SB2886eng 97TH GENERAL ASSEMBLY

SB2886 Engrossed LRB097 17637 HLH 62844 b

AN ACT concerning revenue.

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

Section 5. The Illinois Income Tax Act is amended by changing Section 221 as follows:

(35 ILCS 5/221)

Sec. 221. Rehabilitation costs; qualified historic properties; River Edge Redevelopment Zone.

(a) For taxable years beginning on or after January 1, 2012 and ending prior to January 1, 2017, there shall be allowed a tax credit against the tax imposed by subsections (a) and (b) of Section 201 in an amount equal to 25% of qualified expenditures incurred by a qualified taxpayer during the taxable year in the restoration and preservation of a qualified historic structure located in a River Edge Redevelopment Zone pursuant to a qualified rehabilitation plan, provided that the total amount of such expenditures (i) must equal $5,000 or more and (ii) must exceed 50% of the purchase price of the property.

(b) To obtain a tax credit pursuant to this Section, the taxpayer must apply with the Department of Commerce and Economic Opportunity. The Department of Commerce and Economic Opportunity, in consultation with the Historic Preservation Agency, shall determine the amount of eligible rehabilitation costs and expenses. The Historic Preservation Agency shall determine whether the rehabilitation is consistent with the standards of the Secretary of the United States Department of the Interior for rehabilitation. Upon completion and review of the project, the Department of Commerce and Economic Opportunity shall issue a certificate in the amount of the eligible credits. At the time the certificate is issued, an issuance fee up to the maximum amount of 2% of the amount of the credits issued by the certificate may be collected from the applicant to administer the provisions of this Section. If collected, this issuance fee shall be deposited into the Historic Property Administrative Fund, a special fund created in the State treasury. Subject to appropriation, moneys in the Historic Property Administrative Fund shall be evenly divided between the Department of Commerce and Economic Opportunity and the Historic Preservation Agency to reimburse the Department of Commerce and Economic Opportunity and the Historic Preservation Agency for the costs associated with administering this Section. The taxpayer must attach the certificate to the tax return on which the credits are to be claimed. The Department of Commerce and Economic Opportunity may adopt rules to implement this Section.

(c) The tax credit under this Section may not reduce the taxpayer's liability to less than zero.

(c-5) Any person or entity, referred to in this Section as the assignor, may sell, assign, convey, or otherwise transfer tax credits allowed and earned under this Act. The person or entity acquiring the tax credits, referred to in this Section as the assignee, may use the amount of the acquired tax credits to offset up to 100% of its tax liability for the taxable year in which the qualified rehabilitation plan was first placed into service, and any unused tax credits claimed by the assignee may be carried forward for up to 10 years or carried back for up to 1 year, except that all tax credits must be claimed within 10 years after the tax year in which the qualified rehabilitation plan was first placed into service and may not be carried back more than one year before the taxable year in which the qualified rehabilitation plan was placed in service. The assignor shall enter into a written agreement with the assignee establishing the terms and conditions of the agreement, shall perfect the transfer by notifying the Department of Commerce and Economic Opportunity in writing within 90 calendar days after the effective date of the transfer, and shall provide any information as may be required by the Department of Commerce and Economic Opportunity to administer and carry out the provisions of this Section. For purposes of this Section, assignors and assignees may include a non-profit entity with a Section 501(c)(3) designation under the federal Internal Revenue Code, although such entity shall not be the original recipient of the tax credits. The tax credits may be transferred more than once. The tax credits may be bifurcated to be transferred to more than one assignee. If tax credits that have been transferred are subsequently reduced, adjusted, or recaptured, in whole or in part, by the Department of Commerce and Economic Opportunity, the Department of Revenue, or any other applicable government agency, only the original qualified taxpayer that was awarded the tax credits, and not any subsequent assignee of the tax credits, shall be held liable to repay any amount of such reduction, adjustment, or recapture of the tax credits.

(d) As used in this Section, the following terms have the following meanings.

"Qualified expenditure" means all the costs and expenses defined as qualified rehabilitation expenditures under Section 47 of the federal Internal Revenue Code that were incurred in connection with a qualified historic structure.

"Qualified historic structure" means a certified historic structure as defined under Section 47 (c)(3) of the federal Internal Revenue Code.

"Qualified rehabilitation plan" means a project that is approved by the Historic Preservation Agency as being consistent with the standards in effect on the effective date of this amendatory Act of the 97th General Assembly for rehabilitation as adopted by the federal Secretary of the Interior.

"Qualified taxpayer" means the owner of the qualified historic structure or any other person who qualifies for the federal rehabilitation credit allowed by Section 47 of the federal Internal Revenue Code with respect to that qualified historic structure. Partners, shareholders of subchapter S corporations, and owners of limited liability companies (if the limited liability company is treated as a partnership for purposes of federal and State income taxation) are entitled to a credit under this Section to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 703 and subchapter S of the Internal Revenue Code, provided that credits granted to a partnership, a limited liability company taxed as a partnership, or other multiple owners of property shall be passed through to the partners, members, or owners respectively on a pro rata basis or pursuant to an executed agreement among the partners, members, or owners documenting any alternate distribution method.

(Source: P.A. 97-203, eff. 7-28-11.)

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