Illinois General Assembly - Full Text of SB3067

LRB104 18262 HLH 31701 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB3067

Introduced 1/28/2026, by Sen. Christopher Belt

SYNOPSIS AS INTRODUCED:

20 ILCS 663/15
20 ILCS 663/20
20 ILCS 663/25
20 ILCS 663/50

Amends the New Markets Development Program Act. Provides that a credit under the Act may be transferred to an affiliate. Provides that the cap on credits is $37,000,000 for fiscal years beginning on or after July 1, 2029. Makes changes concerning the allocation schedule. Effective immediately.

A BILL FOR

AN ACT concerning State government.

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

Section 5. The New Markets Development Program Act is amended by changing Sections 15, 20, 25, and 50 as follows:

(20 ILCS 663/15)

Sec. 15. Transferability. No tax credit claimed under this Act shall be refundable or saleable on the open market, except that a tax credit may be transferred to an affiliate. Tax credits earned by a partnership, limited liability company, S corporation, or other "pass-through" entity may be allocated to the partners, members, or shareholders of that entity for their direct use in accordance with the provisions of any agreement among the partners, members, or shareholders. Any amount of tax credit that the taxpayer, or partner, member, or shareholder thereof, is prohibited from claiming in a taxable year may be carried forward to any of the taxpayer's 5 subsequent taxable years.

(Source: P.A. 95-1024, eff. 12-31-08.)

(20 ILCS 663/20)

Sec. 20. Annual cap on credits. The Department shall limit the monetary amount of qualified equity investments permitted under this Act to a level necessary to limit tax credit use at no more than (i) $20,000,000 in tax credits for fiscal years beginning before July 1, 2023, and (ii) $25,000,000 in tax credits for fiscal years beginning on or after July 1, 2023 and beginning before July 1, 2029, and (iii) $37,000,000 in tax credits for fiscal years beginning on or after July 1, 2029. This limitation on qualified equity investments shall be based on the anticipated use of credits without regard to the potential for taxpayers to carry forward tax credits to later tax years.

(Source: P.A. 103-9, eff. 6-7-23.)

(20 ILCS 663/25)

Sec. 25. Certification of qualified equity investments.

(a) A qualified community development entity that seeks to have an equity investment or long-term debt security designated as a qualified equity investment and eligible for tax credits under this Section shall apply to the Department. The qualified community development entity must submit an application on a form that the Department provides that includes:

(1) The name, address, tax identification number of the entity, and evidence of the entity's certification as a qualified community development entity.

(2) A copy of the allocation agreement executed by the entity, or its controlling entity, and the Community Development Financial Institutions Fund.

(3) A certificate executed by an executive officer of the entity attesting that the allocation agreement remains in effect and has not been revoked or cancelled by the Community Development Financial Institutions Fund.

(4) A description of the proposed amount, structure, and purchaser of the equity investment or long-term debt security.

(5) The name and tax identification number of any taxpayer eligible to utilize tax credits earned as a result of the issuance of the qualified equity investment.

(6) Information regarding the proposed use of proceeds from the issuance of the qualified equity investment.

(7) A nonrefundable application fee of $5,000. This fee shall be paid to the Department and shall be required of each application submitted.

(8) With respect to qualified equity investments made on or after January 1, 2017, the amount of qualified equity investment authority the applicant agrees to designate as a federal qualified equity investment under Section 45D of the Internal Revenue Code, including a copy of the screen shot from the Community Development Financial Institutions Fund's Allocation Tracking System of the applicant's remaining federal qualified equity investment authority.

(b) Within 30 days after receipt of a completed application containing the information necessary for the Department to certify a potential qualified equity investment, including the payment of the application fee, the Department shall grant or deny the application in full or in part. If the Department denies any part of the application, it shall inform the qualified community development entity of the grounds for the denial. If the qualified community development entity provides any additional information required by the Department or otherwise completes its application within 15 days of the notice of denial, the application shall be considered completed as of the original date of submission. If the qualified community development entity fails to provide the information or complete its application within the 15-day period, the application remains denied and must be resubmitted in full with a new submission date.

(c) If the application is deemed complete, the Department shall certify the proposed equity investment or long-term debt security as a qualified equity investment that is eligible for tax credits under this Section, subject to the limitations contained in Section 20. The Department shall provide written notice of the certification to the qualified community development entity. The notice shall include the names of those taxpayers who are eligible to utilize the credits and their respective credit amounts. If the names of the taxpayers who are eligible to utilize the credits change due to a transfer of a qualified equity investment or a change in an allocation pursuant to Section 15, the qualified community development entity shall notify the Department of such change.

(d) With respect to applications received before January 1, 2017, the Department shall certify qualified equity investments in the order applications are received by the Department. Applications received on the same day shall be deemed to have been received simultaneously. For applications received on the same day and deemed complete, the Department shall certify, consistent with remaining tax credit capacity, qualified equity investments in proportionate percentages based upon the ratio of the amount of qualified equity investment requested in an application to the total amount of qualified equity investments requested in all applications received on the same day.

(d-5) With respect to applications received on or after January 1, 2017, the Department shall certify applications by applicants that agree to designate qualified equity investments as federal qualified equity investments in accordance with item (8) of subsection (a) of this Section in proportionate percentages based upon the ratio of the amount of qualified equity investments requested in an application to be designated as federal qualified equity investments to the total amount of qualified equity investments to be designated as federal qualified equity investments requested in all applications received on the same day.

(d-10) With respect to applications received on or after January 1, 2017, after complying with subsection (d-5), the Department shall certify the qualified equity investments of all other applicants, including the remaining qualified equity investment authority requested by applicants not designated as federal qualified equity investments in accordance with item (8) of subsection (a) of this Section, in proportionate percentages based upon the ratio of the amount of qualified equity investments requested in the applications to the total amount of qualified equity investments requested in all applications received on the same day.

(e) Once the Department has certified qualified equity investments that, on a cumulative basis, are eligible for an amount of credits equal to the annual cap on credits set forth in Section 20, $20,000,000 in tax credits (for taxable years beginning before July 1, 2023) or $25,000,000 in tax credits (for taxable years beginning on or after July 1, 2023), the Department may not certify any more qualified equity investments. If a pending request cannot be fully certified, the Department shall certify the portion that may be certified unless the qualified community development entity elects to withdraw its request rather than receive partial credit.

(f) Within 30 days after receiving notice of certification, the qualified community development entity shall (i) issue the qualified equity investment and receive cash in the amount of the certified amount and (ii) with respect to qualified equity investments made on or after January 1, 2017, if applicable, designate the required amount of qualified equity investment authority as a federal qualified equity investment. The qualified community development entity must provide the Department with evidence of the receipt of the cash investment within 10 business days after receipt and, with respect to qualified equity investments made on or after January 1, 2017, if applicable, provide evidence that the required amount of qualified equity investment authority was designated as a federal qualified equity investment. If the qualified community development entity does not receive the cash investment and issue the qualified equity investment within 30 days following receipt of the certification notice, the certification shall lapse and the entity may not issue the qualified equity investment without reapplying to the Department for certification. A certification that lapses reverts back to the Department and may be reissued only in accordance with the application process outline in this Section 25.

(g) Allocation rounds enabled by this Act shall be applied for according to the following schedule:

(1) on January 2, 2019, $125,000,000 of qualified equity investments;

(2) not less than 45 days after but not more than 90 days after the Community Development Financial Institutions Fund of the United States Department of the Treasury announces allocation awards under a Notice of Funding Availability that is published in the Federal Register after September 6, 2019, $125,000,000 of qualified equity investments; and

(3) on or after January 1, 2024, but not more than 120 days after the Community Development Financial Institutions Fund of the United States Department of the Treasury announces allocation awards under a Notice of Funding Availability that was published in the Federal Register on November 22, 2022, $312,500,000 of qualified equity investments; .

(4) on or after January 1, 2027, but not later than 120 days after the Community Development Financial Institutions Fund of the United States Department of the Treasury, or any successor office with primary responsibility for administering Section 45D of the Internal Revenue Code, announces allocation awards for the most recent federal application round conducted under a Notice of Funding Available published in the Federal Register, $150,000,000 of qualified equity investments;

(5) on or after January 1, 2029, but not later than 120 days after the Community Development Financial Institutions Fund of the United States Department of the Treasury, or any successor office with primary responsibility for administering Section 45D of the Internal Revenue Code, announces allocation awards for the most recent federal application round conducted under a Notice of Funding Available published in the Federal Register, $150,000,000 of qualified equity investments; and

(6) on or after January 1, 2031, but not later than 120 days after the Community Development Financial Institutions Fund of the United States Department of the Treasury, or any successor office with primary responsibility for administering Section 45D of the Internal Revenue Code, announces allocation awards for the most recent federal application round conducted under a Notice of Funding Available published in the Federal Register, $150,000,000 of qualified equity investments.

Certifications shall be subject to the annual limitations on tax credits set forth in Section 20.

(Source: P.A. 103-9, eff. 6-7-23.)

(20 ILCS 663/50)

Sec. 50. Sunset. For fiscal years following fiscal year 2037 2031, qualified equity investments shall not be made under this Act unless reauthorization is made pursuant to this Section. For all fiscal years following fiscal year 2031, unless the General Assembly adopts a joint resolution granting authority to the Department to approve qualified equity investments for the Illinois new markets development program and clearly describing the amount of tax credits available for the next fiscal year, or otherwise complies with the provisions of this Section, no qualified equity investments may be permitted to be made under this Act. The amount of available tax credits contained in such a resolution shall not exceed the limitation provided under Section 20. Nothing in this Section precludes a taxpayer who makes a qualified equity investment prior to the expiration of authority to make qualified equity investments from claiming tax credits relating to that qualified equity investment for each applicable credit allowance date.

(Source: P.A. 102-16, eff. 6-17-21; 103-9, eff. 6-7-23.)

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