Full Text of SB3527 100th General Assembly
SB3527enr 100TH 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 | | Historic Preservation Tax Credit Act. | 6 | | Section 5. Definitions. As used in this Act, unless the | 7 | | context clearly indicates otherwise: | 8 | | "Division" means the State Historic Preservation Office | 9 | | within the Department of Natural Resources. | 10 | | "Phased rehabilitation" means a project that is completed | 11 | | in phases, as defined under Section 47 of the federal Internal | 12 | | Revenue Code and pursuant to National Park Service regulations | 13 | | at 36 C.F.R. 67. | 14 | | "Placed in service" means the date when the property is | 15 | | placed in a condition or state of readiness and availability | 16 | | for a specifically assigned function as defined under Section | 17 | | 47 of the federal Internal Revenue Code and federal Treasury | 18 | | Regulation Sections 1.46 and 1.48. | 19 | | "Qualified expenditures" means all the costs and expenses | 20 | | defined as qualified rehabilitation expenditures under Section | 21 | | 47 of the federal Internal Revenue Code that were incurred in | 22 | | connection with a qualified historic structure. | 23 | | "Qualified historic structure" means any structure that is |
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| 1 | | located in Illinois and is defined as a certified historic | 2 | | structure under Section 47 (c)(3) of the federal Internal | 3 | | Revenue Code. | 4 | | "Qualified rehabilitation plan" means a project that is | 5 | | approved by the Department of Natural Resources and the | 6 | | National Park Service as being consistent with the United | 7 | | States Secretary of the Interior's Standards for | 8 | | Rehabilitation. | 9 | | "Qualified taxpayer" means the owner of the qualified | 10 | | historic structure or any other person who may qualify for the | 11 | | federal rehabilitation credit allowed by Section 47 of the | 12 | | federal Internal Revenue Code. | 13 | | "Recapture event" means any of the following events | 14 | | occurring during the recapture period: | 15 | | (1) failure to place in service the rehabilitated | 16 | | portions of the qualified historic structure, or failure to | 17 | | maintain the rehabilitated portions of the qualified | 18 | | historic structure in service after they are placed in | 19 | | service; provided that a recapture event under this | 20 | | paragraph (1) shall not include a removal from service for | 21 | | a reasonable period of time to conduct maintenance and | 22 | | repairs that are reasonably necessary to protect the health | 23 | | and safety of the public or to protect the structural | 24 | | integrity of the qualified historic structure or a | 25 | | neighboring structure; | 26 | | (2) demolition or other alteration of the qualified |
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| 1 | | historic structure in a manner that is inconsistent with | 2 | | the qualified rehabilitation plan or the Secretary of the | 3 | | Interior's Standards for Rehabilitation; | 4 | | (3) disposition of the rehabilitated qualified | 5 | | historic structure in whole or a proportional disposition | 6 | | of a partnership interest therein, except as otherwise | 7 | | permitted by this Section; or | 8 | | (4) use of the qualified historic structure in a manner | 9 | | that is inconsistent with the qualified rehabilitation | 10 | | plan or that is otherwise inconsistent with the provisions | 11 | | and intent of this Section. | 12 | | A recapture event occurring in one taxable year shall be | 13 | | deemed continuing to subsequent taxable years unless and until | 14 | | corrected. | 15 | | The following dispositions of a qualified historic | 16 | | structure shall not be deemed to be a recapture event for | 17 | | purposes of this Section: | 18 | | (1) a transfer by reason of death; | 19 | | (2) a transfer between spouses incident to divorce; | 20 | | (3) a sale by and leaseback to an entity that, when the | 21 | | rehabilitated portions of the qualified historic structure | 22 | | are placed in service, will be a lessee of the qualified | 23 | | historic structure, but only for so long as the entity | 24 | | continues to be a lessee; and | 25 | | (4) a mere change in the form of conducting the trade | 26 | | or business by the owner (or, if applicable, the lessee) of |
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| 1 | | the qualified historic structure, so long as the property | 2 | | interest in such qualified historic structure is retained | 3 | | in such trade or business and the owner or lessee retains a | 4 | | substantial interest in such trade or business. | 5 | | "Recapture period" means the 5-year period beginning on the | 6 | | date that the qualified historic structure or rehabilitated | 7 | | portions of the qualified historic structure are placed in | 8 | | service. | 9 | | "Substantial rehabilitation" means that the qualified | 10 | | rehabilitation expenditures during the 24-month period | 11 | | selected by the taxpayer at the time and in the manner | 12 | | prescribed by rule and ending with or within the taxable year | 13 | | exceed the greater of (i) the adjusted basis of the building | 14 | | and its structural components or (ii) $5,000. The adjusted | 15 | | basis of the building and its structural components shall be | 16 | | determined as of the beginning of the first day of such | 17 | | 24-month period or as of the beginning of the first day of the | 18 | | holding period of the building, whichever is later. For | 19 | | purposes of determining the adjusted basis, the determination | 20 | | of the beginning of the holding period shall be made without | 21 | | regard to any reconstruction by the taxpayer in connection with | 22 | | the rehabilitation. In the case of any phased rehabilitation, | 23 | | with phases set forth in architectural plans and specifications | 24 | | completed before the rehabilitation begins, this definition | 25 | | shall be applied by substituting "60-month period" for | 26 | | "24-month period" wherever that term occurs in the definition. |
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| 1 | | Section 10. Allowable credit. | 2 | | (a) To the extent authorized by this Act, for taxable years | 3 | | beginning on or after January 1, 2019 and ending on or before | 4 | | December 31, 2023, there shall be allowed a tax credit against | 5 | | the tax imposed by subsections (a) and (b) of Section 201 of | 6 | | the Illinois Income Tax Act in an aggregate amount equal to 25% | 7 | | of qualified expenditures incurred by a qualified taxpayer | 8 | | undertaking a qualified rehabilitation plan of a qualified | 9 | | historic structure, provided that the total amount of such | 10 | | expenditures must (i) equal $5,000 or more or (ii) exceed the | 11 | | adjusted basis of the qualified historic structure on the first | 12 | | day the qualified rehabilitation plan commenced. If the | 13 | | qualified rehabilitation plan spans multiple years, the | 14 | | aggregate credit for the entire project shall be allowed in the | 15 | | last taxable year. | 16 | | (b) To obtain a tax credit pursuant to this Section, the | 17 | | taxpayer must apply with the Division. The Division shall | 18 | | determine the amount of eligible rehabilitation expenditures | 19 | | within 45 days after receipt of a complete application. The | 20 | | taxpayer must provide to the Division a third-party cost | 21 | | certification conducted by a certified public accountant | 22 | | verifying (i) the qualified and non-qualified rehabilitation | 23 | | expenses and (ii) that the qualified expenditures exceed the | 24 | | adjusted basis of the qualified historic structure on the first | 25 | | day the qualified rehabilitation plan commenced. The |
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| 1 | | accountant shall provide appropriate review and testing of | 2 | | invoices. The Division is authorized, but not required, to | 3 | | accept this third-party cost certification to determine the | 4 | | amount of qualified expenditures. The Division and the National | 5 | | Park Service shall determine whether the rehabilitation is | 6 | | consistent with the Standards of the Secretary of the United | 7 | | States Department of the Interior. | 8 | | (c) If the amount of any tax credit awarded under this Act | 9 | | exceeds the qualified taxpayer's income tax liability for the | 10 | | year in which the qualified rehabilitation plan was placed in | 11 | | service, the excess amount may be carried forward for deduction | 12 | | from the taxpayer's income tax liability in the next succeeding | 13 | | year or years until the total amount of the credit has been | 14 | | used, except that a credit may not be carried forward for | 15 | | deduction after the tenth taxable year after the taxable year | 16 | | in which the qualified rehabilitation plan was placed in | 17 | | service. Upon completion and review of the project, the | 18 | | Division shall issue a single certificate in the amount of the
| 19 | | eligible credits equal to 25% of the qualified expenditures | 20 | | incurred during the eligible taxable years. At the time the | 21 | | certificate is issued, an issuance fee up to the maximum amount | 22 | | of 2% of the amount of the credits issued by the certificate | 23 | | may be collected from the applicant to administer the Act. If | 24 | | collected, this issuance fee shall be directed to the Division | 25 | | Historic Property Administrative Fund or other such fund as | 26 | | appropriate for use of the Division in the administration of |
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| 1 | | the Historic Preservation Tax Credit Program. The taxpayer must | 2 | | attach the certificate or legal documentation of her or his | 3 | | proportional share of the certificate to the tax
return on | 4 | | which the credits are to be claimed. The tax credit under this | 5 | | Section may not reduce the taxpayer's liability to less than | 6 | | zero. If the amount of the credit exceeds the tax liability for | 7 | | the year, the excess credit may be carried forward and applied | 8 | | to the tax liability of the 10 taxable years following the | 9 | | excess credit year.
| 10 | | (d) If the taxpayer is (i) a corporation having an election | 11 | | in effect under Subchapter S of the federal Internal Revenue | 12 | | Code, (ii) a partnership, or (iii) a limited liability company, | 13 | | the credit provided under this Act may be claimed by the | 14 | | shareholders of the corporation, the partners of the | 15 | | partnership, or the members of the limited liability company in | 16 | | the same manner as those shareholders, partners, or members | 17 | | account for their proportionate shares of the income or losses | 18 | | of the corporation, partnership, or limited liability company, | 19 | | or as provided in the bylaws or other executed agreement of the | 20 | | corporation, partnership, or limited liability company. | 21 | | Credits granted to a partnership, a limited liability company | 22 | | taxed as a partnership, or other multiple owners of property | 23 | | shall be passed through to the partners, members, or owners | 24 | | respectively on a pro rata basis or pursuant to an executed | 25 | | agreement among the partners, members, or owners documenting | 26 | | any alternate distribution method. |
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| 1 | | (e) If a recapture event occurs during the recapture period | 2 | | with respect to a qualified historic structure, then for any | 3 | | taxable year in which the credits are allowed as specified in | 4 | | this Act, the tax under the applicable Section of this Act | 5 | | shall be increased by applying the recapture percentage set | 6 | | forth below to the tax decrease resulting from the application | 7 | | of credits allowed under this Act to the taxable year in | 8 | | question. | 9 | | For the purposes of this subsection, the recapture | 10 | | percentage shall be determined as follows: | 11 | | (1) if the recapture event occurs within the first year | 12 | | after commencement of the recapture period, then the | 13 | | recapture percentage is 100%; | 14 | | (2) if the recapture event occurs within the second | 15 | | year after commencement of the recapture period, then the | 16 | | recapture percentage is 80%; | 17 | | (3) if the recapture event occurs within the third year | 18 | | after commencement of the recapture period, then the | 19 | | recapture percentage is 60%; | 20 | | (4) if the recapture event occurs within the fourth | 21 | | year after commencement of the recapture period, then the | 22 | | recapture percentage is 40%; and | 23 | | (5) if the recapture event occurs within the fifth year | 24 | | after commencement of the recapture period, then the | 25 | | recapture percentage is 20%.
| 26 | | In the case of any recapture event, the carryforwards under |
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| 1 | | this Act shall be adjusted by reason of such event. | 2 | | (d) The Division may adopt rules to implement this Section | 3 | | in addition to the rules expressly authorized herein. | 4 | | Section 20. Limitations, reporting, and monitoring. | 5 | | (a) The Division shall award not more than an aggregate of | 6 | | $15,000,000 in total annual tax credits pursuant to qualified | 7 | | rehabilitation plans for qualified historic structures. The | 8 | | Division shall award not more than $3,000,000 in tax credits | 9 | | with regard to a single qualified rehabilitation plan. In | 10 | | awarding tax credits under this Act, the Division must | 11 | | prioritize projects that meet one or more of the following: | 12 | | (1) the qualified historic structure is located in a | 13 | | county that borders a State with a historic property | 14 | | rehabilitation credit; | 15 | | (2) the qualified historic structure was previously | 16 | | owned by a federal, state, or local governmental entity; | 17 | | (3) the qualified historic structure is located in a | 18 | | census tract that has a median family income at or below | 19 | | the State median family income; data from the most recent | 20 | | 5-year estimate from the American Community Survey (ACS), | 21 | | published by the U.S. Census Bureau, shall be used to | 22 | | determine eligibility; | 23 | | (4) the qualified rehabilitation plan includes in the | 24 | | development partnership a Community Development Entity or | 25 | | a low-profit (B Corporation) or not-for-profit |
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| 1 | | organization, as defined by Section 501(c)(3) of the | 2 | | Internal Revenue Code; or | 3 | | (5) the qualified historic structure is located in an | 4 | | area declared under an Emergency Declaration or Major | 5 | | Disaster Declaration under the federal Robert T. Stafford | 6 | | Disaster Relief and Emergency Assistance Act. | 7 | | (b) The annual aggregate program allocation of $15,000,000 | 8 | | set forth in subsection (a) shall be allocated by the Division, | 9 | | in such proportion as determined by the Department, on a per | 10 | | calendar basis twice in each year that the program is in | 11 | | effect, provided that: (i) the amount initially allocated by | 12 | | the Division for any one calendar application period shall not | 13 | | exceed 65% of the total allowable amount and (ii) any portion | 14 | | of the allocated allowable amount remaining unused as of the | 15 | | end of any of the second calendar application period of a given | 16 | | calendar year shall be rolled into and added to the total | 17 | | allocated amount for the next available calendar year. The | 18 | | qualified rehabilitation plan must meet a readiness test, as | 19 | | defined in the rules created by the Division, in order for the | 20 | | Applicant to qualify. Applicants that qualify under this Act | 21 | | will be placed in a queue based on the date and time the | 22 | | application is received until such time as the application | 23 | | period total allowable amount is reached. Applicants must | 24 | | reapply for each application period. | 25 | | (c) On or before December 31, 2019,
and on or before | 26 | | December 31 of each odd-numbered year thereafter through
2023, |
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| 1 | | subject to appropriation and prior to equal disbursement to the | 2 | | Division, moneys in the Historic Property Administrative Fund | 3 | | shall be used, beginning at the end of the first fiscal year | 4 | | after the effective date of this Act, to hire a qualified third | 5 | | party to prepare a biennial report to assess the overall | 6 | | effectiveness of this Act from the qualified rehabilitation | 7 | | projects under this Act completed in that year and in previous | 8 | | years. Baseline data of the metrics in the report shall be | 9 | | collected at the initiation of a qualified rehabilitation | 10 | | project. The overall economic impact shall include at least: | 11 | | (1) the number of applications, project locations, and | 12 | | proposed use of qualified historic structures; | 13 | | (2) the amount of credits awarded and the number and | 14 | | location of projects receiving credit allocations; | 15 | | (3) the status of ongoing projects and projected | 16 | | qualifying expenditures for ongoing projects;
| 17 | | (4) for completed projects, the total amount of | 18 | | qualifying rehabilitation expenditures and non-qualifying | 19 | | expenditures, the number of housing units created and the | 20 | | number of housing units that qualify as affordable, and the | 21 | | total square footage rehabilitated and developed; | 22 | | (5) direct, indirect, and induced economic impacts; | 23 | | (6) temporary, permanent, and construction jobs | 24 | | created; and | 25 | | (7) sales, income, and property tax generation before | 26 | | construction, during construction, and after completion. |
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| 1 | | The report to the General Assembly shall be filed with the | 2 | | Clerk of the House of Representatives and the Secretary of the | 3 | | Senate in electronic form only, in the manner that the Clerk | 4 | | and the Secretary shall direct. | 5 | | (d) Any time prior to issuance of a tax credit certificate, | 6 | | the Director of the Division, the State Historic Preservation | 7 | | Officer, or staff of the Division may, upon reasonable notice | 8 | | to the project owner of not less than 3 business days, conduct | 9 | | a site visit to the project to inspect and evaluate the | 10 | | project. | 11 | | (e) Any time prior to the issuance of a tax credit | 12 | | certificate and for a period of 4 years following the effective | 13 | | date of a project tax credit certificate, the Director may, | 14 | | upon reasonable notice of not less than 30 calendar days, | 15 | | request a status report from the Applicant consisting of | 16 | | information and updates relevant to the status of the project. | 17 | | Status reports shall not be requested more than twice yearly. | 18 | | (f) In order to demonstrate sufficient evidence of | 19 | | reviewable progress within 12 months after the date the | 20 | | Applicant received notification of approval from the Division, | 21 | | the Applicant shall provide all of the following: | 22 | | (1) a viable financial plan which demonstrates by way | 23 | | of an executed agreement that all financing has been | 24 | | secured for the project; such financing shall include, but | 25 | | not be limited to, equity investment as demonstrated by | 26 | | letters of commitment from the owner of the property, |
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| 1 | | investment partners, and equity investors; | 2 | | (2) final construction drawings or approved building | 3 | | permits that demonstrate the complete rehabilitation of | 4 | | the full scope of the application; and | 5 | | (3) all historic approvals, including all federal and | 6 | | State rehabilitation documents required by the Division. | 7 | | The Director shall review the submitted evidence and may | 8 | | request additional documentation from the Applicant if | 9 | | necessary. The Applicant will have 30 calendar days to provide | 10 | | the information requested, otherwise the approval may be | 11 | | rescinded at the discretion of the Director. | 12 | | (g) In order to demonstrate sufficient evidence of | 13 | | reviewable progress within 18 months after the date the | 14 | | application received notification of approval from the | 15 | | Division, the Applicant is required to provide detailed | 16 | | evidence that the Applicant has secured and closed on financing | 17 | | for the complete scope of rehabilitation for the project. To | 18 | | demonstrate evidence that the Applicant has secured and closed | 19 | | on financing, the Applicant will need to provide signed and | 20 | | processed loan agreements, bank financing documents or other | 21 | | legal and contractual evidence to demonstrate that adequate | 22 | | financing is available to complete the project. The Director | 23 | | shall review the submitted evidence and may request additional | 24 | | documentation from the Applicant if necessary. The Applicant | 25 | | will have 30 calendar days to provide the information | 26 | | requested, otherwise the approval may be rescinded at the |
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| 1 | | discretion of the Director. | 2 | | If the Applicant fails to document reviewable progress | 3 | | within 18 months of approval, the Director may notify the | 4 | | Applicant that the application is rescinded. However, should | 5 | | financing and construction be imminent, the Director may elect | 6 | | to grant the Applicant no more than 5 months to close on | 7 | | financing and commence construction. If the Applicant fails to | 8 | | meet these conditions in the required timeframe, the Director | 9 | | shall notify the Applicant that the application is rescinded. | 10 | | Any such rescinded allocation shall be added to the aggregate | 11 | | amount of credits available for allocation for the year in | 12 | | which the forfeiture occurred. | 13 | | The amount of the qualified expenditures identified in the | 14 | | Applicant's certification of completion and reflected on the | 15 | | Historic Preservation Tax Credit certificate issued by the | 16 | | Director is subject to inspection, examination, and audit by | 17 | | the Department of Revenue. | 18 | | The Applicant shall establish and maintain for a period of | 19 | | 4 years following the effective date on a project tax credit | 20 | | certificate such records as required by the Director. Such | 21 | | records include, but are not limited to, records documenting | 22 | | project expenditures and compliance with the U.S. Secretary of | 23 | | the Interior's Standards. The Applicant shall make such records | 24 | | available for review and verification by the Director, the | 25 | | State Historic Preservation Officer, the Department of | 26 | | Revenue, or appropriate staff, as well as other appropriate |
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| 1 | | State agencies. In the event the Director determines an | 2 | | Applicant has submitted an annual report containing erroneous | 3 | | information or data not supported by records established and | 4 | | maintained under this Act, the Director may, after providing | 5 | | notice, require the Applicant to resubmit corrected reports. | 6 | | Section 25. Powers. The Division shall adopt rules for the | 7 | | administration of this Act. The Division may enter into an | 8 | | intergovernmental agreement with the Department of Commerce | 9 | | and Economic Opportunity, the Department of Revenue, or both, | 10 | | for the administration of this Act. Such intergovernmental | 11 | | agreement may allow for the distribution of all or a portion of | 12 | | the issuance fee imposed under Section 10 to the Department of | 13 | | Commerce and Economic Opportunity or the Department of Revenue, | 14 | | as applicable. | 15 | | Section 900. The Illinois Income Tax Act is amended by | 16 | | changing Section 221 and by adding Section 227 as follows: | 17 | | (35 ILCS 5/221) | 18 | | Sec. 221. Rehabilitation costs; qualified historic | 19 | | properties; River Edge Redevelopment Zone. | 20 | | (a) For taxable years that begin beginning on or after | 21 | | January 1, 2012 and begin ending prior to January 1, 2018 | 22 | | January 1, 2022 , there shall be allowed a tax credit against | 23 | | the tax imposed by subsections (a) and (b) of Section 201 of |
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| 1 | | this Act in an amount equal to 25% of qualified expenditures | 2 | | incurred by a qualified taxpayer during the taxable year in the | 3 | | restoration and preservation of a qualified historic structure | 4 | | located in a River Edge Redevelopment Zone pursuant to a | 5 | | qualified rehabilitation plan, provided that the total amount | 6 | | of such expenditures (i) must equal $5,000 or more and (ii) | 7 | | must exceed 50% of the purchase price of the property. | 8 | | (a-1) For taxable years that begin on or after January 1, | 9 | | 2018 and end prior to January 1, 2022, there shall be allowed a | 10 | | tax credit against the tax imposed by subsections (a) and (b) | 11 | | of Section 201 of this Act in an aggregate amount equal to 25% | 12 | | of qualified expenditures incurred by a qualified taxpayer in | 13 | | the restoration and preservation of a qualified historic | 14 | | structure located in a River Edge Redevelopment Zone pursuant | 15 | | to a qualified rehabilitation plan, provided that the total | 16 | | amount of such expenditures must (i) equal $5,000 or more and | 17 | | (ii) exceed the adjusted basis of the qualified historic | 18 | | structure on the first day the qualified rehabilitation plan | 19 | | begins. For any rehabilitation project, regardless of duration | 20 | | or number of phases, the project's compliance with the | 21 | | foregoing provisions (i) and (ii) shall be determined based on | 22 | | the aggregate amount of qualified expenditures for the entire | 23 | | project and may include expenditures incurred under subsection | 24 | | (a), this subsection, or both subsection (a) and this | 25 | | subsection. If the qualified rehabilitation plan spans | 26 | | multiple years, the aggregate credit for the entire project |
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| 1 | | shall be allowed in the last taxable year, except for phased | 2 | | rehabilitation projects, which may receive credits upon | 3 | | completion of each phase. Before obtaining the first phased | 4 | | credit: (A) the total amount of such expenditures must meet the | 5 | | requirements of provisions (i) and (ii) of this subsection; (B) | 6 | | the rehabilitated portion of the qualified historic structure | 7 | | must be placed in service; and (C) the requirements of | 8 | | subsection (b) must be met. | 9 | | (b) To obtain a tax credit pursuant to this Section, the | 10 | | taxpayer must apply with the Department of Natural Resources | 11 | | Commerce and Economic Opportunity . The Department of Natural | 12 | | Resources Commerce and Economic Opportunity, in consultation | 13 | | with the Historic Preservation Agency, shall determine the | 14 | | amount of eligible rehabilitation costs and expenses within 45 | 15 | | days of receipt of a complete application. The taxpayer must | 16 | | submit a certification of costs prepared by an independent | 17 | | certified public accountant that certifies (i) the project | 18 | | expenses, (ii) whether those expenses are qualified | 19 | | expenditures, and (iii) that the qualified expenditures exceed | 20 | | the adjusted basis of the qualified historic structure on the | 21 | | first day the qualified rehabilitation plan commenced. The | 22 | | Department of Natural Resources is authorized, but not | 23 | | required, to accept this certification of costs to determine | 24 | | the amount of qualified expenditures and the amount of the | 25 | | credit. The Department of Natural Resources shall provide | 26 | | guidance as to the minimum standards to be followed in the |
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| 1 | | preparation of such certification . The Department of Natural | 2 | | Resources and the National Park Service Historic Preservation | 3 | | Agency shall determine whether the rehabilitation is | 4 | | consistent with the United States Secretary of the Interior's | 5 | | Standards for Rehabilitation the standards of the Secretary of | 6 | | the United States Department of the Interior for | 7 | | rehabilitation . | 8 | | (b-1) Upon completion and review of the project and | 9 | | approval of the complete application , the Department of Natural | 10 | | Resources Commerce and Economic Opportunity shall issue a | 11 | | single certificate in the amount of the eligible credits equal | 12 | | to 25% of qualified expenditures incurred during the eligible | 13 | | taxable years, as defined in subsections (a) and (a-1), | 14 | | excepting any credits awarded under subsection (a) prior to the | 15 | | effective date of this amendatory Act of the 100th General | 16 | | Assembly and any phased credits issued prior to the eligible | 17 | | taxable year under subsection (a-1) . At the time the | 18 | | certificate is issued, an issuance fee up to the maximum amount | 19 | | of 2% of the amount of the credits issued by the certificate | 20 | | may be collected from the applicant to administer the | 21 | | provisions of this Section. If collected, this issuance fee | 22 | | shall be deposited into the Historic Property Administrative | 23 | | Fund, a special fund created in the State treasury. Subject to | 24 | | appropriation, moneys in the Historic Property Administrative | 25 | | Fund shall be provided to the Department of Natural Resources | 26 | | as reimbursement evenly divided between the Department of |
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| 1 | | Commerce and Economic Opportunity and the Historic | 2 | | Preservation Agency to reimburse the Department of Commerce and | 3 | | Economic Opportunity and the Historic Preservation Agency for | 4 | | the costs associated with administering this Section. The | 5 | | taxpayer must attach the certificate to the tax return on which | 6 | | the credits are to be claimed. The Department of Commerce and | 7 | | Economic Opportunity may adopt rules to implement this Section. | 8 | | (c) The taxpayer must attach the certificate to the tax | 9 | | return on which the credits are to be claimed. The tax credit | 10 | | under this Section may not reduce the taxpayer's liability to | 11 | | less than
zero. If the amount of the credit exceeds the tax | 12 | | liability for the year, the excess credit may be carried | 13 | | forward and applied to the tax liability of the 5 taxable years | 14 | | following the excess credit year. | 15 | | (c-1) Subject to appropriation, moneys in the Historic | 16 | | Property Administrative Fund shall be used, on a biennial basis | 17 | | beginning at the end of the second fiscal year after the | 18 | | effective date of this amendatory Act of the 100th General | 19 | | Assembly, to hire a qualified third party to prepare a biennial | 20 | | report to assess the overall economic impact to the State from | 21 | | the qualified rehabilitation projects under this Section | 22 | | completed in that year and in previous years. The overall | 23 | | economic impact shall include at least: (1) the direct and | 24 | | indirect or induced economic impacts of completed projects; (2) | 25 | | temporary, permanent, and construction jobs created; (3) | 26 | | sales, income, and property tax generation before, during |
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| 1 | | construction, and after completion; and (4) indirect | 2 | | neighborhood impact after completion. The report shall be | 3 | | submitted to the Governor and the General Assembly. The report | 4 | | to the General Assembly shall be filed with the Clerk of the | 5 | | House of Representatives and the Secretary of the Senate in | 6 | | electronic form only, in the manner that the Clerk and the | 7 | | Secretary shall direct. | 8 | | (c-2) The Department of Natural Resources may adopt rules | 9 | | to implement this Section in addition to the rules expressly | 10 | | authorized in this Section. | 11 | | (d) As used in this Section, the following terms have the | 12 | | following meanings. | 13 | | "Phased rehabilitation" means a project that is completed | 14 | | in phases, as defined under Section 47 of the federal Internal | 15 | | Revenue Code and pursuant to National Park Service regulations | 16 | | at 36 C.F.R. 67. | 17 | | "Placed in service" means the date when the property is | 18 | | placed in a condition or state of readiness and availability | 19 | | for a specifically assigned function as defined under Section | 20 | | 47 of the federal Internal Revenue Code and federal Treasury | 21 | | Regulation Sections 1.46 and 1.48. | 22 | | "Qualified expenditure" means all the costs and expenses | 23 | | defined as qualified rehabilitation expenditures under Section | 24 | | 47 of the federal Internal Revenue Code that were incurred in | 25 | | connection with a qualified historic structure. | 26 | | "Qualified historic structure" means a certified historic |
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| 1 | | structure as defined under Section 47(c)(3) of the federal | 2 | | Internal Revenue Code. | 3 | | "Qualified rehabilitation plan" means a project that is | 4 | | approved by the Department of Natural Resources and the | 5 | | National Park Service Historic Preservation Agency as being | 6 | | consistent with the United States Secretary of the Interior's | 7 | | Standards for Rehabilitation standards in effect on the | 8 | | effective date of this amendatory Act of the 97th General | 9 | | Assembly for rehabilitation as adopted by the federal Secretary | 10 | | of the Interior . | 11 | | "Qualified taxpayer" means the owner of the qualified | 12 | | historic structure or any other person who qualifies for the | 13 | | federal rehabilitation credit allowed by Section 47 of the | 14 | | federal Internal Revenue Code with respect to that qualified | 15 | | historic structure. Partners, shareholders of subchapter S | 16 | | corporations, and owners of limited liability companies (if the | 17 | | limited liability company is treated as a partnership for | 18 | | purposes of federal and State income taxation) are entitled to | 19 | | a credit under this Section to be determined in accordance with | 20 | | the determination of income and distributive share of income | 21 | | under Sections 702 and 703 and subchapter S of the Internal | 22 | | Revenue Code, provided that credits granted to a partnership, a | 23 | | limited liability company taxed as a partnership, or other | 24 | | multiple owners of property shall be passed through to the | 25 | | partners, members, or owners respectively on a pro rata basis | 26 | | or pursuant to an executed agreement among the partners, |
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| 1 | | members, or owners documenting any alternate distribution | 2 | | method.
| 3 | | (Source: P.A. 99-914, eff. 12-20-16; 100-236, eff. 8-18-17.) | 4 | | (35 ILCS 5/227 new) | 5 | | Sec. 227. Historic preservation credit. For
tax years | 6 | | beginning on or after January 1, 2019 and ending on
or before | 7 | | December 31, 2023, a taxpayer who qualifies for a
credit under | 8 | | the Historic Preservation Tax Credit Act is entitled to a | 9 | | credit against the taxes
imposed under subsections (a) and (b) | 10 | | of Section 201 of this
Act as provided in that Act. If the | 11 | | taxpayer is a partnership
or Subchapter S corporation, the | 12 | | credit shall be allowed to the
partners or shareholders in | 13 | | accordance with the determination
of income and distributive | 14 | | share of income under Sections 702
and 704 and Subchapter S of | 15 | | the Internal Revenue Code.
If the amount of any tax credit | 16 | | awarded under this Section
exceeds the qualified taxpayer's | 17 | | income tax liability for the
year in which the qualified | 18 | | rehabilitation plan was placed in
service, the excess amount | 19 | | may be carried forward as
provided in the Historic Preservation | 20 | | Tax Credit Act.
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