Rep. Lawrence M. Walsh, Jr.

Filed: 3/20/2014

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 341

2    AMENDMENT NO. ______. Amend Senate Bill 341 by replacing
3everything after the enacting clause with the following:
 
4    "Section 1. Short title. This Act may be cited as the
5Illinois State Property Revitalization Tax Credit Act.
 
6    Section 5. Definitions. As used in this Act, unless the
7context clearly indicates otherwise:
8    "Department" means the Department of Commerce and Economic
9Opportunity.
10    "Qualified expenditure" means all the costs and expenses
11properly chargeable to the capital account for property and:
12        (1) for which depreciation is allowable under Section
13    168 of the federal Internal Revenue Code; and
14        (2) that is an expenditure related to:
15            (A) nonresidential real property;
16            (B) residential rental property;

 

 

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1            (C) real property that has a class life of more
2        than 12.5 years; or
3            (D) an addition or improvement to property
4        described in (A), (B), or (C).
5    For the purposes of the definition of "qualified
6expenditure", the terms "nonresidential real property",
7"residential rental property", and "class life" have the
8meanings given to those terms in Section 168 of the federal
9Internal Revenue Code.
10    "Qualified expenditure" does not include:
11        (1) any expenditure with respect to which the applicant
12    does not use the straight line method over a recovery
13    period determined under subsection (c) or (g) of Section
14    168 of the federal Internal Revenue Code; this item (1)
15    does not apply to an expenditure if the alternative
16    depreciation system set forth in subsection (g) of Section
17    168 of the federal Internal Revenue Code applies to that
18    expenditure by reason of subparagraph (B) or (C) of item
19    (1) of that subsection;
20        (2) the cost of acquiring any building or interest
21    therein;
22        (3) any expenditure attributable to the rehabilitation
23    of a certified historic structure in a registered historic
24    district, if the rehabilitation plan has not been approved
25    by the Historic Preservation Agency as being consistent
26    with the standards for rehabilitation as adopted by the

 

 

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1    federal Secretary of the Interior; "certified historic
2    structure" means a building and its structural components
3    that: (A) is listed on the National Register of Historic
4    Places; (B) is located in a registered historic district;
5    and (C) is certified by the Secretary of the Interior as
6    being of historic significance to the district;
7    "registered historic district" means: (A) any district
8    listed on the National Register of Historic Places; and (B)
9    any district (i) that is designated under a State statute
10    or local ordinance that has been certified by the Secretary
11    of the Interior as containing criteria that will
12    substantially achieve the purpose of preserving and
13    rehabilitating buildings of historic significance to the
14    district, and (ii) that has been certified by the Secretary
15    of the Interior as meeting substantially all of the
16    requirements for the listing of districts on the National
17    Register of Historic Places.
18    "Qualified structure" means a facility or structure
19located in Illinois (i) that was owned by the State of Illinois
20prior to the effective date of this Act and (ii) at which more
21than 100 employees were employed prior to the effective date of
22this Act.
23    "Qualified rehabilitation plan" means a proposed
24rehabilitation design that is approved by the Department.
25    "Qualified rehabilitation project" means a completed
26rehabilitation project that is approved by the Department.

 

 

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1    "Qualified taxpayer" means any owner of the qualified
2structure. If the taxpayer is (i) a corporation having an
3election in effect under subchapter S of the federal Internal
4Revenue Code, (ii) a partnership, including a limited
5partnership or a limited liability partnership, or (iii) a
6limited liability company, the credit provided by this Act may
7be claimed by the shareholders of the corporation, the partners
8of the partnership, or the members of the limited liability
9company in the same manner as those shareholders, partners, or
10members account for their proportionate shares of the income or
11losses of the corporation, partnership, or limited liability
12company, or as provided in the bylaws or other executed
13agreement of the corporation, partnership, or limited
14liability company.
15    Credits granted to a partnership, including a limited
16partnership or a limited liability partnership, a limited
17liability company taxed as a partnership, or other multiple
18owners of property shall be passed through to the partners,
19members, or owners respectively on a pro rata basis or pursuant
20to an executed agreement among the partners, members, or owners
21documenting any alternate distribution method. Nothing in this
22Act is intended to prohibit a non-profit entity with a Section
23501(c)(3) designation under the federal Internal Revenue Code
24from serving as a shareholder, partner, member or other owner
25of a qualified taxpayer.
 

 

 

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1    Section 10. Allowable credit. There shall be allowed a tax
2credit against (i) the tax imposed by subsections (a) and (b)
3of Section 201 of the Illinois Income Tax Act and (ii) the
4taxes imposed under Sections 409, 413, 444, and 444.1 of the
5Illinois Insurance Code in an aggregate amount equal to 30% of
6the qualified expenditures incurred by a qualified taxpayer
7pursuant to a qualified rehabilitation plan on a qualified
8structure, provided that the total amount of such qualified
9expenditures exceeds the greater of $5,000 for each qualified
10structure or the adjusted basis of the property.
11    While a tax credit may be earned before July 1, 2014, no
12tax credit shall be issued by the Department before that date.
13If the amount of any tax credit awarded under this Act exceeds
14the taxpayer's tax liability for the year in which the
15qualified rehabilitation project was placed in service, the
16excess amount may be carried forward for deduction from the
17taxpayer's tax liability in the next succeeding year or years
18or may be carried back for deduction from the taxpayer's tax
19liability for the immediately preceding year until the total
20amount of the credit has been used, except that a credit may
21not be carried forward for deduction after the fifth taxable
22year after the taxable year in which the qualified
23rehabilitation project was placed in service or carried back
24for deduction more than one year before the taxable year in
25which the qualified rehabilitation project was placed in
26service.

 

 

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1    Applicants may incur qualified expenditures, at their own
2risk, from the earlier of (i) the commencement of construction
3or (ii) one year prior to receipt of preliminary approval of an
4application pursuant to Section 30 of this Act.
 
5    Section 15. Economic needs test. When the total credits
6requested with respect to a qualified rehabilitation plan will
7be $1,000,000 or more, the Department shall evaluate whether,
8without public intervention, the economic development project
9would not otherwise benefit from private sector investment.
 
10    Section 20. Transfer of credits.
11    (a) Any qualified taxpayer may elect to transfer, in whole
12or in part, any unused credit amount granted under this Act as
13provided in subsection (b). An election to transfer any unused
14credit amount must be made no later than 5 years after the date
15the credit is awarded, after which period the credit expires
16and may not be used. The Department shall notify the Department
17of Revenue of the election and transfer.
18    (b) A qualified taxpayer is permitted a one-time transfer
19of unused credit amounts to no more than 4 transferees. Those
20transfers must occur in the same taxable year.
21    (c) The transferee is subject to the same rights and
22limitations as the accredited production company awarded the
23credit, except that the transferee may not sell or otherwise
24transfer the credit.

 

 

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1    (d) The Department may adopt rules to administer this
2Section.
 
3    Section 25. Maximum limits. The credits awarded for each
4qualified rehabilitation project shall be limited to a maximum
5of $10,000,000. The aggregate amount of the tax credits that
6may be claimed under this Act for investments in qualified
7rehabilitation projects shall be limited to $40,000,000. A
8qualified rehabilitation project shall not receive credits
9pursuant to this Act if the qualified rehabilitation project
10has received credits pursuant to the River Edge Redevelopment
11Zone Act.
 
12    Section 30. Application process.
13    (a) To obtain the credits allowed under this Act, the
14applicant shall submit an application for tax credits to the
15Department. The application shall be in such form as the
16Department shall reasonably require, and the application shall
17include sufficient information to permit the Department to
18approve, approve with conditions, or reject the structure,
19rehabilitation plan, or rehabilitation project.
20    (b) The Department may charge a non-refundable application
21fee of up to 1% of the amount of credits requested, with a
22minimum fee of $1,000 per application per project. All
23application fees shall be deposited into the Department's
24Administrative Fund.

 

 

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1    (c) All applicants with applications receiving preliminary
2approval on or after the effective date of this Act shall
3commence rehabilitation within 3 years of the date of issue of
4the letter from the Department granting preliminary approval
5for credits. Commencement of rehabilitation means that, as of
6the date on which actual physical work has begun, the applicant
7has incurred no less than 10% of the estimated costs of
8rehabilitation provided in the application. The applicant may
9commence and incur qualified expenditures at its own risk
10before the property becomes a qualified structure. If the
11rehabilitation receives final approval under this Section,
12including the necessary verification of the total costs and
13expenses of rehabilitation, the applicant shall receive tax
14credits for all qualified expenditures incurred within the time
15periods allowed in this Act.
16    (d) For qualified rehabilitation projects, the applicant
17shall submit a cost certification, and if the credits requested
18with respect to a qualified rehabilitation project are $250,000
19or more, the Department shall require an independent audit of
20the cost certification at the applicant's expense. Those audits
21shall be conducted by a licensed Certified Public Accounting
22firm that participates in the peer review program of the
23American Institute of Certified Public Accountants.
24    (e) The Department shall determine the amount of qualified
25expenditures and the amount of credits to be issued to the
26applicant. The issuance of certificates of credits to

 

 

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1applicants shall be performed by the Department. The Department
2shall coordinate with the Illinois Department of Revenue to
3determine if the applicant has any outstanding Illinois tax
4obligations that can be satisfied by the credits to be issued.
5The Department shall inform the applicant of final approval and
6of the final credit amount by letter. An issuance fee of up to
72% of the amount of the credits issued by the tax credit
8certificate may be collected from the applicant and remitted to
9the Department for the purpose of administering the Act. When
10the Department has received the issuance fee from the applicant
11and deposited it into the Department's Administrative Fund, the
12Department shall issue a tax credit certificate to the
13applicant. The taxpayer must attach the tax credit certificate
14to the tax return on which the credits are to be claimed.
 
15    Section 35. Biennial report; powers of the Department. The
16Department shall issue a report no later than the last day of
17the second fiscal year after the effective date of this Act on
18the overall economic impact to the State of the qualified
19rehabilitation projects. The Department is granted and has all
20the powers necessary or convenient to carry out the provisions
21of this Act. The Department has the power to promulgate rules
22for the administration of this Act, including the power to
23adopt emergency rules for a period of 12 months after the
24effective date of this Act for the purposes of establishing
25application forms and entering into agreements related to this

 

 

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1Act.
 
2    Section 40. Appeals process. An applicant may appeal an
3adverse decision made by the Department, other than a decision
4related to the qualifications of the structure, rehabilitation
5plan, or rehabilitation project, by requesting a hearing under
6the terms of Article 10 of the Illinois Administrative
7Procedure Act. A petition for hearing must be postmarked no
8later than 30 days from the date of the adverse decision.
 
9    Section 60. The State Property Control Act is amended by
10changing Section 7.1 as follows:
 
11    (30 ILCS 605/7.1)  (from Ch. 127, par. 133b10.1)
12    Sec. 7.1. (a) Except as otherwise provided by law, all
13surplus real property held by the State of Illinois shall be
14disposed of by the administrator as provided in this Section.
15"Surplus real property," as used in this Section, means any
16real property to which the State holds fee simple title or
17lesser interest, and is determined by the head of the State
18agency to no longer be required for the State agency's needs
19and responsibilities vacant, unoccupied or unused and which has
20no foreseeable use by the owning agency.
21    (b) All responsible officers shall submit an Annual Real
22Property Utilization Report to the Administrator, or annual
23update of such report, on forms required by the Administrator,

 

 

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1by July 31 of each year. The Administrator may require such
2documentation as he deems reasonably necessary in connection
3with this Report, and shall require that such Report include
4the following information:
5    (1) A legal description of all real property owned by the
6State under the control of the responsible officer.
7    (2) A description of the use of the real property listed
8under (1).
9    (3) A list of any improvements made to such real property
10during the previous year.
11    (4) The dates on which the State first acquired its
12interest in such real property, and the purchase price and
13source of the funds used to acquire the property.
14    (5) Plans for the future use of currently unused real
15property.
16    (6) A declaration of any surplus real property. On or
17before October 31 of each year the Administrator shall furnish
18copies of each responsible officer's report along with a list
19of surplus property indexed by legislative district to the
20General Assembly.
21    This report shall be filed with the Speaker, the Minority
22Leader and the Clerk of the House of Representatives and the
23President, the Minority Leader and the Secretary of the Senate
24and shall be duplicated and made available to the members of
25the General Assembly for evaluation by such members for
26possible liquidation of unused public property at public sale.

 

 

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1    (c) Following receipt of the Annual Real Property
2Utilization Report required under paragraph (b), the
3Administrator shall notify all State agencies by October 31 of
4all declared surplus real property. Any State agency may submit
5a written request to the Administrator, within 60 days of the
6date of such notification, to have control of surplus real
7property transferred to that agency. Such request must indicate
8the reason for the transfer and the intended use to be made of
9such surplus real property. The Administrator may deny any or
10all such requests by a State agency or agencies if the
11Administrator determines that it is more advantageous to the
12State to dispose of the surplus real property under paragraph
13(d). In case requests for the same surplus real property are
14received from more than one State agency, the Administrator
15shall weigh the benefits to the State and determine to which
16agency, if any, to transfer control of such property. The
17Administrator shall coordinate the use and disposal of State
18surplus real property with any State space utilization program.
19    (d) Any surplus real property which is not transferred to
20the control of another State agency under paragraph (c) shall
21be disposed of by the Administrator. No appraisal is required
22if during his initial survey of surplus real property the
23Administrator determines such property has a fair market value
24of less than $5,000. If the value of such property is
25determined by the Administrator in his initial survey to be
26$5,000 or more, then the Administrator shall obtain 2 3

 

 

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1appraisals of such real property, which shall include any known
2liabilities, including, but not limited to, environmental
3costs one of which shall be performed by an appraiser residing
4in the county in which said surplus real property is located.
5The average of these 2 3 appraisals, plus the costs of
6obtaining the appraisals, shall represent the fair market value
7of the surplus real property. However, if the 2 appraisals
8differ by more than 15%, then the Administrator shall obtain a
9third appraisal, and the fair market value shall be the average
10of these 3 appraisals.
11    No surplus real property may be conveyed by the
12Administrator for less than the fair market value, unless the
13Administrator makes a written determination that it is in the
14best interests of the State to establish a different value.
15That written determination shall be published in the Illinois
16Procurement Bulletin. Such written determination, along with
17an affidavit setting forth the conditions and circumstances
18that make the use of a different value in the best interests of
19the State, shall also be filed with the Executive Ethics
20Commission. The Executive Ethics Commission shall have at least
2130 days to review the written determination. The Executive
22Ethics Commission may order an additional 30 days to review the
23written determination. The Administrator shall provide the
24Executive Ethics Commission with any information requested by
25the Executive Ethics Commission related to the Administrator's
26determination of the value of the surplus real property. If the

 

 

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1Executive Ethics commission objects in writing to the value
2determined by the Administrator, then the Administrator shall
3not convey the surplus real property for less than either the
4fair market value as determined by the average of appraisals or
5an amount agreed upon by the Executive Ethics Commission and
6the Administrator. Circumstances in which it is in the best
7interest of the State to establish a different value may
8include, but are not limited to, the following: an auction did
9not yield any bids at the established fair market value; a unit
10of local government is interested in acquiring the surplus real
11property; or the costs to the State of maintaining such surplus
12real property are sufficiently high that it would be reasonable
13to a prudent person to sell such surplus real property for less
14than the fair market value established by the average of
15appraisals.
16    Prior to offering the surplus real property for sale to the
17public the Administrator shall give notice in writing of the
18existence and fair market value of the surplus real property to
19each State agency and to the governing bodies of the county and
20of all cities, villages and incorporated towns in the county in
21which such real property is located. Any such State agency or
22governing body may notify the Administrator of its interest in
23acquiring exercise its option to acquire the surplus real
24property for the fair market value within the notice period set
25by the Administrator of at least 14 days 60 days of the notice.
26If any Stage agency or governing body notifies the

 

 

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1Administrator of its interest in acquiring the property, then
2the Administrator shall wait a minimum of 30 additional days
3during which to engage in negotiations with that State agency
4or governing body for the sale of the surplus real property.
5After the notice period 60 day period has passed, the
6Administrator may sell the surplus real property by public
7auction, which may include an electronic auction or the use of
8sealed bids, following notice of such sale by publication on 3
9separate days not less than 15 nor more than 30 days prior to
10the sale in the State newspaper and in a newspaper having
11general circulation in the county in which the surplus real
12property is located. The Administrator shall post "For Sale"
13signs of a conspicuous nature on such surplus real property
14offered for sale to the public. If no acceptable offers for the
15surplus real property are received, the Administrator may have
16new appraisals of such property made. The Administrator shall
17have all power necessary to convey surplus real property under
18this Section. All moneys received for the sale of surplus real
19property shall be deposited in the General Revenue Fund, except
20that:
21        (1) Where moneys expended for the acquisition of such
22    real property were from a special fund which is still a
23    special fund in the State treasury, this special fund shall
24    be reimbursed in the amount of the original expenditure and
25    any amount in excess thereof shall be deposited in the
26    General Revenue Fund.

 

 

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1        (2) Whenever a State mental health facility operated by
2    the Department of Human Services is closed and the real
3    estate on which the facility is located is sold by the
4    State, the net proceeds of the sale of the real estate
5    shall be deposited into the Community Mental Health
6    Medicaid Trust Fund.
7        (3) Whenever a State developmental disabilities
8    facility operated by the Department of Human Services is
9    closed and the real estate on which the facility is located
10    is sold by the State, the net proceeds of the sale of the
11    real estate shall be deposited into the Community
12    Developmental Disability Services Medicaid Trust Fund.
13    The Administrator shall have authority to order such
14surveys, abstracts of title, or commitments for title insurance
15as may, in his reasonable discretion, be deemed necessary to
16demonstrate to prospective purchasers or bidders good and
17marketable title in any property offered for sale pursuant to
18this Section. Unless otherwise specifically authorized by the
19General Assembly, all conveyances of property made by the
20Administrator shall be by quit claim deed.
21    (e) The Administrator shall submit an annual report on or
22before February 1 to the Governor and the General Assembly
23containing a detailed statement of surplus real property either
24transferred or conveyed under this Section.
25(Source: P.A. 96-527, eff. 1-1-10; 96-660, eff. 8-25-09;
2696-1000, eff. 7-2-10.)
 

 

 

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1    Section 70. The Illinois Income Tax Act is amended by
2adding Section 224 as follows:
 
3    (35 ILCS 5/224 new)
4    Sec. 224. Rehabilitation and revitalization credit. For
5tax years commencing on or after January 1, 2014, a taxpayer
6who qualifies for a credit under the Illinois Rehabilitation
7and Revitalization Tax Credit Act is entitled to a credit
8against the taxes imposed under subsections (a) and (b) of
9Section 201 of this Act. If the taxpayer is a partnership or
10Subchapter S corporation, the credit shall be allowed to the
11partners or shareholders in accordance with the determination
12of income and distributive share of income under Sections 702
13and 704 and Subchapter S of the Internal Revenue Code or the
14credit shall be allowed to the partners or shareholders
15pursuant to an executed agreement among the partners or
16shareholders documenting any alternate distribution method.
17This Section is exempt from the provisions of Section 250 of
18this Act.
 
19    Section 75. The Illinois Insurance Code is amended by
20adding Section 409.2 as follows:
 
21    (215 ILCS 5/409.2 new)
22    Sec. 409.2. Rehabilitation and revitalization credit. For

 

 

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1taxes payable after January 1, 2014, credits may be granted
2against the taxes imposed under Section 409, 413, 444, and
3444.1 of this Act as provided in the Illinois Rehabilitation
4and Revitalization Tax Credit Act.
 
5    Section 99. Effective date. This Act takes effect upon
6becoming law.".