Bill Text: IL SB0157 | 2021-2022 | 102nd General Assembly | Introduced


Bill Title: Amends the Illinois Income Tax Act. Provides that the credit for expenditures incurred in the restoration and preservation of a qualified historic structure located in a River Edge Redevelopment Zone applies for taxable years ending prior to January 1, 2027 (currently January 1, 2022). Effective immediately.

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Introduced) 2021-04-13 - Placed on Calendar Order of 3rd Reading ** April 14, 2021 [SB0157 Detail]

Download: Illinois-2021-SB0157-Introduced.html


102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB0157

Introduced 2/9/2021, by Sen. Linda Holmes

SYNOPSIS AS INTRODUCED:
35 ILCS 5/221

Amends the Illinois Income Tax Act. Provides that the credit for expenditures incurred in the restoration and preservation of a qualified historic structure located in a River Edge Redevelopment Zone applies for taxable years ending prior to January 1, 2027 (currently January 1, 2022). Effective immediately.
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FISCAL NOTE ACT MAY APPLY

A BILL FOR

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1 AN ACT concerning revenue.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 5. The Illinois Income Tax Act is amended by
5changing Section 221 as follows:
6 (35 ILCS 5/221)
7 Sec. 221. Rehabilitation costs; qualified historic
8properties; River Edge Redevelopment Zone.
9 (a) For taxable years that begin on or after January 1,
102012 and begin prior to January 1, 2018, there shall be allowed
11a tax credit against the tax imposed by subsections (a) and (b)
12of Section 201 of this Act in an amount equal to 25% of
13qualified expenditures incurred by a qualified taxpayer during
14the taxable year in the restoration and preservation of a
15qualified historic structure located in a River Edge
16Redevelopment Zone pursuant to a qualified rehabilitation
17plan, provided that the total amount of such expenditures (i)
18must equal $5,000 or more and (ii) must exceed 50% of the
19purchase price of the property.
20 (a-1) For taxable years that begin on or after January 1,
212018 and end prior to January 1, 2027 January 1, 2022, there
22shall be allowed a tax credit against the tax imposed by
23subsections (a) and (b) of Section 201 of this Act in an

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1aggregate amount equal to 25% of qualified expenditures
2incurred by a qualified taxpayer in the restoration and
3preservation of a qualified historic structure located in a
4River Edge Redevelopment Zone pursuant to a qualified
5rehabilitation plan, provided that the total amount of such
6expenditures must (i) equal $5,000 or more and (ii) exceed the
7adjusted basis of the qualified historic structure on the
8first day the qualified rehabilitation plan begins. For any
9rehabilitation project, regardless of duration or number of
10phases, the project's compliance with the foregoing provisions
11(i) and (ii) shall be determined based on the aggregate amount
12of qualified expenditures for the entire project and may
13include expenditures incurred under subsection (a), this
14subsection, or both subsection (a) and this subsection. If the
15qualified rehabilitation plan spans multiple years, the
16aggregate credit for the entire project shall be allowed in
17the last taxable year, except for phased rehabilitation
18projects, which may receive credits upon completion of each
19phase. Before obtaining the first phased credit: (A) the total
20amount of such expenditures must meet the requirements of
21provisions (i) and (ii) of this subsection; (B) the
22rehabilitated portion of the qualified historic structure must
23be placed in service; and (C) the requirements of subsection
24(b) must be met.
25 (a-2) For taxable years beginning on or after January 1,
262021 and ending prior to January 1, 2022, there shall be

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1allowed a tax credit against the tax imposed by subsections
2(a) and (b) of Section 201 as provided in Section 10-10.3 of
3the River Edge Redevelopment Zone Act. The credit allowed
4under this subsection (a-2) shall apply only to taxpayers that
5make a capital investment of at least $1,000,000 in a
6qualified rehabilitation plan.
7 The credit or credits may not reduce the taxpayer's
8liability to less than zero. If the amount of the credit or
9credits exceeds the taxpayer's liability, the excess may be
10carried forward and applied against the taxpayer's liability
11in succeeding calendar years in the manner provided under
12paragraph (4) of Section 211 of this Act. The credit or credits
13shall be applied to the earliest year for which there is a tax
14liability. If there are credits from more than one taxable
15year that are available to offset a liability, the earlier
16credit shall be applied first.
17 For partners, shareholders of Subchapter S corporations,
18and owners of limited liability companies, if the liability
19company is treated as a partnership for the purposes of
20federal and State income taxation, there shall be allowed a
21credit under this Section to be determined in accordance with
22the determination of income and distributive share of income
23under Sections 702 and 704 and Subchapter S of the Internal
24Revenue Code.
25 The total aggregate amount of credits awarded under the
26Blue Collar Jobs Act (Article 20 of this amendatory Act of the

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1101st General Assembly) shall not exceed $20,000,000 in any
2State fiscal year.
3 (b) To obtain a tax credit pursuant to this Section, the
4taxpayer must apply with the Department of Natural Resources.
5The Department of Natural Resources shall determine the amount
6of eligible rehabilitation costs and expenses in addition to
7the amount of the River Edge construction jobs credit within
845 days of receipt of a complete application. The taxpayer
9must submit a certification of costs prepared by an
10independent certified public accountant that certifies (i) the
11project expenses, (ii) whether those expenses are qualified
12expenditures, and (iii) that the qualified expenditures exceed
13the adjusted basis of the qualified historic structure on the
14first day the qualified rehabilitation plan commenced. The
15Department of Natural Resources is authorized, but not
16required, to accept this certification of costs to determine
17the amount of qualified expenditures and the amount of the
18credit. The Department of Natural Resources shall provide
19guidance as to the minimum standards to be followed in the
20preparation of such certification. The Department of Natural
21Resources and the National Park Service shall determine
22whether the rehabilitation is consistent with the United
23States Secretary of the Interior's Standards for
24Rehabilitation.
25 (b-1) Upon completion of the project and approval of the
26complete application, the Department of Natural Resources

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1shall issue a single certificate in the amount of the eligible
2credits equal to 25% of qualified expenditures incurred during
3the eligible taxable years, as defined in subsections (a) and
4(a-1), excepting any credits awarded under subsection (a)
5prior to January 1, 2019 (the effective date of Public Act
6100-629) and any phased credits issued prior to the eligible
7taxable year under subsection (a-1). At the time the
8certificate is issued, an issuance fee up to the maximum
9amount of 2% of the amount of the credits issued by the
10certificate may be collected from the applicant to administer
11the provisions of this Section. If collected, this issuance
12fee shall be deposited into the Historic Property
13Administrative Fund, a special fund created in the State
14treasury. Subject to appropriation, moneys in the Historic
15Property Administrative Fund shall be provided to the
16Department of Natural Resources as reimbursement for the costs
17associated with administering this Section.
18 (c) The taxpayer must attach the certificate to the tax
19return on which the credits are to be claimed. The tax credit
20under this Section may not reduce the taxpayer's liability to
21less than zero. If the amount of the credit exceeds the tax
22liability for the year, the excess credit may be carried
23forward and applied to the tax liability of the 5 taxable years
24following the excess credit year.
25 (c-1) Subject to appropriation, moneys in the Historic
26Property Administrative Fund shall be used, on a biennial

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1basis beginning at the end of the second fiscal year after
2January 1, 2019 (the effective date of Public Act 100-629), to
3hire a qualified third party to prepare a biennial report to
4assess the overall economic impact to the State from the
5qualified rehabilitation projects under this Section completed
6in that year and in previous years. The overall economic
7impact shall include at least: (1) the direct and indirect or
8induced economic impacts of completed projects; (2) temporary,
9permanent, and construction jobs created; (3) sales, income,
10and property tax generation before, during construction, and
11after completion; and (4) indirect neighborhood impact after
12completion. The report shall be submitted to the Governor and
13the General Assembly. The report to the General Assembly shall
14be filed with the Clerk of the House of Representatives and the
15Secretary of the Senate in electronic form only, in the manner
16that the Clerk and the Secretary shall direct.
17 (c-2) The Department of Natural Resources may adopt rules
18to implement this Section in addition to the rules expressly
19authorized in this Section.
20 (d) As used in this Section, the following terms have the
21following meanings.
22 "Phased rehabilitation" means a project that is completed
23in phases, as defined under Section 47 of the federal Internal
24Revenue Code and pursuant to National Park Service regulations
25at 36 C.F.R. 67.
26 "Placed in service" means the date when the property is

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1placed in a condition or state of readiness and availability
2for a specifically assigned function as defined under Section
347 of the federal Internal Revenue Code and federal Treasury
4Regulation Sections 1.46 and 1.48.
5 "Qualified expenditure" means all the costs and expenses
6defined as qualified rehabilitation expenditures under Section
747 of the federal Internal Revenue Code that were incurred in
8connection with a qualified historic structure.
9 "Qualified historic structure" means a certified historic
10structure as defined under Section 47(c)(3) of the federal
11Internal Revenue Code.
12 "Qualified rehabilitation plan" means a project that is
13approved by the Department of Natural Resources and the
14National Park Service as being consistent with the United
15States Secretary of the Interior's Standards for
16Rehabilitation.
17 "Qualified taxpayer" means the owner of the qualified
18historic structure or any other person who qualifies for the
19federal rehabilitation credit allowed by Section 47 of the
20federal Internal Revenue Code with respect to that qualified
21historic structure. Partners, shareholders of subchapter S
22corporations, and owners of limited liability companies (if
23the limited liability company is treated as a partnership for
24purposes of federal and State income taxation) are entitled to
25a credit under this Section to be determined in accordance
26with the determination of income and distributive share of

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1income under Sections 702 and 703 and subchapter S of the
2Internal Revenue Code, provided that credits granted to a
3partnership, a limited liability company taxed as a
4partnership, or other multiple owners of property shall be
5passed through to the partners, members, or owners
6respectively on a pro rata basis or pursuant to an executed
7agreement among the partners, members, or owners documenting
8any alternate distribution method.
9(Source: P.A. 100-236, eff. 8-18-17; 100-629, eff. 1-1-19;
10100-695, eff. 8-3-18; 101-9, eff. 6-5-19; 101-81, eff.
117-12-19.)
12 Section 99. Effective date. This Act takes effect upon
13becoming law.
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