State of Illinois
92nd General Assembly
Legislation

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92_SB0075

 
                                               LRB9202721SMdv

 1        AN ACT concerning the environment.

 2        Be it enacted by the People of  the  State  of  Illinois,
 3    represented in the General Assembly:

 4        Section  5.   The Illinois Enterprise Zone Act is amended
 5    by adding Section 4.5 as follows:

 6        (20 ILCS 655/4.5 new)
 7        Sec.  4.5.   Eligibility  of  environmental   remediation
 8    projects.    A   project   eligible   for   an  environmental
 9    remediation  tax  credit   under   Section   58.14   of   the
10    Environmental   Protection   Act  may  be  eligible  for  the
11    incentives provided under this Act as provided in  subsection
12    (f-10) of Section 58.14 of the Environmental Protection Act.

13        Section  10.   The State Finance Act is amended by adding
14    Section 5.545 as follows:

15        (30 ILCS 105/5.545 new)
16        Sec. 5.545.  The Distressed  Communities  and  Industries
17    Grant Fund.  Subsections (b) and (c) of Section 5 of this Act
18    do not apply to this Fund.

19        Section  15.   The  Economic  Development  for  a Growing
20    Economy Tax Credit Act is amended by changing Section 5-20 as
21    follows:

22        (35 ILCS 10/5-20)
23        Sec. 5-20. Application  for  a   project  to  create  and
24    retain new jobs.
25        (a)  Any  Taxpayer proposing a project located or planned
26    to be located  in  Illinois  may  request  consideration  for
27    designation  of  its  project,  by  formal  written letter of
 
                            -2-                LRB9202721SMdv
 1    request or by formal application to the Department, in  which
 2    the  Applicant states its intent to make at least a specified
 3    level of investment and intends to hire or retain a specified
 4    number of full-time employees at  a  designated  location  in
 5    Illinois.    As  circumstances  require,  the  Department may
 6    require a formal application from an Applicant and  a  formal
 7    letter of request for assistance.
 8        (b)  In  order  to qualify for Credits under this Act, an
 9    Applicant's project must:
10             (1)  involve an investment of at least $5,000,000 in
11        capital improvements to  be  placed  in  service  and  to
12        employ  at  least  25 New Employees within the State as a
13        direct result of the project; or
14             (2)  involve an investment of at least an amount (to
15        be  expressly  specified  by  the  Department   and   the
16        Committee)  in  capital  improvements  to  be  placed  in
17        service  and  will  employ  at  least  an  amount  (to be
18        expressly specified by the Department and the  Committee)
19        of  New  Employees  within  the  State, provided that the
20        Department and the Committee  have  determined  that  the
21        project  will  provide  a substantial economic benefit to
22        the State; or
23             (3)  meet the requirements set forth  in  subsection
24        (f-10)  of  Section 58.14 of the Environmental Protection
25        Act.
26        (c)  After receipt of an application, the Department  may
27    enter into an Agreement with the Applicant if the application
28    is accepted in accordance with Section 5-25.
29    (Source: P.A. 91-476, eff. 8-11-99.)

30        Section  20.   The  Illinois Income Tax Act is amended by
31    changing Section 201 as follows:

32        (35 ILCS 5/201) (from Ch. 120, par. 2-201)
 
                            -3-                LRB9202721SMdv
 1        Sec. 201.  Tax Imposed.
 2        (a)  In general. A tax measured by net income  is  hereby
 3    imposed  on  every  individual, corporation, trust and estate
 4    for each taxable year ending  after  July  31,  1969  on  the
 5    privilege  of earning or receiving income in or as a resident
 6    of this State. Such tax shall be in  addition  to  all  other
 7    occupation or privilege taxes imposed by this State or by any
 8    municipal corporation or political subdivision thereof.
 9        (b)  Rates.  The  tax  imposed  by subsection (a) of this
10    Section shall be determined as follows, except as adjusted by
11    subsection (d-1):
12             (1)  In the case of an individual, trust or  estate,
13        for taxable years ending prior to July 1, 1989, an amount
14        equal  to  2  1/2%  of  the taxpayer's net income for the
15        taxable year.
16             (2)  In the case of an individual, trust or  estate,
17        for  taxable  years  beginning  prior to July 1, 1989 and
18        ending after June 30, 1989, an amount equal to the sum of
19        (i) 2 1/2% of the taxpayer's net income  for  the  period
20        prior to July 1, 1989, as calculated under Section 202.3,
21        and  (ii)  3% of the taxpayer's net income for the period
22        after June 30, 1989, as calculated under Section 202.3.
23             (3)  In the case of an individual, trust or  estate,
24        for  taxable  years  beginning  after  June  30, 1989, an
25        amount equal to 3% of the taxpayer's net income  for  the
26        taxable year.
27             (4)  (Blank).
28             (5)  (Blank).
29             (6)  In the case of a corporation, for taxable years
30        ending  prior  to  July 1, 1989, an amount equal to 4% of
31        the taxpayer's net income for the taxable year.
32             (7)  In the case of a corporation, for taxable years
33        beginning prior to July 1, 1989 and ending after June 30,
34        1989, an amount equal  to  the  sum  of  (i)  4%  of  the
 
                            -4-                LRB9202721SMdv
 1        taxpayer's  net  income  for  the period prior to July 1,
 2        1989, as calculated under Section 202.3, and (ii) 4.8% of
 3        the taxpayer's net income for the period after  June  30,
 4        1989, as calculated under Section 202.3.
 5             (8)  In the case of a corporation, for taxable years
 6        beginning after June 30, 1989, an amount equal to 4.8% of
 7        the taxpayer's net income for the taxable year.
 8        (c)  Beginning   on  July  1,  1979  and  thereafter,  in
 9    addition to such income tax, there is also hereby imposed the
10    Personal Property Tax Replacement Income Tax measured by  net
11    income   on   every   corporation   (including  Subchapter  S
12    corporations), partnership and trust, for each  taxable  year
13    ending  after  June  30, 1979.  Such taxes are imposed on the
14    privilege of earning or receiving income in or as a  resident
15    of  this State.  The Personal Property Tax Replacement Income
16    Tax shall be  in  addition  to  the  income  tax  imposed  by
17    subsections  (a)  and  (b) of this Section and in addition to
18    all other occupation or privilege taxes imposed by this State
19    or by any  municipal  corporation  or  political  subdivision
20    thereof.
21        (d)  Additional  Personal Property Tax Replacement Income
22    Tax Rates.  The personal property tax replacement income  tax
23    imposed by this subsection and subsection (c) of this Section
24    in  the  case  of  a  corporation,  other than a Subchapter S
25    corporation and except as adjusted by subsection (d-1), shall
26    be an additional amount equal to 2.85% of such taxpayer's net
27    income for the taxable year, except that beginning on January
28    1, 1981, and thereafter, the rate of 2.85% specified in  this
29    subsection  shall  be  reduced  to 2.5%, and in the case of a
30    partnership, trust or a Subchapter S corporation shall be  an
31    additional amount equal to 1.5% of such taxpayer's net income
32    for the taxable year.
33        (d-1)  Rate  reduction  for certain foreign insurers.  In
34    the case of a foreign insurer, as defined by Section 35A-5 of
 
                            -5-                LRB9202721SMdv
 1    the Illinois  Insurance  Code,  whose  state  or  country  of
 2    domicile   imposes   on  insurers  domiciled  in  Illinois  a
 3    retaliatory tax (excluding any insurer  whose  premiums  from
 4    reinsurance  assumed  are  50% or more of its total insurance
 5    premiums as determined under paragraph (2) of subsection  (b)
 6    of   Section   304,   except   that   for  purposes  of  this
 7    determination  premiums  from  reinsurance  do  not   include
 8    premiums   from  inter-affiliate  reinsurance  arrangements),
 9    beginning with taxable years ending on or after December  31,
10    1999,  the sum of the rates of tax imposed by subsections (b)
11    and (d) shall be reduced (but not increased) to the  rate  at
12    which  the total amount of tax imposed under this Act, net of
13    all credits allowed under this Act, shall equal (i) the total
14    amount of tax that would be imposed on the foreign  insurer's
15    net income allocable to Illinois for the taxable year by such
16    foreign  insurer's  state  or country of domicile if that net
17    income were subject to all income taxes and taxes measured by
18    net income imposed by such foreign insurer's state or country
19    of domicile, net of all credits allowed or  (ii)  a  rate  of
20    zero  if no such tax is imposed on such income by the foreign
21    insurer's  state  of  domicile.  For  the  purposes  of  this
22    subsection  (d-1),  an  inter-affiliate  includes  a   mutual
23    insurer under common management.
24             (1)  For  the  purposes  of  subsection (d-1), in no
25        event shall the sum  of  the  rates  of  tax  imposed  by
26        subsections  (b)  and  (d)  be  reduced below the rate at
27        which the sum of:
28                  (A)  the total amount of tax  imposed  on  such
29             foreign  insurer  under this Act for a taxable year,
30             net of all credits allowed under this Act, plus
31                  (B)  the privilege tax imposed by  Section  409
32             of  the  Illinois Insurance Code, the fire insurance
33             company tax  imposed  by  Section  12  of  the  Fire
34             Investigation  Act,  and  the  fire department taxes
 
                            -6-                LRB9202721SMdv
 1             imposed  under  Section  11-10-1  of  the   Illinois
 2             Municipal Code,
 3        equals  1.25% of the net taxable premiums written for the
 4        taxable year, as described by subsection (1)  of  Section
 5        409  of the Illinois Insurance Code.  This paragraph will
 6        in no event increase the rates imposed under  subsections
 7        (b) and (d).
 8             (2)  Any  reduction  in  the rates of tax imposed by
 9        this subsection shall be applied first against the  rates
10        imposed  by subsection (b) and only after the tax imposed
11        by subsection (a) net of all credits allowed  under  this
12        Section  other  than  the credit allowed under subsection
13        (i) has been reduced to zero, against the  rates  imposed
14        by subsection (d).
15        This  subsection  (d-1)  is exempt from the provisions of
16    Section 250.
17        (e)  Investment credit.  A taxpayer shall  be  allowed  a
18    credit  against  the Personal Property Tax Replacement Income
19    Tax for investment in qualified property.
20             (1)  A taxpayer shall be allowed a credit  equal  to
21        .5%  of the basis of qualified property placed in service
22        during the taxable year, provided such property is placed
23        in service on or after July  1,  1984.   There  shall  be
24        allowed an additional credit equal to .5% of the basis of
25        qualified  property  placed in service during the taxable
26        year, provided such property is placed in service  on  or
27        after  July  1,  1986, and the taxpayer's base employment
28        within Illinois has increased by  1%  or  more  over  the
29        preceding year as determined by the taxpayer's employment
30        records  filed with the Illinois Department of Employment
31        Security.  Taxpayers who are new  to  Illinois  shall  be
32        deemed  to  have met the 1% growth in base employment for
33        the first year in which they file employment records with
34        the Illinois  Department  of  Employment  Security.   The
 
                            -7-                LRB9202721SMdv
 1        provisions  added  to  this Section by Public Act 85-1200
 2        (and restored by Public Act 87-895) shall be construed as
 3        declaratory of existing law and not as a  new  enactment.
 4        If,  in  any year, the increase in base employment within
 5        Illinois over the preceding year is  less  than  1%,  the
 6        additional  credit  shall  be  limited to that percentage
 7        times a fraction, the numerator of which is .5%  and  the
 8        denominator  of  which  is  1%, but shall not exceed .5%.
 9        The investment credit shall not be allowed to the  extent
10        that  it  would  reduce a taxpayer's liability in any tax
11        year  below  zero,  nor  may  any  credit  for  qualified
12        property be allowed for any year other than the  year  in
13        which the property was placed in service in Illinois. For
14        tax years ending on or after December 31, 1987, and on or
15        before December 31, 1988, the credit shall be allowed for
16        the  tax year in which the property is placed in service,
17        or, if the amount of the credit exceeds the tax liability
18        for that year, whether it exceeds the original  liability
19        or  the  liability  as  later amended, such excess may be
20        carried forward and applied to the tax liability of the 5
21        taxable years following the excess credit  years  if  the
22        taxpayer  (i)  makes investments which cause the creation
23        of a  minimum  of  2,000  full-time  equivalent  jobs  in
24        Illinois,   (ii)   is   located  in  an  enterprise  zone
25        established pursuant to the Illinois Enterprise Zone  Act
26        and  (iii) is certified by the Department of Commerce and
27        Community Affairs  as  complying  with  the  requirements
28        specified  in  clause  (i) and (ii) by July 1, 1986.  The
29        Department of Commerce and Community Affairs shall notify
30        the Department of  Revenue  of  all  such  certifications
31        immediately.  For  tax  years  ending  after December 31,
32        1988, the credit shall be allowed for  the  tax  year  in
33        which  the  property  is  placed  in  service, or, if the
34        amount of the credit exceeds the tax liability  for  that
 
                            -8-                LRB9202721SMdv
 1        year,  whether  it  exceeds the original liability or the
 2        liability as later amended, such excess  may  be  carried
 3        forward and applied to the tax liability of the 5 taxable
 4        years following the excess credit years. The credit shall
 5        be  applied  to  the  earliest  year for which there is a
 6        liability. If there is credit from more than one tax year
 7        that is available to offset a liability,  earlier  credit
 8        shall be applied first.
 9             (2)  The  term  "qualified  property" means property
10        which:
11                  (A)  is  tangible,   whether   new   or   used,
12             including  buildings  and  structural  components of
13             buildings and signs that are real property, but  not
14             including land or improvements to real property that
15             are not a structural component of a building such as
16             landscaping,   sewer   lines,  local  access  roads,
17             fencing, parking lots, and other appurtenances;
18                  (B)  is depreciable pursuant to Section 167  of
19             the  Internal  Revenue  Code,  except  that  "3-year
20             property" as defined in Section 168(c)(2)(A) of that
21             Code is not eligible for the credit provided by this
22             subsection (e);
23                  (C)  is  acquired  by  purchase  as  defined in
24             Section 179(d) of the Internal Revenue Code;
25                  (D)  is used in Illinois by a taxpayer  who  is
26             primarily  engaged  in  manufacturing,  or in mining
27             coal or fluorite, or in retailing; and
28                  (E)  has not previously been used  in  Illinois
29             in  such  a  manner  and  by  such a person as would
30             qualify for the credit provided by  this  subsection
31             (e) or subsection (f).
32             (3)  For    purposes   of   this   subsection   (e),
33        "manufacturing" means the material staging and production
34        of tangible  personal  property  by  procedures  commonly
 
                            -9-                LRB9202721SMdv
 1        regarded  as  manufacturing,  processing, fabrication, or
 2        assembling which changes some existing material into  new
 3        shapes, new qualities, or new combinations.  For purposes
 4        of  this  subsection (e) the term "mining" shall have the
 5        same meaning as the term "mining" in  Section  613(c)  of
 6        the   Internal   Revenue  Code.   For  purposes  of  this
 7        subsection (e), the term "retailing" means  the  sale  of
 8        tangible   personal  property  or  services  rendered  in
 9        conjunction with the sale of tangible consumer  goods  or
10        commodities.
11             (4)  The  basis  of  qualified property shall be the
12        basis used to  compute  the  depreciation  deduction  for
13        federal income tax purposes.
14             (5)  If the basis of the property for federal income
15        tax  depreciation purposes is increased after it has been
16        placed in service in Illinois by the taxpayer, the amount
17        of such increase  shall  be  deemed  property  placed  in
18        service on the date of such increase in basis.
19             (6)  The  term  "placed  in  service" shall have the
20        same meaning as under Section 46 of the Internal  Revenue
21        Code.
22             (7)  If during any taxable year, any property ceases
23        to  be  qualified  property  in the hands of the taxpayer
24        within 48 months after being placed in  service,  or  the
25        situs of any qualified property is moved outside Illinois
26        within  48  months  after  being  placed  in service, the
27        Personal Property Tax Replacement  Income  Tax  for  such
28        taxable  year shall be increased.  Such increase shall be
29        determined by (i) recomputing the investment credit which
30        would have been allowed for the year in which credit  for
31        such  property was originally allowed by eliminating such
32        property from such computation and, (ii) subtracting such
33        recomputed credit from the amount  of  credit  previously
34        allowed.  For  the  purposes  of  this  paragraph  (7), a
 
                            -10-               LRB9202721SMdv
 1        reduction of the basis of  qualified  property  resulting
 2        from  a  redetermination  of  the purchase price shall be
 3        deemed a disposition of qualified property to the  extent
 4        of such reduction.
 5             (8)  Unless  the  investment  credit  is extended by
 6        law, the basis of qualified property  shall  not  include
 7        costs  incurred after December 31, 2003, except for costs
 8        incurred pursuant to a binding contract entered  into  on
 9        or before December 31, 2003.
10             (9)  Each  taxable  year  ending before December 31,
11        2000, a partnership may elect  to  pass  through  to  its
12        partners the credits to which the partnership is entitled
13        under  this  subsection  (e)  for  the  taxable  year.  A
14        partner may use the credit allocated to him or her  under
15        this   paragraph   only   against   the  tax  imposed  in
16        subsections  (c)  and  (d)  of  this  Section.   If   the
17        partnership  makes  that election, those credits shall be
18        allocated  among  the  partners  in  the  partnership  in
19        accordance with the rules set forth in Section 704(b)  of
20        the  Internal  Revenue  Code,  and  the rules promulgated
21        under that Section,  and  the  allocated  amount  of  the
22        credits shall be allowed to the partners for that taxable
23        year.   The  partnership  shall make this election on its
24        Personal Property Tax Replacement Income Tax  return  for
25        that  taxable  year.  The  election  to  pass through the
26        credits shall be irrevocable.
27             For taxable years ending on or  after  December  31,
28        2000,  a  partner  that  qualifies  its partnership for a
29        subtraction under subparagraph (I) of  paragraph  (2)  of
30        subsection  (d)  of  Section  203  or  a shareholder that
31        qualifies a Subchapter S corporation  for  a  subtraction
32        under subparagraph (S) of paragraph (2) of subsection (b)
33        of  Section  203  shall  be  allowed  a credit under this
34        subsection (e) equal to its share of  the  credit  earned
 
                            -11-               LRB9202721SMdv
 1        under  this subsection (e) during the taxable year by the
 2        partnership or Subchapter S  corporation,  determined  in
 3        accordance   with   the   determination   of  income  and
 4        distributive share of income under Sections 702  and  704
 5        and  Subchapter  S  of  the  Internal Revenue Code.  This
 6        paragraph is exempt from the provisions of Section 250.
 7          (f)  Investment credit; Enterprise Zone.
 8             (1)  A taxpayer shall be allowed  a  credit  against
 9        the  tax  imposed  by  subsections  (a)  and  (b) of this
10        Section for investment in  qualified  property  which  is
11        placed  in service in an Enterprise Zone created pursuant
12        to  the  Illinois  Enterprise  Zone  Act.  For  partners,
13        shareholders of Subchapter S corporations, and owners  of
14        limited  liability companies, if the liability company is
15        treated as a partnership  for  purposes  of  federal  and
16        State  income  taxation,  there shall be allowed a credit
17        under this subsection (f) to be determined in  accordance
18        with  the  determination of income and distributive share
19        of income under Sections 702 and 704 and Subchapter S  of
20        the Internal Revenue Code. The credit shall be .5% of the
21        basis  for  such property.  The credit shall be available
22        only in the taxable year in which the property is  placed
23        in  service  in  the  Enterprise  Zone  and  shall not be
24        allowed to the extent that it would reduce  a  taxpayer's
25        liability  for the tax imposed by subsections (a) and (b)
26        of this Section to below zero. For tax years ending on or
27        after December 31, 1985, the credit shall be allowed  for
28        the  tax year in which the property is placed in service,
29        or, if the amount of the credit exceeds the tax liability
30        for that year, whether it exceeds the original  liability
31        or  the  liability  as  later amended, such excess may be
32        carried forward and applied to the tax liability of the 5
33        taxable years  following  the  excess  credit  year.  The
34        credit  shall  be  applied to the earliest year for which
 
                            -12-               LRB9202721SMdv
 1        there is a liability. If there is credit from  more  than
 2        one tax year that is available to offset a liability, the
 3        credit accruing first in time shall be applied first.
 4             (2)  The  term  qualified  property  means  property
 5        which:
 6                  (A)  is   tangible,   whether   new   or  used,
 7             including buildings  and  structural  components  of
 8             buildings;
 9                  (B)  is  depreciable pursuant to Section 167 of
10             the  Internal  Revenue  Code,  except  that  "3-year
11             property" as defined in Section 168(c)(2)(A) of that
12             Code is not eligible for the credit provided by this
13             subsection (f);
14                  (C)  is acquired  by  purchase  as  defined  in
15             Section 179(d) of the Internal Revenue Code;
16                  (D)  is  used  in  the  Enterprise  Zone by the
17             taxpayer; and
18                  (E)  has not been previously 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             (f) or subsection (e).
22             (3)  The  basis  of  qualified property shall be the
23        basis used to  compute  the  depreciation  deduction  for
24        federal income tax purposes.
25             (4)  If the basis of the property for federal income
26        tax  depreciation purposes is increased after it has been
27        placed in service in the Enterprise Zone by the taxpayer,
28        the amount of such  increase  shall  be  deemed  property
29        placed in service on the date of such increase in basis.
30             (5)  The  term  "placed  in  service" shall have the
31        same meaning as under Section 46 of the Internal  Revenue
32        Code.
33             (6)  If during any taxable year, any property ceases
34        to  be  qualified  property  in the hands of the taxpayer
 
                            -13-               LRB9202721SMdv
 1        within 48 months after being placed in  service,  or  the
 2        situs  of  any  qualified  property  is moved outside the
 3        Enterprise Zone within 48 months after  being  placed  in
 4        service, the tax imposed under subsections (a) and (b) of
 5        this  Section  for  such taxable year shall be increased.
 6        Such increase shall be determined by (i) recomputing  the
 7        investment  credit  which would have been allowed for the
 8        year in which credit for  such  property  was  originally
 9        allowed   by   eliminating   such   property   from  such
10        computation, and (ii) subtracting such recomputed  credit
11        from  the  amount  of credit previously allowed.  For the
12        purposes of this paragraph (6), a reduction of the  basis
13        of qualified property resulting from a redetermination of
14        the  purchase  price  shall  be  deemed  a disposition of
15        qualified property to the extent of such reduction.
16          (g)  Jobs Tax Credit; Enterprise Zone and Foreign Trade
17    Zone or Sub-Zone.
18             (1)  A taxpayer conducting a trade or business in an
19        enterprise zone or a High Impact Business  designated  by
20        the   Department   of   Commerce  and  Community  Affairs
21        conducting a trade or business in a federally  designated
22        Foreign  Trade Zone or Sub-Zone shall be allowed a credit
23        against the tax imposed by subsections  (a)  and  (b)  of
24        this  Section in the amount of $500 per eligible employee
25        hired to work in the zone during the taxable year.
26             (2)  To qualify for the credit:
27                  (A)  the taxpayer must hire 5 or more  eligible
28             employees to work in an enterprise zone or federally
29             designated Foreign Trade Zone or Sub-Zone during the
30             taxable year;
31                  (B)  the taxpayer's total employment within the
32             enterprise  zone  or  federally  designated  Foreign
33             Trade  Zone  or  Sub-Zone must increase by 5 or more
34             full-time employees beyond  the  total  employed  in
 
                            -14-               LRB9202721SMdv
 1             that  zone  at  the end of the previous tax year for
 2             which a jobs  tax  credit  under  this  Section  was
 3             taken,  or beyond the total employed by the taxpayer
 4             as of December 31, 1985, whichever is later; and
 5                  (C)  the eligible employees  must  be  employed
 6             180 consecutive days in order to be deemed hired for
 7             purposes of this subsection.
 8             (3)  An  "eligible  employee"  means an employee who
 9        is:
10                  (A)  Certified by the  Department  of  Commerce
11             and  Community  Affairs  as  "eligible for services"
12             pursuant to regulations  promulgated  in  accordance
13             with  Title  II of the Job Training Partnership Act,
14             Training Services for the Disadvantaged or Title III
15             of the Job Training Partnership Act, Employment  and
16             Training Assistance for Dislocated Workers Program.
17                  (B)  Hired   after   the   enterprise  zone  or
18             federally designated Foreign Trade Zone or  Sub-Zone
19             was  designated or the trade or business was located
20             in that zone, whichever is later.
21                  (C)  Employed in the enterprise zone or Foreign
22             Trade Zone or Sub-Zone. An employee is  employed  in
23             an  enterprise  zone or federally designated Foreign
24             Trade Zone or Sub-Zone if his services are  rendered
25             there  or  it  is  the  base  of  operations for the
26             services performed.
27                  (D)  A full-time employee working  30  or  more
28             hours per week.
29             (4)  For  tax  years ending on or after December 31,
30        1985 and prior to December 31, 1988, the credit shall  be
31        allowed  for the tax year in which the eligible employees
32        are hired.  For tax years ending on or after December 31,
33        1988, the credit  shall  be  allowed  for  the  tax  year
34        immediately  following the tax year in which the eligible
 
                            -15-               LRB9202721SMdv
 1        employees are hired.  If the amount of the credit exceeds
 2        the tax liability for that year, whether it  exceeds  the
 3        original  liability  or  the  liability as later amended,
 4        such excess may be carried forward and applied to the tax
 5        liability of the 5 taxable  years  following  the  excess
 6        credit year.  The credit shall be applied to the earliest
 7        year  for  which there is a liability. If there is credit
 8        from more than one tax year that is available to offset a
 9        liability, earlier credit shall be applied first.
10             (5)  The Department of Revenue shall promulgate such
11        rules and regulations as may be deemed necessary to carry
12        out the purposes of this subsection (g).
13             (6)  The credit  shall  be  available  for  eligible
14        employees hired on or after January 1, 1986.
15             (h)  Investment credit; High Impact Business.
16             (1)  Subject to subsection (b) of Section 5.5 of the
17        Illinois Enterprise Zone Act, a taxpayer shall be allowed
18        a  credit  against the tax imposed by subsections (a) and
19        (b) of this Section for investment in qualified  property
20        which  is  placed  in service by a Department of Commerce
21        and Community Affairs designated  High  Impact  Business.
22        The  credit  shall be .5% of the basis for such property.
23        The credit shall  not  be  available  until  the  minimum
24        investments  in  qualified  property set forth in Section
25        5.5  of  the  Illinois  Enterprise  Zone  Act  have  been
26        satisfied and shall not be allowed to the extent that  it
27        would  reduce  a taxpayer's liability for the tax imposed
28        by subsections (a) and (b) of this Section to below zero.
29        The credit applicable to such minimum  investments  shall
30        be  taken  in  the  taxable  year  in  which such minimum
31        investments  have  been  completed.    The   credit   for
32        additional investments beyond the minimum investment by a
33        designated  high  impact business shall be available only
34        in the taxable year in which the property  is  placed  in
 
                            -16-               LRB9202721SMdv
 1        service  and  shall  not be allowed to the extent that it
 2        would reduce a taxpayer's liability for the  tax  imposed
 3        by subsections (a) and (b) of this Section to below zero.
 4        For  tax  years ending on or after December 31, 1987, the
 5        credit shall be allowed for the tax  year  in  which  the
 6        property  is  placed in service, or, if the amount of the
 7        credit exceeds the tax liability for that  year,  whether
 8        it  exceeds  the  original  liability or the liability as
 9        later amended, such excess may  be  carried  forward  and
10        applied  to  the  tax  liability  of  the 5 taxable years
11        following the excess credit year.  The  credit  shall  be
12        applied  to  the  earliest  year  for  which  there  is a
13        liability.  If there is credit from  more  than  one  tax
14        year  that is available to offset a liability, the credit
15        accruing first in time shall be applied first.
16             Changes made in this subdivision  (h)(1)  by  Public
17        Act 88-670 restore changes made by Public Act 85-1182 and
18        reflect existing law.
19             (2)  The  term  qualified  property  means  property
20        which:
21                  (A)  is   tangible,   whether   new   or  used,
22             including buildings  and  structural  components  of
23             buildings;
24                  (B)  is  depreciable pursuant to Section 167 of
25             the  Internal  Revenue  Code,  except  that  "3-year
26             property" as defined in Section 168(c)(2)(A) of that
27             Code is not eligible for the credit provided by this
28             subsection (h);
29                  (C)  is acquired  by  purchase  as  defined  in
30             Section 179(d) of the Internal Revenue Code; and
31                  (D)  is  not  eligible  for the Enterprise Zone
32             Investment Credit provided by subsection (f) of this
33             Section.
34             (3)  The basis of qualified property  shall  be  the
 
                            -17-               LRB9202721SMdv
 1        basis  used  to  compute  the  depreciation deduction for
 2        federal income tax purposes.
 3             (4)  If the basis of the property for federal income
 4        tax depreciation purposes is increased after it has  been
 5        placed in service in a federally designated Foreign Trade
 6        Zone or Sub-Zone located in Illinois by the taxpayer, the
 7        amount  of  such increase shall be deemed property placed
 8        in service on the date of such increase in basis.
 9             (5)  The term "placed in  service"  shall  have  the
10        same  meaning as under Section 46 of the Internal Revenue
11        Code.
12             (6)  If during any taxable year ending on or  before
13        December  31,  1996,  any property ceases to be qualified
14        property in the hands of the taxpayer  within  48  months
15        after  being  placed  in  service,  or  the  situs of any
16        qualified property is moved outside  Illinois  within  48
17        months  after  being  placed  in service, the tax imposed
18        under subsections (a) and (b) of this  Section  for  such
19        taxable  year shall be increased.  Such increase shall be
20        determined by (i) recomputing the investment credit which
21        would have been allowed for the year in which credit  for
22        such  property was originally allowed by eliminating such
23        property from such computation, and (ii) subtracting such
24        recomputed credit from the amount  of  credit  previously
25        allowed.   For  the  purposes  of  this  paragraph (6), a
26        reduction of the basis of  qualified  property  resulting
27        from  a  redetermination  of  the purchase price shall be
28        deemed a disposition of qualified property to the  extent
29        of such reduction.
30             (7)  Beginning  with tax years ending after December
31        31, 1996, if a taxpayer qualifies for  the  credit  under
32        this   subsection  (h)  and  thereby  is  granted  a  tax
33        abatement and the taxpayer relocates its entire  facility
34        in  violation  of  the  explicit  terms and length of the
 
                            -18-               LRB9202721SMdv
 1        contract under Section 18-183 of the Property  Tax  Code,
 2        the  tax  imposed  under  subsections (a) and (b) of this
 3        Section shall be increased for the taxable year in  which
 4        the taxpayer relocated its facility by an amount equal to
 5        the  amount of credit received by the taxpayer under this
 6        subsection (h).
 7        (i)  A credit shall be allowed against the tax imposed by
 8    subsections (a) and (b) of this Section for the  tax  imposed
 9    by  subsections  (c)  and  (d)  of this Section.  This credit
10    shall  be  computed  by  multiplying  the  tax   imposed   by
11    subsections  (c)  and  (d) of this Section by a fraction, the
12    numerator of which is base income allocable to  Illinois  and
13    the denominator of which is Illinois base income, and further
14    multiplying   the   product   by  the  tax  rate  imposed  by
15    subsections (a) and (b) of this Section.
16        Any credit earned on or after  December  31,  1986  under
17    this  subsection  which  is  unused in the year the credit is
18    computed because it exceeds  the  tax  liability  imposed  by
19    subsections (a) and (b) for that year (whether it exceeds the
20    original  liability or the liability as later amended) may be
21    carried forward and applied to the tax liability  imposed  by
22    subsections  (a) and (b) of the 5 taxable years following the
23    excess credit year.  This credit shall be  applied  first  to
24    the  earliest  year for which there is a liability.  If there
25    is a credit under this subsection from more than one tax year
26    that is available to offset a liability the  earliest  credit
27    arising under this subsection shall be applied first.
28        If,  during  any taxable year ending on or after December
29    31, 1986, the tax imposed by subsections (c) and (d) of  this
30    Section  for which a taxpayer has claimed a credit under this
31    subsection (i) is reduced, the amount of credit for such  tax
32    shall also be reduced.  Such reduction shall be determined by
33    recomputing  the  credit to take into account the reduced tax
34    imposed by subsection (c) and (d).  If  any  portion  of  the
 
                            -19-               LRB9202721SMdv
 1    reduced  amount  of  credit  has  been carried to a different
 2    taxable year, an amended  return  shall  be  filed  for  such
 3    taxable year to reduce the amount of credit claimed.
 4        (j)  Training  expense  credit.  Beginning with tax years
 5    ending on or after December 31, 1986,  a  taxpayer  shall  be
 6    allowed  a  credit  against the tax imposed by subsection (a)
 7    and (b) under this Section for all amounts paid  or  accrued,
 8    on behalf of all persons employed by the taxpayer in Illinois
 9    or  Illinois  residents  employed  outside  of  Illinois by a
10    taxpayer,  for  educational   or   vocational   training   in
11    semi-technical or technical fields or semi-skilled or skilled
12    fields,   which  were  deducted  from  gross  income  in  the
13    computation of taxable income.  The credit  against  the  tax
14    imposed  by  subsections  (a)  and  (b) shall be 1.6% of such
15    training expenses.  For partners, shareholders of  subchapter
16    S corporations, and owners of limited liability companies, if
17    the  liability  company  is  treated  as  a  partnership  for
18    purposes of federal and State income taxation, there shall be
19    allowed  a  credit under this subsection (j) to be determined
20    in  accordance  with  the   determination   of   income   and
21    distributive  share  of income under Sections 702 and 704 and
22    subchapter S of the Internal Revenue Code.
23        Any credit allowed under this subsection which is  unused
24    in  the  year  the credit is earned may be carried forward to
25    each of the 5 taxable years following the year for which  the
26    credit is first computed until it is used.  This credit shall
27    be  applied  first  to the earliest year for which there is a
28    liability.  If there is a credit under this  subsection  from
29    more  than  one  tax  year  that  is  available  to  offset a
30    liability the earliest credit arising under  this  subsection
31    shall be applied first.
32        (k)  Research and development credit.
33        Beginning  with  tax  years  ending after July 1, 1990, a
34    taxpayer shall be allowed a credit against the tax imposed by
 
                            -20-               LRB9202721SMdv
 1    subsections (a)  and  (b)  of  this  Section  for  increasing
 2    research  activities  in  this  State.   The  credit  allowed
 3    against  the  tax imposed by subsections (a) and (b) shall be
 4    equal to 6 1/2% of the qualifying expenditures for increasing
 5    research activities in this State. For partners, shareholders
 6    of subchapter S corporations, and owners of limited liability
 7    companies,  if  the  liability  company  is  treated   as   a
 8    partnership   for   purposes  of  federal  and  State  income
 9    taxation,  there  shall  be  allowed  a  credit  under   this
10    subsection   to   be   determined   in  accordance  with  the
11    determination of income  and  distributive  share  of  income
12    under  Sections  702 and 704 and subchapter S of the Internal
13    Revenue Code.
14        For   purposes   of    this    subsection,    "qualifying
15    expenditures"  means  the  qualifying expenditures as defined
16    for the federal credit  for  increasing  research  activities
17    which  would  be  allowable  under Section 41 of the Internal
18    Revenue  Code  and  which  are  conducted  in   this   State,
19    "qualifying  expenditures  for increasing research activities
20    in this State" means the excess  of  qualifying  expenditures
21    for  the  taxable  year  in  which  incurred  over qualifying
22    expenditures for the base  period,  "qualifying  expenditures
23    for  the  base  period"  means  the average of the qualifying
24    expenditures for each year in  the  base  period,  and  "base
25    period"  means  the 3 taxable years immediately preceding the
26    taxable year for which the determination is being made.
27        Any credit in excess of the tax liability for the taxable
28    year may be carried forward. A taxpayer may elect to have the
29    unused credit shown on its  final  completed  return  carried
30    over  as a credit against the tax liability for the following
31    5 taxable years or until it has been  fully  used,  whichever
32    occurs first.
33        If  an  unused  credit is carried forward to a given year
34    from 2 or more earlier years,  that  credit  arising  in  the
 
                            -21-               LRB9202721SMdv
 1    earliest year will be applied first against the tax liability
 2    for  the  given  year.  If a tax liability for the given year
 3    still remains, the credit from the next  earliest  year  will
 4    then  be applied, and so on, until all credits have been used
 5    or  no  tax  liability  for  the  given  year  remains.   Any
 6    remaining unused credit  or  credits  then  will  be  carried
 7    forward  to  the next following year in which a tax liability
 8    is incurred, except that no credit can be carried forward  to
 9    a year which is more than 5 years after the year in which the
10    expense for which the credit is given was incurred.
11        Unless  extended  by  law,  the  credit shall not include
12    costs incurred after December  31,  2004,  except  for  costs
13    incurred  pursuant  to  a binding contract entered into on or
14    before December 31, 2004.
15        No inference shall be drawn from this amendatory  Act  of
16    the  91st  General  Assembly  in  construing this Section for
17    taxable years beginning before January 1, 1999.
18        (l)  Environmental Remediation Tax Credit.
19             (i)  For tax  years ending after December  31,  1997
20        and on or before December 31, 2010 2001, a taxpayer shall
21        be   allowed   a   credit  against  the  tax  imposed  by
22        subsections (a) and  (b)  of  this  Section  for  certain
23        amounts paid for unreimbursed eligible remediation costs,
24        as  specified  in  this subsection.  For purposes of this
25        Section, "unreimbursed eligible remediation costs"  means
26        costs  approved  by the Illinois Environmental Protection
27        Agency   ("Agency")   under   Section   58.14   of    the
28        Environmental Protection Act that were paid in performing
29        environmental  remediation  at  a  site accepted into the
30        Site Remediation Program  that  meets  the  criteria  set
31        forth  in  Section  58.14  of  the Illinois Environmental
32        Protection  Act.   The  credit  applies  only  to   costs
33        incurred   during   the   10-year  period  following  the
34        acceptance of the site into the Site Remediation  Program
 
                            -22-               LRB9202721SMdv
 1        unless  an  extension  of  this  period is granted by the
 2        Agency for which a  No  Further  Remediation  Letter  was
 3        issued  by the Agency and recorded under Section 58.10 of
 4        the Environmental Protection Act.   The  credit  must  be
 5        claimed  for the taxable year in which Agency approval of
 6        the eligible remediation costs is granted. The credit  is
 7        not  available  to  any  taxpayer  if the taxpayer or any
 8        related party caused or contributed to, in  any  material
 9        respect,  a  release  of  regulated substances on, in, or
10        under the site that is being was identified and addressed
11        by the remedial action pursuant to the  Site  Remediation
12        Program  of  the Environmental Protection Act.  After the
13        Pollution Control Board rules are adopted pursuant to the
14        Illinois   Administrative   Procedure   Act    for    the
15        administration  and  enforcement  of  Section 58.9 of the
16        Environmental Protection Act, determinations as to credit
17        availability for purposes of this Section shall  be  made
18        consistent  with  those  rules.   For  purposes  of  this
19        Section,   "taxpayer"   includes   a   person  whose  tax
20        attributes the taxpayer has succeeded  to  under  Section
21        381  of  the  Internal  Revenue  Code and "related party"
22        includes the persons disallowed a deduction for losses by
23        paragraphs (b), (c), and (f)(1) of  Section  267  of  the
24        Internal  Revenue  Code  by  virtue  of  being  a related
25        taxpayer, as well as any of  its  partners.   The  credit
26        allowed  against  the  tax imposed by subsections (a) and
27        (b) shall be  equal  to  100%  25%  of  the  unreimbursed
28        eligible remediation costs, as set forth in Section 58.14
29        of the Environmental Protection Act in excess of $100,000
30        per  site,  except  that the $100,000 threshold shall not
31        apply to any site contained  in  an  enterprise  zone  as
32        determined  by  the  Department of Commerce and Community
33        Affairs.  The  total  credit  allowed  shall  not  exceed
34        $40,000  per  year  with  a maximum total of $150,000 per
 
                            -23-               LRB9202721SMdv
 1        site.  For partners  and  shareholders  of  subchapter  S
 2        corporations,  there shall be allowed a credit under this
 3        subsection  to  be  determined  in  accordance  with  the
 4        determination of income and distributive share of  income
 5        under  Sections  702  and  704 and of subchapter S of the
 6        Internal Revenue Code.
 7             (ii)  Until  the  Agency   issues   a   No   Further
 8        Remediation  Letter for the site, no more than 75% of the
 9        allowed credit may be claimed by the  eligible  taxpayer.
10        The  remaining  25% in allowed tax credits may be claimed
11        following the issuance by the  Agency  of  a  No  Further
12        Remediation Letter for the site.
13             (iii) (ii)  A  credit  allowed under this subsection
14        that is unused in the year the credit is  earned  may  be
15        carried  forward  to  each  of  the  15  5  taxable years
16        following the year for which the credit is  first  earned
17        until  it  is  used.    The term "unused credit" does not
18        include any amounts of unreimbursed eligible  remediation
19        costs in excess of the maximum credit per site authorized
20        under  paragraph (i).  This credit shall be applied first
21        to the earliest year for which there is a liability.   If
22        there  is  a  credit under this subsection from more than
23        one tax year that is available to offset a liability, the
24        earliest credit arising under this  subsection  shall  be
25        applied first. The recipient of credits may assign, sell,
26        or  transfer, in whole or in part, the tax credit allowed
27        under this subsection  to  any  other  person.  A  credit
28        allowed  under  this subsection may be sold to a buyer as
29        part of a sale of all or part of the remediation site for
30        which  the  credit  was  granted.   The  purchaser  of  a
31        remediation site and the tax credit shall succeed to  the
32        unused  credit  and remaining carry-forward period of the
33        seller.  To perfect  the  transfer,  the  assignor  shall
34        record  the  transfer  in the chain of title for the site
 
                            -24-               LRB9202721SMdv
 1        and  provide  written  notice  to  the  Director  of  the
 2        Illinois Department of  Revenue  of  (i)  the  assignor's
 3        intent  to transfer the tax credits to the assignee, (ii)
 4        the date the transfer is effective, (iii) the  assignee's
 5        name and address, (iv) the assignee's tax period, and (v)
 6        the  amount of tax credits to be transferred.  The number
 7        of tax periods during which the assignee may subsequently
 8        claim the tax credits shall not exceed  15  tax  periods,
 9        less  the  number  of tax periods the assignor previously
10        claimed the credits before the transfer occurred sell the
11        remediation site and the amount of the tax credit  to  be
12        transferred  as a portion of the sale.  In no event may a
13        credit be transferred to any taxpayer if the taxpayer  or
14        a   related   party  would  not  be  eligible  under  the
15        provisions of subsection (i).
16             (iv) (iii)  For purposes of this Section,  the  term
17        "site"  shall have the same meaning as under Section 58.2
18        of the Environmental Protection Act.
19        The  changes  made  to  this  subsection  (l)   by   this
20    amendatory  Act of the 92nd General Assembly apply to taxable
21    years ending on or after December 31, 2001.
22        (m)  Education expense credit.
23        Beginning with tax years ending after December 31,  1999,
24    a  taxpayer  who  is  the custodian of one or more qualifying
25    pupils shall be allowed a credit against the tax  imposed  by
26    subsections  (a)  and  (b)  of  this  Section  for  qualified
27    education  expenses  incurred  on  behalf  of  the qualifying
28    pupils.  The credit  shall  be  equal  to  25%  of  qualified
29    education  expenses,  but  in  no  event may the total credit
30    under this Section claimed by a family that is the  custodian
31    of  qualifying pupils exceed $500. In no event shall a credit
32    under this subsection reduce the taxpayer's  liability  under
33    this  Act  to  less than zero. This subsection is exempt from
34    the provisions of Section 250 of this Act.
 
                            -25-               LRB9202721SMdv
 1        For purposes of this subsection;
 2        "Qualifying  pupils"  means  individuals  who   (i)   are
 3    residents of the State of Illinois, (ii) are under the age of
 4    21  at  the  close  of  the school year for which a credit is
 5    sought, and (iii) during the school year for which  a  credit
 6    is  sought  were  full-time pupils enrolled in a kindergarten
 7    through twelfth grade education program  at  any  school,  as
 8    defined in this subsection.
 9        "Qualified  education  expense" means the amount incurred
10    on behalf of  a  qualifying  pupil  in  excess  of  $250  for
11    tuition,  book  fees, and lab fees at the school in which the
12    pupil is enrolled during the regular school year.
13        "School" means any  public  or  nonpublic  elementary  or
14    secondary school in Illinois that is in compliance with Title
15    VI  of  the  Civil Rights Act of 1964 and attendance at which
16    satisfies the requirements of  Section  26-1  of  the  School
17    Code,  except  that  nothing  shall be construed to require a
18    child to attend any particular public or nonpublic school  to
19    qualify for the credit under this Section.
20        "Custodian"  means, with respect to qualifying pupils, an
21    Illinois resident who is  a  parent,  the  parents,  a  legal
22    guardian, or the legal guardians of the qualifying pupils.
23    (Source:  P.A.  90-123,  eff.  7-21-97; 90-458, eff. 8-17-97;
24    90-605, eff. 6-30-98;  90-655,  eff.  7-30-98;  90-717,  eff.
25    8-7-98;  90-792, eff. 1-1-99; 91-9, eff. 1-1-00; 91-357, eff.
26    7-29-99; 91-643, eff. 8-20-99; 91-644, eff. 8-20-99;  91-860,
27    eff. 6-22-00; 91-913, eff. 1-1-01; revised 10-24-00.)

28        Section  25.  The Environmental Protection Act is amended
29    by changing  Section  58.14  and  adding  Section  58.13a  as
30    follows:

31        (415 ILCS 5/58.13a new)
32        Sec.  58.13a. Distressed Communities and Industries Grant
 
                            -26-               LRB9202721SMdv
 1    Fund.
 2        (a)  The Director  of  Commerce  and  Community  Affairs,
 3    subject  to  other  applicable provisions of this Title XVII,
 4    may issue a grant to any entity for the purpose of paying the
 5    allowable costs needed to cause an eligible project to occur,
 6    including, but not limited to, demolition, remediation,  site
 7    preparation remediation, or site investigation costs, subject
 8    to the following conditions:
 9             (1)  The  project otherwise qualifies as an eligible
10        project  in  accordance  with  Section   58.14   and   is
11        economically sound.
12             (2)  Twenty-five  percent of all grant funds will be
13        made  available  to  counties   with   populations   over
14        2,000,000 and the remaining grant funds will be disbursed
15        throughout the State.
16             (3)  The proposed recipient of the grant given under
17        this  Section is unable to finance the entire cost of the
18        project through ordinary financial channels.
19             (4)  When  completed,  the   eligible   project   is
20        projected  to involve an investment of at least an amount
21        (to be expressly specified by the Department) in  capital
22        improvements  to  be placed in service and will employ at
23        least  an  amount  (to  be  expressly  specified  by  the
24        Department) of new employees within the  State,  provided
25        that  the Department has determined that the project will
26        provide a substantial  economic  benefit  to  the  State.
27        This  projection  shall be made by the proposed recipient
28        and confirmed by the Department of Commerce and Community
29        Affairs.
30             (5)  The amount to be issued in a  grant  shall  not
31        exceed   $1,000,000   or  100%  of  the  allowable  cost,
32        whichever is less.  In no event, however, may  the  total
33        financial assistance provided under this Section, Section
34        58.14,  and  Section  201  of the Illinois Income Tax Act
 
                            -27-               LRB9202721SMdv
 1        exceed the allowable cost.
 2             (6)  Priority for grants issued under  this  Section
 3        shall  be  given  to  areas  with high levels of poverty,
 4        where the unemployment rate exceeds  the  State  average,
 5        where  an  enterprise  zone  exists, or where the area is
 6        otherwise economically depressed  as  determined  by  the
 7        Department of Commerce and Community Affairs.
 8        (b)  The determinations of the Department of Commerce and
 9    Community  Affairs under this Section shall be conclusive for
10    purposes of the validity of a grant agreement signed  by  the
11    Director of Commerce and Community Affairs.
12        (c)  Grants  issued  under  this Section shall be such as
13    the Department of Commerce and Community  Affairs  determines
14    to be appropriate and in furtherance of the purpose for which
15    the  grants  are  made.  The moneys used in making the grants
16    shall  be  disbursed  from  the  Distressed  Communities  and
17    Industries Grant Fund upon written order of the Department of
18    Commerce and Community Affairs.
19        (d)  The grants issued under this Section shall  be  used
20    for  the  purposes approved by the Department of Commerce and
21    Community Affairs.  In no event,  however,  shall  the  grant
22    money  be  used  to  hire  or pay additional employees of the
23    grant recipient.
24        (e)  The Department of Commerce and Community Affairs may
25    fix service charges for the making of a grant to  offset  its
26    costs  of  administering  the  program  and  processing grant
27    applications.  The charges shall be payable at such time  and
28    place  and in such amounts and manner as may be prescribed by
29    the Department.
30        (f)  In the exercise  of  the  sound  discretion  of  the
31    Department  of  Commerce  and  Community  Affairs,  the grant
32    described in this Section may be  terminated,  suspended,  or
33    revoked  if the grant recipient fails to continue to meet the
34    conditions set forth in  this  Section.   In  making  such  a
 
                            -28-               LRB9202721SMdv
 1    determination,  the  Department  of  Commerce  and  Community
 2    Affairs   shall   consider  the  severity  of  the  condition
 3    violation,  actions  taken  to  correct  the  violation,  the
 4    frequency  of  any  condition  violations,  and  whether  the
 5    actions exhibit a pattern of conduct by the  recipient.   The
 6    Department  shall  also  consider changes in general economic
 7    conditions  affecting  the  project.   The  Department  shall
 8    notify the Director  of  the  Agency  of  the  suspension  or
 9    revocation  of  the  grant.  In the event the grant recipient
10    fails to repay the grant,  the  Department  of  Commerce  and
11    Community  Affairs  shall  refer  the  matter to the Attorney
12    General to institute collection proceedings  as  appropriate.
13    In  any  event,  however,  the  Department  of  Commerce  and
14    Community Affairs may immediately file a lien on the property
15    that   is  the  subject  of  the  grant  in  accordance  with
16    applicable law.
17        (g)  There is hereby created  in  the  State  treasury  a
18    special  fund  to  be known as the Distressed Communities and
19    Industries Grant  Fund.  The  Fund  is  intended  to  provide
20    $10,000,000 annually in uncommitted funds for grants that are
21    to  be made under this Section. The Fund shall consist of all
22    moneys  that  may  be  appropriated  to  it  by  the  General
23    Assembly,  any  gifts,  contributions,  grants,  or  bequests
24    received from federal, private, or other sources, and  moneys
25    from  the  repayment  of any grants terminated, suspended, or
26    revoked under  this  Section.  Subsections  (b)  and  (c)  of
27    Section  5  of  the  State  Finance  Act  do not apply to the
28    Distressed Communities and Industries Grant Fund.
29             (A)  At least annually, the  State  Treasurer  shall
30        certify  the  amount  deposited  into  the  Fund  to  the
31        Department of Commerce and Community Affairs.
32             (B)  Any  portion of the Fund not immediately needed
33        for the purposes authorized  shall  be  invested  by  the
34        State  Treasurer as provided by the constitution and laws
 
                            -29-               LRB9202721SMdv
 1        of this State.  All income from the investments shall  be
 2        credited to the Fund.
 3        (h)  Within  6  months  after  the effective date of this
 4    amendatory Act of the 92nd General Assembly, the  Agency  and
 5    the  Department  of  Commerce  and  Community  Affairs  shall
 6    propose  rules  prescribing  procedures and standards for the
 7    administration of this Section.

 8        (415 ILCS 5/58.14)
 9        Sec. 58.14.  Environmental Remediation Tax Credit review.
10        (a)  Prior to applying for the Environmental  Remediation
11    Tax  Credit under Section 201 of the Illinois Income Tax Act,
12    Remediation Applicants shall first submit to  the  Agency  an
13    application for review of remediation costs.  The application
14    and  review process shall be conducted in accordance with the
15    requirements of this Section  and  the  rules  adopted  under
16    subsection  (g).   A  preliminary  review  of  the  estimated
17    remediation  costs  for development and implementation of the
18    Remedial Action Plan  may  be  obtained  in  accordance  with
19    subsection (d).
20        (b)  No application for review shall be submitted until a
21    No  Further  Remediation Letter has been issued by the Agency
22    and recorded in the chain of title for the site in accordance
23    with Section 58.10.  The Agency shall review the  application
24    to  determine  whether  the  costs  submitted are remediation
25    costs, and whether the costs incurred  are  reasonable.   The
26    application  shall be on forms prescribed and provided by the
27    Agency.  At a minimum,  the  application  shall  include  the
28    following:
29             (1)  information    identifying    the   Remediation
30        Applicant and the site for which the tax credit is  being
31        sought  and  the  date of acceptance of the site into the
32        Site Remediation Program;
33             (2)  a determination by the Department  of  Commerce
 
                            -30-               LRB9202721SMdv
 1        and  Community  Affairs  that remediation of the site for
 2        which the credit is being sought will  result  in  a  net
 3        economic benefit to the State of Illinois.  "Net economic
 4        benefit" shall be determined based on factors such as the
 5        number of jobs created, the number of jobs retained if it
 6        is demonstrated the jobs would otherwise be lost, capital
 7        investment,   capital   improvements,   the   number   of
 8        construction-related   jobs,  increased  sales,  material
 9        purchases, other increases  in  service  and  operational
10        expenditures,   and  other  factors  established  by  the
11        Department of Commerce and Community  Affairs.   Priority
12        shall be given to sites located in areas with high levels
13        of poverty, where the unemployment rate exceeds the State
14        average,  where  an  enterprise zone exists, or where the
15        area is otherwise economically depressed as determined by
16        the Department of Commerce and Community Affairs  a  copy
17        of  the  No  Further  Remediation  Letter  with  official
18        verification  that  the  letter  has been recorded in the
19        chain of title for the site and a demonstration that  the
20        site  for  which the application is submitted is the same
21        site as the one for  which  the  No  Further  Remediation
22        Letter is issued;
23             (3)  a   demonstration   that  the  release  of  the
24        regulated substances of concern that is being  remediated
25        under  the  Site Remediation Program was for which the No
26        Further Remediation Letter was issued were not caused  or
27        contributed to in any material respect by the Remediation
28        Applicant.  After  the  Pollution Control Board rules are
29        adopted pursuant to the Illinois Administrative Procedure
30        Act for the administration  and  enforcement  of  Section
31        58.9  of the Environmental Protection Act, determinations
32        as to credit availability shall be made  consistent  with
33        those rules;
34             (4)  an  itemization  and  documentation,  including
 
                            -31-               LRB9202721SMdv
 1        receipts, of the remediation costs incurred;
 2             (5)  a  demonstration  that  the  costs incurred are
 3        remediation costs as defined in this Act and its rules;
 4             (6)  a demonstration that the  costs  submitted  for
 5        review  were  incurred  by  the Remediation Applicant who
 6        received the No Further Remediation Letter;
 7             (7)  an application fee in the amount set  forth  in
 8        subsection   (e)  for  each  site  for  which  review  of
 9        remediation  costs  is  requested  and,  if   applicable,
10        certification   from   the  Department  of  Commerce  and
11        Community  Affairs  that  the  site  is  located  in   an
12        enterprise zone; and
13             (8)  any other information deemed appropriate by the
14        Agency.
15        (c)  Within  60  days  after  receipt by the Agency of an
16    application meeting the requirements of subsection  (b),  the
17    Agency  shall  issue  a  letter  to  the applicant approving,
18    disapproving, or modifying the remediation costs submitted in
19    the application.  If the remediation costs  are  approved  as
20    submitted,  the Agency's letter shall state the amount of the
21    remediation costs to  be  applied  toward  the  Environmental
22    Remediation  Tax Credit.  If an application is disapproved or
23    approved with modification of remediation costs, the Agency's
24    letter shall set forth the reasons  for  the  disapproval  or
25    modification  and  state the amount of the remediation costs,
26    if any, to be applied toward  the  Environmental  Remediation
27    Tax Credit.
28        If  a  preliminary  review  of  a  budget  plan  has been
29    obtained under subsection (d), the Remediation Applicant  may
30    submit,  with  the  application  and supporting documentation
31    under  subsection  (b),  a  copy  of   the   Agency's   final
32    determination  accompanied by a certification that the actual
33    remediation  costs   incurred   for   the   development   and
34    implementation  of  the  Remedial Action Plan are equal to or
 
                            -32-               LRB9202721SMdv
 1    less  than  the  costs  approved  in   the   Agency's   final
 2    determination on the budget plan.  The certification shall be
 3    signed  by the Remediation Applicant and notarized.  Based on
 4    that submission, the Agency shall not be required to  conduct
 5    further  review  of  the  costs  incurred for development and
 6    implementation of the Remedial Action Plan  and  may  approve
 7    costs as submitted.
 8        Within   35  days  after  receipt  of  an  Agency  letter
 9    disapproving or modifying  an  application  for  approval  of
10    remediation  costs,  the Remediation Applicant may appeal the
11    Agency's decision to the Board in the manner provided for the
12    review of permits in Section 40 of this Act.
13        (d)  (1) A Remediation Applicant may obtain a preliminary
14        review of estimated remediation costs for the development
15        and  implementation  of  the  Remedial  Action  Plan   by
16        submitting  a  budget plan along with the Remedial Action
17        Plan.  The budget  plan  shall  be  set  forth  on  forms
18        prescribed  and  provided by the Agency and shall include
19        but shall not be limited to line item  estimates  of  the
20        costs  associated with each line item (such as personnel,
21        equipment, and materials) that the Remediation  Applicant
22        anticipates  will  be  incurred  for  the development and
23        implementation of the Remedial Action Plan.   The  Agency
24        shall  review  the  budget  plan  along with the Remedial
25        Action Plan to  determine  whether  the  estimated  costs
26        submitted  are  remediation  costs  and whether the costs
27        estimated for the activities are reasonable.
28             (2)  If the Remedial Action Plan is amended  by  the
29        Remediation  Applicant  or  as a result of Agency action,
30        the  corresponding   budget   plan   shall   be   revised
31        accordingly and resubmitted for Agency review.
32             (3)  The  budget  plan  shall  be accompanied by the
33        applicable fee as set forth in subsection (e).
34             (4)  Submittal of a budget plan shall be  deemed  an
 
                            -33-               LRB9202721SMdv
 1        automatic  60-day  waiver  of  the  Remedial  Action Plan
 2        review deadlines set forth in this Section and its rules.
 3             (5)  Within the applicable  period  of  review,  the
 4        Agency  shall issue a letter to the Remediation Applicant
 5        approving,  disapproving,  or  modifying  the   estimated
 6        remediation  costs  submitted  in  the budget plan.  If a
 7        budget plan is disapproved or approved with  modification
 8        of estimated remediation costs, the Agency's letter shall
 9        set   forth   the   reasons   for   the   disapproval  or
10        modification.
11             (6)  Within 35  days  after  receipt  of  an  Agency
12        letter  disapproving  or  modifying  a  budget  plan, the
13        Remediation Applicant may appeal the Agency's decision to
14        the Board in  the  manner  provided  for  the  review  of
15        permits in Section 40 of this Act.
16        (e)  The  fees  for  reviews conducted under this Section
17    are in addition to any other  fees  or  payments  for  Agency
18    services  rendered  pursuant  to the Site Remediation Program
19    and shall be as follows:
20             (1)  The  fee  for  an  application  for  review  of
21        remediation costs shall be $1,000 for each site reviewed.
22             (2)  The fee for  the  review  of  the  budget  plan
23        submitted  under  subsection  (d)  shall be $500 for each
24        site reviewed.
25             (3)  In  the  case  of   a   Remediation   Applicant
26        submitting for review total remediation costs of $100,000
27        or  less for a site located within an enterprise zone (as
28        set forth in paragraph (i) of subsection (l)  of  Section
29        201  of  the  Illinois  Income  Tax  Act), the fee for an
30        application for review of remediation costs shall be $250
31        for each site reviewed. For those sites, there  shall  be
32        no fee for review of a budget plan under subsection (d).
33        The application fee shall be made payable to the State of
34    Illinois, for deposit into the Hazardous Waste Fund.
 
                            -34-               LRB9202721SMdv
 1        Pursuant  to appropriation, the Agency shall use the fees
 2    collected  under  this   subsection   for   development   and
 3    administration of the review program.
 4        (f)  The  Agency  shall  have the authority to enter into
 5    any contracts or agreements that may be  necessary  to  carry
 6    out its duties and responsibilities under this Section.
 7        (f-5)  The  Agency  may  immediately  file  a lien on the
 8    property that is the subject of the tax credit in  accordance
 9    with  applicable law if the recipient of the tax credit fails
10    to continue to meet the conditions set forth in this Section.
11    In making such a determination, the Agency shall consider the
12    severity of the condition violation, actions taken to correct
13    the violation, the frequency of any condition violations, and
14    whether the actions exhibit  a  pattern  of  conduct  by  the
15    recipient.   The  Director of the Agency shall provide notice
16    to the recipient  of  alleged  noncompliance  and  allow  the
17    recipient  a  hearing  under  the  provisions of the Illinois
18    Administrative Procedure Act.  If, after such notice and  any
19    hearing,  the  Agency determines that a noncompliance exists,
20    the Director of the  Agency  shall  notify  the  Director  of
21    Commerce and Community Affairs and the Director of Revenue of
22    the suspension or revocation of the tax credit.
23        (f-10)  For  eligible  projects, the Director of Commerce
24    and Community Affairs, with notice to the  Directors  of  the
25    Agency  and  Revenue,  and subject to the other provisions of
26    Section 201 of the Illinois Income Tax Act and this  Section,
27    may  not  create  a new enterprise zone but may decide that a
28    prospective  operator  of  a  facility  being  remedied   and
29    renovated  under this Section may receive the tax credits and
30    exemptions under  the  Economic  Development  for  a  Growing
31    Economy  Tax Credit Act and the Illinois Enterprise Zone Act.
32    The tax credits allowed under this subsection (f-10) shall be
33    used to offset the tax imposed by subsections (a) and (b)  of
34    Section  201 of the Illinois Income Tax Act.  For purposes of
 
                            -35-               LRB9202721SMdv
 1    this subsection (f-10):
 2             (1)  For receipt  of  the  tax  credit  for  new  or
 3        expanded   business   facilities   under   the   Economic
 4        Development  for a Growing Economy Tax Credit Act and the
 5        Illinois Enterprise Zone Act, the eligible  project  must
 6        create  at  least  10  new jobs or retain businesses that
 7        supply at  least  25  existing  jobs,  or  a  combination
 8        thereof.   For  purposes  of  this Section, the financial
 9        incentives described in the Economic  Development  for  a
10        Growing  Economy  Tax  Credit  Act  are  modified only as
11        follows:  the tax credit shall be $400 per  employee  per
12        year,  an  additional  $400  per  year  for each employee
13        exceeding the minimum employment thresholds of 10 and  25
14        jobs  for  new and existing businesses, respectively, and
15        an additional $400  per  year  for  each  person  who  is
16        unemployed  for  at  least  3 months immediately prior to
17        being employed at the new business facility.
18        (g)  Within 6 months after the  effective  date  of  this
19    amendatory  Act  of  1997,  the  Agency  shall  propose rules
20    prescribing procedures and standards for  its  administration
21    of  this  Section.   Within  6  months  after  receipt of the
22    Agency's proposed rules, the  Board  shall  adopt  on  second
23    notice,  pursuant  to  Sections 27 and 28 of this Act and the
24    Illinois  Administrative  Procedure  Act,  rules   that   are
25    consistent with this Section.  Prior to the effective date of
26    rules  adopted  under  this  Section,  the Agency may conduct
27    reviews of applications under this Section and the Agency  is
28    further  authorized to distribute guidance documents on costs
29    that are eligible or ineligible as remediation costs.
30        (h)  Within 6 months after the  effective  date  of  this
31    amendatory  Act  of the 92nd General Assembly, the Agency and
32    the  Department  of  Commerce  and  Community  Affairs  shall
33    propose rules prescribing procedures and  standards  for  the
34    administration  of this Section as changed by this amendatory
 
                            -36-               LRB9202721SMdv
 1    Act of the 92nd General Assembly.
 2        (i)  The changes relating to taxes made to  this  Section
 3    by  this amendatory Act of the 92nd General Assembly apply to
 4    taxable years ending on or after December 31, 2001.
 5    (Source: P.A. 90-123, eff. 7-21-97; 90-792, eff. 1-1-99.)

 6        Section 99.  Effective date.  This Act takes effect  upon
 7    becoming law.

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