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HB 3412

Relating to the climate.

2025 Regular Session

The bill creates a temporary Illinois income tax credit (2026–2031) to rehabilitate old homes or build owner-occupied houses in designated areas, boosting neighborhood preservation

In committee upon adjournment.
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WeVote Research Nonpartisan
Bill Summary · HB 3412

HB 3412 — Preserving Illinois Neighborhoods Act (2025)

Status: Introduced by Rep. Amy Elik (2/18/2025). Read and referred to multiple committees; most recently listed “in committee upon adjournment” (6/28/2025).

Purpose

Creates a temporary state income tax credit program to encourage rehabilitation of older single‑family homes and construction of owner‑occupied residences on long‑vacant or condemned residential lots in designated “qualified” areas. The stated aim is to preserve neighborhoods, return blighted properties to productive use, and spur reinvestment in underserved communities.

Key provisions

  • Program period: Credits available for taxable years beginning on or after January 1, 2026 and ending on or before December 31, 2031. Act repealed Jan 1, 2032.
  • Administering agency: Illinois Department of Commerce and Economic Opportunity (DCEO), with rules in consultation with the Department of Revenue.
  • Eligible properties:
    • Residential property in a “qualified area” (tied to areas defined under Section 5-5 of the Economic Development for a Growing Economy Tax Credit Act).
    • Either vacant for at least 2 years or containing a structure that is/was condemned.
    • For rehabilitation: existing single‑family residences at least 40 years old and with rehabilitation cost $300,000 or less.
  • Qualified taxpayers: Individuals, partnerships, corporations, trusts, LLCs, and tax‑exempt charitable organizations to the extent unrelated business taxable income is subject to Illinois income tax.
  • Credit amounts:
    • 15% of qualified new construction expenditures for constructing an owner‑occupied new residence (not replacing property listed on the National or Illinois Register of Historic Places).
    • 25% of qualified rehabilitation expenditures for restoring eligible existing residences.
  • Qualified expenditures: construction, site prep (other than demolition), surveys, architectural/engineering services, remodeling, structural work, etc. Costs paid with grants or forgivable loans are excluded (except existing state/federal tax credits may apply).
  • Project thresholds and limits:
    • Minimum of $10,000 in eligible expenditures required per project.
    • Per‑project credit cap: the bill text caps credits/expenditures per project at $40,000 (project‑level limit is included in the draft).
    • Statewide annual cap: DCEO may not award more than $5,000,000 in credits per calendar year; credits awarded first‑come, first‑served.
    • A taxpayer may not claim this credit for the same expenditure if they already received another State income tax credit for that expenditure.
  • Application & certification: Applicants submit a separate application for each project to DCEO. Upon approval DCEO issues a credit certificate which the taxpayer attaches to the Illinois tax return when claiming the credit.
  • Reporting: DCEO must report on program effectiveness to the Governor and General Assembly by Dec 31, 2027 and every odd‑numbered year thereafter through Dec 31, 2031.

Who is affected

  • Direct beneficiaries: property owners, developers, or organizations that undertake eligible rehabilitation or new construction projects in qualified areas and meet program rules.
  • Fiscal/administrative impact: potential reduction in State income tax revenue up to the annual $5 million cap; administrative duties for DCEO and the Department of Revenue to implement, certify, and monitor awards.

Notes / caveats

  • Definitions and some statutory language in the introduced draft are partially fragmented; readers should consult the official bill text for precise legal language.
  • Eligibility depends on DCEO rulemaking and the designated definition of “qualified area” as referenced to existing economic development statute.

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

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