HB1726 95TH GENERAL ASSEMBLY

LRB095 11219 BDD 31662 b

95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
HB1726

Introduced 2/22/2007, by Rep. Thomas Holbrook

SYNOPSIS AS INTRODUCED:

20 ILCS 3405/40 new
35 ILCS 5/218 new

Amends Historic Preservation Agency Act and the Illinois Income Tax Act. Requires the Historic Preservation Agency to authorize an income tax credit to taxpayers who incur eligible costs and expenses for rehabilitation of a certified historic structure or a structure in a certified historic district. Sets forth procedures and criteria for authorizing the credits. Provides that the aggregate amount of all credits that the Department may authorize in any calendar year may not exceed $40,000,000. Requires that 50% of the credits must be reserved for those rehabilitation projects incurring eligible costs and expenses of $1,000,000 or less and 25% must be reserved for those rehabilitation projects incurring eligible costs and expenses of $50,000 or less. Provides that the credit may be carried forward for 2 years. Exempts the credit from the Act's sunset provisions. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning taxes.

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

Section 5. The Historic Preservation Agency Act is amended by adding Section 40 as follows:

(20 ILCS 3405/40 new)

Sec. 40. Authorizations of historic preservation credits.

(a) The Agency shall authorize an income tax credit to taxpayers who incur eligible costs and expenses for rehabilitation of a certified historic structure or a structure in a certified historic district. The amount of the credit that may be authorized to a taxpayer by the Agency under this Section is an amount equal to 25% of the eligible costs and expenses incurred in the taxable year. The Agency shall develop and make available a standardized application pertaining to the allocation of tax credits under this Section. The Department must accepts applications and authorize credits on an ongoing basis. The Department must make public, by June 1 and by December 1 of each year, the total number of requests for tax credits and the total amount of requested tax credits that have been submitted and awarded.

(b) The aggregate amount of all credits that the Agency may authorize in any calendar year under this Section may not exceed $40,000,000. Of the annual amount available for tax credits, 50% must be reserved for those rehabilitation projects incurring eligible costs and expenses of $1,000,000 or less and 25% must be reserved for those rehabilitation projects incurring eligible costs and expenses of $50,000 or less. If, by September 1 of any year, any percentage of credits that is reserved under this subsection is not allocated, then the remaining amount is available for other applicants.

(c) If the Agency receives applications for tax credit in excess of the amount available, then the applications must be prioritized by the date that the Agency received them. If the number of applications exceeds the amount of annual tax credits available, then the Agency must establish a wait list for the next year's allocation of tax credits, and applications must first be funded in the order listed on that wait list.

(d) For the purposes of this Section:

"Eligible costs and expenses" are those expenses that exceed 50% of the federal tax basis of the property and that meet the requirements for qualified rehabilitation expenditures as defined under Section 47(c)(2)(A) of the Internal Revenue Code.

"Rehabilitation" includes only those rehabilitations that meet the standards of the Secretary of the United States Department of the Interior for rehabilitation, as determined by the Agency.

Section 10. The Illinois Income Tax Act is amended by adding Section 218 as follows:

(35 ILCS 5/218 new)

Sec. 218. Historic Preservation Tax Credit.

(a) For taxable years ending on or after December 31, 2007, each taxpayer for whom a tax credit has been authorized by the Historic Preservation Agency under Section 40 of the Historic Preservation Agency Act, is entitled to a credit against the tax imposed under subsections (a) and (b) of Section 201 in an amount equal to the amount authorized under that Section.

(b) For partners, shareholders of Subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there is allowed a credit under this Section to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code.

(c) The credit may not be carried back and may not reduce the taxpayer's liability to less than zero. If the amount of the credit exceeds the tax liability for the year, the excess may be carried forward and applied to the tax liability of the 2 taxable years following the excess credit year. The tax credit must be applied to the earliest year for which there is a tax liability. If there are credits for more than one year that are available to offset a liability, the earlier credit shall be applied first.

(d) This Section is exempt from the provisions of Section 250.

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