103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB2413

 

Introduced 2/10/2023, by Sen. Mattie Hunter

 

SYNOPSIS AS INTRODUCED:
 
New Act
65 ILCS 5/11-13-28 new
65 ILCS 5/11-13-29 new
20 ILCS 686/110 new
605 ILCS 5/5-907  from Ch. 121, par. 5-907
605 ILCS 5/5-918  from Ch. 121, par. 5-918
605 ILCS 5/5-918.1 new

    Creates the Home Buyer Savings Account Act. Sets forth provisions concerning legislative findings; establishment of first-time and second-chance home buyer savings accounts; use of first-time and second-chance home buyer savings accounts; account holder responsibilities; responsibilities of financial institutions; deduction of contributions, exclusion of earnings, and limitations; penalty for withdrawal; Department of Revenue forms; and an annual report. Defines terms. Amends the Illinois Municipal Code. Sets forth provisions concerning accessory dwelling units and housing. Amends the Reimagining Electric Vehicles in Illinois Act. Provides that the Department of Commerce and Economic Opportunity shall establish a pilot grant program to encourage the construction and rehabilitation of housing located near a REV Illinois Project. Amends the Illinois Highway Code. Sets forth provisions concerning units of local government which have in effect an impact fee ordinance or resolution. Makes other changes.


LRB103 25768 HLH 52117 b

 

 

A BILL FOR

 

SB2413LRB103 25768 HLH 52117 b

1    AN ACT concerning local government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4
Article 5.

 
5    Section 5-1. Short title. This Act may be cited as the Home
6Buyer Savings Accounts Act.
 
7    Section 5-5. Legislative findings. The General Assembly
8finds and recognizes that the American Dream has always been
9closely associated with owning your own home. However, for
10many reasons, it is becoming more and more difficult to
11achieve the goal of homeownership in Illinois and throughout
12the country. The General Assembly finds and recognizes that
13homeownership provides more than a dream to an individual
14person or family, but that an increase in homeownership rates
15in Illinois has a direct impact on the quality of our
16communities and schools, economic and education opportunities,
17and safe streets. The General Assembly is intent on finding
18methods to make it easier for those in Illinois to achieve
19their goal of homeownership for the first time. It is the
20General Assembly's intent with this Act to provide a
21tax-incentivized savings account for qualified first-time and
22certain second-chance home buyers, which in turn can be used

 

 

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1toward a down payment or certain eligible closing costs for
2the purchase of a home in Illinois.
 
3    Section 5-10. Definitions. In this Act:
4    "Account holder" means a first-time and second-chance home
5buyer who establishes, individually or jointly with another
6first-time and second-chance home buyer, a first-time and
7second-chance home buyer savings account.
8    "Allowable closing costs" means a disbursement listed on a
9settlement statement for the purchase of a single-family
10residence in Illinois by a first-time and second-chance home
11buyer.
12    "Department" means the Department of Revenue.
13    "Eligible costs" means the down payment and allowable
14closing costs for the purchase of a single-family residence in
15Illinois by a first-time and second-chance home buyer.
16Eligible costs do not include any costs incurred prior to the
17establishment of a first-time and second-chance home buyer
18savings account.
19    "Financial institution" means any bank, savings
20institution, industrial loan association, credit union, or
21other similar entity authorized to do business and accept
22deposits in Illinois.
23    "First-time and second-chance home buyer" means an
24individual who resides in Illinois and has not owned or
25purchased, either individually or jointly, a single-family

 

 

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1residence during a period of ten years prior to the date of the
2purchase of a single-family residence.
3    "First-time and second-chance home buyer savings account"
4or "account" means an account with a financial institution
5created for the purpose of payment or reimbursement of
6eligible costs for the purchase of a single-family residence
7in Illinois by a first-time and second-chance home buyer and
8designated by the financial institution upon its creation as a
9first-time and second-chance home buyer savings account.
10    "Settlement statement" means the statement of receipts and
11disbursements for a transaction related to real estate,
12including a statement prescribed under the Real Estate
13Settlement Procedures Act of 1974, 12 U.S.C. 2601 et seq., as
14amended, and regulations thereunder.
15    "Single-family residence" means a single-family residence
16owned and occupied by a first-time and second-chance home
17buyer as the first-time and second-chance home buyer's
18principal residence, which may also include a manufactured
19home, trailer, mobile home, condominium unit, or cooperative.
 
20    Section 5-15. Establishment of first-time and
21second-chance home buyer savings account. After the effective
22date of this Act, a first-time and second-chance home buyer
23may open an account with a financial institution designated in
24its entirety by the financial institution as a first-time and
25second-chance home buyer savings account.
 

 

 

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1    Section 5-20. Use of first-time and second-chance home
2buyer savings account.
3    (a) Funds from a first-time and second-chance home buyer
4savings account may be used only to pay a first-time and
5second-chance home buyer's eligible costs for the purchase of
6a single-family residence in Illinois.
7    (b) A first-time and second-chance home buyer may jointly
8own a first-time and second-chance home buyer savings account
9with another first-time and second-chance home buyer if the
10joint account holders file a joint income tax return.
11    (c) Only cash and marketable securities may be contributed
12to a first-time and second-chance home buyer savings account.
13Subject to the limitations of Section 5-35, persons other than
14the account holder may contribute funds to a first-time and
15second-chance home buyer savings account. There is no
16limitation on the amount of contributions that may be made to
17or retained in a first-time and second-chance home buyer
18savings account.
 
19    Section 5-25. Account holder responsibilities.
20    (a) The account holder shall do all the following:
21        (1) Not use funds held in a first-time and
22    second-chance home buyer savings account to pay expenses
23    of administering the account, except that a service or
24    other account fee may be deducted from the account by the

 

 

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1    financial institution in which the account is held.
2        (2) Submit the following to the Department of Revenue
3    with the account holder's Illinois income tax return:
4            (A) Detailed information, in a form prescribed by
5        the Department of Revenue, regarding the first-time
6        and second-chance home buyer savings account,
7        including a list of transactions for the account
8        during the tax year.
9            (B) Form 1099 issued by the financial institution
10        for the account.
11        (3) Submit to the Department, upon a withdrawal of
12    funds from a first-time and second-chance home buyer
13    savings account, a detailed account of the eligible costs
14    toward which the account funds were applied and a
15    statement of the amount of funds remaining in the account,
16    if any. If, upon withdrawal of funds from the first-time
17    and second-chance home buyer savings account, the account
18    holder fails to provide the Department with the detailed
19    account of the eligible costs towards which the account
20    funds were applied, the entire account's funds, including
21    the interest and other income on principal, shall be
22    subject to the penalties listed under Section 5-40.
23    (b) Failure to submit the documentation required under
24subsection (a) on an annual basis with the filing of the
25Illinois income tax return will result in the automatic denial
26of the deduction and exclusion.
 

 

 

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1    Section 5-30. Responsibilities of financial institutions.
2    (a) A financial institution shall be required to do the
3following:
4        (1) Create a new account for the first-time and
5    second-chance home buyer and designate the account as a
6    "first-time and second-chance home buyer's savings
7    account" on records and transactional statements related
8    to the account.
9        (2) Provide the account holder with a detailed account
10    statement relating to the first-time and second-chance
11    home buyer's savings account on a yearly basis.
12    (b) A financial institution shall not be required to do
13any of the following:
14        (1) Track the use of money withdrawn from a first-time
15    and second-chance home buyer savings account.
16        (2) Allocate funds in a first-time and second-chance
17    home buyer savings account between joint account holders.
18        (3) Report any information not otherwise required by
19    law to the Department of Revenue or any other governmental
20    agency.
21    (c) A financial institution is not responsible or liable
22for the following:
23        (1) Determining or ensuring that an account satisfies
24    the requirements to be a first-time and second-chance home
25    buyer savings account.

 

 

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1        (2) Determining or ensuring that funds in a first-time
2    and second-chance home buyer savings account are used for
3    eligible costs.
4        (3) Reporting or remitting taxes or penalties related
5    to the use of a first-time and second-chance home buyer
6    savings account.
7    (d) Upon being furnished proof of the death of the account
8holder and any other information related to the death required
9by the financial institution or contract governing the
10first-time and second-chance home buyer savings account, a
11financial institution shall distribute the principal and
12accumulated interest or other income in the account in
13accordance with the terms of the contract governing the
14account or as otherwise required by law.
 
15    Section 5-35. Deduction of contributions, exclusion of
16earnings, and limitations.
17    (a) Except as otherwise provided in this Act and subject
18to the limitations under this Section, a first-time and
19second-chance home buyer savings account holder shall be
20entitled to a state tax deduction, subject to the limitations
21of this Section, not to exceed $5,000 for an account holder who
22files an individual tax return or $10,000 for joint account
23holders who file a joint tax return, for contributions made by
24the account holder to a first-time and second-chance home
25buyer savings account during the tax year in which the

 

 

SB2413- 8 -LRB103 25768 HLH 52117 b

1deduction is claimed.
2    (b) Except as otherwise provided in this Act and subject
3to the limitations under this Section, earnings from the
4first-time and second-chance home buyer savings account,
5including interest and other income on the principal, shall be
6excluded from taxable income of an account holder for Illinois
7income tax purposes during the tax year.
8    (c) An account holder may claim the deduction and
9exclusion under this Section as follows:
10        (1) For a period not to exceed 10 years.
11        (2) For an aggregate total amount of principal and
12    earnings not to exceed $25,000 for individual accounts and
13    $50,000 for joint accounts during the 10-year period.
14        (3) Only if the principal and earnings of the account
15    remain in the account until a withdrawal is made for
16    eligible costs related to the purchase of a single-family
17    residence by a first-time and second-chance home buyer.
18    (d) A person other than the account holder who deposits
19funds in a first-time and second-chance home buyer savings
20account shall not be entitled to the deduction and exclusion
21provided under this Act.
22    (e) The deduction and exclusion from taxable income
23provided by this Act shall apply to any alternative basis for
24calculating taxable income for Illinois income tax purposes.
25    (f) The funds in the first-time and second-chance home
26buyer savings account shall not be used to purchase a

 

 

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1single-family residence outside of this State.
 
2    Section 5-40. Penalty for withdrawal for purpose other
3than eligible costs. Except as otherwise provided in this
4Section, if the account holder withdraws any funds from a
5first-time and second-chance home buyer savings account for a
6purpose other than eligible costs for the purchase of a
7single-family residence in this State, the following shall
8apply:
9    (1) The entire balance of the fund, including interest and
10other income on principal, shall be included in the account
11holder's taxable income for the tax year in which the
12withdrawal was made.
13    (2) The account holder shall pay a penalty to the
14Department of Revenue equal to 10% of the amount withdrawn.
15The penalty shall not apply to funds withdrawn from an account
16which were:
17        (A) Withdrawn by reason of the account holder's death
18    or disability or due to unemployment after the account
19    holder has exhausted his or her applicable unemployment
20    compensation benefits.
21        (B) A disbursement of assets of the account pursuant
22    to a filing for protection under the United States
23    Bankruptcy Code.
24    (3) Paragraphs (1) and (2) do not apply to funds withdrawn
25or distributed from a first-time and second-chance home buyer

 

 

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1savings account that within 60 days of their withdrawal or
2distribution are deposited in full into another first-time and
3second-chance home buyer savings account. This paragraph shall
4apply both to transfers between any qualifying first-time and
5second-chance home buyer savings accounts whether such
6transfers are to or from qualifying individual or joint
7accounts.
 
8    Section 5-45. Department; forms. The Department of Revenue
9shall adopt forms for the following:
10    (1) The designation of an account with a financial
11institution to serve as a first-time and second-chance home
12buyer savings account.
13    (2) An account holder to annually submit to the Department
14of Revenue detailed information regarding the first-time and
15second-chance home buyer savings account, including, but not
16limited to, a list of transactions for the account during the
17tax year and identifying any supporting documentation required
18to be maintained by the account holder.
 
19    Section 5-50. Annual report. The Department shall submit
20an annual report to the General Assembly no later than March 31
21of each calendar year with the first annual report due no later
22than March 31, 2024, in which the Department shall include the
23total annual number of deductions claimed and the total amount
24of deposits deducted pursuant to this Act, the number of

 

 

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1taxpayers who submitted an account to the Department pursuant
2to paragraph (3) of subsection (a) of Section 5-25, and the
3number of taxpayers who were subjected to the penalty
4provisions of Section 5-40.
 
5
Article 10.

 
6    Section 10-5. The Illinois Municipal Code is amended by
7adding Sections 11-13-28 and 11-13-29 as follows:
 
8    (65 ILCS 5/11-13-28 new)
9    Sec. 11-13-28. Accessory dwelling units.
10    (a) As used in this Section:
11    "Accessory dwelling unit" means an attached or a detached
12residential dwelling unit that provides complete independent
13living facilities for one or more persons and is located on a
14lot with a proposed or existing primary residence and that
15includes permanent provisions for living, sleeping, eating,
16cooking, and sanitation on the same parcel as the
17single-family or multifamily dwelling upon which it is or will
18be situated. "Accessory dwelling unit" includes, but is not
19limited to:
20        (1) An efficiency unit.
21        (2) A manufactured home, as that term is defined in
22    paragraph (53) of subsection (a) of Section 9-102 of the
23    Uniform Commercial Code.

 

 

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1    "Efficiency unit" means a unit for occupancy by no more
2than 2 persons that has a minimum floor area of 150 square feet
3and that may also have a partial kitchen or bathroom
4facilities.
5    (b) A unit of local government, as defined in Section 1 of
6Article VII of the Illinois Constitution, may not prohibit the
7building or usage of accessory dwelling units in the unit of
8local government.
9    (c) A unit of local government may provide reasonable
10regulations relating to the size and location of accessory
11dwelling units similar to other accessory structures, unless a
12regulation would have the effect of prohibiting accessory
13dwelling units.
14    (d) A home rule unit may not regulate accessory dwelling
15units in a manner inconsistent with this Section. This Section
16is a limitation under subsection (i) of Section 6 of Article
17VII of the Illinois Constitution on the concurrent exercise by
18home rule units of powers and functions exercised by the
19State.
 
20    (65 ILCS 5/11-13-29 new)
21    Sec. 11-13-29. Provisions related to housing.
22    (a) As used in this Section:
23    "Cottage clusters" means groupings of no fewer than 4
24detached housing units per acre with a footprint of no less
25than 900 and no more than 1500 square feet each and that

 

 

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1include a common courtyard.
2    "Middle housing" means:
3        (A) duplexes;
4        (B) triplexes;
5        (C) quadplexes;
6        (D) cottage clusters; and
7        (E) townhouses.
8"Townhouses" means a dwelling unit constructed in a row of 2 or
9more attached units, where each dwelling unit is located on an
10individual lot or parcel and shares at least one common wall
11with an adjacent unit.
12    (b) Except as provided in subsection (d), each city with a
13population of 25,000 or more shall allow the development of:
14        (1) all middle housing types in areas zoned for
15    residential use that allow for the development of detached
16    single-family dwellings; and
17        (2) a duplex on each lot or parcel zoned for
18    residential use that allows for the development of
19    detached single-family dwellings.
20    (c) Except as provided in subsection (d), each city with a
21population of more than 10,000 and less than 25,000 shall
22allow the development of a duplex on each lot or parcel zoned
23for residential use that allows for the development of
24detached single-family dwellings. Nothing in this subsection
25prohibits a local government from allowing middle housing
26types in addition to duplexes.

 

 

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1    (d) This Section does not apply to:
2        (1) cities with a population of 10,000 or fewer; and
3        (2) unincorporated lands adjacent to or adjoining
4    incorporated city boundaries.
5    (e) Local governments may regulate siting and design of
6middle housing required to be permitted under this Section, if
7the regulations do not, individually or cumulatively,
8discourage the development of all middle housing types
9permitted in the area through unreasonable costs or delay.
10Local governments may regulate middle housing to comply with
11protective measures adopted pursuant to statewide land use
12planning goals.
13    (f) This Section does not prohibit local governments from
14permitting:
15        (1) single-family dwellings in areas zoned to allow
16    for single-family dwellings; or
17        (2) middle housing in areas not required under this
18    Section.
19    (g) A home rule unit may not regulate housing developments
20in a manner inconsistent with this Section. This Section is a
21limitation under subsection (i) of Section 6 of Article VII of
22the Illinois Constitution on the concurrent exercise by home
23rule units of powers and functions exercised by the State.
 
24
Article 15.

 

 

 

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1    Section 15-5. The Reimagining Electric Vehicles in
2Illinois Act is amended by adding Section 110 as follows:
 
3    (20 ILCS 686/110 new)
4    Sec. 110. Electric Vehicle Oriented (EVO) Housing Pilot
5Program.
6    (a) The inventory of available homes for sale in Illinois
7has been in continuous decline for multiple years. The lack of
8inventory contributes directly to affordability, making it
9more difficult to purchase a home, even for those individuals
10who have incomes at or close to the median income of the area
11in which they live. This problem is especially frustrating
12where a potential REV Illinois Project faces the prospect of
13little to no housing options for the employees of that
14project. The General Assembly intends to authorize the
15creation of a pilot grant program for electric vehicle
16oriented (EVO) housing, with the goal of incentivizing the
17construction of new homes near REV Illinois Projects.
18    (b) Subject to appropriation, the Department shall
19establish a pilot grant program to encourage the construction
20and rehabilitation of housing located near a REV Illinois
21Project. Funding may be used for the acquisition,
22construction, development, predevelopment, or rehabilitation
23of a qualified development as provided in subsection (d).
24    (c) "Qualified development" means a project that (i) is
25geographically located within 10 miles of a REV Illinois

 

 

SB2413- 16 -LRB103 25768 HLH 52117 b

1Project, (ii) involves the new construction of 2 or more
2single-family homes, including detached homes, attached
3duplex, triplex or fourplex homes, and condominiums, and (iii)
4results in the construction of homes that, according to the
5federal Department of Housing and Urban Development, are
6affordable for either home ownership or rental and that are
7occupied, reserved, or marketed for occupancy by households
8with a gross household income that is greater than 80% but less
9than 120% of the area median household income.
10    (d) The EVO housing pilot grant program shall provide for
11grants of up to 10% of the land acquisition costs and 15% of
12the construction, development, predevelopment, or
13rehabilitation costs of a qualified development.
14    (e) Project sponsors who wish to participate in the EVO
15housing pilot grant program shall submit a grant application
16to the Department in accordance with rules adopted by the
17Department.
18    (f) No application for the EVO Housing Grant Pilot Program
19shall be accepted by the Department after December 31, 2026.
 
20
Article 20.

 
21    Section 20-5. The Illinois Highway Code is amended by
22changing Sections 5-907 and 5-918 and by adding Section
235-918.1 as follows:
 

 

 

SB2413- 17 -LRB103 25768 HLH 52117 b

1    (605 ILCS 5/5-907)  (from Ch. 121, par. 5-907)
2    Sec. 5-907. Advisory Committee. A road improvement impact
3fee advisory committee shall be created by the unit of local
4government intending to impose impact fees. The Advisory
5Committee shall consist of not less than 10 members and not
6more than 20 members. Not less than 40% of the members of the
7committee shall be representatives of the real estate,
8development, and building industries and the labor communities
9and may not be employees or officials of the unit of local
10government.
11    (a) The members of the Advisory Committee shall be
12selected as follows:
13        (1) The representatives of real estate shall be
14    licensed under the Real Estate License Act of 2000 and
15    shall be designated by the President of the Illinois
16    Association of Realtors from a local Board from the
17    service area or areas of the unit of local government.
18        (2) The representatives of the development industry
19    shall be designated by the Regional Developers
20    Association.
21        (3) The representatives of the building industry shall
22    be designated representatives of the Regional Home
23    Builders representing the unit of local government's
24    geographic area as appointed from time to time by that
25    Association's president.
26        (4) The labor representatives shall be chosen by

 

 

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1    either the Central Labor Council or the Building and
2    Construction Trades Council having jurisdiction within the
3    unit of local government.
4    (b) If the unit of local government is a county, at least
530% of the members serving on the commission must be
6representatives of the municipalities within the county. The
7municipal representatives shall be selected by a convention of
8mayors in the county, who shall elect from their membership
9municipal representatives to serve on the Advisory Committee.
10The members representing the county shall be appointed by the
11chief executive officer of the county.
12    (c) If the unit of local government is a municipality, the
13non-public representatives shall be appointed by the chief
14executive officer of the municipality.
15    (d) Each unit of local government that imposes or intends
16to impose impact fees and that has created an Advisory
17Committee shall publish the names of the Advisory Committee
18members on the public website maintained by the unit of local
19government, together with a list of the dates and times at
20which the Advisory Committee has met, and shall provide an
21electronically accessible copy of the minutes of any such
22meetings.
23    If the unit of local government has a planning or zoning
24commission, the unit of local government may elect to use its
25planning or zoning commission to serve as the Advisory
26Committee, provided that not less than 40% of the committee

 

 

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1members include representatives of the real estate,
2development, and building industries and the labor communities
3who are not employees or officials of the unit of local
4government. A unit of local government may appoint additional
5members to serve on the planning or zoning commission as ad hoc
6voting members whenever the planning or zoning commission
7functions as the Advisory Committee; provided that no less
8than 40% of the members include representatives of the real
9estate, development, and building industries and the labor
10communities.
11(Source: P.A. 91-245, eff. 12-31-99.)
 
12    (605 ILCS 5/5-918)  (from Ch. 121, par. 5-918)
13    Sec. 5-918. Transition Clauses.
14    (a) Conformance of Existing Ordinances. A unit of local
15government which currently has in effect an impact fee
16ordinance or resolution shall have not more than 12 months
17from July 1, 2023 26, 1989 to bring its ordinance or resolution
18into conformance with the requirements imposed by this Act,
19except that a home rule unit of local government with a
20population over 75,000 and located in a county with a
21population over 600,000 and less than 2,000,000 shall have not
22more than 18 months from July 1, 2023 26, 1989, to bring that
23ordinance or resolution into conformance. As used in this
24subsection, "conformance" includes conformance with Section
255-907.

 

 

SB2413- 20 -LRB103 25768 HLH 52117 b

1    (b) Exemption of Developments Receiving Site Specific
2Development Approval. No development which has received site
3specific development approval from a unit of local government
4within 18 months before the first date of publication by the
5unit of local government of a notice of public hearing to
6consider land use assumptions relating to the development of a
7comprehensive road improvement plan and imposition of impact
8fees and which has filed for building permits or certificates
9of occupancy within 18 months of the date of approval of the
10site specific development plan shall be required to pay impact
11fees for permits or certificates of occupancy issued within
12that 18 month period.
13    This Division shall have no effect on the validity of any
14existing agreements entered into between a developer and a
15unit of local government pertaining to fees, exactions or
16donations made by a developer for the purpose of funding road
17improvements.
18    (c) Exception to the Exemption of Developments Receiving
19Site Specific Development Approval. Nothing in this Section
20shall require the refund of impact fees previously collected
21by units of local government in accordance with their
22ordinances or resolutions, if such ordinances or resolutions
23were adopted prior to the effective date of this Act and
24provided that such impact fees are encumbered as provided in
25Section 5-916.
26(Source: P.A. 86-97; 86-1158.)
 

 

 

SB2413- 21 -LRB103 25768 HLH 52117 b

1    (605 ILCS 5/5-918.1 new)
2    Sec. 5-918.1. Refund for non-compliance. Any unit of local
3government that has in effect an impact fee ordinance or
4resolution on the effective date of this amendatory Act of the
5103rd General Assembly and that has not brought its impact fee
6ordinance or resolution into compliance with this Section by
7the date provided for in Section 5-918 shall refund all funds
8previously collected under the impact fee ordinance or
9resolution together with any interest earned on those funds.
10Any impact fee ordinance or resolution that does not conform
11with this Section by the date provided for in Section 5-918
12shall be considered null and void.