State of Illinois
2013 and 2014


Introduced 2/6/2013, by Sen. Antonio Muņoz


New Act
35 ILCS 5/224 new

    Creates the Endow Illinois Tax Credit Act and amends the Illinois Income Tax Act. Requires the Department of Revenue to authorize an income tax credit to taxpayers who provide an endowment gift to a permanent endowment fund. Sets forth procedures and criteria for authorizing the credits. Provides that the aggregate amount of all credits that the Department may authorize may not exceed $10,000,000 in 2013, $25,000,000 in 2014, or $50,000,000 in 2015 and each calendar year thereafter. Provides conditions for eligibility. Requires the Department to make an annual report concerning the credits. Provides that the credit may be carried forward for 5 years. Exempts the credit from the Act's sunset provisions. Effective immediately.

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SB1448LRB098 06730 HLH 36778 b

1    AN ACT concerning revenue.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 1. Short title. This Act may be cited as the Endow
5Illinois Tax Credit Act.
6    Section 5. Definitions. For the purposes of this Act:
7    "Department" means the Department of Revenue.
8    "Endowment gift" means an irrevocable contribution to a
9permanent endowment fund held by a qualified community
11    "Permanent endowment fund" means a fund that (i) is held by
12a qualified community foundation to provide benefit to
13charitable causes in the State, (ii) is intended to exist in
14perpetuity, and (iii) has an annual spend rate based on the
15foundation spending policy, but not to exceed 7%.
16    "Qualified community foundation" means a community
17foundation or similar publicly-supported organization
18described in Section 170 (b)(1)(A)(vi) of the Internal Revenue
19Code of 1986 that is organized or operating in this State and
20that substantially complies with the national standards for
21U.S. community foundations that are established by the National
22Council on Foundations, as determined by the Department.



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1    Section 10. Tax credit awards.
2    (a) The Department shall authorize an income tax credit to
3taxpayers who provide an endowment gift to a permanent
4endowment fund. The amount of the credit that may be authorized
5to a taxpayer by the Department under this Act is an amount
6equal to 50% of the endowment gift. A taxpayer that is a
7business entity is not eligible to receive a credit under this
8Act for the taxable year if the taxpayer's gross business
9receipts exceed $10,000,000 for taxable years ending in 2013,
10$25,000,000 for taxable years ending in 2014, or $50,000,000
11for taxable years ending in 2015 or thereafter.
12    (b) The aggregate amount of all credits that the Department
13may authorize under this Act may not exceed $10,000,000 in
142013, $25,000,000 in 2014, or $50,000,000 in 2015 and each
15calendar year thereafter. The aggregate amount of all credits
16that the Department may authorize to any single taxpayer in a
17calendar year may not exceed 5% of the aggregate amount of all
18credits authorized by the Department in that calendar year. The
19aggregate amount of all credits that the Department may
20authorize in any calendar year based on endowment gifts to any
21specific community foundation may not exceed 25% of aggregate
22credits authorized for that year.
23    (c) If the Department receives applications for tax credit
24in excess of the amount available, then the applications must
25be prioritized by the date that the Department received them.
26If the number of applications exceeds the amount of annual tax



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1credits available, then the Department must establish a wait
2list for the next year's allocation of tax credits, and
3applications must first be funded in the order listed on that
4wait list.
5    Section 15. Applications for tax credits.
6    (a) The Department shall develop and make available a
7standardized application pertaining to the allocation of tax
8credits under this Act.
9    (b) Of the annual amount available for tax credits, 10%
10must be reserved for those endowment gifts of $30,000 or less.
11If the entire 10% that is reserved for permanent endowment
12gifts totalling $30,000 or less is not allocated, then the
13remaining amount is available in the following years for
14endowment gifts of $30,000 or less.
15    (c) The Department must accept applications and authorize
16credits in an ongoing basis. The Department must make public,
17by June 1 and by December 1 of each year, the total number of
18requests for tax credits and the total amount of requested tax
19credits that have been submitted and awarded.
20    Section 20. Annual report. By January 31 of each year, the
21Department must submit an annual report to the Governor and the
22General Assembly concerning the activities conduced under this
23Act during the previous calendar year. The report must include
24a detailed listing of tax credits authorized under this Act by



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1the Department.
2    Section 90. The Illinois Income Tax Act is amended by
3adding Section 224 as follows:
4    (35 ILCS 5/224 new)
5    Sec. 224. The Endow Illinois Tax Credit.
6    (a) For taxable years ending on or after December 31, 2013,
7each taxpayer for whom a tax credit has been authorized by the
8Department of Revenue under the Endow Illinois Tax Credit Act,
9is entitled to a credit against the tax imposed under
10subsections (a) and (b) of Section 201 in an amount equal to
11the amount authorized under that Act.
12    (b) For partners, shareholders of Subchapter S
13corporations, and owners of limited liability companies, if the
14liability company is treated as a partnership for purposes of
15federal and State income taxation, there is allowed a credit
16under this Section to be determined in accordance with the
17determination of income and distributive share of income under
18Sections 702 and 704 and Subchapter S of the Internal Revenue
20    (c) The credit may not be carried back and may not reduce
21the taxpayer's liability to less than zero. If the amount of
22the credit exceeds the tax liability for the year, the excess
23may be carried forward and applied to the tax liability of the
245 taxable years following the excess credit year. The tax



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1credit shall be applied to the earliest year for which there is
2a tax liability. If there are credits for more than one year
3that are available to offset a liability, the earlier credit
4shall be applied first.
5    (d) This Section is exempt from the provisions of Section
7    Section 99. Effective date. This Act takes effect upon
8becoming law.