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91_SB0329
LRB9103543NTsb
1 AN ACT concerning educational opportunity grants.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 1. Short title. This Act may be cited as the
5 Educational Opportunity Grant Act.
6 Section 5. Findings and declaration of policy. The
7 General Assembly finds and declares the following:
8 (1) The imposition on families of the compulsory
9 education law imposes important responsibilities on the
10 General Assembly to safeguard the academic choices for
11 parents of children attending elementary and secondary
12 schools in this State. These choices should include the
13 freedom of parents to choose the elementary or secondary
14 school that their children attend.
15 (2) There is a crisis in elementary and secondary
16 education in this State. Many school children are
17 performing significantly below relevant standards; others
18 are dropping out of school before completing the ordinary
19 course of secondary education. Mobility rates or
20 attendance rates at some schools reach levels that create
21 a significant hindrance to effective instruction and
22 results in obstacles to teachers' efforts to teach.
23 Parental satisfaction with the education provided to
24 their children attending these schools is low.
25 (3) Low-income parents of school age children are
26 frequently unable to evaluate the quality of the
27 educational services available and determine in which
28 school to enroll their children. The barriers to
29 information low-income parents face include a lack of
30 accessible and comprehensive information about
31 educational options for their children and a lack of
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1 proximity to a variety of educational opportunities.
2 Sometimes this inability is due to laws and regulations
3 that limit parents' freedom to schools that they believe
4 can provide their children with a quality education.
5 Low-income parents often also lack the resources to make
6 residential choices that include an evaluation of the
7 quality of the local schools or avail themselves of
8 private school alternatives.
9 (4) Some schools in this State are providing a
10 better elementary and secondary education than others.
11 Those schools have low mobility rates and high attendance
12 rates. Pupils in those schools generally remain in
13 school until they complete the ordinary course of their
14 secondary education and receive effective educational
15 instruction. Pupils in these schools generally meet
16 appropriate performance standards. As a result, pupils
17 in these schools are generally prepared to meet the
18 challenges of post-secondary education or workforce
19 participation. Parental satisfaction with the
20 educational services provided by these schools is high.
21 (5) Businesses cite the caliber of the available
22 workforce and the availability of quality schools to
23 which their employees can send their children as factors
24 in determining where to locate or expand facilities.
25 (6) The ability of parents to chose the schools
26 their children attend carries a positive competitive
27 force on all schools, both public and private.
28 (7) High quality, cost effective, responsive, and
29 innovative education for this State's children is vital
30 to the State's future.
31 (8) The State has the right and duty, in order to
32 promote the future well being of all its citizens,
33 particularly those who are economically and socially
34 disadvantaged, to provide educational opportunity grants
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1 to low-income parents to help them exercise a choice in
2 the selection of their child's school. Providing the
3 child of these parents with an educational opportunity
4 grant to attend a nonpublic school serves a public
5 benefit, is in the public interest, and serves a secular
6 purpose.
7 Section 10. Definitions. In this Act:
8 "Custodian" means, with respect to a qualifying pupil, an
9 Illinois resident who is the parent or legal guardian of the
10 qualifying pupil.
11 "Eligible private school" means one of the following:
12 (1) A private school that has been operating for at
13 least 2 years and meets standards pursuant to Section 45
14 of this Act.
15 (2) A private school operating for less than 2
16 years that meets standards pursuant to Section 45 of this
17 Act and obtains a letter of credit or bond for one-third
18 of the total amount of funds to be received in a single
19 school year through acceptance of qualifying pupils whose
20 custodians will pay for qualified education expenses
21 through grants provided for in this Act. The letter of
22 credit or bond shall, in the event of nonperformance, be
23 payable to the State of Illinois and renewable each
24 academic year.
25 "Grant" means a written instrument payable to a custodian
26 of a qualifying pupil for the purpose of paying qualified
27 education expenses incurred on behalf of the qualifying pupil
28 at an eligible private school. For a qualifying pupil
29 enrolled at an eligible private school in grades kindergarten
30 through 8, the value of the grant shall be the lesser of (i)
31 90% of the qualified education expenses incurred by a
32 qualifying pupil at the school in which the pupil is
33 enrolled, or (ii) $2,000. For a qualifying pupil enrolled at
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1 an eligible private school in grades 9 through 12, the value
2 of the grant shall be the lesser of (i) 90% of the qualified
3 education expenses incurred by a qualifying pupil at the
4 school in which the pupil is enrolled or (ii) $3,000.
5 "Office of Grant Administration" means the Office of
6 Educational Opportunity Grant Administration.
7 "Participating school district" means one of the
8 following 6 public school districts:
9 (1) City of Chicago School District 299.
10 (2) Rockford School District 205.
11 (3) Peoria School District 150.
12 (4) East St. Louis School District 189.
13 (5) Joliet School District 86.
14 (6) Joliet Township High School District 204.
15 For purposes of Section 20 of this Act, the enrollment at
16 Joliet School District 86 and Joliet Township High School
17 District 204 shall be aggregated.
18 "Private school" means any non-home based, nonpublic
19 elementary or secondary school located in this State that is
20 in compliance with the laws of this State and Title VI of the
21 Civil Rights Act of 1964 and whose attendance satisfies the
22 requirements of Section 26-1 of the School Code.
23 "Qualified education expenses" means costs reasonably
24 incurred by a custodian on behalf of a qualifying pupil for
25 services at the eligible private school in which the pupil is
26 enrolled during the regular school year. Qualified education
27 expenses shall not include costs incurred for supplies or
28 extra-curricular activities.
29 "Qualifying pupil" means an individual who:
30 (1) resides within one of the participating school
31 districts;
32 (2) is under age 21 at the close of the school year
33 for which the grant is sought;
34 (3) during the school year for which the grant is
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1 sought is a full-time pupil enrolled in a kindergarten
2 through 12th grade education program at any eligible
3 private school as defined in this Act; and
4 (4) is a member of a family that has a total family
5 income that does not exceed an amount equal to 1.5 times
6 the family income level necessary to qualify for free
7 meals under the National School Lunch Act.
8 Section 15. Educational opportunity grant program.
9 Beginning with the 2000-2001 school year, a custodian of a
10 qualifying pupil shall be entitled, subject to Section 25 of
11 this Act, to a grant for payment of qualified education
12 expenses incurred on behalf of a qualifying pupil at any
13 eligible private school in which the pupil is enrolled. The
14 amount of the grant in the case of any qualifying pupil who
15 is being educated pursuant to an individualized education
16 program for children with disabilities in accordance with
17 Article 14 of the School Code shall be increased to take into
18 account the instruction, related services, and transportation
19 costs for educating the pupil.
20 Section 20. Number of grants. The total number of grants
21 available in school years 2000-2001 and 2001-2002 in a
22 participating school district shall be the greater of 200 or
23 1% of the district's average daily attendance for the prior
24 school year as calculated under of Section 18-8.05 of the
25 School Code. The total number of grants available in school
26 years 2002-2003, 2003-2004, and 2004-2005 in a participating
27 school district shall be equal to 1.5% of the district's
28 average daily attendance for the prior school year as
29 calculated under Section 18-8.05 of the School Code.
30 Seventy-five percent of these grants shall be reserved for
31 qualifying pupils in grades kindergarten through 8 and 25% of
32 these grants shall be reserved for qualifying pupils in
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1 grades 9 through 12. Subject to the limits of this Section,
2 the Office of Grant Administration shall award as many grants
3 as can be funded given the amount appropriated for the
4 program. In no case, however, shall more than 20% of all
5 grants awarded be used by qualifying pupils who were enrolled
6 in a private school prior to and during the school year of
7 application for a grant. With respect to kindergartners, this
8 provision shall be satisfied by enrolling the pupil in a
9 kindergarten during the school year of application for a
10 grant.
11 Section 25. Eligibility for and award of grants. In
12 order to be eligible for a grant within the dollar limits set
13 out in this Act, a custodian must apply in accordance with
14 procedures established by the Office of Grant Administration.
15 These procedures shall require application for the grant with
16 documentation as to eligibility no later than the fifteenth
17 day of February prior to admission and award of grants to
18 eligible custodians no later than the fifteenth day of April
19 prior to admission. If there are more applications than
20 grants available in a participating school district, the
21 grants shall be awarded by lot from among all eligible
22 applicants, subject to the following conditions:
23 (1) First preference shall be given to custodians of
24 qualifying pupils who attend public schools in a
25 participating school district that are on the State Board
26 of Education Early Academic Warning List or Academic
27 Watch List under Section 2-3.25d of the School Code.
28 (2) First preference shall also be given to
29 custodians of qualifying pupils who attend public schools
30 in a participating school district that are on
31 remediation or probation in accordance with Section
32 34-8.3 of the School Code, subject to the actions set
33 forth in subsection (d) of Section 34-8.3 of the School
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1 Code, in educational crisis in accordance with subsection
2 (f) of Section 34-8.3 of the School Code, or subject to
3 intervention in accordance with Section 34-8.4 of the
4 School Code.
5 Section 30. Use of grants. A custodian of a child with
6 a grant may use the grant for educational services at an
7 eligible private school only if the child is admitted to the
8 eligible private school. A qualifying pupil who is awarded a
9 grant under this Act may decide to utilize the grant at an
10 eligible private school if all of the following conditions
11 are met:
12 (1) At any time prior to the start of the school
13 year, the custodian makes an application on behalf of the
14 pupil to an eligible private school.
15 (2) The eligible private school notifies the
16 custodian and the Office of Grant Administration within
17 60 days after the date the pupil filed an application
18 that the pupil has been admitted.
19 (3) The pupil actually enrolls in the eligible
20 private school to which the pupil was admitted.
21 Section 35. Issuance and payment of grants.
22 (a) Each grant to be used for payment of qualified
23 education expenses at an eligible private school is payable
24 to the custodian of the qualifying pupil to whom the grant
25 was awarded.
26 (b) At intervals during the school year established by
27 the Office of Grant Administration, eligible private schools
28 in which any grant pupils are enrolled shall notify the
29 Office of Grant Administration of:
30 (1) the number of qualifying pupils who were
31 reported to the Office of Grant Administration as having
32 been admitted by that private school and who are still
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1 enrolled in the private school; and
2 (2) the number of qualifying pupils who were
3 reported to the Office of Grant Administration as having
4 been admitted by another private school and since the
5 date of admission have transferred to that school.
6 (c) From time to time, the Office of Grant
7 Administration shall make a payment to the custodian of each
8 qualifying pupil entitled to a grant. The first payment under
9 this Section shall be made by the fifteenth day of October
10 and shall equal 50% of the grant amount. The final payment
11 under this Section shall be made by the fifteenth day of
12 February and shall equal 50% of the grant amount. A
13 custodian, in turn, shall make corresponding payments for
14 qualified education expenses to the eligible private school
15 at which the custodian's qualifying pupil is enrolled. The
16 amount of the payments under this Section shall be
17 proportionately reduced in the case of any pupil who is not
18 enrolled in an eligible private school for the entire school
19 year.
20 (d) The Office of Grant Administration shall establish
21 procedures for the issuance and payment of the grants under
22 this Act.
23 Section 40. Transportation. A custodian of a qualifying
24 pupil who attends an eligible private school shall be
25 entitled to reimbursement of qualified transportation
26 expenses under Section 29-5.2 of the School Code.
27 Section 45. Private school qualifications. Custodians
28 may only use grants at private schools that:
29 (1) Register with the Office of Grant Administration
30 and commit in writing to follow the requirements of this
31 Act.
32 (2) Meet all State minimum standards for recognition
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1 with which private schools must currently comply or are
2 accredited by a recognized school accreditation agency.
3 Newly established private schools must either meet all
4 State minimum standards for recognition or comply or be
5 accredited by a recognized school accreditation agency
6 within 2 years of initiating operations.
7 (3) Enroll a minimum of 10 pupils per class or a
8 sum of at least 25 pupils in all the classes offered.
9 (4) Have admission policies that do not
10 discriminate as to race, ethnicity, national origin,
11 religion, sex, or a pupil's physical or mental
12 disability.
13 (5) Do not advocate or foster unlawful behavior or
14 teach hatred of any person or group on the basis of race,
15 ethnicity, national origin, or religion.
16 (6) Provide a curriculum that includes the core
17 subjects of English language arts (reading and writing),
18 mathematics, biological and physical sciences, and social
19 sciences.
20 (7) Meet minimum health and safety standards with
21 which private schools must currently comply.
22 (8) Disclose teacher credentials to parents.
23 (9) Report pupil achievement data as measured by
24 standardized tests or other criteria as determined by the
25 Office of Grant Administration.
26 (10) Provide to the Office of Grant Administration
27 information regarding:
28 (A) Its participation in the grant program.
29 (B) Its program of instruction.
30 (C) Achievement data regarding pupils
31 attending the school.
32 (D) The incidence of illegal drug use.
33 (E) School discipline and safety.
34 (11) Agree not to charge any tuition to a
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1 qualifying pupil participating in this grant program in
2 excess of 10% of the grant amount. In its discretion,
3 the private school may permit the payment of any such
4 excess tuition to be satisfied by the custodian's
5 provision of in-kind contributions or services.
6 Section 50. Funding. The cost of the grant program
7 established by this Act shall be paid from a separate
8 appropriation made by the General Assembly for the purposes
9 of this Act. The State Board of Education shall insure that
10 the State aid payable to all other school districts is
11 neither reduced or increased as a result of the
12 appropriations made for this program, except for all
13 categorical funding for any qualifying pupil who is being
14 educated pursuant to an individualized education program for
15 children with disabilities in accordance with Article 14 of
16 the School Code, including funds for instruction, related
17 services, and transportation costs for educating the pupil,
18 which shall be reduced from the funds otherwise provided to
19 the resident school district of each such qualifying pupil.
20 In addition, the State Board of Education shall establish
21 procedures for ensuring that no participating school district
22 experiences a decrease in enrollment for purposes of
23 calculating general State aid in any year of this program as
24 a result of participation by qualifying pupils in the
25 program. For purposes of calculating a participating school
26 district's average daily attendance under Section 18-8.05 of
27 the School Code, all pupils previously enrolled in a school
28 operated by a participating school district receiving a grant
29 under this Act shall be included in the pupil attendance
30 figures of the school district in which the pupil resides.
31 Section 55. Sectarian, religious, or parochial school.
32 Grants under this Act are grants-of-aid to children through
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1 their custodians, not to the eligible private schools in
2 which the children are enrolled. The selection by custodians
3 of an eligible private school shall not constitute a decision
4 or act of the State or any of its subdivisions. A
5 custodian's use of grant funds for the payment of qualified
6 education expenses to an eligible private school which is a
7 sectarian, religious, or parochial school under this Act
8 shall not constitute aid to any church, sect, religious
9 denomination, or sectarian institution. A qualifying pupil
10 who is enrolled at an eligible private school that is a
11 sectarian, religious, or parochial school and receives grant
12 funds paid by the pupil's custodian shall be permitted to opt
13 out of any mandatory religious education courses upon written
14 request of the pupil's custodian.
15 Section 60. Not gross income. The amount of any grant
16 redeemed under this Act shall not be considered gross income
17 and shall not be taxable for Illinois income tax purposes.
18 Section 65. Penalties. It shall be a Class 3 felony to
19 use or attempt to use a grant for any purpose other than
20 those permitted by this Act. It shall be a Class 3 felony
21 to, with intent to defraud, knowingly forge, alter, or
22 misrepresent information on a grant or any documents
23 submitted in application for a grant, to issue or deliver any
24 such document knowing it to have been thus forged, altered,
25 or based on misrepresentation, or to possess, with intent to
26 issue or deliver, any such document knowing it to have been
27 forged, altered, or based on misrepresentation.
28 Section 70. Office of Educational Opportunity Grant
29 Administration.
30 (a) There shall be established in the State Board of
31 Education an Office of Educational Opportunity Grant
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1 Administration. The Governor shall appoint the Director of
2 the Office of Grant Administration and the Director shall
3 report directly to the Governor. The Office of Grant
4 Administration shall perform the duties imposed on it by this
5 Act, including without limitation dissemination of
6 information regarding the grant program, identification of
7 eligible private schools, administration of the lottery,
8 transportation coordination, issuance and payment of grants,
9 and being a clearinghouse for research regarding the academic
10 performance of qualifying pupils who receive grants and the
11 overall effectiveness of the program. The General Assembly
12 shall appropriate sufficient funds for all of the
13 responsibilities outlined in this Act for the Office of Grant
14 Administration.
15 (b) The Office of Grant Administration shall convene a
16 Council of Advisors of not more than 10 individuals with
17 academic credentials or applicable professional experience
18 appropriate to discharge the responsibilities of the Council
19 of Advisors outlined in this subsection (b). If the amount
20 needed to fund grants for all qualifying pupils exceeds the
21 amount appropriated in any year, the Council of Advisors
22 shall determine an equitable way to allocate the appropriated
23 amount among the qualifying pupils consistent with the stated
24 purpose and policy of this Act. The Council of Advisors
25 shall arrange, by a competitive process, to have conducted an
26 independent evaluation of the effectiveness of this program.
27 A comprehensive review and evaluation shall be completed and
28 submitted to the Council of Advisors and the Office of Grant
29 Administration after the end of the 2001-2002 school year and
30 shall be updated and resubmitted annually thereafter.
31 Section 75. Rules. The Office of Grant Administration
32 shall promulgate any rules necessary to implement this Act.
33 The Office of Grant Administration shall promulgate rules
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1 only to the extent necessary to facilitate the operation of
2 this program and shall not use this Act to impose further
3 substantive educational requirements on any school. However,
4 rules may be promulgated to safeguard against eligible
5 private schools increasing qualified educational expenses for
6 the sole purpose of gaining access to increased grant
7 amounts.
8 Section 905. The Illinois Income Tax Act is amended by
9 changing Section 203 as follows:
10 (35 ILCS 5/203) (from Ch. 120, par. 2-203)
11 Sec. 203. Base income defined.
12 (a) Individuals.
13 (1) In general. In the case of an individual, base
14 income means an amount equal to the taxpayer's adjusted
15 gross income for the taxable year as modified by
16 paragraph (2).
17 (2) Modifications. The adjusted gross income
18 referred to in paragraph (1) shall be modified by adding
19 thereto the sum of the following amounts:
20 (A) An amount equal to all amounts paid or
21 accrued to the taxpayer as interest or dividends
22 during the taxable year to the extent excluded from
23 gross income in the computation of adjusted gross
24 income, except stock dividends of qualified public
25 utilities described in Section 305(e) of the
26 Internal Revenue Code;
27 (B) An amount equal to the amount of tax
28 imposed by this Act to the extent deducted from
29 gross income in the computation of adjusted gross
30 income for the taxable year;
31 (C) An amount equal to the amount received
32 during the taxable year as a recovery or refund of
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1 real property taxes paid with respect to the
2 taxpayer's principal residence under the Revenue Act
3 of 1939 and for which a deduction was previously
4 taken under subparagraph (L) of this paragraph (2)
5 prior to July 1, 1991, the retrospective application
6 date of Article 4 of Public Act 87-17. In the case
7 of multi-unit or multi-use structures and farm
8 dwellings, the taxes on the taxpayer's principal
9 residence shall be that portion of the total taxes
10 for the entire property which is attributable to
11 such principal residence;
12 (D) An amount equal to the amount of the
13 capital gain deduction allowable under the Internal
14 Revenue Code, to the extent deducted from gross
15 income in the computation of adjusted gross income;
16 (D-5) An amount, to the extent not included in
17 adjusted gross income, equal to the amount of money
18 withdrawn by the taxpayer in the taxable year from a
19 medical care savings account and the interest earned
20 on the account in the taxable year of a withdrawal
21 pursuant to subsection (b) of Section 20 of the
22 Medical Care Savings Account Act; and
23 (D-10) For taxable years ending after December
24 31, 1997, an amount equal to any eligible
25 remediation costs that the individual deducted in
26 computing adjusted gross income and for which the
27 individual claims a credit under subsection (l) of
28 Section 201;
29 and by deducting from the total so obtained the sum of
30 the following amounts:
31 (E) Any amount included in such total in
32 respect of any compensation (including but not
33 limited to any compensation paid or accrued to a
34 serviceman while a prisoner of war or missing in
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1 action) paid to a resident by reason of being on
2 active duty in the Armed Forces of the United States
3 and in respect of any compensation paid or accrued
4 to a resident who as a governmental employee was a
5 prisoner of war or missing in action, and in respect
6 of any compensation paid to a resident in 1971 or
7 thereafter for annual training performed pursuant to
8 Sections 502 and 503, Title 32, United States Code
9 as a member of the Illinois National Guard;
10 (F) An amount equal to all amounts included in
11 such total pursuant to the provisions of Sections
12 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
13 408 of the Internal Revenue Code, or included in
14 such total as distributions under the provisions of
15 any retirement or disability plan for employees of
16 any governmental agency or unit, or retirement
17 payments to retired partners, which payments are
18 excluded in computing net earnings from self
19 employment by Section 1402 of the Internal Revenue
20 Code and regulations adopted pursuant thereto;
21 (G) The valuation limitation amount;
22 (H) An amount equal to the amount of any tax
23 imposed by this Act which was refunded to the
24 taxpayer and included in such total for the taxable
25 year;
26 (I) An amount equal to all amounts included in
27 such total pursuant to the provisions of Section 111
28 of the Internal Revenue Code as a recovery of items
29 previously deducted from adjusted gross income in
30 the computation of taxable income;
31 (J) An amount equal to those dividends
32 included in such total which were paid by a
33 corporation which conducts business operations in an
34 Enterprise Zone or zones created under the Illinois
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1 Enterprise Zone Act, and conducts substantially all
2 of its operations in an Enterprise Zone or zones;
3 (K) An amount equal to those dividends
4 included in such total that were paid by a
5 corporation that conducts business operations in a
6 federally designated Foreign Trade Zone or Sub-Zone
7 and that is designated a High Impact Business
8 located in Illinois; provided that dividends
9 eligible for the deduction provided in subparagraph
10 (J) of paragraph (2) of this subsection shall not be
11 eligible for the deduction provided under this
12 subparagraph (K);
13 (L) For taxable years ending after December
14 31, 1983, an amount equal to all social security
15 benefits and railroad retirement benefits included
16 in such total pursuant to Sections 72(r) and 86 of
17 the Internal Revenue Code;
18 (M) With the exception of any amounts
19 subtracted under subparagraph (N), an amount equal
20 to the sum of all amounts disallowed as deductions
21 by Sections 171(a) (2), and 265(2) of the Internal
22 Revenue Code of 1954, as now or hereafter amended,
23 and all amounts of expenses allocable to interest
24 and disallowed as deductions by Section 265(1) of
25 the Internal Revenue Code of 1954, as now or
26 hereafter amended;
27 (N) An amount equal to all amounts included in
28 such total which are exempt from taxation by this
29 State either by reason of its statutes or
30 Constitution or by reason of the Constitution,
31 treaties or statutes of the United States; provided
32 that, in the case of any statute of this State that
33 exempts income derived from bonds or other
34 obligations from the tax imposed under this Act, the
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1 amount exempted shall be the interest net of bond
2 premium amortization;
3 (O) An amount equal to any contribution made
4 to a job training project established pursuant to
5 the Tax Increment Allocation Redevelopment Act;
6 (P) An amount equal to the amount of the
7 deduction used to compute the federal income tax
8 credit for restoration of substantial amounts held
9 under claim of right for the taxable year pursuant
10 to Section 1341 of the Internal Revenue Code of
11 1986;
12 (Q) An amount equal to any amounts included in
13 such total, received by the taxpayer as an
14 acceleration in the payment of life, endowment or
15 annuity benefits in advance of the time they would
16 otherwise be payable as an indemnity for a terminal
17 illness;
18 (R) An amount equal to the amount of any
19 federal or State bonus paid to veterans of the
20 Persian Gulf War;
21 (S) An amount, to the extent included in
22 adjusted gross income, equal to the amount of a
23 contribution made in the taxable year on behalf of
24 the taxpayer to a medical care savings account
25 established under the Medical Care Savings Account
26 Act to the extent the contribution is accepted by
27 the account administrator as provided in that Act;
28 (T) An amount, to the extent included in
29 adjusted gross income, equal to the amount of
30 interest earned in the taxable year on a medical
31 care savings account established under the Medical
32 Care Savings Account Act on behalf of the taxpayer,
33 other than interest added pursuant to item (D-5) of
34 this paragraph (2);
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1 (U) For one taxable year beginning on or after
2 January 1, 1994, an amount equal to the total amount
3 of tax imposed and paid under subsections (a) and
4 (b) of Section 201 of this Act on grant amounts
5 received by the taxpayer under the Nursing Home
6 Grant Assistance Act during the taxpayer's taxable
7 years 1992 and 1993;
8 (V) Beginning with tax years ending on or
9 after December 31, 1995 and ending with tax years
10 ending on or before December 31, 1999, an amount
11 equal to the amount paid by a taxpayer who is a
12 self-employed taxpayer, a partner of a partnership,
13 or a shareholder in a Subchapter S corporation for
14 health insurance or long-term care insurance for
15 that taxpayer or that taxpayer's spouse or
16 dependents, to the extent that the amount paid for
17 that health insurance or long-term care insurance
18 may be deducted under Section 213 of the Internal
19 Revenue Code of 1986, has not been deducted on the
20 federal income tax return of the taxpayer, and does
21 not exceed the taxable income attributable to that
22 taxpayer's income, self-employment income, or
23 Subchapter S corporation income; except that no
24 deduction shall be allowed under this item (V) if
25 the taxpayer is eligible to participate in any
26 health insurance or long-term care insurance plan of
27 an employer of the taxpayer or the taxpayer's
28 spouse. The amount of the health insurance and
29 long-term care insurance subtracted under this item
30 (V) shall be determined by multiplying total health
31 insurance and long-term care insurance premiums paid
32 by the taxpayer times a number that represents the
33 fractional percentage of eligible medical expenses
34 under Section 213 of the Internal Revenue Code of
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1 1986 not actually deducted on the taxpayer's federal
2 income tax return; and
3 (W) For taxable years beginning on or after
4 January 1, 1998, all amounts included in the
5 taxpayer's federal gross income in the taxable year
6 from amounts converted from a regular IRA to a Roth
7 IRA. This paragraph is exempt from the provisions of
8 Section 250; and.
9 (X) An amount equal to the amount of any grant
10 redeemed under the Educational Opportunity Grant
11 Act.
12 (b) Corporations.
13 (1) In general. In the case of a corporation, base
14 income means an amount equal to the taxpayer's taxable
15 income for the taxable year as modified by paragraph (2).
16 (2) Modifications. The taxable income referred to
17 in paragraph (1) shall be modified by adding thereto the
18 sum of the following amounts:
19 (A) An amount equal to all amounts paid or
20 accrued to the taxpayer as interest and all
21 distributions received from regulated investment
22 companies during the taxable year to the extent
23 excluded from gross income in the computation of
24 taxable income;
25 (B) An amount equal to the amount of tax
26 imposed by this Act to the extent deducted from
27 gross income in the computation of taxable income
28 for the taxable year;
29 (C) In the case of a regulated investment
30 company, an amount equal to the excess of (i) the
31 net long-term capital gain for the taxable year,
32 over (ii) the amount of the capital gain dividends
33 designated as such in accordance with Section
34 852(b)(3)(C) of the Internal Revenue Code and any
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1 amount designated under Section 852(b)(3)(D) of the
2 Internal Revenue Code, attributable to the taxable
3 year. (this amendatory Act of 1995 (Public Act
4 89-89) is declarative of existing law and is not a
5 new enactment);.
6 (D) The amount of any net operating loss
7 deduction taken in arriving at taxable income, other
8 than a net operating loss carried forward from a
9 taxable year ending prior to December 31, 1986; and
10 (E) For taxable years in which a net operating
11 loss carryback or carryforward from a taxable year
12 ending prior to December 31, 1986 is an element of
13 taxable income under paragraph (1) of subsection (e)
14 or subparagraph (E) of paragraph (2) of subsection
15 (e), the amount by which addition modifications
16 other than those provided by this subparagraph (E)
17 exceeded subtraction modifications in such earlier
18 taxable year, with the following limitations applied
19 in the order that they are listed:
20 (i) the addition modification relating to
21 the net operating loss carried back or forward
22 to the taxable year from any taxable year
23 ending prior to December 31, 1986 shall be
24 reduced by the amount of addition modification
25 under this subparagraph (E) which related to
26 that net operating loss and which was taken
27 into account in calculating the base income of
28 an earlier taxable year, and
29 (ii) the addition modification relating
30 to the net operating loss carried back or
31 forward to the taxable year from any taxable
32 year ending prior to December 31, 1986 shall
33 not exceed the amount of such carryback or
34 carryforward;
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1 For taxable years in which there is a net
2 operating loss carryback or carryforward from more
3 than one other taxable year ending prior to December
4 31, 1986, the addition modification provided in this
5 subparagraph (E) shall be the sum of the amounts
6 computed independently under the preceding
7 provisions of this subparagraph (E) for each such
8 taxable year;, and
9 (E-5) For taxable years ending after December
10 31, 1997, an amount equal to any eligible
11 remediation costs that the corporation deducted in
12 computing adjusted gross income and for which the
13 corporation claims a credit under subsection (l) of
14 Section 201;
15 and by deducting from the total so obtained the sum of
16 the following amounts:
17 (F) An amount equal to the amount of any tax
18 imposed by this Act which was refunded to the
19 taxpayer and included in such total for the taxable
20 year;
21 (G) An amount equal to any amount included in
22 such total under Section 78 of the Internal Revenue
23 Code;
24 (H) In the case of a regulated investment
25 company, an amount equal to the amount of exempt
26 interest dividends as defined in subsection (b) (5)
27 of Section 852 of the Internal Revenue Code, paid to
28 shareholders for the taxable year;
29 (I) With the exception of any amounts
30 subtracted under subparagraph (J), an amount equal
31 to the sum of all amounts disallowed as deductions
32 by Sections 171(a) (2), and 265(a)(2) and amounts
33 disallowed as interest expense by Section 291(a)(3)
34 of the Internal Revenue Code, as now or hereafter
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1 amended, and all amounts of expenses allocable to
2 interest and disallowed as deductions by Section
3 265(a)(1) of the Internal Revenue Code, as now or
4 hereafter amended;
5 (J) An amount equal to all amounts included in
6 such total which are exempt from taxation by this
7 State either by reason of its statutes or
8 Constitution or by reason of the Constitution,
9 treaties or statutes of the United States; provided
10 that, in the case of any statute of this State that
11 exempts income derived from bonds or other
12 obligations from the tax imposed under this Act, the
13 amount exempted shall be the interest net of bond
14 premium amortization;
15 (K) An amount equal to those dividends
16 included in such total which were paid by a
17 corporation which conducts business operations in an
18 Enterprise Zone or zones created under the Illinois
19 Enterprise Zone Act and conducts substantially all
20 of its operations in an Enterprise Zone or zones;
21 (L) An amount equal to those dividends
22 included in such total that were paid by a
23 corporation that conducts business operations in a
24 federally designated Foreign Trade Zone or Sub-Zone
25 and that is designated a High Impact Business
26 located in Illinois; provided that dividends
27 eligible for the deduction provided in subparagraph
28 (K) of paragraph 2 of this subsection shall not be
29 eligible for the deduction provided under this
30 subparagraph (L);
31 (M) For any taxpayer that is a financial
32 organization within the meaning of Section 304(c) of
33 this Act, an amount included in such total as
34 interest income from a loan or loans made by such
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1 taxpayer to a borrower, to the extent that such a
2 loan is secured by property which is eligible for
3 the Enterprise Zone Investment Credit. To determine
4 the portion of a loan or loans that is secured by
5 property eligible for a Section 201(h) investment
6 credit to the borrower, the entire principal amount
7 of the loan or loans between the taxpayer and the
8 borrower should be divided into the basis of the
9 Section 201(h) investment credit property which
10 secures the loan or loans, using for this purpose
11 the original basis of such property on the date that
12 it was placed in service in the Enterprise Zone.
13 The subtraction modification available to taxpayer
14 in any year under this subsection shall be that
15 portion of the total interest paid by the borrower
16 with respect to such loan attributable to the
17 eligible property as calculated under the previous
18 sentence;
19 (M-1) For any taxpayer that is a financial
20 organization within the meaning of Section 304(c) of
21 this Act, an amount included in such total as
22 interest income from a loan or loans made by such
23 taxpayer to a borrower, to the extent that such a
24 loan is secured by property which is eligible for
25 the High Impact Business Investment Credit. To
26 determine the portion of a loan or loans that is
27 secured by property eligible for a Section 201(i)
28 investment credit to the borrower, the entire
29 principal amount of the loan or loans between the
30 taxpayer and the borrower should be divided into the
31 basis of the Section 201(i) investment credit
32 property which secures the loan or loans, using for
33 this purpose the original basis of such property on
34 the date that it was placed in service in a
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1 federally designated Foreign Trade Zone or Sub-Zone
2 located in Illinois. No taxpayer that is eligible
3 for the deduction provided in subparagraph (M) of
4 paragraph (2) of this subsection shall be eligible
5 for the deduction provided under this subparagraph
6 (M-1). The subtraction modification available to
7 taxpayers in any year under this subsection shall be
8 that portion of the total interest paid by the
9 borrower with respect to such loan attributable to
10 the eligible property as calculated under the
11 previous sentence;
12 (N) Two times any contribution made during the
13 taxable year to a designated zone organization to
14 the extent that the contribution (i) qualifies as a
15 charitable contribution under subsection (c) of
16 Section 170 of the Internal Revenue Code and (ii)
17 must, by its terms, be used for a project approved
18 by the Department of Commerce and Community Affairs
19 under Section 11 of the Illinois Enterprise Zone
20 Act;
21 (O) An amount equal to: (i) 85% for taxable
22 years ending on or before December 31, 1992, or, a
23 percentage equal to the percentage allowable under
24 Section 243(a)(1) of the Internal Revenue Code of
25 1986 for taxable years ending after December 31,
26 1992, of the amount by which dividends included in
27 taxable income and received from a corporation that
28 is not created or organized under the laws of the
29 United States or any state or political subdivision
30 thereof, including, for taxable years ending on or
31 after December 31, 1988, dividends received or
32 deemed received or paid or deemed paid under
33 Sections 951 through 964 of the Internal Revenue
34 Code, exceed the amount of the modification provided
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1 under subparagraph (G) of paragraph (2) of this
2 subsection (b) which is related to such dividends;
3 plus (ii) 100% of the amount by which dividends,
4 included in taxable income and received, including,
5 for taxable years ending on or after December 31,
6 1988, dividends received or deemed received or paid
7 or deemed paid under Sections 951 through 964 of the
8 Internal Revenue Code, from any such corporation
9 specified in clause (i) that would but for the
10 provisions of Section 1504 (b) (3) of the Internal
11 Revenue Code be treated as a member of the
12 affiliated group which includes the dividend
13 recipient, exceed the amount of the modification
14 provided under subparagraph (G) of paragraph (2) of
15 this subsection (b) which is related to such
16 dividends;
17 (P) An amount equal to any contribution made
18 to a job training project established pursuant to
19 the Tax Increment Allocation Redevelopment Act; and
20 (Q) An amount equal to the amount of the
21 deduction used to compute the federal income tax
22 credit for restoration of substantial amounts held
23 under claim of right for the taxable year pursuant
24 to Section 1341 of the Internal Revenue Code of
25 1986.
26 (3) Special rule. For purposes of paragraph (2)
27 (A), "gross income" in the case of a life insurance
28 company, for tax years ending on and after December 31,
29 1994, shall mean the gross investment income for the
30 taxable year.
31 (c) Trusts and estates.
32 (1) In general. In the case of a trust or estate,
33 base income means an amount equal to the taxpayer's
34 taxable income for the taxable year as modified by
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1 paragraph (2).
2 (2) Modifications. Subject to the provisions of
3 paragraph (3), the taxable income referred to in
4 paragraph (1) shall be modified by adding thereto the sum
5 of the following amounts:
6 (A) An amount equal to all amounts paid or
7 accrued to the taxpayer as interest or dividends
8 during the taxable year to the extent excluded from
9 gross income in the computation of taxable income;
10 (B) In the case of (i) an estate, $600; (ii) a
11 trust which, under its governing instrument, is
12 required to distribute all of its income currently,
13 $300; and (iii) any other trust, $100, but in each
14 such case, only to the extent such amount was
15 deducted in the computation of taxable income;
16 (C) An amount equal to the amount of tax
17 imposed by this Act to the extent deducted from
18 gross income in the computation of taxable income
19 for the taxable year;
20 (D) The amount of any net operating loss
21 deduction taken in arriving at taxable income, other
22 than a net operating loss carried forward from a
23 taxable year ending prior to December 31, 1986;
24 (E) For taxable years in which a net operating
25 loss carryback or carryforward from a taxable year
26 ending prior to December 31, 1986 is an element of
27 taxable income under paragraph (1) of subsection (e)
28 or subparagraph (E) of paragraph (2) of subsection
29 (e), the amount by which addition modifications
30 other than those provided by this subparagraph (E)
31 exceeded subtraction modifications in such taxable
32 year, with the following limitations applied in the
33 order that they are listed:
34 (i) the addition modification relating to
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1 the net operating loss carried back or forward
2 to the taxable year from any taxable year
3 ending prior to December 31, 1986 shall be
4 reduced by the amount of addition modification
5 under this subparagraph (E) which related to
6 that net operating loss and which was taken
7 into account in calculating the base income of
8 an earlier taxable year, and
9 (ii) the addition modification relating
10 to the net operating loss carried back or
11 forward to the taxable year from any taxable
12 year ending prior to December 31, 1986 shall
13 not exceed the amount of such carryback or
14 carryforward;
15 For taxable years in which there is a net
16 operating loss carryback or carryforward from more
17 than one other taxable year ending prior to December
18 31, 1986, the addition modification provided in this
19 subparagraph (E) shall be the sum of the amounts
20 computed independently under the preceding
21 provisions of this subparagraph (E) for each such
22 taxable year;
23 (F) For taxable years ending on or after
24 January 1, 1989, an amount equal to the tax deducted
25 pursuant to Section 164 of the Internal Revenue Code
26 if the trust or estate is claiming the same tax for
27 purposes of the Illinois foreign tax credit under
28 Section 601 of this Act;
29 (G) An amount equal to the amount of the
30 capital gain deduction allowable under the Internal
31 Revenue Code, to the extent deducted from gross
32 income in the computation of taxable income; and
33 (G-5) For taxable years ending after December
34 31, 1997, an amount equal to any eligible
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1 remediation costs that the trust or estate deducted
2 in computing adjusted gross income and for which the
3 trust or estate claims a credit under subsection (l)
4 of Section 201;
5 and by deducting from the total so obtained the sum of
6 the following amounts:
7 (H) An amount equal to all amounts included in
8 such total pursuant to the provisions of Sections
9 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and
10 408 of the Internal Revenue Code or included in such
11 total as distributions under the provisions of any
12 retirement or disability plan for employees of any
13 governmental agency or unit, or retirement payments
14 to retired partners, which payments are excluded in
15 computing net earnings from self employment by
16 Section 1402 of the Internal Revenue Code and
17 regulations adopted pursuant thereto;
18 (I) The valuation limitation amount;
19 (J) An amount equal to the amount of any tax
20 imposed by this Act which was refunded to the
21 taxpayer and included in such total for the taxable
22 year;
23 (K) An amount equal to all amounts included in
24 taxable income as modified by subparagraphs (A),
25 (B), (C), (D), (E), (F) and (G) which are exempt
26 from taxation by this State either by reason of its
27 statutes or Constitution or by reason of the
28 Constitution, treaties or statutes of the United
29 States; provided that, in the case of any statute of
30 this State that exempts income derived from bonds or
31 other obligations from the tax imposed under this
32 Act, the amount exempted shall be the interest net
33 of bond premium amortization;
34 (L) With the exception of any amounts
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1 subtracted under subparagraph (K), an amount equal
2 to the sum of all amounts disallowed as deductions
3 by Sections 171(a) (2) and 265(a)(2) of the Internal
4 Revenue Code, as now or hereafter amended, and all
5 amounts of expenses allocable to interest and
6 disallowed as deductions by Section 265(1) of the
7 Internal Revenue Code of 1954, as now or hereafter
8 amended;
9 (M) An amount equal to those dividends
10 included in such total which were paid by a
11 corporation which conducts business operations in an
12 Enterprise Zone or zones created under the Illinois
13 Enterprise Zone Act and conducts substantially all
14 of its operations in an Enterprise Zone or Zones;
15 (N) An amount equal to any contribution made
16 to a job training project established pursuant to
17 the Tax Increment Allocation Redevelopment Act;
18 (O) An amount equal to those dividends
19 included in such total that were paid by a
20 corporation that conducts business operations in a
21 federally designated Foreign Trade Zone or Sub-Zone
22 and that is designated a High Impact Business
23 located in Illinois; provided that dividends
24 eligible for the deduction provided in subparagraph
25 (M) of paragraph (2) of this subsection shall not be
26 eligible for the deduction provided under this
27 subparagraph (O); and
28 (P) An amount equal to the amount of the
29 deduction used to compute the federal income tax
30 credit for restoration of substantial amounts held
31 under claim of right for the taxable year pursuant
32 to Section 1341 of the Internal Revenue Code of
33 1986.
34 (3) Limitation. The amount of any modification
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1 otherwise required under this subsection shall, under
2 regulations prescribed by the Department, be adjusted by
3 any amounts included therein which were properly paid,
4 credited, or required to be distributed, or permanently
5 set aside for charitable purposes pursuant to Internal
6 Revenue Code Section 642(c) during the taxable year.
7 (d) Partnerships.
8 (1) In general. In the case of a partnership, base
9 income means an amount equal to the taxpayer's taxable
10 income for the taxable year as modified by paragraph (2).
11 (2) Modifications. The taxable income referred to
12 in paragraph (1) shall be modified by adding thereto the
13 sum of the following amounts:
14 (A) An amount equal to all amounts paid or
15 accrued to the taxpayer as interest or dividends
16 during the taxable year to the extent excluded from
17 gross income in the computation of taxable income;
18 (B) An amount equal to the amount of tax
19 imposed by this Act to the extent deducted from
20 gross income for the taxable year; and
21 (C) The amount of deductions allowed to the
22 partnership pursuant to Section 707 (c) of the
23 Internal Revenue Code in calculating its taxable
24 income; and
25 (D) An amount equal to the amount of the
26 capital gain deduction allowable under the Internal
27 Revenue Code, to the extent deducted from gross
28 income in the computation of taxable income;
29 and by deducting from the total so obtained the following
30 amounts:
31 (E) The valuation limitation amount;
32 (F) An amount equal to the amount of any tax
33 imposed by this Act which was refunded to the
34 taxpayer and included in such total for the taxable
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1 year;
2 (G) An amount equal to all amounts included in
3 taxable income as modified by subparagraphs (A),
4 (B), (C) and (D) which are exempt from taxation by
5 this State either by reason of its statutes or
6 Constitution or by reason of the Constitution,
7 treaties or statutes of the United States; provided
8 that, in the case of any statute of this State that
9 exempts income derived from bonds or other
10 obligations from the tax imposed under this Act, the
11 amount exempted shall be the interest net of bond
12 premium amortization;
13 (H) Any income of the partnership which
14 constitutes personal service income as defined in
15 Section 1348 (b) (1) of the Internal Revenue Code
16 (as in effect December 31, 1981) or a reasonable
17 allowance for compensation paid or accrued for
18 services rendered by partners to the partnership,
19 whichever is greater;
20 (I) An amount equal to all amounts of income
21 distributable to an entity subject to the Personal
22 Property Tax Replacement Income Tax imposed by
23 subsections (c) and (d) of Section 201 of this Act
24 including amounts distributable to organizations
25 exempt from federal income tax by reason of Section
26 501(a) of the Internal Revenue Code;
27 (J) With the exception of any amounts
28 subtracted under subparagraph (G), an amount equal
29 to the sum of all amounts disallowed as deductions
30 by Sections 171(a) (2), and 265(2) of the Internal
31 Revenue Code of 1954, as now or hereafter amended,
32 and all amounts of expenses allocable to interest
33 and disallowed as deductions by Section 265(1) of
34 the Internal Revenue Code, as now or hereafter
-32- LRB9103543NTsb
1 amended;
2 (K) An amount equal to those dividends
3 included in such total which were paid by a
4 corporation which conducts business operations in an
5 Enterprise Zone or zones created under the Illinois
6 Enterprise Zone Act, enacted by the 82nd General
7 Assembly, and which does not conduct such operations
8 other than in an Enterprise Zone or Zones;
9 (L) An amount equal to any contribution made
10 to a job training project established pursuant to
11 the Real Property Tax Increment Allocation
12 Redevelopment Act;
13 (M) An amount equal to those dividends
14 included in such total that were paid by a
15 corporation that conducts business operations in a
16 federally designated Foreign Trade Zone or Sub-Zone
17 and that is designated a High Impact Business
18 located in Illinois; provided that dividends
19 eligible for the deduction provided in subparagraph
20 (K) of paragraph (2) of this subsection shall not be
21 eligible for the deduction provided under this
22 subparagraph (M); and
23 (N) An amount equal to the amount of the
24 deduction used to compute the federal income tax
25 credit for restoration of substantial amounts held
26 under claim of right for the taxable year pursuant
27 to Section 1341 of the Internal Revenue Code of
28 1986.
29 (e) Gross income; adjusted gross income; taxable income.
30 (1) In general. Subject to the provisions of
31 paragraph (2) and subsection (b) (3), for purposes of
32 this Section and Section 803(e), a taxpayer's gross
33 income, adjusted gross income, or taxable income for the
34 taxable year shall mean the amount of gross income,
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1 adjusted gross income or taxable income properly
2 reportable for federal income tax purposes for the
3 taxable year under the provisions of the Internal Revenue
4 Code. Taxable income may be less than zero. However, for
5 taxable years ending on or after December 31, 1986, net
6 operating loss carryforwards from taxable years ending
7 prior to December 31, 1986, may not exceed the sum of
8 federal taxable income for the taxable year before net
9 operating loss deduction, plus the excess of addition
10 modifications over subtraction modifications for the
11 taxable year. For taxable years ending prior to December
12 31, 1986, taxable income may never be an amount in excess
13 of the net operating loss for the taxable year as defined
14 in subsections (c) and (d) of Section 172 of the Internal
15 Revenue Code, provided that when taxable income of a
16 corporation (other than a Subchapter S corporation),
17 trust, or estate is less than zero and addition
18 modifications, other than those provided by subparagraph
19 (E) of paragraph (2) of subsection (b) for corporations
20 or subparagraph (E) of paragraph (2) of subsection (c)
21 for trusts and estates, exceed subtraction modifications,
22 an addition modification must be made under those
23 subparagraphs for any other taxable year to which the
24 taxable income less than zero (net operating loss) is
25 applied under Section 172 of the Internal Revenue Code or
26 under subparagraph (E) of paragraph (2) of this
27 subsection (e) applied in conjunction with Section 172 of
28 the Internal Revenue Code.
29 (2) Special rule. For purposes of paragraph (1) of
30 this subsection, the taxable income properly reportable
31 for federal income tax purposes shall mean:
32 (A) Certain life insurance companies. In the
33 case of a life insurance company subject to the tax
34 imposed by Section 801 of the Internal Revenue Code,
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1 life insurance company taxable income, plus the
2 amount of distribution from pre-1984 policyholder
3 surplus accounts as calculated under Section 815a of
4 the Internal Revenue Code;
5 (B) Certain other insurance companies. In the
6 case of mutual insurance companies subject to the
7 tax imposed by Section 831 of the Internal Revenue
8 Code, insurance company taxable income;
9 (C) Regulated investment companies. In the
10 case of a regulated investment company subject to
11 the tax imposed by Section 852 of the Internal
12 Revenue Code, investment company taxable income;
13 (D) Real estate investment trusts. In the
14 case of a real estate investment trust subject to
15 the tax imposed by Section 857 of the Internal
16 Revenue Code, real estate investment trust taxable
17 income;
18 (E) Consolidated corporations. In the case of
19 a corporation which is a member of an affiliated
20 group of corporations filing a consolidated income
21 tax return for the taxable year for federal income
22 tax purposes, taxable income determined as if such
23 corporation had filed a separate return for federal
24 income tax purposes for the taxable year and each
25 preceding taxable year for which it was a member of
26 an affiliated group. For purposes of this
27 subparagraph, the taxpayer's separate taxable income
28 shall be determined as if the election provided by
29 Section 243(b) (2) of the Internal Revenue Code had
30 been in effect for all such years;
31 (F) Cooperatives. In the case of a
32 cooperative corporation or association, the taxable
33 income of such organization determined in accordance
34 with the provisions of Section 1381 through 1388 of
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1 the Internal Revenue Code;
2 (G) Subchapter S corporations. In the case
3 of: (i) a Subchapter S corporation for which there
4 is in effect an election for the taxable year under
5 Section 1362 of the Internal Revenue Code, the
6 taxable income of such corporation determined in
7 accordance with Section 1363(b) of the Internal
8 Revenue Code, except that taxable income shall take
9 into account those items which are required by
10 Section 1363(b)(1) of the Internal Revenue Code to
11 be separately stated; and (ii) a Subchapter S
12 corporation for which there is in effect a federal
13 election to opt out of the provisions of the
14 Subchapter S Revision Act of 1982 and have applied
15 instead the prior federal Subchapter S rules as in
16 effect on July 1, 1982, the taxable income of such
17 corporation determined in accordance with the
18 federal Subchapter S rules as in effect on July 1,
19 1982; and
20 (H) Partnerships. In the case of a
21 partnership, taxable income determined in accordance
22 with Section 703 of the Internal Revenue Code,
23 except that taxable income shall take into account
24 those items which are required by Section 703(a)(1)
25 to be separately stated but which would be taken
26 into account by an individual in calculating his
27 taxable income.
28 (f) Valuation limitation amount.
29 (1) In general. The valuation limitation amount
30 referred to in subsections (a) (2) (G), (c) (2) (I) and
31 (d)(2) (E) is an amount equal to:
32 (A) The sum of the pre-August 1, 1969
33 appreciation amounts (to the extent consisting of
34 gain reportable under the provisions of Section 1245
-36- LRB9103543NTsb
1 or 1250 of the Internal Revenue Code) for all
2 property in respect of which such gain was reported
3 for the taxable year; plus
4 (B) The lesser of (i) the sum of the
5 pre-August 1, 1969 appreciation amounts (to the
6 extent consisting of capital gain) for all property
7 in respect of which such gain was reported for
8 federal income tax purposes for the taxable year, or
9 (ii) the net capital gain for the taxable year,
10 reduced in either case by any amount of such gain
11 included in the amount determined under subsection
12 (a) (2) (F) or (c) (2) (H).
13 (2) Pre-August 1, 1969 appreciation amount.
14 (A) If the fair market value of property
15 referred to in paragraph (1) was readily
16 ascertainable on August 1, 1969, the pre-August 1,
17 1969 appreciation amount for such property is the
18 lesser of (i) the excess of such fair market value
19 over the taxpayer's basis (for determining gain) for
20 such property on that date (determined under the
21 Internal Revenue Code as in effect on that date), or
22 (ii) the total gain realized and reportable for
23 federal income tax purposes in respect of the sale,
24 exchange or other disposition of such property.
25 (B) If the fair market value of property
26 referred to in paragraph (1) was not readily
27 ascertainable on August 1, 1969, the pre-August 1,
28 1969 appreciation amount for such property is that
29 amount which bears the same ratio to the total gain
30 reported in respect of the property for federal
31 income tax purposes for the taxable year, as the
32 number of full calendar months in that part of the
33 taxpayer's holding period for the property ending
34 July 31, 1969 bears to the number of full calendar
-37- LRB9103543NTsb
1 months in the taxpayer's entire holding period for
2 the property.
3 (C) The Department shall prescribe such
4 regulations as may be necessary to carry out the
5 purposes of this paragraph.
6 (g) Double deductions. Unless specifically provided
7 otherwise, nothing in this Section shall permit the same item
8 to be deducted more than once.
9 (h) Legislative intention. Except as expressly provided
10 by this Section there shall be no modifications or
11 limitations on the amounts of income, gain, loss or deduction
12 taken into account in determining gross income, adjusted
13 gross income or taxable income for federal income tax
14 purposes for the taxable year, or in the amount of such items
15 entering into the computation of base income and net income
16 under this Act for such taxable year, whether in respect of
17 property values as of August 1, 1969 or otherwise.
18 (Source: P.A. 89-89, eff. 6-30-95; 89-235, eff. 8-4-95;
19 89-418, eff. 11-15-95; 89-460, eff. 5-24-96; 89-626, eff.
20 8-9-96; 90-491, eff. 1-1-98; 90-717, eff. 8-7-98; 90-770,
21 eff. 8-14-98; revised 9-21-98.)
22 Section 990. Repeal. This Act is repealed on July 1,
23 2005.
24 Section 995. Severability. If any provision of this Act
25 or its application to any person or circumstance is held
26 invalid, the invalidity of that provision or application does
27 not affect other provisions or applications of this Act that
28 can be given effect without the invalid provision or
29 application.
30 Section 999. Effective date. This Act takes effect upon
-38- LRB9103543NTsb
1 becoming law.