97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB5097

 

Introduced 2/7/2012, by Rep. Sidney H. Mathias

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/901  from Ch. 120, par. 9-901

    Amends the Illinois Income Tax Act. Provides that, if the rate of tax is reduced because the State has exceeded the State spending limit, then, beginning with the first distribution to occur after the effective date of the reduction, the State Comptroller shall order transferred and the State Treasurer shall transfer each month from the General Revenue Fund to the Local Government Distributive Fund an amount equal to 1/10 of the net revenue realized under Act during the preceding month. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by
5changing Section 901 as follows:
 
6    (35 ILCS 5/901)  (from Ch. 120, par. 9-901)
7    Sec. 901. Collection Authority.
8    (a) In general.
9    The Department shall collect the taxes imposed by this Act.
10The Department shall collect certified past due child support
11amounts under Section 2505-650 of the Department of Revenue Law
12(20 ILCS 2505/2505-650). Except as provided in subsections (c),
13(e), (f), and (g) of this Section, money collected pursuant to
14subsections (a) and (b) of Section 201 of this Act shall be
15paid into the General Revenue Fund in the State treasury; money
16collected pursuant to subsections (c) and (d) of Section 201 of
17this Act shall be paid into the Personal Property Tax
18Replacement Fund, a special fund in the State Treasury; and
19money collected under Section 2505-650 of the Department of
20Revenue Law (20 ILCS 2505/2505-650) shall be paid into the
21Child Support Enforcement Trust Fund, a special fund outside
22the State Treasury, or to the State Disbursement Unit
23established under Section 10-26 of the Illinois Public Aid

 

 

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1Code, as directed by the Department of Healthcare and Family
2Services.
3    (b) Local Government Distributive Fund.
4    Beginning August 1, 1969, and continuing through June 30,
51994, the Treasurer shall transfer each month from the General
6Revenue Fund to a special fund in the State treasury, to be
7known as the "Local Government Distributive Fund", an amount
8equal to 1/12 of the net revenue realized from the tax imposed
9by subsections (a) and (b) of Section 201 of this Act during
10the preceding month. Beginning July 1, 1994, and continuing
11through June 30, 1995, the Treasurer shall transfer each month
12from the General Revenue Fund to the Local Government
13Distributive Fund an amount equal to 1/11 of the net revenue
14realized from the tax imposed by subsections (a) and (b) of
15Section 201 of this Act during the preceding month. Beginning
16July 1, 1995 and continuing through January 31, 2011, the
17Treasurer shall transfer each month from the General Revenue
18Fund to the Local Government Distributive Fund an amount equal
19to the net of (i) 1/10 of the net revenue realized from the tax
20imposed by subsections (a) and (b) of Section 201 of the
21Illinois Income Tax Act during the preceding month (ii) minus,
22beginning July 1, 2003 and ending June 30, 2004, $6,666,666,
23and beginning July 1, 2004, zero. Beginning February 1, 2011,
24and continuing through January 31, 2015 (or until the first
25distribution to occur after the effective date of a rate
26reduction under Section 201.5 of this Act), the Treasurer shall

 

 

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1transfer each month from the General Revenue Fund to the Local
2Government Distributive Fund an amount equal to the sum of (i)
36% (10% of the ratio of the 3% individual income tax rate prior
4to 2011 to the 5% individual income tax rate after 2010) of the
5net revenue realized from the tax imposed by subsections (a)
6and (b) of Section 201 of this Act upon individuals, trusts,
7and estates during the preceding month and (ii) 6.86% (10% of
8the ratio of the 4.8% corporate income tax rate prior to 2011
9to the 7% corporate income tax rate after 2010) of the net
10revenue realized from the tax imposed by subsections (a) and
11(b) of Section 201 of this Act upon corporations during the
12preceding month. Beginning February 1, 2015 and continuing
13through January 31, 2025, the Treasurer shall transfer each
14month from the General Revenue Fund to the Local Government
15Distributive Fund an amount equal to the sum of (i) 8% (10% of
16the ratio of the 3% individual income tax rate prior to 2011 to
17the 3.75% individual income tax rate after 2014) of the net
18revenue realized from the tax imposed by subsections (a) and
19(b) of Section 201 of this Act upon individuals, trusts, and
20estates during the preceding month and (ii) 9.14% (10% of the
21ratio of the 4.8% corporate income tax rate prior to 2011 to
22the 5.25% corporate income tax rate after 2014) of the net
23revenue realized from the tax imposed by subsections (a) and
24(b) of Section 201 of this Act upon corporations during the
25preceding month. Beginning February 1, 2025, the Treasurer
26shall transfer each month from the General Revenue Fund to the

 

 

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1Local Government Distributive Fund an amount equal to the sum
2of (i) 9.23% (10% of the ratio of the 3% individual income tax
3rate prior to 2011 to the 3.25% individual income tax rate
4after 2024) of the net revenue realized from the tax imposed by
5subsections (a) and (b) of Section 201 of this Act upon
6individuals, trusts, and estates during the preceding month and
7(ii) 10% of the net revenue realized from the tax imposed by
8subsections (a) and (b) of Section 201 of this Act upon
9corporations during the preceding month. Notwithstanding any
10other provision of law, if the rate of tax is reduced pursuant
11to Section 201.5 of this Act, then, beginning with the first
12distribution to occur after the effective date of the
13reduction, the State Comptroller shall order transferred and
14the State Treasurer shall transfer each month from the General
15Revenue Fund to the Local Government Distributive Fund an
16amount equal to 1/10 of the net revenue realized from the tax
17imposed by subsections (a) and (b) of Section 201 of the
18Illinois Income Tax Act during the preceding month. Net revenue
19realized for a month shall be defined as the revenue from the
20tax imposed by subsections (a) and (b) of Section 201 of this
21Act which is deposited in the General Revenue Fund, the
22Education Assistance Fund, the Income Tax Surcharge Local
23Government Distributive Fund, the Fund for the Advancement of
24Education, and the Commitment to Human Services Fund during the
25month minus the amount paid out of the General Revenue Fund in
26State warrants during that same month as refunds to taxpayers

 

 

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1for overpayment of liability under the tax imposed by
2subsections (a) and (b) of Section 201 of this Act.
3    (c) Deposits Into Income Tax Refund Fund.
4        (1) Beginning on January 1, 1989 and thereafter, the
5    Department shall deposit a percentage of the amounts
6    collected pursuant to subsections (a) and (b)(1), (2), and
7    (3), of Section 201 of this Act into a fund in the State
8    treasury known as the Income Tax Refund Fund. The
9    Department shall deposit 6% of such amounts during the
10    period beginning January 1, 1989 and ending on June 30,
11    1989. Beginning with State fiscal year 1990 and for each
12    fiscal year thereafter, the percentage deposited into the
13    Income Tax Refund Fund during a fiscal year shall be the
14    Annual Percentage. For fiscal years 1999 through 2001, the
15    Annual Percentage shall be 7.1%. For fiscal year 2003, the
16    Annual Percentage shall be 8%. For fiscal year 2004, the
17    Annual Percentage shall be 11.7%. Upon the effective date
18    of this amendatory Act of the 93rd General Assembly, the
19    Annual Percentage shall be 10% for fiscal year 2005. For
20    fiscal year 2006, the Annual Percentage shall be 9.75%. For
21    fiscal year 2007, the Annual Percentage shall be 9.75%. For
22    fiscal year 2008, the Annual Percentage shall be 7.75%. For
23    fiscal year 2009, the Annual Percentage shall be 9.75%. For
24    fiscal year 2010, the Annual Percentage shall be 9.75%. For
25    fiscal year 2011, the Annual Percentage shall be 8.75%. For
26    fiscal year 2012, the Annual Percentage shall be 8.75%. For

 

 

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1    all other fiscal years, the Annual Percentage shall be
2    calculated as a fraction, the numerator of which shall be
3    the amount of refunds approved for payment by the
4    Department during the preceding fiscal year as a result of
5    overpayment of tax liability under subsections (a) and
6    (b)(1), (2), and (3) of Section 201 of this Act plus the
7    amount of such refunds remaining approved but unpaid at the
8    end of the preceding fiscal year, minus the amounts
9    transferred into the Income Tax Refund Fund from the
10    Tobacco Settlement Recovery Fund, and the denominator of
11    which shall be the amounts which will be collected pursuant
12    to subsections (a) and (b)(1), (2), and (3) of Section 201
13    of this Act during the preceding fiscal year; except that
14    in State fiscal year 2002, the Annual Percentage shall in
15    no event exceed 7.6%. The Director of Revenue shall certify
16    the Annual Percentage to the Comptroller on the last
17    business day of the fiscal year immediately preceding the
18    fiscal year for which it is to be effective.
19        (2) Beginning on January 1, 1989 and thereafter, the
20    Department shall deposit a percentage of the amounts
21    collected pursuant to subsections (a) and (b)(6), (7), and
22    (8), (c) and (d) of Section 201 of this Act into a fund in
23    the State treasury known as the Income Tax Refund Fund. The
24    Department shall deposit 18% of such amounts during the
25    period beginning January 1, 1989 and ending on June 30,
26    1989. Beginning with State fiscal year 1990 and for each

 

 

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1    fiscal year thereafter, the percentage deposited into the
2    Income Tax Refund Fund during a fiscal year shall be the
3    Annual Percentage. For fiscal years 1999, 2000, and 2001,
4    the Annual Percentage shall be 19%. For fiscal year 2003,
5    the Annual Percentage shall be 27%. For fiscal year 2004,
6    the Annual Percentage shall be 32%. Upon the effective date
7    of this amendatory Act of the 93rd General Assembly, the
8    Annual Percentage shall be 24% for fiscal year 2005. For
9    fiscal year 2006, the Annual Percentage shall be 20%. For
10    fiscal year 2007, the Annual Percentage shall be 17.5%. For
11    fiscal year 2008, the Annual Percentage shall be 15.5%. For
12    fiscal year 2009, the Annual Percentage shall be 17.5%. For
13    fiscal year 2010, the Annual Percentage shall be 17.5%. For
14    fiscal year 2011, the Annual Percentage shall be 17.5%. For
15    fiscal year 2012, the Annual Percentage shall be 17.5%. For
16    all other fiscal years, the Annual Percentage shall be
17    calculated as a fraction, the numerator of which shall be
18    the amount of refunds approved for payment by the
19    Department during the preceding fiscal year as a result of
20    overpayment of tax liability under subsections (a) and
21    (b)(6), (7), and (8), (c) and (d) of Section 201 of this
22    Act plus the amount of such refunds remaining approved but
23    unpaid at the end of the preceding fiscal year, and the
24    denominator of which shall be the amounts which will be
25    collected pursuant to subsections (a) and (b)(6), (7), and
26    (8), (c) and (d) of Section 201 of this Act during the

 

 

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1    preceding fiscal year; except that in State fiscal year
2    2002, the Annual Percentage shall in no event exceed 23%.
3    The Director of Revenue shall certify the Annual Percentage
4    to the Comptroller on the last business day of the fiscal
5    year immediately preceding the fiscal year for which it is
6    to be effective.
7        (3) The Comptroller shall order transferred and the
8    Treasurer shall transfer from the Tobacco Settlement
9    Recovery Fund to the Income Tax Refund Fund (i) $35,000,000
10    in January, 2001, (ii) $35,000,000 in January, 2002, and
11    (iii) $35,000,000 in January, 2003.
12    (d) Expenditures from Income Tax Refund Fund.
13        (1) Beginning January 1, 1989, money in the Income Tax
14    Refund Fund shall be expended exclusively for the purpose
15    of paying refunds resulting from overpayment of tax
16    liability under Section 201 of this Act, for paying rebates
17    under Section 208.1 in the event that the amounts in the
18    Homeowners' Tax Relief Fund are insufficient for that
19    purpose, and for making transfers pursuant to this
20    subsection (d).
21        (2) The Director shall order payment of refunds
22    resulting from overpayment of tax liability under Section
23    201 of this Act from the Income Tax Refund Fund only to the
24    extent that amounts collected pursuant to Section 201 of
25    this Act and transfers pursuant to this subsection (d) and
26    item (3) of subsection (c) have been deposited and retained

 

 

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1    in the Fund.
2        (3) As soon as possible after the end of each fiscal
3    year, the Director shall order transferred and the State
4    Treasurer and State Comptroller shall transfer from the
5    Income Tax Refund Fund to the Personal Property Tax
6    Replacement Fund an amount, certified by the Director to
7    the Comptroller, equal to the excess of the amount
8    collected pursuant to subsections (c) and (d) of Section
9    201 of this Act deposited into the Income Tax Refund Fund
10    during the fiscal year over the amount of refunds resulting
11    from overpayment of tax liability under subsections (c) and
12    (d) of Section 201 of this Act paid from the Income Tax
13    Refund Fund during the fiscal year.
14        (4) As soon as possible after the end of each fiscal
15    year, the Director shall order transferred and the State
16    Treasurer and State Comptroller shall transfer from the
17    Personal Property Tax Replacement Fund to the Income Tax
18    Refund Fund an amount, certified by the Director to the
19    Comptroller, equal to the excess of the amount of refunds
20    resulting from overpayment of tax liability under
21    subsections (c) and (d) of Section 201 of this Act paid
22    from the Income Tax Refund Fund during the fiscal year over
23    the amount collected pursuant to subsections (c) and (d) of
24    Section 201 of this Act deposited into the Income Tax
25    Refund Fund during the fiscal year.
26        (4.5) As soon as possible after the end of fiscal year

 

 

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1    1999 and of each fiscal year thereafter, the Director shall
2    order transferred and the State Treasurer and State
3    Comptroller shall transfer from the Income Tax Refund Fund
4    to the General Revenue Fund any surplus remaining in the
5    Income Tax Refund Fund as of the end of such fiscal year;
6    excluding for fiscal years 2000, 2001, and 2002 amounts
7    attributable to transfers under item (3) of subsection (c)
8    less refunds resulting from the earned income tax credit.
9        (5) This Act shall constitute an irrevocable and
10    continuing appropriation from the Income Tax Refund Fund
11    for the purpose of paying refunds upon the order of the
12    Director in accordance with the provisions of this Section.
13    (e) Deposits into the Education Assistance Fund and the
14Income Tax Surcharge Local Government Distributive Fund.
15    On July 1, 1991, and thereafter, of the amounts collected
16pursuant to subsections (a) and (b) of Section 201 of this Act,
17minus deposits into the Income Tax Refund Fund, the Department
18shall deposit 7.3% into the Education Assistance Fund in the
19State Treasury. Beginning July 1, 1991, and continuing through
20January 31, 1993, of the amounts collected pursuant to
21subsections (a) and (b) of Section 201 of the Illinois Income
22Tax Act, minus deposits into the Income Tax Refund Fund, the
23Department shall deposit 3.0% into the Income Tax Surcharge
24Local Government Distributive Fund in the State Treasury.
25Beginning February 1, 1993 and continuing through June 30,
261993, of the amounts collected pursuant to subsections (a) and

 

 

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1(b) of Section 201 of the Illinois Income Tax Act, minus
2deposits into the Income Tax Refund Fund, the Department shall
3deposit 4.4% into the Income Tax Surcharge Local Government
4Distributive Fund in the State Treasury. Beginning July 1,
51993, and continuing through June 30, 1994, of the amounts
6collected under subsections (a) and (b) of Section 201 of this
7Act, minus deposits into the Income Tax Refund Fund, the
8Department shall deposit 1.475% into the Income Tax Surcharge
9Local Government Distributive Fund in the State Treasury.
10    (f) Deposits into the Fund for the Advancement of
11Education. Beginning February 1, 2015, the Department shall
12deposit the following portions of the revenue realized from the
13tax imposed upon individuals, trusts, and estates by
14subsections (a) and (b) of Section 201 of this Act during the
15preceding month, minus deposits into the Income Tax Refund
16Fund, into the Fund for the Advancement of Education:
17        (1) beginning February 1, 2015, and prior to February
18    1, 2025, 1/30; and
19        (2) beginning February 1, 2025, 1/26.
20    If the rate of tax imposed by subsection (a) and (b) of
21Section 201 is reduced pursuant to Section 201.5 of this Act,
22the Department shall not make the deposits required by this
23subsection (f) on or after the effective date of the reduction.
24    (g) Deposits into the Commitment to Human Services Fund.
25Beginning February 1, 2015, the Department shall deposit the
26following portions of the revenue realized from the tax imposed

 

 

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1upon individuals, trusts, and estates by subsections (a) and
2(b) of Section 201 of this Act during the preceding month,
3minus deposits into the Income Tax Refund Fund, into the
4Commitment to Human Services Fund:
5        (1) beginning February 1, 2015, and prior to February
6    1, 2025, 1/30; and
7        (2) beginning February 1, 2025, 1/26.
8    If the rate of tax imposed by subsection (a) and (b) of
9Section 201 is reduced pursuant to Section 201.5 of this Act,
10the Department shall not make the deposits required by this
11subsection (g) on or after the effective date of the reduction.
12(Source: P.A. 96-45, eff. 7-15-09; 96-328, eff. 8-11-09;
1396-959, eff. 7-1-10; 96-1496, eff. 1-13-11; 97-72, eff.
147-1-11.)
 
15    Section 99. Effective date. This Act takes effect upon
16becoming law.