103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB3442

 

Introduced 2/8/2024, by Sen. Willie Preston

 

SYNOPSIS AS INTRODUCED:
 
New Act
310 ILCS 65/5  from Ch. 67 1/2, par. 1255

    Creates the House Illinois Families Act. Imposes on each applicable taxpayer an annual tax 10% of the property value for each single-family residence that the applicable taxpayer owns in excess of 25 single-family residences. Provides that "applicable taxpayer" means a taxpayer that is not any of the following: (i) a mortgage note holder that owns a single-family residence through foreclosure; (ii) an organization that is described in Section 501(c)(3) of the Internal Revenue Code and exempt from tax under Section 501(a); (iii) an organization primarily engaged in the construction or rehabilitation of single-family residences; or (v) a person who owns federally subsidized housing. Defines "single-family residence" as residential property consisting of not more than 4 dwelling units. Provides that this tax must be deposited into the Illinois Affordable Housing Trust Fund to fund housing programs for justice involved individuals and provide rental and mortgage assistance. Requires an applicable taxpayer to report to the Department of Revenue information about applicable single-family residences. Imposes a penalty of $50,000 for failure to comply with these notice provisions. Provides that the applicable taxpayer must give notice to each tenant of an applicable single-family residence of the taxpayer's intent to sell this residence. Provides the tenant with a right of first refusal in which the tenant has the right to purchase the property to continue to live there as their residence. Creates a process for the tenant to purchase the single-family residence. Amends the Illinois Affordable Housing Act. Allows the Trust Fund in that Act to receive moneys that are designated for deposit into the Trust Fund as provided in the House Illinois Families Act. Makes other changes. Effective immediately.


LRB103 38634 JRC 68771 b

 

 

A BILL FOR

 

SB3442LRB103 38634 JRC 68771 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the House
5Illinois Families Act.
 
6    Section 5. Definitions. As used in this Act:
7    "Applicable taxpayer" means a taxpayer that is not:
8        (i) A mortgage note holder that owns a single-family
9    residence through foreclosure;
10        (ii) An organization that is described in Section
11    501(c)(3) and exempt from tax under Section 501(a);
12        (iii) An organization primarily engaged in the
13    construction or rehabilitation of single-family
14    residences; or.
15        (iv) A person who owns federally subsidized housing.
16    "Disqualified sale" means a sale or transfer to:
17        (i) A corporation or entity engaged in a trade or
18    business;
19        (ii) A group of more than 2 individuals; or
20        (iii) A person who owns any other single-family
21    residence.
22    "Department" means the Department of Revenue.
23    "Single-family residence" means a residential property

 

 

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1consisting of not more than 4 dwelling units.
2    "Own" means having a direct majority ownership interest in
3the single-family residence.
 
4    Section 10. Excess single-family residences.
5    (a) There is imposed on each applicable taxpayer for each
6taxable year a tax of 10% of the property value of each
7single-family residence owned by the taxpayer as of the last
8day of the taxable year in excess of 25 single-family
9residences.
10    (b) The tax collected shall be deposited into the Illinois
11Affordable Housing Trust Fund with the purpose of funding
12housing programs for justice involved individuals and
13providing rental and mortgage assistance.
 
14    Section 15. Special rule for certain sales. A
15single-family residence which is sold or transferred in a
16disqualified sale during the taxable year shall be treated as
17a single-family residence which is owned by the applicable
18taxpayer as of the last day of such taxable year.
 
19    Section 20. Reporting.
20    (a) The Department of Revenue shall adopt rules to
21administer and enforce the provisions of this Act. Those rules
22require such reporting as the Department determines necessary
23or appropriate to carry out the purposes of this Act,

 

 

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1including reporting with respect to:
2        (i) The dates on which single-family residences owned
3    by an applicable taxpayer were acquired by the taxpayer;
4        (ii) The dates on which single-family residences owned
5    by an applicable taxpayer are sold by the taxpayer in
6    accordance with this Act; and
7        (iii) Whether any person acquiring a single-family
8    residence from an applicable taxpayer owns any other
9    single-family residences.
10    (b) Any applicable taxpayer who fails to report in
11accordance with this Section or who fails to include correct
12information in the report shall pay a penalty of $50,000, on
13notice and demand of the Department, to be deposited into the
14Illinois Affordable Housing Trust Fund with the purpose of
15funding housing programs for justice involved individuals and
16providing rental and mortgage payment assistance.
17    (c) No penalty shall be imposed under this paragraph with
18respect to any failure if it is shown that the failure is due
19to reasonable cause and not to willful neglect.
 
20    Section 25. Sale of applicable single-family residences;
21right of first refusal.
22    (a) An applicable taxpayer shall give notice to each
23tenant of an applicable single-family residence of their
24intent to sell the applicable single-family residence in which
25the tenant resides. The notice under this subsection shall be

 

 

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1mailed by certified mail.
2    (b) Before an applicable single-family residence may be
3sold, the applicable taxpayer shall give notice to each tenant
4of the residence, by certified mail, of any third-party bona
5fide offer for sale that the taxpayer intends to accept. The
6notice shall include the price and the terms and conditions of
7the offer. The price shall be calculated as a single lump sum
8amount that reflects (i) the total purchase price, or (ii) the
9present value of any installment payments offered in lieu of
10cash payments.
11    (c) Upon receiving notice of any third-party bona fide
12offer, the tenant of that residence shall have the right to
13purchase the subject property for the purpose of continuing
14the use of the property as their residence. The tenant shall
15(1) submit to the applicable taxpayer notice of their interest
16in purchasing the applicable single-family residence; (2)
17submit to the applicable taxpayer a proposed purchase and sale
18agreement on substantially equivalent terms and conditions
19within 45 days after receipt of notice of the bona fide offer
20made; (3) obtain a binding commitment for any necessary
21financing or guarantees within an additional 90 days after
22execution of the purchase and sale agreement; and (4) close on
23the purchase within an additional 90 days after the end of the
2490-day period under item (3).
25    No applicable taxpayer shall unreasonably refuse to enter
26into, or unreasonably delay the execution or closing on, a

 

 

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1purchase and sale or lease agreement with tenants who have
2made a bona fide offer to meet the price and substantially
3equivalent terms and conditions of an offer for which notice
4is required to be given pursuant to subsection (b). Failure of
5the tenants to submit such a purchase and sale agreement
6within the first 45-day period, to obtain a binding commitment
7for financing within the additional 90-day period, or to close
8on the purchase within the second 90-day period shall serve to
9terminate the rights of the residents to purchase the
10applicable single-family residence. The time periods provided
11in this Section may be extended by agreement. Nothing in this
12Section shall be construed to require an applicable taxpayer
13to provide financing to tenants except to the extent such
14financing would be provided to the third-party offeror.
15    (d) The right of first refusal created in this Section
16shall inure to the tenants for the time periods set forth in
17this Section, beginning on the date of notice to the tenants
18under paragraph (b). The effective period for such right of
19first refusal shall obtain separately for each substantially
20different bona fide offer to purchase the applicable
21single-family residence, and for each offer substantially
22equivalent to an offer made more than 3 months prior to the
23later offer; provided however, that in the case of a
24substantially equivalent offer made by a prospective buyer who
25has previously made an offer for which notice to tenants was
26required by subsection (b), the right of first refusal shall

 

 

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1obtain only if the subsequent offer is made more than 6 months
2after the earlier offer. The right of first refusal shall not
3apply with respect to any offer received by the applicable
4taxpayer for which a notice is not required pursuant to
5subsection (b). No right of first refusal shall apply to a
6government taking by eminent domain or negotiated purchase, a
7forced sale pursuant to a foreclosure by an unrelated third
8party, transfer by gift, devise or operation of law, or a sale
9to a person who would be an heir at law if there were to be a
10death intestate of a mobile home park owner.
11    (e) If the tenants of the applicable single-family
12residence are not the successful purchasers, the applicable
13taxpayer shall provide evidence of compliance with this
14Section by filing an affidavit of compliance with the
15Department within 7 days after the sale or lease of the park.
 
16    Section 900. The Illinois Affordable Housing Act is
17amended by changing Section 5 as follows:
 
18    (310 ILCS 65/5)  (from Ch. 67 1/2, par. 1255)
19    Sec. 5. Illinois Affordable Housing Trust Fund.
20    (a) There is hereby created the Illinois Affordable
21Housing Trust Fund, hereafter referred to in this Act as the
22"Trust Fund" to be held as a separate fund within the State
23Treasury and to be administered by the Program Administrator.
24The purpose of the Trust Fund is to finance projects of the

 

 

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1Illinois Affordable Housing Program as authorized and approved
2by the Program Administrator. The Funding Agent shall
3establish, within the Trust Fund, a General Account, a Bond
4Account, a Commitment Account and a Development Credits
5Account. The Funding Agent shall authorize distribution of
6Trust Fund moneys to the Program Administrator or a payee
7designated by the Program Administrator for purposes
8authorized by this Act. After receipt of the Trust Fund moneys
9by the Program Administrator or designated payee, the Program
10Administrator shall ensure that all those moneys are expended
11for a public purpose and only as authorized by this Act.
12    (b) Except as otherwise provided in Section 8(c) of this
13Act, there shall be deposited in the Trust Fund such amounts as
14may become available under the provisions of this Act,
15including, but not limited to:
16        (1) all receipts, including dividends, principal and
17    interest repayments attributable to any loans or
18    agreements funded from the Trust Fund;
19        (2) all proceeds of assets of whatever nature received
20    by the Program Administrator, and attributable to default
21    with respect to loans or agreements funded from the Trust
22    Fund;
23        (3) any appropriations, grants or gifts of funds or
24    property, or financial or other aid from any federal or
25    State agency or body, local government or any other public
26    organization or private individual made to the Trust Fund;

 

 

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1        (4) any income received as a result of the investment
2    of moneys in the Trust Fund;
3        (5) all fees or charges collected by the Program
4    Administrator or Funding Agent pursuant to this Act;
5        (6) amounts as provided in Section 31-35 of the Real
6    Estate Transfer Tax Law;
7        (7) other funds as appropriated by the General
8    Assembly; and
9        (8) any income, less costs and fees associated with
10    the Program Escrow, received by the Program Administrator
11    that is derived from Trust Fund Moneys held in the Program
12    Escrow prior to expenditure of such Trust Fund Moneys.
13    (c) Additional Trust Fund Purpose: Receipt and use of
14federal funding for programs responding to the COVID-19 public
15health emergency. Notwithstanding any other provision of this
16Act or any other law limiting or directing the use of the Trust
17Fund, the Trust Fund may receive, directly or indirectly,
18federal funds from the Homeowner Assistance Fund authorized
19under Section 3206 of the federal American Rescue Plan Act of
202021 (Public Law 117-2). Any such funds shall be deposited
21into a Homeowner Assistance Account which shall be established
22within the Trust Fund by the Funding Agent so that such funds
23can be accounted for separately from other funds in the Trust
24Fund. Such funds may be used only in the manner and for the
25purposes authorized in Section 3206 of the American Rescue
26Plan Act of 2021 and in related federal guidance. Also, the

 

 

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1Trust Fund may receive, directly or indirectly, federal funds
2from the Emergency Rental Assistance Program authorized under
3Section 3201 of the federal American Rescue Plan Act of 2021
4and Section 501 of Subtitle A of Title V of Division N of the
5Consolidated Appropriations Act, 2021 (Public Law 116–260).
6Any such funds shall be deposited into an Emergency Rental
7Assistance Account which shall be established within the Trust
8Fund by the Funding Agent so that such funds can be accounted
9for separately from other funds in the Trust Fund. Such funds
10may be used only in the manner and for the purposes authorized
11in Section 3201 of the American Rescue Plan Act of 2021 and in
12related federal guidance. Expenditures under this subsection
13(c) are subject to annual appropriation to the Funding Agent.
14Unless used in this subsection (c), the defined terms set
15forth in Section 3 shall not apply to funds received pursuant
16to the American Rescue Plan Act of 2021. Notwithstanding any
17other provision of this Act or any other law limiting or
18directing the use of the Trust Fund, funds received under the
19American Rescue Plan Act of 2021 are not subject to the terms
20and provisions of this Act except as specifically set forth in
21this subsection (c).
22    (d) Additional Trust Fund Purpose. The Trust Fund may also
23receive moneys that are designated for deposit into the Trust
24Fund as provided in the House Illinois Families Act. Those
25moneys may be used as provided in that Act.
26(Source: P.A. 102-16, eff. 6-17-21; 103-8, eff. 7-1-23.)
 

 

 

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1    Section 999. Effective date. This Act takes effect upon
2becoming law.