Senate Sponsors: PETERSON-RADOGNO-WELCH-FAWELL. House Sponsors: HOFFMAN-OSMOND-HOLBROOK-REITZ Short description: CERTIFIED CAPITAL COMPANY ACT Synopsis of Bill as introduced: Creates the Certified Capital Company Act to provide assistance in the formation of new and expansion of existing businesses that create jobs in the State by providing an incentive, in the form of tax credits against the State's privilege taxes, for insurance companies to invest in certified capital companies. Provides that the Department of Commerce and Community Affairs shall implement the provisions of the Act. Provides that an insurance company that qualifies as a certified investor shall earn a vested credit against State privilege taxes equal to 100% of the investor's investment of certified capital, of which 10% may be taken in any taxable year. Provides that the aggregate amount of certified capital for which privilege tax credits shall be allowed for all certified investors shall not exceed the amount that would entitle all certified investors to take aggregate credits of $30,000,000 per year. Amends the Illinois Insurance Code to provide that the amount of the credit earned under the Certified Capital Company Act may be deducted from a company's privilege tax liability. Effective immediately. FISCAL NOTE (Department of Insurance) There will be no fiscal impact on the Department; fiscal impact on GRF could be as much as $30 million per year. SENATE AMENDMENT NO. 1. Deletes everything and reinstates the provisions of the Certified Capital Company Act. Provides that a certified investor or holder of a transferred credit claiming a credit against State privilege tax liability shall provide the Department of Insurance certain information. Provides that the Department of Insurance shall adopt rules to collect the privilege tax credit. Provides that a certified investor may not be required to reduce the provision for the tax included in ratemaking due to a reduction in privilege tax derived from the credit. Deletes the time limit for the Department to determine whether a business meets the definition of a qualified business for investment purposes. Deletes the provision exempting a certified capital company from regulation after investing 100% of its certified capital in qualified investments. Establishes reporting requirements of financial information to the General Assembly. Makes other changes. Effective immediately. SENATE AMENDMENT NO. 2. Provides that the privilege tax credits may be carried forward until used or until the tax filings for calendar year 2010 (now 2020), whichever is sooner. SENATE AMENDMENT NO. 3. Includes within the Act's provisions for an affiliate of a certified capital company or insurance company a person that owns, whether through rights, options, convertible interests, or otherwise, or has the power to vote 25% (now 10%) or more of the outstanding voting securities. Provides that a qualified distribution or payment for reasonable costs and expenses may not be made directly or indirectly to a certified investor. Adds to requirements of a qualified debt instrument that the instrument must have an annualized internal rate of return (calculated using the purchase price of the qualified debt instrument, all payments of principal and interest, and all future tax credits projected to be received) not to exceed 3.5% over the then current yield of the most recently issued 10-year U.S. Treasury security. Makes other changes. SENATE AMENDMENT NO. 4. Deletes everything and reinserts the provisions of the bill as amended. Provides that the privilege tax credits may be carried forward until used or until the tax filings for calendar year 2015 (now 2010), whichever is sooner. Provides that certain distributions to equity holders of a certified capital company are subject to audit by a nationally recognized certified public accounting firm at the expense of the company. Provides that 30% of certain distributions in excess of the amount required to produce a 15% return shall be paid annually to the State Pension Fund. HOUSE AMENDMENT NO. 1. Deletes reference to: 215 ILCS 5/409 Deletes everything. Creates the Certified Capital Company Act with the short title as the only provision. Last action on Bill: SESSION SINE DIE Last action date: 01-01-09 Location: Senate Amendments to Bill: AMENDMENTS ADOPTED: HOUSE - 1 SENATE - 4 END OF INQUIRY Full Text Bill Status