Illinois General Assembly - Full Text of HB4790
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Full Text of HB4790  103rd General Assembly

HB4790 103RD GENERAL ASSEMBLY

 


 
103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB4790

 

Introduced 2/6/2024, by Rep. Kimberly Du Buclet

 

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.


LRB103 36907 HLH 67020 b

 

 

A BILL FOR

 

HB4790LRB103 36907 HLH 67020 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) As used in this Section:
9    "Qualified conversion expenditure" means any expenditure
10that is incurred by the taxpayer in converting a building from
11office use to residential, retail, or other commercial use and
12that is properly chargeable to a capital account. "Qualified
13expenditure" does not include the cost of acquisition of the
14building or property to be converted, the cost to enlarge the
15building, any expenditure that is allocable to a portion of
16the property that is tax-exempt use property, or any
17expenditure incurred by a lessee of a building on or after the
18date on which the conversion is complete.
19    "Qualified converted building" means a building that meets
20all of the following criteria:
21        (1) the building has been substantially converted from
22    office use to residential, retail, or other commercial use
23    by the qualified taxpayer;

 

 

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1        (2) prior to the conversion described in item (1), the
2    building was not used for residential purposes and was
3    leased to office tenants or was available for lease to
4    office tenants;
5        (3) the building was initially placed in service at
6    least 25 years before the beginning of the conversion
7    described in item (1);
8        (4) the building is eligible for depreciation on the
9    taxpayer's federal income taxes;
10        (5) the building is carbon neutral or has attained
11    certification under one or more of the following green
12    building standards: BREEAM for New Construction or BREEAM
13    In-Use; ENERGY STAR; Envision; ISO 50001-energy
14    management; LEED for Building Design and Construction or
15    LEED for Operations and Maintenance; Green Globes for New
16    Construction or Green Globes for Existing Buildings; UL
17    3223; or an equivalent standard approved by the
18    Department; and
19        (6) in the case of a building that is converted to
20    residential use property under item (1):
21            (A) upon the completion of the conversion, 20% or
22        more of the residential housing units will be both
23        rent-restricted and occupied by individuals whose
24        income is 80% or less of the median income for the
25        municipality as established by the United States
26        Department of Health and Human Services; and

 

 

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1            (B) the property is subject to a binding State or
2        local agreement with respect to the provision of
3        financing of affordable housing, and that agreement is
4        documented in writing.
5    "Qualified office building" means (i) commercial property
6that is leased or available for lease to office tenants or is
7used primarily for office use and (ii) the structural
8components of that property.
9    "Qualified taxpayer" means an Illinois resident that is
10the owner of a qualified office building located in the State.
11    "Substantially converted" means that the qualified
12expenditures incurred by the qualified taxpayer with respect
13to the subject building during the 24-month period selected by
14the taxpayer at the time and in the manner prescribed by the
15Department by rule and ending during the taxable year for
16which the credit is claimed exceed the greater of: (i) the
17adjusted basis of the building and its structural components
18or (ii) $15,000. The adjusted basis of the building and its
19structural components shall be determined as of the first day
20of that 24-month period or the beginning of the first day of
21the holding period of the building, whichever is later. For
22purposes of determining the adjusted basis, the determination
23of the beginning of the holding period shall be made without
24regard to any reconstruction by the qualified taxpayer.
25    (b) For taxable years beginning on or after January 1,
262025, a taxpayer may apply to the Department, in the form and

 

 

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1manner required by the Department, for a credit against the
2taxes imposed under subsections (a) and (b) of Section 201 of
3this Act. The amount of the credit shall be equal to 20% of the
4qualified conversion expenditures incurred by the qualified
5taxpayer during the taxable year with respect to a qualified
6converted building. If the qualified conversion expenditures
7include construction work, then that construction work must be
8subject to a project labor agreement. In no event shall the
9amount of the credit exceed $15,000 per taxpayer in a single
10tax year; however, if the qualified conversion plan spans
11multiple years, the aggregate credit for the entire project
12may be claimed in the last taxable year so long as the total
13credit amount for the entire project does not exceed $15,000
14per year for each year of the project. The total aggregate
15amount of credits awarded by the Department under this Section
16shall not exceed $50,000,000 in any State fiscal year. Credits
17shall be awarded on a first-come, first-served basis.
18    (c) The credit for partners and shareholders of subchapter
19S corporations shall be determined as provided in Section 251.
20    (d) In no event shall a credit under this Section reduce
21the taxpayer's liability to less than zero. If the amount of
22the credit exceeds the tax liability for the year, the excess
23may be carried forward and applied to the tax liability of the
245 taxable years following the excess credit year. The tax
25credit shall be applied to the earliest year for which there is
26a tax liability. If there are credits for more than one year

 

 

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1that are available to offset a liability, the earlier credit
2shall be applied first.
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.