SB1366 96TH GENERAL ASSEMBLY

LRB096 10710 HLH 20888 b

96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
SB1366

Introduced 2/10/2009, by Sen. Dan Kotowski

SYNOPSIS AS INTRODUCED:

New Act

Creates the Historic Rehabilitation Tax Credit Act. Authorizes tax credits against Illinois income taxes and insurance company privilege taxes for 25% of the costs of rehabilitating eligible historic property. Allows excess credits to be carried back and forward. Allows credits to be transferred, sold, or assigned. Administered by the Department of Commerce and Economic Opportunity. Sets forth application and award procedures. Effective July 1, 2009.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning revenue.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Historic Rehabilitation Tax Credit Act.

Section 5. Definitions.

As used in this Act, unless the context requires otherwise:

(1) "Certified historic structure" means a property located in Illinois that is listed individually on the National Register of Historic Places or is designated as a historic structure by a unit of local government.

(2) "Eligible property" means property located in Illinois that is offered or used for residential, non-profit, local governmental, or business purposes.

(3) "Structure in a historic district" means a structure located in Illinois that is certified by the United States Department of the Interior as contributing to the historic significance of a certified historic district listed on the National Register of Historic Places, a local district that has been certified by the United States Department of the Interior, or a local district that has been designated by a local government, either municipal or county.

Section 10. Rehabilitation of eligible property. Any person, firm, partnership, trust, estate, corporation, or association incurring costs and expenses for the rehabilitation of eligible property, when that eligible property is a certified historic structure or a structure in a certified historic district, is entitled to a credit against the taxes imposed under the Illinois Income Tax Act (35 ILCS 5/), except Article 7 of that Act, and under Section 409 of the Illinois Insurance Code (215 ILCS 5/409) in an amount equal to 25% of the total costs and expenses of rehabilitation incurred after July 1, 2009. Expenses of rehabilitation include, but are not limited to, qualified rehabilitation expenditures as defined under Section 47(c)(2)(A) of the Internal Revenue Code of 1986, as amended, and the related regulations thereunder, provided the rehabilitation costs associated with rehabilitation and the expenses exceed 50% of the total basis in the property and the rehabilitation meets standards consistent with the standards of the Secretary of the United States Department of the Interior for rehabilitation as determined by the Department of Commerce and Economic Opportunity in consultation with the State Historic Preservation Officer.

Section 15. Use of tax credits, carried forward or carried back, assignment.

(a) If the amount of the credit exceeds the total tax liability for the year in which the rehabilitated property is placed in service, the amount that exceeds the tax liability may be carried back to any of the 3 preceding years and carried forward for any of the succeeding 10 years as a credit against the taxes imposed under the Illinois Income Tax Act (except Article 7) and Section 409 of the Illinois Insurance Code, or until the full credit is used, whichever occurs first. Taxpayers eligible for the credits may transfer, sell, or assign the credits. Not-for-profit entities are eligible to receive, transfer, sell, or assign the credits. Credits granted to a partnership, a limited liability company taxed as a partnership, or multiple owners of property shall be passed through to the partners, members, or owners respectively pro rata or pursuant to an executed agreement among the partners, members, or owners documenting an alternate distribution method.

(b) The assignor of the credits may transfer, sell, or assign any or all of the credits to the assignee who may use the acquired credits to offset tax liabilities imposed under the Illinois Income Tax Act (except Article 7) and Section 409 of the Illinois Insurance Code. The assignor must perfect the transfer, sale, or assignment by notifying the Department of Commerce and Economic Opportunity in writing within 30 calendar days following the effective date of the transfer, sale, or assignment, and must provide any information that is required by the Department of Commerce and Economic Opportunity to administer and carry out the provisions of this Section. The credits may be transferred more than once.

(c) If credits that have been transferred are subsequently reduced, adjusted, or recaptured by the Department of Commerce and Economic Opportunity, Department of Revenue, or any other applicable government agency, only the transferor originally allowed the credits, and not any subsequent transferee of the credits, shall be held liable to repay any amount of that reduction, adjustment, or recapture of the credits.

Section 20. Application to claim tax credit; certificates of eligible credits.

(a) To obtain the credit, an application must be made to the Department of Commerce and Economic Opportunity. The Department, in consultation with the Director of Historic Sites and Preservation and the United States Department of the Interior, shall determine the amount of eligible rehabilitation costs and expenses and whether the rehabilitation meets the standards of the Secretary of the United States Department of the Interior for rehabilitation. The Department of Commerce and Economic Opportunity shall issue a certificate in the amount of the eligible credits. The taxpayer must attach the certificate to the tax return on which the credits are to be claimed.

(b) The Department of Commerce and Economic Opportunity shall determine, on an annual basis, the overall economic impact to the State from the rehabilitation of eligible property.

(c) The Department of Commerce and Economic Opportunity is granted and has all powers necessary or convenient to carry out the provisions of this Act, including, but not limited to, the power to adopt rules for the administration of this Act and the power to establish application forms and other agreements.

Section 99. Effective date. This Act takes effect July 1, 2009.