Illinois General Assembly - Full Text of SB2032
Illinois General Assembly

Previous General Assemblies

Full Text of SB2032  101st General Assembly




State of Illinois
2019 and 2020


Introduced 2/15/2019, by Sen. Steve McClure


New Act
30 ILCS 605/7.1  from Ch. 127, par. 133b10.1
35 ILCS 5/229 new
215 ILCS 5/409.2 new

    Creates the Illinois State Property Revitalization Tax Credit Act. Creates a credit against taxes imposed under the Illinois Income Tax Act and the Illinois Insurance Code in an amount equal to 30% of qualified expenditures incurred by a qualified taxpayer in the rehabilitation of certain property that had been owned by the State. Provides that credits must be approved by the Department of Commerce and Economic Opportunity. Provides that credits may be transferred and assigned. Contains provisions concerning application fees. Amends the Illinois Income Tax Act and the Illinois Insurance Code to make conforming changes. Amends the State Property Control Act. Makes changes to provisions concerning surplus real property. Effective immediately.

LRB101 10712 HLH 55824 b






SB2032LRB101 10712 HLH 55824 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
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
10    "Qualified expenditures" means all the costs and expenses
11associated with the rehabilitation of qualified structures as
12defined in this Act. Applicants may incur qualified
13expenditures, at their own risk, from the earlier of (i) the
14commencement of construction or (ii) one year prior to receipt
15of preliminary approval of an application pursuant to Section
1630 of this Act.
17    "Qualified structure" means a facility or structure
18located in Illinois that is owned by the State of Illinois and
19has not been used for at least 2 years. For the purposes of
20this definition, regular maintenance and upkeep are not
21considered "use".
22    "Qualified rehabilitation plan" means a proposed
23rehabilitation design that is approved by the Department.



SB2032- 2 -LRB101 10712 HLH 55824 b

1    "Qualified rehabilitation project" means a completed
2rehabilitation project that is approved by the Department.
3    "Qualified taxpayer" means any owner of the qualified
4structure. If the taxpayer is (i) a corporation having an
5election in effect under subchapter S of the federal Internal
6Revenue Code, (ii) a partnership, including a limited
7partnership or a limited liability partnership, or (iii) a
8limited liability company, the credit provided by this Act may
9be claimed by the shareholders of the corporation, the partners
10of the partnership, or the members of the limited liability
11company in the same manner as those shareholders, partners, or
12members account for their proportionate shares of the income or
13losses of the corporation, partnership, or limited liability
14company, or as provided in the bylaws or other executed
15agreement of the corporation, partnership, or limited
16liability company.
17    Credits granted to a partnership, including a limited
18partnership or a limited liability partnership, a limited
19liability company taxed as a partnership, or other multiple
20owners of property shall be passed through to the partners,
21members, or owners respectively on a pro rata basis or pursuant
22to an executed agreement among the partners, members, or owners
23documenting any alternate distribution method. Nothing in this
24Act is intended to prohibit a non-profit entity with a Section
25501(c)(3) designation under the federal Internal Revenue Code
26from serving as a shareholder, partner, member or other owner



SB2032- 3 -LRB101 10712 HLH 55824 b

1of a qualified taxpayer.
2    Section 10. Allowable credit. There shall be allowed a tax
3credit against (i) the tax imposed by subsections (a) and (b)
4of Section 201 of the Illinois Income Tax Act and (ii) the
5taxes imposed under Sections 409, 413, 444, and 444.1 of the
6Illinois Insurance Code in an aggregate amount equal to 30% of
7the qualified expenditures incurred by a qualified taxpayer
8pursuant to a qualified rehabilitation plan on a qualified
9structure, provided that the total amount of such qualified
10expenditures exceeds the greater of $5,000 for each qualified
11structure or the adjusted basis of the property.
12    While a tax credit may be earned before July 1, 2019, no
13tax credit shall be issued by the Department before that date.
14If the amount of any tax credit awarded under this Act exceeds
15the taxpayer's tax liability for the year in which the
16qualified rehabilitation project was placed in service, the
17excess amount may be carried forward for deduction from the
18taxpayer's tax liability in the next succeeding year or years
19or may be carried back for deduction from the taxpayer's tax
20liability for the immediately preceding year until the total
21amount of the credit has been used, except that a credit may
22not be carried forward for deduction after the fifth taxable
23year after the taxable year in which the qualified
24rehabilitation project was placed in service or carried back
25for deduction more than one year before the taxable year in



SB2032- 4 -LRB101 10712 HLH 55824 b

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



SB2032- 5 -LRB101 10712 HLH 55824 b

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



SB2032- 6 -LRB101 10712 HLH 55824 b

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



SB2032- 7 -LRB101 10712 HLH 55824 b

1determine if the applicant has any outstanding Illinois tax
2obligations that can be satisfied by the credits to be issued.
3The Department shall inform the applicant of final approval and
4of the final credit amount by letter. An issuance fee of up to
52% of the amount of the credits issued by the tax credit
6certificate may be collected from the applicant and remitted to
7the Department for the purpose of administering the Act. When
8the Department has received the issuance fee from the applicant
9and deposited it into the Department's Administrative Fund, the
10Department shall issue a tax credit certificate to the
11applicant. The taxpayer must attach the tax credit certificate
12to the tax return on which the credits are to be claimed.
13    Section 35. Biennial report; powers of the Department. The
14Department shall issue a report no later than the last day of
15the second fiscal year after the effective date of this Act on
16the overall economic impact to the State of the qualified
17rehabilitation projects. The Department is granted and has all
18the powers necessary or convenient to carry out the provisions
19of this Act. The Department has the power to promulgate rules
20for the administration of this Act, including the power to
21adopt emergency rules for a period of 12 months after the
22effective date of this Act for the purposes of establishing
23application forms and entering into agreements related to this



SB2032- 8 -LRB101 10712 HLH 55824 b

1    Section 40. Appeals process. An applicant may appeal an
2adverse decision made by the Department, other than a decision
3related to the qualifications of the structure, rehabilitation
4plan, or rehabilitation project, by requesting a hearing under
5the terms of Article 10 of the Illinois Administrative
6Procedure Act. A petition for hearing must be postmarked no
7later than 30 days from the date of the adverse decision.
8    Section 900. The State Property Control Act is amended by
9changing Section 7.1 as follows:
10    (30 ILCS 605/7.1)  (from Ch. 127, par. 133b10.1)
11    Sec. 7.1. (a) Except as otherwise provided by law, all
12surplus real property held by the State of Illinois shall be
13disposed of by the administrator as provided in this Section.
14"Surplus real property," as used in this Section, means any
15real property to which the State holds fee simple title or
16lesser interest, and is determined by the head of the State
17agency to no longer be required for the State agency's needs
18and responsibilities vacant, unoccupied or unused and which has
19no foreseeable use by the owning agency.
20    (b) All responsible officers shall submit an Annual Real
21Property Utilization Report to the Administrator, or annual
22update of such report, on forms required by the Administrator,
23by July 31 of each year. The Administrator may require such
24documentation as he deems reasonably necessary in connection



SB2032- 9 -LRB101 10712 HLH 55824 b

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



SB2032- 10 -LRB101 10712 HLH 55824 b

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



SB2032- 11 -LRB101 10712 HLH 55824 b

1costs one of which shall be performed by an appraiser residing
2in the county in which said surplus real property is located.
3The average of these 2 3 appraisals, plus the costs of
4obtaining the appraisals, shall represent the fair market value
5of the surplus real property. However, if the 2 appraisals
6differ by more than 15%, then the Administrator shall obtain a
7third appraisal, and the fair market value shall be the average
8of these 3 appraisals.
9    No surplus real property may be conveyed by the
10Administrator for less than the fair market value, unless the
11Administrator makes a written determination that it is in the
12best interests of the State to establish a different value.
13That written determination shall be published in the Illinois
14Procurement Bulletin. Such written determination, along with
15an affidavit setting forth the conditions and circumstances
16that make the use of a different value in the best interests of
17the State, shall also be filed with the Executive Ethics
18Commission. The Executive Ethics Commission shall have at least
1930 days to review the written determination. The Executive
20Ethics Commission may order an additional 30 days to review the
21written determination. The Administrator shall provide the
22Executive Ethics Commission with any information requested by
23the Executive Ethics Commission related to the Administrator's
24determination of the value of the surplus real property. If the
25Executive Ethics commission objects in writing to the value
26determined by the Administrator, then the Administrator shall



SB2032- 12 -LRB101 10712 HLH 55824 b

1not convey the surplus real property for less than either the
2fair market value as determined by the average of appraisals or
3an amount agreed upon by the Executive Ethics Commission and
4the Administrator. Circumstances in which it is in the best
5interest of the State to establish a different value may
6include, but are not limited to, the following: an auction did
7not yield any bids at the established fair market value; a unit
8of local government is interested in acquiring the surplus real
9property; or the costs to the State of maintaining such surplus
10real property are sufficiently high that it would be reasonable
11to a prudent person to sell such surplus real property for less
12than the fair market value established by the average of
14    Prior to offering the surplus real property for sale to the
15public the Administrator shall give notice in writing of the
16existence and fair market value of the surplus real property to
17each State agency and to the governing bodies of the county and
18of all cities, villages and incorporated towns in the county in
19which such real property is located. Any such State agency or
20governing body may notify the Administrator of its interest in
21acquiring exercise its option to acquire the surplus real
22property for the fair market value within the notice period set
23by the Administrator of at least 14 days 60 days of the notice.
24If any Stage agency or governing body notifies the
25Administrator of its interest in acquiring the property, then
26the Administrator shall wait a minimum of 30 additional days



SB2032- 13 -LRB101 10712 HLH 55824 b

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



SB2032- 14 -LRB101 10712 HLH 55824 b

1    estate on which the facility is located is sold by the
2    State, the net proceeds of the sale of the real estate
3    shall be deposited into the Community Mental Health
4    Medicaid Trust Fund.
5        (3) Whenever a State developmental disabilities
6    facility operated by the Department of Human Services is
7    closed and the real estate on which the facility is located
8    is sold by the State, the net proceeds of the sale of the
9    real estate shall be deposited into the Community
10    Developmental Disability Services Medicaid Trust Fund.
11    The Administrator shall have authority to order such
12surveys, abstracts of title, or commitments for title insurance
13as may, in his reasonable discretion, be deemed necessary to
14demonstrate to prospective purchasers or bidders good and
15marketable title in any property offered for sale pursuant to
16this Section. Unless otherwise specifically authorized by the
17General Assembly, all conveyances of property made by the
18Administrator shall be by quit claim deed.
19    (e) The Administrator shall submit an annual report on or
20before February 1 to the Governor and the General Assembly
21containing a detailed statement of surplus real property either
22transferred or conveyed under this Section.
23(Source: P.A. 96-527, eff. 1-1-10; 96-660, eff. 8-25-09;
2496-1000, eff. 7-2-10.)
25    Section 905. The Illinois Income Tax Act is amended by



SB2032- 15 -LRB101 10712 HLH 55824 b

1adding Section 229 as follows:
2    (35 ILCS 5/229 new)
3    Sec. 229. Rehabilitation and revitalization credit. For
4tax years commencing on or after January 1, 2014, a taxpayer
5who qualifies for a credit under the Illinois Rehabilitation
6and Revitalization Tax Credit Act is entitled to a credit
7against the taxes imposed under subsections (a) and (b) of
8Section 201 of this Act. If the taxpayer is a partnership or
9Subchapter S corporation, the credit shall be allowed to the
10partners or shareholders in accordance with the determination
11of income and distributive share of income under Sections 702
12and 704 and Subchapter S of the Internal Revenue Code or the
13credit shall be allowed to the partners or shareholders
14pursuant to an executed agreement among the partners or
15shareholders documenting any alternate distribution method.
16This Section is exempt from the provisions of Section 250 of
17this Act.
18    Section 910. The Illinois Insurance Code is amended by
19adding Section 409.2 as follows:
20    (215 ILCS 5/409.2 new)
21    Sec. 409.2. Rehabilitation and revitalization credit. For
22taxes payable after January 1, 2014, credits may be granted
23against the taxes imposed under Section 409, 413, 444, and



SB2032- 16 -LRB101 10712 HLH 55824 b

1444.1 of this Act as provided in the Illinois Rehabilitation
2and Revitalization Tax Credit Act.
3    Section 999. Effective date. This Act takes effect upon
4becoming law.