Illinois General Assembly - Full Text of SB3529
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Full Text of SB3529  101st General Assembly




State of Illinois
2019 and 2020


Introduced 2/14/2020, by Sen. Sara Feigenholtz


35 ILCS 200/15-178 new

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

LRB101 17533 HLH 70069 b






SB3529LRB101 17533 HLH 70069 b

1    AN ACT concerning revenue.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Property Tax Code is amended by adding
5Section 15-178 as follows:
6    (35 ILCS 200/15-178 new)
7    Sec. 15-178. Reduction in assessed value for affordable
8rental housing construction or rehabilitation.
9    (a) The General Assembly finds that there is a shortage of
10high quality affordable rental homes for low-income and
11very-low-income households throughout Illinois; that owners
12and developers of rental housing face significant challenges
13building newly constructed apartments or undertaking
14rehabilitation of existing properties that result in rents that
15are affordable for low-income and very-low-income households;
16and that it will help Cook County and other parts of Illinois
17address the extreme shortage of affordable rental housing by
18developing a Statewide policy to determine the assessed value
19for newly constructed and rehabilitated affordable rental
20housing that both encourages investment and incentivizes
21property owners to keep rents affordable.
22    (b) Any county with 3,000,000 or more inhabitants shall
23implement a special assessment program to reduce the equalized



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1assessed value of all eligible newly-constructed residential
2real property or qualifying rehabilitation to all eligible
3existing residential real property in accordance with
4subsection (c) for 10 taxable years after the newly constructed
5residential real property or improvements to existing
6residential real property are put in service. Any county with
7less than 3,000,000 inhabitants may decide not to implement
8this special assessment program upon passage of an ordinance by
9a majority vote of the county board. Subsequent to a vote to
10opt-out of this special assessment program, any county with
11less than 3,000,000 inhabitants may decide to implement this
12special assessment program upon passage of an ordinance by a
13majority vote of the county board. Property is eligible for the
14special assessment program if and only if all of the following
15factors have been met:
16        (1) the property consists of a newly-constructed
17    multifamily building containing 7 or more rental dwelling
18    units or an existing multifamily building that has
19    undergone qualifying rehabilitation containing 7 or more
20    rental dwelling units;
21        (2) except as defined in subparagraphs (E), (F), and
22    (G) of paragraph (4) of subsection (d) of this Section,
23    prior to the newly-constructed residential real property
24    or improvements to existing residential real property
25    being put in service, the owner of the residential real
26    property commits that, for a period of 10 years, at least



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



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1    bill shall be reduced by an amount equal to 35% of the
2    assessed value of the property as initially determined by
3    the assessor for the property in the current assessment
4    year for the newly constructed residential real property or
5    based on the improvements to an existing residential real
6    property.
7    (d) Application requirements.
8        (1) In order to receive the reduced valuation under
9    this Section, the owner must submit an application
10    containing the following information to the chief county
11    assessment officer for review in the form required by the
12    chief county assessment officer:
13            (A) the owner's name;
14            (B) the postal address and permanent index number
15        of the parcel;
16            (C) a deed or other instrument conveying the parcel
17        to the current owner;
18            (D) written evidence that the new construction or
19        qualifying rehabilitation has been completed with
20        respect to the residential real property, including,
21        but not limited to, copies of building permits, a
22        notarized contractor's sworn affidavit, and
23        photographs of the interior and exterior of the
24        building after new construction or rehabilitation is
25        completed;
26            (E) written evidence that the residential real



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



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



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1    expenses associated with the program.
2        (4) The reduced valuation conferred by this Section is
3    limited as follows:
4            (A) The owner is eligible to apply for the reduced
5        valuation conferred by this Section beginning in the
6        first assessment cycle after the effective date of this
7        amendatory Act of the 101st General Assembly through
8        December 31, 2029. If approved, the reduction will be
9        effective for the current assessment year, which will
10        be reflected in the tax bill issued in the following
11        calendar year. Owners that are approved for the reduced
12        valuation under this Section before December 31, 2029
13        shall, at minimum, be eligible for annual renewal of
14        the reduced valuation during an initial 10-year period
15        if annual certification requirements are met for each
16        of the 10 years, as described in subparagraph (B) of
17        paragraph (4) of subsection (d) of this Section until
18        December 31, 2039.
19            (B) Property receiving a reduction outlined in
20        this Section shall continue to be eligible for an
21        initial period of up to 10 years if annual
22        certification requirements are met for each of the 10
23        years, but shall be extended for up to 2 additional
24        10-year periods with annual renewals if the owner
25        continues to meet the requirements of this Section,
26        including annual certifications, and excluding the



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



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1        residential real property were put in service on or
2        after January 1, 2015. However, the initial 10-year
3        eligibility period shall be reduced by the number of
4        years between the placed in service date and the date
5        the owner first receives this reduced valuation.
6            (F) The owner may apply for the reduced valuation
7        within 2 years after the newly-constructed residential
8        real property or improvements to existing residential
9        real property are put in service. However, the initial
10        10 year eligibility period shall be reduced for the
11        number of years between the placed in service date and
12        the date the owner first receives this reduced
13        valuation.
14            (G) Owners of a multifamily building receiving a
15        reduced valuation through the Cook County Class 9
16        program on December 31, 2019 shall be deemed
17        automatically eligible for the reduced valuation
18        defined in this Section in terms of meeting the
19        criteria for new construction or substantial
20        rehabilitation for a specific multifamily building
21        regardless of when the newly-constructed residential
22        real property or improvements to existing residential
23        real property were put in service. If a Cook County
24        Class 9 owner had Class 9 status revoked on or after
25        January 1, 2017 but can provide documents sufficient to
26        prove that the revocation was in error or any



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1        deficiencies leading to the revocation have been
2        cured, the chief county assessment officer may deem the
3        owner to be eligible. However, owners may not receive
4        the both the reduced valuation under this Section and
5        the reduced valuation under the Cook County Class 9
6        program in any single assessment year. In addition, the
7        number of years during which an owner has participated
8        in the Class 9 program shall count against the number
9        of remaining years eligible for the reduced valuation
10        as defined in this Section.
11            (H) At the completion of the assessment reduction
12        period described in this Section, the entire parcel
13        will be assessed as otherwise provided in State law.
14    (e) For the purposes of this Section,
15    "Affordable units" means units that have rents that do not
16exceed the maximum rents as defined in this Section.
17    "Household income" includes the annual income for all the
18people who occupy a housing unit that is anticipated to be
19received from a source outside of the family during the
2012-month period following admission or the annual
21recertification, including related family members and all the
22unrelated people who share the housing unit. Household income
23includes the sum total of the following income sources: wages,
24salaries and tips before any payroll deductions; net business
25income; interest and dividends; payments in lieu of earnings,
26such as unemployment and disability compensation, worker's



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1compensation and severance pay; Social Security income,
2including lump sum payments; payments from insurance policies,
3annuities, pensions, disability benefits and other types of
4periodic payments, alimony, child support, and other regular
5monetary contributions; and public assistance, except for
6assistance from the Supplemental Nutrition Assistance Program
7(SNAP). "Household income" does not include: earnings of
8children under age 18; temporary income such as cash gifts;
9reimbursement for medical expenses; lump sums from
10inheritance, insurance payments, settlements for personal or
11property losses; student financial assistance paid directly to
12the student or to an educational institution; foster child care
13payments; receipts from government-funded training programs;
14assistance from the Supplemental Nutrition Assistance Program
16    "Maximum income limits" means the maximum regular income
17limits for 60% of area median income for the geographic area in
18which the multifamily building is located for multifamily
19programs as determined by the United States Department of
20Housing and Urban Development and published annually by the
21Illinois Housing Development Authority.
22    "Maximum rent" means the maximum regular rent for 60% of
23the area median income for the geographic area in which the
24multifamily building is located for multifamily programs as
25determined by the United States Department of Housing and Urban
26Development and published annually by the Illinois Housing



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1Development Authority. To be eligible for the reduced valuation
2defined in this Section, maximum rents are to be consistent
3with the Illinois Housing Development Authority's rules; or if
4the owner is leasing an affordable unit to a household with an
5income at or below the maximum income limit who is
6participating in qualifying income-based rental subsidy
7program, "maximum rent" means the maximum rents allowable under
8the guidelines of the qualifying income-based rental subsidy
10    "Qualifying income-based rental subsidy program" means a
11Housing Choice Voucher issued by a housing authority under
12Section 8 of the United States Housing Act of 1937, a tenant
13voucher converted to a project-based voucher by a housing
14authority or any other program administered or funded by a
15housing authority, the Illinois Housing Development Authority,
16another State agency, a federal agency, or a unit of local
17government where participation is limited to households with
18incomes at or below the maximum income limits as defined in
19this Section and the tenants' portion of the rent payment is
20based on a percentage of their income or a flat amount that
21does not exceed the maximum rent as defined in this Section.
22    "Qualifying rehabilitation" means, at a minimum,
23compliance with local building codes and the replacement or
24renovation of at least 2 primary building systems. Although the
25cost of each primary building system may vary, to be approved
26for the reduced valuation under paragraph (1) of subsection (c)



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1of this Section, the combined expenditure for making the
2building compliant with local codes and replacing primary
3building systems must be at least $8 per square foot for work
4completed between January 1, 2020 and December 31, 2020 and in
5subsequent years, $8 adjusted by the Consumer Price Index for
6All Urban Consumers, as published annually by the U.S.
7Department of Labor. To be approved for the reduced valuation
8under paragraph (2) of subsection (c) of this Section, the
9combined expenditure for making the building compliant with
10local codes and replacing primary building systems must be at
11least $12.50 per square foot for work completed between January
121, 2020 and December 31, 2020 and in subsequent years, $12.50
13adjusted by the Consumer Price Index for All Urban Consumers,
14as published annually by the U.S. Department of Labor. "Primary
15building systems", together with their related
16rehabilitations, specifically approved for this program are:
17        (1) Electrical. All electrical work must comply with
18    applicable codes; it may consist of a combination of any of
19    the following alternatives:
20            (A) installing individual equipment and appliance
21        branch circuits as required by code (the minimum being
22        a kitchen appliance branch circuit);
23            (B) installing a new emergency service, including
24        emergency lighting with all associated conduits and
25        wiring;
26            (C) rewiring all existing feeder conduits ("home



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1        runs") from the main switchgear to apartment area
2        distribution panels;
3            (D) installing new in-wall conduits for
4        receptacles, switches, appliances, equipment, and
5        fixtures;
6            (E) replacing power wiring for receptacles,
7        switches, appliances, equipment, and fixtures;
8            (F) installing new light fixtures throughout the
9        building including closets and central areas;
10            (G) replacing, adding, or doing work as necessary
11        to bring all receptacles, switches, and other
12        electrical devices into code compliance;
13            (H) installing a new main service, including
14        conduit, cables into the building, and main disconnect
15        switch; and
16            (I) installing new distribution panels, including
17        all panel wiring, terminals, circuit breakers, and all
18        other panel devices.
19        (2) Heating. All heating work must comply with
20    applicable codes; it may consist of a combination of any of
21    the following alternatives:
22            (A) installing a new system to replace one of the
23        following heat distribution systems:
24                (i) piping and heat radiating units, including
25            new main line venting and radiator venting; or
26                (ii) duct work, diffusers, and cold air



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1            returns; or
2                (iii) any other type of existing heat
3            distribution and radiation/diffusion components;
4            or
5            (B) installing a new system to replace one of the
6        following heat generating units:
7                (i) hot water/steam boiler;
8                (ii) gas furnace; or
9                (iii) any other type of existing heat
10            generating unit.
11        (3) Plumbing. All plumbing work must comply with
12    applicable codes. Replace all or a part of the in-wall
13    supply and waste plumbing; however, main supply risers,
14    waste stacks and vents, and code-conforming waste lines
15    need not be replaced.
16        (4) Roofing. All roofing work must comply with
17    applicable codes; it may consist of either of the following
18    alternatives, separately or in combination:
19            (A) replacing all rotted roof decks and
20        insulation; or
21            (B) replacing or repairing leaking roof membranes
22        (10% is the suggested minimum replacement of
23        membrane); restoration of the entire roof is an
24        acceptable substitute for membrane replacement.
25        (5) Exterior doors and windows. Replace the exterior
26    doors and windows. Renovation of ornate entry doors is an



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1    acceptable substitute for replacement.
2        (6) Floors, walls, and ceilings. Finishes must be
3    replaced or covered over with new material. Acceptable
4    replacement or covering materials are as follows:
5            (A) floors must have new carpeting, vinyl tile,
6        ceramic, refurbished wood finish, or a similar
7        substitute;
8            (B) walls must have new drywall, including joint
9        taping and painting; or
10            (C) new ceilings must be either drywall, suspended
11        type, or a similar
12        (7) Exterior walls.
13            (A) replace loose or crumbling mortar and masonry
14        with new material;
15            (B) replace or paint wall siding and trim as
16        needed;
17            (C) bring porches and balconies to a sound
18        condition; or
19            (D) any combination of (A), (B), and (C).
20        (8) Elevators. Where applicable, at least 4 of the
21    following 7 alternatives must be accomplished:
22            (A) replace or rebuild the machine room controls
23        and refurbish the elevator machine (or equivalent
24        mechanisms in the case of hydraulic elevators);
25            (B) replace hoistway electro-mechanical items
26        including: ropes, switches, limits, buffers, levelers,



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1        and deflector sheaves (or equivalent mechanisms in the
2        case of hydraulic elevators);
3            (C) replace hoistway wiring;
4            (D) replace door operators and linkage;
5            (E) replace door panels at each opening;
6            (F) replace hall stations, car stations, and
7        signal fixtures; or
8            (G) rebuild the car shell and refinish the
9        interior.
10        (9) Health and safety.
11            (A) install or replace fire suppression systems;
12            (B) install or replace security systems; or
13            (C) environmental remediation of lead-based paint,
14        asbestos, leaking underground storage tanks, or radon.
15        (10) Energy conservation improvements undertaken to
16    limit the amount of solar energy absorbed by a building's
17    roof or to reduce energy use for the property, including,
18    but not limited to, any of the following activities:
19            (A) installing or replacing reflective roof
20        coatings (flat roofs);
21            (B) installing or replacing R-49 roof insulation;
22            (C) installing or replacing R-19 perimeter wall
23        insulation;
24            (D) installing or replacing insulated entry doors;
25            (E) installing or replacing Low E, insulated
26        windows;



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1            (F) installing or replacing WaterSense labeled
2        plumbing fixtures;
3            (G) installing or replacing 90% or better sealed
4        combustion heating systems;
5            (H) installing Energy Star hot water heaters;
6            (I) installing or replacing mechanical ventilation
7        to exterior for kitchens and baths;
8            (J) installing or replacing Energy Star
9        appliances;
10            (K) installing or replacing Energy Star certified
11        lighting in common areas; or
12            (L) installing or replacing grading and
13        landscaping to promote on-site water retention if the
14        retained water is used to replace water that is
15        provided from a municipal source.
16        (11) Accessibility improvements. All accessibility
17    improvements must comply with applicable codes. An owner
18    may make accessibility improvements to residential real
19    property to increase access for people with disabilities.
20    As used in this paragraph (11), "disability" has the
21    meaning given to that term in the Illinois Human Rights
22    Act. As used in this paragraph (11), "accessibility
23    improvements" means a home modification listed under the
24    Home Services Program administered by the Department of
25    Human Services (Part 686 of Title 89 of the Illinois
26    Administrative Code) including, but not limited to:



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1    installation of ramps, grab bars, or wheelchair lifts;
2    widening doorways or hallways; re-configuring rooms and
3    closets; and any other changes to enhance the independence
4    of people with disabilities.
5        (12) Any applicant who has purchased the property in an
6    arm's length transaction not more than 90 days before
7    applying for this reduced valuation may use the cost of
8    rehabilitation or repairs required by documented code
9    violations, up to a maximum of $2 per square foot, to meet
10    the qualifying rehabilitation requirements.
11    Section 99. Effective date. This Act takes effect upon
12becoming law.