98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB4461

 

Introduced , by Rep. John M. Cabello

 

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 this Act
18during the preceding month. Net revenue realized for a month
19shall be defined as the revenue from the tax imposed by
20subsections (a) and (b) of Section 201 of this Act which is
21deposited in the General Revenue Fund, the Education Assistance
22Fund, the Income Tax Surcharge Local Government Distributive
23Fund, the Fund for the Advancement of Education, and the
24Commitment to Human Services Fund during the month minus the
25amount paid out of the General Revenue Fund in State warrants
26during that same month as refunds to taxpayers for overpayment

 

 

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1of liability under the tax imposed by subsections (a) and (b)
2of 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    fiscal year 2013, the Annual Percentage shall be 9.75%. For
2    fiscal year 2014, the Annual Percentage shall be 9.5%. For
3    all other fiscal years, the Annual Percentage shall be
4    calculated as a fraction, the numerator of which shall be
5    the amount of refunds approved for payment by the
6    Department during the preceding fiscal year as a result of
7    overpayment of tax liability under subsections (a) and
8    (b)(1), (2), and (3) of Section 201 of this Act plus the
9    amount of such refunds remaining approved but unpaid at the
10    end of the preceding fiscal year, minus the amounts
11    transferred into the Income Tax Refund Fund from the
12    Tobacco Settlement Recovery Fund, and the denominator of
13    which shall be the amounts which will be collected pursuant
14    to subsections (a) and (b)(1), (2), and (3) of Section 201
15    of this Act during the preceding fiscal year; except that
16    in State fiscal year 2002, the Annual Percentage shall in
17    no event exceed 7.6%. The Director of Revenue shall certify
18    the Annual Percentage to the Comptroller on the last
19    business day of the fiscal year immediately preceding the
20    fiscal year for which it is to be effective.
21        (2) Beginning on January 1, 1989 and thereafter, the
22    Department shall deposit a percentage of the amounts
23    collected pursuant to subsections (a) and (b)(6), (7), and
24    (8), (c) and (d) of Section 201 of this Act into a fund in
25    the State treasury known as the Income Tax Refund Fund. The
26    Department shall deposit 18% of such amounts during the

 

 

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1    period beginning January 1, 1989 and ending on June 30,
2    1989. Beginning with State fiscal year 1990 and for each
3    fiscal year thereafter, the percentage deposited into the
4    Income Tax Refund Fund during a fiscal year shall be the
5    Annual Percentage. For fiscal years 1999, 2000, and 2001,
6    the Annual Percentage shall be 19%. For fiscal year 2003,
7    the Annual Percentage shall be 27%. For fiscal year 2004,
8    the Annual Percentage shall be 32%. Upon the effective date
9    of this amendatory Act of the 93rd General Assembly, the
10    Annual Percentage shall be 24% for fiscal year 2005. For
11    fiscal year 2006, the Annual Percentage shall be 20%. For
12    fiscal year 2007, the Annual Percentage shall be 17.5%. For
13    fiscal year 2008, the Annual Percentage shall be 15.5%. For
14    fiscal year 2009, the Annual Percentage shall be 17.5%. For
15    fiscal year 2010, the Annual Percentage shall be 17.5%. For
16    fiscal year 2011, the Annual Percentage shall be 17.5%. For
17    fiscal year 2012, the Annual Percentage shall be 17.5%. For
18    fiscal year 2013, the Annual Percentage shall be 14%. For
19    fiscal year 2014, the Annual Percentage shall be 13.4%. For
20    all other fiscal years, the Annual Percentage shall be
21    calculated as a fraction, the numerator of which shall be
22    the amount of refunds approved for payment by the
23    Department during the preceding fiscal year as a result of
24    overpayment of tax liability under subsections (a) and
25    (b)(6), (7), and (8), (c) and (d) of Section 201 of this
26    Act plus the amount of such refunds remaining approved but

 

 

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

 

 

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

 

 

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1    the amount collected pursuant to subsections (c) and (d) of
2    Section 201 of this Act deposited into the Income Tax
3    Refund Fund during the fiscal year.
4        (4.5) As soon as possible after the end of fiscal year
5    1999 and of each fiscal year thereafter, the Director shall
6    order transferred and the State Treasurer and State
7    Comptroller shall transfer from the Income Tax Refund Fund
8    to the General Revenue Fund any surplus remaining in the
9    Income Tax Refund Fund as of the end of such fiscal year;
10    excluding for fiscal years 2000, 2001, and 2002 amounts
11    attributable to transfers under item (3) of subsection (c)
12    less refunds resulting from the earned income tax credit.
13        (5) This Act shall constitute an irrevocable and
14    continuing appropriation from the Income Tax Refund Fund
15    for the purpose of paying refunds upon the order of the
16    Director in accordance with the provisions of this Section.
17    (e) Deposits into the Education Assistance Fund and the
18Income Tax Surcharge Local Government Distributive Fund.
19    On July 1, 1991, and thereafter, of the amounts collected
20pursuant to subsections (a) and (b) of Section 201 of this Act,
21minus deposits into the Income Tax Refund Fund, the Department
22shall deposit 7.3% into the Education Assistance Fund in the
23State Treasury. Beginning July 1, 1991, and continuing through
24January 31, 1993, of the amounts collected pursuant to
25subsections (a) and (b) of Section 201 of the Illinois Income
26Tax Act, minus deposits into the Income Tax Refund Fund, the

 

 

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1Department shall deposit 3.0% into the Income Tax Surcharge
2Local Government Distributive Fund in the State Treasury.
3Beginning February 1, 1993 and continuing through June 30,
41993, of the amounts collected pursuant to subsections (a) and
5(b) of Section 201 of the Illinois Income Tax Act, minus
6deposits into the Income Tax Refund Fund, the Department shall
7deposit 4.4% into the Income Tax Surcharge Local Government
8Distributive Fund in the State Treasury. Beginning July 1,
91993, and continuing through June 30, 1994, of the amounts
10collected under subsections (a) and (b) of Section 201 of this
11Act, minus deposits into the Income Tax Refund Fund, the
12Department shall deposit 1.475% into the Income Tax Surcharge
13Local Government Distributive Fund in the State Treasury.
14    (f) Deposits into the Fund for the Advancement of
15Education. Beginning February 1, 2015, the Department shall
16deposit the following portions of the revenue realized from the
17tax imposed upon individuals, trusts, and estates by
18subsections (a) and (b) of Section 201 of this Act during the
19preceding month, minus deposits into the Income Tax Refund
20Fund, into the Fund for the Advancement of Education:
21        (1) beginning February 1, 2015, and prior to February
22    1, 2025, 1/30; and
23        (2) beginning February 1, 2025, 1/26.
24    If the rate of tax imposed by subsection (a) and (b) of
25Section 201 is reduced pursuant to Section 201.5 of this Act,
26the Department shall not make the deposits required by this

 

 

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1subsection (f) on or after the effective date of the reduction.
2    (g) Deposits into the Commitment to Human Services Fund.
3Beginning February 1, 2015, the Department shall deposit the
4following portions of the revenue realized from the tax imposed
5upon individuals, trusts, and estates by subsections (a) and
6(b) of Section 201 of this Act during the preceding month,
7minus deposits into the Income Tax Refund Fund, into the
8Commitment to Human Services Fund:
9        (1) beginning February 1, 2015, and prior to February
10    1, 2025, 1/30; and
11        (2) beginning February 1, 2025, 1/26.
12    If the rate of tax imposed by subsection (a) and (b) of
13Section 201 is reduced pursuant to Section 201.5 of this Act,
14the Department shall not make the deposits required by this
15subsection (g) on or after the effective date of the reduction.
16(Source: P.A. 97-72, eff. 7-1-11; 97-732, eff. 6-30-12; 98-24,
17eff. 6-19-13.)
 
18    Section 99. Effective date. This Act takes effect upon
19becoming law.