103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB3576

 

Introduced 2/9/2024, by Sen. Mattie Hunter

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/241 new

    Amends the Illinois Income Tax Act. Creates a credit in an amount equal to 20% of the qualified conversion expenditures incurred by a taxpayer for a qualified converted building. Effective immediately.


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A BILL FOR

 

SB3576LRB103 36906 HLH 67019 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 5. The Illinois Income Tax Act is amended by
5adding Section 241 as follows:
 
6    (35 ILCS 5/241 new)
7    Sec. 241. Revitalizing Illinois Downtowns Tax Credit.
8    (a) For taxable years beginning on or after January 1,
92025, a taxpayer may apply to the Department, in the form and
10manner required by the Department, for a credit against the
11taxes imposed under subsections (a) and (b) of Section 201 of
12this Act. The amount of the credit shall be equal to 20% of the
13qualified conversion expenditures incurred by the qualified
14taxpayer during the taxable year with respect to a qualified
15converted building. If the qualified conversion expenditures
16include construction work, then that construction work must be
17subject to a project labor agreement. In no event shall the
18amount of the credit exceed $15,000 per taxpayer in a single
19tax year; however, if the qualified conversion plan spans
20multiple years, the aggregate credit for the entire project
21may be claimed in the last taxable year so long as the total
22credit amount for the entire project does not exceed $15,000
23per year for each year of the project. The total aggregate

 

 

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1amount of credits awarded by the Department under this Section
2shall not exceed $50,000,000 in any State fiscal year. Credits
3shall be awarded on a first-come, first-served basis.
4    (b) The credit for partners and shareholders of subchapter
5S corporations shall be determined as provided in Section 251.
6    (c) In no event shall a credit under this Section reduce
7the taxpayer's liability to less than zero. If the amount of
8the credit exceeds the tax liability for the year, the excess
9may be carried forward and applied to the tax liability of the
105 taxable years following the excess credit year. The tax
11credit shall be applied to the earliest year for which there is
12a tax liability. If there are credits for more than one year
13that are available to offset a liability, the earlier credit
14shall be applied first.
15    (d) As used in this Section:
16    "Qualified converted building" means a building that meets
17all of the following criteria:
18        (1) the building has been substantially converted from
19    office use to residential, retail, or other commercial use
20    by the qualified taxpayer;
21        (2) prior to the conversion described in item (1), the
22    building was not used for residential purposes and was
23    leased to office tenants or was available for lease to
24    office tenants;
25        (3) the building was initially placed in service at
26    least 25 years before the beginning of the conversion

 

 

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1    described in item (1);
2        (4) the building is eligible for depreciation on the
3    taxpayer's federal income taxes;
4        (5) the building is carbon neutral or has attained
5    certification under one or more of the following green
6    building standards: BREEAM for New Construction or BREEAM
7    In-Use; ENERGY STAR; Envision; ISO 50001-energy
8    management; LEED for Building Design and Construction or
9    LEED for Operations and Maintenance; Green Globes for New
10    Construction or Green Globes for Existing Buildings; UL
11    3223; or an equivalent standard approved by the
12    Department; and
13        (6) in the case of a building that is converted to
14    residential use property under item (1):
15            (A) upon the completion of the conversion, 20% or
16        more of the residential housing units will be both
17        rent-restricted and occupied by individuals whose
18        income is 80% or less of the median income for the
19        municipality as established by the United States
20        Department of Health and Human Services; and
21            (B) the property is subject to a binding State or
22        local agreement with respect to the provision of
23        financing of affordable housing, and that agreement is
24        documented in writing.
25    "Qualified conversion expenditure" means any expenditure
26that is incurred by the taxpayer in converting a building from

 

 

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1office use to residential, retail, or other commercial use and
2that is properly chargeable to a capital account. "Qualified
3expenditure" does not include the cost of acquisition of the
4building or property to be converted, the cost to enlarge the
5building, any expenditure that is allocable to a portion of
6the property that is tax-exempt use property, or any
7expenditure incurred by a lessee of a building on or after the
8date on which the conversion is complete.
9    "Qualified office building" means (i) commercial property
10that is leased or available for lease to office tenants or is
11used primarily for office use and (ii) the structural
12components of that property.
13    "Qualified taxpayer" means an Illinois resident that is
14the owner of a qualified office building located in the State.
15    "Substantially converted" means that the qualified
16expenditures incurred by the qualified taxpayer with respect
17to the subject building during the 24-month period selected by
18the taxpayer at the time and in the manner prescribed by the
19Department by rule and ending during the taxable year for
20which the credit is claimed exceed the greater of: (i) the
21adjusted basis of the building and its structural components
22or (ii) $15,000. The adjusted basis of the building and its
23structural components shall be determined as of the first day
24of that 24-month period or the beginning of the first day of
25the holding period of the building, whichever is later. For
26purposes of determining the adjusted basis, the determination

 

 

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1of the beginning of the holding period shall be made without
2regard to any reconstruction by the qualified taxpayer.
3    (e) The Department may, in consultation with the
4Department of Commerce and Economic Opportunity, adopt rules
5to administer the provisions of this Section.
 
6    Section 99. Effective date. This Act takes effect upon
7becoming law.