Bill Text: IL HB4106 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Amends the Illinois Income Tax Act. Provides that a qualified taxpayer that has begun construction on a qualified restoration or preservation project prior to December 31, 2026, will be eligible to receive the tax credit until the taxable year that the project is completed or suspended.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2024-04-05 - Rule 19(a) / Re-referred to Rules Committee [HB4106 Detail]

Download: Illinois-2023-HB4106-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB4106 Introduced , by Rep. Kevin Schmidt SYNOPSIS AS INTRODUCED:
35 ILCS 5/221
Amends the Illinois Income Tax Act. Provides that a qualified taxpayer that has begun construction on a qualified restoration or preservation project prior to December 31, 2026, will be eligible to receive the tax credit until the taxable year that the project is completed or suspended.
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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 5. The Illinois Income Tax Act is amended by
changing Section 221 as follows:
(35 ILCS 5/221)
Sec. 221. Rehabilitation costs; qualified historic
properties; River Edge Redevelopment Zone.
(a) For taxable years that begin on or after January 1,
2012 and begin prior to January 1, 2018, there shall be allowed
a tax credit against the tax imposed by subsections (a) and (b)
of Section 201 of this Act in an amount equal to 25% of
qualified expenditures incurred by a qualified taxpayer during
the taxable year in the restoration and preservation of a
qualified historic structure located in a River Edge
Redevelopment Zone pursuant to a qualified rehabilitation
plan, provided that the total amount of such expenditures (i)
must equal $5,000 or more and (ii) must exceed 50% of the
purchase price of the property.
(a-1) For taxable years that begin on or after January 1,
2018 and end prior to January 1, 2027, there shall be allowed a
tax credit against the tax imposed by subsections (a) and (b)
of Section 201 of this Act in an aggregate amount equal to 25%

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of qualified expenditures incurred by a qualified taxpayer in
the restoration and preservation of a qualified historic
structure located in a River Edge Redevelopment Zone pursuant
to a qualified rehabilitation plan, provided that the total
amount of such expenditures must (i) equal $5,000 or more and
(ii) exceed the adjusted basis of the qualified historic
structure on the first day the qualified rehabilitation plan
begins. For any rehabilitation project, regardless of duration
or number of phases, the project's compliance with the
foregoing provisions (i) and (ii) shall be determined based on
the aggregate amount of qualified expenditures for the entire
project and may include expenditures incurred under subsection
(a), this subsection, or both subsection (a) and this
subsection. If the qualified rehabilitation plan spans
multiple years, the aggregate credit for the entire project
shall be allowed in the last taxable year, except for phased
rehabilitation projects, which may receive credits upon
completion of each phase. Before obtaining the first phased
credit: (A) the total amount of such expenditures must meet
the requirements of provisions (i) and (ii) of this
subsection; (B) the rehabilitated portion of the qualified
historic structure must be placed in service; and (C) the
requirements of subsection (b) must be met.
(a-2) For taxable years beginning on or after January 1,
2021 and ending prior to January 1, 2027, there shall be
allowed a tax credit against the tax imposed by subsections

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(a) and (b) of Section 201 as provided in Section 10-10.3 of
the River Edge Redevelopment Zone Act. The credit allowed
under this subsection (a-2) shall apply only to taxpayers that
make a capital investment of at least $1,000,000 in a
qualified rehabilitation plan.
The credit or credits may not reduce the taxpayer's
liability to less than zero. If the amount of the credit or
credits exceeds the taxpayer's liability, the excess may be
carried forward and applied against the taxpayer's liability
in succeeding calendar years in the manner provided under
paragraph (4) of Section 211 of this Act. The credit or credits
shall be applied to the earliest year for which there is a tax
liability. If there are credits from more than one taxable
year that are available to offset a liability, the earlier
credit shall be applied first.
For partners, shareholders of Subchapter S corporations,
and owners of limited liability companies, if the liability
company is treated as a partnership for the purposes of
federal and State income taxation, there shall be allowed a
credit under this Section to be determined in accordance with
the determination of income and distributive share of income
under Sections 702 and 704 and Subchapter S of the Internal
Revenue Code.
The total aggregate amount of credits awarded under the
Blue Collar Jobs Act (Article 20 of this amendatory Act of the
101st General Assembly) shall not exceed $20,000,000 in any

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State fiscal year.
(b) To obtain a tax credit pursuant to this Section, the
taxpayer must apply with the Department of Natural Resources.
The Department of Natural Resources shall determine the amount
of eligible rehabilitation costs and expenses in addition to
the amount of the River Edge construction jobs credit within
45 days of receipt of a complete application. The taxpayer
must submit a certification of costs prepared by an
independent certified public accountant that certifies (i) the
project expenses, (ii) whether those expenses are qualified
expenditures, and (iii) that the qualified expenditures exceed
the adjusted basis of the qualified historic structure on the
first day the qualified rehabilitation plan commenced. The
Department of Natural Resources is authorized, but not
required, to accept this certification of costs to determine
the amount of qualified expenditures and the amount of the
credit. The Department of Natural Resources shall provide
guidance as to the minimum standards to be followed in the
preparation of such certification. The Department of Natural
Resources and the National Park Service shall determine
whether the rehabilitation is consistent with the United
States Secretary of the Interior's Standards for
Rehabilitation.
(b-1) Upon completion of the project and approval of the
complete application, the Department of Natural Resources
shall issue a single certificate in the amount of the eligible

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credits equal to 25% of qualified expenditures incurred during
the eligible taxable years, as defined in subsections (a) and
(a-1), excepting any credits awarded under subsection (a)
prior to January 1, 2019 (the effective date of Public Act
100-629) and any phased credits issued prior to the eligible
taxable year under subsection (a-1). At the time the
certificate is issued, an issuance fee up to the maximum
amount of 2% of the amount of the credits issued by the
certificate may be collected from the applicant to administer
the provisions of this Section. If collected, this issuance
fee shall be deposited into the Historic Property
Administrative Fund, a special fund created in the State
treasury. Subject to appropriation, moneys in the Historic
Property Administrative Fund shall be provided to the
Department of Natural Resources as reimbursement for the costs
associated with administering this Section.
(c) The taxpayer must attach the certificate to the tax
return on which the credits are to be claimed. The tax credit
under this Section may not reduce the taxpayer's liability to
less than zero. If the amount of the credit exceeds the tax
liability for the year, the excess credit may be carried
forward and applied to the tax liability of the 5 taxable years
following the excess credit year.
(c-1) Subject to appropriation, moneys in the Historic
Property Administrative Fund shall be used, on a biennial
basis beginning at the end of the second fiscal year after

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January 1, 2019 (the effective date of Public Act 100-629), to
hire a qualified third party to prepare a biennial report to
assess the overall economic impact to the State from the
qualified rehabilitation projects under this Section completed
in that year and in previous years. The overall economic
impact shall include at least: (1) the direct and indirect or
induced economic impacts of completed projects; (2) temporary,
permanent, and construction jobs created; (3) sales, income,
and property tax generation before, during construction, and
after completion; and (4) indirect neighborhood impact after
completion. The report shall be submitted to the Governor and
the General Assembly. The report to the General Assembly shall
be filed with the Clerk of the House of Representatives and the
Secretary of the Senate in electronic form only, in the manner
that the Clerk and the Secretary shall direct.
(c-2) The Department of Natural Resources may adopt rules
to implement this Section in addition to the rules expressly
authorized in this Section.
(c-3) A qualified taxpayer that has begun construction on
a qualified restoration or preservation project under this
Section prior to December 31, 2026, will be eligible to
receive the tax credit until the taxable year that the project
is completed or suspended.
(d) As used in this Section, the following terms have the
following meanings.
"Phased rehabilitation" means a project that is completed

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in phases, as defined under Section 47 of the federal Internal
Revenue Code and pursuant to National Park Service regulations
at 36 C.F.R. 67.
"Placed in service" means the date when the property is
placed in a condition or state of readiness and availability
for a specifically assigned function as defined under Section
47 of the federal Internal Revenue Code and federal Treasury
Regulation Sections 1.46 and 1.48.
"Qualified expenditure" means all the costs and expenses
defined as qualified rehabilitation expenditures under Section
47 of the federal Internal Revenue Code that were incurred in
connection with a qualified historic structure.
"Qualified historic structure" means a certified historic
structure as defined under Section 47(c)(3) of the federal
Internal Revenue Code.
"Qualified rehabilitation plan" means a project that is
approved by the Department of Natural Resources and the
National Park Service as being consistent with the United
States Secretary of the Interior's Standards for
Rehabilitation.
"Qualified taxpayer" means the owner of the qualified
historic structure or any other person who qualifies for the
federal rehabilitation credit allowed by Section 47 of the
federal Internal Revenue Code with respect to that qualified
historic structure. Partners, shareholders of subchapter S
corporations, and owners of limited liability companies (if

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the limited liability company is treated as a partnership for
purposes of federal and State income taxation) are entitled to
a credit under this Section to be determined in accordance
with the determination of income and distributive share of
income under Sections 702 and 703 and subchapter S of the
Internal Revenue Code, provided that credits granted to a
partnership, a limited liability company taxed as a
partnership, or other multiple owners of property shall be
passed through to the partners, members, or owners
respectively on a pro rata basis or pursuant to an executed
agreement among the partners, members, or owners documenting
any alternate distribution method.
(Source: P.A. 101-9, eff. 6-5-19; 101-81, eff. 7-12-19;
102-16, eff. 6-17-21.)