103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB3537
 
Introduced , by Rep. Amy L. Grant
 
SYNOPSIS AS INTRODUCED:



35 ILCS 5/224
35 ILCS 40/40
35 ILCS 40/65

 Amends the Illinois Income Tax Act and the Invest in Kids Act. Provides that the Invest in Kids credit applies for taxable years ending before January 1, 2034 (currently, January 1, 2024). Effective immediately.



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A BILL FOR
 


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1 AN ACT concerning revenue.


2 Be it enacted by the People of the State of Illinois,

3represented in the General Assembly:



4 Section 5. The Illinois Income Tax Act is amended by 
5changing Section 224 as follows:

6 (35 ILCS 5/224)
7 Sec. 224. Invest in Kids credit. 
8 (a) For taxable years beginning on or after January 1, 
92018 and ending before January 1, 2034 January 1, 2024, each 
10taxpayer for whom a tax credit has been awarded by the 
11Department under the Invest in Kids Act is entitled to a credit 
12against the tax imposed under subsections (a) and (b) of 
13Section 201 of this Act in an amount equal to the amount 
14awarded under the Invest in Kids Act. 
15 (b) For partners, shareholders of subchapter S 
16corporations, and owners of limited liability companies, if 
17the liability company is treated as a partnership for purposes 
18of federal and State income taxation, the credit under this 
19Section shall be determined in accordance with the 
20determination of income and distributive share of income under 
21Sections 702 and 704 and subchapter S of the Internal Revenue 
22Code. 
23 (c) The credit may not be carried back and may not reduce 
 
 
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1the taxpayer's liability to less than zero. If the amount of 
2the credit exceeds the tax liability for the year, the excess 
3may be carried forward and applied to the tax liability of the 
45 taxable years following the excess credit year. The tax 
5credit shall be applied to the earliest year for which there is 
6a tax liability. If there are credits for more than one year 
7that are available to offset the liability, the earlier credit 
8shall be applied first. 
9 (d) A tax credit awarded by the Department under the 
10Invest in Kids Act may not be claimed for any qualified 
11contribution for which the taxpayer claims a federal income 
12tax deduction.

13(Source: P.A. 102-699, eff. 4-19-22.)

14 Section 10. The Invest in Kids Act is amended by changing 
15Sections 40 and 65 as follows:

16 (35 ILCS 40/40)
17 (Section scheduled to be repealed on January 1, 2025)

18 Sec. 40. Scholarship granting organization 
19responsibilities. 
20 (a) Before granting a scholarship for an academic year, 
21all scholarship granting organizations shall assess and 
22document each student's eligibility for the academic year.

23 (b) A scholarship granting organization shall grant 
24scholarships only to eligible students.

 
 
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1 (c) A scholarship granting organization shall allow an 
2eligible student to attend any qualified school of the 
3student's choosing, subject to the availability of funds.

4 (d) In granting scholarships, beginning in the 2022-2023 
5school year and for each school year thereafter, a scholarship 
6granting organization shall give priority to eligible students 
7who received a scholarship from a scholarship granting 
8organization during the previous school year. Second priority 
9shall be given to the following priority groups:
10  (1) (blank);

11  (2) eligible students who are members of a household 
12 whose previous year's total annual income does not exceed 
13 185% of the federal poverty level;

14  (3) eligible students who reside within a focus 
15 district; and

16  (4) eligible students who are siblings of students 
17 currently receiving a scholarship.

18 (d-5) A scholarship granting organization shall begin 
19granting scholarships no later than February 1 preceding the 
20school year for which the scholarship is sought. Each priority 
21group identified in subsection (d) of this Section shall be 
22eligible to receive scholarships on a first-come, first-served 
23basis until April 1 immediately preceding the school year for 
24which the scholarship is sought, starting with the first 
25priority group identified in subsection (d) of this Section. 
26Applications for scholarships for eligible students meeting 
 
 
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1the qualifications of one or more priority groups that are 
2received before April 1 must be either approved or denied 
3within 10 business days after receipt. Beginning April 1, all 
4eligible students shall be eligible to receive scholarships 
5without regard to the priority groups identified in subsection 
6(d) of this Section.
7 (e) Except as provided in subsection (e-5) of this 
8Section, scholarships shall not exceed the lesser of (i) the 
9statewide average operational expense per
student among public 
10schools or (ii) the necessary costs and fees for attendance at 
11the qualified school. A qualified school may set a lower 
12maximum scholarship amount for eligible students whose family 
13income falls within paragraphs (2) and (3) of this subsection 
14(e); that amount may not exceed the necessary costs and fees 
15for attendance at the qualified school and is subject to the 
16limitations on average scholarship amounts set forth in 
17paragraphs (2) and (3) of this subsection, as applicable. The 
18qualified school shall notify the scholarship granting 
19organization of its necessary costs and fees as well as any 
20maximum scholarship amount set by the school.
Scholarships 
21shall be prorated as follows:
22  (1) for eligible students whose household income is 
23 less than 185% of the federal poverty level, the 
24 scholarship shall be 100% of the amount determined 
25 pursuant to this subsection (e) and subsection (e-5) of 
26 this Section;
 
 
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1  (2) for eligible students whose household income is 
2 185% or more of the federal poverty level but less than 
3 250% of the federal poverty level, the average of 
4 scholarships shall be 75% of the amount determined 
5 pursuant to this subsection (e) and subsection (e-5) of 
6 this Section; and
7  (3) for eligible students whose household income is 
8 250% or more of the federal poverty level, the average of 
9 scholarships shall be 50% of the amount determined 
10 pursuant to this subsection (e) and subsection (e-5) of 
11 this Section.
12 (e-5) The statewide average operational expense per 
13student among public schools shall be multiplied by the 
14following factors:
15  (1) for students determined eligible to receive 
16 services under the federal Individuals with Disabilities 
17 Education Act, 2;
18  (2) for students who are English learners, as defined 
19 in subsection (d) of Section 14C-2 of the School Code, 
20 1.2; and
21  (3) for students who are gifted and talented children, 
22 as defined in Section 14A-20 of the School Code, 1.1.
23 (f) A scholarship granting organization shall distribute 
24scholarship payments to the participating school where the 
25student is enrolled.

26 (g) For the 2018-2019 school year through the 2032-2033 
 
 
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12022-2023 school year, each scholarship granting organization 
2shall expend no less than 75% of the qualified contributions 
3received during the calendar year in which the qualified 
4contributions were received. No more than 25% of the
qualified 
5contributions may be carried forward to the following calendar 
6year.

7 (h) For the 2033-2034 2023-2024 school year, each 
8scholarship granting organization shall expend all qualified 
9contributions received during the calendar year in which the 
10qualified contributions were
received. No qualified 
11contributions may be carried forward to the following calendar 
12year.

13 (i) A scholarship granting organization shall allow an 
14eligible student to transfer a scholarship during a school 
15year to any other participating school of the custodian's 
16choice. Such scholarships shall be prorated.

17 (j) With the prior approval of the Department, a 
18scholarship granting organization may transfer funds to 
19another scholarship granting organization if additional funds 
20are required to meet scholarship demands at the receiving 
21scholarship granting organization. All transferred funds must 
22be
deposited by the receiving scholarship granting 
23organization into its scholarship accounts. All transferred 
24amounts received by any scholarship granting organization must 
25be separately
disclosed to the Department.

26 (k) If the approval of a scholarship granting organization 
 
 
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1is revoked as provided in Section 20 of this Act or the 
2scholarship granting organization is dissolved, all remaining 
3qualified contributions of the scholarship granting 
4organization shall be transferred to another scholarship 
5granting organization. All transferred funds must be deposited 
6by the receiving scholarship granting organization into its 
7scholarship accounts.
8 (l) Scholarship granting organizations shall make 
9reasonable efforts to advertise the availability of 
10scholarships to eligible students.

11(Source: P.A. 102-699, eff. 4-19-22; 102-1059, eff. 6-10-22; 
12revised 8-3-22.)

13 (35 ILCS 40/65)
14 (Section scheduled to be repealed on January 1, 2025)

15 Sec. 65. Credit period; repeal. 
16 (a) A taxpayer may take a credit under this Act for tax 
17years beginning on or after January 1, 2018 and ending before 
18January 1, 2034 January 1, 2024. A taxpayer may not take a 
19credit pursuant to this Act for tax years beginning on or after 
20January 1, 2034 January 1, 2024.

21 (b) This Act is repealed on January 1, 2035 January 1, 
222025.


23(Source: P.A. 102-16, eff. 6-17-21.)


24 Section 99. Effective date. This Act takes effect upon 
25becoming law.