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1 | AN ACT concerning revenue.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Housing Development Act is amended | ||||||||||||||||||||||||||
5 | by changing Section 7.28 as follows:
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6 | (20 ILCS 3805/7.28)
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7 | Sec. 7.28. Tax credit for donation to sponsors. The | ||||||||||||||||||||||||||
8 | Authority may administer and adopt rules
for
an affordable | ||||||||||||||||||||||||||
9 | housing tax donation credit program to provide tax credits for
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10 | donations as set forth in this
Section.
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11 | (a) In this Section:
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12 | "Administrative housing agency" means either the Authority | ||||||||||||||||||||||||||
13 | or an agency of the City of Chicago.
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14 | "Affordable housing project" means either (i) a rental | ||||||||||||||||||||||||||
15 | project in which at
least 25% of the units have rents | ||||||||||||||||||||||||||
16 | (including tenant-paid heat) that do not
exceed, on a monthly | ||||||||||||||||||||||||||
17 | basis,
maximum gross rent figures, as published by the | ||||||||||||||||||||||||||
18 | Authority, that are: (i)
based
on data published annually by | ||||||||||||||||||||||||||
19 | the U.S. Department of Housing and Urban
Development, (ii) | ||||||||||||||||||||||||||
20 | based on the annual income of households earning 60% of the
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21 | area median income, (iii) computed using a 30% of gross monthly
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22 | income
standard and (iv) adjusted for unit size and at least | ||||||||||||||||||||||||||
23 | 25% of the units are
occupied by persons and families whose |
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1 | incomes do not exceed 60% of the median
family income for the | ||||||
2 | geographic area in which the residential unit is located
or | ||||||
3 | (ii) a unit for sale to homebuyers whose gross household income | ||||||
4 | is at or
below 60% of the area median income and who pay no more | ||||||
5 | than 30% of their gross
household income for mortgage | ||||||
6 | principal, interest, property taxes, and
property insurance | ||||||
7 | (PITI). "Affordable housing project" includes projects | ||||||
8 | involving the purchase of foreclosed single-family and | ||||||
9 | multi-family properties if the project meets all other | ||||||
10 | requirements of this Section.
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11 | "Donation" means money, securities, or real or personal | ||||||
12 | property that is
donated to a not-for-profit sponsor that is | ||||||
13 | used solely for costs associated
with either (i) purchasing, | ||||||
14 | constructing, or rehabilitating an affordable
housing project | ||||||
15 | in this State, (ii) an employer-assisted housing project in
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16 | this State, (iii) general operating support, or (iv) technical | ||||||
17 | assistance as
defined by this Section.
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18 | "Employer-assisted housing project" means either | ||||||
19 | down-payment assistance,
reduced-interest mortgages, mortgage | ||||||
20 | guarantee programs, rental subsidies, or
individual | ||||||
21 | development account savings plans that are provided by | ||||||
22 | employers to
employees to assist in securing affordable housing | ||||||
23 | near the work place, that
are restricted to housing near the | ||||||
24 | work place, and that are restricted to
employees whose gross | ||||||
25 | household income is at or below 120% of the area median
income.
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26 | "General operating support" means any cost incurred by a |
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1 | sponsor that is a
part of its general program costs and is not | ||||||
2 | limited to costs directly incurred
by the affordable housing | ||||||
3 | project.
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4 | "Geographical area" means the metropolitan area or county | ||||||
5 | designated as an
area by the federal Department of Housing and | ||||||
6 | Urban Development under Section 8
of the United States Housing | ||||||
7 | Act of 1937, as amended, for purposes of
determining fair | ||||||
8 | market rental rates.
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9 | "Median income" means the incomes that are determined by | ||||||
10 | the federal
Department of Housing and Urban Development | ||||||
11 | guidelines and adjusted for family
size.
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12 | "Project" means an affordable housing project, an | ||||||
13 | employer-assisted housing
project, general operating support, | ||||||
14 | or technical assistance.
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15 | "Sponsor" means a not-for-profit organization that (i) is | ||||||
16 | organized as a
not-for-profit organization under the laws of | ||||||
17 | this State or another
state and (1) for an affordable housing | ||||||
18 | project, has as one of its purposes the
development of | ||||||
19 | affordable housing; (2) for an employer-assisted housing
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20 | project, has as one of its purposes home ownership education; | ||||||
21 | and (3) for a
technical assistance project, has as one of
its | ||||||
22 | purposes either the development of affordable housing or home | ||||||
23 | ownership
education; (ii) is organized
for the purpose of | ||||||
24 | constructing or rehabilitating affordable housing units and
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25 | has
been issued a ruling from the Internal Revenue Service of | ||||||
26 | the United States
Department of the Treasury that the |
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1 | organization is exempt from income taxation
under provisions of | ||||||
2 | the Internal Revenue Code; or (iii) is an organization
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3 | designated as a community development corporation by the United | ||||||
4 | States
government under Title VII of the Economic Opportunity | ||||||
5 | Act of 1964.
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6 | "Tax credit" means a tax credit allowed under Section 214 | ||||||
7 | of the Illinois
Income Tax Act.
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8 | "Technical assistance" means any cost incurred by a sponsor | ||||||
9 | for project
planning, assistance with applying for financing, | ||||||
10 | or counseling services
provided to prospective homebuyers.
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11 | (b) A sponsor must apply to an administrative housing | ||||||
12 | agency for approval of the project. The
administrative housing
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13 | agency must reserve a specific amount of tax credits for each | ||||||
14 | approved project.
Tax credits for general operating support can | ||||||
15 | only be reserved as part of a
reservation of tax credits for an | ||||||
16 | affordable housing project, an
employer-assisted housing | ||||||
17 | project, or technical assistance. No tax credits
shall be | ||||||
18 | allowed for a project without a reservation of such tax credits | ||||||
19 | by an
administrative housing agency for that project.
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20 | (c) The Authority must adopt rules
establishing
criteria | ||||||
21 | for eligible costs and donations, issuing and verifying tax | ||||||
22 | credits,
and selecting projects that are eligible for a tax
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23 | credit.
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24 | (d) Tax credits for employer-assisted housing projects are | ||||||
25 | limited to
that pool of
tax credits that have been set aside | ||||||
26 | for employer-assisted housing. Tax
credits for general |
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1 | operating support are limited to 10% of the total tax
credit | ||||||
2 | reservation for the related project (other than general | ||||||
3 | operating
support) and are also limited to that pool of
tax
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4 | credits that have been set aside for general operating support. | ||||||
5 | Tax credits
for technical assistance are limited to that pool | ||||||
6 | of tax credits that have been
set aside for technical | ||||||
7 | assistance.
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8 | (e) The amount of tax credits reserved by the | ||||||
9 | administrative housing agency
for an approved project is | ||||||
10 | limited to $13 million in the initial year and shall
increase | ||||||
11 | each year by 5%. The City of Chicago shall receive 24.5% of | ||||||
12 | total tax
credits authorized for each fiscal year. The
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13 | Authority shall receive the balance of the tax credits | ||||||
14 | authorized for each
fiscal year. The tax credits may be used | ||||||
15 | anywhere in this State.
The tax
credits have the following | ||||||
16 | set-asides:
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17 | (1) for employer-assisted housing projects, $2 | ||||||
18 | million; and
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19 | (2) for general operating support and technical | ||||||
20 | assistance, $1 million.
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21 | The balance of the funds must be used for affordable | ||||||
22 | housing
projects.
During the first 9 months of a fiscal year, | ||||||
23 | if an administrative housing
agency is unable to reserve the | ||||||
24 | tax credits set aside for the purposes
described in
subsection | ||||||
25 | (e), the administrative housing agency may reserve the tax | ||||||
26 | credits
for any approved projects.
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1 | (f) The administrative housing agency that reserves tax | ||||||
2 | credits for an
affordable housing project must record
against | ||||||
3 | the land upon which the affordable housing project is located | ||||||
4 | an
instrument to assure that
the property maintains its | ||||||
5 | affordable housing compliance for a minimum of 10
years. The | ||||||
6 | Authority has flexibility to assure that the instrument
does
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7 | not cause undue hardship on homeowners.
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8 | (Source: P.A. 92-491, eff. 8-23-01; 93-369, eff. 7-24-03.)
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9 | Section 10. The Illinois Income Tax Act is amended by | ||||||
10 | changing Section 214 as follows:
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11 | (35 ILCS 5/214)
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12 | Sec. 214. Tax credit for affordable housing donations.
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13 | (a) Beginning with taxable years ending on or after | ||||||
14 | December 31, 2001 and
until the taxable year ending on December | ||||||
15 | 31, 2011 , a taxpayer who makes a
donation under Section 7.28 of | ||||||
16 | the Illinois Housing Development Act is entitled to a credit
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17 | against the tax imposed by subsections (a) and (b) of Section | ||||||
18 | 201 in an amount
equal
to 50% of the value of the donation. | ||||||
19 | Partners, shareholders of subchapter S
corporations, and | ||||||
20 | owners of limited liability companies (if the limited
liability | ||||||
21 | company is treated as a partnership for purposes of federal and | ||||||
22 | State
income
taxation) are entitled a credit under this Section | ||||||
23 | to be determined in
accordance with the determination of income | ||||||
24 | and distributive share of income
under Sections 702 and 703 and |
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1 | subchapter S of the Internal Revenue Code.
Persons or entities | ||||||
2 | not subject to the tax imposed by subsections (a) and (b)
of | ||||||
3 | Section 201 and who make a donation under Section 7.28 of the | ||||||
4 | Illinois
Housing Development Act are entitled to a credit as | ||||||
5 | described in this
subsection and may transfer that credit as | ||||||
6 | described in subsection (c).
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7 | (b) If the amount of the credit exceeds the tax liability | ||||||
8 | for the year, the
excess may be carried forward and applied to | ||||||
9 | the tax liability of the 5 taxable
years following the excess | ||||||
10 | credit year. The tax credit shall be applied to the
earliest | ||||||
11 | year for which there is a tax liability. If there are credits | ||||||
12 | for
more than one year that are available to offset a | ||||||
13 | liability, the earlier credit
shall be applied first.
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14 | (c) The transfer of the tax credit allowed under this | ||||||
15 | Section may be made
(i) to the purchaser of land that has been | ||||||
16 | designated solely for affordable
housing projects in | ||||||
17 | accordance with the Illinois Housing Development Act or
(ii) to | ||||||
18 | another donor who has also made a donation in accordance with | ||||||
19 | Section 7.28 of the
Illinois Housing
Development Act.
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20 | (d) A taxpayer claiming the credit provided by this Section | ||||||
21 | must maintain
and record any information that the Department | ||||||
22 | may require by regulation
regarding the project for which the | ||||||
23 | credit is claimed.
When
claiming the credit provided by this | ||||||
24 | Section, the taxpayer must provide
information regarding the | ||||||
25 | taxpayer's donation to the project under the Illinois Housing | ||||||
26 | Development Act.
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1 | This Section is exempt from the provisions of Section 250. | ||||||
2 | (Source: P.A. 93-369, eff. 7-24-03; 94-46, eff. 6-17-05.)
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3 | Section 99. Effective date. This Act takes effect upon | ||||||
4 | becoming law.
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