102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB2445

 

Introduced 2/26/2021, by Sen. Mattie Hunter - Ann Gillespie - Sara Feigenholtz

 

SYNOPSIS AS INTRODUCED:
 
New Act
20 ILCS 3805/13.1 new
35 ILCS 5/232 new
35 ILCS 120/5m new
35 ILCS 200/15-178 new
215 ILCS 5/409  from Ch. 73, par. 1021
215 ILCS 5/444  from Ch. 73, par. 1056
310 ILCS 67/15
310 ILCS 67/25
310 ILCS 67/50
310 ILCS 67/70 new

    Creates the Build Illinois Homes Tax Credit Act. Provides that owners of qualified low-income housing developments are eligible for credits against (i) State income taxes and (ii) any privilege tax or retaliatory tax, penalty, fee, charge, or payment imposed under the Illinois Insurance Code. Amends the Illinois Housing Development Act. Provides that the Illinois Housing Development Authority shall develop a form and include it with certain financing agreements. Amends the Retailers' Occupation Tax Act. Creates an exemption for building materials to be incorporated into an 100% affordable housing project by rehabilitation or new construction. Amends the Property Tax Code. Provides for a reduction in assessed value for affordable rental housing construction or rehabilitation. Amends the Affordable Housing Planning and Appeal Act. Provides that an affordable housing plan, or any revision thereof, shall not be adopted by a non-exempt local government until notice and opportunity for public hearing have first been afforded. Makes other changes. Effective immediately.


LRB102 17214 HLH 22672 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB2445LRB102 17214 HLH 22672 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4
Article 1. Build Illinois Homes Tax Credit Act

 
5    Section 1-1. Short title. This Act may be cited as the
6Build Illinois Homes Tax Credit Act. References in this
7Article to "this Act" mean this Article.
 
8    Section 1-5. Definitions. As used in this Act, unless the
9context clearly requires otherwise:
10    "Allocation" means an award of tax credits to the owner of
11a qualified development in any allocation round, to be claimed
12ratably annually over the credit period.
13    "Allocation round" means all allocations by the Authority
14of credits under this Act to qualified developments in any
15calendar year.
16    "Allocation schedule certification" means the
17certification issued by the owner of a qualified development
18or its designee pursuant to subsection (d) of Section 1-10 of
19this Act.
20    "Authority" means:
21        (1) the Illinois Housing Development Authority; or
22        (2) the City of Chicago Department of Housing.

 

 

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1    "Credit" means the credit allowed pursuant to this Act.
2    "Credit period" means the period of 10 taxable years
3beginning with the taxable year in which a qualified
4development is placed in service. If a qualified development
5consists of more than one building, the qualified development
6is deemed to be placed in service in the taxable year during
7which the last building of the qualified development is placed
8in service.
9    "Department" means the Department of Revenue.
10    "Federal tax credit" means the federal low-income housing
11tax credit provided by Section 42 of the federal Internal
12Revenue Code, including federal low-income housing tax credits
13issued pursuant to 26 U.S.C. 42(h)(3) and 26 U.S.C. 42(h)(4).
14    "Qualified allocation plan" means the qualified allocation
15plan adopted by the Authority pursuant to Section 42(m) of the
16federal Internal Revenue Code of 1986.
17    "Qualified basis" means the qualified basis of the
18qualified development as determined pursuant to Section 42 of
19the federal Internal Revenue Code of 1986.
20    "Qualified development" means a qualified low-income
21housing project, as that term is defined in Section 42 of the
22federal Internal Revenue Code of 1986, that is located in the
23State and is determined to be eligible for the federal tax
24credit set forth in Section 42 of the Internal Revenue Code,
25whether or not a federal tax credit is allocated with respect
26to that qualified development.

 

 

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1    "Qualified taxpayer" means an individual, person, firm,
2corporation, or other entity that owns an interest, direct or
3indirect, in a qualified development and is subject to any or
4all of the following: (i) the taxes imposed by the Illinois
5Income Tax Act; or (ii) any privilege tax or retaliatory tax,
6penalty, fee, charge or payment imposed by the Illinois
7Insurance Code.
8    "State credit eligibility statement" means a statement
9issued by the Authority under Section 1-7.
10    "State tax return" means the income tax return filed with
11the Department or the privilege and retaliatory tax return
12filed with the Department of Insurance, as applicable.
 
13    Section 1-7. State credit eligibility statements. A State
14credit eligibility statement shall be issued by the Authority
15with respect to each building within the qualified development
16following construction or rehabilitation of the qualified
17development certifying that each such building within that
18qualified development qualifies for the credit and specifying:
19        (1) the calendar year in which the last building of
20    the qualified development was placed in service;
21        (2) the amount of the credit allowed for each year of
22    the credit period;
23        (3) the maximum qualified basis of the qualified
24    development taken into account in determining such annual
25    credit amount; and

 

 

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1        (4) a unique identification number for each State
2    credit eligibility statement issued.
3    The State credit eligibility statement shall be issued by
4the Authority simultaneously with IRS Form 8609 if the
5qualified development was also allocated federal tax credits.
6    The State credit eligibility statement shall include a
7Section to be completed by the owner of the qualified
8development annually for each year of the credit period
9certifying that the qualified development was in conformance
10with all compliance requirements. That certification shall be
11filed with the project owner's State tax return annually of
12each year of the credit period.
 
13    Section 1-10. Credit for low-income housing developments.
14    (a) The Authority shall include the credit in its annual
15qualified allocation plan each year until expiration of this
16Act. Each allocation round shall be simultaneous with
17allocations of federal tax credits.
18    (b) For taxable years beginning on or after January 1,
192021, the Authority may allocate a credit to the owner of a
20qualified development in any allocation round in an amount
21determined by the Authority, subject to the following
22guidelines:
23        (1) the Authority must find that the credit is
24    necessary for the financial feasibility of the qualified
25    development;

 

 

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1        (2) the aggregate sum of credits allocated to
2    qualified developments in any allocation round shall not
3    exceed $35,000,000, plus the amount of unallocated
4    credits, if any, from the preceding allocation round, plus
5    the amount of any credit recaptured or otherwise returned
6    to the Authority since the previous allocation round;
7        (3) of the $35,000,000 annual allocation: (i) 75.5% of
8    the available credits in each allocation round shall be
9    allocated by the Illinois Housing Development Authority,
10    plus any credits the Illinois Housing Development
11    Authority did not allocate from the previous allocation
12    round, plus the amount of any credits recaptured or
13    otherwise returned to the Illinois Housing Development
14    Authority since the previous allocation round; and (ii)
15    24.5% of the available credits in each allocation round
16    shall be allocated by the City of Chicago Department of
17    Housing, plus any credits the City of Chicago Department
18    of Housing did not allocate from the previous allocation
19    round, plus the amount of any credits recaptured or
20    otherwise returned to the City of Chicago Department of
21    Housing since the previous allocation round; and
22        (4) unless otherwise provided in this Act, or unless
23    the context clearly requires otherwise, the Authority must
24    determine eligibility for credits and allocate credits in
25    accordance with the standards and requirements set forth
26    in Section 42 of the federal Internal Revenue Code of

 

 

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1    1986.
2    (c) For tax years during the credit period, any qualified
3taxpayer is allowed a credit as provided in this Act against
4any or all of the following: (i) the taxes imposed by
5subsections (a) and (b) of Section 201 of the Illinois Income
6Tax Act; or (ii) any privilege tax or retaliatory tax,
7penalty, fee, charge, or payment imposed under the Illinois
8Insurance Code.
9    (d) If a taxpayer receiving an allocation of a credit is
10(i) a corporation that has an election in effect under
11Subchapter S of the federal Internal Revenue Code, (ii) a
12partnership, or (iii) a limited liability company that is
13taxed as a partnership, the credit provided under this Act may
14be claimed by the shareholders of the corporation, the
15partners of the partnership, or the members of the limited
16liability company as such terms are defined under applicable
17State law in the same manner as those shareholders, partners,
18or members account for their proportionate shares of the
19income or losses of the corporation, partnership, or limited
20liability company, or as provided in the bylaws or other
21executed agreement of the corporation, partnership, or limited
22liability company. Credits granted to a partnership, a limited
23liability company taxed as a partnership, or other multiple
24owners of property shall be passed through to the partners,
25members, or owners respectively on a pro rata basis or
26pursuant to an executed agreement among the partners, members,

 

 

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1or owners documenting any alternative distribution method. A
2qualified taxpayer may claim a credit so long as its direct or
3indirect interest in the qualified development is acquired
4prior to the filing of its tax return claiming the credit. On
5or before February 28th following each year of the credit
6period, the owner must submit an allocation schedule
7certification in an electronic format prescribed by the
8Department and the Department of Insurance to the Department
9and the Department of Insurance detailing the amount of credit
10allocated to each qualified taxpayer for the applicable year
11and whether each qualified taxpayer intends to apply the
12credit to income tax or insurance premium tax, or the owner
13must notify the Department and the Department of Insurance
14that it has assigned the duty of the allocation schedule
15certification to its designee who must provide such allocation
16schedule certification to the Department and the Department of
17Insurance by the deadline. Such allocation schedule
18certification may be amended in the event the State credit
19eligibility statement for a project is received after the
20deadline for filing the allocation schedule certification. Any
21such amendment shall be filed prior to any taxpayer attempting
22to claim tax credits associated with the applicable State
23credit eligibility statement. Each qualified taxpayer is
24allowed to claim its allocated amount of credit subject to any
25restrictions set forth in this Section.
26    (e) No credit may be allocated pursuant to this Act unless

 

 

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1the qualified development is the subject of a recorded
2restrictive covenant requiring the development to be
3maintained and operated as a qualified development; this
4requirement for a recorded restrictive covenant may be
5satisfied by the agreement for an extended low-income housing
6commitment required for the federal tax credits as defined in
7Section 42(h)(6)(B) of the federal Internal Revenue Code of
81986.
9    (f) If, during a taxable year, there is a determination
10that no recorded restrictive covenant meeting the requirements
11of subsection (e) was in effect as of the beginning of that
12year, such determination shall not apply to any period before
13that year and subsection (e) shall be applied without regard
14to that determination if the failure is corrected within one
15year from the date of the determination.
16    (g) The credit amount may be taken against the taxes
17imposed by the Illinois Income Tax Act for each taxable year of
18the credit period. The credit amount may be taken against the
19taxes, penalties, fees, charges, and payments imposed by the
20Illinois Insurance Code for each reporting period in the
21credit period. Any credit amount that exceeds the tax due for a
22taxable year may be carried forward as a tax credit against
23payments due for up to 5 taxable years following the tax year
24to which the credit relates and must be applied first to the
25earliest reporting periods possible. Credits that are not
26claimed may not be refunded to the qualified taxpayer.

 

 

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1    (h) By January 15, 2022 and by January 15 of each year
2thereafter, the Authority shall provide to the Department and
3the Department of Insurance an electronic file containing all
4data related to all State credit eligibility statements issued
5during the preceding year in the manner and form as provided by
6the Department.
 
7    Section 1-15. Recapture. If, under Section 42 of the
8Internal Revenue Code of 1986, a portion of any federal tax
9credit claimed with respect to a qualified development is
10required to be recaptured during the first 10 years after a
11project is placed in service, then the Authority shall provide
12written notice, upon a form created by the Authority, to the
13Department and the Department of Insurance of the amount to be
14recaptured. The amount of credit subject to recapture shall be
15proportionately equal to the amount of the qualified
16development's federal tax credits which are subject to
17recapture. The Department and the Department of Insurance, as
18applicable, shall notify the qualified taxpayer that claimed
19the credit of the amount recaptured, and the qualified
20taxpayer subject to recapture shall increase the qualified
21taxpayer's tax by the amount of any credit wrongfully claimed
22in the tax year the qualified taxpayer is notified of the
23recapture.
 
24    Section 1-20. Filing requirements. An owner of a qualified

 

 

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1development that has received an allocation and each qualified
2taxpayer claiming any portion of the credit must file with
3their State tax returns a copy of the State credit eligibility
4statement issued by the Authority for that qualified
5development. A qualified taxpayer receiving an allocation of
6credit through a pass-through entity shall attach to its State
7tax return a copy of the Schedule K-1-P or other written
8statement from the pass-through entity stating the portion of
9the annual credit shown on the State credit eligibility
10statement that is allocated to that partner, member or
11shareholder for that taxable year. In addition, the owner of a
12qualified development or its designee shall file a copy of the
13allocation schedule certification prior to any tax return
14being filed claiming a State credit for such qualified
15development.
 
16    Section 1-25. Rules. The Illinois Housing Development
17Authority, the Department, and the Department of Insurance, in
18consultation with each other, shall adopt such rules as are
19necessary to carry out their respective responsibilities under
20this Act.
 
21    Section 1-30. Compliance monitoring. The Authority, in
22consultation with the Department, shall monitor and oversee
23compliance with the provisions of this Act and shall report
24specific occurrences of noncompliance to the Department and

 

 

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1the Department of Insurance.
 
2    Section 1-35. Report to the General Assembly.
3    (a) The Illinois Housing Development Authority and the
4Chicago Department of Housing must, by December 31 of each
5allocation year, provide a written report to the General
6Assembly and must publish that report on their websites.
7    (b) The report shall:
8        (1) set forth the number of qualified developments
9    that have been allocated tax credits under this Act during
10    the allocation year and the total number of units
11    supported by each qualified development;
12        (2) describe each qualified development that has been
13    allocated tax credits under this Act including, without
14    limitation, the geographic location of the qualified
15    development, the household type and any specific
16    demographic information available about residents intended
17    to be served by the qualified development, the income
18    levels intended to be served by the qualified development,
19    and the rents or set-asides authorized for each qualified
20    development;
21        (3) provide housing market and demographic information
22    that demonstrates how the qualified developments supported
23    by the tax credits are addressing the need for affordable
24    housing within the communities they are intended to serve
25    as well as information about any remaining disparities in

 

 

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1    the affordability of housing within those communities; and
2        (4) provide information on the percentage of qualified
3    developments allocated credits that received incentive
4    scoring points in the qualified allocation plan as a
5    result of the general contractor, property manager,
6    architect, or sponsor being certified under the Business
7    Enterprise Program for Minorities, Females, and Persons
8    with a Disability.
 
9    Section 1-40. Exempt from automatic sunset. The credit
10under this Act is exempt from the provisions of Section 250 of
11the Illinois Income Tax Act.
 
12
Article 90. Amendatory Provisions

 
13    Section 90-5. The Illinois Housing Development Act is
14amended by adding Section 13.1 as follows:
 
15    (20 ILCS 3805/13.1 new)
16    Sec. 13.1. Form for local agencies. The Authority shall
17develop a form and include it with the final financing
18agreement that summarizes the terms of the financing
19agreement, which should include the following: the length of
20the affordability period guaranteed under the financing
21agreement; a legal description; if then available, the address
22and property index numbers for all applicable property

 

 

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1contemplated by the agreement; and any other information that
2may be relevant for a local county assessor's office and local
3county and municipal housing development authority to qualify
4or evidence eligibility for an applicable reduction in the
5assessed value of an affordable rental housing. This form may
6vary by county only if the Authority deems necessary. The
7nonprofit corporation, housing corporation, limited-profit
8entity, developer, or other entity receiving financing or
9other assistance under this Act shall file the form with the
10local county assessor's office and, where applicable, the
11local county and municipal housing authority for the county in
12which the property is located. No fees shall be levied against
13the nonprofit corporation, housing corporation, limited-profit
14entity, developer, or other entity for filing the form with
15the county assessor's office of local housing authority.
 
16    Section 90-10. The Illinois Income Tax Act is amended by
17adding Section 232 as follows:
 
18    (35 ILCS 5/232 new)
19    Sec. 232. Build Illinois Homes Tax Credit Act.
20    (a) For taxable years beginning on or after January 1,
212022, any eligible taxpayer with respect to a credit awarded
22in accordance with the Build Illinois Homes Tax Credit Act on
23or after January 1, 2021 that is named on the allocation
24schedule certification for a particular tax year is entitled

 

 

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1to a credit against the taxes imposed by subsections (a) and
2(b) of Section 201 as provided in the Build Illinois Homes Tax
3Credit Act.
4    (b) The taxpayer shall attach a copy of the allocation
5schedule certification and the State credit eligibility
6certificate issued under the Build Illinois Homes Tax Credit
7Act to the tax return on which the credits are to be claimed.
8    (c) If, during any taxable year, a taxpayer is notified of
9a recapture of a credit previously claimed on a State income
10tax return in accordance with the Build Illinois Homes Tax
11Credit Act, the tax imposed under subsections (a) and (b) of
12Section 201 for that taxpayer for that taxable year shall be
13increased. The amount of the increase shall be determined by
14(i) recomputing the Build Illinois Homes Tax Credit that would
15have been allowed for the year in which the credit was
16originally allowed by eliminating the recaptured amount from
17such computation, and (ii) subtracting that recomputed credit
18from the amount of credit previously allowed. No Build
19Illinois Homes tax Credit shall be allowed with respect to any
20credit subject to a recapture notice for any taxable year
21ending after the issuance of a recapture notice.
22    (d) This Section is exempt from the provisions of Section
23250.
 
24    Section 90-15. The Retailers' Occupation Tax Act is
25amended by changing Section 5m as follows:
 

 

 

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1    (35 ILCS 120/5m new)
2    Sec. 5m. Building materials exemption; affordable housing.
3    (a) Beginning July 1, 2022, each retailer located within a
4disproportionately impacted area who makes a qualified sale of
5building materials to be incorporated into an 100% affordable
6housing project by rehabilitation or new construction, may
7deduct receipts from those sales when calculating the tax
8imposed by this Act. For purposes of this Section, "qualified
9sale" means a sale of building materials from a business
10located in a disproportionately impacted area that will be
11incorporated an 100% affordable housing project for which an
12Affordable Housing Building Materials Exemption Certificate
13has been issued to the purchaser by the Department. A
14construction contractor or other entity shall not make
15tax-free purchases unless it has an active exemption
16certificate issued by the Department at the time of the
17purchase.
18    (b) To document the exemption allowed under this Section,
19the retailer must obtain from the purchaser the certification
20required under subsection (c), which must contain the
21Affordable Housing Building Materials Exemption Certificate
22number issued to the purchaser by the Department. The
23Department shall make the exemption certificates available
24directly to each construction contractor or other entity. The
25request for an Affordable Housing Building Materials Exemption

 

 

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1Certificate from the Department must include the following
2information:
3        (1) the name and address of the construction
4    contractor or other entity;
5        (2) the name and location or address of the 100%
6    affordable housing project;
7        (3) the estimated amount of the exemption for each
8    construction contractor or other entity for which a
9    request for exemption certificate is made, based on a
10    stated estimated average tax rate and the percentage of
11    the contract that consists of materials;
12        (4) the period of time over which supplies for the
13    project are expected to be purchased;
14        (5) statement demonstrating the commitment to provide
15    affordable units that will remain affordable 10 years
16    after being put into service; this statement must provide
17    evidence by a financing agreement with the State or unit
18    of local government, certification from a local housing
19    development authority, or other documentation as
20    determined by the Department; and
21        (6) other reasonable information as the Department may
22    require, including, but not limited to FEIN numbers, to
23    determine if the contractor or other entity, or any
24    partner, or a corporate officer, and in the case of a
25    limited liability company, any manager or member, of the
26    construction contractor or other entity, is or has been

 

 

SB2445- 17 -LRB102 17214 HLH 22672 b

1    the owner, a partner, a corporate officer, and in the case
2    of a limited liability company, a manager or member, of a
3    person that is in default for moneys due to the Department
4    under this Act or any other tax or fee Act administered by
5    the Department.
6    The Department shall issue the Affordable Housing Building
7Materials Exemption Certificate within 5 business days after
8receipt of a request to the Department. This requirement does
9not apply in circumstances where the Department, for
10reasonable cause, is unable to issue the exemption certificate
11within 5 business days. The Department may refuse to issue an
12exemption certificate under this Section if the owner, any
13partner, any corporate officer, or, in the case of a limited
14liability company, any manager or member, of the construction
15contractor or other entity is or has been the owner, a partner,
16a corporate officer, or, in the case of a limited liability
17company, a manager or member, of a person that is in default
18for moneys due to the Department under this Act or any other
19tax or fee Act administered by the Department.
20    The Department, in its discretion, may require that
21requests for Affordable Housing Building Materials Exemption
22Certificates be submitted electronically. The Department may,
23in its discretion, issue exemption certificates
24electronically. The Affordable Housing Building Materials
25Exemption Certificate number shall be designed in such a way
26that the Department can identify, from the unique number on

 

 

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1the exemption certificate issued to a given construction
2contractor or other entity, the project for which the
3exemption certificate is issued and the construction
4contractor or other entity to whom the exemption certificate
5is issued. The exemption certificate shall contain an
6expiration date, which shall be no more than 2 years after the
7date of issuance. The Department may adopt rules allowing a
8contractor or other entity to renew an exemption certificate.
9A contractor or other entity may request that the Department
10rescind an Affordable Housing Building Materials Exemption
11Certificate previously issued by the Department that has not
12yet expired.
13    If the Department determines that a construction
14contractor or other entity that was issued an Affordable
15Housing Building Materials Exemption Certificate made a
16tax-exempt purchase, as described in this Section, that was
17not eligible for exemption under this Section or allowed
18another person to make a tax-exempt purchase, as described in
19this Section, that was not eligible for exemption under this
20Section, then, in addition to any tax or other penalty
21imposed, the construction contractor or other entity is
22subject to a penalty equal to the tax that would have been paid
23by the retailer under this Act as well as any applicable local
24retailers' occupation tax on the purchase that was not
25eligible for the exemption. The Affordable Housing Building
26Materials Exemption Certificate shall contain language stating

 

 

SB2445- 19 -LRB102 17214 HLH 22672 b

1that if the construction contractor or other entity who is
2issued the exemption certificate makes a tax-exempt purchase,
3as described in this Section, that is not eligible for
4exemption under this Section or allows another person to make
5a tax-exempt purchase, as described in this Section, that is
6not eligible for exemption under this Section, then, in
7addition to any tax or other penalty imposed, the construction
8contractor or other entity is subject to a penalty equal to the
9tax that would have been paid by the retailer under this Act as
10well as any applicable local retailers' occupation tax on the
11purchase that is not eligible for the exemption.
12    (c) In addition, the retailer must obtain certification
13from the purchaser that contains:
14        (1) a statement that the building materials are being
15    purchased for a 100% affordable housing project;
16        (2) the location or address of the real estate into
17    which the building materials will be incorporated;
18        (3) a description of the building materials being
19    purchased;
20        (4) the purchaser's Affordable Housing Building
21    Materials Exemption Certificate number issued by the
22    Department; and
23        (5) the purchaser's signature and date of purchase.
24    (d) The deduction allowed by this Section for the sale of
25building materials may be limited, to the extent authorized by
26ordinance adopted after the effective date of this amendatory

 

 

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1Act of the 102nd General Assembly, by a municipality or county
2located in a disproportionately impacted area into which the
3building materials will be incorporated. The ordinance may
4neither require nor prohibit the purchase of building
5materials from any retailer or class of retailers in order to
6qualify for the exemption allowed under this Section. The
7provisions of this Section are exempt from Section 2-70.
8    (e) For the purposes of this Section, the following terms
9have the same meanings given to those terms in the Illinois
10Affordable Housing Act: "affordable housing"; "low-income
11household"; and "very low-income household".
12    In addition, the following terms have the following
13meanings:
14    "Disproportionately impacted area" means a census tract or
15comparable geographic area that meets at least one of the
16following criteria, as determined by the Department of
17Commerce and Economic Opportunity:
18        (1) the area has a poverty rate of at least 20%
19    according to the latest federal decennial census; or
20        (2) 75% or more of the children in the area
21    participate in the federal free lunch program according to
22    reported statistics from the State Board of Education; or
23        (3) at least 20% of the households in the area receive
24    assistance under the Supplemental Nutrition Assistance
25    Program; or
26        (4) the area has an average unemployment rate, as

 

 

SB2445- 21 -LRB102 17214 HLH 22672 b

1    determined by the Department of Employment Security, that
2    is more than 120% of the national unemployment average, as
3    determined by the United States Department of Labor, for a
4    period of at least 2 consecutive calendar years preceding
5    the date of the application.
6    "One hundred percent affordable housing project" means a
7residential housing project that, after rehabilitation or new
8construction will lead to 100% of the units being utilized as
9affordable housing units. These units must remain affordable
10housing for 10 years commencing from the time a unit is put
11into operation.
 
12    Section 90-20. The Property Tax Code is amended by adding
13Section 15-178 as follows:
 
14    (35 ILCS 200/15-178 new)
15    Sec. 15-178. Reduction in assessed value for affordable
16rental housing construction or rehabilitation.
17    (a) The General Assembly finds that there is a shortage of
18high quality affordable rental homes for low-income and
19very-low-income households throughout Illinois; that owners
20and developers of rental housing face significant challenges
21building newly constructed apartments or undertaking
22rehabilitation of existing properties that results in rents
23that are affordable for low-income and very-low-income
24households; and that it will help Cook County and other parts

 

 

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1of Illinois address the extreme shortage of affordable rental
2housing by developing a Statewide policy to determine the
3assessed value for newly constructed and rehabilitated
4affordable rental housing that both encourages investment and
5incentivizes property owners to keep rents affordable.
6    (b) Each chief county assessment officer shall implement
7special assessment programs to reduce the assessed value of
8all eligible newly-constructed residential real property or
9qualifying rehabilitation to all eligible existing residential
10real property in accordance with subsection (c) for 10 taxable
11years after the newly constructed residential real property or
12improvements to existing residential real property are put in
13service. Any county with less than 3,000,000 inhabitants may
14decide not to implement one or both of the special assessment
15programs defined in in subparagraph (1) of subsection (c) of
16this Section and subparagraph (2) of subsection (c) of this
17Section upon passage of an ordinance by a majority vote of the
18county board. Subsequent to a vote to opt-out of this special
19assessment program, any county with less than 3,000,000
20inhabitants may decide to implement one or both of the special
21assessment programs defined in in subparagraph (1) of
22subsection (c) of this Section and subparagraph (2) of
23subsection (c) of this Section upon passage of an ordinance by
24a majority vote of the county board. Property is eligible for
25the special assessment program if and only if all of the
26following factors have been met:

 

 

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1        (1) at the conclusion of the new construction or
2    qualifying rehabilitation, the property consists of a
3    newly-constructed multifamily building containing 7 or
4    more rental dwelling units or an existing multifamily
5    building that has undergone qualifying rehabilitation
6    resulting in 7 or more rental dwelling units; and
7        (2) the property meets the application requirements
8    defined in subsection (f).
9    (c) For those counties that are required to implement the
10special assessment program and do not opt-out of such special
11assessment program, the chief county assessment officer for
12that county shall require that residential real property is
13eligible for the special assessment program if and only if one
14of the additional factors have been met:
15        (1) except as defined in subparagraphs (E), (F), and
16    (G) of paragraph (5) of subsection (f) of this Section,
17    prior to the newly-constructed residential real property
18    or improvements to existing residential real property
19    being put in service, the owner of the residential real
20    property commits that, for a period of 10 years, at least
21    15% of the multifamily building's units will have rents as
22    defined in this Section that are at or below maximum rents
23    and are occupied by households with household incomes at
24    or below maximum income limits; or
25        (2) except as defined in subparagraphs (E), (F), and
26    (G) of paragraph (5) of subsection (f) of this Section,

 

 

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1    prior to the newly constructed residential real property
2    located in a low affordability community being put in
3    service, the owner of the residential real property
4    commits that, for a period of 30 years after the newly
5    constructed residential real property or improvements to
6    existing residential real property are put in service, at
7    least 20% of the multifamily building's units will have
8    rents as defined in this Section that are at or below
9    maximum rents and are occupied by households with
10    household incomes at or below maximum income limits.
11    If a reduction in assessed value is granted under one
12special assessment program provided for in this Section, then
13that same residential real property is not eligible for an
14additional special assessment program under this Section at
15the same time.
16    (d) The amount of the reduction in assessed value for
17residential real property meeting the conditions set forth in
18subparagraph (1) of subsection (c) shall be calculated as
19follows:
20        (1) if the owner of the residential real property
21    commits for a period of at least 10 years that at least 15%
22    but fewer than 35% of the multifamily building's units
23    have rents at or below maximum rents and are occupied by
24    households with household incomes at or below maximum
25    income limits, the assessed value of the property used to
26    calculate the tax bill shall be reduced by an amount equal

 

 

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1    to 25% of the assessed value of the property as determined
2    by the assessor for the property in the current taxable
3    year for the newly-constructed residential real property
4    or based on the improvements to an existing residential
5    real property; and
6        (2) if the owner of the residential real property
7    commits for a period of at least 10 years that at least 35%
8    of the multifamily building's units have rents at or below
9    maximum rents and are occupied by households with
10    household incomes at or below maximum income limits, the
11    assessed value of the property used to calculate the tax
12    bill shall be reduced by an amount equal to 35% of the
13    assessed value of the property as determined by the
14    assessor for the property in the current assessment year
15    for the newly constructed residential real property or
16    based on the improvements to an existing residential real
17    property.
18    (e) The amount of the reduction for residential real
19property meeting the conditions set forth in subparagraph (2)
20of subsection (c) shall be calculated as follows:
21        (1) for the first, second, and third taxable year
22    after the residential real property or improvements are
23    placed in service, the residential real property is
24    entitled to a reduction in its assessed value in an amount
25    equal to the difference between the assessed value in the
26    year for which the incentive is sought and the assessed

 

 

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1    value for the residential real property in the base year;
2        (2) for the fourth, fifth, and sixth taxable year
3    after the residential real property or improvements are
4    placed in service, the property is entitled to a reduction
5    in its assessed value in an amount equal to 80% of the
6    difference between the assessed value in the year for
7    which the incentive is sought and the assessed value for
8    the residential real property in the base year;
9        (3) for the seventh, eighth, and ninth taxable year
10    after the property or improvements are placed in service,
11    the residential real property is entitled to a reduction
12    in its assessed value in an amount equal to 60% of the
13    difference between the assessed value in the year for
14    which the incentive is sought and the assessed value for
15    the residential real property in the base year;
16        (4) for the tenth, eleventh, and twelfth taxable year
17    after the residential real property or improvements are
18    placed in service, the residential real property is
19    entitled to a reduction in its assessed value in an amount
20    equal to 40% of the difference between the assessed value
21    in the year for which the incentive is sought and the
22    assessed value for the residential real property in the
23    base year; and
24        (5) for the thirteenth through the thirtieth taxable
25    year after the residential real property or improvements
26    are placed in service, the residential real property is

 

 

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1    entitled to a reduction in its assessed value in an amount
2    equal to 20% of the difference between the assessed value
3    in the year for which the incentive is sought and the
4    assessed value for the residential real property in the
5    base year.
6    (f) Application requirements.
7        (1) In order to receive the reduced valuation under
8    this Section, the owner must submit an application
9    containing the following information to the chief county
10    assessment officer for review in the form and by the date
11    required by the chief county assessment officer:
12            (A) the owner's name;
13            (B) the postal address and permanent index number
14        or numbers of the parcel or parcels for which the owner
15        is applying to receive reduced valuation under this
16        Section;
17            (C) a deed or other instrument conveying the
18        parcel or parcels to the current owner;
19            (D) written evidence that the new construction or
20        qualifying rehabilitation has been completed with
21        respect to the residential real property, including,
22        but not limited to, copies of building permits, a
23        notarized contractor's sworn affidavit, and
24        photographs of the interior and exterior of the
25        building after new construction or rehabilitation is
26        completed;

 

 

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

 

 

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1        exceed the maximum income limits allowable for the
2        area in which the residential real property is
3        located;
4            (J) a written statement that the owner has
5        verified and retained documentation of household
6        income for every household occupying an affordable
7        unit; and
8            (K) any additional information consistent with
9        this Section as reasonably required by the chief
10        county assessment officer, including, but not limited
11        to, any information necessary to ensure compliance
12        with applicable local ordinances and to ensure the
13        owner is complying with the provisions of subparagraph
14        (F) of paragraph (4) of subsection (d) of this
15        Section.
16        (2) The application requirements contained in
17    paragraph (1) of subsection (f) are continuing
18    requirements for the duration of the reduction in assessed
19    value received and may be annually or periodically
20    verified by the chief county assessment officer for the
21    county whereby the benefit is being issued.
22        (3) In lieu of submitting an application containing
23    the information prescribed in paragraph (1) of subsection
24    (f), the chief county assessment officer may allow for
25    submission of a substantially similar certification
26    granted by the Illinois Housing Development Authority or a

 

 

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1    comparable local authority provided that the chief county
2    assessment officer independently verifies the veracity of
3    the certification with the Illinois Housing Development
4    Authority or comparable local authority.
5        (4) The chief county assessment officer shall notify
6    the owner as to whether or not the property meets the
7    requirements of this Section. If the property does not
8    meet the requirements of this Section, the chief county
9    assessment officer shall provide written notice of any
10    deficiencies to the owner, who shall then have 30 days
11    from the date of notification to provide supplemental
12    information showing compliance with this Section. The
13    chief county assessment officer shall, in its discretion,
14    grant additional time to cure any deficiency. If the owner
15    does not exercise this right to cure the deficiency, or if
16    the information submitted, in the sole judgment of the
17    chief county assessment officer, is insufficient to meet
18    the requirements of this Section, the chief county
19    assessment officer shall provide a written explanation of
20    the reasons for denial.
21        (5) The chief county assessment officer may charge a
22    reasonable application fee to offset the administrative
23    expenses associated with the program.
24        (6) The reduced valuation conferred by this Section is
25    limited as follows:
26            (A) The owner is eligible to apply for the reduced

 

 

SB2445- 31 -LRB102 17214 HLH 22672 b

1        valuation conferred by this Section beginning in the
2        first assessment year after the effective date of this
3        amendatory Act of the 102nd General Assembly through
4        December 31, 2031. If approved, the reduction will be
5        effective for the current assessment year, which will
6        be reflected in the tax bill issued in the following
7        calendar year. Owners that are approved for the
8        reduced valuation under this Section before December
9        31, 2031 shall, at minimum, be eligible for annual
10        renewal of the reduced valuation during an initial
11        10-year period if annual certification requirements
12        are met for each of the 10 years, as described in
13        subparagraph (B) of paragraph (4) of subsection (d) of
14        this Section until December 31, 2041.
15            (B) Property receiving a reduction outlined in
16        paragraph (1) of subsection (c) of this Section shall
17        continue to be eligible for an initial period of up to
18        10 years if annual certification requirements are met
19        for each of the 10 years, but shall be extended for up
20        to 2 additional 10-year periods with annual renewals
21        if the owner continues to meet the requirements of
22        this Section, including annual certifications, and
23        excluding the requirements regarding new construction
24        or qualifying rehabilitation defined in subparagraph
25        (D) of paragraph (1) of this subsection.
26            (C) The annual certification materials in the year

 

 

SB2445- 32 -LRB102 17214 HLH 22672 b

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

 

 

SB2445- 33 -LRB102 17214 HLH 22672 b

1        the owner first receives this reduced valuation.
2            (F) The owner may apply for the reduced valuation
3        within 2 years after the newly-constructed residential
4        real property or improvements to existing residential
5        real property are put in service. However, the initial
6        10 year eligibility period shall be reduced for the
7        number of years between the placed in service date and
8        the date the owner first receives this reduced
9        valuation.
10            (G) Owners of a multifamily building receiving a
11        reduced valuation through the Cook County Class 9
12        program during the year in which this amendatory Act
13        of the 102nd General Assembly takes effect shall be
14        deemed automatically eligible for the reduced
15        valuation defined in this Section in terms of meeting
16        the criteria for new construction or substantial
17        rehabilitation for a specific multifamily building
18        regardless of when the newly-constructed residential
19        real property or improvements to existing residential
20        real property were put in service. If a Cook County
21        Class 9 owner had Class 9 status revoked on or after
22        January 1, 2017 but can provide documents sufficient
23        to prove that the revocation was in error or any
24        deficiencies leading to the revocation have been
25        cured, the chief county assessment officer may deem
26        the owner to be eligible. However, owners may not

 

 

SB2445- 34 -LRB102 17214 HLH 22672 b

1        receive both the reduced valuation under this Section
2        and the reduced valuation under the Cook County Class
3        9 program in any single assessment year. In addition,
4        the number of years during which an owner has
5        participated in the Class 9 program shall count
6        against the 3 10-year periods of eligibility for the
7        reduced valuation as defined in subparagraph (1) of
8        subsection (c) of this Section.
9            (H) At the completion of the assessment reduction
10        period described in this Section, the entire parcel
11        will be assessed as otherwise provided by law.
12    (e) For the purposes of this Section,
13    "Affordable units" means units that have rents that do not
14exceed the maximum rents as defined in this Section.
15    "Household income" includes the annual income for all the
16people who occupy a housing unit that is anticipated to be
17received from a source outside of the family during the
1812-month period following admission or the annual
19recertification, including related family members and all the
20unrelated people who share the housing unit. Household income
21includes the sum total of the following income sources: wages,
22salaries and tips before any payroll deductions; net business
23income; interest and dividends; payments in lieu of earnings,
24such as unemployment and disability compensation, worker's
25compensation and severance pay; Social Security income,
26including lump sum payments; payments from insurance policies,

 

 

SB2445- 35 -LRB102 17214 HLH 22672 b

1annuities, pensions, disability benefits and other types of
2periodic payments, alimony, child support, and other regular
3monetary contributions; and public assistance, except for
4assistance from the Supplemental Nutrition Assistance Program
5(SNAP). "Household income" does not include: earnings of
6children under age 18; temporary income such as cash gifts;
7reimbursement for medical expenses; lump sums from
8inheritance, insurance payments, settlements for personal or
9property losses; student financial assistance paid directly to
10the student or to an educational institution; foster child
11care payments; receipts from government-funded training
12programs; assistance from the Supplemental Nutrition
13Assistance Program (SNAP).
14    "Low affordability community" means (1) a municipality or
15jurisdiction in which 40% or less of its total year-round
16housing units are affordable, as determined by the Illinois
17Housing Development Authority during the exemption
18determination process under the Affordable Housing Planning
19and Appeal Act; or (2) a jurisdiction located in a
20municipality with 1,000,000 or more inhabitants that has been
21designated as a low affordability community by passage of a
22local ordinance by that municipality, specifying the census
23tract or property by permanent index number or numbers.
24    "Maximum income limits" means the maximum regular income
25limits for 60% of area median income for the geographic area in
26which the multifamily building is located for multifamily

 

 

SB2445- 36 -LRB102 17214 HLH 22672 b

1programs as determined by the United States Department of
2Housing and Urban Development and published annually by the
3Illinois Housing Development Authority.
4    "Maximum rent" means the maximum regular rent for 60% of
5the area median income for the geographic area in which the
6multifamily building is located for multifamily programs as
7determined by the United States Department of Housing and
8Urban Development and published annually by the Illinois
9Housing Development Authority. To be eligible for the reduced
10valuation defined in this Section, maximum rents are to be
11consistent with the Illinois Housing Development Authority's
12rules; or if the owner is leasing an affordable unit to a
13household with an income at or below the maximum income limit
14who is participating in qualifying income-based rental subsidy
15program, "maximum rent" means the maximum rents allowable
16under the guidelines of the qualifying income-based rental
17subsidy program.
18    "Qualifying income-based rental subsidy program" means a
19Housing Choice Voucher issued by a housing authority under
20Section 8 of the United States Housing Act of 1937, a tenant
21voucher converted to a project-based voucher by a housing
22authority or any other program administered or funded by a
23housing authority, the Illinois Housing Development Authority,
24another State agency, a federal agency, or a unit of local
25government where participation is limited to households with
26incomes at or below the maximum income limits as defined in

 

 

SB2445- 37 -LRB102 17214 HLH 22672 b

1this Section and the tenants' portion of the rent payment is
2based on a percentage of their income or a flat amount that
3does not exceed the maximum rent as defined in this Section.
4    "Qualifying rehabilitation" means, at a minimum,
5compliance with local building codes and the replacement or
6renovation of at least 2 primary building systems to be
7approved for the reduced valuation under paragraph (1) of
8subsection (c) of this Section and at least 5 primary building
9systems to be approved for the reduced valuation under
10paragraph (2) of subsection (c) of this Section. Although the
11cost of each primary building system may vary, to be approved
12for the reduced valuation under paragraph (1) of subsection
13(c) of this Section, the combined expenditure for making the
14building compliant with local codes and replacing primary
15building systems must be at least $8 per square foot for work
16completed between January 1 of the year in which this
17amendatory Act of the 102nd General Assembly takes effect and
18December 31 of the year in which this amendatory Act of the
19102nd General Assembly takes effect and, in subsequent years,
20$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 reduced valuation under
23paragraph (2) of subsection (c) of this Section, the combined
24expenditure for making the building compliant with local codes
25and replacing primary building systems must be at least $60
26per square foot for work completed between January 1 of the

 

 

SB2445- 38 -LRB102 17214 HLH 22672 b

1year that this amendatory Act of the 102nd General Assembly
2becomes effective and December 31 of the year that this
3amendatory Act of the 102nd General Assembly becomes effective
4and, in subsequent years, $60 adjusted by the Consumer Price
5Index for All Urban Consumers, as published annually by the
6U.S. Department of Labor. "Primary building systems", together
7with their related rehabilitations, specifically approved for
8this program are:
9        (1) Electrical. All electrical work must comply with
10    applicable codes; it may consist of a combination of any
11    of the following alternatives:
12            (A) installing individual equipment and appliance
13        branch circuits as required by code (the minimum being
14        a kitchen appliance branch circuit);
15            (B) installing a new emergency service, including
16        emergency lighting with all associated conduits and
17        wiring;
18            (C) rewiring all existing feeder conduits ("home
19        runs") from the main switchgear to apartment area
20        distribution panels;
21            (D) installing new in-wall conduits for
22        receptacles, switches, appliances, equipment, and
23        fixtures;
24            (E) replacing power wiring for receptacles,
25        switches, appliances, equipment, and fixtures;
26            (F) installing new light fixtures throughout the

 

 

SB2445- 39 -LRB102 17214 HLH 22672 b

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

 

 

SB2445- 40 -LRB102 17214 HLH 22672 b

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

 

 

SB2445- 41 -LRB102 17214 HLH 22672 b

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

 

 

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1        interior.
2        (9) Health and safety.
3            (A) install or replace fire suppression systems;
4            (B) install or replace security systems; or
5            (C) environmental remediation of lead-based paint,
6        asbestos, leaking underground storage tanks, or radon.
7        (10) Energy conservation improvements undertaken to
8    limit the amount of solar energy absorbed by a building's
9    roof or to reduce energy use for the property, including,
10    but not limited to, any of the following activities:
11            (A) installing or replacing reflective roof
12        coatings (flat roofs);
13            (B) installing or replacing R-49 roof insulation;
14            (C) installing or replacing R-19 perimeter wall
15        insulation;
16            (D) installing or replacing insulated entry doors;
17            (E) installing or replacing Low E, insulated
18        windows;
19            (F) installing or replacing WaterSense labeled
20        plumbing fixtures;
21            (G) installing or replacing 90% or better sealed
22        combustion heating systems;
23            (H) installing Energy Star hot water heaters;
24            (I) installing or replacing mechanical ventilation
25        to exterior for kitchens and baths;
26            (J) installing or replacing Energy Star

 

 

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

 

 

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1    violations, up to a maximum of $2 per square foot, to meet
2    the qualifying rehabilitation requirements.
 
3    Section 90-25. The Illinois Insurance Code is amended by
4changing Sections 409 and 444 as follows:
 
5    (215 ILCS 5/409)  (from Ch. 73, par. 1021)
6    Sec. 409. Annual privilege tax payable by companies.
7    (1) As of January 1, 1999 for all health maintenance
8organization premiums written; as of July 1, 1998 for all
9premiums written as accident and health business, voluntary
10health service plan business, dental service plan business, or
11limited health service organization business; and as of
12January 1, 1998 for all other types of insurance premiums
13written, every company doing any form of insurance business in
14this State, including, but not limited to, every risk
15retention group, and excluding all fraternal benefit
16societies, all farm mutual companies, all religious charitable
17risk pooling trusts, and excluding all statutory residual
18market and special purpose entities in which companies are
19statutorily required to participate, whether incorporated or
20otherwise, shall pay, for the privilege of doing business in
21this State, to the Director for the State treasury a State tax
22equal to 0.5% of the net taxable premium written, together
23with any amounts due under Section 444 of this Code, except
24that the tax to be paid on any premium derived from any

 

 

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1accident and health insurance or on any insurance business
2written by any company operating as a health maintenance
3organization, voluntary health service plan, dental service
4plan, or limited health service organization shall be equal to
50.4% of such net taxable premium written, together with any
6amounts due under Section 444. Upon the failure of any company
7to pay any such tax due, the Director may, by order, revoke or
8suspend the company's certificate of authority after giving 20
9days written notice to the company, or commence proceedings
10for the suspension of business in this State under the
11procedures set forth by Section 401.1 of this Code. The gross
12taxable premium written shall be the gross amount of premiums
13received on direct business during the calendar year on
14contracts covering risks in this State, except premiums on
15annuities, premiums on which State premium taxes are
16prohibited by federal law, premiums paid by the State for
17health care coverage for Medicaid eligible insureds as
18described in Section 5-2 of the Illinois Public Aid Code,
19premiums paid for health care services included as an element
20of tuition charges at any university or college owned and
21operated by the State of Illinois, premiums on group insurance
22contracts under the State Employees Group Insurance Act of
231971, and except premiums for deferred compensation plans for
24employees of the State, units of local government, or school
25districts. The net taxable premium shall be the gross taxable
26premium written reduced only by the following:

 

 

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1        (a) the amount of premiums returned thereon which
2    shall be limited to premiums returned during the same
3    preceding calendar year and shall not include the return
4    of cash surrender values or death benefits on life
5    policies including annuities;
6        (b) dividends on such direct business that have been
7    paid in cash, applied in reduction of premiums or left to
8    accumulate to the credit of policyholders or annuitants.
9    In the case of life insurance, no deduction shall be made
10    for the payment of deferred dividends paid in cash to
11    policyholders on maturing policies; dividends left to
12    accumulate to the credit of policyholders or annuitants
13    shall be included as gross taxable premium written when
14    such dividend accumulations are applied to purchase
15    paid-up insurance or to shorten the endowment or premium
16    paying period.
17    (2) The annual privilege tax payment due from a company
18under subsection (4) of this Section may be reduced by: (a) the
19excess amount, if any, by which the aggregate income taxes
20paid by the company, on a cash basis, for the preceding
21calendar year under Sections 601 and 803 of the Illinois
22Income Tax Act exceed 1.5% of the company's net taxable
23premium written for that prior calendar year, as determined
24under subsection (1) of this Section; and (b) the amount of any
25fire department taxes paid by the company during the preceding
26calendar year under Section 11-10-1 of the Illinois Municipal

 

 

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1Code. Any deductible amount or offset allowed under items (a)
2and (b) of this subsection for any calendar year will not be
3allowed as a deduction or offset against the company's
4privilege tax liability for any other taxing period or
5calendar year.
6    (3) If a company survives or was formed by a merger,
7consolidation, reorganization, or reincorporation, the
8premiums received and amounts returned or paid by all
9companies party to the merger, consolidation, reorganization,
10or reincorporation shall, for purposes of determining the
11amount of the tax imposed by this Section, be regarded as
12received, returned, or paid by the surviving or new company.
13    (4)(a) All companies subject to the provisions of this
14Section shall make an annual return for the preceding calendar
15year on or before March 15 setting forth such information on
16such forms as the Director may reasonably require. Payments of
17quarterly installments of the taxpayer's total estimated tax
18for the current calendar year shall be due on or before April
1915, June 15, September 15, and December 15 of such year, except
20that all companies transacting insurance in this State whose
21annual tax for the immediately preceding calendar year was
22less than $5,000 shall make only an annual return. Failure of a
23company to make the annual payment, or to make the quarterly
24payments, if required, of at least 25% of either (i) the total
25tax paid during the previous calendar year or (ii) 80% of the
26actual tax for the current calendar year shall subject it to

 

 

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1the penalty provisions set forth in Section 412 of this Code.
2    (b) Notwithstanding the foregoing provisions, no annual
3return shall be required or made on March 15, 1998, under this
4subsection. For the calendar year 1998:
5        (i) each health maintenance organization shall have no
6    estimated tax installments;
7        (ii) all companies subject to the tax as of July 1,
8    1998 as set forth in subsection (1) shall have estimated
9    tax installments due on September 15 and December 15 of
10    1998 which installments shall each amount to no less than
11    one-half of 80% of the actual tax on its net taxable
12    premium written during the period July 1, 1998, through
13    December 31, 1998; and
14        (iii) all other companies shall have estimated tax
15    installments due on June 15, September 15, and December 15
16    of 1998 which installments shall each amount to no less
17    than one-third of 80% of the actual tax on its net taxable
18    premium written during the calendar year 1998.
19    In the year 1999 and thereafter all companies shall make
20annual and quarterly installments of their estimated tax as
21provided by paragraph (a) of this subsection.
22    (5) In addition to the authority specifically granted
23under Article XXV of this Code, the Director shall have such
24authority to adopt rules and establish forms as may be
25reasonably necessary for purposes of determining the
26allocation of Illinois corporate income taxes paid under

 

 

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1subsections (a) through (d) of Section 201 of the Illinois
2Income Tax Act amongst members of a business group that files
3an Illinois corporate income tax return on a unitary basis,
4for purposes of regulating the amendment of tax returns, for
5purposes of defining terms, and for purposes of enforcing the
6provisions of Article XXV of this Code. The Director shall
7also have authority to defer, waive, or abate the tax imposed
8by this Section if in his opinion the company's solvency and
9ability to meet its insured obligations would be immediately
10threatened by payment of the tax due.
11    (6) This Section is subject to the provisions of Section
1210 of the New Markets Development Program Act.
13    (7) This Section is subject to the provisions of the Build
14Illinois Homes Tax Credit Act. For taxable years beginning on
15or after January 1, 2022, qualified taxpayers are entitled to
16claim credits awarded in accordance with the Build Illinois
17Homes Tax Credit on or after January 1, 2021 against the taxes
18imposed by this Section as provided in the Build Illinois
19Homes Tax Credit Act. Companies claiming a credit under the
20Build Illinois Homes Tax Credit Act are not required to pay any
21additional tax as a result of claiming the credit. The credit
22may fully offset any amounts imposed under this Section.
23(Source: P.A. 97-813, eff. 7-13-12; 98-1169, eff. 1-9-15.)
 
24    (215 ILCS 5/444)  (from Ch. 73, par. 1056)
25    Sec. 444. Retaliation.

 

 

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1    (1) Whenever the existing or future laws of any other
2state or country shall require of companies incorporated or
3organized under the laws of this State as a condition
4precedent to their doing business in such other state or
5country, compliance with laws, rules, regulations, and
6prohibitions more onerous or burdensome than the rules and
7regulations imposed by this State on foreign or alien
8companies, or shall require any deposit of securities or other
9obligations in such state or country, for the protection of
10policyholders or otherwise or require of such companies or
11agents thereof or brokers the payment of penalties, fees,
12charges, or taxes greater than the penalties, fees, charges,
13or taxes required in the aggregate for like purposes by this
14Code or any other law of this State, of foreign or alien
15companies, agents thereof or brokers, then such laws, rules,
16regulations, and prohibitions of said other state or country
17shall apply to companies incorporated or organized under the
18laws of such state or country doing business in this State, and
19all such companies, agents thereof, or brokers doing business
20in this State, shall be required to make deposits, pay
21penalties, fees, charges, and taxes, in amounts equal to those
22required in the aggregate for like purposes of Illinois
23companies doing business in such state or country, agents
24thereof or brokers. Whenever any other state or country shall
25refuse to permit any insurance company incorporated or
26organized under the laws of this State to transact business

 

 

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1according to its usual plan in such other state or country, the
2director may, if satisfied that such company of this State is
3solvent, properly managed, and can operate legally under the
4laws of such other state or country, forthwith suspend or
5cancel the license of every insurance company doing business
6in this State which is incorporated or organized under the
7laws of such other state or country to the extent that it
8insures in this State against any of the risks or hazards which
9are sought to be insured against by the company of this State
10in such other state or country.
11    (2) The provisions of this Section shall not apply to
12residual market or special purpose assessments or guaranty
13fund or guaranty association assessments, both under the laws
14of this State and under the laws of any other state or country,
15and any tax offset or credit for any such assessment shall, for
16purposes of this Section, be treated as a tax paid both under
17the laws of this State and under the laws of any other state or
18country.
19    (3) The terms "penalties", "fees", "charges", and "taxes"
20in subsection (1) of this Section shall include: the
21penalties, fees, charges, and taxes collected on a cash basis
22under State law and referenced within Article XXV exclusive of
23any items referenced by subsection (2) of this Section, but
24including any tax offset allowed under Section 531.13 of this
25Code; the aggregate Illinois corporate income taxes paid under
26Sections 601 and 803 of the Illinois Income Tax Act during the

 

 

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1calendar year for which the retaliatory tax calculation is
2being made, less the recapture of any Illinois corporate
3income tax cash refunds to the extent that the amount of tax
4refunded was reported as part of the Illinois basis in the
5calculation of the retaliatory tax for a prior tax year,
6provided that such recaptured refund shall not exceed the
7amount necessary for equivalence of the Illinois basis with
8the state of incorporation basis in such tax year, and after
9any tax offset allowed under Section 531.13 of this Code;
10income or personal property taxes imposed by other states or
11countries; penalties, fees, charges, and taxes of other states
12or countries imposed for purposes like those of the penalties,
13fees, charges, and taxes specified in Article XXV of this Code
14exclusive of any item referenced in subsection (2) of this
15Section; and any penalties, fees, charges, and taxes required
16as a franchise, privilege, or licensing tax for conducting the
17business of insurance whether calculated as a percentage of
18income, gross receipts, premium, or otherwise.
19    (4) Nothing contained in this Section or Section 409 or
20Section 444.1 is intended to authorize or expand any power of
21local governmental units or municipalities to impose taxes,
22fees, or charges.
23    (5) This Section is subject to the provisions of Section
2410 of the New Markets Development Program Act.
25    (6) This Section is subject to the provisions of the Build
26Illinois Homes Tax Credit Act. For taxable years beginning on

 

 

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1or after January 1, 2022, qualified taxpayers are entitled to
2claim credits awarded in accordance with the Build Illinois
3Homes Tax Credit on or after January 1, 2021 against the taxes
4imposed by this Section as provided in the Build Illinois
5Homes Tax Credit Act. Companies claiming a credit under the
6Build Illinois Homes Tax Credit Act are not required to pay any
7additional tax as a result of claiming the credit. The credit
8may fully offset any amounts imposed under this Section.
9(Source: P.A. 98-1169, eff. 1-9-15.)
 
10    Section 90-30. The Affordable Housing Planning and Appeal
11Act is amended by changing Sections 15, 25, and 50 and by
12adding Section 70 as follows:
 
13    (310 ILCS 67/15)
14    Sec. 15. Definitions. As used in this Act:
15    "Affordable housing" means housing that has a value or
16cost or rental amount that is within the means of a household
17that may occupy moderate-income or low-income housing. In the
18case of owner-occupied dwelling units, housing that is
19affordable means housing in which mortgage, amortization,
20taxes, insurance, and condominium or association fees, if any,
21constitute no more than 30% of the gross annual household
22income for a household of the size that may occupy the unit. In
23the case of dwelling units for rent, housing that is
24affordable means housing for which the rent, any required

 

 

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1parking, maintenance, landlord-imposed fees, and utilities
2constitute no more than 30% of the gross annual household
3income for a household of the size that may occupy the unit.
4    "Affordable housing developer" means a nonprofit entity,
5limited equity cooperative or public agency, or private
6individual, firm, corporation, or other entity seeking to
7build an affordable housing development.
8    "Affordable housing development" means (i) any housing
9that is subsidized by the federal or State government or (ii)
10any housing in which at least 20% of the dwelling units are
11subject to covenants or restrictions that require that the
12dwelling units be sold or rented at prices that preserve them
13as affordable housing for a period of at least 15 years, in the
14case of owner-occupied housing, and at least 30 years, in the
15case of rental housing.
16    "Approving authority" means the governing body of the
17county or municipality.
18    "Area median household income" means the median household
19income adjusted for family size for applicable income limit
20areas as determined annually by the federal Department of
21Housing and Urban Development under Section 8 of the United
22States Housing Act of 1937.
23    "Community land trust" means a private, not-for-profit
24corporation organized exclusively for charitable, cultural,
25and other purposes and created to acquire and own land for the
26benefit of the local government, including the creation and

 

 

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1preservation of affordable housing.
2    "Development" means any building, construction,
3renovation, or excavation or any material change in any
4structure or land, or change in the use of such structure or
5land, that results in a net increase in the number of dwelling
6units in a structure or on a parcel of land by more than one
7dwelling unit.
8    "Exempt local government" means any local government in
9which at least 10% of its total year-round housing units are
10affordable, as determined by the Illinois Housing Development
11Authority pursuant to Section 20 of this Act; or any
12municipality under 1,000 population.
13    "Household" means the person or persons occupying a
14dwelling unit.
15    "Housing trust fund" means a separate fund, either within
16a local government or between local governments pursuant to
17intergovernmental agreement, established solely for the
18purposes authorized in subsection (d) of Section 25,
19including, without limitation, the holding and disbursing of
20financial resources to address the affordable housing needs of
21individuals or households that may occupy low-income or
22moderate-income housing.
23    "Local government" means a county or municipality.
24    "Low-income housing" means housing that is affordable,
25according to the federal Department of Housing and Urban
26Development, for either home ownership or rental, and that is

 

 

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1occupied, reserved, or marketed for occupancy by households
2with a gross household income that does not exceed 50% of the
3area median household income.
4    "Moderate-income housing" means housing that is
5affordable, according to the federal Department of Housing and
6Urban Development, for either home ownership or rental, and
7that is occupied, reserved, or marketed for occupancy by
8households with a gross household income that is greater than
950% but does not exceed 80% of the area median household
10income.
11    "Non-appealable local government requirements" means all
12essential requirements that protect the public health and
13safety, including any local building, electrical, fire, or
14plumbing code requirements or those requirements that are
15critical to the protection or preservation of the environment.
16(Source: P.A. 98-287, eff. 8-9-13.)
 
17    (310 ILCS 67/25)
18    Sec. 25. Affordable housing plan.
19    (a) Prior to April 1, 2005, all non-exempt local
20governments must approve an affordable housing plan. Any local
21government that is determined by the Illinois Housing
22Development Authority under Section 20 to be non-exempt for
23the first time based on the recalculation of U.S. Census
24Bureau data after 2010 shall have 18 months from the date of
25notification of its non-exempt status to approve an affordable

 

 

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1housing plan under this Act. On and after the effective date of
2this amendatory Act of the 102nd General Assembly, an
3affordable housing plan, or any revision thereof, shall not be
4adopted by a non-exempt local government until notice and
5opportunity for public hearing have first been afforded.
6    (b) For the purposes of this Act, the affordable housing
7plan shall consist of at least the following:
8        (i) a statement of the total number of affordable
9    housing units that are necessary to exempt the local
10    government from the operation of this Act as defined in
11    Section 15 and Section 20;
12        (ii) an identification of lands within the
13    jurisdiction that are most appropriate for the
14    construction of affordable housing and of existing
15    structures most appropriate for conversion to, or
16    rehabilitation for, affordable housing, including a
17    consideration of lands and structures of developers who
18    have expressed a commitment to provide affordable housing
19    and lands and structures that are publicly or
20    semi-publicly owned;
21        (iii) incentives that local governments may provide
22    for the purpose of attracting affordable housing to their
23    jurisdiction; and
24        (iv) a goal of a minimum of 15% of all new development
25    or redevelopment within the local government that would be
26    defined as affordable housing in this Act; or a minimum of

 

 

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1    a 3 percentage point increase in the overall percentage of
2    affordable housing within its jurisdiction, as described
3    in subsection (b) of Section 20 of this Act; or a minimum
4    of a total of 10% affordable housing within its
5    jurisdiction as described in subsection (b) of Section 20
6    of this Act. These goals may be met, in whole or in part,
7    through the creation of affordable housing units under
8    intergovernmental agreements as described in subsection
9    (e) of this Section.
10    (c) Within 60 days after the adoption of an affordable
11housing plan or revisions to its affordable housing plan, the
12local government must submit a copy of that plan to the
13Illinois Housing Development Authority.
14    (d) In order to promote the goals of this Act and to
15maximize the creation, establishment, or preservation of
16affordable housing throughout the State of Illinois, a local
17government, whether exempt or non-exempt under this Act, may
18adopt the following measures to address the need for
19affordable housing:
20        (1) Local governments may individually or jointly
21    create or participate in a housing trust fund or otherwise
22    provide funding or support for the purpose of supporting
23    affordable housing, including, without limitation, to
24    support the following affordable housing activities:
25            (A) Housing production, including, without
26        limitation, new construction, rehabilitation, and

 

 

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1        adaptive re-use.
2            (B) Acquisition, including, without limitation,
3        land, single-family homes, multi-unit buildings, and
4        other existing structures that may be used in whole or
5        in part for residential use.
6            (C) Rental payment assistance.
7            (D) Home-ownership purchase assistance.
8            (E) Preservation of existing affordable housing.
9            (F) Weatherization.
10            (G) Emergency repairs.
11            (H) Housing related support services, including
12        homeownership education and financial counseling.
13            (I) Grants or loans to not-for-profit
14        organizations engaged in addressing the affordable
15        housing needs of low-income and moderate-income
16        households.
17        Local governments may authorize housing trust funds to
18    accept and utilize funds, property, and other resources
19    from all proper and lawful public and private sources so
20    long as those funds are used solely for addressing the
21    affordable housing needs of individuals or households that
22    may occupy low-income or moderate-income housing.
23        (2) A local government may create a community land
24    trust, which may: acquire developed or undeveloped
25    interests in real property and hold them for affordable
26    housing purposes; convey such interests under long-term

 

 

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1    leases, including ground leases; convey such interests for
2    affordable housing purposes; and retain an option to
3    reacquire any such real property interests at a price
4    determined by a formula ensuring that such interests may
5    be utilized for affordable housing purposes.
6        (3) A local government may use its zoning powers to
7    require the creation and preservation of affordable
8    housing as authorized under Section 5-12001 of the
9    Counties Code and Section 11-13-1 of the Illinois
10    Municipal Code.
11        (4) A local government may accept donations of money
12    or land for the purpose of addressing the affordable
13    housing needs of individuals or households that may occupy
14    low-income or moderate-income housing. These donations may
15    include, without limitation, donations of money or land
16    from persons, as long as the donations are demonstrably
17    used to preserve, create, or subsidize low-income housing
18    or moderate-income housing within the jurisdiction in lieu
19    of building affordable housing.
20    (e) In order to encourage regional cooperation and the
21maximum creation of affordable housing in areas lacking such
22housing in the State of Illinois, any non-exempt local
23government may enter into intergovernmental agreements under
24subsection (e) of Section 25 with local governments within 10
25miles of its corporate boundaries in order to create
26affordable housing units to meet the goals of this Act. A

 

 

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1non-exempt local government may not enter into an
2intergovernmental agreement, however, with any local
3government that contains more than 25% affordable housing as
4determined under Section 20 of this Act. All intergovernmental
5agreements entered into to create affordable housing units to
6meet the goals of this Act must also specify the basis for
7determining how many of the affordable housing units created
8will be credited to each local government participating in the
9agreement for purposes of complying with this Act. All
10intergovernmental agreements entered into to create affordable
11housing units to meet the goals of this Act must also specify
12the anticipated number of newly created affordable housing
13units that are to be credited to each local government
14participating in the agreement for purposes of complying with
15this Act. In specifying how many affordable housing units will
16be credited to each local government, the same affordable
17housing unit may not be counted by more than one local
18government.
19    (f) To enforce compliance with the provisions of this
20Section, and to encourage local governments to submit their
21affordable housing plans to the Illinois Housing Development
22Authority in a timely manner, the Illinois Housing Development
23Authority shall notify any local government and may notify the
24Office of the Attorney General that the local government is in
25violation of State law if the Illinois Housing Development
26Authority finds that the affordable housing plan submitted is

 

 

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1not in substantial compliance with this Section or that the
2local government failed to submit an affordable housing plan.
3The Attorney General may enforce this provision of the Act by
4an action for mandamus or injunction or by means of other
5appropriate relief.
6(Source: P.A. 98-287, eff. 8-9-13.)
 
7    (310 ILCS 67/50)
8    Sec. 50. Housing Appeals Board.
9    (a) Prior to January 1, 2008, a Housing Appeals Board
10shall be created consisting of 7 members appointed by the
11Governor as follows:
12        (1) a retired circuit judge or retired appellate
13    judge, who shall act as chairperson;
14        (2) a zoning board of appeals member;
15        (3) a planning board member;
16        (4) a mayor or municipal council or board member;
17        (5) a county board member;
18        (6) an affordable housing developer; and
19        (7) an affordable housing advocate.
20    In addition, the Chairman of the Illinois Housing
21Development Authority, ex officio, shall serve as a non-voting
22member. No more than 4 of the appointed members may be from the
23same political party. Appointments under items (2), (3), and
24(4) shall be from local governments that are not exempt under
25this Act.

 

 

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1    (b) Initial terms of 4 members designated by the Governor
2shall be for 2 years. Initial terms of 3 members designated by
3the Governor shall be for one year. Thereafter, members shall
4be appointed for terms of 2 years. After a member's term
5expires, the member shall continue to serve until a successor
6is appointed. There shall be no limit to the number of terms an
7appointee may serve. A member shall receive no compensation
8for his or her services, but shall be reimbursed by the State
9for all reasonable expenses actually and necessarily incurred
10in the performance of his or her official duties. The board
11shall hear all petitions for review filed under this Act and
12shall conduct all hearings in accordance with the rules and
13regulations established by the chairperson. The Illinois
14Housing Development Authority shall provide space and clerical
15and other assistance that the Board may require.
16    (c) (Blank).
17    (d) Any vacancies in the Housing Appeals Board shall be
18filled within 90 days of the vacancy.
19(Source: P.A. 98-287, eff. 8-9-13.)
 
20    (310 ILCS 67/70 new)
21    Sec. 70. Home rule application. Unless otherwise provided
22under this Act or otherwise in accordance with State law, a
23unit of local government, including a home rule unit, or any
24non-home rule county within the unincorporated territory of
25the county, may not regulate the activities described in this

 

 

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1Act in a manner more restrictive than the regulation of those
2activities by the State under this Act. This Section is a
3limitation under subsection (i) of Section 6 of Article VII of
4the Illinois Constitution on the concurrent exercise by home
5rule units of powers and functions exercised by the State.
 
6
Article 99. Effective Date

 
7    Section 99-99. Effective date. This Act takes effect upon
8becoming law.