Bill Amendment: IL SB3527 | 2017-2018 | 100th General Assembly
NOTE: For additional amemendments please see the Bill Drafting List
Bill Title: RIVER EDGE REDEVELOPMENT TAX
Status: 2018-07-26 - Public Act . . . . . . . . . 100-0629 [SB3527 Detail]
Download: Illinois-2017-SB3527-House_Amendment_003.html
Bill Title: RIVER EDGE REDEVELOPMENT TAX
Status: 2018-07-26 - Public Act . . . . . . . . . 100-0629 [SB3527 Detail]
Download: Illinois-2017-SB3527-House_Amendment_003.html
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1 | AMENDMENT TO SENATE BILL 3527
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2 | AMENDMENT NO. ______. Amend Senate Bill 3527, AS AMENDED, | ||||||
3 | by replacing everything after the enacting clause with the | ||||||
4 | following:
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5 | "Section 1. Short title. This Act may be cited as the | ||||||
6 | Historic Preservation Tax Credit Act.
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7 | Section 5. Definitions. As used in this Act, unless the | ||||||
8 | context clearly indicates otherwise: | ||||||
9 | "Division" means the State Historic Preservation Office | ||||||
10 | within the Department of Natural Resources. | ||||||
11 | "Phased rehabilitation" means a project that is completed | ||||||
12 | in phases, as defined under Section 47 of the federal Internal | ||||||
13 | Revenue Code and pursuant to National Park Service regulations | ||||||
14 | at 36 C.F.R. 67. | ||||||
15 | "Placed in service" means the date when the property is | ||||||
16 | placed in a condition or state of readiness and availability |
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1 | for a specifically assigned function as defined under Section | ||||||
2 | 47 of the federal Internal Revenue Code and federal Treasury | ||||||
3 | Regulation Sections 1.46 and 1.48. | ||||||
4 | "Qualified expenditures" means all the costs and expenses | ||||||
5 | defined as qualified rehabilitation expenditures under Section | ||||||
6 | 47 of the federal Internal Revenue Code that were incurred in | ||||||
7 | connection with a qualified historic structure. | ||||||
8 | "Qualified historic structure" means any structure that is | ||||||
9 | located in Illinois and is defined as a certified historic | ||||||
10 | structure under Section 47 (c)(3) of the federal Internal | ||||||
11 | Revenue Code. | ||||||
12 | "Qualified rehabilitation plan" means a project that is | ||||||
13 | approved by the Department of Natural Resources and the | ||||||
14 | National Park Service as being consistent with the United | ||||||
15 | States Secretary of the Interior's Standards for | ||||||
16 | Rehabilitation. | ||||||
17 | "Qualified taxpayer" means the owner of the qualified | ||||||
18 | historic structure or any other person who may qualify for the | ||||||
19 | federal rehabilitation credit allowed by Section 47 of the | ||||||
20 | federal Internal Revenue Code. | ||||||
21 | "Recapture event" means any of the following events | ||||||
22 | occurring during the recapture period: | ||||||
23 | (1) failure to place in service the rehabilitated | ||||||
24 | portions of the qualified historic structure, or failure to | ||||||
25 | maintain the rehabilitated portions of the qualified | ||||||
26 | historic structure in service after they are placed in |
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1 | service; provided that a recapture event under this | ||||||
2 | paragraph (1) shall not include a removal from service for | ||||||
3 | a reasonable period of time to conduct maintenance and | ||||||
4 | repairs that are reasonably necessary to protect the health | ||||||
5 | and safety of the public or to protect the structural | ||||||
6 | integrity of the qualified historic structure or a | ||||||
7 | neighboring structure; | ||||||
8 | (2) demolition or other alteration of the qualified | ||||||
9 | historic structure in a manner that is inconsistent with | ||||||
10 | the qualified rehabilitation plan or the Secretary of the | ||||||
11 | Interior's Standards for Rehabilitation; | ||||||
12 | (3) disposition of the rehabilitated qualified | ||||||
13 | historic structure in whole or a proportional disposition | ||||||
14 | of a partnership interest therein, except as otherwise | ||||||
15 | permitted by this Section; or | ||||||
16 | (4) use of the qualified historic structure in a manner | ||||||
17 | that is inconsistent with the qualified rehabilitation | ||||||
18 | plan or that is otherwise inconsistent with the provisions | ||||||
19 | and intent of this Section. | ||||||
20 | A recapture event occurring in one taxable year shall be | ||||||
21 | deemed continuing to subsequent taxable years unless and until | ||||||
22 | corrected. | ||||||
23 | The following dispositions of a qualified historic | ||||||
24 | structure shall not be deemed to be a recapture event for | ||||||
25 | purposes of this Section: | ||||||
26 | (1) a transfer by reason of death; |
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1 | (2) a transfer between spouses incident to divorce; | ||||||
2 | (3) a sale by and leaseback to an entity that, when the | ||||||
3 | rehabilitated portions of the qualified historic structure | ||||||
4 | are placed in service, will be a lessee of the qualified | ||||||
5 | historic structure, but only for so long as the entity | ||||||
6 | continues to be a lessee; and | ||||||
7 | (4) a mere change in the form of conducting the trade | ||||||
8 | or business by the owner (or, if applicable, the lessee) of | ||||||
9 | the qualified historic structure, so long as the property | ||||||
10 | interest in such qualified historic structure is retained | ||||||
11 | in such trade or business and the owner or lessee retains a | ||||||
12 | substantial interest in such trade or business. | ||||||
13 | "Recapture period" means the 5-year period beginning on the | ||||||
14 | date that the qualified historic structure or rehabilitated | ||||||
15 | portions of the qualified historic structure are placed in | ||||||
16 | service. | ||||||
17 | "Substantial rehabilitation" means that the qualified | ||||||
18 | rehabilitation expenditures during the 24-month period | ||||||
19 | selected by the taxpayer at the time and in the manner | ||||||
20 | prescribed by rule and ending with or within the taxable year | ||||||
21 | exceed the greater of (i) the adjusted basis of the building | ||||||
22 | and its structural components or (ii) $5,000. The adjusted | ||||||
23 | basis of the building and its structural components shall be | ||||||
24 | determined as of the beginning of the first day of such | ||||||
25 | 24-month period or as of the beginning of the first day of the | ||||||
26 | holding period of the building, whichever is later. For |
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1 | purposes of determining the adjusted basis, the determination | ||||||
2 | of the beginning of the holding period shall be made without | ||||||
3 | regard to any reconstruction by the taxpayer in connection with | ||||||
4 | the rehabilitation. In the case of any phased rehabilitation, | ||||||
5 | with phases set forth in architectural plans and specifications | ||||||
6 | completed before the rehabilitation begins, this definition | ||||||
7 | shall be applied by substituting "60-month period" for | ||||||
8 | "24-month period" wherever that term occurs in the definition.
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9 | Section 10. Allowable credit. | ||||||
10 | (a) To the extent authorized by this Act, for taxable years | ||||||
11 | beginning on or after January 1, 2019 and ending on or before | ||||||
12 | December 31, 2023, there shall be allowed a tax credit against | ||||||
13 | the tax imposed by subsections (a) and (b) of Section 201 of | ||||||
14 | the Illinois Income Tax Act in an aggregate amount equal to 25% | ||||||
15 | of qualified expenditures incurred by a qualified taxpayer | ||||||
16 | undertaking a qualified rehabilitation plan of a qualified | ||||||
17 | historic structure, provided that the total amount of such | ||||||
18 | expenditures must (i) equal $5,000 or more or (ii) exceed the | ||||||
19 | adjusted basis of the qualified historic structure on the first | ||||||
20 | day the qualified rehabilitation plan commenced. If the | ||||||
21 | qualified rehabilitation plan spans multiple years, the | ||||||
22 | aggregate credit for the entire project shall be allowed in the | ||||||
23 | last taxable year. | ||||||
24 | (b) To obtain a tax credit pursuant to this Section, the | ||||||
25 | taxpayer must apply with the Division. The Division shall |
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1 | determine the amount of eligible rehabilitation expenditures | ||||||
2 | within 45 days after receipt of a complete application. The | ||||||
3 | taxpayer must provide to the Division a third-party cost | ||||||
4 | certification conducted by a certified public accountant | ||||||
5 | verifying (i) the qualified and non-qualified rehabilitation | ||||||
6 | expenses and (ii) that the qualified expenditures exceed the | ||||||
7 | adjusted basis of the qualified historic structure on the first | ||||||
8 | day the qualified rehabilitation plan commenced. The | ||||||
9 | accountant shall provide appropriate review and testing of | ||||||
10 | invoices. The Division is authorized, but not required, to | ||||||
11 | accept this third-party cost certification to determine the | ||||||
12 | amount of qualified expenditures. The Division and the National | ||||||
13 | Park Service shall determine whether the rehabilitation is | ||||||
14 | consistent with the Standards of the Secretary of the United | ||||||
15 | States Department of the Interior. | ||||||
16 | (c) If the amount of any tax credit awarded under this Act | ||||||
17 | exceeds the qualified taxpayer's income tax liability for the | ||||||
18 | year in which the qualified rehabilitation plan was placed in | ||||||
19 | service, the excess amount may be carried forward for deduction | ||||||
20 | from the taxpayer's income tax liability in the next succeeding | ||||||
21 | year or years until the total amount of the credit has been | ||||||
22 | used, except that a credit may not be carried forward for | ||||||
23 | deduction after the tenth taxable year after the taxable year | ||||||
24 | in which the qualified rehabilitation plan was placed in | ||||||
25 | service. Upon completion and review of the project, the | ||||||
26 | Division shall issue a single certificate in the amount of the
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1 | eligible credits equal to 25% of the qualified expenditures | ||||||
2 | incurred during the eligible taxable years. At the time the | ||||||
3 | certificate is issued, an issuance fee up to the maximum amount | ||||||
4 | of 2% of the amount of the credits issued by the certificate | ||||||
5 | may be collected from the applicant to administer the Act. If | ||||||
6 | collected, this issuance fee shall be directed to the Division | ||||||
7 | Historic Property Administrative Fund or other such fund as | ||||||
8 | appropriate for use of the Division in the administration of | ||||||
9 | the Historic Preservation Tax Credit Program. The taxpayer must | ||||||
10 | attach the certificate or legal documentation of her or his | ||||||
11 | proportional share of the certificate to the tax
return on | ||||||
12 | which the credits are to be claimed. The tax credit under this | ||||||
13 | Section may not reduce the taxpayer's liability to less than | ||||||
14 | zero. If the amount of the credit exceeds the tax liability for | ||||||
15 | the year, the excess credit may be carried forward and applied | ||||||
16 | to the tax liability of the 10 taxable years following the | ||||||
17 | excess credit year.
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18 | (d) If the taxpayer is (i) a corporation having an election | ||||||
19 | in effect under Subchapter S of the federal Internal Revenue | ||||||
20 | Code, (ii) a partnership, or (iii) a limited liability company, | ||||||
21 | the credit provided under this Act may be claimed by the | ||||||
22 | shareholders of the corporation, the partners of the | ||||||
23 | partnership, or the members of the limited liability company in | ||||||
24 | the same manner as those shareholders, partners, or members | ||||||
25 | account for their proportionate shares of the income or losses | ||||||
26 | of the corporation, partnership, or limited liability company, |
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1 | or as provided in the by-laws or other executed agreement of | ||||||
2 | the corporation, partnership, or limited liability company. | ||||||
3 | Credits granted to a partnership, a limited liability company | ||||||
4 | taxed as a partnership, or other multiple owners of property | ||||||
5 | shall be passed through to the partners, members, or owners | ||||||
6 | respectively on a pro rata basis or pursuant to an executed | ||||||
7 | agreement among the partners, members, or owners documenting | ||||||
8 | any alternate distribution method. | ||||||
9 | (e) If a recapture event occurs during the recapture period | ||||||
10 | with respect to a qualified historic structure, then for any | ||||||
11 | taxable year in which the credits are allowed as specified in | ||||||
12 | this Act, the tax under the applicable section of this Act | ||||||
13 | shall be increased by applying the recapture percentage set | ||||||
14 | forth below to the tax decrease resulting from the application | ||||||
15 | of credits allowed under this Act to the taxable year in | ||||||
16 | question. | ||||||
17 | For the purposes of this subsection, the recapture | ||||||
18 | percentage shall be determined as follows: | ||||||
19 | (1) if the recapture event occurs within the first year | ||||||
20 | after commencement of the recapture period, then the | ||||||
21 | recapture percentage is 100%; | ||||||
22 | (2) if the recapture event occurs within the second | ||||||
23 | year after commencement of the recapture period, then the | ||||||
24 | recapture percentage is 80%; | ||||||
25 | (3) if the recapture event occurs within the third year | ||||||
26 | after commencement of the recapture period, then the |
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1 | recapture percentage is 60%; | ||||||
2 | (4) if the recapture event occurs within the fourth | ||||||
3 | year after commencement of the recapture period, then the | ||||||
4 | recapture percentage is 40%; and | ||||||
5 | (5) if the recapture event occurs within the fifth year | ||||||
6 | after commencement of the recapture period, then the | ||||||
7 | recapture percentage is 20%.
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8 | In the case of any recapture event, the carryforwards under | ||||||
9 | this Act shall be adjusted by reason of such event. | ||||||
10 | (d) The Division may adopt rules to implement this Section | ||||||
11 | in addition to the rules expressly authorized herein.
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12 | Section 20. Limitations, reporting, and monitoring. | ||||||
13 | (a) The Division shall award not more than an aggregate of | ||||||
14 | $15,000,000 in total annual tax credits pursuant to qualified | ||||||
15 | rehabilitation plans for qualified historic structures. The | ||||||
16 | Division shall award not more than $3,000,000 in tax credits | ||||||
17 | with regard to a single qualified rehabilitation plan. In | ||||||
18 | awarding tax credits under this Act, the Division must | ||||||
19 | prioritize projects that meet one or more of the following: | ||||||
20 | (1) the qualified historic structure is located in a | ||||||
21 | county that borders a State with a historic property | ||||||
22 | rehabilitation credit; | ||||||
23 | (2) the qualified historic structure was previously | ||||||
24 | owned by a federal, State, or local governmental entity; | ||||||
25 | (3) the qualified historic structure is located in a |
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1 | census tract that has a median family income at or below | ||||||
2 | the State median family income; data from the most recent | ||||||
3 | 5-year estimate from the American Community Survey (ACS), | ||||||
4 | published by the U.S. Census Bureau, shall be used to | ||||||
5 | determine eligibility; | ||||||
6 | (4) the qualified rehabilitation plan includes in the | ||||||
7 | development partnership a Community Development Entity or | ||||||
8 | a low-profit (B Corporation) or not-for-profit | ||||||
9 | organization, as defined by Section 501(c)(3) of the | ||||||
10 | Internal Revenue Code; or | ||||||
11 | (5) the qualified historic structure is located in an | ||||||
12 | area declared under an Emergency Declaration or Major | ||||||
13 | Disaster Declaration under the federal Robert T. Stafford | ||||||
14 | Disaster Relief and Emergency Assistance Act. | ||||||
15 | (b) The annual aggregate program allocation of $15,000,000 | ||||||
16 | set forth in subsection (a) shall be allocated by the Division, | ||||||
17 | in such proportion as determined by the Department, on a per | ||||||
18 | calendar basis twice in each year that the program is in | ||||||
19 | effect, provided that: (i) the amount initially allocated by | ||||||
20 | the Division for any one calendar application period shall not | ||||||
21 | exceed 65% of the total allowable amount and (ii) any portion | ||||||
22 | of the allocated allowable amount remaining unused as of the | ||||||
23 | end of any of the second calendar application period of a given | ||||||
24 | calendar year shall be rolled into and added to the total | ||||||
25 | allocated amount for the next available calendar year. The | ||||||
26 | qualified rehabilitation plan must meet a readiness test, as |
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1 | defined in the rules created by the Division, in order for the | ||||||
2 | Applicant to qualify. Applicants that qualify under this Act | ||||||
3 | will be placed in a queue based on the date and time the | ||||||
4 | application is received until such time as the application | ||||||
5 | period total allowable amount is reached. Applicants must | ||||||
6 | reapply for each application period. | ||||||
7 | (c) On or before December 31, 2019,
and on or before | ||||||
8 | December 31 of each odd-numbered year thereafter through
2023, | ||||||
9 | subject to appropriation and prior to equal disbursement to the | ||||||
10 | Division, moneys in the Historic Property Administrative Fund | ||||||
11 | shall be used, beginning at the end of the first fiscal year | ||||||
12 | after the effective date of this Act, to hire a qualified third | ||||||
13 | party to prepare a biennial report to assess the overall | ||||||
14 | effectiveness of this Act from the qualified rehabilitation | ||||||
15 | projects under this Act completed in that year and in previous | ||||||
16 | years. Baseline data of the metrics in the report shall be | ||||||
17 | collected at the initiation of a qualified rehabilitation | ||||||
18 | project. The overall economic impact shall include at least: | ||||||
19 | (1) the number of applications, project locations, and | ||||||
20 | proposed use of qualified historic structures; | ||||||
21 | (2) the amount of credits awarded and the number and | ||||||
22 | location of projects receiving credit allocations; | ||||||
23 | (3) the status of ongoing projects and projected | ||||||
24 | qualifying expenditures for ongoing projects;
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25 | (4) for completed projects, the total amount of | ||||||
26 | qualifying rehabilitation expenditures and non-qualifying |
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1 | expenditures, the number of housing units created and the | ||||||
2 | number of housing units that qualify as affordable, and the | ||||||
3 | total square footage rehabilitated and developed; | ||||||
4 | (5) direct, indirect, and induced economic impacts; | ||||||
5 | (6) temporary, permanent, and construction jobs | ||||||
6 | created; and | ||||||
7 | (7) sales, income, and property tax generation before | ||||||
8 | construction, during construction, and after completion. | ||||||
9 | The report to the General Assembly shall be filed with the | ||||||
10 | Clerk of the House of Representatives and the Secretary of the | ||||||
11 | Senate in electronic form only, in the manner that the Clerk | ||||||
12 | and the Secretary shall direct. | ||||||
13 | (d) Any time prior to issuance of a tax credit certificate, | ||||||
14 | the Director of the Division, the State Historic Preservation | ||||||
15 | Officer, or staff of the Division may, upon reasonable notice | ||||||
16 | to the project owner of not less than 3 business days, conduct | ||||||
17 | a site visit to the project to inspect and evaluate the | ||||||
18 | project. | ||||||
19 | (e) Any time prior to the issuance of a tax credit | ||||||
20 | certificate and for a period of 4 years following the effective | ||||||
21 | date of a project tax credit certificate, the Director may, | ||||||
22 | upon reasonable notice of not less than 30 calendar days, | ||||||
23 | request a status report from the Applicant consisting of | ||||||
24 | information and updates relevant to the status of the project. | ||||||
25 | Status reports shall not be requested more than twice yearly. | ||||||
26 | (f) In order to demonstrate sufficient evidence of |
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1 | reviewable progress within 12 months after the date the | ||||||
2 | Applicant received notification of approval from the Division, | ||||||
3 | the Applicant shall provide all of the following: | ||||||
4 | (1) a viable financial plan which demonstrates by way | ||||||
5 | of an executed agreement that all financing has been | ||||||
6 | secured for the project; such financing shall include, but | ||||||
7 | not be limited to, equity investment as demonstrated by | ||||||
8 | letters of commitment from the owner of the property, | ||||||
9 | investment partners, and equity investors; | ||||||
10 | (2) final construction drawings or approved building | ||||||
11 | permits that demonstrate the complete rehabilitation of | ||||||
12 | the full scope of the application; and | ||||||
13 | (3) all historic approvals, including all federal and | ||||||
14 | State rehabilitation documents required by the Division. | ||||||
15 | The Director shall review the submitted evidence and may | ||||||
16 | request additional documentation from the Applicant if | ||||||
17 | necessary. The Applicant will have 30 calendar days to provide | ||||||
18 | the information requested, otherwise the approval may be | ||||||
19 | rescinded at the discretion of the Director. | ||||||
20 | (g) In order to demonstrate sufficient evidence of | ||||||
21 | reviewable progress within 18 months after the date the | ||||||
22 | application received notification of approval from the | ||||||
23 | Division, the Applicant is required to provide detailed | ||||||
24 | evidence that the Applicant has secured and closed on financing | ||||||
25 | for the complete scope of rehabilitation for the project. To | ||||||
26 | demonstrate evidence that the Applicant has secured and closed |
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1 | on financing, the Applicant will need to provide signed and | ||||||
2 | processed loan agreements, bank financing documents or other | ||||||
3 | legal and contractual evidence to demonstrate that adequate | ||||||
4 | financing is available to complete the project. The Director | ||||||
5 | shall review the submitted evidence and may request additional | ||||||
6 | documentation from the Applicant if necessary. The Applicant | ||||||
7 | will have 30 calendar days to provide the information | ||||||
8 | requested, otherwise the approval may be rescinded at the | ||||||
9 | discretion of the Director. | ||||||
10 | If the Applicant fails to document reviewable progress | ||||||
11 | within 18 months of approval, the Director may notify the | ||||||
12 | Applicant that the application is rescinded. However, should | ||||||
13 | financing and construction be imminent, the Director may elect | ||||||
14 | to grant the Applicant no more than 5 months to close on | ||||||
15 | financing and commence construction. If the Applicant fails to | ||||||
16 | meet these conditions in the required timeframe, the Director | ||||||
17 | shall notify the Applicant that the application is rescinded. | ||||||
18 | Any such rescinded allocation shall be added to the aggregate | ||||||
19 | amount of credits available for allocation for the year in | ||||||
20 | which the forfeiture occurred. | ||||||
21 | The amount of the qualified expenditures identified in the | ||||||
22 | Applicant's certification of completion and reflected on the | ||||||
23 | Historic Preservation Tax Credit certificate issued by the | ||||||
24 | Director is subject to inspection, examination, and audit by | ||||||
25 | the Department of Revenue. | ||||||
26 | The Applicant shall establish and maintain for a period of |
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1 | 4 years following the effective date on a project tax credit | ||||||
2 | certificate such records as required by the Director. Such | ||||||
3 | records include, but are not limited to, records documenting | ||||||
4 | project expenditures and compliance with the U.S. Secretary of | ||||||
5 | the Interior's Standards. The Applicant shall make such records | ||||||
6 | available for review and verification by the Director, the | ||||||
7 | State Historic Preservation Officer, the Department of | ||||||
8 | Revenue, or appropriate staff, as well as other appropriate | ||||||
9 | State agencies. In the event the Director determines an | ||||||
10 | Applicant has submitted an annual report containing erroneous | ||||||
11 | information or data not supported by records established and | ||||||
12 | maintained under this Act, the Director may, after providing | ||||||
13 | notice, require the Applicant to resubmit corrected reports.
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14 | Section 25. Powers. The Division shall adopt rules for the | ||||||
15 | administration of this Act. The Division may enter into an | ||||||
16 | intergovernmental agreement with the Department of Commerce | ||||||
17 | and Economic Opportunity, the Department of Revenue, or both, | ||||||
18 | for the administration of this Act. Such intergovernmental | ||||||
19 | agreement may allow for the distribution of all or a portion of | ||||||
20 | the issuance fee imposed under Section 10 to the Department of | ||||||
21 | Commerce and Economic Opportunity or the Department of Revenue, | ||||||
22 | as applicable.
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23 | Section 900. The Illinois Income Tax Act is amended by | ||||||
24 | changing Section 221 and by adding Section 227 as follows:
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1 | (35 ILCS 5/221) | ||||||
2 | Sec. 221. Rehabilitation costs; qualified historic | ||||||
3 | properties; River Edge Redevelopment Zone. | ||||||
4 | (a) For taxable years that begin beginning on or after | ||||||
5 | January 1, 2012 and begin ending prior to January 1, 2018 | ||||||
6 | January 1, 2022 , there shall be allowed a tax credit against | ||||||
7 | the tax imposed by subsections (a) and (b) of Section 201 of | ||||||
8 | this Act in an amount equal to 25% of qualified expenditures | ||||||
9 | incurred by a qualified taxpayer during the taxable year in the | ||||||
10 | restoration and preservation of a qualified historic structure | ||||||
11 | located in a River Edge Redevelopment Zone pursuant to a | ||||||
12 | qualified rehabilitation plan, provided that the total amount | ||||||
13 | of such expenditures (i) must equal $5,000 or more and (ii) | ||||||
14 | must exceed 50% of the purchase price of the property. | ||||||
15 | (a-1) For taxable years that begin on or after January 1, | ||||||
16 | 2018 and end prior to January 1, 2022, there shall be allowed a | ||||||
17 | tax credit against the tax imposed by subsections (a) and (b) | ||||||
18 | of Section 201 of this Act in an aggregate amount equal to 25% | ||||||
19 | of qualified expenditures incurred by a qualified taxpayer in | ||||||
20 | the restoration and preservation of a qualified historic | ||||||
21 | structure located in a River Edge Redevelopment Zone pursuant | ||||||
22 | to a qualified rehabilitation plan, provided that the total | ||||||
23 | amount of such expenditures must (i) equal $5,000 or more and | ||||||
24 | (ii) exceed the adjusted basis of the qualified historic | ||||||
25 | structure on the first day the qualified rehabilitation plan |
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1 | begins. For any rehabilitation project, regardless of duration | ||||||
2 | or number of phases, the project's compliance with the | ||||||
3 | foregoing provisions (i) and (ii) shall be determined based on | ||||||
4 | the aggregate amount of qualified expenditures for the entire | ||||||
5 | project and may include expenditures incurred under subsection | ||||||
6 | (a), this subsection, or both subsection (a) and this | ||||||
7 | subsection. If the qualified rehabilitation plan spans | ||||||
8 | multiple years, the aggregate credit for the entire project | ||||||
9 | shall be allowed in the last taxable year, except for phased | ||||||
10 | rehabilitation projects, which may receive credits upon | ||||||
11 | completion of each phase. Before obtaining the first phased | ||||||
12 | credit: (A) the total amount of such expenditures must meet the | ||||||
13 | requirements of provisions (i) and (ii) of this subsection; (B) | ||||||
14 | the rehabilitated portion of the qualified historic structure | ||||||
15 | must be placed in service; and (C) the requirements of | ||||||
16 | subsection (b) must be met. | ||||||
17 | (b) To obtain a tax credit pursuant to this Section, the | ||||||
18 | taxpayer must apply with the Department of Natural Resources | ||||||
19 | Commerce and Economic Opportunity . The Department of Natural | ||||||
20 | Resources Commerce and Economic Opportunity, in consultation | ||||||
21 | with the Historic Preservation Agency, shall determine the | ||||||
22 | amount of eligible rehabilitation costs and expenses within 45 | ||||||
23 | days of receipt of a complete application. The taxpayer must | ||||||
24 | submit a certification of costs prepared by an independent | ||||||
25 | certified public accountant that certifies (i) the project | ||||||
26 | expenses, (ii) whether those expenses are qualified |
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1 | expenditures, and (iii) that the qualified expenditures exceed | ||||||
2 | the adjusted basis of the qualified historic structure on the | ||||||
3 | first day the qualified rehabilitation plan commenced. The | ||||||
4 | Department of Natural Resources is authorized, but not | ||||||
5 | required, to accept this certification of costs to determine | ||||||
6 | the amount of qualified expenditures and the amount of the | ||||||
7 | credit. The Department of Natural Resources shall provide | ||||||
8 | guidance as to the minimum standards to be followed in the | ||||||
9 | preparation of such certification . The Department of Natural | ||||||
10 | Resources and the National Park Service Historic Preservation | ||||||
11 | Agency shall determine whether the rehabilitation is | ||||||
12 | consistent with the United States Secretary of the Interior's | ||||||
13 | Standards for Rehabilitation the standards of the Secretary of | ||||||
14 | the United States Department of the Interior for | ||||||
15 | rehabilitation . | ||||||
16 | (b-1) Upon completion and review of the project and | ||||||
17 | approval of the complete application , the Department of Natural | ||||||
18 | Resources Commerce and Economic Opportunity shall issue a | ||||||
19 | single certificate in the amount of the eligible credits equal | ||||||
20 | to 25% of qualified expenditures incurred during the eligible | ||||||
21 | taxable years, as defined in subsections (a) and (a-1), | ||||||
22 | excepting any credits awarded under subsection (a) prior to the | ||||||
23 | effective date of this amendatory Act of the 100th General | ||||||
24 | Assembly and any phased credits issued prior to the eligible | ||||||
25 | taxable year under subsection (a-1) . At the time the | ||||||
26 | certificate is issued, an issuance fee up to the maximum amount |
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1 | of 2% of the amount of the credits issued by the certificate | ||||||
2 | may be collected from the applicant to administer the | ||||||
3 | provisions of this Section. If collected, this issuance fee | ||||||
4 | shall be deposited into the Historic Property Administrative | ||||||
5 | Fund, a special fund created in the State treasury. Subject to | ||||||
6 | appropriation, moneys in the Historic Property Administrative | ||||||
7 | Fund shall be provided to the Department of Natural Resources | ||||||
8 | as reimbursement evenly divided between the Department of | ||||||
9 | Commerce and Economic Opportunity and the Historic | ||||||
10 | Preservation Agency to reimburse the Department of Commerce and | ||||||
11 | Economic Opportunity and the Historic Preservation Agency for | ||||||
12 | the costs associated with administering this Section. The | ||||||
13 | taxpayer must attach the certificate to the tax return on which | ||||||
14 | the credits are to be claimed. The Department of Commerce and | ||||||
15 | Economic Opportunity may adopt rules to implement this Section. | ||||||
16 | (c) The taxpayer must attach the certificate to the tax | ||||||
17 | return on which the credits are to be claimed. The tax credit | ||||||
18 | under this Section may not reduce the taxpayer's liability to | ||||||
19 | less than
zero. If the amount of the credit exceeds the tax | ||||||
20 | liability for the year, the excess credit may be carried | ||||||
21 | forward and applied to the tax liability of the 5 taxable years | ||||||
22 | following the excess credit year. | ||||||
23 | (c-1) Subject to appropriation, moneys in the Historic | ||||||
24 | Property Administrative Fund shall be used, on a biennial basis | ||||||
25 | beginning at the end of the second fiscal year after the | ||||||
26 | effective date of this amendatory Act of the 100th General |
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| |||||||
1 | Assembly, to hire a qualified third party to prepare a biennial | ||||||
2 | report to assess the overall economic impact to the State from | ||||||
3 | the qualified rehabilitation projects under this Section | ||||||
4 | completed in that year and in previous years. The overall | ||||||
5 | economic impact shall include at least: (1) the direct and | ||||||
6 | indirect or induced economic impacts of completed projects; (2) | ||||||
7 | temporary, permanent, and construction jobs created; (3) | ||||||
8 | sales, income, and property tax generation before, during | ||||||
9 | construction, and after completion; and (4) indirect | ||||||
10 | neighborhood impact after completion. The report shall be | ||||||
11 | submitted to Governor and the General Assembly. The report to | ||||||
12 | the General Assembly shall be filed with the Clerk of the House | ||||||
13 | of Representatives and the Secretary of the Senate in | ||||||
14 | electronic form only, in the manner that the Clerk and the | ||||||
15 | Secretary shall direct. | ||||||
16 | (c-2) The Department of Natural Resources may adopt rules | ||||||
17 | to implement this Section in addition to the rules expressly | ||||||
18 | authorized in this Section. | ||||||
19 | (d) As used in this Section, the following terms have the | ||||||
20 | following meanings. | ||||||
21 | "Phased rehabilitation" means a project that is completed | ||||||
22 | in phases, as defined under Section 47 of the federal Internal | ||||||
23 | Revenue Code and pursuant to National Park Service regulations | ||||||
24 | at 36 C.F.R. 67. | ||||||
25 | "Placed in service" means the date when the property is | ||||||
26 | placed in a condition or state of readiness and availability |
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1 | for a specifically assigned function as defined under Section | ||||||
2 | 47 of the federal Internal Revenue Code and federal Treasury | ||||||
3 | Regulation Sections 1.46 and 1.48. | ||||||
4 | "Qualified expenditure" means all the costs and expenses | ||||||
5 | defined as qualified rehabilitation expenditures under Section | ||||||
6 | 47 of the federal Internal Revenue Code that were incurred in | ||||||
7 | connection with a qualified historic structure. | ||||||
8 | "Qualified historic structure" means a certified historic | ||||||
9 | structure as defined under Section 47(c)(3) of the federal | ||||||
10 | Internal Revenue Code. | ||||||
11 | "Qualified rehabilitation plan" means a project that is | ||||||
12 | approved by the Department of Natural Resources and the | ||||||
13 | National Park Service Historic Preservation Agency as being | ||||||
14 | consistent with the United States Secretary of the Interior's | ||||||
15 | Standards for Rehabilitation standards in effect on the | ||||||
16 | effective date of this amendatory Act of the 97th General | ||||||
17 | Assembly for rehabilitation as adopted by the federal Secretary | ||||||
18 | of the Interior . | ||||||
19 | "Qualified taxpayer" means the owner of the qualified | ||||||
20 | historic structure or any other person who qualifies for the | ||||||
21 | federal rehabilitation credit allowed by Section 47 of the | ||||||
22 | federal Internal Revenue Code with respect to that qualified | ||||||
23 | historic structure. Partners, shareholders of subchapter S | ||||||
24 | corporations, and owners of limited liability companies (if the | ||||||
25 | limited liability company is treated as a partnership for | ||||||
26 | purposes of federal and State income taxation) are entitled to |
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| |||||||
1 | a credit under this Section to be determined in accordance with | ||||||
2 | the determination of income and distributive share of income | ||||||
3 | under Sections 702 and 703 and subchapter S of the Internal | ||||||
4 | Revenue Code, provided that credits granted to a partnership, a | ||||||
5 | limited liability company taxed as a partnership, or other | ||||||
6 | multiple owners of property shall be passed through to the | ||||||
7 | partners, members, or owners respectively on a pro rata basis | ||||||
8 | or pursuant to an executed agreement among the partners, | ||||||
9 | members, or owners documenting any alternate distribution | ||||||
10 | method.
| ||||||
11 | (Source: P.A. 99-914, eff. 12-20-16; 100-236, eff. 8-18-17.)
| ||||||
12 | (35 ILCS 5/227 new) | ||||||
13 | Sec. 227. Historic preservation credit. For
tax years | ||||||
14 | beginning on or after January 1, 2019 and ending on
or before | ||||||
15 | December 31, 2023, a taxpayer who qualifies for a
credit under | ||||||
16 | the Historic Preservation Tax Credit Act is entitled to a | ||||||
17 | credit against the taxes
imposed under subsections (a) and (b) | ||||||
18 | of Section 201 of this
Act as provided in that Act. If the | ||||||
19 | taxpayer is a partnership
or Subchapter S corporation, the | ||||||
20 | credit shall be allowed to the
partners or shareholders in | ||||||
21 | accordance with the determination
of income and distributive | ||||||
22 | share of income under Sections 702
and 704 and Subchapter S of | ||||||
23 | the Internal Revenue Code.
If the amount of any tax credit | ||||||
24 | awarded under this Section
exceeds the qualified taxpayer's | ||||||
25 | income tax liability for the
year in which the qualified |
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| |||||||
1 | rehabilitation plan was placed in
service, the excess amount | ||||||
2 | may be carried forward as
provided in the Historic Preservation | ||||||
3 | Tax Credit Act. ".
|