101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB3563

 

Introduced , by Rep. Lance Yednock

 

SYNOPSIS AS INTRODUCED:
 
New Act
35 ILCS 5/201  from Ch. 120, par. 2-201
35 ILCS 120/1d  from Ch. 120, par. 440d
35 ILCS 120/1e  from Ch. 120, par. 440e
35 ILCS 120/1f  from Ch. 120, par. 440f
35 ILCS 120/5l  from Ch. 120, par. 444l
220 ILCS 5/9-222  from Ch. 111 2/3, par. 9-222
220 ILCS 5/9-222.1A

    Creates the Green Energy Business Act. Authorizes the Department of Commerce and Economic Opportunity to receive and approve the applications of qualified businesses seeking designation as Green Energy Businesses. Amends the Illinois Income Tax Act, the Retailers' Occupation Tax Act, and the Public Utilities Act to provide that Green Energy Businesses are eligible for certain credits and exemptions under those Acts. Effective immediately.


LRB101 05945 HLH 50966 b

 

 

A BILL FOR

 

HB3563LRB101 05945 HLH 50966 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the Green
5Energy Business Act.
 
6    Section 5. Definitions. As used in this Act:
7    "Biodiesel" means a renewable diesel fuel derived from
8biomass that is intended for use in diesel engines.
9    "Department" means the Department of Commerce and Economic
10Opportunity.
11    "Ethanol" means a product produced from agricultural
12commodities or by-products used as a fuel or to be blended with
13other fuels for use in motor vehicles.
14    "Green Energy Business" means a business that:
15        (i) produces or manufactures components used in the
16    production of electricity from renewable energy resources;
17        (ii) has the capacity to produce and produces at least
18    5 megawatts of electricity from renewable energy resources
19    each year;
20        (iii) has the capacity to produce and produces no less
21    than 30,000,000 gallons of biodiesel or ethanol each year.
22    "Renewable energy resources" means wind energy; solar
23thermal energy; photovoltaic cells and panels; biodiesel;

 

 

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1crops; untreated and unadulterated organic waste biomass;
2trees and tree trimmings; hydropower that does not involve new
3construction or significant expansion of hydropower dams; and
4other alternative sources of environmentally preferable
5energy. For purposes of this Act, landfill gas produced in the
6State is a renewable energy resource, but tires; garbage;
7general household, institutional, and commercial waste;
8industrial lunchroom or office waste; landscape waste (other
9than trees and tree trimmings); railroad crossties; utility
10poles; and construction or demolition debris (other than
11untreated and unadulterated waste wood) are not. Renewable
12energy resources also include any renewable energy credit or
13credits associated with or generated by a source of energy that
14otherwise qualifies as a renewable energy resource under this
15Act.
 
16    Section 10. Green Energy Business.
17    (a) To assist in the encouragement, development, growth,
18and expansion of the private sector through green energy
19projects, the Department may receive and approve applications
20for the designation of "Green Energy Business" in Illinois.
21Applications may be submitted at any time. No later than 90
22days after an application is submitted, the Department shall
23notify the applicant of the Department's determination as to
24the applicant's qualification to be designated as a Green
25Energy Business under this Section. To qualify as a Green

 

 

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1Energy Business, a business must meet all of the following
2conditions:
3        (1) It must not be located, at the time of designation,
4    in an enterprise zone designated under the Illinois
5    Enterprise Zone Act.
6        (2) It must commit to (i) produce or manufacture
7    components used in the production of electricity from
8    renewable energy resources; (ii) produce at least 5
9    megawatts of electricity from renewable energy resources
10    each year; or (iii) produce not less than 30,000,000
11    gallons of biodiesel or ethanol each year.
12        (3) It must commit to have the business placed in
13    service at a qualified property in Illinois.
14        (4) It must certify in writing that (i) the investments
15    would not be placed in service at a qualified property
16    without the tax credits and exemptions referenced in
17    subsection (b) of this Section and (ii) the job creation or
18    job retention would not occur without the tax credits and
19    exemptions referenced in subsection (b) of this Section.
20    The terms "placed in service" and "qualified property" have
21    the same meanings as described in subsection (h) of Section
22    201 of the Illinois Income Tax Act.
23        (5) It must meet any additional criteria established by
24    the Department.
25    (b) Each business designated as a Green Energy Business by
26the Department shall qualify for the credits and exemptions in

 

 

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1Sections 9-222 and 9-222.1A of the Public Utilities Act;
2subsection (h) of Section 201 of the Illinois Income Tax Act;
3and Section 1d of the Retailers' Occupation Tax Act. Each
4business designated as a Green Energy Business under this
5Section shall also qualify for the exemption described in
6Section 5l of the Retailers' Occupation Tax Act. The credit
7provided in subsection (h) of Section 201 of the Illinois
8Income Tax Act shall be applicable to investments in qualified
9property used to meet the requirements in subdivision (a)(2) of
10this Section.
11    (c) The Department must revoke a Green Energy Business
12designation if, within the Department's discretion, the
13participating business fails to comply with the terms and
14conditions of the designation.
 
15    Section 15. Project labor agreements.
16    (a) Each business designated as a Green Energy Business by
17the Department must enter into a project labor agreement. The
18project labor agreement must include provisions establishing
19(i) the minimum hourly wage for each class of labor
20organization employee; (ii) the benefits and other
21compensation for each class of labor organization employee; and
22(iii) that no strike or disputes will be engaged in by the
23labor organization employees; and (iv) that no lockout or
24disputes will be engaged in by the owner of a Green Energy
25Business. The owner of a Green Energy Business and the labor

 

 

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1organizations shall have the authority to include other terms
2and conditions as they deem necessary.
3    (b) Each project labor agreement shall be filed with the
4Director in accordance with the procedures established by the
5Department. At a minimum, the project labor agreement must
6provide the names, addresses, and occupations of the owner of
7the Green Energy Business and the individuals representing the
8labor organization employees participating in the project
9labor agreement. The agreement must also specify the terms and
10conditions required in subsection (a) of this Section.
 
11    Section 20. The Illinois Income Tax Act is amended by
12changing Section 201 as follows:
 
13    (35 ILCS 5/201)  (from Ch. 120, par. 2-201)
14    Sec. 201. Tax imposed.
15    (a) In general. A tax measured by net income is hereby
16imposed on every individual, corporation, trust and estate for
17each taxable year ending after July 31, 1969 on the privilege
18of earning or receiving income in or as a resident of this
19State. Such tax shall be in addition to all other occupation or
20privilege taxes imposed by this State or by any municipal
21corporation or political subdivision thereof.
22    (b) Rates. The tax imposed by subsection (a) of this
23Section shall be determined as follows, except as adjusted by
24subsection (d-1):

 

 

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1        (1) In the case of an individual, trust or estate, for
2    taxable years ending prior to July 1, 1989, an amount equal
3    to 2 1/2% of the taxpayer's net income for the taxable
4    year.
5        (2) In the case of an individual, trust or estate, for
6    taxable years beginning prior to July 1, 1989 and ending
7    after June 30, 1989, an amount equal to the sum of (i) 2
8    1/2% of the taxpayer's net income for the period prior to
9    July 1, 1989, as calculated under Section 202.3, and (ii)
10    3% of the taxpayer's net income for the period after June
11    30, 1989, as calculated under Section 202.3.
12        (3) In the case of an individual, trust or estate, for
13    taxable years beginning after June 30, 1989, and ending
14    prior to January 1, 2011, an amount equal to 3% of the
15    taxpayer's net income for the taxable year.
16        (4) In the case of an individual, trust, or estate, for
17    taxable years beginning prior to January 1, 2011, and
18    ending after December 31, 2010, an amount equal to the sum
19    of (i) 3% of the taxpayer's net income for the period prior
20    to January 1, 2011, as calculated under Section 202.5, and
21    (ii) 5% of the taxpayer's net income for the period after
22    December 31, 2010, as calculated under Section 202.5.
23        (5) In the case of an individual, trust, or estate, for
24    taxable years beginning on or after January 1, 2011, and
25    ending prior to January 1, 2015, an amount equal to 5% of
26    the taxpayer's net income for the taxable year.

 

 

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1        (5.1) In the case of an individual, trust, or estate,
2    for taxable years beginning prior to January 1, 2015, and
3    ending after December 31, 2014, an amount equal to the sum
4    of (i) 5% of the taxpayer's net income for the period prior
5    to January 1, 2015, as calculated under Section 202.5, and
6    (ii) 3.75% of the taxpayer's net income for the period
7    after December 31, 2014, as calculated under Section 202.5.
8        (5.2) In the case of an individual, trust, or estate,
9    for taxable years beginning on or after January 1, 2015,
10    and ending prior to July 1, 2017, an amount equal to 3.75%
11    of the taxpayer's net income for the taxable year.
12        (5.3) In the case of an individual, trust, or estate,
13    for taxable years beginning prior to July 1, 2017, and
14    ending after June 30, 2017, an amount equal to the sum of
15    (i) 3.75% of the taxpayer's net income for the period prior
16    to July 1, 2017, as calculated under Section 202.5, and
17    (ii) 4.95% of the taxpayer's net income for the period
18    after June 30, 2017, as calculated under Section 202.5.
19        (5.4) In the case of an individual, trust, or estate,
20    for taxable years beginning on or after July 1, 2017, an
21    amount equal to 4.95% of the taxpayer's net income for the
22    taxable year.
23        (6) In the case of a corporation, for taxable years
24    ending prior to July 1, 1989, an amount equal to 4% of the
25    taxpayer's net income for the taxable year.
26        (7) In the case of a corporation, for taxable years

 

 

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1    beginning prior to July 1, 1989 and ending after June 30,
2    1989, an amount equal to the sum of (i) 4% of the
3    taxpayer's net income for the period prior to July 1, 1989,
4    as calculated under Section 202.3, and (ii) 4.8% of the
5    taxpayer's net income for the period after June 30, 1989,
6    as calculated under Section 202.3.
7        (8) In the case of a corporation, for taxable years
8    beginning after June 30, 1989, and ending prior to January
9    1, 2011, an amount equal to 4.8% of the taxpayer's net
10    income for the taxable year.
11        (9) In the case of a corporation, for taxable years
12    beginning prior to January 1, 2011, and ending after
13    December 31, 2010, an amount equal to the sum of (i) 4.8%
14    of the taxpayer's net income for the period prior to
15    January 1, 2011, as calculated under Section 202.5, and
16    (ii) 7% of the taxpayer's net income for the period after
17    December 31, 2010, as calculated under Section 202.5.
18        (10) In the case of a corporation, for taxable years
19    beginning on or after January 1, 2011, and ending prior to
20    January 1, 2015, an amount equal to 7% of the taxpayer's
21    net income for the taxable year.
22        (11) In the case of a corporation, for taxable years
23    beginning prior to January 1, 2015, and ending after
24    December 31, 2014, an amount equal to the sum of (i) 7% of
25    the taxpayer's net income for the period prior to January
26    1, 2015, as calculated under Section 202.5, and (ii) 5.25%

 

 

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1    of the taxpayer's net income for the period after December
2    31, 2014, as calculated under Section 202.5.
3        (12) In the case of a corporation, for taxable years
4    beginning on or after January 1, 2015, and ending prior to
5    July 1, 2017, an amount equal to 5.25% of the taxpayer's
6    net income for the taxable year.
7        (13) In the case of a corporation, for taxable years
8    beginning prior to July 1, 2017, and ending after June 30,
9    2017, an amount equal to the sum of (i) 5.25% of the
10    taxpayer's net income for the period prior to July 1, 2017,
11    as calculated under Section 202.5, and (ii) 7% of the
12    taxpayer's net income for the period after June 30, 2017,
13    as calculated under Section 202.5.
14        (14) In the case of a corporation, for taxable years
15    beginning on or after July 1, 2017, an amount equal to 7%
16    of the taxpayer's net income for the taxable year.
17    The rates under this subsection (b) are subject to the
18provisions of Section 201.5.
19    (c) Personal Property Tax Replacement Income Tax.
20Beginning on July 1, 1979 and thereafter, in addition to such
21income tax, there is also hereby imposed the Personal Property
22Tax Replacement Income Tax measured by net income on every
23corporation (including Subchapter S corporations), partnership
24and trust, for each taxable year ending after June 30, 1979.
25Such taxes are imposed on the privilege of earning or receiving
26income in or as a resident of this State. The Personal Property

 

 

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1Tax Replacement Income Tax shall be in addition to the income
2tax imposed by subsections (a) and (b) of this Section and in
3addition to all other occupation or privilege taxes imposed by
4this State or by any municipal corporation or political
5subdivision thereof.
6    (d) Additional Personal Property Tax Replacement Income
7Tax Rates. The personal property tax replacement income tax
8imposed by this subsection and subsection (c) of this Section
9in the case of a corporation, other than a Subchapter S
10corporation and except as adjusted by subsection (d-1), shall
11be an additional amount equal to 2.85% of such taxpayer's net
12income for the taxable year, except that beginning on January
131, 1981, and thereafter, the rate of 2.85% specified in this
14subsection shall be reduced to 2.5%, and in the case of a
15partnership, trust or a Subchapter S corporation shall be an
16additional amount equal to 1.5% of such taxpayer's net income
17for the taxable year.
18    (d-1) Rate reduction for certain foreign insurers. In the
19case of a foreign insurer, as defined by Section 35A-5 of the
20Illinois Insurance Code, whose state or country of domicile
21imposes on insurers domiciled in Illinois a retaliatory tax
22(excluding any insurer whose premiums from reinsurance assumed
23are 50% or more of its total insurance premiums as determined
24under paragraph (2) of subsection (b) of Section 304, except
25that for purposes of this determination premiums from
26reinsurance do not include premiums from inter-affiliate

 

 

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1reinsurance arrangements), beginning with taxable years ending
2on or after December 31, 1999, the sum of the rates of tax
3imposed by subsections (b) and (d) shall be reduced (but not
4increased) to the rate at which the total amount of tax imposed
5under this Act, net of all credits allowed under this Act,
6shall equal (i) the total amount of tax that would be imposed
7on the foreign insurer's net income allocable to Illinois for
8the taxable year by such foreign insurer's state or country of
9domicile if that net income were subject to all income taxes
10and taxes measured by net income imposed by such foreign
11insurer's state or country of domicile, net of all credits
12allowed or (ii) a rate of zero if no such tax is imposed on such
13income by the foreign insurer's state of domicile. For the
14purposes of this subsection (d-1), an inter-affiliate includes
15a mutual insurer under common management.
16        (1) For the purposes of subsection (d-1), in no event
17    shall the sum of the rates of tax imposed by subsections
18    (b) and (d) be reduced below the rate at which the sum of:
19            (A) the total amount of tax imposed on such foreign
20        insurer under this Act for a taxable year, net of all
21        credits allowed under this Act, plus
22            (B) the privilege tax imposed by Section 409 of the
23        Illinois Insurance Code, the fire insurance company
24        tax imposed by Section 12 of the Fire Investigation
25        Act, and the fire department taxes imposed under
26        Section 11-10-1 of the Illinois Municipal Code,

 

 

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1    equals 1.25% for taxable years ending prior to December 31,
2    2003, or 1.75% for taxable years ending on or after
3    December 31, 2003, of the net taxable premiums written for
4    the taxable year, as described by subsection (1) of Section
5    409 of the Illinois Insurance Code. This paragraph will in
6    no event increase the rates imposed under subsections (b)
7    and (d).
8        (2) Any reduction in the rates of tax imposed by this
9    subsection shall be applied first against the rates imposed
10    by subsection (b) and only after the tax imposed by
11    subsection (a) net of all credits allowed under this
12    Section other than the credit allowed under subsection (i)
13    has been reduced to zero, against the rates imposed by
14    subsection (d).
15    This subsection (d-1) is exempt from the provisions of
16Section 250.
17    (e) Investment credit. A taxpayer shall be allowed a credit
18against the Personal Property Tax Replacement Income Tax for
19investment in qualified property.
20        (1) A taxpayer shall be allowed a credit equal to .5%
21    of the basis of qualified property placed in service during
22    the taxable year, provided such property is placed in
23    service on or after July 1, 1984. There shall be allowed an
24    additional credit equal to .5% of the basis of qualified
25    property placed in service during the taxable year,
26    provided such property is placed in service on or after

 

 

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1    July 1, 1986, and the taxpayer's base employment within
2    Illinois has increased by 1% or more over the preceding
3    year as determined by the taxpayer's employment records
4    filed with the Illinois Department of Employment Security.
5    Taxpayers who are new to Illinois shall be deemed to have
6    met the 1% growth in base employment for the first year in
7    which they file employment records with the Illinois
8    Department of Employment Security. The provisions added to
9    this Section by Public Act 85-1200 (and restored by Public
10    Act 87-895) shall be construed as declaratory of existing
11    law and not as a new enactment. If, in any year, the
12    increase in base employment within Illinois over the
13    preceding year is less than 1%, the additional credit shall
14    be limited to that percentage times a fraction, the
15    numerator of which is .5% and the denominator of which is
16    1%, but shall not exceed .5%. The investment credit shall
17    not be allowed to the extent that it would reduce a
18    taxpayer's liability in any tax year below zero, nor may
19    any credit for qualified property be allowed for any year
20    other than the year in which the property was placed in
21    service in Illinois. For tax years ending on or after
22    December 31, 1987, and on or before December 31, 1988, the
23    credit shall be allowed for the tax year in which the
24    property is placed in service, or, if the amount of the
25    credit exceeds the tax liability for that year, whether it
26    exceeds the original liability or the liability as later

 

 

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1    amended, such excess may be carried forward and applied to
2    the tax liability of the 5 taxable years following the
3    excess credit years if the taxpayer (i) makes investments
4    which cause the creation of a minimum of 2,000 full-time
5    equivalent jobs in Illinois, (ii) is located in an
6    enterprise zone established pursuant to the Illinois
7    Enterprise Zone Act and (iii) is certified by the
8    Department of Commerce and Community Affairs (now
9    Department of Commerce and Economic Opportunity) as
10    complying with the requirements specified in clause (i) and
11    (ii) by July 1, 1986. The Department of Commerce and
12    Community Affairs (now Department of Commerce and Economic
13    Opportunity) shall notify the Department of Revenue of all
14    such certifications immediately. For tax years ending
15    after December 31, 1988, the credit shall be allowed for
16    the tax year in which the property is placed in service,
17    or, if the amount of the credit exceeds the tax liability
18    for that year, whether it exceeds the original liability or
19    the liability as later amended, such excess may be carried
20    forward and applied to the tax liability of the 5 taxable
21    years following the excess credit years. The credit shall
22    be applied to the earliest year for which there is a
23    liability. If there is credit from more than one tax year
24    that is available to offset a liability, earlier credit
25    shall be applied first.
26        (2) The term "qualified property" means property

 

 

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1    which:
2            (A) is tangible, whether new or used, including
3        buildings and structural components of buildings and
4        signs that are real property, but not including land or
5        improvements to real property that are not a structural
6        component of a building such as landscaping, sewer
7        lines, local access roads, fencing, parking lots, and
8        other appurtenances;
9            (B) is depreciable pursuant to Section 167 of the
10        Internal Revenue Code, except that "3-year property"
11        as defined in Section 168(c)(2)(A) of that Code is not
12        eligible for the credit provided by this subsection
13        (e);
14            (C) is acquired by purchase as defined in Section
15        179(d) of the Internal Revenue Code;
16            (D) is used in Illinois by a taxpayer who is
17        primarily engaged in manufacturing, or in mining coal
18        or fluorite, or in retailing, or was placed in service
19        on or after July 1, 2006 in a River Edge Redevelopment
20        Zone established pursuant to the River Edge
21        Redevelopment Zone Act; and
22            (E) has not previously been used in Illinois in
23        such a manner and by such a person as would qualify for
24        the credit provided by this subsection (e) or
25        subsection (f).
26        (3) For purposes of this subsection (e),

 

 

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1    "manufacturing" means the material staging and production
2    of tangible personal property by procedures commonly
3    regarded as manufacturing, processing, fabrication, or
4    assembling which changes some existing material into new
5    shapes, new qualities, or new combinations. For purposes of
6    this subsection (e) the term "mining" shall have the same
7    meaning as the term "mining" in Section 613(c) of the
8    Internal Revenue Code. For purposes of this subsection (e),
9    the term "retailing" means the sale of tangible personal
10    property for use or consumption and not for resale, or
11    services rendered in conjunction with the sale of tangible
12    personal property for use or consumption and not for
13    resale. For purposes of this subsection (e), "tangible
14    personal property" has the same meaning as when that term
15    is used in the Retailers' Occupation Tax Act, and, for
16    taxable years ending after December 31, 2008, does not
17    include the generation, transmission, or distribution of
18    electricity.
19        (4) The basis of qualified property shall be the basis
20    used to compute the depreciation deduction for federal
21    income tax purposes.
22        (5) If the basis of the property for federal income tax
23    depreciation purposes is increased after it has been placed
24    in service in Illinois by the taxpayer, the amount of such
25    increase shall be deemed property placed in service on the
26    date of such increase in basis.

 

 

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1        (6) The term "placed in service" shall have the same
2    meaning as under Section 46 of the Internal Revenue Code.
3        (7) If during any taxable year, any property ceases to
4    be qualified property in the hands of the taxpayer within
5    48 months after being placed in service, or the situs of
6    any qualified property is moved outside Illinois within 48
7    months after being placed in service, the Personal Property
8    Tax Replacement Income Tax for such taxable year shall be
9    increased. Such increase shall be determined by (i)
10    recomputing the investment credit which would have been
11    allowed for the year in which credit for such property was
12    originally allowed by eliminating such property from such
13    computation and, (ii) subtracting such recomputed credit
14    from the amount of credit previously allowed. For the
15    purposes of this paragraph (7), a reduction of the basis of
16    qualified property resulting from a redetermination of the
17    purchase price shall be deemed a disposition of qualified
18    property to the extent of such reduction.
19        (8) Unless the investment credit is extended by law,
20    the basis of qualified property shall not include costs
21    incurred after December 31, 2018, except for costs incurred
22    pursuant to a binding contract entered into on or before
23    December 31, 2018.
24        (9) Each taxable year ending before December 31, 2000,
25    a partnership may elect to pass through to its partners the
26    credits to which the partnership is entitled under this

 

 

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1    subsection (e) for the taxable year. A partner may use the
2    credit allocated to him or her under this paragraph only
3    against the tax imposed in subsections (c) and (d) of this
4    Section. If the partnership makes that election, those
5    credits shall be allocated among the partners in the
6    partnership in accordance with the rules set forth in
7    Section 704(b) of the Internal Revenue Code, and the rules
8    promulgated under that Section, and the allocated amount of
9    the credits shall be allowed to the partners for that
10    taxable year. The partnership shall make this election on
11    its Personal Property Tax Replacement Income Tax return for
12    that taxable year. The election to pass through the credits
13    shall be irrevocable.
14        For taxable years ending on or after December 31, 2000,
15    a partner that qualifies its partnership for a subtraction
16    under subparagraph (I) of paragraph (2) of subsection (d)
17    of Section 203 or a shareholder that qualifies a Subchapter
18    S corporation for a subtraction under subparagraph (S) of
19    paragraph (2) of subsection (b) of Section 203 shall be
20    allowed a credit under this subsection (e) equal to its
21    share of the credit earned under this subsection (e) during
22    the taxable year by the partnership or Subchapter S
23    corporation, determined in accordance with the
24    determination of income and distributive share of income
25    under Sections 702 and 704 and Subchapter S of the Internal
26    Revenue Code. This paragraph is exempt from the provisions

 

 

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1    of Section 250.
2    (f) Investment credit; Enterprise Zone; River Edge
3Redevelopment Zone.
4        (1) A taxpayer shall be allowed a credit against the
5    tax imposed by subsections (a) and (b) of this Section for
6    investment in qualified property which is placed in service
7    in an Enterprise Zone created pursuant to the Illinois
8    Enterprise Zone Act or, for property placed in service on
9    or after July 1, 2006, a River Edge Redevelopment Zone
10    established pursuant to the River Edge Redevelopment Zone
11    Act. For partners, shareholders of Subchapter S
12    corporations, and owners of limited liability companies,
13    if the liability company is treated as a partnership for
14    purposes of federal and State income taxation, there shall
15    be allowed a credit under this subsection (f) to be
16    determined in accordance with the determination of income
17    and distributive share of income under Sections 702 and 704
18    and Subchapter S of the Internal Revenue Code. The credit
19    shall be .5% of the basis for such property. The credit
20    shall be available only in the taxable year in which the
21    property is placed in service in the Enterprise Zone or
22    River Edge Redevelopment Zone and shall not be allowed to
23    the extent that it would reduce a taxpayer's liability for
24    the tax imposed by subsections (a) and (b) of this Section
25    to below zero. For tax years ending on or after December
26    31, 1985, the credit shall be allowed for the tax year in

 

 

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1    which the property is placed in service, or, if the amount
2    of the credit exceeds the tax liability for that year,
3    whether it exceeds the original liability or the liability
4    as later amended, such excess may be carried forward and
5    applied to the tax liability of the 5 taxable years
6    following the excess credit year. The credit shall be
7    applied to the earliest year for which there is a
8    liability. If there is credit from more than one tax year
9    that is available to offset a liability, the credit
10    accruing first in time shall be applied first.
11        (2) The term qualified property means property which:
12            (A) is tangible, whether new or used, including
13        buildings and structural components of buildings;
14            (B) is depreciable pursuant to Section 167 of the
15        Internal Revenue Code, except that "3-year property"
16        as defined in Section 168(c)(2)(A) of that Code is not
17        eligible for the credit provided by this subsection
18        (f);
19            (C) is acquired by purchase as defined in Section
20        179(d) of the Internal Revenue Code;
21            (D) is used in the Enterprise Zone or River Edge
22        Redevelopment Zone by the taxpayer; and
23            (E) has not been previously used in Illinois in
24        such a manner and by such a person as would qualify for
25        the credit provided by this subsection (f) or
26        subsection (e).

 

 

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1        (3) The basis of qualified property shall be the basis
2    used to compute the depreciation deduction for federal
3    income tax purposes.
4        (4) If the basis of the property for federal income tax
5    depreciation purposes is increased after it has been placed
6    in service in the Enterprise Zone or River Edge
7    Redevelopment Zone by the taxpayer, the amount of such
8    increase shall be deemed property placed in service on the
9    date of such increase in basis.
10        (5) The term "placed in service" shall have the same
11    meaning as under Section 46 of the Internal Revenue Code.
12        (6) If during any taxable year, any property ceases to
13    be qualified property in the hands of the taxpayer within
14    48 months after being placed in service, or the situs of
15    any qualified property is moved outside the Enterprise Zone
16    or River Edge Redevelopment Zone within 48 months after
17    being placed in service, the tax imposed under subsections
18    (a) and (b) of this Section for such taxable year shall be
19    increased. Such increase shall be determined by (i)
20    recomputing the investment credit which would have been
21    allowed for the year in which credit for such property was
22    originally allowed by eliminating such property from such
23    computation, and (ii) subtracting such recomputed credit
24    from the amount of credit previously allowed. For the
25    purposes of this paragraph (6), a reduction of the basis of
26    qualified property resulting from a redetermination of the

 

 

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1    purchase price shall be deemed a disposition of qualified
2    property to the extent of such reduction.
3        (7) There shall be allowed an additional credit equal
4    to 0.5% of the basis of qualified property placed in
5    service during the taxable year in a River Edge
6    Redevelopment Zone, provided such property is placed in
7    service on or after July 1, 2006, and the taxpayer's base
8    employment within Illinois has increased by 1% or more over
9    the preceding year as determined by the taxpayer's
10    employment records filed with the Illinois Department of
11    Employment Security. Taxpayers who are new to Illinois
12    shall be deemed to have met the 1% growth in base
13    employment for the first year in which they file employment
14    records with the Illinois Department of Employment
15    Security. If, in any year, the increase in base employment
16    within Illinois over the preceding year is less than 1%,
17    the additional credit shall be limited to that percentage
18    times a fraction, the numerator of which is 0.5% and the
19    denominator of which is 1%, but shall not exceed 0.5%.
20    (g) (Blank).
21    (h) Investment credit; High Impact Business; Green Energy
22Business.
23        (1) Subject to subsection (a) of Section 10 of the
24    Green Energy Business Act, or subsections (b) and (b-5) of
25    Section 5.5 of the Illinois Enterprise Zone Act, a taxpayer
26    shall be allowed a credit against the tax imposed by

 

 

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1    subsections (a) and (b) of this Section for investment in
2    qualified property which is placed in service by a
3    Department of Commerce and Economic Opportunity designated
4    Green Energy Business or High Impact Business. The credit
5    shall be .5% of the basis for such property. The credit
6    shall not be available (i) until the minimum investments in
7    qualified property set forth in subdivision (a)(3)(A) of
8    Section 5.5 of the Illinois Enterprise Zone Act have been
9    satisfied or (ii) until the Department of Commerce and
10    Economic Opportunity designates the business as a Green
11    Energy Business under the Green Energy Business Act, or
12    until the time authorized in subsection (b-5) of the
13    Illinois Enterprise Zone Act for entities designated as
14    High Impact Businesses under subdivisions (a)(3)(B),
15    (a)(3)(C), and (a)(3)(D) of Section 5.5 of the Illinois
16    Enterprise Zone Act, and shall not be allowed to the extent
17    that it would reduce a taxpayer's liability for the tax
18    imposed by subsections (a) and (b) of this Section to below
19    zero. The credit applicable to such investments shall be
20    taken in the taxable year in which such investments have
21    been completed. The credit for additional investments
22    beyond the minimum investment by a designated high impact
23    business authorized under subdivision (a)(3)(A) of Section
24    5.5 of the Illinois Enterprise Zone Act shall be available
25    only in the taxable year in which the property is placed in
26    service and shall not be allowed to the extent that it

 

 

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1    would reduce a taxpayer's liability for the tax imposed by
2    subsections (a) and (b) of this Section to below zero. For
3    tax years ending on or after December 31, 1987, the credit
4    shall be allowed for the tax year in which the property is
5    placed in service, or, if the amount of the credit exceeds
6    the tax liability for that year, whether it exceeds the
7    original liability or the liability as later amended, such
8    excess may be carried forward and applied to the tax
9    liability of the 5 taxable years following the excess
10    credit year. The credit shall be applied to the earliest
11    year for which there is a liability. If there is credit
12    from more than one tax year that is available to offset a
13    liability, the credit accruing first in time shall be
14    applied first.
15        Changes made in this subdivision (h)(1) by Public Act
16    88-670 restore changes made by Public Act 85-1182 and
17    reflect existing law.
18        (2) The term qualified property means property which:
19            (A) is tangible, whether new or used, including
20        buildings and structural components of buildings;
21            (B) is depreciable pursuant to Section 167 of the
22        Internal Revenue Code, except that "3-year property"
23        as defined in Section 168(c)(2)(A) of that Code is not
24        eligible for the credit provided by this subsection
25        (h);
26            (C) is acquired by purchase as defined in Section

 

 

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1        179(d) of the Internal Revenue Code; and
2            (D) is not eligible for the Enterprise Zone
3        Investment Credit provided by subsection (f) of this
4        Section.
5        (3) The basis of qualified property shall be the basis
6    used to compute the depreciation deduction for federal
7    income tax purposes.
8        (4) If the basis of the property for federal income tax
9    depreciation purposes is increased after it has been placed
10    in service in a federally designated Foreign Trade Zone or
11    Sub-Zone located in Illinois by the taxpayer, the amount of
12    such increase shall be deemed property placed in service on
13    the date of such increase in basis.
14        (5) The term "placed in service" shall have the same
15    meaning as under Section 46 of the Internal Revenue Code.
16        (6) If during any taxable year ending on or before
17    December 31, 1996, any property ceases to be qualified
18    property in the hands of the taxpayer within 48 months
19    after being placed in service, or the situs of any
20    qualified property is moved outside Illinois within 48
21    months after being placed in service, the tax imposed under
22    subsections (a) and (b) of this Section for such taxable
23    year shall be increased. Such increase shall be determined
24    by (i) recomputing the investment credit which would have
25    been allowed for the year in which credit for such property
26    was originally allowed by eliminating such property from

 

 

HB3563- 26 -LRB101 05945 HLH 50966 b

1    such computation, and (ii) subtracting such recomputed
2    credit from the amount of credit previously allowed. For
3    the purposes of this paragraph (6), a reduction of the
4    basis of qualified property resulting from a
5    redetermination of the purchase price shall be deemed a
6    disposition of qualified property to the extent of such
7    reduction.
8        (7) Beginning with tax years ending after December 31,
9    1996, if a taxpayer qualifies for the credit under this
10    subsection (h) and thereby is granted a tax abatement and
11    the taxpayer relocates its entire facility in violation of
12    the explicit terms and length of the contract under Section
13    18-183 of the Property Tax Code, the tax imposed under
14    subsections (a) and (b) of this Section shall be increased
15    for the taxable year in which the taxpayer relocated its
16    facility by an amount equal to the amount of credit
17    received by the taxpayer under this subsection (h).
18    (i) Credit for Personal Property Tax Replacement Income
19Tax. For tax years ending prior to December 31, 2003, a credit
20shall be allowed against the tax imposed by subsections (a) and
21(b) of this Section for the tax imposed by subsections (c) and
22(d) of this Section. This credit shall be computed by
23multiplying the tax imposed by subsections (c) and (d) of this
24Section by a fraction, the numerator of which is base income
25allocable to Illinois and the denominator of which is Illinois
26base income, and further multiplying the product by the tax

 

 

HB3563- 27 -LRB101 05945 HLH 50966 b

1rate imposed by subsections (a) and (b) of this Section.
2    Any credit earned on or after December 31, 1986 under this
3subsection which is unused in the year the credit is computed
4because it exceeds the tax liability imposed by subsections (a)
5and (b) for that year (whether it exceeds the original
6liability or the liability as later amended) may be carried
7forward and applied to the tax liability imposed by subsections
8(a) and (b) of the 5 taxable years following the excess credit
9year, provided that no credit may be carried forward to any
10year ending on or after December 31, 2003. This credit shall be
11applied first to the earliest year for which there is a
12liability. If there is a credit under this subsection from more
13than one tax year that is available to offset a liability the
14earliest credit arising under this subsection shall be applied
15first.
16    If, during any taxable year ending on or after December 31,
171986, the tax imposed by subsections (c) and (d) of this
18Section for which a taxpayer has claimed a credit under this
19subsection (i) is reduced, the amount of credit for such tax
20shall also be reduced. Such reduction shall be determined by
21recomputing the credit to take into account the reduced tax
22imposed by subsections (c) and (d). If any portion of the
23reduced amount of credit has been carried to a different
24taxable year, an amended return shall be filed for such taxable
25year to reduce the amount of credit claimed.
26    (j) Training expense credit. Beginning with tax years

 

 

HB3563- 28 -LRB101 05945 HLH 50966 b

1ending on or after December 31, 1986 and prior to December 31,
22003, a taxpayer shall be allowed a credit against the tax
3imposed by subsections (a) and (b) under this Section for all
4amounts paid or accrued, on behalf of all persons employed by
5the taxpayer in Illinois or Illinois residents employed outside
6of Illinois by a taxpayer, for educational or vocational
7training in semi-technical or technical fields or semi-skilled
8or skilled fields, which were deducted from gross income in the
9computation of taxable income. The credit against the tax
10imposed by subsections (a) and (b) shall be 1.6% of such
11training expenses. For partners, shareholders of subchapter S
12corporations, and owners of limited liability companies, if the
13liability company is treated as a partnership for purposes of
14federal and State income taxation, there shall be allowed a
15credit under this subsection (j) to be determined in accordance
16with the determination of income and distributive share of
17income under Sections 702 and 704 and subchapter S of the
18Internal Revenue Code.
19    Any credit allowed under this subsection which is unused in
20the year the credit is earned may be carried forward to each of
21the 5 taxable years following the year for which the credit is
22first computed until it is used. This credit shall be applied
23first to the earliest year for which there is a liability. If
24there is a credit under this subsection from more than one tax
25year that is available to offset a liability the earliest
26credit arising under this subsection shall be applied first. No

 

 

HB3563- 29 -LRB101 05945 HLH 50966 b

1carryforward credit may be claimed in any tax year ending on or
2after December 31, 2003.
3    (k) Research and development credit. For tax years ending
4after July 1, 1990 and prior to December 31, 2003, and
5beginning again for tax years ending on or after December 31,
62004, and ending prior to January 1, 2022, a taxpayer shall be
7allowed a credit against the tax imposed by subsections (a) and
8(b) of this Section for increasing research activities in this
9State. The credit allowed against the tax imposed by
10subsections (a) and (b) shall be equal to 6 1/2% of the
11qualifying expenditures for increasing research activities in
12this State. For partners, shareholders of subchapter S
13corporations, and owners of limited liability companies, if the
14liability company is treated as a partnership for purposes of
15federal and State income taxation, there shall be allowed a
16credit under this subsection to be determined in accordance
17with the determination of income and distributive share of
18income under Sections 702 and 704 and subchapter S of the
19Internal Revenue Code.
20    For purposes of this subsection, "qualifying expenditures"
21means the qualifying expenditures as defined for the federal
22credit for increasing research activities which would be
23allowable under Section 41 of the Internal Revenue Code and
24which are conducted in this State, "qualifying expenditures for
25increasing research activities in this State" means the excess
26of qualifying expenditures for the taxable year in which

 

 

HB3563- 30 -LRB101 05945 HLH 50966 b

1incurred over qualifying expenditures for the base period,
2"qualifying expenditures for the base period" means the average
3of the qualifying expenditures for each year in the base
4period, and "base period" means the 3 taxable years immediately
5preceding the taxable year for which the determination is being
6made.
7    Any credit in excess of the tax liability for the taxable
8year may be carried forward. A taxpayer may elect to have the
9unused credit shown on its final completed return carried over
10as a credit against the tax liability for the following 5
11taxable years or until it has been fully used, whichever occurs
12first; provided that no credit earned in a tax year ending
13prior to December 31, 2003 may be carried forward to any year
14ending on or after December 31, 2003.
15    If an unused credit is carried forward to a given year from
162 or more earlier years, that credit arising in the earliest
17year will be applied first against the tax liability for the
18given year. If a tax liability for the given year still
19remains, the credit from the next earliest year will then be
20applied, and so on, until all credits have been used or no tax
21liability for the given year remains. Any remaining unused
22credit or credits then will be carried forward to the next
23following year in which a tax liability is incurred, except
24that no credit can be carried forward to a year which is more
25than 5 years after the year in which the expense for which the
26credit is given was incurred.

 

 

HB3563- 31 -LRB101 05945 HLH 50966 b

1    No inference shall be drawn from this amendatory Act of the
291st General Assembly in construing this Section for taxable
3years beginning before January 1, 1999.
4    It is the intent of the General Assembly that the research
5and development credit under this subsection (k) shall apply
6continuously for all tax years ending on or after December 31,
72004 and ending prior to January 1, 2022, including, but not
8limited to, the period beginning on January 1, 2016 and ending
9on the effective date of this amendatory Act of the 100th
10General Assembly. All actions taken in reliance on the
11continuation of the credit under this subsection (k) by any
12taxpayer are hereby validated.
13    (l) Environmental Remediation Tax Credit.
14        (i) For tax years ending after December 31, 1997 and on
15    or before December 31, 2001, a taxpayer shall be allowed a
16    credit against the tax imposed by subsections (a) and (b)
17    of this Section for certain amounts paid for unreimbursed
18    eligible remediation costs, as specified in this
19    subsection. For purposes of this Section, "unreimbursed
20    eligible remediation costs" means costs approved by the
21    Illinois Environmental Protection Agency ("Agency") under
22    Section 58.14 of the Environmental Protection Act that were
23    paid in performing environmental remediation at a site for
24    which a No Further Remediation Letter was issued by the
25    Agency and recorded under Section 58.10 of the
26    Environmental Protection Act. The credit must be claimed

 

 

HB3563- 32 -LRB101 05945 HLH 50966 b

1    for the taxable year in which Agency approval of the
2    eligible remediation costs is granted. The credit is not
3    available to any taxpayer if the taxpayer or any related
4    party caused or contributed to, in any material respect, a
5    release of regulated substances on, in, or under the site
6    that was identified and addressed by the remedial action
7    pursuant to the Site Remediation Program of the
8    Environmental Protection Act. After the Pollution Control
9    Board rules are adopted pursuant to the Illinois
10    Administrative Procedure Act for the administration and
11    enforcement of Section 58.9 of the Environmental
12    Protection Act, determinations as to credit availability
13    for purposes of this Section shall be made consistent with
14    those rules. For purposes of this Section, "taxpayer"
15    includes a person whose tax attributes the taxpayer has
16    succeeded to under Section 381 of the Internal Revenue Code
17    and "related party" includes the persons disallowed a
18    deduction for losses by paragraphs (b), (c), and (f)(1) of
19    Section 267 of the Internal Revenue Code by virtue of being
20    a related taxpayer, as well as any of its partners. The
21    credit allowed against the tax imposed by subsections (a)
22    and (b) shall be equal to 25% of the unreimbursed eligible
23    remediation costs in excess of $100,000 per site, except
24    that the $100,000 threshold shall not apply to any site
25    contained in an enterprise zone as determined by the
26    Department of Commerce and Community Affairs (now

 

 

HB3563- 33 -LRB101 05945 HLH 50966 b

1    Department of Commerce and Economic Opportunity). The
2    total credit allowed shall not exceed $40,000 per year with
3    a maximum total of $150,000 per site. For partners and
4    shareholders of subchapter S corporations, there shall be
5    allowed a credit under this subsection to be determined in
6    accordance with the determination of income and
7    distributive share of income under Sections 702 and 704 and
8    subchapter S of the Internal Revenue Code.
9        (ii) A credit allowed under this subsection that is
10    unused in the year the credit is earned may be carried
11    forward to each of the 5 taxable years following the year
12    for which the credit is first earned until it is used. The
13    term "unused credit" does not include any amounts of
14    unreimbursed eligible remediation costs in excess of the
15    maximum credit per site authorized under paragraph (i).
16    This credit shall be applied first to the earliest year for
17    which there is a liability. If there is a credit under this
18    subsection from more than one tax year that is available to
19    offset a liability, the earliest credit arising under this
20    subsection shall be applied first. A credit allowed under
21    this subsection may be sold to a buyer as part of a sale of
22    all or part of the remediation site for which the credit
23    was granted. The purchaser of a remediation site and the
24    tax credit shall succeed to the unused credit and remaining
25    carry-forward period of the seller. To perfect the
26    transfer, the assignor shall record the transfer in the

 

 

HB3563- 34 -LRB101 05945 HLH 50966 b

1    chain of title for the site and provide written notice to
2    the Director of the Illinois Department of Revenue of the
3    assignor's intent to sell the remediation site and the
4    amount of the tax credit to be transferred as a portion of
5    the sale. In no event may a credit be transferred to any
6    taxpayer if the taxpayer or a related party would not be
7    eligible under the provisions of subsection (i).
8        (iii) For purposes of this Section, the term "site"
9    shall have the same meaning as under Section 58.2 of the
10    Environmental Protection Act.
11    (m) Education expense credit. Beginning with tax years
12ending after December 31, 1999, a taxpayer who is the custodian
13of one or more qualifying pupils shall be allowed a credit
14against the tax imposed by subsections (a) and (b) of this
15Section for qualified education expenses incurred on behalf of
16the qualifying pupils. The credit shall be equal to 25% of
17qualified education expenses, but in no event may the total
18credit under this subsection claimed by a family that is the
19custodian of qualifying pupils exceed (i) $500 for tax years
20ending prior to December 31, 2017, and (ii) $750 for tax years
21ending on or after December 31, 2017. In no event shall a
22credit under this subsection reduce the taxpayer's liability
23under this Act to less than zero. Notwithstanding any other
24provision of law, for taxable years beginning on or after
25January 1, 2017, no taxpayer may claim a credit under this
26subsection (m) if the taxpayer's adjusted gross income for the

 

 

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1taxable year exceeds (i) $500,000, in the case of spouses
2filing a joint federal tax return or (ii) $250,000, in the case
3of all other taxpayers. This subsection is exempt from the
4provisions of Section 250 of this Act.
5    For purposes of this subsection:
6    "Qualifying pupils" means individuals who (i) are
7residents of the State of Illinois, (ii) are under the age of
821 at the close of the school year for which a credit is
9sought, and (iii) during the school year for which a credit is
10sought were full-time pupils enrolled in a kindergarten through
11twelfth grade education program at any school, as defined in
12this subsection.
13    "Qualified education expense" means the amount incurred on
14behalf of a qualifying pupil in excess of $250 for tuition,
15book fees, and lab fees at the school in which the pupil is
16enrolled during the regular school year.
17    "School" means any public or nonpublic elementary or
18secondary school in Illinois that is in compliance with Title
19VI of the Civil Rights Act of 1964 and attendance at which
20satisfies the requirements of Section 26-1 of the School Code,
21except that nothing shall be construed to require a child to
22attend any particular public or nonpublic school to qualify for
23the credit under this Section.
24    "Custodian" means, with respect to qualifying pupils, an
25Illinois resident who is a parent, the parents, a legal
26guardian, or the legal guardians of the qualifying pupils.

 

 

HB3563- 36 -LRB101 05945 HLH 50966 b

1    (n) River Edge Redevelopment Zone site remediation tax
2credit.
3        (i) For tax years ending on or after December 31, 2006,
4    a taxpayer shall be allowed a credit against the tax
5    imposed by subsections (a) and (b) of this Section for
6    certain amounts paid for unreimbursed eligible remediation
7    costs, as specified in this subsection. For purposes of
8    this Section, "unreimbursed eligible remediation costs"
9    means costs approved by the Illinois Environmental
10    Protection Agency ("Agency") under Section 58.14a of the
11    Environmental Protection Act that were paid in performing
12    environmental remediation at a site within a River Edge
13    Redevelopment Zone for which a No Further Remediation
14    Letter was issued by the Agency and recorded under Section
15    58.10 of the Environmental Protection Act. The credit must
16    be claimed for the taxable year in which Agency approval of
17    the eligible remediation costs is granted. The credit is
18    not available to any taxpayer if the taxpayer or any
19    related party caused or contributed to, in any material
20    respect, a release of regulated substances on, in, or under
21    the site that was identified and addressed by the remedial
22    action pursuant to the Site Remediation Program of the
23    Environmental Protection Act. Determinations as to credit
24    availability for purposes of this Section shall be made
25    consistent with rules adopted by the Pollution Control
26    Board pursuant to the Illinois Administrative Procedure

 

 

HB3563- 37 -LRB101 05945 HLH 50966 b

1    Act for the administration and enforcement of Section 58.9
2    of the Environmental Protection Act. For purposes of this
3    Section, "taxpayer" includes a person whose tax attributes
4    the taxpayer has succeeded to under Section 381 of the
5    Internal Revenue Code and "related party" includes the
6    persons disallowed a deduction for losses by paragraphs
7    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
8    Code by virtue of being a related taxpayer, as well as any
9    of its partners. The credit allowed against the tax imposed
10    by subsections (a) and (b) shall be equal to 25% of the
11    unreimbursed eligible remediation costs in excess of
12    $100,000 per site.
13        (ii) A credit allowed under this subsection that is
14    unused in the year the credit is earned may be carried
15    forward to each of the 5 taxable years following the year
16    for which the credit is first earned until it is used. This
17    credit shall be applied first to the earliest year for
18    which there is a liability. If there is a credit under this
19    subsection from more than one tax year that is available to
20    offset a liability, the earliest credit arising under this
21    subsection shall be applied first. A credit allowed under
22    this subsection may be sold to a buyer as part of a sale of
23    all or part of the remediation site for which the credit
24    was granted. The purchaser of a remediation site and the
25    tax credit shall succeed to the unused credit and remaining
26    carry-forward period of the seller. To perfect the

 

 

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1    transfer, the assignor shall record the transfer in the
2    chain of title for the site and provide written notice to
3    the Director of the Illinois Department of Revenue of the
4    assignor's intent to sell the remediation site and the
5    amount of the tax credit to be transferred as a portion of
6    the sale. In no event may a credit be transferred to any
7    taxpayer if the taxpayer or a related party would not be
8    eligible under the provisions of subsection (i).
9        (iii) For purposes of this Section, the term "site"
10    shall have the same meaning as under Section 58.2 of the
11    Environmental Protection Act.
12    (o) For each of taxable years during the Compassionate Use
13of Medical Cannabis Pilot Program, a surcharge is imposed on
14all taxpayers on income arising from the sale or exchange of
15capital assets, depreciable business property, real property
16used in the trade or business, and Section 197 intangibles of
17an organization registrant under the Compassionate Use of
18Medical Cannabis Pilot Program Act. The amount of the surcharge
19is equal to the amount of federal income tax liability for the
20taxable year attributable to those sales and exchanges. The
21surcharge imposed does not apply if:
22        (1) the medical cannabis cultivation center
23    registration, medical cannabis dispensary registration, or
24    the property of a registration is transferred as a result
25    of any of the following:
26            (A) bankruptcy, a receivership, or a debt

 

 

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1        adjustment initiated by or against the initial
2        registration or the substantial owners of the initial
3        registration;
4            (B) cancellation, revocation, or termination of
5        any registration by the Illinois Department of Public
6        Health;
7            (C) a determination by the Illinois Department of
8        Public Health that transfer of the registration is in
9        the best interests of Illinois qualifying patients as
10        defined by the Compassionate Use of Medical Cannabis
11        Pilot Program Act;
12            (D) the death of an owner of the equity interest in
13        a registrant;
14            (E) the acquisition of a controlling interest in
15        the stock or substantially all of the assets of a
16        publicly traded company;
17            (F) a transfer by a parent company to a wholly
18        owned subsidiary; or
19            (G) the transfer or sale to or by one person to
20        another person where both persons were initial owners
21        of the registration when the registration was issued;
22        or
23        (2) the cannabis cultivation center registration,
24    medical cannabis dispensary registration, or the
25    controlling interest in a registrant's property is
26    transferred in a transaction to lineal descendants in which

 

 

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1    no gain or loss is recognized or as a result of a
2    transaction in accordance with Section 351 of the Internal
3    Revenue Code in which no gain or loss is recognized.
4(Source: P.A. 100-22, eff. 7-6-17.)
 
5    Section 25. The Retailers' Occupation Tax Act is amended by
6changing Sections 1d, 1e, 1f, and 5l as follows:
 
7    (35 ILCS 120/1d)  (from Ch. 120, par. 440d)
8    Sec. 1d. Subject to the provisions of Section 1f, all
9tangible personal property to be used or consumed within an
10enterprise zone established pursuant to the "Illinois
11Enterprise Zone Act", as amended, or subject to the provisions
12of Section 5.5 of the Illinois Enterprise Zone Act, or subject
13to the provisions of Section 10 of the Green Energy Business
14Act, all tangible personal property to be used or consumed by
15any High Impact Business or Green Energy Business , in the
16process of the manufacturing or assembly of tangible personal
17property for wholesale or retail sale or lease or in the
18process of graphic arts production if used or consumed at a
19facility which is a Department of Commerce and Economic
20Opportunity certified business and located in a county of more
21than 4,000 persons and less than 45,000 persons is exempt from
22the tax imposed by this Act. This exemption includes repair and
23replacement parts for machinery and equipment used primarily in
24the process of manufacturing or assembling tangible personal

 

 

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1property or in the process of graphic arts production if used
2or consumed at a facility which is a Department of Commerce and
3Economic Opportunity certified business and located in a county
4of more than 4,000 persons and less than 45,000 persons for
5wholesale or retail sale, or lease, and equipment,
6manufacturing or graphic arts fuels, material and supplies for
7the maintenance, repair or operation of such manufacturing or
8assembling or graphic arts machinery or equipment. The
9exemption provided in this Section for tangible personal
10property to be used or consumed in the process of manufacturing
11or assembly of tangible personal property for wholesale or
12retail sale or lease, and the repair and replacement parts for
13that machinery and equipment, does not apply to such property
14used or consumed in (i) the generation of electricity for
15wholesale or retail sale; (ii) the generation or treatment of
16natural or artificial gas for wholesale or retail sale that is
17delivered to customers through pipes, pipelines, or mains; or
18(iii) the treatment of water for wholesale or retail sale that
19is delivered to customers through pipes, pipelines, or mains.
20The provisions of this amendatory Act of the 98th General
21Assembly are declaratory of existing law as to the meaning and
22scope of this exemption.
23(Source: P.A. 98-583, eff. 1-1-14.)
 
24    (35 ILCS 120/1e)  (from Ch. 120, par. 440e)
25    Sec. 1e. Subject to the provisions of Section 1f, or

 

 

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1subject to the provisions of Section 5.5 of the Illinois
2Enterprise Zone Act, or subject to the provisions of Section 10
3of the Green Energy Business Act, all tangible personal
4property to be used or consumed in the operation of pollution
5control facilities, as defined in Section 1a of this Act,
6within an enterprise zone established pursuant to the "Illinois
7Enterprise Zone Act", as amended, shall be exempt from the tax
8imposed by this Act.
9(Source: P.A. 85-1182.)
 
10    (35 ILCS 120/1f)  (from Ch. 120, par. 440f)
11    Sec. 1f. Except for High Impact Businesses or Green Energy
12Businesses, the exemption stated in Sections 1d and 1e of this
13Act shall only apply to business enterprises which:
14        (1) either (i) make investments which cause the
15    creation of a minimum of 200 full-time equivalent jobs in
16    Illinois or (ii) make investments which cause the retention
17    of a minimum of 2000 full-time jobs in Illinois or (iii)
18    make investments of a minimum of $40,000,000 and retain at
19    least 90% of the jobs in place on the date on which the
20    exemption is granted and for the duration of the exemption;
21    and
22        (2) are located in an Enterprise Zone established
23    pursuant to the Illinois Enterprise Zone Act; and
24        (3) are certified by the Department of Commerce and
25    Economic Opportunity as complying with the requirements

 

 

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1    specified in clauses (1) and (2).
2    In addition, from March 1, 2010 to July 31, 2012, the
3exemption stated in Sections 1d and 1e of this Act shall also
4apply to a business enterprise that (i) complied with the
5requirements specified in clause (1) above as of March 1, 2010,
6(ii) receives certification from the Department of Commerce and
7Economic Opportunity, (iii) was a Department of Commerce and
8Economic Opportunity certified business enterprise in 2009,
9and (iv) retained a minimum of 500 full-time equivalent jobs in
10Illinois in 2009 and 2010, 675 full-time equivalent jobs in
11Illinois in 2011, 850 full-time equivalent jobs in Illinois in
122012, and 1,000 full-time equivalent jobs in Illinois in 2013;
13those jobs must have been created in the manufacturing sector
14as defined by the North American Industry Classification
15System.
16    Any business enterprise seeking to avail itself of the
17exemptions stated in Sections 1d or 1e, or both, shall make
18application to the Department of Commerce and Economic
19Opportunity in such form and providing such information as may
20be prescribed by the Department of Commerce and Economic
21Opportunity. However, no business enterprise shall be
22required, as a condition for certification under clause (3) of
23this Section, to attest that its decision to invest under
24clause (1) of this Section and to locate under clause (2) of
25this Section is predicated upon the availability of the
26exemptions authorized by Sections 1d or 1e.

 

 

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1    The Department of Commerce and Economic Opportunity shall
2determine whether the business enterprise meets the criteria
3prescribed in this Section. If the Department of Commerce and
4Economic Opportunity determines that such business enterprise
5meets the criteria, it shall issue a certificate of eligibility
6for exemption to the business enterprise in such form as is
7prescribed by the Department of Revenue. The Department of
8Commerce and Economic Opportunity shall act upon such
9certification requests within 60 days after receipt of the
10application, and shall file with the Department of Revenue a
11copy of each certificate of eligibility for exemption.
12    The Department of Commerce and Economic Opportunity shall
13have the power to promulgate rules and regulations to carry out
14the provisions of this Section including the power to define
15the amounts and types of eligible investments not specified in
16this Section which business enterprises must make in order to
17receive the exemptions stated in Sections 1d and 1e of this
18Act; and to require that any business enterprise that is
19granted a tax exemption repay the exempted tax if the business
20enterprise fails to comply with the terms and conditions of the
21certification.
22    Such certificate of eligibility for exemption shall be
23presented by the business enterprise to its supplier when
24making the initial purchase of tangible personal property for
25which an exemption is granted by Section 1d or Section 1e, or
26both, together with a certification by the business enterprise

 

 

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1that such tangible personal property is exempt from taxation
2under Section 1d or Section 1e and by indicating the exempt
3status of each subsequent purchase on the face of the purchase
4order.
5    The Department of Commerce and Economic Opportunity shall
6determine the period during which such exemption from the taxes
7imposed under this Act is in effect which shall not exceed 20
8years.
9(Source: P.A. 100-1032, eff. 8-22-18.)
 
10    (35 ILCS 120/5l)  (from Ch. 120, par. 444l)
11    Sec. 5l. Building materials exemption; High Impact
12Business.
13    (a) Beginning January 1, 1995, each retailer who makes a
14sale of building materials that will be incorporated into a
15High Impact Business location as designated by the Department
16of Commerce and Economic Opportunity under Section 5.5 of the
17Illinois Enterprise Zone Act or Section 10 of the Green Energy
18Business Act may deduct receipts from such sales when
19calculating only the 6.25% State rate of tax imposed by this
20Act. Beginning on the effective date of this amendatory Act of
211995, a retailer may also deduct receipts from such sales when
22calculating any applicable local taxes. However, until the
23effective date of this amendatory Act of 1995, a retailer may
24file claims for credit or refund to recover the amount of any
25applicable local tax paid on such sales. No retailer who is

 

 

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1eligible for the deduction or credit under Section 5k of this
2Act for making a sale of building materials to be incorporated
3into real estate in an enterprise zone by rehabilitation,
4remodeling or new construction shall be eligible for the
5deduction or credit authorized under this Section.
6    (b) On and after July 1, 2013, in addition to any other
7requirements to document the exemption allowed under this
8Section, the retailer must obtain from the purchaser the
9purchaser's High Impact Business Building Materials Exemption
10Certificate number issued by the Department. A construction
11contractor or other entity shall not make tax-free purchases
12unless it has an active Exemption Certificate issued by the
13Department at the time of purchase.
14    Upon request from the designated High Impact Business, the
15Department shall issue a High Impact Business Building
16Materials Exemption Certificate for each construction
17contractor or other entity identified by the designated High
18Impact Business. The Department shall make the Exemption
19Certificates available to each construction contractor or
20other entity and the designated High Impact Business. The
21request for Building Materials Exemption Certificates from the
22designated High Impact Business to the Department must include
23the following information:
24        (1) the name and address of the construction contractor
25    or other entity;
26        (2) the name and location or address of the designated

 

 

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1    High Impact Business;
2        (3) the estimated amount of the exemption for each
3    construction contractor or other entity for which a request
4    for Exemption Certificate is made, based on a stated
5    estimated average tax rate and the percentage of the
6    contract that consists of materials;
7        (4) the period of time over which supplies for the
8    project are expected to be purchased; and
9        (5) other reasonable information as the Department may
10    require, including but not limited to FEIN numbers, to
11    determine if the contractor or other entity, or any
12    partner, or a corporate officer, and in the case of a
13    limited liability company, any manager or member, of the
14    construction contractor or other entity, is or has been the
15    owner, a partner, a corporate officer, and in the case of a
16    limited liability company, a manager or member, of a person
17    that is in default for moneys due to the Department under
18    this Act or any other tax or fee Act administered by the
19    Department.
20    The Department shall issue the High Impact Business
21Building Materials Exemption Certificates within 3 business
22days after receipt of request from the designated High Impact
23Business. This requirement does not apply in circumstances
24where the Department, for reasonable cause, is unable to issue
25the Exemption Certificate within 3 business days. The
26Department may refuse to issue an Exemption Certificate if the

 

 

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1owner, any partner, or a corporate officer, and in the case of
2a limited liability company, any manager or member, of the
3construction contractor or other entity is or has been the
4owner, a partner, a corporate officer, and in the case of a
5limited liability company, a manager or member, of a person
6that is in default for moneys due to the Department under this
7Act or any other tax or fee Act administered by the Department.
8The High Impact Business Building Materials Exemption
9Certificate shall contain language stating that if the
10construction contractor or other entity who is issued the
11Exemption Certificate makes a tax-exempt purchase, as
12described in this Section, that is not eligible for exemption
13under this Section or allows another person to make a
14tax-exempt purchase, as described in this Section, that is not
15eligible for exemption under this Section, then, in addition to
16any tax or other penalty imposed, the construction contractor
17or other entity is subject to a penalty equal to the tax that
18would have been paid by the retailer under this Act as well as
19any applicable local retailers' occupation tax on the purchase
20that is not eligible for the exemption.
21    The Department, in its discretion, may require that the
22request for High Impact Business Building Materials Exemption
23Certificates be submitted electronically. The Department may,
24in its discretion, issue the Exemption Certificates
25electronically. The High Impact Business Building Materials
26Exemption Certificate number shall be designed in such a way

 

 

HB3563- 49 -LRB101 05945 HLH 50966 b

1that the Department can identify from the unique number on the
2Exemption Certificate issued to a given construction
3contractor or other entity, the name of the designated High
4Impact Business and the construction contractor or other entity
5to whom the Exemption Certificate is issued. The Exemption
6Certificate shall contain an expiration date, which shall be no
7more than 2 years after the date of issuance. At the request of
8the designated High Impact Business, the Department may renew
9an Exemption Certificate. After the Department issues
10Exemption Certificates for a given designated High Impact
11Business, the designated High Impact Business may notify the
12Department of additional construction contractors or other
13entities eligible for a Building Materials Exemption
14Certificate. Upon notification by the designated High Impact
15Business and subject to the other provisions of this subsection
16(b), the Department shall issue a High Impact Business Building
17Materials Exemption Certificate to each additional
18construction contractor or other entity identified by the
19designated High Impact Business. A designated High Impact
20Business may notify the Department to rescind a Building
21Materials Exemption Certificate previously issued by the
22Department but that has not yet expired. Upon notification by
23the designated High Impact Business and subject to the other
24provisions of this subsection (b), the Department shall issue
25the rescission of the Building Materials Exemption Certificate
26to the construction contractor or other entity identified by

 

 

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1the designated High Impact Business and provide a copy to the
2designated High Impact Business.
3    If the Department of Revenue determines that a construction
4contractor or other entity that was issued an Exemption
5Certificate under this subsection (b) made a tax-exempt
6purchase, as described in this Section, that was not eligible
7for exemption under this Section or allowed another person to
8make a tax-exempt purchase, as described in this Section, that
9was not eligible for exemption under this Section, then, in
10addition to any tax or other penalty imposed, the construction
11contractor or other entity is subject to a penalty equal to the
12tax that would have been paid by the retailer under this Act as
13well as any applicable local retailers' occupation tax on the
14purchase that was not eligible for the exemption.
15    (c) Notwithstanding anything to the contrary in this
16Section, for High Impact Businesses for which projects are
17already in existence and for which construction contracts are
18already in place on July 1, 2013, the request for High Impact
19Business Building Materials Exemption Certificates from the
20High Impact Business to the Department for these pre-existing
21construction contractors and other entities must include the
22information required under subsection (b), but not including
23the information listed in items (3) and (4). For any new
24construction contract entered into on or after July 1, 2013,
25however, all of the information in subsection (b) must be
26provided.

 

 

HB3563- 51 -LRB101 05945 HLH 50966 b

1(Source: P.A. 97-905, eff. 8-7-12; 98-109, eff. 7-25-13.)
 
2    Section 30. The Public Utilities Act is amended by changing
3Sections 9-222 and 9-222.1A as follows:
 
4    (220 ILCS 5/9-222)  (from Ch. 111 2/3, par. 9-222)
5    Sec. 9-222. Whenever a tax is imposed upon a public utility
6engaged in the business of distributing, supplying,
7furnishing, or selling gas for use or consumption pursuant to
8Section 2 of the Gas Revenue Tax Act, or whenever a tax is
9required to be collected by a delivering supplier pursuant to
10Section 2-7 of the Electricity Excise Tax Act, or whenever a
11tax is imposed upon a public utility pursuant to Section 2-202
12of this Act, such utility may charge its customers, other than
13customers who are Green Energy Businesses under Section 10 of
14the Green Energy Business Act, High Impact Businesses high
15impact businesses under Section 5.5 of the Illinois Enterprise
16Zone Act, or certified business enterprises under Section
179-222.1 of this Act, to the extent of such exemption and during
18the period in which such exemption is in effect, in addition to
19any rate authorized by this Act, an additional charge equal to
20the total amount of such taxes. The exemption of this Section
21relating to High Impact Businesses high impact businesses shall
22be subject to the provisions of subsections (a), (b), and (b-5)
23of Section 5.5 of the Illinois Enterprise Zone Act. The
24exemption of this Section relating to Green Energy Businesses

 

 

HB3563- 52 -LRB101 05945 HLH 50966 b

1shall be subject to the provisions of subsection (a) of Section
210 of the Green Energy Business Act. This requirement shall not
3apply to taxes on invested capital imposed pursuant to the
4Messages Tax Act, the Gas Revenue Tax Act and the Public
5Utilities Revenue Act. Such utility shall file with the
6Commission a supplemental schedule which shall specify such
7additional charge and which shall become effective upon filing
8without further notice. Such additional charge shall be shown
9separately on the utility bill to each customer. The Commission
10shall have the power to investigate whether or not such
11supplemental schedule correctly specifies such additional
12charge, but shall have no power to suspend such supplemental
13schedule. If the Commission finds, after a hearing, that such
14supplemental schedule does not correctly specify such
15additional charge, it shall by order require a refund to the
16appropriate customers of the excess, if any, with interest, in
17such manner as it shall deem just and reasonable, and in and by
18such order shall require the utility to file an amended
19supplemental schedule corresponding to the finding and order of
20the Commission. Except with respect to taxes imposed on
21invested capital, such tax liabilities shall be recovered from
22customers solely by means of the additional charges authorized
23by this Section.
24(Source: P.A. 91-914, eff. 7-7-00; 92-12, eff. 7-1-01.)
 
25    (220 ILCS 5/9-222.1A)

 

 

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1    Sec. 9-222.1A. High impact business or green energy
2business. Beginning on August 1, 1998 and thereafter, a
3business enterprise that is certified as a High Impact Business
4or a Green Energy Business by the Department of Commerce and
5Economic Opportunity (formerly Department of Commerce and
6Community Affairs) is exempt from the tax imposed by Section
72-4 of the Electricity Excise Tax Law, if the High Impact
8Business or a Green Energy Business is registered to
9self-assess that tax, and is exempt from any additional charges
10added to the business enterprise's utility bills as a pass-on
11of State utility taxes under Section 9-222 of this Act, to the
12extent the tax or charges are exempted by the percentage
13specified by the Department of Commerce and Economic
14Opportunity for State utility taxes, provided the business
15enterprise meets the following criteria:
16        (1) (A) it intends either (i) to make a minimum
17        eligible investment of $12,000,000 that will be placed
18        in service in qualified property in Illinois and is
19        intended to create at least 500 full-time equivalent
20        jobs at a designated location in Illinois; or (ii) to
21        make a minimum eligible investment of $30,000,000 that
22        will be placed in service in qualified property in
23        Illinois and is intended to retain at least 1,500
24        full-time equivalent jobs at a designated location in
25        Illinois; or
26            (B) it meets the criteria of subdivision

 

 

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1        (a)(3)(B), (a)(3)(C), (a)(3)(D), or (a)(3)(F) of
2        Section 5.5 of the Illinois Enterprise Zone Act, or of
3        subsection (a) of Section 10 of the Green Energy
4        Business Act;
5        (2) it is designated as a High Impact Business or a
6    Green Energy Business by the Department of Commerce and
7    Economic Opportunity; and
8        (3) it is certified by the Department of Commerce and
9    Economic Opportunity as complying with the requirements
10    specified in clauses (1) and (2) of this Section.
11    The Department of Commerce and Economic Opportunity shall
12determine the period during which the exemption from the
13Electricity Excise Tax Law and the charges imposed under
14Section 9-222 are in effect, which shall not exceed 20 years
15from the date of initial certification, and shall specify the
16percentage of the exemption from those taxes or additional
17charges.
18    The Department of Commerce and Economic Opportunity is
19authorized to promulgate rules and regulations to carry out the
20provisions of this Section, including procedures for complying
21with the requirements specified in clauses (1) and (2) of this
22Section and procedures for applying for the exemptions
23authorized under this Section; to define the amounts and types
24of eligible investments that business enterprises must make in
25order to receive State utility tax exemptions or exemptions
26from the additional charges imposed under Section 9-222 and

 

 

HB3563- 55 -LRB101 05945 HLH 50966 b

1this Section; to approve such utility tax exemptions for
2business enterprises whose investments are not yet placed in
3service; and to require that business enterprises granted tax
4exemptions or exemptions from additional charges under Section
59-222 repay the exempted amount if the business enterprise
6fails to comply with the terms and conditions of the
7certification.
8    Upon certification of the business enterprises by the
9Department of Commerce and Economic Opportunity, the
10Department of Commerce and Economic Opportunity shall notify
11the Department of Revenue of the certification. The Department
12of Revenue shall notify the public utilities of the exemption
13status of business enterprises from the tax or pass-on charges
14of State utility taxes. The exemption status shall take effect
15within 3 months after certification of the business enterprise.
16(Source: P.A. 98-109, eff. 7-25-13.)
 
17    Section 99. Effective date. This Act takes effect upon
18becoming law.