Bill Text: IL SB3529 | 2019-2020 | 101st General Assembly | Introduced

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Bill Title: 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.

Spectrum: Moderate Partisan Bill (Democrat 4-1)

Status: (Failed) 2021-01-13 - Session Sine Die [SB3529 Detail]

Download: Illinois-2019-SB3529-Introduced.html

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101ST GENERAL ASSEMBLY State of Illinois 2019 and 2020 SB3529 Introduced 2/13/2020, by Sen. Sara Feigenholtz SYNOPSIS AS INTRODUCED:
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.
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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. Reduction in assessed value for affordable
rental housing construction or rehabilitation.
(a) The General Assembly finds that there is a shortage of
high quality affordable rental homes for low-income and
very-low-income households throughout Illinois; that owners
and developers of rental housing face significant challenges
building newly constructed apartments or undertaking
rehabilitation of existing properties that result in rents that
are affordable for low-income and very-low-income households;
and that it will help Cook County and other parts of Illinois
address the extreme shortage of affordable rental housing by
developing a Statewide policy to determine the assessed value
for newly constructed and rehabilitated affordable rental
housing that both encourages investment and incentivizes
property owners to keep rents affordable.
(b) Any county with 3,000,000 or more inhabitants shall
implement a special assessment program to reduce the equalized

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assessed value of all eligible newly-constructed residential
real property or qualifying rehabilitation to all eligible
existing residential real property in accordance with
subsection (c) for 10 taxable years after the newly constructed
residential real property or improvements to existing
residential real property are put in service. Any county with
less than 3,000,000 inhabitants may decide not to implement
this special assessment program upon passage of an ordinance by
a majority vote of the county board. Subsequent to a vote to
opt-out of this special assessment program, any county with
less than 3,000,000 inhabitants may decide to implement this
special assessment program upon passage of an ordinance by a
majority vote of the county board. Property is eligible for the
special assessment program if and only if all of the following
factors have been met:
(1) the property consists of a newly-constructed
multifamily building containing 7 or more rental dwelling
units or an existing multifamily building that has
undergone qualifying rehabilitation containing 7 or more
rental dwelling units;
(2) except as defined in subparagraphs (E), (F), and
(G) of paragraph (4) of subsection (d) 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, at least

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15% 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 (d).
(c) The amount of the reduction shall be calculated as
follows:
(1) if the owner of the residential real property
commits for a period of at least 10 years that at least 15%
but fewer than 35% of the multifamily building's units have
rents at or below maximum rents and are occupied by
households with household incomes at or below maximum
income limits, the assessed value of the property used to
calculate the tax bill shall be reduced by an amount equal
to 25% of the assessed value of the property as initially
determined by the assessor for the property in the current
taxable year for the newly-constructed residential real
property or based on the improvements to an existing
residential real property; and
(2) if the owner of the residential real property
commits for a period of at least 10 years that at least 35%
of the multifamily building's units have rents at or below
maximum rents and are occupied by households with household
incomes at or below maximum income limits, the equalized
assessed value of the property used to calculate the tax

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bill shall be reduced by an amount equal to 35% of the
assessed value of the property as initially determined by
the assessor for the property in the current assessment
year for the newly constructed residential real property or
based on the improvements to an existing residential real
property.
(d) Application requirements.
(1) In order to receive the reduced valuation under
this Section, the owner must submit an application
containing 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

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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;
(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 (e) 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;

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(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 consistent with
this Section as reasonably 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 (F) of
paragraph (4) of subsection (d) of this Section.
(2) The chief county assessment officer shall notify
the owner as to whether or not 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 14 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

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

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requirements regarding new construction or qualifying
rehabilitation defined in subparagraph (D) of
paragraph (1) of this subsection.
(C) The annual certification materials in the year
prior to final year of eligibility for the reduction in
assessed value must include a dated copy of the written
notice provided to tenants informing them of the date
of the termination if the owner is not seeking a
renewal.
(D) If the property is sold or transferred, the
purchaser or transferee must comply with all
requirements of this Section, excluding the
requirements regarding new construction or qualifying
rehabilitation defined in subparagraph (D) of
paragraph (1) of this subsection, in order to continue
receiving the reduction in assessed value. Purchasers
and transferees who comply with all requirements of
this Section excluding the requirements regarding new
construction or qualifying rehabilitation defined in
subparagraph (D) of paragraph (1) of this subsection
are eligible to apply for renewal on the schedule set
by the initial application.
(E) The owner may apply for the reduced valuation
if the residential real property meets all
requirements of this Section and the newly-constructed
residential real property or improvements to existing

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residential real property were put in service on or
after January 1, 2015. However, the initial 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 reduced valuation.
(F) The owner may apply for the reduced valuation
within 2 years after the newly-constructed residential
real property or improvements to existing residential
real property are put in service. However, the initial
10 year eligibility period shall be reduced for the
number of years between the placed in service date and
the date the owner first receives this reduced
valuation.
(G) Owners of a multifamily building receiving a
reduced valuation through the Cook County Class 9
program on December 31, 2019 shall be deemed
automatically eligible for the reduced valuation
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

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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 reduced valuation under this Section and
the reduced valuation under the Cook County Class 9
program in any single assessment 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 reduced valuation
as defined in this Section.
(H) At the completion of the assessment reduction
period described in this Section, the entire parcel
will be assessed as otherwise provided in State law.
(e) 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.
"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

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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
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

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Development Authority. To be eligible for the reduced valuation
defined in this Section, maximum rents are to be consistent
with the Illinois Housing Development Authority's rules; 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" 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,
another State agency, a federal 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 reduced valuation under paragraph (1) of subsection (c)

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of 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. To be approved for the reduced valuation
under paragraph (2) of subsection (c) of this Section, the
combined expenditure for making the building compliant with
local codes and replacing primary building systems must be at
least $12.50 per square foot for work completed between January
1, 2020 and December 31, 2020 and in subsequent years, $12.50
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, 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

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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
(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

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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.
(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

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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
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,

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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
limit the amount of solar energy absorbed by a building's
roof or to reduce energy use for the property, including,
but not limited to, 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;

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(F) installing or replacing WaterSense labeled
plumbing fixtures;
(G) installing or replacing 90% or better sealed
combustion heating systems;
(H) installing Energy Star hot water heaters;
(I) installing or replacing mechanical ventilation
to exterior for kitchens and baths;
(J) installing or replacing Energy Star
appliances;
(K) installing or replacing Energy Star certified
lighting in common areas; or
(L) installing or replacing grading and
landscaping to promote on-site water retention if the
retained water is used to replace water that is
provided from a municipal source.
(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:

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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 reduced valuation 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.