093_SB0905

 
                                     LRB093 10875 DRJ 11377 b

 1        AN ACT concerning long term health care.

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

 4        Section 1.  Short title.  This Act may be  cited  as  the
 5    Elder Care Savings Fund Act.

 6        Section  5.   Declaration of purpose.  It is declared (i)
 7    that for the benefit of the people of the State of  Illinois,
 8    the  conduct  and  increase of their commerce, the protection
 9    and  enhancement  of  their  welfare,  the   development   of
10    continued prosperity, and the improvement of their health and
11    living  conditions,  it  is  essential  that  this and future
12    generations be given the fullest opportunity to  provide  for
13    their  long  term  health care needs and (ii) that to achieve
14    these ends it is  of  the  utmost  importance  that  Illinois
15    residents be provided with investment alternatives to enhance
16    their  financial  access to long term health care.  It is the
17    intent of this Act to create a savings fund that will provide
18    residents of the State of Illinois with an investment  option
19    that  will  earn  the  highest available rate of return while
20    managing risk and maintaining liquidity.

21        Section 10.  Definitions.  In this Act:
22        (a)  "Assisted living establishment"  or  "establishment"
23    means  a  home, building, residence, or any other place where
24    sleeping accommodations are provided for at least 3 unrelated
25    adults, at least 80% of whom are 55 years of  age  or  older,
26    and  where  the  following   are provided consistent with the
27    purposes of this Act:
28             (1)  Services consistent with a social model that is
29        based on the premise that the resident's unit in assisted
30        living and shared housing is his or her own home.
 
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 1             (2)  Community-based residential  care  for  persons
 2        who  need  assistance  with  activities  of daily living,
 3        including  personal,    supportive,    and   intermittent
 4        health-related  services  available  24 hours per day, if
 5        needed, to meet the scheduled and unscheduled needs of  a
 6        resident.
 7             (3)  Counseling  for  health,  social  services, and
 8        nutrition by  licensed  personnel  or  case  coordination
 9        units under the Department on Aging and the area agencies
10        on aging.
11             (4)  Mandatory  services,  whether provided directly
12        by the establishment or by another entity arranged for by
13        the establishment, with the consent of  the  resident  or
14        resident's representative.
15             (5)  A  physical  environment  that  is  a  homelike
16        setting that includes the following and other elements as
17        established  by  the  Department  on Aging in conjunction
18        with the Assisted  Living  and  Shared  Housing  Advisory
19        Board:  individual  living  units,  each  of  which shall
20        accommodate small kitchen appliances and contain  private
21        bathing,  washing,  and  toilet  facilities,  or  private
22        washing  and toilet facilities with a common bathing room
23        readily accessible to each  resident.    Units  shall  be
24        maintained  for single occupancy except in cases in which
25        2 residents choose to share  a  unit.  Sufficient  common
26        space   shall   exist  to  permit  individual  and  group
27        activities.
28        "Assisted living establishment" or  "establishment"  does
29    not mean any of the following:
30             (A)  A  home, institution, or similar place operated
31        by the federal government or the State of Illinois.
32             (B)  A long-term care facility  licensed  under  the
33        Nursing Home Care Act. However, a long term care facility
34        may  convert   distinct parts of the facility to assisted
 
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 1        living.  If the long-term care facility elects to do  so,
 2        the facility shall retain the Certificate of Need for its
 3        nursing beds that were converted.
 4             (C)  A  hospital,  sanitarium, or other institution,
 5        the principal  activity  or  business  of  which  is  the
 6        diagnosis,  care, and treatment of human illness and that
 7        is required to be licensed under the  Hospital  Licensing
 8        Act.
 9             (D)  A  facility  for  child  care as defined in the
10        Child Care Act of 1969.
11             (E)  A community living facility as defined  in  the
12        Community Living Facilities Licensing Act.
13             (F)  A nursing home or sanitarium operated solely by
14        and  for  persons  who rely exclusively upon treatment by
15        spiritual means through prayer  in  accordance  with  the
16        creed or tenants of a well-recognized church or religious
17        denomination.
18             (G)  A  facility licensed by the Department of Human
19        Services as a community-integrated living arrangement  as
20        defined  in  the Community-Integrated Living Arrangements
21        Licensure and Certification Act.
22             (H)  A  supportive  residence  licensed  under   the
23        Supportive Residences Licensing Act.
24             (I)  A  life  care  facility  as defined in the Life
25        Care Facilities Act; a life care facility may apply under
26        this Act to convert sections of the community to assisted
27        living.
28             (J)  A free-standing hospice facility.
29             (K)  A shared housing establishment.
30             (L)  A supportive living facility  as  described  in
31        Section 5-5.0la of the Illinois Public Aid Code.
32        (b)  "Authority" means the Elder Care Trust Authority.
33        (c)  "Elder  Care  Savings  Fund"  means the fund that is
34    created and administered by the State Treasurer to supplement
 
                            -4-      LRB093 10875 DRJ 11377 b
 1    and enhance the investment opportunities otherwise  available
 2    to  Illinois residents seeking to save money to pay the costs
 3    of long term health care.

 4        Section  15.  Establishment  and  administration  of  the
 5    Elder Care Savings Fund.
 6        (a)   In  order  to  provide  investors  with  investment
 7    alternatives to enhance their financial access  to  long-term
 8    health  care, and in furtherance of the public policy of this
 9    Act, the State Treasurer  may  establish  and  administer  an
10    Elder Care Savings Fund.
11        (b)   The  Treasurer,  in  administering  the  Elder Care
12    Savings Fund, may receive moneys from Illinois residents into
13    the fund and invest moneys within the fund on  their  behalf.
14    The  Treasurer  may  invest  the funds constituting the Elder
15    Care Savings Fund in the same manner and in the same types of
16    investments and subject to the same limitations provided  for
17    the investment of funds in the State Treasury.  The Treasurer
18    shall  develop,  publish,  and implement an investment policy
19    covering the management of funds in the  Elder  Care  Savings
20    Fund.   The policy shall be published at least once each year
21    in at least one newspaper  of  general  circulation  in  both
22    Springfield  and  Chicago, and each year as part of the audit
23    of the Elder Care Savings Fund by the Auditor General,  which
24    shall  be  distributed  to all participants in the fund.  The
25    Treasurer shall notify all participants in writing,  and  the
26    Treasurer shall publish in a newspaper of general circulation
27    in   both   Chicago  and  Springfield,  any  changes  to  the
28    previously published investment policy at least  30  calendar
29    days  before  implementing the policy.  Any investment policy
30    adopted by the Treasurer shall be reviewed,  and  updated  if
31    necessary, within 90 days following the installation of a new
32    Treasurer.
33        (c)   A  portion  of  the  administrative expenses of the
 
                            -5-      LRB093 10875 DRJ 11377 b
 1    Elder Care Savings Fund shall be paid from  the  earnings  of
 2    the  fund.  No more than 0.5% of the assets of the fund shall
 3    be used to pay administrative expenses.  The Treasurer  shall
 4    seek  an  appropriation  for any administrative expenses that
 5    are not paid from the earnings of the fund.  As soon  as  the
 6    Elder Care Savings Fund reaches an asset level that equals or
 7    exceeds  $200,000,000,  the  administration  expenses  of the
 8    Elder Care  Savings  Fund  shall  be  paid  solely  from  its
 9    earnings.   Interest  earnings  in  excess  of administrative
10    expenses shall be credited or paid  monthly  to  the  several
11    participants  in the fund in a manner that equitably reflects
12    the differing amounts of their respective investments in  the
13    fund  and the differing periods of time for which the amounts
14    were in the custody of the fund.
15        (d)  The Treasurer shall promulgate rules and regulations
16    as he or she deems necessary for the efficient administration
17    of the Elder Care Savings Fund,  including  specification  of
18    minimum  and  maximum  amounts that may be deposited, minimum
19    and maximum  periods  of  time  for  which  deposits  may  be
20    retained  in  the  fund, and conditions under which penalties
21    will be assessed for refunds of earnings that  are  not  used
22    for  long-term  health care expenses defined in Section 10 of
23    this Act.
24        (e)  Upon creating an Elder Care Savings Fund  the  State
25    Treasurer shall give bond with 2 or more sufficient sureties,
26    payable  to  and  for  the benefit of the participants in the
27    Elder Care Savings  Fund,  in  the  penal  sum  of  $500,000,
28    conditioned  upon the faithful discharge of his or her duties
29    in relation to the fund.

30        Section 20.  Exemption from  taxation.   As  provided  in
31    this Act, the investment in the Elder Care Savings Fund is in
32    all  respects  for  the benefit of the People of the State of
33    Illinois, the conduct and increase  of  their  commerce,  the
 
                            -6-      LRB093 10875 DRJ 11377 b
 1    protection  and enhancement of their welfare, the development
 2    of continued prosperity, and the improvement of their  health
 3    and   living   conditions   is   for   public  purposes.   In
 4    consideration of those facts, income derived from investments
 5    in the Elder Care Savings    Fund  and  financial  incentives
 6    received  under  the grant program described in Section 25 of
 7    this Act shall be free from all taxation by the State or  its
 8    political  subdivisions,  except  for  estate,  transfer, and
 9    inheritance taxes.

10        Section 25.  Grant program.
11        (a)  The Governor and the Director of the Bureau  of  the
12    Budget  shall  provide  for  a  grant  program  of additional
13    financial incentives to be provided to  participants  in  the
14    Elder  Care  Savings Program to encourage the use of the fund
15    and the income derived from the fund for one or more  of  the
16    following purposes:
17             (1)  Care  in  a facility licensed under the Nursing
18        Home Care Act.
19             (2)  Home health nursing  services  or  home  health
20        aide  services  provided by a home health agency licensed
21        under the Home Health Agency Licensing Act.
22             (3)  Respite care as defined in the Respite  Program
23        Act.
24             (4)  Custodial care services.
25             (5)  Care  in  a  hospice licensed under the Hospice
26        Program Licensing Act.
27             (6)  Long-term health care services  for  the  aged,
28        the  disabled,  or persons diagnosed as infected with HIV
29        or having AIDS or a related  condition.   These  services
30        include, without limitation, chore-housekeeping services,
31        a  personal  care  attendant,  adult  day care, assistive
32        equipment, home  renovation,  home-delivered  meals,  and
33        emergency  response  systems.  As used in this paragraph,
 
                            -7-      LRB093 10875 DRJ 11377 b
 1        "AIDS" means acquired  immunodeficiency  syndrome;  "HIV"
 2        means  the  Human  Immunodeficiency  Virus  or  any other
 3        identified causative agent of AIDS.
 4             (7)  Care in an assisted living establishment.
 5        (b)  The grant program of financial incentives  shall  be
 6    administered    by    the   State   Treasurer   pursuant   to
 7    administrative rules adopted by the Treasurer.  The financial
 8    incentives shall be in forms determined by the  Governor  and
 9    the  Director  of  the  Bureau of the Budget and may include,
10    among others, supplemental payments to  the  participants  in
11    the Elder Care Savings Fund to be applied to costs of care or
12    services  specified  in  items  (1) through (6) of subsection
13    (a).  The Treasurer may establish,  by  rule,  administrative
14    procedures  and  eligibility  criteria for the grant program;
15    those rules must be consistent with the purposes of this Act.
16    The Treasurer may require  participants  in  the  Elder  Care
17    Savings  Fund,  providers  of long-term health care services,
18    and other necessary parties to assist in the determination of
19    eligibility for financial incentives under the grant program.
20        (c)  All  grants  shall  be   subject   to   the   annual
21    appropriation  of  moneys  for  that  purpose  by the General
22    Assembly.  Financial incentives shall be provided only if, in
23    the sole judgment of  the  Director  of  the  Bureau  of  the
24    Budget, the total incentives offered in a given year will not
25    exceed  the balance of the Elder Care Savings Fund on the day
26    the incentives are offered by more than 0.5%.

27        Section 30. Education program.  The State  Treasurer,  in
28    cooperation with the Department on Aging and area agencies on
29    aging,  shall  develop and implement an education program and
30    marketing strategies designed to  inform  residents  of  this
31    State  about  the  options  available for financing long-term
32    health  care  and  the  need  to  accumulate  the   financial
33    resources  necessary  to  pay  for  that care.  The Treasurer
 
                            -8-      LRB093 10875 DRJ 11377 b
 1    shall report to the General Assembly on the program developed
 2    and its operation before May 1, 2004.   The  Treasurer  shall
 3    adopt  rules  with  respect  to  his or her powers and duties
 4    under this Act.

 5        Section 35. Elder Care Trust Authority.
 6        (a)  The Elder Care  Trust  Authority  is  created.   The
 7    Authority  shall  consist  of  11 members, 7 of whom shall be
 8    appointed as follows:  the Speaker and Minority Leader of the
 9    House of  Representatives  and  the  President  and  Minority
10    Leader  of  the Senate shall each appoint one member, and the
11    Governor shall appoint 3 members.  The State  Treasurer,  the
12    Director  of the Bureau of the Budget, the Director of Public
13    Health, and the Director of the Illinois Economic and  Fiscal
14    Commission,  or  their  respective designees, shall each be a
15    member ex officio.   The  Governor  and  legislative  leaders
16    shall  give  consideration  to selecting members that include
17    representatives  from  the  following   categories:   (i)   a
18    director,  officer,  or  employee  of an entity that provides
19    long-term health  care  services;  (ii)  a  person  having  a
20    favorable  reputation for skill, knowledge, and experience in
21    the  field  of  portfolio  management;  and  (iii)  a  person
22    experienced in and having a favorable reputation  for  skill,
23    knowledge,  and  experience  in  the  long-term  health  care
24    savings field.
25        The  State  Treasurer  or  the Treasurer's designee shall
26    serve as the chairperson of the Authority.
27        The appointed members of the  Authority  first  appointed
28    shall  serve  for  terms  expiring  on June 30 in 2004, 2005,
29    2006, 2007, 2008, 2009, and 2010 respectively, or until their
30    respective successors have been appointed and have qualified.
31    The initial term of each of those members shall be determined
32    by lot.  Upon the expiration of the term of any  member,  the
33    member's  successor  shall be appointed for a term of 6 years
 
                            -9-      LRB093 10875 DRJ 11377 b
 1    and until his or her successor has  been  appointed  and  has
 2    qualified.
 3        Any vacancy shall be filled in the manner of the original
 4    appointment for the remainder of the unexpired term.
 5        Any  member  of  the  Authority  may  be  removed  by the
 6    appointing authority for misfeasance, malfeasance, or  wilful
 7    neglect  of  duty  or  other  cause after notice and a public
 8    hearing, unless that notice and hearing are expressly  waived
 9    by the member in writing.
10        Members  shall be compensated from moneys appropriated to
11    the State Treasurer for their  reasonable  expenses  actually
12    incurred in performing their duties.
13        Staff  assistance  shall  be provided to the Authority by
14    the State Treasurer.
15        The Authority shall meet at least once each year.
16        (b)  The Authority has the following responsibilities:
17             (1)  To  make  recommendations  to  the  Elder  Care
18        Savings Fund staff regarding the marketing of  the  Elder
19        Care  Savings  Fund  to  ensure  the  use  of the fund by
20        participants throughout the State for  long  term  health
21        care purposes.
22             (2)  To  advise the Elder Care Savings Fund staff on
23        an effective advertising campaign to inform  the  general
24        public   about   Elder   Care   Savings   Fund   and  its
25        availability.
26             (3)  To advise the Elder  Care  Savings  Fund  staff
27        regarding  the  investment  portfolio  of  the Elder Care
28        Savings Fund.
29             (4)  After the creation of the  Elder  Care  Savings
30        Fund,  to  assess  the  effectiveness  of the program and
31        recommend constructive  changes  to  the  Bureau  of  the
32        Budget.
33             (5)  To make recommendations to the General Assembly
34        regarding  statutory  changes  that  the  Authority deems
 
                            -10-     LRB093 10875 DRJ 11377 b
 1        necessary or desirable.

 2        Section 90.  The Illinois Income Tax Act  is  amended  by
 3    changing Section 203 as follows:

 4        (35 ILCS 5/203) (from Ch. 120, par. 2-203)
 5        Sec. 203.  Base income defined.
 6        (a)  Individuals.
 7             (1)  In general.  In the case of an individual, base
 8        income  means  an amount equal to the taxpayer's adjusted
 9        gross  income  for  the  taxable  year  as  modified   by
10        paragraph (2).
11             (2)  Modifications.    The   adjusted  gross  income
12        referred to in paragraph (1) shall be modified by  adding
13        thereto the sum of the following amounts:
14                  (A)  An  amount  equal  to  all amounts paid or
15             accrued to the taxpayer  as  interest  or  dividends
16             during  the taxable year to the extent excluded from
17             gross income in the computation  of  adjusted  gross
18             income,  except  stock dividends of qualified public
19             utilities  described  in  Section  305(e)   of   the
20             Internal Revenue Code;
21                  (B)  An  amount  equal  to  the  amount  of tax
22             imposed by this Act  to  the  extent  deducted  from
23             gross  income  in  the computation of adjusted gross
24             income for the taxable year;
25                  (C)  An amount equal  to  the  amount  received
26             during  the  taxable year as a recovery or refund of
27             real  property  taxes  paid  with  respect  to   the
28             taxpayer's principal residence under the Revenue Act
29             of  1939  and  for  which a deduction was previously
30             taken under subparagraph (L) of this  paragraph  (2)
31             prior to July 1, 1991, the retrospective application
32             date  of Article 4 of Public Act 87-17.  In the case
 
                            -11-     LRB093 10875 DRJ 11377 b
 1             of  multi-unit  or  multi-use  structures  and  farm
 2             dwellings, the taxes  on  the  taxpayer's  principal
 3             residence  shall  be that portion of the total taxes
 4             for the entire property  which  is  attributable  to
 5             such principal residence;
 6                  (D)  An  amount  equal  to  the  amount  of the
 7             capital gain deduction allowable under the  Internal
 8             Revenue  Code,  to  the  extent  deducted from gross
 9             income in the computation of adjusted gross income;
10                  (D-5)  An amount, to the extent not included in
11             adjusted gross income, equal to the amount of  money
12             withdrawn by the taxpayer in the taxable year from a
13             medical care savings account and the interest earned
14             on  the  account in the taxable year of a withdrawal
15             pursuant to subsection (b)  of  Section  20  of  the
16             Medical  Care  Savings Account Act or subsection (b)
17             of Section 20 of the Medical  Care  Savings  Account
18             Act of 2000;
19                  (D-7)  An amount, to the extent not included in
20             adjusted  gross income, equal to the amount of money
21             withdrawn by the taxpayer in the taxable  year  from
22             an  account  in  the Elder Care Savings Fund and the
23             interest earned on that account in the taxable  year
24             of such a withdrawal;
25                  (D-10)  For taxable years ending after December
26             31,   1997,   an   amount   equal  to  any  eligible
27             remediation costs that the  individual  deducted  in
28             computing  adjusted  gross  income and for which the
29             individual claims a credit under subsection  (l)  of
30             Section 201;
31                  (D-15)  For  taxable years 2001 and thereafter,
32             an amount equal to the bonus depreciation  deduction
33             (30%   of   the  adjusted  basis  of  the  qualified
34             property) taken on the taxpayer's federal income tax
 
                            -12-     LRB093 10875 DRJ 11377 b
 1             return for the taxable year under subsection (k)  of
 2             Section 168 of the Internal Revenue Code; and
 3                  (D-16)  If  the taxpayer reports a capital gain
 4             or loss on the taxpayer's federal income tax  return
 5             for  the taxable year based on a sale or transfer of
 6             property for which the taxpayer was required in  any
 7             taxable  year to make an addition modification under
 8             subparagraph (D-15), then an  amount  equal  to  the
 9             aggregate  amount  of  the  deductions  taken in all
10             taxable years under subparagraph (Z) with respect to
11             that property.;
12                  The taxpayer is required to make  the  addition
13             modification  under this subparagraph only once with
14             respect to any one piece of property;. and
15                  (D-20) (D-15)  For taxable years  beginning  on
16             or   after  January  1,  2002,  in  the  case  of  a
17             distribution from a qualified tuition program  under
18             Section 529 of the Internal Revenue Code, other than
19             (i)  a  distribution  from  a  College  Savings Pool
20             created under Section 16.5 of  the  State  Treasurer
21             Act or (ii) a distribution from the Illinois Prepaid
22             Tuition  Trust  Fund,  an amount equal to the amount
23             excluded   from   gross   income    under    Section
24             529(c)(3)(B);
25        and  by  deducting  from the total so obtained the sum of
26        the following amounts:
27                  (E)  For taxable years ending  before  December
28             31,  2001,  any  amount  included  in  such total in
29             respect  of  any  compensation  (including  but  not
30             limited to any compensation paid  or  accrued  to  a
31             serviceman  while  a  prisoner  of war or missing in
32             action) paid to a resident by  reason  of  being  on
33             active duty in the Armed Forces of the United States
34             and  in  respect of any compensation paid or accrued
 
                            -13-     LRB093 10875 DRJ 11377 b
 1             to a resident who as a governmental employee  was  a
 2             prisoner of war or missing in action, and in respect
 3             of  any  compensation  paid to a resident in 1971 or
 4             thereafter for annual training performed pursuant to
 5             Sections 502 and 503, Title 32, United  States  Code
 6             as  a  member  of  the  Illinois National Guard. For
 7             taxable years ending on or after December 31,  2001,
 8             any  amount included in such total in respect of any
 9             compensation  (including  but  not  limited  to  any
10             compensation paid or accrued to a serviceman while a
11             prisoner of war or missing  in  action)  paid  to  a
12             resident   by  reason  of  being  a  member  of  any
13             component of the Armed Forces of the  United  States
14             and  in  respect of any compensation paid or accrued
15             to a resident who as a governmental employee  was  a
16             prisoner of war or missing in action, and in respect
17             of  any  compensation  paid to a resident in 2001 or
18             thereafter by  reason  of  being  a  member  of  the
19             Illinois  National  Guard.  The  provisions  of this
20             amendatory Act of  the  92nd  General  Assembly  are
21             exempt from the provisions of Section 250;
22                  (F)  An amount equal to all amounts included in
23             such  total  pursuant  to the provisions of Sections
24             402(a), 402(c), 403(a), 403(b), 406(a), 407(a),  and
25             408  of  the  Internal  Revenue Code, or included in
26             such total as distributions under the provisions  of
27             any  retirement  or disability plan for employees of
28             any  governmental  agency  or  unit,  or  retirement
29             payments to retired  partners,  which  payments  are
30             excluded   in   computing  net  earnings  from  self
31             employment by Section 1402 of the  Internal  Revenue
32             Code and regulations adopted pursuant thereto;
33                  (G)  The valuation limitation amount;
34                  (H)  An  amount  equal to the amount of any tax
 
                            -14-     LRB093 10875 DRJ 11377 b
 1             imposed by  this  Act  which  was  refunded  to  the
 2             taxpayer  and included in such total for the taxable
 3             year;
 4                  (I)  An amount equal to all amounts included in
 5             such total pursuant to the provisions of Section 111
 6             of the Internal Revenue Code as a recovery of  items
 7             previously  deducted  from  adjusted gross income in
 8             the computation of taxable income;
 9                  (J)  An  amount  equal   to   those   dividends
10             included   in  such  total  which  were  paid  by  a
11             corporation which conducts business operations in an
12             Enterprise Zone or zones created under the  Illinois
13             Enterprise  Zone Act, and conducts substantially all
14             of its operations in an Enterprise Zone or zones;
15                  (K)  An  amount  equal   to   those   dividends
16             included   in   such  total  that  were  paid  by  a
17             corporation that conducts business operations  in  a
18             federally  designated Foreign Trade Zone or Sub-Zone
19             and  that  is  designated  a  High  Impact  Business
20             located  in  Illinois;   provided   that   dividends
21             eligible  for the deduction provided in subparagraph
22             (J) of paragraph (2) of this subsection shall not be
23             eligible  for  the  deduction  provided  under  this
24             subparagraph (K);
25                  (L)  For taxable years  ending  after  December
26             31,  1983,  an  amount  equal to all social security
27             benefits and railroad retirement  benefits  included
28             in  such  total pursuant to Sections 72(r) and 86 of
29             the Internal Revenue Code;
30                  (M)  With  the   exception   of   any   amounts
31             subtracted  under  subparagraph (N), an amount equal
32             to the sum of all amounts disallowed  as  deductions
33             by  (i)  Sections  171(a)  (2),  and  265(2)  of the
34             Internal Revenue Code of 1954, as now  or  hereafter
 
                            -15-     LRB093 10875 DRJ 11377 b
 1             amended,  and  all  amounts of expenses allocable to
 2             interest and  disallowed as  deductions  by  Section
 3             265(1)  of the Internal Revenue Code of 1954, as now
 4             or hereafter amended; and  (ii)  for  taxable  years
 5             ending   on  or  after  August  13,  1999,  Sections
 6             171(a)(2), 265, 280C,  and  832(b)(5)(B)(i)  of  the
 7             Internal   Revenue  Code;  the  provisions  of  this
 8             subparagraph  are  exempt  from  the  provisions  of
 9             Section 250;
10                  (N)  An amount equal to all amounts included in
11             such total which are exempt from  taxation  by  this
12             State   either   by   reason   of  its  statutes  or
13             Constitution  or  by  reason  of  the  Constitution,
14             treaties or statutes of the United States;  provided
15             that,  in the case of any statute of this State that
16             exempts  income  derived   from   bonds   or   other
17             obligations from the tax imposed under this Act, the
18             amount  exempted  shall  be the interest net of bond
19             premium amortization;
20                  (O)  An amount equal to any  contribution  made
21             to  a  job  training project established pursuant to
22             the Tax Increment Allocation Redevelopment Act;
23                  (P)  An amount  equal  to  the  amount  of  the
24             deduction  used  to  compute  the federal income tax
25             credit for restoration of substantial  amounts  held
26             under  claim  of right for the taxable year pursuant
27             to Section 1341 of  the  Internal  Revenue  Code  of
28             1986;
29                  (Q)  An amount equal to any amounts included in
30             such   total,   received   by  the  taxpayer  as  an
31             acceleration in the payment of  life,  endowment  or
32             annuity  benefits  in advance of the time they would
33             otherwise be payable as an indemnity for a  terminal
34             illness;
 
                            -16-     LRB093 10875 DRJ 11377 b
 1                  (R)  An  amount  equal  to  the  amount  of any
 2             federal or State  bonus  paid  to  veterans  of  the
 3             Persian Gulf War;
 4                  (S)  An  amount,  to  the  extent  included  in
 5             adjusted  gross  income,  equal  to  the amount of a
 6             contribution made in the taxable year on  behalf  of
 7             the  taxpayer  to  a  medical  care  savings account
 8             established under the Medical Care  Savings  Account
 9             Act  or the Medical Care Savings Account Act of 2000
10             to the extent the contribution is  accepted  by  the
11             account administrator as provided in that Act;
12                  (T)  An  amount,  to  the  extent  included  in
13             adjusted  gross  income,  equal  to  the  amount  of
14             interest  earned  in  the  taxable year on a medical
15             care savings account established under  the  Medical
16             Care Savings Account Act or the Medical Care Savings
17             Account Act of 2000 on behalf of the taxpayer, other
18             than  interest  added pursuant to item (D-5) of this
19             paragraph (2);
20                  (T-5)  An amount, to  the  extent  included  in
21             adjusted  gross  income,  equal  to  the  amount  of
22             interest earned in the taxable year on an account in
23             the  Elder  Care  Savings Fund established under the
24             Elder Care Savings Fund  Act,  other  than  interest
25             added pursuant to item (D-7) of this paragraph (2);
26                  (U)  For one taxable year beginning on or after
27             January 1, 1994, an amount equal to the total amount
28             of  tax  imposed  and paid under subsections (a) and
29             (b) of Section 201 of  this  Act  on  grant  amounts
30             received  by  the  taxpayer  under  the Nursing Home
31             Grant Assistance Act during the  taxpayer's  taxable
32             years 1992 and 1993;
33                  (V)  Beginning  with  tax  years  ending  on or
34             after December 31, 1995 and ending  with  tax  years
 
                            -17-     LRB093 10875 DRJ 11377 b
 1             ending  on  or  before  December 31, 2004, an amount
 2             equal to the amount paid by  a  taxpayer  who  is  a
 3             self-employed  taxpayer, a partner of a partnership,
 4             or a shareholder in a Subchapter S  corporation  for
 5             health  insurance  or  long-term  care insurance for
 6             that  taxpayer  or   that   taxpayer's   spouse   or
 7             dependents,  to  the extent that the amount paid for
 8             that health insurance or  long-term  care  insurance
 9             may  be  deducted  under Section 213 of the Internal
10             Revenue Code of 1986, has not been deducted  on  the
11             federal  income tax return of the taxpayer, and does
12             not exceed the taxable income attributable  to  that
13             taxpayer's   income,   self-employment   income,  or
14             Subchapter S  corporation  income;  except  that  no
15             deduction  shall  be  allowed under this item (V) if
16             the taxpayer  is  eligible  to  participate  in  any
17             health insurance or long-term care insurance plan of
18             an  employer  of  the  taxpayer  or  the  taxpayer's
19             spouse.   The  amount  of  the  health insurance and
20             long-term care insurance subtracted under this  item
21             (V)  shall be determined by multiplying total health
22             insurance and long-term care insurance premiums paid
23             by the taxpayer times a number that  represents  the
24             fractional  percentage  of eligible medical expenses
25             under Section 213 of the Internal  Revenue  Code  of
26             1986 not actually deducted on the taxpayer's federal
27             income tax return;
28                  (W)  For  taxable  years  beginning on or after
29             January  1,  1998,  all  amounts  included  in   the
30             taxpayer's  federal gross income in the taxable year
31             from amounts converted from a regular IRA to a  Roth
32             IRA. This paragraph is exempt from the provisions of
33             Section 250;
34                  (X)  For  taxable  year 1999 and thereafter, an
 
                            -18-     LRB093 10875 DRJ 11377 b
 1             amount equal to the amount of any (i) distributions,
 2             to the extent includible in gross income for federal
 3             income tax purposes, made to the taxpayer because of
 4             his or her status as a  victim  of  persecution  for
 5             racial  or  religious reasons by Nazi Germany or any
 6             other Axis regime or as an heir of  the  victim  and
 7             (ii)  items  of  income, to the extent includible in
 8             gross  income  for  federal  income  tax   purposes,
 9             attributable  to, derived from or in any way related
10             to assets stolen from,  hidden  from,  or  otherwise
11             lost  to  a  victim  of  persecution  for  racial or
12             religious reasons by Nazi Germany or any other  Axis
13             regime immediately prior to, during, and immediately
14             after  World  War II, including, but not limited to,
15             interest on the  proceeds  receivable  as  insurance
16             under policies issued to a victim of persecution for
17             racial  or  religious reasons by Nazi Germany or any
18             other Axis regime by  European  insurance  companies
19             immediately  prior  to  and  during  World  War  II;
20             provided,  however,  this  subtraction  from federal
21             adjusted gross  income  does  not  apply  to  assets
22             acquired  with such assets or with the proceeds from
23             the sale of such  assets;  provided,  further,  this
24             paragraph shall only apply to a taxpayer who was the
25             first  recipient of such assets after their recovery
26             and who is a victim of  persecution  for  racial  or
27             religious  reasons by Nazi Germany or any other Axis
28             regime or as an heir of the victim.  The  amount  of
29             and  the  eligibility  for  any  public  assistance,
30             benefit,  or  similar entitlement is not affected by
31             the  inclusion  of  items  (i)  and  (ii)  of   this
32             paragraph  in  gross  income  for federal income tax
33             purposes.  This  paragraph  is   exempt   from   the
34             provisions of Section 250;
 
                            -19-     LRB093 10875 DRJ 11377 b
 1                  (Y)  For  taxable  years  beginning on or after
 2             January 1, 2002, moneys contributed in  the  taxable
 3             year to a College Savings Pool account under Section
 4             16.5 of the State Treasurer Act, except that amounts
 5             excluded    from    gross   income   under   Section
 6             529(c)(3)(C)(i) of the Internal Revenue  Code  shall
 7             not  be  considered  moneys  contributed  under this
 8             subparagraph (Y).  This subparagraph (Y)  is  exempt
 9             from the provisions of Section 250;
10                  (Z)  For taxable years 2001 and thereafter, for
11             the  taxable  year  in  which the bonus depreciation
12             deduction  (30%  of  the  adjusted  basis   of   the
13             qualified  property)  is  taken  on  the  taxpayer's
14             federal  income  tax  return under subsection (k) of
15             Section 168 of the Internal  Revenue  Code  and  for
16             each  applicable  taxable year thereafter, an amount
17             equal to "x", where:
18                       (1)  "y"  equals   the   amount   of   the
19                  depreciation  deduction  taken  for the taxable
20                  year  on  the  taxpayer's  federal  income  tax
21                  return  on  property  for   which   the   bonus
22                  depreciation  deduction  (30%  of  the adjusted
23                  basis of the qualified property) was  taken  in
24                  any year under subsection (k) of Section 168 of
25                  the  Internal  Revenue  Code, but not including
26                  the bonus depreciation deduction; and
27                       (2)  "x" equals "y" multiplied by  30  and
28                  then  divided  by  70  (or  "y"  multiplied  by
29                  0.429).
30                  The   aggregate   amount  deducted  under  this
31             subparagraph in all taxable years for any one  piece
32             of  property  may not exceed the amount of the bonus
33             depreciation deduction (30% of the adjusted basis of
34             the qualified property) taken on  that  property  on
 
                            -20-     LRB093 10875 DRJ 11377 b
 1             the  taxpayer's  federal  income  tax  return  under
 2             subsection  (k)  of  Section  168  of  the  Internal
 3             Revenue Code; and
 4                  (AA)  If the taxpayer reports a capital gain or
 5             loss on the taxpayer's federal income tax return for
 6             the  taxable  year  based  on  a sale or transfer of
 7             property for which the taxpayer was required in  any
 8             taxable  year to make an addition modification under
 9             subparagraph (D-15), then an amount  equal  to  that
10             addition modification.
11                  The  taxpayer  is allowed to take the deduction
12             under this subparagraph only once  with  respect  to
13             any one piece of property; and
14                  (BB) (Z)  Any amount included in adjusted gross
15             income, other than salary, received by a driver in a
16             ridesharing arrangement using a motor vehicle.

17        (b)  Corporations.
18             (1)  In general.  In the case of a corporation, base
19        income  means  an  amount equal to the taxpayer's taxable
20        income for the taxable year as modified by paragraph (2).
21             (2)  Modifications.  The taxable income referred  to
22        in  paragraph (1) shall be modified by adding thereto the
23        sum of the following amounts:
24                  (A)  An amount equal to  all  amounts  paid  or
25             accrued   to   the  taxpayer  as  interest  and  all
26             distributions  received  from  regulated  investment
27             companies during the  taxable  year  to  the  extent
28             excluded  from  gross  income  in the computation of
29             taxable income;
30                  (B)  An amount  equal  to  the  amount  of  tax
31             imposed  by  this  Act  to  the extent deducted from
32             gross income in the computation  of  taxable  income
33             for the taxable year;
34                  (C)  In  the  case  of  a  regulated investment
 
                            -21-     LRB093 10875 DRJ 11377 b
 1             company, an amount equal to the excess  of  (i)  the
 2             net  long-term  capital  gain  for the taxable year,
 3             over (ii) the amount of the capital  gain  dividends
 4             designated   as  such  in  accordance  with  Section
 5             852(b)(3)(C) of the Internal Revenue  Code  and  any
 6             amount  designated under Section 852(b)(3)(D) of the
 7             Internal Revenue Code, attributable to  the  taxable
 8             year (this amendatory Act of 1995 (Public Act 89-89)
 9             is  declarative  of  existing  law  and is not a new
10             enactment);
11                  (D)  The  amount  of  any  net  operating  loss
12             deduction taken in arriving at taxable income, other
13             than a net operating loss  carried  forward  from  a
14             taxable year ending prior to December 31, 1986;
15                  (E)  For taxable years in which a net operating
16             loss  carryback  or carryforward from a taxable year
17             ending prior to December 31, 1986 is an  element  of
18             taxable income under paragraph (1) of subsection (e)
19             or  subparagraph  (E) of paragraph (2) of subsection
20             (e), the  amount  by  which  addition  modifications
21             other  than  those provided by this subparagraph (E)
22             exceeded subtraction modifications in  such  earlier
23             taxable year, with the following limitations applied
24             in the order that they are listed:
25                       (i)  the addition modification relating to
26                  the  net operating loss carried back or forward
27                  to the  taxable  year  from  any  taxable  year
28                  ending  prior  to  December  31,  1986 shall be
29                  reduced by the amount of addition  modification
30                  under  this  subparagraph  (E) which related to
31                  that net operating loss  and  which  was  taken
32                  into  account in calculating the base income of
33                  an earlier taxable year, and
34                       (ii)  the addition  modification  relating
 
                            -22-     LRB093 10875 DRJ 11377 b
 1                  to  the  net  operating  loss  carried  back or
 2                  forward to the taxable year  from  any  taxable
 3                  year  ending  prior  to December 31, 1986 shall
 4                  not exceed the  amount  of  such  carryback  or
 5                  carryforward;
 6                  For  taxable  years  in  which  there  is a net
 7             operating loss carryback or carryforward  from  more
 8             than one other taxable year ending prior to December
 9             31, 1986, the addition modification provided in this
10             subparagraph  (E)  shall  be  the sum of the amounts
11             computed   independently   under    the    preceding
12             provisions  of  this  subparagraph (E) for each such
13             taxable year;
14                  (E-5)  For taxable years ending after  December
15             31,   1997,   an   amount   equal  to  any  eligible
16             remediation costs that the corporation  deducted  in
17             computing  adjusted  gross  income and for which the
18             corporation claims a credit under subsection (l)  of
19             Section 201;
20                  (E-10)  For  taxable years 2001 and thereafter,
21             an amount equal to the bonus depreciation  deduction
22             (30%   of   the  adjusted  basis  of  the  qualified
23             property) taken on the taxpayer's federal income tax
24             return for the taxable year under subsection (k)  of
25             Section 168 of the Internal Revenue Code; and
26                  (E-11)  If  the taxpayer reports a capital gain
27             or loss on the taxpayer's federal income tax  return
28             for  the taxable year based on a sale or transfer of
29             property for which the taxpayer was required in  any
30             taxable  year to make an addition modification under
31             subparagraph (E-10), then an  amount  equal  to  the
32             aggregate  amount  of  the  deductions  taken in all
33             taxable years under subparagraph (T) with respect to
34             that property.;
 
                            -23-     LRB093 10875 DRJ 11377 b
 1                  The taxpayer is required to make  the  addition
 2             modification  under this subparagraph only once with
 3             respect to any one piece of property;
 4        and by deducting from the total so obtained  the  sum  of
 5        the following amounts:
 6                  (F)  An  amount  equal to the amount of any tax
 7             imposed by  this  Act  which  was  refunded  to  the
 8             taxpayer  and included in such total for the taxable
 9             year;
10                  (G)  An amount equal to any amount included  in
11             such  total under Section 78 of the Internal Revenue
12             Code;
13                  (H)  In the  case  of  a  regulated  investment
14             company,  an  amount  equal  to the amount of exempt
15             interest dividends as defined in subsection (b)  (5)
16             of Section 852 of the Internal Revenue Code, paid to
17             shareholders for the taxable year;
18                  (I)  With   the   exception   of   any  amounts
19             subtracted under subparagraph (J), an  amount  equal
20             to  the  sum of all amounts disallowed as deductions
21             by  (i)  Sections  171(a)  (2),  and  265(a)(2)  and
22             amounts disallowed as interest  expense  by  Section
23             291(a)(3)  of  the  Internal Revenue Code, as now or
24             hereafter  amended,  and  all  amounts  of  expenses
25             allocable to interest and disallowed  as  deductions
26             by  Section  265(a)(1) of the Internal Revenue Code,
27             as now or hereafter amended; and  (ii)  for  taxable
28             years  ending  on or after August 13, 1999, Sections
29             171(a)(2), 265, 280C, 291(a)(3), and 832(b)(5)(B)(i)
30             of the Internal Revenue Code; the provisions of this
31             subparagraph  are  exempt  from  the  provisions  of
32             Section 250;
33                  (J)  An amount equal to all amounts included in
34             such total which are exempt from  taxation  by  this
 
                            -24-     LRB093 10875 DRJ 11377 b
 1             State   either   by   reason   of  its  statutes  or
 2             Constitution  or  by  reason  of  the  Constitution,
 3             treaties or statutes of the United States;  provided
 4             that,  in the case of any statute of this State that
 5             exempts  income  derived   from   bonds   or   other
 6             obligations from the tax imposed under this Act, the
 7             amount  exempted  shall  be the interest net of bond
 8             premium amortization;
 9                  (K)  An  amount  equal   to   those   dividends
10             included   in  such  total  which  were  paid  by  a
11             corporation which conducts business operations in an
12             Enterprise Zone or zones created under the  Illinois
13             Enterprise  Zone  Act and conducts substantially all
14             of its operations in an Enterprise Zone or zones;
15                  (L)  An  amount  equal   to   those   dividends
16             included   in   such  total  that  were  paid  by  a
17             corporation that conducts business operations  in  a
18             federally  designated Foreign Trade Zone or Sub-Zone
19             and  that  is  designated  a  High  Impact  Business
20             located  in  Illinois;   provided   that   dividends
21             eligible  for the deduction provided in subparagraph
22             (K) of paragraph 2 of this subsection shall  not  be
23             eligible  for  the  deduction  provided  under  this
24             subparagraph (L);
25                  (M)  For  any  taxpayer  that  is  a  financial
26             organization within the meaning of Section 304(c) of
27             this  Act,  an  amount  included  in  such  total as
28             interest income from a loan or loans  made  by  such
29             taxpayer  to  a  borrower, to the extent that such a
30             loan is secured by property which  is  eligible  for
31             the Enterprise Zone Investment Credit.  To determine
32             the  portion  of  a loan or loans that is secured by
33             property eligible for a  Section  201(f)  investment
34             credit  to the borrower, the entire principal amount
 
                            -25-     LRB093 10875 DRJ 11377 b
 1             of the loan or loans between the  taxpayer  and  the
 2             borrower  should  be  divided  into the basis of the
 3             Section  201(f)  investment  credit  property  which
 4             secures the loan or loans, using  for  this  purpose
 5             the original basis of such property on the date that
 6             it  was  placed  in  service in the Enterprise Zone.
 7             The subtraction modification available  to  taxpayer
 8             in  any  year  under  this  subsection shall be that
 9             portion of the total interest paid by  the  borrower
10             with  respect  to  such  loan  attributable  to  the
11             eligible  property  as calculated under the previous
12             sentence;
13                  (M-1)  For any taxpayer  that  is  a  financial
14             organization within the meaning of Section 304(c) of
15             this  Act,  an  amount  included  in  such  total as
16             interest income from a loan or loans  made  by  such
17             taxpayer  to  a  borrower, to the extent that such a
18             loan is secured by property which  is  eligible  for
19             the  High  Impact  Business  Investment  Credit.  To
20             determine the portion of a loan  or  loans  that  is
21             secured  by  property  eligible for a Section 201(h)
22             investment  credit  to  the  borrower,  the   entire
23             principal  amount  of  the loan or loans between the
24             taxpayer and the borrower should be divided into the
25             basis  of  the  Section  201(h)  investment   credit
26             property  which secures the loan or loans, using for
27             this purpose the original basis of such property  on
28             the  date  that  it  was  placed  in  service  in  a
29             federally  designated Foreign Trade Zone or Sub-Zone
30             located in Illinois.  No taxpayer that  is  eligible
31             for  the  deduction  provided in subparagraph (M) of
32             paragraph (2) of this subsection shall  be  eligible
33             for  the  deduction provided under this subparagraph
34             (M-1).  The subtraction  modification  available  to
 
                            -26-     LRB093 10875 DRJ 11377 b
 1             taxpayers in any year under this subsection shall be
 2             that  portion  of  the  total  interest  paid by the
 3             borrower with respect to such loan  attributable  to
 4             the   eligible  property  as  calculated  under  the
 5             previous sentence;
 6                  (N)  Two times any contribution made during the
 7             taxable year to a designated  zone  organization  to
 8             the  extent that the contribution (i) qualifies as a
 9             charitable  contribution  under  subsection  (c)  of
10             Section 170 of the Internal Revenue  Code  and  (ii)
11             must,  by  its terms, be used for a project approved
12             by the Department of Commerce and Community  Affairs
13             under  Section  11  of  the Illinois Enterprise Zone
14             Act;
15                  (O)  An amount equal to: (i)  85%  for  taxable
16             years  ending  on or before December 31, 1992, or, a
17             percentage equal to the percentage  allowable  under
18             Section  243(a)(1)  of  the Internal Revenue Code of
19             1986 for taxable years  ending  after  December  31,
20             1992,  of  the amount by which dividends included in
21             taxable income and received from a corporation  that
22             is  not  created  or organized under the laws of the
23             United States or any state or political  subdivision
24             thereof,  including,  for taxable years ending on or
25             after  December  31,  1988,  dividends  received  or
26             deemed  received  or  paid  or  deemed  paid   under
27             Sections  951  through  964  of the Internal Revenue
28             Code, exceed the amount of the modification provided
29             under subparagraph (G)  of  paragraph  (2)  of  this
30             subsection  (b)  which is related to such dividends;
31             plus (ii) 100% of the  amount  by  which  dividends,
32             included  in taxable income and received, including,
33             for taxable years ending on or  after  December  31,
34             1988,  dividends received or deemed received or paid
 
                            -27-     LRB093 10875 DRJ 11377 b
 1             or deemed paid under Sections 951 through 964 of the
 2             Internal Revenue Code,  from  any  such  corporation
 3             specified  in  clause  (i)  that  would  but for the
 4             provisions of Section 1504 (b) (3) of  the  Internal
 5             Revenue   Code   be  treated  as  a  member  of  the
 6             affiliated  group  which   includes   the   dividend
 7             recipient,  exceed  the  amount  of the modification
 8             provided under subparagraph (G) of paragraph (2)  of
 9             this   subsection  (b)  which  is  related  to  such
10             dividends;
11                  (P)  An amount equal to any  contribution  made
12             to  a  job  training project established pursuant to
13             the Tax Increment Allocation Redevelopment Act;
14                  (Q)  An amount  equal  to  the  amount  of  the
15             deduction  used  to  compute  the federal income tax
16             credit for restoration of substantial  amounts  held
17             under  claim  of right for the taxable year pursuant
18             to Section 1341 of  the  Internal  Revenue  Code  of
19             1986;
20                  (R)  In  the  case  of an attorney-in-fact with
21             respect to whom  an  interinsurer  or  a  reciprocal
22             insurer  has  made the election under Section 835 of
23             the Internal Revenue Code, 26 U.S.C. 835, an  amount
24             equal  to the excess, if any, of the amounts paid or
25             incurred by that interinsurer or reciprocal  insurer
26             in the taxable year to the attorney-in-fact over the
27             deduction allowed to that interinsurer or reciprocal
28             insurer  with  respect to the attorney-in-fact under
29             Section 835(b) of the Internal Revenue Code for  the
30             taxable year;
31                  (S)  For  taxable  years  ending  on  or  after
32             December  31,  1997,  in  the case of a Subchapter S
33             corporation, an  amount  equal  to  all  amounts  of
34             income  allocable  to  a  shareholder subject to the
 
                            -28-     LRB093 10875 DRJ 11377 b
 1             Personal Property Tax Replacement Income Tax imposed
 2             by subsections (c) and (d) of Section  201  of  this
 3             Act,  including  amounts  allocable to organizations
 4             exempt from federal income tax by reason of  Section
 5             501(a)   of   the   Internal   Revenue  Code.   This
 6             subparagraph (S) is exempt from  the  provisions  of
 7             Section 250;
 8                  (T)  For taxable years 2001 and thereafter, for
 9             the  taxable  year  in  which the bonus depreciation
10             deduction  (30%  of  the  adjusted  basis   of   the
11             qualified  property)  is  taken  on  the  taxpayer's
12             federal  income  tax  return under subsection (k) of
13             Section 168 of the Internal  Revenue  Code  and  for
14             each  applicable  taxable year thereafter, an amount
15             equal to "x", where:
16                       (1)  "y"  equals   the   amount   of   the
17                  depreciation  deduction  taken  for the taxable
18                  year  on  the  taxpayer's  federal  income  tax
19                  return  on  property  for   which   the   bonus
20                  depreciation  deduction  (30%  of  the adjusted
21                  basis of the qualified property) was  taken  in
22                  any year under subsection (k) of Section 168 of
23                  the  Internal  Revenue  Code, but not including
24                  the bonus depreciation deduction; and
25                       (2)  "x" equals "y" multiplied by  30  and
26                  then  divided  by  70  (or  "y"  multiplied  by
27                  0.429).
28                  The   aggregate   amount  deducted  under  this
29             subparagraph in all taxable years for any one  piece
30             of  property  may not exceed the amount of the bonus
31             depreciation deduction (30% of the adjusted basis of
32             the qualified property) taken on  that  property  on
33             the  taxpayer's  federal  income  tax  return  under
34             subsection  (k)  of  Section  168  of  the  Internal
 
                            -29-     LRB093 10875 DRJ 11377 b
 1             Revenue Code; and
 2                  (U)  If  the taxpayer reports a capital gain or
 3             loss on the taxpayer's federal income tax return for
 4             the taxable year based on  a  sale  or  transfer  of
 5             property  for which the taxpayer was required in any
 6             taxable year to make an addition modification  under
 7             subparagraph  (E-10),  then  an amount equal to that
 8             addition modification.
 9                  The taxpayer is allowed to take  the  deduction
10             under  this  subparagraph  only once with respect to
11             any one piece of property.
12             (3)  Special rule.  For purposes  of  paragraph  (2)
13        (A),  "gross  income"  in  the  case  of a life insurance
14        company, for tax years ending on and after  December  31,
15        1994,  shall  mean  the  gross  investment income for the
16        taxable year.

17        (c)  Trusts and estates.
18             (1)  In general.  In the case of a trust or  estate,
19        base  income  means  an  amount  equal  to the taxpayer's
20        taxable income  for  the  taxable  year  as  modified  by
21        paragraph (2).
22             (2)  Modifications.   Subject  to  the provisions of
23        paragraph  (3),  the  taxable  income  referred   to   in
24        paragraph (1) shall be modified by adding thereto the sum
25        of the following amounts:
26                  (A)  An  amount  equal  to  all amounts paid or
27             accrued to the taxpayer  as  interest  or  dividends
28             during  the taxable year to the extent excluded from
29             gross income in the computation of taxable income;
30                  (B)  In the case of (i) an estate, $600; (ii) a
31             trust which,  under  its  governing  instrument,  is
32             required  to distribute all of its income currently,
33             $300; and (iii) any other trust, $100, but  in  each
34             such  case,  only  to  the  extent  such  amount was
 
                            -30-     LRB093 10875 DRJ 11377 b
 1             deducted in the computation of taxable income;
 2                  (C)  An amount  equal  to  the  amount  of  tax
 3             imposed  by  this  Act  to  the extent deducted from
 4             gross income in the computation  of  taxable  income
 5             for the taxable year;
 6                  (D)  The  amount  of  any  net  operating  loss
 7             deduction taken in arriving at taxable income, other
 8             than  a  net  operating  loss carried forward from a
 9             taxable year ending prior to December 31, 1986;
10                  (E)  For taxable years in which a net operating
11             loss carryback or carryforward from a  taxable  year
12             ending  prior  to December 31, 1986 is an element of
13             taxable income under paragraph (1) of subsection (e)
14             or subparagraph (E) of paragraph (2)  of  subsection
15             (e),  the  amount  by  which  addition modifications
16             other than those provided by this  subparagraph  (E)
17             exceeded  subtraction  modifications in such taxable
18             year, with the following limitations applied in  the
19             order that they are listed:
20                       (i)  the addition modification relating to
21                  the  net operating loss carried back or forward
22                  to the  taxable  year  from  any  taxable  year
23                  ending  prior  to  December  31,  1986 shall be
24                  reduced by the amount of addition  modification
25                  under  this  subparagraph  (E) which related to
26                  that net operating loss  and  which  was  taken
27                  into  account in calculating the base income of
28                  an earlier taxable year, and
29                       (ii)  the addition  modification  relating
30                  to  the  net  operating  loss  carried  back or
31                  forward to the taxable year  from  any  taxable
32                  year  ending  prior  to December 31, 1986 shall
33                  not exceed the  amount  of  such  carryback  or
34                  carryforward;
 
                            -31-     LRB093 10875 DRJ 11377 b
 1                  For  taxable  years  in  which  there  is a net
 2             operating loss carryback or carryforward  from  more
 3             than one other taxable year ending prior to December
 4             31, 1986, the addition modification provided in this
 5             subparagraph  (E)  shall  be  the sum of the amounts
 6             computed   independently   under    the    preceding
 7             provisions  of  this  subparagraph (E) for each such
 8             taxable year;
 9                  (F)  For  taxable  years  ending  on  or  after
10             January 1, 1989, an amount equal to the tax deducted
11             pursuant to Section 164 of the Internal Revenue Code
12             if the trust or estate is claiming the same tax  for
13             purposes  of  the  Illinois foreign tax credit under
14             Section 601 of this Act;
15                  (G)  An amount  equal  to  the  amount  of  the
16             capital  gain deduction allowable under the Internal
17             Revenue Code, to  the  extent  deducted  from  gross
18             income in the computation of taxable income;
19                  (G-5)  For  taxable years ending after December
20             31,  1997,  an  amount   equal   to   any   eligible
21             remediation  costs that the trust or estate deducted
22             in computing adjusted gross income and for which the
23             trust or estate claims a credit under subsection (l)
24             of Section 201;
25                  (G-10)  For taxable years 2001 and  thereafter,
26             an  amount equal to the bonus depreciation deduction
27             (30%  of  the  adjusted  basis  of   the   qualified
28             property) taken on the taxpayer's federal income tax
29             return  for the taxable year under subsection (k) of
30             Section 168 of the Internal Revenue Code; and
31                  (G-11)  If the taxpayer reports a capital  gain
32             or  loss on the taxpayer's federal income tax return
33             for the taxable year based on a sale or transfer  of
34             property  for which the taxpayer was required in any
 
                            -32-     LRB093 10875 DRJ 11377 b
 1             taxable year to make an addition modification  under
 2             subparagraph  (G-10),  then  an  amount equal to the
 3             aggregate amount of  the  deductions  taken  in  all
 4             taxable years under subparagraph (R) with respect to
 5             that property.;
 6                  The  taxpayer  is required to make the addition
 7             modification under this subparagraph only once  with
 8             respect to any one piece of property;
 9        and  by  deducting  from the total so obtained the sum of
10        the following amounts:
11                  (H)  An amount equal to all amounts included in
12             such total pursuant to the  provisions  of  Sections
13             402(a),  402(c),  403(a), 403(b), 406(a), 407(a) and
14             408 of the Internal Revenue Code or included in such
15             total as distributions under the provisions  of  any
16             retirement  or  disability plan for employees of any
17             governmental agency or unit, or retirement  payments
18             to  retired partners, which payments are excluded in
19             computing  net  earnings  from  self  employment  by
20             Section  1402  of  the  Internal  Revenue  Code  and
21             regulations adopted pursuant thereto;
22                  (I)  The valuation limitation amount;
23                  (J)  An amount equal to the amount of  any  tax
24             imposed  by  this  Act  which  was  refunded  to the
25             taxpayer and included in such total for the  taxable
26             year;
27                  (K)  An amount equal to all amounts included in
28             taxable  income  as  modified  by subparagraphs (A),
29             (B), (C), (D), (E), (F) and  (G)  which  are  exempt
30             from  taxation by this State either by reason of its
31             statutes  or  Constitution  or  by  reason  of   the
32             Constitution,  treaties  or  statutes  of the United
33             States; provided that, in the case of any statute of
34             this State that exempts income derived from bonds or
 
                            -33-     LRB093 10875 DRJ 11377 b
 1             other obligations from the tax  imposed  under  this
 2             Act,  the  amount exempted shall be the interest net
 3             of bond premium amortization;
 4                  (L)  With  the   exception   of   any   amounts
 5             subtracted  under  subparagraph (K), an amount equal
 6             to the sum of all amounts disallowed  as  deductions
 7             by  (i)  Sections  171(a)  (2)  and 265(a)(2) of the
 8             Internal Revenue Code, as now or hereafter  amended,
 9             and  all  amounts  of expenses allocable to interest
10             and disallowed as deductions by  Section  265(1)  of
11             the  Internal  Revenue  Code  of  1954,  as  now  or
12             hereafter amended; and (ii) for taxable years ending
13             on  or  after  August  13, 1999, Sections 171(a)(2),
14             265,  280C,  and  832(b)(5)(B)(i)  of  the  Internal
15             Revenue Code; the provisions  of  this  subparagraph
16             are exempt from the provisions of Section 250;
17                  (M)  An   amount   equal   to  those  dividends
18             included  in  such  total  which  were  paid  by   a
19             corporation which conducts business operations in an
20             Enterprise  Zone or zones created under the Illinois
21             Enterprise Zone Act and conducts  substantially  all
22             of its operations in an Enterprise Zone or Zones;
23                  (N)  An  amount  equal to any contribution made
24             to a job training project  established  pursuant  to
25             the Tax Increment Allocation Redevelopment Act;
26                  (O)  An   amount   equal   to  those  dividends
27             included  in  such  total  that  were  paid   by   a
28             corporation  that  conducts business operations in a
29             federally designated Foreign Trade Zone or  Sub-Zone
30             and  that  is  designated  a  High  Impact  Business
31             located   in   Illinois;   provided  that  dividends
32             eligible for the deduction provided in  subparagraph
33             (M) of paragraph (2) of this subsection shall not be
34             eligible  for  the  deduction  provided  under  this
 
                            -34-     LRB093 10875 DRJ 11377 b
 1             subparagraph (O);
 2                  (P)  An  amount  equal  to  the  amount  of the
 3             deduction used to compute  the  federal  income  tax
 4             credit  for  restoration of substantial amounts held
 5             under claim of right for the taxable  year  pursuant
 6             to  Section  1341  of  the  Internal Revenue Code of
 7             1986;
 8                  (Q)  For taxable year 1999 and  thereafter,  an
 9             amount equal to the amount of any (i) distributions,
10             to the extent includible in gross income for federal
11             income tax purposes, made to the taxpayer because of
12             his  or  her  status  as a victim of persecution for
13             racial or religious reasons by Nazi Germany  or  any
14             other  Axis  regime  or as an heir of the victim and
15             (ii) items of income, to the  extent  includible  in
16             gross   income  for  federal  income  tax  purposes,
17             attributable to, derived from or in any way  related
18             to  assets  stolen  from,  hidden from, or otherwise
19             lost to  a  victim  of  persecution  for  racial  or
20             religious  reasons by Nazi Germany or any other Axis
21             regime immediately prior to, during, and immediately
22             after World War II, including, but not  limited  to,
23             interest  on  the  proceeds  receivable as insurance
24             under policies issued to a victim of persecution for
25             racial or religious reasons by Nazi Germany  or  any
26             other  Axis  regime  by European insurance companies
27             immediately  prior  to  and  during  World  War  II;
28             provided, however,  this  subtraction  from  federal
29             adjusted  gross  income  does  not  apply  to assets
30             acquired with such assets or with the proceeds  from
31             the  sale  of  such  assets; provided, further, this
32             paragraph shall only apply to a taxpayer who was the
33             first recipient of such assets after their  recovery
34             and  who  is  a victim of  persecution for racial or
 
                            -35-     LRB093 10875 DRJ 11377 b
 1             religious reasons by Nazi Germany or any other  Axis
 2             regime  or  as an heir of the victim.  The amount of
 3             and  the  eligibility  for  any  public  assistance,
 4             benefit, or similar entitlement is not  affected  by
 5             the   inclusion  of  items  (i)  and  (ii)  of  this
 6             paragraph in gross income  for  federal  income  tax
 7             purposes.   This   paragraph   is  exempt  from  the
 8             provisions of Section 250;
 9                  (R)  For taxable years 2001 and thereafter, for
10             the taxable year in  which  the  bonus  depreciation
11             deduction   (30%   of  the  adjusted  basis  of  the
12             qualified  property)  is  taken  on  the  taxpayer's
13             federal income tax return under  subsection  (k)  of
14             Section  168  of  the  Internal Revenue Code and for
15             each applicable taxable year thereafter,  an  amount
16             equal to "x", where:
17                       (1)  "y"   equals   the   amount   of  the
18                  depreciation deduction taken  for  the  taxable
19                  year  on  the  taxpayer's  federal  income  tax
20                  return   on   property   for  which  the  bonus
21                  depreciation deduction  (30%  of  the  adjusted
22                  basis  of  the qualified property) was taken in
23                  any year under subsection (k) of Section 168 of
24                  the Internal Revenue Code,  but  not  including
25                  the bonus depreciation deduction; and
26                       (2)  "x"  equals  "y" multiplied by 30 and
27                  then  divided  by  70  (or  "y"  multiplied  by
28                  0.429).
29                  The  aggregate  amount  deducted   under   this
30             subparagraph  in all taxable years for any one piece
31             of property may not exceed the amount of  the  bonus
32             depreciation deduction (30% of the adjusted basis of
33             the  qualified  property)  taken on that property on
34             the  taxpayer's  federal  income  tax  return  under
 
                            -36-     LRB093 10875 DRJ 11377 b
 1             subsection  (k)  of  Section  168  of  the  Internal
 2             Revenue Code; and
 3                  (S)  If the taxpayer reports a capital gain  or
 4             loss on the taxpayer's federal income tax return for
 5             the  taxable  year  based  on  a sale or transfer of
 6             property for which the taxpayer was required in  any
 7             taxable  year to make an addition modification under
 8             subparagraph (G-10), then an amount  equal  to  that
 9             addition modification.
10                  The  taxpayer  is allowed to take the deduction
11             under this subparagraph only once  with  respect  to
12             any one piece of property.
13             (3)  Limitation.   The  amount  of  any modification
14        otherwise required under  this  subsection  shall,  under
15        regulations  prescribed by the Department, be adjusted by
16        any amounts included therein which  were  properly  paid,
17        credited,  or  required to be distributed, or permanently
18        set aside for charitable purposes pursuant   to  Internal
19        Revenue Code Section 642(c) during the taxable year.

20        (d)  Partnerships.
21             (1)  In  general. In the case of a partnership, base
22        income means an amount equal to  the  taxpayer's  taxable
23        income for the taxable year as modified by paragraph (2).
24             (2)  Modifications.  The  taxable income referred to
25        in paragraph (1) shall be modified by adding thereto  the
26        sum of the following amounts:
27                  (A)  An  amount  equal  to  all amounts paid or
28             accrued to the taxpayer  as  interest  or  dividends
29             during  the taxable year to the extent excluded from
30             gross income in the computation of taxable income;
31                  (B)  An amount  equal  to  the  amount  of  tax
32             imposed  by  this  Act  to  the extent deducted from
33             gross income for the taxable year;
34                  (C)  The amount of deductions  allowed  to  the
 
                            -37-     LRB093 10875 DRJ 11377 b
 1             partnership  pursuant  to  Section  707  (c)  of the
 2             Internal Revenue Code  in  calculating  its  taxable
 3             income;
 4                  (D)  An  amount  equal  to  the  amount  of the
 5             capital gain deduction allowable under the  Internal
 6             Revenue  Code,  to  the  extent  deducted from gross
 7             income in the computation of taxable income;
 8                  (D-5)  For taxable years 2001  and  thereafter,
 9             an  amount equal to the bonus depreciation deduction
10             (30%  of  the  adjusted  basis  of   the   qualified
11             property) taken on the taxpayer's federal income tax
12             return  for the taxable year under subsection (k) of
13             Section 168 of the Internal Revenue Code; and
14                  (D-6)  If the taxpayer reports a  capital  gain
15             or  loss on the taxpayer's federal income tax return
16             for the taxable year based on a sale or transfer  of
17             property  for which the taxpayer was required in any
18             taxable year to make an addition modification  under
19             subparagraph  (D-5),  then  an  amount  equal to the
20             aggregate amount of  the  deductions  taken  in  all
21             taxable years under subparagraph (O) with respect to
22             that property.;
23                  The  taxpayer  is required to make the addition
24             modification under this subparagraph only once  with
25             respect to any one piece of property;
26        and by deducting from the total so obtained the following
27        amounts:
28                  (E)  The valuation limitation amount;
29                  (F)  An  amount  equal to the amount of any tax
30             imposed by  this  Act  which  was  refunded  to  the
31             taxpayer  and included in such total for the taxable
32             year;
33                  (G)  An amount equal to all amounts included in
34             taxable income as  modified  by  subparagraphs  (A),
 
                            -38-     LRB093 10875 DRJ 11377 b
 1             (B),  (C)  and (D) which are exempt from taxation by
 2             this State either  by  reason  of  its  statutes  or
 3             Constitution  or  by  reason  of  the  Constitution,
 4             treaties  or statutes of the United States; provided
 5             that, in the case of any statute of this State  that
 6             exempts   income   derived   from   bonds  or  other
 7             obligations from the tax imposed under this Act, the
 8             amount exempted shall be the interest  net  of  bond
 9             premium amortization;
10                  (H)  Any   income   of  the  partnership  which
11             constitutes personal service income  as  defined  in
12             Section  1348  (b)  (1) of the Internal Revenue Code
13             (as in effect December 31,  1981)  or  a  reasonable
14             allowance  for  compensation  paid  or  accrued  for
15             services  rendered  by  partners to the partnership,
16             whichever is greater;
17                  (I)  An amount equal to all amounts  of  income
18             distributable  to  an entity subject to the Personal
19             Property  Tax  Replacement  Income  Tax  imposed  by
20             subsections (c) and (d) of Section 201 of  this  Act
21             including  amounts  distributable  to  organizations
22             exempt  from federal income tax by reason of Section
23             501(a) of the Internal Revenue Code;
24                  (J)  With  the   exception   of   any   amounts
25             subtracted  under  subparagraph (G), an amount equal
26             to the sum of all amounts disallowed  as  deductions
27             by  (i)  Sections  171(a)  (2),  and  265(2)  of the
28             Internal Revenue Code of 1954, as now  or  hereafter
29             amended,  and  all  amounts of expenses allocable to
30             interest and disallowed  as  deductions  by  Section
31             265(1)  of  the  Internal  Revenue  Code,  as now or
32             hereafter amended; and (ii) for taxable years ending
33             on or after August  13,  1999,  Sections  171(a)(2),
34             265,  280C,  and  832(b)(5)(B)(i)  of  the  Internal
 
                            -39-     LRB093 10875 DRJ 11377 b
 1             Revenue  Code;  the  provisions of this subparagraph
 2             are exempt from the provisions of Section 250;
 3                  (K)  An  amount  equal   to   those   dividends
 4             included   in  such  total  which  were  paid  by  a
 5             corporation which conducts business operations in an
 6             Enterprise Zone or zones created under the  Illinois
 7             Enterprise  Zone  Act,  enacted  by the 82nd General
 8             Assembly, and  conducts  substantially  all  of  its
 9             operations in an Enterprise Zone or Zones;
10                  (L)  An  amount  equal to any contribution made
11             to a job training project  established  pursuant  to
12             the   Real   Property   Tax   Increment   Allocation
13             Redevelopment Act;
14                  (M)  An   amount   equal   to  those  dividends
15             included  in  such  total  that  were  paid   by   a
16             corporation  that  conducts business operations in a
17             federally designated Foreign Trade Zone or  Sub-Zone
18             and  that  is  designated  a  High  Impact  Business
19             located   in   Illinois;   provided  that  dividends
20             eligible for the deduction provided in  subparagraph
21             (K) of paragraph (2) of this subsection shall not be
22             eligible  for  the  deduction  provided  under  this
23             subparagraph (M);
24                  (N)  An  amount  equal  to  the  amount  of the
25             deduction used to compute  the  federal  income  tax
26             credit  for  restoration of substantial amounts held
27             under claim of right for the taxable  year  pursuant
28             to  Section  1341  of  the  Internal Revenue Code of
29             1986;
30                  (O)  For taxable years 2001 and thereafter, for
31             the taxable year in  which  the  bonus  depreciation
32             deduction   (30%   of  the  adjusted  basis  of  the
33             qualified  property)  is  taken  on  the  taxpayer's
34             federal income tax return under  subsection  (k)  of
 
                            -40-     LRB093 10875 DRJ 11377 b
 1             Section  168  of  the  Internal Revenue Code and for
 2             each applicable taxable year thereafter,  an  amount
 3             equal to "x", where:
 4                       (1)  "y"   equals   the   amount   of  the
 5                  depreciation deduction taken  for  the  taxable
 6                  year  on  the  taxpayer's  federal  income  tax
 7                  return   on   property   for  which  the  bonus
 8                  depreciation deduction  (30%  of  the  adjusted
 9                  basis  of  the qualified property) was taken in
10                  any year under subsection (k) of Section 168 of
11                  the Internal Revenue Code,  but  not  including
12                  the bonus depreciation deduction; and
13                       (2)  "x"  equals  "y" multiplied by 30 and
14                  then  divided  by  70  (or  "y"  multiplied  by
15                  0.429).
16                  The  aggregate  amount  deducted   under   this
17             subparagraph  in all taxable years for any one piece
18             of property may not exceed the amount of  the  bonus
19             depreciation deduction (30% of the adjusted basis of
20             the  qualified  property)  taken on that property on
21             the  taxpayer's  federal  income  tax  return  under
22             subsection  (k)  of  Section  168  of  the  Internal
23             Revenue Code; and
24                  (P)  If the taxpayer reports a capital gain  or
25             loss on the taxpayer's federal income tax return for
26             the  taxable  year  based  on  a sale or transfer of
27             property for which the taxpayer was required in  any
28             taxable  year to make an addition modification under
29             subparagraph (D-5), then an  amount  equal  to  that
30             addition modification.
31                  The  taxpayer  is allowed to take the deduction
32             under this subparagraph only once  with  respect  to
33             any one piece of property.

34        (e)  Gross income; adjusted gross income; taxable income.
 
                            -41-     LRB093 10875 DRJ 11377 b
 1             (1)  In  general.   Subject  to  the  provisions  of
 2        paragraph  (2)  and  subsection  (b) (3), for purposes of
 3        this Section  and  Section  803(e),  a  taxpayer's  gross
 4        income,  adjusted gross income, or taxable income for the
 5        taxable year shall  mean  the  amount  of  gross  income,
 6        adjusted   gross   income   or  taxable  income  properly
 7        reportable  for  federal  income  tax  purposes  for  the
 8        taxable year under the provisions of the Internal Revenue
 9        Code. Taxable income may be less than zero. However,  for
10        taxable  years  ending on or after December 31, 1986, net
11        operating loss carryforwards from  taxable  years  ending
12        prior  to  December  31,  1986, may not exceed the sum of
13        federal taxable income for the taxable  year  before  net
14        operating  loss  deduction,  plus  the excess of addition
15        modifications  over  subtraction  modifications  for  the
16        taxable year.  For taxable years ending prior to December
17        31, 1986, taxable income may never be an amount in excess
18        of the net operating loss for the taxable year as defined
19        in subsections (c) and (d) of Section 172 of the Internal
20        Revenue Code, provided that  when  taxable  income  of  a
21        corporation  (other  than  a  Subchapter  S corporation),
22        trust,  or  estate  is  less  than  zero   and   addition
23        modifications,  other than those provided by subparagraph
24        (E) of paragraph (2) of subsection (b)  for  corporations
25        or  subparagraph  (E)  of paragraph (2) of subsection (c)
26        for trusts and estates, exceed subtraction modifications,
27        an  addition  modification  must  be  made  under   those
28        subparagraphs  for  any  other  taxable year to which the
29        taxable income less than zero  (net  operating  loss)  is
30        applied under Section 172 of the Internal Revenue Code or
31        under   subparagraph   (E)   of  paragraph  (2)  of  this
32        subsection (e) applied in conjunction with Section 172 of
33        the Internal Revenue Code.
34             (2)  Special rule.  For purposes of paragraph (1) of
 
                            -42-     LRB093 10875 DRJ 11377 b
 1        this subsection, the taxable income  properly  reportable
 2        for federal income tax purposes shall mean:
 3                  (A)  Certain  life insurance companies.  In the
 4             case of a life insurance company subject to the  tax
 5             imposed by Section 801 of the Internal Revenue Code,
 6             life  insurance  company  taxable  income,  plus the
 7             amount of distribution  from  pre-1984  policyholder
 8             surplus accounts as calculated under Section 815a of
 9             the Internal Revenue Code;
10                  (B)  Certain other insurance companies.  In the
11             case  of  mutual  insurance companies subject to the
12             tax imposed by Section 831 of the  Internal  Revenue
13             Code, insurance company taxable income;
14                  (C)  Regulated  investment  companies.   In the
15             case of a regulated investment  company  subject  to
16             the  tax  imposed  by  Section  852  of the Internal
17             Revenue Code, investment company taxable income;
18                  (D)  Real estate  investment  trusts.   In  the
19             case  of  a  real estate investment trust subject to
20             the tax imposed  by  Section  857  of  the  Internal
21             Revenue  Code,  real estate investment trust taxable
22             income;
23                  (E)  Consolidated corporations.  In the case of
24             a corporation which is a  member  of  an  affiliated
25             group  of  corporations filing a consolidated income
26             tax return for the taxable year for  federal  income
27             tax  purposes,  taxable income determined as if such
28             corporation had filed a separate return for  federal
29             income  tax  purposes  for the taxable year and each
30             preceding taxable year for which it was a member  of
31             an   affiliated   group.   For   purposes   of  this
32             subparagraph, the taxpayer's separate taxable income
33             shall be determined as if the election  provided  by
34             Section  243(b) (2) of the Internal Revenue Code had
 
                            -43-     LRB093 10875 DRJ 11377 b
 1             been in effect for all such years;
 2                  (F)  Cooperatives.    In   the   case   of    a
 3             cooperative  corporation or association, the taxable
 4             income of such organization determined in accordance
 5             with the provisions of Section 1381 through 1388  of
 6             the Internal Revenue Code;
 7                  (G)  Subchapter  S  corporations.   In the case
 8             of: (i) a Subchapter S corporation for  which  there
 9             is  in effect an election for the taxable year under
10             Section 1362  of  the  Internal  Revenue  Code,  the
11             taxable  income  of  such  corporation determined in
12             accordance with  Section  1363(b)  of  the  Internal
13             Revenue  Code, except that taxable income shall take
14             into account  those  items  which  are  required  by
15             Section  1363(b)(1)  of the Internal Revenue Code to
16             be  separately  stated;  and  (ii)  a  Subchapter  S
17             corporation for which there is in effect  a  federal
18             election  to  opt  out  of  the  provisions  of  the
19             Subchapter  S  Revision Act of 1982 and have applied
20             instead the prior federal Subchapter S rules  as  in
21             effect  on  July 1, 1982, the taxable income of such
22             corporation  determined  in  accordance   with   the
23             federal  Subchapter  S rules as in effect on July 1,
24             1982; and
25                  (H)  Partnerships.    In   the   case   of    a
26             partnership, taxable income determined in accordance
27             with  Section  703  of  the  Internal  Revenue Code,
28             except that taxable income shall take  into  account
29             those  items which are required by Section 703(a)(1)
30             to be separately stated but  which  would  be  taken
31             into  account  by  an  individual in calculating his
32             taxable income.

33        (f)  Valuation limitation amount.
34             (1)  In general.  The  valuation  limitation  amount
 
                            -44-     LRB093 10875 DRJ 11377 b
 1        referred  to  in subsections (a) (2) (G), (c) (2) (I) and
 2        (d)(2) (E) is an amount equal to:
 3                  (A)  The  sum  of  the   pre-August   1,   1969
 4             appreciation  amounts  (to  the extent consisting of
 5             gain reportable under the provisions of Section 1245
 6             or 1250  of  the  Internal  Revenue  Code)  for  all
 7             property  in respect of which such gain was reported
 8             for the taxable year; plus
 9                  (B)  The  lesser  of  (i)  the   sum   of   the
10             pre-August  1,  1969  appreciation  amounts  (to the
11             extent consisting of capital gain) for all  property
12             in  respect  of  which  such  gain  was reported for
13             federal income tax purposes for the taxable year, or
14             (ii) the net capital  gain  for  the  taxable  year,
15             reduced  in  either  case by any amount of such gain
16             included in the amount determined  under  subsection
17             (a) (2) (F) or (c) (2) (H).
18             (2)  Pre-August 1, 1969 appreciation amount.
19                  (A)  If  the  fair  market  value  of  property
20             referred   to   in   paragraph   (1)   was   readily
21             ascertainable  on  August 1, 1969, the pre-August 1,
22             1969 appreciation amount for such  property  is  the
23             lesser  of  (i) the excess of such fair market value
24             over the taxpayer's basis (for determining gain) for
25             such property on that  date  (determined  under  the
26             Internal Revenue Code as in effect on that date), or
27             (ii)  the  total  gain  realized  and reportable for
28             federal income tax purposes in respect of the  sale,
29             exchange or other disposition of such property.
30                  (B)  If  the  fair  market  value  of  property
31             referred   to  in  paragraph  (1)  was  not  readily
32             ascertainable on August 1, 1969, the  pre-August  1,
33             1969  appreciation  amount for such property is that
34             amount which bears the same ratio to the total  gain
 
                            -45-     LRB093 10875 DRJ 11377 b
 1             reported  in  respect  of  the  property for federal
 2             income tax purposes for the  taxable  year,  as  the
 3             number  of  full calendar months in that part of the
 4             taxpayer's holding period for  the  property  ending
 5             July  31,  1969 bears to the number of full calendar
 6             months in the taxpayer's entire holding  period  for
 7             the property.
 8                  (C)  The   Department   shall   prescribe  such
 9             regulations as may be necessary  to  carry  out  the
10             purposes of this paragraph.

11        (g)  Double  deductions.   Unless  specifically  provided
12    otherwise, nothing in this Section shall permit the same item
13    to be deducted more than once.

14        (h)  Legislative intention.  Except as expressly provided
15    by   this   Section   there  shall  be  no  modifications  or
16    limitations on the amounts of income, gain, loss or deduction
17    taken into account  in  determining  gross  income,  adjusted
18    gross  income  or  taxable  income  for  federal  income  tax
19    purposes for the taxable year, or in the amount of such items
20    entering  into  the computation of base income and net income
21    under this Act for such taxable year, whether in  respect  of
22    property values as of August 1, 1969 or otherwise.
23    (Source:  P.A.  91-192,  eff.  7-20-99; 91-205, eff. 7-20-99;
24    91-357, eff. 7-29-99;  91-541,  eff.  8-13-99;  91-676,  eff.
25    12-23-99;  91-845,  eff. 6-22-00; 91-913, eff. 1-1-01; 92-16,
26    eff. 6-28-01; 92-244,  eff.  8-3-01;  92-439,  eff.  8-17-01;
27    92-603,  eff.  6-28-02;  92-626,  eff.  7-11-02; 92-651, eff.
28    7-11-02; 92-846, eff. 8-23-02; revised 11-15-02.)

29        Section 99.  Effective date.  This Act takes effect  upon
30    becoming law.