Bill Text: IL HB4691 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Amends the Illinois Income Tax Act and the Invest in Kids Act. Provides that the Invest in Kids credit applies for taxable years ending before January 1, 2035 (currently, January 1, 2024). Effective immediately.

Spectrum: Partisan Bill (Republican 4-0)

Status: (Introduced) 2024-03-06 - Added Chief Co-Sponsor Rep. Joe C. Sosnowski [HB4691 Detail]

Download: Illinois-2023-HB4691-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB4691 Introduced , by Rep. Tim Ozinga SYNOPSIS AS INTRODUCED:
35 ILCS 5/224
35 ILCS 40/40
35 ILCS 40/65
Amends the Illinois Income Tax Act and the Invest in Kids Act. Provides that the Invest in Kids credit applies for taxable years ending before January 1, 2035 (currently, January 1, 2024). Effective immediately.
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A BILL FOR
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AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Income Tax Act is amended by
changing Section 224 as follows:
(35 ILCS 5/224)
Sec. 224. Invest in Kids credit.
(a) For taxable years beginning on or after January 1,
2018 and ending before January 1, 2035 January 1, 2024, each
taxpayer for whom a tax credit has been awarded by the
Department under the Invest in Kids Act is entitled to a credit
against the tax imposed under subsections (a) and (b) of
Section 201 of this Act in an amount equal to the amount
awarded under the Invest in Kids Act.
(b) For taxable years ending before December 31, 2023, for
partners, shareholders of subchapter S corporations, and
owners of limited liability companies, if the liability
company is treated as a partnership for purposes of federal
and State income taxation, the credit under this Section shall
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. For taxable
years ending on or after December 31, 2023, partners and

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shareholders of subchapter S corporations are entitled to a
credit under this Section as provided in Section 251.
(c) The credit may not be carried back and may not reduce
the taxpayer's liability to less than zero. If the amount of
the credit exceeds the tax liability for the year, the excess
may be carried forward and applied to the tax liability of 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 the liability, the earlier credit
shall be applied first.
(d) A tax credit awarded by the Department under the
Invest in Kids Act may not be claimed for any qualified
contribution for which the taxpayer claims a federal income
tax deduction.
(Source: P.A. 102-699, eff. 4-19-22; 103-396, eff. 1-1-24.)
Section 10. The Invest in Kids Act is amended by changing
Sections 40 and 65 as follows:
(35 ILCS 40/40)
(Section scheduled to be repealed on January 1, 2025)
Sec. 40. Scholarship granting organization
responsibilities.
(a) Before granting a scholarship for an academic year,
all scholarship granting organizations shall assess and

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document each student's eligibility for the academic year.
(b) A scholarship granting organization shall grant
scholarships only to eligible students.
(c) A scholarship granting organization shall allow an
eligible student to attend any qualified school of the
student's choosing, subject to the availability of funds.
(d) In granting scholarships, beginning in the 2022-2023
school year and for each school year thereafter, a scholarship
granting organization shall give priority to eligible students
who received a scholarship from a scholarship granting
organization during the previous school year. Second priority
shall be given to the following priority groups:
(1) (blank);
(2) eligible students who are members of a household
whose previous year's total annual income does not exceed
185% of the federal poverty level;
(3) eligible students who reside within a focus
district; and
(4) eligible students who are siblings of students
currently receiving a scholarship.
(d-5) A scholarship granting organization shall begin
granting scholarships no later than February 1 preceding the
school year for which the scholarship is sought. Each priority
group identified in subsection (d) of this Section shall be
eligible to receive scholarships on a first-come, first-served
basis until April 1 immediately preceding the school year for

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which the scholarship is sought, starting with the first
priority group identified in subsection (d) of this Section.
Applications for scholarships for eligible students meeting
the qualifications of one or more priority groups that are
received before April 1 must be either approved or denied
within 10 business days after receipt. Beginning April 1, all
eligible students shall be eligible to receive scholarships
without regard to the priority groups identified in subsection
(d) of this Section.
(e) Except as provided in subsection (e-5) of this
Section, scholarships shall not exceed the lesser of (i) the
statewide average operational expense per student among public
schools or (ii) the necessary costs and fees for attendance at
the qualified school. A qualified school may set a lower
maximum scholarship amount for eligible students whose family
income falls within paragraphs (2) and (3) of this subsection
(e); that amount may not exceed the necessary costs and fees
for attendance at the qualified school and is subject to the
limitations on average scholarship amounts set forth in
paragraphs (2) and (3) of this subsection, as applicable. The
qualified school shall notify the scholarship granting
organization of its necessary costs and fees as well as any
maximum scholarship amount set by the school. Scholarships
shall be prorated as follows:
(1) for eligible students whose household income is
less than 185% of the federal poverty level, the

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scholarship shall be 100% of the amount determined
pursuant to this subsection (e) and subsection (e-5) of
this Section;
(2) for eligible students whose household income is
185% or more of the federal poverty level but less than
250% of the federal poverty level, the average of
scholarships shall be 75% of the amount determined
pursuant to this subsection (e) and subsection (e-5) of
this Section; and
(3) for eligible students whose household income is
250% or more of the federal poverty level, the average of
scholarships shall be 50% of the amount determined
pursuant to this subsection (e) and subsection (e-5) of
this Section.
(e-5) The statewide average operational expense per
student among public schools shall be multiplied by the
following factors:
(1) for students determined eligible to receive
services under the federal Individuals with Disabilities
Education Act, 2;
(2) for students who are English learners, as defined
in subsection (d) of Section 14C-2 of the School Code,
1.2; and
(3) for students who are gifted and talented children,
as defined in Section 14A-20 of the School Code, 1.1.
(f) A scholarship granting organization shall distribute

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scholarship payments to the participating school where the
student is enrolled.
(g) For the 2018-2019 school year through the 2033-2034
2022-2023 school year, each scholarship granting organization
shall expend no less than 75% of the qualified contributions
received during the calendar year in which the qualified
contributions were received. No more than 25% of the qualified
contributions may be carried forward to the following calendar
year.
(h) For the 2034-2035 2023-2024 school year, each
scholarship granting organization shall expend all qualified
contributions received during the calendar year in which the
qualified contributions were received. No qualified
contributions may be carried forward to the following calendar
year.
(i) A scholarship granting organization shall allow an
eligible student to transfer a scholarship during a school
year to any other participating school of the custodian's
choice. Such scholarships shall be prorated.
(j) With the prior approval of the Department, a
scholarship granting organization may transfer funds to
another scholarship granting organization if additional funds
are required to meet scholarship demands at the receiving
scholarship granting organization. All transferred funds must
be deposited by the receiving scholarship granting
organization into its scholarship accounts. All transferred

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amounts received by any scholarship granting organization must
be separately disclosed to the Department.
(k) If the approval of a scholarship granting organization
is revoked as provided in Section 20 of this Act or the
scholarship granting organization is dissolved, all remaining
qualified contributions of the scholarship granting
organization shall be transferred to another scholarship
granting organization. All transferred funds must be deposited
by the receiving scholarship granting organization into its
scholarship accounts.
(l) Scholarship granting organizations shall make
reasonable efforts to advertise the availability of
scholarships to eligible students.
(Source: P.A. 102-699, eff. 4-19-22; 102-1059, eff. 6-10-22;
103-154, eff. 6-30-23.)
(35 ILCS 40/65)
(Section scheduled to be repealed on January 1, 2025)
Sec. 65. Credit period; repeal.
(a) A taxpayer may take a credit under this Act for tax
years beginning on or after January 1, 2018 and ending before
January 1, 2035 January 1, 2024. A taxpayer may not take a
credit pursuant to this Act for tax years beginning on or after
January 1, 2035 January 1, 2024. It is the intent of the
General Assembly that the credit under this Act applies
continuously for all periods beginning on or after January 1,

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2018 and ending before January 1, 2035, including, but not
limited to, the period from January 1, 2024 through the
effective date of this amendatory Act of the 103rd General
Assembly.
(b) This Act is repealed on January 1, 2036 January 1,
2025.
(Source: P.A. 102-16, eff. 6-17-21.)