Bill Text: IL HB3479 | 2011-2012 | 97th General Assembly | Introduced

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Bill Title: Amends the Illinois Income Tax Act. Creates a credit for contributions to qualified student assistance organizations. Provides that the credit may not exceed $100,000 and may not exceed 90% of each dollar contributed. Provides that the credit is exempt from the Act's automatic sunset provision. Effective immediately.

Spectrum: Bipartisan Bill

Status: (Failed) 2013-01-08 - Session Sine Die [HB3479 Detail]

Download: Illinois-2011-HB3479-Introduced.html

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97TH GENERAL ASSEMBLY State of Illinois 2011 and 2012 HB3479 Introduced 2/24/2011, by Rep. Karen A. Yarbrough - Darlene J. Senger SYNOPSIS AS INTRODUCED:
35 ILCS 5/221 new
Amends the Illinois Income Tax Act. Creates a credit for contributions to qualified student assistance organizations. Provides that the credit may not exceed $100,000 and may not exceed 90% of each dollar contributed. Provides that the credit is exempt from the Act's automatic sunset provision. Effective immediately.
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FISCAL NOTE ACT MAY APPLY
A BILL FOR
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AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Income Tax Act is amended by adding
Section 221 as follows:
(35 ILCS 5/221 new)
Sec. 221. Educational Improvement Tax Credit.
(a) The General Assembly finds and declares that the
Constitution of the State of Illinois provides that a
"fundamental goal of the People of the State is the educational
development of all persons to the limits of their capacities",
and that the educational development of every school student
serves the public purposes of the State. In order to enable
Illinois students to develop "to the limit of their
capacities", all students must have access to expanded
educational opportunities. This Section is in the public
interest, for the public benefit, and serves a secular purpose.
(b) An educational improvement tax credit program is hereby
established to enhance the educational opportunities available
to all students in this State.
For tax years beginning after December 31, 2011, a taxpayer
shall be allowed a credit, not in excess of $100,000, against
the tax imposed by subsections (a) and (b) of Section 201 of

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this Act for contributions to a qualified student assistance
organization in the taxable year in which the contribution is
made. The credit shall not exceed 90% of each dollar
contributed during the taxable year by the taxpayer. For
partners, shareholders of Subchapter S corporations, and
owners of limited liability companies, if the liability company
is treated as a partnership for purposes of federal and State
income taxation, there shall be allowed a credit under this
Section to be determined in accordance with the determination
of income and distributive share of income under Section 702
and 704 and Subchapter S of the Internal Revenue Code.
In no event may any credit be claimed for amounts deducted
pursuant to Section 170 of the Internal Revenue Code in
arriving at taxable income.
(c) For purposes of this Section:
"Contribution" means a donation of cash.
"Qualified student assistance organization" means a
nonprofit entity that:
(1) is exempt from federal taxation under Section
501(c)(3) of the Internal Revenue Code of 1986 and any
similar provision of a later compilation; and
(2) contributes at least 90% of its annual receipts, as
required by the by-laws of the organization and as
documented by the nonprofit organizations annual AG990-IL
Charitable Organization Annual Report, or, if the
organization is exempt from filing such a report, by a

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report containing identical information to that contained
in the AG990-IL and certified by the President and
Treasurer of the organization, or alternatively, two
trustees of the organization, either to scholarships for
qualifying students at a school or to enhance educational
options for qualifying students by providing qualifying
students access to secular, neutral, non-ideological
programs, or activities outside the curriculum or academic
program of a school, as long as the program or activities
meet the requirements set forth in rules promulgated by the
Illinois State Board of Education. An entity that has been
in existence less than 2 years prior to the filing of an
application under subsection (f) of this Section shall meet
the requirements of this subsection if its charter, bylaws
or other governing instrument requires that it contribute
90% of its annual receipts for the purposes described in
this subsection.
"Qualifying student" means an individual who:
(1) is a resident of the State of Illinois;
(2) is under the age of 21 during the calendar year for
which a credit is sought;
(3) during the calendar year for which a credit is
sought is a full-time pupil enrolled in a kindergarten
through 12th grade education program at any school, as
defined in this subsection (c); and
(4) is a child of a parent or parents, or is under the

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legal guardianship of an individual or individuals, with a
base income of not more than $50,000 and resides in the
household with those parents or guardians, provided that if
there is more than one dependent member of the household
under the age of 21, counting the qualifying student, then
this annual income requirement shall be increased by
$10,000 for each dependent member of the household under
the age of 21 in excess of the one qualifying student.
Qualified student assistant organizations shall be
responsible for determining whether a student is a
qualifying student, pursuant to rules adopted by the
Illinois State Board of Education.
"School" means any public or State-recognized non-public
elementary or secondary school in Illinois that is in
compliance with Title VI of the Civil Rights Act of 1964 and
attendance at which satisfies the requirements of Section 26-1
of the School Code.
(d) No tax credit established by this Section is allowed if
the taxpayer designates a contribution to a student assistance
organization for the direct benefit of any particular
qualifying student.
(e) Qualified student assistance organizations shall
provide scholarships or funding for enhanced educational
options without limiting availability to only students of one
school.
(f) A tax credit granted under this Section that is not

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used in the taxable year in which the contribution was made
shall not be carried forward or carried back and is not
refundable or transferable.
(g) A taxpayer must apply annually to the Department and
receive approval for a tax credit under this Section prior to
making a contribution to a student assistance organization.
Applicants must be submitted to the Department no later than
March 31 each year for contributions to be made for tax years
ending on or after July 1 of that same year. On May 1 of each
year, the Department shall, on a random basis, select
applications until the total aggregate amount of all requested
tax credits equals the maximum provided for in subsection (h).
The Department shall adopt rules pursuant to the requirements
of the Illinois Administrative Procedure Act that set forth the
information the Department can require on the tax credit
application and the manner in which the tax credit lottery is
to be conducted.
(h) The total aggregate amount of all approved tax credits
shall not exceed $30,000,000 in any State fiscal year.
(i) The Department shall adopt rules consistent with this
Section for the administration of the educational improvement
tax credit program.
(j) A scholarship received by a qualifying student shall
not be considered to be taxable income.
(k) This Section is exempt from the provisions of Section
250.

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Section 99. Effective date. This Act takes effect upon
becoming law.