92nd General Assembly
Summary of HB4077
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Short description: 
INC TAX-EDUCATION TAX CREDIT                                               

Synopsis of Bill as introduced:
        Amends the Illinois  Income  Tax  Act.  Creates  the  educational      
   improvement  tax  credit  program.  Provides  that, beginning with tax      
   years ending after December 31,  2002,  an  entity  authorized  to  do      
   business  in Illinois and subject to Illinois income taxes (a business      
   firm) is entitled to an income  tax  credit  for  contributions  to  a      
   qualified student assistance organization in the taxable year in which      
   the  contribution  is  made. Provides that the credit shall not exceed      
   75% of each dollar contributed during the taxable  year  (90%  if  the      
   business firm provides a written commitment to make the same amount of      
   contribution  for  2  consecutive  tax  years)  and caps the credit at      
   $100,000  annually  per  business  firm.  Defines  "qualified  student      
   assistance organization" as a non-profit entity  that  contributes  at      
   least  80%  of  its  annual  receipts  for  scholarships or to enhance      
   educational options for qualifying students. Defines "qualifying            
   student" as an Illinois resident below age 21 who is a student and who      
   lives in a household with a certain limited income. Provides that the       
   credit may not be carried forward or back. Provides that the                
   Department of Revenue must approve all credits and may not approve          
   credits in an aggregate amount above $50,000,000 each State fiscal          
   year. Requires the Department of Revenue to adopt rules and exempts         
   the credit from the sunset provisions. Effective immediately.               
          FISCAL NOTE (Department of Revenue)                                  
          It is difficult to estimate the fiscal impact of HB 4077 since,      
          in part, it would be dependent upon the amounts contributed by       
          businesses to a qualified student assistance organization.           
          HB 4077 does, however, propose to cap the credit at no more          
          than $50 million in any State fiscal year. While the bill caps       
          the amount of the credit at $50 million annually, the adminis-       
          trative expenses incurred by the Department to verify that a         
          student assistance organization qualifies would be significant.      
          In short, the Department would have to audit each organization       
          to which a donation is proposed and review all of the organi-        
          zation's documents related to expenditures and applications for      
          which scholarships were granted to determine whether 80% was         
          contributed to qualifying students for qualifying purposes.          
          STATE MANDATES NOTE (Illinois State Board of Education)              
          This bill imposes no mandates on local school districts. To          
          the extent that tax credits taken under this legislation reduce      
          State revenues, the money available for State financial assis-       
          tance to local schools will be reduced.                              
        HOUSE AMENDMENT NO. 1.                                                 
        Deletes everything after the enacting clause. Amends the Illinois      
   Income Tax  Act.  Creates  the  educational  improvement  tax  credit.      
   Contains a caption only.                                                    
Last action on Bill: SESSION SINE DIE

   Last action date: JAN-07-2003

           Location: House

 Amendments to Bill: AMENDMENTS ADOPTED: HOUSE -   1     SENATE -   0


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