Sen. David Koehler

Filed: 4/22/2021

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 1823

2    AMENDMENT NO. ______. Amend Senate Bill 1823 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Income Tax Act is amended by
5changing Section 221 as follows:
 
6    (35 ILCS 5/221)
7    Sec. 221. Rehabilitation costs; qualified historic
8properties; River Edge Redevelopment Zone.
9    (a) For taxable years that begin on or after January 1,
102012 and begin prior to January 1, 2018, there shall be allowed
11a tax credit against the tax imposed by subsections (a) and (b)
12of Section 201 of this Act in an amount equal to 25% of
13qualified expenditures incurred by a qualified taxpayer during
14the taxable year in the restoration and preservation of a
15qualified historic structure located in a River Edge
16Redevelopment Zone pursuant to a qualified rehabilitation

 

 

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1plan, provided that the total amount of such expenditures (i)
2must equal $5,000 or more and (ii) must exceed 50% of the
3purchase price of the property.
4    (a-1) There For taxable years that begin on or after
5January 1, 2018 and end prior to January 1, 2022, there shall
6be allowed a tax credit against the tax imposed by subsections
7(a) and (b) of Section 201 of this Act in an aggregate amount
8equal to 25% of qualified expenditures incurred by a qualified
9taxpayer in the restoration and preservation of a qualified
10historic structure located in a River Edge Redevelopment Zone
11pursuant to a qualified rehabilitation plan, provided that the
12total amount of such expenditures must (i) equal $5,000 or
13more and (ii) exceed the adjusted basis of the qualified
14historic structure on the first day the qualified
15rehabilitation plan begins. For any rehabilitation project,
16regardless of duration or number of phases, the project's
17compliance with the foregoing provisions (i) and (ii) shall be
18determined based on the aggregate amount of qualified
19expenditures for the entire project and may include
20expenditures incurred under subsection (a), this subsection,
21or both subsection (a) and this subsection. If the qualified
22rehabilitation plan spans multiple years, the aggregate credit
23for the entire project shall be allowed in the last taxable
24year, except for phased rehabilitation projects, which may
25receive credits upon completion of each phase. Before
26obtaining the first phased credit: (A) the total amount of

 

 

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1such expenditures must meet the requirements of provisions (i)
2and (ii) of this subsection; (B) the rehabilitated portion of
3the qualified historic structure must be placed in service;
4and (C) the requirements of subsection (b) must be met.
5    The credit under this subsection (a-1) shall be allowed
6for taxable years beginning on or after January 1, 2018 and
7beginning on or before January 1, 2031; however, no such
8credit shall be allowed for a project that does not begin
9incurring qualified rehabilitation expenditures prior to
10January 1, 2027.
11    (a-2) For taxable years beginning on or after January 1,
122021 and ending prior to January 1, 2022, there shall be
13allowed a tax credit against the tax imposed by subsections
14(a) and (b) of Section 201 as provided in Section 10-10.3 of
15the River Edge Redevelopment Zone Act. The credit allowed
16under this subsection (a-2) shall apply only to taxpayers that
17make a capital investment of at least $1,000,000 in a
18qualified rehabilitation plan.
19    The credit or credits may not reduce the taxpayer's
20liability to less than zero. If the amount of the credit or
21credits exceeds the taxpayer's liability, the excess may be
22carried forward and applied against the taxpayer's liability
23in succeeding calendar years in the manner provided under
24paragraph (4) of Section 211 of this Act. The credit or credits
25shall be applied to the earliest year for which there is a tax
26liability. If there are credits from more than one taxable

 

 

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1year that are available to offset a liability, the earlier
2credit shall be applied first.
3    For partners, shareholders of Subchapter S corporations,
4and owners of limited liability companies, if the liability
5company is treated as a partnership for the purposes of
6federal and State income taxation, there shall be allowed a
7credit under this Section to be determined in accordance with
8the determination of income and distributive share of income
9under Sections 702 and 704 and Subchapter S of the Internal
10Revenue Code.
11    The total aggregate amount of credits awarded under the
12Blue Collar Jobs Act (Article 20 of this amendatory Act of the
13101st General Assembly) shall not exceed $20,000,000 in any
14State fiscal year.
15    (b) To obtain a tax credit pursuant to this Section, the
16taxpayer must apply with the Department of Natural Resources.
17The Department of Natural Resources shall determine the amount
18of eligible rehabilitation costs and expenses in addition to
19the amount of the River Edge construction jobs credit within
2045 days of receipt of a complete application. The taxpayer
21must submit a certification of costs prepared by an
22independent certified public accountant that certifies (i) the
23project expenses, (ii) whether those expenses are qualified
24expenditures, and (iii) that the qualified expenditures exceed
25the adjusted basis of the qualified historic structure on the
26first day the qualified rehabilitation plan commenced. The

 

 

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1Department of Natural Resources is authorized, but not
2required, to accept this certification of costs to determine
3the amount of qualified expenditures and the amount of the
4credit. The Department of Natural Resources shall provide
5guidance as to the minimum standards to be followed in the
6preparation of such certification. The Department of Natural
7Resources and the National Park Service shall determine
8whether the rehabilitation is consistent with the United
9States Secretary of the Interior's Standards for
10Rehabilitation.
11    (b-1) Upon completion of the project and approval of the
12complete application, the Department of Natural Resources
13shall issue a single certificate in the amount of the eligible
14credits equal to 25% of qualified expenditures incurred during
15the eligible taxable years, as defined in subsections (a), and
16(a-1), and (a-3), excepting any credits awarded under
17subsection (a) prior to January 1, 2019 (the effective date of
18Public Act 100-629) and any phased credits issued prior to the
19eligible taxable year under subsection (a-1). At the time the
20certificate is issued, an issuance fee up to the maximum
21amount of 2% of the amount of the credits issued by the
22certificate may be collected from the applicant to administer
23the provisions of this Section. If collected, this issuance
24fee shall be deposited into the Historic Property
25Administrative Fund, a special fund created in the State
26treasury. Subject to appropriation, moneys in the Historic

 

 

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1Property Administrative Fund shall be provided to the
2Department of Natural Resources as reimbursement for the costs
3associated with administering this Section.
4    (c) The taxpayer must attach the certificate to the tax
5return on which the credits are to be claimed. The tax credit
6under this Section may not reduce the taxpayer's liability to
7less than zero. If the amount of the credit exceeds the tax
8liability for the year, the excess credit may be carried
9forward and applied to the tax liability of the 5 taxable years
10following the excess credit year.
11    (c-1) Subject to appropriation, moneys in the Historic
12Property Administrative Fund shall be used, on a biennial
13basis beginning at the end of the second fiscal year after
14January 1, 2019 (the effective date of Public Act 100-629), to
15hire a qualified third party to prepare a biennial report to
16assess the overall economic impact to the State from the
17qualified rehabilitation projects under this Section completed
18in that year and in previous years. The overall economic
19impact shall include at least: (1) the direct and indirect or
20induced economic impacts of completed projects; (2) temporary,
21permanent, and construction jobs created; (3) sales, income,
22and property tax generation before, during construction, and
23after completion; and (4) indirect neighborhood impact after
24completion. The report shall be submitted to the Governor and
25the General Assembly. The report to the General Assembly shall
26be filed with the Clerk of the House of Representatives and the

 

 

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1Secretary of the Senate in electronic form only, in the manner
2that the Clerk and the Secretary shall direct.
3    (c-2) The Department of Natural Resources may adopt rules
4to implement this Section in addition to the rules expressly
5authorized in this Section.
6    (d) As used in this Section, the following terms have the
7following meanings.
8    "Phased rehabilitation" means a project that is completed
9in phases, as defined under Section 47 of the federal Internal
10Revenue Code and pursuant to National Park Service regulations
11at 36 C.F.R. 67.
12    "Placed in service" means the date when the property is
13placed in a condition or state of readiness and availability
14for a specifically assigned function as defined under Section
1547 of the federal Internal Revenue Code and federal Treasury
16Regulation Sections 1.46 and 1.48.
17    "Qualified expenditure" means all the costs and expenses
18defined as qualified rehabilitation expenditures under Section
1947 of the federal Internal Revenue Code that were incurred in
20connection with a qualified historic structure.
21    "Qualified historic structure" means a certified historic
22structure as defined under Section 47(c)(3) of the federal
23Internal Revenue Code.
24    "Qualified rehabilitation plan" means a project that is
25approved by the Department of Natural Resources and the
26National Park Service as being consistent with the United

 

 

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1States Secretary of the Interior's Standards for
2Rehabilitation.
3    "Qualified taxpayer" means the owner of the qualified
4historic structure or any other person who qualifies for the
5federal rehabilitation credit allowed by Section 47 of the
6federal Internal Revenue Code with respect to that qualified
7historic structure. Partners, shareholders of subchapter S
8corporations, and owners of limited liability companies (if
9the limited liability company is treated as a partnership for
10purposes of federal and State income taxation) are entitled to
11a credit under this Section to be determined in accordance
12with the determination of income and distributive share of
13income under Sections 702 and 703 and subchapter S of the
14Internal Revenue Code, provided that credits granted to a
15partnership, a limited liability company taxed as a
16partnership, or other multiple owners of property shall be
17passed through to the partners, members, or owners
18respectively on a pro rata basis or pursuant to an executed
19agreement among the partners, members, or owners documenting
20any alternate distribution method.
21(Source: P.A. 100-236, eff. 8-18-17; 100-629, eff. 1-1-19;
22100-695, eff. 8-3-18; 101-9, eff. 6-5-19; 101-81, eff.
237-12-19.)
 
24    Section 99. Effective date. This Act takes effect upon
25becoming law.".