Illinois General Assembly - Full Text of HB2168
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Full Text of HB2168  101st General Assembly




State of Illinois
2019 and 2020


Introduced , by Rep. Sara Feigenholtz


35 ILCS 200/15-178 new

    Amends the Property Tax Code. Provides for a reduction in the equalized assessed value of newly-constructed or rehabilitated rental property if the owner of the residential real property commits that, for a period of 10 years, at least 15% of the multifamily building's units will have rents that are at or below maximum rents and are occupied by households with household incomes at or below maximum income limits. Provides that the chief county assessment officer of a county with 3,000,000 or more inhabitants shall establish such a program, and the chief county assessment officer of a county with less than 3,000,000 inhabitants shall establish such a program upon passage of an ordinance by a majority vote of the county board. Sets forth application requirements and the amount of the reduction. Effective immediately.

LRB101 07095 HLH 52132 b






HB2168LRB101 07095 HLH 52132 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 Property Tax Code is amended by adding
5Section 15-178 as follows:
6    (35 ILCS 200/15-178 new)
7    Sec. 15-178. Reduction in assessed value for affordable
8rental housing construction or rehabilitation.
9    (a) The chief county assessment officer of any county with
103,000,000 or more inhabitants shall, and the chief county
11assessment officer of any county with less than 3,000,000
12inhabitants shall upon passage of an ordinance by a majority
13vote of the county board, establish a special assessment
14program to reduce the equalized assessed value of all eligible
15newly-constructed residential real property or qualifying
16rehabilitation to all eligible existing residential real
17property in accordance with subsection (b) for 10 taxable years
18after the newly constructed residential real property or
19improvements to existing residential real property are put in
20service. Property is eligible for the special assessment
21program if and only if all of the following factors have been
23        (1) the property consists of a newly-constructed



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1    multifamily building containing 6 or more rental dwelling
2    units or an existing multifamily building that has
3    undergone qualifying rehabilitation containing 6 or more
4    rental dwelling units;
5        (2) except as defined in subparagraphs (E), (F), and
6    (G) of paragraph (4) of subsection (c) of this Section,
7    prior to the newly-constructed residential real property
8    or improvements to existing residential real property
9    being put in service, the owner of the residential real
10    property commits that, for a period of 10 years, at least
11    15% of the multifamily building's units will have rents as
12    defined in this Section that are at or below maximum rents
13    and are occupied by households with household incomes at or
14    below maximum income limits; and
15        (3) the property meets the application requirements
16    defined in subsection (c).
17    (b) The amount of the reduction shall be calculated as
19        (1) if at least 15% but fewer than 35% of the
20    multifamily building's units have rents at or below maximum
21    rents and are occupied by households with household incomes
22    at or below maximum income limits, the equalized assessed
23    value of the property used to calculate the tax bill shall
24    be reduced by an amount equal to 25% of the equalized
25    assessed value of the property as initially determined by
26    the assessor for the property in the current taxable year



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1    for the newly-constructed residential real property or
2    based on the improvements to an existing residential real
3    property; and
4        (2) if at least 35% of the multifamily building's units
5    have rents at or below maximum rents and are occupied by
6    households with household incomes at or below maximum
7    income limits, the equalized assessed value of the property
8    used to calculate the tax bill shall be reduced by an
9    amount equal to 35% of the equalized assessed value of the
10    property as initially determined by the assessor for the
11    property in the current taxable year for the newly
12    constructed residential real property or based on the
13    improvements to an existing residential real property.
14    (c) Application requirements.
15        (1) In order to receive benefits under this Section,
16    the owner must submit the following information to the
17    chief county assessment officer for review in the form
18    required by the chief county assessment officer:
19            (A) the owner's name;
20            (B) the postal address and permanent index number
21        of the parcel;
22            (C) a deed or other instrument conveying the parcel
23        to the current owner;
24            (D) written evidence that the new construction or
25        qualifying rehabilitation has been completed with
26        respect to the residential real property, including,



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1        but not limited to, copies of building permits, a
2        notarized contractor's sworn affidavit, and
3        photographs of the interior and exterior of the
4        building after new construction or rehabilitation is
5        completed;
6            (E) written evidence that the residential real
7        property meets local building codes, or if there are no
8        local building codes, Housing Quality Standards, as
9        determined by the United States Department of Housing
10        and Urban Development;
11            (F) a list identifying the affordable units in
12        residential real property and a written statement that
13        the affordable units are comparable to the market rate
14        units in terms of unit type, number of bedrooms per
15        unit, quality of exterior appearance, energy
16        efficiency, and overall quality of construction;
17            (G) a written schedule certifying the rents in each
18        affordable unit and a written statement that these
19        rents do not exceed the maximum rents allowable for the
20        area in which the residential real property is located;
21            (H) documentation from the administering agency
22        verifying the owner's participation in a qualifying
23        income-based rental subsidy program as defined in
24        subsection (d) of this Section if units receiving
25        rental subsidies are to be counted among the affordable
26        units in order to meet the thresholds defined in this



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1        Section;
2            (I) a written statement identifying the household
3        income for every household occupying an affordable
4        unit and certifying that the household income does not
5        exceed the maximum income limits allowable for the area
6        in which the residential real property is located;
7            (J) a written statement that the owner has verified
8        and retained documentation of household income for
9        every household occupying an affordable unit; and
10            (K) any additional information as reasonably
11        required by the chief county assessment officer,
12        including, but not limited to, any information
13        necessary to ensure compliance with applicable local
14        ordinances and to ensure the owner is complying with
15        the provisions of subparagraph (F) of paragraph (4) of
16        subsection (c) of this Section.
17        (2) The chief county assessment officer shall notify
18    the owner as to whether or not the property meets the
19    requirements of this Section. If the property does not meet
20    the requirements of this Section, the chief county
21    assessment officer shall provide written notice of any
22    deficiencies to the owner, who shall then have 14 days from
23    the date of notification to provide supplemental
24    information showing compliance with this Section. If the
25    owner does not exercise this right to cure the deficiency,
26    or if the information submitted, in the sole judgment of



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1    the chief county assessment officer, is insufficient to
2    meet the requirements of this Section, the chief county
3    assessment officer shall provide a written explanation of
4    the reasons for denial.
5        (3) The chief county assessment officer may charge a
6    reasonable application fee to offset the administrative
7    expenses associated with the program.
8        (4) The benefit conferred by this Section is limited as
9    follows:
10            (A) The owner is eligible to apply for the benefit
11        conferred by this Section beginning January 1, 2020
12        through December 31, 2029. If approved, the reduction
13        will be effective for the current taxable year, which
14        will be reflected in the tax bill issued in the
15        following taxable year. Owners that are approved for
16        the benefit under this Section before December 31, 2028
17        shall, at minimum, be eligible for annual renewal of
18        the benefit during an initial 10-year period, as
19        described in subparagraph (B) of paragraph (4) of
20        subsection (c) of this Section benefit until December
21        31, 2037.
22            (B) Property receiving a reduction outlined in
23        this Section shall continue to be eligible for annual
24        renewal for an initial period of up to 10 years, but
25        shall be extended for up to an additional 10-year
26        period with annual renewals if the owner continues to



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1        meet the requirements of this Section, excluding the
2        requirements regarding new construction or qualifying
3        rehabilitation defined in subparagraph (D) of
4        paragraph (1) of this subsection.
5            (C) The application materials in the year prior to
6        final year of eligibility for the reduction in assessed
7        value during the initial 10-year period and any
8        additional 10-year periods must include a dated copy of
9        written notice provided to tenants informing them of
10        the date of the termination regardless of whether or
11        not the owner is eligible for or seeking a renewal.
12            (D) If the property is sold or transferred, the
13        purchaser or transferee must comply with all
14        requirements of this Section in order to continue
15        receiving the reduction in assessed value.
16            (E) The owner may apply for the benefit if the
17        newly-constructed residential real property or
18        improvements to existing residential real property
19        were put in service on or after January 1, 2015.
20        However, the initial 10-year eligibility period shall
21        be reduced by the number of years between the placed in
22        service date and the date the owner first receives this
23        benefit.
24            (F) The owner may apply for the benefit within 2
25        years after the newly-constructed residential real
26        property or improvements to existing residential real



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1        property are put in service. However, the initial 10
2        year eligibility period shall be reduced for the number
3        of years between the placed in service date and the
4        date the owner first receives this benefit.
5            (G) Owners of a multifamily building receiving a
6        benefit through the Cook County Class 9 program on
7        December 31, 2019 shall be deemed automatically
8        eligible for the benefit defined in this Section in
9        terms of meeting the criteria for new construction or
10        substantial rehabilitation for a specific multifamily
11        building regardless of when the newly-constructed
12        residential real property or improvements to existing
13        residential real property were put in service. If a
14        Cook County Class 9 owner had Class 9 status revoked on
15        or after January 1, 2017 but can provide documents
16        sufficient to prove that the revocation was in error or
17        any deficiencies leading to the revocation have been
18        cured, the chief county assessment officer may deem the
19        owner to be eligible. However, owners may not receive
20        the both the benefits defined in this Section and the
21        Cook County Class 9 program in any single taxable year.
22        In addition, the number of years during which an owner
23        has participated in the Class 9 program shall count
24        against the number of remaining years eligible for the
25        benefit as defined in this Section.
26            (H) At the completion of the assessment reduction



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1        period described in this Section, the entire parcel
2        will be assessed as otherwise provided in State law.
3    (d) For the purposes of this Section,
4    "Affordable units" means units that have rents that do not
5exceed the maximum rents as defined in this Section.
6    "Household income" includes the annual income for all the
7people who occupy a housing unit that is anticipated to be
8received from a source outside of the family during the
912-month period following admission or the annual
10recertification, including related family members and all the
11unrelated people who share the housing unit. Household income
12includes the sum total of the following income sources: wages,
13salaries and tips before any payroll deductions; net business
14income; interest and dividends; payments in lieu of earnings,
15such as unemployment and disability compensation, worker's
16compensation and severance pay; Social Security income,
17including lump sum payments; payments from insurance policies,
18annuities, pensions, disability benefits and other types of
19periodic payments, alimony, child support, and other regular
20monetary contributions; and public assistance, except for
21assistance from the Supplemental Nutrition Assistance Program
22(SNAP). "Household income" does not include: earnings of
23children under age 18; temporary income such as cash gifts;
24reimbursement for medical expenses; lump sums from
25inheritance, insurance payments, settlements for personal or
26property losses; student financial assistance paid directly to



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1the student or to an educational institution; foster child care
2payments; receipts from government-funded training programs;
3assistance from the Supplemental Nutrition Assistance Program
5    "Maximum income limits" means the maximum regular income
6limits for 60% of area median income for the geographic area in
7which the multifamily building is located for multifamily
8programs as determined by the United States Department of
9Housing and Urban Development and published annually by the
10Illinois Housing Development Authority.
11    "Maximum rent" means the maximum regular rent for 60% of
12the area median income for the geographic area in which the
13multifamily building is located for multifamily programs as
14determined by the United States Department of Housing and Urban
15Development and published annually by the Illinois Housing
16Development Authority. To be eligible for the benefit defined
17in this Section, maximum rents are to be reduced by the owner
18based on the Illinois Housing Development Authority's rules
19regarding tenant payment of utilities; or if the owner is
20leasing an affordable unit to a household with an income at or
21below the maximum income limit who is participating in
22qualifying income-based rental subsidy program, "maximum rent"
23means the maximum rents allowable under the guidelines of the
24qualifying income-based rental subsidy program.
25    "Qualifying income-based rental subsidy program" means a
26Housing Choice Voucher issued by a housing authority under



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1Section 8 of the United States Housing Act of 1937, a tenant
2voucher converted to a project-based voucher by a housing
3authority or any other program administered or funded by a
4housing authority, the Illinois Housing Development Authority,
5or another State agency, or a unit of local government where
6participation is limited to households with incomes at or below
7the maximum income limits as defined in this Section and the
8tenants' portion of the rent payment is based on a percentage
9of their income or a flat amount that does not exceed the
10maximum rent as defined in this Section.
11    "Qualifying rehabilitation" means, at a minimum,
12compliance with local building codes and the replacement or
13renovation of at least 2 primary building systems. Although the
14cost of each primary building system may vary, to be approved
15for the benefit under paragraph (1) of subsection (b) of this
16Section, the combined expenditure for making the building
17compliant with local codes and replacing primary building
18systems must be at least $8 per square foot for work completed
19between January 1, 2020 and December 31, 2020 and in subsequent
20years, $8 adjusted by the Consumer Price Index for All Urban
21Consumers, as published annually by the U.S. Department of
22Labor. To be approved for the benefit under (b)(2) of this
23Section, the combined expenditure for making the building
24compliant with local codes and replacing primary building
25systems must be at least $12.50 per square foot for work
26completed between January 1, 2020 and December 31, 2020 and in



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1subsequent years, $12.50 adjusted by the Consumer Price Index
2for All Urban Consumers, as published annually by the U.S.
3Department of Labor. "Primary building systems", together with
4their related rehabilitations, specifically approved for this
5program are:
6        (1) Electrical. All electrical work must comply with
7    applicable codes; it may consist of a combination of any of
8    the following alternatives:
9            (A) installing individual equipment and appliance
10        branch circuits as required by code (the minimum being
11        a kitchen appliance branch circuit);
12            (B) installing a new emergency service, including
13        emergency lighting with all associated conduits and
14        wiring;
15            (C) rewiring all existing feeder conduits ("home
16        runs") from the main switchgear to apartment area
17        distribution panels;
18            (D) installing new in-wall conduits for
19        receptacles, switches, appliances, equipment, and
20        fixtures;
21            (E) replacing power wiring for receptacles,
22        switches, appliances, equipment, and fixtures;
23            (F) installing new light fixtures throughout the
24        building including closets and central areas;
25            (G) replacing, adding, or doing work as necessary
26        to bring all receptacles, switches, and other



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1        electrical devices into code compliance;
2            (H) installing a new main service, including
3        conduit, cables into the building, and main disconnect
4        switch; and
5            (I) installing new distribution panels, including
6        all panel wiring, terminals, circuit breakers, and all
7        other panel devices.
8        (2) Heating. All heating work must comply with
9    applicable codes; it may consist of a combination of any of
10    the following alternatives:
11            (A) installing a new system to replace one of the
12        following heat distribution systems:
13                (i) piping and heat radiating units, including
14            new main line venting and radiator venting; or
15                (ii) duct work, diffusers, and cold air
16            returns; or
17                (iii) any other type of existing heat
18            distribution and radiation/diffusion components;
19            or
20            (B) installing a new system to replace one of the
21        following heat generating units:
22                (i) hot water/steam boiler;
23                (ii) gas furnace; or
24                (iii) any other type of existing heat
25            generating unit.
26        (3) Plumbing. All plumbing work must comply with



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1    applicable codes. Replace all or a part of the in-wall
2    supply and waste plumbing; however, main supply risers,
3    waste stacks and vents, and code-conforming waste lines
4    need not be replaced.
5        (4) Roofing. All roofing work must comply with
6    applicable codes; it may consist of either of the following
7    alternatives, separately or in combination:
8            (A) replacing all rotted roof decks and
9        insulation; or
10            (B) replacing or repairing leaking roof membranes
11        (10% is the suggested minimum replacement of
12        membrane); restoration of the entire roof is an
13        acceptable substitute for membrane replacement.
14        (5) Exterior doors and windows. Replace the exterior
15    doors and windows. Renovation of ornate entry doors is an
16    acceptable substitute for replacement.
17        (6) Floors, walls, and ceilings. Finishes must be
18    replaced or covered over with new material. Acceptable
19    replacement or covering materials are as follows:
20            (A) floors must have new carpeting, vinyl tile,
21        ceramic, refurbished wood finish, or a similar
22        substitute;
23            (B) walls must have new drywall, including joint
24        taping and painting; or
25            (C) new ceilings must be either drywall, suspended
26        type, or a similar



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1        (7) Exterior walls.
2            (A) replace loose or crumbling mortar and masonry
3        with new material;
4            (B) replace or paint wall siding and trim as
5        needed;
6            (C) bring porches and balconies to a sound
7        condition; or
8            (D) any combination of (A), (B), and (C).
9        (8) Elevators. Where applicable, at least 4 of the
10    following 7 alternatives must be accomplished:
11            (A) replace or rebuild the machine room controls
12        and refurbish the elevator machine (or equivalent
13        mechanisms in the case of hydraulic elevators);
14            (B) replace hoistway electro-mechanical items
15        including: ropes, switches, limits, buffers, levelers,
16        and deflector sheaves (or equivalent mechanisms in the
17        case of hydraulic elevators);
18            (C) replace hoistway wiring;
19            (D) replace door operators and linkage;
20            (E) replace door panels at each opening;
21            (F) replace hall stations, car stations, and
22        signal fixtures; or
23            (G) rebuild the car shell and refinish the
24        interior.
25        (9) Health and safety.
26            (A) install or replace fire suppression systems;



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1            (B) install or replace security systems; or
2            (C) environmental remediation of lead-based paint,
3        asbestos, leaking underground storage tanks, or radon.
4        (10) Energy conservation improvements undertaken to
5    limit the amount of solar energy absorbed by a building's
6    roof or to reduce energy use for the property, including
7    any of the following activities:
8            (A) installing or replacing reflective roof
9        coatings (flat roofs);
10            (B) installing or replacing R-49 roof insulation;
11            (C) installing or replacing R-19 perimeter wall
12        insulation;
13            (D) installing or replacing insulated entry doors;
14            (E) installing or replacing Low E, insulated
15        windows;
16            (F) installing or replacing WaterSense labeled
17        plumbing fixtures;
18            (G) installing or replacing 90% or better sealed
19        combustion heating systems;
20            (H) installing or replacing direct exhaust hot
21        water heaters;
22            (I) installing or replacing mechanical ventilation
23        to exterior for kitchens and baths;
24            (J) installing or replacing Energy Star
25        appliances;
26            (K) installing low VOC interior paints on interior



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1        finishes;
2            (L) installing or replacing Energy Star certified
3        lighting in common areas; or
4            (M) installing or replacing grading and
5        landscaping to promote on-site water retention.
6        (11) Accessibility improvements. All accessibility
7    improvements must comply with applicable codes. An owner
8    may make accessibility improvements to residential real
9    property to increase access for people with disabilities.
10    As used in this paragraph (11), "disability" has the
11    meaning given to that term in the Illinois Human Rights
12    Act. As used in this paragraph (11), "accessibility
13    improvements" means a home modification listed under the
14    Home Services Program administered by the Department of
15    Human Services (Part 686 of Title 89 of the Illinois
16    Administrative Code) including, but not limited to:
17    installation of ramps, grab bars, or wheelchair lifts;
18    widening doorways or hallways; re-configuring rooms and
19    closets; and any other changes to enhance the independence
20    of people with disabilities.
21        (12) Any applicant who has purchased the property in an
22    arm's length transaction not more than 90 days before
23    applying for this benefit may use the cost of
24    rehabilitation or repairs required by documented code
25    violations, up to a maximum of $2 per square foot, to meet
26    the qualifying rehabilitation requirements.



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