103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB2149

 

Introduced 2/10/2023, by Sen. Jil Tracy

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/224
35 ILCS 40/10
35 ILCS 40/40
35 ILCS 40/65

    Amends the Invest in Kids Act. Provides that the Invest in Kids credit applies on a permanent basis. Removes a limitation that the credit may not be taken for any qualified contribution for which the taxpayer claims a federal income tax deduction. Amends the Illinois Income Tax Act to make conforming changes. Effective immediately.


LRB103 26415 HLH 52778 b

 

 

A BILL FOR

 

SB2149LRB103 26415 HLH 52778 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 5. The Illinois Income Tax Act is amended by
5changing Section 224 as follows:
 
6    (35 ILCS 5/224)
7    Sec. 224. Invest in Kids credit.
8    (a) For taxable years beginning on or after January 1,
92018 and ending before January 1, 2024, each taxpayer for whom
10a tax credit has been awarded by the Department under the
11Invest in Kids Act is entitled to a credit against the tax
12imposed under subsections (a) and (b) of Section 201 of this
13Act in an amount equal to the amount awarded under the Invest
14in Kids Act.
15    (b) For partners, shareholders of subchapter S
16corporations, and owners of limited liability companies, if
17the liability company is treated as a partnership for purposes
18of federal and State income taxation, the credit under this
19Section shall be determined in accordance with the
20determination of income and distributive share of income under
21Sections 702 and 704 and subchapter S of the Internal Revenue
22Code.
23    (c) The credit may not be carried back and may not reduce

 

 

SB2149- 2 -LRB103 26415 HLH 52778 b

1the taxpayer's liability to less than zero. If the amount of
2the credit exceeds the tax liability for the year, the excess
3may be carried forward and applied to the tax liability of the
45 taxable years following the excess credit year. The tax
5credit shall be applied to the earliest year for which there is
6a tax liability. If there are credits for more than one year
7that are available to offset the liability, the earlier credit
8shall be applied first.
9    (d) For tax years beginning prior to January 1, 2023, a A
10tax credit awarded by the Department under the Invest in Kids
11Act may not be claimed for any qualified contribution for
12which the taxpayer claims a federal income tax deduction.
13    (e) This Section is exempt from the provisions of Section
14250.
15(Source: P.A. 102-699, eff. 4-19-22.)
 
16    Section 10. The Invest in Kids Act is amended by changing
17Sections 10, 40, and 65 as follows:
 
18    (35 ILCS 40/10)
19    (Section scheduled to be repealed on January 1, 2025)
20    Sec. 10. Credit awards.
21    (a) The Department shall award credits against the tax
22imposed under subsections (a) and (b) of Section 201 of the
23Illinois Income Tax Act to taxpayers who make qualified
24contributions. For contributions made under this Act, the

 

 

SB2149- 3 -LRB103 26415 HLH 52778 b

1credit shall be equal to 75% of the total amount of qualified
2contributions made by the taxpayer during a taxable year, not
3to exceed a credit of $1,000,000 per taxpayer.
4    (b) The aggregate amount of all credits the Department may
5award under this Act in any calendar year may not exceed
6$75,000,000.
7    (c) Contributions made by corporations (including
8Subchapter S corporations), partnerships, and trusts under
9this Act may not be directed to a particular subset of schools,
10a particular school, a particular group of students, or a
11particular student. Contributions made by individuals under
12this Act may be directed to a particular subset of schools or a
13particular school but may not be directed to a particular
14group of students or a particular student.
15    (d) For tax years beginning prior to January 1, 2023, no No
16credit shall be taken under this Act for any qualified
17contribution for which the taxpayer claims a federal income
18tax deduction.
19    (e) Credits shall be awarded in a manner, as determined by
20the Department, that is geographically proportionate to
21enrollment in recognized non-public schools in Illinois. If
22the cap on the aggregate credits that may be awarded by the
23Department is not reached by June 1 of a given year, the
24Department shall award remaining credits on a first-come,
25first-served basis, without regard to the limitation of this
26subsection.

 

 

SB2149- 4 -LRB103 26415 HLH 52778 b

1    (f) Credits awarded for donations made to a technical
2academy shall be awarded without regard to subsection (e), but
3shall not exceed 15% of the annual statewide program cap. For
4the purposes of this subsection, "technical academy" means a
5technical academy that is registered with the Board within 30
6days after the effective date of this amendatory Act of the
7102nd General Assembly.
8(Source: P.A. 102-16, eff. 6-17-21.)
 
9    (35 ILCS 40/40)
10    (Section scheduled to be repealed on January 1, 2025)
11    Sec. 40. Scholarship granting organization
12responsibilities.
13    (a) Before granting a scholarship for an academic year,
14all scholarship granting organizations shall assess and
15document each student's eligibility for the academic year.
16    (b) A scholarship granting organization shall grant
17scholarships only to eligible students.
18    (c) A scholarship granting organization shall allow an
19eligible student to attend any qualified school of the
20student's choosing, subject to the availability of funds.
21    (d) In granting scholarships, beginning in the 2022-2023
22school year and for each school year thereafter, a scholarship
23granting organization shall give priority to eligible students
24who received a scholarship from a scholarship granting
25organization during the previous school year. Second priority

 

 

SB2149- 5 -LRB103 26415 HLH 52778 b

1shall be given to the following priority groups:
2        (1) (blank);
3        (2) eligible students who are members of a household
4    whose previous year's total annual income does not exceed
5    185% of the federal poverty level;
6        (3) eligible students who reside within a focus
7    district; and
8        (4) eligible students who are siblings of students
9    currently receiving a scholarship.
10    (d-5) A scholarship granting organization shall begin
11granting scholarships no later than February 1 preceding the
12school year for which the scholarship is sought. Each priority
13group identified in subsection (d) of this Section shall be
14eligible to receive scholarships on a first-come, first-served
15basis until April 1 immediately preceding the school year for
16which the scholarship is sought, starting with the first
17priority group identified in subsection (d) of this Section.
18Applications for scholarships for eligible students meeting
19the qualifications of one or more priority groups that are
20received before April 1 must be either approved or denied
21within 10 business days after receipt. Beginning April 1, all
22eligible students shall be eligible to receive scholarships
23without regard to the priority groups identified in subsection
24(d) of this Section.
25    (e) Except as provided in subsection (e-5) of this
26Section, scholarships shall not exceed the lesser of (i) the

 

 

SB2149- 6 -LRB103 26415 HLH 52778 b

1statewide average operational expense per student among public
2schools or (ii) the necessary costs and fees for attendance at
3the qualified school. A qualified school may set a lower
4maximum scholarship amount for eligible students whose family
5income falls within paragraphs (2) and (3) of this subsection
6(e); that amount may not exceed the necessary costs and fees
7for attendance at the qualified school and is subject to the
8limitations on average scholarship amounts set forth in
9paragraphs (2) and (3) of this subsection, as applicable. The
10qualified school shall notify the scholarship granting
11organization of its necessary costs and fees as well as any
12maximum scholarship amount set by the school. Scholarships
13shall be prorated as follows:
14        (1) for eligible students whose household income is
15    less than 185% of the federal poverty level, the
16    scholarship shall be 100% of the amount determined
17    pursuant to this subsection (e) and subsection (e-5) of
18    this Section;
19        (2) for eligible students whose household income is
20    185% or more of the federal poverty level but less than
21    250% of the federal poverty level, the average of
22    scholarships shall be 75% of the amount determined
23    pursuant to this subsection (e) and subsection (e-5) of
24    this Section; and
25        (3) for eligible students whose household income is
26    250% or more of the federal poverty level, the average of

 

 

SB2149- 7 -LRB103 26415 HLH 52778 b

1    scholarships shall be 50% of the amount determined
2    pursuant to this subsection (e) and subsection (e-5) of
3    this Section.
4    (e-5) The statewide average operational expense per
5student among public schools shall be multiplied by the
6following factors:
7        (1) for students determined eligible to receive
8    services under the federal Individuals with Disabilities
9    Education Act, 2;
10        (2) for students who are English learners, as defined
11    in subsection (d) of Section 14C-2 of the School Code,
12    1.2; and
13        (3) for students who are gifted and talented children,
14    as defined in Section 14A-20 of the School Code, 1.1.
15    (f) A scholarship granting organization shall distribute
16scholarship payments to the participating school where the
17student is enrolled.
18    (g) Each For the 2018-2019 school year through the
192022-2023 school year, each scholarship granting organization
20shall expend no less than 75% of the qualified contributions
21received during the calendar year in which the qualified
22contributions were received. No more than 25% of the qualified
23contributions may be carried forward to the following calendar
24year.
25    (h) (Blank). For the 2023-2024 school year, each
26scholarship granting organization shall expend all qualified

 

 

SB2149- 8 -LRB103 26415 HLH 52778 b

1contributions received during the calendar year in which the
2qualified contributions were received. No qualified
3contributions may be carried forward to the following calendar
4year.
5    (i) A scholarship granting organization shall allow an
6eligible student to transfer a scholarship during a school
7year to any other participating school of the custodian's
8choice. Such scholarships shall be prorated.
9    (j) With the prior approval of the Department, a
10scholarship granting organization may transfer funds to
11another scholarship granting organization if additional funds
12are required to meet scholarship demands at the receiving
13scholarship granting organization. All transferred funds must
14be deposited by the receiving scholarship granting
15organization into its scholarship accounts. All transferred
16amounts received by any scholarship granting organization must
17be separately disclosed to the Department.
18    (k) If the approval of a scholarship granting organization
19is revoked as provided in Section 20 of this Act or the
20scholarship granting organization is dissolved, all remaining
21qualified contributions of the scholarship granting
22organization shall be transferred to another scholarship
23granting organization. All transferred funds must be deposited
24by the receiving scholarship granting organization into its
25scholarship accounts.
26    (l) Scholarship granting organizations shall make

 

 

SB2149- 9 -LRB103 26415 HLH 52778 b

1reasonable efforts to advertise the availability of
2scholarships to eligible students.
3(Source: P.A. 102-699, eff. 4-19-22; 102-1059, eff. 6-10-22;
4revised 8-3-22.)
 
5    (35 ILCS 40/65)
6    (Section scheduled to be repealed on January 1, 2025)
7    Sec. 65. Credit period; repeal.
8    (a) A taxpayer may take a credit under this Act for tax
9years beginning on or after January 1, 2018 and ending before
10January 1, 2024. A taxpayer may not take a credit pursuant to
11this Act for tax years beginning on or after January 1, 2024.
12    (b) This Act is exempt from the provisions of Section 250
13of the Illinois Income Tax Act repealed on January 1, 2025.
14(Source: P.A. 102-16, eff. 6-17-21.)
 
15    Section 99. Effective date. This Act takes effect upon
16becoming law.