Illinois General Assembly - Full Text of HB5730
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Full Text of HB5730  100th General Assembly

HB5730 100TH GENERAL ASSEMBLY

  
  

 


 
100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB5730

 

Introduced , by Rep. Michael Halpin

 

SYNOPSIS AS INTRODUCED:
 
New Act
35 ILCS 5/227 new

    Creates the Bicentennial Mississippi River Region Redevelopment Historic Tax Credit Act. Provides that an income tax credit is granted to an eligible taxpayer who makes expenditures pursuant to a qualified rehabilitation plan for the rehabilitation of a historic structure located a qualified county. Provides that the credit is available for taxable years beginning on or after January 1, 2019 and ending on or before December 31, 2029. Provides that the credit is equal to 25% of the amount of the eligible expenditure. Contains provisions concerning eligible expenditures. Provides that eligible taxpayers must apply with the Department of Commerce and Economic Opportunity within 6 months after the effective date of the Act. Provides that the credit may be carried forward for up to 10 years and may be carried back for up to 3 years. Amends the Illinois Income Tax Act to make conforming changes. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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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
5Bicentennial Mississippi River Region Redevelopment Historic
6Tax Credit Act.
 
7    Section 5. Definitions. As used in this Act, unless the
8context clearly indicates otherwise:
9    "Department" means the Department of Commerce and Economic
10Opportunity.
11    "Division" means the Historic Preservation Division within
12the Department of Natural Resources.
13    "Qualified county" means Adams, Alexander, Bond, Brown,
14Calhoun, Carroll, Clinton, Greene, Hancock, Henderson, Henry,
15Jackson, Jersey, Jo Daviess, Johnson, Knox, Macoupin, Madison,
16McDonough, Mercer, Monroe, Perry, Pike, Pulaski, Randolph,
17Rock Island, Schuyler, St. Clair, Stephenson, Union, Warren,
18Washington, Whiteside, and Williamson Counties.
19    "Qualified expenditures" means all the costs and expenses
20defined as qualified rehabilitation expenditures under Section
2147 of the federal Internal Revenue Code which were incurred in
22connection with a qualified historic structure.
23    "Qualified historic structure" means any structure that is

 

 

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1located in a qualified county and that is defined as a
2certified historic structure under Section 47 (c)(3) of the
3federal Internal Revenue Code.
4    "Qualified rehabilitation plan" means a project that is
5approved by the Division as being consistent with the standards
6in effect on the effective date of this Act for rehabilitation
7as adopted by the federal Secretary of the Interior.
8    "Qualified taxpayer" means the owner of the qualified
9historic structure or any other person who may qualify for the
10federal rehabilitation credit allowed by Section 47 of the
11federal Internal Revenue Code. If the taxpayer is (i) a
12corporation having an election in effect under Subchapter S of
13the federal Internal Revenue Code, (ii) a partnership, or (iii)
14a limited liability company, the credit provided under this Act
15may be claimed by the shareholders of the corporation, the
16partners of the partnership, or the members of the limited
17liability company in the same manner as those shareholders,
18partners, or members account for their proportionate shares of
19the income or losses of the corporation, partnership, or
20limited liability company, or as provided in the by-laws or
21other executed agreement of the corporation, partnership, or
22limited liability company. Credits granted to a partnership, a
23limited liability company taxed as a partnership, or other
24multiple owners of property shall be passed through to the
25partners, members, or owners respectively on a pro rata basis
26or pursuant to an executed agreement among the partners,

 

 

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1members, or owners documenting any alternate distribution
2method.
 
3    Section 10. Allowable credit. To the extent authorized by
4this Act, for taxable years beginning on or after January 1,
52019 and ending on or before December 31, 2029, there shall be
6allowed a tax credit against the tax imposed by subsections (a)
7and (b) of Section 201 of the Illinois Income Tax Act in an
8amount equal to 25% of qualified expenditures incurred by a
9qualified taxpayer during the taxable year in the restoration
10and preservation of a qualified historic structure pursuant to
11a qualified rehabilitation plan, provided that the total amount
12of such expenditures (i) must equal $5,000 or more, and (ii)
13must exceed 50% of the purchase price of the property. If the
14amount of any tax credit awarded under this Act exceeds the
15qualified taxpayer's income tax liability for the year in which
16the qualified rehabilitation plan was placed in service, the
17excess amount may be carried forward for deduction from the
18taxpayer's income tax liability in the next succeeding year or
19years until the total amount of the credit has been used,
20except that a credit may not be carried forward for deduction
21after the tenth taxable year after the taxable year in which
22the qualified rehabilitation plan was placed in service. To
23obtain a tax credit pursuant to this Act, an application must
24be made to the Department no later than 6 months after the
25effective date of this Act. The Department, in consultation

 

 

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1with the Division, shall determine the amount of eligible
2rehabilitation costs and expenses. The Division shall
3determine whether the rehabilitation is consistent with the
4standards of the Secretary of the United States Department of
5the Interior for rehabilitation. Upon completion and review of
6the project, the Department shall issue a certificate in the
7amount of the eligible credits. At the time the certificate is
8issued, an issuance fee up to the maximum amount of 2% of the
9amount of the credits issued by the certificate may be
10collected from the applicant to administer the Act. If
11collected, this issuance fee shall be evenly divided between
12the Department and the Division. The taxpayer must attach the
13certificate to the tax return on which the credits are to be
14claimed.
 
15    Section 15. Transfer of credits. Any qualified taxpayer,
16referred to in this Section as the assignor, may sell, assign,
17convey, or otherwise transfer tax credits allowed and earned
18under this Act. The taxpayer acquiring the credits, referred to
19in this Section as the assignee, may use the amount of the
20acquired credits to offset up to 100% of its income tax
21liability for either the taxable year in which the qualified
22rehabilitation plan was first placed into service or the
23taxable year in which such acquisition was made. Unused credit
24amounts claimed by the assignee may be carried forward for up
25to 10 years or carried back for up to 3 years, except that all

 

 

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1credits must be claimed within 10 years after the tax year in
2which the qualified rehabilitation plan was first placed into
3service and may not be carried back to a tax year prior to the
4tax year in which the credit was issued. The assignor shall
5enter into a written agreement with the assignee establishing
6the terms and conditions of the agreement and shall perfect the
7transfer by notifying the Department in writing within 90
8calendar days after the effective date of the transfer and
9shall provide any information as may be required by the
10Department to administer and carry out the provisions of this
11Section. If credits that have been transferred are subsequently
12reduced, adjusted, or recaptured, in whole or in part, by the
13Department, the Department of Revenue, or any other applicable
14government agency, only the original qualified taxpayer that
15was awarded the credits, and not any subsequent assignee of the
16credits, shall be held liable to repay any amount of such
17reduction, adjustment, or recapture of the credits.
 
18    Section 25. Pilot program; report. The Department may award
19no more than an aggregate of (i) $30,000,000 in total tax
20credits for qualified rehabilitation plans located in Madison,
21Rock Island, or Jo Daviess County and (ii) $15,000,000 in total
22tax credits for qualified rehabilitation plans located in any
23other qualified county. On or before December 31, 2019 and on
24or before December 31 of each year thereafter through 2029, the
25Department must submit a report to the General Assembly

 

 

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1evaluating the effectiveness of this Act in stimulating
2economic revitalization in the pilot program area.
 
3    Section 30. Powers. The Department and the Division shall
4adopt rules for the administration of this Act.
 
5    Section 45. The Illinois Income Tax Act is amended by
6adding Section 227 as follows:
 
7    (35 ILCS 5/227 new)
8    Sec. 227. Bicentennial Mississippi River Region
9Redevelopment Historic Tax Credit Act. For tax years beginning
10on or after January 1, 2019 and ending on or before December
1131, 2029, a taxpayer who qualifies for a credit under the
12Bicentennial Mississippi River Region Redevelopment Historic
13Tax Credit Act is entitled to a credit against the taxes
14imposed under subsections (a) and (b) of Section 201 of this
15Act as provided in that Act. If the taxpayer is a partnership
16or Subchapter S corporation, the credit shall be allowed to the
17partners or shareholders in accordance with the determination
18of income and distributive share of income under Sections 702
19and 704 and Subchapter S of the Internal Revenue Code.
20    If the amount of any tax credit awarded under this Section
21exceeds the qualified taxpayer's income tax liability for the
22year in which the qualified rehabilitation plan was placed in
23service, the excess amount may be carried forward or back as

 

 

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1provided in the Bicentennial Mississippi River Region
2Redevelopment Historic Tax Credit Act.
 
3    Section 99. Effective date. This Act takes effect upon
4becoming law.