House Sponsors: LYONS,JOSEPH-COWLISHAW-CAPPARELLI-BUGIELSKI, ACEVEDO, MCCARTHY, JOHNSON, ZICKUS AND WOJCIK. Short description: INC TAX-EDUCATION TAX CREDIT Synopsis of Bill as introduced: Amends the Illinois Income Tax Act. Creates the educational improvement tax credit program. Provides that, beginning with tax years ending after December 31, 2002, an entity authorized to do business in Illinois and subject to Illinois income taxes (a business firm) is entitled to an income tax credit for contributions to a qualified student assistance organization in the taxable year in which the contribution is made. Provides that the credit shall not exceed 75% of each dollar contributed during the taxable year (90% if the business firm provides a written commitment to make the same amount of contribution for 2 consecutive tax years) and caps the credit at $100,000 annually per business firm. Defines "qualified student assistance organization" as a non-profit entity that contributes at least 80% of its annual receipts for scholarships or to enhance educational options for qualifying students. Defines "qualifying student" as an Illinois resident below age 21 who is a student and who lives in a household with a certain limited income. Provides that the credit may not be carried forward or back. Provides that the Department of Revenue must approve all credits and may not approve credits in an aggregate amount above $50,000,000 each State fiscal year. Requires the Department of Revenue to adopt rules and exempts the credit from the sunset provisions. Effective immediately. FISCAL NOTE (Department of Revenue) It is difficult to estimate the fiscal impact of HB 4077 since, in part, it would be dependent upon the amounts contributed by businesses to a qualified student assistance organization. HB 4077 does, however, propose to cap the credit at no more than $50 million in any State fiscal year. While the bill caps the amount of the credit at $50 million annually, the adminis- trative expenses incurred by the Department to verify that a student assistance organization qualifies would be significant. In short, the Department would have to audit each organization to which a donation is proposed and review all of the organi- zation's documents related to expenditures and applications for which scholarships were granted to determine whether 80% was contributed to qualifying students for qualifying purposes. STATE MANDATES NOTE (Illinois State Board of Education) This bill imposes no mandates on local school districts. To the extent that tax credits taken under this legislation reduce State revenues, the money available for State financial assis- tance to local schools will be reduced. HOUSE AMENDMENT NO. 1. Deletes everything after the enacting clause. Amends the Illinois Income Tax Act. Creates the educational improvement tax credit. Contains a caption only. Last action on Bill: SESSION SINE DIE Last action date: JAN-07-2003 Location: House Amendments to Bill: AMENDMENTS ADOPTED: HOUSE - 1 SENATE - 0 END OF INQUIRY Full Text Bill Status