Illinois General Assembly - Full Text of SB0341
Illinois General Assembly

Previous General Assemblies

Full Text of SB0341  98th General Assembly


Sen. Antonio Muñoz

Filed: 11/5/2013





09800SB0341sam001LRB098 04610 HLH 49124 a


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
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.



09800SB0341sam001- 2 -LRB098 04610 HLH 49124 a

1    "Qualified structures" means a facility or structure
2located in Illinois (i) that was owned by the State of Illinois
3at any time within the 2 years immediately preceding the
4effective date of this Act and (ii) at which more than 100
5employees were employed within the 2 years immediately
6preceding the effective date of this Act.
7    "Qualified rehabilitation plan" means a proposed
8rehabilitation design that is approved by the Department.
9    "Qualified rehabilitation project" means a completed
10rehabilitation project that is approved by the Department.
11    "Qualified taxpayer" means any owner of the qualified
12structure. If the taxpayer is (i) a corporation having an
13election in effect under subchapter S of the federal Internal
14Revenue Code, (ii) a partnership, including a limited
15partnership or a limited liability partnership, or (iii) a
16limited liability company, the credit provided by this Act may
17be claimed by the shareholders of the corporation, the partners
18of the partnership, or the members of the limited liability
19company in the same manner as those shareholders, partners, or
20members account for their proportionate shares of the income or
21losses of the corporation, partnership, or limited liability
22company, or as provided in the bylaws or other executed
23agreement of the corporation, partnership, or limited
24liability company.
25    Credits granted to a partnership, including a limited
26partnership or a limited liability partnership, a limited



09800SB0341sam001- 3 -LRB098 04610 HLH 49124 a

1liability company taxed as a partnership, or other multiple
2owners of property shall be passed through to the partners,
3members, or owners respectively on a pro rata basis or pursuant
4to an executed agreement among the partners, members, or owners
5documenting any alternate distribution method. Nothing in this
6Act is intended to prohibit a non-profit entity with a Section
7501(c)(3) designation under the federal Internal Revenue Code
8from serving as a shareholder, partner, member or other owner
9of a qualified taxpayer.
10    Section 10. Allowable credit. There shall be allowed a tax
11credit against (i) the tax imposed by subsections (a) and (b)
12of Section 201 of the Illinois Income Tax Act and (ii) the
13taxes imposed under Sections 409, 413, 444, and 444.1 of the
14Illinois Insurance Code in an aggregate amount equal to 30% of
15the qualified expenditures incurred by a qualified taxpayer
16pursuant to a qualified rehabilitation plan on a qualified
17structure, provided that the total amount of such qualified
18expenditures exceeds the greater of $5,000 for each qualified
19structure or the adjusted basis of the property.
20    While a tax credit may be earned before July 1, 2014, no
21tax credit shall be issued by the Department before that date.
22If the amount of any tax credit awarded under this Act exceeds
23the taxpayer's tax liability for the year in which the
24qualified rehabilitation project was placed in service, the
25excess amount may be carried forward for deduction from the



09800SB0341sam001- 4 -LRB098 04610 HLH 49124 a

1taxpayer's tax liability in the next succeeding year or years
2or may be carried back for deduction from the taxpayer's tax
3liability for the immediately preceding year until the total
4amount of the credit has been used, except that a credit may
5not be carried forward for deduction after the fifth taxable
6year after the taxable year in which the qualified
7rehabilitation project was placed in service or carried back
8for deduction more than one year before the taxable year in
9which the qualified rehabilitation project was placed in
11    Section 15. Economic needs test. When the total credits
12requested with respect to a qualified rehabilitation plan will
13be $1,000,000 or more, the Department shall evaluate whether,
14without public intervention, the economic development project
15would not otherwise benefit from private sector investment.
16    Section 20. Transfer of credits.
17    (a) Any qualified taxpayer may elect to transfer, in whole
18or in part, any unused credit amount granted under this Act as
19provided in subsection (b). An election to transfer any unused
20credit amount must be made no later than 5 years after the date
21the credit is awarded, after which period the credit expires
22and may not be used. The Department shall notify the Department
23of Revenue of the election and transfer.
24    (b) A qualified taxpayer is permitted a one-time transfer



09800SB0341sam001- 5 -LRB098 04610 HLH 49124 a

1of unused credit amounts to no more than 4 transferees. Those
2transfers must occur in the same taxable year.
3    (c) The transferee is subject to the same rights and
4limitations as the accredited production company awarded the
5credit, except that the transferee may not sell or otherwise
6transfer the credit.
7    (d) The Department may adopt rules to administer this
9    Section 25. Maximum limits. The credits awarded for each
10qualified rehabilitation project shall be limited to a maximum
11of $10,000,000. The aggregate amount of the tax credits that
12may be claimed under this Act for investments in qualified
13rehabilitation projects shall be limited to $40,000,000. A
14qualified rehabilitation project shall not receive credits
15pursuant to this Act if the qualified rehabilitation project
16has received credits pursuant to the River Edge Redevelopment
17Zone Act.
18    Section 30. Application process.
19    (a) To obtain the credits allowed under this Act, the
20applicant shall submit an application for tax credits to the
21Department. The application shall be in such form as the
22Department shall reasonably require, and the application shall
23include sufficient information to permit the Department to
24approve, approve with conditions, or reject the structure,



09800SB0341sam001- 6 -LRB098 04610 HLH 49124 a

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



09800SB0341sam001- 7 -LRB098 04610 HLH 49124 a

1shall be conducted by a licensed Certified Public Accounting
2firm that participates in the peer review program of the
3American Institute of Certified Public Accountants.
4    (e) The Department shall determine the amount of qualified
5expenditures and the amount of credits to be issued to the
6applicant. The issuance of certificates of credits to
7applicants shall be performed by the Department. The Department
8shall coordinate with the Illinois Department of Revenue to
9determine if the applicant has any outstanding Illinois tax
10obligations that can be satisfied by the credits to be issued.
11The Department shall inform the applicant of final approval and
12of the final credit amount by letter. An issuance fee of up to
132% of the amount of the credits issued by the tax credit
14certificate may be collected from the applicant and remitted to
15the Department for the purpose of administering the Act. When
16the Department has received the issuance fee from the applicant
17and deposited it into the Department's Administrative Fund, the
18Department shall issue a tax credit certificate to the
19applicant. The taxpayer must attach the tax credit certificate
20to the tax return on which the credits are to be claimed.
21    Section 35. Biennial report; powers of the Department. The
22Department shall issue a report no later than the last day of
23the second fiscal year after the effective date of this Act on
24the overall economic impact to the State of the qualified
25rehabilitation projects. The Department is granted and has all



09800SB0341sam001- 8 -LRB098 04610 HLH 49124 a

1the powers necessary or convenient to carry out the provisions
2of this Act. The Department has the power to promulgate rules
3for the administration of this Act, including the power to
4adopt emergency rules for a period of 12 months after the
5effective date of this Act for the purposes of establishing
6application forms and entering into agreements related to this
8    Section 40. Appeals process. An applicant may appeal an
9adverse decision made by the Department, other than a decision
10related to the qualifications of the structure, rehabilitation
11plan, or rehabilitation project, by requesting a hearing under
12the terms of Article 10 of the Illinois Administrative
13Procedure Act. A petition for hearing must be postmarked no
14later than 30 days from the date of the adverse decision.
15    Section 70. The Illinois Income Tax Act is amended by
16adding Section 224 as follows:
17    (35 ILCS 5/224 new)
18    Sec. 224. Rehabilitation and revitalization credit. For
19tax years commencing on or after January 1, 2014, a taxpayer
20who qualifies for a credit under the Illinois Rehabilitation
21and Revitalization Tax Credit Act is entitled to a credit
22against the taxes imposed under subsections (a) and (b) of
23Section 201 of this Act. If the taxpayer is a partnership or



09800SB0341sam001- 9 -LRB098 04610 HLH 49124 a

1Subchapter S corporation, the credit shall be allowed to the
2partners or shareholders in accordance with the determination
3of income and distributive share of income under Sections 702
4and 704 and Subchapter S of the Internal Revenue Code or the
5credit shall be allowed to the partners or shareholders
6pursuant to an executed agreement among the partners or
7shareholders documenting any alternate distribution method.
8This Section is exempt from the provisions of Section 250 of
9this Act.
10    Section 75. The Illinois Insurance Code is amended by
11adding Section 409.2 as follows:
12    (215 ILCS 5/409.2 new)
13    Sec. 409.2. Rehabilitation and revitalization credit. For
14taxes payable after January 1, 2014, credits may be granted
15against the taxes imposed under Section 409, 413, 444, and
16444.1 of this Act as provided in the Illinois Rehabilitation
17and Revitalization Tax Credit Act.
18    Section 99. Effective date. This Act takes effect upon
19becoming law.".