093_HB3049eng

 
HB3049 Engrossed                     LRB093 10000 SJM 10250 b

 1        AN ACT concerning taxes.

 2        Be  it  enacted  by  the People of the State of Illinois,
 3    represented in the General Assembly:

 4        Section  5.  The  Illinois  Housing  Development  Act  is
 5    amended by changing Section 7.28 as follows:

 6        (20 ILCS 3805/7.28)
 7        Sec. 7.28. Tax  credit  for  donation  to  sponsors.  The
 8    Illinois  Housing  Development  Authority  may administer and
 9    adopt rules for an affordable  housing  tax  donation  credit
10    program  to  provide tax credits for donations to sponsors of
11    affordable housing projects as set forth in this Section.
12        (a)  In this Section:
13        "Administrative housing agency" means either the Illinois
14    Housing Development Authority or an agency  of  the  City  of
15    Chicago.
16        "Affordable  housing  project"  means either (i) a rental
17    project in which  at  least  25%  of  the  units  have  rents
18    (including tenant-paid heat) that do not exceed, on a monthly
19    basis,  maximum  gross  rent  figures,  as  published  by the
20    Authority, that are: (i) based on data published annually  by
21    the  U.S.  Department  of Housing and Urban Development, (ii)
22    based on the annual income of households earning 60%  of  the
23    area  median  income, (iii) computed using a 30% of the gross
24    monthly income standard and (iv) adjusted for unit size of  a
25    household  earning 60% of the area median income and at least
26    25% of the units are occupied by persons and  families  whose
27    incomes do not exceed 60% of the median family income for the
28    geographic  area  in which the residential unit is located or
29    (ii) a unit for sale  to  homebuyers  whose  gross  household
30    income  is  at or below 60% of the area median income and who
31    pay no more than 30% of  their  gross  household  income  for
 
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 1    mortgage  principal,  interest,  property taxes, and property
 2    insurance (PITI).
 3        "Donation" means money, securities, or real  or  personal
 4    property  that is donated to a not-for-profit sponsor that is
 5    used solely for costs associated with either (i)  purchasing,
 6    constructing, or rehabilitating an affordable housing project
 7    in  this  State, (ii) an employer-assisted housing project in
 8    this  State,  (iii)  general  operating  support,   or   (iv)
 9    technical assistance as defined by this Section.
10        "Employer-assisted    housing   project"   means   either
11    down-payment assistance, reduced-interest mortgages, mortgage
12    guarantee   programs,   rental   subsidies,   or   individual
13    development  account  savings  plans  that  are  provided  by
14    employers to  employees  to  assist  in  securing  affordable
15    housing  near  the work place, that are restricted to housing
16    near the work place, and that  are  restricted  to  employees
17    whose  gross household income is at or below 120% of the area
18    median income.
19        "General operating support" means any cost incurred by  a
20    sponsor  that  is  a part of its general program costs and is
21    not limited to costs  directly  incurred  by  the  affordable
22    housing project.
23        "Geographical area" means the metropolitan area or county
24    designated  as  an  area by the federal Department of Housing
25    and Urban Development under Section 8 of  the  United  States
26    Housing  Act of 1937, as amended, for purposes of determining
27    fair market rental rates.
28        "Median income" means the incomes that are determined  by
29    the  federal  Department  of  Housing  and  Urban Development
30    guidelines and adjusted for family size.
31        "Project"  means  an  affordable  housing   project,   an
32    employer-assisted housing project, general operating support,
33    or technical assistance.
34        "Sponsor" means a not-for-profit organization that (i) is
 
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 1    organized  as a not-for-profit organization under the laws of
 2    this State or another state and (1) for an affordable housing
 3    project, has as  one  of  its  purposes  the  development  of
 4    affordable  housing;  (2)  for  an  employer-assisted housing
 5    project, has as one of its purposes home ownership education;
 6    and (3) for a technical assistance project, has as one of its
 7    purposes either the development of affordable housing or home
 8    ownership  education  under  the  General  Not   For   Profit
 9    Corporation  Act  of  1986 for the purpose of constructing or
10    rehabilitating affordable housing units in this  State;  (ii)
11    is   organized   for   the   purpose   of   constructing   or
12    rehabilitating affordable housing units and has been issued a
13    ruling from the Internal Revenue Service of the United States
14    Department  of  the  Treasury that the organization is exempt
15    from income taxation under provisions of the Internal Revenue
16    Code; or (iii) is an organization designated as  a  community
17    development corporation by the United States government under
18    Title VII of the Economic Opportunity Act of 1964.
19        "Tax credit" means a tax credit allowed under Section 214
20    of the Illinois Income Tax Act.
21        "Technical  assistance"  means  any  cost  incurred  by a
22    sponsor for project planning, assistance  with  applying  for
23    financing,  or  counseling  services  provided to prospective
24    homebuyers.
25        (b)  A  sponsor  must  apply  to  an  the  administrative
26    housing agency that administers the program for  approval  of
27    the project. The administrative housing agency must reserve a
28    specific  amount  of tax credits for each approved affordable
29    housing project for 24 months after  the  date  of  approval.
30    The  sponsor  must  receive  an eligible donation within that
31    24-month time period or donations to the project  made  after
32    the  end  of the 24-month period are not eligible for the tax
33    credit allowed under Section 214 of the Illinois  Income  Tax
34    Act.  Tax  credits  for general operating support can only be
 
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 1    reserved as part of a  reservation  of  tax  credits  for  an
 2    affordable  housing  project,  an  employer-assisted  housing
 3    project,  or  technical  assistance.  No tax credits shall be
 4    allowed for a project  without  a  reservation  of  such  tax
 5    credits by an administrative housing agency for that project.
 6        (c)  The  Illinois  Housing  Development  Authority  must
 7    adopt  rules  establishing  criteria  for  eligible costs and
 8    donations, issuing and verifying tax credits,  and  selecting
 9    affordable  housing  projects  that  are  eligible  for a tax
10    credit under Section 214 of the Illinois Income Tax Act.
11        (d)  Tax credits for employer-assisted  housing  projects
12    are  limited  to  that pool of tax credits that have been set
13    aside for employer-assisted housing.  Tax credits for general
14    operating support are limited to 10% of the total tax  credit
15    reservation  for  the  related  project  (other  than general
16    operating support) allocation for  a  project  and  are  also
17    limited  to that pool of tax credits that have been set aside
18    for general operating support.   Tax  credits  for  technical
19    assistance  are limited to that pool of tax credits that have
20    been set aside for technical assistance.
21        (e)  The  amount  of  tax   credits   reserved   by   the
22    administrative  housing  agency  for  an  approved project is
23    limited to $13 million in the initial year and shall increase
24    each year by 5%.  The City of Chicago shall receive 24.5%  of
25    total  tax  credits  authorized  for  each  fiscal year.  The
26    Illinois Housing  Development  Authority  shall  receive  the
27    balance  of  the tax credits authorized for each fiscal year.
28    The tax credits may be used anywhere in this the State.   The
29    tax credits have the following set-asides:
30             (1)  for   employer-assisted  housing  projects,  $2
31        million; and
32             (2)  for general  operating  support  and  technical
33        assistance, $1 million.
34        The  balance  of  the  funds  must be used for affordable
 
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 1    housing projects that would otherwise meet the definition  of
 2    affordable  housing.  During  the  first 9 months of a fiscal
 3    year, if  an  administrative  housing  agency  is  unable  to
 4    reserve  the tax credits set aside for the purposes described
 5    in subsection (e),  the  administrative  housing  agency  may
 6    reserve the tax credits for any approved projects.
 7        (f)  The  administrative housing agency that reserves tax
 8    credits for an affordable housing project issues  the  credit
 9    must  record  against  the  land  upon  which  the affordable
10    housing project is located an instrument to assure  that  the
11    property  maintains  its  affordable housing compliance for a
12    minimum of 10 years. The housing Authority has flexibility to
13    assure that the instrument does not cause undue  hardship  on
14    homeowners.
15    (Source: P.A. 92-491, eff. 8-23-01.)

16        Section  10.  The  Illinois  Income Tax Act is amended by
17    changing Section 214 as follows:

18        (35 ILCS 5/214)
19        Sec. 214.  Tax credit for affordable housing donations.
20        (a)  Beginning with taxable  years  ending  on  or  after
21    December  31,  2001  and  until  the  taxable  year ending on
22    December 31, 2006, a taxpayer  who  makes  a  donation  under
23    Section  7.28 of the Illinois Housing Development Act for the
24    development of affordable housing in this State  is  entitled
25    to  a  credit  against the tax imposed by subsections (a) and
26    (b) of Section 201 in an amount equal to 50% of the value  of
27    the   donation.   Partners,   shareholders  of  subchapter  S
28    corporations, and owners of limited liability  companies  (if
29    the limited liability company is treated as a partnership for
30    purposes of federal and State income taxation) are entitled a
31    credit under this Section to be determined in accordance with
32    the  determination of income and distributive share of income
 
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 1    under Sections 702 and 703 and subchapter S of  the  Internal
 2    Revenue  Code.  Persons  or  entities  not subject to the tax
 3    imposed by subsections (a) and (b) of  Section  201  and  who
 4    make  a  donation  under Section 7.28 of the Illinois Housing
 5    Development Act are entitled to a credit as described in this
 6    subsection and may  transfer  that  credit  as  described  in
 7    subsection (c).
 8        (b)  If   the  amount  of  the  credit  exceeds  the  tax
 9    liability for the year, the excess may be carried forward and
10    applied to the tax liability of the 5 taxable years following
11    the excess credit year.  The tax credit shall be  applied  to
12    the  earliest  year  for  which there is a tax liability.  If
13    there are credits for more than one year that  are  available
14    to  offset  a  liability, the earlier credit shall be applied
15    first.
16        (c)  The transfer of the tax credit  allowed  under  this
17    Section  may  be  made  (i) to the purchaser of land that has
18    been designated solely for  affordable  housing  projects  in
19    accordance  with the Illinois Housing Development Act or (ii)
20    to another donor who has also made a an eligible donation  to
21    the  sponsor  of  an affordable housing project in accordance
22    with Section 7.28 of the Illinois Housing Development Act.
23        (d)  A taxpayer claiming  the  credit  provided  by  this
24    Section  must  maintain  and  record any information that the
25    Department may require by regulation regarding the affordable
26    housing project for  which  the  credit  is  claimed.    When
27    claiming  the  credit  provided by this Section, the taxpayer
28    must provide information regarding the taxpayer's donation to
29    the project  development  of  affordable  housing  under  the
30    Illinois Housing Development Act.
31    (Source: P.A. 92-491, eff. 8-23-01.)

32        Section  99.  Effective date.  This Act takes effect upon
33    becoming law.