Full Text of SB3527 100th General Assembly
SB3527sam001 100TH GENERAL ASSEMBLY | Sen. Steve Stadelman Filed: 4/25/2018
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| 1 | | AMENDMENT TO SENATE BILL 3527
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 3527 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Illinois Income Tax Act is amended by | 5 | | changing Section 221 as follows: | 6 | | (35 ILCS 5/221) | 7 | | Sec. 221. Rehabilitation costs; qualified historic | 8 | | properties; River Edge Redevelopment Zone. | 9 | | (a) For taxable years that begin beginning on or after | 10 | | January 1, 2012 and begin ending prior to January 1, 2018 | 11 | | January 1, 2022 , there shall be allowed a tax credit against | 12 | | the tax imposed by subsections (a) and (b) of Section 201 of | 13 | | this Act in an amount equal to 25% of qualified expenditures | 14 | | incurred by a qualified taxpayer during the taxable year in the | 15 | | restoration and preservation of a qualified historic structure | 16 | | located in a River Edge Redevelopment Zone pursuant to a |
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| 1 | | qualified rehabilitation plan, provided that the total amount | 2 | | of such expenditures (i) must equal $5,000 or more and (ii) | 3 | | must exceed 50% of the purchase price of the property. | 4 | | (a-1) For taxable years that begin on or after January 1, | 5 | | 2018 and end prior to January 1, 2022, there shall be allowed a | 6 | | tax credit against the tax imposed by subsections (a) and (b) | 7 | | of Section 201 of this Act in an aggregate amount equal to 25% | 8 | | of qualified expenditures incurred by a qualified taxpayer in | 9 | | the restoration and preservation of a qualified historic | 10 | | structure located in a River Edge Redevelopment Zone pursuant | 11 | | to a qualified rehabilitation plan, provided that the total | 12 | | amount of such expenditures (i) must equal $5,000 or more and | 13 | | (ii) must exceed the adjusted basis of the qualified historic | 14 | | structure on the first day the qualified rehabilitation plan | 15 | | begins. If the qualified rehabilitation plan spans multiple | 16 | | years, the aggregate credit for the entire project shall be | 17 | | allowed in the last taxable year. | 18 | | (b) To obtain a tax credit pursuant to this Section, the | 19 | | taxpayer must apply with the Department of Natural Resources | 20 | | Commerce and Economic Opportunity . The Department of Natural | 21 | | Resources Commerce and Economic Opportunity, in consultation | 22 | | with the Historic Preservation Agency, shall determine the | 23 | | amount of eligible rehabilitation costs and expenses within 30 | 24 | | days of receipt of a complete application. For rehabilitation | 25 | | projects with qualified rehabilitation costs and expenses in | 26 | | excess of $250,000, the taxpayer must provide to the Department |
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| 1 | | of Natural Resources a third-party audit conducted by a | 2 | | professionally qualified, independent auditor verifying (i) | 3 | | the project expenses, (ii) whether they are qualified | 4 | | expenditures, and (iii) that the qualified expenditures exceed | 5 | | the adjusted basis of the qualified historic structure on the | 6 | | first day the qualified rehabilitation plan commenced. The | 7 | | Department of Natural Resources is authorized, but not | 8 | | required, to accept this audit to determine the amount of | 9 | | qualified expenditures. For projects with less than $500,000 in | 10 | | qualified rehabilitation costs, the taxpayer must submit a | 11 | | certification of costs prepared by a certified public | 12 | | accountant and certify that the qualified expenditures exceed | 13 | | the adjusted basis of the qualified historic structure on the | 14 | | first day the qualified rehabilitation plan commenced. The | 15 | | Department of Natural Resources is authorized, but not | 16 | | required, to accept this certification of costs to determine | 17 | | the amount of qualified expenditures and the amount of the | 18 | | credit . The Department of Natural Resources and the National | 19 | | Park Service Historic Preservation Agency shall determine | 20 | | whether the rehabilitation is consistent with the standards of | 21 | | the Secretary of the United States Department of the Interior | 22 | | for rehabilitation. | 23 | | (b-1) Upon completion and review of the project, the | 24 | | Department of Natural Resources Commerce and Economic | 25 | | Opportunity shall issue a single certificate in the amount of | 26 | | the eligible credits equal to 25% of qualified expenditures |
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| 1 | | incurred during the eligible taxable years, as defined in | 2 | | subsections (a) and (a-1) . At the time the certificate is | 3 | | issued, an issuance fee up to the maximum amount of 2% of the | 4 | | amount of the credits issued by the certificate may be | 5 | | collected from the applicant to administer the provisions of | 6 | | this Section. If collected, this issuance fee shall be | 7 | | deposited into the Historic Property Administrative Fund, a | 8 | | special fund created in the State treasury. Subject to | 9 | | appropriation, moneys in the Historic Property Administrative | 10 | | Fund shall be provided to the Department of Natural Resources | 11 | | as reimbursement evenly divided between the Department of | 12 | | Commerce and Economic Opportunity and the Historic | 13 | | Preservation Agency to reimburse the Department of Commerce and | 14 | | Economic Opportunity and the Historic Preservation Agency for | 15 | | the costs associated with administering this Section. The | 16 | | taxpayer must attach the certificate to the tax return on which | 17 | | the credits are to be claimed. The Department of Commerce and | 18 | | Economic Opportunity may adopt rules to implement this Section. | 19 | | (c) The taxpayer must attach the certificate to the tax | 20 | | return on which the credits are to be claimed. The tax credit | 21 | | under this Section may not reduce the taxpayer's liability to | 22 | | less than
zero. If the amount of the credit exceeds the tax | 23 | | liability for the year, the excess credit may be carried | 24 | | forward and applied to the tax liability of the 5 taxable years | 25 | | following the excess credit year. | 26 | | (c-1) If the taxpayer is a partnership, a Subchapter S |
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| 1 | | corporation, or a limited liability company that has elected | 2 | | partnership tax treatment, the credit is allowed to the | 3 | | partners, shareholders, or members in accordance with the | 4 | | determination of income and distributive share of income under | 5 | | the Internal Revenue Code. | 6 | | (c-3) If a recapture event occurs during the recapture | 7 | | period with respect to a qualified historic structure, then for | 8 | | any taxable year in which the credits allowed under subsection | 9 | | (a) or (a-1) have been applied, the tax under the applicable | 10 | | section of this Act shall be increased by applying the | 11 | | recapture percentage set forth below to the tax decrease | 12 | | resulting from the application of credits allowed under | 13 | | subsection (a) or (a-1) to the taxable year in question. | 14 | | For purposes of this subsection, the recapture percentage | 15 | | shall be determined as follows: | 16 | | (1) if the recapture event occurs within the first year | 17 | | after commencement of the recapture period, then the | 18 | | recapture percentage is 100%; | 19 | | (2) if the recapture event occurs within the second | 20 | | year after commencement of the recapture period, then the | 21 | | recapture percentage is 80%; | 22 | | (3) if the recapture event occurs within the third year | 23 | | after commencement of the recapture period, then the | 24 | | recapture percentage is 60%; | 25 | | (4) if the recapture event occurs within the fourth | 26 | | year after commencement of the recapture period, then the |
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| 1 | | recapture percentage is 40%; and | 2 | | (5) if the recapture event occurs within the fifth year | 3 | | after commencement of the recapture period, then the | 4 | | recapture percentage is 20%. | 5 | | In the case of any recapture event, the carryforwards under | 6 | | subsection (c) above shall be adjusted by reason of such event. | 7 | | (c-4) Subject to appropriation and prior to equal | 8 | | disbursement to the Department of Natural Resources, moneys in | 9 | | the Historic Property Administrative Fund shall be used, on a | 10 | | biennial basis beginning at the end of the second fiscal year | 11 | | after the effective date of this amendatory Act of the 100th | 12 | | General Assembly, to hire a qualified third party to prepare a | 13 | | biennial report to assess the overall economic impact to the | 14 | | State from the qualified rehabilitation projects under this Act | 15 | | completed in that year and in previous years. The overall | 16 | | economic impact shall include at least: (i) the direct and | 17 | | indirect or induced economic impacts of completed projects; | 18 | | (ii) temporary, permanent, and construction jobs created; | 19 | | (iii) sales, income, and property tax generation before, during | 20 | | construction, and after completion; and (iv) indirect | 21 | | neighborhood impact after completion. | 22 | | (c-5) The Department of Natural Resources may adopt rules | 23 | | to implement this Section in addition to the rules expressly | 24 | | authorized herein. | 25 | | (d) As used in this Section, the following terms have the | 26 | | following meanings. |
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| 1 | | "Placed in service" means the date the historic structure | 2 | | or the rehabilitated portion thereof is first placed in a | 3 | | condition or state of readiness or occupancy and is operational | 4 | | for its specifically assigned function or use. If the property | 5 | | remains in service during the rehabilitation, the placed in | 6 | | service date will be commensurate with the date of completion | 7 | | of the rehabilitation project as per the qualified | 8 | | rehabilitation plan. | 9 | | "Qualified expenditure" means all the costs and expenses | 10 | | defined as qualified rehabilitation expenditures under Section | 11 | | 47 of the federal Internal Revenue Code that were incurred in | 12 | | connection with a qualified historic structure. | 13 | | "Qualified historic structure" means a certified historic | 14 | | structure as defined under Section 47(c)(3) of the federal | 15 | | Internal Revenue Code. | 16 | | "Qualified rehabilitation plan" means a project that is | 17 | | approved by the Department of Natural Resources and the | 18 | | National Park Service Historic Preservation Agency as being | 19 | | consistent with the standards in effect on the effective date | 20 | | of this amendatory Act of the 97th General Assembly for | 21 | | rehabilitation as adopted by the federal Secretary of the | 22 | | Interior. | 23 | | "Qualified taxpayer" means the owner of the qualified | 24 | | historic structure or any other person who qualifies for the | 25 | | federal rehabilitation credit allowed by Section 47 of the | 26 | | federal Internal Revenue Code with respect to that qualified |
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| 1 | | historic structure. Partners, shareholders of subchapter S | 2 | | corporations, and owners of limited liability companies (if the | 3 | | limited liability company is treated as a partnership for | 4 | | purposes of federal and State income taxation) are entitled to | 5 | | a credit under this Section to be determined in accordance with | 6 | | the determination of income and distributive share of income | 7 | | under Sections 702 and 703 and subchapter S of the Internal | 8 | | Revenue Code, provided that credits granted to a partnership, a | 9 | | limited liability company taxed as a partnership, or other | 10 | | multiple owners of property shall be passed through to the | 11 | | partners, members, or owners respectively on a pro rata basis | 12 | | or pursuant to an executed agreement among the partners, | 13 | | members, or owners documenting any alternate distribution | 14 | | method.
| 15 | | "Recapture event" means any of the following events | 16 | | occurring during the recapture period: | 17 | | (1) failure to place in service the rehabilitated | 18 | | portions of the qualified historic structure, or failure to | 19 | | maintain the rehabilitated portions of the qualified | 20 | | historic structure in service after they are placed in | 21 | | service; provided that a recapture event under this | 22 | | paragraph (1) shall not include a removal from service for | 23 | | a reasonable period of time to conduct maintenance and | 24 | | repairs that are reasonably necessary to protect the health | 25 | | and safety of the public or to protect the structural | 26 | | integrity of the qualified historic structure or a |
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| 1 | | neighboring structure; | 2 | | (2) demolition or other alteration of the qualified | 3 | | historic structure in a manner that is inconsistent with | 4 | | the qualified rehabilitation plan or the Secretary of the | 5 | | Interior's Standards for Rehabilitation; | 6 | | (3) disposition of the rehabilitated qualified | 7 | | historic structure in whole or a proportional disposition | 8 | | of a partnership interest therein, except as otherwise | 9 | | permitted by this Section; or | 10 | | (4) use of the qualified historic structure in a manner | 11 | | that is inconsistent with the qualified rehabilitation | 12 | | plan or that is otherwise inconsistent with the provisions | 13 | | and intent of this Section. | 14 | | A recapture event occurring in one taxable year shall be | 15 | | deemed continuing to subsequent taxable years unless and until | 16 | | corrected. | 17 | | The following dispositions of a qualified historic | 18 | | structure shall not be deemed to be a recapture event for | 19 | | purposes of this Section: | 20 | | (1) a transfer by reason of death; | 21 | | (2) a transfer between spouses incident to divorce; | 22 | | (3) a sale by and leaseback to an entity that, when the | 23 | | rehabilitated portions of the qualified historic structure | 24 | | are placed in service, will be a lessee of the qualified | 25 | | historic structure, but only for so long as the entity | 26 | | continues to be a lessee; and |
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| 1 | | (4) a mere change in the form of conducting the trade | 2 | | or business by the owner (or, if applicable, the lessee) of | 3 | | the qualified historic structure, so long as the property | 4 | | interest in such qualified historic structure is retained | 5 | | in such trade or business and the owner or lessee retains a | 6 | | substantial interest in such trade or business. | 7 | | "Recapture period" means the 5-year period beginning on the | 8 | | date that the qualified historic structure or rehabilitated | 9 | | portions thereof are placed in service. | 10 | | (Source: P.A. 99-914, eff. 12-20-16; 100-236, eff. 8-18-17.)".
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