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HB 4849

INC TAX-LAND PROTECTION

104th Regular Session Introduced by Dee Avelar and 11 co-sponsors

Illinois offers a tax credit up to 100% or 50% of donated land value to perpetual conservation, capped statewide at 7.5 million annually, to encourage private land protection.

Added Co-Sponsor Rep. Amy Briel
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WeVote Research Nonpartisan
Bill Summary · HB 4849

Summary of HB4849 (Illinois, 104th General Assembly) – Farmer Tax Benefit Act

Proposed in Illinois to create an income tax credit program incentivizing private land conservation and protection of natural resources.

Purpose and Intent

  • Establish the Farmer Tax Benefit Act to encourage private landowners to protect and conserve land through donated interests or preserved rights.
  • Position Illinois to remain competitive in attracting businesses by valuing and safeguarding natural resources, open space, farmland, forestry, biodiversity, water supply, and related cultural resources.
  • Recognize carbon storage and sequestration as part of climate and resilience strategies, highlighting natural and working lands as cost-effective climate mitigation and adaptation tools.

Key Provisions and Changes

Creation of Tax Credit

  • New provision: 35 ILCS 5/253 (Farmer Tax Benefit Act) that provides an income tax credit for certain land conservation donations.
  • Credit recipients: Landowners who make qualified donations to a conservation agency.

Qualified Donations and Interests

  • Qualified donation types:
    • Donation of a land protection agreement (perpetual restriction on land use recorded in county records).
    • Donation of a fee simple interest or remainder interest in qualified real property, where the conservation purpose is maintained in perpetuity.
  • Qualified real property interests must ensure conservation/preservation in perpetuity, with conditions on future conveyances to maintain perpetuity.

Conservation Agencies

  • “Conservation agency” includes:
    • State of Illinois, federal agencies, units of local government, federally recognized Indian tribes, or 501(c)(3) nonprofit organizations meeting Internal Revenue Code Section 170(h)(3).
  • Accreditation: An accredited nonprofit land trust automatically qualifies as a conservation agency.

Credit Amounts and Limits

  • For tax years beginning on or after January 1, 2027:
    • Credit equals either:
    • 100% of the fair market value of a qualified donation of a land protection agreement, or
    • 50% of the fair market value of a qualified donation of a fee simple or remainder interest.
    • The value must be supported by a qualified appraisal.
  • Total annual credit cap: $7,500,000 statewide.
  • Individual credit cap per donation: $500,000.

Application and Certification Process

  • Landowners must apply to the Department of Natural Resources (DNR) for a tax credit in the donation year or the following year.
  • Required documents: Qualified appraisal and deed transferring the interest.
  • Department actions within 60 days of receiving an application:
    • Issue a certification and tracking number, request more information, or decline with deficiencies noted.
    • If the Department fails to decide within 60 days, the credit is automatically granted.
  • If public funding (federal/state/local) supports the conservation, that funding can determine the credit value and may trigger automatic grant of the credit.

Credit Use and Transfer

  • Carryforward: If the credit exceeds tax liability, unused portion may be carried forward up to 5 years (cannot reduce liability below zero).
  • Transferability: Credits may be sold or transferred within the 5-year carryforward period, with a 2.5% transfer fee paid to the Department.
  • Transferee can apply the credit against Illinois tax liability; any unused portion can continue to be carried forward.

Departmental Authority and Rules

  • DNR authority to adopt rules, establish application forms, set procedures, and administer the program.
  • Rules to be adopted within 6 months after the Act’s effective date.

Reporting and Accountability

  • By December 31, 2032, the Department must prepare and publicly release an analysis/report detailing land protected and the fair market value of protected land, using eligible taxpayer data as appropriate.

Applicability and Limitations

  • Pass-through entities (trusts, estates, LLCs, partnerships, etc.) must allocate credits proportionally to owners/members/partners/beneficiaries.
  • In most cases, credits cannot be claimed by both the entity and its members for the same donation.
  • Special rules apply to pass-through entities where ownership structure is closely held or family-related.
  • If a conservation agency becomes unqualified after a donation, taxpayers are not required to repay credits or face penalties.

Who/What Would Be Affected

  • Landowners who donate qualifying real property interests or land protection agreements to eligible conservation agencies.
  • Conservation agencies receiving donations (State, federal, local governments, tribes, or accredited 501(c)(3) organizations).
  • Taxpayers who owe Illinois income tax and pursue the credit against their tax liability.
  • Pass-through entities and their owners/parters/members/beneficiaries sharing the donation’s tax benefits.
  • Department of Natural Resources, which administers the credit program, approves applications, and issues credits.

Timing and Procedural Notes

  • Effective date: Provisions apply to tax years beginning on or after January 1, 2027.
  • Annual credit cap and allocation process are in place; if the cap is reached, remaining eligible landowners receive credits in the next year.
  • DNR must adopt rules within 6 months of the Act’s effective date.
  • By 2032, a comprehensive public report on land protection under the program is required.

Summary

HB4849 creates a new Illinois tax credit program to promote private land conservation by rewarding landowners with significant tax credits (100% of the donated value for land protection agreements; 50% for interests in land) when they donate to qualified conservation agencies. The program emphasizes perpetual protections, requires qualified appraisals, caps annual credits at $7.5 million, and allows transferability of credits with a modest processing fee. It includes detailed administrative rules, reporting requirements, and considerations for pass-through entities. The Act positions private land protection as a strategic tool for environmental, climate, and agricultural resilience in Illinois, while creating a formal process for credit certification and oversight by the Department of Natural Resources.

Compiled from official sources — confirm details with the bill’s official record.

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