Bill Text: IL HB3563 | 2019-2020 | 101st General Assembly | Introduced

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Bill Title: Creates the Green Energy Business Act. Authorizes the Department of Commerce and Economic Opportunity to receive and approve the applications of qualified businesses seeking designation as Green Energy Businesses. Amends the Illinois Income Tax Act, the Retailers' Occupation Tax Act, and the Public Utilities Act to provide that Green Energy Businesses are eligible for certain credits and exemptions under those Acts. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2019-03-29 - Rule 19(a) / Re-referred to Rules Committee [HB3563 Detail]

Download: Illinois-2019-HB3563-Introduced.html

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101ST GENERAL ASSEMBLY State of Illinois 2019 and 2020 HB3563 Introduced , by Rep. Lance Yednock SYNOPSIS AS INTRODUCED:
New Act
35 ILCS 5/201 from Ch. 120, par. 2-201
35 ILCS 120/1d from Ch. 120, par. 440d
35 ILCS 120/1e from Ch. 120, par. 440e
35 ILCS 120/1f from Ch. 120, par. 440f
35 ILCS 120/5l from Ch. 120, par. 444l
220 ILCS 5/9-222 from Ch. 111 2/3, par. 9-222
220 ILCS 5/9-222.1A
Creates the Green Energy Business Act. Authorizes the Department of Commerce and Economic Opportunity to receive and approve the applications of qualified businesses seeking designation as Green Energy Businesses. Amends the Illinois Income Tax Act, the Retailers' Occupation Tax Act, and the Public Utilities Act to provide that Green Energy Businesses are eligible for certain credits and exemptions under those Acts. Effective immediately.
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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 1. Short title. This Act may be cited as the Green
Energy Business Act.
Section 5. Definitions. As used in this Act:
"Biodiesel" means a renewable diesel fuel derived from
biomass that is intended for use in diesel engines.
"Department" means the Department of Commerce and Economic
Opportunity.
"Ethanol" means a product produced from agricultural
commodities or by-products used as a fuel or to be blended with
other fuels for use in motor vehicles.
"Green Energy Business" means a business that:
(i) produces or manufactures components used in the
production of electricity from renewable energy resources;
(ii) has the capacity to produce and produces at least
5 megawatts of electricity from renewable energy resources
each year;
(iii) has the capacity to produce and produces no less
than 30,000,000 gallons of biodiesel or ethanol each year.
"Renewable energy resources" means wind energy; solar
thermal energy; photovoltaic cells and panels; biodiesel;

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crops; untreated and unadulterated organic waste biomass;
trees and tree trimmings; hydropower that does not involve new
construction or significant expansion of hydropower dams; and
other alternative sources of environmentally preferable
energy. For purposes of this Act, landfill gas produced in the
State is a renewable energy resource, but tires; garbage;
general household, institutional, and commercial waste;
industrial lunchroom or office waste; landscape waste (other
than trees and tree trimmings); railroad crossties; utility
poles; and construction or demolition debris (other than
untreated and unadulterated waste wood) are not. Renewable
energy resources also include any renewable energy credit or
credits associated with or generated by a source of energy that
otherwise qualifies as a renewable energy resource under this
Act.
Section 10. Green Energy Business.
(a) To assist in the encouragement, development, growth,
and expansion of the private sector through green energy
projects, the Department may receive and approve applications
for the designation of "Green Energy Business" in Illinois.
Applications may be submitted at any time. No later than 90
days after an application is submitted, the Department shall
notify the applicant of the Department's determination as to
the applicant's qualification to be designated as a Green
Energy Business under this Section. To qualify as a Green

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Energy Business, a business must meet all of the following
conditions:
(1) It must not be located, at the time of designation,
in an enterprise zone designated under the Illinois
Enterprise Zone Act.
(2) It must commit to (i) produce or manufacture
components used in the production of electricity from
renewable energy resources; (ii) produce at least 5
megawatts of electricity from renewable energy resources
each year; or (iii) produce not less than 30,000,000
gallons of biodiesel or ethanol each year.
(3) It must commit to have the business placed in
service at a qualified property in Illinois.
(4) It must certify in writing that (i) the investments
would not be placed in service at a qualified property
without the tax credits and exemptions referenced in
subsection (b) of this Section and (ii) the job creation or
job retention would not occur without the tax credits and
exemptions referenced in subsection (b) of this Section.
The terms "placed in service" and "qualified property" have
the same meanings as described in subsection (h) of Section
201 of the Illinois Income Tax Act.
(5) It must meet any additional criteria established by
the Department.
(b) Each business designated as a Green Energy Business by
the Department shall qualify for the credits and exemptions in

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Sections 9-222 and 9-222.1A of the Public Utilities Act;
subsection (h) of Section 201 of the Illinois Income Tax Act;
and Section 1d of the Retailers' Occupation Tax Act. Each
business designated as a Green Energy Business under this
Section shall also qualify for the exemption described in
Section 5l of the Retailers' Occupation Tax Act. The credit
provided in subsection (h) of Section 201 of the Illinois
Income Tax Act shall be applicable to investments in qualified
property used to meet the requirements in subdivision (a)(2) of
this Section.
(c) The Department must revoke a Green Energy Business
designation if, within the Department's discretion, the
participating business fails to comply with the terms and
conditions of the designation.
Section 15. Project labor agreements.
(a) Each business designated as a Green Energy Business by
the Department must enter into a project labor agreement. The
project labor agreement must include provisions establishing
(i) the minimum hourly wage for each class of labor
organization employee; (ii) the benefits and other
compensation for each class of labor organization employee; and
(iii) that no strike or disputes will be engaged in by the
labor organization employees; and (iv) that no lockout or
disputes will be engaged in by the owner of a Green Energy
Business. The owner of a Green Energy Business and the labor

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organizations shall have the authority to include other terms
and conditions as they deem necessary.
(b) Each project labor agreement shall be filed with the
Director in accordance with the procedures established by the
Department. At a minimum, the project labor agreement must
provide the names, addresses, and occupations of the owner of
the Green Energy Business and the individuals representing the
labor organization employees participating in the project
labor agreement. The agreement must also specify the terms and
conditions required in subsection (a) of this Section.
Section 20. The Illinois Income Tax Act is amended by
changing Section 201 as follows:
(35 ILCS 5/201) (from Ch. 120, par. 2-201)
Sec. 201. Tax imposed.
(a) In general. A tax measured by net income is hereby
imposed on every individual, corporation, trust and estate for
each taxable year ending after July 31, 1969 on the privilege
of earning or receiving income in or as a resident of this
State. Such tax shall be in addition to all other occupation or
privilege taxes imposed by this State or by any municipal
corporation or political subdivision thereof.
(b) Rates. The tax imposed by subsection (a) of this
Section shall be determined as follows, except as adjusted by
subsection (d-1):

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(1) In the case of an individual, trust or estate, for
taxable years ending prior to July 1, 1989, an amount equal
to 2 1/2% of the taxpayer's net income for the taxable
year.
(2) In the case of an individual, trust or estate, for
taxable years beginning prior to July 1, 1989 and ending
after June 30, 1989, an amount equal to the sum of (i) 2
1/2% of the taxpayer's net income for the period prior to
July 1, 1989, as calculated under Section 202.3, and (ii)
3% of the taxpayer's net income for the period after June
30, 1989, as calculated under Section 202.3.
(3) In the case of an individual, trust or estate, for
taxable years beginning after June 30, 1989, and ending
prior to January 1, 2011, an amount equal to 3% of the
taxpayer's net income for the taxable year.
(4) In the case of an individual, trust, or estate, for
taxable years beginning prior to January 1, 2011, and
ending after December 31, 2010, an amount equal to the sum
of (i) 3% of the taxpayer's net income for the period prior
to January 1, 2011, as calculated under Section 202.5, and
(ii) 5% of the taxpayer's net income for the period after
December 31, 2010, as calculated under Section 202.5.
(5) In the case of an individual, trust, or estate, for
taxable years beginning on or after January 1, 2011, and
ending prior to January 1, 2015, an amount equal to 5% of
the taxpayer's net income for the taxable year.

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(5.1) In the case of an individual, trust, or estate,
for taxable years beginning prior to January 1, 2015, and
ending after December 31, 2014, an amount equal to the sum
of (i) 5% of the taxpayer's net income for the period prior
to January 1, 2015, as calculated under Section 202.5, and
(ii) 3.75% of the taxpayer's net income for the period
after December 31, 2014, as calculated under Section 202.5.
(5.2) In the case of an individual, trust, or estate,
for taxable years beginning on or after January 1, 2015,
and ending prior to July 1, 2017, an amount equal to 3.75%
of the taxpayer's net income for the taxable year.
(5.3) In the case of an individual, trust, or estate,
for taxable years beginning prior to July 1, 2017, and
ending after June 30, 2017, an amount equal to the sum of
(i) 3.75% of the taxpayer's net income for the period prior
to July 1, 2017, as calculated under Section 202.5, and
(ii) 4.95% of the taxpayer's net income for the period
after June 30, 2017, as calculated under Section 202.5.
(5.4) In the case of an individual, trust, or estate,
for taxable years beginning on or after July 1, 2017, an
amount equal to 4.95% of the taxpayer's net income for the
taxable year.
(6) In the case of a corporation, for taxable years
ending prior to July 1, 1989, an amount equal to 4% of the
taxpayer's net income for the taxable year.
(7) In the case of a corporation, for taxable years

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beginning prior to July 1, 1989 and ending after June 30,
1989, an amount equal to the sum of (i) 4% of the
taxpayer's net income for the period prior to July 1, 1989,
as calculated under Section 202.3, and (ii) 4.8% of the
taxpayer's net income for the period after June 30, 1989,
as calculated under Section 202.3.
(8) In the case of a corporation, for taxable years
beginning after June 30, 1989, and ending prior to January
1, 2011, an amount equal to 4.8% of the taxpayer's net
income for the taxable year.
(9) In the case of a corporation, for taxable years
beginning prior to January 1, 2011, and ending after
December 31, 2010, an amount equal to the sum of (i) 4.8%
of the taxpayer's net income for the period prior to
January 1, 2011, as calculated under Section 202.5, and
(ii) 7% of the taxpayer's net income for the period after
December 31, 2010, as calculated under Section 202.5.
(10) In the case of a corporation, for taxable years
beginning on or after January 1, 2011, and ending prior to
January 1, 2015, an amount equal to 7% of the taxpayer's
net income for the taxable year.
(11) In the case of a corporation, for taxable years
beginning prior to January 1, 2015, and ending after
December 31, 2014, an amount equal to the sum of (i) 7% of
the taxpayer's net income for the period prior to January
1, 2015, as calculated under Section 202.5, and (ii) 5.25%

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of the taxpayer's net income for the period after December
31, 2014, as calculated under Section 202.5.
(12) In the case of a corporation, for taxable years
beginning on or after January 1, 2015, and ending prior to
July 1, 2017, an amount equal to 5.25% of the taxpayer's
net income for the taxable year.
(13) In the case of a corporation, for taxable years
beginning prior to July 1, 2017, and ending after June 30,
2017, an amount equal to the sum of (i) 5.25% of the
taxpayer's net income for the period prior to July 1, 2017,
as calculated under Section 202.5, and (ii) 7% of the
taxpayer's net income for the period after June 30, 2017,
as calculated under Section 202.5.
(14) In the case of a corporation, for taxable years
beginning on or after July 1, 2017, an amount equal to 7%
of the taxpayer's net income for the taxable year.
The rates under this subsection (b) are subject to the
provisions of Section 201.5.
(c) Personal Property Tax Replacement Income Tax.
Beginning on July 1, 1979 and thereafter, in addition to such
income tax, there is also hereby imposed the Personal Property
Tax Replacement Income Tax measured by net income on every
corporation (including Subchapter S corporations), partnership
and trust, for each taxable year ending after June 30, 1979.
Such taxes are imposed on the privilege of earning or receiving
income in or as a resident of this State. The Personal Property

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Tax Replacement Income Tax shall be in addition to the income
tax imposed by subsections (a) and (b) of this Section and in
addition to all other occupation or privilege taxes imposed by
this State or by any municipal corporation or political
subdivision thereof.
(d) Additional Personal Property Tax Replacement Income
Tax Rates. The personal property tax replacement income tax
imposed by this subsection and subsection (c) of this Section
in the case of a corporation, other than a Subchapter S
corporation and except as adjusted by subsection (d-1), shall
be an additional amount equal to 2.85% of such taxpayer's net
income for the taxable year, except that beginning on January
1, 1981, and thereafter, the rate of 2.85% specified in this
subsection shall be reduced to 2.5%, and in the case of a
partnership, trust or a Subchapter S corporation shall be an
additional amount equal to 1.5% of such taxpayer's net income
for the taxable year.
(d-1) Rate reduction for certain foreign insurers. In the
case of a foreign insurer, as defined by Section 35A-5 of the
Illinois Insurance Code, whose state or country of domicile
imposes on insurers domiciled in Illinois a retaliatory tax
(excluding any insurer whose premiums from reinsurance assumed
are 50% or more of its total insurance premiums as determined
under paragraph (2) of subsection (b) of Section 304, except
that for purposes of this determination premiums from
reinsurance do not include premiums from inter-affiliate

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reinsurance arrangements), beginning with taxable years ending
on or after December 31, 1999, the sum of the rates of tax
imposed by subsections (b) and (d) shall be reduced (but not
increased) to the rate at which the total amount of tax imposed
under this Act, net of all credits allowed under this Act,
shall equal (i) the total amount of tax that would be imposed
on the foreign insurer's net income allocable to Illinois for
the taxable year by such foreign insurer's state or country of
domicile if that net income were subject to all income taxes
and taxes measured by net income imposed by such foreign
insurer's state or country of domicile, net of all credits
allowed or (ii) a rate of zero if no such tax is imposed on such
income by the foreign insurer's state of domicile. For the
purposes of this subsection (d-1), an inter-affiliate includes
a mutual insurer under common management.
(1) For the purposes of subsection (d-1), in no event
shall the sum of the rates of tax imposed by subsections
(b) and (d) be reduced below the rate at which the sum of:
(A) the total amount of tax imposed on such foreign
insurer under this Act for a taxable year, net of all
credits allowed under this Act, plus
(B) the privilege tax imposed by Section 409 of the
Illinois Insurance Code, the fire insurance company
tax imposed by Section 12 of the Fire Investigation
Act, and the fire department taxes imposed under
Section 11-10-1 of the Illinois Municipal Code,

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equals 1.25% for taxable years ending prior to December 31,
2003, or 1.75% for taxable years ending on or after
December 31, 2003, of the net taxable premiums written for
the taxable year, as described by subsection (1) of Section
409 of the Illinois Insurance Code. This paragraph will in
no event increase the rates imposed under subsections (b)
and (d).
(2) Any reduction in the rates of tax imposed by this
subsection shall be applied first against the rates imposed
by subsection (b) and only after the tax imposed by
subsection (a) net of all credits allowed under this
Section other than the credit allowed under subsection (i)
has been reduced to zero, against the rates imposed by
subsection (d).
This subsection (d-1) is exempt from the provisions of
Section 250.
(e) Investment credit. A taxpayer shall be allowed a credit
against the Personal Property Tax Replacement Income Tax for
investment in qualified property.
(1) A taxpayer shall be allowed a credit equal to .5%
of the basis of qualified property placed in service during
the taxable year, provided such property is placed in
service on or after July 1, 1984. There shall be allowed an
additional credit equal to .5% of the basis of qualified
property placed in service during the taxable year,
provided such property is placed in service on or after

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July 1, 1986, and the taxpayer's base employment within
Illinois has increased by 1% or more over the preceding
year as determined by the taxpayer's employment records
filed with the Illinois Department of Employment Security.
Taxpayers who are new to Illinois shall be deemed to have
met the 1% growth in base employment for the first year in
which they file employment records with the Illinois
Department of Employment Security. The provisions added to
this Section by Public Act 85-1200 (and restored by Public
Act 87-895) shall be construed as declaratory of existing
law and not as a new enactment. If, in any year, the
increase in base employment within Illinois over the
preceding year is less than 1%, the additional credit shall
be limited to that percentage times a fraction, the
numerator of which is .5% and the denominator of which is
1%, but shall not exceed .5%. The investment credit shall
not be allowed to the extent that it would reduce a
taxpayer's liability in any tax year below zero, nor may
any credit for qualified property be allowed for any year
other than the year in which the property was placed in
service in Illinois. For tax years ending on or after
December 31, 1987, and on or before December 31, 1988, the
credit shall be allowed for the tax year in which the
property is placed in service, or, if the amount of the
credit exceeds the tax liability for that year, whether it
exceeds the original liability or the liability as later

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amended, such excess may be carried forward and applied to
the tax liability of the 5 taxable years following the
excess credit years if the taxpayer (i) makes investments
which cause the creation of a minimum of 2,000 full-time
equivalent jobs in Illinois, (ii) is located in an
enterprise zone established pursuant to the Illinois
Enterprise Zone Act and (iii) is certified by the
Department of Commerce and Community Affairs (now
Department of Commerce and Economic Opportunity) as
complying with the requirements specified in clause (i) and
(ii) by July 1, 1986. The Department of Commerce and
Community Affairs (now Department of Commerce and Economic
Opportunity) shall notify the Department of Revenue of all
such certifications immediately. For tax years ending
after December 31, 1988, the credit shall be allowed for
the tax year in which the property is placed in service,
or, if the amount of the credit exceeds the tax liability
for that year, whether it exceeds the original liability or
the liability as later amended, such excess may be carried
forward and applied to the tax liability of the 5 taxable
years following the excess credit years. The credit shall
be applied to the earliest year for which there is a
liability. If there is credit from more than one tax year
that is available to offset a liability, earlier credit
shall be applied first.
(2) The term "qualified property" means property

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which:
(A) is tangible, whether new or used, including
buildings and structural components of buildings and
signs that are real property, but not including land or
improvements to real property that are not a structural
component of a building such as landscaping, sewer
lines, local access roads, fencing, parking lots, and
other appurtenances;
(B) is depreciable pursuant to Section 167 of the
Internal Revenue Code, except that "3-year property"
as defined in Section 168(c)(2)(A) of that Code is not
eligible for the credit provided by this subsection
(e);
(C) is acquired by purchase as defined in Section
179(d) of the Internal Revenue Code;
(D) is used in Illinois by a taxpayer who is
primarily engaged in manufacturing, or in mining coal
or fluorite, or in retailing, or was placed in service
on or after July 1, 2006 in a River Edge Redevelopment
Zone established pursuant to the River Edge
Redevelopment Zone Act; and
(E) has not previously been used in Illinois in
such a manner and by such a person as would qualify for
the credit provided by this subsection (e) or
subsection (f).
(3) For purposes of this subsection (e),

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"manufacturing" means the material staging and production
of tangible personal property by procedures commonly
regarded as manufacturing, processing, fabrication, or
assembling which changes some existing material into new
shapes, new qualities, or new combinations. For purposes of
this subsection (e) the term "mining" shall have the same
meaning as the term "mining" in Section 613(c) of the
Internal Revenue Code. For purposes of this subsection (e),
the term "retailing" means the sale of tangible personal
property for use or consumption and not for resale, or
services rendered in conjunction with the sale of tangible
personal property for use or consumption and not for
resale. For purposes of this subsection (e), "tangible
personal property" has the same meaning as when that term
is used in the Retailers' Occupation Tax Act, and, for
taxable years ending after December 31, 2008, does not
include the generation, transmission, or distribution of
electricity.
(4) The basis of qualified property shall be the basis
used to compute the depreciation deduction for federal
income tax purposes.
(5) If the basis of the property for federal income tax
depreciation purposes is increased after it has been placed
in service in Illinois by the taxpayer, the amount of such
increase shall be deemed property placed in service on the
date of such increase in basis.

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(6) The term "placed in service" shall have the same
meaning as under Section 46 of the Internal Revenue Code.
(7) If during any taxable year, any property ceases to
be qualified property in the hands of the taxpayer within
48 months after being placed in service, or the situs of
any qualified property is moved outside Illinois within 48
months after being placed in service, the Personal Property
Tax Replacement Income Tax for such taxable year shall be
increased. Such increase shall be determined by (i)
recomputing the investment credit which would have been
allowed for the year in which credit for such property was
originally allowed by eliminating such property from such
computation and, (ii) subtracting such recomputed credit
from the amount of credit previously allowed. For the
purposes of this paragraph (7), a reduction of the basis of
qualified property resulting from a redetermination of the
purchase price shall be deemed a disposition of qualified
property to the extent of such reduction.
(8) Unless the investment credit is extended by law,
the basis of qualified property shall not include costs
incurred after December 31, 2018, except for costs incurred
pursuant to a binding contract entered into on or before
December 31, 2018.
(9) Each taxable year ending before December 31, 2000,
a partnership may elect to pass through to its partners the
credits to which the partnership is entitled under this

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subsection (e) for the taxable year. A partner may use the
credit allocated to him or her under this paragraph only
against the tax imposed in subsections (c) and (d) of this
Section. If the partnership makes that election, those
credits shall be allocated among the partners in the
partnership in accordance with the rules set forth in
Section 704(b) of the Internal Revenue Code, and the rules
promulgated under that Section, and the allocated amount of
the credits shall be allowed to the partners for that
taxable year. The partnership shall make this election on
its Personal Property Tax Replacement Income Tax return for
that taxable year. The election to pass through the credits
shall be irrevocable.
For taxable years ending on or after December 31, 2000,
a partner that qualifies its partnership for a subtraction
under subparagraph (I) of paragraph (2) of subsection (d)
of Section 203 or a shareholder that qualifies a Subchapter
S corporation for a subtraction under subparagraph (S) of
paragraph (2) of subsection (b) of Section 203 shall be
allowed a credit under this subsection (e) equal to its
share of the credit earned under this subsection (e) during
the taxable year by the partnership or Subchapter S
corporation, determined in accordance with the
determination of income and distributive share of income
under Sections 702 and 704 and Subchapter S of the Internal
Revenue Code. This paragraph is exempt from the provisions

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of Section 250.
(f) Investment credit; Enterprise Zone; River Edge
Redevelopment Zone.
(1) A taxpayer shall be allowed a credit against the
tax imposed by subsections (a) and (b) of this Section for
investment in qualified property which is placed in service
in an Enterprise Zone created pursuant to the Illinois
Enterprise Zone Act or, for property placed in service on
or after July 1, 2006, a River Edge Redevelopment Zone
established pursuant to the River Edge Redevelopment Zone
Act. 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 subsection (f) to be
determined in accordance with the determination of income
and distributive share of income under Sections 702 and 704
and Subchapter S of the Internal Revenue Code. The credit
shall be .5% of the basis for such property. The credit
shall be available only in the taxable year in which the
property is placed in service in the Enterprise Zone or
River Edge Redevelopment Zone and shall not be allowed to
the extent that it would reduce a taxpayer's liability for
the tax imposed by subsections (a) and (b) of this Section
to below zero. For tax years ending on or after December
31, 1985, the credit shall be allowed for the tax year in

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which the property is placed in service, or, if the amount
of the credit exceeds the tax liability for that year,
whether it exceeds the original liability or the liability
as later amended, such excess may be carried forward and
applied to the tax liability of the 5 taxable years
following the excess credit year. The credit shall be
applied to the earliest year for which there is a
liability. If there is credit from more than one tax year
that is available to offset a liability, the credit
accruing first in time shall be applied first.
(2) The term qualified property means property which:
(A) is tangible, whether new or used, including
buildings and structural components of buildings;
(B) is depreciable pursuant to Section 167 of the
Internal Revenue Code, except that "3-year property"
as defined in Section 168(c)(2)(A) of that Code is not
eligible for the credit provided by this subsection
(f);
(C) is acquired by purchase as defined in Section
179(d) of the Internal Revenue Code;
(D) is used in the Enterprise Zone or River Edge
Redevelopment Zone by the taxpayer; and
(E) has not been previously used in Illinois in
such a manner and by such a person as would qualify for
the credit provided by this subsection (f) or
subsection (e).

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(3) The basis of qualified property shall be the basis
used to compute the depreciation deduction for federal
income tax purposes.
(4) If the basis of the property for federal income tax
depreciation purposes is increased after it has been placed
in service in the Enterprise Zone or River Edge
Redevelopment Zone by the taxpayer, the amount of such
increase shall be deemed property placed in service on the
date of such increase in basis.
(5) The term "placed in service" shall have the same
meaning as under Section 46 of the Internal Revenue Code.
(6) If during any taxable year, any property ceases to
be qualified property in the hands of the taxpayer within
48 months after being placed in service, or the situs of
any qualified property is moved outside the Enterprise Zone
or River Edge Redevelopment Zone within 48 months after
being placed in service, the tax imposed under subsections
(a) and (b) of this Section for such taxable year shall be
increased. Such increase shall be determined by (i)
recomputing the investment credit which would have been
allowed for the year in which credit for such property was
originally allowed by eliminating such property from such
computation, and (ii) subtracting such recomputed credit
from the amount of credit previously allowed. For the
purposes of this paragraph (6), a reduction of the basis of
qualified property resulting from a redetermination of the

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purchase price shall be deemed a disposition of qualified
property to the extent of such reduction.
(7) There shall be allowed an additional credit equal
to 0.5% of the basis of qualified property placed in
service during the taxable year in a River Edge
Redevelopment Zone, provided such property is placed in
service on or after July 1, 2006, and the taxpayer's base
employment within Illinois has increased by 1% or more over
the preceding year as determined by the taxpayer's
employment records filed with the Illinois Department of
Employment Security. Taxpayers who are new to Illinois
shall be deemed to have met the 1% growth in base
employment for the first year in which they file employment
records with the Illinois Department of Employment
Security. If, in any year, the increase in base employment
within Illinois over the preceding year is less than 1%,
the additional credit shall be limited to that percentage
times a fraction, the numerator of which is 0.5% and the
denominator of which is 1%, but shall not exceed 0.5%.
(g) (Blank).
(h) Investment credit; High Impact Business; Green Energy
Business.
(1) Subject to subsection (a) of Section 10 of the
Green Energy Business Act, or subsections (b) and (b-5) of
Section 5.5 of the Illinois Enterprise Zone Act, a taxpayer
shall be allowed a credit against the tax imposed by

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subsections (a) and (b) of this Section for investment in
qualified property which is placed in service by a
Department of Commerce and Economic Opportunity designated
Green Energy Business or High Impact Business. The credit
shall be .5% of the basis for such property. The credit
shall not be available (i) until the minimum investments in
qualified property set forth in subdivision (a)(3)(A) of
Section 5.5 of the Illinois Enterprise Zone Act have been
satisfied or (ii) until the Department of Commerce and
Economic Opportunity designates the business as a Green
Energy Business under the Green Energy Business Act, or
until the time authorized in subsection (b-5) of the
Illinois Enterprise Zone Act for entities designated as
High Impact Businesses under subdivisions (a)(3)(B),
(a)(3)(C), and (a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone Act, and shall not be allowed to the extent
that it would reduce a taxpayer's liability for the tax
imposed by subsections (a) and (b) of this Section to below
zero. The credit applicable to such investments shall be
taken in the taxable year in which such investments have
been completed. The credit for additional investments
beyond the minimum investment by a designated high impact
business authorized under subdivision (a)(3)(A) of Section
5.5 of the Illinois Enterprise Zone Act shall be available
only in the taxable year in which the property is placed in
service and shall not be allowed to the extent that it

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would reduce a taxpayer's liability for the tax imposed by
subsections (a) and (b) of this Section to below zero. For
tax years ending on or after December 31, 1987, the credit
shall be allowed for the tax year in which the property is
placed in service, or, if the amount of the credit exceeds
the tax liability for that year, whether it exceeds the
original liability or the liability as later amended, such
excess may be carried forward and applied to the tax
liability of the 5 taxable years following the excess
credit year. The credit shall be applied to the earliest
year for which there is a liability. If there is credit
from more than one tax year that is available to offset a
liability, the credit accruing first in time shall be
applied first.
Changes made in this subdivision (h)(1) by Public Act
88-670 restore changes made by Public Act 85-1182 and
reflect existing law.
(2) The term qualified property means property which:
(A) is tangible, whether new or used, including
buildings and structural components of buildings;
(B) is depreciable pursuant to Section 167 of the
Internal Revenue Code, except that "3-year property"
as defined in Section 168(c)(2)(A) of that Code is not
eligible for the credit provided by this subsection
(h);
(C) is acquired by purchase as defined in Section

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179(d) of the Internal Revenue Code; and
(D) is not eligible for the Enterprise Zone
Investment Credit provided by subsection (f) of this
Section.
(3) The basis of qualified property shall be the basis
used to compute the depreciation deduction for federal
income tax purposes.
(4) If the basis of the property for federal income tax
depreciation purposes is increased after it has been placed
in service in a federally designated Foreign Trade Zone or
Sub-Zone located in Illinois by the taxpayer, the amount of
such increase shall be deemed property placed in service on
the date of such increase in basis.
(5) The term "placed in service" shall have the same
meaning as under Section 46 of the Internal Revenue Code.
(6) If during any taxable year ending on or before
December 31, 1996, any property ceases to be qualified
property in the hands of the taxpayer within 48 months
after being placed in service, or the situs of any
qualified property is moved outside Illinois within 48
months after being placed in service, the tax imposed under
subsections (a) and (b) of this Section for such taxable
year shall be increased. Such increase shall be determined
by (i) recomputing the investment credit which would have
been allowed for the year in which credit for such property
was originally allowed by eliminating such property from

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such computation, and (ii) subtracting such recomputed
credit from the amount of credit previously allowed. For
the purposes of this paragraph (6), a reduction of the
basis of qualified property resulting from a
redetermination of the purchase price shall be deemed a
disposition of qualified property to the extent of such
reduction.
(7) Beginning with tax years ending after December 31,
1996, if a taxpayer qualifies for the credit under this
subsection (h) and thereby is granted a tax abatement and
the taxpayer relocates its entire facility in violation of
the explicit terms and length of the contract under Section
18-183 of the Property Tax Code, the tax imposed under
subsections (a) and (b) of this Section shall be increased
for the taxable year in which the taxpayer relocated its
facility by an amount equal to the amount of credit
received by the taxpayer under this subsection (h).
(i) Credit for Personal Property Tax Replacement Income
Tax. For tax years ending prior to December 31, 2003, a credit
shall be allowed against the tax imposed by subsections (a) and
(b) of this Section for the tax imposed by subsections (c) and
(d) of this Section. This credit shall be computed by
multiplying the tax imposed by subsections (c) and (d) of this
Section by a fraction, the numerator of which is base income
allocable to Illinois and the denominator of which is Illinois
base income, and further multiplying the product by the tax

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rate imposed by subsections (a) and (b) of this Section.
Any credit earned on or after December 31, 1986 under this
subsection which is unused in the year the credit is computed
because it exceeds the tax liability imposed by subsections (a)
and (b) for that year (whether it exceeds the original
liability or the liability as later amended) may be carried
forward and applied to the tax liability imposed by subsections
(a) and (b) of the 5 taxable years following the excess credit
year, provided that no credit may be carried forward to any
year ending on or after December 31, 2003. This credit shall be
applied first to the earliest year for which there is a
liability. If there is a credit under this subsection from more
than one tax year that is available to offset a liability the
earliest credit arising under this subsection shall be applied
first.
If, during any taxable year ending on or after December 31,
1986, the tax imposed by subsections (c) and (d) of this
Section for which a taxpayer has claimed a credit under this
subsection (i) is reduced, the amount of credit for such tax
shall also be reduced. Such reduction shall be determined by
recomputing the credit to take into account the reduced tax
imposed by subsections (c) and (d). If any portion of the
reduced amount of credit has been carried to a different
taxable year, an amended return shall be filed for such taxable
year to reduce the amount of credit claimed.
(j) Training expense credit. Beginning with tax years

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ending on or after December 31, 1986 and prior to December 31,
2003, a taxpayer shall be allowed a credit against the tax
imposed by subsections (a) and (b) under this Section for all
amounts paid or accrued, on behalf of all persons employed by
the taxpayer in Illinois or Illinois residents employed outside
of Illinois by a taxpayer, for educational or vocational
training in semi-technical or technical fields or semi-skilled
or skilled fields, which were deducted from gross income in the
computation of taxable income. The credit against the tax
imposed by subsections (a) and (b) shall be 1.6% of such
training expenses. 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 subsection (j) to be determined in accordance
with the determination of income and distributive share of
income under Sections 702 and 704 and subchapter S of the
Internal Revenue Code.
Any credit allowed under this subsection which is unused in
the year the credit is earned may be carried forward to each of
the 5 taxable years following the year for which the credit is
first computed until it is used. This credit shall be applied
first to the earliest year for which there is a liability. If
there is a credit under this subsection from more than one tax
year that is available to offset a liability the earliest
credit arising under this subsection shall be applied first. No

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carryforward credit may be claimed in any tax year ending on or
after December 31, 2003.
(k) Research and development credit. For tax years ending
after July 1, 1990 and prior to December 31, 2003, and
beginning again for tax years ending on or after December 31,
2004, and ending prior to January 1, 2022, a taxpayer shall be
allowed a credit against the tax imposed by subsections (a) and
(b) of this Section for increasing research activities in this
State. The credit allowed against the tax imposed by
subsections (a) and (b) shall be equal to 6 1/2% of the
qualifying expenditures for increasing research activities in
this State. 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 subsection to be determined in accordance
with the determination of income and distributive share of
income under Sections 702 and 704 and subchapter S of the
Internal Revenue Code.
For purposes of this subsection, "qualifying expenditures"
means the qualifying expenditures as defined for the federal
credit for increasing research activities which would be
allowable under Section 41 of the Internal Revenue Code and
which are conducted in this State, "qualifying expenditures for
increasing research activities in this State" means the excess
of qualifying expenditures for the taxable year in which

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incurred over qualifying expenditures for the base period,
"qualifying expenditures for the base period" means the average
of the qualifying expenditures for each year in the base
period, and "base period" means the 3 taxable years immediately
preceding the taxable year for which the determination is being
made.
Any credit in excess of the tax liability for the taxable
year may be carried forward. A taxpayer may elect to have the
unused credit shown on its final completed return carried over
as a credit against the tax liability for the following 5
taxable years or until it has been fully used, whichever occurs
first; provided that no credit earned in a tax year ending
prior to December 31, 2003 may be carried forward to any year
ending on or after December 31, 2003.
If an unused credit is carried forward to a given year from
2 or more earlier years, that credit arising in the earliest
year will be applied first against the tax liability for the
given year. If a tax liability for the given year still
remains, the credit from the next earliest year will then be
applied, and so on, until all credits have been used or no tax
liability for the given year remains. Any remaining unused
credit or credits then will be carried forward to the next
following year in which a tax liability is incurred, except
that no credit can be carried forward to a year which is more
than 5 years after the year in which the expense for which the
credit is given was incurred.

HB3563 - 31 - LRB101 05945 HLH 50966 b
No inference shall be drawn from this amendatory Act of the
91st General Assembly in construing this Section for taxable
years beginning before January 1, 1999.
It is the intent of the General Assembly that the research
and development credit under this subsection (k) shall apply
continuously for all tax years ending on or after December 31,
2004 and ending prior to January 1, 2022, including, but not
limited to, the period beginning on January 1, 2016 and ending
on the effective date of this amendatory Act of the 100th
General Assembly. All actions taken in reliance on the
continuation of the credit under this subsection (k) by any
taxpayer are hereby validated.
(l) Environmental Remediation Tax Credit.
(i) For tax years ending after December 31, 1997 and on
or before December 31, 2001, a taxpayer shall be allowed a
credit against the tax imposed by subsections (a) and (b)
of this Section for certain amounts paid for unreimbursed
eligible remediation costs, as specified in this
subsection. For purposes of this Section, "unreimbursed
eligible remediation costs" means costs approved by the
Illinois Environmental Protection Agency ("Agency") under
Section 58.14 of the Environmental Protection Act that were
paid in performing environmental remediation at a site for
which a No Further Remediation Letter was issued by the
Agency and recorded under Section 58.10 of the
Environmental Protection Act. The credit must be claimed

HB3563 - 32 - LRB101 05945 HLH 50966 b
for the taxable year in which Agency approval of the
eligible remediation costs is granted. The credit is not
available to any taxpayer if the taxpayer or any related
party caused or contributed to, in any material respect, a
release of regulated substances on, in, or under the site
that was identified and addressed by the remedial action
pursuant to the Site Remediation Program of the
Environmental Protection Act. After the Pollution Control
Board rules are adopted pursuant to the Illinois
Administrative Procedure Act for the administration and
enforcement of Section 58.9 of the Environmental
Protection Act, determinations as to credit availability
for purposes of this Section shall be made consistent with
those rules. For purposes of this Section, "taxpayer"
includes a person whose tax attributes the taxpayer has
succeeded to under Section 381 of the Internal Revenue Code
and "related party" includes the persons disallowed a
deduction for losses by paragraphs (b), (c), and (f)(1) of
Section 267 of the Internal Revenue Code by virtue of being
a related taxpayer, as well as any of its partners. The
credit allowed against the tax imposed by subsections (a)
and (b) shall be equal to 25% of the unreimbursed eligible
remediation costs in excess of $100,000 per site, except
that the $100,000 threshold shall not apply to any site
contained in an enterprise zone as determined by the
Department of Commerce and Community Affairs (now

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Department of Commerce and Economic Opportunity). The
total credit allowed shall not exceed $40,000 per year with
a maximum total of $150,000 per site. For partners and
shareholders of subchapter S corporations, there shall be
allowed a credit under this subsection to be determined in
accordance with the determination of income and
distributive share of income under Sections 702 and 704 and
subchapter S of the Internal Revenue Code.
(ii) A credit allowed under this subsection that is
unused in the year the credit is earned may be carried
forward to each of the 5 taxable years following the year
for which the credit is first earned until it is used. The
term "unused credit" does not include any amounts of
unreimbursed eligible remediation costs in excess of the
maximum credit per site authorized under paragraph (i).
This credit shall be applied first to the earliest year for
which there is a liability. If there is a credit under this
subsection from more than one tax year that is available to
offset a liability, the earliest credit arising under this
subsection shall be applied first. A credit allowed under
this subsection may be sold to a buyer as part of a sale of
all or part of the remediation site for which the credit
was granted. The purchaser of a remediation site and the
tax credit shall succeed to the unused credit and remaining
carry-forward period of the seller. To perfect the
transfer, the assignor shall record the transfer in the

HB3563 - 34 - LRB101 05945 HLH 50966 b
chain of title for the site and provide written notice to
the Director of the Illinois Department of Revenue of the
assignor's intent to sell the remediation site and the
amount of the tax credit to be transferred as a portion of
the sale. In no event may a credit be transferred to any
taxpayer if the taxpayer or a related party would not be
eligible under the provisions of subsection (i).
(iii) For purposes of this Section, the term "site"
shall have the same meaning as under Section 58.2 of the
Environmental Protection Act.
(m) Education expense credit. Beginning with tax years
ending after December 31, 1999, a taxpayer who is the custodian
of one or more qualifying pupils shall be allowed a credit
against the tax imposed by subsections (a) and (b) of this
Section for qualified education expenses incurred on behalf of
the qualifying pupils. The credit shall be equal to 25% of
qualified education expenses, but in no event may the total
credit under this subsection claimed by a family that is the
custodian of qualifying pupils exceed (i) $500 for tax years
ending prior to December 31, 2017, and (ii) $750 for tax years
ending on or after December 31, 2017. In no event shall a
credit under this subsection reduce the taxpayer's liability
under this Act to less than zero. Notwithstanding any other
provision of law, for taxable years beginning on or after
January 1, 2017, no taxpayer may claim a credit under this
subsection (m) if the taxpayer's adjusted gross income for the

HB3563 - 35 - LRB101 05945 HLH 50966 b
taxable year exceeds (i) $500,000, in the case of spouses
filing a joint federal tax return or (ii) $250,000, in the case
of all other taxpayers. This subsection is exempt from the
provisions of Section 250 of this Act.
For purposes of this subsection:
"Qualifying pupils" means individuals who (i) are
residents of the State of Illinois, (ii) are under the age of
21 at the close of the school year for which a credit is
sought, and (iii) during the school year for which a credit is
sought were full-time pupils enrolled in a kindergarten through
twelfth grade education program at any school, as defined in
this subsection.
"Qualified education expense" means the amount incurred on
behalf of a qualifying pupil in excess of $250 for tuition,
book fees, and lab fees at the school in which the pupil is
enrolled during the regular school year.
"School" means any public or nonpublic 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,
except that nothing shall be construed to require a child to
attend any particular public or nonpublic school to qualify for
the credit under this Section.
"Custodian" means, with respect to qualifying pupils, an
Illinois resident who is a parent, the parents, a legal
guardian, or the legal guardians of the qualifying pupils.

HB3563 - 36 - LRB101 05945 HLH 50966 b
(n) River Edge Redevelopment Zone site remediation tax
credit.
(i) For tax years ending on or after December 31, 2006,
a taxpayer shall be allowed a credit against the tax
imposed by subsections (a) and (b) of this Section for
certain amounts paid for unreimbursed eligible remediation
costs, as specified in this subsection. For purposes of
this Section, "unreimbursed eligible remediation costs"
means costs approved by the Illinois Environmental
Protection Agency ("Agency") under Section 58.14a of the
Environmental Protection Act that were paid in performing
environmental remediation at a site within a River Edge
Redevelopment Zone for which a No Further Remediation
Letter was issued by the Agency and recorded under Section
58.10 of the Environmental Protection Act. The credit must
be claimed for the taxable year in which Agency approval of
the eligible remediation costs is granted. The credit is
not available to any taxpayer if the taxpayer or any
related party caused or contributed to, in any material
respect, a release of regulated substances on, in, or under
the site that was identified and addressed by the remedial
action pursuant to the Site Remediation Program of the
Environmental Protection Act. Determinations as to credit
availability for purposes of this Section shall be made
consistent with rules adopted by the Pollution Control
Board pursuant to the Illinois Administrative Procedure

HB3563 - 37 - LRB101 05945 HLH 50966 b
Act for the administration and enforcement of Section 58.9
of the Environmental Protection Act. For purposes of this
Section, "taxpayer" includes a person whose tax attributes
the taxpayer has succeeded to under Section 381 of the
Internal Revenue Code and "related party" includes the
persons disallowed a deduction for losses by paragraphs
(b), (c), and (f)(1) of Section 267 of the Internal Revenue
Code by virtue of being a related taxpayer, as well as any
of its partners. The credit allowed against the tax imposed
by subsections (a) and (b) shall be equal to 25% of the
unreimbursed eligible remediation costs in excess of
$100,000 per site.
(ii) A credit allowed under this subsection that is
unused in the year the credit is earned may be carried
forward to each of the 5 taxable years following the year
for which the credit is first earned until it is used. This
credit shall be applied first to the earliest year for
which there is a liability. If there is a credit under this
subsection from more than one tax year that is available to
offset a liability, the earliest credit arising under this
subsection shall be applied first. A credit allowed under
this subsection may be sold to a buyer as part of a sale of
all or part of the remediation site for which the credit
was granted. The purchaser of a remediation site and the
tax credit shall succeed to the unused credit and remaining
carry-forward period of the seller. To perfect the

HB3563 - 38 - LRB101 05945 HLH 50966 b
transfer, the assignor shall record the transfer in the
chain of title for the site and provide written notice to
the Director of the Illinois Department of Revenue of the
assignor's intent to sell the remediation site and the
amount of the tax credit to be transferred as a portion of
the sale. In no event may a credit be transferred to any
taxpayer if the taxpayer or a related party would not be
eligible under the provisions of subsection (i).
(iii) For purposes of this Section, the term "site"
shall have the same meaning as under Section 58.2 of the
Environmental Protection Act.
(o) For each of taxable years during the Compassionate Use
of Medical Cannabis Pilot Program, a surcharge is imposed on
all taxpayers on income arising from the sale or exchange of
capital assets, depreciable business property, real property
used in the trade or business, and Section 197 intangibles of
an organization registrant under the Compassionate Use of
Medical Cannabis Pilot Program Act. The amount of the surcharge
is equal to the amount of federal income tax liability for the
taxable year attributable to those sales and exchanges. The
surcharge imposed does not apply if:
(1) the medical cannabis cultivation center
registration, medical cannabis dispensary registration, or
the property of a registration is transferred as a result
of any of the following:
(A) bankruptcy, a receivership, or a debt

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adjustment initiated by or against the initial
registration or the substantial owners of the initial
registration;
(B) cancellation, revocation, or termination of
any registration by the Illinois Department of Public
Health;
(C) a determination by the Illinois Department of
Public Health that transfer of the registration is in
the best interests of Illinois qualifying patients as
defined by the Compassionate Use of Medical Cannabis
Pilot Program Act;
(D) the death of an owner of the equity interest in
a registrant;
(E) the acquisition of a controlling interest in
the stock or substantially all of the assets of a
publicly traded company;
(F) a transfer by a parent company to a wholly
owned subsidiary; or
(G) the transfer or sale to or by one person to
another person where both persons were initial owners
of the registration when the registration was issued;
or
(2) the cannabis cultivation center registration,
medical cannabis dispensary registration, or the
controlling interest in a registrant's property is
transferred in a transaction to lineal descendants in which

HB3563 - 40 - LRB101 05945 HLH 50966 b
no gain or loss is recognized or as a result of a
transaction in accordance with Section 351 of the Internal
Revenue Code in which no gain or loss is recognized.
(Source: P.A. 100-22, eff. 7-6-17.)
Section 25. The Retailers' Occupation Tax Act is amended by
changing Sections 1d, 1e, 1f, and 5l as follows:
(35 ILCS 120/1d) (from Ch. 120, par. 440d)
Sec. 1d. Subject to the provisions of Section 1f, all
tangible personal property to be used or consumed within an
enterprise zone established pursuant to the "Illinois
Enterprise Zone Act", as amended, or subject to the provisions
of Section 5.5 of the Illinois Enterprise Zone Act, or subject
to the provisions of Section 10 of the Green Energy Business
Act, all tangible personal property to be used or consumed by
any High Impact Business or Green Energy Business , in the
process of the manufacturing or assembly of tangible personal
property for wholesale or retail sale or lease or in the
process of graphic arts production if used or consumed at a
facility which is a Department of Commerce and Economic
Opportunity certified business and located in a county of more
than 4,000 persons and less than 45,000 persons is exempt from
the tax imposed by this Act. This exemption includes repair and
replacement parts for machinery and equipment used primarily in
the process of manufacturing or assembling tangible personal

HB3563 - 41 - LRB101 05945 HLH 50966 b
property or in the process of graphic arts production if used
or consumed at a facility which is a Department of Commerce and
Economic Opportunity certified business and located in a county
of more than 4,000 persons and less than 45,000 persons for
wholesale or retail sale, or lease, and equipment,
manufacturing or graphic arts fuels, material and supplies for
the maintenance, repair or operation of such manufacturing or
assembling or graphic arts machinery or equipment. The
exemption provided in this Section for tangible personal
property to be used or consumed in the process of manufacturing
or assembly of tangible personal property for wholesale or
retail sale or lease, and the repair and replacement parts for
that machinery and equipment, does not apply to such property
used or consumed in (i) the generation of electricity for
wholesale or retail sale; (ii) the generation or treatment of
natural or artificial gas for wholesale or retail sale that is
delivered to customers through pipes, pipelines, or mains; or
(iii) the treatment of water for wholesale or retail sale that
is delivered to customers through pipes, pipelines, or mains.
The provisions of this amendatory Act of the 98th General
Assembly are declaratory of existing law as to the meaning and
scope of this exemption.
(Source: P.A. 98-583, eff. 1-1-14.)
(35 ILCS 120/1e) (from Ch. 120, par. 440e)
Sec. 1e. Subject to the provisions of Section 1f, or

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subject to the provisions of Section 5.5 of the Illinois
Enterprise Zone Act, or subject to the provisions of Section 10
of the Green Energy Business Act, all tangible personal
property to be used or consumed in the operation of pollution
control facilities, as defined in Section 1a of this Act,
within an enterprise zone established pursuant to the "Illinois
Enterprise Zone Act", as amended, shall be exempt from the tax
imposed by this Act.
(Source: P.A. 85-1182.)
(35 ILCS 120/1f) (from Ch. 120, par. 440f)
Sec. 1f. Except for High Impact Businesses or Green Energy
Businesses, the exemption stated in Sections 1d and 1e of this
Act shall only apply to business enterprises which:
(1) either (i) make investments which cause the
creation of a minimum of 200 full-time equivalent jobs in
Illinois or (ii) make investments which cause the retention
of a minimum of 2000 full-time jobs in Illinois or (iii)
make investments of a minimum of $40,000,000 and retain at
least 90% of the jobs in place on the date on which the
exemption is granted and for the duration of the exemption;
and
(2) are located in an Enterprise Zone established
pursuant to the Illinois Enterprise Zone Act; and
(3) are certified by the Department of Commerce and
Economic Opportunity as complying with the requirements

HB3563 - 43 - LRB101 05945 HLH 50966 b
specified in clauses (1) and (2).
In addition, from March 1, 2010 to July 31, 2012, the
exemption stated in Sections 1d and 1e of this Act shall also
apply to a business enterprise that (i) complied with the
requirements specified in clause (1) above as of March 1, 2010,
(ii) receives certification from the Department of Commerce and
Economic Opportunity, (iii) was a Department of Commerce and
Economic Opportunity certified business enterprise in 2009,
and (iv) retained a minimum of 500 full-time equivalent jobs in
Illinois in 2009 and 2010, 675 full-time equivalent jobs in
Illinois in 2011, 850 full-time equivalent jobs in Illinois in
2012, and 1,000 full-time equivalent jobs in Illinois in 2013;
those jobs must have been created in the manufacturing sector
as defined by the North American Industry Classification
System.
Any business enterprise seeking to avail itself of the
exemptions stated in Sections 1d or 1e, or both, shall make
application to the Department of Commerce and Economic
Opportunity in such form and providing such information as may
be prescribed by the Department of Commerce and Economic
Opportunity. However, no business enterprise shall be
required, as a condition for certification under clause (3) of
this Section, to attest that its decision to invest under
clause (1) of this Section and to locate under clause (2) of
this Section is predicated upon the availability of the
exemptions authorized by Sections 1d or 1e.

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The Department of Commerce and Economic Opportunity shall
determine whether the business enterprise meets the criteria
prescribed in this Section. If the Department of Commerce and
Economic Opportunity determines that such business enterprise
meets the criteria, it shall issue a certificate of eligibility
for exemption to the business enterprise in such form as is
prescribed by the Department of Revenue. The Department of
Commerce and Economic Opportunity shall act upon such
certification requests within 60 days after receipt of the
application, and shall file with the Department of Revenue a
copy of each certificate of eligibility for exemption.
The Department of Commerce and Economic Opportunity shall
have the power to promulgate rules and regulations to carry out
the provisions of this Section including the power to define
the amounts and types of eligible investments not specified in
this Section which business enterprises must make in order to
receive the exemptions stated in Sections 1d and 1e of this
Act; and to require that any business enterprise that is
granted a tax exemption repay the exempted tax if the business
enterprise fails to comply with the terms and conditions of the
certification.
Such certificate of eligibility for exemption shall be
presented by the business enterprise to its supplier when
making the initial purchase of tangible personal property for
which an exemption is granted by Section 1d or Section 1e, or
both, together with a certification by the business enterprise

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that such tangible personal property is exempt from taxation
under Section 1d or Section 1e and by indicating the exempt
status of each subsequent purchase on the face of the purchase
order.
The Department of Commerce and Economic Opportunity shall
determine the period during which such exemption from the taxes
imposed under this Act is in effect which shall not exceed 20
years.
(Source: P.A. 100-1032, eff. 8-22-18.)
(35 ILCS 120/5l) (from Ch. 120, par. 444l)
Sec. 5l. Building materials exemption; High Impact
Business.
(a) Beginning January 1, 1995, each retailer who makes a
sale of building materials that will be incorporated into a
High Impact Business location as designated by the Department
of Commerce and Economic Opportunity under Section 5.5 of the
Illinois Enterprise Zone Act or Section 10 of the Green Energy
Business Act may deduct receipts from such sales when
calculating only the 6.25% State rate of tax imposed by this
Act. Beginning on the effective date of this amendatory Act of
1995, a retailer may also deduct receipts from such sales when
calculating any applicable local taxes. However, until the
effective date of this amendatory Act of 1995, a retailer may
file claims for credit or refund to recover the amount of any
applicable local tax paid on such sales. No retailer who is

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eligible for the deduction or credit under Section 5k of this
Act for making a sale of building materials to be incorporated
into real estate in an enterprise zone by rehabilitation,
remodeling or new construction shall be eligible for the
deduction or credit authorized under this Section.
(b) On and after July 1, 2013, in addition to any other
requirements to document the exemption allowed under this
Section, the retailer must obtain from the purchaser the
purchaser's High Impact Business Building Materials Exemption
Certificate number issued by the Department. A construction
contractor or other entity shall not make tax-free purchases
unless it has an active Exemption Certificate issued by the
Department at the time of purchase.
Upon request from the designated High Impact Business, the
Department shall issue a High Impact Business Building
Materials Exemption Certificate for each construction
contractor or other entity identified by the designated High
Impact Business. The Department shall make the Exemption
Certificates available to each construction contractor or
other entity and the designated High Impact Business. The
request for Building Materials Exemption Certificates from the
designated High Impact Business to the Department must include
the following information:
(1) the name and address of the construction contractor
or other entity;
(2) the name and location or address of the designated

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High Impact Business;
(3) the estimated amount of the exemption for each
construction contractor or other entity for which a request
for Exemption Certificate is made, based on a stated
estimated average tax rate and the percentage of the
contract that consists of materials;
(4) the period of time over which supplies for the
project are expected to be purchased; and
(5) other reasonable information as the Department may
require, including but not limited to FEIN numbers, to
determine if the contractor or other entity, or any
partner, or a corporate officer, and in the case of a
limited liability company, any manager or member, of the
construction contractor or other entity, is or has been the
owner, a partner, a corporate officer, and in the case of a
limited liability company, a manager or member, of a person
that is in default for moneys due to the Department under
this Act or any other tax or fee Act administered by the
Department.
The Department shall issue the High Impact Business
Building Materials Exemption Certificates within 3 business
days after receipt of request from the designated High Impact
Business. This requirement does not apply in circumstances
where the Department, for reasonable cause, is unable to issue
the Exemption Certificate within 3 business days. The
Department may refuse to issue an Exemption Certificate if the

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owner, any partner, or a corporate officer, and in the case of
a limited liability company, any manager or member, of the
construction contractor or other entity is or has been the
owner, a partner, a corporate officer, and in the case of a
limited liability company, a manager or member, of a person
that is in default for moneys due to the Department under this
Act or any other tax or fee Act administered by the Department.
The High Impact Business Building Materials Exemption
Certificate shall contain language stating that if the
construction contractor or other entity who is issued the
Exemption Certificate makes a tax-exempt purchase, as
described in this Section, that is not eligible for exemption
under this Section or allows another person to make a
tax-exempt purchase, as described in this Section, that is not
eligible for exemption under this Section, then, in addition to
any tax or other penalty imposed, the construction contractor
or other entity is subject to a penalty equal to the tax that
would have been paid by the retailer under this Act as well as
any applicable local retailers' occupation tax on the purchase
that is not eligible for the exemption.
The Department, in its discretion, may require that the
request for High Impact Business Building Materials Exemption
Certificates be submitted electronically. The Department may,
in its discretion, issue the Exemption Certificates
electronically. The High Impact Business Building Materials
Exemption Certificate number shall be designed in such a way

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that the Department can identify from the unique number on the
Exemption Certificate issued to a given construction
contractor or other entity, the name of the designated High
Impact Business and the construction contractor or other entity
to whom the Exemption Certificate is issued. The Exemption
Certificate shall contain an expiration date, which shall be no
more than 2 years after the date of issuance. At the request of
the designated High Impact Business, the Department may renew
an Exemption Certificate. After the Department issues
Exemption Certificates for a given designated High Impact
Business, the designated High Impact Business may notify the
Department of additional construction contractors or other
entities eligible for a Building Materials Exemption
Certificate. Upon notification by the designated High Impact
Business and subject to the other provisions of this subsection
(b), the Department shall issue a High Impact Business Building
Materials Exemption Certificate to each additional
construction contractor or other entity identified by the
designated High Impact Business. A designated High Impact
Business may notify the Department to rescind a Building
Materials Exemption Certificate previously issued by the
Department but that has not yet expired. Upon notification by
the designated High Impact Business and subject to the other
provisions of this subsection (b), the Department shall issue
the rescission of the Building Materials Exemption Certificate
to the construction contractor or other entity identified by

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the designated High Impact Business and provide a copy to the
designated High Impact Business.
If the Department of Revenue determines that a construction
contractor or other entity that was issued an Exemption
Certificate under this subsection (b) made a tax-exempt
purchase, as described in this Section, that was not eligible
for exemption under this Section or allowed another person to
make a tax-exempt purchase, as described in this Section, that
was not eligible for exemption under this Section, then, in
addition to any tax or other penalty imposed, the construction
contractor or other entity is subject to a penalty equal to the
tax that would have been paid by the retailer under this Act as
well as any applicable local retailers' occupation tax on the
purchase that was not eligible for the exemption.
(c) Notwithstanding anything to the contrary in this
Section, for High Impact Businesses for which projects are
already in existence and for which construction contracts are
already in place on July 1, 2013, the request for High Impact
Business Building Materials Exemption Certificates from the
High Impact Business to the Department for these pre-existing
construction contractors and other entities must include the
information required under subsection (b), but not including
the information listed in items (3) and (4). For any new
construction contract entered into on or after July 1, 2013,
however, all of the information in subsection (b) must be
provided.

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(Source: P.A. 97-905, eff. 8-7-12; 98-109, eff. 7-25-13.)
Section 30. The Public Utilities Act is amended by changing
Sections 9-222 and 9-222.1A as follows:
(220 ILCS 5/9-222) (from Ch. 111 2/3, par. 9-222)
Sec. 9-222. Whenever a tax is imposed upon a public utility
engaged in the business of distributing, supplying,
furnishing, or selling gas for use or consumption pursuant to
Section 2 of the Gas Revenue Tax Act, or whenever a tax is
required to be collected by a delivering supplier pursuant to
Section 2-7 of the Electricity Excise Tax Act, or whenever a
tax is imposed upon a public utility pursuant to Section 2-202
of this Act, such utility may charge its customers, other than
customers who are Green Energy Businesses under Section 10 of
the Green Energy Business Act, High Impact Businesses high
impact businesses under Section 5.5 of the Illinois Enterprise
Zone Act, or certified business enterprises under Section
9-222.1 of this Act, to the extent of such exemption and during
the period in which such exemption is in effect, in addition to
any rate authorized by this Act, an additional charge equal to
the total amount of such taxes. The exemption of this Section
relating to High Impact Businesses high impact businesses shall
be subject to the provisions of subsections (a), (b), and (b-5)
of Section 5.5 of the Illinois Enterprise Zone Act. The
exemption of this Section relating to Green Energy Businesses

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shall be subject to the provisions of subsection (a) of Section
10 of the Green Energy Business Act. This requirement shall not
apply to taxes on invested capital imposed pursuant to the
Messages Tax Act, the Gas Revenue Tax Act and the Public
Utilities Revenue Act. Such utility shall file with the
Commission a supplemental schedule which shall specify such
additional charge and which shall become effective upon filing
without further notice. Such additional charge shall be shown
separately on the utility bill to each customer. The Commission
shall have the power to investigate whether or not such
supplemental schedule correctly specifies such additional
charge, but shall have no power to suspend such supplemental
schedule. If the Commission finds, after a hearing, that such
supplemental schedule does not correctly specify such
additional charge, it shall by order require a refund to the
appropriate customers of the excess, if any, with interest, in
such manner as it shall deem just and reasonable, and in and by
such order shall require the utility to file an amended
supplemental schedule corresponding to the finding and order of
the Commission. Except with respect to taxes imposed on
invested capital, such tax liabilities shall be recovered from
customers solely by means of the additional charges authorized
by this Section.
(Source: P.A. 91-914, eff. 7-7-00; 92-12, eff. 7-1-01.)
(220 ILCS 5/9-222.1A)

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Sec. 9-222.1A. High impact business or green energy
business. Beginning on August 1, 1998 and thereafter, a
business enterprise that is certified as a High Impact Business
or a Green Energy Business by the Department of Commerce and
Economic Opportunity (formerly Department of Commerce and
Community Affairs) is exempt from the tax imposed by Section
2-4 of the Electricity Excise Tax Law, if the High Impact
Business or a Green Energy Business is registered to
self-assess that tax, and is exempt from any additional charges
added to the business enterprise's utility bills as a pass-on
of State utility taxes under Section 9-222 of this Act, to the
extent the tax or charges are exempted by the percentage
specified by the Department of Commerce and Economic
Opportunity for State utility taxes, provided the business
enterprise meets the following criteria:
(1) (A) it intends either (i) to make a minimum
eligible investment of $12,000,000 that will be placed
in service in qualified property in Illinois and is
intended to create at least 500 full-time equivalent
jobs at a designated location in Illinois; or (ii) to
make a minimum eligible investment of $30,000,000 that
will be placed in service in qualified property in
Illinois and is intended to retain at least 1,500
full-time equivalent jobs at a designated location in
Illinois; or
(B) it meets the criteria of subdivision

HB3563 - 54 - LRB101 05945 HLH 50966 b
(a)(3)(B), (a)(3)(C), (a)(3)(D), or (a)(3)(F) of
Section 5.5 of the Illinois Enterprise Zone Act, or of
subsection (a) of Section 10 of the Green Energy
Business Act;
(2) it is designated as a High Impact Business or a
Green Energy Business by the Department of Commerce and
Economic Opportunity; and
(3) it is certified by the Department of Commerce and
Economic Opportunity as complying with the requirements
specified in clauses (1) and (2) of this Section.
The Department of Commerce and Economic Opportunity shall
determine the period during which the exemption from the
Electricity Excise Tax Law and the charges imposed under
Section 9-222 are in effect, which shall not exceed 20 years
from the date of initial certification, and shall specify the
percentage of the exemption from those taxes or additional
charges.
The Department of Commerce and Economic Opportunity is
authorized to promulgate rules and regulations to carry out the
provisions of this Section, including procedures for complying
with the requirements specified in clauses (1) and (2) of this
Section and procedures for applying for the exemptions
authorized under this Section; to define the amounts and types
of eligible investments that business enterprises must make in
order to receive State utility tax exemptions or exemptions
from the additional charges imposed under Section 9-222 and

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this Section; to approve such utility tax exemptions for
business enterprises whose investments are not yet placed in
service; and to require that business enterprises granted tax
exemptions or exemptions from additional charges under Section
9-222 repay the exempted amount if the business enterprise
fails to comply with the terms and conditions of the
certification.
Upon certification of the business enterprises by the
Department of Commerce and Economic Opportunity, the
Department of Commerce and Economic Opportunity shall notify
the Department of Revenue of the certification. The Department
of Revenue shall notify the public utilities of the exemption
status of business enterprises from the tax or pass-on charges
of State utility taxes. The exemption status shall take effect
within 3 months after certification of the business enterprise.
(Source: P.A. 98-109, eff. 7-25-13.)
Section 99. Effective date. This Act takes effect upon
becoming law.