Bill Text: IL SB3576 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Amends the Illinois Income Tax Act. Creates a credit in an amount equal to 20% of the qualified conversion expenditures incurred by a taxpayer for a qualified converted building. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2024-03-15 - Rule 3-9(a) / Re-referred to Assignments [SB3576 Detail]

Download: Illinois-2023-SB3576-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB3576 Introduced 2/9/2024, by Sen. Mattie Hunter SYNOPSIS AS INTRODUCED:
35 ILCS 5/241 new
Amends the Illinois Income Tax Act. Creates a credit in an amount equal to 20% of the qualified conversion expenditures incurred by a taxpayer for a qualified converted building. Effective immediately.
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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 5. The Illinois Income Tax Act is amended by
adding Section 241 as follows:
(35 ILCS 5/241 new)
Sec. 241. Revitalizing Illinois Downtowns Tax Credit.
(a) For taxable years beginning on or after January 1,
2025, a taxpayer may apply to the Department, in the form and
manner required by the Department, for a credit against the
taxes imposed under subsections (a) and (b) of Section 201 of
this Act. The amount of the credit shall be equal to 20% of the
qualified conversion expenditures incurred by the qualified
taxpayer during the taxable year with respect to a qualified
converted building. If the qualified conversion expenditures
include construction work, then that construction work must be
subject to a project labor agreement. In no event shall the
amount of the credit exceed $15,000 per taxpayer in a single
tax year; however, if the qualified conversion plan spans
multiple years, the aggregate credit for the entire project
may be claimed in the last taxable year so long as the total
credit amount for the entire project does not exceed $15,000
per year for each year of the project. The total aggregate

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amount of credits awarded by the Department under this Section
shall not exceed $50,000,000 in any State fiscal year. Credits
shall be awarded on a first-come, first-served basis.
(b) The credit for partners and shareholders of subchapter
S corporations shall be determined as provided in Section 251.
(c) In no event shall a credit under this Section reduce
the taxpayer's liability to less than zero. If the amount of
the credit exceeds the tax liability for the year, the excess
may be carried forward and applied to the tax liability of the
5 taxable years following the excess credit year. The tax
credit shall be applied to the earliest year for which there is
a tax liability. If there are credits for more than one year
that are available to offset a liability, the earlier credit
shall be applied first.
(d) As used in this Section:
"Qualified converted building" means a building that meets
all of the following criteria:
(1) the building has been substantially converted from
office use to residential, retail, or other commercial use
by the qualified taxpayer;
(2) prior to the conversion described in item (1), the
building was not used for residential purposes and was
leased to office tenants or was available for lease to
office tenants;
(3) the building was initially placed in service at
least 25 years before the beginning of the conversion

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described in item (1);
(4) the building is eligible for depreciation on the
taxpayer's federal income taxes;
(5) the building is carbon neutral or has attained
certification under one or more of the following green
building standards: BREEAM for New Construction or BREEAM
In-Use; ENERGY STAR; Envision; ISO 50001-energy
management; LEED for Building Design and Construction or
LEED for Operations and Maintenance; Green Globes for New
Construction or Green Globes for Existing Buildings; UL
3223; or an equivalent standard approved by the
Department; and
(6) in the case of a building that is converted to
residential use property under item (1):
(A) upon the completion of the conversion, 20% or
more of the residential housing units will be both
rent-restricted and occupied by individuals whose
income is 80% or less of the median income for the
municipality as established by the United States
Department of Health and Human Services; and
(B) the property is subject to a binding State or
local agreement with respect to the provision of
financing of affordable housing, and that agreement is
documented in writing.
"Qualified conversion expenditure" means any expenditure
that is incurred by the taxpayer in converting a building from

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office use to residential, retail, or other commercial use and
that is properly chargeable to a capital account. "Qualified
expenditure" does not include the cost of acquisition of the
building or property to be converted, the cost to enlarge the
building, any expenditure that is allocable to a portion of
the property that is tax-exempt use property, or any
expenditure incurred by a lessee of a building on or after the
date on which the conversion is complete.
"Qualified office building" means (i) commercial property
that is leased or available for lease to office tenants or is
used primarily for office use and (ii) the structural
components of that property.
"Qualified taxpayer" means an Illinois resident that is
the owner of a qualified office building located in the State.
"Substantially converted" means that the qualified
expenditures incurred by the qualified taxpayer with respect
to the subject building during the 24-month period selected by
the taxpayer at the time and in the manner prescribed by the
Department by rule and ending during the taxable year for
which the credit is claimed exceed the greater of: (i) the
adjusted basis of the building and its structural components
or (ii) $15,000. The adjusted basis of the building and its
structural components shall be determined as of the first day
of that 24-month period or the beginning of the first day of
the holding period of the building, whichever is later. For
purposes of determining the adjusted basis, the determination

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of the beginning of the holding period shall be made without
regard to any reconstruction by the qualified taxpayer.
(e) The Department may, in consultation with the
Department of Commerce and Economic Opportunity, adopt rules
to administer the provisions of this Section.