103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB3790

 

Introduced 2/9/2024, by Sen. Lakesia Collins

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Illinois Income Tax Act. Sets forth provisions concerning the computation of taxes related to minority and other specific priority population owned business in the State. Amends the Liquor Control Act of 1934. Sets forth provisions concerning hemp products. Amends the Industrial Hemp Act. Establishes provisions that will enable the State to regulate hemp-derived cannabinoids. Distinguishes the lawful use of hemp-derived cannabinoids. Sets forth the limitation and penalties concerning the unlawful use of hemp cannabinoid. Sets forth other provisions concerning licenses and registration of cultivating industrial hemp, rules, administrative hearings and judicial review, loans and grants, immunity, age verification, packaging and labeling of hemp cannabinoid products, laboratory approvals, testing requirements, violations of State and federal law, licensing and regulation of hemp processors and hemp food establishments, academic research institutions, government demonstration and research entity, and cannabinoid retail tax. Limits home rule powers. Defines terms.


LRB103 39446 CES 69640 b

 

 

A BILL FOR

 

SB3790LRB103 39446 CES 69640 b

1    AN ACT concerning agriculture.
 
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 203 as follows:
 
6    (35 ILCS 5/203)
7    Sec. 203. Base income defined.
8    (a) Individuals.
9        (1) In general. In the case of an individual, base
10    income means an amount equal to the taxpayer's adjusted
11    gross income for the taxable year as modified by paragraph
12    (2).
13        (2) Modifications. The adjusted gross income referred
14    to in paragraph (1) shall be modified by adding thereto
15    the sum of the following amounts:
16            (A) An amount equal to all amounts paid or accrued
17        to the taxpayer as interest or dividends during the
18        taxable year to the extent excluded from gross income
19        in the computation of adjusted gross income, except
20        stock dividends of qualified public utilities
21        described in Section 305(e) of the Internal Revenue
22        Code;
23            (B) An amount equal to the amount of tax imposed by

 

 

SB3790- 2 -LRB103 39446 CES 69640 b

1        this Act to the extent deducted from gross income in
2        the computation of adjusted gross income for the
3        taxable year;
4            (C) An amount equal to the amount received during
5        the taxable year as a recovery or refund of real
6        property taxes paid with respect to the taxpayer's
7        principal residence under the Revenue Act of 1939 and
8        for which a deduction was previously taken under
9        subparagraph (L) of this paragraph (2) prior to July
10        1, 1991, the retrospective application date of Article
11        4 of Public Act 87-17. In the case of multi-unit or
12        multi-use structures and farm dwellings, the taxes on
13        the taxpayer's principal residence shall be that
14        portion of the total taxes for the entire property
15        which is attributable to such principal residence;
16            (D) An amount equal to the amount of the capital
17        gain deduction allowable under the Internal Revenue
18        Code, to the extent deducted from gross income in the
19        computation of adjusted gross income;
20            (D-5) An amount, to the extent not included in
21        adjusted gross income, equal to the amount of money
22        withdrawn by the taxpayer in the taxable year from a
23        medical care savings account and the interest earned
24        on the account in the taxable year of a withdrawal
25        pursuant to subsection (b) of Section 20 of the
26        Medical Care Savings Account Act or subsection (b) of

 

 

SB3790- 3 -LRB103 39446 CES 69640 b

1        Section 20 of the Medical Care Savings Account Act of
2        2000;
3            (D-10) For taxable years ending after December 31,
4        1997, an amount equal to any eligible remediation
5        costs that the individual deducted in computing
6        adjusted gross income and for which the individual
7        claims a credit under subsection (l) of Section 201;
8            (D-15) For taxable years 2001 and thereafter, an
9        amount equal to the bonus depreciation deduction taken
10        on the taxpayer's federal income tax return for the
11        taxable year under subsection (k) of Section 168 of
12        the Internal Revenue Code;
13            (D-16) If the taxpayer sells, transfers, abandons,
14        or otherwise disposes of property for which the
15        taxpayer was required in any taxable year to make an
16        addition modification under subparagraph (D-15), then
17        an amount equal to the aggregate amount of the
18        deductions taken in all taxable years under
19        subparagraph (Z) with respect to that property.
20            If the taxpayer continues to own property through
21        the last day of the last tax year for which a
22        subtraction is allowed with respect to that property
23        under subparagraph (Z) and for which the taxpayer was
24        allowed in any taxable year to make a subtraction
25        modification under subparagraph (Z), then an amount
26        equal to that subtraction modification.

 

 

SB3790- 4 -LRB103 39446 CES 69640 b

1            The taxpayer is required to make the addition
2        modification under this subparagraph only once with
3        respect to any one piece of property;
4            (D-17) An amount equal to the amount otherwise
5        allowed as a deduction in computing base income for
6        interest paid, accrued, or incurred, directly or
7        indirectly, (i) for taxable years ending on or after
8        December 31, 2004, to a foreign person who would be a
9        member of the same unitary business group but for the
10        fact that foreign person's business activity outside
11        the United States is 80% or more of the foreign
12        person's total business activity and (ii) for taxable
13        years ending on or after December 31, 2008, to a person
14        who would be a member of the same unitary business
15        group but for the fact that the person is prohibited
16        under Section 1501(a)(27) from being included in the
17        unitary business group because he or she is ordinarily
18        required to apportion business income under different
19        subsections of Section 304. The addition modification
20        required by this subparagraph shall be reduced to the
21        extent that dividends were included in base income of
22        the unitary group for the same taxable year and
23        received by the taxpayer or by a member of the
24        taxpayer's unitary business group (including amounts
25        included in gross income under Sections 951 through
26        964 of the Internal Revenue Code and amounts included

 

 

SB3790- 5 -LRB103 39446 CES 69640 b

1        in gross income under Section 78 of the Internal
2        Revenue Code) with respect to the stock of the same
3        person to whom the interest was paid, accrued, or
4        incurred.
5            This paragraph shall not apply to the following:
6                (i) an item of interest paid, accrued, or
7            incurred, directly or indirectly, to a person who
8            is subject in a foreign country or state, other
9            than a state which requires mandatory unitary
10            reporting, to a tax on or measured by net income
11            with respect to such interest; or
12                (ii) an item of interest paid, accrued, or
13            incurred, directly or indirectly, to a person if
14            the taxpayer can establish, based on a
15            preponderance of the evidence, both of the
16            following:
17                    (a) the person, during the same taxable
18                year, paid, accrued, or incurred, the interest
19                to a person that is not a related member, and
20                    (b) the transaction giving rise to the
21                interest expense between the taxpayer and the
22                person did not have as a principal purpose the
23                avoidance of Illinois income tax, and is paid
24                pursuant to a contract or agreement that
25                reflects an arm's-length interest rate and
26                terms; or

 

 

SB3790- 6 -LRB103 39446 CES 69640 b

1                (iii) the taxpayer can establish, based on
2            clear and convincing evidence, that the interest
3            paid, accrued, or incurred relates to a contract
4            or agreement entered into at arm's-length rates
5            and terms and the principal purpose for the
6            payment is not federal or Illinois tax avoidance;
7            or
8                (iv) an item of interest paid, accrued, or
9            incurred, directly or indirectly, to a person if
10            the taxpayer establishes by clear and convincing
11            evidence that the adjustments are unreasonable; or
12            if the taxpayer and the Director agree in writing
13            to the application or use of an alternative method
14            of apportionment under Section 304(f).
15                Nothing in this subsection shall preclude the
16            Director from making any other adjustment
17            otherwise allowed under Section 404 of this Act
18            for any tax year beginning after the effective
19            date of this amendment provided such adjustment is
20            made pursuant to regulation adopted by the
21            Department and such regulations provide methods
22            and standards by which the Department will utilize
23            its authority under Section 404 of this Act;
24            (D-18) An amount equal to the amount of intangible
25        expenses and costs otherwise allowed as a deduction in
26        computing base income, and that were paid, accrued, or

 

 

SB3790- 7 -LRB103 39446 CES 69640 b

1        incurred, directly or indirectly, (i) for taxable
2        years ending on or after December 31, 2004, to a
3        foreign person who would be a member of the same
4        unitary business group but for the fact that the
5        foreign person's business activity outside the United
6        States is 80% or more of that person's total business
7        activity and (ii) for taxable years ending on or after
8        December 31, 2008, to a person who would be a member of
9        the same unitary business group but for the fact that
10        the person is prohibited under Section 1501(a)(27)
11        from being included in the unitary business group
12        because he or she is ordinarily required to apportion
13        business income under different subsections of Section
14        304. The addition modification required by this
15        subparagraph shall be reduced to the extent that
16        dividends were included in base income of the unitary
17        group for the same taxable year and received by the
18        taxpayer or by a member of the taxpayer's unitary
19        business group (including amounts included in gross
20        income under Sections 951 through 964 of the Internal
21        Revenue Code and amounts included in gross income
22        under Section 78 of the Internal Revenue Code) with
23        respect to the stock of the same person to whom the
24        intangible expenses and costs were directly or
25        indirectly paid, incurred, or accrued. The preceding
26        sentence does not apply to the extent that the same

 

 

SB3790- 8 -LRB103 39446 CES 69640 b

1        dividends caused a reduction to the addition
2        modification required under Section 203(a)(2)(D-17) of
3        this Act. As used in this subparagraph, the term
4        "intangible expenses and costs" includes (1) expenses,
5        losses, and costs for, or related to, the direct or
6        indirect acquisition, use, maintenance or management,
7        ownership, sale, exchange, or any other disposition of
8        intangible property; (2) losses incurred, directly or
9        indirectly, from factoring transactions or discounting
10        transactions; (3) royalty, patent, technical, and
11        copyright fees; (4) licensing fees; and (5) other
12        similar expenses and costs. For purposes of this
13        subparagraph, "intangible property" includes patents,
14        patent applications, trade names, trademarks, service
15        marks, copyrights, mask works, trade secrets, and
16        similar types of intangible assets.
17            This paragraph shall not apply to the following:
18                (i) any item of intangible expenses or costs
19            paid, accrued, or incurred, directly or
20            indirectly, from a transaction with a person who
21            is subject in a foreign country or state, other
22            than a state which requires mandatory unitary
23            reporting, to a tax on or measured by net income
24            with respect to such item; or
25                (ii) any item of intangible expense or cost
26            paid, accrued, or incurred, directly or

 

 

SB3790- 9 -LRB103 39446 CES 69640 b

1            indirectly, if the taxpayer can establish, based
2            on a preponderance of the evidence, both of the
3            following:
4                    (a) the person during the same taxable
5                year paid, accrued, or incurred, the
6                intangible expense or cost to a person that is
7                not a related member, and
8                    (b) the transaction giving rise to the
9                intangible expense or cost between the
10                taxpayer and the person did not have as a
11                principal purpose the avoidance of Illinois
12                income tax, and is paid pursuant to a contract
13                or agreement that reflects arm's-length terms;
14                or
15                (iii) any item of intangible expense or cost
16            paid, accrued, or incurred, directly or
17            indirectly, from a transaction with a person if
18            the taxpayer establishes by clear and convincing
19            evidence, that the adjustments are unreasonable;
20            or if the taxpayer and the Director agree in
21            writing to the application or use of an
22            alternative method of apportionment under Section
23            304(f);
24                Nothing in this subsection shall preclude the
25            Director from making any other adjustment
26            otherwise allowed under Section 404 of this Act

 

 

SB3790- 10 -LRB103 39446 CES 69640 b

1            for any tax year beginning after the effective
2            date of this amendment provided such adjustment is
3            made pursuant to regulation adopted by the
4            Department and such regulations provide methods
5            and standards by which the Department will utilize
6            its authority under Section 404 of this Act;
7            (D-19) For taxable years ending on or after
8        December 31, 2008, an amount equal to the amount of
9        insurance premium expenses and costs otherwise allowed
10        as a deduction in computing base income, and that were
11        paid, accrued, or incurred, directly or indirectly, to
12        a person who would be a member of the same unitary
13        business group but for the fact that the person is
14        prohibited under Section 1501(a)(27) from being
15        included in the unitary business group because he or
16        she is ordinarily required to apportion business
17        income under different subsections of Section 304. The
18        addition modification required by this subparagraph
19        shall be reduced to the extent that dividends were
20        included in base income of the unitary group for the
21        same taxable year and received by the taxpayer or by a
22        member of the taxpayer's unitary business group
23        (including amounts included in gross income under
24        Sections 951 through 964 of the Internal Revenue Code
25        and amounts included in gross income under Section 78
26        of the Internal Revenue Code) with respect to the

 

 

SB3790- 11 -LRB103 39446 CES 69640 b

1        stock of the same person to whom the premiums and costs
2        were directly or indirectly paid, incurred, or
3        accrued. The preceding sentence does not apply to the
4        extent that the same dividends caused a reduction to
5        the addition modification required under Section
6        203(a)(2)(D-17) or Section 203(a)(2)(D-18) of this
7        Act;
8            (D-20) For taxable years beginning on or after
9        January 1, 2002 and ending on or before December 31,
10        2006, in the case of a distribution from a qualified
11        tuition program under Section 529 of the Internal
12        Revenue Code, other than (i) a distribution from a
13        College Savings Pool created under Section 16.5 of the
14        State Treasurer Act or (ii) a distribution from the
15        Illinois Prepaid Tuition Trust Fund, an amount equal
16        to the amount excluded from gross income under Section
17        529(c)(3)(B). For taxable years beginning on or after
18        January 1, 2007, in the case of a distribution from a
19        qualified tuition program under Section 529 of the
20        Internal Revenue Code, other than (i) a distribution
21        from a College Savings Pool created under Section 16.5
22        of the State Treasurer Act, (ii) a distribution from
23        the Illinois Prepaid Tuition Trust Fund, or (iii) a
24        distribution from a qualified tuition program under
25        Section 529 of the Internal Revenue Code that (I)
26        adopts and determines that its offering materials

 

 

SB3790- 12 -LRB103 39446 CES 69640 b

1        comply with the College Savings Plans Network's
2        disclosure principles and (II) has made reasonable
3        efforts to inform in-state residents of the existence
4        of in-state qualified tuition programs by informing
5        Illinois residents directly and, where applicable, to
6        inform financial intermediaries distributing the
7        program to inform in-state residents of the existence
8        of in-state qualified tuition programs at least
9        annually, an amount equal to the amount excluded from
10        gross income under Section 529(c)(3)(B).
11            For the purposes of this subparagraph (D-20), a
12        qualified tuition program has made reasonable efforts
13        if it makes disclosures (which may use the term
14        "in-state program" or "in-state plan" and need not
15        specifically refer to Illinois or its qualified
16        programs by name) (i) directly to prospective
17        participants in its offering materials or makes a
18        public disclosure, such as a website posting; and (ii)
19        where applicable, to intermediaries selling the
20        out-of-state program in the same manner that the
21        out-of-state program distributes its offering
22        materials;
23            (D-20.5) For taxable years beginning on or after
24        January 1, 2018, in the case of a distribution from a
25        qualified ABLE program under Section 529A of the
26        Internal Revenue Code, other than a distribution from

 

 

SB3790- 13 -LRB103 39446 CES 69640 b

1        a qualified ABLE program created under Section 16.6 of
2        the State Treasurer Act, an amount equal to the amount
3        excluded from gross income under Section 529A(c)(1)(B)
4        of the Internal Revenue Code;
5            (D-21) For taxable years beginning on or after
6        January 1, 2007, in the case of transfer of moneys from
7        a qualified tuition program under Section 529 of the
8        Internal Revenue Code that is administered by the
9        State to an out-of-state program, an amount equal to
10        the amount of moneys previously deducted from base
11        income under subsection (a)(2)(Y) of this Section;
12            (D-21.5) For taxable years beginning on or after
13        January 1, 2018, in the case of the transfer of moneys
14        from a qualified tuition program under Section 529 or
15        a qualified ABLE program under Section 529A of the
16        Internal Revenue Code that is administered by this
17        State to an ABLE account established under an
18        out-of-state ABLE account program, an amount equal to
19        the contribution component of the transferred amount
20        that was previously deducted from base income under
21        subsection (a)(2)(Y) or subsection (a)(2)(HH) of this
22        Section;
23            (D-22) For taxable years beginning on or after
24        January 1, 2009, and prior to January 1, 2018, in the
25        case of a nonqualified withdrawal or refund of moneys
26        from a qualified tuition program under Section 529 of

 

 

SB3790- 14 -LRB103 39446 CES 69640 b

1        the Internal Revenue Code administered by the State
2        that is not used for qualified expenses at an eligible
3        education institution, an amount equal to the
4        contribution component of the nonqualified withdrawal
5        or refund that was previously deducted from base
6        income under subsection (a)(2)(y) of this Section,
7        provided that the withdrawal or refund did not result
8        from the beneficiary's death or disability. For
9        taxable years beginning on or after January 1, 2018:
10        (1) in the case of a nonqualified withdrawal or
11        refund, as defined under Section 16.5 of the State
12        Treasurer Act, of moneys from a qualified tuition
13        program under Section 529 of the Internal Revenue Code
14        administered by the State, an amount equal to the
15        contribution component of the nonqualified withdrawal
16        or refund that was previously deducted from base
17        income under subsection (a)(2)(Y) of this Section, and
18        (2) in the case of a nonqualified withdrawal or refund
19        from a qualified ABLE program under Section 529A of
20        the Internal Revenue Code administered by the State
21        that is not used for qualified disability expenses, an
22        amount equal to the contribution component of the
23        nonqualified withdrawal or refund that was previously
24        deducted from base income under subsection (a)(2)(HH)
25        of this Section;
26            (D-23) An amount equal to the credit allowable to

 

 

SB3790- 15 -LRB103 39446 CES 69640 b

1        the taxpayer under Section 218(a) of this Act,
2        determined without regard to Section 218(c) of this
3        Act;
4            (D-24) For taxable years ending on or after
5        December 31, 2017, an amount equal to the deduction
6        allowed under Section 199 of the Internal Revenue Code
7        for the taxable year;
8            (D-25) In the case of a resident, an amount equal
9        to the amount of tax for which a credit is allowed
10        pursuant to Section 201(p)(7) of this Act;
11    and by deducting from the total so obtained the sum of the
12    following amounts:
13            (E) For taxable years ending before December 31,
14        2001, any amount included in such total in respect of
15        any compensation (including but not limited to any
16        compensation paid or accrued to a serviceman while a
17        prisoner of war or missing in action) paid to a
18        resident by reason of being on active duty in the Armed
19        Forces of the United States and in respect of any
20        compensation paid or accrued to a resident who as a
21        governmental employee was a prisoner of war or missing
22        in action, and in respect of any compensation paid to a
23        resident in 1971 or thereafter for annual training
24        performed pursuant to Sections 502 and 503, Title 32,
25        United States Code as a member of the Illinois
26        National Guard or, beginning with taxable years ending

 

 

SB3790- 16 -LRB103 39446 CES 69640 b

1        on or after December 31, 2007, the National Guard of
2        any other state. For taxable years ending on or after
3        December 31, 2001, any amount included in such total
4        in respect of any compensation (including but not
5        limited to any compensation paid or accrued to a
6        serviceman while a prisoner of war or missing in
7        action) paid to a resident by reason of being a member
8        of any component of the Armed Forces of the United
9        States and in respect of any compensation paid or
10        accrued to a resident who as a governmental employee
11        was a prisoner of war or missing in action, and in
12        respect of any compensation paid to a resident in 2001
13        or thereafter by reason of being a member of the
14        Illinois National Guard or, beginning with taxable
15        years ending on or after December 31, 2007, the
16        National Guard of any other state. The provisions of
17        this subparagraph (E) are exempt from the provisions
18        of Section 250;
19            (F) An amount equal to all amounts included in
20        such total pursuant to the provisions of Sections
21        402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
22        408 of the Internal Revenue Code, or included in such
23        total as distributions under the provisions of any
24        retirement or disability plan for employees of any
25        governmental agency or unit, or retirement payments to
26        retired partners, which payments are excluded in

 

 

SB3790- 17 -LRB103 39446 CES 69640 b

1        computing net earnings from self employment by Section
2        1402 of the Internal Revenue Code and regulations
3        adopted pursuant thereto;
4            (G) The valuation limitation amount;
5            (H) An amount equal to the amount of any tax
6        imposed by this Act which was refunded to the taxpayer
7        and included in such total for the taxable year;
8            (I) An amount equal to all amounts included in
9        such total pursuant to the provisions of Section 111
10        of the Internal Revenue Code as a recovery of items
11        previously deducted from adjusted gross income in the
12        computation of taxable income;
13            (J) An amount equal to those dividends included in
14        such total which were paid by a corporation which
15        conducts business operations in a River Edge
16        Redevelopment Zone or zones created under the River
17        Edge Redevelopment Zone Act, and conducts
18        substantially all of its operations in a River Edge
19        Redevelopment Zone or zones. This subparagraph (J) is
20        exempt from the provisions of Section 250;
21            (K) An amount equal to those dividends included in
22        such total that were paid by a corporation that
23        conducts business operations in a federally designated
24        Foreign Trade Zone or Sub-Zone and that is designated
25        a High Impact Business located in Illinois; provided
26        that dividends eligible for the deduction provided in

 

 

SB3790- 18 -LRB103 39446 CES 69640 b

1        subparagraph (J) of paragraph (2) of this subsection
2        shall not be eligible for the deduction provided under
3        this subparagraph (K);
4            (L) For taxable years ending after December 31,
5        1983, an amount equal to all social security benefits
6        and railroad retirement benefits included in such
7        total pursuant to Sections 72(r) and 86 of the
8        Internal Revenue Code;
9            (M) With the exception of any amounts subtracted
10        under subparagraph (N), an amount equal to the sum of
11        all amounts disallowed as deductions by (i) Sections
12        171(a)(2) and 265(a)(2) of the Internal Revenue Code,
13        and all amounts of expenses allocable to interest and
14        disallowed as deductions by Section 265(a)(1) of the
15        Internal Revenue Code; and (ii) for taxable years
16        ending on or after August 13, 1999, Sections
17        171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
18        Internal Revenue Code, plus, for taxable years ending
19        on or after December 31, 2011, Section 45G(e)(3) of
20        the Internal Revenue Code and, for taxable years
21        ending on or after December 31, 2008, any amount
22        included in gross income under Section 87 of the
23        Internal Revenue Code; the provisions of this
24        subparagraph are exempt from the provisions of Section
25        250;
26            (N) An amount equal to all amounts included in

 

 

SB3790- 19 -LRB103 39446 CES 69640 b

1        such total which are exempt from taxation by this
2        State either by reason of its statutes or Constitution
3        or by reason of the Constitution, treaties or statutes
4        of the United States; provided that, in the case of any
5        statute of this State that exempts income derived from
6        bonds or other obligations from the tax imposed under
7        this Act, the amount exempted shall be the interest
8        net of bond premium amortization;
9            (O) An amount equal to any contribution made to a
10        job training project established pursuant to the Tax
11        Increment Allocation Redevelopment Act;
12            (P) An amount equal to the amount of the deduction
13        used to compute the federal income tax credit for
14        restoration of substantial amounts held under claim of
15        right for the taxable year pursuant to Section 1341 of
16        the Internal Revenue Code or of any itemized deduction
17        taken from adjusted gross income in the computation of
18        taxable income for restoration of substantial amounts
19        held under claim of right for the taxable year;
20            (Q) An amount equal to any amounts included in
21        such total, received by the taxpayer as an
22        acceleration in the payment of life, endowment or
23        annuity benefits in advance of the time they would
24        otherwise be payable as an indemnity for a terminal
25        illness;
26            (R) An amount equal to the amount of any federal or

 

 

SB3790- 20 -LRB103 39446 CES 69640 b

1        State bonus paid to veterans of the Persian Gulf War;
2            (S) An amount, to the extent included in adjusted
3        gross income, equal to the amount of a contribution
4        made in the taxable year on behalf of the taxpayer to a
5        medical care savings account established under the
6        Medical Care Savings Account Act or the Medical Care
7        Savings Account Act of 2000 to the extent the
8        contribution is accepted by the account administrator
9        as provided in that Act;
10            (T) An amount, to the extent included in adjusted
11        gross income, equal to the amount of interest earned
12        in the taxable year on a medical care savings account
13        established under the Medical Care Savings Account Act
14        or the Medical Care Savings Account Act of 2000 on
15        behalf of the taxpayer, other than interest added
16        pursuant to item (D-5) of this paragraph (2);
17            (U) For one taxable year beginning on or after
18        January 1, 1994, an amount equal to the total amount of
19        tax imposed and paid under subsections (a) and (b) of
20        Section 201 of this Act on grant amounts received by
21        the taxpayer under the Nursing Home Grant Assistance
22        Act during the taxpayer's taxable years 1992 and 1993;
23            (V) Beginning with tax years ending on or after
24        December 31, 1995 and ending with tax years ending on
25        or before December 31, 2004, an amount equal to the
26        amount paid by a taxpayer who is a self-employed

 

 

SB3790- 21 -LRB103 39446 CES 69640 b

1        taxpayer, a partner of a partnership, or a shareholder
2        in a Subchapter S corporation for health insurance or
3        long-term care insurance for that taxpayer or that
4        taxpayer's spouse or dependents, to the extent that
5        the amount paid for that health insurance or long-term
6        care insurance may be deducted under Section 213 of
7        the Internal Revenue Code, has not been deducted on
8        the federal income tax return of the taxpayer, and
9        does not exceed the taxable income attributable to
10        that taxpayer's income, self-employment income, or
11        Subchapter S corporation income; except that no
12        deduction shall be allowed under this item (V) if the
13        taxpayer is eligible to participate in any health
14        insurance or long-term care insurance plan of an
15        employer of the taxpayer or the taxpayer's spouse. The
16        amount of the health insurance and long-term care
17        insurance subtracted under this item (V) shall be
18        determined by multiplying total health insurance and
19        long-term care insurance premiums paid by the taxpayer
20        times a number that represents the fractional
21        percentage of eligible medical expenses under Section
22        213 of the Internal Revenue Code of 1986 not actually
23        deducted on the taxpayer's federal income tax return;
24            (W) For taxable years beginning on or after
25        January 1, 1998, all amounts included in the
26        taxpayer's federal gross income in the taxable year

 

 

SB3790- 22 -LRB103 39446 CES 69640 b

1        from amounts converted from a regular IRA to a Roth
2        IRA. This paragraph is exempt from the provisions of
3        Section 250;
4            (X) For taxable year 1999 and thereafter, an
5        amount equal to the amount of any (i) distributions,
6        to the extent includible in gross income for federal
7        income tax purposes, made to the taxpayer because of
8        his or her status as a victim of persecution for racial
9        or religious reasons by Nazi Germany or any other Axis
10        regime or as an heir of the victim and (ii) items of
11        income, to the extent includible in gross income for
12        federal income tax purposes, attributable to, derived
13        from or in any way related to assets stolen from,
14        hidden from, or otherwise lost to a victim of
15        persecution for racial or religious reasons by Nazi
16        Germany or any other Axis regime immediately prior to,
17        during, and immediately after World War II, including,
18        but not limited to, interest on the proceeds
19        receivable as insurance under policies issued to a
20        victim of persecution for racial or religious reasons
21        by Nazi Germany or any other Axis regime by European
22        insurance companies immediately prior to and during
23        World War II; provided, however, this subtraction from
24        federal adjusted gross income does not apply to assets
25        acquired with such assets or with the proceeds from
26        the sale of such assets; provided, further, this

 

 

SB3790- 23 -LRB103 39446 CES 69640 b

1        paragraph shall only apply to a taxpayer who was the
2        first recipient of such assets after their recovery
3        and who is a victim of persecution for racial or
4        religious reasons by Nazi Germany or any other Axis
5        regime or as an heir of the victim. The amount of and
6        the eligibility for any public assistance, benefit, or
7        similar entitlement is not affected by the inclusion
8        of items (i) and (ii) of this paragraph in gross income
9        for federal income tax purposes. This paragraph is
10        exempt from the provisions of Section 250;
11            (Y) For taxable years beginning on or after
12        January 1, 2002 and ending on or before December 31,
13        2004, moneys contributed in the taxable year to a
14        College Savings Pool account under Section 16.5 of the
15        State Treasurer Act, except that amounts excluded from
16        gross income under Section 529(c)(3)(C)(i) of the
17        Internal Revenue Code shall not be considered moneys
18        contributed under this subparagraph (Y). For taxable
19        years beginning on or after January 1, 2005, a maximum
20        of $10,000 contributed in the taxable year to (i) a
21        College Savings Pool account under Section 16.5 of the
22        State Treasurer Act or (ii) the Illinois Prepaid
23        Tuition Trust Fund, except that amounts excluded from
24        gross income under Section 529(c)(3)(C)(i) of the
25        Internal Revenue Code shall not be considered moneys
26        contributed under this subparagraph (Y). For purposes

 

 

SB3790- 24 -LRB103 39446 CES 69640 b

1        of this subparagraph, contributions made by an
2        employer on behalf of an employee, or matching
3        contributions made by an employee, shall be treated as
4        made by the employee. This subparagraph (Y) is exempt
5        from the provisions of Section 250;
6            (Z) For taxable years 2001 and thereafter, for the
7        taxable year in which the bonus depreciation deduction
8        is taken on the taxpayer's federal income tax return
9        under subsection (k) of Section 168 of the Internal
10        Revenue Code and for each applicable taxable year
11        thereafter, an amount equal to "x", where:
12                (1) "y" equals the amount of the depreciation
13            deduction taken for the taxable year on the
14            taxpayer's federal income tax return on property
15            for which the bonus depreciation deduction was
16            taken in any year under subsection (k) of Section
17            168 of the Internal Revenue Code, but not
18            including the bonus depreciation deduction;
19                (2) for taxable years ending on or before
20            December 31, 2005, "x" equals "y" multiplied by 30
21            and then divided by 70 (or "y" multiplied by
22            0.429); and
23                (3) for taxable years ending after December
24            31, 2005:
25                    (i) for property on which a bonus
26                depreciation deduction of 30% of the adjusted

 

 

SB3790- 25 -LRB103 39446 CES 69640 b

1                basis was taken, "x" equals "y" multiplied by
2                30 and then divided by 70 (or "y" multiplied
3                by 0.429);
4                    (ii) for property on which a bonus
5                depreciation deduction of 50% of the adjusted
6                basis was taken, "x" equals "y" multiplied by
7                1.0;
8                    (iii) for property on which a bonus
9                depreciation deduction of 100% of the adjusted
10                basis was taken in a taxable year ending on or
11                after December 31, 2021, "x" equals the
12                depreciation deduction that would be allowed
13                on that property if the taxpayer had made the
14                election under Section 168(k)(7) of the
15                Internal Revenue Code to not claim bonus
16                depreciation on that property; and
17                    (iv) for property on which a bonus
18                depreciation deduction of a percentage other
19                than 30%, 50% or 100% of the adjusted basis
20                was taken in a taxable year ending on or after
21                December 31, 2021, "x" equals "y" multiplied
22                by 100 times the percentage bonus depreciation
23                on the property (that is, 100(bonus%)) and
24                then divided by 100 times 1 minus the
25                percentage bonus depreciation on the property
26                (that is, 100(1-bonus%)).

 

 

SB3790- 26 -LRB103 39446 CES 69640 b

1            The aggregate amount deducted under this
2        subparagraph in all taxable years for any one piece of
3        property may not exceed the amount of the bonus
4        depreciation deduction taken on that property on the
5        taxpayer's federal income tax return under subsection
6        (k) of Section 168 of the Internal Revenue Code. This
7        subparagraph (Z) is exempt from the provisions of
8        Section 250;
9            (AA) If the taxpayer sells, transfers, abandons,
10        or otherwise disposes of property for which the
11        taxpayer was required in any taxable year to make an
12        addition modification under subparagraph (D-15), then
13        an amount equal to that addition modification.
14            If the taxpayer continues to own property through
15        the last day of the last tax year for which a
16        subtraction is allowed with respect to that property
17        under subparagraph (Z) and for which the taxpayer was
18        required in any taxable year to make an addition
19        modification under subparagraph (D-15), then an amount
20        equal to that addition modification.
21            The taxpayer is allowed to take the deduction
22        under this subparagraph only once with respect to any
23        one piece of property.
24            This subparagraph (AA) is exempt from the
25        provisions of Section 250;
26            (BB) Any amount included in adjusted gross income,

 

 

SB3790- 27 -LRB103 39446 CES 69640 b

1        other than salary, received by a driver in a
2        ridesharing arrangement using a motor vehicle;
3            (CC) The amount of (i) any interest income (net of
4        the deductions allocable thereto) taken into account
5        for the taxable year with respect to a transaction
6        with a taxpayer that is required to make an addition
7        modification with respect to such transaction under
8        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
9        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
10        the amount of that addition modification, and (ii) any
11        income from intangible property (net of the deductions
12        allocable thereto) taken into account for the taxable
13        year with respect to a transaction with a taxpayer
14        that is required to make an addition modification with
15        respect to such transaction under Section
16        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
17        203(d)(2)(D-8), but not to exceed the amount of that
18        addition modification. This subparagraph (CC) is
19        exempt from the provisions of Section 250;
20            (DD) An amount equal to the interest income taken
21        into account for the taxable year (net of the
22        deductions allocable thereto) with respect to
23        transactions with (i) a foreign person who would be a
24        member of the taxpayer's unitary business group but
25        for the fact that the foreign person's business
26        activity outside the United States is 80% or more of

 

 

SB3790- 28 -LRB103 39446 CES 69640 b

1        that person's total business activity and (ii) for
2        taxable years ending on or after December 31, 2008, to
3        a person who would be a member of the same unitary
4        business group but for the fact that the person is
5        prohibited under Section 1501(a)(27) from being
6        included in the unitary business group because he or
7        she is ordinarily required to apportion business
8        income under different subsections of Section 304, but
9        not to exceed the addition modification required to be
10        made for the same taxable year under Section
11        203(a)(2)(D-17) for interest paid, accrued, or
12        incurred, directly or indirectly, to the same person.
13        This subparagraph (DD) is exempt from the provisions
14        of Section 250;
15            (EE) An amount equal to the income from intangible
16        property taken into account for the taxable year (net
17        of the deductions allocable thereto) with respect to
18        transactions with (i) a foreign person who would be a
19        member of the taxpayer's unitary business group but
20        for the fact that the foreign person's business
21        activity outside the United States is 80% or more of
22        that person's total business activity and (ii) for
23        taxable years ending on or after December 31, 2008, to
24        a person who would be a member of the same unitary
25        business group but for the fact that the person is
26        prohibited under Section 1501(a)(27) from being

 

 

SB3790- 29 -LRB103 39446 CES 69640 b

1        included in the unitary business group because he or
2        she is ordinarily required to apportion business
3        income under different subsections of Section 304, but
4        not to exceed the addition modification required to be
5        made for the same taxable year under Section
6        203(a)(2)(D-18) for intangible expenses and costs
7        paid, accrued, or incurred, directly or indirectly, to
8        the same foreign person. This subparagraph (EE) is
9        exempt from the provisions of Section 250;
10            (FF) An amount equal to any amount awarded to the
11        taxpayer during the taxable year by the Court of
12        Claims under subsection (c) of Section 8 of the Court
13        of Claims Act for time unjustly served in a State
14        prison. This subparagraph (FF) is exempt from the
15        provisions of Section 250;
16            (GG) For taxable years ending on or after December
17        31, 2011, in the case of a taxpayer who was required to
18        add back any insurance premiums under Section
19        203(a)(2)(D-19), such taxpayer may elect to subtract
20        that part of a reimbursement received from the
21        insurance company equal to the amount of the expense
22        or loss (including expenses incurred by the insurance
23        company) that would have been taken into account as a
24        deduction for federal income tax purposes if the
25        expense or loss had been uninsured. If a taxpayer
26        makes the election provided for by this subparagraph

 

 

SB3790- 30 -LRB103 39446 CES 69640 b

1        (GG), the insurer to which the premiums were paid must
2        add back to income the amount subtracted by the
3        taxpayer pursuant to this subparagraph (GG). This
4        subparagraph (GG) is exempt from the provisions of
5        Section 250;
6            (HH) For taxable years beginning on or after
7        January 1, 2018 and prior to January 1, 2028, a maximum
8        of $10,000 contributed in the taxable year to a
9        qualified ABLE account under Section 16.6 of the State
10        Treasurer Act, except that amounts excluded from gross
11        income under Section 529(c)(3)(C)(i) or Section
12        529A(c)(1)(C) of the Internal Revenue Code shall not
13        be considered moneys contributed under this
14        subparagraph (HH). For purposes of this subparagraph
15        (HH), contributions made by an employer on behalf of
16        an employee, or matching contributions made by an
17        employee, shall be treated as made by the employee;
18            (II) For taxable years that begin on or after
19        January 1, 2021 and begin before January 1, 2026, the
20        amount that is included in the taxpayer's federal
21        adjusted gross income pursuant to Section 61 of the
22        Internal Revenue Code as discharge of indebtedness
23        attributable to student loan forgiveness and that is
24        not excluded from the taxpayer's federal adjusted
25        gross income pursuant to paragraph (5) of subsection
26        (f) of Section 108 of the Internal Revenue Code; and

 

 

SB3790- 31 -LRB103 39446 CES 69640 b

1            (JJ) For taxable years beginning on or after
2        January 1, 2023, for any cannabis establishment
3        operating in this State and licensed under the
4        Cannabis Regulation and Tax Act or any cannabis
5        cultivation center or medical cannabis dispensing
6        organization operating in this State and licensed
7        under the Compassionate Use of Medical Cannabis
8        Program Act, an amount equal to the deductions that
9        were disallowed under Section 280E of the Internal
10        Revenue Code for the taxable year and that would not be
11        added back under this subsection. The provisions of
12        this subparagraph (JJ) are exempt from the provisions
13        of Section 250.
14            (KK) (JJ) To the extent includible in gross income
15        for federal income tax purposes, any amount awarded or
16        paid to the taxpayer as a result of a judgment or
17        settlement for fertility fraud as provided in Section
18        15 of the Illinois Fertility Fraud Act, donor
19        fertility fraud as provided in Section 20 of the
20        Illinois Fertility Fraud Act, or similar action in
21        another state.
22            (LL) For taxable years beginning on or after
23        January 1, 2025, for any hemp business establishment
24        operating in this State and licensed under the
25        Industrial Hemp Act, an amount equal to 50% of the
26        income generated by the sale products made by minority

 

 

SB3790- 32 -LRB103 39446 CES 69640 b

1        and other specific priority population owned
2        businesses. The provisions of this subparagraph are
3        exempt from the provisions of Section 250. For
4        purposes of this paragraph, the term "minority and
5        other specific priority population owned businesses"
6        may include, but shall not be limited to, businesses
7        51% or more owned by groups such as women,
8        African-Americans, Puerto Ricans, Hispanics, Asian
9        Americans, veterans, the elderly, hemp justice or hemp
10        social equity participants as defined in the
11        Industrial Hemp Act, persons who are clients of
12        services provided by other State agencies, individuals
13        identifying as LGBTQ, persons with disabilities,
14        intravenous drug users, persons with AIDS or who are
15        HIV infected, and such other specific populations as
16        the Department may from time to time identify.
 
17    (b) Corporations.
18        (1) In general. In the case of a corporation, base
19    income means an amount equal to the taxpayer's taxable
20    income for the taxable year as modified by paragraph (2).
21        (2) Modifications. The taxable income referred to in
22    paragraph (1) shall be modified by adding thereto the sum
23    of the following amounts:
24            (A) An amount equal to all amounts paid or accrued
25        to the taxpayer as interest and all distributions

 

 

SB3790- 33 -LRB103 39446 CES 69640 b

1        received from regulated investment companies during
2        the taxable year to the extent excluded from gross
3        income in the computation of taxable income;
4            (B) An amount equal to the amount of tax imposed by
5        this Act to the extent deducted from gross income in
6        the computation of taxable income for the taxable
7        year;
8            (C) In the case of a regulated investment company,
9        an amount equal to the excess of (i) the net long-term
10        capital gain for the taxable year, over (ii) the
11        amount of the capital gain dividends designated as
12        such in accordance with Section 852(b)(3)(C) of the
13        Internal Revenue Code and any amount designated under
14        Section 852(b)(3)(D) of the Internal Revenue Code,
15        attributable to the taxable year (this amendatory Act
16        of 1995 (Public Act 89-89) is declarative of existing
17        law and is not a new enactment);
18            (D) The amount of any net operating loss deduction
19        taken in arriving at taxable income, other than a net
20        operating loss carried forward from a taxable year
21        ending prior to December 31, 1986;
22            (E) For taxable years in which a net operating
23        loss carryback or carryforward from a taxable year
24        ending prior to December 31, 1986 is an element of
25        taxable income under paragraph (1) of subsection (e)
26        or subparagraph (E) of paragraph (2) of subsection

 

 

SB3790- 34 -LRB103 39446 CES 69640 b

1        (e), the amount by which addition modifications other
2        than those provided by this subparagraph (E) exceeded
3        subtraction modifications in such earlier taxable
4        year, with the following limitations applied in the
5        order that they are listed:
6                (i) the addition modification relating to the
7            net operating loss carried back or forward to the
8            taxable year from any taxable year ending prior to
9            December 31, 1986 shall be reduced by the amount
10            of addition modification under this subparagraph
11            (E) which related to that net operating loss and
12            which was taken into account in calculating the
13            base income of an earlier taxable year, and
14                (ii) the addition modification relating to the
15            net operating loss carried back or forward to the
16            taxable year from any taxable year ending prior to
17            December 31, 1986 shall not exceed the amount of
18            such carryback or carryforward;
19            For taxable years in which there is a net
20        operating loss carryback or carryforward from more
21        than one other taxable year ending prior to December
22        31, 1986, the addition modification provided in this
23        subparagraph (E) shall be the sum of the amounts
24        computed independently under the preceding provisions
25        of this subparagraph (E) for each such taxable year;
26            (E-5) For taxable years ending after December 31,

 

 

SB3790- 35 -LRB103 39446 CES 69640 b

1        1997, an amount equal to any eligible remediation
2        costs that the corporation deducted in computing
3        adjusted gross income and for which the corporation
4        claims a credit under subsection (l) of Section 201;
5            (E-10) For taxable years 2001 and thereafter, an
6        amount equal to the bonus depreciation deduction taken
7        on the taxpayer's federal income tax return for the
8        taxable year under subsection (k) of Section 168 of
9        the Internal Revenue Code;
10            (E-11) If the taxpayer sells, transfers, abandons,
11        or otherwise disposes of property for which the
12        taxpayer was required in any taxable year to make an
13        addition modification under subparagraph (E-10), then
14        an amount equal to the aggregate amount of the
15        deductions taken in all taxable years under
16        subparagraph (T) with respect to that property.
17            If the taxpayer continues to own property through
18        the last day of the last tax year for which a
19        subtraction is allowed with respect to that property
20        under subparagraph (T) and for which the taxpayer was
21        allowed in any taxable year to make a subtraction
22        modification under subparagraph (T), then an amount
23        equal to that subtraction modification.
24            The taxpayer is required to make the addition
25        modification under this subparagraph only once with
26        respect to any one piece of property;

 

 

SB3790- 36 -LRB103 39446 CES 69640 b

1            (E-12) An amount equal to the amount otherwise
2        allowed as a deduction in computing base income for
3        interest paid, accrued, or incurred, directly or
4        indirectly, (i) for taxable years ending on or after
5        December 31, 2004, to a foreign person who would be a
6        member of the same unitary business group but for the
7        fact the foreign person's business activity outside
8        the United States is 80% or more of the foreign
9        person's total business activity and (ii) for taxable
10        years ending on or after December 31, 2008, to a person
11        who would be a member of the same unitary business
12        group but for the fact that the person is prohibited
13        under Section 1501(a)(27) from being included in the
14        unitary business group because he or she is ordinarily
15        required to apportion business income under different
16        subsections of Section 304. The addition modification
17        required by this subparagraph shall be reduced to the
18        extent that dividends were included in base income of
19        the unitary group for the same taxable year and
20        received by the taxpayer or by a member of the
21        taxpayer's unitary business group (including amounts
22        included in gross income pursuant to Sections 951
23        through 964 of the Internal Revenue Code and amounts
24        included in gross income under Section 78 of the
25        Internal Revenue Code) with respect to the stock of
26        the same person to whom the interest was paid,

 

 

SB3790- 37 -LRB103 39446 CES 69640 b

1        accrued, or incurred.
2            This paragraph shall not apply to the following:
3                (i) an item of interest paid, accrued, or
4            incurred, directly or indirectly, to a person who
5            is subject in a foreign country or state, other
6            than a state which requires mandatory unitary
7            reporting, to a tax on or measured by net income
8            with respect to such interest; or
9                (ii) an item of interest paid, accrued, or
10            incurred, directly or indirectly, to a person if
11            the taxpayer can establish, based on a
12            preponderance of the evidence, both of the
13            following:
14                    (a) the person, during the same taxable
15                year, paid, accrued, or incurred, the interest
16                to a person that is not a related member, and
17                    (b) the transaction giving rise to the
18                interest expense between the taxpayer and the
19                person did not have as a principal purpose the
20                avoidance of Illinois income tax, and is paid
21                pursuant to a contract or agreement that
22                reflects an arm's-length interest rate and
23                terms; or
24                (iii) the taxpayer can establish, based on
25            clear and convincing evidence, that the interest
26            paid, accrued, or incurred relates to a contract

 

 

SB3790- 38 -LRB103 39446 CES 69640 b

1            or agreement entered into at arm's-length rates
2            and terms and the principal purpose for the
3            payment is not federal or Illinois tax avoidance;
4            or
5                (iv) an item of interest paid, accrued, or
6            incurred, directly or indirectly, to a person if
7            the taxpayer establishes by clear and convincing
8            evidence that the adjustments are unreasonable; or
9            if the taxpayer and the Director agree in writing
10            to the application or use of an alternative method
11            of apportionment under Section 304(f).
12                Nothing in this subsection shall preclude the
13            Director from making any other adjustment
14            otherwise allowed under Section 404 of this Act
15            for any tax year beginning after the effective
16            date of this amendment provided such adjustment is
17            made pursuant to regulation adopted by the
18            Department and such regulations provide methods
19            and standards by which the Department will utilize
20            its authority under Section 404 of this Act;
21            (E-13) An amount equal to the amount of intangible
22        expenses and costs otherwise allowed as a deduction in
23        computing base income, and that were paid, accrued, or
24        incurred, directly or indirectly, (i) for taxable
25        years ending on or after December 31, 2004, to a
26        foreign person who would be a member of the same

 

 

SB3790- 39 -LRB103 39446 CES 69640 b

1        unitary business group but for the fact that the
2        foreign person's business activity outside the United
3        States is 80% or more of that person's total business
4        activity and (ii) for taxable years ending on or after
5        December 31, 2008, to a person who would be a member of
6        the same unitary business group but for the fact that
7        the person is prohibited under Section 1501(a)(27)
8        from being included in the unitary business group
9        because he or she is ordinarily required to apportion
10        business income under different subsections of Section
11        304. The addition modification required by this
12        subparagraph shall be reduced to the extent that
13        dividends were included in base income of the unitary
14        group for the same taxable year and received by the
15        taxpayer or by a member of the taxpayer's unitary
16        business group (including amounts included in gross
17        income pursuant to Sections 951 through 964 of the
18        Internal Revenue Code and amounts included in gross
19        income under Section 78 of the Internal Revenue Code)
20        with respect to the stock of the same person to whom
21        the intangible expenses and costs were directly or
22        indirectly paid, incurred, or accrued. The preceding
23        sentence shall not apply to the extent that the same
24        dividends caused a reduction to the addition
25        modification required under Section 203(b)(2)(E-12) of
26        this Act. As used in this subparagraph, the term

 

 

SB3790- 40 -LRB103 39446 CES 69640 b

1        "intangible expenses and costs" includes (1) expenses,
2        losses, and costs for, or related to, the direct or
3        indirect acquisition, use, maintenance or management,
4        ownership, sale, exchange, or any other disposition of
5        intangible property; (2) losses incurred, directly or
6        indirectly, from factoring transactions or discounting
7        transactions; (3) royalty, patent, technical, and
8        copyright fees; (4) licensing fees; and (5) other
9        similar expenses and costs. For purposes of this
10        subparagraph, "intangible property" includes patents,
11        patent applications, trade names, trademarks, service
12        marks, copyrights, mask works, trade secrets, and
13        similar types of intangible assets.
14            This paragraph shall not apply to the following:
15                (i) any item of intangible expenses or costs
16            paid, accrued, or incurred, directly or
17            indirectly, from a transaction with a person who
18            is subject in a foreign country or state, other
19            than a state which requires mandatory unitary
20            reporting, to a tax on or measured by net income
21            with respect to such item; or
22                (ii) any item of intangible expense or cost
23            paid, accrued, or incurred, directly or
24            indirectly, if the taxpayer can establish, based
25            on a preponderance of the evidence, both of the
26            following:

 

 

SB3790- 41 -LRB103 39446 CES 69640 b

1                    (a) the person during the same taxable
2                year paid, accrued, or incurred, the
3                intangible expense or cost to a person that is
4                not a related member, and
5                    (b) the transaction giving rise to the
6                intangible expense or cost between the
7                taxpayer and the person did not have as a
8                principal purpose the avoidance of Illinois
9                income tax, and is paid pursuant to a contract
10                or agreement that reflects arm's-length terms;
11                or
12                (iii) any item of intangible expense or cost
13            paid, accrued, or incurred, directly or
14            indirectly, from a transaction with a person if
15            the taxpayer establishes by clear and convincing
16            evidence, that the adjustments are unreasonable;
17            or if the taxpayer and the Director agree in
18            writing to the application or use of an
19            alternative method of apportionment under Section
20            304(f);
21                Nothing in this subsection shall preclude the
22            Director from making any other adjustment
23            otherwise allowed under Section 404 of this Act
24            for any tax year beginning after the effective
25            date of this amendment provided such adjustment is
26            made pursuant to regulation adopted by the

 

 

SB3790- 42 -LRB103 39446 CES 69640 b

1            Department and such regulations provide methods
2            and standards by which the Department will utilize
3            its authority under Section 404 of this Act;
4            (E-14) For taxable years ending on or after
5        December 31, 2008, an amount equal to the amount of
6        insurance premium expenses and costs otherwise allowed
7        as a deduction in computing base income, and that were
8        paid, accrued, or incurred, directly or indirectly, to
9        a person who would be a member of the same unitary
10        business group but for the fact that the person is
11        prohibited under Section 1501(a)(27) from being
12        included in the unitary business group because he or
13        she is ordinarily required to apportion business
14        income under different subsections of Section 304. The
15        addition modification required by this subparagraph
16        shall be reduced to the extent that dividends were
17        included in base income of the unitary group for the
18        same taxable year and received by the taxpayer or by a
19        member of the taxpayer's unitary business group
20        (including amounts included in gross income under
21        Sections 951 through 964 of the Internal Revenue Code
22        and amounts included in gross income under Section 78
23        of the Internal Revenue Code) with respect to the
24        stock of the same person to whom the premiums and costs
25        were directly or indirectly paid, incurred, or
26        accrued. The preceding sentence does not apply to the

 

 

SB3790- 43 -LRB103 39446 CES 69640 b

1        extent that the same dividends caused a reduction to
2        the addition modification required under Section
3        203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this
4        Act;
5            (E-15) For taxable years beginning after December
6        31, 2008, any deduction for dividends paid by a
7        captive real estate investment trust that is allowed
8        to a real estate investment trust under Section
9        857(b)(2)(B) of the Internal Revenue Code for
10        dividends paid;
11            (E-16) An amount equal to the credit allowable to
12        the taxpayer under Section 218(a) of this Act,
13        determined without regard to Section 218(c) of this
14        Act;
15            (E-17) For taxable years ending on or after
16        December 31, 2017, an amount equal to the deduction
17        allowed under Section 199 of the Internal Revenue Code
18        for the taxable year;
19            (E-18) for taxable years beginning after December
20        31, 2018, an amount equal to the deduction allowed
21        under Section 250(a)(1)(A) of the Internal Revenue
22        Code for the taxable year;
23            (E-19) for taxable years ending on or after June
24        30, 2021, an amount equal to the deduction allowed
25        under Section 250(a)(1)(B)(i) of the Internal Revenue
26        Code for the taxable year;

 

 

SB3790- 44 -LRB103 39446 CES 69640 b

1            (E-20) for taxable years ending on or after June
2        30, 2021, an amount equal to the deduction allowed
3        under Sections 243(e) and 245A(a) of the Internal
4        Revenue Code for the taxable year.
5    and by deducting from the total so obtained the sum of the
6    following amounts:
7            (F) An amount equal to the amount of any tax
8        imposed by this Act which was refunded to the taxpayer
9        and included in such total for the taxable year;
10            (G) An amount equal to any amount included in such
11        total under Section 78 of the Internal Revenue Code;
12            (H) In the case of a regulated investment company,
13        an amount equal to the amount of exempt interest
14        dividends as defined in subsection (b)(5) of Section
15        852 of the Internal Revenue Code, paid to shareholders
16        for the taxable year;
17            (I) With the exception of any amounts subtracted
18        under subparagraph (J), an amount equal to the sum of
19        all amounts disallowed as deductions by (i) Sections
20        171(a)(2) and 265(a)(2) and amounts disallowed as
21        interest expense by Section 291(a)(3) of the Internal
22        Revenue Code, and all amounts of expenses allocable to
23        interest and disallowed as deductions by Section
24        265(a)(1) of the Internal Revenue Code; and (ii) for
25        taxable years ending on or after August 13, 1999,
26        Sections 171(a)(2), 265, 280C, 291(a)(3), and

 

 

SB3790- 45 -LRB103 39446 CES 69640 b

1        832(b)(5)(B)(i) of the Internal Revenue Code, plus,
2        for tax years ending on or after December 31, 2011,
3        amounts disallowed as deductions by Section 45G(e)(3)
4        of the Internal Revenue Code and, for taxable years
5        ending on or after December 31, 2008, any amount
6        included in gross income under Section 87 of the
7        Internal Revenue Code and the policyholders' share of
8        tax-exempt interest of a life insurance company under
9        Section 807(a)(2)(B) of the Internal Revenue Code (in
10        the case of a life insurance company with gross income
11        from a decrease in reserves for the tax year) or
12        Section 807(b)(1)(B) of the Internal Revenue Code (in
13        the case of a life insurance company allowed a
14        deduction for an increase in reserves for the tax
15        year); the provisions of this subparagraph are exempt
16        from the provisions of Section 250;
17            (J) An amount equal to all amounts included in
18        such total which are exempt from taxation by this
19        State either by reason of its statutes or Constitution
20        or by reason of the Constitution, treaties or statutes
21        of the United States; provided that, in the case of any
22        statute of this State that exempts income derived from
23        bonds or other obligations from the tax imposed under
24        this Act, the amount exempted shall be the interest
25        net of bond premium amortization;
26            (K) An amount equal to those dividends included in

 

 

SB3790- 46 -LRB103 39446 CES 69640 b

1        such total which were paid by a corporation which
2        conducts business operations in a River Edge
3        Redevelopment Zone or zones created under the River
4        Edge Redevelopment Zone Act and conducts substantially
5        all of its operations in a River Edge Redevelopment
6        Zone or zones. This subparagraph (K) is exempt from
7        the provisions of Section 250;
8            (L) An amount equal to those dividends included in
9        such total that were paid by a corporation that
10        conducts business operations in a federally designated
11        Foreign Trade Zone or Sub-Zone and that is designated
12        a High Impact Business located in Illinois; provided
13        that dividends eligible for the deduction provided in
14        subparagraph (K) of paragraph 2 of this subsection
15        shall not be eligible for the deduction provided under
16        this subparagraph (L);
17            (M) For any taxpayer that is a financial
18        organization within the meaning of Section 304(c) of
19        this Act, an amount included in such total as interest
20        income from a loan or loans made by such taxpayer to a
21        borrower, to the extent that such a loan is secured by
22        property which is eligible for the River Edge
23        Redevelopment Zone Investment Credit. To determine the
24        portion of a loan or loans that is secured by property
25        eligible for a Section 201(f) investment credit to the
26        borrower, the entire principal amount of the loan or

 

 

SB3790- 47 -LRB103 39446 CES 69640 b

1        loans between the taxpayer and the borrower should be
2        divided into the basis of the Section 201(f)
3        investment credit property which secures the loan or
4        loans, using for this purpose the original basis of
5        such property on the date that it was placed in service
6        in the River Edge Redevelopment Zone. The subtraction
7        modification available to the taxpayer in any year
8        under this subsection shall be that portion of the
9        total interest paid by the borrower with respect to
10        such loan attributable to the eligible property as
11        calculated under the previous sentence. This
12        subparagraph (M) is exempt from the provisions of
13        Section 250;
14            (M-1) For any taxpayer that is a financial
15        organization within the meaning of Section 304(c) of
16        this Act, an amount included in such total as interest
17        income from a loan or loans made by such taxpayer to a
18        borrower, to the extent that such a loan is secured by
19        property which is eligible for the High Impact
20        Business Investment Credit. To determine the portion
21        of a loan or loans that is secured by property eligible
22        for a Section 201(h) investment credit to the
23        borrower, the entire principal amount of the loan or
24        loans between the taxpayer and the borrower should be
25        divided into the basis of the Section 201(h)
26        investment credit property which secures the loan or

 

 

SB3790- 48 -LRB103 39446 CES 69640 b

1        loans, using for this purpose the original basis of
2        such property on the date that it was placed in service
3        in a federally designated Foreign Trade Zone or
4        Sub-Zone located in Illinois. No taxpayer that is
5        eligible for the deduction provided in subparagraph
6        (M) of paragraph (2) of this subsection shall be
7        eligible for the deduction provided under this
8        subparagraph (M-1). The subtraction modification
9        available to taxpayers in any year under this
10        subsection shall be that portion of the total interest
11        paid by the borrower with respect to such loan
12        attributable to the eligible property as calculated
13        under the previous sentence;
14            (N) Two times any contribution made during the
15        taxable year to a designated zone organization to the
16        extent that the contribution (i) qualifies as a
17        charitable contribution under subsection (c) of
18        Section 170 of the Internal Revenue Code and (ii)
19        must, by its terms, be used for a project approved by
20        the Department of Commerce and Economic Opportunity
21        under Section 11 of the Illinois Enterprise Zone Act
22        or under Section 10-10 of the River Edge Redevelopment
23        Zone Act. This subparagraph (N) is exempt from the
24        provisions of Section 250;
25            (O) An amount equal to: (i) 85% for taxable years
26        ending on or before December 31, 1992, or, a

 

 

SB3790- 49 -LRB103 39446 CES 69640 b

1        percentage equal to the percentage allowable under
2        Section 243(a)(1) of the Internal Revenue Code of 1986
3        for taxable years ending after December 31, 1992, of
4        the amount by which dividends included in taxable
5        income and received from a corporation that is not
6        created or organized under the laws of the United
7        States or any state or political subdivision thereof,
8        including, for taxable years ending on or after
9        December 31, 1988, dividends received or deemed
10        received or paid or deemed paid under Sections 951
11        through 965 of the Internal Revenue Code, exceed the
12        amount of the modification provided under subparagraph
13        (G) of paragraph (2) of this subsection (b) which is
14        related to such dividends, and including, for taxable
15        years ending on or after December 31, 2008, dividends
16        received from a captive real estate investment trust;
17        plus (ii) 100% of the amount by which dividends,
18        included in taxable income and received, including,
19        for taxable years ending on or after December 31,
20        1988, dividends received or deemed received or paid or
21        deemed paid under Sections 951 through 964 of the
22        Internal Revenue Code and including, for taxable years
23        ending on or after December 31, 2008, dividends
24        received from a captive real estate investment trust,
25        from any such corporation specified in clause (i) that
26        would but for the provisions of Section 1504(b)(3) of

 

 

SB3790- 50 -LRB103 39446 CES 69640 b

1        the Internal Revenue Code be treated as a member of the
2        affiliated group which includes the dividend
3        recipient, exceed the amount of the modification
4        provided under subparagraph (G) of paragraph (2) of
5        this subsection (b) which is related to such
6        dividends. For taxable years ending on or after June
7        30, 2021, (i) for purposes of this subparagraph, the
8        term "dividend" does not include any amount treated as
9        a dividend under Section 1248 of the Internal Revenue
10        Code, and (ii) this subparagraph shall not apply to
11        dividends for which a deduction is allowed under
12        Section 245(a) of the Internal Revenue Code. This
13        subparagraph (O) is exempt from the provisions of
14        Section 250 of this Act;
15            (P) An amount equal to any contribution made to a
16        job training project established pursuant to the Tax
17        Increment Allocation Redevelopment Act;
18            (Q) An amount equal to the amount of the deduction
19        used to compute the federal income tax credit for
20        restoration of substantial amounts held under claim of
21        right for the taxable year pursuant to Section 1341 of
22        the Internal Revenue Code;
23            (R) On and after July 20, 1999, in the case of an
24        attorney-in-fact with respect to whom an interinsurer
25        or a reciprocal insurer has made the election under
26        Section 835 of the Internal Revenue Code, 26 U.S.C.

 

 

SB3790- 51 -LRB103 39446 CES 69640 b

1        835, an amount equal to the excess, if any, of the
2        amounts paid or incurred by that interinsurer or
3        reciprocal insurer in the taxable year to the
4        attorney-in-fact over the deduction allowed to that
5        interinsurer or reciprocal insurer with respect to the
6        attorney-in-fact under Section 835(b) of the Internal
7        Revenue Code for the taxable year; the provisions of
8        this subparagraph are exempt from the provisions of
9        Section 250;
10            (S) For taxable years ending on or after December
11        31, 1997, in the case of a Subchapter S corporation, an
12        amount equal to all amounts of income allocable to a
13        shareholder subject to the Personal Property Tax
14        Replacement Income Tax imposed by subsections (c) and
15        (d) of Section 201 of this Act, including amounts
16        allocable to organizations exempt from federal income
17        tax by reason of Section 501(a) of the Internal
18        Revenue Code. This subparagraph (S) is exempt from the
19        provisions of Section 250;
20            (T) For taxable years 2001 and thereafter, for the
21        taxable year in which the bonus depreciation deduction
22        is taken on the taxpayer's federal income tax return
23        under subsection (k) of Section 168 of the Internal
24        Revenue Code and for each applicable taxable year
25        thereafter, an amount equal to "x", where:
26                (1) "y" equals the amount of the depreciation

 

 

SB3790- 52 -LRB103 39446 CES 69640 b

1            deduction taken for the taxable year on the
2            taxpayer's federal income tax return on property
3            for which the bonus depreciation deduction was
4            taken in any year under subsection (k) of Section
5            168 of the Internal Revenue Code, but not
6            including the bonus depreciation deduction;
7                (2) for taxable years ending on or before
8            December 31, 2005, "x" equals "y" multiplied by 30
9            and then divided by 70 (or "y" multiplied by
10            0.429); and
11                (3) for taxable years ending after December
12            31, 2005:
13                    (i) for property on which a bonus
14                depreciation deduction of 30% of the adjusted
15                basis was taken, "x" equals "y" multiplied by
16                30 and then divided by 70 (or "y" multiplied
17                by 0.429);
18                    (ii) for property on which a bonus
19                depreciation deduction of 50% of the adjusted
20                basis was taken, "x" equals "y" multiplied by
21                1.0;
22                    (iii) for property on which a bonus
23                depreciation deduction of 100% of the adjusted
24                basis was taken in a taxable year ending on or
25                after December 31, 2021, "x" equals the
26                depreciation deduction that would be allowed

 

 

SB3790- 53 -LRB103 39446 CES 69640 b

1                on that property if the taxpayer had made the
2                election under Section 168(k)(7) of the
3                Internal Revenue Code to not claim bonus
4                depreciation on that property; and
5                    (iv) for property on which a bonus
6                depreciation deduction of a percentage other
7                than 30%, 50% or 100% of the adjusted basis
8                was taken in a taxable year ending on or after
9                December 31, 2021, "x" equals "y" multiplied
10                by 100 times the percentage bonus depreciation
11                on the property (that is, 100(bonus%)) and
12                then divided by 100 times 1 minus the
13                percentage bonus depreciation on the property
14                (that is, 100(1-bonus%)).
15            The aggregate amount deducted under this
16        subparagraph in all taxable years for any one piece of
17        property may not exceed the amount of the bonus
18        depreciation deduction taken on that property on the
19        taxpayer's federal income tax return under subsection
20        (k) of Section 168 of the Internal Revenue Code. This
21        subparagraph (T) is exempt from the provisions of
22        Section 250;
23            (U) If the taxpayer sells, transfers, abandons, or
24        otherwise disposes of property for which the taxpayer
25        was required in any taxable year to make an addition
26        modification under subparagraph (E-10), then an amount

 

 

SB3790- 54 -LRB103 39446 CES 69640 b

1        equal to that addition modification.
2            If the taxpayer continues to own property through
3        the last day of the last tax year for which a
4        subtraction is allowed with respect to that property
5        under subparagraph (T) and for which the taxpayer was
6        required in any taxable year to make an addition
7        modification under subparagraph (E-10), then an amount
8        equal to that addition modification.
9            The taxpayer is allowed to take the deduction
10        under this subparagraph only once with respect to any
11        one piece of property.
12            This subparagraph (U) is exempt from the
13        provisions of Section 250;
14            (V) The amount of: (i) any interest income (net of
15        the deductions allocable thereto) taken into account
16        for the taxable year with respect to a transaction
17        with a taxpayer that is required to make an addition
18        modification with respect to such transaction under
19        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
20        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
21        the amount of such addition modification, (ii) any
22        income from intangible property (net of the deductions
23        allocable thereto) taken into account for the taxable
24        year with respect to a transaction with a taxpayer
25        that is required to make an addition modification with
26        respect to such transaction under Section

 

 

SB3790- 55 -LRB103 39446 CES 69640 b

1        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
2        203(d)(2)(D-8), but not to exceed the amount of such
3        addition modification, and (iii) any insurance premium
4        income (net of deductions allocable thereto) taken
5        into account for the taxable year with respect to a
6        transaction with a taxpayer that is required to make
7        an addition modification with respect to such
8        transaction under Section 203(a)(2)(D-19), Section
9        203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section
10        203(d)(2)(D-9), but not to exceed the amount of that
11        addition modification. This subparagraph (V) is exempt
12        from the provisions of Section 250;
13            (W) An amount equal to the interest income taken
14        into account for the taxable year (net of the
15        deductions allocable thereto) with respect to
16        transactions with (i) a foreign person who would be a
17        member of the taxpayer's unitary business group but
18        for the fact that the foreign person's business
19        activity outside the United States is 80% or more of
20        that person's total business activity and (ii) for
21        taxable years ending on or after December 31, 2008, to
22        a person who would be a member of the same unitary
23        business group but for the fact that the person is
24        prohibited under Section 1501(a)(27) from being
25        included in the unitary business group because he or
26        she is ordinarily required to apportion business

 

 

SB3790- 56 -LRB103 39446 CES 69640 b

1        income under different subsections of Section 304, but
2        not to exceed the addition modification required to be
3        made for the same taxable year under Section
4        203(b)(2)(E-12) for interest paid, accrued, or
5        incurred, directly or indirectly, to the same person.
6        This subparagraph (W) is exempt from the provisions of
7        Section 250;
8            (X) An amount equal to the income from intangible
9        property taken into account for the taxable year (net
10        of the deductions allocable thereto) with respect to
11        transactions with (i) a foreign person who would be a
12        member of the taxpayer's unitary business group but
13        for the fact that the foreign person's business
14        activity outside the United States is 80% or more of
15        that person's total business activity and (ii) for
16        taxable years ending on or after December 31, 2008, to
17        a person who would be a member of the same unitary
18        business group but for the fact that the person is
19        prohibited under Section 1501(a)(27) from being
20        included in the unitary business group because he or
21        she is ordinarily required to apportion business
22        income under different subsections of Section 304, but
23        not to exceed the addition modification required to be
24        made for the same taxable year under Section
25        203(b)(2)(E-13) for intangible expenses and costs
26        paid, accrued, or incurred, directly or indirectly, to

 

 

SB3790- 57 -LRB103 39446 CES 69640 b

1        the same foreign person. This subparagraph (X) is
2        exempt from the provisions of Section 250;
3            (Y) For taxable years ending on or after December
4        31, 2011, in the case of a taxpayer who was required to
5        add back any insurance premiums under Section
6        203(b)(2)(E-14), such taxpayer may elect to subtract
7        that part of a reimbursement received from the
8        insurance company equal to the amount of the expense
9        or loss (including expenses incurred by the insurance
10        company) that would have been taken into account as a
11        deduction for federal income tax purposes if the
12        expense or loss had been uninsured. If a taxpayer
13        makes the election provided for by this subparagraph
14        (Y), the insurer to which the premiums were paid must
15        add back to income the amount subtracted by the
16        taxpayer pursuant to this subparagraph (Y). This
17        subparagraph (Y) is exempt from the provisions of
18        Section 250;
19            (Z) The difference between the nondeductible
20        controlled foreign corporation dividends under Section
21        965(e)(3) of the Internal Revenue Code over the
22        taxable income of the taxpayer, computed without
23        regard to Section 965(e)(2)(A) of the Internal Revenue
24        Code, and without regard to any net operating loss
25        deduction. This subparagraph (Z) is exempt from the
26        provisions of Section 250; and

 

 

SB3790- 58 -LRB103 39446 CES 69640 b

1            (AA) For taxable years beginning on or after
2        January 1, 2023, for any cannabis establishment
3        operating in this State and licensed under the
4        Cannabis Regulation and Tax Act or any cannabis
5        cultivation center or medical cannabis dispensing
6        organization operating in this State and licensed
7        under the Compassionate Use of Medical Cannabis
8        Program Act, an amount equal to the deductions that
9        were disallowed under Section 280E of the Internal
10        Revenue Code for the taxable year and that would not be
11        added back under this subsection. The provisions of
12        this subparagraph (AA) are exempt from the provisions
13        of Section 250.
14            (BB) For taxable years beginning on or after
15        January 1, 2025, for any hemp business establishment
16        operating in this State and licensed under the
17        Industrial Hemp Act, an amount equal to 50% of the
18        income generated by the sale products made by minority
19        and other specific priority population owned
20        businesses. The provisions of this subparagraph are
21        exempt from the provisions of Section 250. For
22        purposes of this paragraph, the term "minority and
23        other specific priority population owned businesses"
24        may include, but shall not be limited to, businesses
25        51% or more owned by groups such as women, parents,
26        African-Americans, Puerto Ricans, Hispanics, Asian

 

 

SB3790- 59 -LRB103 39446 CES 69640 b

1        Americans, veterans, the elderly, hemp justice or hemp
2        social equity participants as defined by the
3        Industrial Hemp Act, persons who are clients of
4        services provided by other State agencies, individuals
5        identifying as LGBTQ, persons with disabilities,
6        intravenous drug users, persons with AIDS or who are
7        HIV infected, and such other specific populations as
8        the Department may from time to time identify.
9        (3) Special rule. For purposes of paragraph (2)(A),
10    "gross income" in the case of a life insurance company,
11    for tax years ending on and after December 31, 1994, and
12    prior to December 31, 2011, shall mean the gross
13    investment income for the taxable year and, for tax years
14    ending on or after December 31, 2011, shall mean all
15    amounts included in life insurance gross income under
16    Section 803(a)(3) of the Internal Revenue Code.
 
17    (c) Trusts and estates.
18        (1) In general. In the case of a trust or estate, base
19    income means an amount equal to the taxpayer's taxable
20    income for the taxable year as modified by paragraph (2).
21        (2) Modifications. Subject to the provisions of
22    paragraph (3), the taxable income referred to in paragraph
23    (1) shall be modified by adding thereto the sum of the
24    following amounts:
25            (A) An amount equal to all amounts paid or accrued

 

 

SB3790- 60 -LRB103 39446 CES 69640 b

1        to the taxpayer as interest or dividends during the
2        taxable year to the extent excluded from gross income
3        in the computation of taxable income;
4            (B) In the case of (i) an estate, $600; (ii) a
5        trust which, under its governing instrument, is
6        required to distribute all of its income currently,
7        $300; and (iii) any other trust, $100, but in each such
8        case, only to the extent such amount was deducted in
9        the computation of taxable income;
10            (C) An amount equal to the amount of tax imposed by
11        this Act to the extent deducted from gross income in
12        the computation of taxable income for the taxable
13        year;
14            (D) The amount of any net operating loss deduction
15        taken in arriving at taxable income, other than a net
16        operating loss carried forward from a taxable year
17        ending prior to December 31, 1986;
18            (E) For taxable years in which a net operating
19        loss carryback or carryforward from a taxable year
20        ending prior to December 31, 1986 is an element of
21        taxable income under paragraph (1) of subsection (e)
22        or subparagraph (E) of paragraph (2) of subsection
23        (e), the amount by which addition modifications other
24        than those provided by this subparagraph (E) exceeded
25        subtraction modifications in such taxable year, with
26        the following limitations applied in the order that

 

 

SB3790- 61 -LRB103 39446 CES 69640 b

1        they are listed:
2                (i) the addition modification relating to the
3            net operating loss carried back or forward to the
4            taxable year from any taxable year ending prior to
5            December 31, 1986 shall be reduced by the amount
6            of addition modification under this subparagraph
7            (E) which related to that net operating loss and
8            which was taken into account in calculating the
9            base income of an earlier taxable year, and
10                (ii) the addition modification relating to the
11            net operating loss carried back or forward to the
12            taxable year from any taxable year ending prior to
13            December 31, 1986 shall not exceed the amount of
14            such carryback or carryforward;
15            For taxable years in which there is a net
16        operating loss carryback or carryforward from more
17        than one other taxable year ending prior to December
18        31, 1986, the addition modification provided in this
19        subparagraph (E) shall be the sum of the amounts
20        computed independently under the preceding provisions
21        of this subparagraph (E) for each such taxable year;
22            (F) For taxable years ending on or after January
23        1, 1989, an amount equal to the tax deducted pursuant
24        to Section 164 of the Internal Revenue Code if the
25        trust or estate is claiming the same tax for purposes
26        of the Illinois foreign tax credit under Section 601

 

 

SB3790- 62 -LRB103 39446 CES 69640 b

1        of this Act;
2            (G) An amount equal to the amount of the capital
3        gain deduction allowable under the Internal Revenue
4        Code, to the extent deducted from gross income in the
5        computation of taxable income;
6            (G-5) For taxable years ending after December 31,
7        1997, an amount equal to any eligible remediation
8        costs that the trust or estate deducted in computing
9        adjusted gross income and for which the trust or
10        estate claims a credit under subsection (l) of Section
11        201;
12            (G-10) For taxable years 2001 and thereafter, an
13        amount equal to the bonus depreciation deduction taken
14        on the taxpayer's federal income tax return for the
15        taxable year under subsection (k) of Section 168 of
16        the Internal Revenue Code; and
17            (G-11) If the taxpayer sells, transfers, abandons,
18        or otherwise disposes of property for which the
19        taxpayer was required in any taxable year to make an
20        addition modification under subparagraph (G-10), then
21        an amount equal to the aggregate amount of the
22        deductions taken in all taxable years under
23        subparagraph (R) with respect to that property.
24            If the taxpayer continues to own property through
25        the last day of the last tax year for which a
26        subtraction is allowed with respect to that property

 

 

SB3790- 63 -LRB103 39446 CES 69640 b

1        under subparagraph (R) and for which the taxpayer was
2        allowed in any taxable year to make a subtraction
3        modification under subparagraph (R), then an amount
4        equal to that subtraction modification.
5            The taxpayer is required to make the addition
6        modification under this subparagraph only once with
7        respect to any one piece of property;
8            (G-12) An amount equal to the amount otherwise
9        allowed as a deduction in computing base income for
10        interest paid, accrued, or incurred, directly or
11        indirectly, (i) for taxable years ending on or after
12        December 31, 2004, to a foreign person who would be a
13        member of the same unitary business group but for the
14        fact that the foreign person's business activity
15        outside the United States is 80% or more of the foreign
16        person's total business activity and (ii) for taxable
17        years ending on or after December 31, 2008, to a person
18        who would be a member of the same unitary business
19        group but for the fact that the person is prohibited
20        under Section 1501(a)(27) from being included in the
21        unitary business group because he or she is ordinarily
22        required to apportion business income under different
23        subsections of Section 304. The addition modification
24        required by this subparagraph shall be reduced to the
25        extent that dividends were included in base income of
26        the unitary group for the same taxable year and

 

 

SB3790- 64 -LRB103 39446 CES 69640 b

1        received by the taxpayer or by a member of the
2        taxpayer's unitary business group (including amounts
3        included in gross income pursuant to Sections 951
4        through 964 of the Internal Revenue Code and amounts
5        included in gross income under Section 78 of the
6        Internal Revenue Code) with respect to the stock of
7        the same person to whom the interest was paid,
8        accrued, or incurred.
9            This paragraph shall not apply to the following:
10                (i) an item of interest paid, accrued, or
11            incurred, directly or indirectly, to a person who
12            is subject in a foreign country or state, other
13            than a state which requires mandatory unitary
14            reporting, to a tax on or measured by net income
15            with respect to such interest; or
16                (ii) an item of interest paid, accrued, or
17            incurred, directly or indirectly, to a person if
18            the taxpayer can establish, based on a
19            preponderance of the evidence, both of the
20            following:
21                    (a) the person, during the same taxable
22                year, paid, accrued, or incurred, the interest
23                to a person that is not a related member, and
24                    (b) the transaction giving rise to the
25                interest expense between the taxpayer and the
26                person did not have as a principal purpose the

 

 

SB3790- 65 -LRB103 39446 CES 69640 b

1                avoidance of Illinois income tax, and is paid
2                pursuant to a contract or agreement that
3                reflects an arm's-length interest rate and
4                terms; or
5                (iii) the taxpayer can establish, based on
6            clear and convincing evidence, that the interest
7            paid, accrued, or incurred relates to a contract
8            or agreement entered into at arm's-length rates
9            and terms and the principal purpose for the
10            payment is not federal or Illinois tax avoidance;
11            or
12                (iv) an item of interest paid, accrued, or
13            incurred, directly or indirectly, to a person if
14            the taxpayer establishes by clear and convincing
15            evidence that the adjustments are unreasonable; or
16            if the taxpayer and the Director agree in writing
17            to the application or use of an alternative method
18            of apportionment under Section 304(f).
19                Nothing in this subsection shall preclude the
20            Director from making any other adjustment
21            otherwise allowed under Section 404 of this Act
22            for any tax year beginning after the effective
23            date of this amendment provided such adjustment is
24            made pursuant to regulation adopted by the
25            Department and such regulations provide methods
26            and standards by which the Department will utilize

 

 

SB3790- 66 -LRB103 39446 CES 69640 b

1            its authority under Section 404 of this Act;
2            (G-13) An amount equal to the amount of intangible
3        expenses and costs otherwise allowed as a deduction in
4        computing base income, and that were paid, accrued, or
5        incurred, directly or indirectly, (i) for taxable
6        years ending on or after December 31, 2004, to a
7        foreign person who would be a member of the same
8        unitary business group but for the fact that the
9        foreign person's business activity outside the United
10        States is 80% or more of that person's total business
11        activity and (ii) for taxable years ending on or after
12        December 31, 2008, to a person who would be a member of
13        the same unitary business group but for the fact that
14        the person is prohibited under Section 1501(a)(27)
15        from being included in the unitary business group
16        because he or she is ordinarily required to apportion
17        business income under different subsections of Section
18        304. The addition modification required by this
19        subparagraph shall be reduced to the extent that
20        dividends were included in base income of the unitary
21        group for the same taxable year and received by the
22        taxpayer or by a member of the taxpayer's unitary
23        business group (including amounts included in gross
24        income pursuant to Sections 951 through 964 of the
25        Internal Revenue Code and amounts included in gross
26        income under Section 78 of the Internal Revenue Code)

 

 

SB3790- 67 -LRB103 39446 CES 69640 b

1        with respect to the stock of the same person to whom
2        the intangible expenses and costs were directly or
3        indirectly paid, incurred, or accrued. The preceding
4        sentence shall not apply to the extent that the same
5        dividends caused a reduction to the addition
6        modification required under Section 203(c)(2)(G-12) of
7        this Act. As used in this subparagraph, the term
8        "intangible expenses and costs" includes: (1)
9        expenses, losses, and costs for or related to the
10        direct or indirect acquisition, use, maintenance or
11        management, ownership, sale, exchange, or any other
12        disposition of intangible property; (2) losses
13        incurred, directly or indirectly, from factoring
14        transactions or discounting transactions; (3) royalty,
15        patent, technical, and copyright fees; (4) licensing
16        fees; and (5) other similar expenses and costs. For
17        purposes of this subparagraph, "intangible property"
18        includes patents, patent applications, trade names,
19        trademarks, service marks, copyrights, mask works,
20        trade secrets, and similar types of intangible assets.
21            This paragraph shall not apply to the following:
22                (i) any item of intangible expenses or costs
23            paid, accrued, or incurred, directly or
24            indirectly, from a transaction with a person who
25            is subject in a foreign country or state, other
26            than a state which requires mandatory unitary

 

 

SB3790- 68 -LRB103 39446 CES 69640 b

1            reporting, to a tax on or measured by net income
2            with respect to such item; or
3                (ii) any item of intangible expense or cost
4            paid, accrued, or incurred, directly or
5            indirectly, if the taxpayer can establish, based
6            on a preponderance of the evidence, both of the
7            following:
8                    (a) the person during the same taxable
9                year paid, accrued, or incurred, the
10                intangible expense or cost to a person that is
11                not a related member, and
12                    (b) the transaction giving rise to the
13                intangible expense or cost between the
14                taxpayer and the person did not have as a
15                principal purpose the avoidance of Illinois
16                income tax, and is paid pursuant to a contract
17                or agreement that reflects arm's-length terms;
18                or
19                (iii) any item of intangible expense or cost
20            paid, accrued, or incurred, directly or
21            indirectly, from a transaction with a person if
22            the taxpayer establishes by clear and convincing
23            evidence, that the adjustments are unreasonable;
24            or if the taxpayer and the Director agree in
25            writing to the application or use of an
26            alternative method of apportionment under Section

 

 

SB3790- 69 -LRB103 39446 CES 69640 b

1            304(f);
2                Nothing in this subsection shall preclude the
3            Director from making any other adjustment
4            otherwise allowed under Section 404 of this Act
5            for any tax year beginning after the effective
6            date of this amendment provided such adjustment is
7            made pursuant to regulation adopted by the
8            Department and such regulations provide methods
9            and standards by which the Department will utilize
10            its authority under Section 404 of this Act;
11            (G-14) For taxable years ending on or after
12        December 31, 2008, an amount equal to the amount of
13        insurance premium expenses and costs otherwise allowed
14        as a deduction in computing base income, and that were
15        paid, accrued, or incurred, directly or indirectly, to
16        a person who would be a member of the same unitary
17        business group but for the fact that the person is
18        prohibited under Section 1501(a)(27) from being
19        included in the unitary business group because he or
20        she is ordinarily required to apportion business
21        income under different subsections of Section 304. The
22        addition modification required by this subparagraph
23        shall be reduced to the extent that dividends were
24        included in base income of the unitary group for the
25        same taxable year and received by the taxpayer or by a
26        member of the taxpayer's unitary business group

 

 

SB3790- 70 -LRB103 39446 CES 69640 b

1        (including amounts included in gross income under
2        Sections 951 through 964 of the Internal Revenue Code
3        and amounts included in gross income under Section 78
4        of the Internal Revenue Code) with respect to the
5        stock of the same person to whom the premiums and costs
6        were directly or indirectly paid, incurred, or
7        accrued. The preceding sentence does not apply to the
8        extent that the same dividends caused a reduction to
9        the addition modification required under Section
10        203(c)(2)(G-12) or Section 203(c)(2)(G-13) of this
11        Act;
12            (G-15) An amount equal to the credit allowable to
13        the taxpayer under Section 218(a) of this Act,
14        determined without regard to Section 218(c) of this
15        Act;
16            (G-16) For taxable years ending on or after
17        December 31, 2017, an amount equal to the deduction
18        allowed under Section 199 of the Internal Revenue Code
19        for the taxable year;
20    and by deducting from the total so obtained the sum of the
21    following amounts:
22            (H) An amount equal to all amounts included in
23        such total pursuant to the provisions of Sections
24        402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and 408
25        of the Internal Revenue Code or included in such total
26        as distributions under the provisions of any

 

 

SB3790- 71 -LRB103 39446 CES 69640 b

1        retirement or disability plan for employees of any
2        governmental agency or unit, or retirement payments to
3        retired partners, which payments are excluded in
4        computing net earnings from self employment by Section
5        1402 of the Internal Revenue Code and regulations
6        adopted pursuant thereto;
7            (I) The valuation limitation amount;
8            (J) An amount equal to the amount of any tax
9        imposed by this Act which was refunded to the taxpayer
10        and included in such total for the taxable year;
11            (K) An amount equal to all amounts included in
12        taxable income as modified by subparagraphs (A), (B),
13        (C), (D), (E), (F) and (G) which are exempt from
14        taxation by this State either by reason of its
15        statutes or Constitution or by reason of the
16        Constitution, treaties or statutes of the United
17        States; provided that, in the case of any statute of
18        this State that exempts income derived from bonds or
19        other obligations from the tax imposed under this Act,
20        the amount exempted shall be the interest net of bond
21        premium amortization;
22            (L) With the exception of any amounts subtracted
23        under subparagraph (K), an amount equal to the sum of
24        all amounts disallowed as deductions by (i) Sections
25        171(a)(2) and 265(a)(2) of the Internal Revenue Code,
26        and all amounts of expenses allocable to interest and

 

 

SB3790- 72 -LRB103 39446 CES 69640 b

1        disallowed as deductions by Section 265(a)(1) of the
2        Internal Revenue Code; and (ii) for taxable years
3        ending on or after August 13, 1999, Sections
4        171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
5        Internal Revenue Code, plus, (iii) for taxable years
6        ending on or after December 31, 2011, Section
7        45G(e)(3) of the Internal Revenue Code and, for
8        taxable years ending on or after December 31, 2008,
9        any amount included in gross income under Section 87
10        of the Internal Revenue Code; the provisions of this
11        subparagraph are exempt from the provisions of Section
12        250;
13            (M) An amount equal to those dividends included in
14        such total which were paid by a corporation which
15        conducts business operations in a River Edge
16        Redevelopment Zone or zones created under the River
17        Edge Redevelopment Zone Act and conducts substantially
18        all of its operations in a River Edge Redevelopment
19        Zone or zones. This subparagraph (M) is exempt from
20        the provisions of Section 250;
21            (N) An amount equal to any contribution made to a
22        job training project established pursuant to the Tax
23        Increment Allocation Redevelopment Act;
24            (O) An amount equal to those dividends included in
25        such total that were paid by a corporation that
26        conducts business operations in a federally designated

 

 

SB3790- 73 -LRB103 39446 CES 69640 b

1        Foreign Trade Zone or Sub-Zone and that is designated
2        a High Impact Business located in Illinois; provided
3        that dividends eligible for the deduction provided in
4        subparagraph (M) of paragraph (2) of this subsection
5        shall not be eligible for the deduction provided under
6        this subparagraph (O);
7            (P) An amount equal to the amount of the deduction
8        used to compute the federal income tax credit for
9        restoration of substantial amounts held under claim of
10        right for the taxable year pursuant to Section 1341 of
11        the Internal Revenue Code;
12            (Q) For taxable year 1999 and thereafter, an
13        amount equal to the amount of any (i) distributions,
14        to the extent includible in gross income for federal
15        income tax purposes, made to the taxpayer because of
16        his or her status as a victim of persecution for racial
17        or religious reasons by Nazi Germany or any other Axis
18        regime or as an heir of the victim and (ii) items of
19        income, to the extent includible in gross income for
20        federal income tax purposes, attributable to, derived
21        from or in any way related to assets stolen from,
22        hidden from, or otherwise lost to a victim of
23        persecution for racial or religious reasons by Nazi
24        Germany or any other Axis regime immediately prior to,
25        during, and immediately after World War II, including,
26        but not limited to, interest on the proceeds

 

 

SB3790- 74 -LRB103 39446 CES 69640 b

1        receivable as insurance under policies issued to a
2        victim of persecution for racial or religious reasons
3        by Nazi Germany or any other Axis regime by European
4        insurance companies immediately prior to and during
5        World War II; provided, however, this subtraction from
6        federal adjusted gross income does not apply to assets
7        acquired with such assets or with the proceeds from
8        the sale of such assets; provided, further, this
9        paragraph shall only apply to a taxpayer who was the
10        first recipient of such assets after their recovery
11        and who is a victim of persecution for racial or
12        religious reasons by Nazi Germany or any other Axis
13        regime or as an heir of the victim. The amount of and
14        the eligibility for any public assistance, benefit, or
15        similar entitlement is not affected by the inclusion
16        of items (i) and (ii) of this paragraph in gross income
17        for federal income tax purposes. This paragraph is
18        exempt from the provisions of Section 250;
19            (R) For taxable years 2001 and thereafter, for the
20        taxable year in which the bonus depreciation deduction
21        is taken on the taxpayer's federal income tax return
22        under subsection (k) of Section 168 of the Internal
23        Revenue Code and for each applicable taxable year
24        thereafter, an amount equal to "x", where:
25                (1) "y" equals the amount of the depreciation
26            deduction taken for the taxable year on the

 

 

SB3790- 75 -LRB103 39446 CES 69640 b

1            taxpayer's federal income tax return on property
2            for which the bonus depreciation deduction was
3            taken in any year under subsection (k) of Section
4            168 of the Internal Revenue Code, but not
5            including the bonus depreciation deduction;
6                (2) for taxable years ending on or before
7            December 31, 2005, "x" equals "y" multiplied by 30
8            and then divided by 70 (or "y" multiplied by
9            0.429); and
10                (3) for taxable years ending after December
11            31, 2005:
12                    (i) for property on which a bonus
13                depreciation deduction of 30% of the adjusted
14                basis was taken, "x" equals "y" multiplied by
15                30 and then divided by 70 (or "y" multiplied
16                by 0.429);
17                    (ii) for property on which a bonus
18                depreciation deduction of 50% of the adjusted
19                basis was taken, "x" equals "y" multiplied by
20                1.0;
21                    (iii) for property on which a bonus
22                depreciation deduction of 100% of the adjusted
23                basis was taken in a taxable year ending on or
24                after December 31, 2021, "x" equals the
25                depreciation deduction that would be allowed
26                on that property if the taxpayer had made the

 

 

SB3790- 76 -LRB103 39446 CES 69640 b

1                election under Section 168(k)(7) of the
2                Internal Revenue Code to not claim bonus
3                depreciation on that property; and
4                    (iv) for property on which a bonus
5                depreciation deduction of a percentage other
6                than 30%, 50% or 100% of the adjusted basis
7                was taken in a taxable year ending on or after
8                December 31, 2021, "x" equals "y" multiplied
9                by 100 times the percentage bonus depreciation
10                on the property (that is, 100(bonus%)) and
11                then divided by 100 times 1 minus the
12                percentage bonus depreciation on the property
13                (that is, 100(1-bonus%)).
14            The aggregate amount deducted under this
15        subparagraph in all taxable years for any one piece of
16        property may not exceed the amount of the bonus
17        depreciation deduction taken on that property on the
18        taxpayer's federal income tax return under subsection
19        (k) of Section 168 of the Internal Revenue Code. This
20        subparagraph (R) is exempt from the provisions of
21        Section 250;
22            (S) If the taxpayer sells, transfers, abandons, or
23        otherwise disposes of property for which the taxpayer
24        was required in any taxable year to make an addition
25        modification under subparagraph (G-10), then an amount
26        equal to that addition modification.

 

 

SB3790- 77 -LRB103 39446 CES 69640 b

1            If the taxpayer continues to own property through
2        the last day of the last tax year for which a
3        subtraction is allowed with respect to that property
4        under subparagraph (R) and for which the taxpayer was
5        required in any taxable year to make an addition
6        modification under subparagraph (G-10), then an amount
7        equal to that addition modification.
8            The taxpayer is allowed to take the deduction
9        under this subparagraph only once with respect to any
10        one piece of property.
11            This subparagraph (S) is exempt from the
12        provisions of Section 250;
13            (T) The amount of (i) any interest income (net of
14        the deductions allocable thereto) taken into account
15        for the taxable year with respect to a transaction
16        with a taxpayer that is required to make an addition
17        modification with respect to such transaction under
18        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
19        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
20        the amount of such addition modification and (ii) any
21        income from intangible property (net of the deductions
22        allocable thereto) taken into account for the taxable
23        year with respect to a transaction with a taxpayer
24        that is required to make an addition modification with
25        respect to such transaction under Section
26        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or

 

 

SB3790- 78 -LRB103 39446 CES 69640 b

1        203(d)(2)(D-8), but not to exceed the amount of such
2        addition modification. This subparagraph (T) is exempt
3        from the provisions of Section 250;
4            (U) An amount equal to the interest income taken
5        into account for the taxable year (net of the
6        deductions allocable thereto) with respect to
7        transactions with (i) a foreign person who would be a
8        member of the taxpayer's unitary business group but
9        for the fact the foreign person's business activity
10        outside the United States is 80% or more of that
11        person's total business activity and (ii) for taxable
12        years ending on or after December 31, 2008, to a person
13        who would be a member of the same unitary business
14        group but for the fact that the person is prohibited
15        under Section 1501(a)(27) from being included in the
16        unitary business group because he or she is ordinarily
17        required to apportion business income under different
18        subsections of Section 304, but not to exceed the
19        addition modification required to be made for the same
20        taxable year under Section 203(c)(2)(G-12) for
21        interest paid, accrued, or incurred, directly or
22        indirectly, to the same person. This subparagraph (U)
23        is exempt from the provisions of Section 250;
24            (V) An amount equal to the income from intangible
25        property taken into account for the taxable year (net
26        of the deductions allocable thereto) with respect to

 

 

SB3790- 79 -LRB103 39446 CES 69640 b

1        transactions with (i) a foreign person who would be a
2        member of the taxpayer's unitary business group but
3        for the fact that the foreign person's business
4        activity outside the United States is 80% or more of
5        that person's total business activity and (ii) for
6        taxable years ending on or after December 31, 2008, to
7        a person who would be a member of the same unitary
8        business group but for the fact that the person is
9        prohibited under Section 1501(a)(27) from being
10        included in the unitary business group because he or
11        she is ordinarily required to apportion business
12        income under different subsections of Section 304, but
13        not to exceed the addition modification required to be
14        made for the same taxable year under Section
15        203(c)(2)(G-13) for intangible expenses and costs
16        paid, accrued, or incurred, directly or indirectly, to
17        the same foreign person. This subparagraph (V) is
18        exempt from the provisions of Section 250;
19            (W) in the case of an estate, an amount equal to
20        all amounts included in such total pursuant to the
21        provisions of Section 111 of the Internal Revenue Code
22        as a recovery of items previously deducted by the
23        decedent from adjusted gross income in the computation
24        of taxable income. This subparagraph (W) is exempt
25        from Section 250;
26            (X) an amount equal to the refund included in such

 

 

SB3790- 80 -LRB103 39446 CES 69640 b

1        total of any tax deducted for federal income tax
2        purposes, to the extent that deduction was added back
3        under subparagraph (F). This subparagraph (X) is
4        exempt from the provisions of Section 250;
5            (Y) For taxable years ending on or after December
6        31, 2011, in the case of a taxpayer who was required to
7        add back any insurance premiums under Section
8        203(c)(2)(G-14), such taxpayer may elect to subtract
9        that part of a reimbursement received from the
10        insurance company equal to the amount of the expense
11        or loss (including expenses incurred by the insurance
12        company) that would have been taken into account as a
13        deduction for federal income tax purposes if the
14        expense or loss had been uninsured. If a taxpayer
15        makes the election provided for by this subparagraph
16        (Y), the insurer to which the premiums were paid must
17        add back to income the amount subtracted by the
18        taxpayer pursuant to this subparagraph (Y). This
19        subparagraph (Y) is exempt from the provisions of
20        Section 250;
21            (Z) For taxable years beginning after December 31,
22        2018 and before January 1, 2026, the amount of excess
23        business loss of the taxpayer disallowed as a
24        deduction by Section 461(l)(1)(B) of the Internal
25        Revenue Code; and
26            (AA) For taxable years beginning on or after

 

 

SB3790- 81 -LRB103 39446 CES 69640 b

1        January 1, 2023, for any cannabis establishment
2        operating in this State and licensed under the
3        Cannabis Regulation and Tax Act or any cannabis
4        cultivation center or medical cannabis dispensing
5        organization operating in this State and licensed
6        under the Compassionate Use of Medical Cannabis
7        Program Act, an amount equal to the deductions that
8        were disallowed under Section 280E of the Internal
9        Revenue Code for the taxable year and that would not be
10        added back under this subsection. The provisions of
11        this subparagraph (AA) are exempt from the provisions
12        of Section 250.
13            (BB) For taxable years beginning on or after
14        January 1, 2025, for any hemp business establishment
15        operating in this State and licensed under the
16        Industrial Hemp Act, an amount equal to 50% of the
17        income generated by the sale products made by minority
18        and other specific priority population owned
19        businesses. The provisions of this subparagraph (BB)
20        are exempt from the provisions of Section 250. For
21        purposes of this paragraph, the term "minority and
22        other specific priority population owned businesses"
23        may include, but shall not be limited to, businesses
24        51% or more owned by groups such as women, parents,
25        African-Americans, Puerto Ricans, Hispanics, Asian
26        Americans, veterans, the elderly, hemp justice or hemp

 

 

SB3790- 82 -LRB103 39446 CES 69640 b

1        social equity participants as defined by the
2        Industrial Hemp Act, persons who are clients of
3        services provided by other State agencies, individuals
4        identifying as LGBTQ, persons with disabilities,
5        intravenous drug users, persons with AIDS or who are
6        HIV infected, and such other specific populations as
7        the Department may from time to time identify.
8        (3) Limitation. The amount of any modification
9    otherwise required under this subsection shall, under
10    regulations prescribed by the Department, be adjusted by
11    any amounts included therein which were properly paid,
12    credited, or required to be distributed, or permanently
13    set aside for charitable purposes pursuant to Internal
14    Revenue Code Section 642(c) during the taxable year.
 
15    (d) Partnerships.
16        (1) In general. In the case of a partnership, base
17    income means an amount equal to the taxpayer's taxable
18    income for the taxable year as modified by paragraph (2).
19        (2) Modifications. The taxable income referred to in
20    paragraph (1) shall be modified by adding thereto the sum
21    of the following amounts:
22            (A) An amount equal to all amounts paid or accrued
23        to the taxpayer as interest or dividends during the
24        taxable year to the extent excluded from gross income
25        in the computation of taxable income;

 

 

SB3790- 83 -LRB103 39446 CES 69640 b

1            (B) An amount equal to the amount of tax imposed by
2        this Act to the extent deducted from gross income for
3        the taxable year;
4            (C) The amount of deductions allowed to the
5        partnership pursuant to Section 707 (c) of the
6        Internal Revenue Code in calculating its taxable
7        income;
8            (D) An amount equal to the amount of the capital
9        gain deduction allowable under the Internal Revenue
10        Code, to the extent deducted from gross income in the
11        computation of taxable income;
12            (D-5) For taxable years 2001 and thereafter, an
13        amount equal to the bonus depreciation deduction taken
14        on the taxpayer's federal income tax return for the
15        taxable year under subsection (k) of Section 168 of
16        the Internal Revenue Code;
17            (D-6) If the taxpayer sells, transfers, abandons,
18        or otherwise disposes of property for which the
19        taxpayer was required in any taxable year to make an
20        addition modification under subparagraph (D-5), then
21        an amount equal to the aggregate amount of the
22        deductions taken in all taxable years under
23        subparagraph (O) with respect to that property.
24            If the taxpayer continues to own property through
25        the last day of the last tax year for which a
26        subtraction is allowed with respect to that property

 

 

SB3790- 84 -LRB103 39446 CES 69640 b

1        under subparagraph (O) and for which the taxpayer was
2        allowed in any taxable year to make a subtraction
3        modification under subparagraph (O), then an amount
4        equal to that subtraction modification.
5            The taxpayer is required to make the addition
6        modification under this subparagraph only once with
7        respect to any one piece of property;
8            (D-7) An amount equal to the amount otherwise
9        allowed as a deduction in computing base income for
10        interest paid, accrued, or incurred, directly or
11        indirectly, (i) for taxable years ending on or after
12        December 31, 2004, to a foreign person who would be a
13        member of the same unitary business group but for the
14        fact the foreign person's business activity outside
15        the United States is 80% or more of the foreign
16        person's total business activity and (ii) for taxable
17        years ending on or after December 31, 2008, to a person
18        who would be a member of the same unitary business
19        group but for the fact that the person is prohibited
20        under Section 1501(a)(27) from being included in the
21        unitary business group because he or she is ordinarily
22        required to apportion business income under different
23        subsections of Section 304. The addition modification
24        required by this subparagraph shall be reduced to the
25        extent that dividends were included in base income of
26        the unitary group for the same taxable year and

 

 

SB3790- 85 -LRB103 39446 CES 69640 b

1        received by the taxpayer or by a member of the
2        taxpayer's unitary business group (including amounts
3        included in gross income pursuant to Sections 951
4        through 964 of the Internal Revenue Code and amounts
5        included in gross income under Section 78 of the
6        Internal Revenue Code) with respect to the stock of
7        the same person to whom the interest was paid,
8        accrued, or incurred.
9            This paragraph shall not apply to the following:
10                (i) an item of interest paid, accrued, or
11            incurred, directly or indirectly, to a person who
12            is subject in a foreign country or state, other
13            than a state which requires mandatory unitary
14            reporting, to a tax on or measured by net income
15            with respect to such interest; or
16                (ii) an item of interest paid, accrued, or
17            incurred, directly or indirectly, to a person if
18            the taxpayer can establish, based on a
19            preponderance of the evidence, both of the
20            following:
21                    (a) the person, during the same taxable
22                year, paid, accrued, or incurred, the interest
23                to a person that is not a related member, and
24                    (b) the transaction giving rise to the
25                interest expense between the taxpayer and the
26                person did not have as a principal purpose the

 

 

SB3790- 86 -LRB103 39446 CES 69640 b

1                avoidance of Illinois income tax, and is paid
2                pursuant to a contract or agreement that
3                reflects an arm's-length interest rate and
4                terms; or
5                (iii) the taxpayer can establish, based on
6            clear and convincing evidence, that the interest
7            paid, accrued, or incurred relates to a contract
8            or agreement entered into at arm's-length rates
9            and terms and the principal purpose for the
10            payment is not federal or Illinois tax avoidance;
11            or
12                (iv) an item of interest paid, accrued, or
13            incurred, directly or indirectly, to a person if
14            the taxpayer establishes by clear and convincing
15            evidence that the adjustments are unreasonable; or
16            if the taxpayer and the Director agree in writing
17            to the application or use of an alternative method
18            of apportionment under Section 304(f).
19                Nothing in this subsection shall preclude the
20            Director from making any other adjustment
21            otherwise allowed under Section 404 of this Act
22            for any tax year beginning after the effective
23            date of this amendment provided such adjustment is
24            made pursuant to regulation adopted by the
25            Department and such regulations provide methods
26            and standards by which the Department will utilize

 

 

SB3790- 87 -LRB103 39446 CES 69640 b

1            its authority under Section 404 of this Act; and
2            (D-8) An amount equal to the amount of intangible
3        expenses and costs otherwise allowed as a deduction in
4        computing base income, and that were paid, accrued, or
5        incurred, directly or indirectly, (i) for taxable
6        years ending on or after December 31, 2004, to a
7        foreign person who would be a member of the same
8        unitary business group but for the fact that the
9        foreign person's business activity outside the United
10        States is 80% or more of that person's total business
11        activity and (ii) for taxable years ending on or after
12        December 31, 2008, to a person who would be a member of
13        the same unitary business group but for the fact that
14        the person is prohibited under Section 1501(a)(27)
15        from being included in the unitary business group
16        because he or she is ordinarily required to apportion
17        business income under different subsections of Section
18        304. The addition modification required by this
19        subparagraph shall be reduced to the extent that
20        dividends were included in base income of the unitary
21        group for the same taxable year and received by the
22        taxpayer or by a member of the taxpayer's unitary
23        business group (including amounts included in gross
24        income pursuant to Sections 951 through 964 of the
25        Internal Revenue Code and amounts included in gross
26        income under Section 78 of the Internal Revenue Code)

 

 

SB3790- 88 -LRB103 39446 CES 69640 b

1        with respect to the stock of the same person to whom
2        the intangible expenses and costs were directly or
3        indirectly paid, incurred or accrued. The preceding
4        sentence shall not apply to the extent that the same
5        dividends caused a reduction to the addition
6        modification required under Section 203(d)(2)(D-7) of
7        this Act. As used in this subparagraph, the term
8        "intangible expenses and costs" includes (1) expenses,
9        losses, and costs for, or related to, the direct or
10        indirect acquisition, use, maintenance or management,
11        ownership, sale, exchange, or any other disposition of
12        intangible property; (2) losses incurred, directly or
13        indirectly, from factoring transactions or discounting
14        transactions; (3) royalty, patent, technical, and
15        copyright fees; (4) licensing fees; and (5) other
16        similar expenses and costs. For purposes of this
17        subparagraph, "intangible property" includes patents,
18        patent applications, trade names, trademarks, service
19        marks, copyrights, mask works, trade secrets, and
20        similar types of intangible assets;
21            This paragraph shall not apply to the following:
22                (i) any item of intangible expenses or costs
23            paid, accrued, or incurred, directly or
24            indirectly, from a transaction with a person who
25            is subject in a foreign country or state, other
26            than a state which requires mandatory unitary

 

 

SB3790- 89 -LRB103 39446 CES 69640 b

1            reporting, to a tax on or measured by net income
2            with respect to such item; or
3                (ii) any item of intangible expense or cost
4            paid, accrued, or incurred, directly or
5            indirectly, if the taxpayer can establish, based
6            on a preponderance of the evidence, both of the
7            following:
8                    (a) the person during the same taxable
9                year paid, accrued, or incurred, the
10                intangible expense or cost to a person that is
11                not a related member, and
12                    (b) the transaction giving rise to the
13                intangible expense or cost between the
14                taxpayer and the person did not have as a
15                principal purpose the avoidance of Illinois
16                income tax, and is paid pursuant to a contract
17                or agreement that reflects arm's-length terms;
18                or
19                (iii) any item of intangible expense or cost
20            paid, accrued, or incurred, directly or
21            indirectly, from a transaction with a person if
22            the taxpayer establishes by clear and convincing
23            evidence, that the adjustments are unreasonable;
24            or if the taxpayer and the Director agree in
25            writing to the application or use of an
26            alternative method of apportionment under Section

 

 

SB3790- 90 -LRB103 39446 CES 69640 b

1            304(f);
2                Nothing in this subsection shall preclude the
3            Director from making any other adjustment
4            otherwise allowed under Section 404 of this Act
5            for any tax year beginning after the effective
6            date of this amendment provided such adjustment is
7            made pursuant to regulation adopted by the
8            Department and such regulations provide methods
9            and standards by which the Department will utilize
10            its authority under Section 404 of this Act;
11            (D-9) For taxable years ending on or after
12        December 31, 2008, an amount equal to the amount of
13        insurance premium expenses and costs otherwise allowed
14        as a deduction in computing base income, and that were
15        paid, accrued, or incurred, directly or indirectly, to
16        a person who would be a member of the same unitary
17        business group but for the fact that the person is
18        prohibited under Section 1501(a)(27) from being
19        included in the unitary business group because he or
20        she is ordinarily required to apportion business
21        income under different subsections of Section 304. The
22        addition modification required by this subparagraph
23        shall be reduced to the extent that dividends were
24        included in base income of the unitary group for the
25        same taxable year and received by the taxpayer or by a
26        member of the taxpayer's unitary business group

 

 

SB3790- 91 -LRB103 39446 CES 69640 b

1        (including amounts included in gross income under
2        Sections 951 through 964 of the Internal Revenue Code
3        and amounts included in gross income under Section 78
4        of the Internal Revenue Code) with respect to the
5        stock of the same person to whom the premiums and costs
6        were directly or indirectly paid, incurred, or
7        accrued. The preceding sentence does not apply to the
8        extent that the same dividends caused a reduction to
9        the addition modification required under Section
10        203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this Act;
11            (D-10) An amount equal to the credit allowable to
12        the taxpayer under Section 218(a) of this Act,
13        determined without regard to Section 218(c) of this
14        Act;
15            (D-11) For taxable years ending on or after
16        December 31, 2017, an amount equal to the deduction
17        allowed under Section 199 of the Internal Revenue Code
18        for the taxable year;
19    and by deducting from the total so obtained the following
20    amounts:
21            (E) The valuation limitation amount;
22            (F) An amount equal to the amount of any tax
23        imposed by this Act which was refunded to the taxpayer
24        and included in such total for the taxable year;
25            (G) An amount equal to all amounts included in
26        taxable income as modified by subparagraphs (A), (B),

 

 

SB3790- 92 -LRB103 39446 CES 69640 b

1        (C) and (D) which are exempt from taxation by this
2        State either by reason of its statutes or Constitution
3        or by reason of the Constitution, treaties or statutes
4        of the United States; provided that, in the case of any
5        statute of this State that exempts income derived from
6        bonds or other obligations from the tax imposed under
7        this Act, the amount exempted shall be the interest
8        net of bond premium amortization;
9            (H) Any income of the partnership which
10        constitutes personal service income as defined in
11        Section 1348(b)(1) of the Internal Revenue Code (as in
12        effect December 31, 1981) or a reasonable allowance
13        for compensation paid or accrued for services rendered
14        by partners to the partnership, whichever is greater;
15        this subparagraph (H) is exempt from the provisions of
16        Section 250;
17            (I) An amount equal to all amounts of income
18        distributable to an entity subject to the Personal
19        Property Tax Replacement Income Tax imposed by
20        subsections (c) and (d) of Section 201 of this Act
21        including amounts distributable to organizations
22        exempt from federal income tax by reason of Section
23        501(a) of the Internal Revenue Code; this subparagraph
24        (I) is exempt from the provisions of Section 250;
25            (J) With the exception of any amounts subtracted
26        under subparagraph (G), an amount equal to the sum of

 

 

SB3790- 93 -LRB103 39446 CES 69640 b

1        all amounts disallowed as deductions by (i) Sections
2        171(a)(2) and 265(a)(2) of the Internal Revenue Code,
3        and all amounts of expenses allocable to interest and
4        disallowed as deductions by Section 265(a)(1) of the
5        Internal Revenue Code; and (ii) for taxable years
6        ending on or after August 13, 1999, Sections
7        171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
8        Internal Revenue Code, plus, (iii) for taxable years
9        ending on or after December 31, 2011, Section
10        45G(e)(3) of the Internal Revenue Code and, for
11        taxable years ending on or after December 31, 2008,
12        any amount included in gross income under Section 87
13        of the Internal Revenue Code; the provisions of this
14        subparagraph are exempt from the provisions of Section
15        250;
16            (K) An amount equal to those dividends included in
17        such total which were paid by a corporation which
18        conducts business operations in a River Edge
19        Redevelopment Zone or zones created under the River
20        Edge Redevelopment Zone Act and conducts substantially
21        all of its operations from a River Edge Redevelopment
22        Zone or zones. This subparagraph (K) is exempt from
23        the provisions of Section 250;
24            (L) An amount equal to any contribution made to a
25        job training project established pursuant to the Real
26        Property Tax Increment Allocation Redevelopment Act;

 

 

SB3790- 94 -LRB103 39446 CES 69640 b

1            (M) An amount equal to those dividends included in
2        such total that were paid by a corporation that
3        conducts business operations in a federally designated
4        Foreign Trade Zone or Sub-Zone and that is designated
5        a High Impact Business located in Illinois; provided
6        that dividends eligible for the deduction provided in
7        subparagraph (K) of paragraph (2) of this subsection
8        shall not be eligible for the deduction provided under
9        this subparagraph (M);
10            (N) An amount equal to the amount of the deduction
11        used to compute the federal income tax credit for
12        restoration of substantial amounts held under claim of
13        right for the taxable year pursuant to Section 1341 of
14        the Internal Revenue Code;
15            (O) For taxable years 2001 and thereafter, for the
16        taxable year in which the bonus depreciation deduction
17        is taken on the taxpayer's federal income tax return
18        under subsection (k) of Section 168 of the Internal
19        Revenue Code and for each applicable taxable year
20        thereafter, an amount equal to "x", where:
21                (1) "y" equals the amount of the depreciation
22            deduction taken for the taxable year on the
23            taxpayer's federal income tax return on property
24            for which the bonus depreciation deduction was
25            taken in any year under subsection (k) of Section
26            168 of the Internal Revenue Code, but not

 

 

SB3790- 95 -LRB103 39446 CES 69640 b

1            including the bonus depreciation deduction;
2                (2) for taxable years ending on or before
3            December 31, 2005, "x" equals "y" multiplied by 30
4            and then divided by 70 (or "y" multiplied by
5            0.429); and
6                (3) for taxable years ending after December
7            31, 2005:
8                    (i) for property on which a bonus
9                depreciation deduction of 30% of the adjusted
10                basis was taken, "x" equals "y" multiplied by
11                30 and then divided by 70 (or "y" multiplied
12                by 0.429);
13                    (ii) for property on which a bonus
14                depreciation deduction of 50% of the adjusted
15                basis was taken, "x" equals "y" multiplied by
16                1.0;
17                    (iii) for property on which a bonus
18                depreciation deduction of 100% of the adjusted
19                basis was taken in a taxable year ending on or
20                after December 31, 2021, "x" equals the
21                depreciation deduction that would be allowed
22                on that property if the taxpayer had made the
23                election under Section 168(k)(7) of the
24                Internal Revenue Code to not claim bonus
25                depreciation on that property; and
26                    (iv) for property on which a bonus

 

 

SB3790- 96 -LRB103 39446 CES 69640 b

1                depreciation deduction of a percentage other
2                than 30%, 50% or 100% of the adjusted basis
3                was taken in a taxable year ending on or after
4                December 31, 2021, "x" equals "y" multiplied
5                by 100 times the percentage bonus depreciation
6                on the property (that is, 100(bonus%)) and
7                then divided by 100 times 1 minus the
8                percentage bonus depreciation on the property
9                (that is, 100(1-bonus%)).
10            The aggregate amount deducted under this
11        subparagraph in all taxable years for any one piece of
12        property may not exceed the amount of the bonus
13        depreciation deduction taken on that property on the
14        taxpayer's federal income tax return under subsection
15        (k) of Section 168 of the Internal Revenue Code. This
16        subparagraph (O) is exempt from the provisions of
17        Section 250;
18            (P) If the taxpayer sells, transfers, abandons, or
19        otherwise disposes of property for which the taxpayer
20        was required in any taxable year to make an addition
21        modification under subparagraph (D-5), then an amount
22        equal to that addition modification.
23            If the taxpayer continues to own property through
24        the last day of the last tax year for which a
25        subtraction is allowed with respect to that property
26        under subparagraph (O) and for which the taxpayer was

 

 

SB3790- 97 -LRB103 39446 CES 69640 b

1        required in any taxable year to make an addition
2        modification under subparagraph (D-5), then an amount
3        equal to that addition modification.
4            The taxpayer is allowed to take the deduction
5        under this subparagraph only once with respect to any
6        one piece of property.
7            This subparagraph (P) is exempt from the
8        provisions of Section 250;
9            (Q) The amount of (i) any interest income (net of
10        the deductions allocable thereto) taken into account
11        for the taxable year with respect to a transaction
12        with a taxpayer that is required to make an addition
13        modification with respect to such transaction under
14        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
15        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
16        the amount of such addition modification and (ii) any
17        income from intangible property (net of the deductions
18        allocable thereto) taken into account for the taxable
19        year with respect to a transaction with a taxpayer
20        that is required to make an addition modification with
21        respect to such transaction under Section
22        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
23        203(d)(2)(D-8), but not to exceed the amount of such
24        addition modification. This subparagraph (Q) is exempt
25        from Section 250;
26            (R) An amount equal to the interest income taken

 

 

SB3790- 98 -LRB103 39446 CES 69640 b

1        into account for the taxable year (net of the
2        deductions allocable thereto) with respect to
3        transactions with (i) a foreign person who would be a
4        member of the taxpayer's unitary business group but
5        for the fact that the foreign person's business
6        activity outside the United States is 80% or more of
7        that person's total business activity and (ii) for
8        taxable years ending on or after December 31, 2008, to
9        a person who would be a member of the same unitary
10        business group but for the fact that the person is
11        prohibited under Section 1501(a)(27) from being
12        included in the unitary business group because he or
13        she is ordinarily required to apportion business
14        income under different subsections of Section 304, but
15        not to exceed the addition modification required to be
16        made for the same taxable year under Section
17        203(d)(2)(D-7) for interest paid, accrued, or
18        incurred, directly or indirectly, to the same person.
19        This subparagraph (R) is exempt from Section 250;
20            (S) An amount equal to the income from intangible
21        property taken into account for the taxable year (net
22        of the deductions allocable thereto) with respect to
23        transactions with (i) a foreign person who would be a
24        member of the taxpayer's unitary business group but
25        for the fact that the foreign person's business
26        activity outside the United States is 80% or more of

 

 

SB3790- 99 -LRB103 39446 CES 69640 b

1        that person's total business activity and (ii) for
2        taxable years ending on or after December 31, 2008, to
3        a person who would be a member of the same unitary
4        business group but for the fact that the person is
5        prohibited under Section 1501(a)(27) from being
6        included in the unitary business group because he or
7        she is ordinarily required to apportion business
8        income under different subsections of Section 304, but
9        not to exceed the addition modification required to be
10        made for the same taxable year under Section
11        203(d)(2)(D-8) for intangible expenses and costs paid,
12        accrued, or incurred, directly or indirectly, to the
13        same person. This subparagraph (S) is exempt from
14        Section 250;
15            (T) For taxable years ending on or after December
16        31, 2011, in the case of a taxpayer who was required to
17        add back any insurance premiums under Section
18        203(d)(2)(D-9), such taxpayer may elect to subtract
19        that part of a reimbursement received from the
20        insurance company equal to the amount of the expense
21        or loss (including expenses incurred by the insurance
22        company) that would have been taken into account as a
23        deduction for federal income tax purposes if the
24        expense or loss had been uninsured. If a taxpayer
25        makes the election provided for by this subparagraph
26        (T), the insurer to which the premiums were paid must

 

 

SB3790- 100 -LRB103 39446 CES 69640 b

1        add back to income the amount subtracted by the
2        taxpayer pursuant to this subparagraph (T). This
3        subparagraph (T) is exempt from the provisions of
4        Section 250; and
5            (U) For taxable years beginning on or after
6        January 1, 2023, for any cannabis establishment
7        operating in this State and licensed under the
8        Cannabis Regulation and Tax Act or any cannabis
9        cultivation center or medical cannabis dispensing
10        organization operating in this State and licensed
11        under the Compassionate Use of Medical Cannabis
12        Program Act, an amount equal to the deductions that
13        were disallowed under Section 280E of the Internal
14        Revenue Code for the taxable year and that would not be
15        added back under this subsection. The provisions of
16        this subparagraph (U) are exempt from the provisions
17        of Section 250.
18            (V) For taxable years beginning on or after
19        January 1, 2025, for any hemp business establishment
20        operating in this State and licensed under the
21        Industrial Hemp Act, an amount equal to 20% of the
22        income generated by the sale products made by minority
23        and other specific priority population owned
24        businesses. The provisions of this subparagraph are
25        exempt from the provisions of Section 250. For
26        purposes of this paragraph, the term "minority and

 

 

SB3790- 101 -LRB103 39446 CES 69640 b

1        other specific priority population owned businesses"
2        may include, but shall not be limited to, businesses
3        51% or more owned by groups such as women, parents,
4        African-Americans, Puerto Ricans, Hispanics, Asian
5        Americans, veterans, the elderly, hemp justice or hemp
6        social equity participants as defined by the
7        Industrial Hemp Act, persons who are clients of
8        services provided by other State agencies, individuals
9        identifying as LGBTQ, persons with disabilities,
10        intravenous drug users, persons with AIDS or who are
11        HIV infected, and such other specific populations as
12        the Department may from time to time identify.
 
13    (e) Gross income; adjusted gross income; taxable income.
14        (1) In general. Subject to the provisions of paragraph
15    (2) and subsection (b)(3), for purposes of this Section
16    and Section 803(e), a taxpayer's gross income, adjusted
17    gross income, or taxable income for the taxable year shall
18    mean the amount of gross income, adjusted gross income or
19    taxable income properly reportable for federal income tax
20    purposes for the taxable year under the provisions of the
21    Internal Revenue Code. Taxable income may be less than
22    zero. However, for taxable years ending on or after
23    December 31, 1986, net operating loss carryforwards from
24    taxable years ending prior to December 31, 1986, may not
25    exceed the sum of federal taxable income for the taxable

 

 

SB3790- 102 -LRB103 39446 CES 69640 b

1    year before net operating loss deduction, plus the excess
2    of addition modifications over subtraction modifications
3    for the taxable year. For taxable years ending prior to
4    December 31, 1986, taxable income may never be an amount
5    in excess of the net operating loss for the taxable year as
6    defined in subsections (c) and (d) of Section 172 of the
7    Internal Revenue Code, provided that when taxable income
8    of a corporation (other than a Subchapter S corporation),
9    trust, or estate is less than zero and addition
10    modifications, other than those provided by subparagraph
11    (E) of paragraph (2) of subsection (b) for corporations or
12    subparagraph (E) of paragraph (2) of subsection (c) for
13    trusts and estates, exceed subtraction modifications, an
14    addition modification must be made under those
15    subparagraphs for any other taxable year to which the
16    taxable income less than zero (net operating loss) is
17    applied under Section 172 of the Internal Revenue Code or
18    under subparagraph (E) of paragraph (2) of this subsection
19    (e) applied in conjunction with Section 172 of the
20    Internal Revenue Code.
21        (2) Special rule. For purposes of paragraph (1) of
22    this subsection, the taxable income properly reportable
23    for federal income tax purposes shall mean:
24            (A) Certain life insurance companies. In the case
25        of a life insurance company subject to the tax imposed
26        by Section 801 of the Internal Revenue Code, life

 

 

SB3790- 103 -LRB103 39446 CES 69640 b

1        insurance company taxable income, plus the amount of
2        distribution from pre-1984 policyholder surplus
3        accounts as calculated under Section 815a of the
4        Internal Revenue Code;
5            (B) Certain other insurance companies. In the case
6        of mutual insurance companies subject to the tax
7        imposed by Section 831 of the Internal Revenue Code,
8        insurance company taxable income;
9            (C) Regulated investment companies. In the case of
10        a regulated investment company subject to the tax
11        imposed by Section 852 of the Internal Revenue Code,
12        investment company taxable income;
13            (D) Real estate investment trusts. In the case of
14        a real estate investment trust subject to the tax
15        imposed by Section 857 of the Internal Revenue Code,
16        real estate investment trust taxable income;
17            (E) Consolidated corporations. In the case of a
18        corporation which is a member of an affiliated group
19        of corporations filing a consolidated income tax
20        return for the taxable year for federal income tax
21        purposes, taxable income determined as if such
22        corporation had filed a separate return for federal
23        income tax purposes for the taxable year and each
24        preceding taxable year for which it was a member of an
25        affiliated group. For purposes of this subparagraph,
26        the taxpayer's separate taxable income shall be

 

 

SB3790- 104 -LRB103 39446 CES 69640 b

1        determined as if the election provided by Section
2        243(b)(2) of the Internal Revenue Code had been in
3        effect for all such years;
4            (F) Cooperatives. In the case of a cooperative
5        corporation or association, the taxable income of such
6        organization determined in accordance with the
7        provisions of Section 1381 through 1388 of the
8        Internal Revenue Code, but without regard to the
9        prohibition against offsetting losses from patronage
10        activities against income from nonpatronage
11        activities; except that a cooperative corporation or
12        association may make an election to follow its federal
13        income tax treatment of patronage losses and
14        nonpatronage losses. In the event such election is
15        made, such losses shall be computed and carried over
16        in a manner consistent with subsection (a) of Section
17        207 of this Act and apportioned by the apportionment
18        factor reported by the cooperative on its Illinois
19        income tax return filed for the taxable year in which
20        the losses are incurred. The election shall be
21        effective for all taxable years with original returns
22        due on or after the date of the election. In addition,
23        the cooperative may file an amended return or returns,
24        as allowed under this Act, to provide that the
25        election shall be effective for losses incurred or
26        carried forward for taxable years occurring prior to

 

 

SB3790- 105 -LRB103 39446 CES 69640 b

1        the date of the election. Once made, the election may
2        only be revoked upon approval of the Director. The
3        Department shall adopt rules setting forth
4        requirements for documenting the elections and any
5        resulting Illinois net loss and the standards to be
6        used by the Director in evaluating requests to revoke
7        elections. Public Act 96-932 is declaratory of
8        existing law;
9            (G) Subchapter S corporations. In the case of: (i)
10        a Subchapter S corporation for which there is in
11        effect an election for the taxable year under Section
12        1362 of the Internal Revenue Code, the taxable income
13        of such corporation determined in accordance with
14        Section 1363(b) of the Internal Revenue Code, except
15        that taxable income shall take into account those
16        items which are required by Section 1363(b)(1) of the
17        Internal Revenue Code to be separately stated; and
18        (ii) a Subchapter S corporation for which there is in
19        effect a federal election to opt out of the provisions
20        of the Subchapter S Revision Act of 1982 and have
21        applied instead the prior federal Subchapter S rules
22        as in effect on July 1, 1982, the taxable income of
23        such corporation determined in accordance with the
24        federal Subchapter S rules as in effect on July 1,
25        1982; and
26            (H) Partnerships. In the case of a partnership,

 

 

SB3790- 106 -LRB103 39446 CES 69640 b

1        taxable income determined in accordance with Section
2        703 of the Internal Revenue Code, except that taxable
3        income shall take into account those items which are
4        required by Section 703(a)(1) to be separately stated
5        but which would be taken into account by an individual
6        in calculating his taxable income.
7        (3) Recapture of business expenses on disposition of
8    asset or business. Notwithstanding any other law to the
9    contrary, if in prior years income from an asset or
10    business has been classified as business income and in a
11    later year is demonstrated to be non-business income, then
12    all expenses, without limitation, deducted in such later
13    year and in the 2 immediately preceding taxable years
14    related to that asset or business that generated the
15    non-business income shall be added back and recaptured as
16    business income in the year of the disposition of the
17    asset or business. Such amount shall be apportioned to
18    Illinois using the greater of the apportionment fraction
19    computed for the business under Section 304 of this Act
20    for the taxable year or the average of the apportionment
21    fractions computed for the business under Section 304 of
22    this Act for the taxable year and for the 2 immediately
23    preceding taxable years.
 
24    (f) Valuation limitation amount.
25        (1) In general. The valuation limitation amount

 

 

SB3790- 107 -LRB103 39446 CES 69640 b

1    referred to in subsections (a)(2)(G), (c)(2)(I) and
2    (d)(2)(E) is an amount equal to:
3            (A) The sum of the pre-August 1, 1969 appreciation
4        amounts (to the extent consisting of gain reportable
5        under the provisions of Section 1245 or 1250 of the
6        Internal Revenue Code) for all property in respect of
7        which such gain was reported for the taxable year;
8        plus
9            (B) The lesser of (i) the sum of the pre-August 1,
10        1969 appreciation amounts (to the extent consisting of
11        capital gain) for all property in respect of which
12        such gain was reported for federal income tax purposes
13        for the taxable year, or (ii) the net capital gain for
14        the taxable year, reduced in either case by any amount
15        of such gain included in the amount determined under
16        subsection (a)(2)(F) or (c)(2)(H).
17        (2) Pre-August 1, 1969 appreciation amount.
18            (A) If the fair market value of property referred
19        to in paragraph (1) was readily ascertainable on
20        August 1, 1969, the pre-August 1, 1969 appreciation
21        amount for such property is the lesser of (i) the
22        excess of such fair market value over the taxpayer's
23        basis (for determining gain) for such property on that
24        date (determined under the Internal Revenue Code as in
25        effect on that date), or (ii) the total gain realized
26        and reportable for federal income tax purposes in

 

 

SB3790- 108 -LRB103 39446 CES 69640 b

1        respect of the sale, exchange or other disposition of
2        such property.
3            (B) If the fair market value of property referred
4        to in paragraph (1) was not readily ascertainable on
5        August 1, 1969, the pre-August 1, 1969 appreciation
6        amount for such property is that amount which bears
7        the same ratio to the total gain reported in respect of
8        the property for federal income tax purposes for the
9        taxable year, as the number of full calendar months in
10        that part of the taxpayer's holding period for the
11        property ending July 31, 1969 bears to the number of
12        full calendar months in the taxpayer's entire holding
13        period for the property.
14            (C) The Department shall prescribe such
15        regulations as may be necessary to carry out the
16        purposes of this paragraph.
 
17    (g) Double deductions. Unless specifically provided
18otherwise, nothing in this Section shall permit the same item
19to be deducted more than once.
 
20    (h) Legislative intention. Except as expressly provided by
21this Section there shall be no modifications or limitations on
22the amounts of income, gain, loss or deduction taken into
23account in determining gross income, adjusted gross income or
24taxable income for federal income tax purposes for the taxable

 

 

SB3790- 109 -LRB103 39446 CES 69640 b

1year, or in the amount of such items entering into the
2computation of base income and net income under this Act for
3such taxable year, whether in respect of property values as of
4August 1, 1969 or otherwise.
5(Source: P.A. 102-16, eff. 6-17-21; 102-558, eff. 8-20-21;
6102-658, eff. 8-27-21; 102-813, eff. 5-13-22; 102-1112, eff.
712-21-22; 103-8, eff. 6-7-23; 103-478, eff. 1-1-24; revised
89-26-23.)
 
9    Section 10. The Liquor Control Act of 1934 is amended by
10adding Section 6-29.2 as follows:
 
11    (235 ILCS 5/6-29.2 new)
12    Sec. 6-29.2. Hemp products.
13    (a) Hemp extract, hemp cannabinoid products, and any other
14ingredient or product derived from hemp made in compliance
15with State law or the originating jurisdiction shall be
16considered fit for human consumption and shall not be
17considered injurious to health or deleterious for human
18consumption.
19    (b) License holders under this Act may buy, import,
20manufacture, produce, possess, hold, distribute, transport,
21transfer, sell, serve, sample, dispense, deliver, merchandise,
22and advertise, hemp cannabinoid products and any other act in
23compliance with this Section.
24    (c) Nothing in this Act:

 

 

SB3790- 110 -LRB103 39446 CES 69640 b

1        (1) prohibits the issuance of a license or permit to a
2    person also holding a hemp business establishment license
3    authorizing the manufacture, distribution, or retail sale
4    of cannabinoid products as described in the Industrial
5    Hemp Act;
6        (2) allows any agreement between a licensing authority
7    and license or permit holder that prohibits the license or
8    permit holder from also holding a hemp manufacturer,
9    distributor, or retailer license; or
10        (3) allows the revocation or suspension of a license
11    or permit, or the imposition of a penalty on a license or
12    permit holder, due to the license or permit holder also
13    holding a hemp business license.
14    (d) For purposes of this Section, "hemp business license"
15means a hemp distributor, hemp cultivator, hemp processor,
16hemp retailer, or hemp food establishment license issued under
17the Industrial Hemp Act.
18    (e) For purposes of this Section, "hemp cannabinoid
19product" means a finished product for sale to hemp-cannabinoid
20users or medical patients within the State that contains
21cannabinoids derived from industrial hemp and is intended for
22human consumption, and meets the packaging, labeling, and
23testing requirements of the Industrial Hemp Act.
24    (f) For purposes of this Section, "hemp extract" means a
25substance or compound intended for ingestion or inhalations
26that is derived from or contains hemp and that does not contain

 

 

SB3790- 111 -LRB103 39446 CES 69640 b

1other controlled substances.
 
2    Section 15. The Industrial Hemp Act is amended by changing
3Sections 5, 10, 15, 17, 18, 19, 20, and 25 and by adding
4Sections 3, 7, 8, 8-5, 11, 16, 18.5, 18.10, 21, 22, 22.5,
522.10, 22.15, 23, 23.10, 23.15, 23.20, 23.25, 23.30, 23.35,
624, 26, 27, 28, 30, 35, 40, 45, 50, 55, 60, 65, 80, and 100 as
7follows:
 
8    (505 ILCS 89/3 new)
9    Sec. 3. Findings.
10    (a) In the interest of allowing law enforcement to focus
11on violent and property crimes, generating revenue for
12education, substance abuse prevention and treatment, freeing
13public resources to invest in communities and other public
14purposes, and individual freedom, the General Assembly finds
15and declares that the use of hemp-derived cannabinoids should
16be legal for persons 21 years of age or older and should be
17taxed and regulated in a manner similar to beer, wine,
18spirits, and cannabis.
19    (b) In the interest of the health and public safety of the
20residents of the State, the General Assembly further finds and
21declares that hemp-derived cannabinoids should be regulated in
22a manner similar to beer, wine, spirits, and cannabis so that:
23        (1) Persons will have to show proof of age before
24    purchasing hemp-derived cannabinoids.

 

 

SB3790- 112 -LRB103 39446 CES 69640 b

1        (2) Selling, distributing or transferring hemp-derived
2    cannabinoids to minors and other persons under 21 years of
3    age shall be illegal, except for limited circumstances
4    where the transfer is made by a parent or guardian to their
5    children, or the transfer is to a medical patient under
6    the Compassionate Use of Medical Cannabis Program Act.
7        (3) Driving under the influence of hemp-derived
8    cannabinoids, operating a watercraft under the influence
9    of hemp-derived cannabinoids and operating a snowmobile
10    under the influence of hemp-derived cannabinoids shall be
11    illegal.
12        (4) Legitimate, taxpaying businesspeople, and not
13    criminal actors, will conduct the sales of hemp-derived
14    cannabinoids.
15        (5) Hemp-derived cannabinoids sold in the State will
16    be tested, labeled and subject to additional regulation to
17    ensure that purchasers are informed and protected.
18        (6) Purchasers will be informed of known health risks
19    associated with the use of hemp-derived cannabinoids, as
20    concluded by evidence-based, peer reviewed research.
21    (c) It is necessary to ensure consistency and fairness in
22the application of this Act throughout the State and that,
23therefore, the matters by this Act are, except as specified in
24this Act, matters of statewide concern.
25    (d) This Act shall not diminish the State's duties and
26commitment to purchasers and businesses that operate under the

 

 

SB3790- 113 -LRB103 39446 CES 69640 b

1Cannabis Regulation and Tax Act, nor alter the protections
2granted to them.
3    (e) This Act shall not diminish the State's duties and
4commitment to seriously ill patients registered under the
5Compassionate Use of Medical Cannabis Program Act, nor alter
6the protections granted to them.
7    (f) Supporting and encouraging labor neutrality in the
8hemp-derived cannabinoid industry and employee workplace
9safety is desirable, and employer workplace policies shall be
10interpreted broadly to protect employee safety.
 
11    (505 ILCS 89/5)
12    Sec. 5. Definitions. In this Act:
13    "Batch" means a specific quantity of a specific
14cannabinoid product that is manufactured at the same time and
15using the same methods, equipment, and ingredients, that is
16uniform and intended to meet specifications for identity,
17strength, purity, and composition, and that is manufactured,
18packaged, and labeled according to a single batch production
19record executed and documented during the same cycle of
20manufacture and produced by a continuous process.
21    "Batch cycle" means a specific quantity of a specific
22cannabinoid product that is manufactured using the same
23methods, equipment, and ingredients, that is uniform and
24intended to meet specifications for identity, strength,
25purity, and composition, and that is manufactured, packaged,

 

 

SB3790- 114 -LRB103 39446 CES 69640 b

1and labeled according to a batch cycle production record
2executed and documented during the same cycle of manufacture.
3    "Broad spectrum" means a hemp concentrate, or hemp
4cannabinoid product containing multiple hemp-derived
5cannabinoids, terpenes, and other naturally occurring
6compounds, processed with the intentional removal of delta-9
7Tetrahydrocannabinol.
8    "Cannabinoid menu item" means a restaurant-type food that
9incorporates ready-to-eat cannabinoids included on a menu or
10menu board or offered as a self-service food or food on
11display.
12    "Cannabinoid retail tax" means a tax of 5% that is
13assessed on the final retail sale on qualified products.
14    "Cottage hemp-cannabinoid products" means a type of
15hemp-cannabinoid product available for human consumption
16(including time and temperature controlled foods as defined in
17Section 1-201.10 of the Food Code that utilize intermediate
18hemp products as an input and is produced by a cottage hemp
19food operator. Cottage hemp-cannabinoid products can only be
20sold directly to hemp cannabinoid users or medical patients
21within the State and must contain delta-9 THC levels below
220.3% by weight.
23    "Cottage hemp food operator" means an individual who
24produces food or drink, other than foods and drinks listed as
25prohibited by Section 4 of the Food Handling Regulation
26Enforcement Act, that incorporate intermediate hemp products

 

 

SB3790- 115 -LRB103 39446 CES 69640 b

1in a kitchen located in that person's primary domestic
2residence or another appropriately designed and equipped
3kitchen on a farm for direct sale by the individual, a family
4member or employee. Cottage food operators must disclose that
5prepared ready-to-eat hemp cannabinoid products are "cottage"
6and adhere to the labeling & disclosure requirements as
7outlined in the act. Cottage hemp food operators are limited
8to using the equivalent of 1,000g of delta-9 THC contained in
9intermediate hemp products on an annual basis and must
10register with a hemp distributor, who is responsible for
11collecting and remitting hemp-cannabinoid taxes on behalf of
12the cottage hemp food operator. Cottage hemp food products
13cannot be sold to other hemp business establishments.
14    "Department" means the Department of Agriculture (IDOA),
15the Department of Public Health (IDPH), or the Illinois
16Department of Financial and Professional Regulation (IDFPR)
17from which the concerned hemp cannabinoid business
18establishment secured its registration.
19    "Director" means the Director of Agriculture with
20jurisdiction over the licensee or registrant as specified in
21this Act.
22    "Disproportionately impacted area" means a census tract or
23comparable geographic area as determined by the Department of
24Commerce and Economic Opportunity, that meets at least one of
25the following criteria:
26        (1) 20% or more of the households in the area have

 

 

SB3790- 116 -LRB103 39446 CES 69640 b

1    incomes at or below 185% of the poverty guidelines updated
2    periodically in the federal register by the federal
3    Department of Health and Human Services under the
4    authority of Section 9902 of the Community Services Block
5    Grant Program;
6        (2) 75% or more of the children in the area
7    participate in the national school lunch program according
8    to reported statistics from the State Board of Education;
9        (3) at least 20% of the households in the area receive
10    assistance under the Supplemental Nutrition Assistance
11    Program; or
12        (4) the area has an average unemployment rate, as
13    determined by the Department of Employment Security, that
14    is more than 120% of the national employment average, as
15    determined by the federal Department of Labor, for a
16    period of at least 2 consecutive calendar years preceding
17    the date of the application and has high rates or arrest,
18    conviction, and incarceration related to the sale,
19    possession, use, cultivation, manufacture, or transport of
20    cannabis as defined under the Cannabis Regulation and Tax
21    Act.
22        "Expiration date" or "use by date" means the month and
23    year as determined by the manufacturer, packer, or
24    distributor on the basis of tests or other information
25    showing that the product, until that date, under the
26    conditions of handling, storage, preparation, and use per

 

 

SB3790- 117 -LRB103 39446 CES 69640 b

1    label directions will, when consumed, contain not less
2    than the quantity of each ingredient as set forth on its
3    label.
4        "Full-panel test" means a test that includes potency
5    testing and tests for contaminants, such as pesticides,
6    heavy metals, yeast, mold, and residual solvents.
7        "Full spectrum" means a hemp concentrate or hemp
8    cannabinoid product containing multiple hemp-derived
9    cannabinoids, terpenes, and other naturally occurring
10    compounds, processed without intentional complete removal
11    of any compound and without the addition of isolated
12    cannabinoids.
13    "Hemp" or "industrial hemp" means the plant Cannabis
14sativa L. and any part of that plant, whether growing or not,
15with a delta-9 tetrahydrocannabinol concentration of not more
16than 0.3 percent on a dry weight basis that has been cultivated
17under a license issued under this Act or is otherwise lawfully
18present in this State and includes any intermediate or
19finished product made or derived from industrial hemp.
20    "Hemp business establishment" or "industrial hemp business
21establishment" means a hemp cultivator, hemp processor, hemp
22distributor, hemp retailer, hemp food establishment or cottage
23hemp food operator.
24    "Hemp-cannabinoid" means the chemical constituents of
25industrial hemp plants that are naturally occurring and
26derived from hemp plants with less than 0.3% delta-9 THC as

 

 

SB3790- 118 -LRB103 39446 CES 69640 b

1tested on a dry weight basis.
2    "Hemp-cannabinoid product" means a finished product for
3sale to hemp-cannabinoid users or medical patients within the
4State that contains cannabinoids derived from industrial hemp,
5is intended for human consumption, and meets the packaging,
6labeling, and testing requirements of this Act.
7    "Hemp-cannabinoid user" means a member of the general
8public who buys or uses goods and who is protected by laws
9against unfair or fraudulent practices in the marketplace.
10    "Hemp concentrate" means the extracts and resins of a hemp
11plant or hemp plant parts, including the extracts or resins of
12a hemp plant or hemp plant parts that are refined to increase
13or decrease the presence of targeted cannabinoids.
14    "Hemp cultivator" means a State farm or facility operated
15by an organization or business that is licensed by the
16Department of Agriculture to grow industrial hemp. Hemp
17cultivator facilities can be located outdoors, in greenhouses
18or indoors and can be located on residentially zoned
19properties in accordance with permitted agricultural use
20guidelines from local zoning ordinances.
21    "Hemp distributor" means a facility operated by an
22organization or business that is licensed by the Department of
23Financial and Professional Regulation to distribute or sell
24live hemp products and hemp-cannabinoid products to other hemp
25business establishments.
26    "Hemp extract" means a substance or compound intended for

 

 

SB3790- 119 -LRB103 39446 CES 69640 b

1ingestion or inhalations that is derived from or contains hemp
2and that does not contain other controlled substances.
3    "Hemp food establishment" means a facility regulated by
4the Department of Public Health (IDPH) that incorporates
5intermediate hemp products in the manufacturing, processing or
6preparation of pre-packaged or ready-to-eat hemp cannabinoid
7products intended for human ingestion and which meets the
8requirements of this Act. Hemp food establishments that obtain
9a hemp retailer license, are licensed as retail food
10establishments and who adhere to the additional requirements
11of this act can sell ready-to-eat hemp cannabinoid products to
12hemp cannabinoid users or medical patients.
13    "Hemp justice participant" means an individual who is an
14State resident and has been convicted of a non-violent felony
15relating to a controlled substance under State or federal law
16related to cannabis within the last 10 years before the
17enactment of this statute that is prohibited by either Section
18297C of the 2018 Farm Bill to participate in an industrial hemp
19program or by Section 297D(a) of the 2018 Farm Bill to produce
20hemp under any regulations or guidelines.
21    "Hemp microgreens" means immature hemp seedlings grown for
22human consumption that are harvested above the soil or
23substrate line, prior to flowering, and not more than 14 days
24after germination and no more than five inches in height
25    "Hemp processor" means a facility operated by an
26organization or business that is licensed by the Department of

 

 

SB3790- 120 -LRB103 39446 CES 69640 b

1Agriculture to convert raw industrial hemp material into
2processed hemp products or intermediate hemp products.
3Processing includes the extraction, synthesis or concentration
4of constituent chemicals and compounds from raw hemp or
5intermediate hemp products.
6    "Hemp production plan" means a plan submitted by the
7Department to the Secretary of the United States Department of
8Agriculture pursuant to the federal Agriculture Improvement
9Act of 2018, Public Law 115-334, and consistent with the
10Domestic Hemp Production Program pursuant to 7 CFR Part 990
11wherein the Department establishes its desire to have primary
12regulatory authority over the production of hemp.
13    "Hemp retailer" means a retailer operated by an
14organization or business that is licensed by the Department of
15Financial and Professional Regulation to sell live hemp
16products, or hemp-cannabinoid products to hemp cannabinoid
17users or medical patients. Hemp retailers are responsible for
18collecting and remitting hemp-cannabinoid taxes.
19    "Hemp social equity participant" means an individual who
20is a State resident or business entity in the State that meets
21one or a combination of any the following criteria: (1) an
22applicant with at least 51% ownership and control by one or
23more individuals who have resided for at least 5 of the
24preceding 10 years in a disproportionately impacted area, (2)
25an applicant with at least 51% ownership and control by one or
26more individuals who: (i) have been arrested for, convicted

 

 

SB3790- 121 -LRB103 39446 CES 69640 b

1of, or adjudicated delinquent for any offense that is eligible
2for expungement under the Cannabis Regulation and Tax Act; or
3(ii) is a member of an impacted family.
4    "Human consumption" means inhalation or ingestion and does
5not include topical application.
6    "IDFPR" means the Department of Financial & Professional
7Regulation that regulates hemp retailers to ensure the
8protection of public consumers.
9    "IDPH" means the Department of Public Health that
10regulates hemp food establishments in order to set food safety
11standards and monitor food products.
12    "Illinois hemp" means industrial hemp grown, processed or
13produced by hemp business establishments licensed and located
14within the State under this Act. The "Illinois hemp"
15designation can be applied to live hemp products, raw hemp
16products, intermediate hemp products and hemp-cannabinoid
17products. In order to maintain the "Illinois hemp"
18designation, hemp-cannabinoid and intermediate hemp products
19must be produced in the State and cannot incorporate any form
20of imported hemp. In the event that federal rules disallow
21certain provisions of these rules (e.g., hemp program justice
22participants or individuals with non-violent state or federal
23controlled substance felony convictions within the last 10
24years who are prohibited from participating in industrial hemp
25programs or possessing ownership or controlling management
26stake in an hemp business establishment), "Illinois hemp"

 

 

SB3790- 122 -LRB103 39446 CES 69640 b

1business establishments will have the option to legally
2produce, process and distribute "Illinois hemp" within the
3State provided that they do not export "Illinois hemp".
4    "Imported hemp" means industrial hemp that incorporates
5raw hemp or intermediate hemp products not produced in
6Illinois.
7    "Ingestion" means the process of consuming cannabinoid
8products through the mouth, whether by swallowing into the
9gastrointestinal system or through tissue absorption.
10    "Inhalation" means the process of consuming cannabinoid
11products through the mouth or nasal passages into the
12respiratory system.
13    "Intermediate hemp products" means products that are made
14from processed hemp that can only be sold to hemp business
15establishments to be used as ingredients for other
16intermediate hemp products or final hemp-cannabinoid products
17for human consumption (ingestion or inhalation). The 0.3%
18delta-9 THC limit does not apply for intermediate hemp
19products.
20    "Isolate-based" means a hemp concentrate or hemp
21cannabinoid product containing isolated hemp-derived
22cannabinoids as the only cannabinoid source.
23    "Labor peace agreement" means an agreement between a hemp
24business establishment and any labor organization recognized
25under the federal Labor Relations Act, referred to in this Act
26as a bona fide labor organization, that prohibits labor

 

 

SB3790- 123 -LRB103 39446 CES 69640 b

1organizations and members from engaging in picketing, work
2stoppages, boycotts, and any other economic interference with
3the hemp business establishment. This agreement means that the
4hemp business establishment has agreed not to disrupt efforts
5by the bona fide labor organization to communicate with, and
6attempt to organize and represent, the hemp business
7establishment's employees. The agreement shall provide a bona
8fide labor organization access at reasonable times to areas in
9which the hemp business establishment's employees work, for
10the purpose of meeting with employees to discuss their right
11to representation, employment rights under State law, and
12terms and conditions of employment. This type of agreement
13shall not mandate a particular method of election or
14certification of the bona fide labor organization.
15        "IDOA" means the Illinois Department of Agriculture.
16    "Land area" means a farm as defined in Section 1-60 of the
17Property Tax Code, land otherwise properly zoned for hemp
18cultivation in this State or land or facilities under the
19control of an institution of higher education.
20    "Live hemp products" means living plants, plant cuttings,
21viable seeds or tissue culture that can be used to propagate
22new industrial hemp plants. A representative sample of the
23live hemp material must test under 0.3 percent delta-9 THC by
24weight using high performance liquid chromatography (HPLC) or
25comparable technologies capable of identifying delta-9 THC
26separately from other cannabinoids. Live hemp material can

 

 

SB3790- 124 -LRB103 39446 CES 69640 b

1only be sold or transferred to other hemp cultivators or
2medical patients.
3    "Manufacturing" means preparing or packaging products
4consisting of or containing hemp extract intended for human
5consumption.
6    "Medical patient" means an individual that has been issued
7a medical card under the Compassionate Use of Medical Cannabis
8Program Act. Medical patients are allowed to purchase live
9hemp products and to grow at their residence under the
10Cannabis Regulation and Tax Act. Medical patients under the
11age of 21 are authorized to purchase Hemp-cannabinoid
12products.
13    "Menu" or "menu board" means the primary writing of the
14establishment from which a customer makes an order selection,
15including, but not limited to, breakfast, lunch and dinner
16menus, dessert menus, beverage menus, other specialty menus,
17electronic menus, and menus on the Internet.
18    "Ornamental hemp" means mature or immature hemp plants
19that are not grown for human consumption and will not be
20harvested for any purposes except disposal.
21    "Person" means any individual, partnership, firm,
22corporation, company, society, association, the State or any
23department, agency, or subdivision thereof, or any other
24entity.
25    "Potency test" means a test on hemp-derived products that
26measures the number and amount of cannabinoids, such as THC,

 

 

SB3790- 125 -LRB103 39446 CES 69640 b

1in a sample.
2    "Process" means the conversion of raw industrial hemp
3plant material into a form that is presently legal to import
4from outside the United States under federal law.
5    "Processor" or "extractor" means the establishment that
6removes the hemp extract oil from the hemp plant or refines or
7isomerizes the hemp extract oil into other cannabinoids.
8    "Processed hemp products" means products that are derived
9from industrial hemp that are made for purposes other than
10human consumption. They include hemp fibers, hemp hurd,
11hempcrete, hemp fuels, hemp topicals and lotions, as well as
12other products, like clothing, plastics, paper or textiles
13that use or may incorporate elements of industrial hemp.
14    "Raw hemp products" means products that are derived from
15industrial hemp that are not processed or refined with any
16solvents or chemical reactions. Raw hemp includes hulled hemp
17seed, hemp seed protein powder, hemp seed oil, hemp stalks,
18hemp leaves, and artwork incorporating hemp by-products. Raw
19hemp products can be sold by any legal business entity within
20the State, can be purchased by any member of the general public
21and are not subject to hemp-cannabinoid product taxes.
22    "Ready-to-eat hemp-cannabinoid products" means a type of
23hemp-cannabinoid product available for human consumption
24(including time and temperature controlled foods as defined in
25Section 1-201.10 of the federal Food Code) that use
26intermediate hemp products as an input as is produced as a

 

 

SB3790- 126 -LRB103 39446 CES 69640 b

1single serving in a retail food establishment. Ready-to-eat
2hemp products must be registered per the guidelines of this
3Act and can only be sold directly to hemp cannabinoid users or
4medical patients within the State.
5    "Retail sale" or "at retail" means any sale of cannabinoid
6products that would be subject to the Retailer's Occupation
7Tax Act.
8    "Serving" or "serving size" means the amount of product
9intended to be consumed in a single serving as declared on the
10label expressed in a common household measure. A serving size
11may be indicated by marking or scoring on packaging or
12labeling.
13    "THC" means delta-9 tetrahydrocannabinol. The definition
14of THC does not include CBD, CBG, CBN, delta-7 THC, delta-8
15THC, delta-10 THC, THCa, THCv, THCva, and other yet to be
16discovered cannabinoids.
17(Source: P.A. 102-690, eff. 12-17-21.)
 
18    (505 ILCS 89/7 new)
19    Sec. 7. Lawful user and lawful product.
20    (a) For the purposes of this Act and to clarify the
21legislative findings on the lawful use of hemp-derived
22cannabinoids, a person shall not be considered an unlawful
23user or addicted to narcotics solely as a result of their
24possession or use of hemp-derived cannabinoids in accordance
25with this Act.

 

 

SB3790- 127 -LRB103 39446 CES 69640 b

1    (b) Hemp extract used as a food ingredient or for any food
2products that are possessed, distributed, or sold in
3compliance with this Act shall not be considered adulterated
4or misbranded food products and shall be considered food.
5    (c) The Department shall permit the sale or transfer of
6stripped stalks, fiber, dried roots, nonviable seeds, seed
7oils, floral material, and plant extracts and other marketable
8hemp products in compliance with this Act to members of the
9general public, both within and outside the State in
10compliance with this Act.
11    (d) Lawful products may be transported by consumers.
12Lawful products may not be used as the basis to pull over or
13inspect a vehicle.
14    (e) Unless otherwise stated in this Act, the effective
15date is January 1, 2025. Notwithstanding the foregoing,
16persons shall be able to legally possess, cultivate,
17transport, distribute, process, sell, and buy food products
18(including beverages) which contain a delta-9 THC
19concentration of not more than 0.3 percent by weight upon
20passage of this Act.
 
21    (505 ILCS 89/8 new)
22    Sec. 8. Unlawful user; persons under 21 years of age.
23    (a) Nothing in this Act is intended to permit the transfer
24of hemp cannabinoid product, with or without remuneration, to
25a person under 21 years of age, or to allow a person under 21

 

 

SB3790- 128 -LRB103 39446 CES 69640 b

1years of age to purchase, possess, use, process, transport, or
2consume hemp-cannabinoid products unless the person is:
3        (1) Over the age of 18 and in possession of a valid
4    medical card;
5        (2) or over the age of 18 and in possession of a valid
6    military ID; or
7        (3) Under the supervision of a parent or legal
8    guardian.
9    (b) Notwithstanding section 8-0(a)a-b, nothing in this Act
10authorizes a person who is under 21 years of age to possess
11hemp-cannabinoid products. A person under 21 years of age with
12hemp cannabinoid products in his or her possession is guilty
13of a civil law violation as outlined in Section 4 of the
14Cannabis Control Act.
15    Notwithstanding the foregoing, an individual over the age
16of 18 and in possession of a valid medical card, or over the
17age of 18 and in possession of a valid military ID, or a parent
18or guardian may purchase, possess, process, or transport
19hemp-cannabinoid products.
20    (c) If the person under the age of 21 was driving a motor
21vehicle at the time of the offense, the Secretary of State may
22suspend or revoke the driving privileges of any person for a
23violation of this Section under Section 6-206 of the Vehicle
24Code.
 
25    (505 ILCS 89/8-5 new)

 

 

SB3790- 129 -LRB103 39446 CES 69640 b

1    Sec. 8-5. Unlawful user; limitations and penalties.
2    (a) This Act does not permit any person to engage in, and
3does not prevent the imposition of any civil, criminal, or
4other penalties for engaging in, any of the following conduct:
5        (1) Undertaking any task under the influence of hemp
6    cannabinoid products when doing so would constitute
7    negligence, professional malpractice, or professional
8    misconduct.
9        (2) Possessing hemp cannabinoid products in the
10    following places:
11            (A) on a school bus, unless permitted for a
12        qualifying patient or caregiver pursuant to the
13        Compassionate Use of Medical Cannabis Program Act;
14            (B) on the grounds of any preschool or primary or
15        secondary school, unless permitted for a qualifying
16        patient or caregiver pursuant to the Compassionate Use
17        of Medical Cannabis Program Act;
18            (C) any correctional facility; or
19            (D) a private residence that is used at any time to
20        provide licensed childcare or other similar social
21        service care on the premises;
22        (3) Using hemp cannabinoid products:
23            (A) on a school bus, unless permitted for a
24        qualifying patient or caregiver pursuant to the
25        Compassionate Use of Medical Cannabis Program Act;
26            (B) on the grounds of any preschool or primary or

 

 

SB3790- 130 -LRB103 39446 CES 69640 b

1        secondary school, unless permitted for a qualifying
2        patient or caregiver pursuant to the Compassionate Use
3        of Medical Cannabis Program Act;
4            (C) any correctional facility;
5            (D) any motor vehicle; or
6            (E) a private residence that is used at any time to
7        provide licensed childcare or other similar social
8        service care on the premises.
9        (4) Smoking hemp in any place where smoking is
10    prohibited under the Smoke Free Illinois Act;
11        (5) Operating, navigating, or being in actual physical
12    control of any motor vehicle, aircraft, watercraft, or
13    snowmobile while using or under the influence of hemp
14    cannabinoid products in violation of Sections 11-501 or
15    11-502.1 of the Vehicle Code, Section 5-16 of the Boat
16    Registration and Safety Act, or Section 5-7 of the
17    Snowmobile Registration and Safety Act;
18        (6) Facilitating the use of hemp cannabinoid products
19    by any person who is not allowed to use cannabis under this
20    Act or the Compassionate Use of Medical Cannabis Program
21    Act.
22        (7) Transferring hemp cannabinoid products to any
23    person contrary to this Act or the Compassionate Use of
24    Medical Cannabis Program Act.
25        (8) The use of hemp by a law enforcement officer,
26    corrections officer, probation officer, or firefighter

 

 

SB3790- 131 -LRB103 39446 CES 69640 b

1    while on duty. Nothing in this Act prevents a public
2    employer of law enforcement officers, corrections
3    officers, probation officers, paramedics, or firefighters
4    from prohibiting or taking disciplinary action for the
5    consumption, possession, sales, purchase, or delivery of
6    hemp or hemp-infused substances while on duty, unless
7    provided for in the employer's policies. However, an
8    employer may not take adverse employment action against an
9    employee based solely on the lawful possession or
10    consumption of hemp or hemp-infused substances by members
11    of the employee's household. To the extent that this
12    Section conflicts with any applicable collective
13    bargaining agreement, the provisions of the collective
14    bargaining agreement shall prevail. Further, nothing in
15    this Act shall be construed to limit in any way the right
16    to collectively bargain over the subject matters contained
17    in this Act.
18        (9) The use of hemp cannabinoid products by a person
19    who has a school bus permit or a commercial driver's
20    license while on duty. As used in this Section, "public
21    place" means any place where a person could reasonably be
22    expected to be observed by others. "Public place" includes
23    all parts of buildings owned in whole or in part, or
24    leased, by the State or a unit of local government.
25    "Public place" includes all areas in a park, recreation
26    area, wildlife area, or playground owned in whole or in

 

 

SB3790- 132 -LRB103 39446 CES 69640 b

1    part, leased, or managed by the State or a unit of local
2    government. "Public place" does not include a private
3    residence unless the private residence is used to provide
4    licensed childcare, foster care, or other similar social
5    service care on the premises.
6        (b) Nothing in this Act shall be construed to prevent
7    the arrest or prosecution of a person for reckless driving
8    or driving under the influence of hemp cannabinoid
9    products, operating a watercraft under the influence of
10    hemp cannabinoid products, or operating a snowmobile under
11    the influence of hemp cannabinoid products if probable
12    cause exists.
13        (c) Nothing in this Act shall prevent a private
14    business from restricting or prohibiting the use of hemp
15    cannabinoid products on its property, including areas
16    where motor vehicles are parked.
17        (d) Nothing in this Act shall be construed to allow an
18    individual or business entity to violate the provisions of
19    federal law, including colleges or universities that must
20    abide by the Drug-Free Schools and Communities Act
21    Amendments of 1989, that require campuses to be drug free.
 
22    (505 ILCS 89/10)
23    Sec. 10. Licenses and registration.
24    (a) (Blank) No person shall cultivate industrial hemp in
25this State without a license issued by the Department.

 

 

SB3790- 133 -LRB103 39446 CES 69640 b

1    (b) (Blank) The application for a license shall include:
2        (1) the name and address of the applicant;
3        (2) the legal description of the land area, including
4    Global Positioning System coordinates, to be used to
5    cultivate industrial hemp; and
6        (3) if federal law requires a research purpose for the
7    cultivation of industrial hemp, a description of one or
8    more research purposes planned for the cultivation of
9    industrial hemp which may include the study of the growth,
10    cultivation, or marketing of industrial hemp; however, the
11    research purpose requirement shall not be construed to
12    limit the commercial sale of industrial hemp.
13    (b-5) (Blank) A person shall not process industrial hemp
14in this State without registering with the Department on a
15form prescribed by the Department.
16    (c) (Blank) The Department may determine, by rule, the
17duration of a license or registration; application,
18registration, and license fees; and the requirements for
19license or registration renewal.
20    (d) Each applicant for an industrial hemp business
21establishment license shall submit a signed, complete,
22accurate and legible application form provided by the
23appropriate Department. The IDOA shall regulate hemp
24cultivation and hemp processing licenses. The IDFPR shall
25regulate hemp distributors and hemp retailers. The IDPH shall
26regulate hemp food establishments. The applicant shall provide

 

 

SB3790- 134 -LRB103 39446 CES 69640 b

1the following for the appropriate license being sought:
2        (1) For all applicants, the name, address, phone
3    number, and email address of the person or entity applying
4    for the license.
5        (2) For all applicants, the type of business or
6    organization (corporation, LLC, or partnership, etc.) as
7    well as the entity's EIN.
8        (3) For all applicants, business name and address, if
9    different than the ones submitted in response to paragraph
10    (1) of subsection (d). This shall include the full name of
11    the business, address of the principal business location,
12    and the full name and title of the key participants.
13        (4) For hemp cultivator applicants, the legal
14    description of the land area, including global positioning
15    system coordinates of each contiguous land area, to be
16    used to cultivate industrial hemp.
17        (5) Optionally, for hemp cultivator applicants, a map
18    of the land area on which the applicant plans to grow
19    industrial hemp, showing the boundaries and dimensions of
20    the growing area in acres or square feet or a
21    self-reporting of the hemp acreage of the cultivation to
22    the nearest whole acre.
23        (6) For all applicants, the applicable fee prescribed
24    by this Act.
25        (7) For hemp cultivator applicants, the varieties of
26    industrial hemp that are intended for cultivation.

 

 

SB3790- 135 -LRB103 39446 CES 69640 b

1        (8) For hemp cultivator applicants, an acknowledgment
2    and consent to the Department collecting, maintaining, and
3    providing to USDA directly and through the USDA's online
4    platform, any required data, including but not limited to;
5    status, contact, disposal reporting, background checks if
6    required by the USDA, and real-time information for each
7    hemp licensee licensed or authorized in the State.
8        (9) For hemp cultivator applicants, if federal law
9    requires a research purpose for the cultivation of
10    industrial hemp and the applicant, a description of one or
11    more research purposes planned for the cultivation of
12    industrial hemp which may include the study of the growth,
13    cultivation, or marketing of industrial hemp; however, the
14    research purpose requirement shall not be construed to
15    limit the commercial sale of industrial hemp.
16        (10) The nature of the processing by the registrant,
17    should the applicant wish to process industrial hemp.
18        (11) The Department may encourage hemp business
19    establishment applicants to enter into a labor peace
20    agreement with a bona fide labor organization.
21    (e) Within 30 calendar days after receipt of a completed
22application and the associated fee, the Department will either
23issue a license or deny the application. Incomplete
24applications or applications that do not meet the requirements
25for licensure or registration will be denied. A rejected and
26an additional application fee will be collected for corrected

 

 

SB3790- 136 -LRB103 39446 CES 69640 b

1or new applications.
2    (f) License or registration shall be good for a maximum of
31 calendar year from the date of issuance.
4    (g) An applicant or licensee shall submit the following
5nonrefundable fees with each license application submitted, in
6the form of a certified check or money order payable to the
7licensing agency, or by such other means as approved by the
8Department. The registration, application, and renewal fee for
9any hemp business establishment shall be no more than $500 for
10each annual license. Notwithstanding the foregoing, a hemp
11cultivator entity shall pay a flat annual fee of $100 for a
12license and license renewal.
13    (h) Qualifying academic research institutions shall pay a
14flat annual fee of $100 for license and license renewal.
15    (i) Qualifying government research and demonstration
16entities shall pay a flat annual fee of $100 for a license and
17license renewal. The Department is exempt from this fee when
18registering as a qualifying government research and
19demonstration entity.
20    (j) For social equity applicants, the Department shall
21waive 50% of any nonrefundable permit application fees, any
22nonrefundable fees associated with operating a hemp business
23establishment, and financial requirements for social equity
24applicant who is applying for its first hemp business
25establishment permit.
26    (k) If the Department determines that an applicant who

 

 

SB3790- 137 -LRB103 39446 CES 69640 b

1applied as a social equity applicant is not eligible for such
2status, the applicant shall be provided an additional 10 days
3to provide alternative evidence that he or she qualifies as a
4social equity applicant. Alternatively, the applicant may pay
5the remainder of the waived fee and be considered as a
6non-social equity applicant. If the applicant cannot do
7either, then the Departments may keep the initial permit fee.
8    (l) The Department shall issue an unlimited number of
9licenses for each type of hemp business establishment.
10    (m) The Department shall not limit the number of licenses
11an individual may hold.
12    (n) Any entity, including businesses licensed under the
13Cannabis Regulation and Tax Act and the Compassionate Use of
14Medical Cannabis Program Act, may hold any or all hemp
15business establishment license, except for a cottage food
16operation license.
17    (o) A hemp business establishment license can be obtained
18by an out-of-state entity, provided that the applicant on the
19application agrees to submit to tax nexus within the State and
20agrees to comply with the provisions under this Act for
21jurisdictional, regulatory and enforcement purposes.
22    (p) A hemp business establishment's license shall only
23operate at the location listed on their license.
24    A Hemp Business Establishment who wishes to change
25locations must submit a new application for the new location.
26    (q) As a condition of its license, hemp business

 

 

SB3790- 138 -LRB103 39446 CES 69640 b

1establishments shall:
2        (1) operate in compliance with this Act;
3        (2) operate in accordance with the representations
4    made in its application and license materials;
5        (3) ensure that any building used by the Hemp Business
6    Establishment is free from infestation by insects, rodents
7    or pests; and
8        (4) ensure that any building or equipment used by the
9    hemp business establishment for the storage or sale of
10    live hemp, hemp-cannabinoid products, industrial hemp,
11    hemp-cannabinoid products and ready-to-eat
12    hemp-cannabinoid products are maintained in a clean and
13    sanitary condition appropriate for the products being held
14    and sold.
15    (r) No person except those holding the appropriate hemp
16business establishment license and subject to the regulations
17established by the Department shall cultivate, grow, process,
18sell or infuse hemp, hemp-cannabinoid products for commercial
19purposes.
20    (s) The Department may refuse to issue a license to any of
21the following:
22        (1) anyone who fails to disclose or states falsely any
23    information called for in the application;
24        (2) any principal officer, board member or persons
25    having a financial or voting interest of 5% or greater on
26    the license who is delinquent in (i) filing any required

 

 

SB3790- 139 -LRB103 39446 CES 69640 b

1    tax returns or (ii) paying any amounts owed to the State of
2    Illinois; or
3        (3) anyone whose business address is zoned
4    residential.
5(Source: P.A. 102-690, eff. 12-17-21.)
 
6    (505 ILCS 89/11 new)
7    Sec. 11. Recordkeeping and reports.
8    (a) It is the duty of the hemp business establishment to
9keep at its licensed address or place of business, to be
10located within the State or digitally, complete and accurate
11records of all sales or other dispositions of live hemp
12products, intermediate hemp products and hemp-cannabinoid
13products sold, whether for itself or for another.
14    (b) The hemp business establishment must keep an actual
15record of all sales and must report tax at the applicable
16rates, based on sales as reflected in the retailer's records.
17Books and records must be maintained in sufficient detail so
18that all receipts reported with respect to hemp products can
19be supported.
20    (c) At least 30 calendar days prior to harvest, to the best
21of the licensee's ability, each cultivator licensee shall file
22a harvest report on a form provided by the Department, that
23includes the expected harvest dates for industrial hemp
24cultivated by the licensee. Should the harvest dates change in
25excess of 5 calendar days, the licensee shall notify the

 

 

SB3790- 140 -LRB103 39446 CES 69640 b

1Department of the new expected harvest date.
2    (d) No later than February 1 of each year, each cultivator
3licensee shall submit an industrial hemp cultivator final
4report to the Department that includes:
5        (1) total acres or square feet of industrial hemp
6    planted in the previous calendar year;
7        (2) a description of each variety planted and
8    harvested in the previous calendar year;
9        (3) total acres or square feet harvested in the
10    previous calendar year; and
11        (4) total yield in the appropriate measurement, such
12    as tonnage, seeds per acre, or other measurement approved
13    by the Department.
14    (e) The Department will provide the information in this
15Section to the USDA within 30 calendar days of its receipt.
16    (f) Cultivator licensees shall report hemp planting
17acreage to the Farm Service Agency (FSA). This report shall be
18submitted to the FSA within 30 calendar days after the
19completion of planting of an outdoor crop site, or within 30
20calendar days after the first planting of hemp in the calendar
21year in an indoor cultivation site. At a minimum, the
22following information shall be reported:
23        (1) street address for each crop site;
24        (2) geospatial location for each crop site;
25        (3) acreage of each crop site; and
26        (4) licensee identifying information.

 

 

SB3790- 141 -LRB103 39446 CES 69640 b

1    (g) Each hemp business establishment is required to retain
2records sufficient to support deductions on the ground that
3deliveries of live hemp products, intermediate hemp products
4and hemp-cannabinoid products were made outside of the State,
5records shall include satisfactory evidence of delivery to and
6receipt by out-of-state consignees.
7    (h) Where a hemp business establishment sells live hemp
8products, intermediate hemp products, or hemp-cannabinoid
9products to another hemp business establishment that is not
10cottage hemp food operator, the seller shall render to the
11buyer an invoice describing the hemp product sold (including
12the tax rate category applicable to the product sold), the
13date of sale, and the quantity sold. Duplicate copies of all
14such invoices must be made and preserved by such distributor
15for audit purposes.
16    (i) Where a distributor sells intermediate hemp products
17to a cottage hemp food operator, each original and duplicate
18invoice pertaining to such sale must be printed, stamped, or
19bear in writing, the following language: "Payment of Illinois
20hemp tax made by vendor issuing this invoice".
21    (j) Hemp business establishment records may be maintained
22electronically or physically for 3 years and be available for
23inspection by the Department upon request, unless the
24Department, in writing, authorizes their destruction or
25disposal at an earlier date.
26    (k) If a hemp distributor closes due to insolvency,

 

 

SB3790- 142 -LRB103 39446 CES 69640 b

1revocation, bankruptcy or for any other reasons, all records
2must be preserved at the expense of the hemp distributing
3organization for at least 3 years in a form and location in the
4State acceptable to the Department, whose approval shall not
5be unreasonably withheld. The hemp distributing organization
6shall keep the records longer if requested by the Department
7for good cause. Upon request by the Department, the hemp
8distributing organization shall notify the Department of the
9location where the hemp retailing records are stored or
10transferred.
11    (l) Hemp food establishment records must be maintained
12electronically for 3 years and be available for inspection by
13the Department upon request. Required records include the
14following:
15        (1) operating procedures and recipes;
16        (2) inventory records, policies and procedures;
17        (3) batch creation logs of intermediate hemp products;
18    and
19        (4) dosing records of ready-to-eat products.
 
20    (505 ILCS 89/15)
21    Sec. 15. Rules.
22    (a) The Department shall submit to the Secretary of the
23United States Department of Agriculture a hemp production plan
24under which the Department monitors and regulates the
25production of industrial hemp in this State. The Department

 

 

SB3790- 143 -LRB103 39446 CES 69640 b

1shall adopt rules incorporating the hemp production plan,
2including application and licensing requirements.
3    (b) (Blank) The rules set by the Department shall include
4one yearly inspection of a licensed industrial hemp
5cultivation operation and allow for additional unannounced
6inspections of a licensed industrial hemp cultivation
7operation at the Department's discretion.
8    (c) (Blank) The Department shall adopt rules necessary for
9the administration and enforcement of this Act in accordance
10with all applicable State and federal laws and regulations,
11including rules concerning standards and criteria for
12licensure and registration, for the payment of applicable
13fees, signage, and for forms required for the administration
14of this Act.
15    (d) (Blank) The Department shall adopt rules for the
16testing of the industrial hemp THC levels and the disposal of
17plant matter exceeding lawful THC levels, including an option
18for a cultivator to retest for a minor violation, with the
19retest threshold determined by the Department and set in rule.
20Those rules may provide for the use of seed certified to meet
21the THC levels mandated by this Act as an alternative to
22testing.
23    (e) The application form shall be determined by the
24Department and set by rule within 180 days of the effective
25date of this Act.
26    (f) The Department shall adopt rules necessary for the

 

 

SB3790- 144 -LRB103 39446 CES 69640 b

1administration and enforcement of this Act, including rules
2concerning the payment of applicable fees and forms required
3for the administration of applying for licenses issued under
4this Act. The fee for any hemp business license or renewal
5shall not exceed $500.
6    (g) The Department shall adopt rules concerning the review
7of SOPs for hemp food establishments.
8    (h) The rules set by the appropriate regulatory Department
9may include one yearly inspection of a licensed hemp business
10establishment and allow for additional unannounced inspections
11of a licensed hemp business establishment upon good cause.
12    (i) The Department shall not limit the quantity of any
13hemp licenses. The hemp business establishment license
14application process shall be open indefinitely and the
15Department must approve or deny all license applications
16within 30 calendar days.
17    (j) The Department shall expressly permit individuals who
18are disallowed from holding an Illinois hemp license by
19Section 297B(e)(3)(B)(i) of the Agricultural Marketing Act of
201946 to hold a hemp business license, work for a hemp business
21establishment, and produce Illinois hemp.
22    (k) Any rules adopted by a Department shall not be more
23restrictive than this Act.
24(Source: P.A. 102-690, eff. 12-17-21.)
 
25    (505 ILCS 89/16 new)

 

 

SB3790- 145 -LRB103 39446 CES 69640 b

1    Sec. 16. Other violations; criminal penalties.
2    (a) Subject to the provisions of this Act, the Department
3may:
4        (1) Examine, inspect, and investigate the premises,
5    operations, and records of hemp business establishment
6    applicants and licensees.
7        (2) Conduct investigations of possible violations of
8    this Act pertaining to hemp business establishment
9    applicants and licensees.
10        (3) Conduct hearings on proceedings to refuse to issue
11    or renew licenses or to revoke, suspend, place on
12    probation, reprimand or otherwise discipline a license
13    holder under this Act or take other non-disciplinary
14    action for good cause specified in writing.
15    (b) It is the duty of the Department to administer and
16enforce the provisions of this Act relating to licensing and
17oversight of hemp business establishments unless otherwise
18provided in this Act. Notwithstanding the provisions of this
19Act, a person who does any of the following regarding a product
20regulated under this Act is guilty of a misdemeanor and may be
21required to pay of a fine of not more than $3,000:
22        (1) knowingly alters or otherwise falsifies testing
23    results;
24        (2) intentionally alters or falsifies any information
25    required to be included on the label of any hemp
26    cannabinoid product; or

 

 

SB3790- 146 -LRB103 39446 CES 69640 b

1        (3) intentionally makes a false material statement to
2    the Department of Public Health, Department of
3    Agriculture, or the Department of Financial and
4    Professional Regulation.
5    (c) Notwithstanding the provisions of this Act, a hemp
6business establishment that does any of the following on the
7premises of a registered retailer or another business that
8sells retail goods to customers is guilty of a misdemeanor and
9may be required to pay a fine of not more than $3,000:
10        (1) sells a hemp cannabinoid product knowing that the
11    product does not comply with the limits on the amount or
12    types of cannabinoids that a product may contain;
13        (2) intentionally sells a hemp cannabinoid product
14    knowing that the product does not comply with the
15    applicable testing, packaging, or labeling requirements;
16    or
17        (3) sells a hemp cannabinoid product to a person under
18    the age of 21, except that it is an affirmative defense to
19    a charge under this clause if the defendant proves by a
20    preponderance of the evidence that the defendant
21    reasonably and in good faith relied on proof of age as
22    described in the next section below.
23    (d) No hemp business establishment shall intentionally
24hold itself out to be a "dispensary", "marijuana dispensary",
25"dispensing organization", or any kind of cannabis business
26establishment unless such entity holds a valid cannabis

 

 

SB3790- 147 -LRB103 39446 CES 69640 b

1business establishment license. A person who intentionally
2falsely holds itself out to be a cannabis business
3establishment is guilty of a misdemeanor and may be required
4to pay of a fine of not less than $10,000.
 
5    (505 ILCS 89/17)
6    Sec. 17. Administrative hearings; judicial review.
7    (a) Administrative hearings involving licensees under this
8Act shall be conducted under the Department's rules governing
9formal administrative proceedings.
10    (b) Notwithstanding any other provisions of the Act, the
11following administrative fines may be imposed by the
12Department upon any person who violates any provision of this
13Act:
14        (1) a penalty of $2,500 for a first violation;
15        (2) a penalty of $5,000 for a second violation at the
16    same location within 2 years of the first violation; and
17        (3) a penalty of $10,000 for a third or subsequent
18    violation at the same location within 2 years of the
19    second violation.
20    (c) Monies collected by the Department under this Section
21shall be deposited into the Industrial Hemp Regulatory Fund.
22Any penalty of $5,000 or greater that is not paid within 120
23days of issuance of notice from the Department shall be
24submitted to the Department of Revenue for collection as
25provided under the State Collection Act of 1986.

 

 

SB3790- 148 -LRB103 39446 CES 69640 b

1    (d) All final administrative decisions of the Department
2are subject to judicial review under the Administrative Review
3Law. The term "administrative decision" has the meaning
4ascribed to that term in Section 3-101 of the Code of Civil
5Procedure.
6    (e) Notwithstanding the provisions of this Act, the
7Department may, after notice and a reasonable period to cure,
8and the conduct of an administrative hearing, revoke, cancel,
9or suspend the license of any hemp cannabinoid business
10establishment that violates any of the provisions of this Act
11more than 3 times in a calendar year.
12(Source: P.A. 100-1091, eff. 8-26-18.)
 
13    (505 ILCS 89/18)
14    Sec. 18. Industrial Hemp Regulatory Fund.
15    (a) There is created in the State treasury a special fund
16to be known as the Industrial Hemp Regulatory Fund. All taxes
17paid and all fees and fines collected by the Department under
18this Act shall be deposited into the Industrial Hemp
19Regulatory Fund. Moneys in the Fund shall be utilized by the
20Department for the purposes of implementation, administration,
21and enforcement of this Act.
22    (b) The General Assembly finds that in order to address
23the disparities in diversely owned businesses, aggressive
24approaches and targeted technical assistance resources to
25support social equity entrepreneurs are required. To carry

 

 

SB3790- 149 -LRB103 39446 CES 69640 b

1this intent, the Hemp Social Equity Fund is created to
2directly address the impact of economic disinvestment,
3violence and the historical overuse of criminal justice
4response to community and individual needs by providing
5resources, funding and technical assistance for hemp social
6equity applicants to setup, build and create ownership in hemp
7business establishments.
8    (c) 15% of all monies in the Fund shall be used by the
9Department of Agriculture for the purposes of implementation,
10administration, and enforcement of this Act. 15% of all monies
11in the Fund shall be used by the Department of Public Health
12for the purposes of implementation, administration, and
13enforcement of this Act. 15% of all monies in the Fund shall be
14used by the Department of Financial and Professional
15Regulation for the purposes of implementation, administration,
16and enforcement of this Act. 55% of all monies deposited into
17the Industrial Hemp Regulatory Fund shall be immediately
18deposited into the Hemp Social Equity Fund and be used by the
19IDOA exclusively for the following purposes:
20        (1) To provide no-interest rate loans to qualified
21    social equity applicants to pay for ordinary and necessary
22    expenses to start and operate a hemp business
23    establishment permitted by this Act;
24        (2) To provide grants to qualified social equity
25    applicants to pay for ordinary and necessary expenses to
26    start and operate a hemp business establishment permitted

 

 

SB3790- 150 -LRB103 39446 CES 69640 b

1    by this Act.
2        (3) To compensate the Department of Commerce and
3    Economic Opportunity for any costs related to the
4    provision of low-interest loans and grants to qualified
5    social equity applicants;
6        (4) To pay for education, outreach, and technical
7    assistance that may be provided or targeted to attract and
8    support social equity applicants.
9        (5) To support urban and rural farming, medicinal and
10    food security, and hemp-related criminal justice reform.
11    (d) Notwithstanding any other law to the contrary, the
12Hemp Social Equity Fund is not subject to sweeps,
13administrative chargebacks, or any other fiscal or budgetary
14maneuver that would in any way transfer any amounts from the
15Hemp Social Equity Fund into any other fund of the State.
16(Source: P.A. 100-1091, eff. 8-26-18.)
 
17    (505 ILCS 89/18.5 new)
18    Sec. 18.5. Availability studies.
19    (a) The Director shall commission and publish one or more
20disparity and availability studies that:
21        (1) evaluate the risks and benefits of cannabinoids;
22        (2) evaluate the availability of hemp and cannabis
23    products to minors;
24        (3) evaluate economic development attributable to hemp
25    and hemp derived cannabinoids across the State, especially

 

 

SB3790- 151 -LRB103 39446 CES 69640 b

1    in communities who have been most impacted by the war on
2    drugs;
3        (4) evaluate whether there exists discrimination in
4    the State's hemp industry, and if so, evaluates the impact
5    of such discrimination on the State and includes
6    recommendations to the Department of Agriculture for
7    reducing or eliminating any identified barriers to entry
8    in the hemp market. Such disparity and availability
9    studies shall examine each license type issued pursuant to
10    Section 10 of this Act and shall be initiated within 180
11    days from the issuance of the first of each license
12    authorized by those Sections. The report must include the
13    Task Force's legislative recommendations regarding further
14    cannabinoid research, the use and availability of
15    cannabinoid products and cannabis products among minors,
16    and the impact of cannabinoid products on minority and
17    women-owned business creation. Additionally, the report
18    must contain an analysis of the effectiveness of each
19    recommendation. This analysis will assess the potential
20    impact and outcomes of the proposed legislative measures.
21    Finally, the Task Force will make rule recommendations as
22    part of the report. The results of each disparity and
23    availability study shall be reported to the General
24    Assembly and the Governor no later than 12 months after
25    the commission of each study.
26    (b) The Director shall forward a copy of its findings and

 

 

SB3790- 152 -LRB103 39446 CES 69640 b

1recommendations to the Department of Financial and
2Professional Regulation, the Department of Agriculture, the
3Department of Commerce and Economic Opportunity, the General
4Assembly, and the Governor.
5    (c) The Department of Agriculture may compile, collect, or
6otherwise gather data necessary for the administration of this
7Act and to carry out the Director's duty relating to the
8recommendation of policy changes. The Department of
9Agriculture may direct the Department of Financial and
10Professional Regulation, Department of Public Health,
11Department of Human Services, and Department of Commerce and
12Economic Opportunity to assist in the compilation, collection,
13and data gathering authorized pursuant to this subsection. The
14Director shall compile all of the data into a single report and
15submit the report to the Governor and the General Assembly and
16publish the report on its website.
17    (d) The Director may use a third party to complete the
18responsibilities of this Section. If the Director elects to
19use a third party to complete any element of this Section,
20preference shall be given to entities with experience in
21increasing diversity in the hemp or cannabis industry and
22making policy recommendations to the General Assembly.
 
23    (505 ILCS 89/18.10 new)
24    Sec. 18.10. Loans and grants to social equity hemp
25applicants.

 

 

SB3790- 153 -LRB103 39446 CES 69640 b

1    (a) The Department of Commerce and Economic Opportunity
2shall establish grant and loan programs, subject to
3appropriations from the Hemp Social Equity Fund, for the
4purpose of providing financial assistance, loans, grants and
5technical assistance to social equity applicants.
6    (b) The Department of Commerce and Economic Opportunity
7has the power to:
8        (1) Provide hemp social equity loans and grants from
9    appropriations from the Hemp Social Equity Fund to assist
10    qualified social equity applicants in gaining entry to,
11    and successfully operating in, the State's regulated
12    hemp-derived cannabinoid marketplace.
13        (2) Enter into agreements that set forth terms and
14    conditions of the financial assistance, accept funds, or
15    grants and engage in cooperation with private entities and
16    agencies of State or local government to carry out the
17    purposes of this Section.
18        (3) Fix, determine, charge and collect any premiums,
19    fees, charges, costs and expenses, including application
20    fees, commitment fees, program fees, financing charges, or
21    publication fees in connection with its activities under
22    this Section.
23        (4) Coordinate assistance under these loan programs
24    with activities of the Department of Financial and
25    Professional Regulation, the Department of Agriculture and
26    other agencies as needed to maximize the effectiveness and

 

 

SB3790- 154 -LRB103 39446 CES 69640 b

1    efficiency of this Act.
2        (5) Provide staff, administrative and related support
3    required to administer this Section.
4        (6) Take whatever actions are necessary or appropriate
5    to protect the State's interest in the event of
6    bankruptcy, default, foreclosure, or noncompliance with
7    the terms and conditions of financial assistance provided
8    under this Section, including the ability to recapture
9    funds if the recipient is found to be noncompliant with
10    the terms and conditions of the financial assistance
11    agreement.
12        (7) Establish application, notification, contract, and
13    other forms, procedures or rules deemed necessary and
14    appropriate.
15        (8) Use vendors or contract work to carry out the
16    purposes of this Act.
17    (c) Loans made under this Section shall:
18        (1) only be made if the project furthers the goals set
19    forth in this Act; and
20        (2) be in such principal amount and form and contain
21    such terms and provisions with respect to security,
22    insurance, reporting, delinquency charges, default
23    remedies, and other matters as the Department shall
24    determine appropriate to protect the public interest and
25    to be consistent with the purposes of this Section. The
26    terms and provisions may be less than required for similar

 

 

SB3790- 155 -LRB103 39446 CES 69640 b

1    loans not covered by this Section.
2    (d) Grants made under this Section shall be awarded on a
3competitive and annual basis under the Grant Accountability
4and Transparency Act. Grants made under this Section shall
5further and promote the goals of this Act, including promotion
6of social equity applicants, job training and workforce
7development, and technical assistance to social equity
8applicants.
9    (e) Beginning January 1, 2025 and each year thereafter,
10the Department shall annually report to the Governor and the
11General Assembly on the outcomes and effectiveness of this
12Section that shall include the following:
13        (1) The number of persons or businesses receiving
14    financial assistance under this Section.
15        (2) The amount in financial assistance awarded in the
16    aggregate, in addition to the amount of loans made that
17    are outstanding and the amount of grants awarded.
18        (3) The location of the project engaged in by the
19    person or business.
20        (4) The number of new jobs and other forms of economic
21    output created as a result of the financial assistance.
22    (f) The Department of Commerce and Economic Opportunity
23shall include engagement with individuals with limited English
24proficiency as part of its outreach provided or targeted to
25attract and support social equity applicants.
 

 

 

SB3790- 156 -LRB103 39446 CES 69640 b

1    (505 ILCS 89/19)
2    Sec. 19. Immunity. Except for willful or wanton
3misconduct, a person employed by a the Department with
4jurisdiction over a licensee issued and administered under
5this Act shall not be subject to criminal or civil penalties
6for taking any action under this Act when the actions are
7within the scope of his or her employment. Representation and
8indemnification of Department employees shall be provided to
9Department employees as set forth in Section 2 of the State
10Employee Indemnification Act.
11(Source: P.A. 100-1091, eff. 8-26-18.)
 
12    (505 ILCS 89/20)
13    Sec. 20. Hemp products.
14    (a) Nothing in this Act shall alter the legality of hemp or
15hemp products that are presently legal to possess or own. The
16Department shall not promulgate any rules altering the
17legality of the same.
18    (b) Hemp extract intended for human consumption or hemp
19cannabinoid products shall not be manufactured, processed,
20packaged, held, or prepared in a private home or in a room used
21as living or sleeping quarters, except as otherwise permitted
22in this Act.
23    (c) All hemp extract and hemp cannabinoid products for
24human consumption shall be manufactured by a source that meets
25local and state health standards from the jurisdiction of

 

 

SB3790- 157 -LRB103 39446 CES 69640 b

1origin.
2    (d) The maximum THC per serving of a hemp-cannabinoid
3products for human consumption is 50 milligrams.
4(Source: P.A. 100-1091, eff. 8-26-18.)
 
5    (505 ILCS 89/21 new)
6    Sec. 21. Age verification.
7    (a) Hemp-cannabinoid consumers must be at least 21 years
8of age to purchase, transport, or consume hemp-cannabinoids
9products, be over 18 and present a valid medical card, or over
10the age of 18 and in possession of a valid military ID.
11    (b) The giving or sampling of hemp extract or hemp
12cannabinoid products intended for human consumption by a hemp
13food establishment or any person to any person under the age of
1421 is prohibited.
15    (c) Hemp food establishments shall exercise diligence in
16the management and supervision of their premises and in the
17supervision and training of their employees to prevent the
18underage sale of these products.
19    Prior to initiating a sale or otherwise providing hemp
20cannabinoid product to an individual, an employee of a
21retailer must verify that the individual is (i) at least 21
22years of age, (ii) is over 18 and presents a valid medical
23card, or over the age of 18 and in possession of a valid
24military ID;
25    (d) Proof of age may be established only by verifying the

 

 

SB3790- 158 -LRB103 39446 CES 69640 b

1birthdate and age on one of the following:
2        (1) a valid driver's license or identification card
3    issued by the State, another state, or a province of
4    Canada and including the photograph and date of birth of
5    the licensed person;
6        (2) a valid Tribal identification card/indigenous
7    reservation government identification card;
8        (3) a valid passport issued by the United States;
9        (4) in the case of a foreign national, by a valid
10    passport;
11        (5) consular identification card;
12        (6) temporary visitor driver's license;
13        (7) Chicago city key identification;
14        (8) international election identification cards;
15        (9) visa; or
16        (10) green card.
17    (e) A registered retailer may seize a form of
18identification listed under subsection (b) of this Section if
19the registered retailer has reasonable grounds to believe that
20the form of identification has been altered or falsified or is
21being used to violate any law. A registered retailer that
22seizes a form of identification as authorized under this
23paragraph must deliver it to a law enforcement agency within
2414 days of seizing it.
 
25    (505 ILCS 89/22 new)

 

 

SB3790- 159 -LRB103 39446 CES 69640 b

1    Sec. 22. Hemp cannabinoid product packaging and labeling.
2    (a) The Department shall be authorized to audit and
3inspect labels for compliance with this Act.
4    In the event of any violation of this section, the
5Department may issue a citation against the offender as
6official notice of the offense committed and to require the
7offender to correct the offense within 180 days.
8    (b) Unless otherwise specified in this Act, each
9hemp-cannabinoid product, with the exception of ready-to-eat
10hemp cannabinoid and cottage hemp-cannabinoid products shall
11be labeled before sale and each label shall be securely
12affixed to the package and shall state in legible English:
13        (1) The name and mailing address of the manufacturer.
14        (2) The common or usual name of the item and the name
15    of the hemp-cannabinoid product.
16        (3) The "use by" date.
17        (4) A list of any hemp-derived cannabinoid exceeding 1
18    mg per serving.
19        (5) All other ingredients of the item, including any
20    colors, artificial flavors and preservatives, listed in
21    descending order by predominance of weight shown with
22    common or usual names. However, ingredients listed on the
23    label may be combined into similar categories including
24    but not limited to hemp extract or emulsion, natural
25    colors, artificial colors, natural flavors, or artificial
26    flavors.

 

 

SB3790- 160 -LRB103 39446 CES 69640 b

1        (6) For hemp-cannabinoid products:
2            (A) the date of testing and the identification of
3        the independent testing laboratory; and
4            (B) a pass/fail rating based on the laboratory's
5        microbiological, mycotoxins, and pesticide and solvent
6        residue analysis.
7        (7) For ready to eat hemp-cannabinoid products:
8            (A) the date of the intermediate hemp product
9        testing, packaging and the identification of the
10        independent testing laboratory; and
11            (B) a pass/fail rating based on the laboratory's
12        microbiological, mycotoxins, and pesticide and solvent
13        residue analysis of the Intermediate Hemp Product.
14        (8) The required packaging elements of Section
15    22(b)(5-7) may be satisfied by means of a QR code linking
16    to a website where the information is available for a
17    consumer.
18    (c) Packaging for packaged hemp-cannabinoid products must
19not contain information that:
20        (1) is materially false;
21        (2) depicts a person under 21 years of age consuming
22    hemp-cannabinoids;
23        (3) includes images designed or likely to appeal to
24    minors, including cartoons, toys, animals, or children, or
25    any other likeness to images, characters, or phrases that
26    are popularly used to advertise to children, or any

 

 

SB3790- 161 -LRB103 39446 CES 69640 b

1    packaging or labeling that bears reasonable resemblance to
2    any product available for consumption as a commercially
3    available candy; or
4        (4) contains any seal, flag, crest, coat of arms, or
5    other insignia likely to mislead the purchaser to believe
6    that the product has been endorsed, made, or used by the
7    State or any of its representatives except where
8    authorized by this Act.
9    (d) All packaged hemp-cannabinoid products must contain
10warning statements specified in subsection (e) of this
11Section, of a size that is legible and readily visible to a
12consumer inspecting a package, which may not be covered or
13obscured in any way. Notwithstanding the foregoing, batch and
14lot information printed on packaging that is printed on the
15labeling shall not be considered to cover or obscure the
16label.
17    (e) Hemp cannabinoid products must have warning statements
18on the packaging in a form and manner that clearly
19communicates the following:
20        (1) That the product contains hemp derived
21    cannabinoids.
22        (2) A warning to consumers not to use if pregnant or
23    breastfeeding.
24        (3) A warning not to use if operating a motor vehicle
25    or machinery.
26        (4) The product is for use by adults 21 or over.

 

 

SB3790- 162 -LRB103 39446 CES 69640 b

1    (f) Hemp cannabinoid products of the following product
2types must have warning statements on the packaging in a form
3and manner that clearly communicates the following:
4        (1) Hemp-cannabinoid products for inhalation must
5    contain a statement that clearly communicates smoking is
6    hazardous to your health.
7        (2) Hemp-cannabinoid products for ingestion must
8    contain a statement that communicates the effects of
9    cannabinoids may be delayed.
10        (3) Hemp-cannabinoids products for ingestion must
11    contain a statement that communicates this product was
12    produced in a facility that may also process common food
13    allergens or a list of known allergens in the product.
14        (4) That the required packaging elements of subsection
15    (b) of this Section may be satisfied by means of a QR code
16    linking to a website where the information is available
17    for a consumer.
18    (g) Hemp extract intended for human consumption must have
19warning statements on the packaging in a form and manner that
20clearly communicating the following:
21        (1) If cannabinoids are marketed, for every
22    cannabinoid with more than 1mg per serving, the number of
23    milligrams of each cannabinoid per serving and the serving
24    size must be declared on the label.
25        (2) The label and advertisement shall not contain
26    claims indicating the product is intended for diagnosis,

 

 

SB3790- 163 -LRB103 39446 CES 69640 b

1    cure, mitigation, treatment, or prevention of disease,
2    unless such claims are approved by the FDA; and if
3    unapproved claims are included, then the product shall be
4    considered misbranded.
5        (3) Hemp extract intended solely for inhalation must
6    communicate the product is not intended for ingestion and
7    for consumers not to eat.
8    (h) Hemp extract intended for human consumption that is
9not clearly labeled as intended for inhalation or ingestion
10must meet all of the requirements for hemp products intended
11for both inhalation and ingestion. If there are different
12requirements for hemp products intended for inhalation and
13hemp products intended for ingestion, the stricter standard
14shall apply.
 
15    (505 ILCS 89/22.5 new)
16    Sec. 22.5. Ready-to-eat cannabinoid product packaging and
17labeling.
18    (a) Hemp food establishments must ensure that the total
19milligram content of each type of cannabinoid exceeding 1 mg
20contained in each ready-to-eat hemp cannabinoid menu item is
21listed on the menu board adjacent to the name or the price of
22the associated menu item.
23    (b) Hemp food establishments must ensure that served
24ready-to-eat hemp cannabinoid menu items include a label that
25indicates:

 

 

SB3790- 164 -LRB103 39446 CES 69640 b

1        (1) total milligram content of the served item; and
2        (2) QR code to links to a web page containing:
3            (A) a copy of the testing results of the
4        intermediate hemp product used;
5            (B) a copy of the dosing SOP; and
6            (C) a copy of a representative compliance test for
7        the recipe.
8    (c) Ready to eat hemp cannabinoid products may not be
9shipped out of State.
 
10    (505 ILCS 89/22.10 new)
11    Sec. 22.10. Labeling for certain product packaging and
12labeling products.
13    (a) The following types of hemp cannabinoid products are
14exempted from the requirements of Section 22-0:
15        (1) broad spectrum hemp-cannabinoid products;
16        (2) full-spectrum hemp cannabinoid products;
17        (3) isolate-based hemp cannabinoid products;
18        (4) cannabinoid products sold for research purposes;
19        (5) cannabinoid products with less than .5mg delta-9
20    Tetrahydrocannabinol per serving; and
21        (6) topical products.
22    (b) The Department shall be authorized to audit and
23inspect labels for compliance with this Act.
24    In the event of any violation of this Section, the
25Department may issue a citation against the offender as

 

 

SB3790- 165 -LRB103 39446 CES 69640 b

1official notice of the offense committed and to require the
2offender to correct the offense within 180 days.
3    (c) The hemp-cannabinoid products in subsection (a) of
4this Section shall be labeled before sale and each label shall
5be securely affixed to the package and shall state in legible
6English:
7        (1) The name and mailing address of the manufacturer.
8        (2) The common or usual name of the item and the name
9    of the hemp-cannabinoid product.
10        (3) The "use by" date.
11        (4) A list of any hemp-derived cannabinoids exceeding
12    1 mg per serving;
13        (5) For hemp-cannabinoid products:
14            (A) The date of testing and the identification of
15        the independent testing laboratory.
16            (B) A pass/fail rating based on the laboratory's
17        microbiological, mycotoxins, and pesticide and solvent
18        residue analysis.
19        (7) All other ingredients of the item, including any
20    colors, artificial flavors and preservatives, listed in
21    descending order by predominance of weight shown with
22    common or usual names. However, ingredients listed on the
23    label may be combined into similar categories including
24    but not limited to hemp extract or emulsion, natural
25    colors, artificial colors, natural flavors, or artificial
26    flavors.

 

 

SB3790- 166 -LRB103 39446 CES 69640 b

1        (8) The required packaging elements of subsection (d)
2    of this Section may be satisfied by means of a QR code
3    linking to a website where the information is available
4    for a consumer.
5    (d) The label and advertisement shall not contain claims
6indicating the product is intended for diagnosis, cure,
7mitigation, treatment, or prevention of disease, unless such
8claims are approved by the FDA; and if unapproved claims are
9included, then the product shall be considered misbranded.
10    (e) The hemp-cannabinoid products in subsection (a) of
11this Section shall have warning statements on the packaging
12that clearly indicates the following:
13        (1) The product contains hemp derived cannabinoids.
14        (2) A warning to consumers not to use if pregnant or
15    breastfeeding.
16        (3) The product is for use by adults 21 or over unless
17    under the supervision of a parent or guardian.
18        (4) The required packaging elements of this subsection
19    may be satisfied by means of a QR code linking to a website
20    where the warnings are available for a consumer.
21    (f) The following types of hemp cannabinoid products are
22exempted from the requirements of this Section: processed
23hemp, live hemp products, raw hemp products, processed-hemp
24products, and cottage hemp-cannabinoid products.
25    
 

 

 

SB3790- 167 -LRB103 39446 CES 69640 b

1    (505 ILCS 89/22.15 new)
2    Sec. 22.15. Labeling for intermediate hemp products.
3    (a) Intermediate hemp cannabinoid products shall be
4labeled and each label shall be securely affixed to the
5package and shall state in legible English:
6        (1) The name and mailing address of the manufacturer.
7        (2) The common or usual name of the item and the name
8    of the intermediate hemp-cannabinoid product.
9        (3) The "use by" date.
10        (4) The storage instructions.
11        (5) The batch information.
12        (6) The net weight.
13        (7) A list of any hemp-derived cannabinoid exceeding 1
14    mg/g of potency.
15        (8) The total amount of each cannabinoid with a
16    potency exceeding 1mg/g per container.
17        (9) All other ingredients of the item, including any
18    colors, artificial flavors and preservatives, listed in
19    descending order by predominance of weight shown with
20    common or usual names.
21        (10) For intermediate hemp-cannabinoid products:
22            (A) The date of testing and the identification of
23        the independent testing laboratory.
24            (B) A pass/fail rating based on the laboratory's
25        microbiological, mycotoxins, and pesticide and solvent
26        residue analysis.

 

 

SB3790- 168 -LRB103 39446 CES 69640 b

1        (11) The required packaging elements paragraphs of
2    (7)-(10) of this subsection (a) may be satisfied by means
3    of a QR code linking to a website where the information is
4    available for a consumer.
5    (b) Intermediate hemp cannabinoid products must have
6warning statements on the packaging in a form and manner that
7clearly communicating the following:
8        (1) This product contains hemp derived cannabinoids.
9        (2) A warning for use as an ingredient.
10        (3) A warning that the product is not for consumptions
11    without dilution.
12        (4) Poison control contact information.
 
13    (505 ILCS 89/23 new)
14    Sec. 23. Laboratory approval.
15    (a) No laboratory shall be approved to handle, test or
16analyze hemp unless the laboratory:
17        (1) is accredited to the ISO/IEC 17025 standard by a
18    private non-profit laboratory accrediting organization, or
19    can demonstrate that it has a current working relationship
20    with an accrediting organization and receives final
21    accreditation within one year of applying to be an
22    approved laboratory with the Department;
23        (2) is independent from all other persons involved in
24    the hemp industry in the State, which shall mean that no
25    person with a direct or indirect interest in the

 

 

SB3790- 169 -LRB103 39446 CES 69640 b

1    laboratory shall have a direct or indirect financial,
2    management, or other interest in a hemp business
3    establishment license;
4        (3) has employed at least one person to oversee and be
5    responsible for the laboratory testing who has earned,
6    from a college or university accredited by a national or
7    regional certifying authority, at least:
8            (A) a master's level degree in chemical or
9        biological sciences and a minimum of 2 years
10        post-degree laboratory experience; or
11            (B) a bachelor's degree in chemical or biological
12        sciences and a minimum of 4 years post-degree
13        laboratory experience; and
14        (4) has procedures requiring hemp testing adherence to
15    standards of performance for detecting delta-9 THC
16    concentration, including the measurement of uncertainty
17    (MU).
18    (b) The Department may request a copy of the most recent
19annual inspection report granting accreditation or any annual
20report thereafter.
21    (c) All laboratories with a valid DEA registration, a
22current cannabis laboratory license issued by the Department,
23or a valid ISO 17025 certification are considered approved.
 
24    (505 ILCS 89/23.10 new)
25    Sec. 23.10. Testing requirements.

 

 

SB3790- 170 -LRB103 39446 CES 69640 b

1    (a) Industrial hemp sampled for testing may be transported
2to the approved laboratory.
3    (b) The industrial hemp shall be tested using a reliable
4method, including those approved by the USDA, to detect
5delta-9 THC concentration levels of the sampled hemp. Reliable
6methods of testing shall include gas chromatography or a
7high-performance liquid chromatography technique.
8    (c) No more than 30 days prior to harvest, hemp
9cultivators shall submit to an approved laboratory a sample of
10industrial hemp to verify that the delta-9 THC concentration
11does not exceed 0.3% on a dry weight basis.
12    (1) A sample shall be sent for each separate strain and/or
13    for each separate growing area at the Department's
14    discretion.
15    (2) A sample will consist of at least one ounce, weighed at
16    the time of harvest, and consist of full bud(s), along
17    with any attached leaves and stems,
18    (3) Quantitative laboratory determination of THC
19    concentration on a dry weight basis will be performed.
20    (d) A test result with a THC concentration on a dry weight
21basis that exceeds 0.3% but is less than 0.7% may be retested
22at the expense of the licensee. A request for a retest by the
23licensee must be received by the Department within 3 days
24after initial receipt of the original test results by the
25licensee.
26    (e) All harvested industrial hemp receiving a sample test

 

 

SB3790- 171 -LRB103 39446 CES 69640 b

1result with a delta-9 THC concentration on a dry weight basis
2that exceeds 0.3% and is not retested at the request of the
3licensee shall be destroyed.
4    (f) All harvested industrial hemp receiving both a sample
5test result and a sample retest result with delta-9 THC
6concentrations on a dry weight basis that exceeds 0.3% shall
7be destroyed.
8    (g) All harvested industrial hemp receiving a sample test
9result with a delta-9 THC concentration on a dry weight basis
10that equals or exceeds 1.0% shall be destroyed.
11    (h) All harvested industrial hemp awaiting test results
12shall be stored by the licensee or processor and shall not be
13processed or transported until test results are obtained and
14the industrial hemp is released by the Department.
15    (i) The Department shall have the authority to set and
16collect fees for hemp testing conducted by the Department.
17Such fees shall be deposited into the Industrial Hemp
18Regulatory Fund.
 
19    (505 ILCS 89/23.15 new)
20    Sec. 23.15. Laboratory testing of intermediate hemp
21products.
22    (a) Immediately after the manufacturing or processing of
23any intermediate hemp product, each batch shall be tested by
24an approved laboratory for:
25        (i) microbiological contaminants;

 

 

SB3790- 172 -LRB103 39446 CES 69640 b

1        (ii) mycotoxins;
2        (iii) pesticide active ingredients;
3        (iv) residual solvents; and
4        (v) an active ingredient analysis.
5    (b) The laboratory shall immediately return or dispose of
6any intermediate hemp product upon the completion of any
7testing, use or research. If intermediate hemp is disposed of,
8it shall be done in compliance with this Act.
9    (c) If a sample of the intermediate hemp product does not
10pass the microbiological, mycotoxin, pesticide chemical
11residue or solvent residual test, based on the standards
12established by the Department of Agriculture, the following
13shall apply:
14        (1) If the sample failed the pesticide chemical
15    residue test, the entire batch from which the sample was
16    taken shall, if applicable, be recalled as provided by
17    rule.
18        (2) If the sample failed any other test, the batch may
19    be used to make a CO2-based or solvent-based extract.
20    After processing, the CO2-based or solvent-based extract
21    must still pass all required tests.
22    (d) The laboratory shall maintain the laboratory test
23results for at least 3 years and make them available at the
24Department of Agriculture's request.
25    (e) The hemp processor or hemp distributor shall provide
26to a hemp business establishment the laboratory test results

 

 

SB3790- 173 -LRB103 39446 CES 69640 b

1for each batch of intermediate hemp products purchased by the
2hemp business establishment, upon request. Each hemp business
3establishment must have these laboratory results available
4online or in-person upon request of the purchasers.
 
5    (505 ILCS 89/23.20 new)
6    Sec. 23.20. Laboratory testing for hemp-cannabinoid
7products utilizing hemp cannabinoids directly extracted from
8raw hemp or untested intermediate-hemp products and
9hemp-cannabinoid products for human inhalation.
10    (a) Hemp processors, hemp distributors, and hemp food
11establishments must begin a new batch cycle every time a
12specific hemp-cannabinoid product is made. A manufacturer of a
13product regulated under this Section shall be tested by the
14approved laboratory for:
15        (1) potency;
16        (2) microbiological contaminants;
17        (3) mycotoxins;
18        (4) pesticide active ingredients;
19        (5) residual solvents; and
20        (6) an active ingredient analysis.
21    (b) The laboratory shall immediately return or dispose of
22any hemp-cannabinoid product upon the completion of any
23testing, use or research. If the hemp-cannabinoid product is
24disposed of, it shall be done in compliance with any rules
25adopted by the Department of Agriculture.

 

 

SB3790- 174 -LRB103 39446 CES 69640 b

1    (c) If a sample of the hemp-cannabinoid does not pass the
2microbiological, mycotoxin, pesticide chemical residue, or
3solvent residual test, based on the standards established by
4the Department of Agriculture, which shall be no stricter than
5the standards listed below, the stricter shall apply.
6    (d) Products intended for human consumption shall be
7considered adulterated if contaminants are detected at levels
8greater than the limits listed in this Section. Contaminant
9limits under this Section do not constitute authorization to
10use or apply any of the following contaminants during hemp
11cultivation or processing.
12        (1) The following substances are prohibited in
13    intermediate hemp products, hemp extract, and hemp
14    cannabinoid products:
15            (A) Abamectin, 300 parts per billion for
16        ingestion; 100 parts per billion for inhalation.
17            (B) Acephate, 3,000 parts per billion for
18        ingestion; 100 parts per billion for inhalation.
19            (C) Acequinocyl, 2,000 parts per billion for
20        ingestion; 100 parts per billion for inhalation.
21            (D) Acetamiprid, 3,000 parts per billion for
22        ingestion; 100 parts per billion for inhalation.
23            (E) Aldicarb, 100 parts per billion for ingestion
24        or inhalation.
25            (F) Azoxystrobin, 3,000 parts per billion for
26        ingestion; 100 parts per billion for inhalation.

 

 

SB3790- 175 -LRB103 39446 CES 69640 b

1            (G) Bifenazate, 3,000 parts per billion for
2        ingestion; 100 parts per billion for inhalation.
3            (H) Bifenthrin, 500 parts per billion for
4        ingestion; 100 parts per billion for inhalation.
5            (I) Boscalid, 3,000 parts per billion for
6        ingestion; 100 parts per billion for inhalation.
7            (J) Captan, 3,000 parts per billion for ingestion;
8        700 parts per billion for inhalation.
9            (K) Carbaryl, 500 parts per billion for ingestion;
10        500 parts per billion for inhalation.
11            (L) Carbofuran, 100 parts per billion for
12        ingestion or inhalation.
13            (M) Chlorantraniliprole, 3,000 parts per billion
14        for ingestion; 1,000 parts per billion for inhalation.
15            (N) Chlordane, 100 parts per billion for ingestion
16        or inhalation.
17            (O) Chlorfenapyr, 100 parts per billion for
18        ingestion or inhalation.
19            (P) Chlormequat chloride, 3,000 parts per billion
20        for ingestion; 1,000 parts per billion for inhalation.
21            (Q) Chlorpyrifos, 100 parts per billion for
22        ingestion or inhalation.
23            (R) Clofentezine, 500 parts per billion for
24        ingestion; 200 parts per billion for inhalation.
25            (S) Coumaphos, 100 parts per billion for ingestion
26        or inhalation.

 

 

SB3790- 176 -LRB103 39446 CES 69640 b

1            (T) Cyfluthrin, 1,000 parts per billion for
2        ingestion; 500 parts per billion for inhalation.
3            (U) Cypermethrin, 1,000 parts per billion for
4        ingestion; 500 parts per billion for inhalation.
5            (V) Daminozide, 100 parts per billion for
6        ingestion or inhalation.
7            (W) DDVP (Dichlorvos), 100 parts per billion for
8        ingestion or inhalation.
9            (X) Diazinon, 200 parts per billion for ingestion;
10        100 parts per billion for inhalation.
11            (Y) Dimethoate, 100 parts per billion for
12        ingestion or inhalation.
13            (Z) Dimethomorph, 3,000 parts per billion for
14        ingestion; 200 parts per billion for inhalation.
15            (AA) Ethoprop(hos), 100 parts per billion for
16        ingestion or inhalation.
17            (BB) Etofenprox, 100 parts per billion for
18        ingestion or inhalation.
19            (CC) Etoxazole, 1,500 parts per billion for
20        ingestion; 100 parts per billion for inhalation.
21            (DD) Fenhexamid, 3,000 parts per billion for
22        ingestion; 100 parts per billion for inhalation.
23            (EE) Fenoxycarb, 100 parts per billion for
24        ingestion or inhalation.
25            (FF) Fenpyroximate, 2,000 parts per billion for
26        ingestion; 100 parts per billion for inhalation.

 

 

SB3790- 177 -LRB103 39446 CES 69640 b

1            (GG) Fipronil, 100 parts per billion for ingestion
2        or inhalation.
3            (HH) Flonicamid, 2,000 parts per billion for
4        ingestion; 100 parts per billion for inhalation.
5            (II) Fludioxonil, 3,000 parts per billion for
6        ingestion; 100 parts per billion for inhalation.
7            (JJ) Hexythiazox, 2,000 parts per billion for
8        ingestion; 100 parts per billion for inhalation.
9            (KK) Imazalil, 100 parts per billion for ingestion
10        or inhalation.
11            (LL) Imidacloprid, 3,000 parts per billion for
12        ingestion; 400 parts per billion for inhalation.
13            (MM) Kresoxim-methyl, 1,000 parts per billion for
14        ingestion; 100 parts per billion for inhalation.
15            (NN) Malathion, 2,000 parts per billion for
16        ingestion; 200 parts per billion for inhalation.
17            (OO) Metalaxyl, 3,000 parts per billion for
18        ingestion; 100 parts per billion for inhalation.
19            (PP) Methiocarb, 100 parts per billion for
20        ingestion or inhalation.
21            (QQ) Methomyl, 100 parts per billion for ingestion
22        or inhalation.
23            (RR) Methyl parathion, 100 parts per billion for
24        ingestion or inhalation.
25            (SS) Mevinphos, 100 parts per billion for
26        ingestion or inhalation.

 

 

SB3790- 178 -LRB103 39446 CES 69640 b

1            (TT) (Myclobutanil, 3,000 parts per billion for
2        ingestion; prohibited at any concentration for
3        inhalation.
4            (UU) Naled, 500 parts per billion for ingestion;
5        250 parts per billion for inhalation.
6            (VV) Oxamyl, 500 parts per billion for ingestion
7        or inhalation.
8            (WW) Paclobutrazol, 100 parts per billion for
9        ingestion or inhalation.
10            (XX) Pentachloronitrobenzene, 200 parts per
11        billion for ingestion; 150 parts per billion for
12        inhalation.
13            (YY) Permethrin, 1,000 parts per billion for
14        ingestion; 100 parts per billion for inhalation.
15            (ZZ) Phosmet, 200 parts per billion for ingestion;
16        100 parts per billion for inhalation.
17            (AAA) Piperonyl butoxide, 3,000 parts per billion
18        for ingestion or inhalation.
19            (BBB) Prallethrin, 400 parts per billion for
20        ingestion; 100 parts per billion for inhalation.
21            (CCC) Propiconazole, 1,000 parts per billion for
22        ingestion; 100 parts per billion for inhalation.
23            (DDD) Propoxur, 100 parts per billion for
24        ingestion or inhalation.
25            (EEE) Pyrethrins, 1,000 parts per billion for
26        ingestion; 500 parts per billion for inhalation.

 

 

SB3790- 179 -LRB103 39446 CES 69640 b

1            (FFF) Pyridaben, 3,000 parts per billion for
2        ingestion; 200 parts per billion for inhalation.
3            (GGG) Spinetoram, 3,000 parts per billion for
4        ingestion; 200 parts per billion for inhalation.
5            (HHH) Spinosad A & D, 3,000 parts per billion for
6        ingestion; 100 parts per billion for inhalation.
7            (III) Spiromesifen, 3,000 parts per billion for
8        ingestion; 100 parts per billion for inhalation.
9            (JJJ) Spirotetramat, 3,000 parts per billion for
10        ingestion; 100 parts per billion for inhalation.
11            (KKK) Spiroxamine, 100 parts per billion for
12        ingestion or inhalation.
13            (LLL) Tebuconazole, 1,000 parts per billion for
14        ingestion; 100 parts per billion for inhalation.
15            (MMM) Thiacloprid, 100 parts per billion for
16        ingestion; 100 parts per billion for inhalation.
17            (NNN) Thiamethoxam, 1,000 parts per billion for
18        ingestion; 500 parts per billion for inhalation.
19            (OOO) Trifloxystrobin, 3,000 parts per billion for
20        ingestion; 100 parts per billion for inhalation.
21        (2) Residual solvent limits for ingestion or
22    inhalation:
23            (A) 1,2-Dichloroethane, 2 parts per million.
24            (B) 1,1-Dichloroethene, 8 parts per million.
25            (C) Acetone, 750 parts per million.
26            (D) Acetonitrile, 60 parts per million.

 

 

SB3790- 180 -LRB103 39446 CES 69640 b

1            (E) Benzene, 1 part per million.
2            (F) Butane, 5,000 parts per million.
3            (G) Chloroform, 2 parts per million.
4            (H) Ethanol, 5,000 parts per million.
5            (I) Ethyl Acetate, 400 parts per million.
6            (J) Ethyl Ether, 500 parts per million.
7            (K) Ethylene Oxide, 5 parts per million.
8            (L) Heptane, 5,000 parts per million.
9            (M) Hexane, 250 parts per million.
10            (N) Isopropyl Alcohol, 500 parts per million.
11            (O) Methanol, 250 parts per million.
12            (P) Methylene Chloride, 125 parts per million.
13            (Q) Pentane, 750 parts per million.
14            (R) Propane, 5,000 parts per million.
15            (S) Toluene, 150 parts per million.
16            (T) Trichloroethylene 25 parts per million.
17            (U) Xylenes, Total (ortho-, meta-, para-), 150
18        parts per million.
19        (3) Metals limits are:
20            (A) Cadmium, 500 parts per billion for ingestion;
21        200 parts per billion for inhalation.
22            (B) Lead, 500 parts per billion for ingestion or
23        inhalation.
24            (C) Arsenic, 1,500 parts per billion for
25        ingestion; 200 parts per billion for inhalation.
26            (D) Mercury, 3,000 parts per billion for

 

 

SB3790- 181 -LRB103 39446 CES 69640 b

1        ingestion; 200 parts per billion for inhalation.
2        (4) Biological limits for ingestion or inhalation:
3            (A) Shiga toxin-producing escherichia coli (STEC
4        E. coli) and other pathogenic E. coli, 1 CFU per gram.
5            (B) Salmonella, 1 CFU per gram.
6            (C) Aspergillus niger, aspergillus fumigatus,
7        aspergillus flavus, aspergillus terreus, 1 CFU per
8        gram.
9        (5) Mycotoxin limits are:
10            (A) Total aflatoxin (B1, B2, G1, G2), 20 parts per
11        billion for ingestion or inhalation.
12            (B) Ochratoxin, 20 parts per billion for ingestion
13        or inhalation.
14        (6) The total combined yeast and mold limit is 100,000
15    CFU per gram for ingestion or inhalation.
16        (7) The cannabinoid limits are delta-9
17    tetrahydrocannabinol concentration shall not exceed 0.3%
18    by weight.
19        (8) If a testing sample is found to contain levels of
20    any pathogen, toxicant, residual solvent, metal, or
21    pesticide not enumerated in this Section or by State law,
22    then the hemp extract shall be considered adulterated.
23        (9) Devices used during the inhalation process must
24    not introduce contaminants over the limits listed in this
25    Section into the hemp extract product.
26    (e) If the sample failed the pesticide chemical residue

 

 

SB3790- 182 -LRB103 39446 CES 69640 b

1test, the entire batch from which the sample was taken shall,
2if applicable, be recalled as provided by rule.
3    (f) If the sample failed any other test, the batch may be
4used to make a CO2-based or solvent-based extract. After
5processing, the CO2-based or solvent-based extract must still
6pass all required tests.
7    (g) The Department of Agriculture shall establish
8standards for microbial, mycotoxin, pesticide residue, solvent
9residue, or other standards for the presence of possible
10contaminants which shall be no stricter than those listed in
11this Section.
12    (h) A hemp business establishment shall provide the
13laboratory test results for each batch of hemp cannabinoid
14products purchased by any other hemp business establishment,
15upon request.
 
16    (505 ILCS 89/23.25 new)
17    Sec. 23.25. Laboratory testing for hemp-cannabinoid
18products for human ingestion using intermediate-hemp products.
19    (a) Hemp food establishments using intermediate hemp
20products to create hemp-cannabinoid products for human
21ingestion that have passed the testing requirements under this
22Act only need to test for potency provided that all other
23ingredients and inputs to be added into the hemp-cannabinoid
24products are food-grade.
25    (b) The manufacturer of a product regulated under this

 

 

SB3790- 183 -LRB103 39446 CES 69640 b

1section must submit a representative sample of the batch cycle
2every time a different intermediate hemp product batch is used
3to an independent, accredited laboratory, which shall be
4tested by the approved laboratory for potency.
5    (c) The laboratory shall immediately return or dispose of
6any hemp-cannabinoid product upon the completion of any
7testing, use, or research. If the hemp-cannabinoid product is
8disposed of, it shall be done in compliance with Department of
9Agriculture rule.
10    (d) The hemp distributor or food establishment shall
11provide to a hemp business establishment the laboratory test
12results for each batch of hemp cannabinoid products purchased
13by the hemp business establishment. Each hemp business
14establishment must have these laboratory results available
15upon request to purchasers.
 
16    (505 ILCS 89/23.30 new)
17    Sec. 23.30. Laboratory testing for ready-to-eat
18hemp-cannabinoid products using tested intermediate-hemp
19products.
20    (a) Retail hemp food establishments using intermediate
21hemp products that have passed testing to create ready-to-eat
22hemp-cannabinoid products only need to test for potency
23provided that all other ingredients and inputs to be added
24into the hemp-cannabinoid products are food-grade. The retail
25hemp food establishment creating the ready-to-eat

 

 

SB3790- 184 -LRB103 39446 CES 69640 b

1hemp-cannabinoid product for manufacturer of a product
2regulated under this Section must submit a representative
3sample of its registered recipe using its registered dosing
4standard operating procedure ("SOP") either (i) annually or
5(ii) every time a different intermediate hemp product batch is
6used to an independent, accredited laboratory, which shall be
7tested by the approved laboratory for potency.
8    (b) The laboratory shall immediately return or dispose of
9any ready-to-eat hemp-cannabinoid product upon the completion
10of any testing, use, or research. If the ready-to-eat
11hemp-cannabinoid product is disposed of, it shall be done in
12compliance with Department of Agriculture rule.
13    (c) The retail hemp food establishment shall provide to
14its customers a copy of its registered recipe and registered
15dosing SOP. The hemp distributor or food establishment shall
16provide to a hemp business establishment the laboratory test
17results for each batch of hemp cannabinoid products purchased
18by the hemp business establishment, upon request.
19    (d) Each hemp business establishment must have these
20laboratory results available upon request to purchasers.
 
21    (505 ILCS 89/23.35 new)
22    Sec. 23.35. Standard remediation procedures and
23guidelines.
24    (a) Non-compliant hemp may only be disposed of or
25remediated. Only successfully remediated crops will be allowed

 

 

SB3790- 185 -LRB103 39446 CES 69640 b

1to enter the stream of commerce. All other non-compliant crops
2shall be disposed.
3    (b) Remediation may take place using one of the following
4options.
5        (1) Non-compliant hemp may be remediated by separating
6    and destroying non-compliant flowers, while retaining
7    stalks, leaves, and seeds.
8        (2) Non-compliant hemp may be remediated by shredding
9    the entire hemp lot to create biomass. Lots shall be kept
10    separate and shall not be combined during this process.
11    (c) The licensee, designated employee, or an approved
12representative of the Department, as the Department deems
13appropriate, shall remediate or dispose of non-compliant hemp.
14The Department may require that a representative of the
15Department be present during the remediation or disposal
16process.
17    (d) Upon notification that a lot has tested above the
18acceptable hemp THC level, the licensee shall notify the
19Department of the licensee's decision to either dispose of or
20remediate the non-compliant lot and the method of disposal or
21remediation the licensee will use. If the licensee refuses to
22dispose of or remediate the non-compliant hemp lot, the
23Department will issue the licensee an order of disposal.
24    (e) All lots subject to remediation shall be stored,
25labeled and kept apart from each other and from other
26compliant hemp lots stored or held nearby.

 

 

SB3790- 186 -LRB103 39446 CES 69640 b

1    (f) The following procedures must be followed during the
2creation of biomass:
3        (1) The entire lot, as reported to the Department
4    shall be shredded to create a homogenous and uniform
5    biomass.
6        (2) The biomass created through this process shall be
7    resampled and retested to ensure compliance before
8    entering the stream of commerce. Biomass that fails the
9    retesting is non-compliant hemp and shall be disposed.
10    (g) Remediated biomass shall be separated from any
11compliant hemp stored in the area and clearly labeled as "hemp
12for remediation purposes". Remediated biomass shall not leave
13the labeled area until a test result showing compliance with
14the acceptable hemp THC level is received or the biomass is
15ready to be disposed.
16    (h) Remediated biomass or remediated stalks, leaves, and
17seeds shall be resampled and retested to ensure compliance
18before entering the stream of commerce. Remediated biomass or
19remediated stalks, leaves, and seeds that fail the retesting
20shall be destroyed.
21    (i) The resample must be taken by the sampling agent in a
22manner described in USDA published guidance and must meet the
23USDA requirements set forth in Sections 990.3 and 990.27 of
24the Domestic Hemp Production Program and the federal Code of
25Regulations.
26    (j) When taking the resample, the sampling agent under

 

 

SB3790- 187 -LRB103 39446 CES 69640 b

1contract with a licensee or registrant shall take remediated
2biomass or remediated stalks, leaves and seeds material from
3various depths, locations, and containers in the labeled and
4demarcated area to collect a representative sample of the
5material. At minimum, 750 mL or three standard measuring cups
6of remediated biomass or remediated stalks, leaves and seeds
7material shall be collected. Sampling agents may collect more
8remediated biomass or remediated stalks, leaves and seeds
9material based on the requirements of the testing laboratory.
10If 750 mL of material is not available, the sampling agent
11shall collect enough remediated biomass or remediated stalks,
12leaves and seeds material for a representative sample.
13    (k) An original copy of the resample test results, or a
14legible copy, must be retained by the licensee or an
15authorized representative and available for inspection for a
16period of three years from the date of receipt.
17    (l) Laboratories testing a resample shall use the same
18testing protocols as when testing a standard sample.
19    (m) In the event a crop will be harvested for hemp
20microgreens, the crop will not be subject to the sampling and
21testing requirements described in this Section).
22        (1) Due to extremely low levels of cannabinoids in the
23    immature plants, sampling and testing of every lot hemp
24    microgreens is unnecessary.
25        (2) Licensees are solely responsible for ensuring
26    seeds used by the licensee for hemp microgreen production

 

 

SB3790- 188 -LRB103 39446 CES 69640 b

1    are from cannabis varieties meeting the definition of
2    hemp.
3        (3) A licensed grower who produces a crop that does
4    not meet the criteria for an exception as a hemp
5    microgreen under this subsection shall either:
6            (A) follow the compliance, sampling and testing
7        requirement pursuant to this Section; or
8            (B) dispose of the crop in by approved methods of
9        disposal include plowing, tilling, or disking plant
10        material into the soil; mulching, composting,
11        chopping, or bush mowing plant material into green
12        manure; burning plant material; burying plant material
13        into the earth and covering with soil, and any other
14        methods approved by USDA or the Department.
15    (n) In the event a hemp crop will be grown for ornamental
16purposes, the crop will not be subject to the sampling and
17testing requirements described in this Section.
18        (1) Due to extremely low levels of cannabinoids in the
19    plants, sampling and testing of every lot of ornamental
20    hemp is unnecessary.
21        (2) Licensees are solely responsible for ensuring
22    seeds used by the licensee for ornamental hemp production
23    are from varieties meeting the definition of hemp.
24        (3) A licensed grower who produces a crop that does
25    not meet the criteria for an exception as ornamental hemp
26    under this subsection shall either:

 

 

SB3790- 189 -LRB103 39446 CES 69640 b

1            (A) follow the compliance, sampling and testing
2        requirement pursuant to this Section; or
3            (B) dispose of the crop in by approved methods of
4        disposal include plowing, tilling, or disking plant
5        material into the soil; mulching, composting,
6        chopping, or bush mowing plant material into green
7        manure; burning plant material; burying plant material
8        into the earth and covering with soil, and any other
9        methods approved by USDA or the Department.
10    (o) In the event a hemp crop will be grown for grain or
11fiber purposes, the crop will not be subject to the sampling
12and testing requirements described in this Section.
13        (1) Due to extremely low levels of cannabinoids in the
14    plants, sampling and testing of every lot of grain and
15    fiber hemp is unnecessary.
16        (2) Licensees are solely responsible for ensuring
17    seeds used by the licensee for grain or fiber hemp
18    production are from varieties meeting the definition of
19    hemp.
20        (3) A licensed grower who produces a crop that does
21    not meet the criteria for an exception as grain or fiber
22    hemp under this subsection shall either:
23            (A) follow the compliance, sampling and testing
24        requirement pursuant to this Act; or
25            (B) dispose of the crop in by approved methods of
26        disposal include plowing, tilling, or disking plant

 

 

SB3790- 190 -LRB103 39446 CES 69640 b

1        material into the soil; mulching, composting,
2        chopping, or bush mowing plant material into green
3        manure; burning plant material; burying plant material
4        into the earth and covering with soil, and any other
5        methods approved by USDA or the Department.
 
6    (505 ILCS 89/24 new)
7    Sec. 24. Transportation of industrial hemp.
8    (a) Industrial hemp that has not been processed may be
9transferred by the licensee or registrant from the place of
10cultivation to the place of processing at any time after
11passing official THC compliance testing. Approved laboratory
12personnel, Department personnel, a third party designated by
13the Department, cannabis transporter licensees, sampling
14agents or hemp business establishment employees may transport
15hemp samples for testing to laboratories for testing purposes.
16    (b) There is no State restriction on the transportation of
17any hemp or hemp cannabinoid product including after the
18retail sale to a member of the public.
19    (c) A licensed or registered person shall not ship or
20transport, or allow to be shipped or transported, live hemp
21plants, cuttings for planting, or viable seeds from a variety
22that is currently designated by the Department as a prohibited
23variety or a variety of concern to any location outside the
24State.
25    (d) A licensed person shall not sell or transfer, or

 

 

SB3790- 191 -LRB103 39446 CES 69640 b

1permit the sale or transfer of, living plants or viable seeds
2outside the State that is not authorized by a state agency
3under the laws of the destination state.
 
4    (505 ILCS 89/25)