State of Illinois
90th General Assembly
Legislation

   [ Search ]   [ Legislation ]   [ Bill Summary ]
[ Home ]   [ Back ]   [ Bottom ]


[ Introduced ][ Enrolled ][ House Amendment 001 ]
[ Senate Amendment 001 ]

90_SB1705eng

      415 ILCS 5/58.13
          Amends the Environmental Protection Act.   Provides  that
      the   Agency   shall  have  the  authority  to  administer  a
      Brownfields revolving loan program using grant money  awarded
      by the United States Environmental Protection Agency.
                                                     LRB9008944LDbd
SB1705 Engrossed                               LRB9008944LDbd
 1        AN  ACT concerning environmental remediation tax credits,
 2    amending named Acts.
 3        Be it enacted by the People of  the  State  of  Illinois,
 4    represented in the General Assembly:
 5        Section  5.   The  Illinois  Income Tax Act is amended by
 6    changing Section 201 as follows:
 7        (35 ILCS 5/201) (from Ch. 120, par. 2-201)
 8        Sec. 201.  Tax Imposed.
 9        (a)  In general. A tax measured by net income  is  hereby
10    imposed  on  every  individual, corporation, trust and estate
11    for each taxable year ending  after  July  31,  1969  on  the
12    privilege  of earning or receiving income in or as a resident
13    of this State. Such tax shall be in  addition  to  all  other
14    occupation or privilege taxes imposed by this State or by any
15    municipal corporation or political subdivision thereof.
16        (b)  Rates.  The  tax  imposed  by subsection (a) of this
17    Section shall be determined as follows:
18             (1)  In the case of an individual, trust or  estate,
19        for taxable years ending prior to July 1, 1989, an amount
20        equal  to  2  1/2%  of  the taxpayer's net income for the
21        taxable year.
22             (2)  In the case of an individual, trust or  estate,
23        for  taxable  years  beginning  prior to July 1, 1989 and
24        ending after June 30, 1989, an amount equal to the sum of
25        (i) 2 1/2% of the taxpayer's net income  for  the  period
26        prior to July 1, 1989, as calculated under Section 202.3,
27        and  (ii)  3% of the taxpayer's net income for the period
28        after June 30, 1989, as calculated under Section 202.3.
29             (3)  In the case of an individual, trust or  estate,
30        for  taxable  years  beginning  after  June  30, 1989, an
31        amount equal to 3% of the taxpayer's net income  for  the
SB1705 Engrossed            -2-                LRB9008944LDbd
 1        taxable year.
 2             (4)  (Blank).
 3             (5)  (Blank).
 4             (6)  In the case of a corporation, for taxable years
 5        ending  prior  to  July 1, 1989, an amount equal to 4% of
 6        the taxpayer's net income for the taxable year.
 7             (7)  In the case of a corporation, for taxable years
 8        beginning prior to July 1, 1989 and ending after June 30,
 9        1989, an amount equal  to  the  sum  of  (i)  4%  of  the
10        taxpayer's  net  income  for  the period prior to July 1,
11        1989, as calculated under Section 202.3, and (ii) 4.8% of
12        the taxpayer's net income for the period after  June  30,
13        1989, as calculated under Section 202.3.
14             (8)  In the case of a corporation, for taxable years
15        beginning after June 30, 1989, an amount equal to 4.8% of
16        the taxpayer's net income for the taxable year.
17        (c)  Beginning   on  July  1,  1979  and  thereafter,  in
18    addition to such income tax, there is also hereby imposed the
19    Personal Property Tax Replacement Income Tax measured by  net
20    income   on   every   corporation   (including  Subchapter  S
21    corporations), partnership and trust, for each  taxable  year
22    ending  after  June  30, 1979.  Such taxes are imposed on the
23    privilege of earning or receiving income in or as a  resident
24    of  this State.  The Personal Property Tax Replacement Income
25    Tax shall be  in  addition  to  the  income  tax  imposed  by
26    subsections  (a)  and  (b) of this Section and in addition to
27    all other occupation or privilege taxes imposed by this State
28    or by any  municipal  corporation  or  political  subdivision
29    thereof.
30        (d)  Additional  Personal Property Tax Replacement Income
31    Tax Rates.  The personal property tax replacement income  tax
32    imposed by this subsection and subsection (c) of this Section
33    in  the  case  of  a  corporation,  other than a Subchapter S
34    corporation, shall be an additional amount equal to 2.85%  of
SB1705 Engrossed            -3-                LRB9008944LDbd
 1    such  taxpayer's net income for the taxable year, except that
 2    beginning on January 1, 1981, and  thereafter,  the  rate  of
 3    2.85%  specified in this subsection shall be reduced to 2.5%,
 4    and in the case of a partnership, trust  or  a  Subchapter  S
 5    corporation  shall  be  an additional amount equal to 1.5% of
 6    such taxpayer's net income for the taxable year.
 7        (e)  Investment credit.  A taxpayer shall  be  allowed  a
 8    credit  against  the Personal Property Tax Replacement Income
 9    Tax for investment in qualified property.
10             (1)  A taxpayer shall be allowed a credit  equal  to
11        .5%  of the basis of qualified property placed in service
12        during the taxable year, provided such property is placed
13        in service on or after July  1,  1984.   There  shall  be
14        allowed an additional credit equal to .5% of the basis of
15        qualified  property  placed in service during the taxable
16        year, provided such property is placed in service  on  or
17        after  July  1,  1986, and the taxpayer's base employment
18        within Illinois has increased by  1%  or  more  over  the
19        preceding year as determined by the taxpayer's employment
20        records  filed with the Illinois Department of Employment
21        Security.  Taxpayers who are new  to  Illinois  shall  be
22        deemed  to  have met the 1% growth in base employment for
23        the first year in which they file employment records with
24        the Illinois  Department  of  Employment  Security.   The
25        provisions  added  to  this Section by Public Act 85-1200
26        (and restored by Public Act 87-895) shall be construed as
27        declaratory of existing law and not as a  new  enactment.
28        If,  in  any year, the increase in base employment within
29        Illinois over the preceding year is  less  than  1%,  the
30        additional  credit  shall  be  limited to that percentage
31        times a fraction, the numerator of which is .5%  and  the
32        denominator  of  which  is  1%, but shall not exceed .5%.
33        The investment credit shall not be allowed to the  extent
34        that  it  would  reduce a taxpayer's liability in any tax
SB1705 Engrossed            -4-                LRB9008944LDbd
 1        year  below  zero,  nor  may  any  credit  for  qualified
 2        property be allowed for any year other than the  year  in
 3        which the property was placed in service in Illinois. For
 4        tax years ending on or after December 31, 1987, and on or
 5        before December 31, 1988, the credit shall be allowed for
 6        the  tax year in which the property is placed in service,
 7        or, if the amount of the credit exceeds the tax liability
 8        for that year, whether it exceeds the original  liability
 9        or  the  liability  as  later amended, such excess may be
10        carried forward and applied to the tax liability of the 5
11        taxable years following the excess credit  years  if  the
12        taxpayer  (i)  makes investments which cause the creation
13        of a  minimum  of  2,000  full-time  equivalent  jobs  in
14        Illinois,   (ii)   is   located  in  an  enterprise  zone
15        established pursuant to the Illinois Enterprise Zone  Act
16        and  (iii) is certified by the Department of Commerce and
17        Community Affairs  as  complying  with  the  requirements
18        specified  in  clause  (i) and (ii) by July 1, 1986.  The
19        Department of Commerce and Community Affairs shall notify
20        the Department of  Revenue  of  all  such  certifications
21        immediately.  For  tax  years  ending  after December 31,
22        1988, the credit shall be allowed for  the  tax  year  in
23        which  the  property  is  placed  in  service, or, if the
24        amount of the credit exceeds the tax liability  for  that
25        year,  whether  it  exceeds the original liability or the
26        liability as later amended, such excess  may  be  carried
27        forward and applied to the tax liability of the 5 taxable
28        years following the excess credit years. The credit shall
29        be  applied  to  the  earliest  year for which there is a
30        liability. If there is credit from more than one tax year
31        that is available to offset a liability,  earlier  credit
32        shall be applied first.
33             (2)  The  term  "qualified  property" means property
34        which:
SB1705 Engrossed            -5-                LRB9008944LDbd
 1                  (A)  is  tangible,   whether   new   or   used,
 2             including  buildings  and  structural  components of
 3             buildings and signs that are real property, but  not
 4             including land or improvements to real property that
 5             are not a structural component of a building such as
 6             landscaping,   sewer   lines,  local  access  roads,
 7             fencing, parking lots, and other appurtenances;
 8                  (B)  is depreciable pursuant to Section 167  of
 9             the  Internal  Revenue  Code,  except  that  "3-year
10             property" as defined in Section 168(c)(2)(A) of that
11             Code is not eligible for the credit provided by this
12             subsection (e);
13                  (C)  is  acquired  by  purchase  as  defined in
14             Section 179(d) of the Internal Revenue Code;
15                  (D)  is used in Illinois by a taxpayer  who  is
16             primarily  engaged  in  manufacturing,  or in mining
17             coal or fluorite, or in retailing; and
18                  (E)  has not previously been used  in  Illinois
19             in  such  a  manner  and  by  such a person as would
20             qualify for the credit provided by  this  subsection
21             (e) or subsection (f).
22             (3)  For    purposes   of   this   subsection   (e),
23        "manufacturing" means the material staging and production
24        of tangible  personal  property  by  procedures  commonly
25        regarded  as  manufacturing,  processing, fabrication, or
26        assembling which changes some existing material into  new
27        shapes, new qualities, or new combinations.  For purposes
28        of  this  subsection (e) the term "mining" shall have the
29        same meaning as the term "mining" in  Section  613(c)  of
30        the   Internal   Revenue  Code.   For  purposes  of  this
31        subsection (e), the term "retailing" means  the  sale  of
32        tangible   personal  property  or  services  rendered  in
33        conjunction with the sale of tangible consumer  goods  or
34        commodities.
SB1705 Engrossed            -6-                LRB9008944LDbd
 1             (4)  The  basis  of  qualified property shall be the
 2        basis used to  compute  the  depreciation  deduction  for
 3        federal income tax purposes.
 4             (5)  If the basis of the property for federal income
 5        tax  depreciation purposes is increased after it has been
 6        placed in service in Illinois by the taxpayer, the amount
 7        of such increase  shall  be  deemed  property  placed  in
 8        service on the date of such increase in basis.
 9             (6)  The  term  "placed  in  service" shall have the
10        same meaning as under Section 46 of the Internal  Revenue
11        Code.
12             (7)  If during any taxable year, any property ceases
13        to  be  qualified  property  in the hands of the taxpayer
14        within 48 months after being placed in  service,  or  the
15        situs of any qualified property is moved outside Illinois
16        within  48  months  after  being  placed  in service, the
17        Personal Property Tax Replacement  Income  Tax  for  such
18        taxable  year shall be increased.  Such increase shall be
19        determined by (i) recomputing the investment credit which
20        would have been allowed for the year in which credit  for
21        such  property was originally allowed by eliminating such
22        property from such computation and, (ii) subtracting such
23        recomputed credit from the amount  of  credit  previously
24        allowed.  For  the  purposes  of  this  paragraph  (7), a
25        reduction of the basis of  qualified  property  resulting
26        from  a  redetermination  of  the purchase price shall be
27        deemed a disposition of qualified property to the  extent
28        of such reduction.
29             (8)  Unless  the  investment  credit  is extended by
30        law, the basis of qualified property  shall  not  include
31        costs  incurred after December 31, 2003, except for costs
32        incurred pursuant to a binding contract entered  into  on
33        or before December 31, 2003.
34             (9)  Each  taxable  year, a partnership may elect to
SB1705 Engrossed            -7-                LRB9008944LDbd
 1        pass through to its partners the  credits  to  which  the
 2        partnership is entitled under this subsection (e) for the
 3        taxable  year.  A partner may use the credit allocated to
 4        him or her under this  paragraph  only  against  the  tax
 5        imposed  in  subsections (c) and (d) of this Section.  If
 6        the partnership makes that election, those credits  shall
 7        be  allocated  among  the  partners in the partnership in
 8        accordance with the rules set forth in Section 704(b)  of
 9        the  Internal  Revenue  Code,  and  the rules promulgated
10        under that Section,  and  the  allocated  amount  of  the
11        credits shall be allowed to the partners for that taxable
12        year.   The  partnership  shall make this election on its
13        Personal Property Tax Replacement Income Tax  return  for
14        that  taxable  year.  The  election  to  pass through the
15        credits shall be irrevocable.
16        (f)  Investment credit; Enterprise Zone.
17             (1)  A taxpayer shall be allowed  a  credit  against
18        the  tax  imposed  by  subsections  (a)  and  (b) of this
19        Section for investment in  qualified  property  which  is
20        placed  in service in an Enterprise Zone created pursuant
21        to the Illinois Enterprise Zone Act. For partners and for
22        shareholders of Subchapter S corporations, there shall be
23        allowed  a  credit  under  this  subsection  (f)  to   be
24        determined in accordance with the determination of income
25        and  distributive  share of income under Sections 702 and
26        704 and Subchapter S of the Internal  Revenue  Code.  The
27        credit  shall be .5% of the basis for such property.  The
28        credit shall be available only in  the  taxable  year  in
29        which the property is placed in service in the Enterprise
30        Zone and shall not be allowed to the extent that it would
31        reduce  a  taxpayer's  liability  for  the tax imposed by
32        subsections (a) and (b) of this Section  to  below  zero.
33        For  tax  years ending on or after December 31, 1985, the
34        credit shall be allowed for the tax  year  in  which  the
SB1705 Engrossed            -8-                LRB9008944LDbd
 1        property  is  placed in service, or, if the amount of the
 2        credit exceeds the tax liability for that  year,  whether
 3        it  exceeds  the  original  liability or the liability as
 4        later amended, such excess may  be  carried  forward  and
 5        applied  to  the  tax  liability  of  the 5 taxable years
 6        following the excess credit year.  The  credit  shall  be
 7        applied  to  the  earliest  year  for  which  there  is a
 8        liability. If there is credit from more than one tax year
 9        that is available  to  offset  a  liability,  the  credit
10        accruing first in time shall be applied first.
11             (2)  The  term  qualified  property  means  property
12        which:
13                  (A)  is   tangible,   whether   new   or  used,
14             including buildings  and  structural  components  of
15             buildings;
16                  (B)  is  depreciable pursuant to Section 167 of
17             the  Internal  Revenue  Code,  except  that  "3-year
18             property" as defined in Section 168(c)(2)(A) of that
19             Code is not eligible for the credit provided by this
20             subsection (f);
21                  (C)  is acquired  by  purchase  as  defined  in
22             Section 179(d) of the Internal Revenue Code;
23                  (D)  is  used  in  the  Enterprise  Zone by the
24             taxpayer; and
25                  (E)  has not been previously used  in  Illinois
26             in  such  a  manner  and  by  such a person as would
27             qualify for the credit provided by  this  subsection
28             (f) or subsection (e).
29             (3)  The  basis  of  qualified property shall be the
30        basis used to  compute  the  depreciation  deduction  for
31        federal income tax purposes.
32             (4)  If the basis of the property for federal income
33        tax  depreciation purposes is increased after it has been
34        placed in service in the Enterprise Zone by the taxpayer,
SB1705 Engrossed            -9-                LRB9008944LDbd
 1        the amount of such  increase  shall  be  deemed  property
 2        placed in service on the date of such increase in basis.
 3             (5)  The  term  "placed  in  service" shall have the
 4        same meaning as under Section 46 of the Internal  Revenue
 5        Code.
 6             (6)  If during any taxable year, any property ceases
 7        to  be  qualified  property  in the hands of the taxpayer
 8        within 48 months after being placed in  service,  or  the
 9        situs  of  any  qualified  property  is moved outside the
10        Enterprise Zone within 48 months after  being  placed  in
11        service, the tax imposed under subsections (a) and (b) of
12        this  Section  for  such taxable year shall be increased.
13        Such increase shall be determined by (i) recomputing  the
14        investment  credit  which would have been allowed for the
15        year in which credit for  such  property  was  originally
16        allowed   by   eliminating   such   property   from  such
17        computation, and (ii) subtracting such recomputed  credit
18        from  the  amount  of credit previously allowed.  For the
19        purposes of this paragraph (6), a reduction of the  basis
20        of qualified property resulting from a redetermination of
21        the  purchase  price  shall  be  deemed  a disposition of
22        qualified property to the extent of such reduction.
23             (g)  Jobs Tax Credit; Enterprise  Zone  and  Foreign
24    Trade Zone or Sub-Zone.
25             (1)  A taxpayer conducting a trade or business in an
26        enterprise  zone  or a High Impact Business designated by
27        the  Department  of  Commerce   and   Community   Affairs
28        conducting  a trade or business in a federally designated
29        Foreign Trade Zone or Sub-Zone shall be allowed a  credit
30        against  the  tax  imposed  by subsections (a) and (b) of
31        this Section in the amount of $500 per eligible  employee
32        hired to work in the zone during the taxable year.
33             (2)  To qualify for the credit:
34                  (A)  the  taxpayer must hire 5 or more eligible
SB1705 Engrossed            -10-               LRB9008944LDbd
 1             employees to work in an enterprise zone or federally
 2             designated Foreign Trade Zone or Sub-Zone during the
 3             taxable year;
 4                  (B)  the taxpayer's total employment within the
 5             enterprise  zone  or  federally  designated  Foreign
 6             Trade Zone or Sub-Zone must increase by  5  or  more
 7             full-time  employees  beyond  the  total employed in
 8             that zone at the end of the previous  tax  year  for
 9             which  a  jobs  tax  credit  under  this Section was
10             taken, or beyond the total employed by the  taxpayer
11             as of December 31, 1985, whichever is later; and
12                  (C)  the  eligible  employees  must be employed
13             180 consecutive days in order to be deemed hired for
14             purposes of this subsection.
15             (3)  An "eligible employee" means  an  employee  who
16        is:
17                  (A)  Certified  by  the  Department of Commerce
18             and Community Affairs  as  "eligible  for  services"
19             pursuant  to  regulations  promulgated in accordance
20             with Title II of the Job Training  Partnership  Act,
21             Training Services for the Disadvantaged or Title III
22             of  the Job Training Partnership Act, Employment and
23             Training Assistance for Dislocated Workers Program.
24                  (B)  Hired  after  the   enterprise   zone   or
25             federally  designated Foreign Trade Zone or Sub-Zone
26             was designated or the trade or business was  located
27             in that zone, whichever is later.
28                  (C)  Employed in the enterprise zone or Foreign
29             Trade  Zone  or Sub-Zone. An employee is employed in
30             an enterprise zone or federally  designated  Foreign
31             Trade  Zone or Sub-Zone if his services are rendered
32             there or it  is  the  base  of  operations  for  the
33             services performed.
34                  (D)  A  full-time  employee  working 30 or more
SB1705 Engrossed            -11-               LRB9008944LDbd
 1             hours per week.
 2             (4)  For tax years ending on or after  December  31,
 3        1985  and prior to December 31, 1988, the credit shall be
 4        allowed for the tax year in which the eligible  employees
 5        are hired.  For tax years ending on or after December 31,
 6        1988,  the  credit  shall  be  allowed  for  the tax year
 7        immediately following the tax year in which the  eligible
 8        employees are hired.  If the amount of the credit exceeds
 9        the  tax  liability for that year, whether it exceeds the
10        original liability or the  liability  as  later  amended,
11        such excess may be carried forward and applied to the tax
12        liability  of  the  5  taxable years following the excess
13        credit year.  The credit shall be applied to the earliest
14        year for which there is a liability. If there  is  credit
15        from more than one tax year that is available to offset a
16        liability, earlier credit shall be applied first.
17             (5)  The Department of Revenue shall promulgate such
18        rules and regulations as may be deemed necessary to carry
19        out the purposes of this subsection (g).
20             (6)  The  credit  shall  be  available  for eligible
21        employees hired on or after January 1, 1986.
22             (h)  Investment credit; High Impact Business.
23             (1)  Subject to subsection (b) of Section 5.5 of the
24        Illinois Enterprise Zone Act, a taxpayer shall be allowed
25        a credit against the tax imposed by subsections  (a)  and
26        (b)  of this Section for investment in qualified property
27        which is placed in service by a  Department  of  Commerce
28        and  Community  Affairs  designated High Impact Business.
29        The credit shall be .5% of the basis for  such  property.
30        The  credit  shall  not  be  available  until the minimum
31        investments in qualified property set  forth  in  Section
32        5.5  of  the  Illinois  Enterprise  Zone  Act  have  been
33        satisfied  and shall not be allowed to the extent that it
34        would reduce a taxpayer's liability for the  tax  imposed
SB1705 Engrossed            -12-               LRB9008944LDbd
 1        by subsections (a) and (b) of this Section to below zero.
 2        The  credit  applicable to such minimum investments shall
 3        be taken in  the  taxable  year  in  which  such  minimum
 4        investments   have   been   completed.   The  credit  for
 5        additional investments beyond the minimum investment by a
 6        designated high impact business shall be  available  only
 7        in  the  taxable  year in which the property is placed in
 8        service and shall not be allowed to the  extent  that  it
 9        would  reduce  a taxpayer's liability for the tax imposed
10        by subsections (a) and (b) of this Section to below zero.
11        For tax years ending on or after December 31,  1987,  the
12        credit  shall  be  allowed  for the tax year in which the
13        property is placed in service, or, if the amount  of  the
14        credit  exceeds  the tax liability for that year, whether
15        it exceeds the original liability  or  the  liability  as
16        later  amended,  such  excess  may be carried forward and
17        applied to the tax  liability  of  the  5  taxable  years
18        following  the  excess  credit year.  The credit shall be
19        applied to  the  earliest  year  for  which  there  is  a
20        liability.   If  there  is  credit from more than one tax
21        year that is available to offset a liability, the  credit
22        accruing first in time shall be applied first.
23             Changes  made  in  this subdivision (h)(1) by Public
24        Act 88-670 restore changes made by Public Act 85-1182 and
25        reflect existing law.
26             (2)  The  term  qualified  property  means  property
27        which:
28                  (A)  is  tangible,   whether   new   or   used,
29             including  buildings  and  structural  components of
30             buildings;
31                  (B)  is depreciable pursuant to Section 167  of
32             the  Internal  Revenue  Code,  except  that  "3-year
33             property" as defined in Section 168(c)(2)(A) of that
34             Code is not eligible for the credit provided by this
SB1705 Engrossed            -13-               LRB9008944LDbd
 1             subsection (h);
 2                  (C)  is  acquired  by  purchase  as  defined in
 3             Section 179(d) of the Internal Revenue Code; and
 4                  (D)  is not eligible for  the  Enterprise  Zone
 5             Investment Credit provided by subsection (f) of this
 6             Section.
 7             (3)  The  basis  of  qualified property shall be the
 8        basis used to  compute  the  depreciation  deduction  for
 9        federal income tax purposes.
10             (4)  If the basis of the property for federal income
11        tax  depreciation purposes is increased after it has been
12        placed in service in a federally designated Foreign Trade
13        Zone or Sub-Zone located in Illinois by the taxpayer, the
14        amount of such increase shall be deemed  property  placed
15        in service on the date of such increase in basis.
16             (5)  The  term  "placed  in  service" shall have the
17        same meaning as under Section 46 of the Internal  Revenue
18        Code.
19             (6)  If  during any taxable year ending on or before
20        December 31, 1996, any property ceases  to  be  qualified
21        property  in  the  hands of the taxpayer within 48 months
22        after being placed  in  service,  or  the  situs  of  any
23        qualified  property  is  moved outside Illinois within 48
24        months after being placed in  service,  the  tax  imposed
25        under  subsections  (a)  and (b) of this Section for such
26        taxable year shall be increased.  Such increase shall  be
27        determined by (i) recomputing the investment credit which
28        would  have been allowed for the year in which credit for
29        such property was originally allowed by eliminating  such
30        property from such computation, and (ii) subtracting such
31        recomputed  credit  from  the amount of credit previously
32        allowed.  For the  purposes  of  this  paragraph  (6),  a
33        reduction  of  the  basis of qualified property resulting
34        from a redetermination of the  purchase  price  shall  be
SB1705 Engrossed            -14-               LRB9008944LDbd
 1        deemed  a disposition of qualified property to the extent
 2        of such reduction.
 3             (7)  Beginning with tax years ending after  December
 4        31,  1996,  if  a taxpayer qualifies for the credit under
 5        this  subsection  (h)  and  thereby  is  granted  a   tax
 6        abatement  and the taxpayer relocates its entire facility
 7        in violation of the explicit  terms  and  length  of  the
 8        contract  under  Section 18-183 of the Property Tax Code,
 9        the tax imposed under subsections (a)  and  (b)  of  this
10        Section  shall be increased for the taxable year in which
11        the taxpayer relocated its facility by an amount equal to
12        the amount of credit received by the taxpayer under  this
13        subsection (h).
14        (i)  A credit shall be allowed against the tax imposed by
15    subsections  (a)  and (b) of this Section for the tax imposed
16    by subsections (c) and (d)  of  this  Section.   This  credit
17    shall   be   computed  by  multiplying  the  tax  imposed  by
18    subsections (c) and (d) of this Section by  a  fraction,  the
19    numerator  of  which is base income allocable to Illinois and
20    the denominator of which is Illinois base income, and further
21    multiplying  the  product  by  the  tax   rate   imposed   by
22    subsections (a) and (b) of this Section.
23        Any  credit  earned  on  or after December 31, 1986 under
24    this subsection which is unused in the  year  the  credit  is
25    computed  because  it  exceeds  the  tax liability imposed by
26    subsections (a) and (b) for that year (whether it exceeds the
27    original liability or the liability as later amended) may  be
28    carried  forward  and applied to the tax liability imposed by
29    subsections (a) and (b) of the 5 taxable years following  the
30    excess  credit  year.   This credit shall be applied first to
31    the earliest year for which there is a liability.   If  there
32    is a credit under this subsection from more than one tax year
33    that  is  available to offset a liability the earliest credit
34    arising under this subsection shall be applied first.
SB1705 Engrossed            -15-               LRB9008944LDbd
 1        If, during any taxable year ending on or  after  December
 2    31,  1986, the tax imposed by subsections (c) and (d) of this
 3    Section for which a taxpayer has claimed a credit under  this
 4    subsection  (i) is reduced, the amount of credit for such tax
 5    shall also be reduced.  Such reduction shall be determined by
 6    recomputing the credit to take into account the  reduced  tax
 7    imposed  by  subsection  (c)  and (d).  If any portion of the
 8    reduced amount of credit has  been  carried  to  a  different
 9    taxable  year,  an  amended  return  shall  be filed for such
10    taxable year to reduce the amount of credit claimed.
11        (j)  Training expense credit.  Beginning with  tax  years
12    ending  on  or  after  December 31, 1986, a taxpayer shall be
13    allowed a credit against the tax imposed  by  subsection  (a)
14    and  (b)  under this Section for all amounts paid or accrued,
15    on behalf of all persons employed by the taxpayer in Illinois
16    or Illinois residents  employed  outside  of  Illinois  by  a
17    taxpayer,   for   educational   or   vocational  training  in
18    semi-technical or technical fields or semi-skilled or skilled
19    fields,  which  were  deducted  from  gross  income  in   the
20    computation  of  taxable  income.  The credit against the tax
21    imposed by subsections (a) and (b)  shall  be  1.6%  of  such
22    training  expenses.   For  partners  and  for shareholders of
23    subchapter S corporations, there shall be  allowed  a  credit
24    under this subsection (j) to be determined in accordance with
25    the  determination of income and distributive share of income
26    under Sections 702 and 704 and subchapter S of  the  Internal
27    Revenue Code.
28        Any  credit allowed under this subsection which is unused
29    in the year the credit is earned may be  carried  forward  to
30    each  of the 5 taxable years following the year for which the
31    credit is first computed until it is used.  This credit shall
32    be applied first to the earliest year for which  there  is  a
33    liability.   If  there is a credit under this subsection from
34    more than  one  tax  year  that  is  available  to  offset  a
SB1705 Engrossed            -16-               LRB9008944LDbd
 1    liability  the  earliest credit arising under this subsection
 2    shall be applied first.
 3        (k)  Research and development credit.
 4        Beginning with tax years ending after  July  1,  1990,  a
 5    taxpayer shall be allowed a credit against the tax imposed by
 6    subsections  (a)  and  (b)  of  this  Section  for increasing
 7    research  activities  in  this  State.   The  credit  allowed
 8    against the tax imposed by subsections (a) and (b)  shall  be
 9    equal to 6 1/2% of the qualifying expenditures for increasing
10    research activities in this State.
11        For    purposes    of    this   subsection,   "qualifying
12    expenditures" means the qualifying  expenditures  as  defined
13    for  the  federal  credit  for increasing research activities
14    which would be allowable under Section  41  of  the  Internal
15    Revenue   Code   and  which  are  conducted  in  this  State,
16    "qualifying expenditures for increasing  research  activities
17    in  this  State"  means the excess of qualifying expenditures
18    for the  taxable  year  in  which  incurred  over  qualifying
19    expenditures  for  the  base period, "qualifying expenditures
20    for the base period" means  the  average  of  the  qualifying
21    expenditures  for  each  year  in  the base period, and "base
22    period" means the 3 taxable years immediately  preceding  the
23    taxable year for which the determination is being made.
24        Any credit in excess of the tax liability for the taxable
25    year may be carried forward. A taxpayer may elect to have the
26    unused  credit  shown  on  its final completed return carried
27    over as a credit against the tax liability for the  following
28    5  taxable  years  or until it has been fully used, whichever
29    occurs first.
30        If an unused credit is carried forward to  a  given  year
31    from  2  or  more  earlier  years, that credit arising in the
32    earliest year will be applied first against the tax liability
33    for the given year.  If a tax liability for  the  given  year
34    still  remains,  the  credit from the next earliest year will
SB1705 Engrossed            -17-               LRB9008944LDbd
 1    then be applied, and so on, until all credits have been  used
 2    or  no  tax  liability  for  the  given  year  remains.   Any
 3    remaining  unused  credit  or  credits  then  will be carried
 4    forward to the next following year in which a  tax  liability
 5    is  incurred, except that no credit can be carried forward to
 6    a year which is more than 5 years after the year in which the
 7    expense for which the credit is given was incurred.
 8        Unless extended by law,  the  credit  shall  not  include
 9    costs  incurred  after  December  31,  1999, except for costs
10    incurred pursuant to a binding contract entered  into  on  or
11    before December 31, 1999.
12        (l)  Environmental Remediation Tax Credit.
13             (i)  For  tax   years ending after December 31, 1997
14        and on or before December 31, 2001, a taxpayer  shall  be
15        allowed  a  credit against the tax imposed by subsections
16        (a) and (b) of this Section for certain amounts paid  for
17        unreimbursed  eligible remediation costs, as specified in
18        this  subsection.   For   purposes   of   this   Section,
19        "unreimbursed  eligible  remediation  costs"  means costs
20        approved by the Illinois Environmental Protection  Agency
21        ("Agency")  under  Section  58.14  of  the  Environmental
22        Protection Act that were paid in performing environmental
23        remediation  at a site for which a No Further Remediation
24        Letter was  issued  by  the  Agency  and  recorded  under
25        Section  58.10  of  the Environmental Protection Act, and
26        does not mean approved eligible  remediation  costs  that
27        are  at  any  time  deducted  under the provisions of the
28        Internal Revenue Code.  The credit must  be  claimed  for
29        the taxable year in which Agency approval of the eligible
30        remediation   costs   is  granted.   In  no  event  shall
31        unreimbursed eligible remediation costs include any costs
32        taken  into  account  in  calculating  an   environmental
33        remediation  credit  granted  against a tax imposed under
34        the provisions of the Internal Revenue Code.  The  credit
SB1705 Engrossed            -18-               LRB9008944LDbd
 1        is  not  available to any taxpayer if the taxpayer or any
 2        related party caused or contributed to, in  any  material
 3        respect,  a  release  of  regulated substances on, in, or
 4        under the site that was identified and addressed  by  the
 5        remedial  action pursuant to the Site Remediation Program
 6        of the Environmental Protection Act.  After the Pollution
 7        Control Board rules are adopted pursuant to the  Illinois
 8        Administrative  Procedure  Act for the administration and
 9        enforcement  of  Section  58.9   of   the   Environmental
10        Protection  Act, determinations as to credit availability
11        for purposes of this Section  shall  be  made  consistent
12        with   those   rules.   For  purposes  of  this  Section,
13        "taxpayer" includes a person  whose  tax  attributes  the
14        taxpayer  has  succeeded  to  under  Section  381  of the
15        Internal Revenue Code and "related  party"  includes  the
16        persons  disallowed  a deduction for losses by paragraphs
17        (b), (c), and (f)(1)  of  Section  267  of  the  Internal
18        Revenue  Code  by  virtue of being a related taxpayer, as
19        well as any of its partners.  The credit allowed  against
20        the tax imposed by subsections (a) and (b) shall be equal
21        to  25% of the unreimbursed eligible remediation costs in
22        excess of $100,000 per site,  except  that  the  $100,000
23        threshold  shall  not  apply  to any site contained in an
24        enterprise zone as and located in a census tract that  is
25        located  in  a  minor  civil division and place or county
26        that has been determined by the  Department  of  Commerce
27        and Community Affairs to contain a majority of households
28        consisting of low and moderate income persons.  The total
29        credit  allowed  shall not exceed $40,000 per year with a
30        maximum total of $150,000 per  site.   For  partners  and
31        shareholders of subchapter S corporations, there shall be
32        allowed  a  credit under this subsection to be determined
33        in  accordance  with  the  determination  of  income  and
34        distributive share of income under Sections 702  and  704
SB1705 Engrossed            -19-               LRB9008944LDbd
 1        of subchapter S of the Internal Revenue Code.
 2             (ii)  A credit allowed under this subsection that is
 3        unused  in  the  year the credit is earned may be carried
 4        forward to each of the 5 taxable years following the year
 5        for which the credit is first earned until  it  is  used.
 6        The  term "unused credit" does not include any amounts of
 7        unreimbursed eligible remediation costs in excess of  the
 8        maximum  credit  per site authorized under paragraph (i).
 9        This credit shall be applied first to the  earliest  year
10        for  which  there  is  a liability.  If there is a credit
11        under this subsection from more than one tax year that is
12        available to offset  a  liability,  the  earliest  credit
13        arising  under this subsection shall be applied first.  A
14        credit allowed under this subsection may  be  sold  to  a
15        buyer as part of a sale of all or part of the remediation
16        site  for which the credit was granted.  The purchaser of
17        a remediation site and the tax credit  shall  succeed  to
18        the  unused  credit and remaining carry-forward period of
19        the seller.  To perfect the transfer, the assignor  shall
20        record  the  transfer  in the chain of title for the site
21        and  provide  written  notice  to  the  Director  of  the
22        Illinois Department of Revenue of the  assignor's  intent
23        to  sell  the  remediation site and the amount of the tax
24        credit to be transferred as a portion of the sale.  In no
25        event may a credit be transferred to any taxpayer if  the
26        taxpayer  or  a related party would not be eligible under
27        the provisions of subsection (i).
28             (iii)  For purposes of this Section, the term "site"
29        shall have the same meaning as under Section 58.2 of  the
30        Environmental Protection Act.
31    (Source:  P.A.  89-235,  eff.  8-4-95;  89-519, eff. 7-18-96;
32    89-591, eff.  8-1-96;  90-123,  eff.  7-21-97;  90-458,  eff.
33    8-17-97; revised 10-16-97.)
SB1705 Engrossed            -20-               LRB9008944LDbd
 1        Section  10.  The Environmental Protection Act is amended
 2    by changing Section 58.14 as follows:
 3        (415 ILCS 5/58.14)
 4        Sec. 58.14.  Environmental Remediation Tax Credit review.
 5        (a)  Prior to applying for the Environmental  Remediation
 6    Tax  Credit under Section 201 of the Illinois Income Tax Act,
 7    Remediation Applicants shall first submit to  the  Agency  an
 8    application for review of remediation costs.  The application
 9    and  review process shall be conducted in accordance with the
10    requirements of this Section  and  the  rules  adopted  under
11    subsection  (g).   A  preliminary  review  of  the  estimated
12    remediation  costs  for development and implementation of the
13    Remedial Action Plan  may  be  obtained  in  accordance  with
14    subsection (d).
15        (b)  No application for review shall be submitted until a
16    No  Further  Remediation Letter has been issued by the Agency
17    and recorded in the chain of title for the site in accordance
18    with Section 58.10.  The Agency shall review the  application
19    to  determine  whether  the  costs  submitted are remediation
20    costs, and whether the costs incurred  are  reasonable.   The
21    application  shall be on forms prescribed and provided by the
22    Agency.  At a minimum,  the  application  shall  include  the
23    following:
24             (1)  information    identifying    the   Remediation
25        Applicant and the site for which the tax credit is  being
26        sought  and  the  date of acceptance of the site into the
27        Site Remediation Program;
28             (2)  a copy of the  No  Further  Remediation  Letter
29        with  official  verification  that  the  letter  has been
30        recorded in the  chain  of  title  for  the  site  and  a
31        demonstration  that the site for which the application is
32        submitted is the same site as the one for  which  the  No
33        Further Remediation Letter is issued;
SB1705 Engrossed            -21-               LRB9008944LDbd
 1             (3)  a   demonstration   that  the  release  of  the
 2        regulated substances of concern for which the No  Further
 3        Remediation   Letter   was  issued  were  not  caused  or
 4        contributed to in any material respect by the Remediation
 5        Applicant. After the Pollution Control  Board  rules  are
 6        adopted pursuant to the Illinois Administrative Procedure
 7        Act  for  the  administration  and enforcement of Section
 8        58.9 of the Environmental Protection Act,  determinations
 9        as  to  credit availability shall be made consistent with
10        those rules;
11             (4)  an  itemization  and  documentation,  including
12        receipts, of the remediation costs incurred;
13             (5)  a demonstration that  the  costs  incurred  are
14        remediation costs as defined in this Act and its rules;
15             (6)  a  demonstration  that  the costs submitted for
16        review were incurred by  the  Remediation  Applicant  who
17        received the No Further Remediation Letter;
18             (7)  an  application  fee in the amount set forth in
19        subsection  (e)  for  each  site  for  which  review   of
20        remediation   costs  is  requested  and,  if  applicable,
21        certification  from  the  Department  of   Commerce   and
22        Community   Affairs  that  the  site  is  located  in  an
23        enterprise zone and is located in a census tract that  is
24        located  in  a  minor  civil division and place or county
25        that has been determined by the  Department  of  Commerce
26        and Community Affairs to contain a majority of households
27        consisting of low and moderate income persons;
28             (8)  any other information deemed appropriate by the
29        Agency.
30        (c)  Within  60  days  after  receipt by the Agency of an
31    application meeting the requirements of subsection  (b),  the
32    Agency  shall  issue  a  letter  to  the applicant approving,
33    disapproving, or modifying the remediation costs submitted in
34    the application.  If the remediation costs  are  approved  as
SB1705 Engrossed            -22-               LRB9008944LDbd
 1    submitted,  the Agency's letter shall state the amount of the
 2    remediation costs to  be  applied  toward  the  Environmental
 3    Remediation  Tax Credit.  If an application is disapproved or
 4    approved with modification of remediation costs, the Agency's
 5    letter shall set forth the reasons  for  the  disapproval  or
 6    modification  and  state the amount of the remediation costs,
 7    if any, to be applied toward  the  Environmental  Remediation
 8    Tax Credit.
 9        If  a  preliminary  review  of  a  budget  plan  has been
10    obtained under subsection (d), the Remediation Applicant  may
11    submit,  with  the  application  and supporting documentation
12    under  subsection  (b),  a  copy  of   the   Agency's   final
13    determination  accompanied by a certification that the actual
14    remediation  costs   incurred   for   the   development   and
15    implementation  of  the  Remedial Action Plan are equal to or
16    less  than  the  costs  approved  in   the   Agency's   final
17    determination on the budget plan.  The certification shall be
18    signed  by the Remediation Applicant and notarized.  Based on
19    that submission, the Agency shall not be required to  conduct
20    further  review  of  the  costs  incurred for development and
21    implementation of the Remedial Action Plan  and  may  approve
22    costs as submitted.
23        Within   35  days  after  receipt  of  an  Agency  letter
24    disapproving or modifying  an  application  for  approval  of
25    remediation  costs,  the Remediation Applicant may appeal the
26    Agency's decision to the Board in the manner provided for the
27    review of permits in Section 40 of this Act.
28        (d)  (1) A Remediation Applicant may obtain a preliminary
29        review of estimated remediation costs for the development
30        and  implementation  of  the  Remedial  Action  Plan   by
31        submitting  a  budget plan along with the Remedial Action
32        Plan.  The budget  plan  shall  be  set  forth  on  forms
33        prescribed  and  provided by the Agency and shall include
34        but shall not be limited to line item  estimates  of  the
SB1705 Engrossed            -23-               LRB9008944LDbd
 1        costs  associated with each line item (such as personnel,
 2        equipment, and materials) that the Remediation  Applicant
 3        anticipates  will  be  incurred  for  the development and
 4        implementation of the Remedial Action Plan.   The  Agency
 5        shall  review  the  budget  plan  along with the Remedial
 6        Action Plan to  determine  whether  the  estimated  costs
 7        submitted  are  remediation  costs  and whether the costs
 8        estimated for the activities are reasonable.
 9             (2)  If the Remedial Action Plan is amended  by  the
10        Remediation  Applicant  or  as a result of Agency action,
11        the  corresponding   budget   plan   shall   be   revised
12        accordingly and resubmitted for Agency review.
13             (3)  The  budget  plan  shall  be accompanied by the
14        applicable fee as set forth in subsection (e).
15             (4)  Submittal of a budget plan shall be  deemed  an
16        automatic  60-day  waiver  of  the  Remedial  Action Plan
17        review deadlines set forth in this Section and its rules.
18             (5)  Within the applicable  period  of  review,  the
19        Agency  shall issue a letter to the Remediation Applicant
20        approving,  disapproving,  or  modifying  the   estimated
21        remediation  costs  submitted  in  the budget plan.  If a
22        budget plan is disapproved or approved with  modification
23        of estimated remediation costs, the Agency's letter shall
24        set   forth   the   reasons   for   the   disapproval  or
25        modification.
26             (6)  Within 35  days  after  receipt  of  an  Agency
27        letter  disapproving  or  modifying  a  budget  plan, the
28        Remediation Applicant may appeal the Agency's decision to
29        the Board in  the  manner  provided  for  the  review  of
30        permits in Section 40 of this Act.
31        (e)  The  fees  for  reviews conducted under this Section
32    are in addition to any other  fees  or  payments  for  Agency
33    services  rendered  pursuant  to the Site Remediation Program
34    and shall be as follows:
SB1705 Engrossed            -24-               LRB9008944LDbd
 1             (1)  The  fee  for  an  application  for  review  of
 2        remediation costs shall be $1,000 for each site reviewed.
 3             (2)  The fee for  the  review  of  the  budget  plan
 4        submitted  under  subsection  (d)  shall be $500 for each
 5        site reviewed.
 6             (3)  In  the  case  of   a   Remediation   Applicant
 7        submitting for review total remediation costs of $100,000
 8        or  less for a site located within an enterprise zone (as
 9        set forth in paragraph (i) of subsection (l)  of  Section
10        201  of  the  Illinois  Income  Tax  Act), the fee for an
11        application for review of remediation costs shall be $250
12        for each site reviewed. For those sites, there  shall  be
13        no fee for review of a budget plan under subsection (d).
14        The application fee shall be made payable to the State of
15    Illinois, for deposit into the Hazardous Waste Fund.
16        Pursuant  to appropriation, the Agency shall use the fees
17    collected  under  this   subsection   for   development   and
18    administration of the review program.
19        (f)  The  Agency  shall  have the authority to enter into
20    any contracts or agreements that may be  necessary  to  carry
21    out its duties and responsibilities under this Section.
22        (g)  Within  6  months  after  the effective date of this
23    amendatory Act  of  1997,  the  Agency  shall  propose  rules
24    prescribing  procedures  and standards for its administration
25    of this Section.   Within  6  months  after  receipt  of  the
26    Agency's  proposed  rules,  the  Board  shall adopt on second
27    notice, pursuant to Sections 27 and 28 of this  Act  and  the
28    Illinois   Administrative   Procedure  Act,  rules  that  are
29    consistent with this Section.  Prior to the effective date of
30    rules adopted under this  Section,  the  Agency  may  conduct
31    reviews  of applications under this Section and the Agency is
32    further authorized to distribute guidance documents on  costs
33    that are eligible or ineligible as remediation costs.
34    (Source: P.A. 90-123, eff. 7-21-97.)

[ Top ]