093_HB2791

 
                                     LRB093 07092 SJM 07245 b

 1        AN ACT in relation to taxes.

 2        Be  it  enacted  by  the People of the State of Illinois,
 3    represented in the General Assembly:

 4        Section 5.  The Illinois Income Tax  Act  is  amended  by
 5    changing Section 211 as follows:

 6        (35 ILCS 5/211)
 7        Sec. 211.  Economic Development for a Growing Economy Tax
 8    Credit.  For tax years beginning on or after January 1, 1999,
 9    a Taxpayer who  has  entered  into  an  Agreement  under  the
10    Economic  Development for a Growing Economy Tax Credit Act is
11    entitled  to  a  credit  against  the  taxes  imposed   under
12    subsections  (a)  and  (b)  of  Section 201 of this Act in an
13    amount to be determined in the Agreement.  If the Taxpayer is
14    a partnership or Subchapter S corporation, the  credit  shall
15    be allowed to the partners or shareholders in accordance with
16    the  determination of income and distributive share of income
17    under Sections 702 and 704 and subchapter S of  the  Internal
18    Revenue   Code.  The  Department,  in  cooperation  with  the
19    Department of Commerce and Community Affairs, shall prescribe
20    rules to  enforce  and  administer  the  provisions  of  this
21    Section.   This  Section  is  exempt  from  the provisions of
22    Section 250 of this Act.
23        The credit shall be  subject to the conditions set  forth
24    in the Agreement and the following limitations:
25             (1)  The tax credit shall not exceed the Incremental
26        Income  Tax  (as  defined  in Section 5-5 of the Economic
27        Development for a Growing Economy Tax  Credit  Act)  with
28        respect to the project.
29             (2)  The amount of the credit allowed during the tax
30        year  plus  the sum of all amounts allowed in prior years
31        shall not exceed 100% of the aggregate amount expended by
 
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 1        the Taxpayer during all prior tax years on approved costs
 2        defined by Agreement.
 3             (3)  The amount of the credit shall be determined on
 4        an annual basis.  Except as applied in a  carryover  year
 5        pursuant  to  Section  211(4) of this Act, the credit may
 6        not be applied against any State income tax liability  in
 7        more  than  15  10 taxable years; provided, however, that
 8        (i) an eligible business certified by the  Department  of
 9        Commerce   and  Community  Affairs  under  the  Corporate
10        Headquarters Relocation Act  may  not  apply  the  credit
11        against  any  of  its  State income tax liability in more
12        than 15 taxable years and (ii) credits  allowed  to  that
13        eligible  business  are  subject  to  the  conditions and
14        requirements set forth in Sections 5-35 and 5-45  of  the
15        Economic  Development  for  a  Growing Economy Tax Credit
16        Act.
17             (4)  The credit may not exceed the amount  of  taxes
18        imposed  pursuant  to  subsections (a) and (b) of Section
19        201 of this Act.  Any credit that is unused in  the  year
20        the credit is computed may be carried forward and applied
21        to the tax liability of the 5 taxable years following the
22        excess  credit  year.  The credit shall be applied to the
23        earliest year for which there is  a  tax  liability.   If
24        there  are  credits  from more than one tax year that are
25        available to offset a liability, the earlier credit shall
26        be applied first.
27             (5)  No credit shall be allowed with respect to  any
28        Agreement   for   any   taxable  year  ending  after  the
29        Noncompliance Date.  Upon receiving notification  by  the
30        Department  of  Commerce  and  Community  Affairs  of the
31        noncompliance  of  a  Taxpayer  with  an  Agreement,  the
32        Department shall notify the Taxpayer that  no  credit  is
33        allowed  with  respect  to that Agreement for any taxable
34        year ending after the Noncompliance Date,  as  stated  in
 
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 1        such  notification.   If any credit has been allowed with
 2        respect to an Agreement for a taxable year  ending  after
 3        the  Noncompliance  Date  for  that Agreement, any refund
 4        paid to the Taxpayer for that taxable year shall, to  the
 5        extent  of  that  credit  allowed, be an erroneous refund
 6        within the meaning of Section 912 of this Act.
 7             (6)  For  purposes  of  this  Section,   the   terms
 8        "Agreement",      "Incremental     Income    Tax",    and
 9        "Noncompliance Date" have the same meaning as  when  used
10        in  the  Economic  Development  for a Growing Economy Tax
11        Credit Act.
12    (Source: P.A. 91-476, eff. 8-11-99; 92-207, eff. 8-1-01.)

13        Section  5.   The  Economic  Development  for  a  Growing
14    Economy Tax Credit Act is amended by changing  Sections  5-20
15    and 5-45 as follows:

16        (35 ILCS 10/5-20)
17        Sec.  5-20.  Application  for  a   project  to create and
18    retain new jobs.
19        (a)  Any Taxpayer proposing a project located or  planned
20    to  be  located  in  Illinois  may  request consideration for
21    designation of its  project,  by  formal  written  letter  of
22    request  or by formal application to the Department, in which
23    the Applicant states its intent to make at least a  specified
24    level of investment and intends to hire or retain a specified
25    number  of  full-time  employees  at a designated location in
26    Illinois.   As  circumstances  require,  the  Department  may
27    require  a  formal application from an Applicant and a formal
28    letter of request for assistance.
29        (b)  In order to qualify for Credits under this  Act,  an
30    Applicant's project must:
31             (1)  involve an investment of at least $5,000,000 in
32        capital  improvements  to  be  placed  in  service and to
 
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 1        employ at least 25 New Employees within the  State  as  a
 2        direct result of the project; or
 3             (2)  involve an investment of at least an amount (to
 4        be   expressly   specified  by  the  Department  and  the
 5        Committee)  in  capital  improvements  to  be  placed  in
 6        service and  will  employ  at  least  an  amount  (to  be
 7        expressly  specified by the Department and the Committee)
 8        of New Employees within  the  State,  provided  that  the
 9        Department  and  the  Committee  have determined that the
10        project will provide a substantial  economic  benefit  to
11        the State and that the State will receive a return on its
12        investment.
13        (c)  After  receipt of an application, the Department may
14    enter into an Agreement with the Applicant if the application
15    is accepted in accordance with Section 5-25.
16    (Source: P.A. 91-476, eff. 8-11-99.)

17        (35 ILCS 10/5-45)
18        Sec. 5-45.  Amount and duration of the credit.
19        (a)  The  Department  shall  determine  the  amount   and
20    duration  of  the credit awarded under this Act. The duration
21    of the credit may not exceed 15 10 taxable years. The  credit
22    may  be  stated as a percentage of the Incremental Income Tax
23    attributable to the applicant's project  and  may  include  a
24    fixed dollar limitation.
25        (b)  Notwithstanding  subsection  (a),  and except as the
26    credit may be applied in a carryover year pursuant to Section
27    211(4) of the Illinois Income Tax  Act,  the  credit  may  be
28    applied  against  the State income tax liability in more than
29    10 taxable years but not in more than 15 taxable years for an
30    eligible business that (i) qualifies under this Act  and  the
31    Corporate   Headquarters  Relocation  Act  and  has  in  fact
32    undertaken  a  qualifying  project  within  the  time   frame
33    specified by the Department of Commerce and Community Affairs
 
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 1    under that Act, and (ii) applies against its State income tax
 2    liability, during the entire 15-year period, no more than 60%
 3    of  the  maximum  credit  per  year  that  would otherwise be
 4    available under this Act.
 5    (Source: P.A. 91-476, eff. 8-11-99; 92-207, eff. 8-1-01.)

 6        Section 99.  Effective date.  This Act takes effect  upon
 7    becoming law.