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Public Act 92-0491
SB1135 Enrolled LRB9207590SMdv
AN ACT concerning taxes.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Housing Development Act is
amended by adding Section 7.28 as follows:
(20 ILCS 3805/7.28 new)
Sec. 7.28. Tax credit for donation to sponsors. The
Illinois Housing Development Authority may administer and
adopt rules for an affordable housing tax donation credit
program to provide tax credits for donations to sponsors of
affordable housing projects as set forth in this Section.
(a) In this Section:
"Administrative housing agency" means either the Illinois
Housing Development Authority or an agency of the City of
Chicago.
"Affordable housing project" means either (i) a rental
project in which at least 25% of the units have rents
(including tenant-paid heat) that do not exceed, on a monthly
basis, 30% of the gross monthly income of a household earning
60% of the area median income and at least 25% of the units
are occupied by persons and families whose incomes do not
exceed 60% of the median family income for the geographic
area in which the residential unit is located or (ii) a unit
for sale to homebuyers whose gross household income is at or
below 60% of the area median income and who pay no more than
30% of their gross household income for mortgage principal,
interest, property taxes, and property insurance (PITI).
"Donation" means money, securities, or real or personal
property that is donated to a not-for-profit sponsor that is
used solely for costs associated with either (i) purchasing,
constructing, or rehabilitating an affordable housing project
in this State, (ii) an employer-assisted housing project in
this State, (iii) general operating support, or (iv)
technical assistance as defined by this Section.
"Employer-assisted housing project" means either
down-payment assistance, reduced-interest mortgages, mortgage
guarantee programs, rental subsidies, or individual
development account savings plans that are provided by
employers to employees to assist in securing affordable
housing near the work place, that are restricted to housing
near the work place, and that are restricted to employees
whose gross household income is at or below 120% of the area
median income.
"General operating support" means any cost incurred by a
sponsor that is a part of its general program costs and is
not limited to costs directly incurred by the affordable
housing project.
"Geographical area" means the metropolitan area or county
designated as an area by the federal Department of Housing
and Urban Development under Section 8 of the United States
Housing Act of 1937, as amended, for purposes of determining
fair market rental rates.
"Median income" means the incomes that are determined by
the federal Department of Housing and Urban Development
guidelines and adjusted for family size.
"Sponsor" means a not-for-profit organization that (i) is
organized under the General Not For Profit Corporation Act of
1986 for the purpose of constructing or rehabilitating
affordable housing units in this State; (ii) is organized for
the purpose of constructing or rehabilitating affordable
housing units and has been issued a ruling from the Internal
Revenue Service of the United States Department of the
Treasury that the organization is exempt from income taxation
under provisions of the Internal Revenue Code; or (iii) is an
organization designated as a community development
corporation by the United States government under Title VII
of the Economic Opportunity Act of 1964.
"Technical assistance" means any cost incurred by a
sponsor for project planning, assistance with applying for
financing, or counseling services provided to prospective
homebuyers.
(b) A sponsor must apply to the administrative housing
agency that administers the program for approval of the
project. The administrative housing agency must reserve a
specific amount of tax credits for each approved affordable
housing project for 24 months after the date of approval.
The sponsor must receive an eligible donation within that
24-month time period or donations to the project made after
the end of the 24-month period are not eligible for the tax
credit allowed under Section 214 of the Illinois Income Tax
Act.
(c) The Illinois Housing Development Authority must
adopt rules establishing criteria for eligible costs and
donations, issuing and verifying tax credits, and selecting
affordable housing projects that are eligible for a tax
credit under Section 214 of the Illinois Income Tax Act.
(d) Tax credits for employer-assisted housing are
limited to that pool of tax credits that have been set aside
for employer-assisted housing. Tax credits for general
operating support are limited to 10% of the total tax credit
allocation for a project and are also limited to that pool of
tax credits that have been set aside for general operating
support. Tax credits for technical assistance are limited to
that pool of tax credits that have been set aside for
technical assistance.
(e) The amount of tax credits reserved by the
administrative housing agency for an approved project is
limited to $13 million in the initial year and shall increase
each year by 5%. The City of Chicago shall receive 24.5% of
total tax credits authorized for each fiscal year. The
Illinois Housing Development Authority shall receive the
balance of the tax credits authorized for each fiscal year.
The tax credits may be used anywhere in the State. The tax
credits have the following set-asides:
(1) for employer-assisted housing, $2 million; and
(2) for general operating support and technical
assistance, $1 million.
The balance of the funds must be used for projects that
would otherwise meet the definition of affordable housing.
(f) The administrative housing agency that issues the
credit must record against the land upon which the project is
located an instrument to assure that the property maintains
its affordable housing compliance for a minimum of 10 years.
The housing authority has flexibility to assure that the
instrument does not cause undue hardship on homeowners.
Section 10. The Illinois Income Tax Act is amended by
adding Section 214 as follows:
(35 ILCS 5/214 new)
Sec. 214. Tax credit for affordable housing donations.
(a) Beginning with taxable years ending on or after
December 31, 2001 and until the taxable year ending on
December 31, 2006, a taxpayer who makes a donation under
Section 7.28 of the Illinois Housing Development Act for the
development of affordable housing in this State is entitled
to a credit against the tax imposed by subsections (a) and
(b) of Section 201 in an amount equal to 50% of the value of
the donation. Partners, shareholders of subchapter S
corporations, and owners of limited liability companies (if
the limited liability company is treated as a partnership for
purposes of federal and State income taxation) are entitled a
credit under this Section to be determined in accordance with
the determination of income and distributive share of income
under Sections 702 and 703 and subchapter S of the Internal
Revenue Code.
(b) If the amount of the credit exceeds the tax
liability for the year, the excess may be carried forward and
applied to the tax liability of the 5 taxable years following
the excess credit year. The tax credit shall be applied to
the earliest year for which there is a tax liability. If
there are credits for more than one year that are available
to offset a liability, the earlier credit shall be applied
first.
(c) The transfer of the tax credit allowed under this
Section may be made (i) to the purchaser of land that has
been designated solely for affordable housing projects in
accordance with the Illinois Housing Development Act or (ii)
to another donor who has also made an eligible donation to
the sponsor of an affordable housing project in accordance
with the Illinois Housing Development Act.
(d) A taxpayer claiming the credit provided by this
Section must maintain and record any information that the
Department may require by regulation regarding the affordable
housing project for which the credit is claimed. When
claiming the credit provided by this Section, the taxpayer
must provide information regarding the taxpayer's donation to
the development of affordable housing under the Illinois
Housing Development Act.
Section 99. Effective date. This Act takes effect upon
becoming law.
Passed in the General Assembly May 30, 2001.
Approved August 23, 2001.
Effective August 23, 2001.
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