Full Text of HB5071 101st General Assembly
HB5071ham001 101ST GENERAL ASSEMBLY | Rep. Emanuel Chris Welch Filed: 5/15/2020
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| 1 | | AMENDMENT TO HOUSE BILL 5071
| 2 | | AMENDMENT NO. ______. Amend House Bill 5071 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Property Tax Code is amended by adding | 5 | | Section 15-178 as follows: | 6 | | (35 ILCS 200/15-178 new) | 7 | | Sec. 15-178. Property tax incentives for affordable rental | 8 | | housing construction or substantial rehabilitation. | 9 | | (a) The chief county assessment officer shall, upon passage | 10 | | of an ordinance by a majority vote of the county board, | 11 | | establish a tax incentive program for eligible | 12 | | newly-constructed residential real property or qualifying | 13 | | substantial rehabilitation to all eligible existing | 14 | | residential real property in accordance with subsection (b). | 15 | | The program shall apply during the construction period and for | 16 | | 30 taxable years after the newly-constructed residential real |
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| 1 | | property or improvements to existing residential real property | 2 | | are put in service. Property is eligible for the program if and | 3 | | only if all of the following factors have been met: | 4 | | (1) at the conclusion of the new construction or | 5 | | qualifying substantial rehabilitation, the property will | 6 | | consist of a newly-constructed multifamily building | 7 | | containing 6 or more rental dwelling units or an existing | 8 | | multifamily building that has undergone qualifying | 9 | | substantial rehabilitation containing 6 or more rental | 10 | | dwelling units; | 11 | | (2) except as defined in subparagraphs (D), (E), and | 12 | | (F) of paragraph (4) of subsection (c) of this Section, | 13 | | prior to the newly-constructed residential real property | 14 | | or improvements to existing residential real property | 15 | | being put in service, the owner of the residential real | 16 | | property commits that, for a period of 30 years after the | 17 | | newly-constructed residential real property or | 18 | | improvements to existing residential real property are put | 19 | | in service, at least 20% of the multifamily building's | 20 | | units will have rents as defined in this Section that are | 21 | | at or below maximum rents and are occupied by households | 22 | | with household incomes at or below maximum income limits; | 23 | | and | 24 | | (3) the property meets the application requirements | 25 | | defined in subsection (c). | 26 | | (b) The incentives shall be calculated as follows: |
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| 1 | | (1) during the construction period, the property is | 2 | | entitled to a reduction in its equalized assessed value in | 3 | | an amount equal to the difference between the equalized | 4 | | assessed value in the year for which the incentive is | 5 | | sought and the equalized assessed value for the property in | 6 | | the base year; | 7 | | (2) for the first through tenth taxable years after the | 8 | | property or improvements are placed in service, the | 9 | | property is entitled to a reduction in its equalized | 10 | | assessed value in an amount equal to 50% of the difference | 11 | | between the equalized assessed value in the year for which | 12 | | the incentive is sought and the equalized assessed value | 13 | | for the property in the base year; | 14 | | (3) for the eleventh through twentieth taxable years | 15 | | after the property or improvements are placed in service, | 16 | | the property is entitled to a reduction in its equalized | 17 | | assessed value in an amount equal to 40% of the difference | 18 | | between the equalized assessed value in the year for which | 19 | | the incentive is sought and the equalized assessed value | 20 | | for the property in the base year; and | 21 | | (4) for the twenty-first through thirtieth taxable | 22 | | years after the property or improvements are placed in | 23 | | service, the property is entitled to a reduction in its | 24 | | equalized assessed value in an amount equal to 30% of the | 25 | | difference between the equalized assessed value in the year | 26 | | for which the incentive is sought and the equalized |
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| 1 | | assessed value for the property in the base year. | 2 | | (c) Application requirements. | 3 | | (1) In order to receive benefits under this Section, | 4 | | the owner must submit the following information to the | 5 | | chief county assessment officer for review in the form | 6 | | required by the chief county assessment officer: | 7 | | (A) the owner's name; | 8 | | (B) the postal address and permanent index number | 9 | | of the parcel; | 10 | | | 11 | | (C) a deed or other instrument conveying the parcel | 12 | | to the current owner; | 13 | | (D) written evidence that the new construction or | 14 | | qualifying substantial rehabilitation has been | 15 | | completed with respect to the residential real | 16 | | property, including, but not limited to, copies of | 17 | | building permits, a notarized contractor's sworn | 18 | | affidavit, and photographs of the interior and | 19 | | exterior of the building after new construction or | 20 | | substantial rehabilitation is completed; | 21 | | (E) written evidence that the residential real | 22 | | property meets local building codes, or, if there are | 23 | | no local building codes, Housing Quality Standards, as | 24 | | determined by the United States Department of Housing | 25 | | and Urban Development; | 26 | | (F) a list identifying the affordable units in the |
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| 1 | | residential real property and a written statement that | 2 | | the affordable units are comparable to the market rate | 3 | | units in terms of unit type, number of bedrooms per | 4 | | unit, quality of exterior appearance, energy | 5 | | efficiency, and overall quality of construction; | 6 | | (G) a written schedule certifying the rents in each | 7 | | affordable unit and a written statement that these | 8 | | rents do not exceed the maximum rents allowable for the | 9 | | area in which the residential real property is located; | 10 | | (H) documentation from the administering agency | 11 | | verifying the owner's participation in a qualifying | 12 | | income-based rental subsidy program as defined in | 13 | | subsection (d) of this Section if units receiving | 14 | | rental subsidies are to be counted among the affordable | 15 | | units in order to meet the thresholds defined in this | 16 | | Section; | 17 | | (I) a written statement identifying the household | 18 | | income for every household occupying an affordable | 19 | | unit and certifying that the household income does not | 20 | | exceed the maximum income limits allowable for the area | 21 | | in which the residential real property is located; | 22 | | (J) a written statement that the owner has verified | 23 | | and retained documentation of household income for | 24 | | every household occupying an affordable unit; and | 25 | | (K) any additional information as reasonably | 26 | | required by the chief county assessment officer, |
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| 1 | | including, but not limited to, any information | 2 | | necessary to ensure compliance with applicable local | 3 | | ordinances and to ensure that the owner is complying | 4 | | with the provisions of subparagraph (E) of paragraph | 5 | | (4) of this subsection. | 6 | | (2) The chief county assessment officer shall notify | 7 | | the owner as to whether the property meets the requirements | 8 | | of this Section. If the property does not meet the | 9 | | requirements of this Section, the chief county assessment | 10 | | officer shall provide written notice of any deficiencies to | 11 | | the owner, who shall then have 30 days from the date of | 12 | | notification to provide supplemental information showing | 13 | | compliance with this Section. If the owner does not | 14 | | exercise this right to cure the deficiency, or if the | 15 | | information submitted, in the sole judgment of the chief | 16 | | county assessment officer, is insufficient to meet the | 17 | | requirements of this Section, the chief county assessment | 18 | | officer shall provide a written explanation of the reasons | 19 | | for denial. | 20 | | (3) The chief county assessment officer may charge a | 21 | | reasonable application fee to offset the administrative | 22 | | expenses associated with the program. | 23 | | (4) The benefit conferred by this Section is limited as | 24 | | follows: | 25 | | (A) The owner is eligible to apply for the benefit | 26 | | conferred by this Section from June 1, 2020 through |
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| 1 | | December 31, 2029. If approved, the reduction will be | 2 | | effective for the current taxable year, which will be | 3 | | reflected in the tax bill issued in the following | 4 | | taxable year. | 5 | | (B) In the year prior to the final year of | 6 | | eligibility for the reduction in assessed value, | 7 | | written notice must be provided to tenants informing | 8 | | them of the date of the termination. | 9 | | (C) If the property is sold or transferred, the | 10 | | purchaser or transferee must comply with all | 11 | | requirements of this Section in order to continue | 12 | | receiving the reduction in assessed value. | 13 | | (D) The owner may apply for the benefit if the | 14 | | newly-constructed residential real property or | 15 | | improvements to existing residential real property | 16 | | were put in service on or after June 6, 2015. However, | 17 | | the 30-year eligibility period shall be reduced by the | 18 | | number of years between the placed in service date and | 19 | | the date the owner first receives this benefit. | 20 | | (E) The owner may apply for the benefit within 2 | 21 | | years after the newly-constructed residential real | 22 | | property or improvements to existing residential real | 23 | | property are put in service. However, the 30-year | 24 | | eligibility period shall be reduced for the number of | 25 | | years between the placed in service date and the date | 26 | | the owner first receives this benefit. |
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| 1 | | (F) Owners of a multifamily building receiving a | 2 | | benefit through the Cook County Class 9 program on May | 3 | | 31, 2020 shall be deemed automatically eligible for the | 4 | | benefit defined in this Section in terms of meeting the | 5 | | criteria for new construction or substantial | 6 | | rehabilitation for a specific multifamily building | 7 | | regardless of when the newly-constructed residential | 8 | | real property or improvements to existing residential | 9 | | real property were put in service. If a Cook County | 10 | | Class 9 owner had Class 9 status revoked on or after | 11 | | June 1, 2017 but can provide documents sufficient to | 12 | | prove that the revocation was in error or any | 13 | | deficiencies leading to the revocation have been | 14 | | cured, the chief county assessment officer may deem the | 15 | | owner to be eligible. However, owners may not receive | 16 | | the both the benefits defined in this Section and the | 17 | | Cook County Class 9 program in any single taxable year. | 18 | | In addition, the number of years during which an owner | 19 | | has participated in the Class 9 program shall count | 20 | | against the number of remaining years eligible for the | 21 | | benefit as defined in this Section. | 22 | | (G) At the completion of the assessment reduction | 23 | | period described in this Section, the entire parcel | 24 | | shall be assessed as otherwise provided in State law. | 25 | | (d) For the purposes of this Section: | 26 | | "Affordable units" means units that have rents that do not |
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| 1 | | exceed the maximum rents as defined in this Section. | 2 | | "Base year" means the taxable year prior to the first year | 3 | | of the construction period. | 4 | | "Construction period" means a period of not more than 3 | 5 | | consecutive tax years during which the dwelling units are being | 6 | | newly-constructed or the qualifying substantial rehabilitation | 7 | | is taking place. | 8 | | "Household income" includes the annual income for all the | 9 | | people who occupy a housing unit that is anticipated to be | 10 | | received from a source outside of the family during the | 11 | | 12-month period following admission or the annual | 12 | | recertification, including related family members and all the | 13 | | unrelated people who share the housing unit. Household income | 14 | | includes the sum total of the following income sources: wages, | 15 | | salaries, and tips before any payroll deductions; net business | 16 | | income; interest and dividends; payments in lieu of earnings, | 17 | | such as unemployment and disability compensation, worker's | 18 | | compensation and severance pay; Social Security income, | 19 | | including lump sum payments; payments from insurance policies, | 20 | | annuities, pensions, disability benefits and other types of | 21 | | periodic payments; alimony, child support, and other regular | 22 | | monetary contributions; and public assistance, except for | 23 | | assistance from the Supplemental Nutrition Assistance Program | 24 | | (SNAP). "Household income" does not include: earnings of | 25 | | children under age 18; temporary income such as cash gifts; | 26 | | reimbursement for medical expenses; lump sums from |
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| 1 | | inheritance, insurance payments, settlements for personal or | 2 | | property losses; student financial assistance paid directly to | 3 | | the student or to an educational institution; foster child care | 4 | | payments; receipts from government-funded training programs; | 5 | | assistance from the Supplemental Nutrition Assistance Program | 6 | | (SNAP). | 7 | | "Maximum income limits" means the maximum regular income | 8 | | limits for 60% of the area median income for the geographic | 9 | | area in which the multifamily building is located for | 10 | | multifamily programs, as determined by the United States | 11 | | Department of Housing and Urban Development and published | 12 | | annually by the Illinois Housing Development Authority. | 13 | | "Maximum rent" means the maximum regular rent for 60% of | 14 | | the area median income for the geographic area in which the | 15 | | multifamily building is located for multifamily programs, as | 16 | | determined by the United States Department of Housing and Urban | 17 | | Development and published annually by the Illinois Housing | 18 | | Development Authority. To be eligible for the benefit defined | 19 | | in this Section, maximum rents are to be reduced by the owner | 20 | | based on the Illinois Housing Development Authority's rules | 21 | | regarding tenant payment of utilities; or, if the owner is | 22 | | leasing an affordable unit to a household with an income at or | 23 | | below the maximum income limit who is participating in | 24 | | qualifying income-based rental subsidy program, "maximum rent" | 25 | | means the maximum rents allowable under the guidelines of the | 26 | | qualifying income-based rental subsidy program. |
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| 1 | | "Qualifying income-based rental subsidy program" means a | 2 | | Housing Choice Voucher issued by a housing authority under | 3 | | Section 8 of the United States Housing Act of 1937, a tenant | 4 | | voucher converted to a project-based voucher by a housing | 5 | | authority or any other program administered or funded by a | 6 | | housing authority, the Illinois Housing Development Authority, | 7 | | or another State agency, or a unit of local government where | 8 | | participation is limited to households with incomes at or below | 9 | | the maximum income limits as defined in this Section and the | 10 | | tenants' portion of the rent payment is based on a percentage | 11 | | of their income or a flat amount that does not exceed the | 12 | | maximum rent as defined in this Section. | 13 | | "Qualifying substantial rehabilitation" means, at a | 14 | | minimum, compliance with local building codes and the | 15 | | replacement or renovation of at least 2 primary building | 16 | | systems. Although the cost of each primary building system may | 17 | | vary, to be approved for the benefit under this Section, the | 18 | | combined expenditure for making the building compliant with | 19 | | local codes and replacing primary building systems must be at | 20 | | least $8 per square foot for work completed between June 1, | 21 | | 2020 and December 31, 2020 and, in subsequent years, $8 | 22 | | adjusted by the Consumer Price Index for All Urban Consumers, | 23 | | as published annually by the U.S. Department of Labor. "Primary | 24 | | building systems", together with their related | 25 | | rehabilitations, specifically approved for this program are: | 26 | | (1) Electrical. All electrical work must comply with |
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| 1 | | applicable codes; it may consist of a combination of any of | 2 | | the following alternatives: | 3 | | (A) installing individual equipment and appliance | 4 | | branch circuits as required by code (the minimum being | 5 | | a kitchen appliance branch circuit); | 6 | | (B) installing a new emergency service, including | 7 | | emergency lighting with all associated conduits and | 8 | | wiring; | 9 | | (C) rewiring all existing feeder conduits ("home | 10 | | runs") from the main switchgear to apartment area | 11 | | distribution panels; | 12 | | (D) installing new in-wall conduits for | 13 | | receptacles, switches, appliances, equipment, and | 14 | | fixtures; | 15 | | (E) replacing power wiring for receptacles, | 16 | | switches, appliances, equipment, and fixtures; | 17 | | (F) installing new light fixtures throughout the | 18 | | building including closets and central areas; | 19 | | (G) replacing, adding, or doing work as necessary | 20 | | to bring all receptacles, switches, and other | 21 | | electrical devices into code compliance; | 22 | | (H) installing a new main service, including | 23 | | conduit cables, into the building and main disconnect | 24 | | switch; and | 25 | | (I) installing new distribution panels, including | 26 | | all panel wiring, terminals, circuit breakers, and all |
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| 1 | | other panel devices. | 2 | | (2) Heating. All heating work must comply with | 3 | | applicable codes; it may consist of a combination of any of | 4 | | the following alternatives: | 5 | | (A) installing a new system to replace one of the | 6 | | following heat distribution systems: | 7 | | (i) piping and heat radiating units, including | 8 | | new main line venting and radiator venting; or | 9 | | (ii) duct work, diffusers, and cold air | 10 | | returns; or | 11 | | (iii) any other type of existing heat | 12 | | distribution and radiation/diffusion components; | 13 | | or | 14 | | (B) installing a new system to replace one of the | 15 | | following heat generating units: | 16 | | (i) hot water/steam boiler; | 17 | | (ii) gas furnace; or | 18 | | (iii) any other type of existing heat | 19 | | generating unit. | 20 | | (3) Plumbing. All plumbing work must comply with | 21 | | applicable codes. Replace all or a part of the in-wall | 22 | | supply and waste plumbing; however, main supply risers, | 23 | | waste stacks and vents, and code-conforming waste lines | 24 | | need not be replaced. | 25 | | (4) Roofing. All roofing work must comply with | 26 | | applicable codes; it may consist of either of the following |
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| 1 | | alternatives, separately or in combination: | 2 | | (A) replacing all rotted roof decks and | 3 | | insulation; or | 4 | | (B) replacing or repairing leaking roof membranes | 5 | | (10% is the suggested minimum replacement of | 6 | | membrane); restoration of the entire roof is an | 7 | | acceptable substitute for membrane replacement. | 8 | | (5) Exterior doors and windows. Replace the exterior | 9 | | doors and windows. Renovation of ornate entry doors is an | 10 | | acceptable substitute for replacement. | 11 | | (6) Floors, walls, and ceilings. Finishes must be | 12 | | replaced or covered over with new material. Acceptable | 13 | | replacement or covering materials are as follows: | 14 | | (A) floors must have new carpeting, vinyl tile, | 15 | | ceramic, refurbished wood finish, or a similar | 16 | | substitute; | 17 | | (B) walls must have new drywall, including joint | 18 | | taping and painting; or | 19 | | (C) new ceilings must be either drywall, suspended | 20 | | type, or a similar system. | 21 | | (7) Exterior walls. | 22 | | (A) replace loose or crumbling mortar and masonry | 23 | | with new material; | 24 | | (B) replace or paint wall siding and trim as | 25 | | needed; | 26 | | (C) bring porches and balconies to a sound |
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| 1 | | condition; or | 2 | | (D) any combination of (A), (B), and (C). | 3 | | (8) Elevators. Where applicable, at least 4 of the | 4 | | following 7 alternatives must be accomplished: | 5 | | (A) replace or rebuild the machine room controls | 6 | | and refurbish the elevator machine (or equivalent | 7 | | mechanisms in the case of hydraulic elevators); | 8 | | (B) replace hoistway electro-mechanical items, | 9 | | including: ropes, switches, limits, buffers, levelers, | 10 | | and deflector sheaves (or equivalent mechanisms in the | 11 | | case of hydraulic elevators); | 12 | | (C) replace hoistway wiring; | 13 | | (D) replace door operators and linkage; | 14 | | (E) replace door panels at each opening; | 15 | | (F) replace hall stations, car stations, and | 16 | | signal fixtures; or | 17 | | (G) rebuild the car shell and refinish the | 18 | | interior. | 19 | | (9) Health and safety. | 20 | | (A) install or replace fire suppression systems; | 21 | | (B) install or replace security systems; or | 22 | | (C) environmental remediation of lead-based paint, | 23 | | asbestos, leaking underground storage tanks, or radon. | 24 | | (10) Energy conservation improvements undertaken to | 25 | | limit the amount of solar energy absorbed by a building's | 26 | | roof or to reduce energy use for the property, including |
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| 1 | | any of the following activities: | 2 | | (A) installing or replacing reflective roof | 3 | | coatings (flat roofs); | 4 | | (B) installing or replacing R-49 roof insulation; | 5 | | (C) installing or replacing R-19 perimeter wall | 6 | | insulation; | 7 | | (D) installing or replacing insulated entry doors; | 8 | | (E) installing or replacing Low E, insulated | 9 | | windows; | 10 | | (F) installing or replacing WaterSense labeled | 11 | | plumbing fixtures; | 12 | | (G) installing or replacing 90% or better sealed | 13 | | combustion heating systems; | 14 | | (H) installing or replacing direct exhaust hot | 15 | | water heaters; | 16 | | (I) installing or replacing mechanical ventilation | 17 | | to exterior for kitchens and baths; | 18 | | (J) installing or replacing Energy Star | 19 | | appliances; | 20 | | (K) installing low VOC interior paints on interior | 21 | | finishes; | 22 | | (L) installing or replacing Energy Star certified | 23 | | lighting in common areas;or | 24 | | (M) installing or replacing grading and | 25 | | landscaping to promote on-site water retention. | 26 | | (11) Accessibility improvements. All accessibility |
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| 1 | | improvements must comply with applicable codes. An owner | 2 | | may make accessibility improvements to residential real | 3 | | property to increase access for people with disabilities. | 4 | | As used in this paragraph (11), "disability" has the | 5 | | meaning given to that term in the Illinois Human Rights
| 6 | | Act. As used in this paragraph (11), "accessibility | 7 | | improvements" means a home modification listed under the | 8 | | Home Services Program administered by the Department of | 9 | | Human Services (Part 686 of Title 89 of the Illinois | 10 | | Administrative Code) including, but not limited to: | 11 | | installation of ramps, grab bars, or wheelchair lifts; | 12 | | widening doorways or hallways; re-configuring rooms and | 13 | | closets; and any other changes to enhance the independence | 14 | | of people with disabilities. | 15 | | (12) Any applicant who has purchased the property in an | 16 | | arm's length transaction not more than 90 days before | 17 | | applying for this benefit may use the cost of | 18 | | rehabilitation or repairs required by documented code | 19 | | violations, up to a maximum of $2 per square foot, to meet | 20 | | the qualifying substantial rehabilitation requirements.
| 21 | | Section 99. Effective date. This Act takes effect upon | 22 | | becoming law.".
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