The Illinois Senate Revenue Committee met Thursday to discuss several changes to Illinois tax laws, including a bill package to revitalize Illinois’ capital city and the creation of a tax credit for foster parents. 

Senate Bill 3436 — sponsored by Sen. Doris Turner (D-Decatur) — would create the Capital City Redevelopment Zone Act, allowing for the City of Springfield to adopt an ordinance creating a redevelopment zone in the city.   

Businesses that develop in that zone would then be eligible for myriad tax credits and grants to support developments.  

Turner said the bill was modeled after the River Edge Redevelopment Zone, a tax credit program intended to encourage development in seven cities adjacent to Illinois’ rivers: Alton, Aurora, East St. Louis, Elgin, Peoria, Rockford and Sterling.   

Springfield Mayor Misty Buscher said the city struggles to find interested developers for their downtown building because of the number of historic and aging buildings.   

“Anyone who is on this call that spends time in downtown knows that our downtown needs some help,” she said. “We have a lot of old historic buildings that our investors in our community are finding difficult to make them turnkey because of just the expense.”  

Buscher said they hope with the incentives to help with some of the expense, they can attract developers to create more apartment units and retail space downtown.  

Sen. Donald DeWitte (R-West Dundee) said the measure is a “really good bill,” but also said there were communities statewide that could benefit from the tax credits.  

Turner said Springfield is in a unique situation because of the number of historic buildings.  

The second bill in the package — Senate Bill 3499 — would create the Capital Area Tourism Authority Act. The measure would allow Sangamon County to adopt an ordinance to establish a Sales Tax and Revenue (STAR) bond district in the region and establish a tax on hotel operators within that district.   

The revenue from that district would then be used to support projects within it, namely an expansion of the Bank of Springfield Convention Center and a new full-service hotel in downtown Springfield, Turner said.  

She said the convention center is hoping to expand the types of conventions it hosts, ideally bringing more tourists to the city.  

“Springfield is definitely a tourist destination,” Turner said. “We have people coming here from all over the world, and this will give us another opportunity to look at what we can do from an economic development standpoint in our downtown.”  

Keenan Irish, vice president of government relations for the Illinois Hotel and Lodging Association, said the organization believes the hotel tax would not be used to provide enough support for the hotel region in the industry.   

He said they were also concerned that a tourism authority created by the bill does not include a requirement that board members or the authority executive director have experience in “tourism promotion, destination marketing, hotel operations or the convention business.”   

Turner said she has had conversations with Irish and will continue them to ideally find a compromise.  

Turner also presented Senate Bill 3614, which would allow small business owners to open a small business asset purchase account and create a tax deduction of up to 50 percent of their contribution to the account.   

“I think that we can all agree that small businesses are the backbone of our communities,” Turner said. “I think that no big business can match the care and support of a local mom- and- pop shop. And I think that this legislation will allow small businesses to make necessary improvements that will allow them to grow and thrive.” 

Noah Finley, Illinois state director of the National Federation of Independent Business, said the intention of the bill is to allow small business owners to reinvest their earnings into the business and avoid extra costs that come with having to acquire outside financing.  

The committee also heard Senate Bill 3692 — sponsored by Sen. Dave Koehler (D-Peoria) — which would make companies that recycle and melt steel products, as well as those that manufacture new steel wire and products, eligible for the state’s Economic Development for a Growing Economy (EDGE) Tax Credit.   

The EDGE program is available to companies that meet minimum investment and job creation requirements. The program has two tiers. To be eligible for Tier 1, companies must create 50 new full-time jobs and invest up to $2.5 million in the state. Companies must create or retain 100-500 full-time jobs and invest $50-100 million to be eligible for Tier 2.  

The tax credit lasts for 10-15 years, depending on the tier and size of the investment. EDGE tax credits have been awarded 388 times since 2015.  

Sen. Willie Preston (D-Chicago) presented Senate Bill 2830, which prohibits property tax payers from being charged interest for sale-in-error refunds arising from an error or omission from the county.  

The measure would also require tax purchasers to be responsible for at least 10 percent of the risk for issues that could have been easily discoverable at the time of the purchase. It also requires a presale certification from the county that properties are legally eligible for sale.  

The measure would also redirect properties in a distressed community that are not purchased in a scavenger sale into a property trust, with the goal of preventing properties from being completely abandoned.  

Finally, the measure would create new transparency requirements for property tax errors and refunds.  

Preston said that although the measure is based on Cook County, it is not limited to the county because some other parts of the state have similar issues.  

The committee also heard Senate Bill 2097 — sponsored by Sen. Erica Harriss (R-Edwardsville) — which would create an income tax credit for foster care expenses up to $1,000. A taxpayer must provide care for at least six months to be eligible for the credit.  

Harriss said the credit would help with some of the expenses that come with caring for children and will prevent foster families from leaving the program, therefore minimizing the number of placements foster kids might experience.  

Harriss also presented Senate Bill 3959. The measure would create a $500 nonrefundable income tax credit for first-time homebuyers in the state.   

“It's targeted, modest relief, for the early and often most difficult years of homeownership,” Harriss said. “It's not a cure-all, but it's a meaningful step and signal that Illinois supports young families and wants them to build their future here.”   

Sen. Robert Martwick (D-Chicago) presented Senate Bill 3828, which would make myriad changes to four Illinois tax laws related to cigarettes. The measure modernizes licensing procedures and would eliminate a bond requirement for cigarette machine operators, distributors and certain permit holders beginning July 1, 2027.  

The measure also would require a possessor or owner of seized contraband to pay the cost to destroy the items. The cost currently falls to the state.  

Richard Sgro, legislative director for the Illinois Department of Revenue, said the issue has come up more recently with illegal vapes and electronic cigarettes.   

Senate Bill 3765, a measure to create an income tax credit for qualified railroad expenditures or qualified new rail infrastructure expenditures, was also heard.  

Sen. Mark Walker (D-Arlington Heights) — a chief co-sponsor — said the measure would provide support for railroads across the state, many of which are essential for transporting materials to and from Illinois’ manufacturers.    

Finally, the committee heard Senate Bill 3944, sponsored by DeWitte. The measure would create a sales tax exemption for homeowners who lease solar panels.   

DeWitte said the measure is intended to fix a change in sales tax law that unintentionally included the leases, a problem he said has been brought to his attention by several constituents.  

“I don't particularly see any reason that we should be penalizing people who are going ahead and making the investment in these products to provide themselves with electricity while at the same time doing their part to shrink their carbon footprint,” DeWitte said.  

The measures were all heard on subject matter and were not voted on.