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91_SB1676
LRB9113038SMdv
1 AN ACT in relation to taxation.
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 214 as follows:
6 (35 ILCS 5/214 new)
7 Sec. 214. Affordable housing donation tax credit.
8 (a) As used in this Section, unless the context clearly
9 requires otherwise:
10 "Affordable housing project" means either (i) a rental
11 project, at least 25% of the units of which have rents
12 (including tenant-paid heat) that do not exceed, on a monthly
13 basis, 30% of the gross monthly income of a household earning
14 60% of the area median income, and at least 25% of the units
15 of which are occupied by persons and families whose income
16 does not exceed 60% of the median family income for the
17 geographic area in which the residential unit is located, or
18 (ii) a unit for sale to homebuyers whose gross household
19 income is at or below 60% of area median income, and who pay
20 more than 30% of their gross household income for mortgage
21 principal, interest, property taxes, and property insurance
22 (PITI).
23 "Donation" means money, real or personal property, or a
24 professional service that is donated to a not-for-profit
25 sponsor that: (i) is organized under the General
26 Not-For-Protit Corporation Act of 1986 for the purpose of
27 constructing or rehabilitating affordable housing units in
28 this State; (ii) is organized for the purpose of constructing
29 or rehabilitating affordable housing units and has been
30 issued a ruling from the Internal Revenue Service of the
31 United States Department of the Treasury that the
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1 organization is exempt from income taxation under the
2 provisions of the Internal Revenue Code; or (iii) is an
3 organization designated as a community development
4 corporation by the United States government under Title VII
5 of the Economic Opportunity Act of 1964.
6 "Employer-assisted housing project" means either
7 down-payment assistance, reduced-interest mortgages, mortgage
8 guarantee programs, rental subsidies, or Individual
9 Development Account savings plans that are provided by
10 employers to employees to assist in securing affordable
11 housing near the work place, and which are restricted to
12 employees whose gross household income is at or below 120% of
13 the area median income.
14 "General operating support" means any cost incurred by
15 the not-for-profit sponsor that is a part of its general
16 program costs and is not limited to costs directly incurred
17 by the affordable housing project.
18 "Geographic area" means the metropolitan area or county
19 designated as an area by the federal Department of Housing
20 and Urban Development under Section 8 of the United States
21 Housing Act of 1937, as amended, for purposes of determining
22 fair market rental rates.
23 "Housing authority" means either the Illinois Housing
24 Development Authority or the City of Chicago Department of
25 Housing.
26 "Median income" means those incomes that are determined
27 by the federal Department of Housing and Urban Development
28 guidelines and adjusted for family size.
29 "Technical assistance" means any cost incurred by the
30 not-for-profit sponsor for project planning, assistance with
31 applying for financing, or counseling services provided to
32 prospective homebuyers.
33 (b) Beginning with taxable years ending on or after
34 December 31, 2000 and ending with taxable years ending on or
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1 before December 31, 2006, a taxpayer shall be allowed a
2 credit against the tax imposed by subsections (a) and (b) of
3 Section 201 for contributing to the development of affordable
4 housing in this State. The credit allowed against the tax
5 imposed by subsections (a) and (b) of Section 201, to be
6 termed the "affordable housing donation tax credit", shall be
7 equal to 50% of the value of the taxpayer's donation. Tax
8 credits for employer-assisted housing are limited to that
9 pool of tax credits that have been set aside for
10 employer-assisted housing. Tax credits for general operating
11 support are limited to 10% of the total tax credit allocation
12 for a project and are also limited to that pool of tax
13 credits that have been set aside for general operating
14 support. Tax credits for technical assistance are limited to
15 that pool of tax credits that have been set aside for
16 technical assistance.
17 If the amount of the credit exceeds the tax liability for
18 the year, the excess may be carried forward and applied to
19 the tax liability of the 10 taxable years following the
20 excess credit year. The tax credit shall be applied to the
21 earliest year for which there is a tax liability. If there
22 are credits for more than one year that are available to
23 offset a liability, the earlier credit shall be applied
24 first. The tax credit may be sold or transferred by the donor
25 to another taxpayer either directly or through an
26 intermediary organization.
27 (c) The not-for-profit sponsor shall make application
28 for approval of a project to the housing authority that
29 administers this program. The housing authority shall
30 reserve the credits for an approved project for 24 months
31 from the date of approval. The sponsor must receive an
32 eligible donation within that time period or forfeit the tax
33 credit.
34 (d) The not-for-profit organization receiving the
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1 donation shall maintain and record such information as the
2 Department may require by regulation regarding the affordable
3 housing project and donation for which the credit is claimed.
4 The sponsor shall be responsible for maintaining the
5 project's eligibility under this Section and associated
6 regulations.
7 (e) The Illinois Housing Development Authority shall
8 promulgate rules and regulations establishing criteria for
9 designating not-for-profit organizations that are qualified
10 to receive donations that are eligible for a tax credit under
11 this Section. The criteria shall require that designated
12 not-for-profit organizations utilize donations solely for (i)
13 costs associated with constructing or rehabilitating
14 affordable housing units in this State, (ii) technical
15 assistance, or (iii) general operating expenses.
16 (f) The housing authority that issues the credit shall
17 record against the land upon which the project resides an
18 instrument to assure that the property maintains its
19 affordable housing compliance for 10 years. The housing
20 authority shall have flexibility to assure that the
21 instrument does not cause undue hardship on homeowners.
22 (g) The amount of tax credits awarded shall be limited
23 to $13 million in the initial year and shall increase each
24 year by 5%. The City of Chicago shall receive 24.5% of total
25 tax credits authorized for each fiscal year. The Illinois
26 Housing Development Authority shall receive the balance of
27 the tax credits authorized for each fiscal year. The tax
28 credits may be used anywhere in the State. The tax credits
29 shall have the following set-asides:
30 (1) For employer-assisted housing, $2 million; and
31 (2) For technical assistance and general operating
32 support, $1 million.
33 The balance of the funds shall be used for projects that
34 would otherwise meet the definition of affordable housing
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1 project as set forth in this Section.
2 Section 99. Effective date. This Act takes effect upon
3 becoming law.