Full Text of SB3744 96th General Assembly
SB3744 96TH GENERAL ASSEMBLY
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96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010 SB3744
Introduced 2/11/2010, by Sen. Kimberly A. Lightford SYNOPSIS AS INTRODUCED: |
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Amends the Illinois Income Tax Act. Creates a credit for businesses that make contributions to (i) educational improvement organizations, (ii) qualified scholarship organizations, or (iii) qualified pre-kindergarten scholarship organizations. Sets forth the amount of the credit. Provides that educational improvement organizations, scholarship organizations, and qualified pre-kindergarten scholarship organizations must submit certain information to the Department of Commerce and Economic Opportunity. Provides that the credit is exempt from the Act's automatic sunset provision. Effective immediately.
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A BILL FOR
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SB3744 |
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| AN ACT concerning revenue.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Illinois Income Tax Act is amended by adding | 5 |
| Section 219 as follows: | 6 |
| (35 ILCS 5/219 new) | 7 |
| Sec. 219. Credit for contributions to educational | 8 |
| improvement organizations and scholarship organizations. | 9 |
| (a) For taxable years beginning on or after January 1, | 10 |
| 2011, each business that, during the taxable year, makes a | 11 |
| contribution to (i) an educational improvement organization or | 12 |
| (ii) a qualified scholarship organization is entitled to a | 13 |
| credit against the tax imposed under subsections (a) and (b) of | 14 |
| Section 201 in an amount equal to 75% of the amount | 15 |
| contributed. However, if the business provides a written | 16 |
| commitment to the Department that it will provide an equal | 17 |
| contribution in the next taxable year, and such a contribution | 18 |
| is made, then the business is entitled to a credit in both | 19 |
| taxable years in an amount equal to 90% of the amount | 20 |
| contributed during the taxable year. The written commitment | 21 |
| must be made in the form and manner prescribed by the | 22 |
| Department. A credit awarded under this subsection (a) may not | 23 |
| exceed $300,000 per taxable year. |
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| (b) In addition, each business that, during the taxable | 2 |
| year, makes a contribution to a qualified pre-kindergarten | 3 |
| scholarship organization is entitled to a credit against the | 4 |
| tax imposed under subsections (a) and (b) of Section 201 in an | 5 |
| amount equal to (i) 100% of the first $10,000 contributed by | 6 |
| the business during the taxable year, and (ii) 90% of any | 7 |
| additional amounts contributed by the business during the | 8 |
| taxable year. A credit awarded under this subsection (b) may | 9 |
| not exceed $150,000 per taxable year. | 10 |
| (c) For the purposes of this Section: | 11 |
| "Department" means the Department of Commerce and | 12 |
| Economic Opportunity. | 13 |
| "Educational improvement organization" means a | 14 |
| non-profit entity that (i) is exempt from taxation under | 15 |
| Section 501(c)(3) of the Internal Revenue Code of 1986 and | 16 |
| (ii) contributes at least 80% of its annual receipts as | 17 |
| grants to a public school for innovative educational | 18 |
| programs. | 19 |
| "Eligible pre-kindergarten student" means a student, | 20 |
| including an eligible student with a disability, who is | 21 |
| enrolled in a pre-kindergarten program and is a member of a | 22 |
| household with a household income of no more than the | 23 |
| maximum annual household income. | 24 |
| "Eligible student" means a school-age student, | 25 |
| including an eligible student with a disability, who is a | 26 |
| resident of the State of Illinois, who is enrolled in a |
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| school and is a member of a household with a household | 2 |
| income of no more than the maximum annual household income. | 3 |
| "Eligible student with a disability" means a | 4 |
| pre-kindergarten student or a school-age student who meets | 5 |
| all of the following: (i) is either enrolled in a special | 6 |
| education school or otherwise meets the definition of | 7 |
| "children with disabilities," as defined in Section | 8 |
| 14-1.02 of the School Code; (ii) needs special education | 9 |
| and related services; (iii) is enrolled in a | 10 |
| pre-kindergarten program or in a school; and (iv) is a | 11 |
| member of a household with a household income of not more | 12 |
| than the maximum annual household income. | 13 |
| "Household" means a household in which one or more | 14 |
| eligible students resides with a spouse, parent, | 15 |
| grandparent, sibling, or legal guardian. | 16 |
| "Household income" means all moneys or property | 17 |
| received of whatever nature and from whatever source | 18 |
| derived. The term does not include the following: (i) | 19 |
| periodic payments for sickness and disability other than | 20 |
| regular wages received during a period of sickness or | 21 |
| disability; (ii) disability, retirement, or other payments | 22 |
| arising under workers' compensation Acts, occupational | 23 |
| disease Acts, and similar legislation by any unit of | 24 |
| government; (iii) payments commonly recognized as old-age | 25 |
| or retirement benefits paid to persons retired from service | 26 |
| after reaching a specific age or after a stated period of |
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| employment; (iv) payments commonly known as public | 2 |
| assistance or unemployment compensation payments by a | 3 |
| governmental agency; (v) payments to reimburse actual | 4 |
| expenses; (vi) payments made by employers or labor unions | 5 |
| for programs covering hospitalization, sickness, | 6 |
| disability or death, supplemental unemployment benefits, | 7 |
| strike benefits, social security and retirement; and (vii) | 8 |
| compensation received by United States servicemen serving | 9 |
| in a combat zone. | 10 |
| "Innovative educational program" means an advanced | 11 |
| academic or similar program that is not part of the regular | 12 |
| academic program of a public school, but that enhances the | 13 |
| curriculum or academic program of the public school or | 14 |
| provides pre-kindergarten programs to public school | 15 |
| students. | 16 |
| "Maximum annual household income" means (i) 200% of the | 17 |
| federal poverty level, as that level is calculated for a | 18 |
| family of 4, or (ii) with respect to a household with an | 19 |
| eligible student with a disability, the maximum household | 20 |
| income calculated under item (i) multiplied by (A) 1.5 or | 21 |
| (B) 3.0 if the household has at least one eligible student | 22 |
| with a disability who is enrolled in a special education | 23 |
| school. | 24 |
| "Pre-kindergarten program" means a program of | 25 |
| instruction for 3-year-old or 4-year-old students that | 26 |
| utilizes a curriculum aligned with the curriculum of the |
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| school with which it is affiliated and which provides one | 2 |
| of the following: (i) a minimum of 2 hours of instructional | 3 |
| and developmental activities per day at least 60 days per | 4 |
| school year or (ii) a minimum of 2 hours of instructional | 5 |
| and developmental activities per day at least 20 days over | 6 |
| the summer recess. | 7 |
| "Pre-kindergarten scholarship organization" means a | 8 |
| nonprofit entity which: (i) either is exempt from taxation | 9 |
| under Section 501(c)(3) of the Internal Revenue Code of | 10 |
| 1986 or is operated as a separate segregated fund by a | 11 |
| qualified scholarship organization and (ii) contributes at | 12 |
| least 80% of its annual cash receipts to a pre-kindergarten | 13 |
| scholarship program by expending those funds for | 14 |
| distribution during the then current fiscal year of the | 15 |
| organization or during the next succeeding fiscal year of | 16 |
| the organization. | 17 |
| "Pre-kindergarten scholarship program" means a program | 18 |
| to provide tuition to eligible pre-kindergarten students | 19 |
| to attend a pre-kindergarten program operated by or in | 20 |
| conjunction with a school located in this State and that | 21 |
| includes an application and review process for the purpose | 22 |
| of making awards to eligible pre-kindergarten students and | 23 |
| awards scholarships to eligible pre-kindergarten students | 24 |
| without limiting availability to only students of one | 25 |
| school. | 26 |
| "Qualified scholarship organization" means a |
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| non-profit entity that (i) is exempt from taxation under | 2 |
| Section 501(c)(3) of the Internal Revenue Code of 1986 and | 3 |
| (ii) contributes at least 80% of its annual receipts to a | 4 |
| scholarship program. | 5 |
| "Scholarship program" means a program to provide | 6 |
| tuition to eligible students to attend a public or | 7 |
| non-public pre-kindergarten, kindergarten, elementary, or | 8 |
| secondary school in the State. A scholarship program must | 9 |
| include an application and review process for the purpose | 10 |
| of making awards to eligible students. The award of | 11 |
| scholarships to eligible students shall be made without | 12 |
| limiting availability to only students of one school. | 13 |
| "School" means a public or nonpublic pre-kindergarten, | 14 |
| kindergarten, elementary school, or secondary school and | 15 |
| attendance at which satisfies requirements of Section 26-1 | 16 |
| of the School Code and which meets the applicable | 17 |
| requirements of Title VI of the Civil Rights Act of 1964. | 18 |
| "School age" means children from the earliest | 19 |
| admission age to a school's pre-kindergarten or | 20 |
| kindergarten program or, when no pre-kindergarten or | 21 |
| kindergarten program is provided, the school's earliest | 22 |
| admission age for beginners, until the end of the school | 23 |
| year in which the student attains 21 years of age or | 24 |
| graduation from high school, whichever occurs first. | 25 |
| "Special education school" means a school or program | 26 |
| within a school that is designated specifically and |
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| exclusively for students with disabilities as defined by | 2 |
| Section 14-1.02 of the School Code and meets at least one | 3 |
| of the following criteria: (i) the program is a non-public | 4 |
| program approved under Section 14-7.02 of the School Code; | 5 |
| (ii) is accredited by the State Board of Education; (iii) | 6 |
| is a school for the blind or deaf receiving State funding; | 7 |
| (iv) is operated by or under the authority of a bona fide | 8 |
| religious institution or by the State of Illinois or any | 9 |
| political subdivision thereof; or (v) is a facility created | 10 |
| under a special education joint agreement under Section | 11 |
| 10-22.31 of the School Code. | 12 |
| (d) In order to qualify under this Section, a scholarship | 13 |
| organization, a pre-kindergarten scholarship organization, or | 14 |
| an educational improvement organization must submit | 15 |
| information to the Department that enables the Department to | 16 |
| confirm that the organization is exempt from taxation under | 17 |
| section 501(c)(3) of the Internal Revenue Code of 1986. A | 18 |
| scholarship organization or pre-kindergarten scholarship | 19 |
| organization must certify to the Department that the | 20 |
| organization is eligible to participate in the program | 21 |
| established under this Section and must agree to annually | 22 |
| report the following information to the Department by December | 23 |
| 1, 2011 and September 1 of each year thereafter: | 24 |
| (1) the number of scholarships awarded during the | 25 |
| immediately preceding school year to eligible | 26 |
| pre-kindergarten students; |
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| (2) the total and average amounts of the scholarships | 2 |
| awarded during the immediately preceding school year to | 3 |
| eligible pre-kindergarten students; | 4 |
| (3) the number of scholarships awarded during the | 5 |
| immediately preceding school year to eligible students in | 6 |
| grades kindergarten through 8; | 7 |
| (4) the total and average amounts of the scholarships | 8 |
| awarded during the immediately preceding school year to | 9 |
| eligible students in grades kindergarten through 8; | 10 |
| (5) the number of scholarships awarded during the | 11 |
| immediately preceding school year to eligible students in | 12 |
| grades 9 through 12; | 13 |
| (6) the total and average amounts of the scholarships | 14 |
| awarded during the immediately preceding school year to | 15 |
| eligible students in grades 9 through 12; and | 16 |
| (7) if the scholarship organization or | 17 |
| pre-kindergarten scholarship organization collects | 18 |
| information on a county-by-county basis, the total number | 19 |
| and the total amount of scholarships awarded during the | 20 |
| immediately preceding school year to residents of each | 21 |
| county in which the scholarship organization or | 22 |
| pre-kindergarten scholarship organization awarded | 23 |
| scholarships. | 24 |
| The information required under items (1) through (7) of | 25 |
| this subsection shall be submitted on a form provided by the | 26 |
| Department. No later than September 1, 2011 and May 1 of each |
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| year thereafter, the Department shall annually distribute such | 2 |
| sample forms, together with the forms on which the reports are | 3 |
| required to be made, to each listed scholarship organization | 4 |
| and pre-kindergarten scholarship organization. The Department | 5 |
| may not require any other information to be provided by | 6 |
| scholarship organizations or pre-kindergarten scholarship | 7 |
| organizations, except as expressly authorized in this Section. | 8 |
| (e) An application submitted by an educational improvement | 9 |
| organization must describe its proposed innovative educational | 10 |
| program or programs in the form and manner prescribed by the | 11 |
| Department. The Department shall consult with the State Board | 12 |
| of Education as necessary. The Department shall review and | 13 |
| approve or disapprove the application. In order to be eligible | 14 |
| to participate in the program established under this Section, | 15 |
| an educational improvement organization must agree to annually | 16 |
| report the following information to the department by December | 17 |
| 1, 2011 and September 1 of each year thereafter: | 18 |
| (1) the name of the innovative educational program or | 19 |
| programs and the total amount of the grant or grants made | 20 |
| to those programs during the immediately preceding school | 21 |
| year; | 22 |
| (2) a description of how each grant was utilized during | 23 |
| the immediately preceding school year and a description of | 24 |
| any demonstrated or expected innovative educational | 25 |
| improvements; | 26 |
| (3) the names of the public schools and school |
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| districts where innovative educational programs that | 2 |
| received grants during the immediately preceding school | 3 |
| year were implemented; and | 4 |
| (4) if the educational improvement organization | 5 |
| collects information on a county-by-county basis, the | 6 |
| total number and the total amount of grants made during the | 7 |
| immediately preceding school year for programs at public | 8 |
| schools in each county in which the educational improvement | 9 |
| organization made grants. | 10 |
| The information required under items (1) through (4) of | 11 |
| this subsection shall be submitted on a form provided by the | 12 |
| Department. No later than September 1, 2011 and May 1 of each | 13 |
| year thereafter, the Department shall annually distribute such | 14 |
| sample forms, together with the forms on which the reports are | 15 |
| required to be made, to each listed educational improvement | 16 |
| organization. The Department may not require any other | 17 |
| information to be provided by educational improvement | 18 |
| organizations, except as expressly authorized in this Section. | 19 |
| (f) The Department shall notify the scholarship | 20 |
| organization, pre-kindergarten scholarship organization, or | 21 |
| educational improvement organization that the organization | 22 |
| meets the requirements of this Section for that fiscal year no | 23 |
| later than 60 days after the organization has submitted the | 24 |
| information required under this Section. The Department shall | 25 |
| annually publish in the Illinois Register a list of each | 26 |
| scholarship organization, pre-kindergarten scholarship |
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| organization, or educational improvement organization | 2 |
| qualified. The list shall also be posted and updated as | 3 |
| necessary on the publicly accessible internet website of the | 4 |
| Department. | 5 |
| (g) A taxpayer shall apply to the Department for a tax | 6 |
| credit under this Section. The taxpayer shall receive a tax | 7 |
| credit under this Section if the scholarship organization, | 8 |
| pre-kindergarten scholarship organization, or educational | 9 |
| improvement organization that receives the contribution | 10 |
| appears on the list established under subsection (f). Tax | 11 |
| credits under this Section shall be awarded by the Department | 12 |
| on a first-come, first-served basis within the limitation | 13 |
| established under subsection (h) of this Section. A | 14 |
| contribution by a business to a scholarship organization, | 15 |
| pre-kindergarten scholarship organization or educational | 16 |
| improvement organization shall be made no later than 60 days | 17 |
| following the approval of the application. | 18 |
| (h) The total aggregate amount of all tax credits approved | 19 |
| under this Section shall not exceed $10,000,000 in a fiscal | 20 |
| year. The total aggregate amount of all tax credits approved | 21 |
| under this Section for contributions from business firms to | 22 |
| scholarship organizations shall not exceed $7,000,000. The | 23 |
| total aggregate amount of all tax credits approved under this | 24 |
| Section for contributions from business firms to educational | 25 |
| improvement organizations shall not exceed $2,000,000. The | 26 |
| total aggregate amount of all tax credits approved under this |
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| Section for contributions from business firms to | 2 |
| pre-kindergarten scholarship programs shall not exceed | 3 |
| $1,000,000 in a fiscal year. No tax credit shall be approved | 4 |
| under this Section for activities that are a part of the | 5 |
| taxpayer's normal course of business. | 6 |
| (i) For partners, shareholders of Subchapter S | 7 |
| corporations, and owners of limited liability companies, if the | 8 |
| liability company is treated as a partnership for purposes of | 9 |
| federal and State income taxation, there is allowed a credit | 10 |
| under this Section to be determined in accordance with the | 11 |
| determination of income and distributive share of income under | 12 |
| Sections 702 and 704 and Subchapter S of the Internal Revenue | 13 |
| Code. | 14 |
| (j) A credit awarded under this Section may not reduce the | 15 |
| taxpayer's liability to less than zero. | 16 |
| (k) The Department shall provide a list of all scholarship | 17 |
| organizations, pre-kindergarten scholarship organizations and | 18 |
| educational improvement organizations receiving contributions | 19 |
| from business firms granted a tax credit under this article to | 20 |
| the General Assembly by June 30th of each year. The Department | 21 |
| in consultation with the State Board of Education shall develop | 22 |
| guidelines to determine the eligibility of an innovative | 23 |
| educational program. | 24 |
| (f) This Section is exempt from the provisions of Section | 25 |
| 250.
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| Section 99. Effective date. This Act takes effect upon |
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| becoming law.
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