PRESERVING NEIGHBORHOODS ACT

Illinois General Assembly - Full Text of HB4870

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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB4870

Introduced , by Rep. Amy Elik

SYNOPSIS AS INTRODUCED:

New Act
35 ILCS 5/246 new

Creates the Preserving Illinois Neighborhoods Act. Provides that, for
taxable years that begin on or after January 1, 2027 and end on or before
December 31, 2032, qualified taxpayers who incur qualified new
construction expenditures or qualified rehabilitation expenditures during
the taxable year are entitled to a credit. Effective immediately.
LRB104 17774 HLH 31206 b

A BILL FOR

HB4870
LRB104 17774 HLH 31206 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
5
Preserving Illinois Neighborhoods Act.

6

Section 5.
Definitions.
7

"Department" means the Department of Commerce and Economic
8
Opportunity.
9

"Eligible property" means residential property that (i)
10
has a market value prior to the new construction or
11
rehabilitation of $300,000 or less, (ii) is located in a
12
qualified area, and (iii) has either (A) been vacant for at
13
least 2 years or (B) is or was occupied by a structure that has
14
been condemned by the unit of local government in which the
15
structure is located.
16

"Qualified area" means an area classified as an
17
underserved area, as defined in Section 5-5 of the Economic
18
Development for a Growing Economy Tax Credit Act, during the
19
taxable year.
20

"Qualified new construction expenditure" means an expense
21
incurred in connection with the construction of a qualified
22
new residence on eligible property, including, but not limited
23
to, an expense incurred for any of the following: site

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LRB104 17774 HLH 31206 b
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preparation other than demolition; surveys; architectural and
2
engineering services; construction; or any other necessary and
3
incidental expense incurred for constructing a qualified new
4
residence on the property. Costs paid for by the taxpayer with
5
grants or forgivable loans, other than tax credits provided by
6
State or federal programs, are not considered qualified new
7
construction expenditures.
8

"Qualified new residence" means a residential structure
9
that is or will be owner-occupied and that is not replacing a
10
structure that is listed on the National Register of Historic
11
Places or the Illinois Register of Historic Places.
12

"Qualified rehabilitation expenditure" means an expense
13
incurred for the renovation or rehabilitation of an existing
14
single-family residence that is 40 years of age or older,
15
including, but not limited to, an expense incurred for any of
16
the following: site preparation; surveys; architectural and
17
engineering services; or construction, modification,
18
expansion, remodeling, or structural alteration of the
19
residence. Costs paid for by the taxpayer with grants or
20
forgivable loans, other than tax credits provided by State or
21
federal programs, are not considered qualified rehabilitation
22
expenditures.
23

"Qualified taxpayer" means any taxpayer that is a person,
24
partnership, corporation, trust, limited liability company, or
25
tax-exempt charitable organization and whose Illinois
26
unrelated business taxable income, if any, is subject to the

HB4870
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LRB104 17774 HLH 31206 b
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State income tax imposed under subsections (a) and (b) of
2
Section 201 of the Illinois Income Tax Act.

3

Section 10.
Allowable credit; application.
4

(a) For taxable years that begin on or after January 1,
5
2027 and end on or before December 31, 2032, qualified
6
taxpayers who incur qualified new construction expenditures or
7
qualified rehabilitation expenditures during the taxable year
8
are entitled to a credit against the tax imposed by
9
subsections (a) and (b) of Section 201 of the Illinois Income
10
Tax Act as provided in this Act. Subject to the limitations in
11
Section 15, credits under this Act shall be calculated as
12
follows:
13

(1) 15% of the qualified new construction expenditures
14

incurred by the qualified taxpayer during the taxable year
15

in the construction of a qualified new residence in a
16

qualified area; and
17

(2) 25% of the qualified rehabilitation expenditures
18

incurred by the qualified taxpayer during the taxable year
19

in the restoration and preservation of eligible property
20

in a qualified area;
21

(b) Taxpayers shall apply to the Department for credits
22
under this Act in the form and manner required by the
23
Department by rule. A separate application shall be completed
24
for each of the taxpayer's projects that are eligible for
25
credits under this Act. Upon approval of the complete

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application, the Department shall issue a tax credit
2
certificate in the amount of the eligible credits. The
3
taxpayer must attach the certificate to the tax return on
4
which the credits are to be claimed.

5

Section 15.
Limitations.
6

(a) Tax credits awarded under this Act for qualified new
7
construction expenditures shall not exceed $40,000 per
8
project. The taxpayer must incur a minimum of $10,000 in
9
eligible expenditures with respect to a project to be eligible
10
for credits under this Act for that project.
11

(b) The Department may not award more than $5,000,000 in
12
credits under this Act in any calendar year. Credits shall be
13
awarded on a first-come, first-served basis, and the
14
Department must adopt rules whose goal is to ensure that the
15
tax credits are awarded justly and equitably throughout the
16
State.
17

(c) A taxpayer is not eligible for a credit under this
18
Section if the taxpayer receives a State income tax credit for
19
the same expenditure under any other provision of law.

20

Section 20.
Rulemaking.
The Department, in consultation
21
with the Department of Revenue, shall adopt rules for the
22
implementation and administration of this Act.

23

Section 25.
Report.
The Department shall report to the

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LRB104 17774 HLH 31206 b
1
Governor and the General Assembly on the effectiveness of the
2
credits awarded under this Section no later than December 31,
3
2028 and by December 31 of each even-numbered year through
4
December 31, 2032.

5

Section 30.
Repeal.
This Act is repealed on January 1,
6
2032.

7

Section 35.
The Illinois Income Tax Act is amended by
8
adding Section 246 as follows:

9

(35 ILCS 5/246 new)
10

Sec. 246.
Preserving Illinois Neighborhoods Act.
For
11
taxable years that begin on or after January 1, 2027 and end on
12
or before December 31, 2032, qualified taxpayers who incur
13
qualified new construction expenditures or qualified
14
rehabilitation expenditures during the taxable year are
15
entitled to a credit against the tax imposed by subsections
16
(a) and (b) of Section 201 of the Illinois Income Tax Act as
17
provided in the Preserving Illinois Neighborhoods Act.
18

This Section is repealed on January 1, 2032.

19

Section 99.
Effective date.
This Act takes effect upon
20
becoming law.

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