Full Text of HB3318 101st General Assembly
HB3318ham001 101ST GENERAL ASSEMBLY | Rep. Mark L. Walker Filed: 3/27/2019
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| 1 | | AMENDMENT TO HOUSE BILL 3318
| 2 | | AMENDMENT NO. ______. Amend House Bill 3318 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Illinois Income Tax Act is amended by | 5 | | adding Section 229 as follows: | 6 | | (35 ILCS 5/229 new) | 7 | | Sec. 229. Venture capital investment credit. | 8 | | (a) Definitions. As used in this Section: | 9 | | "Certified investment fund manager" means a business that | 10 | | is certified under subsection (e). | 11 | | "Claimant" means an individual who files a claim for credit | 12 | | under this Section. | 13 | | "Department" means the Department of Commerce and Economic | 14 | | Opportunity, unless otherwise specifically provided. | 15 | | "Equity investment" means a purchase of an equity interest, | 16 | | or any other investment expenditure, in a qualified new |
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| 1 | | business venture either directly or through a certified | 2 | | investment fund manager as determined by subsection (e). | 3 | | "Qualified new business venture" means a business that is | 4 | | certified under subsection (d). | 5 | | (b) Filing claims for credit. For taxable years beginning | 6 | | on or after January 1, 2020 and beginning prior to January 1, | 7 | | 2025, a claimant may claim as a credit against the tax imposed | 8 | | under subsections (a) and (b) of Section 201 of this Act an | 9 | | amount equal to 25% of the claimant's equity investment made | 10 | | directly to a qualified new business venture in the taxable | 11 | | year, or made to a certified fund manager if the fund manager | 12 | | invests in a business certified under subsection (d). | 13 | | (c) Limitations. | 14 | | (1) The maximum amount of the credits that may be | 15 | | claimed under this Section for all taxable years combined | 16 | | is $50,000,000. | 17 | | (2) The maximum amount of a claimant's investment that | 18 | | may be used as the basis for a credit under this Section is | 19 | | $500,000 for each investment made directly to a business | 20 | | certified under subsection (d). | 21 | | (3) If an investment for which a claimant claims a | 22 | | credit under subsection (b) is held by the claimant for | 23 | | less than one year, then the claimant shall pay to the | 24 | | Department of Revenue, in the manner prescribed by the | 25 | | Department of Revenue, the amount of the credit that the | 26 | | claimant received related to the investment. |
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| 1 | | (4) Any credit allowed under this Section that is | 2 | | unused in the year the credit is earned may be carried | 3 | | forward to each of the 5 taxable years following the year | 4 | | for which the credit is first computed until it is used. | 5 | | This credit shall be applied first to the earliest year for | 6 | | which there is a liability. If there is a credit under this | 7 | | Section from more than one tax year that is available to | 8 | | offset a liability, then the earliest credit arising under | 9 | | this Section shall be applied first. | 10 | | (5) For partners, shareholders of Subchapter S | 11 | | corporations, and owners of limited liability companies, | 12 | | if the liability company is treated as a partnership for | 13 | | purposes of federal and State income taxation, there shall | 14 | | be allowed a credit under this Section to be determined in | 15 | | accordance with the determination of income and | 16 | | distributive share of income under Sections 702 and 704 and | 17 | | Subchapter S of the Internal Revenue Code. | 18 | | (d) Qualified new business ventures. The Department shall | 19 | | implement a program to certify businesses for purposes of this | 20 | | credit. A business desiring certification shall submit an | 21 | | application to the Department in each taxable year for which | 22 | | the business desires certification. Unless otherwise provided | 23 | | under the rules of the Department, a business may be certified | 24 | | under this subsection and may maintain that certification only | 25 | | if the business satisfies all of the following conditions: | 26 | | (1) it has its headquarters in this State; |
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| 1 | | (2) at least 51% of the employees employed by the | 2 | | business are employed in this State; | 3 | | (3) it is engaged in manufacturing, agriculture, or | 4 | | processing or assembling products and conducting research | 5 | | and development or developing a new product or business | 6 | | process; | 7 | | (4) it is not engaged in real estate development, | 8 | | insurance, banking, lending, lobbying, political | 9 | | consulting, professional services provided by attorneys, | 10 | | accountants, business consultants, physicians, or health | 11 | | care consultants, wholesale or retail trade, leisure, | 12 | | hospitality, transportation, or construction; | 13 | | (5) it has fewer than 100 employees; | 14 | | (6) it has been in operation in this State for not more | 15 | | than 7 consecutive years; and | 16 | | (7) it has not received more than $1,000,000 in | 17 | | investments that have qualified for tax credits under this | 18 | | Section. | 19 | | The Department shall maintain a list of certified | 20 | | businesses and shall permit public access to the lists through | 21 | | the Department's Internet website. | 22 | | (e) Certified investment fund managers. The Department | 23 | | shall implement a program to certify investment fund managers | 24 | | for purposes of this Section. An investment fund manager | 25 | | desiring certification shall submit an application to the | 26 | | Department. In determining whether to certify an investment |
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| 1 | | fund manager, the Department shall consider the investment fund | 2 | | manager's experience in managing venture capital funds, the | 3 | | past performance of investment funds managed by the applicant, | 4 | | the expected level of investment in the investment fund to be | 5 | | managed by the applicant, and any other relevant factors. The | 6 | | Department may certify only investment fund managers that | 7 | | commit to placing investments in businesses certified under | 8 | | subsection (d). The Department shall maintain a list of | 9 | | certified investment fund managers and shall permit public | 10 | | access to the lists through the Department's Internet website. | 11 | | (f) The Department shall issue a credit certificate that | 12 | | must be attached to the taxpayer's return. The certificate must | 13 | | include the expiration date. | 14 | | (g) Annual report. Annually, no later than February 1, the | 15 | | Department shall submit a report to the General Assembly for | 16 | | distribution to legislators, listing all of the following | 17 | | information: | 18 | | (1) the total amount of tax credits claimed under this | 19 | | Section; | 20 | | (2) the name of each business in which investments | 21 | | qualifying for those tax credits were made, the amount of | 22 | | the tax credits, and the amount of the investment; and | 23 | | (3) any other information the Department considers | 24 | | reasonable to include. | 25 | | (h) Rules. The Department, in consultation with the | 26 | | Department of Revenue, shall adopt rules to administer this |
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