State of Illinois
92nd General Assembly
Legislation

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[ House Amendment 001 ]


92_SB1135sam001

 










                                           LRB9207590SMdvam01

 1                    AMENDMENT TO SENATE BILL 1135

 2        AMENDMENT NO.     .  Amend Senate Bill 1135 by  replacing
 3    everything after the enacting clause with the following:

 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
 
                            -2-            LRB9207590SMdvam01
 1    area in which the residential unit is located or (ii) a  unit
 2    for  sale to homebuyers whose gross household income is at or
 3    below 60% of the area median income and who pay no more  than
 4    30%  of  their gross household income for mortgage principal,
 5    interest, property taxes, and property insurance (PITI).
 6        "Donation" means money, securities, or real  or  personal
 7    property  that is donated to a not-for-profit sponsor that is
 8    used solely for costs associated with either (i)  purchasing,
 9    constructing, or rehabilitating an affordable housing project
10    in  this  State, (ii) an employer-assisted housing project in
11    this  State,  (iii)  general  operating  support,   or   (iv)
12    technical assistance as defined by this Section.
13        "Employer-assisted    housing   project"   means   either
14    down-payment assistance, reduced-interest mortgages, mortgage
15    guarantee   programs,   rental   subsidies,   or   individual
16    development  account  savings  plans  that  are  provided  by
17    employers to  employees  to  assist  in  securing  affordable
18    housing  near  the work place, that are restricted to housing
19    near the work place, and that  are  restricted  to  employees
20    whose  gross household income is at or below 120% of the area
21    median income.
22        "General operating support" means any cost incurred by  a
23    sponsor  that  is  a part of its general program costs and is
24    not limited to costs  directly  incurred  by  the  affordable
25    housing project.
26        "Geographical area" means the metropolitan area or county
27    designated  as  an  area by the federal Department of Housing
28    and Urban Development under Section 8 of  the  United  States
29    Housing  Act of 1937, as amended, for purposes of determining
30    fair market rental rates.
31        "Median income" means the incomes that are determined  by
32    the  federal  Department  of  Housing  and  Urban Development
33    guidelines and adjusted for family size.
34        "Sponsor" means a not-for-profit organization that (i) is
 
                            -3-            LRB9207590SMdvam01
 1    organized under the General Not For Profit Corporation Act of
 2    1986  for  the  purpose  of  constructing  or  rehabilitating
 3    affordable housing units in this State; (ii) is organized for
 4    the purpose  of  constructing  or  rehabilitating  affordable
 5    housing  units and has been issued a ruling from the Internal
 6    Revenue Service  of  the  United  States  Department  of  the
 7    Treasury that the organization is exempt from income taxation
 8    under provisions of the Internal Revenue Code; or (iii) is an
 9    organization    designated   as   a   community   development
10    corporation by the United States government under  Title  VII
11    of the Economic Opportunity Act of 1964.
12        "Technical  assistance"  means  any  cost  incurred  by a
13    sponsor for project planning, assistance  with  applying  for
14    financing,  or  counseling  services  provided to prospective
15    homebuyers.
16        (b)  A sponsor must apply to the  administrative  housing
17    agency  that  administers  the  program  for  approval of the
18    project. The administrative housing  agency  must  reserve  a
19    specific  amount  of tax credits for each approved affordable
20    housing project for 24 months after  the  date  of  approval.
21    The  sponsor  must  receive  an eligible donation within that
22    24-month time period or donations to the project  made  after
23    the  end  of the 24-month period are not eligible for the tax
24    credit allowed under Section 214 of the Illinois  Income  Tax
25    Act.
26        (c)  The  Illinois  Housing  Development  Authority  must
27    adopt  rules  establishing  criteria  for  eligible costs and
28    donations, issuing and verifying tax credits,  and  selecting
29    affordable  housing  projects  that  are  eligible  for a tax
30    credit under Section 214 of the Illinois Income Tax Act.
31        (d)  Tax  credits  for  employer-assisted   housing   are
32    limited  to that pool of tax credits that have been set aside
33    for  employer-assisted  housing.   Tax  credits  for  general
34    operating support are limited to 10% of the total tax  credit
 
                            -4-            LRB9207590SMdvam01
 1    allocation for a project and are also limited to that pool of
 2    tax  credits  that  have been set aside for general operating
 3    support.  Tax credits for technical assistance are limited to
 4    that pool of  tax  credits  that  have  been  set  aside  for
 5    technical assistance.
 6        (e)  The   amount   of   tax   credits  reserved  by  the
 7    administrative housing agency  for  an  approved  project  is
 8    limited to $13 million in the initial year and shall increase
 9    each  year by 5%.  The City of Chicago shall receive 24.5% of
10    total tax credits  authorized  for  each  fiscal  year.   The
11    Illinois  Housing  Development  Authority  shall  receive the
12    balance of the tax credits authorized for each  fiscal  year.
13    The  tax  credits may be used anywhere in the State.  The tax
14    credits have the following set-asides:
15             (1)  for employer-assisted housing, $2 million; and
16             (2)  for general  operating  support  and  technical
17        assistance, $1 million.
18        The  balance  of the funds must be used for projects that
19    would otherwise meet the definition of affordable housing.
20        (f)  The administrative housing agency  that  issues  the
21    credit must record against the land upon which the project is
22    located  an  instrument to assure that the property maintains
23    its affordable housing compliance for a minimum of 10  years.
24    The  housing  authority  has  flexibility  to assure that the
25    instrument does not cause undue hardship on homeowners.

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

28        (35 ILCS 5/214 new)
29        Sec. 214.  Tax credit for affordable housing donations.
30        (a)  Beginning  with  taxable  years  ending  on or after
31    December 31, 2001  and  until  the  taxable  year  ending  on
32    December  31,  2006,  a  taxpayer  who makes a donation under
 
                            -5-            LRB9207590SMdvam01
 1    Section 7.28 of the Illinois Housing Development Act for  the
 2    development  of  affordable housing in this State is entitled
 3    to a credit against the tax imposed by  subsections  (a)  and
 4    (b)  of Section 201 in an amount equal to 50% of the value of
 5    the  donation.  Partners,  shareholders   of   subchapter   S
 6    corporations,  and  owners of limited liability companies (if
 7    the limited liability company is treated as a partnership for
 8    purposes of federal and State income taxation) are entitled a
 9    credit under this Section to be determined in accordance with
10    the determination of income and distributive share of  income
11    under  Sections  702 and 703 and subchapter S of the Internal
12    Revenue Code.
13        (b)  If  the  amount  of  the  credit  exceeds  the   tax
14    liability for the year, the excess may be carried forward and
15    applied to the tax liability of the 5 taxable years following
16    the  excess  credit year.  The tax credit shall be applied to
17    the earliest year for which there is  a  tax  liability.   If
18    there  are  credits for more than one year that are available
19    to offset a liability, the earlier credit  shall  be  applied
20    first.
21        (c)  The  transfer  of  the tax credit allowed under this
22    Section may be made (i) to the purchaser  of  land  that  has
23    been  designated  solely  for  affordable housing projects in
24    accordance with the Illinois Housing Development Act or  (ii)
25    to  another  donor  who has also made an eligible donation to
26    the sponsor of an affordable housing  project  in  accordance
27    with the Illinois Housing Development Act.
28        (d)  A  taxpayer  claiming  the  credit  provided by this
29    Section must maintain and record  any  information  that  the
30    Department may require by regulation regarding the affordable
31    housing  project  for  which  the  credit  is  claimed.  When
32    claiming the credit provided by this  Section,  the  taxpayer
33    must provide information regarding the taxpayer's donation to
34    the  development  of  affordable  housing  under the Illinois
 
                            -6-            LRB9207590SMdvam01
 1    Housing Development Act.

 2        Section 99.  Effective date.  This Act takes effect  upon
 3    becoming law.".

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