Bill Text: IL SB3619 | 2011-2012 | 97th General Assembly | Chaptered

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Bill Title: Amends the Illinois Income Tax Act. Makes a technical change in a Section concerning the short title.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Passed) 2012-08-24 - Public Act . . . . . . . . . 97-1097 [SB3619 Detail]

Download: Illinois-2011-SB3619-Chaptered.html

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Public Act 097-1097
SB3619 Enrolled LRB097 18931 HLH 64169 b
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 220 as follows:
(35 ILCS 5/220)
Sec. 220. Angel investment credit.
(a) As used in this Section:
"Applicant" means a corporation, partnership, limited
liability company, or a natural person that makes an investment
in a qualified new business venture. The term "applicant" does
not include a corporation, partnership, limited liability
company, or a natural person who has a direct or indirect
ownership interest of at least 51% in the profits, capital, or
value of the investment or a related member.
"Claimant" means an applicant certified by the Department
who files a claim for a credit under this Section.
"Department" means the Department of Commerce and Economic
Opportunity.
"Qualified new business venture" means a business that is
registered with the Department under this Section.
"Related member" means a person that, with respect to the
investment, is any one of the following:

(1) An individual, if the individual and the members of
the individual's family (as defined in Section 318 of the
Internal Revenue Code) own directly, indirectly,
beneficially, or constructively, in the aggregate, at
least 50% of the value of the outstanding profits, capital,
stock, or other ownership interest in the applicant.
(2) A partnership, estate, or trust and any partner or
beneficiary, if the partnership, estate, or trust and its
partners or beneficiaries own directly, indirectly,
beneficially, or constructively, in the aggregate, at
least 50% of the profits, capital, stock, or other
ownership interest in the applicant.
(3) A corporation, and any party related to the
corporation in a manner that would require an attribution
of stock from the corporation under the attribution rules
of Section 318 of the Internal Revenue Code, if the
applicant and any other related member own, in the
aggregate, directly, indirectly, beneficially, or
constructively, at least 50% of the value of the
corporation's outstanding stock.
(4) A corporation and any party related to that
corporation in a manner that would require an attribution
of stock from the corporation to the party or from the
party to the corporation under the attribution rules of
Section 318 of the Internal Revenue Code, if the
corporation and all such related parties own, in the

aggregate, at least 50% of the profits, capital, stock, or
other ownership interest in the applicant.
(5) A person to or from whom there is attribution of
stock ownership in accordance with Section 1563(e) of the
Internal Revenue Code, except that for purposes of
determining whether a person is a related member under this
paragraph, "20%" shall be substituted for "5%" whenever
"5%" appears in Section 1563(e) of the Internal Revenue
Code.
(b) For taxable years beginning after December 31, 2010,
and ending on or before December 31, 2016, subject to the
limitations provided in this Section, a claimant may claim, as
a credit against the tax imposed under subsections (a) and (b)
of Section 201 of this Act, an amount equal to 25% of the
claimant's investment made directly in a qualified new business
venture. In order for an investment in a qualified new business
venture to be eligible for tax credits, the business must have
applied for and received certification under subsection (e) for
the taxable year in which the investment was made prior to the
date on which the investment was made. The credit under this
Section may not exceed the taxpayer's Illinois income tax
liability for the taxable year. If the amount of the credit
exceeds the tax liability for the year, the 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 tax

liability. If there are credits from more than one tax year
that are available to offset a liability, the earlier credit
shall be applied first. In the case of a partnership or
Subchapter S Corporation, the credit is allowed to the partners
or shareholders 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.
(c) The maximum amount of an applicant's investment that
may be used as the basis for a credit under this Section is
$2,000,000 for each investment made directly in a qualified new
business venture.
(d) The Department shall implement a program to certify an
applicant for an angel investment credit. Upon satisfactory
review, the Department shall issue a tax credit certificate
stating the amount of the tax credit to which the applicant is
entitled. The Department shall annually certify that the
claimant's investment has been made and remains in the
qualified new business venture for no less than 3 years.
If an investment for which a claimant is allowed a credit
under subsection (b) is held by the claimant for less than 3
years, or, if within that period of time the qualified new
business venture is moved from the State of Illinois, the
claimant shall pay to the Department of Revenue, in the manner
prescribed by the Department of Revenue, the amount of the
credit that the claimant received related to the investment.
(e) The Department shall implement a program to register

qualified new business ventures for purposes of this Section. A
business desiring registration shall submit an application to
the Department in each taxable year for which the business
desires registration. The Department may register the business
only if the business satisfies all of the following conditions:
(1) it has its headquarters in this State;
(2) at least 51% of the employees employed by the
business are employed in this State;
(3) it has the potential for increasing jobs in this
State, increasing capital investment in this State, or
both, and either of the following apply:
(A) it is principally engaged in innovation in any
of the following: manufacturing; biotechnology;
nanotechnology; communications; agricultural sciences;
clean energy creation or storage technology;
processing or assembling products, including medical
devices, pharmaceuticals, computer software, computer
hardware, semiconductors, other innovative technology
products, or other products that are produced using
manufacturing methods that are enabled by applying
proprietary technology; or providing services that are
enabled by applying proprietary technology; or
(B) it is undertaking pre-commercialization
activity related to proprietary technology that
includes conducting research, developing a new product
or business process, or developing a service that is

principally reliant on applying proprietary
technology;
(4) it is not principally engaged in real estate
development, insurance, banking, lending, lobbying,
political consulting, professional services provided by
attorneys, accountants, business consultants, physicians,
or health care consultants, wholesale or retail trade,
leisure, hospitality, transportation, or construction,
except construction of power production plants that derive
energy from a renewable energy resource, as defined in
Section 1 of the Illinois Power Agency Act;
(5) at the time it is first certified:
(A) it has fewer than 100 employees;
(B) it has been in operation in Illinois for not
more than 10 consecutive years prior to the year of
certification; and
(C) it has received not more than $10,000,000 in
aggregate private equity investment in cash;
(6) (blank); it has been in operation in Illinois for
not more than 10 consecutive years prior to the year of
certification; and
(7) it has received not more than (i) $10,000,000 in
aggregate private equity investment in cash or (ii)
$4,000,000 in investments that qualified for tax credits
under this Section.
(f) The Department, in consultation with the Department of

Revenue, shall adopt rules to administer this Section. The
aggregate amount of the tax credits that may be claimed under
this Section for investments made in qualified new business
ventures shall be limited at $10,000,000 per calendar year.
(g) A claimant may not sell or otherwise transfer a credit
awarded under this Section to another person.
(h) On or before March 1 of each year, the Department shall
report to the Governor and to the General Assembly on the tax
credit certificates awarded under this Section for the prior
calendar year.
(1) This report must include, for each tax credit
certificate awarded:
(A) the name of the claimant and the amount of
credit awarded or allocated to that claimant;
(B) the name and address of the qualified new
business venture that received the investment giving
rise to the credit and the county in which the
qualified new business venture is located; and
(C) the date of approval by the Department of the
applications for the tax credit certificate.
(2) The report must also include:
(A) the total number of applicants and amount for
tax credit certificates awarded under this Section in
the prior calendar year;
(B) the total number of applications and amount for
which tax credit certificates were issued in the prior

calendar year; and
(C) the total tax credit certificates and amount
authorized under this Section for all calendar years.
(Source: P.A. 96-939, eff. 1-1-11; 97-507, eff. 8-23-11.)
Section 10. The Business Location Efficiency Incentive Act
is amended by adding Section 21 as follows:
(35 ILCS 11/21 new)
Sec. 21. Continuation of Act; validation.
(a) The General Assembly finds and declares that:
(1) Public Act 97-636, which takes effect on June 1,
2012, changed the repeal date set for the Business Location
Efficiency Incentive Act from December 31, 2011 to December
31, 2016.
(2) The Statute on Statutes sets forth general rules on
the repeal of statutes and the construction of multiple
amendments, but Section 1 of that Act also states that
these rules will not be observed when the result would be
"inconsistent with the manifest intent of the General
Assembly or repugnant to the context of the statute".
(3) This amendatory Act of the 97th General Assembly
manifests the intention of the General Assembly to extend
the repeal of the Business Location Efficiency Incentive
Act and have the Business Location Efficiency Incentive Act
continue in effect until December 31, 2016.

(4) The Business Location Efficiency Incentive Act was
originally enacted to protect, promote, and preserve the
general welfare. Any construction of this Act that results
in the repeal of this Act on December 31, 2011 would be
inconsistent with the manifest intent of the General
Assembly and repugnant to the context of the Business
Location Efficiency Incentive Act.
(b) It is hereby declared to have been the intent of the
General Assembly that the Business Location Efficiency
Incentive Act not be subject to repeal on December 31, 2011.
(c) The Business Location Efficiency Incentive Act shall be
deemed to have been in continuous effect since January 1, 2007
(the effective date of Public Act 94-966), and it shall
continue to be in effect henceforward until it is otherwise
lawfully repealed. All previously enacted amendments to the Act
taking effect on or after December 31, 2011, are hereby
validated.
(d) All actions taken in reliance on or pursuant to the
Business Location Efficiency Incentive Act by the Department of
Revenue, the Department of Commerce and Economic Opportunity,
or any other person or entity are hereby validated.
(e) In order to ensure the continuing effectiveness of the
Business Location Efficiency Incentive Act, it is set forth in
full and re-enacted by this amendatory Act of the 97th General
Assembly. This re-enactment is intended as a continuation of
the Act. It is not intended to supersede any amendment to the

Act that is enacted by the 97th General Assembly.
(f) The Business Location Efficiency Incentive Act applies
to all claims, civil actions, and proceedings pending on or
filed on or before the effective date of this Act.
Section 15. The Business Location Efficiency Incentive Act
is re-enacted as follows:
(35 ILCS 11/Act title)
An Act concerning business incentives.
(35 ILCS 11/1)
(Section scheduled to be repealed on December 31, 2011)
Sec. 1. Short title. This Act may be cited as the Business
Location Efficiency Incentive Act.
(Source: P.A. 94-966, eff. 1-1-07.)
(35 ILCS 11/5)
(Section scheduled to be repealed on December 31, 2011)
Sec. 5. Definitions. In this Act:
"Location efficient" means a project that maximizes the use
of existing investments in infrastructure, avoids or minimizes
additional government expenditures for new infrastructure, and
has nearby housing affordable to the permanent workforce of the
project or has accessible and affordable mass transit or its
equivalent or some combination of both.

"Location efficiency report" means a report that is
prepared by an applicant for increased State economic
development assistance under Section 10 and follows this Act
and any related Department guidelines, and that describes the
existence of (i) affordable workforce housing or (ii)
accessible and affordable mass transit or its equivalent.
"Employee housing or transportation remediation plan"
means a plan to increase affordable housing or transportation
options, or both, for employees earning up to the median annual
salary of the workforce at the project. The plan may include,
but is not limited to, an employer-financed or assisted housing
program that can be supplemented by State or federal grants,
shuttle services between the place of employment and existing
transit stops or other reasonably accessible places,
facilitation of employee carpooling, or similar services.
"Accessible and affordable mass transit" means access to
transit stops with regular and frequent service within one mile
from the project site and pedestrian access to transit stops.
"Affordable workforce housing" means owner-occupied or
rental housing that costs, based on current census data for the
municipality where the project is located or any municipality
within 3 miles of the municipality where the project is
located, no more than 35% of the median salary at the project
site, exclusive of the highest 10% of the site's salaries. If
the project is located in an unincorporated area, "affordable
workforce housing" means no more than 35% of the median salary

at the project site, excluding the highest 10% of the site's
salaries, based on the median cost of rental or of
owner-occupied housing in the county where the unincorporated
area is located.
"Department" means the Department of Commerce and Economic
Opportunity (DCEO) or its successor agency.
"Applicant" means a company or its representative that
negotiates or applies for economic development assistance from
DCEO.
"Economic development assistance" means State tax credits
and tax exemptions given as an incentive to an eligible company
after certification by DCEO under the Economic Development for
a Growing Economy Tax Credit Act (EDGE).
"Existence of infrastructure" means the existence within
1,500 feet of the proposed site of roads, sewers, sidewalks,
and other utilities and a description of the investments or
improvements, if any, that an applicant expects State or local
government to make to that infrastructure.
(Source: P.A. 94-966, eff. 1-1-07.)
(35 ILCS 11/10)
(Section scheduled to be repealed on December 31, 2011)
Sec. 10. Economic development assistance awards.
(a) An applicant that also wants to be considered for
increased economic development assistance under this Act shall
submit a location efficiency report.

(b) DCEO may give an applicant an increased tax credit or
extension if the applicant's location efficiency report
demonstrates that the applicant is seeking assistance for a
project to be located in an area that satisfies this Act's
standards for affordable workforce housing or affordable and
accessible mass transit. If the Department determines from the
location efficiency report that the applicant is seeking
assistance in an area that is not location efficient, the
Department may award an increase in State economic development
assistance if an applicant (i) submits, and the Department
accepts, an applicant's employee housing and transportation
remediation plan or (ii) creates jobs in a labor surplus area
as defined by the Department of Employment Security at the end
of each calendar year.
(c) Applicants locating or expanding at location-efficient
sites, with approved location efficiency plans, or creating
jobs in labor surplus areas may receive (i) up to 10% more than
the maximum allowable tax credits for which they are eligible
under the Economic Development for a Growing Economy Tax Credit
Act (EDGE), but not to equal or exceed 100% of the applicant's
tax liability, or (ii) such other adjustment of those tax
credits, including but not limited to extensions, as the
Department deems appropriate.
(d) The Department may provide technical assistance to
employers requesting assistance in developing an appropriate
employee housing or transportation plan.

(Source: P.A. 94-966, eff. 1-1-07.)
(35 ILCS 11/15)
(Section scheduled to be repealed on December 31, 2011)
Sec. 15. Summaries; progress reports.
(a) DCEO shall include summaries of the initial employee
housing or transportation plans for each assisted project in
the annual compilation and publication of project progress
reports required under subsection (d) of Section 20 of the
Corporate Accountability for Tax Expenditures Act. Companies
that fail to do so or that make inadequate progress shall have
their increased tax credit or extension eliminated. Applicants
and submitted data are subject to all disclosure, reporting,
and recapture provisions set forth in Public Act 93-552.
(b) By June 1, 2008 and by June 1 of each year thereafter
through 2011, the Department shall include, when appropriate,
data on the outcomes or status of approved employee housing or
transportation plans in the project progress reports required
under the Corporate Accountability for Tax Expenditure Act.
(Source: P.A. 94-966, eff. 1-1-07.)
(35 ILCS 11/20)
(Section scheduled to be repealed on December 31, 2011)
Sec. 20. Duration of incentives; report to General
Assembly.
(a) Any multi-year incentive awarded under this Act shall

continue for the time period called for in the agreement with
the Department and shall not be altered by the repeal of this
Act.
(b) By January 1, 2011, the Department shall submit to the
Speaker of the House of Representatives and the President of
the Senate, for assignment to the appropriate committees, a
report on the incentives awarded under this Act and the
Department's activities, findings, and recommendations with
respect to this Act and its extension, amendment, or repeal.
The report, when acted upon by those committees, shall be
distributed to each member of the General Assembly.
(Source: P.A. 94-966, eff. 1-1-07.)
(35 ILCS 11/25)
(Section scheduled to be repealed on December 31, 2011)
Sec. 25. Repeal. This Act is repealed on December 31, 2016.
(Source: P.A. 97-636, eff. 6-1-12.)
(35 ILCS 11/99)
(Section scheduled to be repealed on December 31, 2011)
Sec. 99. Effective date. This Act takes effect January 1,
2007.
(Source: P.A. 94-966, eff. 1-1-07.)