SB0750sam001 96TH GENERAL ASSEMBLY

Sen. James T. Meeks

Filed: 3/5/2009

09600SB0750sam001 LRB096 09436 NHT 22252 a

AMENDMENT TO SENATE BILL 750

AMENDMENT NO. ______. Amend Senate Bill 750 by replacing everything after the enacting clause with the following:

"Section 5. The State Finance Act is amended by adding Sections 5.719, 5.720, 5.721, 6z-76, and 6z-77 as follows:

(30 ILCS 105/5.719 new)

Sec. 5.719. The Education Financial Award System Fund.

(30 ILCS 105/5.720 new)

Sec. 5.720. The Digital Learning Technology Grant Fund.

(30 ILCS 105/5.721 new)

Sec. 5.721. The STEM Education Center Grant Fund.

(30 ILCS 105/6z-76 new)

Sec. 6z-76. The Invest in Illinois Fund.

(a) The Invest in Illinois Fund is intended to benefit the people of the State of Illinois by creating a specific revenue source to fund capital programs for infrastructure that will support economic growth, education, transportation, tourism, and other capital needs generated by demographic changes (such as but not limited to the aging of the population) across the State.

(b) The Invest in Illinois Fund is created as a special fund in the State treasury. All interest earned on moneys in the Fund shall be deposited into the Fund. The Invest in Illinois Fund shall not be subject to sweeps, administrative charges, or chargebacks, such as but not limited to those authorized under Section 8h, or any other fiscal or budgetary maneuver that would in any way result in the transfer of any amounts from the Invest in Illinois Fund to any other fund of the State, or having any of those amounts used for any purpose other than funding the cost of issuance, interest, fees, principal payments, and other debt service on Invest in Illinois Bonds, as that term is defined in subsection (d) of this Section.

(c) Beginning in fiscal year 2010, the State Treasurer and the State Comptroller shall transfer $500,000,000 from the General Revenue Fund to the Invest in Illinois Fund. For Fiscal Year 2011 the State Treasurer and the State Comptroller shall transfer $1,000,000,000 from the General Revenue Fund to the Invest in Illinois Fund. For Fiscal Year 2012 the State Treasurer and the State Comptroller shall transfer $1,100,000,000 from the General Revenue Fund to the Invest in Illinois Fund, and for Fiscal Year 2013 and each Fiscal Year thereafter the State Comptroller and the State Treasurer shall transfer $1,200,000,000 from the General Revenue Fund to the Invest in Illinois Fund.

(d) "Invest in Illinois Bonds" means those bonds issued for the purposes enumerated in this Section, after receiving the recommendation of the Capital Strategy Board, as defined in this Section. The Capital Strategy Board (the "board") shall consist of 5 members, one appointed by the Governor, one appointed by the Speaker of the House, one appointed by the Minority Leader of the House, one appointed by the Senate President, and one appointed by the Minority Leader of the Senate. Each board member shall serve for a 4-year period, and shall have at least 5 years of relevant experience in public or private finance. The board shall recommend the issuance of Invest in Illinois Bonds to the General Assembly by a simple majority vote. No member of the board, nor any business in which a board member has an interest, nor any immediate familial relative, spouse, or in-law (father, mother, sister, brother, son, or daughter) of a board member, may have any financial interest in nor receive any remuneration (such as but not limited to a consulting, referral, legal, or banking fees) for any bond issued due to a recommendation of the board. The board shall gather information and hold public hearings regarding the need for capital facilities and infrastructure investments needed in Illinois for the acquisition, development, construction, reconstruction, maintenance, improvement, financing, architectural planning, and installation of capital facilities within the State, whether consisting of buildings, structures, vehicles for public transit, police or fire fighters, durable equipment, land, or interests in land, to be used for any of the following purposes: (i) transportation and transit, including but not limited to railroad, road, bridge, or airport construction and maintenance, public fleet acquisition, and associated building construction or maintenance; (ii) educational purposes for (A) State universities and colleges, (B) the Illinois Community College Board created by the Public Community College Act for grants to public community Colleges authorized under Sections 5-11 and 5-12 of the Public Community College Act, (C) local K-12 school districts for school building maintenance, renovation, and construction for all grades, including but not limited to pre-school; (iii) childcare, mental health, and public health facilities and facilities for the care of veterans and their spouses; (iv) correctional purposes at State prison and correctional centers; (v) open spaces, recreational and conservation purposes, environmental protection purposes, and protection of the land, air, or water; (vi) for use by the State, its departments, authorities, public corporations, commissions, and agencies; (vii) for grants by the Secretary of State as State Librarian for central library facilities authorized by Section 8 of the Illinois Library System Act, and for grants by the Capital Development Board to units of local government for public library facilities; and (viii) for capital facilities consisting of buildings, structures, roads, bridges, healthcare facilities, police and fire stations and equipment, other durable equipment, and land grants to counties and municipalities. The board shall recommend a capital investment plan for the issuance of Invest in Illinois Bonds covering the needs of the entire State, taking into account the status of existing infrastructure, demographic changes, regional needs, sprawl, economic development for distressed communities, educational priorities, public safety, environmental protection, minority participation, and such other matters as are relevant to devising a strategic and equitable approach to capital planning. Within 12 months after being appointed, the board shall make its initial recommendations to the General Assembly for bonds financed under this Act to be issued in a strategic fashion across Illinois. No such bonds may be issued, however, without approval by the requisite vote of the General Assembly, and concomitant authority for the issuance of the applicable general obligation bond amounts, under the relevant provisions of the General Obligation Bond Act.

(30 ILCS 105/6z-77 new)

Sec. 6z-77. The Higher Education Operating Assistance Fund.

(a) The Higher Education Operating Assistance Fund is created as a special fund in the State treasury. Moneys in the Fund may be used only for the purposes set forth in this Section. All interest earned on moneys in the Fund must be deposited into the Fund. The Higher Education Operating Assistance Fund shall not be subject to sweeps, administrative charges, or charge backs, such as but not limited to those authorized under Section 8h, or any other fiscal or budgetary maneuver that would in any way transfer any funds from the Higher Education Operating Assistance Fund into any other fund of the State.

(b) The General Assembly must transfer from the General Revenue Fund to the Higher Education Operating Assistance Fund, the following amounts: (i) in fiscal year 2010, $300,000,000.00; (ii) in each fiscal year after fiscal year 2010, the sum of the total amount appropriated to the Higher Education Operating Assistance Fund in the immediately preceding fiscal year, plus the amount equal to (1) the percentage increase in the Economic Cost Index for all Urban Consumers published by the federal Bureau of Labor Statistics for the then most recent, complete calendar year, multiplied by (2) the total amount appropriated to the Higher Education Operating Assistance Fund in the immediately preceding fiscal year.

(c) Subject to the conditions set forth in subsection (d), distributions from the Higher Education Operating Assistance Fund shall be as follows: (1) the General Assembly must appropriate 75% of all moneys in the Higher Education Operating Assistance Fund, including any balance from the prior year, to the Board of Higher Education for grants to State universities for their ordinary and contingent expenses; the grants under this item (1) must be distributed to each State university based upon each university's full time equivalent head count; and (2) the General Assembly must appropriate 25% of all moneys in the Higher Education Operating Assistance Fund, including any balance from the prior year, to the Illinois Community College Board for grants to community colleges for their ordinary and contingent expenses; the grants under this item (2) must be distributed to each community college based upon each community college's full time equivalent head count. For purposes of item (2), "full time equivalent head count" means the total number of undergraduate students enrolled in 12 or more semester hours or quarter hours of credit courses in any given semester or quarter.

(d) Distributions from the Higher Education Operating Assistance Fund shall not be used for any of the following: (1) executive management; executive level activities concerned with the overall management of, and long-range planning for, the entire university, including but not limited to activities such as policy formation and executive direction, the activities of any governing board, the chief executive officer, the senior executive officer, or legal activities conduced on behalf of the university; (2) financial management and operations, including but not limited to activities related to the day-to-day financial management and fiscal operations of the university and long-range financial planning and policy formulations; (3) general administrative and logistical services, including but not limited to general administrative operations and services of the university (with exception of financial operations and student records activities), such as administration of personnel programs, purchasing and maintenance of supplies and materials, management of facilities, and administrative computing support; (4) faculty and staff auxiliary services, including but not limited to non-academic related support services established primarily for faculty and staff, such as faculty lounges and cafeterias; (5) public relations and development, including but not limited to activities established to maintain relations with the local community, the university's alumni, governmental entities, and the public in general, as well as activities carried out to support institution-side fund raising and development efforts; (6) superintendence, including but not limited to activities necessary to carry out the duties of management and administration for all areas under the jurisdiction of the physical plant division of the university; (7) custodial, including but not limited to activities related to custodial services in building interiors; (8) grounds maintenance, including but not limited to operation and maintenance of campus landscape and grounds, which includes maintenance of roads and walkways, snow removal, maintenance of fences, retaining walls, and drainage ditches, and care of shrubs, trees, and grass; and (9) transportation, including but not limited to all charges related to the purchase, maintenance, and operation of motor vehicles, specifically for the use of the physical plant department.

(e) This amendatory Act of the 96th General Assembly constitutes an irrevocable and continuing appropriation (i) from the General Fund to the Higher Education Operating Assistance Fund and (ii) from the Higher Education Operating Assistance Fund to the Board of Higher Education and to the Illinois Community College Board in accordance with the provisions of this Section.

Section 10. The Illinois Income Tax Act is amended by changing Sections 201 and 208 and by adding Sections 202.5, 218, and 219 as follows:

(35 ILCS 5/201) (from Ch. 120, par. 2-201)

Sec. 201. Tax Imposed.

(a) In general. A tax measured by net income is hereby imposed on every individual, corporation, trust and estate for each taxable year ending after July 31, 1969 on the privilege of earning or receiving income in or as a resident of this State. Such tax shall be in addition to all other occupation or privilege taxes imposed by this State or by any municipal corporation or political subdivision thereof.

(b) Rates. The tax imposed by subsection (a) of this Section shall be determined as follows, except as adjusted by subsection (d-1):

(1) In the case of an individual, trust or estate, for taxable years ending prior to July 1, 1989, an amount equal to 2 1/2% of the taxpayer's net income for the taxable year.

(2) In the case of an individual, trust or estate, for taxable years beginning prior to July 1, 1989 and ending after June 30, 1989, an amount equal to the sum of (i) 2 1/2% of the taxpayer's net income for the period prior to July 1, 1989, as calculated under Section 202.3, and (ii) 3% of the taxpayer's net income for the period after June 30, 1989, as calculated under Section 202.3.

(3) In the case of an individual, trust or estate, for taxable years beginning after June 30, 1989 and ending before January 1, 2010, an amount equal to 3% of the taxpayer's net income for the taxable year.

(4) In the case of an individual, trust, or estate, for taxable years beginning prior to January 1, 2010 and ending after December 31, 2009, an amount equal to the sum of (i) 3% of the taxpayer's net income for the period prior to January 1, 2010, as calculated under Section 202.5, and (ii) 5% of the taxpayer's net income for the period after December 31, 2009, as calculated under Section 202.5. (Blank).

(5) In the case of an individual, trust ,or estate, for taxable years beginning on or after January 1, 2010, an amount equal to 5% of the taxpayer's net income for the taxable year. (Blank).

(6) In the case of a corporation, for taxable years ending prior to July 1, 1989, an amount equal to 4% of the taxpayer's net income for the taxable year.

(7) In the case of a corporation, for taxable years beginning prior to July 1, 1989 and ending after June 30, 1989, an amount equal to the sum of (i) 4% of the taxpayer's net income for the period prior to July 1, 1989, as calculated under Section 202.3, and (ii) 4.8% of the taxpayer's net income for the period after June 30, 1989, as calculated under Section 202.3.

(8) In the case of a corporation, for taxable years beginning after June 30, 1989 and ending before January 1, 2010, an amount equal to 4.8% of the taxpayer's net income for the taxable year.

(9) In the case of a corporation, for taxable years beginning prior to January 1, 2010 and ending after December 31, 2009, an amount equal to the sum of (i) 4.8% of the taxpayer's net income for the period prior to January 1, 2010, as calculated under Section 202.5, and (ii) 8% of the taxpayer's net income for the period after December 31, 2009, as calculated under Section 202.5.

(10) In the case of a corporation, for taxable years beginning on or after January 1, 2010, an amount equal to 8% of the taxpayer's net income for the taxable year.

(c) Personal Property Tax Replacement Income Tax. Beginning on July 1, 1979 and thereafter, in addition to such income tax, there is also hereby imposed the Personal Property Tax Replacement Income Tax measured by net income on every corporation (including Subchapter S corporations), partnership and trust, for each taxable year ending after June 30, 1979. Such taxes are imposed on the privilege of earning or receiving income in or as a resident of this State. The Personal Property Tax Replacement Income Tax shall be in addition to the income tax imposed by subsections (a) and (b) of this Section and in addition to all other occupation or privilege taxes imposed by this State or by any municipal corporation or political subdivision thereof.

(d) Additional Personal Property Tax Replacement Income Tax Rates. The personal property tax replacement income tax imposed by this subsection and subsection (c) of this Section in the case of a corporation, other than a Subchapter S corporation and except as adjusted by subsection (d-1), shall be an additional amount equal to 2.85% of such taxpayer's net income for the taxable year, except that beginning on January 1, 1981, and thereafter, the rate of 2.85% specified in this subsection shall be reduced to 2.5%, and in the case of a partnership, trust or a Subchapter S corporation shall be an additional amount equal to 1.5% of such taxpayer's net income for the taxable year.

(d-1) Rate reduction for certain foreign insurers. In the case of a foreign insurer, as defined by Section 35A-5 of the Illinois Insurance Code, whose state or country of domicile imposes on insurers domiciled in Illinois a retaliatory tax (excluding any insurer whose premiums from reinsurance assumed are 50% or more of its total insurance premiums as determined under paragraph (2) of subsection (b) of Section 304, except that for purposes of this determination premiums from reinsurance do not include premiums from inter-affiliate reinsurance arrangements), beginning with taxable years ending on or after December 31, 1999, the sum of the rates of tax imposed by subsections (b) and (d) shall be reduced (but not increased) to the rate at which the total amount of tax imposed under this Act, net of all credits allowed under this Act, shall equal (i) the total amount of tax that would be imposed on the foreign insurer's net income allocable to Illinois for the taxable year by such foreign insurer's state or country of domicile if that net income were subject to all income taxes and taxes measured by net income imposed by such foreign insurer's state or country of domicile, net of all credits allowed or (ii) a rate of zero if no such tax is imposed on such income by the foreign insurer's state of domicile. For the purposes of this subsection (d-1), an inter-affiliate includes a mutual insurer under common management.

(1) For the purposes of subsection (d-1), in no event shall the sum of the rates of tax imposed by subsections (b) and (d) be reduced below the rate at which the sum of:

(A) the total amount of tax imposed on such foreign insurer under this Act for a taxable year, net of all credits allowed under this Act, plus

(B) the privilege tax imposed by Section 409 of the Illinois Insurance Code, the fire insurance company tax imposed by Section 12 of the Fire Investigation Act, and the fire department taxes imposed under Section 11-10-1 of the Illinois Municipal Code,

equals 1.25% for taxable years ending prior to December 31, 2003, or 1.75% for taxable years ending on or after December 31, 2003, of the net taxable premiums written for the taxable year, as described by subsection (1) of Section 409 of the Illinois Insurance Code. This paragraph will in no event increase the rates imposed under subsections (b) and (d).

(2) Any reduction in the rates of tax imposed by this subsection shall be applied first against the rates imposed by subsection (b) and only after the tax imposed by subsection (a) net of all credits allowed under this Section other than the credit allowed under subsection (i) has been reduced to zero, against the rates imposed by subsection (d).

This subsection (d-1) is exempt from the provisions of Section 250.

(e) Investment credit. A taxpayer shall be allowed a credit against the Personal Property Tax Replacement Income Tax for investment in qualified property.

(1) A taxpayer shall be allowed a credit equal to .5% of the basis of qualified property placed in service during the taxable year, provided such property is placed in service on or after July 1, 1984. There shall be allowed an additional credit equal to .5% of the basis of qualified property placed in service during the taxable year, provided such property is placed in service on or after July 1, 1986, and the taxpayer's base employment within Illinois has increased by 1% or more over the preceding year as determined by the taxpayer's employment records filed with the Illinois Department of Employment Security. Taxpayers who are new to Illinois shall be deemed to have met the 1% growth in base employment for the first year in which they file employment records with the Illinois Department of Employment Security. The provisions added to this Section by Public Act 85-1200 (and restored by Public Act 87-895) shall be construed as declaratory of existing law and not as a new enactment. If, in any year, the increase in base employment within Illinois over the preceding year is less than 1%, the additional credit shall be limited to that percentage times a fraction, the numerator of which is .5% and the denominator of which is 1%, but shall not exceed .5%. The investment credit shall not be allowed to the extent that it would reduce a taxpayer's liability in any tax year below zero, nor may any credit for qualified property be allowed for any year other than the year in which the property was placed in service in Illinois. For tax years ending on or after December 31, 1987, and on or before December 31, 1988, the credit shall be allowed for the tax year in which the property is placed in service, or, if the amount of the credit exceeds the tax liability for that year, whether it exceeds the original liability or the liability as later amended, such excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit years if the taxpayer (i) makes investments which cause the creation of a minimum of 2,000 full-time equivalent jobs in Illinois, (ii) is located in an enterprise zone established pursuant to the Illinois Enterprise Zone Act and (iii) is certified by the Department of Commerce and Community Affairs (now Department of Commerce and Economic Opportunity) as complying with the requirements specified in clause (i) and (ii) by July 1, 1986. The Department of Commerce and Community Affairs (now Department of Commerce and Economic Opportunity) shall notify the Department of Revenue of all such certifications immediately. For tax years ending after December 31, 1988, the credit shall be allowed for the tax year in which the property is placed in service, or, if the amount of the credit exceeds the tax liability for that year, whether it exceeds the original liability or the liability as later amended, such excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit years. The credit shall be applied to the earliest year for which there is a liability. If there is credit from more than one tax year that is available to offset a liability, earlier credit shall be applied first.

(2) The term "qualified property" means property which:

(A) is tangible, whether new or used, including buildings and structural components of buildings and signs that are real property, but not including land or improvements to real property that are not a structural component of a building such as landscaping, sewer lines, local access roads, fencing, parking lots, and other appurtenances;

(B) is depreciable pursuant to Section 167 of the Internal Revenue Code, except that "3-year property" as defined in Section 168(c)(2)(A) of that Code is not eligible for the credit provided by this subsection (e);

(C) is acquired by purchase as defined in Section 179(d) of the Internal Revenue Code;

(D) is used in Illinois by a taxpayer who is primarily engaged in manufacturing, or in mining coal or fluorite, or in retailing, or was placed in service on or after July 1, 2006 in a River Edge Redevelopment Zone established pursuant to the River Edge Redevelopment Zone Act; and

(E) has not previously been used in Illinois in such a manner and by such a person as would qualify for the credit provided by this subsection (e) or subsection (f).

(3) For purposes of this subsection (e), "manufacturing" means the material staging and production of tangible personal property by procedures commonly regarded as manufacturing, processing, fabrication, or assembling which changes some existing material into new shapes, new qualities, or new combinations. For purposes of this subsection (e) the term "mining" shall have the same meaning as the term "mining" in Section 613(c) of the Internal Revenue Code. For purposes of this subsection (e), the term "retailing" means the sale of tangible personal property or services rendered in conjunction with the sale of tangible consumer goods or commodities.

(4) The basis of qualified property shall be the basis used to compute the depreciation deduction for federal income tax purposes.

(5) If the basis of the property for federal income tax depreciation purposes is increased after it has been placed in service in Illinois by the taxpayer, the amount of such increase shall be deemed property placed in service on the date of such increase in basis.

(6) The term "placed in service" shall have the same meaning as under Section 46 of the Internal Revenue Code.

(7) If during any taxable year, any property ceases to be qualified property in the hands of the taxpayer within 48 months after being placed in service, or the situs of any qualified property is moved outside Illinois within 48 months after being placed in service, the Personal Property Tax Replacement Income Tax for such taxable year shall be increased. Such increase shall be determined by (i) recomputing the investment credit which would have been allowed for the year in which credit for such property was originally allowed by eliminating such property from such computation and, (ii) subtracting such recomputed credit from the amount of credit previously allowed. For the purposes of this paragraph (7), a reduction of the basis of qualified property resulting from a redetermination of the purchase price shall be deemed a disposition of qualified property to the extent of such reduction.

(8) Unless the investment credit is extended by law, the basis of qualified property shall not include costs incurred after December 31, 2008, except for costs incurred pursuant to a binding contract entered into on or before December 31, 2008.

(9) Each taxable year ending before December 31, 2000, a partnership may elect to pass through to its partners the credits to which the partnership is entitled under this subsection (e) for the taxable year. A partner may use the credit allocated to him or her under this paragraph only against the tax imposed in subsections (c) and (d) of this Section. If the partnership makes that election, those credits shall be allocated among the partners in the partnership in accordance with the rules set forth in Section 704(b) of the Internal Revenue Code, and the rules promulgated under that Section, and the allocated amount of the credits shall be allowed to the partners for that taxable year. The partnership shall make this election on its Personal Property Tax Replacement Income Tax return for that taxable year. The election to pass through the credits shall be irrevocable.

For taxable years ending on or after December 31, 2000, a partner that qualifies its partnership for a subtraction under subparagraph (I) of paragraph (2) of subsection (d) of Section 203 or a shareholder that qualifies a Subchapter S corporation for a subtraction under subparagraph (S) of paragraph (2) of subsection (b) of Section 203 shall be allowed a credit under this subsection (e) equal to its share of the credit earned under this subsection (e) during the taxable year by the partnership or Subchapter S corporation, determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code. This paragraph is exempt from the provisions of Section 250.

(f) Investment credit; Enterprise Zone; River Edge Redevelopment Zone.

(1) A taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for investment in qualified property which is placed in service in an Enterprise Zone created pursuant to the Illinois Enterprise Zone Act or, for property placed in service on or after July 1, 2006, a River Edge Redevelopment Zone established pursuant to the River Edge Redevelopment Zone Act. For partners, shareholders of Subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there shall be allowed a credit under this subsection (f) to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code. The credit shall be .5% of the basis for such property. The credit shall be available only in the taxable year in which the property is placed in service in the Enterprise Zone or River Edge Redevelopment Zone and shall not be allowed to the extent that it would reduce a taxpayer's liability for the tax imposed by subsections (a) and (b) of this Section to below zero. For tax years ending on or after December 31, 1985, the credit shall be allowed for the tax year in which the property is placed in service, or, if the amount of the credit exceeds the tax liability for that year, whether it exceeds the original liability or the liability as later amended, such excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year. The credit shall be applied to the earliest year for which there is a liability. If there is credit from more than one tax year that is available to offset a liability, the credit accruing first in time shall be applied first.

(2) The term qualified property means property which:

(A) is tangible, whether new or used, including buildings and structural components of buildings;

(B) is depreciable pursuant to Section 167 of the Internal Revenue Code, except that "3-year property" as defined in Section 168(c)(2)(A) of that Code is not eligible for the credit provided by this subsection (f);

(C) is acquired by purchase as defined in Section 179(d) of the Internal Revenue Code;

(D) is used in the Enterprise Zone or River Edge Redevelopment Zone by the taxpayer; and

(E) has not been previously used in Illinois in such a manner and by such a person as would qualify for the credit provided by this subsection (f) or subsection (e).

(3) The basis of qualified property shall be the basis used to compute the depreciation deduction for federal income tax purposes.

(4) If the basis of the property for federal income tax depreciation purposes is increased after it has been placed in service in the Enterprise Zone or River Edge Redevelopment Zone by the taxpayer, the amount of such increase shall be deemed property placed in service on the date of such increase in basis.

(5) The term "placed in service" shall have the same meaning as under Section 46 of the Internal Revenue Code.

(6) If during any taxable year, any property ceases to be qualified property in the hands of the taxpayer within 48 months after being placed in service, or the situs of any qualified property is moved outside the Enterprise Zone or River Edge Redevelopment Zone within 48 months after being placed in service, the tax imposed under subsections (a) and (b) of this Section for such taxable year shall be increased. Such increase shall be determined by (i) recomputing the investment credit which would have been allowed for the year in which credit for such property was originally allowed by eliminating such property from such computation, and (ii) subtracting such recomputed credit from the amount of credit previously allowed. For the purposes of this paragraph (6), a reduction of the basis of qualified property resulting from a redetermination of the purchase price shall be deemed a disposition of qualified property to the extent of such reduction.

(7) There shall be allowed an additional credit equal to 0.5% of the basis of qualified property placed in service during the taxable year in a River Edge Redevelopment Zone, provided such property is placed in service on or after July 1, 2006, and the taxpayer's base employment within Illinois has increased by 1% or more over the preceding year as determined by the taxpayer's employment records filed with the Illinois Department of Employment Security. Taxpayers who are new to Illinois shall be deemed to have met the 1% growth in base employment for the first year in which they file employment records with the Illinois Department of Employment Security. If, in any year, the increase in base employment within Illinois over the preceding year is less than 1%, the additional credit shall be limited to that percentage times a fraction, the numerator of which is 0.5% and the denominator of which is 1%, but shall not exceed 0.5%.

(g) Jobs Tax Credit; Enterprise Zone, River Edge Redevelopment Zone, and Foreign Trade Zone or Sub-Zone.

(1) A taxpayer conducting a trade or business in an enterprise zone or a High Impact Business designated by the Department of Commerce and Economic Opportunity or for taxable years ending on or after December 31, 2006, in a River Edge Redevelopment Zone conducting a trade or business in a federally designated Foreign Trade Zone or Sub-Zone shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section in the amount of $500 per eligible employee hired to work in the zone during the taxable year.

(2) To qualify for the credit:

(A) the taxpayer must hire 5 or more eligible employees to work in an enterprise zone, River Edge Redevelopment Zone, or federally designated Foreign Trade Zone or Sub-Zone during the taxable year;

(B) the taxpayer's total employment within the enterprise zone, River Edge Redevelopment Zone, or federally designated Foreign Trade Zone or Sub-Zone must increase by 5 or more full-time employees beyond the total employed in that zone at the end of the previous tax year for which a jobs tax credit under this Section was taken, or beyond the total employed by the taxpayer as of December 31, 1985, whichever is later; and

(C) the eligible employees must be employed 180 consecutive days in order to be deemed hired for purposes of this subsection.

(3) An "eligible employee" means an employee who is:

(A) Certified by the Department of Commerce and Economic Opportunity as "eligible for services" pursuant to regulations promulgated in accordance with Title II of the Job Training Partnership Act, Training Services for the Disadvantaged or Title III of the Job Training Partnership Act, Employment and Training Assistance for Dislocated Workers Program.

(B) Hired after the enterprise zone, River Edge Redevelopment Zone, or federally designated Foreign Trade Zone or Sub-Zone was designated or the trade or business was located in that zone, whichever is later.

(C) Employed in the enterprise zone, River Edge Redevelopment Zone, or Foreign Trade Zone or Sub-Zone. An employee is employed in an enterprise zone or federally designated Foreign Trade Zone or Sub-Zone if his services are rendered there or it is the base of operations for the services performed.

(D) A full-time employee working 30 or more hours per week.

(4) For tax years ending on or after December 31, 1985 and prior to December 31, 1988, the credit shall be allowed for the tax year in which the eligible employees are hired. For tax years ending on or after December 31, 1988, the credit shall be allowed for the tax year immediately following the tax year in which the eligible employees are hired. If the amount of the credit exceeds the tax liability for that year, whether it exceeds the original liability or the liability as later amended, such excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year. The credit shall be applied to the earliest year for which there is a liability. If there is credit from more than one tax year that is available to offset a liability, earlier credit shall be applied first.

(5) The Department of Revenue shall promulgate such rules and regulations as may be deemed necessary to carry out the purposes of this subsection (g).

(6) The credit shall be available for eligible employees hired on or after January 1, 1986.

(h) Investment credit; High Impact Business.

(1) Subject to subsections (b) and (b-5) of Section 5.5 of the Illinois Enterprise Zone Act, a taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for investment in qualified property which is placed in service by a Department of Commerce and Economic Opportunity designated High Impact Business. The credit shall be .5% of the basis for such property. The credit shall not be available (i) until the minimum investments in qualified property set forth in subdivision (a)(3)(A) of Section 5.5 of the Illinois Enterprise Zone Act have been satisfied or (ii) until the time authorized in subsection (b-5) of the Illinois Enterprise Zone Act for entities designated as High Impact Businesses under subdivisions (a)(3)(B), (a)(3)(C), and (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone Act, and shall not be allowed to the extent that it would reduce a taxpayer's liability for the tax imposed by subsections (a) and (b) of this Section to below zero. The credit applicable to such investments shall be taken in the taxable year in which such investments have been completed. The credit for additional investments beyond the minimum investment by a designated high impact business authorized under subdivision (a)(3)(A) of Section 5.5 of the Illinois Enterprise Zone Act shall be available only in the taxable year in which the property is placed in service and shall not be allowed to the extent that it would reduce a taxpayer's liability for the tax imposed by subsections (a) and (b) of this Section to below zero. For tax years ending on or after December 31, 1987, the credit shall be allowed for the tax year in which the property is placed in service, or, if the amount of the credit exceeds the tax liability for that year, whether it exceeds the original liability or the liability as later amended, such excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year. The credit shall be applied to the earliest year for which there is a liability. If there is credit from more than one tax year that is available to offset a liability, the credit accruing first in time shall be applied first.

Changes made in this subdivision (h)(1) by Public Act 88-670 restore changes made by Public Act 85-1182 and reflect existing law.

(2) The term qualified property means property which:

(A) is tangible, whether new or used, including buildings and structural components of buildings;

(B) is depreciable pursuant to Section 167 of the Internal Revenue Code, except that "3-year property" as defined in Section 168(c)(2)(A) of that Code is not eligible for the credit provided by this subsection (h);

(C) is acquired by purchase as defined in Section 179(d) of the Internal Revenue Code; and

(D) is not eligible for the Enterprise Zone Investment Credit provided by subsection (f) of this Section.

(3) The basis of qualified property shall be the basis used to compute the depreciation deduction for federal income tax purposes.

(4) If the basis of the property for federal income tax depreciation purposes is increased after it has been placed in service in a federally designated Foreign Trade Zone or Sub-Zone located in Illinois by the taxpayer, the amount of such increase shall be deemed property placed in service on the date of such increase in basis.

(5) The term "placed in service" shall have the same meaning as under Section 46 of the Internal Revenue Code.

(6) If during any taxable year ending on or before December 31, 1996, any property ceases to be qualified property in the hands of the taxpayer within 48 months after being placed in service, or the situs of any qualified property is moved outside Illinois within 48 months after being placed in service, the tax imposed under subsections (a) and (b) of this Section for such taxable year shall be increased. Such increase shall be determined by (i) recomputing the investment credit which would have been allowed for the year in which credit for such property was originally allowed by eliminating such property from such computation, and (ii) subtracting such recomputed credit from the amount of credit previously allowed. For the purposes of this paragraph (6), a reduction of the basis of qualified property resulting from a redetermination of the purchase price shall be deemed a disposition of qualified property to the extent of such reduction.

(7) Beginning with tax years ending after December 31, 1996, if a taxpayer qualifies for the credit under this subsection (h) and thereby is granted a tax abatement and the taxpayer relocates its entire facility in violation of the explicit terms and length of the contract under Section 18-183 of the Property Tax Code, the tax imposed under subsections (a) and (b) of this Section shall be increased for the taxable year in which the taxpayer relocated its facility by an amount equal to the amount of credit received by the taxpayer under this subsection (h).

(i) Credit for Personal Property Tax Replacement Income Tax. For tax years ending prior to December 31, 2003, a credit shall be allowed against the tax imposed by subsections (a) and (b) of this Section for the tax imposed by subsections (c) and (d) of this Section. This credit shall be computed by multiplying the tax imposed by subsections (c) and (d) of this Section by a fraction, the numerator of which is base income allocable to Illinois and the denominator of which is Illinois base income, and further multiplying the product by the tax rate imposed by subsections (a) and (b) of this Section.

Any credit earned on or after December 31, 1986 under this subsection which is unused in the year the credit is computed because it exceeds the tax liability imposed by subsections (a) and (b) for that year (whether it exceeds the original liability or the liability as later amended) may be carried forward and applied to the tax liability imposed by subsections (a) and (b) of the 5 taxable years following the excess credit year, provided that no credit may be carried forward to any year ending on or after December 31, 2003. This credit shall be applied first to the earliest year for which there is a liability. If there is a credit under this subsection from more than one tax year that is available to offset a liability the earliest credit arising under this subsection shall be applied first.

If, during any taxable year ending on or after December 31, 1986, the tax imposed by subsections (c) and (d) of this Section for which a taxpayer has claimed a credit under this subsection (i) is reduced, the amount of credit for such tax shall also be reduced. Such reduction shall be determined by recomputing the credit to take into account the reduced tax imposed by subsections (c) and (d). If any portion of the reduced amount of credit has been carried to a different taxable year, an amended return shall be filed for such taxable year to reduce the amount of credit claimed.

(j) Training expense credit. Beginning with tax years ending on or after December 31, 1986 and prior to December 31, 2003, a taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) under this Section for all amounts paid or accrued, on behalf of all persons employed by the taxpayer in Illinois or Illinois residents employed outside of Illinois by a taxpayer, for educational or vocational training in semi-technical or technical fields or semi-skilled or skilled fields, which were deducted from gross income in the computation of taxable income. The credit against the tax imposed by subsections (a) and (b) shall be 1.6% of such training expenses. For partners, shareholders of subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there shall be allowed a credit under this subsection (j) to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and subchapter S of the Internal Revenue Code.

Any credit allowed under this subsection which is unused in the year the credit is earned may be carried forward to each of the 5 taxable years following the year for which the credit is first computed until it is used. This credit shall be applied first to the earliest year for which there is a liability. If there is a credit under this subsection from more than one tax year that is available to offset a liability the earliest credit arising under this subsection shall be applied first. No carryforward credit may be claimed in any tax year ending on or after December 31, 2003.

(k) Research and development credit.

For tax years ending after July 1, 1990 and prior to December 31, 2003, and beginning again for tax years ending on or after December 31, 2004, a taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for increasing research activities in this State. The credit allowed against the tax imposed by subsections (a) and (b) shall be equal to 6 1/2% of the qualifying expenditures for increasing research activities in this State. For partners, shareholders of subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there shall be allowed a credit under this subsection to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and subchapter S of the Internal Revenue Code.

For purposes of this subsection, "qualifying expenditures" means the qualifying expenditures as defined for the federal credit for increasing research activities which would be allowable under Section 41 of the Internal Revenue Code and which are conducted in this State, "qualifying expenditures for increasing research activities in this State" means the excess of qualifying expenditures for the taxable year in which incurred over qualifying expenditures for the base period, "qualifying expenditures for the base period" means the average of the qualifying expenditures for each year in the base period, and "base period" means the 3 taxable years immediately preceding the taxable year for which the determination is being made.

Any credit in excess of the tax liability for the taxable year may be carried forward. A taxpayer may elect to have the unused credit shown on its final completed return carried over as a credit against the tax liability for the following 5 taxable years or until it has been fully used, whichever occurs first; provided that no credit earned in a tax year ending prior to December 31, 2003 may be carried forward to any year ending on or after December 31, 2003.

If an unused credit is carried forward to a given year from 2 or more earlier years, that credit arising in the earliest year will be applied first against the tax liability for the given year. If a tax liability for the given year still remains, the credit from the next earliest year will then be applied, and so on, until all credits have been used or no tax liability for the given year remains. Any remaining unused credit or credits then will be carried forward to the next following year in which a tax liability is incurred, except that no credit can be carried forward to a year which is more than 5 years after the year in which the expense for which the credit is given was incurred.

No inference shall be drawn from this amendatory Act of the 91st General Assembly in construing this Section for taxable years beginning before January 1, 1999.

(l) Environmental Remediation Tax Credit.

(i) For tax years ending after December 31, 1997 and on or before December 31, 2001, a taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for certain amounts paid for unreimbursed eligible remediation costs, as specified in this subsection. For purposes of this Section, "unreimbursed eligible remediation costs" means costs approved by the Illinois Environmental Protection Agency ("Agency") under Section 58.14 of the Environmental Protection Act that were paid in performing environmental remediation at a site for which a No Further Remediation Letter was issued by the Agency and recorded under Section 58.10 of the Environmental Protection Act. The credit must be claimed for the taxable year in which Agency approval of the eligible remediation costs is granted. The credit is not available to any taxpayer if the taxpayer or any related party caused or contributed to, in any material respect, a release of regulated substances on, in, or under the site that was identified and addressed by the remedial action pursuant to the Site Remediation Program of the Environmental Protection Act. After the Pollution Control Board rules are adopted pursuant to the Illinois Administrative Procedure Act for the administration and enforcement of Section 58.9 of the Environmental Protection Act, determinations as to credit availability for purposes of this Section shall be made consistent with those rules. For purposes of this Section, "taxpayer" includes a person whose tax attributes the taxpayer has succeeded to under Section 381 of the Internal Revenue Code and "related party" includes the persons disallowed a deduction for losses by paragraphs (b), (c), and (f)(1) of Section 267 of the Internal Revenue Code by virtue of being a related taxpayer, as well as any of its partners. The credit allowed against the tax imposed by subsections (a) and (b) shall be equal to 25% of the unreimbursed eligible remediation costs in excess of $100,000 per site, except that the $100,000 threshold shall not apply to any site contained in an enterprise zone as determined by the Department of Commerce and Community Affairs (now Department of Commerce and Economic Opportunity). The total credit allowed shall not exceed $40,000 per year with a maximum total of $150,000 per site. For partners and shareholders of subchapter S corporations, there shall be allowed a credit under this subsection to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and subchapter S of the Internal Revenue Code.

(ii) A credit allowed under this subsection that is unused in the year the credit is earned may be carried forward to each of the 5 taxable years following the year for which the credit is first earned until it is used. The term "unused credit" does not include any amounts of unreimbursed eligible remediation costs in excess of the maximum credit per site authorized under paragraph (i). This credit shall be applied first to the earliest year for which there is a liability. If there is a credit under this subsection from more than one tax year that is available to offset a liability, the earliest credit arising under this subsection shall be applied first. A credit allowed under this subsection may be sold to a buyer as part of a sale of all or part of the remediation site for which the credit was granted. The purchaser of a remediation site and the tax credit shall succeed to the unused credit and remaining carry-forward period of the seller. To perfect the transfer, the assignor shall record the transfer in the chain of title for the site and provide written notice to the Director of the Illinois Department of Revenue of the assignor's intent to sell the remediation site and the amount of the tax credit to be transferred as a portion of the sale. In no event may a credit be transferred to any taxpayer if the taxpayer or a related party would not be eligible under the provisions of subsection (i).

(iii) For purposes of this Section, the term "site" shall have the same meaning as under Section 58.2 of the Environmental Protection Act.

(m) Education expense credit. Beginning with tax years ending after December 31, 1999, a taxpayer who is the custodian of one or more qualifying pupils shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for qualified education expenses incurred on behalf of the qualifying pupils. The credit shall be equal to 25% of qualified education expenses, but in no event may the total credit under this subsection claimed by a family that is the custodian of qualifying pupils exceed $500. In no event shall a credit under this subsection reduce the taxpayer's liability under this Act to less than zero. This subsection is exempt from the provisions of Section 250 of this Act.

For purposes of this subsection:

"Qualifying pupils" means individuals who (i) are residents of the State of Illinois, (ii) are under the age of 21 at the close of the school year for which a credit is sought, and (iii) during the school year for which a credit is sought were full-time pupils enrolled in a kindergarten through twelfth grade education program at any school, as defined in this subsection.

"Qualified education expense" means the amount incurred on behalf of a qualifying pupil in excess of $250 for tuition, book fees, and lab fees at the school in which the pupil is enrolled during the regular school year.

"School" means any public or nonpublic elementary or secondary school in Illinois that is in compliance with Title VI of the Civil Rights Act of 1964 and attendance at which satisfies the requirements of Section 26-1 of the School Code, except that nothing shall be construed to require a child to attend any particular public or nonpublic school to qualify for the credit under this Section.

"Custodian" means, with respect to qualifying pupils, an Illinois resident who is a parent, the parents, a legal guardian, or the legal guardians of the qualifying pupils.

(n) River Edge Redevelopment Zone site remediation tax credit.

(i) For tax years ending on or after December 31, 2006, a taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for certain amounts paid for unreimbursed eligible remediation costs, as specified in this subsection. For purposes of this Section, "unreimbursed eligible remediation costs" means costs approved by the Illinois Environmental Protection Agency ("Agency") under Section 58.14a of the Environmental Protection Act that were paid in performing environmental remediation at a site within a River Edge Redevelopment Zone for which a No Further Remediation Letter was issued by the Agency and recorded under Section 58.10 of the Environmental Protection Act. The credit must be claimed for the taxable year in which Agency approval of the eligible remediation costs is granted. The credit is not available to any taxpayer if the taxpayer or any related party caused or contributed to, in any material respect, a release of regulated substances on, in, or under the site that was identified and addressed by the remedial action pursuant to the Site Remediation Program of the Environmental Protection Act. Determinations as to credit availability for purposes of this Section shall be made consistent with rules adopted by the Pollution Control Board pursuant to the Illinois Administrative Procedure Act for the administration and enforcement of Section 58.9 of the Environmental Protection Act. For purposes of this Section, "taxpayer" includes a person whose tax attributes the taxpayer has succeeded to under Section 381 of the Internal Revenue Code and "related party" includes the persons disallowed a deduction for losses by paragraphs (b), (c), and (f)(1) of Section 267 of the Internal Revenue Code by virtue of being a related taxpayer, as well as any of its partners. The credit allowed against the tax imposed by subsections (a) and (b) shall be equal to 25% of the unreimbursed eligible remediation costs in excess of $100,000 per site.

(ii) A credit allowed under this subsection that is unused in the year the credit is earned may be carried forward to each of the 5 taxable years following the year for which the credit is first earned until it is used. This credit shall be applied first to the earliest year for which there is a liability. If there is a credit under this subsection from more than one tax year that is available to offset a liability, the earliest credit arising under this subsection shall be applied first. A credit allowed under this subsection may be sold to a buyer as part of a sale of all or part of the remediation site for which the credit was granted. The purchaser of a remediation site and the tax credit shall succeed to the unused credit and remaining carry-forward period of the seller. To perfect the transfer, the assignor shall record the transfer in the chain of title for the site and provide written notice to the Director of the Illinois Department of Revenue of the assignor's intent to sell the remediation site and the amount of the tax credit to be transferred as a portion of the sale. In no event may a credit be transferred to any taxpayer if the taxpayer or a related party would not be eligible under the provisions of subsection (i).

(iii) For purposes of this Section, the term "site" shall have the same meaning as under Section 58.2 of the Environmental Protection Act.

(iv) This subsection is exempt from the provisions of Section 250.

(Source: P.A. 94-1021, eff. 7-12-06; 95-454, eff. 8-27-07.)

(35 ILCS 5/202.5 new)

Sec. 202.5. Net income attributable to the period prior to January 1, 2010 and net income attributable to the period after December 31, 2009.

(a) In general. With respect to the taxable year of a taxpayer beginning prior to January 1, 2010 and ending after December 31, 2009, net income for the period after December 31, 2009 is that amount that bears the same ratio to the taxpayer's net income for the entire taxable year as the number of days in that year after December 31, 2009 bears to the total number of days in that year, and the net income for the period prior to January 1, 2010 is that amount that bears the same ratio to the taxpayer's net income for the entire taxable year as the number of days in that year prior to January 1, 2010 bears to the total number of days in that year.

(b) Election to attribute income and deduction items specifically to the respective portions of a taxable year prior to January 1, 2010 and after December 31, 2009. In the case of a taxpayer with a taxable year beginning prior to January 1, 2010 and ending after December 31, 2009, the taxpayer may elect, instead of the procedure established in subsection (a) of this Section, to determine net income on a specific accounting basis for the 2 portions of his or her taxable year:

(i) from the beginning of the taxable year through December 31, 2009; and

(ii) from January 1, 2010 through the end of the taxable year.

If the taxpayer elects specific accounting under this subsection, there shall be taken into account in computing base income for each of the 2 portions of the taxable year only those items earned, received, paid, incurred or accrued in each such period. The standard exemption provided by Section 204 must be divided between the respective periods in amounts that bear the same ratio to the total exemption allowable under Section 204 (determined without regard to this Section) as the total number of days in each such period bears to the total number of days in the taxable year. The election provided by this subsection must be made in form and manner that the Department requires by rule, but must be made no later than the due date (including any extensions thereof) for the filing of the return for the taxable year, and is irrevocable.

(35 ILCS 5/208) (from Ch. 120, par. 2-208)

Sec. 208. Tax credit for residential real property taxes. Beginning with tax years ending on or after December 31, 1991 and before January 1, 2010, every individual taxpayer shall be entitled to a tax credit equal to 5% of real property taxes paid by such taxpayer during the taxable year on the principal residence of the taxpayer. In the case of multi-unit or multi-use structures and farm dwellings, the taxes on the taxpayer's principal residence shall be that portion of the total taxes which is attributable to such principal residence.

For tax years beginning on January 1, 2010 and thereafter, every individual, trust, estate, and corporate taxpayer shall be entitled to a tax credit equal to 10% of real property taxes paid by the taxpayer during the taxable year on real property situated within the State. In the case of multi-unit or multi-use structures, the taxes on the taxpayer's principal residence shall be that portion of the total taxes that is attributable to the principal residence. The credit under this Section may not be carried forward or back. If the amount of the credit exceeds the income tax liability for the applicable tax year, then the excess credit must be refunded to the taxpayer. However, a refund under this Section may not exceed $1,000. This Section is exempt from the provisions of Section 250 of this Act.

(Source: P.A. 87-17.)

(35 ILCS 5/218 new)

Sec. 218. Family Tax Credit.

(a) For taxable years beginning on or after January 1, 2010, each individual taxpayer filing single or as a married person filing separately that reports total annual income of less than $27,652 (the "eligibility cap for single and married filing separately") or is a married couple filing jointly or an individual filing as head of household that reports total annual income of less than $55,304 (the "eligibility cap for married filing jointly and head of household"), is entitled to a credit against the tax imposed under subsections (a) and (b) of Section 201 of this Act for each dependent and personal exemption he or she is entitled to claim on his or her federal return under Section 151 of the Internal Revenue Code of 1986. The credit is known as the "Family Tax Credit" and shall be in those amounts per personal exemption and dependent that are identified in subsection (b) of this Section. The Family Tax Credit may be claimed only upon proper filing of an Illinois income tax return by an eligible taxpayer. The eligibility caps shall increase for each tax year beginning after December 31, 2010, by an amount equal to the percentage increase, if any, in the Consumer Price Index published by the U.S. Bureau of Labor Statistics for the immediately preceding complete calendar year, multiplied by the eligibility caps for that immediately preceding tax year.

(b) The amount of the credit is determined as follows:

(1) for a single taxpayer with a total annual income of:

(A) less than $17,136, the credit is $50;

(B) $17,136 or more but less than $19,419, the credit is $65;

(C) $19,420 or more but less than $19,420, the credit is $125;

(D) $19,420 or more but less than $21,705, the credit is $185; or

(E) $21,705 or more but less than $27,652, the credit is $248;

(2) for married taxpayers filing separately with a total annual income of:

(A) less than $11,424, the credit is $50;

(B) $11,424 or more but less than $14,280, the credit is $65;

(C) $14,280 or more but less than $17,136, the credit is $125;

(D) $17,136 or more but less than $20,563, the credit is $185; and

(E) $20,563 or more but less than $27,652, the credit is $248;

(3) for married taxpayers filing jointly with a total annual income of:

(A) less than $22,848, the credit is $50;

(B) $22,848 or more but less than $28,560, the credit is $65;

(C) $28,560 or more but less than $34,272, the credit is $125;

(D) $34,272 or more but less than $41,126, the credit is $185; and

(E) $41,126 or more but less than $55,304, the credit is $248; and

(4) for a taxpayer who is a head of household with a total annual income of:

(A) less than $22,848, the credit is $50;

(B) $22,848 or more but less than $28,560, the credit is $65;

(C) $28,560 or more but less than $34,272, the credit is $125;

(D) $34,272 or more but less than $41,126, the credit is $185; and

(E) $41,126 or more but less than $55,304, the credit is $248.

The dollar range of total annual income identified in the respective filing statuses and the credit per dependent/personal exemption amounts associated therewith, shall each increase in each tax year beginning after December 31, 2010, by an amount equal to the applicable percentage increase, if any, in the Consumer Price Index for the immediately preceding complete calendar year, multiplied by the applicable total annual income range amounts and the credit per dependent/personal exemption amounts associated therewith. The Department of Revenue shall update the total annual income range amounts and associated credit amounts for the Family Tax Credit annually and distribute the updated table with the Illinois personal income tax returns

(c) If the amount of the Family Tax Credit exceeds the income tax liability of an eligible taxpayer, the State shall refund to the taxpayer the difference between the Family Tax Credit and that eligible taxpayer's income tax liability.

(d) This Section is exempt from the provisions of Section 250 of this Act.

(35 ILCS 5/219 new)

Sec. 219. Residential rent credit. Each individual taxpayer paying rent on a principal residence located within the State is entitled to a credit, not to exceed $500, against the personal income tax imposed under this Act, in the amount of 5% of the annual rent paid by that taxpayer during the taxable year for the residence of the taxpayer. If the amount of the renter's credit exceeds the income tax liability of an eligible taxpayer, the State shall refund to that taxpayer the difference between the credit and income tax liability. This Section is exempt from the provisions of Section 250 of this Act.

Section 15. The Retailers' Occupation Tax Act is amended by changing Sections 1 and 2 as follows:

(35 ILCS 120/1) (from Ch. 120, par. 440)

Sec. 1. Definitions. "Sale at retail" means any transfer of the ownership of or title to tangible personal property to a purchaser, for the purpose of use or consumption, and not for the purpose of resale in any form as tangible personal property to the extent not first subjected to a use for which it was purchased, for a valuable consideration: Provided that the property purchased is deemed to be purchased for the purpose of resale, despite first being used, to the extent to which it is resold as an ingredient of an intentionally produced product or byproduct of manufacturing. For this purpose, slag produced as an incident to manufacturing pig iron or steel and sold is considered to be an intentionally produced byproduct of manufacturing. Transactions whereby the possession of the property is transferred but the seller retains the title as security for payment of the selling price shall be deemed to be sales.

"Sale at retail" shall be construed to include any transfer of the ownership of or title to tangible personal property to a purchaser, for use or consumption by any other person to whom such purchaser may transfer the tangible personal property without a valuable consideration, and to include any transfer, whether made for or without a valuable consideration, for resale in any form as tangible personal property unless made in compliance with Section 2c of this Act.

Sales of tangible personal property, which property, to the extent not first subjected to a use for which it was purchased, as an ingredient or constituent, goes into and forms a part of tangible personal property subsequently the subject of a "Sale at retail", are not sales at retail as defined in this Act: Provided that the property purchased is deemed to be purchased for the purpose of resale, despite first being used, to the extent to which it is resold as an ingredient of an intentionally produced product or byproduct of manufacturing.

"Sale at retail" includes all of the following services, as enumerated in the North American Industry Classification System Manual (NAICS), 1997, prepared by the United States Office of Management and Budget:

(1) Specialized good warehousing and storage (4931902).

(2) Household goods warehousing and storage (4931901).

(3) Marinas (7131901).

(4) Travel arrangement reservation services (5615).

(5) Consumer electronics repair and maintenance (811211).

(6) Personal and household goods.

(7) Carpet and upholstery cleaning services (56174).

(8) Dating services (8129902).

(9) Hair, nail, and skin care (81211).

(10) Other personal services other than hair, nail, facial, or nonpermanent makeup services (81219).

(11) Dry cleaning and laundry, except coin-operated (81232).

(12) Consumer goods rental (5322).

(13) General goods rental (5323).

(14) Diet and weight reducing services (812191).

(15) Investigation services (561611).

(16) Bail bonding (8129901).

(17) Telephone answering services (561421).

(18) Photographic studios, portrait (541921).

(19) Linen supply (812331).

(20) Industrial launderers (812332).

(21) Interior design services (54141).

(22) Computer systems design and related services (5415).

(23) Credit bureaus (56145).

(24) Collection agencies (56144).

(25) Other business services, including copy shops (561439).

(26) Automotive repair and maintenance (8111).

(27) Parking lots and garages (81293).

(28) Motor vehicle towing (48841).

(29) Racetracks (711212).

(30) Amusement parks and arcades (7131).

(31) Bowling Centers (71395).

(32) Cable and other program distribution (51322).

(33) Circuses (7111901).

(34) Coin operated amusement devices, except slots (7139905).

(35) Golf courses and country clubs (71391).

(36) Fitness and recreational sports centers (711211).

(37) Sports teams and clubs (711211).

(38) Performing arts companies (7111).

(39) Miniature golf courses (7139904).

(40) Scenic and sightseeing transportation (487).

(41) Limousine services (48532).

(42) Unscheduled chartered passenger air transportation (481211).

(43) Motion picture theaters, except drive-in theaters (512131).

(44) Drive-in motion picture theaters (512132).

(45) Horse boarding and training (not race horses) (11521).

(46) Pet grooming (81291).

(47) Landscaping services (including lawn care) (56173).

(48) Carpentry, painting, plumbing and similar trades (238).

(49) Construction service (grading, excavating, etc.) (23593).

(50) Water well drilling (23581).

(51) Income from intrastate transportation of persons (485).

(52) Automotive storage.

(53) Sewer and refuse, industrial (33132/562).

(54) Mini -storage (53113).

(55) Household goods storage (49311).

(56) Cold storage (49312).

(57) Marina Service (docking, storage, cleaning, repair) (71393).

(58) Marine towing service (incl. tugboats) (48833).

(59) Packing and crating (488991).

(60) Water (22131).

(61) Service charges of banking institutions (522).

(62) Investment counseling (52392/3).

(63) Income from funeral services (81221).

(64) Garment services (altering & repairing) (81149).

(65) Gift and package wrapping service (5619).

(66) Gift and package wrapping service(81231).

(67) Shoe repair (81143).

(68) Massage services (81299).

(69) Swimming pool cleaning & maintenance (56179).

(70) Tax return preparation (541213).

(71) Tuxedo rental (53222).

(72) Water softening and conditioning (56199).

(73) Armored car services (561613).

(74) Advertising agency fees (not ad placement) (54181).

(75) Commercial art and graphic design (54143).

(76) Temporary help agencies (56132).

(77) Employment agencies (56131).

(78) Test laboratories (excluding medical) (54138).

(79) Maintenance and janitorial services (56172).

(80) Exterminating (includes termite services) (56171).

(81) Packing and crating.

(82) Tire recapping and repairing (326212/811198).

(83) Private investigation (detective) services (561612).

(84) Printing (32311).

(85) Internet Service Providers-Dialup (518111).

(86) Sign construction and installation (54189).

(87) Internet Service Providers-DSL or other broadband (518111).

(88) Automotive washing and waxing (811192).

(89) Automotive road service and towing services (48848112).

(90) Auto service. except repairs, incl. painting & lube (81119).

(91) Parking lots & garages (81293).

(92) Automotive rustproofing & undercoating (811198).

(93) Amusement park admission & rides (71311).

(94) Circuses and fairs -- admission and games (7113).

(95) Cable TV services (51751).

(96) Admission to school and college sports events (7112).

(97) Membership fees in private clubs (71391).

(98) Admission to cultural events (7111).

(99) Pinball and other mechanical amusements (71312).

(100) Rental of video tapes for home viewing (53223).

(101) Personal property, short term and long term (generally) (5322).

(102) Taxidermy.

(103) Custom fabrication labor.

(104) Repair labor, generally.

(105) Rental of hand tools to licensed contractors (532412).

(106) Trailer parks - overnight (7212).

(107) Welding labor (fabrication and repair).

(108) Custom meat slaughtering, cutting and wrapping.

(109) Installation charges - other than seller of goods.

(110) Custom processing (on customer's property).

(111)Installation charges by persons selling property.

(112) Labor charges on repair of aircraft.

(113) Labor charges - repairs to intrastate vessels.

(114) Labor - repairs to commercial fishing vessels (336611).

(115) Labor charges on repairs to railroad rolling stock.

(116) Labor - repairs or remodeling of real property.

(117) Labor charges - repairs other tangible property (811).

(118) Labor on radio/TV repairs; other electronic equip (8112).

(119) Labor charges on repairs to motor vehicles (811111).

"Sale at retail" shall be construed to include any Illinois florist's sales transaction in which the purchase order is received in Illinois by a florist and the sale is for use or consumption, but the Illinois florist has a florist in another state deliver the property to the purchaser or the purchaser's donee in such other state.

Nonreusable tangible personal property that is used by persons engaged in the business of operating a restaurant, cafeteria, or drive-in is a sale for resale when it is transferred to customers in the ordinary course of business as part of the sale of food or beverages and is used to deliver, package, or consume food or beverages, regardless of where consumption of the food or beverages occurs. Examples of those items include, but are not limited to nonreusable, paper and plastic cups, plates, baskets, boxes, sleeves, buckets or other containers, utensils, straws, placemats, napkins, doggie bags, and wrapping or packaging materials that are transferred to customers as part of the sale of food or beverages in the ordinary course of business.

The purchase, employment and transfer of such tangible personal property as newsprint and ink for the primary purpose of conveying news (with or without other information) is not a purchase, use or sale of tangible personal property.

A person whose activities are organized and conducted primarily as a not-for-profit service enterprise, and who engages in selling tangible personal property at retail (whether to the public or merely to members and their guests) is engaged in the business of selling tangible personal property at retail with respect to such transactions, excepting only a person organized and operated exclusively for charitable, religious or educational purposes either (1), to the extent of sales by such person to its members, students, patients or inmates of tangible personal property to be used primarily for the purposes of such person, or (2), to the extent of sales by such person of tangible personal property which is not sold or offered for sale by persons organized for profit. The selling of school books and school supplies by schools at retail to students is not "primarily for the purposes of" the school which does such selling. The provisions of this paragraph shall not apply to nor subject to taxation occasional dinners, socials or similar activities of a person organized and operated exclusively for charitable, religious or educational purposes, whether or not such activities are open to the public.

A person who is the recipient of a grant or contract under Title VII of the Older Americans Act of 1965 (P.L. 92-258) and serves meals to participants in the federal Nutrition Program for the Elderly in return for contributions established in amount by the individual participant pursuant to a schedule of suggested fees as provided for in the federal Act is not engaged in the business of selling tangible personal property at retail with respect to such transactions.

"Purchaser" means anyone who, through a sale at retail, acquires the ownership of or title to tangible personal property for a valuable consideration.

"Reseller of motor fuel" means any person engaged in the business of selling or delivering or transferring title of motor fuel to another person other than for use or consumption. No person shall act as a reseller of motor fuel within this State without first being registered as a reseller pursuant to Section 2c or a retailer pursuant to Section 2a.

"Selling price" or the "amount of sale" means the consideration for a sale valued in money whether received in money or otherwise, including cash, credits, property, other than as hereinafter provided, and services, but not including the value of or credit given for traded-in tangible personal property where the item that is traded-in is of like kind and character as that which is being sold, and shall be determined without any deduction on account of the cost of the property sold, the cost of materials used, labor or service cost or any other expense whatsoever, but does not include charges that are added to prices by sellers on account of the seller's tax liability under this Act, or on account of the seller's duty to collect, from the purchaser, the tax that is imposed by the Use Tax Act, or, except as otherwise provided with respect to any cigarette tax imposed by a home rule unit, on account of the seller's tax liability under any local occupation tax administered by the Department, or, except as otherwise provided with respect to any cigarette tax imposed by a home rule unit on account of the seller's duty to collect, from the purchasers, the tax that is imposed under any local use tax administered by the Department. Effective December 1, 1985, "selling price" shall include charges that are added to prices by sellers on account of the seller's tax liability under the Cigarette Tax Act, on account of the sellers' duty to collect, from the purchaser, the tax imposed under the Cigarette Use Tax Act, and on account of the seller's duty to collect, from the purchaser, any cigarette tax imposed by a home rule unit.

The phrase "like kind and character" shall be liberally construed (including but not limited to any form of motor vehicle for any form of motor vehicle, or any kind of farm or agricultural implement for any other kind of farm or agricultural implement), while not including a kind of item which, if sold at retail by that retailer, would be exempt from retailers' occupation tax and use tax as an isolated or occasional sale.

"Gross receipts" from the sales of tangible personal property at retail means the total selling price or the amount of such sales, as hereinbefore defined. In the case of charge and time sales, the amount thereof shall be included only as and when payments are received by the seller. Receipts or other consideration derived by a seller from the sale, transfer or assignment of accounts receivable to a wholly owned subsidiary will not be deemed payments prior to the time the purchaser makes payment on such accounts.

"Department" means the Department of Revenue.

"Person" means any natural individual, firm, partnership, association, joint stock company, joint adventure, public or private corporation, limited liability company, or a receiver, executor, trustee, guardian or other representative appointed by order of any court.

The isolated or occasional sale of tangible personal property at retail by a person who does not hold himself out as being engaged (or who does not habitually engage) in selling such tangible personal property at retail, or a sale through a bulk vending machine, does not constitute engaging in a business of selling such tangible personal property at retail within the meaning of this Act; provided that any person who is engaged in a business which is not subject to the tax imposed by this Act because of involving the sale of or a contract to sell real estate or a construction contract to improve real estate or a construction contract to engineer, install, and maintain an integrated system of products, but who, in the course of conducting such business, transfers tangible personal property to users or consumers in the finished form in which it was purchased, and which does not become real estate or was not engineered and installed, under any provision of a construction contract or real estate sale or real estate sales agreement entered into with some other person arising out of or because of such nontaxable business, is engaged in the business of selling tangible personal property at retail to the extent of the value of the tangible personal property so transferred. If, in such a transaction, a separate charge is made for the tangible personal property so transferred, the value of such property, for the purpose of this Act, shall be the amount so separately charged, but not less than the cost of such property to the transferor; if no separate charge is made, the value of such property, for the purposes of this Act, is the cost to the transferor of such tangible personal property. Construction contracts for the improvement of real estate consisting of engineering, installation, and maintenance of voice, data, video, security, and all telecommunication systems do not constitute engaging in a business of selling tangible personal property at retail within the meaning of this Act if they are sold at one specified contract price.

A person who holds himself or herself out as being engaged (or who habitually engages) in selling tangible personal property at retail is a person engaged in the business of selling tangible personal property at retail hereunder with respect to such sales (and not primarily in a service occupation) notwithstanding the fact that such person designs and produces such tangible personal property on special order for the purchaser and in such a way as to render the property of value only to such purchaser, if such tangible personal property so produced on special order serves substantially the same function as stock or standard items of tangible personal property that are sold at retail.

Persons who engage in the business of transferring tangible personal property upon the redemption of trading stamps are engaged in the business of selling such property at retail and shall be liable for and shall pay the tax imposed by this Act on the basis of the retail value of the property transferred upon redemption of such stamps.

"Bulk vending machine" means a vending machine, containing unsorted confections, nuts, toys, or other items designed primarily to be used or played with by children which, when a coin or coins of a denomination not larger than $0.50 are inserted, are dispensed in equal portions, at random and without selection by the customer.

(Source: P.A. 95-723, eff. 6-23-08.)

(35 ILCS 120/2) (from Ch. 120, par. 441)

Sec. 2. Tax imposed. A tax is imposed upon persons engaged in the business of selling at retail tangible personal property, including computer software, and including photographs, negatives, and positives that are the product of photoprocessing, but not including products of photoprocessing produced for use in motion pictures for public commercial exhibition, or engaged in the business of providing services as set forth in in Section 1 of this Act. Beginning January 1, 2001, prepaid telephone calling arrangements shall be considered tangible personal property subject to the tax imposed under this Act regardless of the form in which those arrangements may be embodied, transmitted, or fixed by any method now known or hereafter developed.

(Source: P.A. 91-51, eff. 6-30-99; 91-870, eff. 6-22-00.)

Section 20. The Illinois Pension Code is amended by changing Section 16-158 as follows:

(40 ILCS 5/16-158) (from Ch. 108 1/2, par. 16-158)

Sec. 16-158. Contributions by State and other employing units.

(a) The State shall make contributions to the System by means of appropriations from the Common School Fund and other State funds of amounts which, together with other employer contributions, employee contributions, investment income, and other income, will be sufficient to meet the cost of maintaining and administering the System on a 90% funded basis in accordance with actuarial recommendations.

The Board shall determine the amount of State contributions required for each fiscal year on the basis of the actuarial tables and other assumptions adopted by the Board and the recommendations of the actuary, using the formula in subsection (b-3).

(a-1) Annually, on or before November 15, the Board shall certify to the Governor the amount of the required State contribution for the coming fiscal year. The certification shall include a copy of the actuarial recommendations upon which it is based.

On or before May 1, 2004, the Board shall recalculate and recertify to the Governor the amount of the required State contribution to the System for State fiscal year 2005, taking into account the amounts appropriated to and received by the System under subsection (d) of Section 7.2 of the General Obligation Bond Act.

On or before July 1, 2005, the Board shall recalculate and recertify to the Governor the amount of the required State contribution to the System for State fiscal year 2006, taking into account the changes in required State contributions made by this amendatory Act of the 94th General Assembly.

(b) Through State fiscal year 1995, the State contributions shall be paid to the System in accordance with Section 18-7 of the School Code.

(b-1) Beginning in State fiscal year 1996, on the 15th day of each month, or as soon thereafter as may be practicable, the Board shall submit vouchers for payment of State contributions to the System, in a total monthly amount of one-twelfth of the required annual State contribution certified under subsection (a-1). From the effective date of this amendatory Act of the 93rd General Assembly through June 30, 2004, the Board shall not submit vouchers for the remainder of fiscal year 2004 in excess of the fiscal year 2004 certified contribution amount determined under this Section after taking into consideration the transfer to the System under subsection (a) of Section 6z-61 of the State Finance Act. These vouchers shall be paid by the State Comptroller and Treasurer by warrants drawn on the funds appropriated to the System for that fiscal year.

If in any month the amount remaining unexpended from all other appropriations to the System for the applicable fiscal year (including the appropriations to the System under Section 8.12 of the State Finance Act and Section 1 of the State Pension Funds Continuing Appropriation Act) is less than the amount lawfully vouchered under this subsection, the difference shall be paid from the Common School Fund under the continuing appropriation authority provided in Section 1.1 of the State Pension Funds Continuing Appropriation Act.

(b-2) Allocations from the Common School Fund apportioned to school districts not coming under this System shall not be diminished or affected by the provisions of this Article.

(b-3) For State fiscal years 2011 through 2045, the minimum contribution to the System to be made by the State for each fiscal year shall be an amount determined by the System to be sufficient to bring the total assets of the System up to 90% of the total actuarial liabilities of the System by the end of State fiscal year 2045. In making these determinations, the required State contribution shall be calculated each year as a level percentage of payroll over the years remaining to and including fiscal year 2045 and shall be determined under the projected unit credit actuarial cost method.

For State fiscal years 1996 through 2005, the State contribution to the System, as a percentage of the applicable employee payroll, shall be increased in equal annual increments so that by State fiscal year 2011, the State is contributing at the rate required under this Section; except that in the following specified State fiscal years, the State contribution to the System shall not be less than the following indicated percentages of the applicable employee payroll, even if the indicated percentage will produce a State contribution in excess of the amount otherwise required under this subsection and subsection (a), and notwithstanding any contrary certification made under subsection (a-1) before the effective date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77% in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY 2003; and 13.56% in FY 2004.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2006 is $534,627,700.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2007 is $738,014,500.

For each of State fiscal years 2008 through 2010, the State contribution to the System, as a percentage of the applicable employee payroll, shall be increased in equal annual increments from the required State contribution for State fiscal year 2007, so that by State fiscal year 2011, the State is contributing at the rate otherwise required under this Section.

Beginning in State fiscal year 2046, the minimum State contribution for each fiscal year shall be the amount needed to maintain the total assets of the System at 90% of the total actuarial liabilities of the System.

Amounts received by the System pursuant to Section 25 of the Budget Stabilization Act or Section 8.12 of the State Finance Act in any fiscal year do not reduce and do not constitute payment of any portion of the minimum State contribution required under this Article in that fiscal year. Such amounts shall not reduce, and shall not be included in the calculation of, the required State contributions under this Article in any future year until the System has reached a funding ratio of at least 90%. A reference in this Article to the "required State contribution" or any substantially similar term does not include or apply to any amounts payable to the System under Section 25 of the Budget Stabilization Act.

Notwithstanding any other provision of this Section, the required State contribution for State fiscal year 2005 and for fiscal year 2008 and each fiscal year thereafter, as calculated under this Section and certified under subsection (a-1), shall not exceed an amount equal to (i) the amount of the required State contribution that would have been calculated under this Section for that fiscal year if the System had not received any payments under subsection (d) of Section 7.2 of the General Obligation Bond Act, minus (ii) the portion of the State's total debt service payments for that fiscal year on the bonds issued for the purposes of that Section 7.2, as determined and certified by the Comptroller, that is the same as the System's portion of the total moneys distributed under subsection (d) of Section 7.2 of the General Obligation Bond Act. In determining this maximum for State fiscal years 2008 through 2010, however, the amount referred to in item (i) shall be increased, as a percentage of the applicable employee payroll, in equal increments calculated from the sum of the required State contribution for State fiscal year 2007 plus the applicable portion of the State's total debt service payments for fiscal year 2007 on the bonds issued for the purposes of Section 7.2 of the General Obligation Bond Act, so that, by State fiscal year 2011, the State is contributing at the rate otherwise required under this Section.

(c) Payment of the required State contributions and of all pensions, retirement annuities, death benefits, refunds, and other benefits granted under or assumed by this System, and all expenses in connection with the administration and operation thereof, are obligations of the State.

If members are paid from special trust or federal funds which are administered by the employing unit, whether school district or other unit, the employing unit shall pay to the System from such funds the full accruing retirement costs based upon that service, as determined by the System. Employer contributions, based on salary paid to members from federal funds, may be forwarded by the distributing agency of the State of Illinois to the System prior to allocation, in an amount determined in accordance with guidelines established by such agency and the System.

(d) Effective July 1, 1986, any employer of a teacher as defined in paragraph (8) of Section 16-106 shall pay the employer's normal cost of benefits based upon the teacher's service, in addition to employee contributions, as determined by the System. Such employer contributions shall be forwarded monthly in accordance with guidelines established by the System.

However, with respect to benefits granted under Section 16-133.4 or 16-133.5 to a teacher as defined in paragraph (8) of Section 16-106, the employer's contribution shall be 12% (rather than 20%) of the member's highest annual salary rate for each year of creditable service granted, and the employer shall also pay the required employee contribution on behalf of the teacher. For the purposes of Sections 16-133.4 and 16-133.5, a teacher as defined in paragraph (8) of Section 16-106 who is serving in that capacity while on leave of absence from another employer under this Article shall not be considered an employee of the employer from which the teacher is on leave.

(e) Beginning July 1, 1998, every employer of a teacher shall pay to the System an employer contribution computed as follows:

(1) Beginning July 1, 1998 through June 30, 1999, the employer contribution shall be equal to 0.3% of each teacher's salary.

(2) Beginning July 1, 1999 and thereafter, the employer contribution shall be equal to 0.58% of each teacher's salary.

The school district or other employing unit may pay these employer contributions out of any source of funding available for that purpose and shall forward the contributions to the System on the schedule established for the payment of member contributions.

These employer contributions are intended to offset a portion of the cost to the System of the increases in retirement benefits resulting from this amendatory Act of 1998.

Each employer of teachers is entitled to a credit against the contributions required under this subsection (e) with respect to salaries paid to teachers for the period January 1, 2002 through June 30, 2003, equal to the amount paid by that employer under subsection (a-5) of Section 6.6 of the State Employees Group Insurance Act of 1971 with respect to salaries paid to teachers for that period.

The additional 1% employee contribution required under Section 16-152 by this amendatory Act of 1998 is the responsibility of the teacher and not the teacher's employer, unless the employer agrees, through collective bargaining or otherwise, to make the contribution on behalf of the teacher.

If an employer is required by a contract in effect on May 1, 1998 between the employer and an employee organization to pay, on behalf of all its full-time employees covered by this Article, all mandatory employee contributions required under this Article, then the employer shall be excused from paying the employer contribution required under this subsection (e) for the balance of the term of that contract. The employer and the employee organization shall jointly certify to the System the existence of the contractual requirement, in such form as the System may prescribe. This exclusion shall cease upon the termination, extension, or renewal of the contract at any time after May 1, 1998.

(f) If the amount of a teacher's salary for any school year used to determine final average salary exceeds the member's annual full-time salary rate with the same employer for the previous school year by more than 6%, the teacher's employer shall pay to the System, in addition to all other payments required under this Section and in accordance with guidelines established by the System, the present value of the increase in benefits resulting from the portion of the increase in salary that is in excess of 6%. This present value shall be computed by the System on the basis of the actuarial assumptions and tables used in the most recent actuarial valuation of the System that is available at the time of the computation. If a teacher's salary for the 2005-2006 school year is used to determine final average salary under this subsection (f), then the changes made to this subsection (f) by Public Act 94-1057 shall apply in calculating whether the increase in his or her salary is in excess of 6%. For the purposes of this Section, change in employment under Section 10-21.12 of the School Code on or after June 1, 2005 shall constitute a change in employer. The System may require the employer to provide any pertinent information or documentation. The changes made to this subsection (f) by this amendatory Act of the 94th General Assembly apply without regard to whether the teacher was in service on or after its effective date.

Whenever it determines that a payment is or may be required under this subsection, the System shall calculate the amount of the payment and bill the employer for that amount. The bill shall specify the calculations used to determine the amount due. If the employer disputes the amount of the bill, it may, within 30 days after receipt of the bill, apply to the System in writing for a recalculation. The application must specify in detail the grounds of the dispute and, if the employer asserts that the calculation is subject to subsection (g) or (h) of this Section, must include an affidavit setting forth and attesting to all facts within the employer's knowledge that are pertinent to the applicability of that subsection. Upon receiving a timely application for recalculation, the System shall review the application and, if appropriate, recalculate the amount due.

The employer contributions required under this subsection (f) may be paid in the form of a lump sum within 90 days after receipt of the bill. If the employer contributions are not paid within 90 days after receipt of the bill, then interest will be charged at a rate equal to the System's annual actuarially assumed rate of return on investment compounded annually from the 91st day after receipt of the bill. Payments must be concluded within 3 years after the employer's receipt of the bill.

(g) This subsection (g) applies only to payments made or salary increases given on or after June 1, 2005 but before July 1, 2011. The changes made by Public Act 94-1057 shall not require the System to refund any payments received before July 31, 2006 (the effective date of Public Act 94-1057).

When assessing payment for any amount due under subsection (f), the System shall exclude salary increases paid to teachers under contracts or collective bargaining agreements entered into, amended, or renewed before June 1, 2005.

When assessing payment for any amount due under subsection (f), the System shall exclude salary increases paid to a teacher at a time when the teacher is 10 or more years from retirement eligibility under Section 16-132 or 16-133.2.

When assessing payment for any amount due under subsection (f), the System shall exclude salary increases resulting from overload work, including summer school, when the school district has certified to the System, and the System has approved the certification, that (i) the overload work is for the sole purpose of classroom instruction in excess of the standard number of classes for a full-time teacher in a school district during a school year and (ii) the salary increases are equal to or less than the rate of pay for classroom instruction computed on the teacher's current salary and work schedule.

When assessing payment for any amount due under subsection (f), the System shall exclude a salary increase resulting from a promotion (i) for which the employee is required to hold a certificate or supervisory endorsement issued by the State Teacher Certification Board that is a different certification or supervisory endorsement than is required for the teacher's previous position and (ii) to a position that has existed and been filled by a member for no less than one complete academic year and the salary increase from the promotion is an increase that results in an amount no greater than the lesser of the average salary paid for other similar positions in the district requiring the same certification or the amount stipulated in the collective bargaining agreement for a similar position requiring the same certification.

When assessing payment for any amount due under subsection (f), the System shall exclude any payment to the teacher from the State of Illinois or the State Board of Education over which the employer does not have discretion or which is paid to a mentor teacher or principal from funds provided to the employer by the State Board of Education for the purpose of mentoring a new teacher or principal, notwithstanding that the payment is included in the computation of final average salary.

(h) When assessing payment for any amount due under subsection (f), the System shall exclude any salary increase described in subsection (g) of this Section given on or after July 1, 2011 but before July 1, 2014 under a contract or collective bargaining agreement entered into, amended, or renewed on or after June 1, 2005 but before July 1, 2011. Notwithstanding any other provision of this Section, any payments made or salary increases given after June 30, 2014 shall be used in assessing payment for any amount due under subsection (f) of this Section.

(i) The System shall prepare a report and file copies of the report with the Governor and the General Assembly by January 1, 2007 that contains all of the following information:

(1) The number of recalculations required by the changes made to this Section by Public Act 94-1057 for each employer.

(2) The dollar amount by which each employer's contribution to the System was changed due to recalculations required by Public Act 94-1057.

(3) The total amount the System received from each employer as a result of the changes made to this Section by Public Act 94-4.

(4) The increase in the required State contribution resulting from the changes made to this Section by Public Act 94-1057.

(Source: P.A. 94-4, eff. 6-1-05; 94-839, eff. 6-6-06; 94-1057, eff. 7-31-06; 94-1111, eff. 2-27-07; 95-331, eff. 8-21-07; 95-950, eff. 8-29-08.)

Section 25. The School Code is amended by changing Sections 1A-8, 1C-2, 2-3.25c, 2-3.25d, 2-3.53a, 3-7, 10-17a, 10-20.20, 10-22.45, 14-13.01, 18-8.05, 19-3, 21-29, 21A-5, 21A-10, 21A-15, 21A-20, 21A-25, 21A-30, 23-3, 23-6, 24-12, 24A-3, 24A-4, 24A-5, 24A-6, and 24A-8, by adding Sections 2-3.25d-5, 2-3.53b, 2-3.64b, 2-3.148, 2-3.149, 2-3.150, 2-3.151, 2-3.152, 3-6.5, 10-16.10, 10-17b, 10-17c, 10-17d, 10-20.46, 17-2.11c, 21A-3, 23-5.5, 34-18.37, 34-18.38, 34-18.39, 34-18.40, and 34-18.41, and by renumbering and changing Section 10-20.41 as added by Public Act 95-707 as follows:

(105 ILCS 5/1A-8) (from Ch. 122, par. 1A-8)

Sec. 1A-8. Powers of the Board in Assisting Districts Deemed in Financial Difficulties. To promote the financial integrity of school districts, the State Board of Education shall be provided the necessary powers to promote sound financial management and continue operation of the public schools.

The State Superintendent of Education may require a school district, including any district subject to Article 34A of this Code, to share financial information relevant to a proper investigation of the district's financial condition and the delivery of appropriate State financial, technical, and consulting services to the district if the district (i) has been designated, through the State Board of Education's School District Financial Profile System, as on financial warning or financial watch status, (ii) has failed to file an annual financial report, annual budget, deficit reduction plan, or other financial information as required by law, or (iii) has been identified, through the district's annual audit or other financial and management information, as in serious financial difficulty in the current or next school year. In addition to financial, technical, and consulting services provided by the State Board of Education, at the request of a school district, the State Superintendent may provide for an independent financial consultant to assist the district review its financial condition and options.

The State Board of Education, after proper investigation of a district's financial condition, may certify that a district, including any district subject to Article 34A, is in financial difficulty when any of the following conditions occur:

(1) The district has issued school or teacher orders for wages as permitted in Sections 8-16, 32-7.2 and 34-76 of this Code;

(2) The district has issued tax anticipation warrants or tax anticipation notes in anticipation of a second year's taxes when warrants or notes in anticipation of current year taxes are still outstanding, as authorized by Sections 17-16, 34-23, 34-59 and 34-63 of this Code, or has issued short-term debt against 2 future revenue sources, such as, but not limited to, tax anticipation warrants and general State Aid certificates or tax anticipation warrants and revenue anticipation notes;

(3) The district has for 2 consecutive years shown an excess of expenditures and other financing uses over revenues and other financing sources and beginning fund balances on its annual financial report for the aggregate totals of the Educational, Operations and Maintenance, Transportation, and Working Cash Funds;

(4) The district refuses to provide financial information or cooperate with the State Superintendent in an investigation of the district's financial condition.

No school district shall be certified by the State Board of Education to be in financial difficulty by reason of any of the above circumstances (i) if arising solely as a result of the failure of the county to make any distribution of property tax money due the district at the time such distribution is due; (ii) if arising solely as a result of the failure of the Comptroller to disburse reimbursements in accordance with Sections 14-7.02, 14-7.02b, 14-7.03, 14-13.01, 18-3, 18-11, 18-4.3, and 29-5 for receipt by the school district no later than June 30th of each year; or (iii) if the district clearly demonstrates to the satisfaction of the State Board of Education at the time of its determination that such condition no longer exists. If the State Board of Education certifies that a district in a city with 500,000 inhabitants or more is in financial difficulty, the State Board shall so notify the Governor and the Mayor of the city in which the district is located. The State Board of Education may require school districts certified in financial difficulty, except those districts subject to Article 34A, to develop, adopt and submit a financial plan within 45 days after certification of financial difficulty. The financial plan shall be developed according to guidelines presented to the district by the State Board of Education within 14 days of certification. Such guidelines shall address the specific nature of each district's financial difficulties. Any proposed budget of the district shall be consistent with the financial plan submitted to and approved by the State Board of Education.

A district certified to be in financial difficulty, other than a district subject to Article 34A, shall report to the State Board of Education at such times and in such manner as the State Board may direct, concerning the district's compliance with each financial plan. The State Board may review the district's operations, obtain budgetary data and financial statements, require the district to produce reports, and have access to any other information in the possession of the district that it deems relevant. The State Board may issue recommendations or directives within its powers to the district to assist in compliance with the financial plan. The district shall produce such budgetary data, financial statements, reports and other information and comply with such directives. If the State Board of Education determines that a district has failed to comply with its financial plan, the State Board of Education may rescind approval of the plan and appoint a Financial Oversight Panel for the district as provided in Section 1B-4. This action shall be taken only after the district has been given notice and an opportunity to appear before the State Board of Education to discuss its failure to comply with its financial plan.

No bonds, notes, teachers orders, tax anticipation warrants or other evidences of indebtedness shall be issued or sold by a school district or be legally binding upon or enforceable against a local board of education of a district certified to be in financial difficulty unless and until the financial plan required under this Section has been approved by the State Board of Education.

Any financial watch list distributed by the State Board of Education pursuant to this Section shall designate those school districts on the watch list that would not otherwise be on the watch list were it not for the inability or refusal of the State of Illinois to make timely disbursements of any payments due school districts or to fully reimburse school districts for mandated categorical programs pursuant to reimbursement formulas provided in this School Code.

(Source: P.A. 94-234, eff. 7-1-06.)

(105 ILCS 5/1C-2)

Sec. 1C-2. Block grants.

(a) For fiscal year 1999, and each fiscal year thereafter, the State Board of Education shall award to school districts block grants as described in subsection (c). The State Board of Education may adopt rules and regulations necessary to implement this Section. In accordance with Section 2-3.32, all state block grants are subject to an audit. Therefore, block grant receipts and block grant expenditures shall be recorded to the appropriate fund code.

(b) (Blank).

(c) An Early Childhood Education Block Grant shall be created by combining the following programs: Preschool Education, Parental Training and Prevention Initiative. These funds shall be distributed to school districts and other entities on a competitive basis. Eleven percent of this grant shall be used to fund programs for children ages 0-3.

(d) The General Assembly shall appropriate or transfer amounts to the Early Childhood Education Block Grant for the programs specified in subsection (c) of this Section as follows: the Fiscal Year 2009 appropriation plus (1) at least the Fiscal Year 2009 appropriation plus an additional $45,000,000 for Fiscal Year 2010; (2) at least the previous fiscal year appropriation plus at least an additional $90,000,000 for Fiscal Year 2011; (3) at least the previous fiscal year appropriation plus at least an additional $135,000,000 for Fiscal Year 2012; and (4) at least the previous fiscal year appropriation plus at least an additional $180,000,000 for Fiscal Year 2013. Thereafter, the amount appropriated or transferred to the Early Childhood Education Block Grant each fiscal year shall be the amount from the previous fiscal year, increased by at least the percentage increase, if any, in the Employment Cost Index for Elementary and Secondary Schools, published by the U.S. Bureau of Labor Statistics, for the then most recent, completed calendar year. The Early Childhood Education Block Grant shall not be subject to sweeps, administrative charges, or charge-backs, including, but not limited to, those authorized under Section 8h of the State Finance Act or any other fiscal or budgetary maneuver that would in any way transfer any funds from the Early Childhood Education Block Grant into any other fund of this State.

(Source: P.A. 95-793, eff. 1-1-09.)

(105 ILCS 5/2-3.25c) (from Ch. 122, par. 2-3.25c)

Sec. 2-3.25c. Financial and other awards Rewards and acknowledgements.

(a) The State Board of Education shall implement a system of rewards for school districts, and the schools themselves, whose students and schools consistently meet adequate yearly progress criteria for 2 or more consecutive years and a system to acknowledge schools and districts that meet adequate yearly progress criteria in a given year as specified in Section 2-3.25d of this Code.

(b) Financial awards shall be provided to the schools that the State Superintendent of Education determines have demonstrated the greatest improvement in achieving the education goals of improved student achievement and improved school completion, subject to appropriation by the General Assembly and any limitation set by the State Superintendent on the total amount that may be awarded to a school or school district; provided that such financial awards must not be used to enhance the compensation of staff in school districts having a population not exceeding 500,000.

(c) The State Superintendent of Education may present proclamations or certificates to schools and school systems determined to have met or exceeded the State's education goals under Section 2-3.64 of this Code.

(d) The Education Financial Award System Fund is created as a special fund in the State treasury. All money in the Fund shall be used, subject to appropriation, by the State Board of Education for the purpose of funding financial awards under this Section. The Fund shall consist of all moneys appropriated to the fund by the General Assembly and any gifts, grants, donations, and other moneys received by the State Board of Education for implementation of the awards system.

Any unexpended or unencumbered moneys remaining in the Education Financial Award System Fund at the end of a fiscal year shall remain in the Fund and shall not revert or be credited or transferred to the General Revenue Fund nor be transferred to any other fund. Any interest derived from the deposit and investment of moneys in the Education Financial Award System Fund shall remain in the Fund and shall not be credited to the General Revenue Fund. The Education Financial Award System Fund must be appropriated and expended only for the awards system. The awards are subject to audit requirements established by the State Board of Education.

(e) If a school or school district meets adequate yearly progress criteria for 2 consecutive school years, that school or district shall be exempt from review and approval of its improvement plan for the next 2 succeeding school years.

(Source: P.A. 93-470, eff. 8-8-03.)

(105 ILCS 5/2-3.25d) (from Ch. 122, par. 2-3.25d)

Sec. 2-3.25d. Academic early warning and watch status.

(a) Beginning with the 2005-2006 school year, unless the federal government formally disapproves of such policy through the submission and review process for the Illinois Accountability Workbook, those schools that do not meet adequate yearly progress criteria for 2 consecutive annual calculations in the same subgroup and in the same subject or in their participation rate, attendance rate, or graduation rate shall be placed on academic early warning status for the next school year. Schools on academic early warning status that do not meet adequate yearly progress criteria for a third annual calculation in the same subgroup and in the same subject or in their participation rate, attendance rate, or graduation rate shall remain on academic early warning status. Schools on academic early warning status that do not meet adequate yearly progress criteria for a fourth annual calculation in the same subgroup and in the same subject or in their participation rate, attendance rate, or graduation rate shall be placed on initial academic watch status. Schools on academic watch status that do not meet adequate yearly progress criteria for a fifth or subsequent annual calculation in the same subgroup and in the same subject or in their participation rate, attendance rate, or graduation rate shall remain on academic watch status. Schools on academic early warning or academic watch status that meet adequate yearly progress criteria for one annual calculation shall be considered as having met expectations and shall be removed from any status designation.

The school district of a school placed on either academic early warning status or academic watch status may appeal the status to the State Board of Education in accordance with Section 2-3.25m of this Code.

A school district that has one or more schools on academic early warning or academic watch status shall prepare a revised School Improvement Plan or amendments thereto setting forth the district's expectations for removing each school from academic early warning or academic watch status and for improving student performance in the affected school or schools. Districts operating under Article 34 of this Code may prepare the School Improvement Plan required under Section 34-2.4 of this Code.

The revised School Improvement Plan for a school that is initially placed on academic early warning status or that remains on academic early warning status after a third annual calculation must be approved by the school board (and by the school's local school council in a district operating under Article 34 of this Code, unless the school is on probation pursuant to subsection (c) of Section 34-8.3 of this Code).

The revised School Improvement Plan for a school that is initially placed on academic watch status after a fourth annual calculation must be approved by the school board (and by the school's local school council in a district operating under Article 34 of this Code, unless the school is on probation pursuant to subsection (c) of Section 34-8.3 of this Code).

The revised School Improvement Plan for a school that remains on academic watch status after a fifth annual calculation must be approved by the school board (and by the school's local school council in a district operating under Article 34 of this Code, unless the school is on probation pursuant to subsection (c) of Section 34-8.3 of this Code). In addition, the district must develop a school restructuring plan for the school that must be approved by the school board (and by the school's local school council in a district operating under Article 34 of this Code).

A school on academic watch status that does not meet adequate yearly progress criteria for a sixth annual calculation shall implement its approved school restructuring plan beginning with the next school year, subject to the State interventions specified in Section 2-3.25f of this Code.

(b) Beginning with the 2005-2006 school year, unless the federal government formally disapproves of such policy through the submission and review process for the Illinois Accountability Workbook, those school districts that do not meet adequate yearly progress criteria for 2 consecutive annual calculations in the same subgroup and in the same subject or in their participation rate, attendance rate, or graduation rate shall be placed on academic early warning status for the next school year. Districts on academic early warning status that do not meet adequate yearly progress criteria for a third annual calculation in the same subgroup and in the same subject or in their participation rate, attendance rate, or graduation rate shall remain on academic early warning status. Districts on academic early warning status that do not meet adequate yearly progress criteria for a fourth annual calculation in the same subgroup and in the same subject or in their participation rate, attendance rate, or graduation rate shall be placed on initial academic watch status. Districts on academic watch status that do not meet adequate yearly progress criteria for a fifth or subsequent annual calculation in the same subgroup and in the same subject or in their participation rate, attendance rate, or graduation rate shall remain on academic watch status. Districts on academic early warning or academic watch status that meet adequate yearly progress criteria for one annual calculation shall be considered as having met expectations and shall be removed from any status designation.

A district placed on either academic early warning status or academic watch status may appeal the status to the State Board of Education in accordance with Section 2-3.25m of this Code.

Districts on academic early warning or academic watch status shall prepare a District Improvement Plan or amendments thereto setting forth the district's expectations for removing the district from academic early warning or academic watch status and for improving student performance in the district.

All District Improvement Plans must be approved by the school board.

(c) All new and revised School and District Improvement Plans shall be developed in collaboration with parents, staff in the affected school or school district and their exclusive bargaining representatives, if any, and outside experts. All revised School and District Improvement Plans shall be developed, submitted, and monitored pursuant to rules adopted by the State Board of Education. The revised Improvement Plan shall address measurable outcomes for improving student performance so that such performance meets adequate yearly progress criteria as specified by the State Board of Education and shall include a staff professional development plan developed at least in cooperation with staff or, if applicable, the exclusive bargaining representatives of the staff. All school districts required to revise a School Improvement Plan in accordance with this Section shall establish a peer review process for the evaluation of School Improvement Plans.

(d) All federal requirements apply to schools and school districts utilizing federal funds under Title I, Part A of the federal Elementary and Secondary Education Act of 1965.

(e) The State Board of Education, from any moneys it may have available for this purpose, must implement and administer a grant program that provides 2-year grants to school districts on the academic watch list and other school districts that have the lowest achieving students, as determined by the State Board of Education, to be used to improve student achievement. In order to receive a grant under this program, a school district must establish an accountability program. The accountability program must involve the use of statewide testing standards and local evaluation measures. A grant shall be automatically renewed when achievement goals are met. The Board may adopt any rules necessary to implement and administer this grant program.

(f) In addition to any moneys available under subsection (e) of this Section, a school district required to maintain School and District Improvement Plans under this Section, including a school district organized under Article 34 of this Code, shall annually receive from the State an amount equal to $150 times the number of full-time certified teachers and administrators it employs for developing and implementing its mandatory School and District Improvement Plans, including its staff professional development plan.

(Source: P.A. 93-470, eff. 8-8-03; 93-890, eff. 8-9-04; 94-666, eff. 8-23-05; 94-875, eff. 7-1-06.)

(105 ILCS 5/2-3.25d-5 new)

Sec. 2-3.25d-5. Educational improvement plan.

(a) Except for school districts required to develop School and District Improvement Plans under Section 2-3.25d of this Code, each school district shall develop, in compliance with rules promulgated by the State Board of Education, an educational improvement plan that must include (i) measures for improving school district, school building, and individual student performance and (ii) a staff professional development plan developed at least in cooperation with staff or, if applicable, the exclusive bargaining representatives of the staff. The district shall develop the educational improvement plan in collaboration with parents, staff, and the staff's exclusive bargaining representatives, if any.

(105 ILCS 5/2-3.53a)

Sec. 2-3.53a. New principal mentoring program.

(a) In this Section, "new principal" means a principal of a public school who has less than 2 full school years of experience as a principal in a public school in this State. Beginning on July 1, 2007, and subject to an annual appropriation by the General Assembly, to establish a new principal mentoring program for new principals. Any individual who is hired as a principal in the State of Illinois on or after July 1, 2007 shall participate in a new principal mentoring program for the duration of his or her first year as a principal and must complete the program in accordance with the requirements established by the State Board of Education by rule or, for a school district created by Article 34 of this Code, in accordance with the provisions of Section 34-18.27 of this Code. School districts created by Article 34 are not subject to the requirements of subsection (b), (c), (d), (e), (f), or (g) of this Section. The new principal mentoring program shall match an experienced principal who meets the requirements of subsection (b) of this Section with each new principal in his or her first year in that position in order to assist the new principal in the development of his or her professional growth and to provide guidance during the new principal's first year of service.

(b) Any individual who has been a principal in Illinois for 3 or more years and who has demonstrated success as an instructional leader, as determined by the State Board by rule, is eligible to apply to be a mentor under a new principal mentoring program. Mentors shall complete mentoring training by entities approved by the State Board and meet any other requirements set forth by the State Board and by the school district employing the mentor.

(c) The State Board shall certify an entity or entities approved to provide training of mentors.

(d) A mentor shall be assigned to a new principal based on (i) similarity of grade level or type of school, (ii) learning needs of the new principal, and (iii) geographical proximity of the mentor to the new principal. The principal, in collaboration with the mentor, shall identify areas for improvement of the new principal's professional growth, including, but not limited to, each of the following:

(1) Analyzing data and applying it to practice.

(2) Aligning professional development and instructional programs.

(3) Building a professional learning community.

(4) Observing classroom practices and providing feedback.

(5) Facilitating effective meetings.

(6) Developing distributive leadership practices.

(7) Facilitating organizational change. The mentor shall not be required to provide an evaluation of the new principal on the basis of the mentoring relationship.

(e) On or after January 1, 2008 and on or after January 1 of each year thereafter, each mentor and each new principal shall complete a survey of progress on a form developed by their respective school districts. On or before July 1, 2008 and on or after July 1 of each year thereafter, the State Board shall facilitate a review and evaluate the mentoring training program in collaboration with the approved providers. Each new principal and his or her mentor must complete a verification form developed by the State Board in order to certify their completion of a new principal mentoring program.

(f) The requirements of this Section do not apply to any individual who has previously served as an assistant principal in Illinois acting under an administrative certificate for 5 or more years and who is hired, on or after July 1, 2007, as a principal by the school district in which the individual last served as an assistant principal, although such an individual may choose to participate in this program or shall be required to participate by the school district.

(f-5) A separate appropriation shall annually be made for the purposes of this Section for each new principal, as defined by this Section, for each of 2 school years for the purpose of providing one or more of the following:

(1) Mentor principal compensation.

(2) Mentor principal training.

(3) Program administration, not to exceed 20% of the total program cost.

The General Assembly shall annually appropriate $3,800,000 for the principal mentoring, leadership, and professional development program.

(g) The State Board may adopt any rules necessary for the implementation of this Section.

(Source: P.A. 94-1039, eff. 7-20-06.)

(105 ILCS 5/2-3.53b new)

Sec. 2-3.53b. New superintendent mentoring program.

(a) Beginning on July 1, 2009 and subject to an annual appropriation by the General Assembly, to establish a new superintendent mentoring program for new superintendents. Any individual who begins serving as a superintendent in this State on or after July 1, 2009 and has not previously served as a school district superintendent in this State shall participate in the new superintendent mentoring program for the duration of his or her first 2 school years as a superintendent and must complete the program in accordance with the requirements established by the State Board of Education by rule. The new superintendent mentoring program shall match an experienced superintendent who meets the requirements of subsection (b) of this Section with each new superintendent in his or her first 2 school years in that position in order to assist the new superintendent in the development of his or her professional growth and to provide guidance during the new superintendent's first 2 school years of service.

(b) Any individual who has actively served as a school district superintendent in this State for 3 or more years and who has demonstrated success as an instructional leader, as determined by the State Board of Education by rule, is eligible to apply to be a mentor under the new superintendent mentoring program. Mentors shall complete mentoring training through a provider selected by the State Board of Education and shall meet any other requirements set forth by the State Board and by the school district employing the mentor.

(c) Under the new superintendent mentoring program, a provider selected by the State Board of Education shall assign a mentor to a new superintendent based on (i) similarity of grade level or type of school district, (ii) learning needs of the new superintendent, and (iii) geographical proximity of the mentor to the new superintendent. The new superintendent, in collaboration with the mentor, shall identify areas for improvement of the new superintendent's professional growth, including, but not limited to, each of the following:

(1) Analyzing data and applying it to practice.

(2) Aligning professional development and instructional programs.

(3) Building a professional learning community.

(4) Effective school board relations.

(5) Facilitating effective meetings.

(6) Developing distributive leadership practices.

(7) Facilitating organizational change.

The mentor must not be required to provide an evaluation of the new superintendent on the basis of the mentoring relationship.

(d) From January 1, 2010 until May 15, 2010 and from January 1 until May 15 each year thereafter, each mentor and each new superintendent shall complete a survey of progress of the new superintendent on a form developed by the school district. On or before September 1, 2010 and on or before September 1 of each year thereafter, the provider selected by the State Board of Education shall submit a detailed annual report to the State Board of how the appropriation for the new superintendent mentoring program was spent, details on each mentor-mentee relationship, and a qualitative evaluation of the outcomes. The provider shall develop a verification form that each new superintendent and his or her mentor must complete and submit to the provider to certify completion of each year of the new superintendent mentoring program by July 15 immediately following the school year just completed.

(e) The requirements of this Section do not apply to any individual who has previously served as an assistant superintendent in a school district in this State acting under an administrative certificate for 5 or more years and who, on or after July 1, 2009, begins serving as a superintendent in the school district where he or she had served as an assistant superintendent immediately prior to being named superintendent, although such an individual may choose to participate in the new superintendent mentoring program or may be required to participate by the school district. The requirements of this Section do not apply to any superintendent or chief executive officer of a school district organized under Article 34 of this Code.

(f) The State Board may adopt any rules that are necessary for the implementation of this Section.

(105 ILCS 5/2-3.64b new)

Sec. 2-3.64b. Performance measures.

(a) In this Section:

"Growth model assessment" means a statistical system for educational outcome assessment that uses measures of student learning to enable the estimation of teacher, school, and school district statistical distributions and that conforms to or is consistent with applicable State and federal laws and regulations to the extent practicable. The statistical system shall use available and appropriate data as input to account for differences in prior student attainment, such that the impact that the teacher, school, and school district have on the educational progress of students may be estimated on a student attainment constant basis. The impact that a teacher, school, or school district has on the progress or lack of progress in educational advancement or learning of a student is referred to in this Section as the "effect" of the teacher, school, or school district on the educational progress of students.

"School" includes a charter school.

"Teacher" includes a teacher in a charter school.

(b) No later than July 1, 2013, the State Board of Education shall establish a statewide growth model assessment system to measure the annual increase or growth in each student's performance relative to a standard year of academic growth on the assessments provided for in Section 2-3.64 of this Code and other performance indicators that the State Board may identify. In developing such a system, the State Board shall coordinate with school districts, including a school district organized under Article 34 of this Code, that have or that are in the process of developing local growth model assessment systems.

(c) The growth model assessment system shall reliably estimate school district, school, and teacher effects on students' academic achievement over time, control for student characteristics, and use an independently verifiable statistical methodology to produce such estimates.

(d) A specific teacher's effect on the educational progress of students may not be used as a part of a formal personnel evaluation until data from 3 complete academic years are obtained and unless the district and the exclusive bargaining representative of the district's teachers, if any, have agreed to its use as part of an alternative evaluation plan under Section 24A-5 or 24A-8 of this Code. Teacher effect data must not be retained for use in evaluations for more than the most recent 5 years. A student must have been present for 150 days of classroom instruction per year or 75 days of classroom instruction per semester before that student's record is attributable to a specific teacher. Records from any student who is eligible for special education services under federal law must not be used as part of the growth model assessment.

(e) The State Board of Education shall provide growth model assessment data to each school district as soon as practicable after receipt of such data, but in no case later than December 1. The aggregate growth model assessment estimates for each school district and school shall also be included in each school district's report card under Section 10-17a of this Code.

(f) All identifiable individual student performance data, information, and reports shall be deemed confidential, shall not be a public record, and shall not be disclosed; provided that such information shall be made available only to a student's classroom teacher and other appropriate educational personnel and to the student's parent or guardian.

(g) All identifiable teacher effects data, information, and reports shall be deemed confidential, shall not be a public record, and shall not be disclosed without the teacher's express written consent, except to appropriate personnel in the district in which the teacher is employed.

(h) The data, information, and reports referred to in subsection (f) of this Section shall not constitute a school student record under Section 2 of the Illinois School Student Records Act and shall otherwise be exempt from disclosure under Section 6 of the Illinois School Student Records Act. The data, information, and reports referred to in subsections (f) and (g) of this Section shall not constitute a public record under Section 2 of the Freedom of Information Act and shall otherwise be exempt from disclosure under subdivisions (a) and (b) of subsection (1) of Section 7 of the Freedom of Information Act. Nothing in this Section prevents the State Board of Education from releasing or otherwise disclosing such data, information, and reports to any person associated with a recognized institution of higher education for the purpose of research, analysis, or statistical reporting or planning, provided that no student or teacher can be identified from the data, information, or report released and the person to whom the data, information, or report is released signs an affidavit agreeing to comply with all applicable statutes pertaining to confidential student and personnel records.

(i) As provided in Sections 2-3.25d, 2-3.25f, and 2-3.25h of this Code, the State Board of Education shall establish a coherent and sustained system of assistance and support for schools not meeting identified levels of achievement or not showing specified levels of progress, as determined by the State Board based upon the schools' growth model assessment results. As provided in Section 2-3.25f of this Code, the State Board of Education shall specify appropriate levels of assistance and intervention for schools that receive an unacceptable rating on student performance for the absolute student achievement standard or on progress on improved student achievement.

(j) The State Board of Education, from any moneys it may have available for the purposes set forth in this Section, must implement and administer a grant program that provides 2-year grants to school districts, including a school district organized under Article 34 of this Code, as determined by the State Board of Education, to be used to develop local growth model assessment systems. The Board may adopt any rules necessary to implement and administer this grant program.

(105 ILCS 5/2-3.148 new)

Sec. 2-3.148. The Digital Learning Technology Grant Program.

(a) As used in this Section, unless the context otherwise requires, "information technology education" means education in the development, design, use, maintenance, repair, and application of information technology systems or equipment, including, but not limited to, computers, the Internet, telecommunications devices and networks, and multi-media techniques.

(b) There is created the Digital Learning Technology Grant Program to provide money to school districts and charter schools to use in integrating information technology and scientific equipment as tools to measurably improve teaching and learning in grades 9 through 12 in this State's public schools. The State Board of Education shall administer the grant program through the acceptance, review, and recommendation of applications submitted pursuant to this Section.

(c) Grants awarded through the grant program created under this Section shall continue for 4 fiscal years and may be renewed as provided by rule of the State Board of Education. Grants awarded through the program shall be paid out of any money appropriated or credited to the Digital Learning Technology Grant Fund. A school district or charter school shall use any moneys obtained through the grant program to integrate information technology education into the 9th grade through 12th grade curriculum. In the case of a school district, such integration shall be accomplished in one or more public schools in the district. The school district or charter school may contract with one or more private entities for assistance in integrating information technology education into the curriculum. In addition, school districts and charter schools are encouraged to partner with businesses for assistance in integrating information technology education into the curriculum.

(d) The State Board of Education shall adopt rules for the administration and implementation of the grant program created under this Section. The first grants shall be awarded through the program for the 2009-2010 school year. Grants shall be awarded annually thereafter.

(e) Any school district or charter school that seeks to participate in the grant program created under this Section shall submit an application to the State Board of Education in the form and according to the deadlines established by rule of the State Board of Education. The application shall include the following information:

(1) if the applicant is a school district, the names of the schools that will receive the benefits of the grant;

(2) the current level of information technology education integration at the recipient schools;

(3) the school district's or charter school's plan for integrating information technology education into the 9th grade through 12th grade curriculum, including any specific method or program to be used, and any entities with whom the school district or charter school plans to contract or cooperate in achieving the integration;

(4) the specific, measurable goals to be achieved and the actual deliverables to be produced through the integration of information technology education into the curriculum, a deadline for achieving those goals, and a proposed method of measuring whether the goals were achieved;

(5) any businesses with which the school district or charter school has partnered to improve the availability and integration of information technology education within the curriculum; and

(6) any other information that may be specified by rule of the State Board of Education.

(f) In recommending and awarding grants through the program, the State Board of Education shall consider the following criteria:

(1) the degree to which information technology education is already integrated into the curriculum of the applying school district or charter school to ensure that those school districts and charter schools with the least degree of integration receive the grants first;

(2) the degree to which the applicant's proposed plan for using the grant moneys will result in integration of information technology tools and scientific equipment in a manner that measurably improves teaching and learning;

(3) the validity, clarity, and measurability of the goals established by the applicant and the validity of the proposed methods for measuring achievement of the goals;