Full Text of HB3969 96th General Assembly
HB3969 96TH GENERAL ASSEMBLY
|
|
|
96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010 HB3969
Introduced 2/26/2009, by Rep. Mark L. Walker SYNOPSIS AS INTRODUCED: |
|
|
Amends the Illinois Income Tax Act. Provides for a credit in an amount equal to 25% of the taxpayer's equity investment in a qualified new business venture, including investments made through a certified fund manager. Sets forth limitations on the credit.
|
| |
|
|
| FISCAL NOTE ACT MAY APPLY | |
|
|
A BILL FOR
|
|
|
|
|
HB3969 |
|
LRB096 11694 HLH 22377 b |
|
| 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 5. The Illinois Income Tax Act is amended by adding | 5 |
| Section 218 as follows: | 6 |
| (35 ILCS 5/218 new) | 7 |
| Sec. 218. Venture capital investment credit. | 8 |
| (a) Definitions. In this Section: | 9 |
| (1) "Equity investment" means a purchase of an equity | 10 |
| interest, or any other investment expenditure, in a | 11 |
| qualified new business venture either directly or through a | 12 |
| certified investment fund manager as determined by | 13 |
| subsection (e). | 14 |
| (2) "Claimant" means an individual who files a claim | 15 |
| for credit under this subsection. | 16 |
| (3) "Qualified new business venture" means a business | 17 |
| that is certified under subsection (d). | 18 |
| (4) "Certified investment fund manager" means a | 19 |
| business that is certified under subsection (e). | 20 |
| (5) "Department" means the Department of Commerce and | 21 |
| Economic Opportunity, unless otherwise specifically | 22 |
| provided. | 23 |
| (b) Filing claims for credit. A claimant may claim as a |
|
|
|
HB3969 |
- 2 - |
LRB096 11694 HLH 22377 b |
|
| 1 |
| credit against the tax imposed under subsections (a) and (b) of | 2 |
| Section 201 of this Act an amount equal to 25% of the | 3 |
| claimant's equity investment made directly to a qualified new | 4 |
| business venture in the taxable year, or made to a certified | 5 |
| fund manager if the fund manager invests in a business | 6 |
| certified under subsection (d). | 7 |
| (c) Limitations. | 8 |
| (1) The maximum amount of the credits that may be | 9 |
| claimed under this Section for all taxable years combined | 10 |
| is $50,000,000. | 11 |
| (2) The maximum amount of a claimant's investment that | 12 |
| may be used as the basis for a credit under this Section is | 13 |
| $500,000 for each investment made directly to a business | 14 |
| certified under subsection (d). | 15 |
| (3) If an investment for which a claimant claims a | 16 |
| credit under subsection (b) is held by the claimant for | 17 |
| less than one year, the claimant shall pay to the | 18 |
| Department, in the manner prescribed by the Department, the | 19 |
| amount of the credit that the claimant received related to | 20 |
| the investment. | 21 |
| (4) Any credit allowed under this Section that is | 22 |
| unused in the year the credit is earned may be carried | 23 |
| forward to each of the 5 taxable years following the year | 24 |
| for which the credit is first computed until it is used. | 25 |
| This credit shall be applied first to the earliest year for | 26 |
| which there is a liability. If there is a credit under this |
|
|
|
HB3969 |
- 3 - |
LRB096 11694 HLH 22377 b |
|
| 1 |
| Section from more than one tax year that is available to | 2 |
| offset a liability, then the earliest credit arising under | 3 |
| this Section shall be applied first. | 4 |
| (5) A partnership may elect to pass through to its | 5 |
| partners the credits to which the partnership is entitled | 6 |
| under this Section for the taxable year. A partner may use | 7 |
| the credit allocated to him or her under this paragraph | 8 |
| only against the tax imposed in subsections (a) and (b) of | 9 |
| Section 201 of this Act. If the
partnership makes that | 10 |
| election, those credits shall be allocated among the | 11 |
| partners in the partnership in accordance with the rules | 12 |
| set forth in Section 704(b) of the Internal Revenue Code, | 13 |
| and the rules promulgated under that Section, and the | 14 |
| allocated amount of the credits shall be allowed to the | 15 |
| partners for that taxable year. | 16 |
| (d) Qualified new business ventures. The Department shall | 17 |
| implement a program to certify businesses for purposes of this | 18 |
| credit. A business desiring certification shall submit an | 19 |
| application to the Department in each taxable year for which | 20 |
| the business desires certification. Unless otherwise provided | 21 |
| under the rules of the Department, a business may be certified | 22 |
| under this subsection and may maintain that certification only | 23 |
| if the business satisfies all of the following conditions: | 24 |
| (1) It has its headquarters in this State. | 25 |
| (2) At least 51% of the employees employed by the | 26 |
| business are employed in this State. |
|
|
|
HB3969 |
- 4 - |
LRB096 11694 HLH 22377 b |
|
| 1 |
| (3) It is engaged in, or has committed to engage in, | 2 |
| manufacturing, agriculture, or processing or assembling | 3 |
| products and conducting research and development or | 4 |
| developing a new product or business process. | 5 |
| (4) It is not engaged in real estate development, | 6 |
| insurance, banking, lending, lobbying, political | 7 |
| consulting, professional services provided by attorneys, | 8 |
| accountants, business consultants, physicians, or health | 9 |
| care consultants, wholesale or retail trade, leisure, | 10 |
| hospitality, transportation, or construction. | 11 |
| (5) It has fewer than 100 employees. | 12 |
| (6) It has been in operation in this State for not more | 13 |
| than 7 consecutive years. | 14 |
| (7) It has not received more than $1,000,000 in | 15 |
| investments that have qualified for tax credits under this | 16 |
| Section. | 17 |
| The Department shall maintain a list of certified | 18 |
| businesses and shall permit public access to the lists through | 19 |
| the Department's Internet website. | 20 |
| (e) Certified investment fund managers. The Department | 21 |
| shall implement a program to certify investment fund managers | 22 |
| for purposes of this Section. An investment fund manager | 23 |
| desiring certification shall submit an application to the | 24 |
| Department. In determining whether to certify an investment | 25 |
| fund manager, the Department shall consider the investment fund | 26 |
| manager's experience in managing venture capital funds, the |
|
|
|
HB3969 |
- 5 - |
LRB096 11694 HLH 22377 b |
|
| 1 |
| past performance of investment funds managed by the applicant, | 2 |
| the expected level of investment in the investment fund to be | 3 |
| managed by the applicant, and any other relevant factors. The | 4 |
| Department may certify only investment fund managers that | 5 |
| commit to placing investments in businesses certified under | 6 |
| subsection (d). The Department shall maintain a list of | 7 |
| certified investment fund managers and shall permit public | 8 |
| access to the lists through the Department's Internet website. | 9 |
| (f) The Department shall notify the Department of Revenue | 10 |
| of every certification issued under this Section and the date | 11 |
| on which any such certification is revoked or expires. | 12 |
| (g) Annual report. Annually, no later than February 1, the | 13 |
| Department shall submit a report to the General Assembly for | 14 |
| distribution to legislators, listing all of the following | 15 |
| information: | 16 |
| (1) The total amount of tax credits claimed under this | 17 |
| Section. | 18 |
| (2) The name of each business in which investments | 19 |
| qualifying for those tax credits were made, the amount of | 20 |
| the tax credits, and the amount of the investment. | 21 |
| (3) Any other information the Department considers | 22 |
| reasonable to include. | 23 |
| (h) Rules. The Department, in consultation with the | 24 |
| Department of Revenue, shall promulgate rules to administer | 25 |
| this Section.
|
|