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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB4849

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.
LRB104 17527 HLH 30954 b

A BILL FOR

HB4849
LRB104 17527 HLH 30954 b
1

AN ACT concerning revenue.

2

Be it enacted by the People of the State of Illinois,
3
represented in the General Assembly:

4

Section 1.
Short title.
This Act may be cited as the
Farmer
5
Tax Benefit Act.

6

Section 5.
Purpose and findings.
The General Assembly
7
finds that:
8

(1) The State of Illinois' unique natural resources,
9

wildlife habitats, open spaces, agricultural and forested
10

resources, wetlands, and historical, cultural, and
11

archaeological resources are of significant economic,
12

environmental, and social benefit to the State and the
13

public.
14

(2) The Illinois economy is vulnerable to other states
15

that have financial incentive programs targeted to support
16

the protection of unique natural and agricultural
17

resources. Illinois should advance new tools to ensure
18

that Illinois offers a competitive quality of life and is
19

desirable in site location decision-making for businesses.
20

(3) Natural carbon storage and increasing carbon
21

sequestration from natural and working lands is a critical
22

component of State and national deep decarbonization
23

strategies because the maintenance of existing sequestered

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carbon in intact natural and working lands systems can be
2

among the most cost-effective ways to support climate
3

goals.
4

(4) The protection of natural and working lands is an
5

important climate adaptation strategy, with land
6

conservation serving to build community resilience against
7

extreme weather events, such as by absorbing excess
8

rainwater to reduce flooding, filtering pollutants,
9

offering cooling from extreme heat, preserving
10

biodiversity, ensuring species' corridor migration, and
11

protecting productive farmland that provides food
12

security.
13

(5) Much of the State's unique natural, historical,
14

agricultural and open space resources and habitats are
15

found on lands that are privately owned. The General
16

Assembly intends to provide private landowners with
17

incentives to encourage voluntary protection of private
18

lands for open space, natural resources, biodiversity
19

conservation, water supply, outdoor recreation, farmland
20

and forestland preservation, historic preservation, and
21

land conservation purposes.

22

Section 10.
Definitions.
As used in this Act:
23

"Conservation agency" means the following:
24

(1) the State of Illinois;
25

(2) a federal agency;

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(3) a unit of local government;
2

(4) a federally-recognized Indian tribe; or
3

(5) a 501(c)(3) nonprofit organization that has
4

experience acquiring conservation real estate, whether
5

through purchase, donation, or transfer, and that meets
6

the requirements of Section 170(h)(3) of the Internal
7

Revenue Code and the regulations adopted under that
8

Section.
9

A conservation agency must also:
10

(1) be authorized to acquire, hold, and maintain title
11

to real estate or interests in real estate in Illinois;
12

(2) be organized and operated for purposes expressly
13

including natural resource protection, land conservation,
14

or historic preservation; and
15

(3) meet other criteria or certifications required by
16

the Department by rule.
17

Any non-profit corporation that is accredited through
18
the Land Trust Accreditation Commission shall automatically be
19
deemed a conservation agency with no further burden of proof.
20

"Credit" means the Illinois Land Protection Credit created
21
and administered as outlined in this Act.
22

"Department" means the Department of Natural Resources.
23

"Federally recognized Indian tribe" means any Indian tribe
24
that is included on the list of federally recognized Indian
25
tribes that is published from time to time by the United States
26
Department of the Interior under the Federally Recognized

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Indian Tribe List Act of 1994.
2

"Landowner" means the owner of fee simple title to land,
3
as evidenced by the county real property records in the county
4
where the real property interest is located, including,
5
without limitation, individuals, trusts and estates, and
6
entities such as limited liability companies, partnerships,
7
and corporations, whether for profit or not-for-profit.
8

"Land protection agreement" means a restriction, granted
9
in perpetuity and created pursuant to Illinois real property
10
law, on the use that may be made of real property, and that
11
complies with Section 170(h)(2)(C) of the Internal Revenue
12
Code.
13

"Qualified appraisal" has the same meaning as that term is
14
defined in 26 CFR 1.170A-17.
15

"Qualified donation" means the transfer and conveyance by
16
gift, without consideration, of all or a portion, including
17
bargain sales, of a qualified real property interest to a
18
conservation agency if those purposes are secured in
19
perpetuity through recording of a deed in the real property
20
records in the county where the qualified real property
21
interest is located.
22

"Qualified real property interest" means any of the
23
following interests in real property located in the State of
24
Illinois:
25

(1) fee simple interest;
26

(2) a remainder interest; or

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(3) a land protection agreement.
2

A fee simple interest or remainder interest shall not be
3
deemed a qualified real property interest unless the
4
conservation and preservation purposes are assured in
5
perpetuity. In these cases, the credit shall not be allowed
6
until the conservation agency agrees in recorded documentation
7
that any subsequent conveyances of the fee simple or remainder
8
interest in the property will be subject to a prior conveyance
9
in perpetuity of a land protection agreement or will be
10
conveyed to another conservation agency.

11

Section 15.
Credit availability.
12

(a) For taxable years beginning on or after January 1,
13
2027, taxpayers may apply to the Department for a credit
14
against the tax imposed by subsections (a) and (b) of Section
15
201 of the Illinois Income Tax Act in an amount equal to either
16
(i) 100% of the fair market value of a qualified donation of a
17
land protection agreement or (ii) 50% of the fair market value
18
of the qualified donation of a fee simple interest or a
19
remainder interest in qualified real property. The fair market
20
value of any donation made under this Section shall be
21
substantiated by a qualified appraisal prepared by a qualified
22
appraiser.
23

(b) The total aggregate amount of tax credits issued under
24
this Act in any State fiscal year shall not exceed $7,500,000.
25
Certificates of tax credit shall be allocated on a first-come,

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1
first-served basis. The Department shall log applications as
2
they are received. If the $7,500,000 total aggregate cap is
3
exceeded in any one year, the Department shall issue a
4
certificate of tax credit to be available to the landowner in
5
the subsequent tax year with an effective date of the
6
subsequent year.
7

(c) The amount of the credit that may be claimed by a
8
landowner for any single qualified donation shall not exceed
9
$500,000.
10

(d) The credit under this Act is exempt from the
11
provisions of Section 250.

12

Section 20.
Credit allocation by the Department.
13

(a) A landowner seeking to claim a tax credit under
14
Section 15 above shall, in either the year of the donation or
15
the year following the year of donation, submit to the
16
Department an application for a land protection tax credit on
17
a form to be created by the Department. The application shall
18
be accompanied by the qualified appraisal substantiating the
19
value of the qualified donation and the deed transferring the
20
qualified real property interest. If the landowner is a
21
pass-through entity, the application shall also include
22
documentation that the landowner has owned the property for
23
more than 3 years at the time of the donation or otherwise
24
meets the family exception set forth in Section 40.
25

(b) On receipt of the application and all supporting

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documentation, the Department shall either (i) record the
2
transaction and provide the landowner with a certificate
3
acknowledging the credit, together with a tracking number, on
4
a form to be created by the Department, (ii) request more
5
information, or (iii) decline to issue the certificate by
6
providing a written statement of the deficiencies in the
7
application. The landowner shall have an opportunity to cure
8
any deficiencies. The Department shall make its determination
9
within 60 days of receipt of the application. If no
10
determination is made within 60 days after receipt, the credit
11
shall be deemed automatically granted.
12

If the landowner is receiving compensation for any
13
non-donated portion of a qualified real property interest and
14
that compensation derives from a federal, State, or local
15
public conservation funding source, then the landowner shall
16
include, with the application, documentation confirming the
17
award of public funding towards the qualified real property
18
interest. In that case, the public funding award shall be
19
determinative of the conservation benefit and value, no
20
additional review by the Department shall be necessary, and
21
the credit shall be automatically granted and the certificate
22
automatically issued.

23

Section 25.
Allowable credit use.
24

(a) If the amount of the credit exceeds the tax liability
25
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
2
credit year. In no event shall a credit under this Section
3
reduce the taxpayer's liability to less than zero. The
4
landowner shall submit a copy of the certificate of tax credit
5
with its tax returns for the year of the claimed credit.
6

(b) A sale, assignment, or transfer of the tax credit may
7
be made by the taxpayer earning the credit at any time during
8
the 5-year carry forward period. Upon notice of transfer, the
9
Department shall issue transfer certificates to the transferor
10
and transferee that identify the amount of the credit
11
transferred. Upon issuance of the transfer certificates, the
12
transferor relinquishes all rights to the portion of the
13
credit that was transferred. The transferred credit may be
14
applied by the transferee against its tax imposed by the
15
Illinois Income Tax Act, and any credit not used by the
16
transferee may be carried forward for the remainder of the
17
original 5-year carry forward period. A landowner seeking to
18
transfer a credit shall submit to the Department a Notice of
19
Tax Credit Transfer on a form to be created by the Department.
20
Upon any transfer of a credit, a fee equal to 2.5% of the
21
amount of the credit so transferred shall be paid to the
22
Department by the landowner to cover the administrative costs
23
of this process.

24

Section 30.
Powers of the Department.
25

(a) The Department, in addition to those powers granted

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1
under the Civil Administrative Code of Illinois, is granted
2
and has all the powers necessary or convenient to carry out and
3
effectuate the purposes and provisions of this Act, including,
4
but not limited to, power and authority to:
5

(1) Adopt rules deemed necessary and appropriate for
6

the administration of the tax credit program.
7

(2) Establish forms for applications, notifications,
8

contracts, or any other agreements and accept applications
9

at any time during the year.
10

(3) Assist applicants pursuant to the provisions of
11

this Act to promote, foster, and support land conservation
12

and its related benefits within the State.
13

(4) Gather information and conduct inquiries in the
14

manner and by the methods as it deems desirable.
15

(5) Provide for sufficient personnel to permit
16

administration, staffing, operation, and related support
17

required to adequately discharge its duties and
18

responsibilities described in this Act from funds as may
19

be appropriated by the General Assembly for the
20

administration of this Act.
21

(6) Require applicants, upon written request, to issue
22

any necessary authorization to the appropriate federal,
23

State, or local authority for the release of information
24

concerning a project being considered under the provisions
25

of this Act, with the information requested to include,
26

but not be limited to, financial reports, returns, or

HB4849
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LRB104 17527 HLH 30954 b
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records.
2

(b) The Department shall adopt rules within 6 months after
3
the effective date of this Act.

4

Section 35.
Analysis of the Illinois Land Protection Tax
5
Credit.
6

(a) By December 31, 2032, the Department, in consultation
7
with other State agencies as needed, shall prepare a report
8
detailing the amount of land and the fair market value of land
9
protected during the reporting period pursuant to this Act.
10
The Department may consider application and attestation
11
information provided by eligible taxpayers pursuant to this
12
Act and any other data it deems relevant.
13

(b) The final report shall be made publicly available, and
14
copies of the final report shall be filed with the General
15
Assembly and the Governor.

16

Section 40.
Applicability and limitations.
17

(a) Any tax credits arising under this Act from a
18
qualified donation made by a pass-through tax entity, such as
19
a trust, estate, limited liability corporation, or
20
partnership, limited partnership, subchapter S corporation, or
21
other fiduciary, shall be used either by that entity, if it is
22
the taxpayer on behalf of such entity, or by the member,
23
manager, partner, shareholder, or beneficiary, as the case may
24
be, in proportion to the person's interest in the entity, if

HB4849
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that income tax liability passes through such entity to such
2
member, manager, partner, shareholder, beneficiary. Tax
3
credits may not be claimed by both the entity and the member,
4
manager, partner, shareholder, or beneficiary for the same
5
qualified donation. In the case of a pass-through entity
6
described above, no qualified donation shall be eligible for a
7
tax credit under this Act unless the entity acquired the land
8
or qualified real property interest 3 or more years before the
9
donation for which the qualified donation is being sought.
10

(b) Subsection (a) shall not apply with respect to any
11
qualified donation by any partnership or pass-through entity
12
for which a tax credit is being sought under this Act if
13
substantially all of the partnership interests or pass-through
14
entity interests in the partnership or pass-through entity are
15
held, directly or indirectly, by an individual or members of
16
the individual's family.
17

As used in this subsection, "member of the family" means
18
the individual's spouse or any person who bears a relationship
19
to the individual that is described in Internal Revenue Code
20
Section 152(d)(2) subparagraphs (A) through (G).
21

(c) If a conservation agency becomes unqualified after the
22
effective date of a qualified donation, it shall not require
23
any taxpayer to repay tax credits claimed under this Act, nor
24
shall such event be cause for any other penalty to be imposed
25
on a taxpayer.

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Section 45.
Construction.
2

(a) Nothing in this Act shall be interpreted to in any way
3
alter or amend any permit requirements, reporting
4
requirements, allocation procedures, or other requirements set
5
forth in any other provision of State law.
6

(b) Notwithstanding any provision of law to the contrary,
7
a land protection agreement held pursuant to this Section
8
shall be construed in favor of achieving the conservation
9
purposes for which it was created.

10

Section 900.
The Illinois Income Tax Act is amended by
11
adding Section 253 as follows:

12

(35 ILCS 5/253 new)
13

Sec. 253.
Farmer Tax Benefit Act.
A taxpayer who has been
14
awarded a credit under the Farmer Tax Benefit Act is entitled
15
to a credit as provided in that Act.

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