Rep. Adam Brown

Filed: 3/27/2014

 

 


 

 


 
09800HB4838ham001LRB098 17699 HLH 56257 a

1
AMENDMENT TO HOUSE BILL 4838

2    AMENDMENT NO. ______. Amend House Bill 4838 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Enterprise Zone Act is amended by
5changing Section 5.5 as follows:
 
6    (20 ILCS 655/5.5)   (from Ch. 67 1/2, par. 609.1)
7    Sec. 5.5. High Impact Business.
8    (a) In order to respond to unique opportunities to assist
9in the encouragement, development, growth and expansion of the
10private sector through large scale investment and development
11projects, the Department is authorized to receive and approve
12applications for the designation of "High Impact Businesses" in
13Illinois subject to the following conditions:
14        (1) such applications may be submitted at any time
15    during the year;
16        (2) such business is not located, at the time of

 

 

09800HB4838ham001- 2 -LRB098 17699 HLH 56257 a

1    designation, in an enterprise zone designated pursuant to
2    this Act;
3        (3) the business intends to do one or more of the
4    following:
5            (A) the business intends to make a minimum
6        investment of $12,000,000 which will be placed in
7        service in qualified property and intends to create 500
8        full-time equivalent jobs at a designated location in
9        Illinois or intends to make a minimum investment of
10        $30,000,000 which will be placed in service in
11        qualified property and intends to retain 1,500
12        full-time retained jobs at a designated location in
13        Illinois. The business must certify in writing that the
14        investments would not be placed in service in qualified
15        property and the job creation or job retention would
16        not occur without the tax credits and exemptions set
17        forth in subsection (b) of this Section. The terms
18        "placed in service" and "qualified property" have the
19        same meanings as described in subsection (h) of Section
20        201 of the Illinois Income Tax Act; or
21            (B) the business intends to establish a new
22        electric generating facility at a designated location
23        in Illinois. "New electric generating facility", for
24        purposes of this Section, means a newly-constructed
25        electric generation plant or a newly-constructed
26        generation capacity expansion at an existing electric

 

 

09800HB4838ham001- 3 -LRB098 17699 HLH 56257 a

1        generation plant, including the transmission lines and
2        associated equipment that transfers electricity from
3        points of supply to points of delivery, and for which
4        such new foundation construction commenced not sooner
5        than July 1, 2001. Such facility shall be designed to
6        provide baseload electric generation and shall operate
7        on a continuous basis throughout the year; and (i)
8        shall have an aggregate rated generating capacity of at
9        least 1,000 megawatts for all new units at one site if
10        it uses natural gas as its primary fuel and foundation
11        construction of the facility is commenced on or before
12        December 31, 2004, or shall have an aggregate rated
13        generating capacity of at least 400 megawatts for all
14        new units at one site if it uses coal or gases derived
15        from coal as its primary fuel and shall support the
16        creation of at least 150 new Illinois coal mining jobs,
17        or (ii) shall be funded through a federal Department of
18        Energy grant before December 31, 2010 and shall support
19        the creation of Illinois coal-mining jobs, or (iii)
20        shall use coal gasification or integrated
21        gasification-combined cycle units that generate
22        electricity or chemicals, or both, and shall support
23        the creation of Illinois coal-mining jobs. The
24        business must certify in writing that the investments
25        necessary to establish a new electric generating
26        facility would not be placed in service and the job

 

 

09800HB4838ham001- 4 -LRB098 17699 HLH 56257 a

1        creation in the case of a coal-fueled plant would not
2        occur without the tax credits and exemptions set forth
3        in subsection (b-5) of this Section. The term "placed
4        in service" has the same meaning as described in
5        subsection (h) of Section 201 of the Illinois Income
6        Tax Act; or
7            (B-5) the business intends to establish a new
8        gasification facility at a designated location in
9        Illinois. As used in this Section, "new gasification
10        facility" means a newly constructed coal gasification
11        facility that generates chemical feedstocks or
12        transportation fuels derived from coal (which may
13        include, but are not limited to, methane, methanol, and
14        nitrogen fertilizer), that supports the creation or
15        retention of Illinois coal-mining jobs, and that
16        qualifies for financial assistance from the Department
17        before December 31, 2010. A new gasification facility
18        does not include a pilot project located within
19        Jefferson County or within a county adjacent to
20        Jefferson County for synthetic natural gas from coal;
21        or
22            (C) the business intends to establish production
23        operations at a new coal mine, re-establish production
24        operations at a closed coal mine, or expand production
25        at an existing coal mine at a designated location in
26        Illinois not sooner than July 1, 2001; provided that

 

 

09800HB4838ham001- 5 -LRB098 17699 HLH 56257 a

1        the production operations result in the creation of 150
2        new Illinois coal mining jobs as described in
3        subdivision (a)(3)(B) of this Section, and further
4        provided that the coal extracted from such mine is
5        utilized as the predominant source for a new electric
6        generating facility. The business must certify in
7        writing that the investments necessary to establish a
8        new, expanded, or reopened coal mine would not be
9        placed in service and the job creation would not occur
10        without the tax credits and exemptions set forth in
11        subsection (b-5) of this Section. The term "placed in
12        service" has the same meaning as described in
13        subsection (h) of Section 201 of the Illinois Income
14        Tax Act; or
15            (D) the business intends to construct new
16        transmission facilities or upgrade existing
17        transmission facilities at designated locations in
18        Illinois, for which construction commenced not sooner
19        than July 1, 2001. For the purposes of this Section,
20        "transmission facilities" means transmission lines
21        with a voltage rating of 115 kilovolts or above,
22        including associated equipment, that transfer
23        electricity from points of supply to points of delivery
24        and that transmit a majority of the electricity
25        generated by a new electric generating facility
26        designated as a High Impact Business in accordance with

 

 

09800HB4838ham001- 6 -LRB098 17699 HLH 56257 a

1        this Section. The business must certify in writing that
2        the investments necessary to construct new
3        transmission facilities or upgrade existing
4        transmission facilities would not be placed in service
5        without the tax credits and exemptions set forth in
6        subsection (b-5) of this Section. The term "placed in
7        service" has the same meaning as described in
8        subsection (h) of Section 201 of the Illinois Income
9        Tax Act; or
10            (E) the business intends to establish a new wind
11        power facility at a designated location in Illinois.
12        For purposes of this Section, "new wind power facility"
13        means a newly constructed electric generation
14        facility, or a newly constructed expansion of an
15        existing electric generation facility, placed in
16        service on or after July 1, 2009, that generates
17        electricity using wind energy devices, and such
18        facility shall be deemed to include all associated
19        transmission lines, substations, and other equipment
20        related to the generation of electricity from wind
21        energy devices. For purposes of this Section, "wind
22        energy device" means any device, with a nameplate
23        capacity of at least 0.5 megawatts, that is used in the
24        process of converting kinetic energy from the wind to
25        generate electricity; or
26            (F) the business commits to (i) make a minimum

 

 

09800HB4838ham001- 7 -LRB098 17699 HLH 56257 a

1        investment of $500,000,000, which will be placed in
2        service in a qualified property, (ii) create 125
3        full-time equivalent jobs at a designated location in
4        Illinois, (iii) establish a fertilizer plant at a
5        designated location in Illinois that complies with the
6        set-back standards as described in Table 1: Initial
7        Isolation and Protective Action Distances in the 2012
8        Emergency Response Guidebook published by the United
9        States Department of Transportation, (iv) pay a
10        prevailing wage for employees at that location who are
11        engaged in construction activities, and (v) secure an
12        appropriate level of general liability insurance to
13        protect against catastrophic failure of the fertilizer
14        plant or any of its constituent systems; in addition,
15        the business must agree to enter into a construction
16        project labor agreement including provisions
17        establishing wages, benefits, and other compensation
18        for employees performing work under the project labor
19        agreement at that location; for the purposes of this
20        Section, "fertilizer plant" means a newly constructed
21        or upgraded plant utilizing gas used in the production
22        of anhydrous ammonia and downstream nitrogen
23        fertilizer products for resale; for the purposes of
24        this Section, the terms "placed in service" and
25        "qualified property" have the same meanings as
26        described in subsection (h) of Section 201 of the

 

 

09800HB4838ham001- 8 -LRB098 17699 HLH 56257 a

1        Illinois Income Tax Act; for the purposes of this
2        Section, "prevailing wage" means the hourly cash wages
3        plus fringe benefits for training and apprenticeship
4        programs approved by the U.S. Department of Labor,
5        Bureau of Apprenticeship and Training, health and
6        welfare, insurance, vacations and pensions paid
7        generally, in the locality in which the work is being
8        performed, to employees engaged in work of a similar
9        character on public works; this paragraph (F) applies
10        only to businesses that submit an application to the
11        Department within 60 days after the effective date of
12        this amendatory Act of the 98th General Assembly; and
13        (4) no later than 90 days after an application is
14    submitted, the Department shall notify the applicant of the
15    Department's determination of the qualification of the
16    proposed High Impact Business under this Section.
17    (b) Businesses designated as High Impact Businesses
18pursuant to subdivision (a)(3)(A) or (a)(3)(F) of this Section
19shall qualify for the credits and exemptions described in the
20following Acts: Section 9-222 and Section 9-222.1A of the
21Public Utilities Act, subsection (h) of Section 201 of the
22Illinois Income Tax Act, and Section 1d of the Retailers'
23Occupation Tax Act; provided that these credits and exemptions
24described in these Acts shall not be authorized until the
25minimum investments set forth in subdivision (a)(3)(A) or
26(a)(3)(F) of this Section have been placed in service in

 

 

09800HB4838ham001- 9 -LRB098 17699 HLH 56257 a

1qualified properties and, in the case of the exemptions
2described in the Public Utilities Act and Section 1d of the
3Retailers' Occupation Tax Act, the minimum full-time
4equivalent jobs or full-time retained jobs set forth in
5subdivision (a)(3)(A) or (a)(3)(F) of this Section have been
6created or retained. Businesses designated as High Impact
7Businesses under this Section shall also qualify for the
8exemption described in Section 5l of the Retailers' Occupation
9Tax Act. The credit provided in subsection (h) of Section 201
10of the Illinois Income Tax Act shall be applicable to
11investments in qualified property as set forth in subdivision
12(a)(3)(A) or (a)(3)(F) of this Section.
13    (b-5) Businesses designated as High Impact Businesses
14pursuant to subdivisions (a)(3)(B), (a)(3)(B-5), (a)(3)(C),
15and (a)(3)(D) of this Section shall qualify for the credits and
16exemptions described in the following Acts: Section 51 of the
17Retailers' Occupation Tax Act, Section 9-222 and Section
189-222.1A of the Public Utilities Act, and subsection (h) of
19Section 201 of the Illinois Income Tax Act; however, the
20credits and exemptions authorized under Section 9-222 and
21Section 9-222.1A of the Public Utilities Act, and subsection
22(h) of Section 201 of the Illinois Income Tax Act shall not be
23authorized until the new electric generating facility, the new
24gasification facility, the new transmission facility, or the
25new, expanded, or reopened coal mine is operational, except
26that a new electric generating facility whose primary fuel

 

 

09800HB4838ham001- 10 -LRB098 17699 HLH 56257 a

1source is natural gas is eligible only for the exemption under
2Section 5l of the Retailers' Occupation Tax Act.
3    (b-6) Businesses designated as High Impact Businesses
4pursuant to subdivision (a)(3)(E) of this Section shall qualify
5for the exemptions described in Section 5l of the Retailers'
6Occupation Tax Act; any business so designated as a High Impact
7Business being, for purposes of this Section, a "Wind Energy
8Business".
9    (c) High Impact Businesses located in federally designated
10foreign trade zones or sub-zones are also eligible for
11additional credits, exemptions and deductions as described in
12the following Acts: Section 9-221 and Section 9-222.1 of the
13Public Utilities Act; and subsection (g) of Section 201, and
14Section 203 of the Illinois Income Tax Act.
15    (d) Except for businesses contemplated under subdivision
16(a)(3)(E) of this Section, existing Illinois businesses which
17apply for designation as a High Impact Business must provide
18the Department with the prospective plan for which 1,500
19full-time retained jobs would be eliminated in the event that
20the business is not designated.
21    (e) Except for new wind power facilities contemplated under
22subdivision (a)(3)(E) of this Section, new proposed facilities
23which apply for designation as High Impact Business must
24provide the Department with proof of alternative non-Illinois
25sites which would receive the proposed investment and job
26creation in the event that the business is not designated as a

 

 

09800HB4838ham001- 11 -LRB098 17699 HLH 56257 a

1High Impact Business.
2    (f) Except for businesses contemplated under subdivision
3(a)(3)(E) of this Section, in the event that a business is
4designated a High Impact Business and it is later determined
5after reasonable notice and an opportunity for a hearing as
6provided under the Illinois Administrative Procedure Act, that
7the business would have placed in service in qualified property
8the investments and created or retained the requisite number of
9jobs without the benefits of the High Impact Business
10designation, the Department shall be required to immediately
11revoke the designation and notify the Director of the
12Department of Revenue who shall begin proceedings to recover
13all wrongfully exempted State taxes with interest. The business
14shall also be ineligible for all State funded Department
15programs for a period of 10 years.
16    (g) The Department shall revoke a High Impact Business
17designation if the participating business fails to comply with
18the terms and conditions of the designation. However, the
19penalties for new wind power facilities or Wind Energy
20Businesses for failure to comply with any of the terms or
21conditions of the Illinois Prevailing Wage Act shall be only
22those penalties identified in the Illinois Prevailing Wage Act,
23and the Department shall not revoke a High Impact Business
24designation as a result of the failure to comply with any of
25the terms or conditions of the Illinois Prevailing Wage Act in
26relation to a new wind power facility or a Wind Energy

 

 

09800HB4838ham001- 12 -LRB098 17699 HLH 56257 a

1Business.
2    (h) Prior to designating a business, the Department shall
3provide the members of the General Assembly and Commission on
4Government Forecasting and Accountability with a report
5setting forth the terms and conditions of the designation and
6guarantees that have been received by the Department in
7relation to the proposed business being designated.
8(Source: P.A. 97-905, eff. 8-7-12; 98-109, eff. 7-25-13.)
 
9    Section 10. The Illinois Income Tax Act is amended by
10changing Section 201 as follows:
 
11    (35 ILCS 5/201)  (from Ch. 120, par. 2-201)
12    Sec. 201. Tax Imposed.
13    (a) In general. A tax measured by net income is hereby
14imposed on every individual, corporation, trust and estate for
15each taxable year ending after July 31, 1969 on the privilege
16of earning or receiving income in or as a resident of this
17State. Such tax shall be in addition to all other occupation or
18privilege taxes imposed by this State or by any municipal
19corporation or political subdivision thereof.
20    (b) Rates. The tax imposed by subsection (a) of this
21Section shall be determined as follows, except as adjusted by
22subsection (d-1):
23        (1) In the case of an individual, trust or estate, for
24    taxable years ending prior to July 1, 1989, an amount equal

 

 

09800HB4838ham001- 13 -LRB098 17699 HLH 56257 a

1    to 2 1/2% of the taxpayer's net income for the taxable
2    year.
3        (2) In the case of an individual, trust or estate, for
4    taxable years beginning prior to July 1, 1989 and ending
5    after June 30, 1989, an amount equal to the sum of (i) 2
6    1/2% of the taxpayer's net income for the period prior to
7    July 1, 1989, as calculated under Section 202.3, and (ii)
8    3% of the taxpayer's net income for the period after June
9    30, 1989, as calculated under Section 202.3.
10        (3) In the case of an individual, trust or estate, for
11    taxable years beginning after June 30, 1989, and ending
12    prior to January 1, 2011, an amount equal to 3% of the
13    taxpayer's net income for the taxable year.
14        (4) In the case of an individual, trust, or estate, for
15    taxable years beginning prior to January 1, 2011, and
16    ending after December 31, 2010, an amount equal to the sum
17    of (i) 3% of the taxpayer's net income for the period prior
18    to January 1, 2011, as calculated under Section 202.5, and
19    (ii) 5% of the taxpayer's net income for the period after
20    December 31, 2010, as calculated under Section 202.5.
21        (5) In the case of an individual, trust, or estate, for
22    taxable years beginning on or after January 1, 2011, and
23    ending prior to January 1, 2015, an amount equal to 5% of
24    the taxpayer's net income for the taxable year.
25        (5.1) In the case of an individual, trust, or estate,
26    for taxable years beginning prior to January 1, 2015, and

 

 

09800HB4838ham001- 14 -LRB098 17699 HLH 56257 a

1    ending after December 31, 2014, an amount equal to the sum
2    of (i) 5% of the taxpayer's net income for the period prior
3    to January 1, 2015, as calculated under Section 202.5, and
4    (ii) 3.75% of the taxpayer's net income for the period
5    after December 31, 2014, as calculated under Section 202.5.
6        (5.2) In the case of an individual, trust, or estate,
7    for taxable years beginning on or after January 1, 2015,
8    and ending prior to January 1, 2025, an amount equal to
9    3.75% of the taxpayer's net income for the taxable year.
10        (5.3) In the case of an individual, trust, or estate,
11    for taxable years beginning prior to January 1, 2025, and
12    ending after December 31, 2024, an amount equal to the sum
13    of (i) 3.75% of the taxpayer's net income for the period
14    prior to January 1, 2025, as calculated under Section
15    202.5, and (ii) 3.25% of the taxpayer's net income for the
16    period after December 31, 2024, as calculated under Section
17    202.5.
18        (5.4) In the case of an individual, trust, or estate,
19    for taxable years beginning on or after January 1, 2025, an
20    amount equal to 3.25% of the taxpayer's net income for the
21    taxable year.
22        (6) In the case of a corporation, for taxable years
23    ending prior to July 1, 1989, an amount equal to 4% of the
24    taxpayer's net income for the taxable year.
25        (7) In the case of a corporation, for taxable years
26    beginning prior to July 1, 1989 and ending after June 30,

 

 

09800HB4838ham001- 15 -LRB098 17699 HLH 56257 a

1    1989, an amount equal to the sum of (i) 4% of the
2    taxpayer's net income for the period prior to July 1, 1989,
3    as calculated under Section 202.3, and (ii) 4.8% of the
4    taxpayer's net income for the period after June 30, 1989,
5    as calculated under Section 202.3.
6        (8) In the case of a corporation, for taxable years
7    beginning after June 30, 1989, and ending prior to January
8    1, 2011, an amount equal to 4.8% of the taxpayer's net
9    income for the taxable year.
10        (9) In the case of a corporation, for taxable years
11    beginning prior to January 1, 2011, and ending after
12    December 31, 2010, an amount equal to the sum of (i) 4.8%
13    of the taxpayer's net income for the period prior to
14    January 1, 2011, as calculated under Section 202.5, and
15    (ii) 7% of the taxpayer's net income for the period after
16    December 31, 2010, as calculated under Section 202.5.
17        (10) In the case of a corporation, for taxable years
18    beginning on or after January 1, 2011, and ending prior to
19    January 1, 2015, an amount equal to 7% of the taxpayer's
20    net income for the taxable year.
21        (11) In the case of a corporation, for taxable years
22    beginning prior to January 1, 2015, and ending after
23    December 31, 2014, an amount equal to the sum of (i) 7% of
24    the taxpayer's net income for the period prior to January
25    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
26    of the taxpayer's net income for the period after December

 

 

09800HB4838ham001- 16 -LRB098 17699 HLH 56257 a

1    31, 2014, as calculated under Section 202.5.
2        (12) In the case of a corporation, for taxable years
3    beginning on or after January 1, 2015, and ending prior to
4    January 1, 2025, an amount equal to 5.25% of the taxpayer's
5    net income for the taxable year.
6        (13) In the case of a corporation, for taxable years
7    beginning prior to January 1, 2025, and ending after
8    December 31, 2024, an amount equal to the sum of (i) 5.25%
9    of the taxpayer's net income for the period prior to
10    January 1, 2025, as calculated under Section 202.5, and
11    (ii) 4.8% of the taxpayer's net income for the period after
12    December 31, 2024, as calculated under Section 202.5.
13        (14) In the case of a corporation, for taxable years
14    beginning on or after January 1, 2025, an amount equal to
15    4.8% of the taxpayer's net income for the taxable year.
16    The rates under this subsection (b) are subject to the
17provisions of Section 201.5.
18    (c) Personal Property Tax Replacement Income Tax.
19Beginning on July 1, 1979 and thereafter, in addition to such
20income tax, there is also hereby imposed the Personal Property
21Tax Replacement Income Tax measured by net income on every
22corporation (including Subchapter S corporations), partnership
23and trust, for each taxable year ending after June 30, 1979.
24Such taxes are imposed on the privilege of earning or receiving
25income in or as a resident of this State. The Personal Property
26Tax Replacement Income Tax shall be in addition to the income

 

 

09800HB4838ham001- 17 -LRB098 17699 HLH 56257 a

1tax imposed by subsections (a) and (b) of this Section and in
2addition to all other occupation or privilege taxes imposed by
3this State or by any municipal corporation or political
4subdivision thereof.
5    (d) Additional Personal Property Tax Replacement Income
6Tax Rates. The personal property tax replacement income tax
7imposed by this subsection and subsection (c) of this Section
8in the case of a corporation, other than a Subchapter S
9corporation and except as adjusted by subsection (d-1), shall
10be an additional amount equal to 2.85% of such taxpayer's net
11income for the taxable year, except that beginning on January
121, 1981, and thereafter, the rate of 2.85% specified in this
13subsection shall be reduced to 2.5%, and in the case of a
14partnership, trust or a Subchapter S corporation shall be an
15additional amount equal to 1.5% of such taxpayer's net income
16for the taxable year.
17    (d-1) Rate reduction for certain foreign insurers. In the
18case of a foreign insurer, as defined by Section 35A-5 of the
19Illinois Insurance Code, whose state or country of domicile
20imposes on insurers domiciled in Illinois a retaliatory tax
21(excluding any insurer whose premiums from reinsurance assumed
22are 50% or more of its total insurance premiums as determined
23under paragraph (2) of subsection (b) of Section 304, except
24that for purposes of this determination premiums from
25reinsurance do not include premiums from inter-affiliate
26reinsurance arrangements), beginning with taxable years ending

 

 

09800HB4838ham001- 18 -LRB098 17699 HLH 56257 a

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

 

 

09800HB4838ham001- 19 -LRB098 17699 HLH 56257 a

1    2003, or 1.75% for taxable years ending on or after
2    December 31, 2003, of the net taxable premiums written for
3    the taxable year, as described by subsection (1) of Section
4    409 of the Illinois Insurance Code. This paragraph will in
5    no event increase the rates imposed under subsections (b)
6    and (d).
7        (2) Any reduction in the rates of tax imposed by this
8    subsection shall be applied first against the rates imposed
9    by subsection (b) and only after the tax imposed by
10    subsection (a) net of all credits allowed under this
11    Section other than the credit allowed under subsection (i)
12    has been reduced to zero, against the rates imposed by
13    subsection (d).
14    This subsection (d-1) is exempt from the provisions of
15Section 250.
16    (e) Investment credit. A taxpayer shall be allowed a credit
17against the Personal Property Tax Replacement Income Tax for
18investment in qualified property.
19        (1) A taxpayer shall be allowed a credit equal to .5%
20    of the basis of qualified property placed in service during
21    the taxable year, provided such property is placed in
22    service on or after July 1, 1984. There shall be allowed an
23    additional credit equal to .5% of the basis of qualified
24    property placed in service during the taxable year,
25    provided such property is placed in service on or after
26    July 1, 1986, and the taxpayer's base employment within

 

 

09800HB4838ham001- 20 -LRB098 17699 HLH 56257 a

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

 

 

09800HB4838ham001- 21 -LRB098 17699 HLH 56257 a

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

 

 

09800HB4838ham001- 22 -LRB098 17699 HLH 56257 a

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

 

 

09800HB4838ham001- 23 -LRB098 17699 HLH 56257 a

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

 

 

09800HB4838ham001- 24 -LRB098 17699 HLH 56257 a

1    meaning as under Section 46 of the Internal Revenue Code.
2        (7) If during any taxable year, any property ceases to
3    be qualified property in the hands of the taxpayer within
4    48 months after being placed in service, or the situs of
5    any qualified property is moved outside Illinois within 48
6    months after being placed in service, the Personal Property
7    Tax Replacement Income Tax for such taxable year shall be
8    increased. Such increase shall be determined by (i)
9    recomputing the investment credit which would have been
10    allowed for the year in which credit for such property was
11    originally allowed by eliminating such property from such
12    computation and, (ii) subtracting such recomputed credit
13    from the amount of credit previously allowed. For the
14    purposes of this paragraph (7), a reduction of the basis of
15    qualified property resulting from a redetermination of the
16    purchase price shall be deemed a disposition of qualified
17    property to the extent of such reduction.
18        (8) Unless the investment credit is extended by law,
19    the basis of qualified property shall not include costs
20    incurred after December 31, 2018, except for costs incurred
21    pursuant to a binding contract entered into on or before
22    December 31, 2018.
23        (9) Each taxable year ending before December 31, 2000,
24    a partnership may elect to pass through to its partners the
25    credits to which the partnership is entitled under this
26    subsection (e) for the taxable year. A partner may use the

 

 

09800HB4838ham001- 25 -LRB098 17699 HLH 56257 a

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

 

 

09800HB4838ham001- 26 -LRB098 17699 HLH 56257 a

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

 

 

09800HB4838ham001- 27 -LRB098 17699 HLH 56257 a

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

 

 

09800HB4838ham001- 28 -LRB098 17699 HLH 56257 a

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

 

 

09800HB4838ham001- 29 -LRB098 17699 HLH 56257 a

1    property to the extent of such reduction.
2        (7) There shall be allowed an additional credit equal
3    to 0.5% of the basis of qualified property placed in
4    service during the taxable year in a River Edge
5    Redevelopment Zone, provided such property is placed in
6    service on or after July 1, 2006, and the taxpayer's base
7    employment within Illinois has increased by 1% or more over
8    the preceding year as determined by the taxpayer's
9    employment records filed with the Illinois Department of
10    Employment Security. Taxpayers who are new to Illinois
11    shall be deemed to have met the 1% growth in base
12    employment for the first year in which they file employment
13    records with the Illinois Department of Employment
14    Security. If, in any year, the increase in base employment
15    within Illinois over the preceding year is less than 1%,
16    the additional credit shall be limited to that percentage
17    times a fraction, the numerator of which is 0.5% and the
18    denominator of which is 1%, but shall not exceed 0.5%.
19    (g) (Blank).
20    (h) Investment credit; High Impact Business.
21        (1) Subject to subsections (b) and (b-5) of Section 5.5
22    of the Illinois Enterprise Zone Act, a taxpayer shall be
23    allowed a credit against the tax imposed by subsections (a)
24    and (b) of this Section for investment in qualified
25    property which is placed in service by a Department of
26    Commerce and Economic Opportunity designated High Impact

 

 

09800HB4838ham001- 30 -LRB098 17699 HLH 56257 a

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

 

 

09800HB4838ham001- 31 -LRB098 17699 HLH 56257 a

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

 

 

09800HB4838ham001- 32 -LRB098 17699 HLH 56257 a

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

 

 

09800HB4838ham001- 33 -LRB098 17699 HLH 56257 a

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

 

 

09800HB4838ham001- 34 -LRB098 17699 HLH 56257 a

1forward and applied to the tax liability imposed by subsections
2(a) and (b) of the 5 taxable years following the excess credit
3year, provided that no credit may be carried forward to any
4year ending on or after December 31, 2003. This credit shall be
5applied first to the earliest year for which there is a
6liability. If there is a credit under this subsection from more
7than one tax year that is available to offset a liability the
8earliest credit arising under this subsection shall be applied
9first.
10    If, during any taxable year ending on or after December 31,
111986, the tax imposed by subsections (c) and (d) of this
12Section for which a taxpayer has claimed a credit under this
13subsection (i) is reduced, the amount of credit for such tax
14shall also be reduced. Such reduction shall be determined by
15recomputing the credit to take into account the reduced tax
16imposed by subsections (c) and (d). If any portion of the
17reduced amount of credit has been carried to a different
18taxable year, an amended return shall be filed for such taxable
19year to reduce the amount of credit claimed.
20    (j) Training expense credit. Beginning with tax years
21ending on or after December 31, 1986 and prior to December 31,
222003, a taxpayer shall be allowed a credit against the tax
23imposed by subsections (a) and (b) under this Section for all
24amounts paid or accrued, on behalf of all persons employed by
25the taxpayer in Illinois or Illinois residents employed outside
26of Illinois by a taxpayer, for educational or vocational

 

 

09800HB4838ham001- 35 -LRB098 17699 HLH 56257 a

1training in semi-technical or technical fields or semi-skilled
2or skilled fields, which were deducted from gross income in the
3computation of taxable income. The credit against the tax
4imposed by subsections (a) and (b) shall be 1.6% of such
5training expenses. For partners, shareholders of subchapter S
6corporations, and owners of limited liability companies, if the
7liability company is treated as a partnership for purposes of
8federal and State income taxation, there shall be allowed a
9credit under this subsection (j) to be determined in accordance
10with the determination of income and distributive share of
11income under Sections 702 and 704 and subchapter S of the
12Internal Revenue Code.
13    Any credit allowed under this subsection which is unused in
14the year the credit is earned may be carried forward to each of
15the 5 taxable years following the year for which the credit is
16first computed until it is used. This credit shall be applied
17first to the earliest year for which there is a liability. If
18there is a credit under this subsection from more than one tax
19year that is available to offset a liability the earliest
20credit arising under this subsection shall be applied first. No
21carryforward credit may be claimed in any tax year ending on or
22after December 31, 2003.
23    (k) Research and development credit. For tax years ending
24after July 1, 1990 and prior to December 31, 2003, and
25beginning again for tax years ending on or after December 31,
262004, and ending prior to January 1, 2016, a taxpayer shall be

 

 

09800HB4838ham001- 36 -LRB098 17699 HLH 56257 a

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

 

 

09800HB4838ham001- 37 -LRB098 17699 HLH 56257 a

1    Any credit in excess of the tax liability for the taxable
2year may be carried forward. A taxpayer may elect to have the
3unused credit shown on its final completed return carried over
4as a credit against the tax liability for the following 5
5taxable years or until it has been fully used, whichever occurs
6first; provided that no credit earned in a tax year ending
7prior to December 31, 2003 may be carried forward to any year
8ending on or after December 31, 2003.
9    If an unused credit is carried forward to a given year from
102 or more earlier years, that credit arising in the earliest
11year will be applied first against the tax liability for the
12given year. If a tax liability for the given year still
13remains, the credit from the next earliest year will then be
14applied, and so on, until all credits have been used or no tax
15liability for the given year remains. Any remaining unused
16credit or credits then will be carried forward to the next
17following year in which a tax liability is incurred, except
18that no credit can be carried forward to a year which is more
19than 5 years after the year in which the expense for which the
20credit is given was incurred.
21    No inference shall be drawn from this amendatory Act of the
2291st General Assembly in construing this Section for taxable
23years beginning before January 1, 1999.
24    (l) Environmental Remediation Tax Credit.
25        (i) For tax years ending after December 31, 1997 and on
26    or before December 31, 2001, a taxpayer shall be allowed a

 

 

09800HB4838ham001- 38 -LRB098 17699 HLH 56257 a

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

 

 

09800HB4838ham001- 39 -LRB098 17699 HLH 56257 a

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

 

 

09800HB4838ham001- 40 -LRB098 17699 HLH 56257 a

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

 

 

09800HB4838ham001- 41 -LRB098 17699 HLH 56257 a

1the qualifying pupils. The credit shall be equal to 25% of
2qualified education expenses, but in no event may the total
3credit under this subsection claimed by a family that is the
4custodian of qualifying pupils exceed $500. In no event shall a
5credit under this subsection reduce the taxpayer's liability
6under this Act to less than zero. This subsection is exempt
7from the provisions of Section 250 of this Act.
8    For purposes of this subsection:
9    "Qualifying pupils" means individuals who (i) are
10residents of the State of Illinois, (ii) are under the age of
1121 at the close of the school year for which a credit is
12sought, and (iii) during the school year for which a credit is
13sought were full-time pupils enrolled in a kindergarten through
14twelfth grade education program at any school, as defined in
15this subsection.
16    "Qualified education expense" means the amount incurred on
17behalf of a qualifying pupil in excess of $250 for tuition,
18book fees, and lab fees at the school in which the pupil is
19enrolled during the regular school year.
20    "School" means any public or nonpublic elementary or
21secondary school in Illinois that is in compliance with Title
22VI of the Civil Rights Act of 1964 and attendance at which
23satisfies the requirements of Section 26-1 of the School Code,
24except that nothing shall be construed to require a child to
25attend any particular public or nonpublic school to qualify for
26the credit under this Section.

 

 

09800HB4838ham001- 42 -LRB098 17699 HLH 56257 a

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

 

 

09800HB4838ham001- 43 -LRB098 17699 HLH 56257 a

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

 

 

09800HB4838ham001- 44 -LRB098 17699 HLH 56257 a

1    was granted. The purchaser of a remediation site and the
2    tax credit shall succeed to the unused credit and remaining
3    carry-forward period of the seller. To perfect the
4    transfer, the assignor shall record the transfer in the
5    chain of title for the site and provide written notice to
6    the Director of the Illinois Department of Revenue of the
7    assignor's intent to sell the remediation site and the
8    amount of the tax credit to be transferred as a portion of
9    the sale. In no event may a credit be transferred to any
10    taxpayer if the taxpayer or a related party would not be
11    eligible under the provisions of subsection (i).
12        (iii) For purposes of this Section, the term "site"
13    shall have the same meaning as under Section 58.2 of the
14    Environmental Protection Act.
15    (o) For each of taxable years during the Compassionate Use
16of Medical Cannabis Pilot Program, a surcharge is imposed on
17all taxpayers on income arising from the sale or exchange of
18capital assets, depreciable business property, real property
19used in the trade or business, and Section 197 intangibles of
20an organization registrant under the Compassionate Use of
21Medical Cannabis Pilot Program Act. The amount of the surcharge
22is equal to the amount of federal income tax liability for the
23taxable year attributable to those sales and exchanges. The
24surcharge imposed does not apply if:
25        (1) the medical cannabis cultivation center
26    registration, medical cannabis dispensary registration, or

 

 

09800HB4838ham001- 45 -LRB098 17699 HLH 56257 a

1    the property of a registration is transferred as a result
2    of any of the following:
3            (A) bankruptcy, a receivership, or a debt
4        adjustment initiated by or against the initial
5        registration or the substantial owners of the initial
6        registration;
7            (B) cancellation, revocation, or termination of
8        any registration by the Illinois Department of Public
9        Health;
10            (C) a determination by the Illinois Department of
11        Public Health that transfer of the registration is in
12        the best interests of Illinois qualifying patients as
13        defined by the Compassionate Use of Medical Cannabis
14        Pilot Program Act;
15            (D) the death of an owner of the equity interest in
16        a registrant;
17            (E) the acquisition of a controlling interest in
18        the stock or substantially all of the assets of a
19        publicly traded company;
20            (F) a transfer by a parent company to a wholly
21        owned subsidiary; or
22            (G) the transfer or sale to or by one person to
23        another person where both persons were initial owners
24        of the registration when the registration was issued;
25        or
26        (2) the cannabis cultivation center registration,

 

 

09800HB4838ham001- 46 -LRB098 17699 HLH 56257 a

1    medical cannabis dispensary registration, or the
2    controlling interest in a registrant's property is
3    transferred in a transaction to lineal descendants in which
4    no gain or loss is recognized or as a result of a
5    transaction in accordance with Section 351 of the Internal
6    Revenue Code in which no gain or loss is recognized.
7(Source: P.A. 97-2, eff. 5-6-11; 97-636, eff. 6-1-12; 97-905,
8eff. 8-7-12; 98-109, eff. 7-25-13; 98-122, eff. 1-1-14; revised
98-9-13.)
 
10    Section 15. The Gas Revenue Tax Act is amended by changing
11Section 1 as follows:
 
12    (35 ILCS 615/1)  (from Ch. 120, par. 467.16)
13    Sec. 1. For the purposes of this Act: "Gross receipts"
14means the consideration received for gas distributed,
15supplied, furnished or sold to persons for use or consumption
16and not for resale, and for all services (including the
17transportation or storage of gas for an end-user) rendered in
18connection therewith, and shall include cash, services and
19property of every kind or nature, and shall be determined
20without any deduction on account of the cost of the service,
21product or commodity supplied, the cost of materials used,
22labor or service costs, or any other expense whatsoever.
23However, "gross receipts" shall not include receipts from:
24        (i) any minimum or other charge for gas or gas service

 

 

09800HB4838ham001- 47 -LRB098 17699 HLH 56257 a

1    where the customer has taken no therms of gas;
2        (ii) any charge for a dishonored check;
3        (iii) any finance or credit charge, penalty or charge
4    for delayed payment, or discount for prompt payment;
5        (iv) any charge for reconnection of service or for
6    replacement or relocation of facilities;
7        (v) any advance or contribution in aid of construction;
8        (vi) repair, inspection or servicing of equipment
9    located on customer premises;
10        (vii) leasing or rental of equipment, the leasing or
11    rental of which is not necessary to distributing,
12    furnishing, supplying, selling, transporting or storing
13    gas;
14        (viii) any sale to a customer if the taxpayer is
15    prohibited by federal or State constitution, treaty,
16    convention, statute or court decision from recovering the
17    related tax liability from such customer;
18        (ix) any charges added to customers' bills pursuant to
19    the provisions of Section 9-221 or Section 9-222 of the
20    Public Utilities Act, as amended, or any charges added to
21    customers' bills by taxpayers who are not subject to rate
22    regulation by the Illinois Commerce Commission for the
23    purpose of recovering any of the tax liabilities or other
24    amounts specified in such provisions of such Act; and
25        (x) prior to October 1, 2003, any charge for gas or gas
26    services to a customer who acquired contractual rights for

 

 

09800HB4838ham001- 48 -LRB098 17699 HLH 56257 a

1    the direct purchase of gas or gas services originating from
2    an out-of-state supplier or source on or before March 1,
3    1995, except for those charges solely related to the local
4    distribution of gas by a public utility. This exemption
5    includes any charge for gas or gas service, except for
6    those charges solely related to the local distribution of
7    gas by a public utility, to a customer who maintained an
8    account with a public utility (as defined in Section 3-105
9    of the Public Utilities Act) for the transportation of
10    customer-owned gas on or before March 1, 1995. The
11    provisions of this amendatory Act of 1997 are intended to
12    clarify, rather than change, existing law as to the meaning
13    and scope of this exemption. This exemption (x) expires on
14    September 30, 2003.
15    In case credit is extended, the amount thereof shall be
16included only as and when payments are received.
17    "Gross receipts" shall not include consideration received
18from business enterprises certified under Section 9-222.1 of
19the Public Utilities Act, as amended, or designated as a High
20Impact Business under subdivision (a)(3)(F) of Section 5.5 of
21the Illinois Enterprise Zone Act to the extent of such
22exemption and during the period of time specified by the
23Department of Commerce and Economic Opportunity.
24    "Department" means the Department of Revenue of the State
25of Illinois.
26    "Director" means the Director of Revenue for the Department

 

 

09800HB4838ham001- 49 -LRB098 17699 HLH 56257 a

1of Revenue of the State of Illinois.
2    "Taxpayer" means a person engaged in the business of
3distributing, supplying, furnishing or selling gas for use or
4consumption and not for resale.
5    "Person" means any natural individual, firm, trust,
6estate, partnership, association, joint stock company, joint
7adventure, corporation, limited liability company, or a
8receiver, trustee, guardian or other representative appointed
9by order of any court, or any city, town, county or other
10political subdivision of this State.
11    "Invested capital" means that amount equal to (i) the
12average of the balances at the beginning and end of each
13taxable period of the taxpayer's total stockholder's equity and
14total long-term debt, less investments in and advances to all
15corporations, as set forth on the balance sheets included in
16the taxpayer's annual report to the Illinois Commerce
17Commission for the taxable period; (ii) multiplied by a
18fraction determined under Sections 301 and 304(a) of the
19"Illinois Income Tax Act" and reported on the Illinois income
20tax return for the taxable period ending in or with the taxable
21period in question. However, notwithstanding the income tax
22return reporting requirement stated above, beginning July 1,
231979, no taxpayer's denominators used to compute the sales,
24property or payroll factors under subsection (a) of Section 304
25of the Illinois Income Tax Act shall include payroll, property
26or sales of any corporate entity other than the taxpayer for

 

 

09800HB4838ham001- 50 -LRB098 17699 HLH 56257 a

1the purposes of determining an allocation for the invested
2capital tax. This amendatory Act of 1982, Public Act 82-1024,
3is not intended to and does not make any change in the meaning
4of any provision of this Act, it having been the intent of the
5General Assembly in initially enacting the definition of
6"invested capital" to provide for apportionment of the invested
7capital of each company, based solely upon the sales, property
8and payroll of that company.
9    "Taxable period" means each period which ends after the
10effective date of this Act and which is covered by an annual
11report filed by the taxpayer with the Illinois Commerce
12Commission.
13(Source: P.A. 93-31, eff. 10-1-03; 94-793, eff. 5-19-06.)
 
14    Section 99. Effective date. This Act takes effect upon
15becoming law.".