102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB3618

 

Introduced 1/19/2022, by Sen. Antonio Muņoz

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 40/5
35 ILCS 40/10
35 ILCS 40/40
35 ILCS 40/65

    Amends the Invest in Kids Act. Provides that students who are eligible to attend a qualifying pre-kindergarten school are also considered eligible students under the Act. Provides that the credit shall be equal to 100% (currently, 75%) of the total amount of qualified contributions made by the taxpayer during a taxable year. Removes a limitation that contributions may not be directed to a particular subset of schools, a particular school, a particular group of students, or a particular student. Provides that applications for scholarships for eligible students who received a scholarship from a scholarship granting organization during the previous school year shall be considered for re-application for the current school year and shall be considered received on the first day that the scholarship granting organization begins granting scholarships. Provides that the Act applies on a permanent basis. Effective immediately.


LRB102 24247 HLH 33478 b

 

 

A BILL FOR

 

SB3618LRB102 24247 HLH 33478 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 Invest in Kids Act is amended by changing
5Sections 5, 10, 40, and 65 as follows:
 
6    (35 ILCS 40/5)
7    (Section scheduled to be repealed on January 1, 2025)
8    Sec. 5. Definitions. As used in this Act:
9    "Authorized contribution" means the contribution amount
10that is listed on the contribution authorization certificate
11issued to the taxpayer.
12    "Board" means the State Board of Education.
13    "Contribution" means a donation made by the taxpayer
14during the taxable year for providing scholarships as provided
15in this Act.
16    "Custodian" means, with respect to eligible students, an
17Illinois resident who is a parent or legal guardian of the
18eligible student or students.
19    "Department" means the Department of Revenue.
20    "Eligible student" means a child who:
21        (1) is a member of a household whose federal adjusted
22    gross income the year before he or she initially receives
23    a scholarship under this program, as determined by the

 

 

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1    Department, does not exceed 300% of the federal poverty
2    level and, once the child receives a scholarship, does not
3    exceed 400% of the federal poverty level;
4        (2) is eligible to attend a qualifying
5    pre-kindergarten school, a public elementary school, or a
6    high school in Illinois in the semester immediately
7    preceding the semester for which he or she first receives
8    a scholarship or is starting school in Illinois for the
9    first time when he or she first receives a scholarship;
10    and
11        (3) resides in Illinois while receiving a scholarship.
12    "Family member" means a parent, child, or sibling, whether
13by whole blood, half blood, or adoption; spouse; or stepchild.
14    "Focus district" means a school district which has a
15school that is either (i) a school that has one or more
16subgroups in which the average student performance is at or
17below the State average for the lowest 10% of student
18performance in that subgroup or (ii) a school with an average
19graduation rate of less than 60% and not identified for
20priority.
21    "Jointly administered CTE program" means a program or set
22of programs within a non-public school located in Illinois, as
23determined by the State Board of Education pursuant to Section
247.5 of this Act.
25    "Necessary costs and fees" includes the customary charge
26for instruction and use of facilities in general and the

 

 

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1additional fixed fees charged for specified purposes that are
2required generally of non-scholarship recipients for each
3academic period for which the scholarship applicant actually
4enrolls, including costs associated with student assessments,
5but does not include fees payable only once and other
6contingent deposits that are refundable in whole or in part.
7The Board may prescribe, by rules consistent with this Act,
8detailed provisions concerning the computation of necessary
9costs and fees.
10    "Scholarship granting organization" means an entity that:
11        (1) is exempt from taxation under Section 501(c)(3) of
12    the Internal Revenue Code;
13        (2) uses at least 95% of the qualified contributions
14    received during a taxable year for scholarships;
15        (3) provides scholarships to students according to the
16    guidelines of this Act;
17        (4) deposits and holds qualified contributions and any
18    income derived from qualified contributions in an account
19    that is separate from the organization's operating fund or
20    other funds until such qualified contributions or income
21    are withdrawn for use; and
22        (5) is approved to issue certificates of receipt.
23    "Technical academy" means a non-public school located in
24Illinois that: (1) registers with the Board pursuant to
25Section 2-3.25 of the School Code; and (2) operates or will
26operate a jointly administered CTE program as the primary

 

 

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1focus of the school. To maintain its status as a technical
2academy, the non-public school must obtain recognition from
3the Board pursuant to Section 2-3.25o of the School Code
4within 2 calendar years of its registration with the Board.
5    "Qualified contribution" means the authorized contribution
6made by a taxpayer to a scholarship granting organization for
7which the taxpayer has received a certificate of receipt from
8such organization.
9    "Qualified school" means a non-public school located in
10Illinois and recognized by the Board pursuant to Section
112-3.25o of the School Code, or a state-recognized non-public
12pre-kindergarten school in Illinois.
13    "Scholarship" means an educational scholarship awarded to
14an eligible student to attend a qualified school of their
15custodians' choice in an amount not exceeding the necessary
16costs and fees to attend that school.
17    "Taxpayer" means any individual, corporation, partnership,
18trust, or other entity subject to the Illinois income tax. For
19the purposes of this Act, 2 individuals filing a joint return
20shall be considered one taxpayer.
21(Source: P.A. 102-16, eff. 6-17-21.)
 
22    (35 ILCS 40/10)
23    (Section scheduled to be repealed on January 1, 2025)
24    Sec. 10. Credit awards.
25    (a) The Department shall award credits against the tax

 

 

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1imposed under subsections (a) and (b) of Section 201 of the
2Illinois Income Tax Act to taxpayers who make qualified
3contributions. For contributions made under this Act, the
4credit shall be equal to 100% 75% of the total amount of
5qualified contributions made by the taxpayer during a taxable
6year, not to exceed a credit of $1,000,000 per taxpayer.
7    (b) The aggregate amount of all credits the Department may
8award under this Act in any calendar year may not exceed
9$75,000,000.
10    (c) Contributions made by corporations (including
11Subchapter S corporations), partnerships, and trusts under
12this Act may not be directed to a particular subset of schools,
13a particular school, a particular group of students, or a
14particular student. Contributions made by individuals or
15corporations under this Act may be directed to a particular
16subset of schools or a particular school but may not be
17directed to a particular group of students or a particular
18student.
19    (d) No credit shall be taken under this Act for any
20qualified contribution for which the taxpayer claims a federal
21income tax deduction.
22    (e) Credits shall be awarded in a manner, as determined by
23the Department, that is geographically proportionate to
24enrollment in recognized non-public schools in Illinois. If
25the cap on the aggregate credits that may be awarded by the
26Department is not reached by June 1 of a given year, the

 

 

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1Department shall award remaining credits on a first-come,
2first-served basis, without regard to the limitation of this
3subsection.
4    (f) Credits awarded for donations made to a technical
5academy shall be awarded without regard to subsection (e), but
6shall not exceed 15% of the annual statewide program cap. For
7the purposes of this subsection, "technical academy" means a
8technical academy that is registered with the Board within 30
9days after the effective date of this amendatory Act of the
10102nd General Assembly.
11(Source: P.A. 102-16, eff. 6-17-21.)
 
12    (35 ILCS 40/40)
13    (Section scheduled to be repealed on January 1, 2025)
14    Sec. 40. Scholarship granting organization
15responsibilities.
16    (a) Before granting a scholarship for an academic year,
17all scholarship granting organizations shall assess and
18document each student's eligibility for the academic year.
19    (b) A scholarship granting organization shall grant
20scholarships only to eligible students.
21    (c) A scholarship granting organization shall allow an
22eligible student to attend any qualified school of the
23student's choosing, subject to the availability of funds.
24    (d) In granting scholarships, a scholarship granting
25organization shall give priority to the following priority

 

 

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

 

 

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1no longer meets the qualifications of this Act, the
2applications for scholarships for eligible students who
3received a scholarship from a scholarship granting
4organization during the previous school year shall be
5considered for re-application for the current school year and
6shall be considered received on the first day that the
7scholarship granting organization begins granting
8scholarships. If the student no longer meets the
9qualifications of this Act or changes in circumstance cause
10the application to otherwise become defective under this Act,
11the scholarship granting organization shall notify the
12student's custodian of the defect no later than January 1.
13Beginning April 1, all eligible students shall be eligible to
14receive scholarships without regard to the priority groups
15identified in subsection (d) of this Section.
16    (e) Except as provided in subsection (e-5) of this
17Section, scholarships shall not exceed the lesser of (i) the
18statewide average operational expense per student among public
19schools or (ii) the necessary costs and fees for attendance at
20the qualified school. Scholarships shall be prorated as
21follows:
22        (1) for eligible students whose household income is
23    less than 185% of the federal poverty level, the
24    scholarship shall be 100% of the amount determined
25    pursuant to this subsection (e) and subsection (e-5) of
26    this Section;

 

 

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1        (2) for eligible students whose household income is
2    185% or more of the federal poverty level but less than
3    250% of the federal poverty level, the average of
4    scholarships shall be 75% of the amount determined
5    pursuant to this subsection (e) and subsection (e-5) of
6    this Section; and
7        (3) for eligible students whose household income is
8    250% or more of the federal poverty level, the average of
9    scholarships shall be 50% of the amount determined
10    pursuant to this subsection (e) and subsection (e-5) of
11    this Section.
12    (e-5) The statewide average operational expense per
13student among public schools shall be multiplied by the
14following factors:
15        (1) for students determined eligible to receive
16    services under the federal Individuals with Disabilities
17    Education Act, 2;
18        (2) for students who are English learners, as defined
19    in subsection (d) of Section 14C-2 of the School Code,
20    1.2; and
21        (3) for students who are gifted and talented children,
22    as defined in Section 14A-20 of the School Code, 1.1.
23    (f) A scholarship granting organization shall distribute
24scholarship payments to the participating school where the
25student is enrolled.
26    (g) For the 2018-2019 school year through the 2021-2022

 

 

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1school year, each scholarship granting organization shall
2expend no less than 75% of the qualified contributions
3received during the calendar year in which the qualified
4contributions were received. No more than 25% of the qualified
5contributions may be carried forward to the following calendar
6year.
7    (h) For the 2022-2023 school year, each scholarship
8granting organization shall expend all qualified contributions
9received during the calendar year in which the qualified
10contributions were received. No qualified contributions may be
11carried forward to the following calendar year.
12    (i) A scholarship granting organization shall allow an
13eligible student to transfer a scholarship during a school
14year to any other participating school of the custodian's
15choice. Such scholarships shall be prorated.
16    (j) With the prior approval of the Department, a
17scholarship granting organization may transfer funds to
18another scholarship granting organization if additional funds
19are required to meet scholarship demands at the receiving
20scholarship granting organization. All transferred funds must
21be deposited by the receiving scholarship granting
22organization into its scholarship accounts. All transferred
23amounts received by any scholarship granting organization must
24be separately disclosed to the Department.
25    (k) If the approval of a scholarship granting organization
26is revoked as provided in Section 20 of this Act or the

 

 

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1scholarship granting organization is dissolved, all remaining
2qualified contributions of the scholarship granting
3organization shall be transferred to another scholarship
4granting organization. All transferred funds must be deposited
5by the receiving scholarship granting organization into its
6scholarship accounts.
7    (l) Scholarship granting organizations shall make
8reasonable efforts to advertise the availability of
9scholarships to eligible students.
10(Source: P.A. 100-465, eff. 8-31-17.)
 
11    (35 ILCS 40/65)
12    (Section scheduled to be repealed on January 1, 2025)
13    Sec. 65. Credit period; repeal.
14    (a) A taxpayer may take a credit under this Act for tax
15years beginning on or after January 1, 2018 and ending before
16January 1, 2024. A taxpayer may not take a credit pursuant to
17this Act for tax years beginning on or after January 1, 2024.
18    (b) This Act is exempt from the provisions of Section 250
19of the Illinois Income Tax Act repealed on January 1, 2025.
20(Source: P.A. 102-16, eff. 6-17-21.)
 
21    Section 99. Effective date. This Act takes effect upon
22becoming law.