCS 200/10-935 new

17 35 ILCS 200/10-937 new

18 35 ILCS 200/10-940 new

19 35 ILCS 200/10-945 new

20 35 ILCS 200/10-950 new

21 35 ILCS 200/10-955 new

22 35 ILCS 200/10-960 new

23 35 ILCS 200/10-965 new

24 35 ILCS 200/10-970 new

25 35 ILCS 200/10-980 new

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