101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB5409

 

Introduced , by Rep. Amy Grant - Grant Wehrli

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/224
35 ILCS 40/40
35 ILCS 40/65

    Amends the Illinois Income Tax Act and the Invest in Kids Act. Provides that the Invest in Kids credit applies permanently (currently, the credit applies for taxable years ending before January 1, 2023). Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB5409LRB101 15477 HLH 64820 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 5. The Illinois Income Tax Act is amended by
5changing Section 224 as follows:
 
6    (35 ILCS 5/224)
7    Sec. 224. Invest in Kids credit.
8    (a) For taxable years beginning on or after January 1, 2018
9and ending before January 1, 2023, each taxpayer for whom a tax
10credit has been awarded by the Department under the Invest in
11Kids Act is entitled to a credit against the tax imposed under
12subsections (a) and (b) of Section 201 of this Act in an amount
13equal to the amount awarded under the Invest in Kids Act.
14    (b) For partners, shareholders of subchapter S
15corporations, and owners of limited liability companies, if the
16liability company is treated as a partnership for purposes of
17federal and State income taxation, the credit under this
18Section shall be determined in accordance with the
19determination of income and distributive share of income under
20Sections 702 and 704 and subchapter S of the Internal Revenue
21Code.
22    (c) The credit may not be carried back and may not reduce
23the taxpayer's liability to less than zero. If the amount of

 

 

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1the credit exceeds the tax liability for the year, the excess
2may be carried forward and applied to the tax liability of the
35 taxable years following the excess credit year. The tax
4credit shall be applied to the earliest year for which there is
5a tax liability. If there are credits for more than one year
6that are available to offset the liability, the earlier credit
7shall be applied first.
8    (d) A tax credit awarded by the Department under the Invest
9in Kids Act may not be claimed for any qualified contribution
10for which the taxpayer claims a federal income tax deduction.
11    (e) This Section is exempt from the provisions of Section
12250.
13(Source: P.A. 100-465, eff. 8-31-17.)
 
14    Section 10. The Invest in Kids Act is amended by changing
15Sections 40 and 65 as follows:
 
16    (35 ILCS 40/40)
17    (Section scheduled to be repealed on January 1, 2024)
18    Sec. 40. Scholarship granting organization
19responsibilities.
20    (a) Before granting a scholarship for an academic year, all
21scholarship granting organizations shall assess and document
22each student's eligibility for the academic year.
23    (b) A scholarship granting organization shall grant
24scholarships only to eligible students.

 

 

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1    (c) A scholarship granting organization shall allow an
2eligible student to attend any qualified school of the
3student's choosing, subject to the availability of funds.
4    (d) In granting scholarships, a scholarship granting
5organization shall give priority to the following priority
6groups:
7        (1) eligible students who received a scholarship from a
8    scholarship granting organization during the previous
9    school year;
10        (2) eligible students who are members of a household
11    whose previous year's total annual income does not exceed
12    185% of the federal poverty level;
13        (3) eligible students who reside within a focus
14    district; and
15        (4) eligible students who are siblings of students
16    currently receiving a scholarship.
17    (d-5) A scholarship granting organization shall begin
18granting scholarships no later than February 1 preceding the
19school year for which the scholarship is sought. The priority
20groups identified in subsection (d) of this Section shall be
21eligible to receive scholarships on a first-come, first-served
22basis until the April 1 immediately preceding the school year
23for which the scholarship is sought. Applications for
24scholarships for eligible students meeting the qualifications
25of one or more priority groups that are received before April 1
26must be either approved or denied within 10 business days after

 

 

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1receipt. Beginning April 1, all eligible students shall be
2eligible to receive scholarships without regard to the priority
3groups identified in subsection (d) of this Section.
4    (e) Except as provided in subsection (e-5) of this Section,
5scholarships shall not exceed the lesser of (i) the statewide
6average operational expense per student among public schools or
7(ii) the necessary costs and fees for attendance at the
8qualified school. Scholarships shall be prorated as follows:
9        (1) for eligible students whose household income is
10    less than 185% of the federal poverty level, the
11    scholarship shall be 100% of the amount determined pursuant
12    to this subsection (e) and subsection (e-5) of this
13    Section;
14        (2) for eligible students whose household income is
15    185% or more of the federal poverty level but less than
16    250% of the federal poverty level, the average of
17    scholarships shall be 75% of the amount determined pursuant
18    to this subsection (e) and subsection (e-5) of this
19    Section; and
20        (3) for eligible students whose household income is
21    250% or more of the federal poverty level, the average of
22    scholarships shall be 50% of the amount determined pursuant
23    to this subsection (e) and subsection (e-5) of this
24    Section.
25    (e-5) The statewide average operational expense per
26student among public schools shall be multiplied by the

 

 

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1following factors:
2        (1) for students determined eligible to receive
3    services under the federal Individuals with Disabilities
4    Education Act, 2;
5        (2) for students who are English learners, as defined
6    in subsection (d) of Section 14C-2 of the School Code, 1.2;
7    and
8        (3) for students who are gifted and talented children,
9    as defined in Section 14A-20 of the School Code, 1.1.
10    (f) A scholarship granting organization shall distribute
11scholarship payments to the participating school where the
12student is enrolled.
13    (g) Each For the 2018-2019 school year through the
142021-2022 school year, each scholarship granting organization
15shall expend no less than 75% of the qualified contributions
16received during the calendar year in which the qualified
17contributions were received. No more than 25% of the qualified
18contributions may be carried forward to the following calendar
19year.
20    (h) (Blank). For the 2022-2023 school year, each
21scholarship granting organization shall expend all qualified
22contributions received during the calendar year in which the
23qualified contributions were received. No qualified
24contributions may be carried forward to the following calendar
25year.
26    (i) A scholarship granting organization shall allow an

 

 

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1eligible student to transfer a scholarship during a school year
2to any other participating school of the custodian's choice.
3Such scholarships shall be prorated.
4    (j) With the prior approval of the Department, a
5scholarship granting organization may transfer funds to
6another scholarship granting organization if additional funds
7are required to meet scholarship demands at the receiving
8scholarship granting organization. All transferred funds must
9be deposited by the receiving scholarship granting
10organization into its scholarship accounts. All transferred
11amounts received by any scholarship granting organization must
12be separately disclosed to the Department.
13    (k) If the approval of a scholarship granting organization
14is revoked as provided in Section 20 of this Act or the
15scholarship granting organization is dissolved, all remaining
16qualified contributions of the scholarship granting
17organization shall be transferred to another scholarship
18granting organization. All transferred funds must be deposited
19by the receiving scholarship granting organization into its
20scholarship accounts.
21    (l) Scholarship granting organizations shall make
22reasonable efforts to advertise the availability of
23scholarships to eligible students.
24(Source: P.A. 100-465, eff. 8-31-17.)
 
25    (35 ILCS 40/65)

 

 

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1    (Section scheduled to be repealed on January 1, 2024)
2    Sec. 65. Credit period; repeal.
3    (a) A taxpayer may take a credit under this Act for tax
4years beginning on or after January 1, 2018 and ending before
5January 1, 2023. A taxpayer may not take a credit pursuant to
6this Act for tax years beginning on or after January 1, 2023.
7    (b) This Act is exempt from the provisions of Section 250
8of the Illinois Income Tax Act repealed on January 1, 2024.
9(Source: P.A. 100-465, eff. 8-31-17.)
 
10    Section 99. Effective date. This Act takes effect upon
11becoming law.