Illinois General Assembly - Full Text of HB4237
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Full Text of HB4237  100th General Assembly


Sen. Julie A. Morrison

Filed: 5/22/2018





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2    AMENDMENT NO. ______. Amend House Bill 4237 by replacing
3everything after the enacting clause with the following:
4    "Section 1. Short title. This Act may be cited as the Local
5Government Charitable Fund Act.
6    Section 5. Definitions.
7    "Annual credit-eligible donation cap" means the cap on the
8total value of local charitable donations that are eligible for
9a local property tax credit, as established in this Act.
10    "Charitable fund" means a fund established pursuant to this
12    "Fund administrator" means the official or entity
13designated to be responsible for the collection, distribution,
14and administration of donations to charitable funds; that
15person shall be an official serving as the custodian of public
16funds for the local unit establishing the charitable fund.



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1    "Local charitable donation" means a donation paid in money
2by or on behalf of a local property owner to a charitable fund
3established by a local unit.
4    "Local property owner" means a person or entity who owns
5real property within a local unit that has established a
6charitable fund to which a local charitable donation is made.
7    "Local unit" means a municipality, county, or school
8district, but does not include community college districts.
9    "Mortgagee" means the holder of a mortgage loan.
10    "Property tax credit" means the credit established
11pursuant to this Act.
12    "Qualified donation" means a local charitable donation
13that may qualify real property of the donor for a property tax
15    "Servicing organization" means a mortgagee or an agent of a
16mortgagee, pursuant to a written agreement between the agent
17and the mortgagee, that is responsible for one or more mortgage
18escrow accounts.
19    Section 10. Charitable funds; creation; donation caps.
20    (a) A county may, by ordinance or resolution, authorize
21local units located in whole or in part within that county to
22establish charitable funds. If such authority is granted, a
23local unit may establish, by ordinance or resolution, as
24appropriate, one or more charitable funds for specific public
25purposes of that local unit. A charitable fund shall be held in



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1one or more bank accounts in the name of the local unit and
2shall be kept separate from the other accounts of the local
3unit. A charitable fund shall not be administered jointly by
4more than one local unit. All such charitable funds and the
5moneys deposited into such funds shall be governed in the same
6manner as other funds established by the local unit. All moneys
7deposited into a charitable fund shall be expended in
8accordance with applicable State law exclusively for public
9purposes of the local unit. Moneys deposited into a charitable
10fund shall be equivalent to tax revenues for the purposes of
11the State aid formula, local unit revenue calculations, local
12unit bonding capacity, and similar State or municipal
13computations. Moneys deposited into a charitable fund shall be
14immediately available to the establishing local unit for the
15payment of budgeted and emergency mandatory expenses,
16including debt service, upon request of the local unit to the
17fund administrator.
18    (b) The ordinance or resolution establishing a charitable
19fund shall designate the official serving as the local unit's
20custodian of public funds to serve as the fund administrator.
21The fund administrator shall assume responsibility for the
22collection, administration, and distribution of donations made
23to the charitable fund and shall continually track the total of
24all qualified donations with respect to a fiscal year.
25    (c) A charitable fund shall have one or more specified
26public purposes in its authorizing ordinance or resolution. The



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1specified public purposes shall be more limited than the
2general purposes of the local unit. The specified public
3purposes shall be described in documents and records made
4publicly available.
5    (d) The ordinance or resolution establishing a charitable
6fund shall set forth an annual credit-eligible donation cap,
7which shall be the maximum amount of credit-eligible moneys the
8fund may collect. The ordinance or resolution shall also limit
9the total amount of money an individual or entity may donate
10through local charitable donations to a particular charitable
11fund or combination of charitable funds that qualify for a
12local property tax credit. The ordinance or resolution
13establishing a charitable fund shall establish an initial
14annual credit-eligible donation cap and shall set an initial
15annual limit on tax credit funding that shall be available as a
16result of local charitable donations to the particular
17charitable fund. The annual limit on available local property
18tax credit funding shall equal 90% of the annual
19credit-eligible donation cap. The ordinance or resolution
20establishing a charitable fund shall also limit the extent to
21which an eligible local charitable donation on behalf of a
22specific real property may count against the annual
23credit-eligible donation cap. Both the maximum amount of local
24property tax credit funding made available and the annual
25credit-eligible donation cap shall be established by the
26ordinance or resolution adopted to establish the charitable



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1fund but may be adjusted through subsequent ordinances or
2resolutions, as applicable, of the governing body of the local
3unit. The annual credit-eligible donation cap shall be
4established prior to the beginning of each fiscal year. The
5annual credit-eligible donation cap shall not be construed to
6limit all donations to the charitable fund. The annual
7credit-eligible donation cap shall limit only the amount of
8donations that are credit-eligible against property tax
9payments. The annual credit eligible donation cap for a given
10year shall be based upon the tax levy from the prior calendar
11year. The annual credit-eligible donation cap established
12prior to the start of the calendar year may not exceed 85% of
13the prior year budget. Upon certification of a current-year
14budget tax levy, a local unit may amend a charitable fund's
15credit-eligible donation cap to reflect the estimate of the
16current tax levy.
17    Section 15. Donations by local property owners.
18    (a) Any person or entity may donate to a charitable fund
19regardless of property ownership or location of residence by
20directing the payment to the fund administrator of the
21applicable charitable fund. A donation to a charitable fund may
22be made on behalf of a local property owner by directing the
23payment to the fund administrator of the applicable charitable
25    (b) If a local property owner makes a donation to a local



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1charitable fund that is eligible for a property tax credit,
2that property owner shall indicate at the time of the donation
3the specific parcel of property to which the donation shall
4apply in order for such credit to issue. A donation may be
5credited to more than one parcel of real property.
6    (c) Following receipt of a local charitable donation, the
7fund administrator shall:
8        (1) issue a receipt to the donor confirming the amount
9    of the donation and the real property associated with the
10    donation; and
11        (2) notify the county collector and the chief financial
12    officer or business administrator of the local unit, within
13    5 business days after the donation, of the amount of the
14    donation and the amount of credit made available as a
15    result of the donation; thereafter, the county collector
16    shall notify the donor of the amount of the available local
17    property tax credit.
18    (d) Charitable fund donations shall be used for the
19following purposes:
20        (1) public purposes as specified in Section 170 of the
21    Internal Revenue Code relating to charitable contributions
22    and gifts;
23        (2) the payment of any administrative fees of the
24    county that may be required by the county; such fees may
25    not exceed 2% of collections;
26        (3) the remainder of the funds shall be used for the



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1    payment of administrative costs associated with the
2    establishment and continued operation of the fund.
3    Section 20. Property tax credits.
4    (a) For fiscal years beginning on or after January 1, 2019,
5the tax collector shall allow a property owner a credit to be
6applied to property taxes as set forth in this Section.
7    (b) The credit shall be equal to 90% of the amount of local
8charitable donations contributed by or on behalf of the owner's
9specified local real property to a charitable fund established
10by the local unit, up to the previous year's tax liability for
11the property for that local unit. Any excess donation shall be
12retained by the charitable fund and used for the specified
13charitable purposes of that fund. No credit shall issue to any
14owner of local real property who is delinquent in any local
15property tax or any county charges at the time the donation to
16the charitable fund is made.
17    (c) The county collector shall apply the credit against the
18first local property tax bill with respect to the specified
19local real property that is assessed on or after the fifth
20business day following receipt of the notification sent
21pursuant to Section 15; provided that each county shall impose
22a deadline for donations to the charitable fund and a deadline
23by which the fund administrator shall supply the county
24collector with all donation amounts received and the amounts of
25the credits to be made available as a result of those donations



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1in order for the credits to be applied to the next annual
2property tax bill. The county shall have the sole discretion as
3to whether to establish a deadline by which donations made to a
4charitable fund established by a local unit may be credited
5against an annual property tax bill that already has been
6issued, in which case the taxpayer shall have access to a
7statement showing how the credit has been applied.
8    (d) If the total amount of all local property tax credits
9available for specific real property exceeds the amount of
10property tax due during the year in which the donation was made
11and the county tax collector is unable to apply all or a
12portion of a credit awarded under this Act against the local
13property tax bill for the property, then the excess credit
14amount shall not be refunded to the taxpayer and shall not be
15carried forward to future tax years.
16    (e) The county collector shall indicate on each local
17property tax bill the value of the tax credits that apply to
18the property pursuant to this Act.
19    (f) The county collector shall apply credits granted under
20this Act to a specified local parcel of real property and not
21to an individual person or entity.
22    (g) For each notification sent, the county may require a
23fee to be paid by the fund administrator to be allocated toward
24the county's administrative expenses attributable to the
25county tax collector's office and the county treasurer's
26office. The fee shall be deposited into the Tax Sale Automation



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1Fund. The amount collected by the county tax collector through
2such fees shall not be greater than 2% of the funds distributed
3for property tax credits to compensate for reasonable expenses
4associated with the county tax collector's responsibilities
5under this Act.
6    Section 25. Other charitable donations. Nothing in this Act
7shall be construed to prohibit a local unit from accepting
8bequests, legacies, or gifts, or from accepting charitable
9donations in accordance with any other legal authority.
10    Section 30. Liability of local property owners.
11    (a) Notwithstanding any State law, rule, or contract term
12to the contrary, no mortgagee or servicing organization shall
13be entitled to hold a local property owner liable for electing
14to meet his or her obligations to a local unit by means of a
15charitable donation and resulting credit made and obtained in
16conformity with this Act.
17    (b) Notwithstanding any State law, regulation, agreement,
18or contract terms to the contrary, no mortgagee shall be
19entitled to hold a servicing organization liable for complying
20with the election by a local property owner to meet his or her
21local real property tax due to a local unit by means of a
22charitable donation and resulting property tax credit made and
23obtained in conformity with this Act, including, but not
24limited to, actions a servicing organization takes to implement



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1such election, and actions taken in accordance with any other
2applicable law or rule.
3    Section 900. The State Finance Act is amended by adding
4Sections 5.886 and 6z-105 as follows:
5    (30 ILCS 105/5.886 new)
6    Sec. 5.886. The Illinois Education Excellence Fund.
7    (30 ILCS 105/6z-105 new)
8    Sec. 6z-105. The Illinois Education Excellence Fund;
10    (a) The Illinois Education Excellence Fund is hereby
11created as a special fund in the State treasury. The Fund may
12accept contributions for exclusively public education
13purposes, as specified under Section 170 of the Internal
14Revenue Code relating to charitable contributions and gifts.
15All moneys deposited into the Fund and interest earned on those
16moneys shall be transferred to the Common School Fund on an
17annual basis and used for those public education purposes,
18subject to appropriation by the General Assembly. "Public
19education purposes" includes, but is not limited to, early
20childhood education, elementary and secondary education,
21higher education, adult education, and teachers' employment
23    (b) The State Treasurer shall adopt any rules necessary or



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1appropriate to administer the Fund, including rules allowing
2the public to make monetary contributions to the Fund and
3obtain a certification from the Treasurer for the credit
4allowed under Section 228 of the Illinois Income Tax Act. The
5Treasurer shall adopt rules to allow individuals to choose to
6make contributions to the Illinois Education Excellence Fund
7through payroll deductions. The Treasurer shall certify the
8contribution amount eligible for credit within 45 days
9following receipt of the contribution and shall provide a copy
10of the certification, which may be provided electronically, to
11the taxpayer and the Department of Revenue as soon as possible
12after the certification.
13    Section 905. The Illinois Income Tax Act is amended by
14adding Section 228 as follows:
15    (35 ILCS 5/228 new)
16    Sec. 228. Contributions to the Illinois Education
17Excellence Fund.
18    (a) For taxable years ending after December 31, 2017 and
19before January 1, 2026, any individual taxpayer who makes a
20contribution to the Illinois Education Excellence Fund is
21entitled to a credit against the taxes imposed under
22subsections (a) and (b) of Section 201 in an amount equal to
2390% of the contributions made by the taxpayer to the Fund
24during the taxable year.



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1    (b) For partners, shareholders of Subchapter S
2corporations, and owners of limited liability companies, if the
3liability company is treated as a partnership for the purposes
4of federal and State income taxation, there shall be allowed a
5credit under this Section to be determined in accordance with
6the determination of income and distributive share of income
7under Sections 702 and 704 and Subchapter S of the Internal
8Revenue Code.
9    (c) In no event shall a credit under this Section reduce a
10taxpayer's liability to less than zero. If the amount of credit
11exceeds the tax liability for the year, the excess may be
12carried forward and applied to the tax liability for the 5
13taxable years following the excess credit year. The tax credit
14shall be applied to the earliest year for which there is a tax
15liability. If there are credits for more than one year that are
16available to offset liability, the earlier credit shall be
17applied first.
18    (d) This Section is exempt from the provisions of Section
20    Section 999. Effective date. This Act takes effect upon
21becoming law.".