SB0004ham003 97TH GENERAL ASSEMBLY

Rep. Barbara Flynn Currie

Filed: 3/15/2011

 

 


 

 


 
09700SB0004ham003LRB097 05762 HLH 52978 a

1
AMENDMENT TO SENATE BILL 4

2    AMENDMENT NO. ______. Amend Senate Bill 4 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Corporate Accountability for Tax
5Expenditures Act is amended by changing Section 25 as follows:
 
6    (20 ILCS 715/25)
7    Sec. 25. Recapture.
8    (a) All development assistance agreements shall contain,
9at a minimum, the following recapture provisions:
10        (1) The recipient must (i) make the level of capital
11    investment in the economic development project specified
12    in the development assistance agreement; (ii) create or
13    retain, or both, the requisite number of jobs, paying not
14    less than specified wages for the created and retained
15    jobs, within and for the duration of the time period
16    specified in the legislation authorizing, or the

 

 

09700SB0004ham003- 2 -LRB097 05762 HLH 52978 a

1    administrative rules implementing, the development
2    assistance programs and the development assistance
3    agreement.
4        (2) If the recipient fails to create or retain the
5    requisite number of jobs within and for the time period
6    specified, in the legislation authorizing, or the
7    administrative rules implementing, the development
8    assistance programs and the development assistance
9    agreement, the recipient shall be deemed to no longer
10    qualify for the State economic assistance and the
11    applicable recapture provisions shall take effect.
12        (3) If the recipient receives State economic
13    assistance in the form of a High Impact Business
14    designation pursuant to Section 5.5 of the Illinois
15    Enterprise Zone Act and the business receives the benefit
16    of the exemption authorized under Section 5l of the
17    Retailers' Occupation Tax Act (for the sale of building
18    materials incorporated into a High Impact Business
19    location) and the recipient fails to create or retain the
20    requisite number of jobs, as determined by the legislation
21    authorizing the development assistance programs or the
22    administrative rules implementing such legislation, or
23    both, within the requisite period of time, the recipient
24    shall be required to pay to the State the full amount of
25    the State tax exemption that it received as a result of the
26    High Impact Business designation.

 

 

09700SB0004ham003- 3 -LRB097 05762 HLH 52978 a

1        (4) If the recipient receives a grant or loan pursuant
2    to the Large Business Development Program, the Business
3    Development Public Infrastructure Program, or the
4    Industrial Training Program and the recipient fails to
5    create or retain the requisite number of jobs for the
6    requisite time period, as provided in the legislation
7    authorizing the development assistance programs or the
8    administrative rules implementing such legislation, or
9    both, or in the development assistance agreement, the
10    recipient shall be required to repay to the State a pro
11    rata amount of the grant; that amount shall reflect the
12    percentage of the deficiency between the requisite number
13    of jobs to be created or retained by the recipient and the
14    actual number of such jobs in existence as of the date the
15    Department determines the recipient is in breach of the job
16    creation or retention covenants contained in the
17    development assistance agreement. If the recipient of
18    development assistance under the Large Business
19    Development Program, the Business Development Public
20    Infrastructure Program, or the Industrial Training Program
21    ceases operations at the specific project site, during the
22    5-year period commencing on the date of assistance, the
23    recipient shall be required to repay the entire amount of
24    the grant or to accelerate repayment of the loan back to
25    the State.
26        (5) If the recipient receives a tax credit under the

 

 

09700SB0004ham003- 4 -LRB097 05762 HLH 52978 a

1    Economic Development for a Growing Economy tax credit
2    program, the development assistance agreement must provide
3    that (i) if the number of new or retained employees falls
4    below the requisite number set forth in the development
5    assistance agreement, the allowance of the credit shall be
6    automatically suspended until the number of new and
7    retained employees equals or exceeds the requisite number
8    in the development assistance agreement; (ii) if the
9    recipient discontinues operations at the specific project
10    site during the 5-year period after the beginning of the
11    first tax year for which the Department issues a tax credit
12    certificate the first 5 years of the 10-year term of the
13    development assistance agreement, the recipient shall
14    forfeit all credits taken by the recipient during such
15    5-year period; and (iii) in the event of a revocation or
16    suspension of the credit, the Department shall contact the
17    Director of Revenue to initiate proceedings against the
18    recipient to recover wrongfully exempted Illinois State
19    income taxes and the recipient shall promptly repay to the
20    Department of Revenue any wrongfully exempted Illinois
21    State income taxes. The forfeited amount of credits shall
22    be deemed assessed on the date the Department contacts the
23    Department of Revenue and the recipient shall promptly
24    repay to the Department of Revenue any wrongfully exempted
25    Illinois State income taxes.
26    (b) The Director may elect to waive enforcement of any

 

 

09700SB0004ham003- 5 -LRB097 05762 HLH 52978 a

1contractual provision arising out of the development
2assistance agreement required by this Act based on a finding
3that the waiver is necessary to avert an imminent and
4demonstrable hardship to the recipient that may result in such
5recipient's insolvency or discharge of workers. If a waiver is
6granted, the recipient must agree to a contractual
7modification, including recapture provisions, to the
8development assistance agreement. The existence of any waiver
9granted pursuant to this subsection (c), the date of the
10granting of such waiver, and a brief summary of the reasons
11supporting the granting of such waiver shall be disclosed
12consistent with the provisions of Section 25 of this Act.
13    (c) Beginning June 1, 2004, the Department shall annually
14compile a report on the outcomes and effectiveness of recapture
15provisions by program, including but not limited to: (i) the
16total number of companies that receive development assistance
17as defined in this Act; (ii) the total number of recipients in
18violation of development agreements with the Department; (iii)
19the total number of completed recapture efforts; (iv) the total
20number of recapture efforts initiated; and (v) the number of
21waivers granted. This report shall be disclosed consistent with
22the provisions of Section 20 of this Act.
23    (d) For the purposes of this Act, recapture provisions do
24not include the Illinois Department of Transportation Economic
25Development Program, any grants under the Industrial Training
26Program that are not given as an incentive to a recipient

 

 

09700SB0004ham003- 6 -LRB097 05762 HLH 52978 a

1business organization, or any successor programs as described
2in the term "development assistance" in Section 5 of this Act.
3(Source: P.A. 93-552, eff. 8-20-03.)
 
4    Section 10. The Illinois Income Tax Act is amended by
5changing Section 201 as follows:
 
6    (35 ILCS 5/201)  (from Ch. 120, par. 2-201)
7    Sec. 201. Tax Imposed.
8    (a) In general. A tax measured by net income is hereby
9imposed on every individual, corporation, trust and estate for
10each taxable year ending after July 31, 1969 on the privilege
11of earning or receiving income in or as a resident of this
12State. Such tax shall be in addition to all other occupation or
13privilege taxes imposed by this State or by any municipal
14corporation or political subdivision thereof.
15    (b) Rates. The tax imposed by subsection (a) of this
16Section shall be determined as follows, except as adjusted by
17subsection (d-1):
18        (1) In the case of an individual, trust or estate, for
19    taxable years ending prior to July 1, 1989, an amount equal
20    to 2 1/2% of the taxpayer's net income for the taxable
21    year.
22        (2) In the case of an individual, trust or estate, for
23    taxable years beginning prior to July 1, 1989 and ending
24    after June 30, 1989, an amount equal to the sum of (i) 2

 

 

09700SB0004ham003- 7 -LRB097 05762 HLH 52978 a

1    1/2% of the taxpayer's net income for the period prior to
2    July 1, 1989, as calculated under Section 202.3, and (ii)
3    3% of the taxpayer's net income for the period after June
4    30, 1989, as calculated under Section 202.3.
5        (3) In the case of an individual, trust or estate, for
6    taxable years beginning after June 30, 1989, and ending
7    prior to January 1, 2011, an amount equal to 3% of the
8    taxpayer's net income for the taxable year.
9        (4) In the case of an individual, trust, or estate, for
10    taxable years beginning prior to January 1, 2011, and
11    ending after December 31, 2010, an amount equal to the sum
12    of (i) 3% of the taxpayer's net income for the period prior
13    to January 1, 2011, as calculated under Section 202.5, and
14    (ii) 5% of the taxpayer's net income for the period after
15    December 31, 2010, as calculated under Section 202.5.
16        (5) In the case of an individual, trust, or estate, for
17    taxable years beginning on or after January 1, 2011, and
18    ending prior to January 1, 2015, an amount equal to 5% of
19    the taxpayer's net income for the taxable year.
20        (5.1) In the case of an individual, trust, or estate,
21    for taxable years beginning prior to January 1, 2015, and
22    ending after December 31, 2014, an amount equal to the sum
23    of (i) 5% of the taxpayer's net income for the period prior
24    to January 1, 2015, as calculated under Section 202.5, and
25    (ii) 3.75% of the taxpayer's net income for the period
26    after December 31, 2014, as calculated under Section 202.5.

 

 

09700SB0004ham003- 8 -LRB097 05762 HLH 52978 a

1        (5.2) In the case of an individual, trust, or estate,
2    for taxable years beginning on or after January 1, 2015,
3    and ending prior to January 1, 2025, an amount equal to
4    3.75% of the taxpayer's net income for the taxable year.
5        (5.3) In the case of an individual, trust, or estate,
6    for taxable years beginning prior to January 1, 2025, and
7    ending after December 31, 2024, an amount equal to the sum
8    of (i) 3.75% of the taxpayer's net income for the period
9    prior to January 1, 2025, as calculated under Section
10    202.5, and (ii) 3.25% of the taxpayer's net income for the
11    period after December 31, 2024, as calculated under Section
12    202.5.
13        (5.4) In the case of an individual, trust, or estate,
14    for taxable years beginning on or after January 1, 2025, an
15    amount equal to 3.25% of the taxpayer's net income for the
16    taxable year.
17        (6) In the case of a corporation, for taxable years
18    ending prior to July 1, 1989, an amount equal to 4% of the
19    taxpayer's net income for the taxable year.
20        (7) In the case of a corporation, for taxable years
21    beginning prior to July 1, 1989 and ending after June 30,
22    1989, an amount equal to the sum of (i) 4% of the
23    taxpayer's net income for the period prior to July 1, 1989,
24    as calculated under Section 202.3, and (ii) 4.8% of the
25    taxpayer's net income for the period after June 30, 1989,
26    as calculated under Section 202.3.

 

 

09700SB0004ham003- 9 -LRB097 05762 HLH 52978 a

1        (8) In the case of a corporation, for taxable years
2    beginning after June 30, 1989, and ending prior to January
3    1, 2011, an amount equal to 4.8% of the taxpayer's net
4    income for the taxable year.
5        (9) In the case of a corporation, for taxable years
6    beginning prior to January 1, 2011, and ending after
7    December 31, 2010, an amount equal to the sum of (i) 4.8%
8    of the taxpayer's net income for the period prior to
9    January 1, 2011, as calculated under Section 202.5, and
10    (ii) 7% of the taxpayer's net income for the period after
11    December 31, 2010, as calculated under Section 202.5.
12        (10) In the case of a corporation, for taxable years
13    beginning on or after January 1, 2011, and ending prior to
14    January 1, 2015, an amount equal to 7% of the taxpayer's
15    net income for the taxable year.
16        (11) In the case of a corporation, for taxable years
17    beginning prior to January 1, 2015, and ending after
18    December 31, 2014, an amount equal to the sum of (i) 7% of
19    the taxpayer's net income for the period prior to January
20    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
21    of the taxpayer's net income for the period after December
22    31, 2014, as calculated under Section 202.5.
23        (12) In the case of a corporation, for taxable years
24    beginning on or after January 1, 2015, and ending prior to
25    January 1, 2025, an amount equal to 5.25% of the taxpayer's
26    net income for the taxable year.

 

 

09700SB0004ham003- 10 -LRB097 05762 HLH 52978 a

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

 

 

09700SB0004ham003- 11 -LRB097 05762 HLH 52978 a

1Tax Rates. The personal property tax replacement income tax
2imposed by this subsection and subsection (c) of this Section
3in the case of a corporation, other than a Subchapter S
4corporation and except as adjusted by subsection (d-1), shall
5be an additional amount equal to 2.85% of such taxpayer's net
6income for the taxable year, except that beginning on January
71, 1981, and thereafter, the rate of 2.85% specified in this
8subsection shall be reduced to 2.5%, and in the case of a
9partnership, trust or a Subchapter S corporation shall be an
10additional amount equal to 1.5% of such taxpayer's net income
11for the taxable year.
12    (d-1) Rate reduction for certain foreign insurers. In the
13case of a foreign insurer, as defined by Section 35A-5 of the
14Illinois Insurance Code, whose state or country of domicile
15imposes on insurers domiciled in Illinois a retaliatory tax
16(excluding any insurer whose premiums from reinsurance assumed
17are 50% or more of its total insurance premiums as determined
18under paragraph (2) of subsection (b) of Section 304, except
19that for purposes of this determination premiums from
20reinsurance do not include premiums from inter-affiliate
21reinsurance arrangements), beginning with taxable years ending
22on or after December 31, 1999, the sum of the rates of tax
23imposed by subsections (b) and (d) shall be reduced (but not
24increased) to the rate at which the total amount of tax imposed
25under this Act, net of all credits allowed under this Act,
26shall equal (i) the total amount of tax that would be imposed

 

 

09700SB0004ham003- 12 -LRB097 05762 HLH 52978 a

1on the foreign insurer's net income allocable to Illinois for
2the taxable year by such foreign insurer's state or country of
3domicile if that net income were subject to all income taxes
4and taxes measured by net income imposed by such foreign
5insurer's state or country of domicile, net of all credits
6allowed or (ii) a rate of zero if no such tax is imposed on such
7income by the foreign insurer's state of domicile. For the
8purposes of this subsection (d-1), an inter-affiliate includes
9a mutual insurer under common management.
10        (1) For the purposes of subsection (d-1), in no event
11    shall the sum of the rates of tax imposed by subsections
12    (b) and (d) be reduced below the rate at which the sum of:
13            (A) the total amount of tax imposed on such foreign
14        insurer under this Act for a taxable year, net of all
15        credits allowed under this Act, plus
16            (B) the privilege tax imposed by Section 409 of the
17        Illinois Insurance Code, the fire insurance company
18        tax imposed by Section 12 of the Fire Investigation
19        Act, and the fire department taxes imposed under
20        Section 11-10-1 of the Illinois Municipal Code,
21    equals 1.25% for taxable years ending prior to December 31,
22    2003, or 1.75% for taxable years ending on or after
23    December 31, 2003, of the net taxable premiums written for
24    the taxable year, as described by subsection (1) of Section
25    409 of the Illinois Insurance Code. This paragraph will in
26    no event increase the rates imposed under subsections (b)

 

 

09700SB0004ham003- 13 -LRB097 05762 HLH 52978 a

1    and (d).
2        (2) Any reduction in the rates of tax imposed by this
3    subsection shall be applied first against the rates imposed
4    by subsection (b) and only after the tax imposed by
5    subsection (a) net of all credits allowed under this
6    Section other than the credit allowed under subsection (i)
7    has been reduced to zero, against the rates imposed by
8    subsection (d).
9    This subsection (d-1) is exempt from the provisions of
10Section 250.
11    (e) Investment credit. A taxpayer shall be allowed a credit
12against the Personal Property Tax Replacement Income Tax for
13investment in qualified property.
14        (1) A taxpayer shall be allowed a credit equal to .5%
15    of the basis of qualified property placed in service during
16    the taxable year, provided such property is placed in
17    service on or after July 1, 1984. There shall be allowed an
18    additional credit equal to .5% of the basis of qualified
19    property placed in service during the taxable year,
20    provided such property is placed in service on or after
21    July 1, 1986, and the taxpayer's base employment within
22    Illinois has increased by 1% or more over the preceding
23    year as determined by the taxpayer's employment records
24    filed with the Illinois Department of Employment Security.
25    Taxpayers who are new to Illinois shall be deemed to have
26    met the 1% growth in base employment for the first year in

 

 

09700SB0004ham003- 14 -LRB097 05762 HLH 52978 a

1    which they file employment records with the Illinois
2    Department of Employment Security. The provisions added to
3    this Section by Public Act 85-1200 (and restored by Public
4    Act 87-895) shall be construed as declaratory of existing
5    law and not as a new enactment. If, in any year, the
6    increase in base employment within Illinois over the
7    preceding year is less than 1%, the additional credit shall
8    be limited to that percentage times a fraction, the
9    numerator of which is .5% and the denominator of which is
10    1%, but shall not exceed .5%. The investment credit shall
11    not be allowed to the extent that it would reduce a
12    taxpayer's liability in any tax year below zero, nor may
13    any credit for qualified property be allowed for any year
14    other than the year in which the property was placed in
15    service in Illinois. For tax years ending on or after
16    December 31, 1987, and on or before December 31, 1988, the
17    credit shall be allowed for the tax year in which the
18    property is placed in service, or, if the amount of the
19    credit exceeds the tax liability for that year, whether it
20    exceeds the original liability or the liability as later
21    amended, such excess may be carried forward and applied to
22    the tax liability of the 5 taxable years following the
23    excess credit years if the taxpayer (i) makes investments
24    which cause the creation of a minimum of 2,000 full-time
25    equivalent jobs in Illinois, (ii) is located in an
26    enterprise zone established pursuant to the Illinois

 

 

09700SB0004ham003- 15 -LRB097 05762 HLH 52978 a

1    Enterprise Zone Act and (iii) is certified by the
2    Department of Commerce and Community Affairs (now
3    Department of Commerce and Economic Opportunity) as
4    complying with the requirements specified in clause (i) and
5    (ii) by July 1, 1986. The Department of Commerce and
6    Community Affairs (now Department of Commerce and Economic
7    Opportunity) shall notify the Department of Revenue of all
8    such certifications immediately. For tax years ending
9    after December 31, 1988, the credit shall be allowed for
10    the tax year in which the property is placed in service,
11    or, if the amount of the credit exceeds the tax liability
12    for that year, whether it exceeds the original liability or
13    the liability as later amended, such excess may be carried
14    forward and applied to the tax liability of the 5 taxable
15    years following the excess credit years. The credit shall
16    be applied to the earliest year for which there is a
17    liability. If there is credit from more than one tax year
18    that is available to offset a liability, earlier credit
19    shall be applied first.
20        (2) The term "qualified property" means property
21    which:
22            (A) is tangible, whether new or used, including
23        buildings and structural components of buildings and
24        signs that are real property, but not including land or
25        improvements to real property that are not a structural
26        component of a building such as landscaping, sewer

 

 

09700SB0004ham003- 16 -LRB097 05762 HLH 52978 a

1        lines, local access roads, fencing, parking lots, and
2        other appurtenances;
3            (B) is depreciable pursuant to Section 167 of the
4        Internal Revenue Code, except that "3-year property"
5        as defined in Section 168(c)(2)(A) of that Code is not
6        eligible for the credit provided by this subsection
7        (e);
8            (C) is acquired by purchase as defined in Section
9        179(d) of the Internal Revenue Code;
10            (D) is used in Illinois by a taxpayer who is
11        primarily engaged in manufacturing, or in mining coal
12        or fluorite, or in retailing, or was placed in service
13        on or after July 1, 2006 in a River Edge Redevelopment
14        Zone established pursuant to the River Edge
15        Redevelopment Zone Act; and
16            (E) has not previously been used in Illinois in
17        such a manner and by such a person as would qualify for
18        the credit provided by this subsection (e) or
19        subsection (f).
20        (3) For purposes of this subsection (e),
21    "manufacturing" means the material staging and production
22    of tangible personal property by procedures commonly
23    regarded as manufacturing, processing, fabrication, or
24    assembling which changes some existing material into new
25    shapes, new qualities, or new combinations. For purposes of
26    this subsection (e) the term "mining" shall have the same

 

 

09700SB0004ham003- 17 -LRB097 05762 HLH 52978 a

1    meaning as the term "mining" in Section 613(c) of the
2    Internal Revenue Code. For purposes of this subsection (e),
3    the term "retailing" means the sale of tangible personal
4    property for use or consumption and not for resale, or
5    services rendered in conjunction with the sale of tangible
6    personal property for use or consumption and not for
7    resale. For purposes of this subsection (e), "tangible
8    personal property" has the same meaning as when that term
9    is used in the Retailers' Occupation Tax Act, and, for
10    taxable years ending after December 31, 2008, does not
11    include the generation, transmission, or distribution of
12    electricity.
13        (4) The basis of qualified property shall be the basis
14    used to compute the depreciation deduction for federal
15    income tax purposes.
16        (5) If the basis of the property for federal income tax
17    depreciation purposes is increased after it has been placed
18    in service in Illinois by the taxpayer, the amount of such
19    increase shall be deemed property placed in service on the
20    date of such increase in basis.
21        (6) The term "placed in service" shall have the same
22    meaning as under Section 46 of the Internal Revenue Code.
23        (7) If during any taxable year, any property ceases to
24    be qualified property in the hands of the taxpayer within
25    48 months after being placed in service, or the situs of
26    any qualified property is moved outside Illinois within 48

 

 

09700SB0004ham003- 18 -LRB097 05762 HLH 52978 a

1    months after being placed in service, the Personal Property
2    Tax Replacement Income Tax for such taxable year shall be
3    increased. Such increase shall be determined by (i)
4    recomputing the investment credit which would have been
5    allowed for the year in which credit for such property was
6    originally allowed by eliminating such property from such
7    computation and, (ii) subtracting such recomputed credit
8    from the amount of credit previously allowed. For the
9    purposes of this paragraph (7), a reduction of the basis of
10    qualified property resulting from a redetermination of the
11    purchase price shall be deemed a disposition of qualified
12    property to the extent of such reduction.
13        (8) Unless the investment credit is extended by law,
14    the basis of qualified property shall not include costs
15    incurred after December 31, 2013, except for costs incurred
16    pursuant to a binding contract entered into on or before
17    December 31, 2013.
18        (9) Each taxable year ending before December 31, 2000,
19    a partnership may elect to pass through to its partners the
20    credits to which the partnership is entitled under this
21    subsection (e) for the taxable year. A partner may use the
22    credit allocated to him or her under this paragraph only
23    against the tax imposed in subsections (c) and (d) of this
24    Section. If the partnership makes that election, those
25    credits shall be allocated among the partners in the
26    partnership in accordance with the rules set forth in

 

 

09700SB0004ham003- 19 -LRB097 05762 HLH 52978 a

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

 

 

09700SB0004ham003- 20 -LRB097 05762 HLH 52978 a

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

 

 

09700SB0004ham003- 21 -LRB097 05762 HLH 52978 a

1    applied to the earliest year for which there is a
2    liability. If there is credit from more than one tax year
3    that is available to offset a liability, the credit
4    accruing first in time shall be applied first.
5        (2) The term qualified property means property which:
6            (A) is tangible, whether new or used, including
7        buildings and structural components of buildings;
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        (f);
13            (C) is acquired by purchase as defined in Section
14        179(d) of the Internal Revenue Code;
15            (D) is used in the Enterprise Zone or River Edge
16        Redevelopment Zone by the taxpayer; and
17            (E) has not been previously used in Illinois in
18        such a manner and by such a person as would qualify for
19        the credit provided by this subsection (f) or
20        subsection (e).
21        (3) The basis of qualified property shall be the basis
22    used to compute the depreciation deduction for federal
23    income tax purposes.
24        (4) If the basis of the property for federal income tax
25    depreciation purposes is increased after it has been placed
26    in service in the Enterprise Zone or River Edge

 

 

09700SB0004ham003- 22 -LRB097 05762 HLH 52978 a

1    Redevelopment Zone by the taxpayer, the amount of such
2    increase shall be deemed property placed in service on the
3    date of such increase in basis.
4        (5) The term "placed in service" shall have the same
5    meaning as under Section 46 of the Internal Revenue Code.
6        (6) If during any taxable year, any property ceases to
7    be qualified property in the hands of the taxpayer within
8    48 months after being placed in service, or the situs of
9    any qualified property is moved outside the Enterprise Zone
10    or River Edge Redevelopment Zone within 48 months after
11    being placed in service, the tax imposed under subsections
12    (a) and (b) of this Section for such taxable year shall be
13    increased. Such increase shall be determined by (i)
14    recomputing the investment credit which would have been
15    allowed for the year in which credit for such property was
16    originally allowed by eliminating such property from such
17    computation, and (ii) subtracting such recomputed credit
18    from the amount of credit previously allowed. For the
19    purposes of this paragraph (6), a reduction of the basis of
20    qualified property resulting from a redetermination of the
21    purchase price shall be deemed a disposition of qualified
22    property to the extent of such reduction.
23        (7) There shall be allowed an additional credit equal
24    to 0.5% of the basis of qualified property placed in
25    service during the taxable year in a River Edge
26    Redevelopment Zone, provided such property is placed in

 

 

09700SB0004ham003- 23 -LRB097 05762 HLH 52978 a

1    service on or after July 1, 2006, and the taxpayer's base
2    employment within Illinois has increased by 1% or more over
3    the preceding year as determined by the taxpayer's
4    employment records filed with the Illinois Department of
5    Employment Security. Taxpayers who are new to Illinois
6    shall be deemed to have met the 1% growth in base
7    employment for the first year in which they file employment
8    records with the Illinois Department of Employment
9    Security. If, in any year, the increase in base employment
10    within Illinois over the preceding year is less than 1%,
11    the additional credit shall be limited to that percentage
12    times a fraction, the numerator of which is 0.5% and the
13    denominator of which is 1%, but shall not exceed 0.5%.
14    (g) Jobs Tax Credit; Enterprise Zone, River Edge
15Redevelopment Zone, and Foreign Trade Zone or Sub-Zone.
16        (1) A taxpayer conducting a trade or business in an
17    enterprise zone or a High Impact Business designated by the
18    Department of Commerce and Economic Opportunity or for
19    taxable years ending on or after December 31, 2006, in a
20    River Edge Redevelopment Zone conducting a trade or
21    business in a federally designated Foreign Trade Zone or
22    Sub-Zone shall be allowed a credit against the tax imposed
23    by subsections (a) and (b) of this Section in the amount of
24    $500 per eligible employee hired to work in the zone during
25    the taxable year.
26        (2) To qualify for the credit:

 

 

09700SB0004ham003- 24 -LRB097 05762 HLH 52978 a

1            (A) the taxpayer must hire 5 or more eligible
2        employees to work in an enterprise zone, River Edge
3        Redevelopment Zone, or federally designated Foreign
4        Trade Zone or Sub-Zone during the taxable year;
5            (B) the taxpayer's total employment within the
6        enterprise zone, River Edge Redevelopment Zone, or
7        federally designated Foreign Trade Zone or Sub-Zone
8        must increase by 5 or more full-time employees beyond
9        the total employed in that zone at the end of the
10        previous tax year for which a jobs tax credit under
11        this Section was taken, or beyond the total employed by
12        the taxpayer as of December 31, 1985, whichever is
13        later; and
14            (C) the eligible employees must be employed 180
15        consecutive days in order to be deemed hired for
16        purposes of this subsection.
17        (3) An "eligible employee" means an employee who is:
18            (A) Certified by the Department of Commerce and
19        Economic Opportunity as "eligible for services"
20        pursuant to regulations promulgated in accordance with
21        Title II of the Job Training Partnership Act, Training
22        Services for the Disadvantaged or Title III of the Job
23        Training Partnership Act, Employment and Training
24        Assistance for Dislocated Workers Program.
25            (B) Hired after the enterprise zone, River Edge
26        Redevelopment Zone, or federally designated Foreign

 

 

09700SB0004ham003- 25 -LRB097 05762 HLH 52978 a

1        Trade Zone or Sub-Zone was designated or the trade or
2        business was located in that zone, whichever is later.
3            (C) Employed in the enterprise zone, River Edge
4        Redevelopment Zone, or Foreign Trade Zone or Sub-Zone.
5        An employee is employed in an enterprise zone or
6        federally designated Foreign Trade Zone or Sub-Zone if
7        his services are rendered there or it is the base of
8        operations for the services performed.
9            (D) A full-time employee working 30 or more hours
10        per week.
11        (4) For tax years ending on or after December 31, 1985
12    and prior to December 31, 1988, the credit shall be allowed
13    for the tax year in which the eligible employees are hired.
14    For tax years ending on or after December 31, 1988, the
15    credit shall be allowed for the tax year immediately
16    following the tax year in which the eligible employees are
17    hired. If the amount of the credit exceeds the tax
18    liability for that year, whether it exceeds the original
19    liability or the liability as later amended, such excess
20    may be carried forward and applied to the tax liability of
21    the 5 taxable years following the excess credit year. The
22    credit shall be applied to the earliest year for which
23    there is a liability. If there is credit from more than one
24    tax year that is available to offset a liability, earlier
25    credit shall be applied first.
26        (5) The Department of Revenue shall promulgate such

 

 

09700SB0004ham003- 26 -LRB097 05762 HLH 52978 a

1    rules and regulations as may be deemed necessary to carry
2    out the purposes of this subsection (g).
3        (6) The credit shall be available for eligible
4    employees hired on or after January 1, 1986.
5    (h) Investment credit; High Impact Business.
6        (1) Subject to subsections (b) and (b-5) of Section 5.5
7    of the Illinois Enterprise Zone Act, a taxpayer shall be
8    allowed a credit against the tax imposed by subsections (a)
9    and (b) of this Section for investment in qualified
10    property which is placed in service by a Department of
11    Commerce and Economic Opportunity designated High Impact
12    Business. The credit shall be .5% of the basis for such
13    property. The credit shall not be available (i) until the
14    minimum investments in qualified property set forth in
15    subdivision (a)(3)(A) of Section 5.5 of the Illinois
16    Enterprise Zone Act have been satisfied or (ii) until the
17    time authorized in subsection (b-5) of the Illinois
18    Enterprise Zone Act for entities designated as High Impact
19    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
20    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
21    Act, and shall not be allowed to the extent that it would
22    reduce a taxpayer's liability for the tax imposed by
23    subsections (a) and (b) of this Section to below zero. The
24    credit applicable to such investments shall be taken in the
25    taxable year in which such investments have been completed.
26    The credit for additional investments beyond the minimum

 

 

09700SB0004ham003- 27 -LRB097 05762 HLH 52978 a

1    investment by a designated high impact business authorized
2    under subdivision (a)(3)(A) of Section 5.5 of the Illinois
3    Enterprise Zone Act shall be available only in the taxable
4    year in which the property is placed in service and shall
5    not be allowed to the extent that it would reduce a
6    taxpayer's liability for the tax imposed by subsections (a)
7    and (b) of this Section to below zero. For tax years ending
8    on or after December 31, 1987, the credit shall be allowed
9    for the tax year in which the property is placed in
10    service, or, if the amount of the credit exceeds the tax
11    liability for that year, whether it exceeds the original
12    liability or the liability as later amended, such excess
13    may be carried forward and applied to the tax liability of
14    the 5 taxable years following the excess credit year. The
15    credit shall be applied to the earliest year for which
16    there is a liability. If there is credit from more than one
17    tax year that is available to offset a liability, the
18    credit accruing first in time shall be applied first.
19        Changes made in this subdivision (h)(1) by Public Act
20    88-670 restore changes made by Public Act 85-1182 and
21    reflect existing law.
22        (2) The term qualified property means property which:
23            (A) is tangible, whether new or used, including
24        buildings and structural components of buildings;
25            (B) is depreciable pursuant to Section 167 of the
26        Internal Revenue Code, except that "3-year property"

 

 

09700SB0004ham003- 28 -LRB097 05762 HLH 52978 a

1        as defined in Section 168(c)(2)(A) of that Code is not
2        eligible for the credit provided by this subsection
3        (h);
4            (C) is acquired by purchase as defined in Section
5        179(d) of the Internal Revenue Code; and
6            (D) is not eligible for the Enterprise Zone
7        Investment Credit provided by subsection (f) of this
8        Section.
9        (3) The basis of qualified property shall be the basis
10    used to compute the depreciation deduction for federal
11    income tax purposes.
12        (4) If the basis of the property for federal income tax
13    depreciation purposes is increased after it has been placed
14    in service in a federally designated Foreign Trade Zone or
15    Sub-Zone located in Illinois by the taxpayer, the amount of
16    such increase shall be deemed property placed in service on
17    the date of such increase in basis.
18        (5) The term "placed in service" shall have the same
19    meaning as under Section 46 of the Internal Revenue Code.
20        (6) If during any taxable year ending on or before
21    December 31, 1996, any property ceases to be qualified
22    property in the hands of the taxpayer within 48 months
23    after being placed in service, or the situs of any
24    qualified property is moved outside Illinois within 48
25    months after being placed in service, the tax imposed under
26    subsections (a) and (b) of this Section for such taxable

 

 

09700SB0004ham003- 29 -LRB097 05762 HLH 52978 a

1    year shall be increased. Such increase shall be determined
2    by (i) recomputing the investment credit which would have
3    been allowed for the year in which credit for such property
4    was originally allowed by eliminating such property from
5    such computation, and (ii) subtracting such recomputed
6    credit from the amount of credit previously allowed. For
7    the purposes of this paragraph (6), a reduction of the
8    basis of qualified property resulting from a
9    redetermination of the purchase price shall be deemed a
10    disposition of qualified property to the extent of such
11    reduction.
12        (7) Beginning with tax years ending after December 31,
13    1996, if a taxpayer qualifies for the credit under this
14    subsection (h) and thereby is granted a tax abatement and
15    the taxpayer relocates its entire facility in violation of
16    the explicit terms and length of the contract under Section
17    18-183 of the Property Tax Code, the tax imposed under
18    subsections (a) and (b) of this Section shall be increased
19    for the taxable year in which the taxpayer relocated its
20    facility by an amount equal to the amount of credit
21    received by the taxpayer under this subsection (h).
22    (i) Credit for Personal Property Tax Replacement Income
23Tax. For tax years ending prior to December 31, 2003, a credit
24shall be allowed against the tax imposed by subsections (a) and
25(b) of this Section for the tax imposed by subsections (c) and
26(d) of this Section. This credit shall be computed by

 

 

09700SB0004ham003- 30 -LRB097 05762 HLH 52978 a

1multiplying the tax imposed by subsections (c) and (d) of this
2Section by a fraction, the numerator of which is base income
3allocable to Illinois and the denominator of which is Illinois
4base income, and further multiplying the product by the tax
5rate imposed by subsections (a) and (b) of this Section.
6    Any credit earned on or after December 31, 1986 under this
7subsection which is unused in the year the credit is computed
8because it exceeds the tax liability imposed by subsections (a)
9and (b) for that year (whether it exceeds the original
10liability or the liability as later amended) may be carried
11forward and applied to the tax liability imposed by subsections
12(a) and (b) of the 5 taxable years following the excess credit
13year, provided that no credit may be carried forward to any
14year ending on or after December 31, 2003. This credit shall be
15applied first to the earliest year for which there is a
16liability. If there is a credit under this subsection from more
17than one tax year that is available to offset a liability the
18earliest credit arising under this subsection shall be applied
19first.
20    If, during any taxable year ending on or after December 31,
211986, the tax imposed by subsections (c) and (d) of this
22Section for which a taxpayer has claimed a credit under this
23subsection (i) is reduced, the amount of credit for such tax
24shall also be reduced. Such reduction shall be determined by
25recomputing the credit to take into account the reduced tax
26imposed by subsections (c) and (d). If any portion of the

 

 

09700SB0004ham003- 31 -LRB097 05762 HLH 52978 a

1reduced amount of credit has been carried to a different
2taxable year, an amended return shall be filed for such taxable
3year to reduce the amount of credit claimed.
4    (j) Training expense credit. Beginning with tax years
5ending on or after December 31, 1986 and prior to December 31,
62003, a taxpayer shall be allowed a credit against the tax
7imposed by subsections (a) and (b) under this Section for all
8amounts paid or accrued, on behalf of all persons employed by
9the taxpayer in Illinois or Illinois residents employed outside
10of Illinois by a taxpayer, for educational or vocational
11training in semi-technical or technical fields or semi-skilled
12or skilled fields, which were deducted from gross income in the
13computation of taxable income. The credit against the tax
14imposed by subsections (a) and (b) shall be 1.6% of such
15training expenses. For partners, shareholders of subchapter S
16corporations, and owners of limited liability companies, if the
17liability company is treated as a partnership for purposes of
18federal and State income taxation, there shall be allowed a
19credit under this subsection (j) to be determined in accordance
20with the determination of income and distributive share of
21income under Sections 702 and 704 and subchapter S of the
22Internal Revenue Code.
23    Any credit allowed under this subsection which is unused in
24the year the credit is earned may be carried forward to each of
25the 5 taxable years following the year for which the credit is
26first computed until it is used. This credit shall be applied

 

 

09700SB0004ham003- 32 -LRB097 05762 HLH 52978 a

1first to the earliest year for which there is a liability. If
2there is a credit under this subsection from more than one tax
3year that is available to offset a liability the earliest
4credit arising under this subsection shall be applied first. No
5carryforward credit may be claimed in any tax year ending on or
6after December 31, 2003.
7    (k) Research and development credit.
8    For tax years ending after July 1, 1990 and prior to
9December 31, 2003, and beginning again for tax years ending on
10or after December 31, 2004, and ending prior to January 1,
112011, a taxpayer shall be allowed a credit against the tax
12imposed by subsections (a) and (b) of this Section for
13increasing research activities in this State. The credit
14allowed against the tax imposed by subsections (a) and (b)
15shall be equal to 6 1/2% of the qualifying expenditures for
16increasing research activities in this State. For partners,
17shareholders of subchapter S corporations, and owners of
18limited liability companies, if the liability company is
19treated as a partnership for purposes of federal and State
20income taxation, there shall be allowed a credit under this
21subsection to be determined in accordance with the
22determination of income and distributive share of income under
23Sections 702 and 704 and subchapter S of the Internal Revenue
24Code.
25    For purposes of this subsection, "qualifying expenditures"
26means the qualifying expenditures as defined for the federal

 

 

09700SB0004ham003- 33 -LRB097 05762 HLH 52978 a

1credit for increasing research activities which would be
2allowable under Section 41 of the Internal Revenue Code and
3which are conducted in this State, "qualifying expenditures for
4increasing research activities in this State" means the excess
5of qualifying expenditures for the taxable year in which
6incurred over qualifying expenditures for the base period,
7"qualifying expenditures for the base period" means the average
8of the qualifying expenditures for each year in the base
9period, and "base period" means the 3 taxable years immediately
10preceding the taxable year for which the determination is being
11made.
12    Any credit in excess of the tax liability for the taxable
13year may be carried forward. A taxpayer may elect to have the
14unused credit shown on its final completed return carried over
15as a credit against the tax liability for the following 5
16taxable years or until it has been fully used, whichever occurs
17first; provided that no credit earned in a tax year ending
18prior to December 31, 2003 may be carried forward to any year
19ending on or after December 31, 2003, and no credit may be
20carried forward to any taxable year ending on or after January
211, 2011.
22    If an unused credit is carried forward to a given year from
232 or more earlier years, that credit arising in the earliest
24year will be applied first against the tax liability for the
25given year. If a tax liability for the given year still
26remains, the credit from the next earliest year will then be

 

 

09700SB0004ham003- 34 -LRB097 05762 HLH 52978 a

1applied, and so on, until all credits have been used or no tax
2liability for the given year remains. Any remaining unused
3credit or credits then will be carried forward to the next
4following year in which a tax liability is incurred, except
5that no credit can be carried forward to a year which is more
6than 5 years after the year in which the expense for which the
7credit is given was incurred.
8    No inference shall be drawn from this amendatory Act of the
991st General Assembly in construing this Section for taxable
10years beginning before January 1, 1999.
11    (l) Environmental Remediation Tax Credit.
12        (i) For tax years ending after December 31, 1997 and on
13    or before December 31, 2001, a taxpayer shall be allowed a
14    credit against the tax imposed by subsections (a) and (b)
15    of this Section for certain amounts paid for unreimbursed
16    eligible remediation costs, as specified in this
17    subsection. For purposes of this Section, "unreimbursed
18    eligible remediation costs" means costs approved by the
19    Illinois Environmental Protection Agency ("Agency") under
20    Section 58.14 of the Environmental Protection Act that were
21    paid in performing environmental remediation at a site for
22    which a No Further Remediation Letter was issued by the
23    Agency and recorded under Section 58.10 of the
24    Environmental Protection Act. The credit must be claimed
25    for the taxable year in which Agency approval of the
26    eligible remediation costs is granted. The credit is not

 

 

09700SB0004ham003- 35 -LRB097 05762 HLH 52978 a

1    available to any taxpayer if the taxpayer or any related
2    party caused or contributed to, in any material respect, a
3    release of regulated substances on, in, or under the site
4    that was identified and addressed by the remedial action
5    pursuant to the Site Remediation Program of the
6    Environmental Protection Act. After the Pollution Control
7    Board rules are adopted pursuant to the Illinois
8    Administrative Procedure Act for the administration and
9    enforcement of Section 58.9 of the Environmental
10    Protection Act, determinations as to credit availability
11    for purposes of this Section shall be made consistent with
12    those rules. For purposes of this Section, "taxpayer"
13    includes a person whose tax attributes the taxpayer has
14    succeeded to under Section 381 of the Internal Revenue Code
15    and "related party" includes the persons disallowed a
16    deduction for losses by paragraphs (b), (c), and (f)(1) of
17    Section 267 of the Internal Revenue Code by virtue of being
18    a related taxpayer, as well as any of its partners. The
19    credit allowed against the tax imposed by subsections (a)
20    and (b) shall be equal to 25% of the unreimbursed eligible
21    remediation costs in excess of $100,000 per site, except
22    that the $100,000 threshold shall not apply to any site
23    contained in an enterprise zone as determined by the
24    Department of Commerce and Community Affairs (now
25    Department of Commerce and Economic Opportunity). The
26    total credit allowed shall not exceed $40,000 per year with

 

 

09700SB0004ham003- 36 -LRB097 05762 HLH 52978 a

1    a maximum total of $150,000 per site. For partners and
2    shareholders of subchapter S corporations, there shall be
3    allowed a credit under this subsection to be determined in
4    accordance with the determination of income and
5    distributive share of income under Sections 702 and 704 and
6    subchapter S of the Internal Revenue Code.
7        (ii) A credit allowed under this subsection that is
8    unused in the year the credit is earned may be carried
9    forward to each of the 5 taxable years following the year
10    for which the credit is first earned until it is used. The
11    term "unused credit" does not include any amounts of
12    unreimbursed eligible remediation costs in excess of the
13    maximum credit per site authorized under paragraph (i).
14    This credit shall be applied first to the earliest year for
15    which there is a liability. If there is a credit under this
16    subsection from more than one tax year that is available to
17    offset a liability, the earliest credit arising under this
18    subsection shall be applied first. A credit allowed under
19    this subsection may be sold to a buyer as part of a sale of
20    all or part of the remediation site for which the credit
21    was granted. The purchaser of a remediation site and the
22    tax credit shall succeed to the unused credit and remaining
23    carry-forward period of the seller. To perfect the
24    transfer, the assignor shall record the transfer in the
25    chain of title for the site and provide written notice to
26    the Director of the Illinois Department of Revenue of the

 

 

09700SB0004ham003- 37 -LRB097 05762 HLH 52978 a

1    assignor's intent to sell the remediation site and the
2    amount of the tax credit to be transferred as a portion of
3    the sale. In no event may a credit be transferred to any
4    taxpayer if the taxpayer or a related party would not be
5    eligible under the provisions of subsection (i).
6        (iii) For purposes of this Section, the term "site"
7    shall have the same meaning as under Section 58.2 of the
8    Environmental Protection Act.
9    (m) Education expense credit. Beginning with tax years
10ending after December 31, 1999, a taxpayer who is the custodian
11of one or more qualifying pupils shall be allowed a credit
12against the tax imposed by subsections (a) and (b) of this
13Section for qualified education expenses incurred on behalf of
14the qualifying pupils. The credit shall be equal to 25% of
15qualified education expenses, but in no event may the total
16credit under this subsection claimed by a family that is the
17custodian of qualifying pupils exceed $500. In no event shall a
18credit under this subsection reduce the taxpayer's liability
19under this Act to less than zero. This subsection is exempt
20from the provisions of Section 250 of this Act.
21    For purposes of this subsection:
22    "Qualifying pupils" means individuals who (i) are
23residents of the State of Illinois, (ii) are under the age of
2421 at the close of the school year for which a credit is
25sought, and (iii) during the school year for which a credit is
26sought were full-time pupils enrolled in a kindergarten through

 

 

09700SB0004ham003- 38 -LRB097 05762 HLH 52978 a

1twelfth grade education program at any school, as defined in
2this subsection.
3    "Qualified education expense" means the amount incurred on
4behalf of a qualifying pupil in excess of $250 for tuition,
5book fees, and lab fees at the school in which the pupil is
6enrolled during the regular school year.
7    "School" means any public or nonpublic elementary or
8secondary school in Illinois that is in compliance with Title
9VI of the Civil Rights Act of 1964 and attendance at which
10satisfies the requirements of Section 26-1 of the School Code,
11except that nothing shall be construed to require a child to
12attend any particular public or nonpublic school to qualify for
13the credit under this Section.
14    "Custodian" means, with respect to qualifying pupils, an
15Illinois resident who is a parent, the parents, a legal
16guardian, or the legal guardians of the qualifying pupils.
17    (n) River Edge Redevelopment Zone site remediation tax
18credit.
19        (i) For tax years ending on or after December 31, 2006,
20    a taxpayer shall be allowed a credit against the tax
21    imposed by subsections (a) and (b) of this Section for
22    certain amounts paid for unreimbursed eligible remediation
23    costs, as specified in this subsection. For purposes of
24    this Section, "unreimbursed eligible remediation costs"
25    means costs approved by the Illinois Environmental
26    Protection Agency ("Agency") under Section 58.14a of the

 

 

09700SB0004ham003- 39 -LRB097 05762 HLH 52978 a

1    Environmental Protection Act that were paid in performing
2    environmental remediation at a site within a River Edge
3    Redevelopment Zone for which a No Further Remediation
4    Letter was issued by the Agency and recorded under Section
5    58.10 of the Environmental Protection Act. The credit must
6    be claimed for the taxable year in which Agency approval of
7    the eligible remediation costs is granted. The credit is
8    not available to any taxpayer if the taxpayer or any
9    related party caused or contributed to, in any material
10    respect, a release of regulated substances on, in, or under
11    the site that was identified and addressed by the remedial
12    action pursuant to the Site Remediation Program of the
13    Environmental Protection Act. Determinations as to credit
14    availability for purposes of this Section shall be made
15    consistent with rules adopted by the Pollution Control
16    Board pursuant to the Illinois Administrative Procedure
17    Act for the administration and enforcement of Section 58.9
18    of the Environmental Protection Act. For purposes of this
19    Section, "taxpayer" includes a person whose tax attributes
20    the taxpayer has succeeded to under Section 381 of the
21    Internal Revenue Code and "related party" includes the
22    persons disallowed a deduction for losses by paragraphs
23    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
24    Code by virtue of being a related taxpayer, as well as any
25    of its partners. The credit allowed against the tax imposed
26    by subsections (a) and (b) shall be equal to 25% of the

 

 

09700SB0004ham003- 40 -LRB097 05762 HLH 52978 a

1    unreimbursed eligible remediation costs in excess of
2    $100,000 per site.
3        (ii) A credit allowed under this subsection that is
4    unused in the year the credit is earned may be carried
5    forward to each of the 5 taxable years following the year
6    for which the credit is first earned until it is used. This
7    credit shall be applied first to the earliest year for
8    which there is a liability. If there is a credit under this
9    subsection from more than one tax year that is available to
10    offset a liability, the earliest credit arising under this
11    subsection shall be applied first. A credit allowed under
12    this subsection may be sold to a buyer as part of a sale of
13    all or part of the remediation site for which the credit
14    was granted. The purchaser of a remediation site and the
15    tax credit shall succeed to the unused credit and remaining
16    carry-forward period of the seller. To perfect the
17    transfer, the assignor shall record the transfer in the
18    chain of title for the site and provide written notice to
19    the Director of the Illinois Department of Revenue of the
20    assignor's intent to sell the remediation site and the
21    amount of the tax credit to be transferred as a portion of
22    the sale. In no event may a credit be transferred to any
23    taxpayer if the taxpayer or a related party would not be
24    eligible under the provisions of subsection (i).
25        (iii) For purposes of this Section, the term "site"
26    shall have the same meaning as under Section 58.2 of the

 

 

09700SB0004ham003- 41 -LRB097 05762 HLH 52978 a

1    Environmental Protection Act.
2        (iv) This subsection is exempt from the provisions of
3    Section 250.
4(Source: P.A. 95-454, eff. 8-27-07; 96-115, eff. 7-31-09;
596-116, eff. 7-31-09; 96-937, eff. 6-23-10; 96-1000, eff.
67-2-10; 96-1496, eff. 1-13-11.)
 
7    Section 15. The Economic Development for a Growing Economy
8Tax Credit Act is amended by changing Sections 5-15 and 5-50
9and by adding Section 5-77 as follows:
 
10    (35 ILCS 10/5-15)
11    Sec. 5-15. Tax Credit Awards. Subject to the conditions set
12forth in this Act, a Taxpayer is entitled to a Credit against
13or, as described in subsection (g) of this Section, a payment
14towards taxes imposed pursuant to subsections (a) and (b) of
15Section 201 of the Illinois Income Tax Act that may be imposed
16on the Taxpayer for a taxable year beginning on or after
17January 1, 1999, if the Taxpayer is awarded a Credit by the
18Department under this Act for that taxable year.
19    (a) The Department shall make Credit awards under this Act
20to foster job creation and retention in Illinois.
21    (b) A person that proposes a project to create new jobs in
22Illinois must enter into an Agreement with the Department for
23the Credit under this Act.
24    (c) The Credit shall be claimed for the taxable years

 

 

09700SB0004ham003- 42 -LRB097 05762 HLH 52978 a

1specified in the Agreement.
2    (d) The Credit shall not exceed the Incremental Income Tax
3attributable to the project that is the subject of the
4Agreement.
5    (e) Nothing herein shall prohibit a Tax Credit Award to an
6Applicant that uses a PEO if all other award criteria are
7satisfied.
8    (f) In lieu of the Credit allowed under this Act against
9the taxes imposed pursuant to subsections (a) and (b) of
10Section 201 of the Illinois Income Tax Act for any taxable year
11ending on or after December 31, 2009, the Taxpayer may elect to
12claim the Credit against its obligation to pay over withholding
13under Section 704A of the Illinois Income Tax Act.
14        (1) The election under this subsection (f) may be made
15    only by a Taxpayer that (i) is primarily engaged in one of
16    the following business activities: water purification and
17    treatment, motor vehicle metal stamping, automobile
18    manufacturing, automobile and light duty motor vehicle
19    manufacturing, motor vehicle manufacturing, light truck
20    and utility vehicle manufacturing, heavy duty truck
21    manufacturing, or motor vehicle body manufacturing, cable
22    television infrastructure design or manufacturing, or
23    wireless telecommunication or computing terminal device
24    design or manufacturing for use on public networks and (ii)
25    meets the following criteria:
26            (A) the Taxpayer (i) had an Illinois net loss or an

 

 

09700SB0004ham003- 43 -LRB097 05762 HLH 52978 a

1        Illinois net loss deduction under Section 207 of the
2        Illinois Income Tax Act for the taxable year in which
3        the Credit is awarded, (ii) employed a minimum of 1,000
4        full-time employees in this State during the taxable
5        year in which the Credit is awarded, (iii) has an
6        Agreement under this Act on December 14, 2009 (the
7        effective date of Public Act 96-834), and (iv) is in
8        compliance with all provisions of that Agreement;
9            (B) the Taxpayer (i) had an Illinois net loss or an
10        Illinois net loss deduction under Section 207 of the
11        Illinois Income Tax Act for the taxable year in which
12        the Credit is awarded, (ii) employed a minimum of 1,000
13        full-time employees in this State during the taxable
14        year in which the Credit is awarded, and (iii) has
15        applied for an Agreement within 365 days after December
16        14, 2009 (the effective date of Public Act 96-834);
17            (C) the Taxpayer (i) had an Illinois net operating
18        loss carryforward under Section 207 of the Illinois
19        Income Tax Act in a taxable year ending during calendar
20        year 2008, (ii) has applied for an Agreement within 150
21        days after the effective date of this amendatory Act of
22        the 96th General Assembly, (iii) creates at least 400
23        new jobs in Illinois, (iv) retains at least 2,000 jobs
24        in Illinois that would have been at risk of relocation
25        out of Illinois over a 10-year period, and (v) makes a
26        capital investment of at least $75,000,000; or

 

 

09700SB0004ham003- 44 -LRB097 05762 HLH 52978 a

1            (D) the Taxpayer (i) had an Illinois net operating
2        loss carryforward under Section 207 of the Illinois
3        Income Tax Act in a taxable year ending during calendar
4        year 2009, (ii) has applied for an Agreement within 150
5        days after the effective date of this amendatory Act of
6        the 96th General Assembly, (iii) creates at least 150
7        new jobs, (iv) retains at least 1,000 jobs in Illinois
8        that would have been at risk of relocation out of
9        Illinois over a 10-year period, and (v) makes a capital
10        investment of at least $57,000,000; or .
11            (E) the Taxpayer (i) employed at least 2,500
12        full-time employees in the State during the year in
13        which the Credit is awarded, (ii) commits to make at
14        least $500,000,000 in combined capital improvements
15        and project costs under the Agreement, (iii) applies
16        for an Agreement between January 1, 2011 and June 30,
17        2011, (iv) executes an Agreement for the Credit during
18        calendar year 2011, and (v) was incorporated no more
19        than 5 years before the filing of an application for an
20        Agreement.
21        (1.5) The election under this subsection (f) may also
22    be made by a Taxpayer for any Credit awarded pursuant to an
23    agreement that was executed between January 1, 2011 and
24    June 30, 2011, if the Taxpayer (i) is primarily engaged in
25    the manufacture of inner tubes or tires, or both, from
26    natural and synthetic rubber, (ii) employs a minimum of

 

 

09700SB0004ham003- 45 -LRB097 05762 HLH 52978 a

1    2,400 full-time employees in Illinois at the time of
2    application, (iii) creates at least 350 full-time jobs and
3    retains at least 250 full-time jobs in Illinois that would
4    have been at risk of being created or retained outside of
5    Illinois, and (iv) makes a capital investment of at least
6    $200,000,000 at the project location.
7        (2) An election under this subsection shall allow the
8    credit to be taken against payments otherwise due under
9    Section 704A of the Illinois Income Tax Act during the
10    first calendar year beginning after the end of the taxable
11    year in which the credit is awarded under this Act.
12        (3) The election shall be made in the form and manner
13    required by the Illinois Department of Revenue and, once
14    made, shall be irrevocable.
15        (4) If a Taxpayer who meets the requirements of
16    subparagraph (A) of paragraph (1) of this subsection (f)
17    elects to claim the Credit against its withholdings as
18    provided in this subsection (f), then, on and after the
19    date of the election, the terms of the Agreement between
20    the Taxpayer and the Department may not be further amended
21    during the term of the Agreement.
22    (g) A pass-through entity that has been awarded a credit
23under this Act, its shareholders, or its partners may treat
24some or all of the credit awarded pursuant to this Act as a tax
25payment for purposes of the Illinois Income Tax Act. The term
26"tax payment" means a payment as described in Article 6 or

 

 

09700SB0004ham003- 46 -LRB097 05762 HLH 52978 a

1Article 8 of the Illinois Income Tax Act or a composite payment
2made by a pass-through entity on behalf of any of its
3shareholders or partners to satisfy such shareholders' or
4partners' taxes imposed pursuant to subsections (a) and (b) of
5Section 201 of the Illinois Income Tax Act. In no event shall
6the amount of the award credited pursuant to this Act exceed
7the Illinois income tax liability of the pass-through entity or
8its shareholders or partners for the taxable year.
9(Source: P.A. 95-375, eff. 8-23-07; 96-834, eff. 12-14-09;
1096-836, eff. 12-16-09; 96-905, eff. 6-4-10; 96-1000, eff.
117-2-10; 96-1534, eff. 3-4-11.)
 
12    (35 ILCS 10/5-50)
13    Sec. 5-50. Contents of Agreements with Applicants. The
14Department shall enter into an Agreement with an Applicant that
15is awarded a Credit under this Act. The Agreement must include
16all of the following:
17        (1) A detailed description of the project that is the
18    subject of the Agreement, including the location and amount
19    of the investment and jobs created or retained.
20        (2) The duration of the Credit and the first taxable
21    year for which the Credit may be claimed.
22        (3) The Credit amount that will be allowed for each
23    taxable year.
24        (4) A requirement that the Taxpayer shall maintain
25    operations at the project location that shall be stated as

 

 

09700SB0004ham003- 47 -LRB097 05762 HLH 52978 a

1    a minimum number of years not to exceed 10.
2        (5) A specific method for determining the number of New
3    Employees employed during a taxable year.
4        (6) A requirement that the Taxpayer shall annually
5    report to the Department the number of New Employees, the
6    Incremental Income Tax withheld in connection with the New
7    Employees, and any other information the Director needs to
8    perform the Director's duties under this Act.
9        (7) A requirement that the Director is authorized to
10    verify with the appropriate State agencies the amounts
11    reported under paragraph (6), and after doing so shall
12    issue a certificate to the Taxpayer stating that the
13    amounts have been verified.
14        (8) A requirement that the Taxpayer shall provide
15    written notification to the Director not more than 30 days
16    after the Taxpayer makes or receives a proposal that would
17    transfer the Taxpayer's State tax liability obligations to
18    a successor Taxpayer.
19        (9) A detailed description of the number of New
20    Employees to be hired, and the occupation and payroll of
21    the full-time jobs to be created or retained as a result of
22    the project.
23        (10) The minimum investment the business enterprise
24    will make in capital improvements, the time period for
25    placing the property in service, and the designated
26    location in Illinois for the investment.

 

 

09700SB0004ham003- 48 -LRB097 05762 HLH 52978 a

1        (11) A requirement that the Taxpayer shall provide
2    written notification to the Director and the Committee not
3    more than 30 days after the Taxpayer determines that the
4    minimum job creation or retention, employment payroll, or
5    investment no longer is being or will be achieved or
6    maintained as set forth in the terms and conditions of the
7    Agreement.
8        (12) A provision that, if the total number of New
9    Employees falls below a specified level, the allowance of
10    Credit shall be suspended until the number of New Employees
11    equals or exceeds the Agreement amount.
12        (13) A detailed description of the items for which the
13    costs incurred by the Taxpayer will be included in the
14    limitation on the Credit provided in Section 5-30.
15        (13.5) A provision that, if the Taxpayer never meets
16    either the investment or job creation and retention
17    requirements specified in the Agreement during the entire
18    5-year period beginning on the first day of the first
19    taxable year in which the Agreement is executed and ending
20    on the last day of the fifth taxable year after the
21    Agreement is executed, then the Agreement is automatically
22    terminated on the last day of the fifth taxable year after
23    the Agreement is executed and the Taxpayer is not entitled
24    to the award of any credits for any of that 5-year period.
25        (14) Any other performance conditions or contract
26    provisions as the Department determines are appropriate.

 

 

09700SB0004ham003- 49 -LRB097 05762 HLH 52978 a

1(Source: P.A. 91-476, eff. 8-11-99.)
 
2    (35 ILCS 10/5-77 new)
3    Sec. 5-77. Sunset of new Agreements. The Department shall
4not enter into any new Agreements under the provisions of
5Section 5-50 of this Act after December 31, 2016.
 
6    Section 20. The Film Production Services Tax Credit Act of
72008 is amended by adding Section 42 as follows:
 
8    (35 ILCS 16/42 new)
9    Sec. 42. Sunset of credits. The application of credits
10awarded pursuant to this Act shall be limited by a reasonable
11and appropriate sunset date. A taxpayer shall not be entitled
12to take a credit awarded pursuant to this Act for tax years
13beginning on or after 5 years after the effective date of this
14amendatory Act of the 97th General Assembly.
 
15    Section 99. Effective date. This Act takes effect upon
16becoming law.".