Full Text of SB3576 103rd General Assembly
SB3576 103RD GENERAL ASSEMBLY | | | 103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024 SB3576 Introduced 2/9/2024, by Sen. Mattie Hunter SYNOPSIS AS INTRODUCED: | | | 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 |
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| 1 | | AN ACT concerning revenue. | 2 | | Be it enacted by the People of the State of Illinois, | 3 | | represented in the General Assembly: | 4 | | Section 5. The Illinois Income Tax Act is amended by | 5 | | adding 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, | 9 | | 2025, a taxpayer may apply to the Department, in the form and | 10 | | manner required by the Department, for a credit against the | 11 | | taxes imposed under subsections (a) and (b) of Section 201 of | 12 | | this Act. The amount of the credit shall be equal to 20% of the | 13 | | qualified conversion expenditures incurred by the qualified | 14 | | taxpayer during the taxable year with respect to a qualified | 15 | | converted building. If the qualified conversion expenditures | 16 | | include construction work, then that construction work must be | 17 | | subject to a project labor agreement. In no event shall the | 18 | | amount of the credit exceed $15,000 per taxpayer in a single | 19 | | tax year; however, if the qualified conversion plan spans | 20 | | multiple years, the aggregate credit for the entire project | 21 | | may be claimed in the last taxable year so long as the total | 22 | | credit amount for the entire project does not exceed $15,000 | 23 | | per year for each year of the project. The total aggregate |
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| 1 | | amount of credits awarded by the Department under this Section | 2 | | shall not exceed $50,000,000 in any State fiscal year. Credits | 3 | | shall be awarded on a first-come, first-served basis. | 4 | | (b) The credit for partners and shareholders of subchapter | 5 | | S corporations shall be determined as provided in Section 251. | 6 | | (c) In no event shall a credit under this Section reduce | 7 | | the taxpayer's liability to less than zero. If the amount of | 8 | | the credit exceeds the tax liability for the year, the excess | 9 | | may be carried forward and applied to the tax liability of the | 10 | | 5 taxable years following the excess credit year. The tax | 11 | | credit shall be applied to the earliest year for which there is | 12 | | a tax liability. If there are credits for more than one year | 13 | | that are available to offset a liability, the earlier credit | 14 | | shall be applied first. | 15 | | (d) As used in this Section: | 16 | | "Qualified converted building" means a building that meets | 17 | | all 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 | 26 | | that is incurred by the taxpayer in converting a building from |
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| 1 | | office use to residential, retail, or other commercial use and | 2 | | that is properly chargeable to a capital account. "Qualified | 3 | | expenditure" does not include the cost of acquisition of the | 4 | | building or property to be converted, the cost to enlarge the | 5 | | building, any expenditure that is allocable to a portion of | 6 | | the property that is tax-exempt use property, or any | 7 | | expenditure incurred by a lessee of a building on or after the | 8 | | date on which the conversion is complete. | 9 | | "Qualified office building" means (i) commercial property | 10 | | that is leased or available for lease to office tenants or is | 11 | | used primarily for office use and (ii) the structural | 12 | | components of that property. | 13 | | "Qualified taxpayer" means an Illinois resident that is | 14 | | the owner of a qualified office building located in the State. | 15 | | "Substantially converted" means that the qualified | 16 | | expenditures incurred by the qualified taxpayer with respect | 17 | | to the subject building during the 24-month period selected by | 18 | | the taxpayer at the time and in the manner prescribed by the | 19 | | Department by rule and ending during the taxable year for | 20 | | which the credit is claimed exceed the greater of: (i) the | 21 | | adjusted basis of the building and its structural components | 22 | | or (ii) $15,000. The adjusted basis of the building and its | 23 | | structural components shall be determined as of the first day | 24 | | of that 24-month period or the beginning of the first day of | 25 | | the holding period of the building, whichever is later. For | 26 | | purposes of determining the adjusted basis, the determination |
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| 1 | | of the beginning of the holding period shall be made without | 2 | | regard to any reconstruction by the qualified taxpayer. | 3 | | (e) The Department may, in consultation with the | 4 | | Department of Commerce and Economic Opportunity, adopt rules | 5 | | to administer the provisions of this Section. | 6 | | Section 99. Effective date. This Act takes effect upon | 7 | | becoming law. |
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