Full Text of SB0157 102nd General Assembly
SB0157ham001 102ND GENERAL ASSEMBLY | Rep. Jehan Gordon-Booth Filed: 5/18/2021
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| 1 | | AMENDMENT TO SENATE BILL 157
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 157 on page 1, | 3 | | line 5, by replacing "Section 221" with "Sections 220, 221, | 4 | | and 228"; and | 5 | | on page 1, immediately below line 5, by inserting the | 6 | | following: | 7 | | "(35 ILCS 5/220) | 8 | | Sec. 220. Angel investment credit. | 9 | | (a) As used in this Section: | 10 | | "Applicant" means a corporation, partnership, limited | 11 | | liability company, or a natural person that makes an | 12 | | investment in a qualified new business venture. The term | 13 | | "applicant" does not include (i) a corporation, partnership, | 14 | | limited liability company, or a natural person who has a | 15 | | direct or indirect ownership interest of at least 51% in the | 16 | | profits, capital, or value of the qualified new business |
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| 1 | | venture receiving the investment or (ii) a related member. | 2 | | "Claimant" means an applicant certified by the Department | 3 | | who files a claim for a credit under this Section. | 4 | | "Department" means the Department of Commerce and Economic | 5 | | Opportunity. | 6 | | "Investment" means money (or its equivalent) given to a | 7 | | qualified new business venture, at a risk of loss, in | 8 | | consideration for an equity interest of the qualified new | 9 | | business venture. The Department may adopt rules to permit | 10 | | certain forms of contingent equity investments to be | 11 | | considered eligible for a tax credit under this Section. | 12 | | "Qualified new business venture" means a business that is | 13 | | registered with the Department under this Section. | 14 | | "Related member" means a person that, with respect to the
| 15 | | applicant, is any one of the following: | 16 | | (1) An individual, if the individual and the members | 17 | | of the individual's family (as defined in Section 318 of | 18 | | the Internal Revenue Code) own directly, indirectly,
| 19 | | beneficially, or constructively, in the aggregate, at | 20 | | least 50% of the value of the outstanding profits, | 21 | | capital, stock, or other ownership interest in the | 22 | | qualified new business venture that is the recipient of | 23 | | the applicant's investment. | 24 | | (2) A partnership, estate, or trust and any partner or | 25 | | beneficiary, if the partnership, estate, or trust and its | 26 | | partners or beneficiaries own directly, indirectly, |
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| 1 | | beneficially, or constructively, in the aggregate, at | 2 | | least 50% of the profits, capital, stock, or other | 3 | | ownership interest in the qualified new business venture | 4 | | that is the recipient of the applicant's investment. | 5 | | (3) A corporation, and any party related to the | 6 | | corporation in a manner that would require an attribution | 7 | | of stock from the corporation under the attribution rules
| 8 | | of Section 318 of the Internal Revenue Code, if the | 9 | | applicant and any other related member own, in the | 10 | | aggregate, directly, indirectly, beneficially, or | 11 | | constructively, at least 50% of the value of the | 12 | | outstanding stock of the qualified new business venture | 13 | | that is the recipient of the applicant's investment. | 14 | | (4) A corporation and any party related to that | 15 | | corporation in a manner that would require an attribution | 16 | | of stock from the corporation to the party or from the
| 17 | | party to the corporation under the attribution rules of | 18 | | Section 318 of the Internal Revenue Code, if the | 19 | | corporation and all such related parties own, in the | 20 | | aggregate, at least 50% of the profits, capital, stock, or | 21 | | other ownership interest in the qualified new business | 22 | | venture that is the recipient of the applicant's | 23 | | investment. | 24 | | (5) A person to or from whom there is attribution of | 25 | | ownership of stock in the qualified new business venture | 26 | | that is the recipient of the applicant's investment in |
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| 1 | | accordance with Section 1563(e) of the Internal Revenue | 2 | | Code, except that for purposes of determining whether a | 3 | | person is a related member under this paragraph, "20%" | 4 | | shall be substituted for "5%" whenever "5%" appears in | 5 | | Section 1563(e) of the Internal Revenue Code. | 6 | | (b) For taxable years beginning after December 31, 2010, | 7 | | and ending on or before December 31, 2024 December 31, 2021 , | 8 | | subject to the limitations provided in this Section, a | 9 | | claimant may claim, as a credit against the tax imposed under | 10 | | subsections (a) and (b) of Section 201 of this Act, an amount | 11 | | equal to 25% of the claimant's investment made directly in a | 12 | | qualified new business venture. In order for an investment in | 13 | | a qualified new business venture to be eligible for tax | 14 | | credits, the business must have applied for and received | 15 | | certification under subsection (e) for the taxable year in | 16 | | which the investment was made prior to the date on which the | 17 | | investment was made. The credit under this Section may not | 18 | | exceed the taxpayer's Illinois income tax liability for the | 19 | | taxable year. If the amount of the credit exceeds the tax | 20 | | liability for the year, the excess may be carried forward and | 21 | | applied to the tax liability of the 5 taxable years following | 22 | | the excess credit year. The credit shall be applied to the | 23 | | earliest year for which there is a tax liability. If there are | 24 | | credits from more than one tax year that are available to | 25 | | offset a liability, the earlier credit shall be applied first. | 26 | | In the case of a partnership or Subchapter S Corporation, the |
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| 1 | | credit is allowed to the partners or shareholders in | 2 | | accordance with the determination of income and distributive | 3 | | share of income under Sections 702 and 704 and Subchapter S of | 4 | | the Internal Revenue Code. | 5 | | (c) The minimum amount an applicant must invest in any | 6 | | single qualified new business venture in order to be eligible | 7 | | for a credit under this Section is $10,000. The maximum amount | 8 | | of an applicant's total investment made in any single | 9 | | qualified new business venture that may be used as the basis | 10 | | for a credit under this Section is $2,000,000. | 11 | | (d) The Department shall implement a program to certify an | 12 | | applicant for an angel investment credit. Upon satisfactory | 13 | | review, the Department shall issue a tax credit certificate | 14 | | stating the amount of the tax credit to which the applicant is | 15 | | entitled. The Department shall annually certify that: (i) each | 16 | | qualified new business venture that receives an angel | 17 | | investment under this Section has maintained a minimum | 18 | | employment threshold, as defined by rule, in the State (and | 19 | | continues to maintain a minimum employment threshold in the | 20 | | State for a period of no less than 3 years from the issue date | 21 | | of the last tax credit certificate issued by the Department | 22 | | with respect to such business pursuant to this Section); and | 23 | | (ii) the claimant's investment has been made and remains, | 24 | | except in the event of a qualifying liquidity event, in the | 25 | | qualified new business venture for no less than 3 years. | 26 | | If an investment for which a claimant is allowed a credit |
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| 1 | | under subsection (b) is held by the claimant for less than 3 | 2 | | years, other than as a result of a permitted sale of the | 3 | | investment to person who is not a related member, the claimant | 4 | | shall pay to the Department of Revenue, in the manner | 5 | | prescribed by the Department of Revenue, the aggregate amount | 6 | | of the disqualified credits that the claimant received related | 7 | | to the subject investment. | 8 | | If the Department determines that a qualified new business | 9 | | venture failed to maintain a minimum employment threshold in | 10 | | the State through the date which is 3 years from the issue date | 11 | | of the last tax credit certificate issued by the Department | 12 | | with respect to the subject business pursuant to this Section, | 13 | | the claimant or claimants shall pay to the Department of | 14 | | Revenue, in the manner prescribed by the Department of | 15 | | Revenue, the aggregate amount of the disqualified credits that | 16 | | claimant or claimants received related to investments in that | 17 | | business. | 18 | | (e) The Department shall implement a program to register | 19 | | qualified new business ventures for purposes of this Section. | 20 | | A business desiring registration under this Section shall be | 21 | | required to submit a full and complete application to the | 22 | | Department. A submitted application shall be effective only | 23 | | for the taxable year in which it is submitted, and a business | 24 | | desiring registration under this Section shall be required to | 25 | | submit a separate application in and for each taxable year for | 26 | | which the business desires registration. Further, if at any |
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| 1 | | time prior to the acceptance of an application for | 2 | | registration under this Section by the Department one or more | 3 | | events occurs which makes the information provided in that | 4 | | application materially false or incomplete (in whole or in | 5 | | part), the business shall promptly notify the Department of | 6 | | the same. Any failure of a business to promptly provide the | 7 | | foregoing information to the Department may, at the discretion | 8 | | of the Department, result in a revocation of a previously | 9 | | approved application for that business, or disqualification of | 10 | | the business from future registration under this Section, or | 11 | | both. The Department may register the business only if all of | 12 | | the following conditions are satisfied: | 13 | | (1) it has its principal place of business in this | 14 | | State; | 15 | | (2) at least 51% of the employees employed by the | 16 | | business are employed in this State; | 17 | | (3) the business has the potential for increasing jobs | 18 | | in this State, increasing capital investment in this | 19 | | State, or both, as determined by the Department, and | 20 | | either of the following apply: | 21 | | (A) it is principally engaged in innovation in any | 22 | | of the following: manufacturing; biotechnology; | 23 | | nanotechnology; communications; agricultural | 24 | | sciences; clean energy creation or storage technology; | 25 | | processing or assembling products, including medical | 26 | | devices, pharmaceuticals, computer software, computer |
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| 1 | | hardware, semiconductors, other innovative technology | 2 | | products, or other products that are produced using | 3 | | manufacturing methods that are enabled by applying | 4 | | proprietary technology; or providing services that are | 5 | | enabled by applying proprietary technology; or | 6 | | (B) it is undertaking pre-commercialization | 7 | | activity related to proprietary technology that | 8 | | includes conducting research, developing a new product | 9 | | or business process, or developing a service that is | 10 | | principally reliant on applying proprietary | 11 | | technology; | 12 | | (4) it is not principally engaged in real estate | 13 | | development, insurance, banking, lending, lobbying, | 14 | | political consulting, professional services provided by | 15 | | attorneys, accountants, business consultants, physicians, | 16 | | or health care consultants, wholesale or retail trade, | 17 | | leisure, hospitality, transportation, or construction, | 18 | | except construction of power production plants that derive | 19 | | energy from a renewable energy resource, as defined in | 20 | | Section 1 of the Illinois Power Agency Act; | 21 | | (5) at the time it is first certified: | 22 | | (A) it has fewer than 100 employees; | 23 | | (B) it has been in operation in Illinois for not | 24 | | more than 10 consecutive years prior to the year of | 25 | | certification; and | 26 | | (C) it has received not more than $10,000,000 in |
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| 1 | | aggregate investments; | 2 | | (5.1) it agrees to maintain a minimum employment | 3 | | threshold in the State of Illinois prior to the date which | 4 | | is 3 years from the issue date of the last tax credit | 5 | | certificate issued by the Department with respect to that | 6 | | business pursuant to this Section; | 7 | | (6) (blank); and | 8 | | (7) it has received not more than $4,000,000 in | 9 | | investments that qualified for tax credits under this | 10 | | Section. | 11 | | (f) The Department, in consultation with the Department of | 12 | | Revenue, shall adopt rules to administer this Section. The | 13 | | aggregate amount of the tax credits that may be claimed under | 14 | | this Section for investments made in qualified new business | 15 | | ventures shall be limited at $10,000,000 per calendar year, of | 16 | | which $500,000 shall be reserved for investments made in | 17 | | qualified new business ventures which are minority-owned | 18 | | businesses, women-owned businesses, or businesses owned by a | 19 | | person with a disability (as those terms are used and defined | 20 | | in the Business Enterprise for Minorities, Women, and Persons | 21 | | with Disabilities Act), and an additional $500,000 shall be | 22 | | reserved for investments made in qualified new business | 23 | | ventures with their principal place of business in counties | 24 | | with a population of not more than 250,000. The foregoing | 25 | | annual allowable amounts shall be allocated by the Department, | 26 | | on a per calendar quarter basis and prior to the commencement |
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| 1 | | of each calendar year, in such proportion as determined by the | 2 | | Department, provided that: (i) the amount initially allocated | 3 | | by the Department for any one calendar quarter shall not | 4 | | exceed 35% of the total allowable amount; (ii) any portion of | 5 | | the allocated allowable amount remaining unused as of the end | 6 | | of any of the first 3 calendar quarters of a given calendar | 7 | | year shall be rolled into, and added to, the total allocated | 8 | | amount for the next available calendar quarter; and (iii) the | 9 | | reservation of tax credits for investments in minority-owned | 10 | | businesses, women-owned businesses, businesses owned by a | 11 | | person with a disability, and in businesses in counties with a | 12 | | population of not more than 250,000 is limited to the first 3 | 13 | | calendar quarters of a given calendar year, after which they | 14 | | may be claimed by investors in any qualified new business | 15 | | venture. | 16 | | (g) A claimant may not sell or otherwise transfer a credit | 17 | | awarded under this Section to another person. | 18 | | (h) On or before March 1 of each year, the Department shall | 19 | | report to the Governor and to the General Assembly on the tax | 20 | | credit certificates awarded under this Section for the prior | 21 | | calendar year. | 22 | | (1) This report must include, for each tax credit | 23 | | certificate awarded: | 24 | | (A) the name of the claimant and the amount of | 25 | | credit awarded or allocated to that claimant; | 26 | | (B) the name and address (including the county) of |
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| 1 | | the qualified new business venture that received the | 2 | | investment giving rise to the credit, the North | 3 | | American Industry Classification System (NAICS) code | 4 | | applicable to that qualified new business venture, and | 5 | | the number of employees of the qualified new business | 6 | | venture; and | 7 | | (C) the date of approval by the Department of each | 8 | | claimant's tax credit certificate. | 9 | | (2) The report must also include: | 10 | | (A) the total number of applicants and the total | 11 | | number of claimants, including the amount of each tax | 12 | | credit certificate awarded to a claimant under this | 13 | | Section in the prior calendar year; | 14 | | (B) the total number of applications from | 15 | | businesses seeking registration under this Section, | 16 | | the total number of new qualified business ventures | 17 | | registered by the Department, and the aggregate amount | 18 | | of investment upon which tax credit certificates were | 19 | | issued in the prior calendar year; and | 20 | | (C) the total amount of tax credit certificates | 21 | | sought by applicants, the amount of each tax credit | 22 | | certificate issued to a claimant, the aggregate amount | 23 | | of all tax credit certificates issued in the prior | 24 | | calendar year and the aggregate amount of tax credit | 25 | | certificates issued as authorized under this Section | 26 | | for all calendar years.
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| 1 | | (i) For each business seeking registration under this | 2 | | Section after December 31, 2016, the Department shall require | 3 | | the business to include in its application the North American | 4 | | Industry Classification System (NAICS) code applicable to the | 5 | | business and the number of employees of the business at the | 6 | | time of application. Each business registered by the | 7 | | Department as a qualified new business venture that receives | 8 | | an investment giving rise to the issuance of a tax credit | 9 | | certificate pursuant to this Section shall, for each of the 3 | 10 | | years following the issue date of the last tax credit | 11 | | certificate issued by the Department with respect to such | 12 | | business pursuant to this Section, report to the Department | 13 | | the following: | 14 | | (1) the number of employees and the location at which | 15 | | those employees are employed, both as of the end of each | 16 | | year; | 17 | | (2) the amount of additional new capital investment | 18 | | raised as of the end of each year, if any; and | 19 | | (3) the terms of any liquidity event occurring during | 20 | | such year; for the purposes of this Section, a "liquidity | 21 | | event" means any event that would be considered an exit | 22 | | for an illiquid investment, including any event that | 23 | | allows the equity holders of the business (or any material | 24 | | portion thereof) to cash out some or all of their | 25 | | respective equity interests. | 26 | | (Source: P.A. 100-328, eff. 1-1-18; 100-686, eff. 1-1-19; |
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| 1 | | 100-863, eff. 8-14-18; 101-81, eff. 7-12-19.)"; and | 2 | | on page 1, line 21, by replacing " January 1, 2027 " with | 3 | | " January 1, 2025 "; and
| 4 | | on page 8, immediately below line 11, by inserting the | 5 | | following: | 6 | | "(35 ILCS 5/228) | 7 | | Sec. 228. Historic preservation credit. For
tax years | 8 | | beginning on or after January 1, 2019 and ending on
or before | 9 | | December 31, 2023, a taxpayer who qualifies for a
credit under | 10 | | the Historic Preservation Tax Credit Act is entitled to a | 11 | | credit against the taxes
imposed under subsections (a) and (b) | 12 | | of Section 201 of this
Act as provided in that Act. If the | 13 | | taxpayer is a partnership ,
or Subchapter S corporation, or a | 14 | | limited liability company the credit shall be allowed to the
| 15 | | partners , or shareholders , or members in accordance with the | 16 | | determination
of income and distributive share of income under | 17 | | Sections 702
and 704 and Subchapter S of the Internal Revenue | 18 | | Code provided that credits granted to a partnership, a limited | 19 | | liability company taxed as a partnership, or other multiple | 20 | | owners of property shall be passed through to the partners, | 21 | | members, or owners respectively on a pro rata basis or | 22 | | pursuant to an executed agreement among the partners, members, | 23 | | or owners documenting any alternate distribution method .
If |
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| 1 | | the amount of any tax credit awarded under this Section
| 2 | | exceeds the qualified taxpayer's income tax liability for the
| 3 | | year in which the qualified rehabilitation plan was placed in
| 4 | | service, the excess amount may be carried forward as
provided | 5 | | in the Historic Preservation Tax Credit Act.
| 6 | | (Source: P.A. 100-629, eff. 1-1-19; 101-81, eff. 7-12-19.) | 7 | | Section 10. The Historic Preservation Tax Credit Act is | 8 | | amended by changing Sections 5, 10, 20, and 25 as follows: | 9 | | (35 ILCS 31/5)
| 10 | | Sec. 5. Definitions. As used in this Act, unless the | 11 | | context clearly indicates otherwise: | 12 | | "Director" means the Director of Natural Resources or his | 13 | | or her designee. | 14 | | "Division" means the State Historic Preservation Office | 15 | | within the Department of Natural Resources. | 16 | | "Phased rehabilitation" means a project that is completed | 17 | | in phases, as defined under Section 47 of the federal Internal | 18 | | Revenue Code and pursuant to National Park Service regulations | 19 | | at 36 C.F.R. 67. | 20 | | "Placed in service" means the date when the property is | 21 | | placed in a condition or state of readiness and availability | 22 | | for a specifically assigned function as defined under Section | 23 | | 47 of the federal Internal Revenue Code and federal Treasury | 24 | | Regulation Sections 1.46 and 1.48. |
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| 1 | | "Qualified expenditures" means all the costs and expenses | 2 | | defined as qualified rehabilitation expenditures under Section | 3 | | 47 of the federal Internal Revenue Code that were incurred in | 4 | | connection with a qualified rehabilitation plan historic | 5 | | structure . | 6 | | "Qualified historic structure" means any structure that is | 7 | | located in Illinois and is defined as a certified historic | 8 | | structure under Section 47(c)(3) of the federal Internal | 9 | | Revenue Code. | 10 | | "Qualified rehabilitation plan" means a project that is | 11 | | approved by the Department of Natural Resources and the | 12 | | National Park Service as being consistent with the United | 13 | | States Secretary of the Interior's Standards for | 14 | | Rehabilitation. | 15 | | "Qualified taxpayer" means the owner of the qualified | 16 | | historic structure or any other person or entity who may | 17 | | qualify for the federal rehabilitation credit allowed by | 18 | | Section 47 of the federal Internal Revenue Code. | 19 | | "Recapture event" means any of the following events | 20 | | occurring during the recapture period: | 21 | | (1) failure to place in service the rehabilitated | 22 | | portions of the qualified historic structure, or failure | 23 | | to maintain the rehabilitated portions of the qualified | 24 | | historic structure in service after they are placed in | 25 | | service; provided that a recapture event under this | 26 | | paragraph (1) shall not include a removal from service for |
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| 1 | | a reasonable period of time to conduct maintenance and | 2 | | repairs that are reasonably necessary to protect the | 3 | | health and safety of the public or to protect the | 4 | | structural integrity of the qualified historic structure | 5 | | or a neighboring structure; | 6 | | (2) demolition or other alteration of the qualified | 7 | | historic structure in a manner that is inconsistent with | 8 | | the qualified rehabilitation plan or the Secretary of the | 9 | | Interior's Standards for Rehabilitation; | 10 | | (3) disposition of the rehabilitated qualified | 11 | | historic structure in whole or a proportional disposition | 12 | | of a partnership interest therein, except as otherwise | 13 | | permitted by this Section; or | 14 | | (4) use of the qualified historic structure in a | 15 | | manner that is inconsistent with the qualified | 16 | | rehabilitation plan or that is otherwise inconsistent with | 17 | | the provisions and intent of this Section. | 18 | | A recapture event occurring in one taxable year shall be | 19 | | deemed continuing to subsequent taxable years unless and until | 20 | | corrected. | 21 | | The following dispositions of a qualified historic | 22 | | structure shall not be deemed to be a recapture event for | 23 | | purposes of this Section: | 24 | | (1) a transfer by reason of death; | 25 | | (2) a transfer between spouses incident to divorce; | 26 | | (3) a sale by and leaseback to an entity that, when the |
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| 1 | | rehabilitated portions of the qualified historic structure | 2 | | are placed in service, will be a lessee of the qualified | 3 | | historic structure, but only for so long as the entity | 4 | | continues to be a lessee; and | 5 | | (4) a mere change in the form of conducting the trade | 6 | | or business by the owner (or, if applicable, the lessee) | 7 | | of the qualified historic structure, so long as the | 8 | | property interest in such qualified historic structure is | 9 | | retained in such trade or business and the owner or lessee | 10 | | retains a substantial interest in such trade or business. | 11 | | "Recapture period" means the 5-year period beginning on | 12 | | the date that the qualified historic structure or | 13 | | rehabilitated portions of the qualified historic structure are | 14 | | placed in service. | 15 | | "Substantial rehabilitation" means that the qualified | 16 | | rehabilitation expenditures during the 24-month period | 17 | | selected by the taxpayer at the time and in the manner | 18 | | prescribed by rule and ending with or within the taxable year | 19 | | exceed the greater of (i) the adjusted basis of the building | 20 | | and its structural components or (ii) $5,000. The adjusted | 21 | | basis of the building and its structural components shall be | 22 | | determined as of the beginning of the first day of such | 23 | | 24-month period or as of the beginning of the first day of the | 24 | | holding period of the building, whichever is later. For | 25 | | purposes of determining the adjusted basis, the determination | 26 | | of the beginning of the holding period shall be made without |
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| 1 | | regard to any reconstruction by the taxpayer in connection | 2 | | with the rehabilitation. In the case of any phased | 3 | | rehabilitation, with phases set forth in architectural plans | 4 | | and specifications completed before the rehabilitation begins, | 5 | | this definition shall be applied by substituting "60-month | 6 | | period" for "24-month period" wherever that term occurs in the | 7 | | definition.
| 8 | | (Source: P.A. 100-629, eff. 1-1-19 .) | 9 | | (35 ILCS 31/10)
| 10 | | Sec. 10. Allowable credit. | 11 | | (a) To the extent authorized by this Act, for taxable | 12 | | years beginning on or after January 1, 2019 and ending on or | 13 | | before December 31, 2023, there shall be allowed a tax credit | 14 | | to the qualified taxpayer against the tax imposed by | 15 | | subsections (a) and (b) of Section 201 of the Illinois Income | 16 | | Tax Act in an aggregate amount equal to 25% of qualified | 17 | | expenditures , but not to exceed $3,000,000, incurred by a | 18 | | qualified taxpayer undertaking a qualified rehabilitation plan | 19 | | of a qualified historic structure , provided that the total | 20 | | amount of such expenditures must (i) equal $5,000 or more and | 21 | | or (ii) exceed the adjusted basis of the qualified historic | 22 | | structure on the first day the qualified rehabilitation plan | 23 | | commenced. If the qualified rehabilitation plan spans multiple | 24 | | years, the aggregate credit for the entire project shall be | 25 | | allowed in the last taxable year. |
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| 1 | | (b) To obtain a tax credit certificate pursuant to this | 2 | | Section, the qualified taxpayer must apply with the Division. | 3 | | The Division shall determine the amount of eligible | 4 | | rehabilitation expenditures within 45 days after receipt of a | 5 | | complete application. The taxpayer must provide to the | 6 | | Division a third-party cost certification conducted by a | 7 | | certified public accountant verifying (i) the qualified and | 8 | | non-qualified rehabilitation expenses and (ii) that the | 9 | | qualified expenditures exceed the adjusted basis of the | 10 | | qualified historic structure on the first day the qualified | 11 | | rehabilitation plan commenced. The accountant shall provide | 12 | | appropriate review and testing of invoices. The Division is | 13 | | authorized, but not required, to accept this third-party cost | 14 | | certification to determine the amount of qualified | 15 | | expenditures. The Division and the National Park Service shall | 16 | | determine whether the rehabilitation is consistent with the | 17 | | Standards of the Secretary of the United States Department of | 18 | | the Interior. | 19 | | (c) If the amount of any tax credit awarded under this Act | 20 | | exceeds the qualified taxpayer's income tax liability for the | 21 | | year in which the qualified rehabilitation plan was placed in | 22 | | service, the excess amount may be carried forward for | 23 | | deduction from the taxpayer's income tax liability in the next | 24 | | succeeding year or years until the total amount of the credit | 25 | | has been used, except that a credit may not be carried forward | 26 | | for deduction after the tenth taxable year after the taxable |
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| 1 | | year in which the qualified rehabilitation plan was placed in | 2 | | service. Upon completion of the project and approval of the | 3 | | complete application review of the project , the Division shall | 4 | | issue a single certificate in the amount of the
eligible | 5 | | credits equal to 25% of the qualified expenditures incurred | 6 | | during the eligible taxable years , not to exceed the lesser of | 7 | | the allocated amount or $3,000,000 per single qualified | 8 | | rehabilitation plan. Prior to the issuance of the tax credit | 9 | | certificate, the qualified taxpayer must provide to the | 10 | | Division verification that the rehabilitated structure is a | 11 | | qualified historic structure . At the time the certificate is | 12 | | issued, an issuance fee up to the maximum amount of 2% of the | 13 | | amount of the credits issued by the certificate may be | 14 | | collected from the qualified taxpayer applicant to administer | 15 | | the Act. If collected, this issuance fee shall be directed to | 16 | | the Division Historic Property Administrative Fund or other | 17 | | such fund as appropriate for use of the Division in the | 18 | | administration of the Historic Preservation Tax Credit | 19 | | Program. The taxpayer must attach the certificate or legal | 20 | | documentation of her or his proportional share of the | 21 | | certificate to the tax
return on which the credits are to be | 22 | | claimed. The tax credit under this Section may not reduce the | 23 | | taxpayer's liability to less than zero. If the amount of the | 24 | | credit exceeds the tax liability for the year, the excess | 25 | | credit may be carried forward and applied to the tax liability | 26 | | of the 10 taxable years following the first excess credit |
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| 1 | | year. The taxpayer is not eligible to receive credits under | 2 | | this Section and under Section 221 of the Illinois Income Tax | 3 | | Act for the same qualified expenditures or qualified | 4 | | rehabilitation plan. | 5 | | (d) 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, or (iii) a limited liability | 8 | | company, the credit provided under this Act may be claimed by | 9 | | the shareholders of the corporation, the partners of the | 10 | | partnership, or the members of the limited liability company | 11 | | in the same manner as those shareholders, partners, or members | 12 | | account for their proportionate shares of the income or losses | 13 | | of the corporation, partnership, or limited liability company, | 14 | | or as provided in the bylaws or other executed agreement of the | 15 | | corporation, partnership, or limited liability company. | 16 | | Credits granted to a partnership, a limited liability company | 17 | | taxed as a partnership, or other multiple owners of property | 18 | | shall be passed through to the partners, members, or owners | 19 | | respectively on a pro rata basis or pursuant to an executed | 20 | | agreement among the partners, members, or owners documenting | 21 | | any alternate distribution method. | 22 | | (e) If a recapture event occurs during the recapture | 23 | | period with respect to a qualified historic structure, then | 24 | | for any taxable year in which the credits are allowed as | 25 | | specified in this Act, the tax under the applicable Section of | 26 | | this Act shall be increased by applying the recapture |
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| 1 | | percentage set forth below to the tax decrease resulting from | 2 | | the application of credits allowed under this Act to the | 3 | | taxable year in question. | 4 | | For the purposes of this subsection, the recapture | 5 | | percentage shall be determined as follows: | 6 | | (1) if the recapture event occurs within the first | 7 | | year after commencement of the recapture period, then the | 8 | | recapture percentage is 100%; | 9 | | (2) if the recapture event occurs within the second | 10 | | year after commencement of the recapture period, then the | 11 | | recapture percentage is 80%; | 12 | | (3) if the recapture event occurs within the third | 13 | | year after commencement of the recapture period, then the | 14 | | recapture percentage is 60%; | 15 | | (4) if the recapture event occurs within the fourth | 16 | | year after commencement of the recapture period, then the | 17 | | recapture percentage is 40%; and | 18 | | (5) if the recapture event occurs within the fifth | 19 | | year after commencement of the recapture period, then the | 20 | | recapture percentage is 20%.
| 21 | | In the case of any recapture event, the carryforwards | 22 | | under this Act shall be adjusted by reason of such event. | 23 | | (f) The Division may adopt rules to implement this Section | 24 | | in addition to the rules expressly authorized herein.
| 25 | | (Source: P.A. 100-629, eff. 1-1-19; 101-81, eff. 7-12-19.) |
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| 1 | | (35 ILCS 31/20)
| 2 | | Sec. 20. Limitations, reporting, and monitoring. | 3 | | (a) In every calendar year that this program is in effect, | 4 | | the Division is authorized to allocate $15,000,000 in tax | 5 | | credits in addition to any unallocated, returned, or rescinded | 6 | | allocations from previous years, pursuant to qualified | 7 | | rehabilitation plans. The Division shall award not more than | 8 | | an aggregate of $15,000,000 in total annual tax credits | 9 | | pursuant to qualified rehabilitation plans for qualified | 10 | | historic structures. The Division shall not allocate or award | 11 | | award not more than $3,000,000 in tax credits with regard to a | 12 | | single qualified rehabilitation plan. In allocating awarding | 13 | | tax credits under this Act, the Division must prioritize | 14 | | applications projects that meet one or more of the following: | 15 | | (1) the qualified historic structure is located in a | 16 | | county that borders a State with a historic | 17 | | income-producing property rehabilitation credit; | 18 | | (2) the qualified historic structure was previously | 19 | | owned by a federal, state, or local governmental entity | 20 | | for no less than 6 months ; | 21 | | (3) the qualified historic structure is located in a | 22 | | census tract that has a median family income at or below | 23 | | the State median family income; data from the most recent | 24 | | 5-year estimate from the American Community Survey (ACS), | 25 | | published by the U.S. Census Bureau, shall be used to | 26 | | determine eligibility; |
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| 1 | | (4) the qualified rehabilitation plan includes in the | 2 | | development partnership a Community Development Entity or | 3 | | a low-profit (B Corporation) or not-for-profit | 4 | | organization, as defined by Section 501(c)(3) of the | 5 | | Internal Revenue Code; or | 6 | | (5) the qualified historic structure is located in an | 7 | | area declared under an Emergency Declaration or Major | 8 | | Disaster Declaration under the federal Robert T. Stafford | 9 | | Disaster Relief and Emergency Assistance Act. The | 10 | | declaration must be no older than 3 years at the time of | 11 | | application. | 12 | | (b) The annual aggregate authorization program allocation | 13 | | of $15,000,000 set forth in subsection (a) shall be allocated | 14 | | by the Division, in such proportion as determined by the | 15 | | Director Department, on a per calendar basis twice in each | 16 | | calendar year that the program is in effect, provided that : | 17 | | (i) the amount initially allocated by the Division for the | 18 | | first any one calendar year application period shall not | 19 | | exceed 65% of the total allowable amount available for | 20 | | allocation. Any unallocated and (ii) any portion of the | 21 | | allocated allowable amount remaining unused as of the end of | 22 | | any of the second calendar application period of a given | 23 | | calendar year shall be rolled over into and added to the total | 24 | | authorized allocated amount for the next available calendar | 25 | | year. The qualified rehabilitation plan must meet a readiness | 26 | | test, as defined in the rules created by the Division, in order |
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| 1 | | for the application Applicant to qualify. In any given | 2 | | application period, applications Applicants that qualify under | 3 | | this Act will be prioritized as set forth in subsection (a) and | 4 | | placed in a queue based on the date and time the application is | 5 | | received . Applicants whose applications qualify but do not | 6 | | receive an allocation until such time as the application | 7 | | period total allowable amount is reached. Applicants must | 8 | | reapply to be considered in subsequent for each application | 9 | | periods period . | 10 | | (c) Subject On or before December 31, 2019,
and on or | 11 | | before December 31 of each odd-numbered year thereafter | 12 | | through
2023, subject to appropriation and prior to equal | 13 | | disbursement to the Division, moneys in the Historic Property | 14 | | Administrative Fund shall be used, on a biennial basis, | 15 | | beginning at the end of the second first fiscal year after the | 16 | | effective date of this Act, to hire a qualified third party to | 17 | | prepare a biennial report to assess the overall impact | 18 | | effectiveness of this Act from the qualified rehabilitation | 19 | | plans projects under this Act completed in that year and in | 20 | | previous years. Baseline data of the metrics in the report | 21 | | shall be collected at the initiation of a qualified | 22 | | rehabilitation plan project . The overall economic impact shall | 23 | | include at least: | 24 | | (1) the number of applications, project locations, and | 25 | | proposed use of qualified historic structures; | 26 | | (2) the amount of credits awarded and the number and |
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| 1 | | location of projects receiving credit allocations; | 2 | | (3) the status of ongoing projects and projected | 3 | | qualifying expenditures for ongoing projects;
| 4 | | (4) for completed projects, the total amount of | 5 | | qualifying rehabilitation expenditures and non-qualifying | 6 | | expenditures, the number of housing units created and the | 7 | | number of housing units that qualify as affordable, and | 8 | | the total square footage rehabilitated and developed; | 9 | | (5) direct, indirect, and induced economic impacts; | 10 | | (6) temporary, permanent, and construction jobs | 11 | | created; and | 12 | | (7) sales, income, and property tax generation before | 13 | | construction, during construction, and after completion. | 14 | | The report to the General Assembly shall be filed with the | 15 | | Clerk of the House of Representatives and the Secretary of the | 16 | | Senate in electronic form only, in the manner that the Clerk | 17 | | and the Secretary shall direct. | 18 | | (d) Any time prior to issuance of a tax credit | 19 | | certificate, the Director of the Division, the State Historic | 20 | | Preservation Officer, or staff of the Division may, upon | 21 | | reasonable notice to the project owner of not less than 3 | 22 | | business days, conduct a site visit to the project to inspect | 23 | | and evaluate the project. | 24 | | (e) Any time prior to the issuance of a tax credit | 25 | | certificate and for a period of 4 years following the | 26 | | effective date of a project tax credit certificate , the |
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| 1 | | Director may, upon reasonable notice of not less than 30 | 2 | | calendar days, request a status report from the Applicant | 3 | | consisting of information and updates relevant to the status | 4 | | of the project. Status reports shall not be requested more | 5 | | than twice yearly. | 6 | | (f) In order to demonstrate sufficient evidence of | 7 | | reviewable progress within 12 months after the date the | 8 | | Applicant received notification of allocation approval from | 9 | | the Division, the Director may require the Applicant to shall | 10 | | provide all of the following: | 11 | | (1) a viable financial plan which demonstrates by way | 12 | | of an executed agreement that all financing has been | 13 | | secured for the project; such financing shall include, but | 14 | | not be limited to, equity investment as demonstrated by | 15 | | letters of commitment from the owner of the property, | 16 | | investment partners, and equity investors; | 17 | | (2) (blank); final construction drawings or approved | 18 | | building permits that demonstrate the complete | 19 | | rehabilitation of the full scope of the application; and | 20 | | (3) all historic approvals, including all federal and | 21 | | State rehabilitation documents required by the Division. | 22 | | The Director shall review the submitted evidence and may | 23 | | request additional documentation from the Applicant if | 24 | | necessary. The Applicant will have 30 calendar days to provide | 25 | | the information requested, otherwise the allocation approval | 26 | | may be rescinded at the discretion of the Director. |
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| 1 | | (g) In order to demonstrate sufficient evidence of | 2 | | reviewable progress within 24 18 months after the date the | 3 | | application received notification of approval from the | 4 | | Division, the Director may require the Applicant is required | 5 | | to provide detailed evidence that the Applicant has secured | 6 | | and closed on financing for the complete scope of | 7 | | rehabilitation for the project. To demonstrate evidence that | 8 | | the Applicant has secured and closed on financing, the | 9 | | Applicant will need to provide signed and processed loan | 10 | | agreements, bank financing documents or other legal and | 11 | | contractual evidence to demonstrate that adequate financing is | 12 | | available to complete the project. The Director shall review | 13 | | the submitted evidence and may request additional | 14 | | documentation from the Applicant if necessary. The Applicant | 15 | | will have 30 calendar days to provide the information | 16 | | requested, otherwise the allocation approval may be rescinded | 17 | | at the discretion of the Director. | 18 | | If the Applicant fails to document reviewable progress | 19 | | within 24 18 months of approval, the Director may notify the | 20 | | Applicant that the allocation application is rescinded. | 21 | | However, should financing and construction be imminent, the | 22 | | Director may elect to grant the Applicant no more than 5 months | 23 | | to close on financing and commence construction. If the | 24 | | Applicant fails to meet these conditions in the required | 25 | | timeframe, the Director shall notify the Applicant that the | 26 | | allocation application is rescinded. Any such rescinded |
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| 1 | | allocation shall be added to the aggregate amount of credits | 2 | | available for allocation for the year in which the forfeiture | 3 | | occurred. | 4 | | The amount of the qualified expenditures identified in the | 5 | | qualified taxpayer's Applicant's certification of completion | 6 | | and reflected on the Historic Preservation Tax Credit | 7 | | certificate issued by the Director is subject to inspection, | 8 | | examination, and audit by the Department of Revenue. | 9 | | The qualified taxpayer Applicant shall establish and | 10 | | maintain for a period of 4 years following the effective date | 11 | | on a project tax credit certificate such records as required | 12 | | by the Director. Such records include, but are not limited to, | 13 | | records documenting project expenditures and compliance with | 14 | | the U.S. Secretary of the Interior's Standards. The qualified | 15 | | taxpayer Applicant shall make such records available for | 16 | | review and verification by the Director, the State Historic | 17 | | Preservation Officer, the Department of Revenue, or | 18 | | appropriate staff, as well as other appropriate State | 19 | | agencies. In the event the Director determines an Applicant | 20 | | has submitted a status an annual report containing erroneous | 21 | | information or data not supported by records established and | 22 | | maintained under this Act, the Director may, after providing | 23 | | notice, require the Applicant to resubmit corrected reports.
| 24 | | (Source: P.A. 100-629, eff. 1-1-19 .) | 25 | | (35 ILCS 31/25)
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| 1 | | Sec. 25. Powers. The Division may shall adopt rules for | 2 | | the administration of this Act. The Division may enter into an | 3 | | intergovernmental agreement with the Department of Commerce | 4 | | and Economic Opportunity, the Department of Revenue, or both, | 5 | | for the administration of this Act. Such intergovernmental | 6 | | agreement may allow for the distribution of all or a portion of | 7 | | the issuance fee imposed under Section 10 to the Department of | 8 | | Commerce and Economic Opportunity or the Department of | 9 | | Revenue, as applicable.
| 10 | | (Source: P.A. 100-629, eff. 1-1-19 .)".
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