Illinois General Assembly - Full Text of SB0341
Illinois General Assembly

Previous General Assemblies

Full Text of SB0341  98th General Assembly



SB0341 EngrossedLRB098 04610 HLH 34638 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 structures" means a facility or structure
18located in Illinois (i) that was owned by the State of Illinois
19at any time within the 2 years immediately preceding the
20effective date of this Act and (ii) at which more than 100
21employees were employed within the 2 years immediately
22preceding the effective date of this Act.
23    "Qualified rehabilitation plan" means a proposed



SB0341 Engrossed- 2 -LRB098 04610 HLH 34638 b

1rehabilitation design that is approved by the Department.
2    "Qualified rehabilitation project" means a completed
3rehabilitation project that is approved by the Department.
4    "Qualified taxpayer" means any owner of the qualified
5structure. If the taxpayer is (i) a corporation having an
6election in effect under subchapter S of the federal Internal
7Revenue Code, (ii) a partnership, including a limited
8partnership or a limited liability partnership, or (iii) a
9limited liability company, the credit provided by this Act may
10be claimed by the shareholders of the corporation, the partners
11of the partnership, or the members of the limited liability
12company in the same manner as those shareholders, partners, or
13members account for their proportionate shares of the income or
14losses of the corporation, partnership, or limited liability
15company, or as provided in the bylaws or other executed
16agreement of the corporation, partnership, or limited
17liability company.
18    Credits granted to a partnership, including a limited
19partnership or a limited liability partnership, a limited
20liability company taxed as a partnership, or other multiple
21owners of property shall be passed through to the partners,
22members, or owners respectively on a pro rata basis or pursuant
23to an executed agreement among the partners, members, or owners
24documenting any alternate distribution method. Nothing in this
25Act is intended to prohibit a non-profit entity with a Section
26501(c)(3) designation under the federal Internal Revenue Code



SB0341 Engrossed- 3 -LRB098 04610 HLH 34638 b

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



SB0341 Engrossed- 4 -LRB098 04610 HLH 34638 b

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



SB0341 Engrossed- 5 -LRB098 04610 HLH 34638 b

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



SB0341 Engrossed- 6 -LRB098 04610 HLH 34638 b

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



SB0341 Engrossed- 7 -LRB098 04610 HLH 34638 b

1shall coordinate with the Illinois Department of Revenue to
2determine if the applicant has any outstanding Illinois tax
3obligations that can be satisfied by the credits to be issued.
4The Department shall inform the applicant of final approval and
5of the final credit amount by letter. An issuance fee of up to
62% of the amount of the credits issued by the tax credit
7certificate may be collected from the applicant and remitted to
8the Department for the purpose of administering the Act. When
9the Department has received the issuance fee from the applicant
10and deposited it into the Department's Administrative Fund, the
11Department shall issue a tax credit certificate to the
12applicant. The taxpayer must attach the tax credit certificate
13to the tax return on which the credits are to be claimed.
14    Section 35. Biennial report; powers of the Department. The
15Department shall issue a report no later than the last day of
16the second fiscal year after the effective date of this Act on
17the overall economic impact to the State of the qualified
18rehabilitation projects. The Department is granted and has all
19the powers necessary or convenient to carry out the provisions
20of this Act. The Department has the power to promulgate rules
21for the administration of this Act, including the power to
22adopt emergency rules for a period of 12 months after the
23effective date of this Act for the purposes of establishing
24application forms and entering into agreements related to this



SB0341 Engrossed- 8 -LRB098 04610 HLH 34638 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 70. The Illinois Income Tax Act is amended by
9adding Section 224 as follows:
10    (35 ILCS 5/224 new)
11    Sec. 224. Rehabilitation and revitalization credit. For
12tax years commencing on or after January 1, 2014, a taxpayer
13who qualifies for a credit under the Illinois Rehabilitation
14and Revitalization Tax Credit Act is entitled to a credit
15against the taxes imposed under subsections (a) and (b) of
16Section 201 of this Act. If the taxpayer is a partnership or
17Subchapter S corporation, the credit shall be allowed to the
18partners or shareholders in accordance with the determination
19of income and distributive share of income under Sections 702
20and 704 and Subchapter S of the Internal Revenue Code or the
21credit shall be allowed to the partners or shareholders
22pursuant to an executed agreement among the partners or
23shareholders documenting any alternate distribution method.



SB0341 Engrossed- 9 -LRB098 04610 HLH 34638 b

1This Section is exempt from the provisions of Section 250 of
2this Act.
3    Section 75. The Illinois Insurance Code is amended by
4adding Section 409.2 as follows:
5    (215 ILCS 5/409.2 new)
6    Sec. 409.2. Rehabilitation and revitalization credit. For
7taxes payable after January 1, 2014, credits may be granted
8against the taxes imposed under Sections 409, 413, 444, and
9444.1 of this Act as provided in the Illinois Rehabilitation
10and Revitalization Tax Credit Act.
11    Section 99. Effective date. This Act takes effect upon
12becoming law.