Bill Text: IL SB2924 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Creates the Family Home Ownership Act. Imposes a tax on certain partnerships, corporations, limited liability companies, or real estate investment trusts that purchase single-family residences. Provides that the amount of the tax is equal to 100% of the fair market value of the residence. Provides that the proceeds of the tax shall be deposited into the Illinois Affordable Housing Trust Fund for the purpose of providing rental and mortgage payment assistance. Requires hedge funds and other applicable taxpayers to reduce the number of single-family residences owned by the hedge fund over a 10-year period. Provides that, 10 years after the effective date of the Act, hedge funds may not own any applicable single-family residences. Provides that, 10 years after the effective date of the Act, applicable taxpayers other than hedge funds may not own more than 50 applicable single-family residences. Amends the Illinois Affordable Housing Act to make confirming changes. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2024-01-26 - Referred to Assignments [SB2924 Detail]

Download: Illinois-2023-SB2924-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB2924 Introduced 1/26/2024, by Sen. Laura Ellman SYNOPSIS AS INTRODUCED:
New Act
310 ILCS 65/5 from Ch. 67 1/2, par. 1255
Creates the Family Home Ownership Act. Imposes a tax on certain partnerships, corporations, limited liability companies, or real estate investment trusts that purchase single-family residences. Provides that the amount of the tax is equal to 100% of the fair market value of the residence. Provides that the proceeds of the tax shall be deposited into the Illinois Affordable Housing Trust Fund for the purpose of providing rental and mortgage payment assistance. Requires hedge funds and other applicable taxpayers to reduce the number of single-family residences owned by the hedge fund over a 10-year period. Provides that, 10 years after the effective date of the Act, hedge funds may not own any applicable single-family residences. Provides that, 10 years after the effective date of the Act, applicable taxpayers other than hedge funds may not own more than 50 applicable single-family residences. Effective immediately.
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A BILL FOR
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AN ACT concerning home ownership.
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 Family
Home Ownership Act.
Section 5. Definitions. As used in this Act, unless
otherwise stated, the following words or phrases have the
following meanings:
"Acquisition" means the acquisition of a majority
ownership interest in a single-family residence, regardless of
the percentage of that ownership interest.
"Applicable entity" means a partnership, corporation,
limited liability company, or real estate investment trust.
"Applicable entity" does not include:
(1) an organization described in Section 501(c)(3) of
the Internal Revenue Code that is exempt from tax under
Section 501(a) of the Internal Revenue Code; or
(2) an organization that is primarily engaged in the
construction or rehabilitation of single-family
residences.
"Applicable taxpayer" means any applicable entity that:
(1) manages funds pooled from investors; and
(2) is a fiduciary with respect to such investors.

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"Department" means the Department of Revenue.
"Disqualified sale" means any sale or transfer to:
(1) a corporation or other entity engaged in a trade
or business; or
(2) an individual who owns any other single-family
residence at the time of the sale or transfer.
"Fair market value" means the amount for which a property
can be sold in the due course of business and trade, not under
duress, between a willing buyer and a willing seller.
"Hedge fund taxpayer" means, with respect to any taxable
year, any applicable taxpayer that has $25,000,000 or more in
net assets.
"Ownership" means a majority ownership interest in the
single-family residence, regardless of the percentage of that
ownership interest.
"Single-family residence" means residential property
consisting of 1 to 4 dwelling units.
"Single-family residence" does not include any
single-family residence that is not rented or leased and that
is used as the principal residence of any person who has an
ownership interest in the applicable taxpayer.
Section 10. Newly acquired single-family residences. The
acquisition of a single-family residence by an applicable
taxpayer on or after the effective date of this Act is subject
to a tax on the acquisition of the residence equal to 100% of

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the fair market value of the residence at the time of purchase.
The proceeds of the tax shall be deposited into the Illinois
Affordable Housing Trust Fund for the purpose of providing
rental and mortgage payment assistance.
The tax under this Section shall be paid by the applicable
taxpayer and shall be collected in the same manner as real
estate transfer taxes are collected under the Real Estate
Transfer Tax Law in the Property Tax Code, except that
provisions concerning the distribution of proceeds and
exemptions from the tax do not apply to the tax imposed under
this Section.
Section 15. Maximum permissible single-family residences.
(a) The maximum number of single-family residences that
may be owned by a hedge fund taxpayer shall be determined as
follows:
(1) By December 31 of the first full calendar year to
begin on or after the effective date of this Act, the
number of single-family residences owned by a hedge fund
taxpayer may not exceed 90% of the number of single-family
residences owned by that taxpayer on the effective date of
this Act.
(2) By December 31 of the second full calendar year to
begin on or after the effective date of this Act, the
number of single-family residences owned by a hedge fund
taxpayer may not exceed 80% of the number of single-family

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residences owned by that taxpayer on the effective date of
this Act.
(3) By December 31 of the third full calendar year to
begin on or after the effective date of this Act, the
number of single-family residences owned by a hedge fund
taxpayer may not exceed 70% of the number of single-family
residences owned by that taxpayer on the effective date of
this Act.
(4) By December 31 of the fourth full calendar year to
begin on or after the effective date of this Act, the
number of single-family residences owned by a hedge fund
taxpayer may not exceed 60% of the number of single-family
residences owned by that taxpayer on the effective date of
this Act.
(5) By December 31 of the fifth full calendar year to
begin on or after the effective date of this Act, the
number of single-family residences owned by a hedge fund
taxpayer may not exceed 50% of the number of single-family
residences owned by that taxpayer on the effective date of
this Act.
(6) By December 31 of the sixth full calendar year to
begin on or after the effective date of this Act, the
number of single-family residences owned by a hedge fund
taxpayer may not exceed 40% of the number of single-family
residences owned by that taxpayer on the effective date of
this Act.

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(7) By December 31 of the seventh full calendar year
to begin on or after the effective date of this Act, the
number of single-family residences owned by a hedge fund
taxpayer may not exceed 30% of the number of single-family
residences owned by that taxpayer on the effective date of
this Act.
(8) By December 31 of the eighth full calendar year to
begin on or after the effective date of this Act, the
number of single-family residences owned by a hedge fund
taxpayer may not exceed 20% of the number of single-family
residences owned by that taxpayer on the effective date of
this Act.
(9) By December 31 of the ninth full calendar year to
begin on or after the effective date of this Act, the
number of single-family residences owned by a hedge fund
taxpayer may not exceed 10% of the number of single-family
residences owned by that taxpayer on the effective date of
this Act.
(10) On and after December 31 of the tenth full
calendar year to begin on or after the effective date of
this Act, a hedge fund taxpayer may not own any
single-family residences.
(b) The maximum number of single-family residences that
may be owned by an applicable taxpayer other than a hedge fund
taxpayer shall be determined as follows:
(1) By December 31 of the first full calendar year to

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begin on or after the effective date of this Act, the
number of single-family residences owned by an applicable
taxpayer other than a hedge fund taxpayer may not exceed
90% of the number of single-family residences owned by
that taxpayer on the effective date of this Act plus 50
single-family residences.
(2) By December 31 of the second full calendar year to
begin on or after the effective date of this Act, the
number of single-family residences owned by an applicable
taxpayer other than a hedge fund taxpayer may not exceed
80% of the number of single-family residences owned by
that taxpayer on the effective date of this Act plus 50
single-family residences.
(3) By December 31 of the third full calendar year to
begin on or after the effective date of this Act, the
number of single-family residences owned by an applicable
taxpayer other than a hedge fund taxpayer may not exceed
70% of the number of single-family residences owned by
that taxpayer on the effective date of this Act plus 50
single-family residences.
(4) By December 31 of the fourth full calendar year to
begin on or after the effective date of this Act, the
number of single-family residences owned by an applicable
taxpayer other than a hedge fund taxpayer may not exceed
60% of the number of single-family residences owned by
that taxpayer on the effective date of this Act plus 50

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single-family residences.
(5) By December 31 of the fifth full calendar year to
begin on or after the effective date of this Act, the
number of single-family residences owned by an applicable
taxpayer other than a hedge fund taxpayer may not exceed
50% of the number of single-family residences owned by
that taxpayer on the effective date of this Act plus 50
single-family residences.
(6) By December 31 of the sixth full calendar year to
begin on or after the effective date of this Act, the
number of single-family residences owned by an applicable
taxpayer other than a hedge fund taxpayer may not exceed
40% of the number of single-family residences owned by
that taxpayer on the effective date of this Act plus 50
single-family residences.
(7) By December 31 of the seventh full calendar year
to begin on or after the effective date of this Act, the
number of single-family residences owned by an applicable
taxpayer other than a hedge fund taxpayer may not exceed
30% of the number of single-family residences owned by
that taxpayer on the effective date of this Act plus 50
single-family residences.
(8) By December 31 of the eighth full calendar year to
begin on or after the effective date of this Act, the
number of single-family residences owned by an applicable
taxpayer other than a hedge fund taxpayer may not exceed

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20% of the number of single-family residences owned by
that taxpayer on the effective date of this Act plus 50
single-family residences.
(9) By December 31 of the ninth full calendar year to
begin on or after the effective date of this Act, the
number of single-family residences owned by an applicable
taxpayer other than a hedge fund taxpayer may not exceed
10% of the number of single-family residences owned by
that taxpayer on the effective date of this Act plus 50
single-family residences.
(10) On and after December 31 of the tenth full
calendar year to begin on or after the effective date of
this Act, a hedge fund taxpayer may not own more than 50
applicable single-family residences.
(c) For the purpose of calculating the number of
single-family residences owned by a taxpayer during the
calendar year, a single-family residence that is sold or
transferred by the taxpayer in a disqualified sale during a
calendar year shall be treated as a single-family residence
that is owned by the applicable taxpayer as of the last day of
that calendar year.
(d) An applicable taxpayer who fails to meet the
requirements of this Section shall be subject to a $15,000
penalty on each single-family residence owned in excess of the
permissible maximum units for the taxable year to be deposited
into the Illinois Affordable Housing Trust Fund with the

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purpose of providing rental and mortgage payment assistance.
Section 20. Sale of applicable single-family residences;
right of first refusal.
(a) An applicable taxpayer that intends to sell a
single-family residence shall give notice to each tenant of
the single-family residence of the requirements of this Act
and of the applicable taxpayer's intent to sell the
single-family residence in which the tenant resides. The
notice under this subsection shall be mailed by certified
mail.
(b) Before an applicable taxpayer may sell a single-family
residence, the applicable taxpayer shall give notice to each
tenant of the residence, by certified mail, of any third-party
bona fide offer for sale that the taxpayer intends to accept.
The notice shall include the price and the terms and
conditions of the offer. The price shall be calculated as a
single lump sum amount that reflects (i) the total purchase
price or (ii) the present value of any installment payments
offered in lieu of cash payments.
(c) Upon receiving notice of any third-party bona fide
offer, the tenant of that residence shall have the right to
purchase the subject property for the purpose of continuing
the use of the property as their residence. The tenant shall:
(1) submit to the applicable taxpayer notice of their interest
in purchasing the applicable single-family residence; (2)

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submit to the applicable taxpayer a proposed purchase and sale
agreement on substantially equivalent terms and conditions as
the bona fide offer within 45 days after receipt of notice of
the bona fide offer; (3) obtain a binding commitment for any
necessary financing or guarantees within an additional 90 days
after execution of the purchase and sale agreement; and (4)
close on the purchase within an additional 90 days after the
end of the 90-day period under item (3). No applicable
taxpayer shall unreasonably refuse to enter into, or
unreasonably delay the execution or closing on, a purchase and
sale or lease agreement with tenants who have made a bona fide
offer to meet the price and substantially equivalent terms and
conditions of an offer for which notice is required to be given
under subsection (b). Failure of the tenants to submit such a
purchase and sale agreement within the first 45-day period, to
obtain a binding commitment for financing within the
additional 90-day period, or to close on the purchase within
the second 90-day period shall serve to terminate the rights
of such residents to purchase the applicable single-family
residence. The time periods provided in this Section may be
extended by agreement. Nothing in this Section shall be
construed to require an applicable taxpayer to provide
financing to tenants except to the extent such financing would
be provided to the third-party offeror.
(d) The right of first refusal created in this Section
shall inure to the tenants for the time periods set forth in

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this Section, beginning on the date of notice to the tenants
under paragraph (b). The effective period for the right of
first refusal shall obtain separately for each substantially
different bona fide offer to purchase the applicable
single-family residence, and for each offer substantially
equivalent to an offer made more than 3 months prior to the
later offer; provided however, that in the case of a
substantially equivalent offer made by a prospective buyer who
has previously made an offer for which notice to tenants was
required by subsection (b), the right of first refusal shall
obtain only if the subsequent offer is made more than 6 months
after the earlier offer. The right of first refusal shall not
apply with respect to any offer received by the applicable
taxpayer for which a notice is not required under subsection
(b). No right of first refusal shall apply to a government
taking by eminent domain or negotiated purchase, a forced sale
under a foreclosure by an unrelated third-party, transfer by
gift, devise, or operation of law, or a sale to a person who
would be an heir at law if there were to be a death intestate
of the property owner.
(e) If the tenants of the applicable single-family
residence are not the successful purchasers, the applicable
taxpayer shall provide evidence of compliance with this
Section by filing an affidavit of compliance with the
authority having jurisdiction within 7 days after the sale or
lease of the property.

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Section 25. Reporting.
(a) The Department of Revenue shall adopt rules to
administer and enforce the provisions of this Act. Those rules
shall require such reporting as the Department determines
necessary or appropriate to carry out the purposes of this
Act, including reporting with respect to:
(1) the dates on which single-family residences owned
by an applicable taxpayer were acquired by such taxpayer,
(2) the dates on which single-family residences owned
by an applicable taxpayer are sold by such taxpayer in
accordance with this Act, and
(3) whether any person acquiring a single-family
residence from an applicable taxpayer owns any other
single-family residences.
(b) Any applicable taxpayer who fails to report in
accordance with this Section, or who fails to include correct
information in the report, shall, on notice and demand of the
Department, pay a penalty of $20,000 to be deposited into the
Illinois Affordable Housing Trust Fund with the purpose of
providing rental and mortgage payment assistance.
(c) No penalty shall be imposed under this Section with
respect to any failure if it is shown that such failure is due
to reasonable cause and not to willful neglect.
Section 900. The Illinois Affordable Housing Act is

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amended by changing Section 5 as follows:
(310 ILCS 65/5) (from Ch. 67 1/2, par. 1255)
Sec. 5. Illinois Affordable Housing Trust Fund.
(a) There is hereby created the Illinois Affordable
Housing Trust Fund, hereafter referred to in this Act as the
"Trust Fund" to be held as a separate fund within the State
Treasury and to be administered by the Program Administrator.
The purpose of the Trust Fund is to finance projects of the
Illinois Affordable Housing Program as authorized and approved
by the Program Administrator. The Funding Agent shall
establish, within the Trust Fund, a General Account, a Bond
Account, a Commitment Account and a Development Credits
Account. The Funding Agent shall authorize distribution of
Trust Fund moneys to the Program Administrator or a payee
designated by the Program Administrator for purposes
authorized by this Act. After receipt of the Trust Fund moneys
by the Program Administrator or designated payee, the Program
Administrator shall ensure that all those moneys are expended
for a public purpose and only as authorized by this Act.
(b) Except as otherwise provided in Section 8(c) of this
Act, there shall be deposited in the Trust Fund such amounts as
may become available under the provisions of this Act,
including, but not limited to:
(1) all receipts, including dividends, principal and
interest repayments attributable to any loans or

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agreements funded from the Trust Fund;
(2) all proceeds of assets of whatever nature received
by the Program Administrator, and attributable to default
with respect to loans or agreements funded from the Trust
Fund;
(3) any appropriations, grants or gifts of funds or
property, or financial or other aid from any federal or
State agency or body, local government or any other public
organization or private individual made to the Trust Fund;
(4) any income received as a result of the investment
of moneys in the Trust Fund;
(5) all fees or charges collected by the Program
Administrator or Funding Agent pursuant to this Act;
(6) amounts as provided in Section 31-35 of the Real
Estate Transfer Tax Law;
(7) other funds as appropriated by the General
Assembly; and
(8) any income, less costs and fees associated with
the Program Escrow, received by the Program Administrator
that is derived from Trust Fund Moneys held in the Program
Escrow prior to expenditure of such Trust Fund Moneys.
(c) Additional Trust Fund Purpose: Receipt and use of
federal funding for programs responding to the COVID-19 public
health emergency. Notwithstanding any other provision of this
Act or any other law limiting or directing the use of the Trust
Fund, the Trust Fund may receive, directly or indirectly,

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federal funds from the Homeowner Assistance Fund authorized
under Section 3206 of the federal American Rescue Plan Act of
2021 (Public Law 117-2). Any such funds shall be deposited
into a Homeowner Assistance Account which shall be established
within the Trust Fund by the Funding Agent so that such funds
can be accounted for separately from other funds in the Trust
Fund. Such funds may be used only in the manner and for the
purposes authorized in Section 3206 of the American Rescue
Plan Act of 2021 and in related federal guidance. Also, the
Trust Fund may receive, directly or indirectly, federal funds
from the Emergency Rental Assistance Program authorized under
Section 3201 of the federal American Rescue Plan Act of 2021
and Section 501 of Subtitle A of Title V of Division N of the
Consolidated Appropriations Act, 2021 (Public Law 116-260).
Any such funds shall be deposited into an Emergency Rental
Assistance Account which shall be established within the Trust
Fund by the Funding Agent so that such funds can be accounted
for separately from other funds in the Trust Fund. Such funds
may be used only in the manner and for the purposes authorized
in Section 3201 of the American Rescue Plan Act of 2021 and in
related federal guidance. Expenditures under this subsection
(c) are subject to annual appropriation to the Funding Agent.
Unless used in this subsection (c), the defined terms set
forth in Section 3 shall not apply to funds received pursuant
to the American Rescue Plan Act of 2021. Notwithstanding any
other provision of this Act or any other law limiting or

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directing the use of the Trust Fund, funds received under the
American Rescue Plan Act of 2021 are not subject to the terms
and provisions of this Act except as specifically set forth in
this subsection (c).
(d) Additional Trust Fund Purpose. The Trust Fund may also
receive moneys that are designated for deposit into the Trust
Fund as provided in the Family Home Ownership Act. Those
moneys may be used as provided in that Act.
(Source: P.A. 102-16, eff. 6-17-21; 103-8, eff. 7-1-23.)