Full Text of SB0341 98th General Assembly
SB0341eng 98TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning revenue.
| 2 | | Be it enacted by the People of the State of Illinois, | 3 | | represented in the General Assembly:
| 4 | | Section 1. Short title. This Act may be cited as the | 5 | | Illinois State Property Revitalization Tax Credit Act. | 6 | | Section 5. Definitions. As used in this Act, unless the | 7 | | context clearly indicates otherwise: | 8 | | "Department" means the Department of Commerce and Economic | 9 | | Opportunity. | 10 | | "Qualified expenditures" means all the costs and expenses | 11 | | associated with the rehabilitation of qualified structures as | 12 | | defined in this Act. Applicants may incur qualified | 13 | | expenditures, at their own risk, from the earlier of (i) the | 14 | | commencement of construction or (ii) one year prior to receipt | 15 | | of preliminary approval of an application pursuant to Section | 16 | | 30 of this Act. | 17 | | "Qualified structures" means a facility or structure | 18 | | located in Illinois (i) that was owned by the State of Illinois | 19 | | at any time within the 2 years immediately preceding the | 20 | | effective date of this Act and (ii) at which more than 100 | 21 | | employees were employed within the 2 years immediately | 22 | | preceding the effective date of this Act. | 23 | | "Qualified rehabilitation plan" means a proposed |
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| 1 | | rehabilitation design that is approved by the Department. | 2 | | "Qualified rehabilitation project" means a completed | 3 | | rehabilitation project that is approved by the Department. | 4 | | "Qualified taxpayer" means any owner of the qualified | 5 | | structure. If the taxpayer is (i) a corporation having an | 6 | | election in effect under subchapter S of the federal Internal | 7 | | Revenue Code, (ii) a partnership, including a limited | 8 | | partnership or a limited liability partnership, or (iii) a | 9 | | limited liability company, the credit provided by this Act may | 10 | | be claimed by the shareholders of the corporation, the partners | 11 | | of the partnership, or the members of the limited liability | 12 | | company in the same manner as those shareholders, partners, or | 13 | | members account for their proportionate shares of the income or | 14 | | losses of the corporation, partnership, or limited liability | 15 | | company, or as provided in the bylaws or other executed | 16 | | agreement of the corporation, partnership, or limited | 17 | | liability company. | 18 | | Credits granted to a partnership, including a limited | 19 | | partnership or a limited liability partnership, a limited | 20 | | liability company taxed as a partnership, or other multiple | 21 | | owners of property shall be passed through to the partners, | 22 | | members, or owners respectively on a pro rata basis or pursuant | 23 | | to an executed agreement among the partners, members, or owners | 24 | | documenting any alternate distribution method. Nothing in this | 25 | | Act is intended to prohibit a non-profit entity with a Section | 26 | | 501(c)(3) designation under the federal Internal Revenue Code |
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| 1 | | from serving as a shareholder, partner, member or other owner | 2 | | of a qualified taxpayer. | 3 | | Section 10. Allowable credit. There shall be allowed a tax | 4 | | credit against (i) the tax imposed by subsections (a) and (b) | 5 | | of Section 201 of the Illinois Income Tax Act and (ii) the | 6 | | taxes imposed under Sections 409, 413, 444, and 444.1 of the | 7 | | Illinois Insurance Code in an aggregate amount equal to 30% of | 8 | | the qualified expenditures incurred by a qualified taxpayer | 9 | | pursuant to a qualified rehabilitation plan on a qualified | 10 | | structure, provided that the total amount of such qualified | 11 | | expenditures exceeds the greater of $5,000 for each qualified | 12 | | structure or the adjusted basis of the property. | 13 | | While a tax credit may be earned before July 1, 2014, no | 14 | | tax credit shall be issued by the Department before that date. | 15 | | If the amount of any tax credit awarded under this Act exceeds | 16 | | the taxpayer's tax liability for the year in which the | 17 | | qualified rehabilitation project was placed in service, the | 18 | | excess amount may be carried forward for deduction from the | 19 | | taxpayer's tax liability in the next succeeding year or years | 20 | | or may be carried back for deduction from the taxpayer's tax | 21 | | liability for the immediately preceding year until the total | 22 | | amount of the credit has been used, except that a credit may | 23 | | not be carried forward for deduction after the fifth taxable | 24 | | year after the taxable year in which the qualified | 25 | | rehabilitation project was placed in service or carried back |
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| 1 | | for deduction more than one year before the taxable year in | 2 | | which the qualified rehabilitation project was placed in | 3 | | service. | 4 | | Section 15. Economic needs test. When the total credits | 5 | | requested with respect to a qualified rehabilitation plan will | 6 | | be $1,000,000 or more, the Department shall evaluate whether, | 7 | | without public intervention, the economic development project | 8 | | would not otherwise benefit from private sector investment. | 9 | | Section 20. Transfer of credits. | 10 | | (a) Any qualified taxpayer may elect to transfer, in whole | 11 | | or in part, any unused credit amount granted under this Act as | 12 | | provided in subsection (b). An election to transfer any unused | 13 | | credit amount must be made no later than 5 years after the date | 14 | | the credit is awarded, after which period the credit expires | 15 | | and may not be used. The Department shall notify the Department | 16 | | of Revenue of the election and transfer. | 17 | | (b) A qualified taxpayer is permitted a one-time transfer | 18 | | of unused credit amounts to
no more than 4 transferees. Those | 19 | | transfers must occur in the same taxable year. | 20 | | (c) The transferee is subject to the same rights and | 21 | | limitations as the accredited production company awarded the | 22 | | credit, except that the transferee may not sell or otherwise | 23 | | transfer the credit. | 24 | | (d) The Department may adopt rules to administer this |
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| 1 | | Section. | 2 | | Section 25. Maximum limits. The credits awarded for each | 3 | | qualified rehabilitation project shall be limited to a maximum | 4 | | of $10,000,000. The aggregate amount of the tax credits that | 5 | | may be claimed under this Act for investments in qualified | 6 | | rehabilitation projects shall be limited to $40,000,000. A | 7 | | qualified rehabilitation project shall not receive credits | 8 | | pursuant to this Act if the qualified rehabilitation project | 9 | | has received credits pursuant to the River Edge Redevelopment | 10 | | Zone Act. | 11 | | Section 30. Application process. | 12 | | (a) To obtain the credits allowed under this Act, the | 13 | | applicant shall submit an application for tax credits to the | 14 | | Department. The application shall be in such form as the | 15 | | Department shall reasonably require, and the application shall | 16 | | include sufficient information to permit the Department to | 17 | | approve, approve with conditions, or reject the structure, | 18 | | rehabilitation plan, or rehabilitation project. | 19 | | (b) The Department may charge a non-refundable application | 20 | | fee of up to 1% of the amount of credits requested, with a | 21 | | minimum fee of $1,000 per application per project. All | 22 | | application fees shall be deposited into the Department's | 23 | | Administrative Fund. | 24 | | (c) All applicants with applications receiving preliminary |
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| 1 | | approval on or after the effective date of this Act shall | 2 | | commence rehabilitation within 3 years of the date of issue of | 3 | | the letter from the Department granting preliminary approval | 4 | | for credits. Commencement of rehabilitation means that, as of | 5 | | the date on which actual physical work has begun, the applicant | 6 | | has incurred no less than 10% of the estimated costs of | 7 | | rehabilitation provided in the application. The applicant may | 8 | | commence and incur qualified expenditures at its own risk | 9 | | before the property becomes a qualified structure. If the | 10 | | rehabilitation receives final approval under this Section, | 11 | | including the necessary verification of the total costs and | 12 | | expenses of rehabilitation, the applicant shall receive tax | 13 | | credits for all qualified expenditures incurred within the time | 14 | | periods allowed in this Act. | 15 | | (d) For qualified rehabilitation projects, the applicant | 16 | | shall submit a cost certification, and if the credits requested | 17 | | with respect to a qualified rehabilitation project are $250,000 | 18 | | or more, the Department shall require an independent audit of | 19 | | the cost certification at the applicant's expense. Those audits | 20 | | shall be conducted by a licensed Certified Public Accounting | 21 | | firm that participates in the peer review program of the | 22 | | American Institute of Certified Public Accountants. | 23 | | (e) The Department shall determine the amount of qualified | 24 | | expenditures and the amount of credits to be issued to the | 25 | | applicant. The issuance of certificates of credits to | 26 | | applicants shall be performed by the Department. The Department |
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| 1 | | shall coordinate with the Illinois Department of Revenue to | 2 | | determine if the applicant has any outstanding Illinois tax | 3 | | obligations that can be satisfied by the credits to be issued. | 4 | | The Department shall inform the applicant of final approval and | 5 | | of the final credit amount by letter. An issuance fee of up to | 6 | | 2% of the amount of the credits issued by the tax credit | 7 | | certificate may be collected from the applicant and remitted to | 8 | | the Department for the purpose of administering the Act. When | 9 | | the Department has received the issuance fee from the applicant | 10 | | and deposited it into the Department's Administrative Fund, the | 11 | | Department shall issue a tax credit certificate to the | 12 | | applicant. The taxpayer must attach the tax credit certificate | 13 | | to the tax return on which the credits are to be claimed. | 14 | | Section 35. Biennial report; powers of the Department. The | 15 | | Department shall issue a report no later than the last day of | 16 | | the second fiscal year after the effective date of this Act on | 17 | | the overall economic impact to the State of the qualified | 18 | | rehabilitation projects. The Department is granted and has all | 19 | | the powers necessary or
convenient to carry out the provisions | 20 | | of this Act. The Department has the power to promulgate rules | 21 | | for the administration of this Act, including the power to | 22 | | adopt emergency rules for a period of 12 months after the | 23 | | effective date of this Act for the purposes of establishing | 24 | | application forms and entering into agreements related to this | 25 | | Act. |
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| 1 | | Section 40. Appeals process. An applicant may appeal an | 2 | | adverse decision made by the Department, other than a decision | 3 | | related to the qualifications of the structure, rehabilitation | 4 | | plan, or rehabilitation project, by requesting a hearing under | 5 | | the terms of Article 10 of the Illinois Administrative | 6 | | Procedure Act. A petition for hearing must be postmarked no | 7 | | later than 30 days from the date of the adverse decision. | 8 | | Section 70. The Illinois Income Tax Act is amended by | 9 | | adding Section 224 as follows: | 10 | | (35 ILCS 5/224 new) | 11 | | Sec. 224. Rehabilitation and revitalization credit. For | 12 | | tax years commencing on or after January 1, 2014, a taxpayer | 13 | | who qualifies for a credit under the Illinois Rehabilitation | 14 | | and Revitalization Tax Credit Act is entitled to a credit | 15 | | against the taxes imposed under subsections (a) and (b) of | 16 | | Section 201 of this Act. If the taxpayer is a partnership or | 17 | | Subchapter S corporation, the credit shall be allowed to the | 18 | | partners or shareholders in accordance with the determination | 19 | | of income and distributive share of income under Sections 702 | 20 | | and 704 and Subchapter S of the Internal Revenue Code or the | 21 | | credit shall be allowed to the partners or shareholders | 22 | | pursuant to an executed agreement among the partners or | 23 | | shareholders documenting any alternate distribution method. |
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| 1 | | This Section is exempt from the provisions of Section 250 of | 2 | | this Act. | 3 | | Section 75. The Illinois Insurance Code is amended by | 4 | | adding Section 409.2 as follows: | 5 | | (215 ILCS 5/409.2 new) | 6 | | Sec. 409.2. Rehabilitation and revitalization credit. For | 7 | | taxes payable after January 1, 2014, credits may be granted | 8 | | against the taxes imposed under Sections 409, 413, 444, and | 9 | | 444.1 of this Act as provided in the Illinois Rehabilitation | 10 | | and Revitalization Tax Credit Act. | 11 | | Section 99. Effective date. This Act takes effect upon | 12 | | becoming law. |
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