SB3931 creates a new Community Reintegration Housing Fund to pay housing‑related costs for people who are either transitioning out of congregate long‑term care or at risk of placement because they lack affordable accessible housing. The Department of Human Services (or a Governor‑designated entity) will administer the Fund and must adopt program rules within six months.
To finance the Fund, the bill raises the Illinois real estate transfer tax from $0.50 to $0.75 per $500 of value effective July 1, 2026, and redirects a portion of transfer tax receipts so that, after a $300,000 annual deposit to the Governor’s Administrative Fund, 32% of the remaining transfer tax proceeds flow into the new Fund. Benefits are modeled on the federal Section 8 voucher approach, including a 30% income cap on housing costs and portability rights for beneficiaries.
At a Glance
What It Does
Creates the Community Reintegration Housing Fund administered by DHS, limits Fund spending to housing‑related costs, and requires rules patterned on Section 8 (30% income cap and beneficiary portability). It raises the real estate transfer tax to $0.75 per $500 and reallocates transfer tax proceeds so 32% funds the new account starting July 1, 2026.
Who It Affects
Directly affects people in nursing homes, state developmental centers, group homes, or supportive living facilities who lack accessible affordable housing; DHS and partner agencies responsible for rulemaking and program administration; county recorders and parties to real‑estate transfers who will pay the higher transfer tax.
Why It Matters
The bill creates a dedicated revenue stream for community‑based housing tied to Olmstead compliance and long‑term‑care rebalancing, shifting a measurable share of transfer‑tax dollars away from conservation and open‑space programs to housing assistance for people leaving or avoiding institutional care.
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What This Bill Actually Does
SB3931 establishes a statutory special fund — the Community Reintegration Housing Fund — and gives the Department of Human Services (or a Governor‑designated entity) authority to run it. The fund’s stated purpose is to reduce institutionalization consistent with Olmstead v.
L.C. by financing housing costs that otherwise block community placement. The statute limits Fund expenditures to housing‑related costs but does not enumerate every eligible expense.
Eligibility is categorical and means‑tested. One group is current residents of defined congregate facilities (nursing homes, state developmental centers, group homes, supportive living) for whom lack of appropriate housing is a primary barrier to discharge.
The other group is people facing imminent placement who earn at or below 80% of area median income and are either disabled/blind/65+ or already eligible for Supplemental Security Income (Title XVI) or Medicaid (Title XIX). Benefits must be designed so beneficiaries pay no more than 30% of income on housing, and recipients can move to a different qualifying unit without losing assistance.Funding comes primarily from a statutory change to the real estate transfer tax: the tax rises from $0.50 to $0.75 per $500 of value effective July 1, 2026.
The bill amends the deposit schedule for transfer‑tax proceeds so that, after a $300,000 annual payment to the Governor’s Administrative Fund, 32% of remaining receipts will go to the new Fund, with the balance divided among the existing Affordable Housing Trust Fund, Open Space Lands Acquisition and Development Fund, and the Natural Areas Acquisition Fund. DHS must adopt program rules within six months and consult the Long Term Care Ombudsman, the State Protection and Advocacy agency, and the Department of Healthcare and Family Services during rule development.
The Five Things You Need to Know
The bill increases Illinois’ real estate transfer tax to $0.75 per $500 of value effective July 1, 2026.
After a $300,000 annual Governor’s Administrative Fund deposit, 32% of remaining transfer‑tax receipts are allocated to the Community Reintegration Housing Fund starting July 1, 2026.
Eligibility includes (A) residents of nursing homes, state developmental centers, group homes, or supportive living facilities blocked from discharge by lack of housing, and (B) people facing imminent placement who are at or below 80% of area median income and are disabled, blind, 65+, or eligible for Title XVI or Title XIX benefits.
DHS must adopt rules and procedures within 6 months in consultation with the Illinois Long Term Care Ombudsman, the State Protection and Advocacy agency, and the Department of Healthcare and Family Services.
Program assistance must be structured like a Section 8 voucher so beneficiaries pay no more than 30% of income for housing and may relocate without losing benefits; Fund moneys are restricted to housing‑related costs and administered by DHS or a Governor‑designated entity.
Section-by-Section Breakdown
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Creates the Community Reintegration Housing Fund
This addition to the State Finance Act formally establishes the Fund as a special treasury account. Practically, that gives the Fund a discrete appropriation and audit trail and allows the General Assembly to appropriate or supplement it in future budgets. The statutory creation also ties the Fund into State accounting and reporting systems, which matters for transparency and interagency budgeting.
Program purpose, administration, eligibility, and rulemaking timeline
This is the operative program language. It assigns administration to DHS (or a Governor‑designated alternate), limits spending to housing‑related costs, and describes eligible populations in detail (facility residents blocked from discharge; people facing placement under an 80% AMI cap with disability/age or SSI/Medicaid eligibility). It mandates rules within six months and requires consultation with the Long Term Care Ombudsman, State Protection & Advocacy, and the Department of Healthcare and Family Services, signaling cross‑agency coordination with Medicaid and advocacy stakeholders. The statute also adopts operational guardrails—beneficiaries pay no more than 30% of income and have portability rights—without listing every covered housing expense, leaving definitions to rulemaking.
Raises the real estate transfer tax to fund the program
Section 31‑10 changes the per‑$500 tax rate from $0.50 to $0.75 on and after July 1, 2026. That statutory rate change creates the revenue base for the Fund but does not itself describe how receipts are split — that occurs in the next amended section. For practitioners, the key operational consequence is that parties to real estate transfers after July 1, 2026 will face a higher transfer‑tax liability, increasing transaction costs for buyers/sellers and potentially affecting pricing or negotiation.
Redirects transfer‑tax receipts to the new Fund and adjusts other allocations
Section 31‑35 revises deposit percentages: beginning July 1, 2026, after the $300,000 annual Governor’s Administrative Fund deposit, remaining transfer‑tax receipts are allocated 34% to the Illinois Affordable Housing Trust Fund, 24% to Open Space Lands Acquisition and Development, 10% to the Natural Areas Acquisition Fund, and 32% to the Community Reintegration Housing Fund. That reallocation formalizes where money will flow and reduces the shares available to some existing programs; the provision also ties Fund cashflows to market‑sensitive transfer‑tax revenues rather than to a fixed appropriation.
Collection mechanics and electronic revenue stamp language
Section 31‑15 includes provisions on revenue stamps, electronic filing, and phased elimination of paper stamps. Practically, county recorders must file returns electronically and remit receipts via debit/ACH; the Department can suspend electronic filing privileges for noncompliant recorders. While not directly changing Fund policy, these mechanics determine how transfer‑tax dollars are collected and remitted to the State and therefore affect timing and predictability of Fund receipts.
Immediate effect for the Act; tax rate effective July 1, 2026
The Act takes effect upon becoming law, but the higher transfer tax and the new deposit allocation schedule are keyed to July 1, 2026. That bifurcation means DHS can begin rulemaking immediately under the new statute, while revenues to seed the Fund will start only after the tax change and the new deposit schedule begin.
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Explore Housing in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- People leaving or avoiding institutional long‑term care: The Fund pays housing‑related costs and caps beneficiary housing payments at 30% of income, removing a common financial barrier to community placement.
- Medicaid/HCBS programs and long‑term‑care rebalancing efforts: By subsidizing housing, the Fund reduces the non‑medical barrier to transition, which can lower institutional Medicaid spending and support state Olmstead obligations.
- Community‑based service providers and supportive housing operators: Easier placement and rental subsidy options should increase referrals and utilization of community housing capacity, enabling providers to deliver home‑ and community‑based services more effectively.
- Advocacy organizations focused on disability and aging: The statute formalizes a revenue stream and administrative obligation for community reintegration, giving advocates a statutory tool to push for discharges and housing supports.
Who Bears the Cost
- Parties to real estate transfers (sellers or buyers depending on local practice): The tax increase to $0.75 per $500 raises closing costs on transfers after July 1, 2026, which may be negotiated into price or borne directly by sellers/buyers.
- Open space and natural‑areas programs and the Illinois Affordable Housing Trust Fund: Those existing accounts receive reduced percentage shares of transfer‑tax receipts (for example, the Affordable Housing Trust Fund drops from 50% to 34%), effectively reallocating prior revenue streams away from conservation and other uses.
- County recorders and local recording offices: The bill reinforces electronic filing and remittance obligations; counties that lack modern systems or that fall out of compliance risk suspension of electronic filing privileges and must handle operational changes.
- State budget/priorities: The reallocation represents a choice to fund housing reintegration via transfer‑tax receipts rather than new general revenue, but it reduces funds for previously supported programs and creates a revenue stream sensitive to real estate market fluctuations.
Key Issues
The Core Tension
The core dilemma is funding community reintegration by redirecting a portion of transfer‑tax revenue: this creates a dedicated income source to end institutional placements for people who need housing, but it does so by reducing monies for established conservation and housing accounts and by increasing transaction costs on real‑estate transfers — a trade‑off between social supports for vulnerable populations and competing fiscal, environmental, and market‑efficiency objectives.
The bill ties a social‑service objective to a volatile revenue source. Transfer‑tax receipts fluctuate with real‑estate activity; a market downturn could sharply reduce Fund inflows just as demand for housing subsidies rises, leaving DHS to ration assistance or seek additional appropriations.
The statute limits spending to "housing‑related costs" but does not enumerate eligible expenses (security deposits, accessibility retrofits, ongoing rental subsidies, case management), so the substance of what the Fund will cover depends on rulemaking decisions and subsequent appropriations.
The reallocation also creates a clear trade‑off between competing public priorities: conservation and open‑space programs will receive smaller shares of transfer tax revenue, which may slow land acquisition or restoration efforts funded by those accounts. Administrative friction is another risk: implementing a voucher‑style program with portability and means‑testing requires coordination with Medicaid eligibility systems and landlord markets; DHS must build or scale staff, verification processes, and landlord engagement quickly under the six‑month rulemaking timeline.
Finally, statutory language in the collection section contains legacy and timing complexities (electronic stamp phaseout, filing suspensions) that could complicate revenue timing unless the Department issues clarifying guidance.
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