Bill Text: IL SB1692 | 2009-2010 | 96th General Assembly | Introduced

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Bill Title: Amends the Illinois Income Tax Act. Creates the rehabilitation of historic resource credit. Allows a credit against income taxes for 25% of the qualified expenditures for the rehabilitation of a historic resource. Provides that "historic resource" means certain publicly or privately owned historic buildings, structures, sites, objects, features, or open spaces located within a designated historic district or individually designated as historic. Provides that "qualified expenditures" means capital expenditures that qualify for a rehabilitation credit under Internal Revenue Code. Amends the Historic Preservation Agency Act to provide that the Historic Preservation Agency shall exercise all rights, powers, and duties set forth in the credit provisions. Effective immediately.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2009-02-19 - Referred to Assignments [SB1692 Detail]

Download: Illinois-2009-SB1692-Introduced.html

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96TH GENERAL ASSEMBLY State of Illinois 2009 and 2010 SB1692 Introduced 2/19/2009, by Sen. Kirk W. Dillard SYNOPSIS AS INTRODUCED:
20 ILCS 3405/14.1 new
35 ILCS 5/218 new
Amends the Illinois Income Tax Act. Creates the rehabilitation of historic resource credit. Allows a credit against income taxes for 25% of the qualified expenditures for the rehabilitation of a historic resource. Provides that "historic resource" means certain publicly or privately owned historic buildings, structures, sites, objects, features, or open spaces located within a designated historic district or individually designated as historic. Provides that "qualified expenditures" means capital expenditures that qualify for a rehabilitation credit under Internal Revenue Code. Amends the Historic Preservation Agency Act to provide that the Historic Preservation Agency shall exercise all rights, powers, and duties set forth in the credit provisions. Effective immediately.
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FISCAL NOTE ACT MAY APPLY
A BILL FOR
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AN ACT concerning State government.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Historic Preservation Agency Act is amended
by adding Section 14.1 as follows:
(20 ILCS 3405/14.1 new)
Sec. 14.1. Exercise of rights, powers, and duties;
rehabilitation of historic resource tax credit. The Agency
shall exercise all rights, powers, and duties set forth in
Section 218 of the Illinois Income Tax Act.
Section 10. The Illinois Income Tax Act is amended by
adding Section 218 as follows:
(35 ILCS 5/218 new)
Sec. 218. Rehabilitation of historic resource tax credit.
(a) A qualified taxpayer with a rehabilitation plan
certified after December 31, 2009 is entitled to a credit
against the taxes imposed under subsections (a) and (b) of
Section 201 in the amount determined pursuant to subsection (b)
for the qualified expenditures for the rehabilitation of a
historic resource pursuant to the rehabilitation plan in the
year in which the certification of completed rehabilitation of

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the historic resource is issued, provided that the
certification of completed rehabilitation was issued not more
than 5 years after the rehabilitation plan was certified by the
Historic Preservation Agency.
(b) The credit allowed under this Section shall be 25% of
the qualified expenditures that are eligible for the credit
under Section 47(a)(2) of the Internal Revenue Code if the
taxpayer is eligible for the credit under Section 47(a)(2) of
the Internal Revenue Code or, if the taxpayer is not eligible
for the credit under Section 47(a)(2) of the Internal Revenue
Code, 25% of the qualified expenditures that would qualify
under Section 47(a)(2) of the Internal Revenue Code except that
the expenditures are made to a historic resource that is not
eligible for the credit under Section 47(a)(2) of the Internal
Revenue Code, subject to both of the following:
(1) A taxpayer with qualified expenditures that are
eligible for the credit under Section 47(a)(2) of the
Internal Revenue Code may not claim a credit under this
Section for those qualified expenditures unless the
taxpayer has claimed and received a credit for those
qualified expenditures under Section 47(a)(2) of the
Internal Revenue Code.
(2) A credit under this Section shall be reduced by the
amount of a credit received by the taxpayer for the same
qualified expenditures under Section 47(a)(2) of the
Internal Revenue Code.

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(c) To be eligible for the credit under this Section, the
taxpayer shall apply to and receive from the Historic
Preservation Agency certification that the historic
significance, the rehabilitation plan, and the completed
rehabilitation of the historic resource meet the criteria under
subsection (f) and either of the following:
(1) All of the following criteria:
(A) The historic resource contributes to the
significance of the historic district in which it is
located.
(B) Both the rehabilitation plan and completed
rehabilitation of the historic resource meet the
federal Secretary of the Interior's standards for
rehabilitation and guidelines for rehabilitating
historic buildings, 36 C.F.R. part 67.
(C) All rehabilitation work has been done to or
within the walls, boundaries, or structures of the
historic resource or to historic resources located
within the property boundaries of the property.
(2) The taxpayer has received certification from the
National Park Service that the historic resource's
significance, the rehabilitation plan, and the completed
rehabilitation qualify for the credit allowed under
Section 47(a)(2) of the Internal Revenue Code.
(c-5) The Director of Historic Preservation may approve
county or municipal ordinances that qualify historic resources

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for consideration under this Section. However, no ordinance
shall be approved unless it:
(1) is designed to preserve and rehabilitate buildings
of historic significance;
(2) contains criteria for the designation of landmarks
consistent with those established by the U.S. Department of
the Interior for the inclusion of places on the National
Register of Historic Places; and
(3) contains criteria for review of demolition and
major alterations.
(d) If a qualified taxpayer is eligible for the credit
allowed under Section 47(a)(2) of the Internal Revenue Code,
the qualified taxpayer shall file for certification with the
Historic Preservation Agency to qualify for the credit allowed
under Section 47(a)(2) of the Internal Revenue Code. If the
qualified taxpayer has previously filed for certification with
the center to qualify for the credit allowed under Section
47(a)(2) of the Internal Revenue Code, additional filing for
the credit allowed under this Section is not required.
(e) The Historic Preservation Agency may inspect a historic
resource at any time during the rehabilitation process and may
revoke certification of completed rehabilitation if the
rehabilitation was not undertaken as represented in the
rehabilitation plan or if unapproved alterations to the
completed rehabilitation are made during the 5 years after the
tax year in which the credit was claimed. The Historic

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Preservation Agency shall promptly notify the Department of a
revocation.
(f) Qualified expenditures for the rehabilitation of a
historic resource may be used to calculate the credit under
this Section if the historic resource meets one of the criteria
listed in subdivision (f)(1) and one of the criteria listed in
subdivision (f)(2):
(1) The resource is one of the following during the tax
year in which a credit under this Section is claimed for
those qualified expenditures:
(A) Individually listed on the National Register
of Historic Places or the Illinois Register of Historic
Places.
(B) A contributing resource located within a
historic district listed on the National Register of
Historic Places or the Illinois Register of Historic
Places.
(C) A contributing resource located within a
historic district designated by a county or municipal
ordinance approved by the Historic Preservation Agency
under subsection (c-5).
(2) The resource meets one of the following criteria
during the tax year in which a credit under this Section is
claimed for those qualified expenditures:
(A) The historic resource is located in a
designated historic district in a county or

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municipality with an existing ordinance approved by
the Historic Preservation Agency under subsection
(c-5).
(B) The historic resource is located in a county or
municipality that does not have an ordinance approved
by the Historic Preservation Agency under subsection
(c-5) and has a population of less than 5,000.
(C) The historic resource is located in the
unincorporated area of a county.
(g) If a qualified taxpayer is a partnership, limited
liability company, or subchapter S corporation, the qualified
taxpayer may assign all or any portion of a credit allowed
under this Section to its partners, members, or shareholders,
based on the partner's, member's, or shareholder's
proportionate share of ownership or based on an alternative
method approved by the Department. A credit assignment under
this subsection is irrevocable and shall be made in the tax
year in which a certificate of completed rehabilitation is
issued. A qualified taxpayer may claim a portion of a credit
and assign the remaining credit amount. A partner, member, or
shareholder that is an assignee shall not subsequently assign a
credit or any portion of a credit assigned to the partner,
member, or shareholder under this subsection. A credit amount
assigned under this subsection may be claimed against the
partner's, member's, or shareholder's tax liability under this
Act. A credit assignment under this subsection shall be made on

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a form prescribed by the Department. The qualified taxpayer and
assignees shall send a copy of the completed assignment form to
the Department in the tax year in which the assignment is made
and attach a copy of the completed assignment form to the
annual return required to be filed under this Act for that tax
year.
(h) If the credit allowed under this Section for the tax
year and any unused carryforward of the credit allowed by this
Section exceed the taxpayer's tax liability for the tax year,
that portion that exceeds the tax liability for the tax year
shall not be refunded but may be carried forward to offset tax
liability in subsequent tax years for 10 years or until used
up, whichever occurs first.
(i) If the taxpayer sells a historic resource for which a
credit under this Section was claimed less than 5 years after
the year in which the credit was claimed, the following
percentage of the credit amount previously claimed relative to
that historic resource shall be added back to the tax liability
of the taxpayer in the year of the sale:
(1) If the sale is less than one year after the year in
which the credit was claimed, 100%.
(2) If the sale is at least one year but less than 2
years after the year in which the credit was claimed, 80%.
(3) If the sale is at least 2 years but less than 3
years after the year in which the credit was claimed, 60%.
(4) If the sale is at least 3 years but less than 4

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years after the year in which the credit was claimed, 40%.
(5) If the sale is at least 4 years but less than 5
years after the year in which the credit was claimed, 20%.
(6) If the sale is 5 years or more after the year in
which the credit was claimed, an addback to the taxpayer's
tax liability shall not be made.
(j) If a certification of completed rehabilitation is
revoked under subsection (e) less than 5 years after the year
in which a credit was claimed, the following percentage of the
credit amount previously claimed relative to that historic
resource shall be added back to the tax liability of the
taxpayer in the year of the revocation:
(1) If the revocation is less than one year after the
year in which the credit was claimed, 100%.
(2) If the revocation is at least one year but less
than 2 years after the year in which the credit was
claimed, 80%.
(3) If the revocation is at least 2 years but less than
3 years after the year in which the credit was claimed,
60%.
(4) If the revocation is at least 3 years but less than
4 years after the year in which the credit was claimed,
40%.
(5) If the revocation is at least 4 years but less than
5 years after the year in which the credit was claimed,
20%.

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(6) If the revocation is 5 years or more after the year
in which the credit was claimed, an addback to the
taxpayer's tax liability shall not be made.
(k) The Historic Preservation Agency may impose a fee to
cover the administrative cost of implementing the program under
this Section.
(l) The qualified taxpayer shall attach all of the
following to the qualified taxpayer's annual return required
under this Act, on which the credit is claimed:
(1) Certification of completed rehabilitation.
(2) Certification of historic significance related to
the historic resource and the qualified expenditures used
to claim a credit under this Section.
(3) A completed assignment form if the qualified
taxpayer has assigned any portion of a credit allowed under
this Section to a partner, member, or shareholder, or if
the taxpayer is an assignee of any portion of a credit
allowed under this Section.
(m) The Historic Preservation Agency shall adopt rules to
implement this Section pursuant to the Illinois Administrative
Procedure Act.
(n) The total of the credits claimed under this Section for
a rehabilitation project shall not exceed 25% of the total
qualified expenditures eligible for the credit under this
Section for that rehabilitation project.
(o) The Historic Preservation Agency shall report all of

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the following to the General Assembly annually for the
immediately preceding State fiscal year:
(1) The fee schedule used by the Historic Preservation
Agency and the total amount of fees collected.
(2) A description of each rehabilitation project
certified.
(3) The location of each new and ongoing rehabilitation
project.
(p) As used in this Section:
(1) "Contributing resource" means a historic resource
that contributes to the significance of the historic
district in which it is located.
(2) "Historic district" means an area or group of areas
not necessarily having contiguous boundaries that contains
one resource or a group of resources that are related by
history, architecture, archaeology, engineering, or
culture.
(3) "Historic resource" means a publicly or privately
owned historic building, structure, site, object, feature,
or open space located within a historic district designated
by the National Register of Historic Places, the Illinois
Register of Historic Places, or a county or municipal
ordinance approved by the Historic Preservation Agency
under subsection (c-5); or that is individually listed on
the Illinois Register of Historic Places or National
Register of Historic Places and includes all of the

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following:
(A) An owner-occupied personal residence or a
historic resource located within the property
boundaries of that personal residence.
(B) An income-producing commercial, industrial, or
residential resource or a historic resource located
within the property boundaries of that resource.
(C) A resource owned by a governmental body,
nonprofit organization, or tax-exempt entity that is
used primarily by a taxpayer lessee in a trade or
business unrelated to the governmental body, nonprofit
organization, or tax-exempt entity and that is subject
to tax under this Act.
(D) A resource that is occupied or used by a
governmental body, nonprofit organization, or
tax-exempt entity pursuant to a long-term lease or
lease with option to buy agreement.
(E) Any other resource that could benefit from
rehabilitation.
(4) "Long-term lease" means a lease term of at least
27.5 years for a residential resource or at least 31.5
years for a nonresidential resource.
(5) "Historic Preservation Agency" means the Illinois
Historic Preservation Agency.
(6) "Open space" means undeveloped land, a naturally
landscaped area, or a formal or man-made landscaped area

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that provides a connective link or a buffer between other
resources.
(7) "Person" means an individual, partnership,
corporation, association, governmental entity, or other
legal entity.
(8) "Qualified expenditures" means capital
expenditures that qualify for a rehabilitation credit
under Section 47(a)(2) of the Internal Revenue Code if the
taxpayer is eligible for the credit under Section 47(a)(2)
of the Internal Revenue Code or, if the taxpayer is not
eligible for the credit under Section 47(a)(2) of the
Internal Revenue Code, the qualified expenditures that
would qualify under Section 47(a)(2) of the Internal
Revenue Code except that the expenditures are made to a
historic resource that is not eligible for the credit under
Section 47(a)(2) of the Internal Revenue Code that were
paid not more than 5 years after the certification of the
rehabilitation plan that included those expenditures was
approved by the Historic Preservation Agency, and that were
paid after December 31, 2005 for the rehabilitation of a
historic resource. Qualified expenditures do not include
capital expenditures for nonhistoric additions to a
historic resource except an addition that is required by
State or federal regulations that relate to historic
preservation, safety, or accessibility.
(9) "Qualified taxpayer" means a person that is an

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assignee under subsection (g) or either owns the resource
to be rehabilitated or has a long-term lease agreement with
the owner of the historic resource and that has qualified
expenditures for the rehabilitation of the historic
resource equal to or greater than 10% of the equalized
assessed valuation of the property. If the historic
resource to be rehabilitated is a portion of a historic or
nonhistoric resource, the equalized assessed valuation of
only that portion of the property shall be used for
purposes of this subdivision. If the chief county
assessment officer for the county in which the historic
resource is located determines the equalized assessed
valuation of that portion, that chief county assessment
officer's determination shall be used for purposes of this
subdivision. If the chief county assessment officer does
not determine the equalized assessed valuation of that
portion, "qualified expenditures", for purposes of this
subdivision, shall be equal to or greater than 5% of the
appraised value as determined by a certified appraiser. If
the historic resource to be rehabilitated does not have an
equalized assessed valuation, qualified expenditures for
purposes of this subdivision shall be equal to or greater
than 5% of the appraised value of the resource as
determined by a certified appraiser.
(10) "Rehabilitation plan" means a plan for the
rehabilitation of a historic resource that meets the

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federal Secretary of the Interior's standards for
rehabilitation and guidelines for rehabilitation of
historic buildings under 36 C.F.R. part 67.
Section 99. Effective date. This Act takes effect upon
becoming law.