96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
SB2559

 

Introduced 1/13/2010, by Sen. David Koehler

 

SYNOPSIS AS INTRODUCED:
 
New Act
35 ILCS 5/219 new

    Creates the Historic Preservation Tax Credit Act. Provides for an income tax credit in an amount equal to 25% of qualified expenditures incurred by a qualified taxpayer for the restoration and preservation of a qualified historic structure. Provides that the credit may be carried forward for up to 10 years. Provides that the credit may be sold, assigned, conveyed, or transferred. Provides that the cumulative amount of credits awarded under the Act may not exceed $25,000,000 per year per county. Amends the Illinois Income Tax Act to make conforming changes. Effective immediately.


LRB096 17088 HLH 32410 b

 

 

A BILL FOR

 

SB2559 LRB096 17088 HLH 32410 b

1     AN ACT concerning revenue.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 1. Short title. This Act may be cited as the
5 Historic Preservation Tax Credit Act.
 
6     Section 5. Definitions. As used in this Section, unless the
7 context clearly indicates otherwise:
8     (a) "Qualified expenditures" means all the costs and
9 expenses of exterior and interior rehabilitation and
10 construction, including all costs relating to adaptive reuse
11 and parking structures, incurred by a qualified taxpayer in the
12 restoration and preservation of a qualified historic structure
13 pursuant to a qualified rehabilitation plan.
14     (b) "Qualified historic structure" means any building,
15 regardless of whether the building is income producing, is a
16 condominium building, or is of any other ownership structure,
17 that is (i) defined as a certified historic structure under
18 Section 47 (c)(3) of the federal Internal Revenue Code, (ii) is
19 individually listed on the Illinois Register of Historic
20 Places, (iii) is located and contributes to a district listed
21 on the Illinois Register of Historic Places, (iv) is located
22 and contributes to a district listed on the register of
23 Illinois Main Street places, or (v) is located and contributes

 

 

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1 to a district listed on a local register of historic places
2 within a home rule county or home rule municipality.
3     (c) "Qualified rehabilitation plan" means a project that is
4 approved by the Illinois Historic Preservation Agency, by a
5 local historic preservation commission certified by the
6 Illinois Historic Preservation Agency according to rules
7 adopted by the Agency, or by a local historic preservation
8 commission of a home rule county or home rule municipality, as
9 being consistent with the standards for rehabilitation and
10 guidelines for rehabilitation of historic buildings as adopted
11 by the federal Secretary of the Interior and in effect on the
12 effective date of this Act.
13     (d) "Qualified taxpayer" means the owner of the qualified
14 historic structure or any other person who may qualify for the
15 federal rehabilitation credit allowed by Section 47 of the
16 federal Internal Revenue Code. If the taxpayer is (i) a
17 corporation having an election in effect under subchapter S of
18 the federal Internal Revenue Code, (ii) a partnership, or (iii)
19 a limited liability company, the credit provided by this
20 subsection may be claimed by the shareholders of the
21 corporation, the partners of the partnership, or the members of
22 the limited liability company in the same manner as those
23 shareholders, partners, or members account for their
24 proportionate shares of the income or losses of the
25 corporation, partnership, or limited liability company, or as
26 provided in the bylaws or other executed agreement of the

 

 

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1 corporation, partnership, or limited liability company.
2 Credits granted to a partnership, a limited liability company
3 taxed as a partnership, or other multiple owners of property
4 shall be passed through to the partners, members, or owners
5 respectively on a pro rata basis or pursuant to an executed
6 agreement among the partners, members, or owners documenting
7 any alternate distribution method.
 
8     Section 10. Allowable credit. For all taxable years
9 commencing after December 31, 2009, there shall be allowed a
10 tax credit against the tax imposed by subsections (a) and (b)
11 of Section 201 of the Illinois Income Tax Act in an amount
12 equal to 25% of qualified expenditures incurred by a qualified
13 taxpayer in the restoration and preservation of a qualified
14 historic structure pursuant to a qualified rehabilitation plan
15 if the total amount of such expenditures equals $5,000 or more.
16 If the amount of any tax credit awarded under this Act exceeds
17 the qualified taxpayer's income tax liability for the year in
18 which the qualified rehabilitation plan was placed in service,
19 the excess amount may be carried forward for deduction from the
20 taxpayer's income tax liability in the next succeeding year or
21 years until the total amount of the credit has been used,
22 except that a credit may not be carried forward for deduction
23 after the tenth taxable year after the taxable year in which
24 the qualified rehabilitation plan was placed in service.
 

 

 

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1     Section 15. Transfer of credits. Any qualified taxpayer,
2 referred to in this Section as the assignor, may sell, assign,
3 convey, or otherwise transfer tax credits allowed and earned
4 under this Act. The taxpayer acquiring the credits, referred to
5 in this Section as the assignee, may use the amount of the
6 acquired credits to offset up to 100% of its income tax
7 liability for either the taxable year in which the qualified
8 rehabilitation plan was first placed into service or the
9 taxable year in which such acquisition was made. Unused credit
10 amounts claimed by the assignee may be carried forward for up
11 to 10 years or carried back for up to 3 years, except that all
12 credits must be claimed within 10 years after the tax year in
13 which the qualified rehabilitation plan was first placed into
14 service. The assignor shall enter into a written agreement with
15 the assignee establishing the terms and conditions of the
16 agreement and shall perfect the transfer by notifying the
17 Illinois Historic Preservation Agency in writing within 90
18 calendar days after the effective date of the transfer and
19 shall provide any information as may be required by the Agency
20 to administer and carry out the provisions of this Section. The
21 amount received by the assignor of such tax credit shall be
22 taxable as capital gains income of the assignor, and the excess
23 of the value of such credit over the amount paid by the
24 assignee for such credit shall be taxable as capital gains
25 income of the assignee.
 

 

 

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1     Section 20. Annual county limit. The cumulative amount
2 allowable for credits awarded under this Act shall be limited
3 to a maximum of $25,000,000 per year per county.
4 Notwithstanding the 10-year carry forward period for credits
5 awarded under this Act, if a credit is disallowed because it
6 exceeds the annual $25,000,000 cumulative limit per county, the
7 credit shall be allowed in the next year if, within the limit,
8 the claim period for the credit is extended by one additional
9 year for each year disallowed as a result of this Section.
10 Except in cases of bad faith or fraud, no penalty or interest
11 shall be due as a result of any credit disallowed by this
12 Section.
 
13     Section 25. Biennial report. The Department of Commerce and
14 Economic Opportunity shall determine, on a biennial basis
15 beginning at the end of the second fiscal year after the date
16 this Act takes effect, the overall economic impact to the State
17 from the rehabilitation of eligible property.
 
18     Section 50. The Illinois Income Tax Act is amended by
19 adding Section 219 as follows:
 
20     (35 ILCS 5/219 new)
21     Sec. 219. Historic preservation credit. For tax years
22 commencing after December 31, 2009, a Taxpayer who qualifies
23 for a credit under the Historic Preservation Tax Credit Act is

 

 

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1 entitled to a credit against the taxes imposed under
2 subsections (a) and (b) of Section 201 of this Act as provided
3 in that Act. If the taxpayer is a partnership or Subchapter S
4 corporation, the credit shall be allowed to the partners or
5 shareholders in accordance with the determination of income and
6 distributive share of income under Sections 702 and 704 and
7 subchapter S of the Internal Revenue Code. This Section is
8 exempt from the provisions of Section 250 of this Act.
 
9     Section 99. Effective date. This Act takes effect upon
10 becoming law.