103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB2922

 

Introduced 1/26/2024, by Sen. Michael W. Halpin

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/241 new

    Amends the Illinois Income Tax Act. Provides a tax credit for certain developers of single-family residences that incur development costs and that sell or rent qualified residences to individuals who meet certain income thresholds. Sets forth the amount of the credit. Effective immediately.


LRB103 39038 HLH 69273 b

 

 

A BILL FOR

 

SB2922LRB103 39038 HLH 69273 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by
5adding Section 241 as follows:
 
6    (35 ILCS 5/241 new)
7    Sec. 241. Middle-income Housing Development Tax Credit
8Pilot Program.
9    (a) For taxable years ending on or after December 31, 2024
10and ending on or before December 31, 2027, each taxpayer that
11is a developer of a qualified residence and that invests up to
12$200,000 in development costs associated with the qualified
13residence may apply to the Authority for a credit against the
14taxes imposed by subsections (a) and (b) of Section 201 in an
15amount set forth in subsection (b).
16    (b) The amount of the credit shall be calculated as
17follows:
18        (1) if the qualified residence is sold or rented to
19    one or more individuals with a combined household income
20    that exceeds 80% of the median household income in
21    Illinois but does not exceed 90% of the median household
22    income in Illinois, then the credit is equal to 20% of the
23    development costs associated with the qualified residence

 

 

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1    but not to exceed $40,000 for that qualified residence;
2        (2) if the qualified residence is sold or rented to
3    one or more individuals with a combined household income
4    that exceeds 90% of the median household income in
5    Illinois but does not exceed 110% of the median household
6    income in Illinois, then the credit is equal to 15% of the
7    development costs associated with the qualified residence
8    but not to exceed $30,000 for that qualified residence;
9    and
10        (3) if the qualified residence is sold or rented to
11    one or more individuals with a combined household income
12    that exceeds 110% of the median household income in
13    Illinois but does not exceed 120% of the median household
14    income in Illinois, then the credit is equal to 20% of the
15    development costs associated with the qualified residence
16    but not to exceed $20,000 for that qualified residence.
17    The Authority shall determine the median household income
18in Illinois using data compiled by the United States Census
19Bureau. Development costs that are paid for using federal,
20State, or local incentives that do not require repayment are
21not included as qualifying investments and shall not be
22included when calculating the tax credit award amount under
23this Section.
24    (c) The Authority may not issue more than $50,000,000 in
25credits under this Section. Of the total credits awarded under
26this Section, 35% must be for qualified residences located in

 

 

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1a county with 100,000 or more residents and 350,000 or fewer
2residents. Each qualified residence may qualify for only one
3credit during the taxable year in which the residence is first
4sold or rented. No taxpayer may receive more than $2,000,000
5in credits under this Section for any one project.
6    (d) In no event shall a credit under this Section reduce
7the taxpayer's liability to less than zero. If the amount of
8the credit exceeds the tax liability for the year, the excess
9may be carried forward and applied to the tax liability of the
105 taxable years following the excess credit year. The tax
11credit shall be applied to the earliest year for which there is
12a tax liability. If there are credits for more than one year
13that are available to offset a liability, the earlier credit
14shall be applied first.
15    (e) If the taxpayer is a partnership or Subchapter S
16corporation, the credit is allowed to pass through to the
17partners and shareholders as provided in Section 251. Credits
18may also be transferred during the 5 taxable years after the
19taxable year in which the credit is claimed.
20    (f) The Authority shall adopt rules to implement and
21administer this Section, including rules concerning
22applications for the tax credit. A taxpayer claiming a credit
23under this Section must maintain and record any information
24that the Authority may require regarding the development
25project for which the credit is claimed.
26    (g) As used in this Section:

 

 

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1    "Authority" means the Illinois Housing Development
2Authority.
3    "Developer" includes for-profit and non-profit developers,
4as well as land banks.
5    "Development costs" means any costs associated with the
6construction or rehabilitation of a qualified residence.
7    "Household" means all persons using the qualified
8residence as their principal place of residence upon the sale
9or lease of the qualified residence by the developer.
10    "Household income" means the combined federal adjusted
11gross income of the members of the household for the taxable
12year immediately preceding the year in which the qualified
13residence is sold or rented to the members of the household.
14    "Qualified residence" means a single-family residence that
15(i) is new construction or has been rehabilitated with $30,000
16or more in rehabilitative development costs incurred by the
17taxpayer and (ii) is sold or rented pursuant to a contract with
18a term of one year or longer to one or more individuals with a
19combined household income that exceeds 80% of the median
20household income in Illinois but does not exceed 120% of the
21median household income in Illinois. The residence must also
22have at least a $1,000 local match investment.
 
23    Section 99. Effective date. This Act takes effect upon
24becoming law.