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1 | AN ACT concerning revenue.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 1. Short title. This Act may be cited as the | ||||||||||||||||||||||||||
5 | Distressed Areas Land Assemblage Tax Credit Act.
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6 | Section 5. Definitions. As used in this Section: | ||||||||||||||||||||||||||
7 | "Acquisition costs" means all costs and expenses incurred | ||||||||||||||||||||||||||
8 | in the acquisition of an eligible parcel. Acquisition costs | ||||||||||||||||||||||||||
9 | include, but are not limited to, the purchase price for the | ||||||||||||||||||||||||||
10 | eligible parcel, costs for title insurance and survey, | ||||||||||||||||||||||||||
11 | attorneys' fees, costs of environmental assessments, closing | ||||||||||||||||||||||||||
12 | costs, real estate brokerage fees, demolition costs of vacant | ||||||||||||||||||||||||||
13 | structures, relocation costs, and maintenance costs incurred | ||||||||||||||||||||||||||
14 | to maintain an acquired eligible parcel for a period of 5 years | ||||||||||||||||||||||||||
15 | after the acquisition of the eligible parcel. | ||||||||||||||||||||||||||
16 | "Applicant" means any person who has: | ||||||||||||||||||||||||||
17 | (1) incurred, within an eligible project area, | ||||||||||||||||||||||||||
18 | acquisition costs for the acquisition of land sufficient to | ||||||||||||||||||||||||||
19 | satisfy the requirements for an eligible project area; and | ||||||||||||||||||||||||||
20 | (2) been appointed or selected by a municipality as a | ||||||||||||||||||||||||||
21 | redeveloper or similar designation under an economic | ||||||||||||||||||||||||||
22 | incentive act to redevelop an urban renewal area or a | ||||||||||||||||||||||||||
23 | redevelopment area that includes all of an eligible project |
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1 | area or whose redevelopment plan or redevelopment area, | ||||||
2 | which encompasses all of an eligible project area, has been | ||||||
3 | approved or adopted under an economic incentive act. | ||||||
4 | "Certificate" means a tax credit certificate issued under | ||||||
5 | this Act. | ||||||
6 | "Condemnation proceedings" means any action taken by or on | ||||||
7 | behalf of an applicant to initiate an action in a court of | ||||||
8 | competent jurisdiction to use the power of eminent domain to | ||||||
9 | acquire a parcel within the eligible project area. Condemnation | ||||||
10 | proceedings include any and all actions taken after the | ||||||
11 | submission of a notice of intended acquisition to an owner of a | ||||||
12 | parcel within the eligible project area by a municipality or | ||||||
13 | any other person under the Eminent Domain Act. | ||||||
14 | "Department" means the Department of Commerce and Economic | ||||||
15 | Opportunity. | ||||||
16 | "Economic incentive act" means any provision of Illinois | ||||||
17 | law under which economic incentives are provided to | ||||||
18 | redevelopers of a parcel or parcels to redevelop the land, such | ||||||
19 | as tax abatement or payments in lieu of taxes, or redevelopment | ||||||
20 | plans or redevelopment projects approved or adopted which | ||||||
21 | include the use of economic incentives to redevelop the land. | ||||||
22 | "Eligible parcel" means a parcel that is located within an | ||||||
23 | eligible project area and that has been acquired prior to the | ||||||
24 | commencement of any condemnation proceedings within the | ||||||
25 | eligible project area brought by or on behalf of the applicant. | ||||||
26 | Any parcel acquired by the applicant from a municipality is not |
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1 | an eligible parcel. | ||||||
2 | "Eligible project area" means an area that satisfies all of | ||||||
3 | the following requirements: | ||||||
4 | (1) the eligible project area consists of at least 30 | ||||||
5 | acres for municipalities with populations of 75,000 or less | ||||||
6 | and 75 acres for all other municipalities and counties and | ||||||
7 | may include parcels within its boundaries that do not | ||||||
8 | constitute eligible parcels;
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9 | (2) at least 80% of the eligible project area is | ||||||
10 | located within a qualified census tract area, as designated | ||||||
11 | by the United States Department of Housing and Urban | ||||||
12 | Development under 26 U.S.C. Section 42; | ||||||
13 | (3) the eligible parcels acquired by the applicant | ||||||
14 | within an eligible project area total at least 20 acres for | ||||||
15 | municipalities with populations of 75,000 or less and 50 | ||||||
16 | acres for all other municipalities and counties, which may | ||||||
17 | consist of contiguous or noncontiguous parcels; | ||||||
18 | (4) with respect to an eligible project area located | ||||||
19 | within a municipality, the average number of parcels per | ||||||
20 | acre in an eligible project area are at least 2.5 for | ||||||
21 | municipalities with populations of 75,000 or less and 4 for | ||||||
22 | all other municipalities; and | ||||||
23 | (5) less than 5% of the acreage within the boundaries | ||||||
24 | of the eligible project area consist of owner-occupied | ||||||
25 | residences that the applicant has identified for | ||||||
26 | acquisition under the urban renewal plan or the |
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1 | redevelopment plan pursuant to which the applicant was | ||||||
2 | appointed or selected as the redeveloper or by
which the | ||||||
3 | person or entity was qualified as an applicant under this | ||||||
4 | Act on the date of the approval or adoption of such plan. | ||||||
5 | With respect to proposed project areas located within a | ||||||
6 | municipality with a population equal to or less than 50,000 | ||||||
7 | inhabitants, the requirements for an eligible project area may | ||||||
8 | be modified or waived as deemed necessary and reasonable by the | ||||||
9 | Department based upon information provided in the application | ||||||
10 | required under this Act. | ||||||
11 | "Interest costs" means all costs and expenses of an | ||||||
12 | applicant for loans incurred by the applicant to finance the | ||||||
13 | acquisition of an eligible parcel. Interest costs include, but | ||||||
14 | are not limited to, interest, loan fees, closing costs, and | ||||||
15 | attorneys' fees. | ||||||
16 | "Parcel" means a single lot or tract of land, and the | ||||||
17 | improvements thereon, owned by, or recorded as the property of, | ||||||
18 | one or more persons or entities. | ||||||
19 | Section 10. Income tax credit granted. Any applicant is | ||||||
20 | entitled to a credit against the taxes imposed under | ||||||
21 | subsections (a) and (b) of Section 201 of the Illinois Income | ||||||
22 | Tax Act in an amount equal to 50% of the acquisition costs and | ||||||
23 | 100% of the interest costs incurred for a period of 5 years | ||||||
24 | after the acquisition of an eligible parcel. No tax credits may | ||||||
25 | be certified under this Act until after January 1, 2009. |
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1 | Section 15. Carryforward; transferability; pass-through | ||||||
2 | entities. | ||||||
3 | (a) The credit may not be carried back. If the amount of | ||||||
4 | the credit exceeds the tax liability for the year, then the | ||||||
5 | excess may be carried forward and applied to the tax liability | ||||||
6 | of the 6 taxable years following the excess credit year. The | ||||||
7 | tax credit shall be applied to the earliest year for which | ||||||
8 | there is a tax liability. | ||||||
9 | (b) Applicants who are entitled to receive the credit may | ||||||
10 | transfer, sell, or assign the credits. | ||||||
11 | (c) For partners, shareholders of Subchapter S | ||||||
12 | corporations, and owners of limited liability companies, if the | ||||||
13 | liability company is treated as a partnership for purposes of | ||||||
14 | federal and State income taxation, there is allowed a credit | ||||||
15 | under this Section to be determined in accordance with the | ||||||
16 | determination of income and distributive share of income under | ||||||
17 | Sections 702 and 704 and Subchapter S of the Internal Revenue | ||||||
18 | Code. | ||||||
19 | Section 20. Purchase of the credit. A purchaser, | ||||||
20 | transferee, or assignee of the tax credits may use acquired | ||||||
21 | credits to offset up to 100% of the tax liabilities otherwise | ||||||
22 | imposed under subsections (a) and (b) of Section 201 of the | ||||||
23 | Illinois Income Tax Act. A seller, transferor, or assignor | ||||||
24 | shall perfect the transfer by notifying the Department in |
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1 | writing within 30 calendar days following the effective date of | ||||||
2 | the transfer and shall provide any information as may be | ||||||
3 | required by the Department to administer and to carry out the | ||||||
4 | provisions of this Act. | ||||||
5 | Section 25. Certification by the Department. To claim | ||||||
6 | credits authorized under this Act, an applicant must submit to | ||||||
7 | the Department an application for a certificate. The applicant | ||||||
8 | must identify the boundaries of the eligible project area in | ||||||
9 | the application. The Department shall verify that the applicant | ||||||
10 | has submitted a valid application in the form and format | ||||||
11 | required by the Department. On an annual basis, an applicant | ||||||
12 | may file for the credit for the acquisition costs and for the | ||||||
13 | credit for the interest costs, subject to the limitations of | ||||||
14 | this section. If an applicant applying for the tax credit meets | ||||||
15 | the criteria required under this Act, the Department shall | ||||||
16 | issue a certificate in the appropriate amount. | ||||||
17 | Section 30. Limitation on credits. | ||||||
18 | (a) The total aggregate amount of tax credits issued under | ||||||
19 | this Act may not exceed $100,000,000 for all calendar years. | ||||||
20 | (b) The total aggregate amount of tax credits issued under | ||||||
21 | this Act may not exceed $12,000,000 in any one calendar year. | ||||||
22 | If the claims for tax credits under this Act exceed $12,000,000 | ||||||
23 | in any one calendar year, then the Department shall either: | ||||||
24 | (1) certify the credit to the applicant in the amount |
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1 | of $12,000,000 if there is only one applicant entitled to | ||||||
2 | receive the credit in that year; or | ||||||
3 | (2) certify the tax credits on a pro-rata basis to all | ||||||
4 | applicants who are entitled to receive tax credits in that | ||||||
5 | year. | ||||||
6 | Any credit amount of tax credits to which an applicant is | ||||||
7 | entitled that is not certified due to the $12,000,000 | ||||||
8 | limitation shall be carried forward for the benefit of the | ||||||
9 | applicant to subsequent years. | ||||||
10 | Section 35. Rules. The Department, in cooperation with the | ||||||
11 | Department of Revenue, shall adopt any rules necessary for the | ||||||
12 | implementation and administration of this Act. | ||||||
13 | Section 40. Sunset. The Department may not certify any | ||||||
14 | credit under this Act for any taxable year that begins after | ||||||
15 | January 1 of the 6th year after the effective date of this Act. | ||||||
16 | Section 900. The Illinois Income Tax Act is amended by | ||||||
17 | adding Section 218 as follows: | ||||||
18 | (35 ILCS 5/218 new)
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19 | Sec. 218. Distressed Areas Land Assemblage Tax Credit. | ||||||
20 | (a) A taxpayer who has been awarded a tax credit under the
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21 | Distressed Areas Land Assemblage Tax Credit Act is entitled to | ||||||
22 | a credit against the
taxes imposed under subsections (a) and |
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1 | (b) of Section 201 of this Act in an
amount certified by the | ||||||
2 | Department of Commerce and Economic Opportunity under that Act. | ||||||
3 | (b) If the taxpayer is a partnership or
Subchapter S | ||||||
4 | corporation, the credit is allowed to the partners or | ||||||
5 | shareholders
in accordance with the determination of income and | ||||||
6 | distributive share of income
under Sections 702 and 704 and | ||||||
7 | Subchapter S of the Internal Revenue Code. | ||||||
8 | (c) The credit may not be carried back. If the amount of | ||||||
9 | the credit exceeds the tax liability for the year, the
excess | ||||||
10 | may be carried forward and applied to the tax liability of the | ||||||
11 | 6 taxable
years following the excess credit year. The credit
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12 | shall be applied to the earliest year for which there is a tax | ||||||
13 | liability. If
there are credits from more than one tax year | ||||||
14 | that are available to offset a
liability, the earlier credit | ||||||
15 | shall be applied first. In no event shall a credit
under this | ||||||
16 | Section reduce the taxpayer's
liability to less than
zero. A | ||||||
17 | transfer of this credit may be made by the taxpayer earning the | ||||||
18 | credit as set forth under Section 15 of Distressed Areas Land | ||||||
19 | Assemblage Tax Credit Act. | ||||||
20 | (d) The
Department, in cooperation with the Department of | ||||||
21 | Commerce and Economic Opportunity, must prescribe rules to | ||||||
22 | enforce and administer the provisions of this
Section. | ||||||
23 | (e) This Section is exempt from the provisions of Section | ||||||
24 | 250 of this
Act.
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