Bill Text: IL HB4849 | 2025-2026 | 104th General Assembly | Introduced

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Bill Title: Creates the Farmer Tax Benefit Act. Provides that taxpayers may apply to the Department of Natural Resources for an income tax credit in an amount equal to either (i) 100% of the fair market value of a qualified donation to a conservation agency of a land protection agreement or (ii) 50% of the fair market value of the qualified donation to a conservation agency of a fee simple interest or a remainder interest in qualified real property. Amends the Illinois Income Tax Act to make conforming changes.

Sponsorship: Slight Partisan Bill (Democrat 12-5)

Status: (Introduced - Dead) 2026-05-25 - Added Co-Sponsor Rep. Maura Hirschauer [HB4849 Detail]

Download: Illinois-2025-HB4849-Introduced.html

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104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026HB4849 Introduced , by Rep. Will Guzzardi SYNOPSIS AS INTRODUCED:
New Act
35 ILCS 5/253 new
Creates the Farmer Tax Benefit Act. Provides that taxpayers may apply to the Department of Natural Resources for an income tax credit in an amount equal to either (i) 100% of the fair market value of a qualified donation to a conservation agency of a land protection agreement or (ii) 50% of the fair market value of the qualified donation to a conservation agency of a fee simple interest or a remainder interest in qualified real property. Amends the Illinois Income Tax Act to make conforming changes.
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A BILL FOR
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AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Short title. This Act may be cited as the Farmer
Tax Benefit Act.
Section 5. Purpose and findings. The General Assembly
finds that:
(1) The State of Illinois' unique natural resources,
wildlife habitats, open spaces, agricultural and forested
resources, wetlands, and historical, cultural, and
archaeological resources are of significant economic,
environmental, and social benefit to the State and the
public.
(2) The Illinois economy is vulnerable to other states
that have financial incentive programs targeted to support
the protection of unique natural and agricultural
resources. Illinois should advance new tools to ensure
that Illinois offers a competitive quality of life and is
desirable in site location decision-making for businesses.
(3) Natural carbon storage and increasing carbon
sequestration from natural and working lands is a critical
component of State and national deep decarbonization
strategies because the maintenance of existing sequestered

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carbon in intact natural and working lands systems can be
among the most cost-effective ways to support climate
goals.
(4) The protection of natural and working lands is an
important climate adaptation strategy, with land
conservation serving to build community resilience against
extreme weather events, such as by absorbing excess
rainwater to reduce flooding, filtering pollutants,
offering cooling from extreme heat, preserving
biodiversity, ensuring species' corridor migration, and
protecting productive farmland that provides food
security.
(5) Much of the State's unique natural, historical,
agricultural and open space resources and habitats are
found on lands that are privately owned. The General
Assembly intends to provide private landowners with
incentives to encourage voluntary protection of private
lands for open space, natural resources, biodiversity
conservation, water supply, outdoor recreation, farmland
and forestland preservation, historic preservation, and
land conservation purposes.
Section 10. Definitions. As used in this Act:
"Conservation agency" means the following:
(1) the State of Illinois;
(2) a federal agency;

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(3) a unit of local government;
(4) a federally-recognized Indian tribe; or
(5) a 501(c)(3) nonprofit organization that has
experience acquiring conservation real estate, whether
through purchase, donation, or transfer, and that meets
the requirements of Section 170(h)(3) of the Internal
Revenue Code and the regulations adopted under that
Section.
A conservation agency must also:
(1) be authorized to acquire, hold, and maintain title
to real estate or interests in real estate in Illinois;
(2) be organized and operated for purposes expressly
including natural resource protection, land conservation,
or historic preservation; and
(3) meet other criteria or certifications required by
the Department by rule.
Any non-profit corporation that is accredited through
the Land Trust Accreditation Commission shall automatically be
deemed a conservation agency with no further burden of proof.
"Credit" means the Illinois Land Protection Credit created
and administered as outlined in this Act.
"Department" means the Department of Natural Resources.
"Federally recognized Indian tribe" means any Indian tribe
that is included on the list of federally recognized Indian
tribes that is published from time to time by the United States
Department of the Interior under the Federally Recognized

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Indian Tribe List Act of 1994.
"Landowner" means the owner of fee simple title to land,
as evidenced by the county real property records in the county
where the real property interest is located, including,
without limitation, individuals, trusts and estates, and
entities such as limited liability companies, partnerships,
and corporations, whether for profit or not-for-profit.
"Land protection agreement" means a restriction, granted
in perpetuity and created pursuant to Illinois real property
law, on the use that may be made of real property, and that
complies with Section 170(h)(2)(C) of the Internal Revenue
Code.
"Qualified appraisal" has the same meaning as that term is
defined in 26 CFR 1.170A-17.
"Qualified donation" means the transfer and conveyance by
gift, without consideration, of all or a portion, including
bargain sales, of a qualified real property interest to a
conservation agency if those purposes are secured in
perpetuity through recording of a deed in the real property
records in the county where the qualified real property
interest is located.
"Qualified real property interest" means any of the
following interests in real property located in the State of
Illinois:
(1) fee simple interest;
(2) a remainder interest; or

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(3) a land protection agreement.
A fee simple interest or remainder interest shall not be
deemed a qualified real property interest unless the
conservation and preservation purposes are assured in
perpetuity. In these cases, the credit shall not be allowed
until the conservation agency agrees in recorded documentation
that any subsequent conveyances of the fee simple or remainder
interest in the property will be subject to a prior conveyance
in perpetuity of a land protection agreement or will be
conveyed to another conservation agency.
Section 15. Credit availability.
(a) For taxable years beginning on or after January 1,
2027, taxpayers may apply to the Department for a credit
against the tax imposed by subsections (a) and (b) of Section
201 of the Illinois Income Tax Act in an amount equal to either
(i) 100% of the fair market value of a qualified donation of a
land protection agreement or (ii) 50% of the fair market value
of the qualified donation of a fee simple interest or a
remainder interest in qualified real property. The fair market
value of any donation made under this Section shall be
substantiated by a qualified appraisal prepared by a qualified
appraiser.
(b) The total aggregate amount of tax credits issued under
this Act in any State fiscal year shall not exceed $7,500,000.
Certificates of tax credit shall be allocated on a first-come,

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first-served basis. The Department shall log applications as
they are received. If the $7,500,000 total aggregate cap is
exceeded in any one year, the Department shall issue a
certificate of tax credit to be available to the landowner in
the subsequent tax year with an effective date of the
subsequent year.
(c) The amount of the credit that may be claimed by a
landowner for any single qualified donation shall not exceed
$500,000.
(d) The credit under this Act is exempt from the
provisions of Section 250.
Section 20. Credit allocation by the Department.
(a) A landowner seeking to claim a tax credit under
Section 15 above shall, in either the year of the donation or
the year following the year of donation, submit to the
Department an application for a land protection tax credit on
a form to be created by the Department. The application shall
be accompanied by the qualified appraisal substantiating the
value of the qualified donation and the deed transferring the
qualified real property interest. If the landowner is a
pass-through entity, the application shall also include
documentation that the landowner has owned the property for
more than 3 years at the time of the donation or otherwise
meets the family exception set forth in Section 40.
(b) On receipt of the application and all supporting

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documentation, the Department shall either (i) record the
transaction and provide the landowner with a certificate
acknowledging the credit, together with a tracking number, on
a form to be created by the Department, (ii) request more
information, or (iii) decline to issue the certificate by
providing a written statement of the deficiencies in the
application. The landowner shall have an opportunity to cure
any deficiencies. The Department shall make its determination
within 60 days of receipt of the application. If no
determination is made within 60 days after receipt, the credit
shall be deemed automatically granted.
If the landowner is receiving compensation for any
non-donated portion of a qualified real property interest and
that compensation derives from a federal, State, or local
public conservation funding source, then the landowner shall
include, with the application, documentation confirming the
award of public funding towards the qualified real property
interest. In that case, the public funding award shall be
determinative of the conservation benefit and value, no
additional review by the Department shall be necessary, and
the credit shall be automatically granted and the certificate
automatically issued.
Section 25. Allowable credit use.
(a) If the amount of the credit exceeds the tax liability
for the year, the excess may be carried forward and applied to

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the tax liability of the 5 taxable years following the excess
credit year. In no event shall a credit under this Section
reduce the taxpayer's liability to less than zero. The
landowner shall submit a copy of the certificate of tax credit
with its tax returns for the year of the claimed credit.
(b) A sale, assignment, or transfer of the tax credit may
be made by the taxpayer earning the credit at any time during
the 5-year carry forward period. Upon notice of transfer, the
Department shall issue transfer certificates to the transferor
and transferee that identify the amount of the credit
transferred. Upon issuance of the transfer certificates, the
transferor relinquishes all rights to the portion of the
credit that was transferred. The transferred credit may be
applied by the transferee against its tax imposed by the
Illinois Income Tax Act, and any credit not used by the
transferee may be carried forward for the remainder of the
original 5-year carry forward period. A landowner seeking to
transfer a credit shall submit to the Department a Notice of
Tax Credit Transfer on a form to be created by the Department.
Upon any transfer of a credit, a fee equal to 2.5% of the
amount of the credit so transferred shall be paid to the
Department by the landowner to cover the administrative costs
of this process.
Section 30. Powers of the Department.
(a) The Department, in addition to those powers granted

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under the Civil Administrative Code of Illinois, is granted
and has all the powers necessary or convenient to carry out and
effectuate the purposes and provisions of this Act, including,
but not limited to, power and authority to:
(1) Adopt rules deemed necessary and appropriate for
the administration of the tax credit program.
(2) Establish forms for applications, notifications,
contracts, or any other agreements and accept applications
at any time during the year.
(3) Assist applicants pursuant to the provisions of
this Act to promote, foster, and support land conservation
and its related benefits within the State.
(4) Gather information and conduct inquiries in the
manner and by the methods as it deems desirable.
(5) Provide for sufficient personnel to permit
administration, staffing, operation, and related support
required to adequately discharge its duties and
responsibilities described in this Act from funds as may
be appropriated by the General Assembly for the
administration of this Act.
(6) Require applicants, upon written request, to issue
any necessary authorization to the appropriate federal,
State, or local authority for the release of information
concerning a project being considered under the provisions
of this Act, with the information requested to include,
but not be limited to, financial reports, returns, or

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records.
(b) The Department shall adopt rules within 6 months after
the effective date of this Act.
Section 35. Analysis of the Illinois Land Protection Tax
Credit.
(a) By December 31, 2032, the Department, in consultation
with other State agencies as needed, shall prepare a report
detailing the amount of land and the fair market value of land
protected during the reporting period pursuant to this Act.
The Department may consider application and attestation
information provided by eligible taxpayers pursuant to this
Act and any other data it deems relevant.
(b) The final report shall be made publicly available, and
copies of the final report shall be filed with the General
Assembly and the Governor.
Section 40. Applicability and limitations.
(a) Any tax credits arising under this Act from a
qualified donation made by a pass-through tax entity, such as
a trust, estate, limited liability corporation, or
partnership, limited partnership, subchapter S corporation, or
other fiduciary, shall be used either by that entity, if it is
the taxpayer on behalf of such entity, or by the member,
manager, partner, shareholder, or beneficiary, as the case may
be, in proportion to the person's interest in the entity, if

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that income tax liability passes through such entity to such
member, manager, partner, shareholder, beneficiary. Tax
credits may not be claimed by both the entity and the member,
manager, partner, shareholder, or beneficiary for the same
qualified donation. In the case of a pass-through entity
described above, no qualified donation shall be eligible for a
tax credit under this Act unless the entity acquired the land
or qualified real property interest 3 or more years before the
donation for which the qualified donation is being sought.
(b) Subsection (a) shall not apply with respect to any
qualified donation by any partnership or pass-through entity
for which a tax credit is being sought under this Act if
substantially all of the partnership interests or pass-through
entity interests in the partnership or pass-through entity are
held, directly or indirectly, by an individual or members of
the individual's family.
As used in this subsection, "member of the family" means
the individual's spouse or any person who bears a relationship
to the individual that is described in Internal Revenue Code
Section 152(d)(2) subparagraphs (A) through (G).
(c) If a conservation agency becomes unqualified after the
effective date of a qualified donation, it shall not require
any taxpayer to repay tax credits claimed under this Act, nor
shall such event be cause for any other penalty to be imposed
on a taxpayer.

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Section 45. Construction.
(a) Nothing in this Act shall be interpreted to in any way
alter or amend any permit requirements, reporting
requirements, allocation procedures, or other requirements set
forth in any other provision of State law.
(b) Notwithstanding any provision of law to the contrary,
a land protection agreement held pursuant to this Section
shall be construed in favor of achieving the conservation
purposes for which it was created.
Section 900. The Illinois Income Tax Act is amended by
adding Section 253 as follows:
(35 ILCS 5/253 new)
Sec. 253. Farmer Tax Benefit Act. A taxpayer who has been
awarded a credit under the Farmer Tax Benefit Act is entitled
to a credit as provided in that Act.