Bill Text: IL SB2259 | 2019-2020 | 101st General Assembly | Introduced

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Bill Title: Amends the Property Tax Code. Provides for property tax incentives for newly-constructed or rehabilitated rental property if the owner of the residential real property commits that, for a period of 10 years, at least 20% 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, and the chief county assessment officer of a county with less than 3,000,000 inhabitants shall establish such a program upon passage of an ordinance by a majority vote of the county board. Sets forth application requirements and the amount of the reduction. Effective immediately.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Failed) 2021-01-13 - Session Sine Die [SB2259 Detail]

Download: Illinois-2019-SB2259-Introduced.html

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101ST GENERAL ASSEMBLY State of Illinois 2019 and 2020 SB2259 Introduced 5/23/2019, by Sen. John J. Cullerton SYNOPSIS AS INTRODUCED:
35 ILCS 200/15-178 new
Amends the Property Tax Code. Provides for property tax incentives for newly-constructed or rehabilitated rental property if the owner of the residential real property commits that, for a period of 10 years, at least 20% 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, and the chief county assessment officer of a county with less than 3,000,000 inhabitants shall establish such a program upon passage of an ordinance by a majority vote of the county board. Sets forth application requirements and the amount of the reduction. Effective immediately.
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FISCAL NOTE ACT MAY APPLY HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY
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 5. The Property Tax Code is amended by adding
Section 15-178 as follows:
(35 ILCS 200/15-178 new)
Sec. 15-178. Property tax incentives for affordable rental
housing construction or rehabilitation.
(a) The chief county assessment officer of any county with
3,000,000 or more inhabitants shall, and the chief county
assessment officer of any county with less than 3,000,000
inhabitants shall upon passage of an ordinance by a majority
vote of the county board, establish a tax incentive program for
eligible newly-constructed residential real property or
qualifying rehabilitation to all eligible existing residential
real property in accordance with subsection (b). The program
shall apply during the construction period and for 10 taxable
years after the newly-constructed residential real property or
improvements to existing residential real property are put in
service. Property is eligible for the program if and only if
all of the following factors have been met:
(1) at the conclusion of the new construction or
qualifying rehabilitation, the property will consist of a

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newly-constructed multifamily building containing 6 or
more rental dwelling units or an existing multifamily
building that has undergone qualifying rehabilitation
containing 6 or more rental dwelling units;
(2) except as defined in subparagraphs (D), (E), and
(F) of paragraph (4) of subsection (c) of this Section,
prior to the newly-constructed residential real property
or improvements to existing residential real property
being put in service, the owner of the residential real
property commits that, for a period of 10 years after the
newly-constructed residential real property or
improvements to existing residential real property are put
in service, at least 20% of the multifamily building's
units will have rents as defined in this Section that are
at or below maximum rents and are occupied by households
with household incomes at or below maximum income limits;
and
(3) the property meets the application requirements
defined in subsection (c).
(b) The incentives shall be calculated as follows:
(1) during the construction period and for the first
and second taxable year after the property or improvements
are placed in service, the property is entitled to a
reduction in its equalized assessed value in an amount
equal to the difference between the equalized assessed
value in the year for which the incentive is sought and the

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equalized assessed value for the property in the base year;
(2) for the third and fourth taxable year after the
property or improvements are placed in service, the
property is entitled to a reduction in its equalized
assessed value in an amount equal to 80% of the difference
between the equalized assessed value in the year for which
the incentive is sought and the equalized assessed value
for the property in the base year;
(3) for the fifth and sixth taxable year after the
property or improvements are placed in service, the
property is entitled to a reduction in its equalized
assessed value in an amount equal to 60% of the difference
between the equalized assessed value in the year for which
the incentive is sought and the equalized assessed value
for the property in the base year;
(4) for the seventh and eighth taxable year after the
property or improvements are placed in service, the
property is entitled to a reduction in its equalized
assessed value in an amount equal to 40% of the difference
between the equalized assessed value in the year for which
the incentive is sought and the equalized assessed value
for the property in the base year; and
(5) for the ninth and tenth taxable year after the
property or improvements are placed in service, the
property is entitled to a reduction in its equalized
assessed value in an amount equal to 20% of the difference

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between the equalized assessed value in the year for which
the incentive is sought and the equalized assessed value
for the property in the base year.
(c) Application requirements.
(1) In order to receive benefits under this Section,
the owner must submit the following information to the
chief county assessment officer for review in the form
required by the chief county assessment officer:
(A) the owner's name;
(B) the postal address and permanent index number
of the parcel;
(C) a deed or other instrument conveying the parcel
to the current owner;
(D) written evidence that the new construction or
qualifying rehabilitation has been completed with
respect to the residential real property, including,
but not limited to, copies of building permits, a
notarized contractor's sworn affidavit, and
photographs of the interior and exterior of the
building after new construction or rehabilitation is
completed;
(E) written evidence that the residential real
property meets local building codes, or if there are no
local building codes, Housing Quality Standards, as
determined by the United States Department of Housing
and Urban Development;

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(F) a list identifying the affordable units in
residential real property and a written statement that
the affordable units are comparable to the market rate
units in terms of unit type, number of bedrooms per
unit, quality of exterior appearance, energy
efficiency, and overall quality of construction;
(G) a written schedule certifying the rents in each
affordable unit and a written statement that these
rents do not exceed the maximum rents allowable for the
area in which the residential real property is located;
(H) documentation from the administering agency
verifying the owner's participation in a qualifying
income-based rental subsidy program as defined in
subsection (d) of this Section if units receiving
rental subsidies are to be counted among the affordable
units in order to meet the thresholds defined in this
Section;
(I) a written statement identifying the household
income for every household occupying an affordable
unit and certifying that the household income does not
exceed the maximum income limits allowable for the area
in which the residential real property is located;
(J) a written statement that the owner has verified
and retained documentation of household income for
every household occupying an affordable unit; and
(K) any additional information as reasonably

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required by the chief county assessment officer,
including, but not limited to, any information
necessary to ensure compliance with applicable local
ordinances and to ensure the owner is complying with
the provisions of subparagraph (E) of paragraph (4) of
this subsection.
(2) The chief county assessment officer shall notify
the owner as to whether the property meets the requirements
of this Section. If the property does not meet the
requirements of this Section, the chief county assessment
officer shall provide written notice of any deficiencies to
the owner, who shall then have 30 days from the date of
notification to provide supplemental information showing
compliance with this Section. If the owner does not
exercise this right to cure the deficiency, or if the
information submitted, in the sole judgment of the chief
county assessment officer, is insufficient to meet the
requirements of this Section, the chief county assessment
officer shall provide a written explanation of the reasons
for denial.
(3) The chief county assessment officer may charge a
reasonable application fee to offset the administrative
expenses associated with the program.
(4) The benefit conferred by this Section is limited as
follows:
(A) The owner is eligible to apply for the benefit

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conferred by this Section beginning January 1, 2020
through December 31, 2029. If approved, the reduction
will be effective for the current taxable year, which
will be reflected in the tax bill issued in the
following taxable year.
(B) In the year prior to the final year of
eligibility for the reduction in assessed value,
written notice must be provided to tenants informing
them of the date of the termination.
(C) If the property is sold or transferred, the
purchaser or transferee must comply with all
requirements of this Section in order to continue
receiving the reduction in assessed value.
(D) The owner may apply for the benefit if the
newly-constructed residential real property or
improvements to existing residential real property
were put in service on or after January 1, 2015.
However, the 10-year eligibility period shall be
reduced by the number of years between the placed in
service date and the date the owner first receives this
benefit.
(E) The owner may apply for the benefit within 2
years after the newly-constructed residential real
property or improvements to existing residential real
property are put in service. However, the 10-year
eligibility period shall be reduced for the number of

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years between the placed in service date and the date
the owner first receives this benefit.
(F) Owners of a multifamily building receiving a
benefit through the Cook County Class 9 program on
December 31, 2019 shall be deemed automatically
eligible for the benefit defined in this Section in
terms of meeting the criteria for new construction or
substantial rehabilitation for a specific multifamily
building regardless of when the newly-constructed
residential real property or improvements to existing
residential real property were put in service. If a
Cook County Class 9 owner had Class 9 status revoked on
or after January 1, 2017 but can provide documents
sufficient to prove that the revocation was in error or
any deficiencies leading to the revocation have been
cured, the chief county assessment officer may deem the
owner to be eligible. However, owners may not receive
the both the benefits defined in this Section and the
Cook County Class 9 program in any single taxable year.
In addition, the number of years during which an owner
has participated in the Class 9 program shall count
against the number of remaining years eligible for the
benefit as defined in this Section.
(G) At the completion of the assessment reduction
period described in this Section, the entire parcel
will be assessed as otherwise provided in State law.

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(d) For the purposes of this Section,
"Affordable units" means units that have rents that do not
exceed the maximum rents as defined in this Section.
"Base year" means the taxable year prior to the first year
of the construction period.
"Construction period" means a period of not more than 3
consecutive tax years during which the dwelling units are being
newly-constructed or the qualifying rehabilitation is taking
place.
"Household income" includes the annual income for all the
people who occupy a housing unit that is anticipated to be
received from a source outside of the family during the
12-month period following admission or the annual
recertification, including related family members and all the
unrelated people who share the housing unit. Household income
includes the sum total of the following income sources: wages,
salaries and tips before any payroll deductions; net business
income; interest and dividends; payments in lieu of earnings,
such as unemployment and disability compensation, worker's
compensation and severance pay; Social Security income,
including lump sum payments; payments from insurance policies,
annuities, pensions, disability benefits and other types of
periodic payments, alimony, child support, and other regular
monetary contributions; and public assistance, except for
assistance from the Supplemental Nutrition Assistance Program
(SNAP). "Household income" does not include: earnings of

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children under age 18; temporary income such as cash gifts;
reimbursement for medical expenses; lump sums from
inheritance, insurance payments, settlements for personal or
property losses; student financial assistance paid directly to
the student or to an educational institution; foster child care
payments; receipts from government-funded training programs;
assistance from the Supplemental Nutrition Assistance Program
(SNAP).
"Maximum income limits" means the maximum regular income
limits for 60% of area median income for the geographic area in
which the multifamily building is located for multifamily
programs as determined by the United States Department of
Housing and Urban Development and published annually by the
Illinois Housing Development Authority.
"Maximum rent" means the maximum regular rent for 60% of
the area median income for the geographic area in which the
multifamily building is located for multifamily programs as
determined by the United States Department of Housing and Urban
Development and published annually by the Illinois Housing
Development Authority. To be eligible for the benefit defined
in this Section, maximum rents are to be reduced by the owner
based on the Illinois Housing Development Authority's rules
regarding tenant payment of utilities; or if the owner is
leasing an affordable unit to a household with an income at or
below the maximum income limit who is participating in
qualifying income-based rental subsidy program, "maximum rent"

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means the maximum rents allowable under the guidelines of the
qualifying income-based rental subsidy program.
"Qualifying income-based rental subsidy program" means a
Housing Choice Voucher issued by a housing authority under
Section 8 of the United States Housing Act of 1937, a tenant
voucher converted to a project-based voucher by a housing
authority or any other program administered or funded by a
housing authority, the Illinois Housing Development Authority,
or another State agency, or a unit of local government where
participation is limited to households with incomes at or below
the maximum income limits as defined in this Section and the
tenants' portion of the rent payment is based on a percentage
of their income or a flat amount that does not exceed the
maximum rent as defined in this Section.
"Qualifying rehabilitation" means, at a minimum,
compliance with local building codes and the replacement or
renovation of at least 2 primary building systems. Although the
cost of each primary building system may vary, to be approved
for the benefit under this Section, the combined expenditure
for making the building compliant with local codes and
replacing primary building systems must be at least $8 per
square foot for work completed between January 1, 2020 and
December 31, 2020 and, in subsequent years, $8 adjusted by the
Consumer Price Index for All Urban Consumers, as published
annually by the U.S. Department of Labor. "Primary building
systems", together with their related rehabilitations,

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specifically approved for this program are:
(1) Electrical. All electrical work must comply with
applicable codes; it may consist of a combination of any of
the following alternatives:
(A) installing individual equipment and appliance
branch circuits as required by code (the minimum being
a kitchen appliance branch circuit);
(B) installing a new emergency service, including
emergency lighting with all associated conduits and
wiring;
(C) rewiring all existing feeder conduits ("home
runs") from the main switchgear to apartment area
distribution panels;
(D) installing new in-wall conduits for
receptacles, switches, appliances, equipment, and
fixtures;
(E) replacing power wiring for receptacles,
switches, appliances, equipment, and fixtures;
(F) installing new light fixtures throughout the
building including closets and central areas;
(G) replacing, adding, or doing work as necessary
to bring all receptacles, switches, and other
electrical devices into code compliance;
(H) installing a new main service, including
conduit, cables into the building, and main disconnect
switch; and

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(I) installing new distribution panels, including
all panel wiring, terminals, circuit breakers, and all
other panel devices.
(2) Heating. All heating work must comply with
applicable codes; it may consist of a combination of any of
the following alternatives:
(A) installing a new system to replace one of the
following heat distribution systems:
(i) piping and heat radiating units, including
new main line venting and radiator venting; or
(ii) duct work, diffusers, and cold air
returns; or
(iii) any other type of existing heat
distribution and radiation/diffusion components;
or
(B) installing a new system to replace one of the
following heat generating units:
(i) hot water/steam boiler;
(ii) gas furnace; or
(iii) any other type of existing heat
generating unit.
(3) Plumbing. All plumbing work must comply with
applicable codes. Replace all or a part of the in-wall
supply and waste plumbing; however, main supply risers,
waste stacks and vents, and code-conforming waste lines
need not be replaced.

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(4) Roofing. All roofing work must comply with
applicable codes; it may consist of either of the following
alternatives, separately or in combination:
(A) replacing all rotted roof decks and
insulation; or
(B) replacing or repairing leaking roof membranes
(10% is the suggested minimum replacement of
membrane); restoration of the entire roof is an
acceptable substitute for membrane replacement.
(5) Exterior doors and windows. Replace the exterior
doors and windows. Renovation of ornate entry doors is an
acceptable substitute for replacement.
(6) Floors, walls, and ceilings. Finishes must be
replaced or covered over with new material. Acceptable
replacement or covering materials are as follows:
(A) floors must have new carpeting, vinyl tile,
ceramic, refurbished wood finish, or a similar
substitute;
(B) walls must have new drywall, including joint
taping and painting; or
(C) new ceilings must be either drywall, suspended
type, or a similar
(7) Exterior walls.
(A) replace loose or crumbling mortar and masonry
with new material;
(B) replace or paint wall siding and trim as

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needed;
(C) bring porches and balconies to a sound
condition; or
(D) any combination of (A), (B), and (C).
(8) Elevators. Where applicable, at least 4 of the
following 7 alternatives must be accomplished:
(A) replace or rebuild the machine room controls
and refurbish the elevator machine (or equivalent
mechanisms in the case of hydraulic elevators);
(B) replace hoistway electro-mechanical items
including: ropes, switches, limits, buffers, levelers,
and deflector sheaves (or equivalent mechanisms in the
case of hydraulic elevators);
(C) replace hoistway wiring;
(D) replace door operators and linkage;
(E) replace door panels at each opening;
(F) replace hall stations, car stations, and
signal fixtures; or
(G) rebuild the car shell and refinish the
interior.
(9) Health and safety.
(A) install or replace fire suppression systems;
(B) install or replace security systems; or
(C) environmental remediation of lead-based paint,
asbestos, leaking underground storage tanks, or radon.
(10) Energy conservation improvements undertaken to

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limit the amount of solar energy absorbed by a building's
roof or to reduce energy use for the property, including
any of the following activities:
(A) installing or replacing reflective roof
coatings (flat roofs);
(B) installing or replacing R-49 roof insulation;
(C) installing or replacing R-19 perimeter wall
insulation;
(D) installing or replacing insulated entry doors;
(E) installing or replacing Low E, insulated
windows;
(F) installing or replacing WaterSense labeled
plumbing fixtures;
(G) installing or replacing 90% or better sealed
combustion heating systems;
(H) installing or replacing direct exhaust hot
water heaters;
(I) installing or replacing mechanical ventilation
to exterior for kitchens and baths;
(J) installing or replacing Energy Star
appliances;
(K) installing low VOC interior paints on interior
finishes;
(L) installing or replacing Energy Star certified
lighting in common areas; or
(M) installing or replacing grading and

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landscaping to promote on-site water retention.
(11) Accessibility improvements. All accessibility
improvements must comply with applicable codes. An owner
may make accessibility improvements to residential real
property to increase access for people with disabilities.
As used in this paragraph (11), "disability" has the
meaning given to that term in the Illinois Human Rights
Act. As used in this paragraph (11), "accessibility
improvements" means a home modification listed under the
Home Services Program administered by the Department of
Human Services (Part 686 of Title 89 of the Illinois
Administrative Code) including, but not limited to:
installation of ramps, grab bars, or wheelchair lifts;
widening doorways or hallways; re-configuring rooms and
closets; and any other changes to enhance the independence
of people with disabilities.
(12) Any applicant who has purchased the property in an
arm's length transaction not more than 90 days before
applying for this benefit may use the cost of
rehabilitation or repairs required by documented code
violations, up to a maximum of $2 per square foot, to meet
the qualifying rehabilitation requirements.
Section 99. Effective date. This Act takes effect upon
becoming law.