Illinois-2015-HB3566-Introduced

99TH GENERAL ASSEMBLY State of Illinois 2015 and 2016 HB3566

Introduced , by Rep. Jehan A. Gordon-Booth

SYNOPSIS AS INTRODUCED:

`35 ILCS 5/221`
`215 ILCS 5/409.1 new`

Amends the Illinois Income Tax Act and the Illinois Insurance Code. Provides that all or a portion of the income tax credit awarded for the restoration and preservation of a qualified historic structure located in a River Edge Redevelopment Zone may instead be taken as a credit against privilege and retaliatory taxes paid under the Illinois Insurance Code. Provides that the Historic Preservation Agency may issue a certification to the taxpayer stating that, if the project is completed as proposed, the project will qualify for the credits. Contains provisions concerning transfers of credits. Provides that the credit may be carried forward. Provides that the credit sunsets on January 1, 2022 (currently, January 1, 2017). Effective immediately.

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FISCAL NOTE ACT MAY APPLY

A BILL FOR

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1 AN ACT concerning revenue.

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

3 represented in the General Assembly:

4 Section 5. The Illinois Income Tax Act is amended by

5 changing Section 221 as follows:

6 (35 ILCS 5/221)

7 Sec. 221. Rehabilitation costs; qualified historic

8 properties; River Edge Redevelopment Zone.

9 (a) For taxable years beginning on or after January 1, 2012

10 and ending prior to January 1, 2022 ~~January 1, 2017~~, there

11 shall be allowed a tax credit against the tax imposed by (i)

12 subsections (a) and (b) of Section 201 of this Act and (ii)

13 taxes imposed under Sections 409, 413, 444, and 444.1 of the

14 Illinois Insurance Code in an aggregate amount equal to 25% of

15 qualified expenditures incurred by a qualified taxpayer during

16 the taxable year in the restoration and preservation of a

17 qualified historic structure located in a River Edge

18 Redevelopment Zone pursuant to a qualified rehabilitation

19 plan, provided that the total amount of such expenditures (i)

20 must equal $5,000 or more and (ii) must exceed 50% of the

21 purchase price of the property.

22 (b) To obtain a tax credit pursuant to this Section, the

23 taxpayer must apply with the Department of Commerce and

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1 Economic Opportunity. The Department of Commerce and Economic

2 Opportunity, in consultation with the Historic Preservation

3 Agency, shall determine the amount of eligible rehabilitation

4 costs and expenses. The Historic Preservation Agency shall

5 determine whether the rehabilitation is consistent with the

6 standards of the Secretary of the United States Department of

7 the Interior for rehabilitation. The Historic Preservation

8 Agency may, after its approval of any plan of rehabilitation

9 and prior to the completion of any project, issue a

10 certification to the taxpayer stating that, if the project is

11 completed as proposed, the rehabilitation work will qualify for

12 the credits. Upon completion and review of the project, the

13 Department of Commerce and Economic Opportunity shall issue a

14 certificate in the amount of the eligible credits. At the time

15 the certificate is issued, an issuance fee up to the maximum

16 amount of 2% of the amount of the credits issued by the

17 certificate may be collected from the applicant to administer

18 the provisions of this Section. If collected, this issuance fee

19 shall be deposited into the Historic Property Administrative

20 Fund, a special fund created in the State treasury. Subject to

21 appropriation, moneys in the Historic Property Administrative

22 Fund shall be evenly divided between the Department of Commerce

23 and Economic Opportunity and the Historic Preservation Agency

24 to reimburse the Department of Commerce and Economic

25 Opportunity and the Historic Preservation Agency for the costs

26 associated with administering this Section. The taxpayer must

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1 attach the certificate to the tax return on which the credits

2 are to be claimed. The Department of Commerce and Economic

3 Opportunity may adopt rules to implement this Section.

4 (c) The tax credit under this Section may not reduce the

5 taxpayer's liability to less than zero.The credit may not be

6 carried back. If the amount of the credit exceeds the tax

7 liability for the year, the excess may be carried forward and

8 applied to the tax liability of the 5 taxable years following

9 the excess credit year. The credit shall be applied to the

10 earliest year for which there is a tax liability. If there are

11 credits from more than one tax year that are available to

12 offset a liability, the earlier credit shall be applied first.

13 (c-5) Taxpayers who are eligible to claim the credit,

14 including without limitation, any partners, shareholders of

15 subchapter S corporations, and members who are eligible to

16 claim the credit as provided in the definition of "qualified

17 taxpayer" below, may transfer all or any portion of the credit

18 to any individual or entity, within one year after the credit

19 is awarded, in accordance with rules adopted by the Department

20 of Commerce and Economic Opportunity. Any transferee of all or

21 any portion of a credit shall have the right to claim the

22 credit, carry the credit forward as described in subsection (c)

23 above, and allocate such credit to its partners, shareholders

24 of subchapter S corporations, and members (and also through

25 tiers of such entities) as described in the definition of

26 "qualified taxpayer" below, as if the transferee had been

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1 originally issued such credit. The tax credit may not be

2 transferred more than once. Allocations of credits to partners,

3 shareholders of S corporations, members, or other owners

4 (including through tiers of such entities) as described in the

5 definition of "qualified taxpayer" below shall not be

6 considered transfers under this subsection (c-5), and the

7 one-time transfer limitation set forth in the immediately

8 preceding sentence shall not apply to any such allocations.

9 (d) As used in this Section, the following terms have the

10 following meanings.

11 "Qualified expenditure" means all the costs and expenses

12 defined as qualified rehabilitation expenditures under Section

13 47 of the federal Internal Revenue Code that were incurred in

14 connection with a qualified historic structure.

15 "Qualified historic structure" means a certified historic

16 structure as defined under Section 47 (c)(3) of the federal

17 Internal Revenue Code.

18 "Qualified rehabilitation plan" means a project that is

19 approved by the Historic Preservation Agency as being

20 consistent with the standards in effect on the effective date

21 of this amendatory Act of the 97th General Assembly for

22 rehabilitation as adopted by the federal Secretary of the

23 Interior.

24 "Qualified taxpayer" means the owner of the qualified

25 historic structure or any other person who qualifies for the

26 federal rehabilitation credit allowed by Section 47 of the

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1 federal Internal Revenue Code with respect to that qualified

2 historic structure. Partners, shareholders of subchapter S

3 corporations, and owners of limited liability companies (if the

4 limited liability company is treated as a partnership for

5 purposes of federal and State income taxation) are entitled to

6 a credit under this Section to be determined in accordance with

7 the determination of income and distributive share of income

8 under Sections 702 and 703 and subchapter S of the Internal

9 Revenue Code, provided that credits granted to a partnership, a

10 limited liability company taxed as a partnership, or other

11 multiple owners of property shall be passed through to the

12 partners, members, or owners respectively (and shall be passed

13 through more than once in the case of tiers of such entities)

14 on a pro rata basis or pursuant to an executed agreement among

15 the partners, members, or owners documenting any alternate

16 distribution method (which need not be on a pro-rata basis).

17 (Source: P.A. 97-203, eff. 7-28-11.)

18 Section 10. The Illinois Insurance Code is amended by

19 adding Section 409.1 as follows:

20 (215 ILCS 5/409.1 new)

21 Sec. 409.1. River Edge Redevelopment Zone Rehabilitation

22 credit. For taxes payable after January 1, 2015, credits may be

23 granted against the taxes imposed under Section 409, 413, 444,

24 and 444.1 of this Act as provided in Section 221 of the

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1 Illinois Income Tax Act.

2 Section 99. Effective date. This Act takes effect upon

3 becoming law.