Illinois General Assembly - Full Text of HB3479
Illinois General Assembly

Previous General Assemblies

Full Text of HB3479  97th General Assembly




State of Illinois
2011 and 2012


Introduced 2/24/2011, by Rep. Karen A. Yarbrough - Darlene J. Senger


35 ILCS 5/221 new

    Amends the Illinois Income Tax Act. Creates a credit for contributions to qualified student assistance organizations. Provides that the credit may not exceed $100,000 and may not exceed 90% of each dollar contributed. Provides that the credit is exempt from the Act's automatic sunset provision. Effective immediately.

LRB097 09409 HLH 49544 b






HB3479LRB097 09409 HLH 49544 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 5. The Illinois Income Tax Act is amended by adding
5Section 221 as follows:
6    (35 ILCS 5/221 new)
7    Sec. 221. Educational Improvement Tax Credit.
8    (a) The General Assembly finds and declares that the
9Constitution of the State of Illinois provides that a
10"fundamental goal of the People of the State is the educational
11development of all persons to the limits of their capacities",
12and that the educational development of every school student
13serves the public purposes of the State. In order to enable
14Illinois students to develop "to the limit of their
15capacities", all students must have access to expanded
16educational opportunities. This Section is in the public
17interest, for the public benefit, and serves a secular purpose.
18    (b) An educational improvement tax credit program is hereby
19established to enhance the educational opportunities available
20to all students in this State.
21    For tax years beginning after December 31, 2011, a taxpayer
22shall be allowed a credit, not in excess of $100,000, against
23the tax imposed by subsections (a) and (b) of Section 201 of



HB3479- 2 -LRB097 09409 HLH 49544 b

1this Act for contributions to a qualified student assistance
2organization in the taxable year in which the contribution is
3made. The credit shall not exceed 90% of each dollar
4contributed during the taxable year by the taxpayer. For
5partners, shareholders of Subchapter S corporations, and
6owners of limited liability companies, if the liability company
7is treated as a partnership for purposes of federal and State
8income taxation, there shall be allowed a credit under this
9Section to be determined in accordance with the determination
10of income and distributive share of income under Section 702
11and 704 and Subchapter S of the Internal Revenue Code.
12    In no event may any credit be claimed for amounts deducted
13pursuant to Section 170 of the Internal Revenue Code in
14arriving at taxable income.
15    (c) For purposes of this Section:
16    "Contribution" means a donation of cash.
17    "Qualified student assistance organization" means a
18nonprofit entity that:
19        (1) is exempt from federal taxation under Section
20    501(c)(3) of the Internal Revenue Code of 1986 and any
21    similar provision of a later compilation; and
22        (2) contributes at least 90% of its annual receipts, as
23    required by the by-laws of the organization and as
24    documented by the nonprofit organizations annual AG990-IL
25    Charitable Organization Annual Report, or, if the
26    organization is exempt from filing such a report, by a



HB3479- 3 -LRB097 09409 HLH 49544 b

1    report containing identical information to that contained
2    in the AG990-IL and certified by the President and
3    Treasurer of the organization, or alternatively, two
4    trustees of the organization, either to scholarships for
5    qualifying students at a school or to enhance educational
6    options for qualifying students by providing qualifying
7    students access to secular, neutral, non-ideological
8    programs, or activities outside the curriculum or academic
9    program of a school, as long as the program or activities
10    meet the requirements set forth in rules promulgated by the
11    Illinois State Board of Education. An entity that has been
12    in existence less than 2 years prior to the filing of an
13    application under subsection (f) of this Section shall meet
14    the requirements of this subsection if its charter, bylaws
15    or other governing instrument requires that it contribute
16    90% of its annual receipts for the purposes described in
17    this subsection.
18    "Qualifying student" means an individual who:
19        (1) is a resident of the State of Illinois;
20        (2) is under the age of 21 during the calendar year for
21    which a credit is sought;
22        (3) during the calendar year for which a credit is
23    sought is a full-time pupil enrolled in a kindergarten
24    through 12th grade education program at any school, as
25    defined in this subsection (c); and
26        (4) is a child of a parent or parents, or is under the



HB3479- 4 -LRB097 09409 HLH 49544 b

1    legal guardianship of an individual or individuals, with a
2    base income of not more than $50,000 and resides in the
3    household with those parents or guardians, provided that if
4    there is more than one dependent member of the household
5    under the age of 21, counting the qualifying student, then
6    this annual income requirement shall be increased by
7    $10,000 for each dependent member of the household under
8    the age of 21 in excess of the one qualifying student.
9    Qualified student assistant organizations shall be
10    responsible for determining whether a student is a
11    qualifying student, pursuant to rules adopted by the
12    Illinois State Board of Education.
13    "School" means any public or State-recognized non-public
14elementary or secondary school in Illinois that is in
15compliance with Title VI of the Civil Rights Act of 1964 and
16attendance at which satisfies the requirements of Section 26-1
17of the School Code.
18    (d) No tax credit established by this Section is allowed if
19the taxpayer designates a contribution to a student assistance
20organization for the direct benefit of any particular
21qualifying student.
22    (e) Qualified student assistance organizations shall
23provide scholarships or funding for enhanced educational
24options without limiting availability to only students of one
26    (f) A tax credit granted under this Section that is not



HB3479- 5 -LRB097 09409 HLH 49544 b

1used in the taxable year in which the contribution was made
2shall not be carried forward or carried back and is not
3refundable or transferable.
4    (g) A taxpayer must apply annually to the Department and
5receive approval for a tax credit under this Section prior to
6making a contribution to a student assistance organization.
7Applicants must be submitted to the Department no later than
8March 31 each year for contributions to be made for tax years
9ending on or after July 1 of that same year. On May 1 of each
10year, the Department shall, on a random basis, select
11applications until the total aggregate amount of all requested
12tax credits equals the maximum provided for in subsection (h).
13The Department shall adopt rules pursuant to the requirements
14of the Illinois Administrative Procedure Act that set forth the
15information the Department can require on the tax credit
16application and the manner in which the tax credit lottery is
17to be conducted.
18    (h) The total aggregate amount of all approved tax credits
19shall not exceed $30,000,000 in any State fiscal year.
20    (i) The Department shall adopt rules consistent with this
21Section for the administration of the educational improvement
22tax credit program.
23    (j) A scholarship received by a qualifying student shall
24not be considered to be taxable income.
25    (k) This Section is exempt from the provisions of Section



HB3479- 6 -LRB097 09409 HLH 49544 b

1    Section 99. Effective date. This Act takes effect upon
2becoming law.