97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB2079

 

Introduced 2/22/2011, by Rep. Lou Lang

 

SYNOPSIS AS INTRODUCED:
 
New Act
35 ILCS 5/201  from Ch. 120, par. 2-201
35 ILCS 120/1d  from Ch. 120, par. 440d
35 ILCS 120/1e  from Ch. 120, par. 440e
35 ILCS 120/1f  from Ch. 120, par. 440f
35 ILCS 120/5l  from Ch. 120, par. 444l
220 ILCS 5/9-222  from Ch. 111 2/3, par. 9-222
220 ILCS 5/9-222.1A

    Creates the Green Energy Business Act. Authorizes the Department of Commerce and Economic Opportunity to receive and approve the applications of qualified businesses seeking designation as Green Energy Businesses. Amends the Illinois Income Tax Act, the Retailers' Occupation Tax Act, and the Public Utilities Act to provide that Green Energy Businesses are eligible for certain credits and exemptions under those Acts. Effective immediately.


LRB097 08864 HLH 48994 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB2079LRB097 08864 HLH 48994 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the Green
5Energy Business Act.
 
6    Section 5. Definitions. As used in this Act, the following
7words shall have the meanings ascribed to them below, unless
8the context otherwise requires:
9    "Biodiesel" means a renewable diesel fuel derived from
10biomass that is intended for use in diesel engines.
11    "Department" means the Department of Commerce and Economic
12Opportunity.
13    "Ethanol" means a product produced from agricultural
14commodities or by-products used as a fuel or to be blended with
15other fuels for use in motor vehicles.
16    "Green Energy Business" means a business that:
17        (i) produces or manufactures components used in the
18    production of electricity from renewable energy resources;
19        (ii) has the capacity to produce and produces at least
20    5 megawatts of electricity from renewable energy resources
21    each year;
22        (iii) has the capacity to produce and produces no less
23    than 30,000,000 gallons of biodiesel or ethanol each year.

 

 

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1    "Renewable energy resources" means wind energy; solar
2thermal energy; photovoltaic cells and panels; biodiesel;
3crops; untreated and unadulterated organic waste biomass;
4trees and tree trimmings; hydropower that does not involve new
5construction or significant expansion of hydropower dams; and
6other alternative sources of environmentally preferable
7energy. For purposes of this Act, landfill gas produced in the
8State is a renewable energy resource, but tires; garbage;
9general household, institutional, and commercial waste;
10industrial lunchroom or office waste; landscape waste (other
11than trees and tree trimmings); railroad crossties; utility
12poles; and construction or demolition debris (other than
13untreated and unadulterated waste wood) are not. Renewable
14energy resources also include any renewable energy credit or
15credits associated with or generated by a source of energy that
16otherwise qualifies as a renewable energy resource under this
17Act.
 
18    Section 10. Green Energy Business.
19    (a) To assist in the encouragement, development, growth,
20and expansion of the private sector through green energy
21projects, the Department may receive and approve applications
22for the designation of "Green Energy Business" in Illinois.
23Applications may be submitted at any time. No later than 90
24days after an application is submitted, the Department shall
25notify the applicant of the Department's determination as to

 

 

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1the applicant's qualification to be designated as a Green
2Energy Business under this Section. To qualify as a Green
3Energy Business, a business must meet all of the following
4conditions:
5        (1) It must not be located, at the time of designation,
6    in an enterprise zone designated under the Illinois
7    Enterprise Zone Act.
8        (2) It must commit to (i) produce or manufacture
9    components used in the production of electricity from
10    renewable energy resources; (ii) produce at least 5
11    megawatts of electricity from renewable energy resources
12    each year; or (iii) produce not less than 30,000,000
13    gallons of biodiesel or ethanol each year.
14        (3) It must commit to have the business placed in
15    service at a qualified property in Illinois.
16        (4) It must certify in writing that (i) the investments
17    would not be placed in service at a qualified property
18    without the tax credits and exemptions referenced in
19    subsection (b) of this Section and (ii) the job creation or
20    job retention would not occur without the tax credits and
21    exemptions referenced in subsection (b) of this Section.
22    The terms "placed in service" and "qualified property" have
23    the same meanings as described in subsection (h) of Section
24    201 of the Illinois Income Tax Act.
25        (5) It must meet any additional criteria established by
26    the Department.

 

 

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1    (b) Each business designated as a Green Energy Business by
2the Department shall qualify for the credits and exemptions in
3Sections 9-222 and 9-222.1A of the Public Utilities Act;
4subsection (h) of Section 201 of the Illinois Income Tax Act;
5and Section 1d of the Retailers' Occupation Tax Act. Each
6business designated as a Green Energy Business under this
7Section shall also qualify for the exemption described in
8Section 5l of the Retailers' Occupation Tax Act. The credit
9provided in subsection (h) of Section 201 of the Illinois
10Income Tax Act shall be applicable to investments in qualified
11property used to meet the requirements in subdivision (a)(2) of
12this Section.
13    (c) The Department must revoke a Green Energy Business
14designation if, within the Department's discretion, the
15participating business fails to comply with the terms and
16conditions of the designation.
 
17    Section 15. Project labor agreements
18    (a) Each business designated as a Green Energy Business by
19the Department must enter into a project labor agreement. The
20project labor agreement must include provisions establishing
21(i) the minimum hourly wage for each class of labor
22organization employee; (ii) the benefits and other
23compensation for each class of labor organization employee; and
24(iii) that no strike or disputes will be engaged in by the
25labor organization employees; and (iv) that no lockout or

 

 

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1disputes will be engaged in by the owner of a Green Energy
2Business. The owner of a Green Energy Business and the labor
3organizations shall have the authority to include other terms
4and conditions as they deem necessary.
5    (b) Each project labor agreement shall be filed with the
6Director in accordance with the procedures established by the
7Department. At a minimum, the project labor agreement must
8provide the names, addresses, and occupations of the owner of
9the Green Energy Business and the individuals representing the
10labor organization employees participating in the project
11labor agreement. The agreement must also specify the terms and
12conditions required in subsection (a) of this Section.
 
13    Section 20. The Illinois Income Tax Act is amended by
14changing Section 201 as follows:
 
15    (35 ILCS 5/201)  (from Ch. 120, par. 2-201)
16    Sec. 201. Tax Imposed.
17    (a) In general. A tax measured by net income is hereby
18imposed on every individual, corporation, trust and estate for
19each taxable year ending after July 31, 1969 on the privilege
20of earning or receiving income in or as a resident of this
21State. Such tax shall be in addition to all other occupation or
22privilege taxes imposed by this State or by any municipal
23corporation or political subdivision thereof.
24    (b) Rates. The tax imposed by subsection (a) of this

 

 

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1Section shall be determined as follows, except as adjusted by
2subsection (d-1):
3        (1) In the case of an individual, trust or estate, for
4    taxable years ending prior to July 1, 1989, an amount equal
5    to 2 1/2% of the taxpayer's net income for the taxable
6    year.
7        (2) In the case of an individual, trust or estate, for
8    taxable years beginning prior to July 1, 1989 and ending
9    after June 30, 1989, an amount equal to the sum of (i) 2
10    1/2% of the taxpayer's net income for the period prior to
11    July 1, 1989, as calculated under Section 202.3, and (ii)
12    3% of the taxpayer's net income for the period after June
13    30, 1989, as calculated under Section 202.3.
14        (3) In the case of an individual, trust or estate, for
15    taxable years beginning after June 30, 1989, and ending
16    prior to January 1, 2011, an amount equal to 3% of the
17    taxpayer's net income for the taxable year.
18        (4) In the case of an individual, trust, or estate, for
19    taxable years beginning prior to January 1, 2011, and
20    ending after December 31, 2010, an amount equal to the sum
21    of (i) 3% of the taxpayer's net income for the period prior
22    to January 1, 2011, as calculated under Section 202.5, and
23    (ii) 5% of the taxpayer's net income for the period after
24    December 31, 2010, as calculated under Section 202.5.
25        (5) In the case of an individual, trust, or estate, for
26    taxable years beginning on or after January 1, 2011, and

 

 

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1    ending prior to January 1, 2015, an amount equal to 5% of
2    the taxpayer's net income for the taxable year.
3        (5.1) In the case of an individual, trust, or estate,
4    for taxable years beginning prior to January 1, 2015, and
5    ending after December 31, 2014, an amount equal to the sum
6    of (i) 5% of the taxpayer's net income for the period prior
7    to January 1, 2015, as calculated under Section 202.5, and
8    (ii) 3.75% of the taxpayer's net income for the period
9    after December 31, 2014, as calculated under Section 202.5.
10        (5.2) In the case of an individual, trust, or estate,
11    for taxable years beginning on or after January 1, 2015,
12    and ending prior to January 1, 2025, an amount equal to
13    3.75% of the taxpayer's net income for the taxable year.
14        (5.3) In the case of an individual, trust, or estate,
15    for taxable years beginning prior to January 1, 2025, and
16    ending after December 31, 2024, an amount equal to the sum
17    of (i) 3.75% of the taxpayer's net income for the period
18    prior to January 1, 2025, as calculated under Section
19    202.5, and (ii) 3.25% of the taxpayer's net income for the
20    period after December 31, 2024, as calculated under Section
21    202.5.
22        (5.4) In the case of an individual, trust, or estate,
23    for taxable years beginning on or after January 1, 2025, an
24    amount equal to 3.25% of the taxpayer's net income for the
25    taxable year.
26        (6) In the case of a corporation, for taxable years

 

 

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1    ending prior to July 1, 1989, an amount equal to 4% of the
2    taxpayer's net income for the taxable year.
3        (7) In the case of a corporation, for taxable years
4    beginning prior to July 1, 1989 and ending after June 30,
5    1989, an amount equal to the sum of (i) 4% of the
6    taxpayer's net income for the period prior to July 1, 1989,
7    as calculated under Section 202.3, and (ii) 4.8% of the
8    taxpayer's net income for the period after June 30, 1989,
9    as calculated under Section 202.3.
10        (8) In the case of a corporation, for taxable years
11    beginning after June 30, 1989, and ending prior to January
12    1, 2011, an amount equal to 4.8% of the taxpayer's net
13    income for the taxable year.
14        (9) In the case of a corporation, for taxable years
15    beginning prior to January 1, 2011, and ending after
16    December 31, 2010, an amount equal to the sum of (i) 4.8%
17    of the taxpayer's net income for the period prior to
18    January 1, 2011, as calculated under Section 202.5, and
19    (ii) 7% of the taxpayer's net income for the period after
20    December 31, 2010, as calculated under Section 202.5.
21        (10) In the case of a corporation, for taxable years
22    beginning on or after January 1, 2011, and ending prior to
23    January 1, 2015, an amount equal to 7% of the taxpayer's
24    net income for the taxable year.
25        (11) In the case of a corporation, for taxable years
26    beginning prior to January 1, 2015, and ending after

 

 

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1    December 31, 2014, an amount equal to the sum of (i) 7% of
2    the taxpayer's net income for the period prior to January
3    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
4    of the taxpayer's net income for the period after December
5    31, 2014, as calculated under Section 202.5.
6        (12) In the case of a corporation, for taxable years
7    beginning on or after January 1, 2015, and ending prior to
8    January 1, 2025, an amount equal to 5.25% of the taxpayer's
9    net income for the taxable year.
10        (13) In the case of a corporation, for taxable years
11    beginning prior to January 1, 2025, and ending after
12    December 31, 2024, an amount equal to the sum of (i) 5.25%
13    of the taxpayer's net income for the period prior to
14    January 1, 2025, as calculated under Section 202.5, and
15    (ii) 4.8% of the taxpayer's net income for the period after
16    December 31, 2024, as calculated under Section 202.5.
17        (14) In the case of a corporation, for taxable years
18    beginning on or after January 1, 2025, an amount equal to
19    4.8% of the taxpayer's net income for the taxable year.
20    The rates under this subsection (b) are subject to the
21provisions of Section 201.5.
22    (c) Personal Property Tax Replacement Income Tax.
23Beginning on July 1, 1979 and thereafter, in addition to such
24income tax, there is also hereby imposed the Personal Property
25Tax Replacement Income Tax measured by net income on every
26corporation (including Subchapter S corporations), partnership

 

 

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1and trust, for each taxable year ending after June 30, 1979.
2Such taxes are imposed on the privilege of earning or receiving
3income in or as a resident of this State. The Personal Property
4Tax Replacement Income Tax shall be in addition to the income
5tax imposed by subsections (a) and (b) of this Section and in
6addition to all other occupation or privilege taxes imposed by
7this State or by any municipal corporation or political
8subdivision thereof.
9    (d) Additional Personal Property Tax Replacement Income
10Tax Rates. The personal property tax replacement income tax
11imposed by this subsection and subsection (c) of this Section
12in the case of a corporation, other than a Subchapter S
13corporation and except as adjusted by subsection (d-1), shall
14be an additional amount equal to 2.85% of such taxpayer's net
15income for the taxable year, except that beginning on January
161, 1981, and thereafter, the rate of 2.85% specified in this
17subsection shall be reduced to 2.5%, and in the case of a
18partnership, trust or a Subchapter S corporation shall be an
19additional amount equal to 1.5% of such taxpayer's net income
20for the taxable year.
21    (d-1) Rate reduction for certain foreign insurers. In the
22case of a foreign insurer, as defined by Section 35A-5 of the
23Illinois Insurance Code, whose state or country of domicile
24imposes on insurers domiciled in Illinois a retaliatory tax
25(excluding any insurer whose premiums from reinsurance assumed
26are 50% or more of its total insurance premiums as determined

 

 

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1under paragraph (2) of subsection (b) of Section 304, except
2that for purposes of this determination premiums from
3reinsurance do not include premiums from inter-affiliate
4reinsurance arrangements), beginning with taxable years ending
5on or after December 31, 1999, the sum of the rates of tax
6imposed by subsections (b) and (d) shall be reduced (but not
7increased) to the rate at which the total amount of tax imposed
8under this Act, net of all credits allowed under this Act,
9shall equal (i) the total amount of tax that would be imposed
10on the foreign insurer's net income allocable to Illinois for
11the taxable year by such foreign insurer's state or country of
12domicile if that net income were subject to all income taxes
13and taxes measured by net income imposed by such foreign
14insurer's state or country of domicile, net of all credits
15allowed or (ii) a rate of zero if no such tax is imposed on such
16income by the foreign insurer's state of domicile. For the
17purposes of this subsection (d-1), an inter-affiliate includes
18a mutual insurer under common management.
19        (1) For the purposes of subsection (d-1), in no event
20    shall the sum of the rates of tax imposed by subsections
21    (b) and (d) be reduced below the rate at which the sum of:
22            (A) the total amount of tax imposed on such foreign
23        insurer under this Act for a taxable year, net of all
24        credits allowed under this Act, plus
25            (B) the privilege tax imposed by Section 409 of the
26        Illinois Insurance Code, the fire insurance company

 

 

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1        tax imposed by Section 12 of the Fire Investigation
2        Act, and the fire department taxes imposed under
3        Section 11-10-1 of the Illinois Municipal Code,
4    equals 1.25% for taxable years ending prior to December 31,
5    2003, or 1.75% for taxable years ending on or after
6    December 31, 2003, of the net taxable premiums written for
7    the taxable year, as described by subsection (1) of Section
8    409 of the Illinois Insurance Code. This paragraph will in
9    no event increase the rates imposed under subsections (b)
10    and (d).
11        (2) Any reduction in the rates of tax imposed by this
12    subsection shall be applied first against the rates imposed
13    by subsection (b) and only after the tax imposed by
14    subsection (a) net of all credits allowed under this
15    Section other than the credit allowed under subsection (i)
16    has been reduced to zero, against the rates imposed by
17    subsection (d).
18    This subsection (d-1) is exempt from the provisions of
19Section 250.
20    (e) Investment credit. A taxpayer shall be allowed a credit
21against the Personal Property Tax Replacement Income Tax for
22investment in qualified property.
23        (1) A taxpayer shall be allowed a credit equal to .5%
24    of the basis of qualified property placed in service during
25    the taxable year, provided such property is placed in
26    service on or after July 1, 1984. There shall be allowed an

 

 

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1    additional credit equal to .5% of the basis of qualified
2    property placed in service during the taxable year,
3    provided such property is placed in service on or after
4    July 1, 1986, and the taxpayer's base employment within
5    Illinois has increased by 1% or more over the preceding
6    year as determined by the taxpayer's employment records
7    filed with the Illinois Department of Employment Security.
8    Taxpayers who are new to Illinois shall be deemed to have
9    met the 1% growth in base employment for the first year in
10    which they file employment records with the Illinois
11    Department of Employment Security. The provisions added to
12    this Section by Public Act 85-1200 (and restored by Public
13    Act 87-895) shall be construed as declaratory of existing
14    law and not as a new enactment. If, in any year, the
15    increase in base employment within Illinois over the
16    preceding year is less than 1%, the additional credit shall
17    be limited to that percentage times a fraction, the
18    numerator of which is .5% and the denominator of which is
19    1%, but shall not exceed .5%. The investment credit shall
20    not be allowed to the extent that it would reduce a
21    taxpayer's liability in any tax year below zero, nor may
22    any credit for qualified property be allowed for any year
23    other than the year in which the property was placed in
24    service in Illinois. For tax years ending on or after
25    December 31, 1987, and on or before December 31, 1988, the
26    credit shall be allowed for the tax year in which the

 

 

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1    property is placed in service, or, if the amount of the
2    credit exceeds the tax liability for that year, whether it
3    exceeds the original liability or the liability as later
4    amended, such excess may be carried forward and applied to
5    the tax liability of the 5 taxable years following the
6    excess credit years if the taxpayer (i) makes investments
7    which cause the creation of a minimum of 2,000 full-time
8    equivalent jobs in Illinois, (ii) is located in an
9    enterprise zone established pursuant to the Illinois
10    Enterprise Zone Act and (iii) is certified by the
11    Department of Commerce and Community Affairs (now
12    Department of Commerce and Economic Opportunity) as
13    complying with the requirements specified in clause (i) and
14    (ii) by July 1, 1986. The Department of Commerce and
15    Community Affairs (now Department of Commerce and Economic
16    Opportunity) shall notify the Department of Revenue of all
17    such certifications immediately. For tax years ending
18    after December 31, 1988, the credit shall be allowed for
19    the tax year in which the property is placed in service,
20    or, if the amount of the credit exceeds the tax liability
21    for that year, whether it exceeds the original liability or
22    the liability as later amended, such excess may be carried
23    forward and applied to the tax liability of the 5 taxable
24    years following the excess credit years. The credit shall
25    be applied to the earliest year for which there is a
26    liability. If there is credit from more than one tax year

 

 

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1    that is available to offset a liability, earlier credit
2    shall be applied first.
3        (2) The term "qualified property" means property
4    which:
5            (A) is tangible, whether new or used, including
6        buildings and structural components of buildings and
7        signs that are real property, but not including land or
8        improvements to real property that are not a structural
9        component of a building such as landscaping, sewer
10        lines, local access roads, fencing, parking lots, and
11        other appurtenances;
12            (B) is depreciable pursuant to Section 167 of the
13        Internal Revenue Code, except that "3-year property"
14        as defined in Section 168(c)(2)(A) of that Code is not
15        eligible for the credit provided by this subsection
16        (e);
17            (C) is acquired by purchase as defined in Section
18        179(d) of the Internal Revenue Code;
19            (D) is used in Illinois by a taxpayer who is
20        primarily engaged in manufacturing, or in mining coal
21        or fluorite, or in retailing, or was placed in service
22        on or after July 1, 2006 in a River Edge Redevelopment
23        Zone established pursuant to the River Edge
24        Redevelopment Zone Act; and
25            (E) has not previously been used in Illinois in
26        such a manner and by such a person as would qualify for

 

 

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1        the credit provided by this subsection (e) or
2        subsection (f).
3        (3) For purposes of this subsection (e),
4    "manufacturing" means the material staging and production
5    of tangible personal property by procedures commonly
6    regarded as manufacturing, processing, fabrication, or
7    assembling which changes some existing material into new
8    shapes, new qualities, or new combinations. For purposes of
9    this subsection (e) the term "mining" shall have the same
10    meaning as the term "mining" in Section 613(c) of the
11    Internal Revenue Code. For purposes of this subsection (e),
12    the term "retailing" means the sale of tangible personal
13    property for use or consumption and not for resale, or
14    services rendered in conjunction with the sale of tangible
15    personal property for use or consumption and not for
16    resale. For purposes of this subsection (e), "tangible
17    personal property" has the same meaning as when that term
18    is used in the Retailers' Occupation Tax Act, and, for
19    taxable years ending after December 31, 2008, does not
20    include the generation, transmission, or distribution of
21    electricity.
22        (4) The basis of qualified property shall be the basis
23    used to compute the depreciation deduction for federal
24    income tax purposes.
25        (5) If the basis of the property for federal income tax
26    depreciation purposes is increased after it has been placed

 

 

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1    in service in Illinois by the taxpayer, the amount of such
2    increase shall be deemed property placed in service on the
3    date of such increase in basis.
4        (6) The term "placed in service" shall have the same
5    meaning as under Section 46 of the Internal Revenue Code.
6        (7) If during any taxable year, any property ceases to
7    be qualified property in the hands of the taxpayer within
8    48 months after being placed in service, or the situs of
9    any qualified property is moved outside Illinois within 48
10    months after being placed in service, the Personal Property
11    Tax Replacement Income Tax for such taxable year shall be
12    increased. Such increase shall be determined by (i)
13    recomputing the investment credit which would have been
14    allowed for the year in which credit for such property was
15    originally allowed by eliminating such property from such
16    computation and, (ii) subtracting such recomputed credit
17    from the amount of credit previously allowed. For the
18    purposes of this paragraph (7), a reduction of the basis of
19    qualified property resulting from a redetermination of the
20    purchase price shall be deemed a disposition of qualified
21    property to the extent of such reduction.
22        (8) Unless the investment credit is extended by law,
23    the basis of qualified property shall not include costs
24    incurred after December 31, 2013, except for costs incurred
25    pursuant to a binding contract entered into on or before
26    December 31, 2013.

 

 

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1        (9) Each taxable year ending before December 31, 2000,
2    a partnership may elect to pass through to its partners the
3    credits to which the partnership is entitled under this
4    subsection (e) for the taxable year. A partner may use the
5    credit allocated to him or her under this paragraph only
6    against the tax imposed in subsections (c) and (d) of this
7    Section. If the partnership makes that election, those
8    credits shall be allocated among the partners in the
9    partnership in accordance with the rules set forth in
10    Section 704(b) of the Internal Revenue Code, and the rules
11    promulgated under that Section, and the allocated amount of
12    the credits shall be allowed to the partners for that
13    taxable year. The partnership shall make this election on
14    its Personal Property Tax Replacement Income Tax return for
15    that taxable year. The election to pass through the credits
16    shall be irrevocable.
17        For taxable years ending on or after December 31, 2000,
18    a partner that qualifies its partnership for a subtraction
19    under subparagraph (I) of paragraph (2) of subsection (d)
20    of Section 203 or a shareholder that qualifies a Subchapter
21    S corporation for a subtraction under subparagraph (S) of
22    paragraph (2) of subsection (b) of Section 203 shall be
23    allowed a credit under this subsection (e) equal to its
24    share of the credit earned under this subsection (e) during
25    the taxable year by the partnership or Subchapter S
26    corporation, determined in accordance with the

 

 

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1    determination of income and distributive share of income
2    under Sections 702 and 704 and Subchapter S of the Internal
3    Revenue Code. This paragraph is exempt from the provisions
4    of Section 250.
5    (f) Investment credit; Enterprise Zone; River Edge
6Redevelopment Zone.
7        (1) A taxpayer shall be allowed a credit against the
8    tax imposed by subsections (a) and (b) of this Section for
9    investment in qualified property which is placed in service
10    in an Enterprise Zone created pursuant to the Illinois
11    Enterprise Zone Act or, for property placed in service on
12    or after July 1, 2006, a River Edge Redevelopment Zone
13    established pursuant to the River Edge Redevelopment Zone
14    Act. For partners, shareholders of Subchapter S
15    corporations, and owners of limited liability companies,
16    if the liability company is treated as a partnership for
17    purposes of federal and State income taxation, there shall
18    be allowed a credit under this subsection (f) to be
19    determined in accordance with the determination of income
20    and distributive share of income under Sections 702 and 704
21    and Subchapter S of the Internal Revenue Code. The credit
22    shall be .5% of the basis for such property. The credit
23    shall be available only in the taxable year in which the
24    property is placed in service in the Enterprise Zone or
25    River Edge Redevelopment Zone and shall not be allowed to
26    the extent that it would reduce a taxpayer's liability for

 

 

HB2079- 20 -LRB097 08864 HLH 48994 b

1    the tax imposed by subsections (a) and (b) of this Section
2    to below zero. For tax years ending on or after December
3    31, 1985, the credit shall be allowed for the tax year in
4    which the property is placed in service, or, if the amount
5    of the credit exceeds the tax liability for that year,
6    whether it exceeds the original liability or the liability
7    as later amended, such excess may be carried forward and
8    applied to the tax liability of the 5 taxable years
9    following the excess credit year. The credit shall be
10    applied to the earliest year for which there is a
11    liability. If there is credit from more than one tax year
12    that is available to offset a liability, the credit
13    accruing first in time shall be applied first.
14        (2) The term qualified property means property which:
15            (A) is tangible, whether new or used, including
16        buildings and structural components of buildings;
17            (B) is depreciable pursuant to Section 167 of the
18        Internal Revenue Code, except that "3-year property"
19        as defined in Section 168(c)(2)(A) of that Code is not
20        eligible for the credit provided by this subsection
21        (f);
22            (C) is acquired by purchase as defined in Section
23        179(d) of the Internal Revenue Code;
24            (D) is used in the Enterprise Zone or River Edge
25        Redevelopment Zone by the taxpayer; and
26            (E) has not been previously used in Illinois in

 

 

HB2079- 21 -LRB097 08864 HLH 48994 b

1        such a manner and by such a person as would qualify for
2        the credit provided by this subsection (f) or
3        subsection (e).
4        (3) The basis of qualified property shall be the basis
5    used to compute the depreciation deduction for federal
6    income tax purposes.
7        (4) If the basis of the property for federal income tax
8    depreciation purposes is increased after it has been placed
9    in service in the Enterprise Zone or River Edge
10    Redevelopment Zone by the taxpayer, the amount of such
11    increase shall be deemed property placed in service on the
12    date of such increase in basis.
13        (5) The term "placed in service" shall have the same
14    meaning as under Section 46 of the Internal Revenue Code.
15        (6) If during any taxable year, any property ceases to
16    be qualified property in the hands of the taxpayer within
17    48 months after being placed in service, or the situs of
18    any qualified property is moved outside the Enterprise Zone
19    or River Edge Redevelopment Zone within 48 months after
20    being placed in service, the tax imposed under subsections
21    (a) and (b) of this Section for such taxable year shall be
22    increased. Such increase shall be determined by (i)
23    recomputing the investment credit which would have been
24    allowed for the year in which credit for such property was
25    originally allowed by eliminating such property from such
26    computation, and (ii) subtracting such recomputed credit

 

 

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1    from the amount of credit previously allowed. For the
2    purposes of this paragraph (6), a reduction of the basis of
3    qualified property resulting from a redetermination of the
4    purchase price shall be deemed a disposition of qualified
5    property to the extent of such reduction.
6        (7) There shall be allowed an additional credit equal
7    to 0.5% of the basis of qualified property placed in
8    service during the taxable year in a River Edge
9    Redevelopment Zone, provided such property is placed in
10    service on or after July 1, 2006, and the taxpayer's base
11    employment within Illinois has increased by 1% or more over
12    the preceding year as determined by the taxpayer's
13    employment records filed with the Illinois Department of
14    Employment Security. Taxpayers who are new to Illinois
15    shall be deemed to have met the 1% growth in base
16    employment for the first year in which they file employment
17    records with the Illinois Department of Employment
18    Security. If, in any year, the increase in base employment
19    within Illinois over the preceding year is less than 1%,
20    the additional credit shall be limited to that percentage
21    times a fraction, the numerator of which is 0.5% and the
22    denominator of which is 1%, but shall not exceed 0.5%.
23    (g) Jobs Tax Credit; Enterprise Zone, River Edge
24Redevelopment Zone, and Foreign Trade Zone or Sub-Zone.
25        (1) A taxpayer conducting a trade or business in an
26    enterprise zone or a High Impact Business designated by the

 

 

HB2079- 23 -LRB097 08864 HLH 48994 b

1    Department of Commerce and Economic Opportunity or for
2    taxable years ending on or after December 31, 2006, in a
3    River Edge Redevelopment Zone conducting a trade or
4    business in a federally designated Foreign Trade Zone or
5    Sub-Zone shall be allowed a credit against the tax imposed
6    by subsections (a) and (b) of this Section in the amount of
7    $500 per eligible employee hired to work in the zone during
8    the taxable year.
9        (2) To qualify for the credit:
10            (A) the taxpayer must hire 5 or more eligible
11        employees to work in an enterprise zone, River Edge
12        Redevelopment Zone, or federally designated Foreign
13        Trade Zone or Sub-Zone during the taxable year;
14            (B) the taxpayer's total employment within the
15        enterprise zone, River Edge Redevelopment Zone, or
16        federally designated Foreign Trade Zone or Sub-Zone
17        must increase by 5 or more full-time employees beyond
18        the total employed in that zone at the end of the
19        previous tax year for which a jobs tax credit under
20        this Section was taken, or beyond the total employed by
21        the taxpayer as of December 31, 1985, whichever is
22        later; and
23            (C) the eligible employees must be employed 180
24        consecutive days in order to be deemed hired for
25        purposes of this subsection.
26        (3) An "eligible employee" means an employee who is:

 

 

HB2079- 24 -LRB097 08864 HLH 48994 b

1            (A) Certified by the Department of Commerce and
2        Economic Opportunity as "eligible for services"
3        pursuant to regulations promulgated in accordance with
4        Title II of the Job Training Partnership Act, Training
5        Services for the Disadvantaged or Title III of the Job
6        Training Partnership Act, Employment and Training
7        Assistance for Dislocated Workers Program.
8            (B) Hired after the enterprise zone, River Edge
9        Redevelopment Zone, or federally designated Foreign
10        Trade Zone or Sub-Zone was designated or the trade or
11        business was located in that zone, whichever is later.
12            (C) Employed in the enterprise zone, River Edge
13        Redevelopment Zone, or Foreign Trade Zone or Sub-Zone.
14        An employee is employed in an enterprise zone or
15        federally designated Foreign Trade Zone or Sub-Zone if
16        his services are rendered there or it is the base of
17        operations for the services performed.
18            (D) A full-time employee working 30 or more hours
19        per week.
20        (4) For tax years ending on or after December 31, 1985
21    and prior to December 31, 1988, the credit shall be allowed
22    for the tax year in which the eligible employees are hired.
23    For tax years ending on or after December 31, 1988, the
24    credit shall be allowed for the tax year immediately
25    following the tax year in which the eligible employees are
26    hired. If the amount of the credit exceeds the tax

 

 

HB2079- 25 -LRB097 08864 HLH 48994 b

1    liability for that year, whether it exceeds the original
2    liability or the liability as later amended, such excess
3    may be carried forward and applied to the tax liability of
4    the 5 taxable years following the excess credit year. The
5    credit shall be applied to the earliest year for which
6    there is a liability. If there is credit from more than one
7    tax year that is available to offset a liability, earlier
8    credit shall be applied first.
9        (5) The Department of Revenue shall promulgate such
10    rules and regulations as may be deemed necessary to carry
11    out the purposes of this subsection (g).
12        (6) The credit shall be available for eligible
13    employees hired on or after January 1, 1986.
14    (h) Investment credit; High Impact Business; Green Energy
15Business.
16        (1) Subject to subsection (a) of Section 10 of the
17    Green Energy Business Act, or subsections (b) and (b-5) of
18    Section 5.5 of the Illinois Enterprise Zone Act, a taxpayer
19    shall be allowed a credit against the tax imposed by
20    subsections (a) and (b) of this Section for investment in
21    qualified property which is placed in service by a
22    Department of Commerce and Economic Opportunity designated
23    Green Energy Business or High Impact Business. The credit
24    shall be .5% of the basis for such property. The credit
25    shall not be available (i) until the minimum investments in
26    qualified property set forth in subdivision (a)(3)(A) of

 

 

HB2079- 26 -LRB097 08864 HLH 48994 b

1    Section 5.5 of the Illinois Enterprise Zone Act have been
2    satisfied or (ii) until the Department of Commerce and
3    Economic Opportunity designates the business as a Green
4    Energy Business under the Green Energy Business Act, or
5    until the time authorized in subsection (b-5) of the
6    Illinois Enterprise Zone Act for entities designated as
7    High Impact Businesses under subdivisions (a)(3)(B),
8    (a)(3)(C), and (a)(3)(D) of Section 5.5 of the Illinois
9    Enterprise Zone Act, and shall not be allowed to the extent
10    that it would reduce a taxpayer's liability for the tax
11    imposed by subsections (a) and (b) of this Section to below
12    zero. The credit applicable to such investments shall be
13    taken in the taxable year in which such investments have
14    been completed. The credit for additional investments
15    beyond the minimum investment by a designated high impact
16    business authorized under subdivision (a)(3)(A) of Section
17    5.5 of the Illinois Enterprise Zone Act shall be available
18    only in the taxable year in which the property is placed in
19    service and shall not be allowed to the extent that it
20    would reduce a taxpayer's liability for the tax imposed by
21    subsections (a) and (b) of this Section to below zero. For
22    tax years ending on or after December 31, 1987, the credit
23    shall be allowed for the tax year in which the property is
24    placed in service, or, if the amount of the credit exceeds
25    the tax liability for that year, whether it exceeds the
26    original liability or the liability as later amended, such

 

 

HB2079- 27 -LRB097 08864 HLH 48994 b

1    excess may be carried forward and applied to the tax
2    liability of the 5 taxable years following the excess
3    credit year. The credit shall be applied to the earliest
4    year for which there is a liability. If there is credit
5    from more than one tax year that is available to offset a
6    liability, the credit accruing first in time shall be
7    applied first.
8        Changes made in this subdivision (h)(1) by Public Act
9    88-670 restore changes made by Public Act 85-1182 and
10    reflect existing law.
11        (2) The term qualified property means property which:
12            (A) is tangible, whether new or used, including
13        buildings and structural components of buildings;
14            (B) is depreciable pursuant to Section 167 of the
15        Internal Revenue Code, except that "3-year property"
16        as defined in Section 168(c)(2)(A) of that Code is not
17        eligible for the credit provided by this subsection
18        (h);
19            (C) is acquired by purchase as defined in Section
20        179(d) of the Internal Revenue Code; and
21            (D) is not eligible for the Enterprise Zone
22        Investment Credit provided by subsection (f) of this
23        Section.
24        (3) The basis of qualified property shall be the basis
25    used to compute the depreciation deduction for federal
26    income tax purposes.

 

 

HB2079- 28 -LRB097 08864 HLH 48994 b

1        (4) If the basis of the property for federal income tax
2    depreciation purposes is increased after it has been placed
3    in service in a federally designated Foreign Trade Zone or
4    Sub-Zone located in Illinois by the taxpayer, the amount of
5    such increase shall be deemed property placed in service on
6    the date of such increase in basis.
7        (5) The term "placed in service" shall have the same
8    meaning as under Section 46 of the Internal Revenue Code.
9        (6) If during any taxable year ending on or before
10    December 31, 1996, any property ceases to be qualified
11    property in the hands of the taxpayer within 48 months
12    after being placed in service, or the situs of any
13    qualified property is moved outside Illinois within 48
14    months after being placed in service, the tax imposed under
15    subsections (a) and (b) of this Section for such taxable
16    year shall be increased. Such increase shall be determined
17    by (i) recomputing the investment credit which would have
18    been allowed for the year in which credit for such property
19    was originally allowed by eliminating such property from
20    such computation, and (ii) subtracting such recomputed
21    credit from the amount of credit previously allowed. For
22    the purposes of this paragraph (6), a reduction of the
23    basis of qualified property resulting from a
24    redetermination of the purchase price shall be deemed a
25    disposition of qualified property to the extent of such
26    reduction.

 

 

HB2079- 29 -LRB097 08864 HLH 48994 b

1        (7) Beginning with tax years ending after December 31,
2    1996, if a taxpayer qualifies for the credit under this
3    subsection (h) and thereby is granted a tax abatement and
4    the taxpayer relocates its entire facility in violation of
5    the explicit terms and length of the contract under Section
6    18-183 of the Property Tax Code, the tax imposed under
7    subsections (a) and (b) of this Section shall be increased
8    for the taxable year in which the taxpayer relocated its
9    facility by an amount equal to the amount of credit
10    received by the taxpayer under this subsection (h).
11    (i) Credit for Personal Property Tax Replacement Income
12Tax. For tax years ending prior to December 31, 2003, a credit
13shall be allowed against the tax imposed by subsections (a) and
14(b) of this Section for the tax imposed by subsections (c) and
15(d) of this Section. This credit shall be computed by
16multiplying the tax imposed by subsections (c) and (d) of this
17Section by a fraction, the numerator of which is base income
18allocable to Illinois and the denominator of which is Illinois
19base income, and further multiplying the product by the tax
20rate imposed by subsections (a) and (b) of this Section.
21    Any credit earned on or after December 31, 1986 under this
22subsection which is unused in the year the credit is computed
23because it exceeds the tax liability imposed by subsections (a)
24and (b) for that year (whether it exceeds the original
25liability or the liability as later amended) may be carried
26forward and applied to the tax liability imposed by subsections

 

 

HB2079- 30 -LRB097 08864 HLH 48994 b

1(a) and (b) of the 5 taxable years following the excess credit
2year, provided that no credit may be carried forward to any
3year ending on or after December 31, 2003. This credit shall be
4applied first to the earliest year for which there is a
5liability. If there is a credit under this subsection from more
6than one tax year that is available to offset a liability the
7earliest credit arising under this subsection shall be applied
8first.
9    If, during any taxable year ending on or after December 31,
101986, the tax imposed by subsections (c) and (d) of this
11Section for which a taxpayer has claimed a credit under this
12subsection (i) is reduced, the amount of credit for such tax
13shall also be reduced. Such reduction shall be determined by
14recomputing the credit to take into account the reduced tax
15imposed by subsections (c) and (d). If any portion of the
16reduced amount of credit has been carried to a different
17taxable year, an amended return shall be filed for such taxable
18year to reduce the amount of credit claimed.
19    (j) Training expense credit. Beginning with tax years
20ending on or after December 31, 1986 and prior to December 31,
212003, a taxpayer shall be allowed a credit against the tax
22imposed by subsections (a) and (b) under this Section for all
23amounts paid or accrued, on behalf of all persons employed by
24the taxpayer in Illinois or Illinois residents employed outside
25of Illinois by a taxpayer, for educational or vocational
26training in semi-technical or technical fields or semi-skilled

 

 

HB2079- 31 -LRB097 08864 HLH 48994 b

1or skilled fields, which were deducted from gross income in the
2computation of taxable income. The credit against the tax
3imposed by subsections (a) and (b) shall be 1.6% of such
4training expenses. For partners, shareholders of subchapter S
5corporations, and owners of limited liability companies, if the
6liability company is treated as a partnership for purposes of
7federal and State income taxation, there shall be allowed a
8credit under this subsection (j) to be determined in accordance
9with the determination of income and distributive share of
10income under Sections 702 and 704 and subchapter S of the
11Internal Revenue Code.
12    Any credit allowed under this subsection which is unused in
13the year the credit is earned may be carried forward to each of
14the 5 taxable years following the year for which the credit is
15first computed until it is used. This credit shall be applied
16first to the earliest year for which there is a liability. If
17there is a credit under this subsection from more than one tax
18year that is available to offset a liability the earliest
19credit arising under this subsection shall be applied first. No
20carryforward credit may be claimed in any tax year ending on or
21after December 31, 2003.
22    (k) Research and development credit.
23    For tax years ending after July 1, 1990 and prior to
24December 31, 2003, and beginning again for tax years ending on
25or after December 31, 2004, and ending prior to January 1,
262011, a taxpayer shall be allowed a credit against the tax

 

 

HB2079- 32 -LRB097 08864 HLH 48994 b

1imposed by subsections (a) and (b) of this Section for
2increasing research activities in this State. The credit
3allowed against the tax imposed by subsections (a) and (b)
4shall be equal to 6 1/2% of the qualifying expenditures for
5increasing research activities in this State. For partners,
6shareholders of subchapter S corporations, and owners of
7limited liability companies, if the liability company is
8treated as a partnership for purposes of federal and State
9income taxation, there shall be allowed a credit under this
10subsection to be determined in accordance with the
11determination of income and distributive share of income under
12Sections 702 and 704 and subchapter S of the Internal Revenue
13Code.
14    For purposes of this subsection, "qualifying expenditures"
15means the qualifying expenditures as defined for the federal
16credit for increasing research activities which would be
17allowable under Section 41 of the Internal Revenue Code and
18which are conducted in this State, "qualifying expenditures for
19increasing research activities in this State" means the excess
20of qualifying expenditures for the taxable year in which
21incurred over qualifying expenditures for the base period,
22"qualifying expenditures for the base period" means the average
23of the qualifying expenditures for each year in the base
24period, and "base period" means the 3 taxable years immediately
25preceding the taxable year for which the determination is being
26made.

 

 

HB2079- 33 -LRB097 08864 HLH 48994 b

1    Any credit in excess of the tax liability for the taxable
2year may be carried forward. A taxpayer may elect to have the
3unused credit shown on its final completed return carried over
4as a credit against the tax liability for the following 5
5taxable years or until it has been fully used, whichever occurs
6first; provided that no credit earned in a tax year ending
7prior to December 31, 2003 may be carried forward to any year
8ending on or after December 31, 2003, and no credit may be
9carried forward to any taxable year ending on or after January
101, 2011.
11    If an unused credit is carried forward to a given year from
122 or more earlier years, that credit arising in the earliest
13year will be applied first against the tax liability for the
14given year. If a tax liability for the given year still
15remains, the credit from the next earliest year will then be
16applied, and so on, until all credits have been used or no tax
17liability for the given year remains. Any remaining unused
18credit or credits then will be carried forward to the next
19following year in which a tax liability is incurred, except
20that no credit can be carried forward to a year which is more
21than 5 years after the year in which the expense for which the
22credit is given was incurred.
23    No inference shall be drawn from this amendatory Act of the
2491st General Assembly in construing this Section for taxable
25years beginning before January 1, 1999.
26    (l) Environmental Remediation Tax Credit.

 

 

HB2079- 34 -LRB097 08864 HLH 48994 b

1        (i) For tax years ending after December 31, 1997 and on
2    or before December 31, 2001, a taxpayer shall be allowed a
3    credit against the tax imposed by subsections (a) and (b)
4    of this Section for certain amounts paid for unreimbursed
5    eligible remediation costs, as specified in this
6    subsection. For purposes of this Section, "unreimbursed
7    eligible remediation costs" means costs approved by the
8    Illinois Environmental Protection Agency ("Agency") under
9    Section 58.14 of the Environmental Protection Act that were
10    paid in performing environmental remediation at a site for
11    which a No Further Remediation Letter was issued by the
12    Agency and recorded under Section 58.10 of the
13    Environmental Protection Act. The credit must be claimed
14    for the taxable year in which Agency approval of the
15    eligible remediation costs is granted. The credit is not
16    available to any taxpayer if the taxpayer or any related
17    party caused or contributed to, in any material respect, a
18    release of regulated substances on, in, or under the site
19    that was identified and addressed by the remedial action
20    pursuant to the Site Remediation Program of the
21    Environmental Protection Act. After the Pollution Control
22    Board rules are adopted pursuant to the Illinois
23    Administrative Procedure Act for the administration and
24    enforcement of Section 58.9 of the Environmental
25    Protection Act, determinations as to credit availability
26    for purposes of this Section shall be made consistent with

 

 

HB2079- 35 -LRB097 08864 HLH 48994 b

1    those rules. For purposes of this Section, "taxpayer"
2    includes a person whose tax attributes the taxpayer has
3    succeeded to under Section 381 of the Internal Revenue Code
4    and "related party" includes the persons disallowed a
5    deduction for losses by paragraphs (b), (c), and (f)(1) of
6    Section 267 of the Internal Revenue Code by virtue of being
7    a related taxpayer, as well as any of its partners. The
8    credit allowed against the tax imposed by subsections (a)
9    and (b) shall be equal to 25% of the unreimbursed eligible
10    remediation costs in excess of $100,000 per site, except
11    that the $100,000 threshold shall not apply to any site
12    contained in an enterprise zone as determined by the
13    Department of Commerce and Community Affairs (now
14    Department of Commerce and Economic Opportunity). The
15    total credit allowed shall not exceed $40,000 per year with
16    a maximum total of $150,000 per site. For partners and
17    shareholders of subchapter S corporations, there shall be
18    allowed a credit under this subsection to be determined in
19    accordance with the determination of income and
20    distributive share of income under Sections 702 and 704 and
21    subchapter S of the Internal Revenue Code.
22        (ii) A credit allowed under this subsection that is
23    unused in the year the credit is earned may be carried
24    forward to each of the 5 taxable years following the year
25    for which the credit is first earned until it is used. The
26    term "unused credit" does not include any amounts of

 

 

HB2079- 36 -LRB097 08864 HLH 48994 b

1    unreimbursed eligible remediation costs in excess of the
2    maximum credit per site authorized under paragraph (i).
3    This credit shall be applied first to the earliest year for
4    which there is a liability. If there is a credit under this
5    subsection from more than one tax year that is available to
6    offset a liability, the earliest credit arising under this
7    subsection shall be applied first. A credit allowed under
8    this subsection may be sold to a buyer as part of a sale of
9    all or part of the remediation site for which the credit
10    was granted. The purchaser of a remediation site and the
11    tax credit shall succeed to the unused credit and remaining
12    carry-forward period of the seller. To perfect the
13    transfer, the assignor shall record the transfer in the
14    chain of title for the site and provide written notice to
15    the Director of the Illinois Department of Revenue of the
16    assignor's intent to sell the remediation site and the
17    amount of the tax credit to be transferred as a portion of
18    the sale. In no event may a credit be transferred to any
19    taxpayer if the taxpayer or a related party would not be
20    eligible under the provisions of subsection (i).
21        (iii) For purposes of this Section, the term "site"
22    shall have the same meaning as under Section 58.2 of the
23    Environmental Protection Act.
24    (m) Education expense credit. Beginning with tax years
25ending after December 31, 1999, a taxpayer who is the custodian
26of one or more qualifying pupils shall be allowed a credit

 

 

HB2079- 37 -LRB097 08864 HLH 48994 b

1against the tax imposed by subsections (a) and (b) of this
2Section for qualified education expenses incurred on behalf of
3the qualifying pupils. The credit shall be equal to 25% of
4qualified education expenses, but in no event may the total
5credit under this subsection claimed by a family that is the
6custodian of qualifying pupils exceed $500. In no event shall a
7credit under this subsection reduce the taxpayer's liability
8under this Act to less than zero. This subsection is exempt
9from the provisions of Section 250 of this Act.
10    For purposes of this subsection:
11    "Qualifying pupils" means individuals who (i) are
12residents of the State of Illinois, (ii) are under the age of
1321 at the close of the school year for which a credit is
14sought, and (iii) during the school year for which a credit is
15sought were full-time pupils enrolled in a kindergarten through
16twelfth grade education program at any school, as defined in
17this subsection.
18    "Qualified education expense" means the amount incurred on
19behalf of a qualifying pupil in excess of $250 for tuition,
20book fees, and lab fees at the school in which the pupil is
21enrolled during the regular school year.
22    "School" means any public or nonpublic elementary or
23secondary school in Illinois that is in compliance with Title
24VI of the Civil Rights Act of 1964 and attendance at which
25satisfies the requirements of Section 26-1 of the School Code,
26except that nothing shall be construed to require a child to

 

 

HB2079- 38 -LRB097 08864 HLH 48994 b

1attend any particular public or nonpublic school to qualify for
2the credit under this Section.
3    "Custodian" means, with respect to qualifying pupils, an
4Illinois resident who is a parent, the parents, a legal
5guardian, or the legal guardians of the qualifying pupils.
6    (n) River Edge Redevelopment Zone site remediation tax
7credit.
8        (i) For tax years ending on or after December 31, 2006,
9    a taxpayer shall be allowed a credit against the tax
10    imposed by subsections (a) and (b) of this Section for
11    certain amounts paid for unreimbursed eligible remediation
12    costs, as specified in this subsection. For purposes of
13    this Section, "unreimbursed eligible remediation costs"
14    means costs approved by the Illinois Environmental
15    Protection Agency ("Agency") under Section 58.14a of the
16    Environmental Protection Act that were paid in performing
17    environmental remediation at a site within a River Edge
18    Redevelopment Zone for which a No Further Remediation
19    Letter was issued by the Agency and recorded under Section
20    58.10 of the Environmental Protection Act. The credit must
21    be claimed for the taxable year in which Agency approval of
22    the eligible remediation costs is granted. The credit is
23    not available to any taxpayer if the taxpayer or any
24    related party caused or contributed to, in any material
25    respect, a release of regulated substances on, in, or under
26    the site that was identified and addressed by the remedial

 

 

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1    action pursuant to the Site Remediation Program of the
2    Environmental Protection Act. Determinations as to credit
3    availability for purposes of this Section shall be made
4    consistent with rules adopted by the Pollution Control
5    Board pursuant to the Illinois Administrative Procedure
6    Act for the administration and enforcement of Section 58.9
7    of the Environmental Protection Act. For purposes of this
8    Section, "taxpayer" includes a person whose tax attributes
9    the taxpayer has succeeded to under Section 381 of the
10    Internal Revenue Code and "related party" includes the
11    persons disallowed a deduction for losses by paragraphs
12    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
13    Code by virtue of being a related taxpayer, as well as any
14    of its partners. The credit allowed against the tax imposed
15    by subsections (a) and (b) shall be equal to 25% of the
16    unreimbursed eligible remediation costs in excess of
17    $100,000 per site.
18        (ii) A credit allowed under this subsection that is
19    unused in the year the credit is earned may be carried
20    forward to each of the 5 taxable years following the year
21    for which the credit is first earned until it is used. This
22    credit shall be applied first to the earliest year for
23    which there is a liability. If there is a credit under this
24    subsection from more than one tax year that is available to
25    offset a liability, the earliest credit arising under this
26    subsection shall be applied first. A credit allowed under

 

 

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1    this subsection may be sold to a buyer as part of a sale of
2    all or part of the remediation site for which the credit
3    was granted. The purchaser of a remediation site and the
4    tax credit shall succeed to the unused credit and remaining
5    carry-forward period of the seller. To perfect the
6    transfer, the assignor shall record the transfer in the
7    chain of title for the site and provide written notice to
8    the Director of the Illinois Department of Revenue of the
9    assignor's intent to sell the remediation site and the
10    amount of the tax credit to be transferred as a portion of
11    the sale. In no event may a credit be transferred to any
12    taxpayer if the taxpayer or a related party would not be
13    eligible under the provisions of subsection (i).
14        (iii) For purposes of this Section, the term "site"
15    shall have the same meaning as under Section 58.2 of the
16    Environmental Protection Act.
17        (iv) This subsection is exempt from the provisions of
18    Section 250.
19(Source: P.A. 95-454, eff. 8-27-07; 96-115, eff. 7-31-09;
2096-116, eff. 7-31-09; 96-937, eff. 6-23-10; 96-1000, eff.
217-2-10; 96-1496, eff. 1-13-11.)
 
22    Section 25. The Retailers' Occupation Tax Act is amended by
23changing Sections 1d, 1e, 1f, and 5l as follows:
 
24    (35 ILCS 120/1d)  (from Ch. 120, par. 440d)

 

 

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1    Sec. 1d. Subject to the provisions of Section 1f, all
2tangible personal property to be used or consumed within an
3enterprise zone established pursuant to the "Illinois
4Enterprise Zone Act", as amended, or subject to the provisions
5of Section 5.5 of the Illinois Enterprise Zone Act, or subject
6to the provisions of Section 10 of the Green Energy Business
7Act, all tangible personal property to be used or consumed by
8any High Impact Business or Green Energy Business , in the
9process of the manufacturing or assembly of tangible personal
10property for wholesale or retail sale or lease or in the
11process of graphic arts production if used or consumed at a
12facility which is a Department of Commerce and Economic
13Opportunity certified business and located in a county of more
14than 4,000 persons and less than 45,000 persons is exempt from
15the tax imposed by this Act. This exemption includes repair and
16replacement parts for machinery and equipment used primarily in
17the process of manufacturing or assembling tangible personal
18property or in the process of graphic arts production if used
19or consumed at a facility which is a Department of Commerce and
20Economic Opportunity certified business and located in a county
21of more than 4,000 persons and less than 45,000 persons for
22wholesale or retail sale, or lease, and equipment,
23manufacturing or graphic arts fuels, material and supplies for
24the maintenance, repair or operation of such manufacturing or
25assembling or graphic arts machinery or equipment.
26(Source: P.A. 94-793, eff. 5-19-06.)
 

 

 

HB2079- 42 -LRB097 08864 HLH 48994 b

1    (35 ILCS 120/1e)  (from Ch. 120, par. 440e)
2    Sec. 1e. Subject to the provisions of Section 1f, or
3subject to the provisions of Section 5.5 of the Illinois
4Enterprise Zone Act, or subject to the provisions of Section 10
5of the Green Energy Business Act, all tangible personal
6property to be used or consumed in the operation of pollution
7control facilities, as defined in Section 1a of this Act,
8within an enterprise zone established pursuant to the "Illinois
9Enterprise Zone Act", as amended, shall be exempt from the tax
10imposed by this Act.
11(Source: P.A. 85-1182.)
 
12    (35 ILCS 120/1f)  (from Ch. 120, par. 440f)
13    Sec. 1f. Except for High Impact Businesses or Green Energy
14Businesses, the exemption stated in Sections 1d and 1e of this
15Act shall only apply to business enterprises which:
16        (1) either (i) make investments which cause the
17    creation of a minimum of 200 full-time equivalent jobs in
18    Illinois or (ii) make investments which cause the retention
19    of a minimum of 2000 full-time jobs in Illinois or (iii)
20    make investments of a minimum of $40,000,000 and retain at
21    least 90% of the jobs in place on the date on which the
22    exemption is granted and for the duration of the exemption;
23    and
24        (2) are located in an Enterprise Zone established

 

 

HB2079- 43 -LRB097 08864 HLH 48994 b

1    pursuant to the Illinois Enterprise Zone Act; and
2        (3) are certified by the Department of Commerce and
3    Economic Opportunity as complying with the requirements
4    specified in clauses (1), (2) and (3).
5    Any business enterprise seeking to avail itself of the
6exemptions stated in Sections 1d or 1e, or both, shall make
7application to the Department of Commerce and Economic
8Opportunity in such form and providing such information as may
9be prescribed by the Department of Commerce and Economic
10Opportunity. However, no business enterprise shall be
11required, as a condition for certification under clause (4) of
12this Section, to attest that its decision to invest under
13clause (1) of this Section and to locate under clause (2) of
14this Section is predicated upon the availability of the
15exemptions authorized by Sections 1d or 1e.
16    The Department of Commerce and Economic Opportunity shall
17determine whether the business enterprise meets the criteria
18prescribed in this Section. If the Department of Commerce and
19Economic Opportunity determines that such business enterprise
20meets the criteria, it shall issue a certificate of eligibility
21for exemption to the business enterprise in such form as is
22prescribed by the Department of Revenue. The Department of
23Commerce and Economic Opportunity shall act upon such
24certification requests within 60 days after receipt of the
25application, and shall file with the Department of Revenue a
26copy of each certificate of eligibility for exemption.

 

 

HB2079- 44 -LRB097 08864 HLH 48994 b

1    The Department of Commerce and Economic Opportunity shall
2have the power to promulgate rules and regulations to carry out
3the provisions of this Section including the power to define
4the amounts and types of eligible investments not specified in
5this Section which business enterprises must make in order to
6receive the exemptions stated in Sections 1d and 1e of this
7Act; and to require that any business enterprise that is
8granted a tax exemption repay the exempted tax if the business
9enterprise fails to comply with the terms and conditions of the
10certification.
11    Such certificate of eligibility for exemption shall be
12presented by the business enterprise to its supplier when
13making the initial purchase of tangible personal property for
14which an exemption is granted by Section 1d or Section 1e, or
15both, together with a certification by the business enterprise
16that such tangible personal property is exempt from taxation
17under Section 1d or Section 1e and by indicating the exempt
18status of each subsequent purchase on the face of the purchase
19order.
20    The Department of Commerce and Economic Opportunity shall
21determine the period during which such exemption from the taxes
22imposed under this Act is in effect which shall not exceed 20
23years.
24(Source: P.A. 94-793, eff. 5-19-06.)
 
25    (35 ILCS 120/5l)  (from Ch. 120, par. 444l)

 

 

HB2079- 45 -LRB097 08864 HLH 48994 b

1    Sec. 5l. Beginning January 1, 1995, each retailer who makes
2a sale of building materials that will be incorporated into a
3High Impact Business location as designated by the Department
4of Commerce and Economic Opportunity under Section 5.5 of the
5Illinois Enterprise Zone Act or Section 10 of the Green Energy
6Business Act may deduct receipts from such sales when
7calculating only the 6.25% State rate of tax imposed by this
8Act. Beginning on the effective date of this amendatory Act of
91995, a retailer may also deduct receipts from such sales when
10calculating any applicable local taxes. However, until the
11effective date of this amendatory Act of 1995, a retailer may
12file claims for credit or refund to recover the amount of any
13applicable local tax paid on such sales. No retailer who is
14eligible for the deduction or credit under Section 5k of this
15Act for making a sale of building materials to be incorporated
16into real estate in an enterprise zone by rehabilitation,
17remodeling or new construction shall be eligible for the
18deduction or credit authorized under this Section.
19(Source: P.A. 94-793, eff. 5-19-06.)
 
20    Section 30. The Public Utilities Act is amended by changing
21Sections 9-222 and 9-222.1A as follows:
 
22    (220 ILCS 5/9-222)  (from Ch. 111 2/3, par. 9-222)
23    Sec. 9-222. Whenever a tax is imposed upon a public utility
24engaged in the business of distributing, supplying,

 

 

HB2079- 46 -LRB097 08864 HLH 48994 b

1furnishing, or selling gas for use or consumption pursuant to
2Section 2 of the Gas Revenue Tax Act, or whenever a tax is
3required to be collected by a delivering supplier pursuant to
4Section 2-7 of the Electricity Excise Tax Act, or whenever a
5tax is imposed upon a public utility pursuant to Section 2-202
6of this Act, such utility may charge its customers, other than
7customers who are Green Energy Businesses under Section 10 of
8the Green Energy Business Act, High Impact Businesses high
9impact businesses under Section 5.5 of the Illinois Enterprise
10Zone Act, or certified business enterprises under Section
119-222.1 of this Act, to the extent of such exemption and during
12the period in which such exemption is in effect, in addition to
13any rate authorized by this Act, an additional charge equal to
14the total amount of such taxes. The exemption of this Section
15relating to High Impact Businesses high impact businesses shall
16be subject to the provisions of subsections (a), (b), and (b-5)
17of Section 5.5 of the Illinois Enterprise Zone Act. The
18exemption of this Section relating to Green Energy Businesses
19shall be subject to the provisions of subsection (a) of Section
2010 of the Green Energy Business Act. This requirement shall not
21apply to taxes on invested capital imposed pursuant to the
22Messages Tax Act, the Gas Revenue Tax Act and the Public
23Utilities Revenue Act. Such utility shall file with the
24Commission a supplemental schedule which shall specify such
25additional charge and which shall become effective upon filing
26without further notice. Such additional charge shall be shown

 

 

HB2079- 47 -LRB097 08864 HLH 48994 b

1separately on the utility bill to each customer. The Commission
2shall have the power to investigate whether or not such
3supplemental schedule correctly specifies such additional
4charge, but shall have no power to suspend such supplemental
5schedule. If the Commission finds, after a hearing, that such
6supplemental schedule does not correctly specify such
7additional charge, it shall by order require a refund to the
8appropriate customers of the excess, if any, with interest, in
9such manner as it shall deem just and reasonable, and in and by
10such order shall require the utility to file an amended
11supplemental schedule corresponding to the finding and order of
12the Commission. Except with respect to taxes imposed on
13invested capital, such tax liabilities shall be recovered from
14customers solely by means of the additional charges authorized
15by this Section.
16(Source: P.A. 91-914, eff. 7-7-00; 92-12, eff. 7-1-01.)
 
17    (220 ILCS 5/9-222.1A)
18    Sec. 9-222.1A. High impact business or green energy
19business. Beginning on August 1, 1998 and thereafter, a
20business enterprise that is certified as a High Impact Business
21or a Green Energy Business by the Department of Commerce and
22Economic Opportunity (formerly Department of Commerce and
23Community Affairs) is exempt from the tax imposed by Section
242-4 of the Electricity Excise Tax Law, if the High Impact
25Business or Green Energy Business is registered to self-assess

 

 

HB2079- 48 -LRB097 08864 HLH 48994 b

1that tax, and is exempt from any additional charges added to
2the business enterprise's utility bills as a pass-on of State
3utility taxes under Section 9-222 of this Act, to the extent
4the tax or charges are exempted by the percentage specified by
5the Department of Commerce and Economic Opportunity for State
6utility taxes, provided the business enterprise meets the
7following criteria:
8        (1) (A) it intends either (i) to make a minimum
9        eligible investment of $12,000,000 that will be placed
10        in service in qualified property in Illinois and is
11        intended to create at least 500 full-time equivalent
12        jobs at a designated location in Illinois; or (ii) to
13        make a minimum eligible investment of $30,000,000 that
14        will be placed in service in qualified property in
15        Illinois and is intended to retain at least 1,500
16        full-time equivalent jobs at a designated location in
17        Illinois; or
18            (B) it meets the criteria of subdivision
19        (a)(3)(B), (a)(3)(C), or (a)(3)(D) of Section 5.5 of
20        the Illinois Enterprise Zone Act, or of subsection (a)
21        of Section 10 of the Green Energy Business Act;
22        (2) it is designated as a High Impact Business or Green
23    Energy Business by the Department of Commerce and Economic
24    Opportunity; and
25        (3) it is certified by the Department of Commerce and
26    Economic Opportunity as complying with the requirements

 

 

HB2079- 49 -LRB097 08864 HLH 48994 b

1    specified in clauses (1) and (2) of this Section.
2    The Department of Commerce and Economic Opportunity shall
3determine the period during which the exemption from the
4Electricity Excise Tax Law and the charges imposed under
5Section 9-222 are in effect, which shall not exceed 20 years
6from the date of initial certification, and shall specify the
7percentage of the exemption from those taxes or additional
8charges.
9    The Department of Commerce and Economic Opportunity is
10authorized to promulgate rules and regulations to carry out the
11provisions of this Section, including procedures for complying
12with the requirements specified in clauses (1) and (2) of this
13Section and procedures for applying for the exemptions
14authorized under this Section; to define the amounts and types
15of eligible investments that business enterprises must make in
16order to receive State utility tax exemptions or exemptions
17from the additional charges imposed under Section 9-222 and
18this Section; to approve such utility tax exemptions for
19business enterprises whose investments are not yet placed in
20service; and to require that business enterprises granted tax
21exemptions or exemptions from additional charges under Section
229-222 repay the exempted amount if the business enterprise
23fails to comply with the terms and conditions of the
24certification.
25    Upon certification of the business enterprises by the
26Department of Commerce and Economic Opportunity, the

 

 

HB2079- 50 -LRB097 08864 HLH 48994 b

1Department of Commerce and Economic Opportunity shall notify
2the Department of Revenue of the certification. The Department
3of Revenue shall notify the public utilities of the exemption
4status of business enterprises from the tax or pass-on charges
5of State utility taxes. The exemption status shall take effect
6within 3 months after certification of the business enterprise.
7(Source: P.A. 94-793, eff. 5-19-06.)
 
8    Section 99. Effective date. This Act takes effect upon
9becoming law.