Bill Amendment: IL HB4237 | 2017-2018 | 100th General Assembly

NOTE: For additional amemendments please see the Bill Drafting List

---

Bill Title: INC TX-CHARITABLE CONTRIBUTION

Status: 2019-01-08 - Session Sine Die [HB4237 Detail]

Download: Illinois-2017-HB4237-Senate_Amendment_001.html

---

Sen. Julie A. Morrison

Filed: 5/22/2018

10000HB4237sam001 LRB100 16850 HLH 40560 a
AMENDMENT TO HOUSE BILL 4237
AMENDMENT NO. ______. Amend House Bill 4237 by replacing
everything after the enacting clause with the following:
"Section 1. Short title. This Act may be cited as the Local
Government Charitable Fund Act.
Section 5. Definitions.
"Annual credit-eligible donation cap" means the cap on the
total value of local charitable donations that are eligible for
a local property tax credit, as established in this Act.
"Charitable fund" means a fund established pursuant to this
Act.
"Fund administrator" means the official or entity
designated to be responsible for the collection, distribution,
and administration of donations to charitable funds; that
person shall be an official serving as the custodian of public
funds for the local unit establishing the charitable fund.

10000HB4237sam001 - 2 - LRB100 16850 HLH 40560 a
"Local charitable donation" means a donation paid in money
by or on behalf of a local property owner to a charitable fund
established by a local unit.
"Local property owner" means a person or entity who owns
real property within a local unit that has established a
charitable fund to which a local charitable donation is made.
"Local unit" means a municipality, county, or school
district, but does not include community college districts.
"Mortgagee" means the holder of a mortgage loan.
"Property tax credit" means the credit established
pursuant to this Act.
"Qualified donation" means a local charitable donation
that may qualify real property of the donor for a property tax
credit.
"Servicing organization" means a mortgagee or an agent of a
mortgagee, pursuant to a written agreement between the agent
and the mortgagee, that is responsible for one or more mortgage
escrow accounts.
Section 10. Charitable funds; creation; donation caps.
(a) A county may, by ordinance or resolution, authorize
local units located in whole or in part within that county to
establish charitable funds. If such authority is granted, a
local unit may establish, by ordinance or resolution, as
appropriate, one or more charitable funds for specific public
purposes of that local unit. A charitable fund shall be held in

10000HB4237sam001 - 3 - LRB100 16850 HLH 40560 a
one or more bank accounts in the name of the local unit and
shall be kept separate from the other accounts of the local
unit. A charitable fund shall not be administered jointly by
more than one local unit. All such charitable funds and the
moneys deposited into such funds shall be governed in the same
manner as other funds established by the local unit. All moneys
deposited into a charitable fund shall be expended in
accordance with applicable State law exclusively for public
purposes of the local unit. Moneys deposited into a charitable
fund shall be equivalent to tax revenues for the purposes of
the State aid formula, local unit revenue calculations, local
unit bonding capacity, and similar State or municipal
computations. Moneys deposited into a charitable fund shall be
immediately available to the establishing local unit for the
payment of budgeted and emergency mandatory expenses,
including debt service, upon request of the local unit to the
fund administrator.
(b) The ordinance or resolution establishing a charitable
fund shall designate the official serving as the local unit's
custodian of public funds to serve as the fund administrator.
The fund administrator shall assume responsibility for the
collection, administration, and distribution of donations made
to the charitable fund and shall continually track the total of
all qualified donations with respect to a fiscal year.
(c) A charitable fund shall have one or more specified
public purposes in its authorizing ordinance or resolution. The

10000HB4237sam001 - 4 - LRB100 16850 HLH 40560 a
specified public purposes shall be more limited than the
general purposes of the local unit. The specified public
purposes shall be described in documents and records made
publicly available.
(d) The ordinance or resolution establishing a charitable
fund shall set forth an annual credit-eligible donation cap,
which shall be the maximum amount of credit-eligible moneys the
fund may collect. The ordinance or resolution shall also limit
the total amount of money an individual or entity may donate
through local charitable donations to a particular charitable
fund or combination of charitable funds that qualify for a
local property tax credit. The ordinance or resolution
establishing a charitable fund shall establish an initial
annual credit-eligible donation cap and shall set an initial
annual limit on tax credit funding that shall be available as a
result of local charitable donations to the particular
charitable fund. The annual limit on available local property
tax credit funding shall equal 90% of the annual
credit-eligible donation cap. The ordinance or resolution
establishing a charitable fund shall also limit the extent to
which an eligible local charitable donation on behalf of a
specific real property may count against the annual
credit-eligible donation cap. Both the maximum amount of local
property tax credit funding made available and the annual
credit-eligible donation cap shall be established by the
ordinance or resolution adopted to establish the charitable

10000HB4237sam001 - 5 - LRB100 16850 HLH 40560 a
fund but may be adjusted through subsequent ordinances or
resolutions, as applicable, of the governing body of the local
unit. The annual credit-eligible donation cap shall be
established prior to the beginning of each fiscal year. The
annual credit-eligible donation cap shall not be construed to
limit all donations to the charitable fund. The annual
credit-eligible donation cap shall limit only the amount of
donations that are credit-eligible against property tax
payments. The annual credit eligible donation cap for a given
year shall be based upon the tax levy from the prior calendar
year. The annual credit-eligible donation cap established
prior to the start of the calendar year may not exceed 85% of
the prior year budget. Upon certification of a current-year
budget tax levy, a local unit may amend a charitable fund's
credit-eligible donation cap to reflect the estimate of the
current tax levy.
Section 15. Donations by local property owners.
(a) Any person or entity may donate to a charitable fund
regardless of property ownership or location of residence by
directing the payment to the fund administrator of the
applicable charitable fund. A donation to a charitable fund may
be made on behalf of a local property owner by directing the
payment to the fund administrator of the applicable charitable
fund.
(b) If a local property owner makes a donation to a local

10000HB4237sam001 - 6 - LRB100 16850 HLH 40560 a
charitable fund that is eligible for a property tax credit,
that property owner shall indicate at the time of the donation
the specific parcel of property to which the donation shall
apply in order for such credit to issue. A donation may be
credited to more than one parcel of real property.
(c) Following receipt of a local charitable donation, the
fund administrator shall:
(1) issue a receipt to the donor confirming the amount
of the donation and the real property associated with the
donation; and
(2) notify the county collector and the chief financial
officer or business administrator of the local unit, within
5 business days after the donation, of the amount of the
donation and the amount of credit made available as a
result of the donation; thereafter, the county collector
shall notify the donor of the amount of the available local
property tax credit.
(d) Charitable fund donations shall be used for the
following purposes:
(1) public purposes as specified in Section 170 of the
Internal Revenue Code relating to charitable contributions
and gifts;
(2) the payment of any administrative fees of the
county that may be required by the county; such fees may
not exceed 2% of collections;
(3) the remainder of the funds shall be used for the

10000HB4237sam001 - 7 - LRB100 16850 HLH 40560 a
payment of administrative costs associated with the
establishment and continued operation of the fund.
Section 20. Property tax credits.
(a) For fiscal years beginning on or after January 1, 2019,
the tax collector shall allow a property owner a credit to be
applied to property taxes as set forth in this Section.
(b) The credit shall be equal to 90% of the amount of local
charitable donations contributed by or on behalf of the owner's
specified local real property to a charitable fund established
by the local unit, up to the previous year's tax liability for
the property for that local unit. Any excess donation shall be
retained by the charitable fund and used for the specified
charitable purposes of that fund. No credit shall issue to any
owner of local real property who is delinquent in any local
property tax or any county charges at the time the donation to
the charitable fund is made.
(c) The county collector shall apply the credit against the
first local property tax bill with respect to the specified
local real property that is assessed on or after the fifth
business day following receipt of the notification sent
pursuant to Section 15; provided that each county shall impose
a deadline for donations to the charitable fund and a deadline
by which the fund administrator shall supply the county
collector with all donation amounts received and the amounts of
the credits to be made available as a result of those donations

10000HB4237sam001 - 8 - LRB100 16850 HLH 40560 a
in order for the credits to be applied to the next annual
property tax bill. The county shall have the sole discretion as
to whether to establish a deadline by which donations made to a
charitable fund established by a local unit may be credited
against an annual property tax bill that already has been
issued, in which case the taxpayer shall have access to a
statement showing how the credit has been applied.
(d) If the total amount of all local property tax credits
available for specific real property exceeds the amount of
property tax due during the year in which the donation was made
and the county tax collector is unable to apply all or a
portion of a credit awarded under this Act against the local
property tax bill for the property, then the excess credit
amount shall not be refunded to the taxpayer and shall not be
carried forward to future tax years.
(e) The county collector shall indicate on each local
property tax bill the value of the tax credits that apply to
the property pursuant to this Act.
(f) The county collector shall apply credits granted under
this Act to a specified local parcel of real property and not
to an individual person or entity.
(g) For each notification sent, the county may require a
fee to be paid by the fund administrator to be allocated toward
the county's administrative expenses attributable to the
county tax collector's office and the county treasurer's
office. The fee shall be deposited into the Tax Sale Automation

10000HB4237sam001 - 9 - LRB100 16850 HLH 40560 a
Fund. The amount collected by the county tax collector through
such fees shall not be greater than 2% of the funds distributed
for property tax credits to compensate for reasonable expenses
associated with the county tax collector's responsibilities
under this Act.
Section 25. Other charitable donations. Nothing in this Act
shall be construed to prohibit a local unit from accepting
bequests, legacies, or gifts, or from accepting charitable
donations in accordance with any other legal authority.
Section 30. Liability of local property owners.
(a) Notwithstanding any State law, rule, or contract term
to the contrary, no mortgagee or servicing organization shall
be entitled to hold a local property owner liable for electing
to meet his or her obligations to a local unit by means of a
charitable donation and resulting credit made and obtained in
conformity with this Act.
(b) Notwithstanding any State law, regulation, agreement,
or contract terms to the contrary, no mortgagee shall be
entitled to hold a servicing organization liable for complying
with the election by a local property owner to meet his or her
local real property tax due to a local unit by means of a
charitable donation and resulting property tax credit made and
obtained in conformity with this Act, including, but not
limited to, actions a servicing organization takes to implement

10000HB4237sam001 - 10 - LRB100 16850 HLH 40560 a
such election, and actions taken in accordance with any other
applicable law or rule.
Section 900. The State Finance Act is amended by adding
Sections 5.886 and 6z-105 as follows:
(30 ILCS 105/5.886 new)
Sec. 5.886. The Illinois Education Excellence Fund.
(30 ILCS 105/6z-105 new)
Sec. 6z-105. The Illinois Education Excellence Fund;
creation.
(a) The Illinois Education Excellence Fund is hereby
created as a special fund in the State treasury. The Fund may
accept contributions for exclusively public education
purposes, as specified under Section 170 of the Internal
Revenue Code relating to charitable contributions and gifts.
All moneys deposited into the Fund and interest earned on those
moneys shall be transferred to the Common School Fund on an
annual basis and used for those public education purposes,
subject to appropriation by the General Assembly. "Public
education purposes" includes, but is not limited to, early
childhood education, elementary and secondary education,
higher education, adult education, and teachers' employment
benefits.
(b) The State Treasurer shall adopt any rules necessary or

10000HB4237sam001 - 11 - LRB100 16850 HLH 40560 a
appropriate to administer the Fund, including rules allowing
the public to make monetary contributions to the Fund and
obtain a certification from the Treasurer for the credit
allowed under Section 228 of the Illinois Income Tax Act. The
Treasurer shall adopt rules to allow individuals to choose to
make contributions to the Illinois Education Excellence Fund
through payroll deductions. The Treasurer shall certify the
contribution amount eligible for credit within 45 days
following receipt of the contribution and shall provide a copy
of the certification, which may be provided electronically, to
the taxpayer and the Department of Revenue as soon as possible
after the certification.
Section 905. The Illinois Income Tax Act is amended by
adding Section 228 as follows:
(35 ILCS 5/228 new)
Sec. 228. Contributions to the Illinois Education
Excellence Fund.
(a) For taxable years ending after December 31, 2017 and
before January 1, 2026, any individual taxpayer who makes a
contribution to the Illinois Education Excellence Fund is
entitled to a credit against the taxes imposed under
subsections (a) and (b) of Section 201 in an amount equal to
90% of the contributions made by the taxpayer to the Fund
during the taxable year.

10000HB4237sam001 - 12 - LRB100 16850 HLH 40560 a
(b) 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.
(c) In no event shall a credit under this Section reduce a
taxpayer's liability to less than zero. If the amount of credit
exceeds the tax liability for the year, the excess may be
carried forward and applied to the tax liability for the 5
taxable years following the excess credit year. The tax credit
shall be applied to the earliest year for which there is a tax
liability. If there are credits for more than one year that are
available to offset liability, the earlier credit shall be
applied first.
(d) This Section is exempt from the provisions of Section
250.
Section 999. Effective date. This Act takes effect upon
becoming law.".