97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB2078

 

Introduced 2/22/2011, by Rep. Lou Lang

 

SYNOPSIS AS INTRODUCED:
 
New Act
35 ILCS 5/221 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.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB2078LRB097 08857 HLH 48987 b

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

 

 

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

 

 

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1corporation, partnership, or limited liability company.
2Credits granted to a partnership, a limited liability company
3taxed as a partnership, or other multiple owners of property
4shall be passed through to the partners, members, or owners
5respectively on a pro rata basis or pursuant to an executed
6agreement among the partners, members, or owners documenting
7any alternate distribution method.
 
8    Section 10. Allowable credit. For all taxable years
9commencing after December 31, 2010, there shall be allowed a
10tax credit against the tax imposed by subsections (a) and (b)
11of Section 201 of the Illinois Income Tax Act in an amount
12equal to 25% of qualified expenditures incurred by a qualified
13taxpayer in the restoration and preservation of a qualified
14historic structure pursuant to a qualified rehabilitation plan
15if the total amount of such expenditures equals $5,000 or more.
16If the amount of any tax credit awarded under this Act exceeds
17the qualified taxpayer's income tax liability for the year in
18which the qualified rehabilitation plan was placed in service,
19the excess amount may be carried forward for deduction from the
20taxpayer's income tax liability in the next succeeding year or
21years until the total amount of the credit has been used,
22except that a credit may not be carried forward for deduction
23after the tenth taxable year after the taxable year in which
24the qualified rehabilitation plan was placed in service.
 

 

 

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

 

 

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1    Section 20. Annual county limit. The cumulative amount
2allowable for credits awarded under this Act shall be limited
3to a maximum of $25,000,000 per year per county.
4Notwithstanding the 10-year carry forward period for credits
5awarded under this Act, if a credit is disallowed because it
6exceeds the annual $25,000,000 cumulative limit per county, the
7credit shall be allowed in the next year if, within the limit,
8the claim period for the credit is extended by one additional
9year for each year disallowed as a result of this Section.
10Except in cases of bad faith or fraud, no penalty or interest
11shall be due as a result of any credit disallowed by this
12Section.
 
13    Section 25. Biennial report. The Department of Commerce and
14Economic Opportunity shall determine, on a biennial basis
15beginning at the end of the second fiscal year after the date
16this Act takes effect, the overall economic impact to the State
17from the rehabilitation of eligible property.
 
18    Section 50. The Illinois Income Tax Act is amended by
19adding Section 221 as follows:
 
20    (35 ILCS 5/221 new)
21    Sec. 221. Historic preservation credit. For tax years
22commencing after December 31, 2010, a Taxpayer who qualifies
23for a credit under the Historic Preservation Tax Credit Act is

 

 

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