Public Act 93-0369
HB3049 Enrolled LRB093 10000 SJM 10250 b
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 changing Section 7.28 as follows:
(20 ILCS 3805/7.28)
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, maximum gross rent figures, as published by the
Authority, that are: (i) based on data published annually by
the U.S. Department of Housing and Urban Development, (ii)
based on the annual income of households earning 60% of the
area median income, (iii) computed using a 30% of the gross
monthly income standard and (iv) adjusted for unit size 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.
"Project" means an affordable housing project, an
employer-assisted housing project, general operating support,
or technical assistance.
"Sponsor" means a not-for-profit organization that (i) is
organized as a not-for-profit organization under the laws of
this State or another state and (1) for an affordable housing
project, has as one of its purposes the development of
affordable housing; (2) for an employer-assisted housing
project, has as one of its purposes home ownership education;
and (3) for a technical assistance project, has as one of its
purposes either the development of affordable housing or home
ownership education 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.
"Tax credit" means a tax credit allowed under Section 214
of the Illinois Income Tax Act.
"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 an 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. Tax credits for general operating support can only be
reserved as part of a reservation of tax credits for an
affordable housing project, an employer-assisted housing
project, or technical assistance. No tax credits shall be
allowed for a project without a reservation of such tax
credits by an administrative housing agency for that project.
(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 projects
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
reservation for the related project (other than general
operating support) 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 this the State. The
tax credits have the following set-asides:
(1) for employer-assisted housing projects, $2
million; and
(2) for general operating support and technical
assistance, $1 million.
The balance of the funds must be used for affordable
housing projects that would otherwise meet the definition of
affordable housing. During the first 9 months of a fiscal
year, if an administrative housing agency is unable to
reserve the tax credits set aside for the purposes described
in subsection (e), the administrative housing agency may
reserve the tax credits for any approved projects.
(f) The administrative housing agency that reserves tax
credits for an affordable housing project issues the credit
must record against the land upon which the affordable
housing 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.
(Source: P.A. 92-491, eff. 8-23-01.)
Section 10. The Illinois Income Tax Act is amended by
changing Section 214 as follows:
(35 ILCS 5/214)
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. Persons or entities not subject to the tax
imposed by subsections (a) and (b) of Section 201 and who
make a donation under Section 7.28 of the Illinois Housing
Development Act are entitled to a credit as described in this
subsection and may transfer that credit as described in
subsection (c).
(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 a an eligible donation to
the sponsor of an affordable housing project in accordance
with Section 7.28 of 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 project development of affordable housing under the
Illinois Housing Development Act.
(Source: P.A. 92-491, eff. 8-23-01.)
Section 99. Effective date. This Act takes effect upon
becoming law.