State of Illinois
92nd General Assembly

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[ Introduced ][ Engrossed ][ House Amendment 001 ]
[ Senate Amendment 001 ]


SB1135 Enrolled                                LRB9207590SMdv

 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 adding Section 7.28 as follows:

 6        (20 ILCS 3805/7.28 new)
 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, 30% of the gross monthly income of a household earning
20    60% of the area median income and at least 25% of  the  units
21    are  occupied  by  persons  and families whose incomes do not
22    exceed 60% of the median family  income  for  the  geographic
23    area  in which the residential unit is located or (ii) a unit
24    for sale to homebuyers whose gross household income is at  or
25    below  60% of the area median income and who pay no more than
26    30% of their gross household income for  mortgage  principal,
27    interest, property taxes, and property insurance (PITI).
28        "Donation"  means  money, securities, or real or personal
29    property that is donated to a not-for-profit sponsor that  is
30    used  solely for costs associated with either (i) purchasing,
31    constructing, or rehabilitating an affordable housing project
SB1135 Enrolled             -2-                LRB9207590SMdv
 1    in this State, (ii) an employer-assisted housing  project  in
 2    this   State,   (iii)  general  operating  support,  or  (iv)
 3    technical assistance as defined by this Section.
 4        "Employer-assisted   housing   project"   means    either
 5    down-payment assistance, reduced-interest mortgages, mortgage
 6    guarantee   programs,   rental   subsidies,   or   individual
 7    development  account  savings  plans  that  are  provided  by
 8    employers  to  employees  to  assist  in  securing affordable
 9    housing near the work place, that are restricted  to  housing
10    near  the  work  place,  and that are restricted to employees
11    whose gross household income is at or below 120% of the  area
12    median income.
13        "General  operating support" means any cost incurred by a
14    sponsor that is a part of its general program  costs  and  is
15    not  limited  to  costs  directly  incurred by the affordable
16    housing project.
17        "Geographical area" means the metropolitan area or county
18    designated as an area by the federal  Department  of  Housing
19    and  Urban  Development  under Section 8 of the United States
20    Housing Act of 1937, as amended, for purposes of  determining
21    fair market rental rates.
22        "Median  income" means the incomes that are determined by
23    the federal  Department  of  Housing  and  Urban  Development
24    guidelines and adjusted for family size.
25        "Sponsor" means a not-for-profit organization that (i) is
26    organized under the General Not For Profit Corporation Act of
27    1986  for  the  purpose  of  constructing  or  rehabilitating
28    affordable housing units in this State; (ii) is organized for
29    the  purpose  of  constructing  or  rehabilitating affordable
30    housing units and has been issued a ruling from the  Internal
31    Revenue  Service  of  the  United  States  Department  of the
32    Treasury that the organization is exempt from income taxation
33    under provisions of the Internal Revenue Code; or (iii) is an
34    organization   designated   as   a   community    development
SB1135 Enrolled             -3-                LRB9207590SMdv
 1    corporation  by  the United States government under Title VII
 2    of the Economic Opportunity Act of 1964.
 3        "Technical assistance"  means  any  cost  incurred  by  a
 4    sponsor  for  project  planning, assistance with applying for
 5    financing, or counseling  services  provided  to  prospective
 6    homebuyers.
 7        (b)  A  sponsor  must apply to the administrative housing
 8    agency that administers  the  program  for  approval  of  the
 9    project.  The  administrative  housing  agency must reserve a
10    specific amount of tax credits for each  approved  affordable
11    housing  project  for  24  months after the date of approval.
12    The sponsor must receive an  eligible  donation  within  that
13    24-month  time  period or donations to the project made after
14    the end of the 24-month period are not eligible for  the  tax
15    credit  allowed  under Section 214 of the Illinois Income Tax
16    Act.
17        (c)  The  Illinois  Housing  Development  Authority  must
18    adopt rules establishing  criteria  for  eligible  costs  and
19    donations,  issuing  and verifying tax credits, and selecting
20    affordable housing projects  that  are  eligible  for  a  tax
21    credit under Section 214 of the Illinois Income Tax Act.
22        (d)  Tax   credits   for  employer-assisted  housing  are
23    limited to that pool of tax credits that have been set  aside
24    for  employer-assisted  housing.   Tax  credits  for  general
25    operating  support are limited to 10% of the total tax credit
26    allocation for a project and are also limited to that pool of
27    tax credits that have been set aside  for  general  operating
28    support.  Tax credits for technical assistance are limited to
29    that  pool  of  tax  credits  that  have  been  set aside for
30    technical assistance.
31        (e)  The  amount  of  tax   credits   reserved   by   the
32    administrative  housing  agency  for  an  approved project is
33    limited to $13 million in the initial year and shall increase
34    each year by 5%.  The City of Chicago shall receive 24.5%  of
SB1135 Enrolled             -4-                LRB9207590SMdv
 1    total  tax  credits  authorized  for  each  fiscal year.  The
 2    Illinois Housing  Development  Authority  shall  receive  the
 3    balance  of  the tax credits authorized for each fiscal year.
 4    The tax credits may be used anywhere in the State.   The  tax
 5    credits have the following set-asides:
 6             (1)  for employer-assisted housing, $2 million; and
 7             (2)  for  general  operating  support  and technical
 8        assistance, $1 million.
 9        The balance of the funds must be used for  projects  that
10    would otherwise meet the definition of affordable housing.
11        (f)  The  administrative  housing  agency that issues the
12    credit must record against the land upon which the project is
13    located an instrument to assure that the  property  maintains
14    its  affordable housing compliance for a minimum of 10 years.
15    The housing authority has  flexibility  to  assure  that  the
16    instrument does not cause undue hardship on homeowners.

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

19        (35 ILCS 5/214 new)
20        Sec. 214.  Tax credit for affordable housing donations.
21        (a)  Beginning with taxable  years  ending  on  or  after
22    December  31,  2001  and  until  the  taxable  year ending on
23    December 31, 2006, a taxpayer  who  makes  a  donation  under
24    Section  7.28 of the Illinois Housing Development Act for the
25    development of affordable housing in this State  is  entitled
26    to  a  credit  against the tax imposed by subsections (a) and
27    (b) of Section 201 in an amount equal to 50% of the value  of
28    the   donation.   Partners,   shareholders  of  subchapter  S
29    corporations, and owners of limited liability  companies  (if
30    the limited liability company is treated as a partnership for
31    purposes of federal and State income taxation) are entitled a
32    credit under this Section to be determined in accordance with
SB1135 Enrolled             -5-                LRB9207590SMdv
 1    the  determination of income and distributive share of income
 2    under Sections 702 and 703 and subchapter S of  the  Internal
 3    Revenue Code.
 4        (b)  If   the  amount  of  the  credit  exceeds  the  tax
 5    liability for the year, the excess may be carried forward and
 6    applied to the tax liability of the 5 taxable years following
 7    the excess credit year.  The tax credit shall be  applied  to
 8    the  earliest  year  for  which there is a tax liability.  If
 9    there are credits for more than one year that  are  available
10    to  offset  a  liability, the earlier credit shall be applied
11    first.
12        (c)  The transfer of the tax credit  allowed  under  this
13    Section  may  be  made  (i) to the purchaser of land that has
14    been designated solely for  affordable  housing  projects  in
15    accordance  with the Illinois Housing Development Act or (ii)
16    to another donor who has also made an  eligible  donation  to
17    the  sponsor  of  an affordable housing project in accordance
18    with the Illinois Housing Development Act.
19        (d)  A taxpayer claiming  the  credit  provided  by  this
20    Section  must  maintain  and  record any information that the
21    Department may require by regulation regarding the affordable
22    housing project  for  which  the  credit  is  claimed.   When
23    claiming  the  credit  provided by this Section, the taxpayer
24    must provide information regarding the taxpayer's donation to
25    the development of  affordable  housing  under  the  Illinois
26    Housing Development Act.

27        Section  99.  Effective date.  This Act takes effect upon
28    becoming law.

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