Rep. Linda Chapa LaVia

Filed: 4/17/2006

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 17

2     AMENDMENT NO. ______. Amend Senate Bill 17, AS AMENDED, by
3 replacing everything after the enacting clause with the
4 following:
 
5
"ARTICLE 5.
6
SOUTHERN ILLINOIS ECONOMIC DEVELOPMENT AUTHORITY ACT

 
7     Section 5-5. Short title. This Article may be cited as the
8 Southern Illinois Economic Development Authority Act, and
9 references in this Article to "this Act" mean this Article.
 
10     Section 5-10. Findings. The General Assembly determines
11 and declares the following:
12     (1) that labor surplus areas currently exist in southern
13 Illinois;
14     (2) that the economic burdens resulting from involuntary
15 unemployment fall, in part, upon the State in the form of
16 increased need for public assistance and reduced tax revenues
17 and, in the event that the unemployed worker and his or her
18 family migrate elsewhere to find work, the burden may also fall
19 upon the municipalities and other taxing districts within the
20 areas of unemployment in the form of reduced tax revenues,
21 thereby endangering their financial ability to support
22 necessary governmental services for their remaining
23 inhabitants;

 

 

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1     (3) that the State has a responsibility to help create a
2 favorable climate for new and improved job opportunities for
3 its citizens by encouraging the development of commercial and
4 service businesses and industrial and manufacturing plants
5 within the southern region of Illinois;
6     (4) that a lack of decent housing contributes to urban
7 blight, crime, anti-social behavior, disease, a higher need for
8 public assistance, reduced tax revenues, and the migration of
9 workers and their families away from areas which fail to offer
10 adequate, decent, and affordable housing;
11     (5) that decent, affordable housing is a necessary
12 ingredient of life affording each citizen basic human dignity,
13 a sense of self-worth, confidence, and a firm foundation upon
14 which to build a family and educate children;
15     (6) that in order to foster civic and neighborhood pride,
16 citizens require access to educational institutions,
17 recreation, parks and open spaces, entertainment, sports, a
18 reliable transportation network, cultural facilities, and
19 theaters; and
20     (7) that the main purpose of this Act is to promote
21 industrial, commercial, residential, service, transportation,
22 and recreational activities and facilities, thereby reducing
23 the evils attendant upon unemployment and enhancing the public
24 health, safety, morals, happiness, and general welfare of the
25 State.
 
26     Section 5-15. Definitions. In this Act:
27     "Authority" means the Southern Illinois Economic
28 Development Authority.
29     "Governmental agency" means any federal, State, or local
30 governmental body and any agency or instrumentality thereof,
31 corporate or otherwise.
32     "Person" means any natural person, firm, partnership,
33 corporation, both domestic and foreign, company, association

 

 

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1 or joint stock association and includes any trustee, receiver,
2 assignee or personal representative thereof.
3     "Revenue bond" means any bond issued by the Authority, the
4 principal and interest of which is payable solely from revenues
5 or income derived from any project or activity of the
6 Authority.
7     "Board" means the Board of Directors of the Southern
8 Illinois Economic Development Authority.
9     "Governor" means the Governor of the State of Illinois.
10     "City" means any city, village, incorporated town, or
11 township within the geographical territory of the Authority.
12     "Industrial project" means the following:
13     (1) a capital project, including one or more buildings and
14 other structures, improvements, machinery and equipment
15 whether or not on the same site or sites now existing or
16 hereafter acquired, suitable for use by any manufacturing,
17 industrial, research, transportation or commercial enterprise
18 including but not limited to use as a factory, mill, processing
19 plant, assembly plant, packaging plant, fabricating plant,
20 ethanol plant, office building, industrial distribution
21 center, warehouse, repair, overhaul or service facility,
22 freight terminal, research facility, test facility, railroad
23 facility, port facility, solid waste and wastewater treatment
24 and disposal sites and other pollution control facilities,
25 resource or waste reduction, recovery, treatment and disposal
26 facilities, and including also the sites thereof and other
27 rights in land therefore whether improved or unimproved, site
28 preparation and landscaping and all appurtenances and
29 facilities incidental thereto such as utilities, access roads,
30 railroad sidings, truck docking and similar facilities,
31 parking facilities, dockage, wharfage, railroad roadbed,
32 track, trestle, depot, terminal, switching and signaling
33 equipment or related equipment and other improvements
34 necessary or convenient thereto; or

 

 

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1     (2) any land, buildings, machinery or equipment comprising
2 an addition to or renovation, rehabilitation or improvement of
3 any existing capital project.
4     "Commercial project" means any project, including, but not
5 limited to, one or more buildings and other structures,
6 improvements, machinery, and equipment, whether or not on the
7 same site or sites now existing or hereafter acquired, suitable
8 for use by any retail or wholesale concern, distributorship, or
9 agency.
10     "Project" means an industrial, housing, residential,
11 commercial, or service project, or any combination thereof,
12 provided that all uses fall within one of the categories
13 described above. Any project automatically includes all site
14 improvements and new construction involving sidewalks, sewers,
15 solid waste and wastewater treatment and disposal sites and
16 other pollution control facilities, resource or waste
17 reduction, recovery, treatment and disposal facilities, parks,
18 open spaces, wildlife sanctuaries, streets, highways, and
19 runways.
20     "Lease agreement" means an agreement in which a project
21 acquired by the Authority by purchase, gift, or lease is leased
22 to any person or corporation that will use, or cause the
23 project to be used, as a project, upon terms providing for
24 lease rental payments at least sufficient to pay, when due, all
25 principal of and interest and premium, if any, on any bonds,
26 notes, or other evidences of indebtedness of the Authority,
27 issued with respect to the project, providing for the
28 maintenance, insurance, and operation of the project on terms
29 satisfactory to the Authority and providing for disposition of
30 the project upon termination of the lease term, including
31 purchase options or abandonment of the premises, with other
32 terms as may be deemed desirable by the Authority.
33     "Loan agreement" means any agreement in which the Authority
34 agrees to loan the proceeds of its bonds, notes, or other

 

 

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1 evidences of indebtedness, issued with respect to a project, to
2 any person or corporation which will use or cause the project
3 to be used as a project, upon terms providing for loan
4 repayment installments at least sufficient to pay, when due,
5 all principal of and interest and premium, if any, on any
6 bonds, notes, or other evidences of indebtedness of the
7 Authority issued with respect to the project, providing for
8 maintenance, insurance, and operation of the project on terms
9 satisfactory to the Authority and providing for other terms
10 deemed advisable by the Authority.
11     "Financial aid" means the expenditure of Authority funds or
12 funds provided by the Authority for the development,
13 construction, acquisition or improvement of a project, through
14 the issuance of revenue bonds, notes, or other evidences of
15 indebtedness.
16     "Costs incurred in connection with the development,
17 construction, acquisition or improvement of a project" means
18 the following:
19     (1) the cost of purchase and construction of all lands and
20 improvements in connection therewith and equipment and other
21 property, rights, easements, and franchises acquired which are
22 deemed necessary for the construction;
23     (2) financing charges;
24     (3) interest costs with respect to bonds, notes, and other
25 evidences of indebtedness of the Authority prior to and during
26 construction and for a period of 6 months thereafter;
27     (4) engineering and legal expenses; and
28     (5) the costs of plans, specifications, surveys, and
29 estimates of costs and other expenses necessary or incident to
30 determining the feasibility or practicability of any project,
31 together with such other expenses as may be necessary or
32 incident to the financing, insuring, acquisition, and
33 construction of a specific project and the placing of the same
34 in operation.
 

 

 

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1     Section 5-20. Creation.
2     (a) There is created a political subdivision, body politic,
3 and municipal corporation named the Southern Illinois Economic
4 Development Authority. The territorial jurisdiction of the
5 Authority is that geographic area within the boundaries of the
6 following counties: Franklin, Perry, Randolph, Jackson,
7 Williamson, Saline, Gallatin, Union, Johnson, Pope, Hardin,
8 Alexander, Pulaski, and Massac and any navigable waters and air
9 space located therein.
10     (b) The governing and administrative powers of the
11 Authority shall be vested in a body consisting of 21 members as
12 follows:
13         (1) Ex officio member. The Director of Commerce and
14     Economic Opportunity, or a designee of that Department,
15     shall serve as an ex officio member.
16         (2) Public members. Six members shall be appointed by
17     the Governor with the advice and consent of the Senate. The
18     county board chairmen of the following counties shall each
19     appoint one member: Franklin, Perry, Randolph, Jackson,
20     Williamson, Saline, Gallatin, Union, Johnson, Pope,
21     Hardin, Alexander, Pulaski, and Massac. All public members
22     shall reside within the territorial jurisdiction of the
23     Authority. The public members shall be persons of
24     recognized ability and experience in one or more of the
25     following areas: economic development, finance, banking,
26     industrial development, state or local government,
27     commercial agriculture, small business management, real
28     estate development, community development, venture
29     finance, organized labor, or civic or community
30     organization.
31     (c) 11 members shall constitute a quorum.
32     (d) The chairman of the Authority shall be elected annually
33 by the Board and must be a public member that resides within

 

 

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1 the territorial jurisdiction of the Authority.
2     (e) The terms of all initial members of the Authority shall
3 begin 30 days after the effective date of this Act. Of the 6
4 original public members appointed by the Governor, 2 shall
5 serve until the third Monday in January, 2007; 1 shall serve
6 until the third Monday in January, 2008; 1 shall serve until
7 the third Monday in January, 2009; 1 shall serve until the
8 third Monday in January, 2010; and 1 shall serve until the
9 third Monday in January, 2011. The initial terms of the
10 original public members appointed by the county board chairmen
11 shall be determined by lot, according to the following
12 schedule: (i) 3 shall serve until the third Monday in January,
13 2007, (ii) 3 shall serve until the third Monday in January,
14 2008, (iii) 3 shall serve until the third Monday in January,
15 2009, (iv) 3 shall serve until the third Monday in January,
16 2010, and (v) 2 shall serve until the third Monday in January,
17 2011. All successors to these original public members shall be
18 appointed by the original appointing authority and all
19 appointments made by the Governor shall be made with the advice
20 and consent of the Senate, pursuant to subsection (b), and
21 shall hold office for a term of 6 years commencing the third
22 Monday in January of the year in which their term commences,
23 except in the case of an appointment to fill a vacancy.
24 Vacancies occurring among the public members shall be filled
25 for the remainder of the term. In case of vacancy in a
26 Governor-appointed membership when the Senate is not in
27 session, the Governor may make a temporary appointment until
28 the next meeting of the Senate when a person shall be nominated
29 to fill the office and, upon confirmation by the Senate, he or
30 she shall hold office during the remainder of the term and
31 until a successor is appointed and qualified. Members of the
32 Authority are not entitled to compensation for their services
33 as members but are entitled to reimbursement for all necessary
34 expenses incurred in connection with the performance of their

 

 

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1 duties as members.
2     (f) The Governor may remove any public member of the
3 Authority in case of incompetence, neglect of duty, or
4 malfeasance in office. The chairman of a county board may
5 remove any public member appointed by that chairman in the case
6 of incompetence, neglect of duty, or malfeasance in office.
7     (g) The Board shall appoint an Executive Director who shall
8 have a background in finance, including familiarity with the
9 legal and procedural requirements of issuing bonds, real
10 estate, or economic development and administration. The
11 Executive Director shall hold office at the discretion of the
12 Board. The Executive Director shall be the chief administrative
13 and operational officer of the Authority, shall direct and
14 supervise its administrative affairs and general management,
15 perform such other duties as may be prescribed from time to
16 time by the members, and receive compensation fixed by the
17 Authority. The Department of Commerce and Community Affairs
18 shall pay the compensation of the Executive Director from
19 appropriations received for that purpose. The Executive
20 Director shall attend all meetings of the Authority. However,
21 no action of the Authority shall be invalid on account of the
22 absence of the Executive Director from a meeting. The Authority
23 may engage the services of the Illinois Finance Authority,
24 attorneys, appraisers, engineers, accountants, credit
25 analysts, and other consultants if the Southern Illinois
26 Economic Development Authority deems it advisable.
 
27     Section 5-25. Duty. All official acts of the Authority
28 shall require the approval of at least 11 members. It shall be
29 the duty of the Authority to promote development within the
30 geographic confines of Franklin, Perry, Randolph, Jackson,
31 Williamson, Saline, Gallatin, Union, Johnson, Pope, Hardin,
32 Alexander, Pulaski, and Massac counties. The Authority shall
33 use the powers conferred upon it to assist in the development,

 

 

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1 construction, and acquisition of industrial, commercial,
2 housing, or residential projects within those counties.
 
3     Section 5-30. Powers.
4     (a) The Authority possesses all the powers of a body
5 corporate necessary and convenient to accomplish the purposes
6 of this Act, including, without any intended limitation upon
7 the general powers hereby conferred, the following powers:
8         (1) to enter into loans, contracts, agreements, and
9     mortgages in any matter connected with any of its corporate
10     purposes and to invest its funds;
11         (2) to sue and be sued;
12         (3) to utilize services of the Illinois Finance
13     Authority necessary to carry out its purposes;
14         (4) to have and use a common seal and to alter the seal
15     at its discretion;
16         (5) to adopt all needful ordinances, resolutions,
17     bylaws, rules, and regulations for the conduct of its
18     business and affairs and for the management and use of the
19     projects developed, constructed, acquired, and improved in
20     furtherance of its purposes;
21         (6) to designate the fiscal year for the Authority;
22         (7) to accept and expend appropriations;
23         (8) to acquire, own, lease, sell, or otherwise dispose
24     of interests in and to real property and improvements
25     situated on that real property and in personal property
26     necessary to fulfill the purposes of the Authority;
27         (9) to engage in any activity or operation which is
28     incidental to and in furtherance of efficient operation to
29     accomplish the Authority's primary purpose;
30         (10) to acquire, own, construct, lease, operate, and
31     maintain bridges, terminals, terminal facilities, and port
32     facilities and to fix and collect just, reasonable, and
33     nondiscriminatory charges for the use of such facilities.

 

 

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1     These charges shall be used to defray the reasonable
2     expenses of the Authority and to pay the principal and
3     interest of any revenue bonds issued by the Authority;
4         (11) subject to any applicable condition imposed by
5     this Act, to locate, establish and maintain a public
6     airport, public airports and public airport facilities
7     within its corporate limits or within or upon any body of
8     water adjacent thereto and to construct, develop, expand,
9     extend and improve any such airport or airport facility;
10     and
11         (12) to have and exercise all powers and be subject to
12     all duties usually incident to boards of directors of
13     corporations.
14     (b) The Authority shall not issue any bonds relating to the
15 financing of a project located within the planning and
16 subdivision control jurisdiction of any municipality or county
17 unless: (i) notice, including a description of the proposed
18 project and the financing for that project, is submitted to the
19 corporate authorities of the municipality or, in the case of a
20 proposed project in an unincorporated area, to the county board
21 and (ii) the corporate authorities of the municipality do not,
22 or the county board does not, adopt a resolution disapproving
23 the project within 45 days after receipt of the notice.
24     (c) If any of the powers set forth in this Act are
25 exercised within the jurisdictional limits of any
26 municipality, all ordinances of the municipality remain in full
27 force and effect and are controlling.
 
28     Section 5-35. Tax avoidance. Notwithstanding any other
29 provision of law, the Authority shall not enter into any
30 agreement providing for the purchase and lease of tangible
31 personal property which results in the avoidance of taxation
32 under the Retailers' Occupation Tax Act, the Use Tax Act, the
33 Service Use Tax Act, or the Service Occupation Tax Act, without

 

 

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1 the prior written consent of the Governor.
 
2     Section 5-40. Bonds.
3     (a) The Authority, with the written approval of the
4 Governor, shall have the continuing power to issue bonds,
5 notes, or other evidences of indebtedness in an aggregate
6 amount not to exceed $250,000,000 for the following purposes:
7 (i) development, construction, acquisition, or improvement of
8 projects, including those established by business entities
9 locating or expanding property within the territorial
10 jurisdiction of the Authority; (ii) entering into venture
11 capital agreements with businesses locating or expanding
12 within the territorial jurisdiction of the Authority; and (iii)
13 acquisition and improvement of any property necessary and
14 useful in connection therewith. For the purpose of evidencing
15 the obligations of the Authority to repay any money borrowed,
16 the Authority may, pursuant to resolution, from time to time,
17 issue and dispose of its interest-bearing revenue bonds, notes,
18 or other evidences of indebtedness and may also from time to
19 time issue and dispose of such bonds, notes, or other evidences
20 of indebtedness to refund, at maturity, at a redemption date or
21 in advance of either, any bonds, notes, or other evidences of
22 indebtedness pursuant to redemption provisions or at any time
23 before maturity. All such bonds, notes, or other evidences of
24 indebtedness shall be payable solely and only from the revenues
25 or income to be derived from loans made with respect to
26 projects, from the leasing or sale of the projects, or from any
27 other funds available to the Authority for such purposes. The
28 bonds, notes, or other evidences of indebtedness may bear such
29 date or dates, may mature at such time or times not exceeding
30 40 years from their respective dates, may bear interest at such
31 rate or rates not exceeding the maximum rate permitted by the
32 Bond Authorization Act, may be in such form, may carry such
33 registration privileges, may be executed in such manner, may be

 

 

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1 payable at such place or places, may be made subject to
2 redemption in such manner and upon such terms, with or without
3 premium, as is stated on the face thereof, may be authenticated
4 in such manner and may contain such terms and covenants as may
5 be provided by an applicable resolution.
6     (b) The holder or holders of any bonds, notes, or other
7 evidences of indebtedness issued by the Authority may bring
8 suits at law or proceedings in equity to compel the performance
9 and observance by any corporation or person or by the Authority
10 or any of its agents or employees of any contract or covenant
11 made with the holders of the bonds, notes, or other evidences
12 of indebtedness, to compel such corporation, person, the
13 Authority, and any of its agents or employees to perform any
14 duties required to be performed for the benefit of the holders
15 of the bonds, notes, or other evidences of indebtedness by the
16 provision of the resolution authorizing their issuance and to
17 enjoin the corporation, person, the Authority, and any of its
18 agents or employees from taking any action in conflict with any
19 contract or covenant.
20     (c) If the Authority fails to pay the principal of or
21 interest on any of the bonds or premium, if any, as the bond
22 becomes due, a civil action to compel payment may be instituted
23 in the appropriate circuit court by the holder or holders of
24 the bonds on which the default of payment exists or by an
25 indenture trustee acting on behalf of the holders. Delivery of
26 a summons and a copy of the complaint to the chairman of the
27 Board shall constitute sufficient service to give the circuit
28 court jurisdiction over the subject matter of the suit and
29 jurisdiction over the Authority and its officers named as
30 defendants for the purpose of compelling such payment. Any
31 case, controversy, or cause of action concerning the validity
32 of this Act relates to the revenue of the State of Illinois.
33     (d) Notwithstanding the form and tenor of any bond, note,
34 or other evidence of indebtedness and in the absence of any

 

 

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1 express recital on its face that it is non-negotiable, all such
2 bonds, notes, and other evidences of indebtedness shall be
3 negotiable instruments. Pending the preparation and execution
4 of any bonds, notes, or other evidences of indebtedness,
5 temporary bonds, notes, or evidences of indebtedness may be
6 issued as provided by ordinance.
7     (e) To secure the payment of any or all of such bonds,
8 notes, or other evidences of indebtedness, the revenues to be
9 received by the Authority from a lease agreement or loan
10 agreement shall be pledged, and, for the purpose of setting
11 forth the covenants and undertakings of the Authority in
12 connection with the issuance of the bonds, notes, or other
13 evidences of indebtedness and the issuance of any additional
14 bonds, notes or other evidences of indebtedness payable from
15 such revenues, income, or other funds to be derived from
16 projects, the Authority may execute and deliver a mortgage or
17 trust agreement. A remedy for any breach or default of the
18 terms of any mortgage or trust agreement by the Authority may
19 be by mandamus proceeding in the appropriate circuit court to
20 compel performance and compliance under the terms of the
21 mortgage or trust agreement, but the trust agreement may
22 prescribe by whom or on whose behalf the action may be
23 instituted.
24     (f) Bonds or notes shall be secured as provided in the
25 authorizing ordinance which may include, notwithstanding any
26 other provision of this Act, in addition to any other security,
27 a specific pledge, assignment of and lien on, or security
28 interest in any or all revenues or money of the Authority, from
29 whatever source, which may, by law, be used for debt service
30 purposes and a specific pledge, or assignment of and lien on,
31 or security interest in any funds or accounts established or
32 provided for by ordinance of the Authority authorizing the
33 issuance of the bonds or notes.
34     (g) The State of Illinois pledges to and agrees with the

 

 

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1 holders of the bonds and notes of the Authority issued pursuant
2 to this Section that the State will not limit or alter the
3 rights and powers vested in the Authority by this Act so as to
4 impair the terms of any contract made by the Authority with the
5 holders of bonds or notes or in any way impair the rights and
6 remedies of those holders until the bonds and notes, together
7 with interest thereon, with interest on any unpaid installments
8 of interest, and all costs and expenses in connection with any
9 action or proceedings by or on behalf of the holders, are fully
10 met and discharged. In addition, the State pledges to and
11 agrees with the holders of the bonds and notes of the Authority
12 issued pursuant to this Section that the State will not limit
13 or alter the basis on which State funds are to be paid to the
14 Authority as provided in this Act, or the use of such funds, so
15 as to impair the terms of any such contract. The Authority is
16 authorized to include these pledges and agreements of the State
17 in any contract with the holders of bonds or notes issued
18 pursuant to this Section.
19     (h) Not less than 30 days prior to the commitment to issue
20 bonds, notes, or other evidences of indebtedness for the
21 purpose of developing, constructing, acquiring, or improving
22 housing or residential projects, as defined in this Act, the
23 Authority shall provide notice to the Executive Director of the
24 Illinois Housing Development Authority. Within 30 days after
25 the notice is provided, the Illinois Housing Development
26 Authority shall, in writing, either express interest in
27 financing the project or notify the Authority that it is not
28 interested in providing financing and that the Authority may
29 finance the project or seek alternative financing.
 
30     Section 5-45. Bonds and notes; exemption from taxation. The
31 creation of the Authority is in all respects for the benefit of
32 the people of Illinois and for the improvement of their health,
33 safety, welfare, comfort, and security, and its purposes are

 

 

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1 public purposes. In consideration thereof, the notes and bonds
2 of the Authority issued pursuant to this Act and the income
3 from these notes and bonds may be free from all taxation by the
4 State or its political subdivisions, exempt for estate,
5 transfer, and inheritance taxes. The exemption from taxation
6 provided by the preceding sentence shall apply to the income on
7 any notes or bonds of the Authority only if the Authority in
8 its sole judgment determines that the exemption enhances the
9 marketability of the bonds or notes or reduces the interest
10 rates that would otherwise be borne by the bonds or notes. For
11 purposes of Section 250 of the Illinois Income Tax Act, the
12 exemption of the Authority shall terminate after all of the
13 bonds have been paid. The amount of such income that shall be
14 added and then subtracted on the Illinois income tax return of
15 a taxpayer, subject to Section 203 of the Illinois Income Tax
16 Act, from federal adjusted gross income or federal taxable
17 income in computing Illinois base income shall be the interest
18 net of any bond premium amortization.
 
19     Section 5-50. Acquisition.
20     (a) The Authority may, but need not, acquire title to any
21 project with respect to which it exercises its authority.
22     (b) The Authority shall have power to acquire by purchase,
23 lease, gift, or otherwise any property or rights therein from
24 any person or persons, the State of Illinois, any municipal
25 corporation, any local unit of government, the government of
26 the United States and any agency or instrumentality of the
27 United States, any body politic, or any county useful for its
28 purposes, whether improved for the purposes of any prospective
29 project or unimproved. The Authority may also accept any
30 donation of funds for its purposes from any of these sources.
31     (c) The Authority shall have power to develop, construct,
32 and improve, either under its own direction or through
33 collaboration with any approved applicant, or to acquire,

 

 

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1 through purchase or otherwise, any project, using for this
2 purpose the proceeds derived from its sale of revenue bonds,
3 notes, or other evidences of indebtedness or governmental loans
4 or grants and shall have the power to hold title to those
5 projects in the name of the Authority.
6     (d) The Authority shall have the power to enter into
7 intergovernmental agreements with the State of Illinois, the
8 counties of Franklin, Perry, Randolph, Jackson, Williamson,
9 Saline, Gallatin, Union, Johnson, Pope, Hardin, Alexander,
10 Pulaski, or Massac, the Illinois Finance Authority, the
11 Illinois Housing Development Authority, the United States
12 government and any agency or instrumentality of the United
13 States, any unit of local government located within the
14 territory of the Authority, or any other unit of government to
15 the extent allowed by Article VII, Section 10 of the Illinois
16 Constitution and the Intergovernmental Cooperation Act.
17     (e) The Authority shall have the power to share employees
18 with other units of government, including agencies of the
19 United States, agencies of the State of Illinois, and agencies
20 or personnel of any unit of local government.
21     (f) The Authority shall have the power to exercise powers
22 and issue bonds as if it were a municipality so authorized in
23 Divisions 12.1, 74, 74.1, 74.3, and 74.5 of Article 11 of the
24 Illinois Municipal Code.
 
25     Section 5-60. Designation of depository. The Authority
26 shall biennially designate a national or State bank or banks as
27 depositories of its money. Such depositories shall be
28 designated only within the State and upon condition that bonds
29 approved as to form and surety by the Authority and at least
30 equal in amount to the maximum sum expected to be on deposit at
31 any one time shall be first given by such depositories to the
32 Authority, such bonds to be conditioned for the safe keeping
33 and prompt repayment of such deposits. When any of the funds of

 

 

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1 the Authority shall be deposited by the treasurer in any such
2 depository, the treasurer and the sureties on his official bond
3 shall, to such extent, be exempt from liability for the loss of
4 any such deposited funds by reason of the failure, bankruptcy,
5 or any other act or default of such depository; provided that
6 the Authority may accept assignments of collateral by any
7 depository of its funds to secure such deposits to the same
8 extent and conditioned in the same manner as assignments of
9 collateral are permitted by law to secure deposits of the funds
10 of any city.
 
11     Section 5-65. Taxation prohibited. The Authority shall
12 have no right or authority to levy any tax or special
13 assessment, to pledge the credit of the State or any other
14 subdivision or municipal corporation thereof, or to incur any
15 obligation enforceable upon any property, either within or
16 without the territory of the Authority.
 
17     Section 5-70. Fees. The Authority may collect fees and
18 charges in connection with its loans, commitments, and
19 servicing and may provide technical assistance in the
20 development of the region.
 
21     Section 5-75. Reports. The Authority shall annually submit
22 a report of its finances to the Auditor General. The Authority
23 shall annually submit a report of its activities to the
24 Governor and to the General Assembly.
 
25
ARTICLE 10.
26
RIVER EDGE REDEVELOPMENT ZONE ACT

 
27     Section 10-1. This Article may be cited as the River Edge
28 Redevelopment Zone Act, and references in this Article to "this
29 Act" mean this Article.
 

 

 

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1     Section 10-2. Findings. The General Assembly finds and
2 declares that those municipalities adjacent to or surrounding
3 river areas often lack critical tools to safely revive and
4 redevelop environmentally-challenged properties that will
5 stimulate economic revitalization and create jobs in Illinois.
6 Environmentally-challenged properties adjacent to or
7 surrounding Illinois rivers are a threat to the health, safety,
8 and welfare of the people of this State. Many of these
9 environmentally-challenged properties adjacent to or
10 surrounding rivers were former industrial areas that now,
11 subject to appropriate environmental clean-up and remediation,
12 would be ideal for office, residential, retail, hospitality,
13 commercial, recreational, warehouse and distribution, and
14 other economically productive uses. The cost of the cleaning
15 and remediation of these environmentally-challenged properties
16 is often the primary obstacle to returning these properties to
17 a safe and economically productive use.
18     Cooperative and continuous partnership among the State,
19 through the Department of Commerce and Economic Opportunity and
20 the Environmental Protection Agency, municipalities adjacent
21 to or surrounding rivers, and the private sector is necessary
22 to appropriately encourage the cost-effective cleaning and
23 remediation of these environmentally-challenged properties in
24 order to bring about a safe and economically productive use of
25 the properties.
26      Therefore, it is declared to be the purpose of this Act to
27 identify and initiate 2 pilot River Edge Redevelopment Zones to
28 stimulate the safe and cost-effective re-use of
29 environmentally-challenged properties adjacent to or
30 surrounding rivers by means of tax incentives or grants.
 
31     Section 10-3. Definitions. As used in this Act:
32     "Department" means the Department of Commerce and Economic

 

 

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1 Opportunity.
2     "River Edge Redevelopment Zone" means an area of the State
3 certified by the Department as a River Edge Redevelopment Zone
4 pursuant to this Act.
5     "Designated zone organization" means an association or
6 entity: (1) the members of which are substantially all
7 residents of the River Edge Redevelopment Zone or of the
8 municipality in which the River Edge Redevelopment Zone is
9 located; (2) the board of directors of which is elected by the
10 members of the organization; (3) that satisfies the criteria
11 set forth in Section 501(c) (3) or 501(c) (4) of the Internal
12 Revenue Code; and (4) that exists primarily for the purpose of
13 performing within the zone, for the benefit of the residents
14 and businesses thereof, any of the functions set forth in
15 Section 8 of this Act.
16     "Agency" means: each officer, board, commission, and
17 agency created by the Constitution, in the executive branch of
18 State government, other than the State Board of Elections; each
19 officer, department, board, commission, agency, institution,
20 authority, university, and body politic and corporate of the
21 State; each administrative unit or corporate outgrowth of the
22 State government that is created by or pursuant to statute,
23 other than units of local government and their officers, school
24 districts, and boards of election commissioners; and each
25 administrative unit or corporate outgrowth of the above and as
26 may be created by executive order of the Governor. No entity is
27 an "agency" for the purposes of this Act unless the entity is
28 authorized by law to make rules or regulations.
29     "Rule" means each agency statement of general
30 applicability that implements, applies, interprets, or
31 prescribes law or policy, but does not include (i) statements
32 concerning only the internal management of an agency and not
33 affecting private rights or procedures available to persons or
34 entities outside the agency, (ii) intra agency memoranda, or

 

 

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1 (iii) the prescription of standardized forms.
 
2     Section 10-4. Qualifications for River Edge Redevelopment
3 Zones. An area is qualified to become a zone if it:
4         (1) is a contiguous area adjacent to or surrounding a
5     river;
6         (2) comprises a minimum of one half square mile and not
7     more than 12 square miles, exclusive of lakes and
8     waterways;
9         (3) satisfies any additional criteria established by
10     the Department consistent with the purposes of this Act;
11         (4) is entirely within a single home rule municipality;
12     and
13         (5) has at least 100 acres of environmentally
14     challenged land within 1500 yards of the riverfront.
 
15     Section 10-5. Initiation of River Edge Redevelopment Zones
16 by Municipality.
17     (a) No area may be designated as a river edge redevelopment
18 zone except pursuant to an initiating ordinance adopted in
19 accordance with this Section.
20     (b) A municipality may by ordinance designate an area
21 within its jurisdiction as a river edge redevelopment zone,
22 subject to the certification of the Department in accordance
23 with this Act, if:
24         (i) the area is qualified in accordance with Section
25     10-4; and
26         (ii) the municipality has conducted at least one public
27     hearing within the proposed zone area on the question of
28     whether to create the zone, what local plans, tax
29     incentives and other programs should be established in
30     connection with the zone, and what the boundaries of the
31     zone should be; public notice of such hearing shall be
32     published in at least one newspaper of general circulation

 

 

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1     within the zone area, not more than 20 days nor less than 5
2     days before the hearing.
3     (c) An ordinance designating an area as a river edge
4 redevelopment zone shall set forth:
5         (i) a precise description of the area comprising the
6     zone, either in the form of a legal description or by
7     reference to roadways, lakes and waterways, and
8     municipality boundaries;
9         (ii) a finding that the zone area meets the
10     qualifications of Section 10-4;
11         (iii) provisions for any tax incentives or
12     reimbursement for taxes, which pursuant to State and
13     federal law apply to business enterprises within the zone
14     at the election of the designating municipality, and which
15     are not applicable throughout the municipality;
16         (iv) a designation of the area as a river edge
17     redevelopment zone, subject to the approval of the
18     Department in accordance with this Act; and
19         (v) the duration or term of the river edge
20     redevelopment zone.
21     (d) This Section does not prohibit a municipality from
22 extending additional tax incentives or reimbursement for
23 business enterprises in river edge redevelopment zones or
24 throughout their territory by separate ordinance.
 
25     Section 10-5.1. Application to Department. A municipality
26 that has adopted an ordinance designating an area as a river
27 edge redevelopment zone shall make written application to the
28 Department to have the proposed zone certified. The application
29 shall include:
30         (1) a certified copy of the ordinance designating the
31     proposed zone;
32         (2) a map of the proposed zone;
33         (3) an analysis, and any appropriate supporting

 

 

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1     documents, demonstrating that the proposed zone area is
2     qualified in accordance with Section 10-4;
3         (4) a statement detailing any tax, grant, and other
4     financial incentives or benefits, and any programs, to be
5     provided by the municipality to business enterprises or
6     organizations within the zone, other than those provided in
7     the designating ordinance, which are not to be provided
8     throughout the municipality;
9         (5) a statement setting forth the economic development
10     and planning objectives for the zone;
11         (6) an estimate of the economic impact of the zone,
12     considering all of the tax incentives, financial benefits
13     and programs contemplated, upon the revenues of the
14     municipality;
15         (7) a transcript of all public hearings on the zone;
16         (8) a statement describing the functions, programs,
17     and services to be performed by designated zone
18     organizations within the zone; and
19         (9) such additional information as the Department by
20     rule may require.
 
21     Section 10-5.2. Department Review of River Edge
22 Redevelopment Zone Applications.
23     (a) All applications must be considered and acted upon by
24 the Department no later than 180 days after being received by
25 the Department.
26     (b) Upon receipt of an application from a municipality the
27 Department shall review the application to determine whether
28 the designated area qualifies as a River Edge Redevelopment
29 Zone under Section 10-4 of this Act.
30     (c) If any such designated area is found to be qualified to
31 be a River Edge Redevelopment Zone, the Department shall
32 publish a notice in at least one newspaper of general
33 circulation within the municipality in which the proposed zone

 

 

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1 is located to notify the general public of the application and
2 their opportunity to comment. Such notice shall include a
3 description of the area and a brief summary of the application
4 and shall indicate locations where the applicant has provided
5 copies of the application for public inspection. The notice
6 shall also indicate appropriate procedures for the filing of
7 written comments from zone residents, business, civic, and
8 other organizations and property owners to the Department.
9     (d) Within 180 days after receiving an application, the
10 Department shall either approve or deny that application. If an
11 approval of an application is not received within 180 days
12 after the Department's receipt of the application, then the
13 application is considered to be denied. If an application is
14 denied, the Department shall inform the municipality of the
15 specific reasons for the denial.
16     (e) In determining which designated areas shall be approved
17 and certified as River Edge Redevelopment Zones, the Department
18 shall give preference to:
19         (1) areas with high levels of environmentally
20     challenged areas;
21         (2) areas that have evidenced the widest support from
22     the municipality seeking to have such areas designated as
23     River Edge Redevelopment Zones;
24         (3) areas for which a specific plan has been submitted
25     to effect economic growth and expansion;
26         (4) areas for which there is evidence of prior
27     consultation between the municipality seeking designation
28     of an area as an River Edge Redevelopment Zone and
29     business, labor, and neighborhood organizations within the
30     proposed Zone;
31         (5) areas for which a specific plan has been submitted
32     which will or may be expected to benefit zone residents and
33     workers by increasing their ownership opportunities and
34     participation in a River Edge Redevelopment Zone

 

 

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1     development.
2     (f) The Department's determination of whether to certify a
3 River Edge Redevelopment Zone shall be based on the purposes of
4 this Act, the criteria set forth in Section 10-4 and subsection
5 (e) of this Section, and any additional criteria adopted by
6 regulation of the Department under paragraph (d) of Section
7 10-4.
 
8     Section 10-5.3. Certification of River Edge Redevelopment
9 Zones.
10     (a) Approval of designated River Edge Redevelopment Zones
11 shall be made by the Department by certification of the
12 designating ordinance. The Department shall promptly issue a
13 certificate for each zone upon its approval. The certificate
14 shall be signed by the Director of the Department, shall make
15 specific reference to the designating ordinance, which shall be
16 attached thereto, and shall be filed in the office of the
17 Secretary of State. A certified copy of the River Edge
18 Redevelopment Zone Certificate, or a duplicate original
19 thereof, shall be recorded in the office of the recorder of
20 deeds of the county in which the River Edge Redevelopment Zone
21 lies.
22     (b) A River Edge Redevelopment Zone shall be effective upon
23 its certification. The Department shall transmit a copy of the
24 certification to the Department of Revenue, and to the
25 designating municipality. Upon certification of a River Edge
26 Redevelopment Zone, the terms and provisions of the designating
27 ordinance shall be in effect, and may not be amended or
28 repealed except in accordance with Section 10-5.4.
29     (c) A River Edge Redevelopment Zone shall be in effect for
30 the period stated in the certificate, which shall in no event
31 exceed 30 calendar years. Zones shall terminate at midnight of
32 December 31 of the final calendar year of the certified term,
33 except as provided in Section 10-5.4.

 

 

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1     (d) In calendar years 2006 and 2007, the Department may
2 certify one pilot River Edge Redevelopment Zone in the City of
3 East St. Louis and one pilot River Edge Redevelopment Zone in
4 the City of Aurora.
5     Thereafter the Department may not certify any additional
6 River Edge Redevelopment Zones, but may amend and rescind
7 certifications of existing River Edge Redevelopment Zones in
8 accordance with Section 10-5.4.
9     (e) A municipality in which a River Edge Redevelopment Zone
10 has been certified must submit to the Department, within 60
11 days after the certification, a plan for encouraging the
12 participation by minority persons, females, persons with
13 disabilities, and veterans in the zone. The Department may
14 assist the municipality in developing and implementing the
15 plan. The terms "minority person", "female", and "person with a
16 disability" have the meanings set forth under Section 2 of the
17 Business Enterprise for Minorities, Females, and Persons with
18 Disabilities Act. "Veteran" means an Illinois resident who is a
19 veteran as defined in subsection (h) of Section 1491 of Title
20 10 of the United States Code.
 
21     Section 10-5.4. Amendment and decertification of River
22 Edge Redevelopment Zones.
23     (a) The terms of a certified zone designating ordinance may
24 be amended to:
25         (1) alter the boundaries of the Zone;
26         (2) expand, limit or repeal tax incentives or benefits
27     provided in the ordinance;
28         (3) alter the termination date of the zone; or
29         (4) make technical corrections in the river edge
30     redevelopment zone designating ordinance.
31     An amendment shall not be effective unless the Department
32 issues an amended certificate for the River Edge Redevelopment
33 Zone, approving the amended designating ordinance. Upon the

 

 

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1 adoption of any ordinance amending or repealing the terms of a
2 certified river edge redevelopment zone designating ordinance,
3 the municipality shall promptly file with the Department an
4 application for approval thereof, containing substantially the
5 same information as required for an application under Section
6 10-5.1 insofar as material to the proposed changes. The
7 municipality must hold a public hearing on the proposed changes
8 as specified in Section 10-5 and, if the amendment is to
9 effectuate the limitation of tax abatements under Section
10 10-5.4.1, then the public notice of the hearing shall state
11 that property that is in both the zone and a redevelopment
12 project area may not receive tax abatements unless within 60
13 days after the adoption of the amendment to the designating
14 ordinance the municipality has determined that eligibility for
15 tax abatements has been established.
16     (b) The Department shall approve or disapprove a proposed
17 amendment to a certified zone within 90 days after its receipt
18 of the application from the municipality. The Department may
19 not approve changes in a Zone that are not in conformity with
20 this Act, as now or hereafter amended, or with other applicable
21 laws. If the Department issues an amended certificate for a
22 Zone, the amended certificate, together with the amended zone
23 designating ordinance, shall be filed, recorded, and
24 transmitted as provided in Section 10-5.3.
25     (c) A River Edge Redevelopment Zone may be decertified by
26 joint action of the Department and by the municipality in which
27 the River Edge Development Zone is located. The designating
28 municipality shall conduct at least one public hearing within
29 the zone prior to its adoption of an ordinance of
30 decertification. The mayor of the designating municipality
31 shall execute a joint decertification agreement with the
32 Department. A decertification of a River Edge Redevelopment
33 Zone that was initiated by the joint action of the Department
34 and one or more of the municipalities in which the zone is

 

 

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1 located shall not become effective until at least 6 months
2 after the execution of the decertification agreement, which
3 shall be filed in the office of the Secretary of State.
4     (d) A River Edge Redevelopment Zone may be decertified for
5 cause by the Department in accordance with this Section. Prior
6 to decertification:
7         (1) the Department shall notify the chief elected
8     official of the designating municipality in writing of the
9     specific deficiencies that provide cause for
10     decertification;
11         (2) the Department shall place the designating
12     municipality on probationary status for at least 6 months
13     during which time corrective action may be achieved in the
14     zone by the designating municipality; and
15         (3) the Department shall conduct at least one public
16     hearing within the zone.
17 If such corrective action is not achieved during the
18 probationary period, the Department shall issue an amended
19 certificate signed by the Director of the Department
20 decertifying the zone, which certificate shall be filed in the
21 office of the Secretary of State. A certified copy of the
22 amended certificate, or a duplicate original thereof, shall be
23 recorded in the office of recorder of the county in which the
24 River Edge Redevelopment Zone lies, and shall be provided to
25 the chief elected official of the designating municipality.
26 Decertification of a River Edge Redevelopment Zone for cause
27 shall not become effective until 60 days after the date of
28 filing.
29     (e) In the event of a decertification, an amendment
30 reducing the length of the term or the area of a River Edge
31 Redevelopment Zone, or the adoption of an ordinance reducing or
32 eliminating tax benefits in a zone, all benefits previously
33 extended within the zone pursuant to this Act or pursuant to
34 any other Illinois law providing benefits specifically to or

 

 

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1 within River Edge Redevelopment Zones shall remain in effect
2 for the original stated term of the zone, with respect to
3 business enterprises within the zone on the effective date of
4 such decertification or amendment.
5     (f) With respect to a business enterprise (or expansion
6 thereof) that is proposed or under development within a zone at
7 the time of a decertification or an amendment reducing the
8 length of the term of the zone, or excluding from the zone area
9 the site of the proposed enterprise, or an ordinance reducing
10 or eliminating tax benefits in a zone, such business enterprise
11 is entitled to the benefits previously applicable within the
12 zone for the original stated term of the zone, if the business
13 enterprise establishes:
14         (i) that the proposed business enterprise or expansion
15     has been committed to be located within the zone;
16         (ii) that substantial and binding financial
17     obligations have been made towards the development of such
18     enterprise; and
19         (iii) that such commitments have been made in
20     reasonable reliance on the benefits and programs which were
21     to have been applicable to the enterprise by reason of the
22     zone, including in the case of a reduction in term of a
23     zone, the original length of the term.
24     In declaratory judgment actions under this subsection, the
25 Department and the designating municipality shall be necessary
26 parties defendant.
 
27     Section 10-5.4.1. Adoption of tax increment financing.
28     (a) If (i) a redevelopment project area is, will be, or has
29 been created by a municipality under Division 74.4 of Article
30 11 of the Illinois Municipal Code, (ii) the redevelopment
31 project area contains property that is located in a River Edge
32 Redevelopment Zone, (iii) the municipality adopts an amendment
33 to the River Edge Redevelopment Zone designating ordinance

 

 

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1 pursuant to Section 10-4 of this Act specifically concerning
2 the abatement of taxes on property located within a
3 redevelopment project area created pursuant to Division 74.4 of
4 Article 11 of the Illinois Municipal Code, and (iv) the
5 Department certifies the ordinance amendment, then the
6 property that is located in both the River Edge Redevelopment
7 Zone and the redevelopment project area shall not be eligible
8 for the abatement of taxes under Section 18-170 of the Property
9 Tax Code.
10     No business enterprise or expansion or individual,
11 however, that has constructed a new improvement or renovated or
12 rehabilitated an existing improvement and has received an
13 abatement on the improvement under Section 18-170 of the
14 Property Tax Code shall be denied any benefit previously
15 extended within the zone pursuant to this Act or pursuant to
16 any other Illinois law providing benefits specifically to or
17 within River Edge Redevelopment Zones. Moreover, if the
18 business enterprise or individual presents evidence to the
19 municipality within 30 days after the adoption by the
20 municipality of an amendment to the designating ordinance the
21 sufficiency of which shall be determined by findings of the
22 corporate authorities made within 30 days of the receipt of
23 such evidence by the municipality, that before the date of the
24 notice of the public hearing provided by the municipality
25 regarding the amendment to the designating ordinance (i) the
26 business enterprise or expansion or individual was committed to
27 locate within the River Edge Redevelopment Zone, (ii)
28 substantial and binding financial obligations were made
29 towards the development of the enterprise, and (iii) those
30 commitments were made in reasonable reliance on the benefits
31 and programs that were applicable to the enterprise or
32 individual by reason of River Edge Redevelopment Zone, then the
33 enterprise or expansion or individual shall not be denied any
34 benefit previously extended within the zone pursuant to this

 

 

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1 Act or pursuant to any other Illinois law providing benefits
2 specifically to or within River Edge Redevelopment Zones.
3     (b) This Section applies to all property located within
4 both a redevelopment project area adopted under Division 74.4
5 of Article 11 of the Illinois Municipal Code and a River Edge
6 Redevelopment Zone even if the redevelopment project area was
7 adopted before the effective date of this Act.
8     (c) After the effective date of this Act, if (i) a
9 redevelopment project area is created by a municipality under
10 Division 74.4 of Article 11 of the Illinois Municipal Code and
11 (ii) the redevelopment project area contains property that is
12 located in a River Edge Redevelopment Zone, the municipality
13 must adopt an amendment to the certified River Edge
14 Redevelopment Zone designating ordinance under Section 10-5.4
15 specifying that property that is located in both the River Edge
16 Redevelopment Zone and the redevelopment project area shall not
17 be eligible for any abatement of taxes under Section 18-170 of
18 the Property Tax Code for new improvements or the renovation or
19 rehabilitation of existing improvements.
20     (d) In declaratory judgment actions under this Section, the
21 Department and the designating municipality shall be necessary
22 parties defendant.
 
23     Section 10-6. Powers and duties of Department.
24     (a) The Department shall administer this Act and shall have
25 the following powers and duties:
26         (1) To monitor the implementation of this Act and
27     submit reports evaluating the effectiveness of the program
28     and setting forth any suggestions for legislation to the
29     Governor and General Assembly by October 1 of each year
30     preceding a regular Session of the General Assembly.
31         (2) To adopt all necessary rules and regulations to
32     carry out the purposes of this Act in accordance with The
33     Illinois Administrative Procedure Act.

 

 

09400SB0017ham003 - 31 - LRB094 05351 BDD 58378 a

1     (b) The Department shall provide information and
2 appropriate assistance to persons desiring to locate and engage
3 in business in a River Edge Redevelopment Zone and to persons
4 engaged in business in a zone.
5     (c) The Department shall publicize existing tax incentives
6 and economic development programs within the Zone and upon
7 request, offer technical assistance in abatement and
8 alternative revenue source development to local units of
9 government which have River Edge Redevelopment Zones within
10 their jurisdiction.
11     (d) In addition to the reports authorized under subsection
12 (a), no later than December 31, 2009, the Department must
13 submit a report to the General Assembly evaluating the
14 effectiveness of this Act in stimulating economic
15 revitalization in the pilot River Edge Redevelopment Zones
16 authorized by this Act.
 
17     Section 10-8. Zone Administration. The administration of a
18 River Edge Redevelopment Zone shall be under the jurisdiction
19 of the designating municipality. Each designating municipality
20 shall, by ordinance, designate a Zone Administrator for the
21 certified zones within its jurisdiction. A Zone Administrator
22 must be an officer or employee of the municipality. The Zone
23 Administrator shall be the liaison between the designating
24 municipality, the Department, and any designated zone
25 organizations within zones under his or her jurisdiction.
26     A designating municipality may designate one or more
27 organizations to be a designated zone organization, as defined
28 under Section 10-3. The municipality, may, by ordinance,
29 delegate functions within a River Edge Redevelopment Zone to
30 one or more designated zone organizations in such zones.
31     Subject to the necessary governmental authorizations,
32 designated zone organizations may, in coordination with the
33 municipality, provide or contract for provision of public

 

 

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1 services including, but not limited to:
2         (1) crime-watch patrols within zone neighborhoods;
3         (2) volunteer day-care centers;
4         (3) recreational activities for zone-area youth;
5         (4) garbage collection;
6         (5) street maintenance and improvements;
7         (6) bridge maintenance and improvements;
8         (7) maintenance and improvement of water and sewer
9     lines;
10         (8) energy conservation projects;
11         (9) health and clinic services;
12         (10) drug abuse programs;
13         (11) senior citizen assistance programs;
14         (12) park maintenance;
15         (13) rehabilitation, renovation, and operation and
16     maintenance of low and moderate income housing; and
17         (14) other types of public services as provided by law
18     or regulation.
 
19     Section 10-9. Notice of cessation of business operations.
20 Any business located within the River Edge Redevelopment Zone
21 that has received tax credits or exemptions, regulatory relief
22 or any other benefits under this Act shall notify the
23 Department and the municipal officials in which the Zone is
24 located within 60 days after the cessation of any business
25 operations conducted within the Zone. The Department shall
26 adopt rules to implement and administer this Section.
 
27     Section 10-10. Income tax deduction.
28     (a) A business entity may receive a deduction against
29 income subject to State taxes for a contribution to a
30 designated zone organization if the project for which the
31 contribution is made has been specifically approved by the
32 designating municipality and by the Department.

 

 

09400SB0017ham003 - 33 - LRB094 05351 BDD 58378 a

1     (b) Any designated zone organization seeking to have a
2 project approved for contribution must submit an application to
3 the Department describing the nature and benefit of the project
4 and its potential contributors. The application must address
5 how the following criteria will be met:
6         (1) The project must contribute to the self-help
7     efforts of the residents of the area involved.
8         (2) The project must involve the residents of the area
9     in planning and implementing the project.
10         (3) The project must lack sufficient resources.
11         (4) The designated zone organization must be fiscally
12     responsible for the project.
13     (c) The project must enhance the River Edge Redevelopment
14 Zone in one of the following ways:
15         (1) by creating permanent jobs;
16         (2) by physically improving the housing stock;
17         (3) by stimulating neighborhood business activity; or
18         (4) by preventing crime.
19     (d) If the designated zone organization demonstrates its
20 ability to meet the criteria in subsection (b), and the project
21 will enhance the neighborhood in one of the ways listed in
22 subsection (c), the Department shall approve the
23 organization's proposed project and specify the amount of
24 contributions it is eligible to receive for such project.
25 Comments from State elected officials and municipal officials
26 of the units of local government in which all or part of the
27 river edge redevelopment zone is located, or in which the
28 project is proposed to be located, shall be solicited by the
29 Department in making such decision.
30     (e) Within 45 days of the receipt of an application, the
31 Department shall give notice to the applicant as to whether the
32 application has been approved or disapproved. If the Department
33 disapproves the application, it shall specify the reasons for
34 this decision and allow 60 days for the applicant to amend and

 

 

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1 resubmit its application. The Department shall provide
2 assistance upon request to applicants. Resubmitted
3 applications shall receive the Department's approval or
4 disapproval within 30 days of resubmission. Those resubmitted
5 applications satisfying initial Department objectives shall be
6 approved unless reasonable circumstances warrant disapproval.
7     (f) On an annual basis, the designated zone organization
8 shall furnish a statement to the Department on the programmatic
9 and financial status of any approved project and an audited
10 financial statement of the project.
11     (g) For any project which is approved and for which there
12 is a specified amount of contributions which the designated
13 zone organization may receive as provided in subsection (d) of
14 this Section, the designated zone organization shall provide to
15 the Department any information necessary to determine the
16 eligibility of a contribution to the project for a deduction
17 pursuant to subsection (b)(2)(N) of Section 203 of the Illinois
18 Income Tax Act. The Department shall certify to the Department
19 of Revenue the taxpayers eligible for and the amounts of
20 contributions which those taxpayers may claim as a deduction
21 pursuant to subsection (b)(2)(N) of Section 203 of the Illinois
22 Income Tax Act. The total of all actual contributions approved
23 by the Department for deductions pursuant to subsection
24 (b)(2)(N) of Section 203 of the Illinois Income Tax Act shall
25 not exceed $15,400,000 in any one calendar year.
 
26
ARTICLE 90.
27
AMENDATORY PROVISIONS

 
28     Section 90-5. The Department of Commerce and Economic
29 Opportunity Law of the Civil Administrative Code of Illinois is
30 amended by adding Section 605-907 as follows:
 
31     (20 ILCS 605/605-907 new)

 

 

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1     Sec. 605-907. River Edge Redevelopment Zone assistance
2 program. The Department may establish and maintain a program to
3 provide, subject to appropriation, grants and assistance in
4 connection River Edge Redevelopment Zones that are established
5 under the River Edge Redevelopment Zone Act. The Department may
6 adopt any rules necessary for the administration of the program
7 under this Section.
 
8     Section 90-10. The Corporate Accountability for Tax
9 Expenditures Act is amended by changing Section 5 as follows:
 
10     (20 ILCS 715/5)
11     Sec. 5. Definitions. As used in this Act:
12     "Base years" means the first 2 complete calendar years
13 following the effective date of a recipient receiving
14 development assistance.
15     "Date of assistance" means the commencement date of the
16 assistance agreement, which date triggers the period during
17 which the recipient is obligated to create or retain jobs and
18 continue operations at the specific project site.
19     "Default" means that a recipient has not achieved its job
20 creation, job retention, or wage or benefit goals, as
21 applicable, during the prescribed period therefor.
22     "Department" means, unless otherwise noted, the Department
23 of Commerce and Economic Opportunity Community Affairs or any
24 successor agency.
25     "Development assistance" means (1) tax credits and tax
26 exemptions (other than given under tax increment financing)
27 given as an incentive to a recipient business organization
28 pursuant to an initial certification or an initial designation
29 made by the Department under the Economic Development for a
30 Growing Economy Tax Credit Act, River Edge Redevelopment Zone
31 Act, and the Illinois Enterprise Zone Act, including the High
32 Impact Business program, (2) grants or loans given to a

 

 

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1 recipient as an incentive to a business organization pursuant
2 to the River Edge Redevelopment Zone Act, Large Business
3 Development Program, the Business Development Public
4 Infrastructure Program, or the Industrial Training Program,
5 (3) the State Treasurer's Economic Program Loans, (4) the
6 Illinois Department of Transportation Economic Development
7 Program, and (5) all successor and subsequent programs and tax
8 credits designed to promote large business relocations and
9 expansions. "Development assistance" does not include tax
10 increment financing, assistance provided under the Illinois
11 Enterprise Zone Act and River Edge Redevelopment Zone Act
12 pursuant to local ordinance, participation loans, or financial
13 transactions through statutorily authorized financial
14 intermediaries in support of small business loans and
15 investments or given in connection with the development of
16 affordable housing.
17     "Development assistance agreement" means any agreement
18 executed by the State granting body and the recipient setting
19 forth the terms and conditions of development assistance to be
20 provided to the recipient consistent with the final application
21 for development assistance, including but not limited to the
22 date of assistance, submitted to and approved by the State
23 granting body.
24     "Full-time, permanent job" means either: (1) the
25 definition therefor in the legislation authorizing the
26 programs described in the definition of development assistance
27 in the Act or (2) if there is no such definition, then as
28 defined in administrative rules implementing such legislation,
29 provided the administrative rules were in place prior to the
30 effective date of this Act. On and after the effective date of
31 this Act, if there is no definition of "full-time, permanent
32 job" in either the legislation authorizing a program that
33 constitutes economic development assistance under this Act or
34 in any administrative rule implementing such legislation that

 

 

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1 was in place prior to the effective date of this Act, then
2 "full-time, permanent job" means a job in which the new
3 employee works for the recipient at a rate of at least 35 hours
4 per week.
5     "New employee" means either: (1) the definition therefor in
6 the legislation authorizing the programs described in the
7 definition of development assistance in the Act or (2) if there
8 is no such definition, then as defined in administrative rules
9 implementing such legislation, provided the administrative
10 rules were in place prior to the effective date of this Act. On
11 and after the effective date of this Act, if there is no
12 definition of "new employee" in either the legislation
13 authorizing a program that constitutes economic development
14 assistance under this Act nor in any administrative rule
15 implementing such legislation that was in place prior to the
16 effective date of this Act, then "new employee" means a
17 full-time, permanent employee who represents a net increase in
18 the number of the recipient's employees statewide. "New
19 employee" includes an employee who previously filled a new
20 employee position with the recipient who was rehired or called
21 back from a layoff that occurs during or following the base
22 years.
23     The term "New Employee" does not include any of the
24 following:
25         (1) An employee of the recipient who performs a job
26     that was previously performed by another employee in this
27     State, if that job existed in this State for at least 6
28     months before hiring the employee.
29         (2) A child, grandchild, parent, or spouse, other than
30     a spouse who is legally separated from the individual, of
31     any individual who has a direct or indirect ownership
32     interest of at least 5% in the profits, capital, or value
33     of any member of the recipient.
34     "Part-time job" means either: (1) the definition therefor

 

 

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1 in the legislation authorizing the programs described in the
2 definition of development assistance in the Act or (2) if there
3 is no such definition, then as defined in administrative rules
4 implementing such legislation, provided the administrative
5 rules were in place prior to the effective date of this Act. On
6 and after the effective date of this Act, if there is no
7 definition of "part-time job" in either the legislation
8 authorizing a program that constitutes economic development
9 assistance under this Act or in any administrative rule
10 implementing such legislation that was in place prior to the
11 effective date of this Act, then "part-time job" means a job in
12 which the new employee works for the recipient at a rate of
13 less than 35 hours per week.
14     "Recipient" means any business that receives economic
15 development assistance. A business is any corporation, limited
16 liability company, partnership, joint venture, association,
17 sole proprietorship, or other legally recognized entity.
18     "Retained employee" means either: (1) the definition
19 therefor in the legislation authorizing the programs described
20 in the definition of development assistance in the Act or (2)
21 if there is no such definition, then as defined in
22 administrative rules implementing such legislation, provided
23 the administrative rules were in place prior to the effective
24 date of this Act. On and after the effective date of this Act,
25 if there is no definition of "retained employee" in either the
26 legislation authorizing a program that constitutes economic
27 development assistance under this Act or in any administrative
28 rule implementing such legislation that was in place prior to
29 the effective date of this Act, then "retained employee" means
30 any employee defined as having a full-time or full-time
31 equivalent job preserved at a specific facility or site, the
32 continuance of which is threatened by a specific and
33 demonstrable threat, which shall be specified in the
34 application for development assistance.

 

 

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1     "Specific project site" means that distinct operational
2 unit to which any development assistance is applied.
3     "State granting body" means the Department, any State
4 department or State agency that provides development
5 assistance that has reporting requirements under this Act, and
6 any successor agencies to any of the preceding.
7     "Temporary job" means either: (1) the definition therefor
8 in the legislation authorizing the programs described in the
9 definition of development assistance in the Act or (2) if there
10 is no such definition, then as defined in administrative rules
11 implementing such legislation, provided the administrative
12 rules were in place prior to the effective date of this Act. On
13 and after the effective date of this Act, if there is no
14 definition of "temporary job" in either the legislation
15 authorizing a program that constitutes economic development
16 assistance under this Act or in any administrative rule
17 implementing such legislation that was in place prior to the
18 effective date of this Act, then "temporary job" means a job in
19 which the new employee is hired for a specific duration of time
20 or season.
21     "Value of assistance" means the face value of any form of
22 development assistance.
23 (Source: P.A. 93-552, eff. 8-20-03; revised 12-6-03.)
 
24     Section 90-15. The Illinois Income Tax Act is amended by
25 changing Sections 201 and 203 as follows:
 
26     (35 ILCS 5/201)  (from Ch. 120, par. 2-201)
27     Sec. 201. Tax Imposed.
28     (a) In general. A tax measured by net income is hereby
29 imposed on every individual, corporation, trust and estate for
30 each taxable year ending after July 31, 1969 on the privilege
31 of earning or receiving income in or as a resident of this
32 State. Such tax shall be in addition to all other occupation or

 

 

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1 privilege taxes imposed by this State or by any municipal
2 corporation or political subdivision thereof.
3     (b) Rates. The tax imposed by subsection (a) of this
4 Section shall be determined as follows, except as adjusted by
5 subsection (d-1):
6         (1) In the case of an individual, trust or estate, for
7     taxable years ending prior to July 1, 1989, an amount equal
8     to 2 1/2% of the taxpayer's net income for the taxable
9     year.
10         (2) In the case of an individual, trust or estate, for
11     taxable years beginning prior to July 1, 1989 and ending
12     after June 30, 1989, an amount equal to the sum of (i) 2
13     1/2% of the taxpayer's net income for the period prior to
14     July 1, 1989, as calculated under Section 202.3, and (ii)
15     3% of the taxpayer's net income for the period after June
16     30, 1989, as calculated under Section 202.3.
17         (3) In the case of an individual, trust or estate, for
18     taxable years beginning after June 30, 1989, an amount
19     equal to 3% of the taxpayer's net income for the taxable
20     year.
21         (4) (Blank).
22         (5) (Blank).
23         (6) In the case of a corporation, for taxable years
24     ending prior to July 1, 1989, an amount equal to 4% of the
25     taxpayer's net income for the taxable year.
26         (7) In the case of a corporation, for taxable years
27     beginning prior to July 1, 1989 and ending after June 30,
28     1989, an amount equal to the sum of (i) 4% of the
29     taxpayer's net income for the period prior to July 1, 1989,
30     as calculated under Section 202.3, and (ii) 4.8% of the
31     taxpayer's net income for the period after June 30, 1989,
32     as calculated under Section 202.3.
33         (8) In the case of a corporation, for taxable years
34     beginning after June 30, 1989, an amount equal to 4.8% of

 

 

09400SB0017ham003 - 41 - LRB094 05351 BDD 58378 a

1     the taxpayer's net income for the taxable year.
2     (c) Personal Property Tax Replacement Income Tax.
3 Beginning on July 1, 1979 and thereafter, in addition to such
4 income tax, there is also hereby imposed the Personal Property
5 Tax Replacement Income Tax measured by net income on every
6 corporation (including Subchapter S corporations), partnership
7 and trust, for each taxable year ending after June 30, 1979.
8 Such taxes are imposed on the privilege of earning or receiving
9 income in or as a resident of this State. The Personal Property
10 Tax Replacement Income Tax shall be in addition to the income
11 tax imposed by subsections (a) and (b) of this Section and in
12 addition to all other occupation or privilege taxes imposed by
13 this State or by any municipal corporation or political
14 subdivision thereof.
15     (d) Additional Personal Property Tax Replacement Income
16 Tax Rates. The personal property tax replacement income tax
17 imposed by this subsection and subsection (c) of this Section
18 in the case of a corporation, other than a Subchapter S
19 corporation and except as adjusted by subsection (d-1), shall
20 be an additional amount equal to 2.85% of such taxpayer's net
21 income for the taxable year, except that beginning on January
22 1, 1981, and thereafter, the rate of 2.85% specified in this
23 subsection shall be reduced to 2.5%, and in the case of a
24 partnership, trust or a Subchapter S corporation shall be an
25 additional amount equal to 1.5% of such taxpayer's net income
26 for the taxable year.
27     (d-1) Rate reduction for certain foreign insurers. In the
28 case of a foreign insurer, as defined by Section 35A-5 of the
29 Illinois Insurance Code, whose state or country of domicile
30 imposes on insurers domiciled in Illinois a retaliatory tax
31 (excluding any insurer whose premiums from reinsurance assumed
32 are 50% or more of its total insurance premiums as determined
33 under paragraph (2) of subsection (b) of Section 304, except
34 that for purposes of this determination premiums from

 

 

09400SB0017ham003 - 42 - LRB094 05351 BDD 58378 a

1 reinsurance do not include premiums from inter-affiliate
2 reinsurance arrangements), beginning with taxable years ending
3 on or after December 31, 1999, the sum of the rates of tax
4 imposed by subsections (b) and (d) shall be reduced (but not
5 increased) to the rate at which the total amount of tax imposed
6 under this Act, net of all credits allowed under this Act,
7 shall equal (i) the total amount of tax that would be imposed
8 on the foreign insurer's net income allocable to Illinois for
9 the taxable year by such foreign insurer's state or country of
10 domicile if that net income were subject to all income taxes
11 and taxes measured by net income imposed by such foreign
12 insurer's state or country of domicile, net of all credits
13 allowed or (ii) a rate of zero if no such tax is imposed on such
14 income by the foreign insurer's state of domicile. For the
15 purposes of this subsection (d-1), an inter-affiliate includes
16 a mutual insurer under common management.
17         (1) For the purposes of subsection (d-1), in no event
18     shall the sum of the rates of tax imposed by subsections
19     (b) and (d) be reduced below the rate at which the sum of:
20             (A) the total amount of tax imposed on such foreign
21         insurer under this Act for a taxable year, net of all
22         credits allowed under this Act, plus
23             (B) the privilege tax imposed by Section 409 of the
24         Illinois Insurance Code, the fire insurance company
25         tax imposed by Section 12 of the Fire Investigation
26         Act, and the fire department taxes imposed under
27         Section 11-10-1 of the Illinois Municipal Code,
28     equals 1.25% for taxable years ending prior to December 31,
29     2003, or 1.75% for taxable years ending on or after
30     December 31, 2003, of the net taxable premiums written for
31     the taxable year, as described by subsection (1) of Section
32     409 of the Illinois Insurance Code. This paragraph will in
33     no event increase the rates imposed under subsections (b)
34     and (d).

 

 

09400SB0017ham003 - 43 - LRB094 05351 BDD 58378 a

1         (2) Any reduction in the rates of tax imposed by this
2     subsection shall be applied first against the rates imposed
3     by subsection (b) and only after the tax imposed by
4     subsection (a) net of all credits allowed under this
5     Section other than the credit allowed under subsection (i)
6     has been reduced to zero, against the rates imposed by
7     subsection (d).
8     This subsection (d-1) is exempt from the provisions of
9 Section 250.
10     (e) Investment credit. A taxpayer shall be allowed a credit
11 against the Personal Property Tax Replacement Income Tax for
12 investment in qualified property.
13         (1) A taxpayer shall be allowed a credit equal to .5%
14     of the basis of qualified property placed in service during
15     the taxable year, provided such property is placed in
16     service on or after July 1, 1984. There shall be allowed an
17     additional credit equal to .5% of the basis of qualified
18     property placed in service during the taxable year,
19     provided such property is placed in service on or after
20     July 1, 1986, and the taxpayer's base employment within
21     Illinois has increased by 1% or more over the preceding
22     year as determined by the taxpayer's employment records
23     filed with the Illinois Department of Employment Security.
24     Taxpayers who are new to Illinois shall be deemed to have
25     met the 1% growth in base employment for the first year in
26     which they file employment records with the Illinois
27     Department of Employment Security. The provisions added to
28     this Section by Public Act 85-1200 (and restored by Public
29     Act 87-895) shall be construed as declaratory of existing
30     law and not as a new enactment. If, in any year, the
31     increase in base employment within Illinois over the
32     preceding year is less than 1%, the additional credit shall
33     be limited to that percentage times a fraction, the
34     numerator of which is .5% and the denominator of which is

 

 

09400SB0017ham003 - 44 - LRB094 05351 BDD 58378 a

1     1%, but shall not exceed .5%. The investment credit shall
2     not be allowed to the extent that it would reduce a
3     taxpayer's liability in any tax year below zero, nor may
4     any credit for qualified property be allowed for any year
5     other than the year in which the property was placed in
6     service in Illinois. For tax years ending on or after
7     December 31, 1987, and on or before December 31, 1988, the
8     credit shall be allowed for the tax year in which the
9     property is placed in service, or, if the amount of the
10     credit exceeds the tax liability for that year, whether it
11     exceeds the original liability or the liability as later
12     amended, such excess may be carried forward and applied to
13     the tax liability of the 5 taxable years following the
14     excess credit years if the taxpayer (i) makes investments
15     which cause the creation of a minimum of 2,000 full-time
16     equivalent jobs in Illinois, (ii) is located in an
17     enterprise zone established pursuant to the Illinois
18     Enterprise Zone Act and (iii) is certified by the
19     Department of Commerce and Community Affairs (now
20     Department of Commerce and Economic Opportunity) as
21     complying with the requirements specified in clause (i) and
22     (ii) by July 1, 1986. The Department of Commerce and
23     Community Affairs (now Department of Commerce and Economic
24     Opportunity) shall notify the Department of Revenue of all
25     such certifications immediately. For tax years ending
26     after December 31, 1988, the credit shall be allowed for
27     the tax year in which the property is placed in service,
28     or, if the amount of the credit exceeds the tax liability
29     for that year, whether it exceeds the original liability or
30     the liability as later amended, such excess may be carried
31     forward and applied to the tax liability of the 5 taxable
32     years following the excess credit years. The credit shall
33     be applied to the earliest year for which there is a
34     liability. If there is credit from more than one tax year

 

 

09400SB0017ham003 - 45 - LRB094 05351 BDD 58378 a

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

 

 

09400SB0017ham003 - 46 - LRB094 05351 BDD 58378 a

1     this subsection (e) the term "mining" shall have the same
2     meaning as the term "mining" in Section 613(c) of the
3     Internal Revenue Code. For purposes of this subsection (e),
4     the term "retailing" means the sale of tangible personal
5     property or services rendered in conjunction with the sale
6     of tangible consumer goods or commodities.
7         (4) The basis of qualified property shall be the basis
8     used to compute the depreciation deduction for federal
9     income tax purposes.
10         (5) If the basis of the property for federal income tax
11     depreciation purposes is increased after it has been placed
12     in service in Illinois by the taxpayer, the amount of such
13     increase shall be deemed property placed in service on the
14     date of such increase in basis.
15         (6) The term "placed in service" shall have the same
16     meaning as under Section 46 of the Internal Revenue Code.
17         (7) If during any taxable year, any property ceases to
18     be qualified property in the hands of the taxpayer within
19     48 months after being placed in service, or the situs of
20     any qualified property is moved outside Illinois within 48
21     months after being placed in service, the Personal Property
22     Tax Replacement Income Tax for such taxable year shall be
23     increased. Such increase shall be determined by (i)
24     recomputing the investment credit which would have been
25     allowed for the year in which credit for such property was
26     originally allowed by eliminating such property from such
27     computation and, (ii) subtracting such recomputed credit
28     from the amount of credit previously allowed. For the
29     purposes of this paragraph (7), a reduction of the basis of
30     qualified property resulting from a redetermination of the
31     purchase price shall be deemed a disposition of qualified
32     property to the extent of such reduction.
33         (8) Unless the investment credit is extended by law,
34     the basis of qualified property shall not include costs

 

 

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1     incurred after December 31, 2008, except for costs incurred
2     pursuant to a binding contract entered into on or before
3     December 31, 2008.
4         (9) Each taxable year ending before December 31, 2000,
5     a partnership may elect to pass through to its partners the
6     credits to which the partnership is entitled under this
7     subsection (e) for the taxable year. A partner may use the
8     credit allocated to him or her under this paragraph only
9     against the tax imposed in subsections (c) and (d) of this
10     Section. If the partnership makes that election, those
11     credits shall be allocated among the partners in the
12     partnership in accordance with the rules set forth in
13     Section 704(b) of the Internal Revenue Code, and the rules
14     promulgated under that Section, and the allocated amount of
15     the credits shall be allowed to the partners for that
16     taxable year. The partnership shall make this election on
17     its Personal Property Tax Replacement Income Tax return for
18     that taxable year. The election to pass through the credits
19     shall be irrevocable.
20         For taxable years ending on or after December 31, 2000,
21     a partner that qualifies its partnership for a subtraction
22     under subparagraph (I) of paragraph (2) of subsection (d)
23     of Section 203 or a shareholder that qualifies a Subchapter
24     S corporation for a subtraction under subparagraph (S) of
25     paragraph (2) of subsection (b) of Section 203 shall be
26     allowed a credit under this subsection (e) equal to its
27     share of the credit earned under this subsection (e) during
28     the taxable year by the partnership or Subchapter S
29     corporation, determined in accordance with the
30     determination of income and distributive share of income
31     under Sections 702 and 704 and Subchapter S of the Internal
32     Revenue Code. This paragraph is exempt from the provisions
33     of Section 250.
34       (f) Investment credit; Enterprise Zone; River Edge

 

 

09400SB0017ham003 - 48 - LRB094 05351 BDD 58378 a

1 Redevelopment Zone.
2         (1) A taxpayer shall be allowed a credit against the
3     tax imposed by subsections (a) and (b) of this Section for
4     investment in qualified property which is placed in service
5     in an Enterprise Zone created pursuant to the Illinois
6     Enterprise Zone Act or, for property placed in service on
7     or after July 1, 2006, a River Edge Redevelopment Zone
8     established pursuant to the River Edge Redevelopment Zone
9     Act. For partners, shareholders of Subchapter S
10     corporations, and owners of limited liability companies,
11     if the liability company is treated as a partnership for
12     purposes of federal and State income taxation, there shall
13     be allowed a credit under this subsection (f) to be
14     determined in accordance with the determination of income
15     and distributive share of income under Sections 702 and 704
16     and Subchapter S of the Internal Revenue Code. The credit
17     shall be .5% of the basis for such property. The credit
18     shall be available only in the taxable year in which the
19     property is placed in service in the Enterprise Zone or
20     River Edge Redevelopment Zone and shall not be allowed to
21     the extent that it would reduce a taxpayer's liability for
22     the tax imposed by subsections (a) and (b) of this Section
23     to below zero. For tax years ending on or after December
24     31, 1985, the credit shall be allowed for the tax year in
25     which the property is placed in service, or, if the amount
26     of the credit exceeds the tax liability for that year,
27     whether it exceeds the original liability or the liability
28     as later amended, such excess may be carried forward and
29     applied to the tax liability of the 5 taxable years
30     following the excess credit year. The credit shall be
31     applied to the earliest year for which there is a
32     liability. If there is credit from more than one tax year
33     that is available to offset a liability, the credit
34     accruing first in time shall be applied first.

 

 

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1         (2) The term qualified property means property which:
2             (A) is tangible, whether new or used, including
3         buildings and structural components of buildings;
4             (B) is depreciable pursuant to Section 167 of the
5         Internal Revenue Code, except that "3-year property"
6         as defined in Section 168(c)(2)(A) of that Code is not
7         eligible for the credit provided by this subsection
8         (f);
9             (C) is acquired by purchase as defined in Section
10         179(d) of the Internal Revenue Code;
11             (D) is used in the Enterprise Zone or River Edge
12         Redevelopment Zone by the taxpayer; and
13             (E) has not been previously used in Illinois in
14         such a manner and by such a person as would qualify for
15         the credit provided by this subsection (f) or
16         subsection (e).
17         (3) The basis of qualified property shall be the basis
18     used to compute the depreciation deduction for federal
19     income tax purposes.
20         (4) If the basis of the property for federal income tax
21     depreciation purposes is increased after it has been placed
22     in service in the Enterprise Zone or River Edge
23     Redevelopment Zone by the taxpayer, the amount of such
24     increase shall be deemed property placed in service on the
25     date of such increase in basis.
26         (5) The term "placed in service" shall have the same
27     meaning as under Section 46 of the Internal Revenue Code.
28         (6) If during any taxable year, any property ceases to
29     be qualified property in the hands of the taxpayer within
30     48 months after being placed in service, or the situs of
31     any qualified property is moved outside the Enterprise Zone
32     or River Edge Redevelopment Zone within 48 months after
33     being placed in service, the tax imposed under subsections
34     (a) and (b) of this Section for such taxable year shall be

 

 

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1     increased. Such increase shall be determined by (i)
2     recomputing the investment credit which would have been
3     allowed for the year in which credit for such property was
4     originally allowed by eliminating such property from such
5     computation, and (ii) subtracting such recomputed credit
6     from the amount of credit previously allowed. For the
7     purposes of this paragraph (6), a reduction of the basis of
8     qualified property resulting from a redetermination of the
9     purchase price shall be deemed a disposition of qualified
10     property to the extent of such reduction.
11         (7) There shall be allowed an additional credit equal
12     to 0.5% of the basis of qualified property placed in
13     service during the taxable year in a River Edge
14     Redevelopment Zone, provided such property is placed in
15     service on or after July 1, 2006, and the taxpayer's base
16     employment within Illinois has increased by 1% or more over
17     the preceding year as determined by the taxpayer's
18     employment records filed with the Illinois Department of
19     Employment Security. Taxpayers who are new to Illinois
20     shall be deemed to have met the 1% growth in base
21     employment for the first year in which they file employment
22     records with the Illinois Department of Employment
23     Security. If, in any year, the increase in base employment
24     within Illinois over the preceding year is less than 1%,
25     the additional credit shall be limited to that percentage
26     times a fraction, the numerator of which is 0.5% and the
27     denominator of which is 1%, but shall not exceed 0.5%.
28       (g) Jobs Tax Credit; Enterprise Zone, River Edge
29 Redevelopment Zone, and Foreign Trade Zone or Sub-Zone.
30         (1) A taxpayer conducting a trade or business in an
31     enterprise zone or a High Impact Business designated by the
32     Department of Commerce and Economic Opportunity or for
33     taxable years ending on or after December 31, 2006, in a
34     River Edge Redevelopment Zone conducting a trade or

 

 

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1     business in a federally designated Foreign Trade Zone or
2     Sub-Zone shall be allowed a credit against the tax imposed
3     by subsections (a) and (b) of this Section in the amount of
4     $500 per eligible employee hired to work in the zone during
5     the taxable year.
6         (2) To qualify for the credit:
7             (A) the taxpayer must hire 5 or more eligible
8         employees to work in an enterprise zone, River Edge
9         Redevelopment Zone, or federally designated Foreign
10         Trade Zone or Sub-Zone during the taxable year;
11             (B) the taxpayer's total employment within the
12         enterprise zone, River Edge Redevelopment Zone, or
13         federally designated Foreign Trade Zone or Sub-Zone
14         must increase by 5 or more full-time employees beyond
15         the total employed in that zone at the end of the
16         previous tax year for which a jobs tax credit under
17         this Section was taken, or beyond the total employed by
18         the taxpayer as of December 31, 1985, whichever is
19         later; and
20             (C) the eligible employees must be employed 180
21         consecutive days in order to be deemed hired for
22         purposes of this subsection.
23         (3) An "eligible employee" means an employee who is:
24             (A) Certified by the Department of Commerce and
25         Economic Opportunity as "eligible for services"
26         pursuant to regulations promulgated in accordance with
27         Title II of the Job Training Partnership Act, Training
28         Services for the Disadvantaged or Title III of the Job
29         Training Partnership Act, Employment and Training
30         Assistance for Dislocated Workers Program.
31             (B) Hired after the enterprise zone, River Edge
32         Redevelopment Zone, or federally designated Foreign
33         Trade Zone or Sub-Zone was designated or the trade or
34         business was located in that zone, whichever is later.

 

 

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1             (C) Employed in the enterprise zone, River Edge
2         Redevelopment Zone, or Foreign Trade Zone or Sub-Zone.
3         An employee is employed in an enterprise zone or
4         federally designated Foreign Trade Zone or Sub-Zone if
5         his services are rendered there or it is the base of
6         operations for the services performed.
7             (D) A full-time employee working 30 or more hours
8         per week.
9         (4) For tax years ending on or after December 31, 1985
10     and prior to December 31, 1988, the credit shall be allowed
11     for the tax year in which the eligible employees are hired.
12     For tax years ending on or after December 31, 1988, the
13     credit shall be allowed for the tax year immediately
14     following the tax year in which the eligible employees are
15     hired. If the amount of the credit exceeds the tax
16     liability for that year, whether it exceeds the original
17     liability or the liability as later amended, such excess
18     may be carried forward and applied to the tax liability of
19     the 5 taxable years following the excess credit year. The
20     credit shall be applied to the earliest year for which
21     there is a liability. If there is credit from more than one
22     tax year that is available to offset a liability, earlier
23     credit shall be applied first.
24         (5) The Department of Revenue shall promulgate such
25     rules and regulations as may be deemed necessary to carry
26     out the purposes of this subsection (g).
27         (6) The credit shall be available for eligible
28     employees hired on or after January 1, 1986.
29     (h) Investment credit; High Impact Business.
30         (1) Subject to subsections (b) and (b-5) of Section 5.5
31     of the Illinois Enterprise Zone Act, a taxpayer shall be
32     allowed a credit against the tax imposed by subsections (a)
33     and (b) of this Section for investment in qualified
34     property which is placed in service by a Department of

 

 

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1     Commerce and Economic Opportunity designated High Impact
2     Business. The credit shall be .5% of the basis for such
3     property. The credit shall not be available (i) until the
4     minimum investments in qualified property set forth in
5     subdivision (a)(3)(A) of Section 5.5 of the Illinois
6     Enterprise Zone Act have been satisfied or (ii) until the
7     time authorized in subsection (b-5) of the Illinois
8     Enterprise Zone Act for entities designated as High Impact
9     Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
10     (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
11     Act, and shall not be allowed to the extent that it would
12     reduce a taxpayer's liability for the tax imposed by
13     subsections (a) and (b) of this Section to below zero. The
14     credit applicable to such investments shall be taken in the
15     taxable year in which such investments have been completed.
16     The credit for additional investments beyond the minimum
17     investment by a designated high impact business authorized
18     under subdivision (a)(3)(A) of Section 5.5 of the Illinois
19     Enterprise Zone Act shall be available only in the taxable
20     year in which the property is placed in service and shall
21     not be allowed to the extent that it would reduce a
22     taxpayer's liability for the tax imposed by subsections (a)
23     and (b) of this Section to below zero. For tax years ending
24     on or after December 31, 1987, the credit shall be allowed
25     for the tax year in which the property is placed in
26     service, or, if the amount of the credit exceeds the tax
27     liability for that year, whether it exceeds the original
28     liability or the liability as later amended, such excess
29     may be carried forward and applied to the tax liability of
30     the 5 taxable years following the excess credit year. The
31     credit shall be applied to the earliest year for which
32     there is a liability. If there is credit from more than one
33     tax year that is available to offset a liability, the
34     credit accruing first in time shall be applied first.

 

 

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1         Changes made in this subdivision (h)(1) by Public Act
2     88-670 restore changes made by Public Act 85-1182 and
3     reflect existing law.
4         (2) The term qualified property means property which:
5             (A) is tangible, whether new or used, including
6         buildings and structural components of buildings;
7             (B) is depreciable pursuant to Section 167 of the
8         Internal Revenue Code, except that "3-year property"
9         as defined in Section 168(c)(2)(A) of that Code is not
10         eligible for the credit provided by this subsection
11         (h);
12             (C) is acquired by purchase as defined in Section
13         179(d) of the Internal Revenue Code; and
14             (D) is not eligible for the Enterprise Zone
15         Investment Credit provided by subsection (f) of this
16         Section.
17         (3) The basis of qualified property shall be the basis
18     used to compute the depreciation deduction for federal
19     income tax purposes.
20         (4) If the basis of the property for federal income tax
21     depreciation purposes is increased after it has been placed
22     in service in a federally designated Foreign Trade Zone or
23     Sub-Zone located in Illinois by the taxpayer, the amount of
24     such increase shall be deemed property placed in service on
25     the date of such increase in basis.
26         (5) The term "placed in service" shall have the same
27     meaning as under Section 46 of the Internal Revenue Code.
28         (6) If during any taxable year ending on or before
29     December 31, 1996, any property ceases to be qualified
30     property in the hands of the taxpayer within 48 months
31     after being placed in service, or the situs of any
32     qualified property is moved outside Illinois within 48
33     months after being placed in service, the tax imposed under
34     subsections (a) and (b) of this Section for such taxable

 

 

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1     year shall be increased. Such increase shall be determined
2     by (i) recomputing the investment credit which would have
3     been allowed for the year in which credit for such property
4     was originally allowed by eliminating such property from
5     such computation, and (ii) subtracting such recomputed
6     credit from the amount of credit previously allowed. For
7     the purposes of this paragraph (6), a reduction of the
8     basis of qualified property resulting from a
9     redetermination of the purchase price shall be deemed a
10     disposition of qualified property to the extent of such
11     reduction.
12         (7) Beginning with tax years ending after December 31,
13     1996, if a taxpayer qualifies for the credit under this
14     subsection (h) and thereby is granted a tax abatement and
15     the taxpayer relocates its entire facility in violation of
16     the explicit terms and length of the contract under Section
17     18-183 of the Property Tax Code, the tax imposed under
18     subsections (a) and (b) of this Section shall be increased
19     for the taxable year in which the taxpayer relocated its
20     facility by an amount equal to the amount of credit
21     received by the taxpayer under this subsection (h).
22     (i) Credit for Personal Property Tax Replacement Income
23 Tax. For tax years ending prior to December 31, 2003, a credit
24 shall be allowed against the tax imposed by subsections (a) and
25 (b) of this Section for the tax imposed by subsections (c) and
26 (d) of this Section. This credit shall be computed by
27 multiplying the tax imposed by subsections (c) and (d) of this
28 Section by a fraction, the numerator of which is base income
29 allocable to Illinois and the denominator of which is Illinois
30 base income, and further multiplying the product by the tax
31 rate imposed by subsections (a) and (b) of this Section.
32     Any credit earned on or after December 31, 1986 under this
33 subsection which is unused in the year the credit is computed
34 because it exceeds the tax liability imposed by subsections (a)

 

 

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1 and (b) for that year (whether it exceeds the original
2 liability or the liability as later amended) may be carried
3 forward and applied to the tax liability imposed by subsections
4 (a) and (b) of the 5 taxable years following the excess credit
5 year, provided that no credit may be carried forward to any
6 year ending on or after December 31, 2003. This credit shall be
7 applied first to the earliest year for which there is a
8 liability. If there is a credit under this subsection from more
9 than one tax year that is available to offset a liability the
10 earliest credit arising under this subsection shall be applied
11 first.
12     If, during any taxable year ending on or after December 31,
13 1986, the tax imposed by subsections (c) and (d) of this
14 Section for which a taxpayer has claimed a credit under this
15 subsection (i) is reduced, the amount of credit for such tax
16 shall also be reduced. Such reduction shall be determined by
17 recomputing the credit to take into account the reduced tax
18 imposed by subsections (c) and (d). If any portion of the
19 reduced amount of credit has been carried to a different
20 taxable year, an amended return shall be filed for such taxable
21 year to reduce the amount of credit claimed.
22     (j) Training expense credit. Beginning with tax years
23 ending on or after December 31, 1986 and prior to December 31,
24 2003, a taxpayer shall be allowed a credit against the tax
25 imposed by subsections (a) and (b) under this Section for all
26 amounts paid or accrued, on behalf of all persons employed by
27 the taxpayer in Illinois or Illinois residents employed outside
28 of Illinois by a taxpayer, for educational or vocational
29 training in semi-technical or technical fields or semi-skilled
30 or skilled fields, which were deducted from gross income in the
31 computation of taxable income. The credit against the tax
32 imposed by subsections (a) and (b) shall be 1.6% of such
33 training expenses. For partners, shareholders of subchapter S
34 corporations, and owners of limited liability companies, if the

 

 

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

 

 

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1 means the qualifying expenditures as defined for the federal
2 credit for increasing research activities which would be
3 allowable under Section 41 of the Internal Revenue Code and
4 which are conducted in this State, "qualifying expenditures for
5 increasing research activities in this State" means the excess
6 of qualifying expenditures for the taxable year in which
7 incurred over qualifying expenditures for the base period,
8 "qualifying expenditures for the base period" means the average
9 of the qualifying expenditures for each year in the base
10 period, and "base period" means the 3 taxable years immediately
11 preceding the taxable year for which the determination is being
12 made.
13     Any credit in excess of the tax liability for the taxable
14 year may be carried forward. A taxpayer may elect to have the
15 unused credit shown on its final completed return carried over
16 as a credit against the tax liability for the following 5
17 taxable years or until it has been fully used, whichever occurs
18 first; provided that no credit earned in a tax year ending
19 prior to December 31, 2003 may be carried forward to any year
20 ending on or after December 31, 2003.
21     If an unused credit is carried forward to a given year from
22 2 or more earlier years, that credit arising in the earliest
23 year will be applied first against the tax liability for the
24 given year. If a tax liability for the given year still
25 remains, the credit from the next earliest year will then be
26 applied, and so on, until all credits have been used or no tax
27 liability for the given year remains. Any remaining unused
28 credit or credits then will be carried forward to the next
29 following year in which a tax liability is incurred, except
30 that no credit can be carried forward to a year which is more
31 than 5 years after the year in which the expense for which the
32 credit is given was incurred.
33     No inference shall be drawn from this amendatory Act of the
34 91st General Assembly in construing this Section for taxable

 

 

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1 years beginning before January 1, 1999.
2     (l) Environmental Remediation Tax Credit.
3         (i) For tax years ending after December 31, 1997 and on
4     or before December 31, 2001, a taxpayer shall be allowed a
5     credit against the tax imposed by subsections (a) and (b)
6     of this Section for certain amounts paid for unreimbursed
7     eligible remediation costs, as specified in this
8     subsection. For purposes of this Section, "unreimbursed
9     eligible remediation costs" means costs approved by the
10     Illinois Environmental Protection Agency ("Agency") under
11     Section 58.14 of the Environmental Protection Act that were
12     paid in performing environmental remediation at a site for
13     which a No Further Remediation Letter was issued by the
14     Agency and recorded under Section 58.10 of the
15     Environmental Protection Act. The credit must be claimed
16     for the taxable year in which Agency approval of the
17     eligible remediation costs is granted. The credit is not
18     available to any taxpayer if the taxpayer or any related
19     party caused or contributed to, in any material respect, a
20     release of regulated substances on, in, or under the site
21     that was identified and addressed by the remedial action
22     pursuant to the Site Remediation Program of the
23     Environmental Protection Act. After the Pollution Control
24     Board rules are adopted pursuant to the Illinois
25     Administrative Procedure Act for the administration and
26     enforcement of Section 58.9 of the Environmental
27     Protection Act, determinations as to credit availability
28     for purposes of this Section shall be made consistent with
29     those rules. For purposes of this Section, "taxpayer"
30     includes a person whose tax attributes the taxpayer has
31     succeeded to under Section 381 of the Internal Revenue Code
32     and "related party" includes the persons disallowed a
33     deduction for losses by paragraphs (b), (c), and (f)(1) of
34     Section 267 of the Internal Revenue Code by virtue of being

 

 

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1     a related taxpayer, as well as any of its partners. The
2     credit allowed against the tax imposed by subsections (a)
3     and (b) shall be equal to 25% of the unreimbursed eligible
4     remediation costs in excess of $100,000 per site, except
5     that the $100,000 threshold shall not apply to any site
6     contained in an enterprise zone as determined by the
7     Department of Commerce and Community Affairs (now
8     Department of Commerce and Economic Opportunity). The
9     total credit allowed shall not exceed $40,000 per year with
10     a maximum total of $150,000 per site. For partners and
11     shareholders of subchapter S corporations, there shall be
12     allowed a credit under this subsection to be determined in
13     accordance with the determination of income and
14     distributive share of income under Sections 702 and 704 and
15     subchapter S of the Internal Revenue Code.
16         (ii) A credit allowed under this subsection that is
17     unused in the year the credit is earned may be carried
18     forward to each of the 5 taxable years following the year
19     for which the credit is first earned until it is used. The
20     term "unused credit" does not include any amounts of
21     unreimbursed eligible remediation costs in excess of the
22     maximum credit per site authorized under paragraph (i).
23     This credit shall be applied first to the earliest year for
24     which there is a liability. If there is a credit under this
25     subsection from more than one tax year that is available to
26     offset a liability, the earliest credit arising under this
27     subsection shall be applied first. A credit allowed under
28     this subsection may be sold to a buyer as part of a sale of
29     all or part of the remediation site for which the credit
30     was granted. The purchaser of a remediation site and the
31     tax credit shall succeed to the unused credit and remaining
32     carry-forward period of the seller. To perfect the
33     transfer, the assignor shall record the transfer in the
34     chain of title for the site and provide written notice to

 

 

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1     the Director of the Illinois Department of Revenue of the
2     assignor's intent to sell the remediation site and the
3     amount of the tax credit to be transferred as a portion of
4     the sale. In no event may a credit be transferred to any
5     taxpayer if the taxpayer or a related party would not be
6     eligible under the provisions of subsection (i).
7         (iii) For purposes of this Section, the term "site"
8     shall have the same meaning as under Section 58.2 of the
9     Environmental Protection Act.
10     (m) Education expense credit. Beginning with tax years
11 ending after December 31, 1999, a taxpayer who is the custodian
12 of one or more qualifying pupils shall be allowed a credit
13 against the tax imposed by subsections (a) and (b) of this
14 Section for qualified education expenses incurred on behalf of
15 the qualifying pupils. The credit shall be equal to 25% of
16 qualified education expenses, but in no event may the total
17 credit under this subsection claimed by a family that is the
18 custodian of qualifying pupils exceed $500. In no event shall a
19 credit under this subsection reduce the taxpayer's liability
20 under this Act to less than zero. This subsection is exempt
21 from the provisions of Section 250 of this Act.
22     For purposes of this subsection:
23     "Qualifying pupils" means individuals who (i) are
24 residents of the State of Illinois, (ii) are under the age of
25 21 at the close of the school year for which a credit is
26 sought, and (iii) during the school year for which a credit is
27 sought were full-time pupils enrolled in a kindergarten through
28 twelfth grade education program at any school, as defined in
29 this subsection.
30     "Qualified education expense" means the amount incurred on
31 behalf of a qualifying pupil in excess of $250 for tuition,
32 book fees, and lab fees at the school in which the pupil is
33 enrolled during the regular school year.
34     "School" means any public or nonpublic elementary or

 

 

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1 secondary school in Illinois that is in compliance with Title
2 VI of the Civil Rights Act of 1964 and attendance at which
3 satisfies the requirements of Section 26-1 of the School Code,
4 except that nothing shall be construed to require a child to
5 attend any particular public or nonpublic school to qualify for
6 the credit under this Section.
7     "Custodian" means, with respect to qualifying pupils, an
8 Illinois resident who is a parent, the parents, a legal
9 guardian, or the legal guardians of the qualifying pupils.
10     (n) River Edge Redevelopment Zone site remediation tax
11 credit.
12         (i) For tax years ending on or after December 31, 2006,
13     a taxpayer shall be allowed a credit against the tax
14     imposed by subsections (a) and (b) of this Section for
15     certain amounts paid for unreimbursed eligible remediation
16     costs, as specified in this subsection. For purposes of
17     this Section, "unreimbursed eligible remediation costs"
18     means costs approved by the Illinois Environmental
19     Protection Agency ("Agency") under Section 58.14 of the
20     Environmental Protection Act that were paid in performing
21     environmental remediation at a site within a River Edge
22     Redevelopment Zone for which a No Further Remediation
23     Letter was issued by the Agency and recorded under Section
24     58.10 of the Environmental Protection Act. The credit must
25     be claimed for the taxable year in which Agency approval of
26     the eligible remediation costs is granted. The credit is
27     not available to any taxpayer if the taxpayer or any
28     related party caused or contributed to, in any material
29     respect, a release of regulated substances on, in, or under
30     the site that was identified and addressed by the remedial
31     action pursuant to the Site Remediation Program of the
32     Environmental Protection Act. Determinations as to credit
33     availability for purposes of this Section shall be made
34     consistent with rules adopted by the Pollution Control

 

 

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1     Board pursuant to the Illinois Administrative Procedure
2     Act for the administration and enforcement of Section 58.9
3     of the Environmental Protection Act. For purposes of this
4     Section, "taxpayer" includes a person whose tax attributes
5     the taxpayer has succeeded to under Section 381 of the
6     Internal Revenue Code and "related party" includes the
7     persons disallowed a deduction for losses by paragraphs
8     (b), (c), and (f)(1) of Section 267 of the Internal Revenue
9     Code by virtue of being a related taxpayer, as well as any
10     of its partners. The credit allowed against the tax imposed
11     by subsections (a) and (b) shall be equal to 25% of the
12     unreimbursed eligible remediation costs in excess of
13     $100,000 per site.
14         (ii) A credit allowed under this subsection that is
15     unused in the year the credit is earned may be carried
16     forward to each of the 5 taxable years following the year
17     for which the credit is first earned until it is used. This
18     credit shall be applied first to the earliest year for
19     which there is a liability. If there is a credit under this
20     subsection from more than one tax year that is available to
21     offset a liability, the earliest credit arising under this
22     subsection shall be applied first. A credit allowed under
23     this subsection may be sold to a buyer as part of a sale of
24     all or part of the remediation site for which the credit
25     was granted. The purchaser of a remediation site and the
26     tax credit shall succeed to the unused credit and remaining
27     carry-forward period of the seller. To perfect the
28     transfer, the assignor shall record the transfer in the
29     chain of title for the site and provide written notice to
30     the Director of the Illinois Department of Revenue of the
31     assignor's intent to sell the remediation site and the
32     amount of the tax credit to be transferred as a portion of
33     the sale. In no event may a credit be transferred to any
34     taxpayer if the taxpayer or a related party would not be

 

 

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1     eligible under the provisions of subsection (i).
2         (iii) For purposes of this Section, the term "site"
3     shall have the same meaning as under Section 58.2 of the
4     Environmental Protection Act.
5         (iv) This subsection is exempt from the provisions of
6     Section 250.
7 (Source: P.A. 92-12, eff. 7-1-01; 92-16, eff. 6-28-01; 92-651,
8 eff. 7-11-02; 93-840, eff. 7-30-04; 92-846, eff. 8-23-02;
9 93-29, eff. 6-20-03; 93-840, eff. 7-30-04; 93-871, eff. 8-6-04;
10 revised 10-25-04.)
 
11     (35 ILCS 5/203)  (from Ch. 120, par. 2-203)
12     Sec. 203. Base income defined.
13     (a) Individuals.
14         (1) In general. In the case of an individual, base
15     income means an amount equal to the taxpayer's adjusted
16     gross income for the taxable year as modified by paragraph
17     (2).
18         (2) Modifications. The adjusted gross income referred
19     to in paragraph (1) shall be modified by adding thereto the
20     sum of the following amounts:
21             (A) An amount equal to all amounts paid or accrued
22         to the taxpayer as interest or dividends during the
23         taxable year to the extent excluded from gross income
24         in the computation of adjusted gross income, except
25         stock dividends of qualified public utilities
26         described in Section 305(e) of the Internal Revenue
27         Code;
28             (B) An amount equal to the amount of tax imposed by
29         this Act to the extent deducted from gross income in
30         the computation of adjusted gross income for the
31         taxable year;
32             (C) An amount equal to the amount received during
33         the taxable year as a recovery or refund of real

 

 

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1         property taxes paid with respect to the taxpayer's
2         principal residence under the Revenue Act of 1939 and
3         for which a deduction was previously taken under
4         subparagraph (L) of this paragraph (2) prior to July 1,
5         1991, the retrospective application date of Article 4
6         of Public Act 87-17. In the case of multi-unit or
7         multi-use structures and farm dwellings, the taxes on
8         the taxpayer's principal residence shall be that
9         portion of the total taxes for the entire property
10         which is attributable to such principal residence;
11             (D) An amount equal to the amount of the capital
12         gain deduction allowable under the Internal Revenue
13         Code, to the extent deducted from gross income in the
14         computation of adjusted gross income;
15             (D-5) An amount, to the extent not included in
16         adjusted gross income, equal to the amount of money
17         withdrawn by the taxpayer in the taxable year from a
18         medical care savings account and the interest earned on
19         the account in the taxable year of a withdrawal
20         pursuant to subsection (b) of Section 20 of the Medical
21         Care Savings Account Act or subsection (b) of Section
22         20 of the Medical Care Savings Account Act of 2000;
23             (D-10) For taxable years ending after December 31,
24         1997, an amount equal to any eligible remediation costs
25         that the individual deducted in computing adjusted
26         gross income and for which the individual claims a
27         credit under subsection (l) of Section 201;
28             (D-15) For taxable years 2001 and thereafter, an
29         amount equal to the bonus depreciation deduction (30%
30         of the adjusted basis of the qualified property) taken
31         on the taxpayer's federal income tax return for the
32         taxable year under subsection (k) of Section 168 of the
33         Internal Revenue Code;
34             (D-16) If the taxpayer reports a capital gain or

 

 

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1         loss on the taxpayer's federal income tax return for
2         the taxable year based on a sale or transfer of
3         property for which the taxpayer was required in any
4         taxable year to make an addition modification under
5         subparagraph (D-15), then an amount equal to the
6         aggregate amount of the deductions taken in all taxable
7         years under subparagraph (Z) with respect to that
8         property.
9             The taxpayer is required to make the addition
10         modification under this subparagraph only once with
11         respect to any one piece of property;
12             (D-17) For taxable years ending on or after
13         December 31, 2004, an amount equal to the amount
14         otherwise allowed as a deduction in computing base
15         income for interest paid, accrued, or incurred,
16         directly or indirectly, to a foreign person who would
17         be a member of the same unitary business group but for
18         the fact that foreign person's business activity
19         outside the United States is 80% or more of the foreign
20         person's total business activity. The addition
21         modification required by this subparagraph shall be
22         reduced to the extent that dividends were included in
23         base income of the unitary group for the same taxable
24         year and received by the taxpayer or by a member of the
25         taxpayer's unitary business group (including amounts
26         included in gross income under Sections 951 through 964
27         of the Internal Revenue Code and amounts included in
28         gross income under Section 78 of the Internal Revenue
29         Code) with respect to the stock of the same person to
30         whom the interest was paid, accrued, or incurred.
31             This paragraph shall not apply to the following:
32                 (i) an item of interest paid, accrued, or
33             incurred, directly or indirectly, to a foreign
34             person who is subject in a foreign country or

 

 

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1             state, other than a state which requires mandatory
2             unitary reporting, to a tax on or measured by net
3             income with respect to such interest; or
4                 (ii) an item of interest paid, accrued, or
5             incurred, directly or indirectly, to a foreign
6             person if the taxpayer can establish, based on a
7             preponderance of the evidence, both of the
8             following:
9                     (a) the foreign person, during the same
10                 taxable year, paid, accrued, or incurred, the
11                 interest to a person that is not a related
12                 member, and
13                     (b) the transaction giving rise to the
14                 interest expense between the taxpayer and the
15                 foreign person did not have as a principal
16                 purpose the avoidance of Illinois income tax,
17                 and is paid pursuant to a contract or agreement
18                 that reflects an arm's-length interest rate
19                 and terms; or
20                 (iii) the taxpayer can establish, based on
21             clear and convincing evidence, that the interest
22             paid, accrued, or incurred relates to a contract or
23             agreement entered into at arm's-length rates and
24             terms and the principal purpose for the payment is
25             not federal or Illinois tax avoidance; or
26                 (iv) an item of interest paid, accrued, or
27             incurred, directly or indirectly, to a foreign
28             person if the taxpayer establishes by clear and
29             convincing evidence that the adjustments are
30             unreasonable; or if the taxpayer and the Director
31             agree in writing to the application or use of an
32             alternative method of apportionment under Section
33             304(f).
34                 Nothing in this subsection shall preclude the

 

 

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1             Director from making any other adjustment
2             otherwise allowed under Section 404 of this Act for
3             any tax year beginning after the effective date of
4             this amendment provided such adjustment is made
5             pursuant to regulation adopted by the Department
6             and such regulations provide methods and standards
7             by which the Department will utilize its authority
8             under Section 404 of this Act;
9             (D-18) For taxable years ending on or after
10         December 31, 2004, an amount equal to the amount of
11         intangible expenses and costs otherwise allowed as a
12         deduction in computing base income, and that were paid,
13         accrued, or incurred, directly or indirectly, to a
14         foreign person who would be a member of the same
15         unitary business group but for the fact that the
16         foreign person's business activity outside the United
17         States is 80% or more of that person's total business
18         activity. The addition modification required by this
19         subparagraph shall be reduced to the extent that
20         dividends were included in base income of the unitary
21         group for the same taxable year and received by the
22         taxpayer or by a member of the taxpayer's unitary
23         business group (including amounts included in gross
24         income under Sections 951 through 964 of the Internal
25         Revenue Code and amounts included in gross income under
26         Section 78 of the Internal Revenue Code) with respect
27         to the stock of the same person to whom the intangible
28         expenses and costs were directly or indirectly paid,
29         incurred, or accrued. The preceding sentence does not
30         apply to the extent that the same dividends caused a
31         reduction to the addition modification required under
32         Section 203(a)(2)(D-17) of this Act. As used in this
33         subparagraph, the term "intangible expenses and costs"
34         includes (1) expenses, losses, and costs for, or

 

 

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1         related to, the direct or indirect acquisition, use,
2         maintenance or management, ownership, sale, exchange,
3         or any other disposition of intangible property; (2)
4         losses incurred, directly or indirectly, from
5         factoring transactions or discounting transactions;
6         (3) royalty, patent, technical, and copyright fees;
7         (4) licensing fees; and (5) other similar expenses and
8         costs. For purposes of this subparagraph, "intangible
9         property" includes patents, patent applications, trade
10         names, trademarks, service marks, copyrights, mask
11         works, trade secrets, and similar types of intangible
12         assets.
13             This paragraph shall not apply to the following:
14                 (i) any item of intangible expenses or costs
15             paid, accrued, or incurred, directly or
16             indirectly, from a transaction with a foreign
17             person who is subject in a foreign country or
18             state, other than a state which requires mandatory
19             unitary reporting, to a tax on or measured by net
20             income with respect to such item; or
21                 (ii) any item of intangible expense or cost
22             paid, accrued, or incurred, directly or
23             indirectly, if the taxpayer can establish, based
24             on a preponderance of the evidence, both of the
25             following:
26                     (a) the foreign person during the same
27                 taxable year paid, accrued, or incurred, the
28                 intangible expense or cost to a person that is
29                 not a related member, and
30                     (b) the transaction giving rise to the
31                 intangible expense or cost between the
32                 taxpayer and the foreign person did not have as
33                 a principal purpose the avoidance of Illinois
34                 income tax, and is paid pursuant to a contract

 

 

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1                 or agreement that reflects arm's-length terms;
2                 or
3                 (iii) any item of intangible expense or cost
4             paid, accrued, or incurred, directly or
5             indirectly, from a transaction with a foreign
6             person if the taxpayer establishes by clear and
7             convincing evidence, that the adjustments are
8             unreasonable; or if the taxpayer and the Director
9             agree in writing to the application or use of an
10             alternative method of apportionment under Section
11             304(f);
12                 Nothing in this subsection shall preclude the
13             Director from making any other adjustment
14             otherwise allowed under Section 404 of this Act for
15             any tax year beginning after the effective date of
16             this amendment provided such adjustment is made
17             pursuant to regulation adopted by the Department
18             and such regulations provide methods and standards
19             by which the Department will utilize its authority
20             under Section 404 of this Act;
21             (D-20) For taxable years beginning on or after
22         January 1, 2002, in the case of a distribution from a
23         qualified tuition program under Section 529 of the
24         Internal Revenue Code, other than (i) a distribution
25         from a College Savings Pool created under Section 16.5
26         of the State Treasurer Act or (ii) a distribution from
27         the Illinois Prepaid Tuition Trust Fund, an amount
28         equal to the amount excluded from gross income under
29         Section 529(c)(3)(B);
30     and by deducting from the total so obtained the sum of the
31     following amounts:
32             (E) For taxable years ending before December 31,
33         2001, any amount included in such total in respect of
34         any compensation (including but not limited to any

 

 

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1         compensation paid or accrued to a serviceman while a
2         prisoner of war or missing in action) paid to a
3         resident by reason of being on active duty in the Armed
4         Forces of the United States and in respect of any
5         compensation paid or accrued to a resident who as a
6         governmental employee was a prisoner of war or missing
7         in action, and in respect of any compensation paid to a
8         resident in 1971 or thereafter for annual training
9         performed pursuant to Sections 502 and 503, Title 32,
10         United States Code as a member of the Illinois National
11         Guard. For taxable years ending on or after December
12         31, 2001, any amount included in such total in respect
13         of any compensation (including but not limited to any
14         compensation paid or accrued to a serviceman while a
15         prisoner of war or missing in action) paid to a
16         resident by reason of being a member of any component
17         of the Armed Forces of the United States and in respect
18         of any compensation paid or accrued to a resident who
19         as a governmental employee was a prisoner of war or
20         missing in action, and in respect of any compensation
21         paid to a resident in 2001 or thereafter by reason of
22         being a member of the Illinois National Guard. The
23         provisions of this amendatory Act of the 92nd General
24         Assembly are exempt from the provisions of Section 250;
25             (F) An amount equal to all amounts included in such
26         total pursuant to the provisions of Sections 402(a),
27         402(c), 403(a), 403(b), 406(a), 407(a), and 408 of the
28         Internal Revenue Code, or included in such total as
29         distributions under the provisions of any retirement
30         or disability plan for employees of any governmental
31         agency or unit, or retirement payments to retired
32         partners, which payments are excluded in computing net
33         earnings from self employment by Section 1402 of the
34         Internal Revenue Code and regulations adopted pursuant

 

 

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1         thereto;
2             (G) The valuation limitation amount;
3             (H) An amount equal to the amount of any tax
4         imposed by this Act which was refunded to the taxpayer
5         and included in such total for the taxable year;
6             (I) An amount equal to all amounts included in such
7         total pursuant to the provisions of Section 111 of the
8         Internal Revenue Code as a recovery of items previously
9         deducted from adjusted gross income in the computation
10         of taxable income;
11             (J) An amount equal to those dividends included in
12         such total which were paid by a corporation which
13         conducts business operations in an Enterprise Zone or
14         zones created under the Illinois Enterprise Zone Act or
15         a River Edge Redevelopment Zone or zones created under
16         the River Edge Redevelopment Zone Act, and conducts
17         substantially all of its operations in an Enterprise
18         Zone or zones or a River Edge Redevelopment Zone or
19         zones. This subparagraph (J) is exempt from the
20         provisions of Section 250;
21             (K) An amount equal to those dividends included in
22         such total that were paid by a corporation that
23         conducts business operations in a federally designated
24         Foreign Trade Zone or Sub-Zone and that is designated a
25         High Impact Business located in Illinois; provided
26         that dividends eligible for the deduction provided in
27         subparagraph (J) of paragraph (2) of this subsection
28         shall not be eligible for the deduction provided under
29         this subparagraph (K);
30             (L) For taxable years ending after December 31,
31         1983, an amount equal to all social security benefits
32         and railroad retirement benefits included in such
33         total pursuant to Sections 72(r) and 86 of the Internal
34         Revenue Code;

 

 

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1             (M) With the exception of any amounts subtracted
2         under subparagraph (N), an amount equal to the sum of
3         all amounts disallowed as deductions by (i) Sections
4         171(a) (2), and 265(2) of the Internal Revenue Code of
5         1954, as now or hereafter amended, and all amounts of
6         expenses allocable to interest and disallowed as
7         deductions by Section 265(1) of the Internal Revenue
8         Code of 1954, as now or hereafter amended; and (ii) for
9         taxable years ending on or after August 13, 1999,
10         Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of
11         the Internal Revenue Code; the provisions of this
12         subparagraph are exempt from the provisions of Section
13         250;
14             (N) An amount equal to all amounts included in such
15         total which are exempt from taxation by this State
16         either by reason of its statutes or Constitution or by
17         reason of the Constitution, treaties or statutes of the
18         United States; provided that, in the case of any
19         statute of this State that exempts income derived from
20         bonds or other obligations from the tax imposed under
21         this Act, the amount exempted shall be the interest net
22         of bond premium amortization;
23             (O) An amount equal to any contribution made to a
24         job training project established pursuant to the Tax
25         Increment Allocation Redevelopment Act;
26             (P) An amount equal to the amount of the deduction
27         used to compute the federal income tax credit for
28         restoration of substantial amounts held under claim of
29         right for the taxable year pursuant to Section 1341 of
30         the Internal Revenue Code of 1986;
31             (Q) An amount equal to any amounts included in such
32         total, received by the taxpayer as an acceleration in
33         the payment of life, endowment or annuity benefits in
34         advance of the time they would otherwise be payable as

 

 

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1         an indemnity for a terminal illness;
2             (R) An amount equal to the amount of any federal or
3         State bonus paid to veterans of the Persian Gulf War;
4             (S) An amount, to the extent included in adjusted
5         gross income, equal to the amount of a contribution
6         made in the taxable year on behalf of the taxpayer to a
7         medical care savings account established under the
8         Medical Care Savings Account Act or the Medical Care
9         Savings Account Act of 2000 to the extent the
10         contribution is accepted by the account administrator
11         as provided in that Act;
12             (T) An amount, to the extent included in adjusted
13         gross income, equal to the amount of interest earned in
14         the taxable year on a medical care savings account
15         established under the Medical Care Savings Account Act
16         or the Medical Care Savings Account Act of 2000 on
17         behalf of the taxpayer, other than interest added
18         pursuant to item (D-5) of this paragraph (2);
19             (U) For one taxable year beginning on or after
20         January 1, 1994, an amount equal to the total amount of
21         tax imposed and paid under subsections (a) and (b) of
22         Section 201 of this Act on grant amounts received by
23         the taxpayer under the Nursing Home Grant Assistance
24         Act during the taxpayer's taxable years 1992 and 1993;
25             (V) Beginning with tax years ending on or after
26         December 31, 1995 and ending with tax years ending on
27         or before December 31, 2004, an amount equal to the
28         amount paid by a taxpayer who is a self-employed
29         taxpayer, a partner of a partnership, or a shareholder
30         in a Subchapter S corporation for health insurance or
31         long-term care insurance for that taxpayer or that
32         taxpayer's spouse or dependents, to the extent that the
33         amount paid for that health insurance or long-term care
34         insurance may be deducted under Section 213 of the

 

 

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1         Internal Revenue Code of 1986, has not been deducted on
2         the federal income tax return of the taxpayer, and does
3         not exceed the taxable income attributable to that
4         taxpayer's income, self-employment income, or
5         Subchapter S corporation income; except that no
6         deduction shall be allowed under this item (V) if the
7         taxpayer is eligible to participate in any health
8         insurance or long-term care insurance plan of an
9         employer of the taxpayer or the taxpayer's spouse. The
10         amount of the health insurance and long-term care
11         insurance subtracted under this item (V) shall be
12         determined by multiplying total health insurance and
13         long-term care insurance premiums paid by the taxpayer
14         times a number that represents the fractional
15         percentage of eligible medical expenses under Section
16         213 of the Internal Revenue Code of 1986 not actually
17         deducted on the taxpayer's federal income tax return;
18             (W) For taxable years beginning on or after January
19         1, 1998, all amounts included in the taxpayer's federal
20         gross income in the taxable year from amounts converted
21         from a regular IRA to a Roth IRA. This paragraph is
22         exempt from the provisions of Section 250;
23             (X) For taxable year 1999 and thereafter, an amount
24         equal to the amount of any (i) distributions, to the
25         extent includible in gross income for federal income
26         tax purposes, made to the taxpayer because of his or
27         her status as a victim of persecution for racial or
28         religious reasons by Nazi Germany or any other Axis
29         regime or as an heir of the victim and (ii) items of
30         income, to the extent includible in gross income for
31         federal income tax purposes, attributable to, derived
32         from or in any way related to assets stolen from,
33         hidden from, or otherwise lost to a victim of
34         persecution for racial or religious reasons by Nazi

 

 

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1         Germany or any other Axis regime immediately prior to,
2         during, and immediately after World War II, including,
3         but not limited to, interest on the proceeds receivable
4         as insurance under policies issued to a victim of
5         persecution for racial or religious reasons by Nazi
6         Germany or any other Axis regime by European insurance
7         companies immediately prior to and during World War II;
8         provided, however, this subtraction from federal
9         adjusted gross income does not apply to assets acquired
10         with such assets or with the proceeds from the sale of
11         such assets; provided, further, this paragraph shall
12         only apply to a taxpayer who was the first recipient of
13         such assets after their recovery and who is a victim of
14         persecution for racial or religious reasons by Nazi
15         Germany or any other Axis regime or as an heir of the
16         victim. The amount of and the eligibility for any
17         public assistance, benefit, or similar entitlement is
18         not affected by the inclusion of items (i) and (ii) of
19         this paragraph in gross income for federal income tax
20         purposes. This paragraph is exempt from the provisions
21         of Section 250;
22             (Y) For taxable years beginning on or after January
23         1, 2002 and ending on or before December 31, 2004,
24         moneys contributed in the taxable year to a College
25         Savings Pool account under Section 16.5 of the State
26         Treasurer Act, except that amounts excluded from gross
27         income under Section 529(c)(3)(C)(i) of the Internal
28         Revenue Code shall not be considered moneys
29         contributed under this subparagraph (Y). For taxable
30         years beginning on or after January 1, 2005, a maximum
31         of $10,000 contributed in the taxable year to (i) a
32         College Savings Pool account under Section 16.5 of the
33         State Treasurer Act or (ii) the Illinois Prepaid
34         Tuition Trust Fund, except that amounts excluded from

 

 

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1         gross income under Section 529(c)(3)(C)(i) of the
2         Internal Revenue Code shall not be considered moneys
3         contributed under this subparagraph (Y). This
4         subparagraph (Y) is exempt from the provisions of
5         Section 250;
6             (Z) For taxable years 2001 and thereafter, for the
7         taxable year in which the bonus depreciation deduction
8         (30% of the adjusted basis of the qualified property)
9         is taken on the taxpayer's federal income tax return
10         under subsection (k) of Section 168 of the Internal
11         Revenue Code and for each applicable taxable year
12         thereafter, an amount equal to "x", where:
13                 (1) "y" equals the amount of the depreciation
14             deduction taken for the taxable year on the
15             taxpayer's federal income tax return on property
16             for which the bonus depreciation deduction (30% of
17             the adjusted basis of the qualified property) was
18             taken in any year under subsection (k) of Section
19             168 of the Internal Revenue Code, but not including
20             the bonus depreciation deduction; and
21                 (2) "x" equals "y" multiplied by 30 and then
22             divided by 70 (or "y" multiplied by 0.429).
23             The aggregate amount deducted under this
24         subparagraph in all taxable years for any one piece of
25         property may not exceed the amount of the bonus
26         depreciation deduction (30% of the adjusted basis of
27         the qualified property) taken on that property on the
28         taxpayer's federal income tax return under subsection
29         (k) of Section 168 of the Internal Revenue Code;
30             (AA) If the taxpayer reports a capital gain or loss
31         on the taxpayer's federal income tax return for the
32         taxable year based on a sale or transfer of property
33         for which the taxpayer was required in any taxable year
34         to make an addition modification under subparagraph

 

 

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1         (D-15), then an amount equal to that addition
2         modification.
3             The taxpayer is allowed to take the deduction under
4         this subparagraph only once with respect to any one
5         piece of property;
6             (BB) Any amount included in adjusted gross income,
7         other than salary, received by a driver in a
8         ridesharing arrangement using a motor vehicle;
9             (CC) The amount of (i) any interest income (net of
10         the deductions allocable thereto) taken into account
11         for the taxable year with respect to a transaction with
12         a taxpayer that is required to make an addition
13         modification with respect to such transaction under
14         Section 203(a)(2)(D-17), 203(b)(2)(E-13),
15         203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
16         the amount of that addition modification, and (ii) any
17         income from intangible property (net of the deductions
18         allocable thereto) taken into account for the taxable
19         year with respect to a transaction with a taxpayer that
20         is required to make an addition modification with
21         respect to such transaction under Section
22         203(a)(2)(D-18), 203(b)(2)(E-14), 203(c)(2)(G-13), or
23         203(d)(2)(D-8), but not to exceed the amount of that
24         addition modification;
25             (DD) An amount equal to the interest income taken
26         into account for the taxable year (net of the
27         deductions allocable thereto) with respect to
28         transactions with a foreign person who would be a
29         member of the taxpayer's unitary business group but for
30         the fact that the foreign person's business activity
31         outside the United States is 80% or more of that
32         person's total business activity, but not to exceed the
33         addition modification required to be made for the same
34         taxable year under Section 203(a)(2)(D-17) for

 

 

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1         interest paid, accrued, or incurred, directly or
2         indirectly, to the same foreign person; and
3             (EE) An amount equal to the income from intangible
4         property taken into account for the taxable year (net
5         of the deductions allocable thereto) with respect to
6         transactions with a foreign person who would be a
7         member of the taxpayer's unitary business group but for
8         the fact that the foreign person's business activity
9         outside the United States is 80% or more of that
10         person's total business activity, but not to exceed the
11         addition modification required to be made for the same
12         taxable year under Section 203(a)(2)(D-18) for
13         intangible expenses and costs paid, accrued, or
14         incurred, directly or indirectly, to the same foreign
15         person.
 
16     (b) Corporations.
17         (1) In general. In the case of a corporation, base
18     income means an amount equal to the taxpayer's taxable
19     income for the taxable year as modified by paragraph (2).
20         (2) Modifications. The taxable income referred to in
21     paragraph (1) shall be modified by adding thereto the sum
22     of the following amounts:
23             (A) An amount equal to all amounts paid or accrued
24         to the taxpayer as interest and all distributions
25         received from regulated investment companies during
26         the taxable year to the extent excluded from gross
27         income in the computation of taxable income;
28             (B) An amount equal to the amount of tax imposed by
29         this Act to the extent deducted from gross income in
30         the computation of taxable income for the taxable year;
31             (C) In the case of a regulated investment company,
32         an amount equal to the excess of (i) the net long-term
33         capital gain for the taxable year, over (ii) the amount

 

 

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1         of the capital gain dividends designated as such in
2         accordance with Section 852(b)(3)(C) of the Internal
3         Revenue Code and any amount designated under Section
4         852(b)(3)(D) of the Internal Revenue Code,
5         attributable to the taxable year (this amendatory Act
6         of 1995 (Public Act 89-89) is declarative of existing
7         law and is not a new enactment);
8             (D) The amount of any net operating loss deduction
9         taken in arriving at taxable income, other than a net
10         operating loss carried forward from a taxable year
11         ending prior to December 31, 1986;
12             (E) For taxable years in which a net operating loss
13         carryback or carryforward from a taxable year ending
14         prior to December 31, 1986 is an element of taxable
15         income under paragraph (1) of subsection (e) or
16         subparagraph (E) of paragraph (2) of subsection (e),
17         the amount by which addition modifications other than
18         those provided by this subparagraph (E) exceeded
19         subtraction modifications in such earlier taxable
20         year, with the following limitations applied in the
21         order that they are listed:
22                 (i) the addition modification relating to the
23             net operating loss carried back or forward to the
24             taxable year from any taxable year ending prior to
25             December 31, 1986 shall be reduced by the amount of
26             addition modification under this subparagraph (E)
27             which related to that net operating loss and which
28             was taken into account in calculating the base
29             income of an earlier taxable year, and
30                 (ii) the addition modification relating to the
31             net operating loss carried back or forward to the
32             taxable year from any taxable year ending prior to
33             December 31, 1986 shall not exceed the amount of
34             such carryback or carryforward;

 

 

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1             For taxable years in which there is a net operating
2         loss carryback or carryforward from more than one other
3         taxable year ending prior to December 31, 1986, the
4         addition modification provided in this subparagraph
5         (E) shall be the sum of the amounts computed
6         independently under the preceding provisions of this
7         subparagraph (E) for each such taxable year;
8             (E-5) For taxable years ending after December 31,
9         1997, an amount equal to any eligible remediation costs
10         that the corporation deducted in computing adjusted
11         gross income and for which the corporation claims a
12         credit under subsection (l) of Section 201;
13             (E-10) For taxable years 2001 and thereafter, an
14         amount equal to the bonus depreciation deduction (30%
15         of the adjusted basis of the qualified property) taken
16         on the taxpayer's federal income tax return for the
17         taxable year under subsection (k) of Section 168 of the
18         Internal Revenue Code; and
19             (E-11) If the taxpayer reports a capital gain or
20         loss on the taxpayer's federal income tax return for
21         the taxable year based on a sale or transfer of
22         property for which the taxpayer was required in any
23         taxable year to make an addition modification under
24         subparagraph (E-10), then an amount equal to the
25         aggregate amount of the deductions taken in all taxable
26         years under subparagraph (T) with respect to that
27         property.
28             The taxpayer is required to make the addition
29         modification under this subparagraph only once with
30         respect to any one piece of property;
31             (E-12) For taxable years ending on or after
32         December 31, 2004, an amount equal to the amount
33         otherwise allowed as a deduction in computing base
34         income for interest paid, accrued, or incurred,

 

 

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1         directly or indirectly, to a foreign person who would
2         be a member of the same unitary business group but for
3         the fact the foreign person's business activity
4         outside the United States is 80% or more of the foreign
5         person's total business activity. The addition
6         modification required by this subparagraph shall be
7         reduced to the extent that dividends were included in
8         base income of the unitary group for the same taxable
9         year and received by the taxpayer or by a member of the
10         taxpayer's unitary business group (including amounts
11         included in gross income pursuant to Sections 951
12         through 964 of the Internal Revenue Code and amounts
13         included in gross income under Section 78 of the
14         Internal Revenue Code) with respect to the stock of the
15         same person to whom the interest was paid, accrued, or
16         incurred.
17             This paragraph shall not apply to the following:
18                 (i) an item of interest paid, accrued, or
19             incurred, directly or indirectly, to a foreign
20             person who is subject in a foreign country or
21             state, other than a state which requires mandatory
22             unitary reporting, to a tax on or measured by net
23             income with respect to such interest; or
24                 (ii) an item of interest paid, accrued, or
25             incurred, directly or indirectly, to a foreign
26             person if the taxpayer can establish, based on a
27             preponderance of the evidence, both of the
28             following:
29                     (a) the foreign person, during the same
30                 taxable year, paid, accrued, or incurred, the
31                 interest to a person that is not a related
32                 member, and
33                     (b) the transaction giving rise to the
34                 interest expense between the taxpayer and the

 

 

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1                 foreign person did not have as a principal
2                 purpose the avoidance of Illinois income tax,
3                 and is paid pursuant to a contract or agreement
4                 that reflects an arm's-length interest rate
5                 and terms; or
6                 (iii) the taxpayer can establish, based on
7             clear and convincing evidence, that the interest
8             paid, accrued, or incurred relates to a contract or
9             agreement entered into at arm's-length rates and
10             terms and the principal purpose for the payment is
11             not federal or Illinois tax avoidance; or
12                 (iv) an item of interest paid, accrued, or
13             incurred, directly or indirectly, to a foreign
14             person if the taxpayer establishes by clear and
15             convincing evidence that the adjustments are
16             unreasonable; or if the taxpayer and the Director
17             agree in writing to the application or use of an
18             alternative method of apportionment under Section
19             304(f).
20                 Nothing in this subsection shall preclude the
21             Director from making any other adjustment
22             otherwise allowed under Section 404 of this Act for
23             any tax year beginning after the effective date of
24             this amendment provided such adjustment is made
25             pursuant to regulation adopted by the Department
26             and such regulations provide methods and standards
27             by which the Department will utilize its authority
28             under Section 404 of this Act;
29             (E-13) For taxable years ending on or after
30         December 31, 2004, an amount equal to the amount of
31         intangible expenses and costs otherwise allowed as a
32         deduction in computing base income, and that were paid,
33         accrued, or incurred, directly or indirectly, to a
34         foreign person who would be a member of the same

 

 

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1         unitary business group but for the fact that the
2         foreign person's business activity outside the United
3         States is 80% or more of that person's total business
4         activity. The addition modification required by this
5         subparagraph shall be reduced to the extent that
6         dividends were included in base income of the unitary
7         group for the same taxable year and received by the
8         taxpayer or by a member of the taxpayer's unitary
9         business group (including amounts included in gross
10         income pursuant to Sections 951 through 964 of the
11         Internal Revenue Code and amounts included in gross
12         income under Section 78 of the Internal Revenue Code)
13         with respect to the stock of the same person to whom
14         the intangible expenses and costs were directly or
15         indirectly paid, incurred, or accrued. The preceding
16         sentence shall not apply to the extent that the same
17         dividends caused a reduction to the addition
18         modification required under Section 203(b)(2)(E-12) of
19         this Act. As used in this subparagraph, the term
20         "intangible expenses and costs" includes (1) expenses,
21         losses, and costs for, or related to, the direct or
22         indirect acquisition, use, maintenance or management,
23         ownership, sale, exchange, or any other disposition of
24         intangible property; (2) losses incurred, directly or
25         indirectly, from factoring transactions or discounting
26         transactions; (3) royalty, patent, technical, and
27         copyright fees; (4) licensing fees; and (5) other
28         similar expenses and costs. For purposes of this
29         subparagraph, "intangible property" includes patents,
30         patent applications, trade names, trademarks, service
31         marks, copyrights, mask works, trade secrets, and
32         similar types of intangible assets.
33             This paragraph shall not apply to the following:
34                 (i) any item of intangible expenses or costs

 

 

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1             paid, accrued, or incurred, directly or
2             indirectly, from a transaction with a foreign
3             person who is subject in a foreign country or
4             state, other than a state which requires mandatory
5             unitary reporting, to a tax on or measured by net
6             income with respect to such item; or
7                 (ii) any item of intangible expense or cost
8             paid, accrued, or incurred, directly or
9             indirectly, if the taxpayer can establish, based
10             on a preponderance of the evidence, both of the
11             following:
12                     (a) the foreign person during the same
13                 taxable year paid, accrued, or incurred, the
14                 intangible expense or cost to a person that is
15                 not a related member, and
16                     (b) the transaction giving rise to the
17                 intangible expense or cost between the
18                 taxpayer and the foreign person did not have as
19                 a principal purpose the avoidance of Illinois
20                 income tax, and is paid pursuant to a contract
21                 or agreement that reflects arm's-length terms;
22                 or
23                 (iii) any item of intangible expense or cost
24             paid, accrued, or incurred, directly or
25             indirectly, from a transaction with a foreign
26             person if the taxpayer establishes by clear and
27             convincing evidence, that the adjustments are
28             unreasonable; or if the taxpayer and the Director
29             agree in writing to the application or use of an
30             alternative method of apportionment under Section
31             304(f);
32                 Nothing in this subsection shall preclude the
33             Director from making any other adjustment
34             otherwise allowed under Section 404 of this Act for

 

 

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1             any tax year beginning after the effective date of
2             this amendment provided such adjustment is made
3             pursuant to regulation adopted by the Department
4             and such regulations provide methods and standards
5             by which the Department will utilize its authority
6             under Section 404 of this Act;
7     and by deducting from the total so obtained the sum of the
8     following amounts:
9             (F) An amount equal to the amount of any tax
10         imposed by this Act which was refunded to the taxpayer
11         and included in such total for the taxable year;
12             (G) An amount equal to any amount included in such
13         total under Section 78 of the Internal Revenue Code;
14             (H) In the case of a regulated investment company,
15         an amount equal to the amount of exempt interest
16         dividends as defined in subsection (b) (5) of Section
17         852 of the Internal Revenue Code, paid to shareholders
18         for the taxable year;
19             (I) With the exception of any amounts subtracted
20         under subparagraph (J), an amount equal to the sum of
21         all amounts disallowed as deductions by (i) Sections
22         171(a) (2), and 265(a)(2) and amounts disallowed as
23         interest expense by Section 291(a)(3) of the Internal
24         Revenue Code, as now or hereafter amended, and all
25         amounts of expenses allocable to interest and
26         disallowed as deductions by Section 265(a)(1) of the
27         Internal Revenue Code, as now or hereafter amended; and
28         (ii) for taxable years ending on or after August 13,
29         1999, Sections 171(a)(2), 265, 280C, 291(a)(3), and
30         832(b)(5)(B)(i) of the Internal Revenue Code; the
31         provisions of this subparagraph are exempt from the
32         provisions of Section 250;
33             (J) An amount equal to all amounts included in such
34         total which are exempt from taxation by this State

 

 

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1         either by reason of its statutes or Constitution or by
2         reason of the Constitution, treaties or statutes of the
3         United States; provided that, in the case of any
4         statute of this State that exempts income derived from
5         bonds or other obligations from the tax imposed under
6         this Act, the amount exempted shall be the interest net
7         of bond premium amortization;
8             (K) An amount equal to those dividends included in
9         such total which were paid by a corporation which
10         conducts business operations in an Enterprise Zone or
11         zones created under the Illinois Enterprise Zone Act or
12         a River Edge Redevelopment Zone or zones created under
13         the River Edge Redevelopment Zone Act and conducts
14         substantially all of its operations in an Enterprise
15         Zone or zones or a River Edge Redevelopment Zone or
16         zones. This subparagraph (K) is exempt from the
17         provisions of Section 250;
18             (L) An amount equal to those dividends included in
19         such total that were paid by a corporation that
20         conducts business operations in a federally designated
21         Foreign Trade Zone or Sub-Zone and that is designated a
22         High Impact Business located in Illinois; provided
23         that dividends eligible for the deduction provided in
24         subparagraph (K) of paragraph 2 of this subsection
25         shall not be eligible for the deduction provided under
26         this subparagraph (L);
27             (M) For any taxpayer that is a financial
28         organization within the meaning of Section 304(c) of
29         this Act, an amount included in such total as interest
30         income from a loan or loans made by such taxpayer to a
31         borrower, to the extent that such a loan is secured by
32         property which is eligible for the Enterprise Zone
33         Investment Credit or the River Edge Redevelopment Zone
34         Investment Credit. To determine the portion of a loan

 

 

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1         or loans that is secured by property eligible for a
2         Section 201(f) investment credit to the borrower, the
3         entire principal amount of the loan or loans between
4         the taxpayer and the borrower should be divided into
5         the basis of the Section 201(f) investment credit
6         property which secures the loan or loans, using for
7         this purpose the original basis of such property on the
8         date that it was placed in service in the Enterprise
9         Zone or the River Edge Redevelopment Zone. The
10         subtraction modification available to taxpayer in any
11         year under this subsection shall be that portion of the
12         total interest paid by the borrower with respect to
13         such loan attributable to the eligible property as
14         calculated under the previous sentence. This
15         subparagraph (M) is exempt from the provisions of
16         Section 250;
17             (M-1) For any taxpayer that is a financial
18         organization within the meaning of Section 304(c) of
19         this Act, an amount included in such total as interest
20         income from a loan or loans made by such taxpayer to a
21         borrower, to the extent that such a loan is secured by
22         property which is eligible for the High Impact Business
23         Investment Credit. To determine the portion of a loan
24         or loans that is secured by property eligible for a
25         Section 201(h) investment credit to the borrower, the
26         entire principal amount of the loan or loans between
27         the taxpayer and the borrower should be divided into
28         the basis of the Section 201(h) investment credit
29         property which secures the loan or loans, using for
30         this purpose the original basis of such property on the
31         date that it was placed in service in a federally
32         designated Foreign Trade Zone or Sub-Zone located in
33         Illinois. No taxpayer that is eligible for the
34         deduction provided in subparagraph (M) of paragraph

 

 

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1         (2) of this subsection shall be eligible for the
2         deduction provided under this subparagraph (M-1). The
3         subtraction modification available to taxpayers in any
4         year under this subsection shall be that portion of the
5         total interest paid by the borrower with respect to
6         such loan attributable to the eligible property as
7         calculated under the previous sentence;
8             (N) Two times any contribution made during the
9         taxable year to a designated zone organization to the
10         extent that the contribution (i) qualifies as a
11         charitable contribution under subsection (c) of
12         Section 170 of the Internal Revenue Code and (ii) must,
13         by its terms, be used for a project approved by the
14         Department of Commerce and Economic Opportunity under
15         Section 11 of the Illinois Enterprise Zone Act or under
16         Section 10-10 of the Illinois River Edge Redevelopment
17         Zone Act. This subparagraph (N) is exempt from the
18         provisions of Section 250;
19             (O) An amount equal to: (i) 85% for taxable years
20         ending on or before December 31, 1992, or, a percentage
21         equal to the percentage allowable under Section
22         243(a)(1) of the Internal Revenue Code of 1986 for
23         taxable years ending after December 31, 1992, of the
24         amount by which dividends included in taxable income
25         and received from a corporation that is not created or
26         organized under the laws of the United States or any
27         state or political subdivision thereof, including, for
28         taxable years ending on or after December 31, 1988,
29         dividends received or deemed received or paid or deemed
30         paid under Sections 951 through 964 of the Internal
31         Revenue Code, exceed the amount of the modification
32         provided under subparagraph (G) of paragraph (2) of
33         this subsection (b) which is related to such dividends;
34         plus (ii) 100% of the amount by which dividends,

 

 

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1         included in taxable income and received, including,
2         for taxable years ending on or after December 31, 1988,
3         dividends received or deemed received or paid or deemed
4         paid under Sections 951 through 964 of the Internal
5         Revenue Code, from any such corporation specified in
6         clause (i) that would but for the provisions of Section
7         1504 (b) (3) of the Internal Revenue Code be treated as
8         a member of the affiliated group which includes the
9         dividend recipient, exceed the amount of the
10         modification provided under subparagraph (G) of
11         paragraph (2) of this subsection (b) which is related
12         to such dividends;
13             (P) An amount equal to any contribution made to a
14         job training project established pursuant to the Tax
15         Increment Allocation Redevelopment Act;
16             (Q) An amount equal to the amount of the deduction
17         used to compute the federal income tax credit for
18         restoration of substantial amounts held under claim of
19         right for the taxable year pursuant to Section 1341 of
20         the Internal Revenue Code of 1986;
21             (R) In the case of an attorney-in-fact with respect
22         to whom an interinsurer or a reciprocal insurer has
23         made the election under Section 835 of the Internal
24         Revenue Code, 26 U.S.C. 835, an amount equal to the
25         excess, if any, of the amounts paid or incurred by that
26         interinsurer or reciprocal insurer in the taxable year
27         to the attorney-in-fact over the deduction allowed to
28         that interinsurer or reciprocal insurer with respect
29         to the attorney-in-fact under Section 835(b) of the
30         Internal Revenue Code for the taxable year;
31             (S) For taxable years ending on or after December
32         31, 1997, in the case of a Subchapter S corporation, an
33         amount equal to all amounts of income allocable to a
34         shareholder subject to the Personal Property Tax

 

 

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1         Replacement Income Tax imposed by subsections (c) and
2         (d) of Section 201 of this Act, including amounts
3         allocable to organizations exempt from federal income
4         tax by reason of Section 501(a) of the Internal Revenue
5         Code. This subparagraph (S) is exempt from the
6         provisions of Section 250;
7             (T) For taxable years 2001 and thereafter, for the
8         taxable year in which the bonus depreciation deduction
9         (30% of the adjusted basis of the qualified property)
10         is taken on the taxpayer's federal income tax return
11         under subsection (k) of Section 168 of the Internal
12         Revenue Code and for each applicable taxable year
13         thereafter, an amount equal to "x", where:
14                 (1) "y" equals the amount of the depreciation
15             deduction taken for the taxable year on the
16             taxpayer's federal income tax return on property
17             for which the bonus depreciation deduction (30% of
18             the adjusted basis of the qualified property) was
19             taken in any year under subsection (k) of Section
20             168 of the Internal Revenue Code, but not including
21             the bonus depreciation deduction; and
22                 (2) "x" equals "y" multiplied by 30 and then
23             divided by 70 (or "y" multiplied by 0.429).
24             The aggregate amount deducted under this
25         subparagraph in all taxable years for any one piece of
26         property may not exceed the amount of the bonus
27         depreciation deduction (30% of the adjusted basis of
28         the qualified property) taken on that property on the
29         taxpayer's federal income tax return under subsection
30         (k) of Section 168 of the Internal Revenue Code;
31             (U) If the taxpayer reports a capital gain or loss
32         on the taxpayer's federal income tax return for the
33         taxable year based on a sale or transfer of property
34         for which the taxpayer was required in any taxable year

 

 

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1         to make an addition modification under subparagraph
2         (E-10), then an amount equal to that addition
3         modification.
4             The taxpayer is allowed to take the deduction under
5         this subparagraph only once with respect to any one
6         piece of property;
7             (V) The amount of: (i) any interest income (net of
8         the deductions allocable thereto) taken into account
9         for the taxable year with respect to a transaction with
10         a taxpayer that is required to make an addition
11         modification with respect to such transaction under
12         Section 203(a)(2)(D-17), 203(b)(2)(E-12),
13         203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
14         the amount of such addition modification and (ii) any
15         income from intangible property (net of the deductions
16         allocable thereto) taken into account for the taxable
17         year with respect to a transaction with a taxpayer that
18         is required to make an addition modification with
19         respect to such transaction under Section
20         203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
21         203(d)(2)(D-8), but not to exceed the amount of such
22         addition modification;
23             (W) An amount equal to the interest income taken
24         into account for the taxable year (net of the
25         deductions allocable thereto) with respect to
26         transactions with a foreign person who would be a
27         member of the taxpayer's unitary business group but for
28         the fact that the foreign person's business activity
29         outside the United States is 80% or more of that
30         person's total business activity, but not to exceed the
31         addition modification required to be made for the same
32         taxable year under Section 203(b)(2)(E-12) for
33         interest paid, accrued, or incurred, directly or
34         indirectly, to the same foreign person; and

 

 

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1             (X) An amount equal to the income from intangible
2         property taken into account for the taxable year (net
3         of the deductions allocable thereto) with respect to
4         transactions with a foreign person who would be a
5         member of the taxpayer's unitary business group but for
6         the fact that the foreign person's business activity
7         outside the United States is 80% or more of that
8         person's total business activity, but not to exceed the
9         addition modification required to be made for the same
10         taxable year under Section 203(b)(2)(E-13) for
11         intangible expenses and costs paid, accrued, or
12         incurred, directly or indirectly, to the same foreign
13         person.
14         (3) Special rule. For purposes of paragraph (2) (A),
15     "gross income" in the case of a life insurance company, for
16     tax years ending on and after December 31, 1994, shall mean
17     the gross investment income for the taxable year.
 
18     (c) Trusts and estates.
19         (1) In general. In the case of a trust or estate, base
20     income means an amount equal to the taxpayer's taxable
21     income for the taxable year as modified by paragraph (2).
22         (2) Modifications. Subject to the provisions of
23     paragraph (3), the taxable income referred to in paragraph
24     (1) shall be modified by adding thereto the sum of the
25     following amounts:
26             (A) An amount equal to all amounts paid or accrued
27         to the taxpayer as interest or dividends during the
28         taxable year to the extent excluded from gross income
29         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 such

 

 

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1         case, only to the extent such amount was deducted in
2         the computation of taxable income;
3             (C) An amount equal to the amount of tax imposed by
4         this Act to the extent deducted from gross income in
5         the computation of taxable income for the taxable year;
6             (D) The amount of any net operating loss deduction
7         taken in arriving at taxable income, other than a net
8         operating loss carried forward from a taxable year
9         ending prior to December 31, 1986;
10             (E) For taxable years in which a net operating loss
11         carryback or carryforward from a taxable year ending
12         prior to December 31, 1986 is an element of taxable
13         income under paragraph (1) of subsection (e) or
14         subparagraph (E) of paragraph (2) of subsection (e),
15         the amount by which addition modifications other than
16         those provided by this subparagraph (E) exceeded
17         subtraction modifications in such taxable year, with
18         the following limitations applied in the order that
19         they are listed:
20                 (i) the addition modification relating to the
21             net operating loss carried back or forward to the
22             taxable year from any taxable year ending prior to
23             December 31, 1986 shall be reduced by the amount of
24             addition modification under this subparagraph (E)
25             which related to that net operating loss and which
26             was taken into account in calculating the base
27             income of an earlier taxable year, and
28                 (ii) the addition modification relating to the
29             net operating loss carried back or forward to the
30             taxable year from any taxable year ending prior to
31             December 31, 1986 shall not exceed the amount of
32             such carryback or carryforward;
33             For taxable years in which there is a net operating
34         loss carryback or carryforward from more than one other

 

 

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1         taxable year ending prior to December 31, 1986, the
2         addition modification provided in this subparagraph
3         (E) shall be the sum of the amounts computed
4         independently under the preceding provisions of this
5         subparagraph (E) for each such taxable year;
6             (F) For taxable years ending on or after January 1,
7         1989, an amount equal to the tax deducted pursuant to
8         Section 164 of the Internal Revenue Code if the trust
9         or estate is claiming the same tax for purposes of the
10         Illinois foreign tax credit under Section 601 of this
11         Act;
12             (G) An amount equal to the amount of the capital
13         gain deduction allowable under the Internal Revenue
14         Code, to the extent deducted from gross income in the
15         computation of taxable income;
16             (G-5) For taxable years ending after December 31,
17         1997, an amount equal to any eligible remediation costs
18         that the trust or estate deducted in computing adjusted
19         gross income and for which the trust or estate claims a
20         credit under subsection (l) of Section 201;
21             (G-10) For taxable years 2001 and thereafter, an
22         amount equal to the bonus depreciation deduction (30%
23         of the adjusted basis of the qualified property) taken
24         on the taxpayer's federal income tax return for the
25         taxable year under subsection (k) of Section 168 of the
26         Internal Revenue Code; and
27             (G-11) If the taxpayer reports a capital gain or
28         loss on the taxpayer's federal income tax return for
29         the taxable year based on a sale or transfer of
30         property for which the taxpayer was required in any
31         taxable year to make an addition modification under
32         subparagraph (G-10), then an amount equal to the
33         aggregate amount of the deductions taken in all taxable
34         years under subparagraph (R) with respect to that

 

 

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1         property.
2             The taxpayer is required to make the addition
3         modification under this subparagraph only once with
4         respect to any one piece of property;
5             (G-12) For taxable years ending on or after
6         December 31, 2004, an amount equal to the amount
7         otherwise allowed as a deduction in computing base
8         income for interest paid, accrued, or incurred,
9         directly or indirectly, to a foreign person who would
10         be a member of the same unitary business group but for
11         the fact that the foreign person's business activity
12         outside the United States is 80% or more of the foreign
13         person's total business activity. The addition
14         modification required by this subparagraph shall be
15         reduced to the extent that dividends were included in
16         base income of the unitary group for the same taxable
17         year and received by the taxpayer or by a member of the
18         taxpayer's unitary business group (including amounts
19         included in gross income pursuant to Sections 951
20         through 964 of the Internal Revenue Code and amounts
21         included in gross income under Section 78 of the
22         Internal Revenue Code) with respect to the stock of the
23         same person to whom the interest was paid, accrued, or
24         incurred.
25             This paragraph shall not apply to the following:
26                 (i) an item of interest paid, accrued, or
27             incurred, directly or indirectly, to a foreign
28             person who is subject in a foreign country or
29             state, other than a state which requires mandatory
30             unitary reporting, to a tax on or measured by net
31             income with respect to such interest; or
32                 (ii) an item of interest paid, accrued, or
33             incurred, directly or indirectly, to a foreign
34             person if the taxpayer can establish, based on a

 

 

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1             preponderance of the evidence, both of the
2             following:
3                     (a) the foreign person, during the same
4                 taxable year, paid, accrued, or incurred, the
5                 interest to a person that is not a related
6                 member, and
7                     (b) the transaction giving rise to the
8                 interest expense between the taxpayer and the
9                 foreign person did not have as a principal
10                 purpose the avoidance of Illinois income tax,
11                 and is paid pursuant to a contract or agreement
12                 that reflects an arm's-length interest rate
13                 and terms; or
14                 (iii) the taxpayer can establish, based on
15             clear and convincing evidence, that the interest
16             paid, accrued, or incurred relates to a contract or
17             agreement entered into at arm's-length rates and
18             terms and the principal purpose for the payment is
19             not federal or Illinois tax avoidance; or
20                 (iv) an item of interest paid, accrued, or
21             incurred, directly or indirectly, to a foreign
22             person if the taxpayer establishes by clear and
23             convincing evidence that the adjustments are
24             unreasonable; or if the taxpayer and the Director
25             agree in writing to the application or use of an
26             alternative method of apportionment under Section
27             304(f).
28                 Nothing in this subsection shall preclude the
29             Director from making any other adjustment
30             otherwise allowed under Section 404 of this Act for
31             any tax year beginning after the effective date of
32             this amendment provided such adjustment is made
33             pursuant to regulation adopted by the Department
34             and such regulations provide methods and standards

 

 

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1             by which the Department will utilize its authority
2             under Section 404 of this Act;
3             (G-13) For taxable years ending on or after
4         December 31, 2004, an amount equal to the amount of
5         intangible expenses and costs otherwise allowed as a
6         deduction in computing base income, and that were paid,
7         accrued, or incurred, directly or indirectly, to a
8         foreign person who would be a member of the same
9         unitary business group but for the fact that the
10         foreign person's business activity outside the United
11         States is 80% or more of that person's total business
12         activity. The addition modification required by this
13         subparagraph shall be reduced to the extent that
14         dividends were included in base income of the unitary
15         group for the same taxable year and received by the
16         taxpayer or by a member of the taxpayer's unitary
17         business group (including amounts included in gross
18         income pursuant to Sections 951 through 964 of the
19         Internal Revenue Code and amounts included in gross
20         income under Section 78 of the Internal Revenue Code)
21         with respect to the stock of the same person to whom
22         the intangible expenses and costs were directly or
23         indirectly paid, incurred, or accrued. The preceding
24         sentence shall not apply to the extent that the same
25         dividends caused a reduction to the addition
26         modification required under Section 203(c)(2)(G-12) of
27         this Act. As used in this subparagraph, the term
28         "intangible expenses and costs" includes: (1)
29         expenses, losses, and costs for or related to the
30         direct or indirect acquisition, use, maintenance or
31         management, ownership, sale, exchange, or any other
32         disposition of intangible property; (2) losses
33         incurred, directly or indirectly, from factoring
34         transactions or discounting transactions; (3) royalty,

 

 

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1         patent, technical, and copyright fees; (4) licensing
2         fees; and (5) other similar expenses and costs. For
3         purposes of this subparagraph, "intangible property"
4         includes patents, patent applications, trade names,
5         trademarks, service marks, copyrights, mask works,
6         trade secrets, and similar types of intangible assets.
7             This paragraph shall not apply to the following:
8                 (i) any item of intangible expenses or costs
9             paid, accrued, or incurred, directly or
10             indirectly, from a transaction with a foreign
11             person who is subject in a foreign country or
12             state, other than a state which requires mandatory
13             unitary reporting, to a tax on or measured by net
14             income with respect to such item; or
15                 (ii) any item of intangible expense or cost
16             paid, accrued, or incurred, directly or
17             indirectly, if the taxpayer can establish, based
18             on a preponderance of the evidence, both of the
19             following:
20                     (a) the foreign person during the same
21                 taxable year paid, accrued, or incurred, the
22                 intangible expense or cost to a person that is
23                 not a related member, and
24                     (b) the transaction giving rise to the
25                 intangible expense or cost between the
26                 taxpayer and the foreign person did not have as
27                 a principal purpose the avoidance of Illinois
28                 income tax, and is paid pursuant to a contract
29                 or agreement that reflects arm's-length terms;
30                 or
31                 (iii) any item of intangible expense or cost
32             paid, accrued, or incurred, directly or
33             indirectly, from a transaction with a foreign
34             person if the taxpayer establishes by clear and

 

 

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1             convincing evidence, that the adjustments are
2             unreasonable; or if the taxpayer and the Director
3             agree in writing to the application or use of an
4             alternative method of apportionment under Section
5             304(f);
6                 Nothing in this subsection shall preclude the
7             Director from making any other adjustment
8             otherwise allowed under Section 404 of this Act for
9             any tax year beginning after the effective date of
10             this amendment provided such adjustment is made
11             pursuant to regulation adopted by the Department
12             and such regulations provide methods and standards
13             by which the Department will utilize its authority
14             under Section 404 of this Act;
15     and by deducting from the total so obtained the sum of the
16     following amounts:
17             (H) An amount equal to all amounts included in such
18         total pursuant to the provisions of Sections 402(a),
19         402(c), 403(a), 403(b), 406(a), 407(a) and 408 of the
20         Internal Revenue Code or included in such total as
21         distributions under the provisions of any retirement
22         or disability plan for employees of any governmental
23         agency or unit, or retirement payments to retired
24         partners, which payments are excluded in computing net
25         earnings from self employment by Section 1402 of the
26         Internal Revenue Code and regulations adopted pursuant
27         thereto;
28             (I) The valuation limitation amount;
29             (J) An amount equal to the amount of any tax
30         imposed by this Act which was refunded to the taxpayer
31         and included in such total for the taxable year;
32             (K) An amount equal to all amounts included in
33         taxable income as modified by subparagraphs (A), (B),
34         (C), (D), (E), (F) and (G) which are exempt from

 

 

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1         taxation by this State either by reason of its statutes
2         or 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 obligations
6         from the tax imposed under this Act, the amount
7         exempted shall be the interest net of bond premium
8         amortization;
9             (L) With the exception of any amounts subtracted
10         under subparagraph (K), an amount equal to the sum of
11         all amounts disallowed as deductions by (i) Sections
12         171(a) (2) and 265(a)(2) of the Internal Revenue Code,
13         as now or hereafter amended, and all amounts of
14         expenses allocable to interest and disallowed as
15         deductions by Section 265(1) of the Internal Revenue
16         Code of 1954, as now or hereafter amended; and (ii) for
17         taxable years ending on or after August 13, 1999,
18         Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of
19         the Internal Revenue Code; the provisions of this
20         subparagraph are exempt from the provisions of Section
21         250;
22             (M) An amount equal to those dividends included in
23         such total which were paid by a corporation which
24         conducts business operations in an Enterprise Zone or
25         zones created under the Illinois Enterprise Zone Act
26         or a River Edge Redevelopment Zone or zones created
27         under the River Edge Redevelopment Zone Act and
28         conducts substantially all of its operations in an
29         Enterprise Zone or Zones or a River Edge Redevelopment
30         Zone or zones. This subparagraph (M) is exempt from the
31         provisions of Section 250;
32             (N) An amount equal to any contribution made to a
33         job training project established pursuant to the Tax
34         Increment Allocation Redevelopment Act;

 

 

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1             (O) An amount equal to those dividends included in
2         such total that were paid by a corporation that
3         conducts business operations in a federally designated
4         Foreign Trade Zone or Sub-Zone and that is designated a
5         High Impact Business located in Illinois; provided
6         that dividends eligible for the deduction provided in
7         subparagraph (M) of paragraph (2) of this subsection
8         shall not be eligible for the deduction provided under
9         this subparagraph (O);
10             (P) An amount equal to the amount of the deduction
11         used to compute the federal income tax credit for
12         restoration of substantial amounts held under claim of
13         right for the taxable year pursuant to Section 1341 of
14         the Internal Revenue Code of 1986;
15             (Q) For taxable year 1999 and thereafter, an amount
16         equal to the amount of any (i) distributions, to the
17         extent includible in gross income for federal income
18         tax purposes, made to the taxpayer because of his or
19         her status as a victim of persecution for racial or
20         religious reasons by Nazi Germany or any other Axis
21         regime or as an heir of the victim and (ii) items of
22         income, to the extent includible in gross income for
23         federal income tax purposes, attributable to, derived
24         from or in any way related to assets stolen from,
25         hidden from, or otherwise lost to a victim of
26         persecution for racial or religious reasons by Nazi
27         Germany or any other Axis regime immediately prior to,
28         during, and immediately after World War II, including,
29         but not limited to, interest on the proceeds receivable
30         as insurance under policies issued to a victim of
31         persecution for racial or religious reasons by Nazi
32         Germany or any other Axis regime by European insurance
33         companies immediately prior to and during World War II;
34         provided, however, this subtraction from federal

 

 

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1         adjusted gross income does not apply to assets acquired
2         with such assets or with the proceeds from the sale of
3         such assets; provided, further, this paragraph shall
4         only apply to a taxpayer who was the first recipient of
5         such assets after their recovery and who is a victim of
6         persecution for racial or religious reasons by Nazi
7         Germany or any other Axis regime or as an heir of the
8         victim. The amount of and the eligibility for any
9         public assistance, benefit, or similar entitlement is
10         not affected by the inclusion of items (i) and (ii) of
11         this paragraph in gross income for federal income tax
12         purposes. This paragraph is exempt from the provisions
13         of Section 250;
14             (R) For taxable years 2001 and thereafter, for the
15         taxable year in which the bonus depreciation deduction
16         (30% of the adjusted basis of the qualified property)
17         is taken on the taxpayer's federal income tax return
18         under subsection (k) of Section 168 of the Internal
19         Revenue Code and for each applicable taxable year
20         thereafter, an amount equal to "x", where:
21                 (1) "y" equals the amount of the depreciation
22             deduction taken for the taxable year on the
23             taxpayer's federal income tax return on property
24             for which the bonus depreciation deduction (30% of
25             the adjusted basis of the qualified property) was
26             taken in any year under subsection (k) of Section
27             168 of the Internal Revenue Code, but not including
28             the bonus depreciation deduction; and
29                 (2) "x" equals "y" multiplied by 30 and then
30             divided by 70 (or "y" multiplied by 0.429).
31             The aggregate amount deducted under this
32         subparagraph in all taxable years for any one piece of
33         property may not exceed the amount of the bonus
34         depreciation deduction (30% of the adjusted basis of

 

 

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1         the qualified property) taken on that property on the
2         taxpayer's federal income tax return under subsection
3         (k) of Section 168 of the Internal Revenue Code;
4             (S) If the taxpayer reports a capital gain or loss
5         on the taxpayer's federal income tax return for the
6         taxable year based on a sale or transfer of property
7         for which the taxpayer was required in any taxable year
8         to make an addition modification under subparagraph
9         (G-10), then an amount equal to that addition
10         modification.
11             The taxpayer is allowed to take the deduction under
12         this subparagraph only once with respect to any one
13         piece of property;
14             (T) The amount of (i) any interest income (net of
15         the deductions allocable thereto) taken into account
16         for the taxable year with respect to a transaction with
17         a taxpayer that is required to make an addition
18         modification with respect to such transaction under
19         Section 203(a)(2)(D-17), 203(b)(2)(E-12),
20         203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
21         the amount of such addition modification and (ii) any
22         income from intangible property (net of the deductions
23         allocable thereto) taken into account for the taxable
24         year with respect to a transaction with a taxpayer that
25         is required to make an addition modification with
26         respect to such transaction under Section
27         203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
28         203(d)(2)(D-8), but not to exceed the amount of such
29         addition modification;
30             (U) An amount equal to the interest income taken
31         into account for the taxable year (net of the
32         deductions allocable thereto) with respect to
33         transactions with a foreign person who would be a
34         member of the taxpayer's unitary business group but for

 

 

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1         the fact the foreign person's business activity
2         outside the United States is 80% or more of that
3         person's total business activity, but not to exceed the
4         addition modification required to be made for the same
5         taxable year under Section 203(c)(2)(G-12) for
6         interest paid, accrued, or incurred, directly or
7         indirectly, to the same foreign person; and
8             (V) An amount equal to the income from intangible
9         property taken into account for the taxable year (net
10         of the deductions allocable thereto) with respect to
11         transactions with a foreign person who would be a
12         member of the taxpayer's unitary business group but for
13         the fact that the foreign person's business activity
14         outside the United States is 80% or more of that
15         person's total business activity, but not to exceed the
16         addition modification required to be made for the same
17         taxable year under Section 203(c)(2)(G-13) for
18         intangible expenses and costs paid, accrued, or
19         incurred, directly or indirectly, to the same foreign
20         person.
21         (3) Limitation. The amount of any modification
22     otherwise required under this subsection shall, under
23     regulations prescribed by the Department, be adjusted by
24     any amounts included therein which were properly paid,
25     credited, or required to be distributed, or permanently set
26     aside for charitable purposes pursuant to Internal Revenue
27     Code Section 642(c) during the taxable year.
 
28     (d) Partnerships.
29         (1) In general. In the case of a partnership, base
30     income means an amount equal to the taxpayer's taxable
31     income for the taxable year as modified by paragraph (2).
32         (2) Modifications. The taxable income referred to in
33     paragraph (1) shall be modified by adding thereto the sum

 

 

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1     of the following amounts:
2             (A) An amount equal to all amounts paid or accrued
3         to the taxpayer as interest or dividends during the
4         taxable year to the extent excluded from gross income
5         in the computation of taxable income;
6             (B) An amount equal to the amount of tax imposed by
7         this Act to the extent deducted from gross income for
8         the taxable year;
9             (C) The amount of deductions allowed to the
10         partnership pursuant to Section 707 (c) of the Internal
11         Revenue Code in calculating its taxable income;
12             (D) An amount equal to the amount of the capital
13         gain deduction allowable under the Internal Revenue
14         Code, to the extent deducted from gross income in the
15         computation of taxable income;
16             (D-5) For taxable years 2001 and thereafter, an
17         amount equal to the bonus depreciation deduction (30%
18         of the adjusted basis of the qualified property) taken
19         on the taxpayer's federal income tax return for the
20         taxable year under subsection (k) of Section 168 of the
21         Internal Revenue Code;
22             (D-6) If the taxpayer reports a capital gain or
23         loss on the taxpayer's federal income tax return for
24         the taxable year based on a sale or transfer of
25         property for which the taxpayer was required in any
26         taxable year to make an addition modification under
27         subparagraph (D-5), then an amount equal to the
28         aggregate amount of the deductions taken in all taxable
29         years under subparagraph (O) with respect to that
30         property.
31             The taxpayer is required to make the addition
32         modification under this subparagraph only once with
33         respect to any one piece of property;
34             (D-7) For taxable years ending on or after December

 

 

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1         31, 2004, an amount equal to the amount otherwise
2         allowed as a deduction in computing base income for
3         interest paid, accrued, or incurred, directly or
4         indirectly, to a foreign person who would be a member
5         of the same unitary business group but for the fact the
6         foreign person's business activity outside the United
7         States is 80% or more of the foreign person's total
8         business activity. The addition modification required
9         by this subparagraph shall be reduced to the extent
10         that dividends were included in base income of the
11         unitary group for the same taxable year and received by
12         the taxpayer or by a member of the taxpayer's unitary
13         business group (including amounts included in gross
14         income pursuant to Sections 951 through 964 of the
15         Internal Revenue Code and amounts included in gross
16         income under Section 78 of the Internal Revenue Code)
17         with respect to the stock of the same person to whom
18         the interest was paid, accrued, or incurred.
19             This paragraph shall not apply to the following:
20                 (i) an item of interest paid, accrued, or
21             incurred, directly or indirectly, to a foreign
22             person who is subject in a foreign country or
23             state, other than a state which requires mandatory
24             unitary reporting, to a tax on or measured by net
25             income with respect to such interest; or
26                 (ii) an item of interest paid, accrued, or
27             incurred, directly or indirectly, to a foreign
28             person if the taxpayer can establish, based on a
29             preponderance of the evidence, both of the
30             following:
31                     (a) the foreign person, during the same
32                 taxable year, paid, accrued, or incurred, the
33                 interest to a person that is not a related
34                 member, and

 

 

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1                     (b) the transaction giving rise to the
2                 interest expense between the taxpayer and the
3                 foreign person did not have as a principal
4                 purpose the avoidance of Illinois income tax,
5                 and is paid pursuant to a contract or agreement
6                 that reflects an arm's-length interest rate
7                 and terms; or
8                 (iii) the taxpayer can establish, based on
9             clear and convincing evidence, that the interest
10             paid, accrued, or incurred relates to a contract or
11             agreement entered into at arm's-length rates and
12             terms and the principal purpose for the payment is
13             not federal or Illinois tax avoidance; or
14                 (iv) an item of interest paid, accrued, or
15             incurred, directly or indirectly, to a foreign
16             person if the taxpayer establishes by clear and
17             convincing evidence that the adjustments are
18             unreasonable; or if the taxpayer and the Director
19             agree in writing to the application or use of an
20             alternative method of apportionment under Section
21             304(f).
22                 Nothing in this subsection shall preclude the
23             Director from making any other adjustment
24             otherwise allowed under Section 404 of this Act for
25             any tax year beginning after the effective date of
26             this amendment provided such adjustment is made
27             pursuant to regulation adopted by the Department
28             and such regulations provide methods and standards
29             by which the Department will utilize its authority
30             under Section 404 of this Act; and
31             (D-8) For taxable years ending on or after December
32         31, 2004, an amount equal to the amount of intangible
33         expenses and costs otherwise allowed as a deduction in
34         computing base income, and that were paid, accrued, or

 

 

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1         incurred, directly or indirectly, to a foreign person
2         who would be a member of the same unitary business
3         group but for the fact that the foreign person's
4         business activity outside the United States is 80% or
5         more of that person's total business activity. The
6         addition modification required by this subparagraph
7         shall be reduced to the extent that dividends were
8         included in base income of the unitary group for the
9         same taxable year and received by the taxpayer or by a
10         member of the taxpayer's unitary business group
11         (including amounts included in gross income pursuant
12         to Sections 951 through 964 of the Internal Revenue
13         Code and amounts included in gross income under Section
14         78 of the Internal Revenue Code) with respect to the
15         stock of the same person to whom the intangible
16         expenses and costs were directly or indirectly paid,
17         incurred or accrued. The preceding sentence shall not
18         apply to the extent that the same dividends caused a
19         reduction to the addition modification required under
20         Section 203(d)(2)(D-7) of this Act. As used in this
21         subparagraph, the term "intangible expenses and costs"
22         includes (1) expenses, losses, and costs for, or
23         related to, the direct or indirect acquisition, use,
24         maintenance or management, ownership, sale, exchange,
25         or any other disposition of intangible property; (2)
26         losses incurred, directly or indirectly, from
27         factoring transactions or discounting transactions;
28         (3) royalty, patent, technical, and copyright fees;
29         (4) licensing fees; and (5) other similar expenses and
30         costs. For purposes of this subparagraph, "intangible
31         property" includes patents, patent applications, trade
32         names, trademarks, service marks, copyrights, mask
33         works, trade secrets, and similar types of intangible
34         assets;

 

 

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1             This paragraph shall not apply to the following:
2                 (i) any item of intangible expenses or costs
3             paid, accrued, or incurred, directly or
4             indirectly, from a transaction with a foreign
5             person who is subject in a foreign country or
6             state, other than a state which requires mandatory
7             unitary reporting, to a tax on or measured by net
8             income with respect to such item; or
9                 (ii) any item of intangible expense or cost
10             paid, accrued, or incurred, directly or
11             indirectly, if the taxpayer can establish, based
12             on a preponderance of the evidence, both of the
13             following:
14                     (a) the foreign person during the same
15                 taxable year paid, accrued, or incurred, the
16                 intangible expense or cost to a person that is
17                 not a related member, and
18                     (b) the transaction giving rise to the
19                 intangible expense or cost between the
20                 taxpayer and the foreign person did not have as
21                 a principal purpose the avoidance of Illinois
22                 income tax, and is paid pursuant to a contract
23                 or agreement that reflects arm's-length terms;
24                 or
25                 (iii) any item of intangible expense or cost
26             paid, accrued, or incurred, directly or
27             indirectly, from a transaction with a foreign
28             person if the taxpayer establishes by clear and
29             convincing evidence, that the adjustments are
30             unreasonable; or if the taxpayer and the Director
31             agree in writing to the application or use of an
32             alternative method of apportionment under Section
33             304(f);
34                 Nothing in this subsection shall preclude the

 

 

09400SB0017ham003 - 111 - LRB094 05351 BDD 58378 a

1             Director from making any other adjustment
2             otherwise allowed under Section 404 of this Act for
3             any tax year beginning after the effective date of
4             this amendment provided such adjustment is made
5             pursuant to regulation adopted by the Department
6             and such regulations provide methods and standards
7             by which the Department will utilize its authority
8             under Section 404 of this Act;
9     and by deducting from the total so obtained the following
10     amounts:
11             (E) The valuation limitation amount;
12             (F) An amount equal to the amount of any tax
13         imposed by this Act which was refunded to the taxpayer
14         and included in such total for the taxable year;
15             (G) An amount equal to all amounts included in
16         taxable income as modified by subparagraphs (A), (B),
17         (C) and (D) which are exempt from taxation by this
18         State either by reason of its statutes or Constitution
19         or by reason of the Constitution, treaties or statutes
20         of the United States; provided that, in the case of any
21         statute of this State that exempts income derived from
22         bonds or other obligations from the tax imposed under
23         this Act, the amount exempted shall be the interest net
24         of bond premium amortization;
25             (H) Any income of the partnership which
26         constitutes personal service income as defined in
27         Section 1348 (b) (1) of the Internal Revenue Code (as
28         in effect December 31, 1981) or a reasonable allowance
29         for compensation paid or accrued for services rendered
30         by partners to the partnership, whichever is greater;
31             (I) An amount equal to all amounts of income
32         distributable to an entity subject to the Personal
33         Property Tax Replacement Income Tax imposed by
34         subsections (c) and (d) of Section 201 of this Act

 

 

09400SB0017ham003 - 112 - LRB094 05351 BDD 58378 a

1         including amounts distributable to organizations
2         exempt from federal income tax by reason of Section
3         501(a) of the Internal Revenue Code;
4             (J) With the exception of any amounts subtracted
5         under subparagraph (G), an amount equal to the sum of
6         all amounts disallowed as deductions by (i) Sections
7         171(a) (2), and 265(2) of the Internal Revenue Code of
8         1954, as now or hereafter amended, and all amounts of
9         expenses allocable to interest and disallowed as
10         deductions by Section 265(1) of the Internal Revenue
11         Code, as now or hereafter amended; and (ii) for taxable
12         years ending on or after August 13, 1999, Sections
13         171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
14         Internal Revenue Code; the provisions of this
15         subparagraph are exempt from the provisions of Section
16         250;
17             (K) An amount equal to those dividends included in
18         such total which were paid by a corporation which
19         conducts business operations in an Enterprise Zone or
20         zones created under the Illinois Enterprise Zone Act,
21         enacted by the 82nd General Assembly, or a River Edge
22         Redevelopment Zone or zones created under the Rive Edge
23         Redevelopment Zone Act and conducts substantially all
24         of its operations in an Enterprise Zone or Zones or
25         from a River Edge Redevelopment Zone or zones. This
26         subparagraph (K) is exempt from the provisions of
27         Section 250;
28             (L) An amount equal to any contribution made to a
29         job training project established pursuant to the Real
30         Property Tax Increment Allocation Redevelopment Act;
31             (M) An amount equal to those dividends included in
32         such total that were paid by a corporation that
33         conducts business operations in a federally designated
34         Foreign Trade Zone or Sub-Zone and that is designated a

 

 

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1         High Impact Business located in Illinois; provided
2         that dividends eligible for the deduction provided in
3         subparagraph (K) of paragraph (2) of this subsection
4         shall not be eligible for the deduction provided under
5         this subparagraph (M);
6             (N) An amount equal to the amount of the deduction
7         used to compute the federal income tax credit for
8         restoration of substantial amounts held under claim of
9         right for the taxable year pursuant to Section 1341 of
10         the Internal Revenue Code of 1986;
11             (O) For taxable years 2001 and thereafter, for the
12         taxable year in which the bonus depreciation deduction
13         (30% of the adjusted basis of the qualified property)
14         is taken on the taxpayer's federal income tax return
15         under subsection (k) of Section 168 of the Internal
16         Revenue Code and for each applicable taxable year
17         thereafter, an amount equal to "x", where:
18                 (1) "y" equals the amount of the depreciation
19             deduction taken for the taxable year on the
20             taxpayer's federal income tax return on property
21             for which the bonus depreciation deduction (30% of
22             the adjusted basis of the qualified property) was
23             taken in any year under subsection (k) of Section
24             168 of the Internal Revenue Code, but not including
25             the bonus depreciation deduction; and
26                 (2) "x" equals "y" multiplied by 30 and then
27             divided by 70 (or "y" multiplied by 0.429).
28             The aggregate amount deducted under this
29         subparagraph in all taxable years for any one piece of
30         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 the
33         taxpayer's federal income tax return under subsection
34         (k) of Section 168 of the Internal Revenue Code;

 

 

09400SB0017ham003 - 114 - LRB094 05351 BDD 58378 a

1             (P) If the taxpayer reports a capital gain or loss
2         on the taxpayer's federal income tax return for the
3         taxable year based on a sale or transfer of property
4         for which the taxpayer was required in any taxable year
5         to make an addition modification under subparagraph
6         (D-5), then an amount equal to that addition
7         modification.
8             The taxpayer is allowed to take the deduction under
9         this subparagraph only once with respect to any one
10         piece of property;
11             (Q) The amount of (i) any interest income (net of
12         the deductions allocable thereto) taken into account
13         for the taxable year with respect to a transaction with
14         a taxpayer that is required to make an addition
15         modification with respect to such transaction under
16         Section 203(a)(2)(D-17), 203(b)(2)(E-12),
17         203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
18         the amount of such addition modification and (ii) any
19         income from intangible property (net of the deductions
20         allocable thereto) taken into account for the taxable
21         year with respect to a transaction with a taxpayer that
22         is required to make an addition modification with
23         respect to such transaction under Section
24         203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
25         203(d)(2)(D-8), but not to exceed the amount of such
26         addition modification;
27             (R) An amount equal to the interest income taken
28         into account for the taxable year (net of the
29         deductions allocable thereto) with respect to
30         transactions with a foreign person who would be a
31         member of the taxpayer's unitary business group but for
32         the fact that the foreign person's business activity
33         outside the United States is 80% or more of that
34         person's total business activity, but not to exceed the

 

 

09400SB0017ham003 - 115 - LRB094 05351 BDD 58378 a

1         addition modification required to be made for the same
2         taxable year under Section 203(d)(2)(D-7) for interest
3         paid, accrued, or incurred, directly or indirectly, to
4         the same foreign person; and
5             (S) An amount equal to the income from intangible
6         property taken into account for the taxable year (net
7         of the deductions allocable thereto) with respect to
8         transactions with a foreign person who would be a
9         member of the taxpayer's unitary business group but for
10         the fact that the foreign person's business activity
11         outside the United States is 80% or more of that
12         person's total business activity, but not to exceed the
13         addition modification required to be made for the same
14         taxable year under Section 203(d)(2)(D-8) for
15         intangible expenses and costs paid, accrued, or
16         incurred, directly or indirectly, to the same foreign
17         person.
 
18     (e) Gross income; adjusted gross income; taxable income.
19         (1) In general. Subject to the provisions of paragraph
20     (2) and subsection (b) (3), for purposes of this Section
21     and Section 803(e), a taxpayer's gross income, adjusted
22     gross income, or taxable income for the taxable year shall
23     mean the amount of gross income, adjusted gross income or
24     taxable income properly reportable for federal income tax
25     purposes for the taxable year under the provisions of the
26     Internal Revenue Code. Taxable income may be less than
27     zero. However, for taxable years ending on or after
28     December 31, 1986, net operating loss carryforwards from
29     taxable years ending prior to December 31, 1986, may not
30     exceed the sum of federal taxable income for the taxable
31     year before net operating loss deduction, plus the excess
32     of addition modifications over subtraction modifications
33     for the taxable year. For taxable years ending prior to

 

 

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1     December 31, 1986, taxable income may never be an amount in
2     excess of the net operating loss for the taxable year as
3     defined in subsections (c) and (d) of Section 172 of the
4     Internal Revenue Code, provided that when taxable income of
5     a corporation (other than a Subchapter S corporation),
6     trust, or estate is less than zero and addition
7     modifications, other than those provided by subparagraph
8     (E) of paragraph (2) of subsection (b) for corporations or
9     subparagraph (E) of paragraph (2) of subsection (c) for
10     trusts and estates, exceed subtraction modifications, an
11     addition modification must be made under those
12     subparagraphs for any other taxable year to which the
13     taxable income less than zero (net operating loss) is
14     applied under Section 172 of the Internal Revenue Code or
15     under subparagraph (E) of paragraph (2) of this subsection
16     (e) applied in conjunction with Section 172 of the Internal
17     Revenue Code.
18         (2) Special rule. For purposes of paragraph (1) of this
19     subsection, the taxable income properly reportable for
20     federal income tax purposes shall mean:
21             (A) Certain life insurance companies. In the case
22         of a life insurance company subject to the tax imposed
23         by Section 801 of the Internal Revenue Code, life
24         insurance company taxable income, plus the amount of
25         distribution from pre-1984 policyholder surplus
26         accounts as calculated under Section 815a of the
27         Internal Revenue Code;
28             (B) Certain other insurance companies. In the case
29         of mutual insurance companies subject to the tax
30         imposed by Section 831 of the Internal Revenue Code,
31         insurance company taxable income;
32             (C) Regulated investment companies. In the case of
33         a regulated investment company subject to the tax
34         imposed by Section 852 of the Internal Revenue Code,

 

 

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1         investment company taxable income;
2             (D) Real estate investment trusts. In the case of a
3         real estate investment trust subject to the tax imposed
4         by Section 857 of the Internal Revenue Code, real
5         estate investment trust taxable income;
6             (E) Consolidated corporations. In the case of a
7         corporation which is a member of an affiliated group of
8         corporations filing a consolidated income tax return
9         for the taxable year for federal income tax purposes,
10         taxable income determined as if such corporation had
11         filed a separate return for federal income tax purposes
12         for the taxable year and each preceding taxable year
13         for which it was a member of an affiliated group. For
14         purposes of this subparagraph, the taxpayer's separate
15         taxable income shall be determined as if the election
16         provided by Section 243(b) (2) of the Internal Revenue
17         Code had been in effect for all such years;
18             (F) Cooperatives. In the case of a cooperative
19         corporation or association, the taxable income of such
20         organization determined in accordance with the
21         provisions of Section 1381 through 1388 of the Internal
22         Revenue Code;
23             (G) Subchapter S corporations. In the case of: (i)
24         a Subchapter S corporation for which there is in effect
25         an election for the taxable year under Section 1362 of
26         the Internal Revenue Code, the taxable income of such
27         corporation determined in accordance with Section
28         1363(b) of the Internal Revenue Code, except that
29         taxable income shall take into account those items
30         which are required by Section 1363(b)(1) of the
31         Internal Revenue Code to be separately stated; and (ii)
32         a Subchapter S corporation for which there is in effect
33         a federal election to opt out of the provisions of the
34         Subchapter S Revision Act of 1982 and have applied

 

 

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1         instead the prior federal Subchapter S rules as in
2         effect on July 1, 1982, the taxable income of such
3         corporation determined in accordance with the federal
4         Subchapter S rules as in effect on July 1, 1982; and
5             (H) Partnerships. In the case of a partnership,
6         taxable income determined in accordance with Section
7         703 of the Internal Revenue Code, except that taxable
8         income shall take into account those items which are
9         required by Section 703(a)(1) to be separately stated
10         but which would be taken into account by an individual
11         in calculating his taxable income.
12         (3) Recapture of business expenses on disposition of
13     asset or business. Notwithstanding any other law to the
14     contrary, if in prior years income from an asset or
15     business has been classified as business income and in a
16     later year is demonstrated to be non-business income, then
17     all expenses, without limitation, deducted in such later
18     year and in the 2 immediately preceding taxable years
19     related to that asset or business that generated the
20     non-business income shall be added back and recaptured as
21     business income in the year of the disposition of the asset
22     or business. Such amount shall be apportioned to Illinois
23     using the greater of the apportionment fraction computed
24     for the business under Section 304 of this Act for the
25     taxable year or the average of the apportionment fractions
26     computed for the business under Section 304 of this Act for
27     the taxable year and for the 2 immediately preceding
28     taxable years.
29     (f) Valuation limitation amount.
30         (1) In general. The valuation limitation amount
31     referred to in subsections (a) (2) (G), (c) (2) (I) and
32     (d)(2) (E) is an amount equal to:
33             (A) The sum of the pre-August 1, 1969 appreciation
34         amounts (to the extent consisting of gain reportable

 

 

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

 

 

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1             (C) The Department shall prescribe such
2         regulations as may be necessary to carry out the
3         purposes of this paragraph.
 
4     (g) Double deductions. Unless specifically provided
5 otherwise, nothing in this Section shall permit the same item
6 to be deducted more than once.
 
7     (h) Legislative intention. Except as expressly provided by
8 this Section there shall be no modifications or limitations on
9 the amounts of income, gain, loss or deduction taken into
10 account in determining gross income, adjusted gross income or
11 taxable income for federal income tax purposes for the taxable
12 year, or in the amount of such items entering into the
13 computation of base income and net income under this Act for
14 such taxable year, whether in respect of property values as of
15 August 1, 1969 or otherwise.
16 (Source: P.A. 92-16, eff. 6-28-01; 92-244, eff. 8-3-01; 92-439,
17 eff. 8-17-01; 92-603, eff. 6-28-02; 92-626, eff. 7-11-02;
18 92-651, eff. 7-11-02; 92-846, eff. 8-23-02; 93-812, eff.
19 7-26-04; 93-840, eff. 7-30-04; revised 10-12-04.)
 
20     Section 90-20. The Use Tax Act is amended by changing
21 Section 12 as follows:
 
22     (35 ILCS 105/12)  (from Ch. 120, par. 439.12)
23     Sec. 12. Applicability of Retailers' Occupation Tax Act and
24 Uniform Penalty and Interest Act. All of the provisions of
25 Sections 1d, 1e, 1f, 1i, 1j, 1j.1, 1k, 1m, 1n, 1o, 2-54, 2a,
26 2b, 2c, 3, 4 (except that the time limitation provisions shall
27 run from the date when the tax is due rather than from the date
28 when gross receipts are received), 5 (except that the time
29 limitation provisions on the issuance of notices of tax
30 liability shall run from the date when the tax is due rather

 

 

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1 than from the date when gross receipts are received and except
2 that in the case of a failure to file a return required by this
3 Act, no notice of tax liability shall be issued on and after
4 each July 1 and January 1 covering tax due with that return
5 during any month or period more than 6 years before that July 1
6 or January 1, respectively), 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5h,
7 5j, 5k, 5l, 7, 8, 9, 10, 11 and 12 of the Retailers' Occupation
8 Tax Act and Section 3-7 of the Uniform Penalty and Interest
9 Act, which are not inconsistent with this Act, shall apply, as
10 far as practicable, to the subject matter of this Act to the
11 same extent as if such provisions were included herein.
12 (Source: P.A. 90-42, eff. 1-1-98; 90-792, eff. 1-1-99.)
 
13     Section 90-25. The Service Use Tax Act is amended by
14 changing Section 12 as follows:
 
15     (35 ILCS 110/12)  (from Ch. 120, par. 439.42)
16     Sec. 12. Applicability of Retailers' Occupation Tax Act and
17 Uniform Penalty and Interest Act. All of the provisions of
18 Sections 1d, 1e, 1f, 1i, 1j, 1j.1, 1k, 1m, 1n, 1o, 2-54, 2a,
19 2b, 2c, 3 (except as to the disposition by the Department of
20 the money collected under this Act), 4 (except that the time
21 limitation provisions shall run from the date when gross
22 receipts are received), 5 (except that the time limitation
23 provisions on the issuance of notices of tax liability shall
24 run from the date when the tax is due rather than from the date
25 when gross receipts are received and except that in the case of
26 a failure to file a return required by this Act, no notice of
27 tax liability shall be issued on and after July 1 and January 1
28 covering tax due with that return during any month or period
29 more than 6 years before that July 1 or January 1,
30 respectively), 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5j, 5k, 5l, 7, 8, 9,
31 10, 11 and 12 of the Retailers' Occupation Tax Act which are
32 not inconsistent with this Act, and Section 3-7 of the Uniform

 

 

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1 Penalty and Interest Act, shall apply, as far as practicable,
2 to the subject matter of this Act to the same extent as if such
3 provisions were included herein.
4 (Source: P.A. 90-42, eff. 1-1-98; 90-792, eff. 1-1-99.)
 
5     Section 90-30. The Service Occupation Tax Act is amended by
6 changing Section 12 as follows:
 
7     (35 ILCS 115/12)  (from Ch. 120, par. 439.112)
8     Sec. 12. All of the provisions of Sections 1d, 1e, 1f, 1i,
9 1j, 1j.1, 1k, 1m, 1n, 1o, 2-54, 2a, 2b, 2c, 3 (except as to the
10 disposition by the Department of the tax collected under this
11 Act), 4 (except that the time limitation provisions shall run
12 from the date when the tax is due rather than from the date
13 when gross receipts are received), 5 (except that the time
14 limitation provisions on the issuance of notices of tax
15 liability shall run from the date when the tax is due rather
16 than from the date when gross receipts are received), 5a, 5b,
17 5c, 5d, 5e, 5f, 5g, 5j, 5k, 5l, 7, 8, 9, 10, 11 and 12 of the
18 "Retailers' Occupation Tax Act" which are not inconsistent with
19 this Act, and Section 3-7 of the Uniform Penalty and Interest
20 Act shall apply, as far as practicable, to the subject matter
21 of this Act to the same extent as if such provisions were
22 included herein.
23 (Source: P.A. 90-42, eff. 1-1-98; 90-792, eff. 1-1-99.)
 
24     Section 90-35. The Retailers' Occupation Tax Act is amended
25 by adding Section 2-54 as follows:
 
26     (35 ILCS 120/2-54 new)
27     Sec. 2-54. Building materials exemption; River Edge
28 Redevelopment Zones. Each retailer that makes a qualified sale
29 of building materials to be incorporated into real estate
30 within a River Edge Redevelopment Zone in accordance with the

 

 

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1 River Edge Redevelopment Zone Act by remodeling,
2 rehabilitating, or new construction may deduct receipts from
3 those sales when calculating the tax imposed by this Act. For
4 purposes of this Section, "qualified sale" means a sale of
5 building materials that will be incorporated into real estate
6 as part of an industrial or commercial project for which a
7 Certificate of Eligibility for Sales Tax Exemption has been
8 issued by the corporate authorities of the municipality in
9 which the building project is located. To document the
10 exemption allowed under this Section, the retailer must obtain
11 from the purchaser a copy of the Certificate of Eligibility for
12 Sales Tax Exemption issued by the corporate authorities of the
13 municipality in which the real estate into which the building
14 materials will be incorporated is located. The Certificate of
15 Eligibility for Sales Tax Exemption must contain all of the
16 following:
17         (1) A statement that the commercial or industrial
18     project identified in the Certificate meets all the
19     requirements of the jurisdiction in which the project is
20     located.
21         (2) The location or address of the building project.
22         (3) The signature of the chief executive officer of the
23     municipality in which the building project is located, or
24     the chief executive officer's delegate.
25     In addition, the retailer must obtain a certificate from
26 the purchaser that contains all of the following:
27         (1) A statement that the building materials are being
28     purchased for incorporation into real estate located in a
29     River Edge Redevelopment Zone included in a redevelopment
30     project area in accordance with River Edge Redevelopment
31     Zone Act.
32         (2) The location or address of the real estate into
33     which the building materials will be incorporated.
34         (3) The name of the River Edge Redevelopment Zone in

 

 

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1     which that real estate is located.
2         (4) A description of the building materials being
3     purchased.
4         (5) The purchaser's signature and date of purchase.
5     The provisions of this Section are exempt from Section
6 2-70.
 
7     Section 90-40. The Property Tax Code is amended by changing
8 Section 18-170 as follows:
 
9     (35 ILCS 200/18-170)
10     Sec. 18-170. Enterprise zone and River Edge Redevelopment
11 Zone abatement. In addition to the authority to abate taxes
12 under Section 18-165, any taxing district, upon a majority vote
13 of its governing authority, may order the county clerk to abate
14 any portion of its taxes on property, or any class thereof,
15 located within an Enterprise Zone created under the Illinois
16 Enterprise Zone Act or a River Edge Redevelopment Zone created
17 under the River Edge Redevelopment Zone Act, and upon which
18 either new improvements have been constructed or existing
19 improvements have been renovated or rehabilitated after
20 December 7, 1982. However, any abatement of taxes on any parcel
21 shall not exceed the amount attributable to the construction of
22 the improvements and the renovation or rehabilitation of
23 existing improvements on the parcel. In the case of property
24 within a redevelopment area created under the Tax Increment
25 Allocation Redevelopment Act, the abatement shall not apply
26 unless a business enterprise or individual with regard to new
27 improvements or renovated or rehabilitated improvements has
28 met the requirements of Section 5.4.1 of the Illinois
29 Enterprise Zone Act or under Section 10-5.4.1 of the River Edge
30 Redevelopment Zone Act. If an abatement is discontinued under
31 this Section, a municipality shall notify the county clerk and
32 the board of review or board of appeals of the change in

 

 

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1 writing not later than July 1 of the assessment year to be
2 first affected by the change. However, within a county economic
3 development project area created under the County Economic
4 Development Project Area Property Tax Allocation Act, any
5 municipality or county which has adopted tax increment
6 allocation financing under the Tax Increment Allocation
7 Redevelopment Act or the County Economic Development Project
8 Area Tax Increment Allocation Act may abate any portion of its
9 taxes as provided in this Section. Any other taxing district
10 within the county economic development project area may order
11 any portion or all of its taxes abated as provided above if the
12 county or municipality which created the tax increment district
13 has agreed, in writing, to the abatement.
14     A copy of an abatement order adopted under this Section
15 shall be delivered to the county clerk and to the board of
16 review or board of appeals not later than July 1 of the
17 assessment year to be first affected by the order. If it is
18 delivered on or after that date, it will first affect the taxes
19 extended on the assessment of the following year. The board of
20 review or board of appeals shall, each time the assessment
21 books are delivered to the county clerk, also deliver a list of
22 parcels affected by an abatement and the assessed value
23 attributable to new improvements or to the renovation or
24 rehabilitation of existing improvements.
25 (Source: P.A. 89-126, eff. 7-11-95; 89-671, eff. 8-14-96;
26 90-258, eff. 7-30-97.)
 
27     Section 90-45. The Environmental Protection Act is amended
28 by changing Sections 58.13 and 58.14 as follows:
 
29     (415 ILCS 5/58.13)
30     Sec. 58.13. Municipal Brownfields Redevelopment Grant
31 Program.
32     (a) (1) The Agency shall establish and administer a program

 

 

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1     of grants, to be known as the Municipal Brownfields
2     Redevelopment Grant Program, to provide municipalities in
3     Illinois with financial assistance to be used for
4     coordination of activities related to brownfields
5     redevelopment, including but not limited to identification
6     of brownfields sites, including those sites within River
7     Edge Redevelopment Zones, site investigation and
8     determination of remediation objectives and related plans
9     and reports, development of remedial action plans, and
10     implementation of remedial action plans and remedial
11     action completion reports. The plans and reports shall be
12     developed in accordance with Title XVII of this Act.
13         (2) Grants shall be awarded on a competitive basis
14     subject to availability of funding. Criteria for awarding
15     grants shall include, but shall not be limited to the
16     following:
17             (A) problem statement and needs assessment;
18             (B) community-based planning and involvement;
19             (C) implementation planning; and
20             (D) long-term benefits and sustainability.
21         (3) The Agency may give weight to geographic location
22     to enhance geographic distribution of grants across this
23     State.
24         (4) Except for grants to municipalities with
25     designated River Edge Redevelopment Zones, grants Grants
26     shall be limited to a maximum of $240,000, and no
27     municipality shall receive more than this amount under this
28     Section. For grants to municipalities with designated
29     River Edge Redevelopment Zones, grants shall be limited to
30     a maximum of $2,000,000 and no municipality shall receive
31     more than this amount under this Section.
32         (5) Grant amounts shall not exceed 70% of the project
33     amount, with the remainder to be provided by the
34     municipality as local matching funds.

 

 

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1     (b) The Agency shall have the authority to enter into any
2 contracts or agreements that may be necessary to carry out its
3 duties or responsibilities under this Section. The Agency shall
4 have the authority to adopt rules setting forth procedures and
5 criteria for administering the Municipal Brownfields
6 Redevelopment Grant Program. The rules adopted by the Agency
7 may include but shall not be limited to the following:
8         (1) purposes for which grants are available;
9         (2) application periods and content of applications;
10         (3) procedures and criteria for Agency review of grant
11     applications, grant approvals and denials, and grantee
12     acceptance;
13         (4) grant payment schedules;
14         (5) grantee responsibilities for work schedules, work
15     plans, reports, and record keeping;
16         (6) evaluation of grantee performance, including but
17     not limited to auditing and access to sites and records;
18         (7) requirements applicable to contracting and
19     subcontracting by the grantee;
20         (8) penalties for noncompliance with grant
21     requirements and conditions, including stop-work orders,
22     termination of grants, and recovery of grant funds;
23         (9) indemnification of this State and the Agency by the
24     grantee; and
25         (10) manner of compliance with the Local Government
26     Professional Services Selection Act.
27 (Source: P.A. 92-486, eff. 1-1-02; 92-715, eff. 7-23-02.)
 
28     (415 ILCS 5/58.14)
29     Sec. 58.14. Environmental Remediation Tax Credit review.
30     (a) Prior to applying for the Environmental Remediation Tax
31 Credit under Section 201 of the Illinois Income Tax Act,
32 Remediation Applicants shall first submit to the Agency an
33 application for review of remediation costs. The Agency shall

 

 

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1 review the application jointly with the Department of Commerce
2 and Economic Opportunity. The application and review process
3 shall be conducted in accordance with the requirements of this
4 Section and the rules adopted under subsection (g). A
5 preliminary review of the estimated remediation costs for
6 development and implementation of the Remedial Action Plan may
7 be obtained in accordance with subsection (d).
8     (b) No application for review shall be submitted until a No
9 Further Remediation Letter has been issued by the Agency and
10 recorded in the chain of title for the site in accordance with
11 Section 58.10. The Agency shall review the application to
12 determine whether the costs submitted are remediation costs,
13 and whether the costs incurred are reasonable. The application
14 shall be on forms prescribed and provided by the Agency. At a
15 minimum, the application shall include the following:
16         (1) information identifying the Remediation Applicant
17     and the site for which the tax credit is being sought and
18     the date of acceptance of the site into the Site
19     Remediation Program;
20         (2) a copy of the No Further Remediation Letter with
21     official verification that the letter has been recorded in
22     the chain of title for the site and a demonstration that
23     the site for which the application is submitted is the same
24     site as the one for which the No Further Remediation Letter
25     is issued;
26         (3) a demonstration that the release of the regulated
27     substances of concern for which the No Further Remediation
28     Letter was issued were not caused or contributed to in any
29     material respect by the Remediation Applicant. After the
30     Pollution Control Board rules are adopted pursuant to the
31     Illinois Administrative Procedure Act for the
32     administration and enforcement of Section 58.9 of the
33     Environmental Protection Act, determinations as to credit
34     availability shall be made consistent with those rules;

 

 

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1         (4) an itemization and documentation, including
2     receipts, of the remediation costs incurred;
3         (5) a demonstration that the costs incurred are
4     remediation costs as defined in this Act and its rules;
5         (6) a demonstration that the costs submitted for review
6     were incurred by the Remediation Applicant who received the
7     No Further Remediation Letter;
8         (7) an application fee in the amount set forth in
9     subsection (e) for each site for which review of
10     remediation costs is requested and, if applicable,
11     certification from the Department of Commerce and Economic
12     Opportunity Community Affairs that the site is located in
13     an enterprise zone;
14         (8) any other information deemed appropriate by the
15     Agency.
16     (c) Within 60 days after receipt by the Agency of an
17 application meeting the requirements of subsection (b), the
18 Agency shall issue a letter to the applicant approving,
19 disapproving, or modifying the remediation costs submitted in
20 the application. If the remediation costs are approved as
21 submitted, the Agency's letter shall state the amount of the
22 remediation costs to be applied toward the Environmental
23 Remediation Tax Credit. If an application is disapproved or
24 approved with modification of remediation costs, the Agency's
25 letter shall set forth the reasons for the disapproval or
26 modification and state the amount of the remediation costs, if
27 any, to be applied toward the Environmental Remediation Tax
28 Credit.
29     If a preliminary review of a budget plan has been obtained
30 under subsection (d), the Remediation Applicant may submit,
31 with the application and supporting documentation under
32 subsection (b), a copy of the Agency's final determination
33 accompanied by a certification that the actual remediation
34 costs incurred for the development and implementation of the

 

 

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1 Remedial Action Plan are equal to or less than the costs
2 approved in the Agency's final determination on the budget
3 plan. The certification shall be signed by the Remediation
4 Applicant and notarized. Based on that submission, the Agency
5 shall not be required to conduct further review of the costs
6 incurred for development and implementation of the Remedial
7 Action Plan and may approve costs as submitted.
8     Within 35 days after receipt of an Agency letter
9 disapproving or modifying an application for approval of
10 remediation costs, the Remediation Applicant may appeal the
11 Agency's decision to the Board in the manner provided for the
12 review of permits in Section 40 of this Act.
13     (d) (1) A Remediation Applicant may obtain a preliminary
14     review of estimated remediation costs for the development
15     and implementation of the Remedial Action Plan by
16     submitting a budget plan along with the Remedial Action
17     Plan. The budget plan shall be set forth on forms
18     prescribed and provided by the Agency and shall include but
19     shall not be limited to line item estimates of the costs
20     associated with each line item (such as personnel,
21     equipment, and materials) that the Remediation Applicant
22     anticipates will be incurred for the development and
23     implementation of the Remedial Action Plan. The Agency
24     shall review the budget plan along with the Remedial Action
25     Plan to determine whether the estimated costs submitted are
26     remediation costs and whether the costs estimated for the
27     activities are reasonable.
28         (2) If the Remedial Action Plan is amended by the
29     Remediation Applicant or as a result of Agency action, the
30     corresponding budget plan shall be revised accordingly and
31     resubmitted for Agency review.
32         (3) The budget plan shall be accompanied by the
33     applicable fee as set forth in subsection (e).
34         (4) Submittal of a budget plan shall be deemed an

 

 

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1     automatic 60-day waiver of the Remedial Action Plan review
2     deadlines set forth in this Section and its rules.
3         (5) Within the applicable period of review, the Agency
4     shall issue a letter to the Remediation Applicant
5     approving, disapproving, or modifying the estimated
6     remediation costs submitted in the budget plan. If a budget
7     plan is disapproved or approved with modification of
8     estimated remediation costs, the Agency's letter shall set
9     forth the reasons for the disapproval or modification.
10         (6) Within 35 days after receipt of an Agency letter
11     disapproving or modifying a budget plan, the Remediation
12     Applicant may appeal the Agency's decision to the Board in
13     the manner provided for the review of permits in Section 40
14     of this Act.
15     (e) The fees for reviews conducted under this Section are
16 in addition to any other fees or payments for Agency services
17 rendered pursuant to the Site Remediation Program and shall be
18 as follows:
19         (1) The fee for an application for review of
20     remediation costs shall be $1,000 for each site reviewed.
21         (2) The fee for the review of the budget plan submitted
22     under subsection (d) shall be $500 for each site reviewed.
23         (3) In the case of a Remediation Applicant submitting
24     for review total remediation costs of $100,000 or less for
25     a site located within a River Edge Redevelopment Zone an
26     enterprise zone (as set forth in paragraph (i) of
27     subsection (n) (l) of Section 201 of the Illinois Income
28     Tax Act), the fee for an application for review of
29     remediation costs shall be $250 for each site reviewed. For
30     those sites, there shall be no fee for review of a budget
31     plan under subsection (d).
32     The application fee shall be made payable to the State of
33 Illinois, for deposit into the Hazardous Waste Fund.
34     Pursuant to appropriation, the Agency shall use the fees

 

 

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1 collected under this subsection for development and
2 administration of the review program.
3     (f) The Agency shall have the authority to enter into any
4 contracts or agreements that may be necessary to carry out its
5 duties and responsibilities under this Section.
6     (g) Within 6 months after July 21, 1997, the Agency shall
7 propose rules prescribing procedures and standards for its
8 administration of this Section. Within 6 months after receipt
9 of the Agency's proposed rules, the Board shall adopt on second
10 notice, pursuant to Sections 27 and 28 of this Act and the
11 Illinois Administrative Procedure Act, rules that are
12 consistent with this Section. Prior to the effective date of
13 rules adopted under this Section, the Agency may conduct
14 reviews of applications under this Section and the Agency is
15 further authorized to distribute guidance documents on costs
16 that are eligible or ineligible as remediation costs.
17 (Source: P.A. 92-574, eff. 6-26-02; revised 12-6-03.)
 
18
ARTICLE 900.
19
SEVERABILITY; EFFECTIVE DATE

 
20     Section 900-5. Severability. The provisions of this Act are
21 severable under Section 1.31 of the Statute on Statutes.
 
22     Section 900-10. Effective date. This Act takes effect upon
23 becoming law.".