HB1295 95TH GENERAL ASSEMBLY

LRB095 07270 BDD 27408 b

95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
HB1295

Introduced 2/20/2007, by Rep. Kurt M. Granberg

SYNOPSIS AS INTRODUCED:

20 ILCS 605/605-445 new
35 ILCS 5/218 new

Amends the Illinois Income Tax Act and the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois. Provides for an income tax credit for taxpayers that make a donation, during the taxable year, to a community-organization project that is certified by the Department of Commerce and Economic Opportunity. Provides that the amount of the credit is the amount of the donations. Requires taxpayers to maintain and submit records concerning the credit. Provides that the credit may not be carried forward or back and may not reduce the taxpayer's liability to less than zero. Exempts the credit from the Act's sunset provisions. In the Department of Commerce and Economic Opportunity Law, sets forth procedures and criteria for the certification of eligible community-organization projects. Limits the amount of donations for which a credit may be awarded to $10,000,000 per year. Requires the Department to establish and maintain a grant program for community-organization projects. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning finance.

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

Section 5. The Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois is amended by adding Section 605-445 as follows:

(20 ILCS 605/605-445 new)

Sec. 605-445. Certification of community-organization projects.

(a) The Department shall certify those credit-eligible community-organization projects for which taxpayers may receive a credit for monetary donations under Section 218 of the Illinois Income Tax Act. To be certified as a credit-eligible community-organization project, the project must:

(1) be conducted by an eligible not-for-profit agency;

(2) be located within a community that requires economic-development assistance; and

(3) likely result in the improvement of the local physical and social infrastructure within the community.

(b) To receive a certification under this Section, the agency must submit an application in the form and manner required by the Department. The Department must review the applications, and, if a project is approved, then the Department shall certify the amount of donations for which an income tax credit may be awarded under Section 218 of the Illinois Income Tax Act. The aggregate amount of donations for which an income tax credit may be awarded may not exceed $10,000,000 per year. An eligible not-for-profit agency that receives donations in excess of the amount certified by the Department for a community-organization project must notify the donor that he or she will not receive a tax credit for the donation.

The Department must maintain a list of the credit-eligible community-organization projects on an Internet website that is accessible to the public.

(c) The Department, in cooperation with the Secretary of State, the Attorney General, and the Department of Revenue, must adopt any rules that are necessary for the implementation and administration of this Section.

(d) The Department shall also establish and maintain a program to award grants to eligible not-for-profit agencies for community-organization projects in the State. The aggregate amount of grants awarded under this subsection (d) may not exceed $5,000,000 per year. To receive a grant, the agency must submit an application in the form and manner required by the Department. The grants under this subsection (d) are subject to appropriation.

(e) For the purpose of this Section:

"Eligible not-for-profit agency" means a private organization that:

(1) is a not-for-profit corporation that is exempt from federal income taxation under Section 501(c)(3) of the federal Internal Revenue Code of 1986;

(2) is organized under the General Not for Profit Corporation Act of 1986 for the purpose of providing community service; and

(3) complies with the provisions of the Charitable Trust Act.

"Physical infrastructure improvement" means a housing improvement or a revitalization program aimed at the physical improvement of a neighborhood area.

"Social infrastructure improvement" includes community organizing and planning, job training, education, and employment support for area residents.

Section 10. The Illinois Income Tax Act is amended by adding Section 218 as follows:

(35 ILCS 5/218 new)

Sec. 218. Credit for donations to certified community-organization projects.

(a) For taxable years ending on or after December 31, 2007, each taxpayer who, during the taxable year makes a donation to a community-organization project that is certified under Section 605-445 of the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois is entitled to a credit against the tax imposed by subsections (a) and (b) of Section 201 in an amount equal to the aggregate amount of all donations made by the taxpayer in the taxable year.

(c) 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 Section 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.

(d) A taxpayer claiming the credit under this Section must maintain and record any information that the Department requires regarding the donation for which the credit is claimed. When claiming the credit under this Section, the taxpayer must provide information regarding the taxpayer's donation to the community-organization project.

(e) The credit under this Section may not be carried forward or back and may not reduce the taxpayer's liability to less than zero.

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

(g) On or before October 30, 2007, the Department, in cooperation with the Department of Commerce and Economic Opportunity, must adopt rules necessary for the implementation and administration of this Section.

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