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91_HB4090
LRB9112238STsb
1 AN ACT concerning mortgage relief.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 1. Short title. This Act may be cited as the
5 Mortgage Relief Act.
6 Section 5. Definitions. In this Act:
7 "Department" means the Department of Human Services.
8 "Household" means 2 or more persons residing together or
9 a person living alone.
10 Section 10. Mortgage Relief Fund. The Mortgage Relief
11 Fund is created as a special fund in the State treasury and
12 shall be funded by appropriation by the General Assembly to
13 the Department of Human Services.
14 Section 15. Mortgage Relief Demonstration Program. The
15 Department is authorized to establish a Mortgage Relief
16 Demonstration Program, but only if the State receives federal
17 matching funds for expenditures made by the State under the
18 Emergency Food and Shelter Program authorized by Section
19 12-4.5 of the Illinois Public Aid Code. No funds from the
20 Emergency Food and Shelter Program authorized by Section
21 12-4.5 of the Illinois Public Aid Code may be used for this
22 demonstration program. As permitted by Section 12-5 of the
23 Illinois Public Aid Code, the Department, with the consent of
24 the Governor, may deposit into the Mortgage Relief Fund any
25 or all federal funds received as reimbursement for food and
26 shelter assistance under the Emergency Food and Shelter
27 Program authorized by Section 12-4.5 of the Illinois Public
28 Aid Code. Under this demonstration program, grants may be
29 made on behalf of households that, in times of crisis, might
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1 otherwise become homeless because of home mortgage
2 foreclosure. Grants may be made from funds appropriated for
3 the purposes of the program and from any federal funds or
4 funds from other sources that are made available for the
5 purposes of this program. Grants are to be made under the
6 program only to the extent funds are available. The
7 Department may limit the design and operation of the program
8 to certain areas of the State. The Department may administer
9 the program or may contract with a private nonprofit social
10 service agency to administer the program.
11 Section 20. Eligibility for assistance. No household is
12 eligible for assistance unless it meets all of the following
13 criteria:
14 (1) The household meets categorical eligibility for the
15 Temporary Assistance for Needy Families Program and has an
16 income equal to or less than the standard of need for this
17 program. (The Department may establish, by rule, higher
18 income levels.)
19 (2) The household is in imminent danger of eviction,
20 foreclosure, or homelessness.
21 (3) The household documents a temporary economic crisis
22 beyond the household's control, evidenced by at least one of
23 the following conditions:
24 (A) loss of employment;
25 (B) medical disability or emergency;
26 (C) loss or delay of some form of public benefits;
27 (D) natural disaster;
28 (E) substantial change in household composition;
29 (F) victimization by criminal activity;
30 (G) displacement by government or private action; or
31 (H) some other condition that constitutes a hardship
32 comparable to the other conditions enumerated in items
33 (A) through (G).
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1 (4) All other federal, State, or local housing subsidies
2 have been exhausted.
3 (5) The applicant demonstrates an ability to meet the
4 prospective rental obligation after the assistance has been
5 granted based on current or anticipated income.
6 Section 25. Form of assistance. Assistance under the
7 demonstration program shall consist of payment of a mortgage
8 payment arrearage in an amount established as necessary to
9 defeat eviction, but shall in no event be greater than 3
10 months of payment arrears.
11 Section 30. Limits to assistance. Assistance may not be
12 provided to a household more than once in any 12-month
13 period.
14 Section 35. Staff.
15 (a) Staff accepting applications under the program must
16 be trained or experienced in the following:
17 (1) The operation of the program and any regulations
18 adopted in relation to the program by the Department.
19 (2) Identification of federal, State, and local
20 agencies and services that are relevant to the program
21 and the program's clients.
22 (3) Dissemination of information relating to the
23 program.
24 (4) Intake, screening, and referral procedures.
25 (5) Other areas to be determined by the Department.
26 (b) If the Department contracts with a private entity for
27 the operation of the program, the Department must ensure that
28 the staff of the entity has experience and training as
29 specified in subsection (a).
30 Section 40. Duties of staff.
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1 (a) Whenever practicable, program staff must negotiate
2 with the mortgagor of a household approved for assistance
3 under the program to enable the household to remain in its
4 current housing.
5 (b) When there has been a loss of public benefits to the
6 household, program staff must take all practicable steps to
7 assist in the restoration of the household's public benefits.
8 (c) Program staff must identify, and assist households in
9 applying for, any form of public benefits or entitlements for
10 which the household may be eligible.
11 (d) Six months after assistance is provided to a
12 household under the program, program staff must determine (i)
13 whether the household has remained in the residence in which
14 they were residing at the time assistance was provided and
15 (ii) whether the living situation of the household is stable.
16 Section 45. Outreach to persons needing assistance. The
17 program must provide for outreach to persons who are likely
18 to be in need of assistance. This outreach may include, but
19 need not be limited to, general publicity and cooperation
20 with other agencies and court and sheriff's personnel
21 involved in eviction matters.
22 Section 50. Effect of assistance. Assistance received
23 under this Act is not considered to be income in determining
24 a recipient's eligibility for other State assistance programs
25 or for State tax purposes.
26 Section 55. Evaluation report. The Department must
27 conduct an evaluation of the program and present the findings
28 from the evaluation in a report to the General Assembly and
29 the Governor no later than 5 months after the end of the
30 first fiscal year of the program's operation.
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1 Section 60. Rules. The Department may adopt rules as
2 necessary to implement the program.
3 Section 90. The State Finance Act is amended by adding
4 Section 5.541 as follows:
5 (30 ILCS 105/5.541 new)
6 Sec. 5.541. The Mortgage Relief Fund.
7 Section 92. The Illinois Income Tax Act is amended by
8 changing Section 203 as follows:
9 (35 ILCS 5/203) (from Ch. 120, par. 2-203)
10 Sec. 203. Base income defined.
11 (a) Individuals.
12 (1) In general. In the case of an individual, base
13 income means an amount equal to the taxpayer's adjusted
14 gross income for the taxable year as modified by
15 paragraph (2).
16 (2) Modifications. The adjusted gross income
17 referred to in paragraph (1) shall be modified by adding
18 thereto the sum of the following amounts:
19 (A) An amount equal to all amounts paid or
20 accrued to the taxpayer as interest or dividends
21 during the taxable year to the extent excluded from
22 gross income in the computation of adjusted gross
23 income, except stock dividends of qualified public
24 utilities described in Section 305(e) of the
25 Internal Revenue Code;
26 (B) An amount equal to the amount of tax
27 imposed by this Act to the extent deducted from
28 gross income in the computation of adjusted gross
29 income for the taxable year;
30 (C) An amount equal to the amount received
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1 during the taxable year as a recovery or refund of
2 real property taxes paid with respect to the
3 taxpayer's principal residence under the Revenue Act
4 of 1939 and for which a deduction was previously
5 taken under subparagraph (L) of this paragraph (2)
6 prior to July 1, 1991, the retrospective application
7 date of Article 4 of Public Act 87-17. In the case
8 of multi-unit or multi-use structures and farm
9 dwellings, the taxes on the taxpayer's principal
10 residence shall be that portion of the total taxes
11 for the entire property which is attributable to
12 such principal residence;
13 (D) An amount equal to the amount of the
14 capital gain deduction allowable under the Internal
15 Revenue Code, to the extent deducted from gross
16 income in the computation of adjusted gross income;
17 (D-5) An amount, to the extent not included in
18 adjusted gross income, equal to the amount of money
19 withdrawn by the taxpayer in the taxable year from a
20 medical care savings account and the interest earned
21 on the account in the taxable year of a withdrawal
22 pursuant to subsection (b) of Section 20 of the
23 Medical Care Savings Account Act; and
24 (D-10) For taxable years ending after December
25 31, 1997, an amount equal to any eligible
26 remediation costs that the individual deducted in
27 computing adjusted gross income and for which the
28 individual claims a credit under subsection (l) of
29 Section 201;
30 and by deducting from the total so obtained the sum of
31 the following amounts:
32 (E) Any amount included in such total in
33 respect of any compensation (including but not
34 limited to any compensation paid or accrued to a
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1 serviceman while a prisoner of war or missing in
2 action) paid to a resident by reason of being on
3 active duty in the Armed Forces of the United States
4 and in respect of any compensation paid or accrued
5 to a resident who as a governmental employee was a
6 prisoner of war or missing in action, and in respect
7 of any compensation paid to a resident in 1971 or
8 thereafter for annual training performed pursuant to
9 Sections 502 and 503, Title 32, United States Code
10 as a member of the Illinois National Guard;
11 (F) An amount equal to all amounts included in
12 such total pursuant to the provisions of Sections
13 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
14 408 of the Internal Revenue Code, or included in
15 such total as distributions under the provisions of
16 any retirement or disability plan for employees of
17 any governmental agency or unit, or retirement
18 payments to retired partners, which payments are
19 excluded in computing net earnings from self
20 employment by Section 1402 of the Internal Revenue
21 Code and regulations adopted pursuant thereto;
22 (G) The valuation limitation amount;
23 (H) An amount equal to the amount of any tax
24 imposed by this Act which was refunded to the
25 taxpayer and included in such total for the taxable
26 year;
27 (I) An amount equal to all amounts included in
28 such total pursuant to the provisions of Section 111
29 of the Internal Revenue Code as a recovery of items
30 previously deducted from adjusted gross income in
31 the computation of taxable income;
32 (J) An amount equal to those dividends
33 included in such total which were paid by a
34 corporation which conducts business operations in an
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1 Enterprise Zone or zones created under the Illinois
2 Enterprise Zone Act, and conducts substantially all
3 of its operations in an Enterprise Zone or zones;
4 (K) An amount equal to those dividends
5 included in such total that were paid by a
6 corporation that conducts business operations in a
7 federally designated Foreign Trade Zone or Sub-Zone
8 and that is designated a High Impact Business
9 located in Illinois; provided that dividends
10 eligible for the deduction provided in subparagraph
11 (J) of paragraph (2) of this subsection shall not be
12 eligible for the deduction provided under this
13 subparagraph (K);
14 (L) For taxable years ending after December
15 31, 1983, an amount equal to all social security
16 benefits and railroad retirement benefits included
17 in such total pursuant to Sections 72(r) and 86 of
18 the Internal Revenue Code;
19 (M) With the exception of any amounts
20 subtracted under subparagraph (N), an amount equal
21 to the sum of all amounts disallowed as deductions
22 by (i) Sections 171(a) (2), and 265(2) of the
23 Internal Revenue Code of 1954, as now or hereafter
24 amended, and all amounts of expenses allocable to
25 interest and disallowed as deductions by Section
26 265(1) of the Internal Revenue Code of 1954, as now
27 or hereafter amended; and (ii) for taxable years
28 ending on or after August 13, 1999 the effective
29 date of this amendatory Act of the 91st General
30 Assembly, Sections 171(a)(2), 265, 280C, and
31 832(b)(5)(B)(i) of the Internal Revenue Code; the
32 provisions of this subparagraph are exempt from the
33 provisions of Section 250;
34 (N) An amount equal to all amounts included in
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1 such total which are exempt from taxation by this
2 State either by reason of its statutes or
3 Constitution or by reason of the Constitution,
4 treaties or statutes of the United States; provided
5 that, in the case of any statute of this State that
6 exempts income derived from bonds or other
7 obligations from the tax imposed under this Act, the
8 amount exempted shall be the interest net of bond
9 premium amortization;
10 (O) An amount equal to any contribution made
11 to a job training project established pursuant to
12 the Tax Increment Allocation Redevelopment Act;
13 (P) An amount equal to the amount of the
14 deduction used to compute the federal income tax
15 credit for restoration of substantial amounts held
16 under claim of right for the taxable year pursuant
17 to Section 1341 of the Internal Revenue Code of
18 1986;
19 (Q) An amount equal to any amounts included in
20 such total, received by the taxpayer as an
21 acceleration in the payment of life, endowment or
22 annuity benefits in advance of the time they would
23 otherwise be payable as an indemnity for a terminal
24 illness;
25 (R) An amount equal to the amount of any
26 federal or State bonus paid to veterans of the
27 Persian Gulf War;
28 (S) An amount, to the extent included in
29 adjusted gross income, equal to the amount of a
30 contribution made in the taxable year on behalf of
31 the taxpayer to a medical care savings account
32 established under the Medical Care Savings Account
33 Act to the extent the contribution is accepted by
34 the account administrator as provided in that Act;
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1 (T) An amount, to the extent included in
2 adjusted gross income, equal to the amount of
3 interest earned in the taxable year on a medical
4 care savings account established under the Medical
5 Care Savings Account Act on behalf of the taxpayer,
6 other than interest added pursuant to item (D-5) of
7 this paragraph (2);
8 (U) For one taxable year beginning on or after
9 January 1, 1994, an amount equal to the total amount
10 of tax imposed and paid under subsections (a) and
11 (b) of Section 201 of this Act on grant amounts
12 received by the taxpayer under the Nursing Home
13 Grant Assistance Act during the taxpayer's taxable
14 years 1992 and 1993;
15 (V) Beginning with tax years ending on or
16 after December 31, 1995 and ending with tax years
17 ending on or before December 31, 2004, an amount
18 equal to the amount paid by a taxpayer who is a
19 self-employed taxpayer, a partner of a partnership,
20 or a shareholder in a Subchapter S corporation for
21 health insurance or long-term care insurance for
22 that taxpayer or that taxpayer's spouse or
23 dependents, to the extent that the amount paid for
24 that health insurance or long-term care insurance
25 may be deducted under Section 213 of the Internal
26 Revenue Code of 1986, has not been deducted on the
27 federal income tax return of the taxpayer, and does
28 not exceed the taxable income attributable to that
29 taxpayer's income, self-employment income, or
30 Subchapter S corporation income; except that no
31 deduction shall be allowed under this item (V) if
32 the taxpayer is eligible to participate in any
33 health insurance or long-term care insurance plan of
34 an employer of the taxpayer or the taxpayer's
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1 spouse. The amount of the health insurance and
2 long-term care insurance subtracted under this item
3 (V) shall be determined by multiplying total health
4 insurance and long-term care insurance premiums paid
5 by the taxpayer times a number that represents the
6 fractional percentage of eligible medical expenses
7 under Section 213 of the Internal Revenue Code of
8 1986 not actually deducted on the taxpayer's federal
9 income tax return;
10 (W) For taxable years beginning on or after
11 January 1, 1998, all amounts included in the
12 taxpayer's federal gross income in the taxable year
13 from amounts converted from a regular IRA to a Roth
14 IRA. This paragraph is exempt from the provisions of
15 Section 250; and
16 (X) For taxable year 1999 and thereafter, an
17 amount equal to the amount of any (i) distributions,
18 to the extent includible in gross income for federal
19 income tax purposes, made to the taxpayer because of
20 his or her status as a victim of persecution for
21 racial or religious reasons by Nazi Germany or any
22 other Axis regime or as an heir of the victim and
23 (ii) items of income, to the extent includible in
24 gross income for federal income tax purposes,
25 attributable to, derived from or in any way related
26 to assets stolen from, hidden from, or otherwise
27 lost to a victim of persecution for racial or
28 religious reasons by Nazi Germany or any other Axis
29 regime immediately prior to, during, and immediately
30 after World War II, including, but not limited to,
31 interest on the proceeds receivable as insurance
32 under policies issued to a victim of persecution for
33 racial or religious reasons by Nazi Germany or any
34 other Axis regime by European insurance companies
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1 immediately prior to and during World War II;
2 provided, however, this subtraction from federal
3 adjusted gross income does not apply to assets
4 acquired with such assets or with the proceeds from
5 the sale of such assets; provided, further, this
6 paragraph shall only apply to a taxpayer who was the
7 first recipient of such assets after their recovery
8 and who is a victim of persecution for racial or
9 religious reasons by Nazi Germany or any other Axis
10 regime or as an heir of the victim. The amount of
11 and the eligibility for any public assistance,
12 benefit, or similar entitlement is not affected by
13 the inclusion of items (i) and (ii) of this
14 paragraph in gross income for federal income tax
15 purposes. This paragraph is exempt from the
16 provisions of Section 250; and.
17 (Y) An amount equal to assistance received
18 under the Mortgage Relief Act.
19 (b) Corporations.
20 (1) In general. In the case of a corporation, base
21 income means an amount equal to the taxpayer's taxable
22 income for the taxable year as modified by paragraph (2).
23 (2) Modifications. The taxable income referred to
24 in paragraph (1) shall be modified by adding thereto the
25 sum of the following amounts:
26 (A) An amount equal to all amounts paid or
27 accrued to the taxpayer as interest and all
28 distributions received from regulated investment
29 companies during the taxable year to the extent
30 excluded from gross income in the computation of
31 taxable income;
32 (B) An amount equal to the amount of tax
33 imposed by this Act to the extent deducted from
34 gross income in the computation of taxable income
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1 for the taxable year;
2 (C) In the case of a regulated investment
3 company, an amount equal to the excess of (i) the
4 net long-term capital gain for the taxable year,
5 over (ii) the amount of the capital gain dividends
6 designated as such in accordance with Section
7 852(b)(3)(C) of the Internal Revenue Code and any
8 amount designated under Section 852(b)(3)(D) of the
9 Internal Revenue Code, attributable to the taxable
10 year (this amendatory Act of 1995 (Public Act 89-89)
11 is declarative of existing law and is not a new
12 enactment);
13 (D) The amount of any net operating loss
14 deduction taken in arriving at taxable income, other
15 than a net operating loss carried forward from a
16 taxable year ending prior to December 31, 1986;
17 (E) For taxable years in which a net operating
18 loss carryback or carryforward from a taxable year
19 ending prior to December 31, 1986 is an element of
20 taxable income under paragraph (1) of subsection (e)
21 or subparagraph (E) of paragraph (2) of subsection
22 (e), the amount by which addition modifications
23 other than those provided by this subparagraph (E)
24 exceeded subtraction modifications in such earlier
25 taxable year, with the following limitations applied
26 in the order that they are listed:
27 (i) the addition modification relating to
28 the net operating loss carried back or forward
29 to the taxable year from any taxable year
30 ending prior to December 31, 1986 shall be
31 reduced by the amount of addition modification
32 under this subparagraph (E) which related to
33 that net operating loss and which was taken
34 into account in calculating the base income of
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1 an earlier taxable year, and
2 (ii) the addition modification relating
3 to the net operating loss carried back or
4 forward to the taxable year from any taxable
5 year ending prior to December 31, 1986 shall
6 not exceed the amount of such carryback or
7 carryforward;
8 For taxable years in which there is a net
9 operating loss carryback or carryforward from more
10 than one other taxable year ending prior to December
11 31, 1986, the addition modification provided in this
12 subparagraph (E) shall be the sum of the amounts
13 computed independently under the preceding
14 provisions of this subparagraph (E) for each such
15 taxable year; and
16 (E-5) For taxable years ending after December
17 31, 1997, an amount equal to any eligible
18 remediation costs that the corporation deducted in
19 computing adjusted gross income and for which the
20 corporation claims a credit under subsection (l) of
21 Section 201;
22 and by deducting from the total so obtained the sum of
23 the following amounts:
24 (F) An amount equal to the amount of any tax
25 imposed by this Act which was refunded to the
26 taxpayer and included in such total for the taxable
27 year;
28 (G) An amount equal to any amount included in
29 such total under Section 78 of the Internal Revenue
30 Code;
31 (H) In the case of a regulated investment
32 company, an amount equal to the amount of exempt
33 interest dividends as defined in subsection (b) (5)
34 of Section 852 of the Internal Revenue Code, paid to
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1 shareholders for the taxable year;
2 (I) With the exception of any amounts
3 subtracted under subparagraph (J), an amount equal
4 to the sum of all amounts disallowed as deductions
5 by (i) Sections 171(a) (2), and 265(a)(2) and
6 amounts disallowed as interest expense by Section
7 291(a)(3) of the Internal Revenue Code, as now or
8 hereafter amended, and all amounts of expenses
9 allocable to interest and disallowed as deductions
10 by Section 265(a)(1) of the Internal Revenue Code,
11 as now or hereafter amended; and (ii) for taxable
12 years ending on or after August 13, 1999 the
13 effective date of this amendatory Act of the 91st
14 General Assembly, Sections 171(a)(2), 265, 280C, and
15 832(b)(5)(B)(i) of the Internal Revenue Code; the
16 provisions of this subparagraph are exempt from the
17 provisions of Section 250;
18 (J) An amount equal to all amounts included in
19 such total which are exempt from taxation by this
20 State either by reason of its statutes or
21 Constitution or by reason of the Constitution,
22 treaties or statutes of the United States; provided
23 that, in the case of any statute of this State that
24 exempts income derived from bonds or other
25 obligations from the tax imposed under this Act, the
26 amount exempted shall be the interest net of bond
27 premium amortization;
28 (K) An amount equal to those dividends
29 included in such total which were paid by a
30 corporation which conducts business operations in an
31 Enterprise Zone or zones created under the Illinois
32 Enterprise Zone Act and conducts substantially all
33 of its operations in an Enterprise Zone or zones;
34 (L) An amount equal to those dividends
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1 included in such total that were paid by a
2 corporation that conducts business operations in a
3 federally designated Foreign Trade Zone or Sub-Zone
4 and that is designated a High Impact Business
5 located in Illinois; provided that dividends
6 eligible for the deduction provided in subparagraph
7 (K) of paragraph 2 of this subsection shall not be
8 eligible for the deduction provided under this
9 subparagraph (L);
10 (M) For any taxpayer that is a financial
11 organization within the meaning of Section 304(c) of
12 this Act, an amount included in such total as
13 interest income from a loan or loans made by such
14 taxpayer to a borrower, to the extent that such a
15 loan is secured by property which is eligible for
16 the Enterprise Zone Investment Credit. To determine
17 the portion of a loan or loans that is secured by
18 property eligible for a Section 201(h) investment
19 credit to the borrower, the entire principal amount
20 of the loan or loans between the taxpayer and the
21 borrower should be divided into the basis of the
22 Section 201(h) investment credit property which
23 secures the loan or loans, using for this purpose
24 the original basis of such property on the date that
25 it was placed in service in the Enterprise Zone.
26 The subtraction modification available to taxpayer
27 in any year under this subsection shall be that
28 portion of the total interest paid by the borrower
29 with respect to such loan attributable to the
30 eligible property as calculated under the previous
31 sentence;
32 (M-1) For any taxpayer that is a financial
33 organization within the meaning of Section 304(c) of
34 this Act, an amount included in such total as
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1 interest income from a loan or loans made by such
2 taxpayer to a borrower, to the extent that such a
3 loan is secured by property which is eligible for
4 the High Impact Business Investment Credit. To
5 determine the portion of a loan or loans that is
6 secured by property eligible for a Section 201(i)
7 investment credit to the borrower, the entire
8 principal amount of the loan or loans between the
9 taxpayer and the borrower should be divided into the
10 basis of the Section 201(i) investment credit
11 property which secures the loan or loans, using for
12 this purpose the original basis of such property on
13 the date that it was placed in service in a
14 federally designated Foreign Trade Zone or Sub-Zone
15 located in Illinois. No taxpayer that is eligible
16 for the deduction provided in subparagraph (M) of
17 paragraph (2) of this subsection shall be eligible
18 for the deduction provided under this subparagraph
19 (M-1). The subtraction modification available to
20 taxpayers in any year under this subsection shall be
21 that portion of the total interest paid by the
22 borrower with respect to such loan attributable to
23 the eligible property as calculated under the
24 previous sentence;
25 (N) Two times any contribution made during the
26 taxable year to a designated zone organization to
27 the extent that the contribution (i) qualifies as a
28 charitable contribution under subsection (c) of
29 Section 170 of the Internal Revenue Code and (ii)
30 must, by its terms, be used for a project approved
31 by the Department of Commerce and Community Affairs
32 under Section 11 of the Illinois Enterprise Zone
33 Act;
34 (O) An amount equal to: (i) 85% for taxable
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1 years ending on or before December 31, 1992, or, a
2 percentage equal to the percentage allowable under
3 Section 243(a)(1) of the Internal Revenue Code of
4 1986 for taxable years ending after December 31,
5 1992, of the amount by which dividends included in
6 taxable income and received from a corporation that
7 is not created or organized under the laws of the
8 United States or any state or political subdivision
9 thereof, including, for taxable years ending on or
10 after December 31, 1988, dividends received or
11 deemed received or paid or deemed paid under
12 Sections 951 through 964 of the Internal Revenue
13 Code, exceed the amount of the modification provided
14 under subparagraph (G) of paragraph (2) of this
15 subsection (b) which is related to such dividends;
16 plus (ii) 100% of the amount by which dividends,
17 included in taxable income and received, including,
18 for taxable years ending on or after December 31,
19 1988, dividends received or deemed received or paid
20 or deemed paid under Sections 951 through 964 of the
21 Internal Revenue Code, from any such corporation
22 specified in clause (i) that would but for the
23 provisions of Section 1504 (b) (3) of the Internal
24 Revenue Code be treated as a member of the
25 affiliated group which includes the dividend
26 recipient, exceed the amount of the modification
27 provided under subparagraph (G) of paragraph (2) of
28 this subsection (b) which is related to such
29 dividends;
30 (P) An amount equal to any contribution made
31 to a job training project established pursuant to
32 the Tax Increment Allocation Redevelopment Act;
33 (Q) An amount equal to the amount of the
34 deduction used to compute the federal income tax
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1 credit for restoration of substantial amounts held
2 under claim of right for the taxable year pursuant
3 to Section 1341 of the Internal Revenue Code of
4 1986; and
5 (R) In the case of an attorney-in-fact with
6 respect to whom an interinsurer or a reciprocal
7 insurer has made the election under Section 835 of
8 the Internal Revenue Code, 26 U.S.C. 835, an amount
9 equal to the excess, if any, of the amounts paid or
10 incurred by that interinsurer or reciprocal insurer
11 in the taxable year to the attorney-in-fact over the
12 deduction allowed to that interinsurer or reciprocal
13 insurer with respect to the attorney-in-fact under
14 Section 835(b) of the Internal Revenue Code for the
15 taxable year.
16 (3) Special rule. For purposes of paragraph (2)
17 (A), "gross income" in the case of a life insurance
18 company, for tax years ending on and after December 31,
19 1994, shall mean the gross investment income for the
20 taxable year.
21 (c) Trusts and estates.
22 (1) In general. In the case of a trust or estate,
23 base income means an amount equal to the taxpayer's
24 taxable income for the taxable year as modified by
25 paragraph (2).
26 (2) Modifications. Subject to the provisions of
27 paragraph (3), the taxable income referred to in
28 paragraph (1) shall be modified by adding thereto the sum
29 of the following amounts:
30 (A) An amount equal to all amounts paid or
31 accrued to the taxpayer as interest or dividends
32 during the taxable year to the extent excluded from
33 gross income in the computation of taxable income;
34 (B) In the case of (i) an estate, $600; (ii) a
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1 trust which, under its governing instrument, is
2 required to distribute all of its income currently,
3 $300; and (iii) any other trust, $100, but in each
4 such case, only to the extent such amount was
5 deducted in the computation of taxable income;
6 (C) An amount equal to the amount of tax
7 imposed by this Act to the extent deducted from
8 gross income in the computation of taxable income
9 for the taxable year;
10 (D) The amount of any net operating loss
11 deduction taken in arriving at taxable income, other
12 than a net operating loss carried forward from a
13 taxable year ending prior to December 31, 1986;
14 (E) For taxable years in which a net operating
15 loss carryback or carryforward from a taxable year
16 ending prior to December 31, 1986 is an element of
17 taxable income under paragraph (1) of subsection (e)
18 or subparagraph (E) of paragraph (2) of subsection
19 (e), the amount by which addition modifications
20 other than those provided by this subparagraph (E)
21 exceeded subtraction modifications in such taxable
22 year, with the following limitations applied in the
23 order that they are listed:
24 (i) the addition modification relating to
25 the net operating loss carried back or forward
26 to the taxable year from any taxable year
27 ending prior to December 31, 1986 shall be
28 reduced by the amount of addition modification
29 under this subparagraph (E) which related to
30 that net operating loss and which was taken
31 into account in calculating the base income of
32 an earlier taxable year, and
33 (ii) the addition modification relating
34 to the net operating loss carried back or
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1 forward to the taxable year from any taxable
2 year ending prior to December 31, 1986 shall
3 not exceed the amount of such carryback or
4 carryforward;
5 For taxable years in which there is a net
6 operating loss carryback or carryforward from more
7 than one other taxable year ending prior to December
8 31, 1986, the addition modification provided in this
9 subparagraph (E) shall be the sum of the amounts
10 computed independently under the preceding
11 provisions of this subparagraph (E) for each such
12 taxable year;
13 (F) For taxable years ending on or after
14 January 1, 1989, an amount equal to the tax deducted
15 pursuant to Section 164 of the Internal Revenue Code
16 if the trust or estate is claiming the same tax for
17 purposes of the Illinois foreign tax credit under
18 Section 601 of this Act;
19 (G) An amount equal to the amount of the
20 capital gain deduction allowable under the Internal
21 Revenue Code, to the extent deducted from gross
22 income in the computation of taxable income; and
23 (G-5) For taxable years ending after December
24 31, 1997, an amount equal to any eligible
25 remediation costs that the trust or estate deducted
26 in computing adjusted gross income and for which the
27 trust or estate claims a credit under subsection (l)
28 of Section 201;
29 and by deducting from the total so obtained the sum of
30 the following amounts:
31 (H) An amount equal to all amounts included in
32 such total pursuant to the provisions of Sections
33 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and
34 408 of the Internal Revenue Code or included in such
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1 total as distributions under the provisions of any
2 retirement or disability plan for employees of any
3 governmental agency or unit, or retirement payments
4 to retired partners, which payments are excluded in
5 computing net earnings from self employment by
6 Section 1402 of the Internal Revenue Code and
7 regulations adopted pursuant thereto;
8 (I) The valuation limitation amount;
9 (J) An amount equal to the amount of any tax
10 imposed by this Act which was refunded to the
11 taxpayer and included in such total for the taxable
12 year;
13 (K) An amount equal to all amounts included in
14 taxable income as modified by subparagraphs (A),
15 (B), (C), (D), (E), (F) and (G) which are exempt
16 from taxation by this State either by reason of its
17 statutes or Constitution or by reason of the
18 Constitution, treaties or statutes of the United
19 States; provided that, in the case of any statute of
20 this State that exempts income derived from bonds or
21 other obligations from the tax imposed under this
22 Act, the amount exempted shall be the interest net
23 of bond premium amortization;
24 (L) With the exception of any amounts
25 subtracted under subparagraph (K), an amount equal
26 to the sum of all amounts disallowed as deductions
27 by (i) Sections 171(a) (2) and 265(a)(2) of the
28 Internal Revenue Code, as now or hereafter amended,
29 and all amounts of expenses allocable to interest
30 and disallowed as deductions by Section 265(1) of
31 the Internal Revenue Code of 1954, as now or
32 hereafter amended; and (ii) for taxable years ending
33 on or after August 13, 1999 the effective date of
34 this amendatory Act of the 91st General Assembly,
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1 Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i)
2 of the Internal Revenue Code; the provisions of this
3 subparagraph are exempt from the provisions of
4 Section 250;
5 (M) An amount equal to those dividends
6 included in such total which were paid by a
7 corporation which conducts business operations in an
8 Enterprise Zone or zones created under the Illinois
9 Enterprise Zone Act and conducts substantially all
10 of its operations in an Enterprise Zone or Zones;
11 (N) An amount equal to any contribution made
12 to a job training project established pursuant to
13 the Tax Increment Allocation Redevelopment Act;
14 (O) An amount equal to those dividends
15 included in such total that were paid by a
16 corporation that conducts business operations in a
17 federally designated Foreign Trade Zone or Sub-Zone
18 and that is designated a High Impact Business
19 located in Illinois; provided that dividends
20 eligible for the deduction provided in subparagraph
21 (M) of paragraph (2) of this subsection shall not be
22 eligible for the deduction provided under this
23 subparagraph (O);
24 (P) An amount equal to the amount of the
25 deduction used to compute the federal income tax
26 credit for restoration of substantial amounts held
27 under claim of right for the taxable year pursuant
28 to Section 1341 of the Internal Revenue Code of
29 1986; and
30 (Q) For taxable year 1999 and thereafter, an
31 amount equal to the amount of any (i) distributions,
32 to the extent includible in gross income for federal
33 income tax purposes, made to the taxpayer because of
34 his or her status as a victim of persecution for
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1 racial or religious reasons by Nazi Germany or any
2 other Axis regime or as an heir of the victim and
3 (ii) items of income, to the extent includible in
4 gross income for federal income tax purposes,
5 attributable to, derived from or in any way related
6 to assets stolen from, hidden from, or otherwise
7 lost to a victim of persecution for racial or
8 religious reasons by Nazi Germany or any other Axis
9 regime immediately prior to, during, and immediately
10 after World War II, including, but not limited to,
11 interest on the proceeds receivable as insurance
12 under policies issued to a victim of persecution for
13 racial or religious reasons by Nazi Germany or any
14 other Axis regime by European insurance companies
15 immediately prior to and during World War II;
16 provided, however, this subtraction from federal
17 adjusted gross income does not apply to assets
18 acquired with such assets or with the proceeds from
19 the sale of such assets; provided, further, this
20 paragraph shall only apply to a taxpayer who was the
21 first recipient of such assets after their recovery
22 and who is a victim of persecution for racial or
23 religious reasons by Nazi Germany or any other Axis
24 regime or as an heir of the victim. The amount of
25 and the eligibility for any public assistance,
26 benefit, or similar entitlement is not affected by
27 the inclusion of items (i) and (ii) of this
28 paragraph in gross income for federal income tax
29 purposes. This paragraph is exempt from the
30 provisions of Section 250.
31 (3) Limitation. The amount of any modification
32 otherwise required under this subsection shall, under
33 regulations prescribed by the Department, be adjusted by
34 any amounts included therein which were properly paid,
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1 credited, or required to be distributed, or permanently
2 set aside for charitable purposes pursuant to Internal
3 Revenue Code Section 642(c) during the taxable year.
4 (d) Partnerships.
5 (1) In general. In the case of a partnership, base
6 income means an amount equal to the taxpayer's taxable
7 income for the taxable year as modified by paragraph (2).
8 (2) Modifications. The taxable income referred to
9 in paragraph (1) shall be modified by adding thereto the
10 sum of the following amounts:
11 (A) An amount equal to all amounts paid or
12 accrued to the taxpayer as interest or dividends
13 during the taxable year to the extent excluded from
14 gross income in the computation of taxable income;
15 (B) An amount equal to the amount of tax
16 imposed by this Act to the extent deducted from
17 gross income for the taxable year;
18 (C) The amount of deductions allowed to the
19 partnership pursuant to Section 707 (c) of the
20 Internal Revenue Code in calculating its taxable
21 income; and
22 (D) An amount equal to the amount of the
23 capital gain deduction allowable under the Internal
24 Revenue Code, to the extent deducted from gross
25 income in the computation of taxable income;
26 and by deducting from the total so obtained the following
27 amounts:
28 (E) The valuation limitation amount;
29 (F) An amount equal to the amount of any tax
30 imposed by this Act which was refunded to the
31 taxpayer and included in such total for the taxable
32 year;
33 (G) An amount equal to all amounts included in
34 taxable income as modified by subparagraphs (A),
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1 (B), (C) and (D) which are exempt from taxation by
2 this State either by reason of its statutes or
3 Constitution or by reason of the Constitution,
4 treaties or statutes of the United States; provided
5 that, in the case of any statute of this State that
6 exempts income derived from bonds or other
7 obligations from the tax imposed under this Act, the
8 amount exempted shall be the interest net of bond
9 premium amortization;
10 (H) Any income of the partnership which
11 constitutes personal service income as defined in
12 Section 1348 (b) (1) of the Internal Revenue Code
13 (as in effect December 31, 1981) or a reasonable
14 allowance for compensation paid or accrued for
15 services rendered by partners to the partnership,
16 whichever is greater;
17 (I) An amount equal to all amounts of income
18 distributable to an entity subject to the Personal
19 Property Tax Replacement Income Tax imposed by
20 subsections (c) and (d) of Section 201 of this Act
21 including amounts distributable to organizations
22 exempt from federal income tax by reason of Section
23 501(a) of the Internal Revenue Code;
24 (J) With the exception of any amounts
25 subtracted under subparagraph (G), an amount equal
26 to the sum of all amounts disallowed as deductions
27 by (i) Sections 171(a) (2), and 265(2) of the
28 Internal Revenue Code of 1954, as now or hereafter
29 amended, and all amounts of expenses allocable to
30 interest and disallowed as deductions by Section
31 265(1) of the Internal Revenue Code, as now or
32 hereafter amended; and (ii) for taxable years ending
33 on or after August 13, 1999 the effective date of
34 this amendatory Act of the 91st General Assembly,
-27- LRB9112238STsb
1 Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i)
2 of the Internal Revenue Code; the provisions of this
3 subparagraph are exempt from the provisions of
4 Section 250;
5 (K) An amount equal to those dividends
6 included in such total which were paid by a
7 corporation which conducts business operations in an
8 Enterprise Zone or zones created under the Illinois
9 Enterprise Zone Act, enacted by the 82nd General
10 Assembly, and which does not conduct such operations
11 other than in an Enterprise Zone or Zones;
12 (L) An amount equal to any contribution made
13 to a job training project established pursuant to
14 the Real Property Tax Increment Allocation
15 Redevelopment Act;
16 (M) An amount equal to those dividends
17 included in such total that were paid by a
18 corporation that conducts business operations in a
19 federally designated Foreign Trade Zone or Sub-Zone
20 and that is designated a High Impact Business
21 located in Illinois; provided that dividends
22 eligible for the deduction provided in subparagraph
23 (K) of paragraph (2) of this subsection shall not be
24 eligible for the deduction provided under this
25 subparagraph (M); and
26 (N) An amount equal to the amount of the
27 deduction used to compute the federal income tax
28 credit for restoration of substantial amounts held
29 under claim of right for the taxable year pursuant
30 to Section 1341 of the Internal Revenue Code of
31 1986.
32 (e) Gross income; adjusted gross income; taxable income.
33 (1) In general. Subject to the provisions of
34 paragraph (2) and subsection (b) (3), for purposes of
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1 this Section and Section 803(e), a taxpayer's gross
2 income, adjusted gross income, or taxable income for the
3 taxable year shall mean the amount of gross income,
4 adjusted gross income or taxable income properly
5 reportable for federal income tax purposes for the
6 taxable year under the provisions of the Internal Revenue
7 Code. Taxable income may be less than zero. However, for
8 taxable years ending on or after December 31, 1986, net
9 operating loss carryforwards from taxable years ending
10 prior to December 31, 1986, may not exceed the sum of
11 federal taxable income for the taxable year before net
12 operating loss deduction, plus the excess of addition
13 modifications over subtraction modifications for the
14 taxable year. For taxable years ending prior to December
15 31, 1986, taxable income may never be an amount in excess
16 of the net operating loss for the taxable year as defined
17 in subsections (c) and (d) of Section 172 of the Internal
18 Revenue Code, provided that when taxable income of a
19 corporation (other than a Subchapter S corporation),
20 trust, or estate is less than zero and addition
21 modifications, other than those provided by subparagraph
22 (E) of paragraph (2) of subsection (b) for corporations
23 or subparagraph (E) of paragraph (2) of subsection (c)
24 for trusts and estates, exceed subtraction modifications,
25 an addition modification must be made under those
26 subparagraphs for any other taxable year to which the
27 taxable income less than zero (net operating loss) is
28 applied under Section 172 of the Internal Revenue Code or
29 under subparagraph (E) of paragraph (2) of this
30 subsection (e) applied in conjunction with Section 172 of
31 the Internal Revenue Code.
32 (2) Special rule. For purposes of paragraph (1) of
33 this subsection, the taxable income properly reportable
34 for federal income tax purposes shall mean:
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1 (A) Certain life insurance companies. In the
2 case of a life insurance company subject to the tax
3 imposed by Section 801 of the Internal Revenue Code,
4 life insurance company taxable income, plus the
5 amount of distribution from pre-1984 policyholder
6 surplus accounts as calculated under Section 815a of
7 the Internal Revenue Code;
8 (B) Certain other insurance companies. In the
9 case of mutual insurance companies subject to the
10 tax imposed by Section 831 of the Internal Revenue
11 Code, insurance company taxable income;
12 (C) Regulated investment companies. In the
13 case of a regulated investment company subject to
14 the tax imposed by Section 852 of the Internal
15 Revenue Code, investment company taxable income;
16 (D) Real estate investment trusts. In the
17 case of a real estate investment trust subject to
18 the tax imposed by Section 857 of the Internal
19 Revenue Code, real estate investment trust taxable
20 income;
21 (E) Consolidated corporations. In the case of
22 a corporation which is a member of an affiliated
23 group of corporations filing a consolidated income
24 tax return for the taxable year for federal income
25 tax purposes, taxable income determined as if such
26 corporation had filed a separate return for federal
27 income tax purposes for the taxable year and each
28 preceding taxable year for which it was a member of
29 an affiliated group. For purposes of this
30 subparagraph, the taxpayer's separate taxable income
31 shall be determined as if the election provided by
32 Section 243(b) (2) of the Internal Revenue Code had
33 been in effect for all such years;
34 (F) Cooperatives. In the case of a
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1 cooperative corporation or association, the taxable
2 income of such organization determined in accordance
3 with the provisions of Section 1381 through 1388 of
4 the Internal Revenue Code;
5 (G) Subchapter S corporations. In the case
6 of: (i) a Subchapter S corporation for which there
7 is in effect an election for the taxable year under
8 Section 1362 of the Internal Revenue Code, the
9 taxable income of such corporation determined in
10 accordance with Section 1363(b) of the Internal
11 Revenue Code, except that taxable income shall take
12 into account those items which are required by
13 Section 1363(b)(1) of the Internal Revenue Code to
14 be separately stated; and (ii) a Subchapter S
15 corporation for which there is in effect a federal
16 election to opt out of the provisions of the
17 Subchapter S Revision Act of 1982 and have applied
18 instead the prior federal Subchapter S rules as in
19 effect on July 1, 1982, the taxable income of such
20 corporation determined in accordance with the
21 federal Subchapter S rules as in effect on July 1,
22 1982; and
23 (H) Partnerships. In the case of a
24 partnership, taxable income determined in accordance
25 with Section 703 of the Internal Revenue Code,
26 except that taxable income shall take into account
27 those items which are required by Section 703(a)(1)
28 to be separately stated but which would be taken
29 into account by an individual in calculating his
30 taxable income.
31 (f) Valuation limitation amount.
32 (1) In general. The valuation limitation amount
33 referred to in subsections (a) (2) (G), (c) (2) (I) and
34 (d)(2) (E) is an amount equal to:
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1 (A) The sum of the pre-August 1, 1969
2 appreciation amounts (to the extent consisting of
3 gain reportable under the provisions of Section 1245
4 or 1250 of the Internal Revenue Code) for all
5 property in respect of which such gain was reported
6 for the taxable year; plus
7 (B) The lesser of (i) the sum of the
8 pre-August 1, 1969 appreciation amounts (to the
9 extent consisting of capital gain) for all property
10 in respect of which such gain was reported for
11 federal income tax purposes for the taxable year, or
12 (ii) the net capital gain for the taxable year,
13 reduced in either case by any amount of such gain
14 included in the amount determined under subsection
15 (a) (2) (F) or (c) (2) (H).
16 (2) Pre-August 1, 1969 appreciation amount.
17 (A) If the fair market value of property
18 referred to in paragraph (1) was readily
19 ascertainable on August 1, 1969, the pre-August 1,
20 1969 appreciation amount for such property is the
21 lesser of (i) the excess of such fair market value
22 over the taxpayer's basis (for determining gain) for
23 such property on that date (determined under the
24 Internal Revenue Code as in effect on that date), or
25 (ii) the total gain realized and reportable for
26 federal income tax purposes in respect of the sale,
27 exchange or other disposition of such property.
28 (B) If the fair market value of property
29 referred to in paragraph (1) was not readily
30 ascertainable on August 1, 1969, the pre-August 1,
31 1969 appreciation amount for such property is that
32 amount which bears the same ratio to the total gain
33 reported in respect of the property for federal
34 income tax purposes for the taxable year, as the
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1 number of full calendar months in that part of the
2 taxpayer's holding period for the property ending
3 July 31, 1969 bears to the number of full calendar
4 months in the taxpayer's entire holding period for
5 the property.
6 (C) The Department shall prescribe such
7 regulations as may be necessary to carry out the
8 purposes of this paragraph.
9 (g) Double deductions. Unless specifically provided
10 otherwise, nothing in this Section shall permit the same item
11 to be deducted more than once.
12 (h) Legislative intention. Except as expressly provided
13 by this Section there shall be no modifications or
14 limitations on the amounts of income, gain, loss or deduction
15 taken into account in determining gross income, adjusted
16 gross income or taxable income for federal income tax
17 purposes for the taxable year, or in the amount of such items
18 entering into the computation of base income and net income
19 under this Act for such taxable year, whether in respect of
20 property values as of August 1, 1969 or otherwise.
21 (Source: P.A. 90-491, eff. 1-1-98; 90-717, eff. 8-7-98;
22 90-770, eff. 8-14-98; 91-192, eff. 7-20-99; 91-205, eff.
23 7-20-99; 91-357, eff. 7-29-99; 91-541, eff. 8-13-99; 91-676,
24 eff. 12-23-99; revised 1-5-00.)
25 Section 95. The Illinois Public Aid Code is amended by
26 adding Section 1-12 as follows:
27 (305 ILCS 5/1-12 new)
28 Sec. 1-12. Mortgage relief. Assistance received under
29 the Mortgage Relief Act is not considered to be income in
30 determining a recipient's eligibility for public aid.
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1 Section 99. Effective date. This Act takes effect upon
2 becoming law.