Bill Text: IL SB1591 | 2019-2020 | 101st General Assembly | Enrolled


Bill Title: Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Creates an exemption for qualified tangible personal property used in the construction or operation of a data center that has been granted a certificate of exemption by the Department of Revenue. Amends the Department of Revenue Law of the Civil Administrative Code of Illinois to add provisions concerning those certificates of exemption. Effective immediately.

Spectrum: Slight Partisan Bill (Democrat 23-13)

Status: (Enrolled) 2019-06-06 - Sent to the Governor [SB1591 Detail]

Download: Illinois-2019-SB1591-Enrolled.html



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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 adding
5Sections 201 and 229 as follows:
6 (35 ILCS 5/201) (from Ch. 120, par. 2-201)
7 Sec. 201. Tax imposed.
8 (a) In general. A tax measured by net income is hereby
9imposed on every individual, corporation, trust and estate for
10each taxable year ending after July 31, 1969 on the privilege
11of earning or receiving income in or as a resident of this
12State. Such tax shall be in addition to all other occupation or
13privilege taxes imposed by this State or by any municipal
14corporation or political subdivision thereof.
15 (b) Rates. The tax imposed by subsection (a) of this
16Section shall be determined as follows, except as adjusted by
17subsection (d-1):
18 (1) In the case of an individual, trust or estate, for
19 taxable years ending prior to July 1, 1989, an amount equal
20 to 2 1/2% of the taxpayer's net income for the taxable
21 year.
22 (2) In the case of an individual, trust or estate, for
23 taxable years beginning prior to July 1, 1989 and ending

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1 after June 30, 1989, an amount equal to the sum of (i) 2
2 1/2% of the taxpayer's net income for the period prior to
3 July 1, 1989, as calculated under Section 202.3, and (ii)
4 3% of the taxpayer's net income for the period after June
5 30, 1989, as calculated under Section 202.3.
6 (3) In the case of an individual, trust or estate, for
7 taxable years beginning after June 30, 1989, and ending
8 prior to January 1, 2011, an amount equal to 3% of the
9 taxpayer's net income for the taxable year.
10 (4) In the case of an individual, trust, or estate, for
11 taxable years beginning prior to January 1, 2011, and
12 ending after December 31, 2010, an amount equal to the sum
13 of (i) 3% of the taxpayer's net income for the period prior
14 to January 1, 2011, as calculated under Section 202.5, and
15 (ii) 5% of the taxpayer's net income for the period after
16 December 31, 2010, as calculated under Section 202.5.
17 (5) In the case of an individual, trust, or estate, for
18 taxable years beginning on or after January 1, 2011, and
19 ending prior to January 1, 2015, an amount equal to 5% of
20 the taxpayer's net income for the taxable year.
21 (5.1) In the case of an individual, trust, or estate,
22 for taxable years beginning prior to January 1, 2015, and
23 ending after December 31, 2014, an amount equal to the sum
24 of (i) 5% of the taxpayer's net income for the period prior
25 to January 1, 2015, as calculated under Section 202.5, and
26 (ii) 3.75% of the taxpayer's net income for the period

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1 after December 31, 2014, as calculated under Section 202.5.
2 (5.2) In the case of an individual, trust, or estate,
3 for taxable years beginning on or after January 1, 2015,
4 and ending prior to July 1, 2017, an amount equal to 3.75%
5 of the taxpayer's net income for the taxable year.
6 (5.3) In the case of an individual, trust, or estate,
7 for taxable years beginning prior to July 1, 2017, and
8 ending after June 30, 2017, an amount equal to the sum of
9 (i) 3.75% of the taxpayer's net income for the period prior
10 to July 1, 2017, as calculated under Section 202.5, and
11 (ii) 4.95% of the taxpayer's net income for the period
12 after June 30, 2017, as calculated under Section 202.5.
13 (5.4) In the case of an individual, trust, or estate,
14 for taxable years beginning on or after July 1, 2017, an
15 amount equal to 4.95% of the taxpayer's net income for the
16 taxable year.
17 (6) In the case of a corporation, for taxable years
18 ending prior to July 1, 1989, an amount equal to 4% of the
19 taxpayer's net income for the taxable year.
20 (7) In the case of a corporation, for taxable years
21 beginning prior to July 1, 1989 and ending after June 30,
22 1989, an amount equal to the sum of (i) 4% of the
23 taxpayer's net income for the period prior to July 1, 1989,
24 as calculated under Section 202.3, and (ii) 4.8% of the
25 taxpayer's net income for the period after June 30, 1989,
26 as calculated under Section 202.3.

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1 (8) In the case of a corporation, for taxable years
2 beginning after June 30, 1989, and ending prior to January
3 1, 2011, an amount equal to 4.8% of the taxpayer's net
4 income for the taxable year.
5 (9) In the case of a corporation, for taxable years
6 beginning prior to January 1, 2011, and ending after
7 December 31, 2010, an amount equal to the sum of (i) 4.8%
8 of the taxpayer's net income for the period prior to
9 January 1, 2011, as calculated under Section 202.5, and
10 (ii) 7% of the taxpayer's net income for the period after
11 December 31, 2010, as calculated under Section 202.5.
12 (10) In the case of a corporation, for taxable years
13 beginning on or after January 1, 2011, and ending prior to
14 January 1, 2015, an amount equal to 7% of the taxpayer's
15 net income for the taxable year.
16 (11) In the case of a corporation, for taxable years
17 beginning prior to January 1, 2015, and ending after
18 December 31, 2014, an amount equal to the sum of (i) 7% of
19 the taxpayer's net income for the period prior to January
20 1, 2015, as calculated under Section 202.5, and (ii) 5.25%
21 of the taxpayer's net income for the period after December
22 31, 2014, as calculated under Section 202.5.
23 (12) In the case of a corporation, for taxable years
24 beginning on or after January 1, 2015, and ending prior to
25 July 1, 2017, an amount equal to 5.25% of the taxpayer's
26 net income for the taxable year.

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1 (13) In the case of a corporation, for taxable years
2 beginning prior to July 1, 2017, and ending after June 30,
3 2017, an amount equal to the sum of (i) 5.25% of the
4 taxpayer's net income for the period prior to July 1, 2017,
5 as calculated under Section 202.5, and (ii) 7% of the
6 taxpayer's net income for the period after June 30, 2017,
7 as calculated under Section 202.5.
8 (14) In the case of a corporation, for taxable years
9 beginning on or after July 1, 2017, an amount equal to 7%
10 of the taxpayer's net income for the taxable year.
11 The rates under this subsection (b) are subject to the
12provisions of Section 201.5.
13 (c) Personal Property Tax Replacement Income Tax.
14Beginning on July 1, 1979 and thereafter, in addition to such
15income tax, there is also hereby imposed the Personal Property
16Tax Replacement Income Tax measured by net income on every
17corporation (including Subchapter S corporations), partnership
18and trust, for each taxable year ending after June 30, 1979.
19Such taxes are imposed on the privilege of earning or receiving
20income in or as a resident of this State. The Personal Property
21Tax Replacement Income Tax shall be in addition to the income
22tax imposed by subsections (a) and (b) of this Section and in
23addition to all other occupation or privilege taxes imposed by
24this State or by any municipal corporation or political
25subdivision thereof.
26 (d) Additional Personal Property Tax Replacement Income

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1Tax Rates. The personal property tax replacement income tax
2imposed by this subsection and subsection (c) of this Section
3in the case of a corporation, other than a Subchapter S
4corporation and except as adjusted by subsection (d-1), shall
5be an additional amount equal to 2.85% of such taxpayer's net
6income for the taxable year, except that beginning on January
71, 1981, and thereafter, the rate of 2.85% specified in this
8subsection shall be reduced to 2.5%, and in the case of a
9partnership, trust or a Subchapter S corporation shall be an
10additional amount equal to 1.5% of such taxpayer's net income
11for the taxable year.
12 (d-1) Rate reduction for certain foreign insurers. In the
13case of a foreign insurer, as defined by Section 35A-5 of the
14Illinois Insurance Code, whose state or country of domicile
15imposes on insurers domiciled in Illinois a retaliatory tax
16(excluding any insurer whose premiums from reinsurance assumed
17are 50% or more of its total insurance premiums as determined
18under paragraph (2) of subsection (b) of Section 304, except
19that for purposes of this determination premiums from
20reinsurance do not include premiums from inter-affiliate
21reinsurance arrangements), beginning with taxable years ending
22on or after December 31, 1999, the sum of the rates of tax
23imposed by subsections (b) and (d) shall be reduced (but not
24increased) to the rate at which the total amount of tax imposed
25under this Act, net of all credits allowed under this Act,
26shall equal (i) the total amount of tax that would be imposed

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1on the foreign insurer's net income allocable to Illinois for
2the taxable year by such foreign insurer's state or country of
3domicile if that net income were subject to all income taxes
4and taxes measured by net income imposed by such foreign
5insurer's state or country of domicile, net of all credits
6allowed or (ii) a rate of zero if no such tax is imposed on such
7income by the foreign insurer's state of domicile. For the
8purposes of this subsection (d-1), an inter-affiliate includes
9a mutual insurer under common management.
10 (1) For the purposes of subsection (d-1), in no event
11 shall the sum of the rates of tax imposed by subsections
12 (b) and (d) be reduced below the rate at which the sum of:
13 (A) the total amount of tax imposed on such foreign
14 insurer under this Act for a taxable year, net of all
15 credits allowed under this Act, plus
16 (B) the privilege tax imposed by Section 409 of the
17 Illinois Insurance Code, the fire insurance company
18 tax imposed by Section 12 of the Fire Investigation
19 Act, and the fire department taxes imposed under
20 Section 11-10-1 of the Illinois Municipal Code,
21 equals 1.25% for taxable years ending prior to December 31,
22 2003, or 1.75% for taxable years ending on or after
23 December 31, 2003, of the net taxable premiums written for
24 the taxable year, as described by subsection (1) of Section
25 409 of the Illinois Insurance Code. This paragraph will in
26 no event increase the rates imposed under subsections (b)

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1 and (d).
2 (2) Any reduction in the rates of tax imposed by this
3 subsection shall be applied first against the rates imposed
4 by subsection (b) and only after the tax imposed by
5 subsection (a) net of all credits allowed under this
6 Section other than the credit allowed under subsection (i)
7 has been reduced to zero, against the rates imposed by
8 subsection (d).
9 This subsection (d-1) is exempt from the provisions of
10Section 250.
11 (e) Investment credit. A taxpayer shall be allowed a credit
12against the Personal Property Tax Replacement Income Tax for
13investment in qualified property.
14 (1) A taxpayer shall be allowed a credit equal to .5%
15 of the basis of qualified property placed in service during
16 the taxable year, provided such property is placed in
17 service on or after July 1, 1984. There shall be allowed an
18 additional credit equal to .5% of the basis of qualified
19 property placed in service during the taxable year,
20 provided such property is placed in service on or after
21 July 1, 1986, and the taxpayer's base employment within
22 Illinois has increased by 1% or more over the preceding
23 year as determined by the taxpayer's employment records
24 filed with the Illinois Department of Employment Security.
25 Taxpayers who are new to Illinois shall be deemed to have
26 met the 1% growth in base employment for the first year in

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1 which they file employment records with the Illinois
2 Department of Employment Security. The provisions added to
3 this Section by Public Act 85-1200 (and restored by Public
4 Act 87-895) shall be construed as declaratory of existing
5 law and not as a new enactment. If, in any year, the
6 increase in base employment within Illinois over the
7 preceding year is less than 1%, the additional credit shall
8 be limited to that percentage times a fraction, the
9 numerator of which is .5% and the denominator of which is
10 1%, but shall not exceed .5%. The investment credit shall
11 not be allowed to the extent that it would reduce a
12 taxpayer's liability in any tax year below zero, nor may
13 any credit for qualified property be allowed for any year
14 other than the year in which the property was placed in
15 service in Illinois. For tax years ending on or after
16 December 31, 1987, and on or before December 31, 1988, the
17 credit shall be allowed for the tax year in which the
18 property is placed in service, or, if the amount of the
19 credit exceeds the tax liability for that year, whether it
20 exceeds the original liability or the liability as later
21 amended, such excess may be carried forward and applied to
22 the tax liability of the 5 taxable years following the
23 excess credit years if the taxpayer (i) makes investments
24 which cause the creation of a minimum of 2,000 full-time
25 equivalent jobs in Illinois, (ii) is located in an
26 enterprise zone established pursuant to the Illinois

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1 Enterprise Zone Act and (iii) is certified by the
2 Department of Commerce and Community Affairs (now
3 Department of Commerce and Economic Opportunity) as
4 complying with the requirements specified in clause (i) and
5 (ii) by July 1, 1986. The Department of Commerce and
6 Community Affairs (now Department of Commerce and Economic
7 Opportunity) shall notify the Department of Revenue of all
8 such certifications immediately. For tax years ending
9 after December 31, 1988, the credit shall be allowed for
10 the tax year in which the property is placed in service,
11 or, if the amount of the credit exceeds the tax liability
12 for that year, whether it exceeds the original liability or
13 the liability as later amended, such excess may be carried
14 forward and applied to the tax liability of the 5 taxable
15 years following the excess credit years. The credit shall
16 be applied to the earliest year for which there is a
17 liability. If there is credit from more than one tax year
18 that is available to offset a liability, earlier credit
19 shall be applied first.
20 (2) The term "qualified property" means property
21 which:
22 (A) is tangible, whether new or used, including
23 buildings and structural components of buildings and
24 signs that are real property, but not including land or
25 improvements to real property that are not a structural
26 component of a building such as landscaping, sewer

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1 lines, local access roads, fencing, parking lots, and
2 other appurtenances;
3 (B) is depreciable pursuant to Section 167 of the
4 Internal Revenue Code, except that "3-year property"
5 as defined in Section 168(c)(2)(A) of that Code is not
6 eligible for the credit provided by this subsection
7 (e);
8 (C) is acquired by purchase as defined in Section
9 179(d) of the Internal Revenue Code;
10 (D) is used in Illinois by a taxpayer who is
11 primarily engaged in manufacturing, or in mining coal
12 or fluorite, or in retailing, or was placed in service
13 on or after July 1, 2006 in a River Edge Redevelopment
14 Zone established pursuant to the River Edge
15 Redevelopment Zone Act; and
16 (E) has not previously been used in Illinois in
17 such a manner and by such a person as would qualify for
18 the credit provided by this subsection (e) or
19 subsection (f).
20 (3) For purposes of this subsection (e),
21 "manufacturing" means the material staging and production
22 of tangible personal property by procedures commonly
23 regarded as manufacturing, processing, fabrication, or
24 assembling which changes some existing material into new
25 shapes, new qualities, or new combinations. For purposes of
26 this subsection (e) the term "mining" shall have the same

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1 meaning as the term "mining" in Section 613(c) of the
2 Internal Revenue Code. For purposes of this subsection (e),
3 the term "retailing" means the sale of tangible personal
4 property for use or consumption and not for resale, or
5 services rendered in conjunction with the sale of tangible
6 personal property for use or consumption and not for
7 resale. For purposes of this subsection (e), "tangible
8 personal property" has the same meaning as when that term
9 is used in the Retailers' Occupation Tax Act, and, for
10 taxable years ending after December 31, 2008, does not
11 include the generation, transmission, or distribution of
12 electricity.
13 (4) The basis of qualified property shall be the basis
14 used to compute the depreciation deduction for federal
15 income tax purposes.
16 (5) If the basis of the property for federal income tax
17 depreciation purposes is increased after it has been placed
18 in service in Illinois by the taxpayer, the amount of such
19 increase shall be deemed property placed in service on the
20 date of such increase in basis.
21 (6) The term "placed in service" shall have the same
22 meaning as under Section 46 of the Internal Revenue Code.
23 (7) If during any taxable year, any property ceases to
24 be qualified property in the hands of the taxpayer within
25 48 months after being placed in service, or the situs of
26 any qualified property is moved outside Illinois within 48

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1 months after being placed in service, the Personal Property
2 Tax Replacement Income Tax for such taxable year shall be
3 increased. Such increase shall be determined by (i)
4 recomputing the investment credit which would have been
5 allowed for the year in which credit for such property was
6 originally allowed by eliminating such property from such
7 computation and, (ii) subtracting such recomputed credit
8 from the amount of credit previously allowed. For the
9 purposes of this paragraph (7), a reduction of the basis of
10 qualified property resulting from a redetermination of the
11 purchase price shall be deemed a disposition of qualified
12 property to the extent of such reduction.
13 (8) Unless the investment credit is extended by law,
14 the basis of qualified property shall not include costs
15 incurred after December 31, 2018, except for costs incurred
16 pursuant to a binding contract entered into on or before
17 December 31, 2018.
18 (9) Each taxable year ending before December 31, 2000,
19 a partnership may elect to pass through to its partners the
20 credits to which the partnership is entitled under this
21 subsection (e) for the taxable year. A partner may use the
22 credit allocated to him or her under this paragraph only
23 against the tax imposed in subsections (c) and (d) of this
24 Section. If the partnership makes that election, those
25 credits shall be allocated among the partners in the
26 partnership in accordance with the rules set forth in

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1 Section 704(b) of the Internal Revenue Code, and the rules
2 promulgated under that Section, and the allocated amount of
3 the credits shall be allowed to the partners for that
4 taxable year. The partnership shall make this election on
5 its Personal Property Tax Replacement Income Tax return for
6 that taxable year. The election to pass through the credits
7 shall be irrevocable.
8 For taxable years ending on or after December 31, 2000,
9 a partner that qualifies its partnership for a subtraction
10 under subparagraph (I) of paragraph (2) of subsection (d)
11 of Section 203 or a shareholder that qualifies a Subchapter
12 S corporation for a subtraction under subparagraph (S) of
13 paragraph (2) of subsection (b) of Section 203 shall be
14 allowed a credit under this subsection (e) equal to its
15 share of the credit earned under this subsection (e) during
16 the taxable year by the partnership or Subchapter S
17 corporation, determined in accordance with the
18 determination of income and distributive share of income
19 under Sections 702 and 704 and Subchapter S of the Internal
20 Revenue Code. This paragraph is exempt from the provisions
21 of Section 250.
22 (f) Investment credit; Enterprise Zone; River Edge
23Redevelopment Zone.
24 (1) A taxpayer shall be allowed a credit against the
25 tax imposed by subsections (a) and (b) of this Section for
26 investment in qualified property which is placed in service

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1 in an Enterprise Zone created pursuant to the Illinois
2 Enterprise Zone Act or, for property placed in service on
3 or after July 1, 2006, a River Edge Redevelopment Zone
4 established pursuant to the River Edge Redevelopment Zone
5 Act. For partners, shareholders of Subchapter S
6 corporations, and owners of limited liability companies,
7 if the liability company is treated as a partnership for
8 purposes of federal and State income taxation, there shall
9 be allowed a credit under this subsection (f) to be
10 determined in accordance with the determination of income
11 and distributive share of income under Sections 702 and 704
12 and Subchapter S of the Internal Revenue Code. The credit
13 shall be .5% of the basis for such property. The credit
14 shall be available only in the taxable year in which the
15 property is placed in service in the Enterprise Zone or
16 River Edge Redevelopment Zone and shall not be allowed to
17 the extent that it would reduce a taxpayer's liability for
18 the tax imposed by subsections (a) and (b) of this Section
19 to below zero. For tax years ending on or after December
20 31, 1985, the credit shall be allowed for the tax year in
21 which the property is placed in service, or, if the amount
22 of the credit exceeds the tax liability for that year,
23 whether it exceeds the original liability or the liability
24 as later amended, such excess may be carried forward and
25 applied to the tax liability of the 5 taxable years
26 following the excess credit year. The credit shall be

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1 applied to the earliest year for which there is a
2 liability. If there is credit from more than one tax year
3 that is available to offset a liability, the credit
4 accruing first in time shall be applied first.
5 (2) The term qualified property means property which:
6 (A) is tangible, whether new or used, including
7 buildings and structural components of buildings;
8 (B) is depreciable pursuant to Section 167 of the
9 Internal Revenue Code, except that "3-year property"
10 as defined in Section 168(c)(2)(A) of that Code is not
11 eligible for the credit provided by this subsection
12 (f);
13 (C) is acquired by purchase as defined in Section
14 179(d) of the Internal Revenue Code;
15 (D) is used in the Enterprise Zone or River Edge
16 Redevelopment Zone by the taxpayer; and
17 (E) has not been previously used in Illinois in
18 such a manner and by such a person as would qualify for
19 the credit provided by this subsection (f) or
20 subsection (e).
21 (3) The basis of qualified property shall be the basis
22 used to compute the depreciation deduction for federal
23 income tax purposes.
24 (4) If the basis of the property for federal income tax
25 depreciation purposes is increased after it has been placed
26 in service in the Enterprise Zone or River Edge

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1 Redevelopment Zone by the taxpayer, the amount of such
2 increase shall be deemed property placed in service on the
3 date of such increase in basis.
4 (5) The term "placed in service" shall have the same
5 meaning as under Section 46 of the Internal Revenue Code.
6 (6) If during any taxable year, any property ceases to
7 be qualified property in the hands of the taxpayer within
8 48 months after being placed in service, or the situs of
9 any qualified property is moved outside the Enterprise Zone
10 or River Edge Redevelopment Zone within 48 months after
11 being placed in service, the tax imposed under subsections
12 (a) and (b) of this Section for such taxable year shall be
13 increased. Such increase shall be determined by (i)
14 recomputing the investment credit which would have been
15 allowed for the year in which credit for such property was
16 originally allowed by eliminating such property from such
17 computation, and (ii) subtracting such recomputed credit
18 from the amount of credit previously allowed. For the
19 purposes of this paragraph (6), a reduction of the basis of
20 qualified property resulting from a redetermination of the
21 purchase price shall be deemed a disposition of qualified
22 property to the extent of such reduction.
23 (7) There shall be allowed an additional credit equal
24 to 0.5% of the basis of qualified property placed in
25 service during the taxable year in a River Edge
26 Redevelopment Zone, provided such property is placed in

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1 service on or after July 1, 2006, and the taxpayer's base
2 employment within Illinois has increased by 1% or more over
3 the preceding year as determined by the taxpayer's
4 employment records filed with the Illinois Department of
5 Employment Security. Taxpayers who are new to Illinois
6 shall be deemed to have met the 1% growth in base
7 employment for the first year in which they file employment
8 records with the Illinois Department of Employment
9 Security. If, in any year, the increase in base employment
10 within Illinois over the preceding year is less than 1%,
11 the additional credit shall be limited to that percentage
12 times a fraction, the numerator of which is 0.5% and the
13 denominator of which is 1%, but shall not exceed 0.5%.
14 (g) (Blank).
15 (h) Investment credit; High Impact Business.
16 (1) Subject to subsections (b) and (b-5) of Section 5.5
17 of the Illinois Enterprise Zone Act, a taxpayer shall be
18 allowed a credit against the tax imposed by subsections (a)
19 and (b) of this Section for investment in qualified
20 property which is placed in service by a Department of
21 Commerce and Economic Opportunity designated High Impact
22 Business. The credit shall be .5% of the basis for such
23 property. The credit shall not be available (i) until the
24 minimum investments in qualified property set forth in
25 subdivision (a)(3)(A) of Section 5.5 of the Illinois
26 Enterprise Zone Act have been satisfied or (ii) until the

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1 time authorized in subsection (b-5) of the Illinois
2 Enterprise Zone Act for entities designated as High Impact
3 Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
4 (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
5 Act, and shall not be allowed to the extent that it would
6 reduce a taxpayer's liability for the tax imposed by
7 subsections (a) and (b) of this Section to below zero. The
8 credit applicable to such investments shall be taken in the
9 taxable year in which such investments have been completed.
10 The credit for additional investments beyond the minimum
11 investment by a designated high impact business authorized
12 under subdivision (a)(3)(A) of Section 5.5 of the Illinois
13 Enterprise Zone Act shall be available only in the taxable
14 year in which the property is placed in service and shall
15 not be allowed to the extent that it would reduce a
16 taxpayer's liability for the tax imposed by subsections (a)
17 and (b) of this Section to below zero. For tax years ending
18 on or after December 31, 1987, the credit shall be allowed
19 for the tax year in which the property is placed in
20 service, or, if the amount of the credit exceeds the tax
21 liability for that year, whether it exceeds the original
22 liability or the liability as later amended, such excess
23 may be carried forward and applied to the tax liability of
24 the 5 taxable years following the excess credit year. The
25 credit shall be applied to the earliest year for which
26 there is a liability. If there is credit from more than one

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1 tax year that is available to offset a liability, the
2 credit accruing first in time shall be applied first.
3 Changes made in this subdivision (h)(1) by Public Act
4 88-670 restore changes made by Public Act 85-1182 and
5 reflect existing law.
6 (2) The term qualified property means property which:
7 (A) is tangible, whether new or used, including
8 buildings and structural components of buildings;
9 (B) is depreciable pursuant to Section 167 of the
10 Internal Revenue Code, except that "3-year property"
11 as defined in Section 168(c)(2)(A) of that Code is not
12 eligible for the credit provided by this subsection
13 (h);
14 (C) is acquired by purchase as defined in Section
15 179(d) of the Internal Revenue Code; and
16 (D) is not eligible for the Enterprise Zone
17 Investment Credit provided by subsection (f) of this
18 Section.
19 (3) The basis of qualified property shall be the basis
20 used to compute the depreciation deduction for federal
21 income tax purposes.
22 (4) If the basis of the property for federal income tax
23 depreciation purposes is increased after it has been placed
24 in service in a federally designated Foreign Trade Zone or
25 Sub-Zone located in Illinois by the taxpayer, the amount of
26 such increase shall be deemed property placed in service on

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1 the date of such increase in basis.
2 (5) The term "placed in service" shall have the same
3 meaning as under Section 46 of the Internal Revenue Code.
4 (6) If during any taxable year ending on or before
5 December 31, 1996, any property ceases to be qualified
6 property in the hands of the taxpayer within 48 months
7 after being placed in service, or the situs of any
8 qualified property is moved outside Illinois within 48
9 months after being placed in service, the tax imposed under
10 subsections (a) and (b) of this Section for such taxable
11 year shall be increased. Such increase shall be determined
12 by (i) recomputing the investment credit which would have
13 been allowed for the year in which credit for such property
14 was originally allowed by eliminating such property from
15 such computation, and (ii) subtracting such recomputed
16 credit from the amount of credit previously allowed. For
17 the purposes of this paragraph (6), a reduction of the
18 basis of qualified property resulting from a
19 redetermination of the purchase price shall be deemed a
20 disposition of qualified property to the extent of such
21 reduction.
22 (7) Beginning with tax years ending after December 31,
23 1996, if a taxpayer qualifies for the credit under this
24 subsection (h) and thereby is granted a tax abatement and
25 the taxpayer relocates its entire facility in violation of
26 the explicit terms and length of the contract under Section

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1 18-183 of the Property Tax Code, the tax imposed under
2 subsections (a) and (b) of this Section shall be increased
3 for the taxable year in which the taxpayer relocated its
4 facility by an amount equal to the amount of credit
5 received by the taxpayer under this subsection (h).
6 (i) Credit for Personal Property Tax Replacement Income
7Tax. For tax years ending prior to December 31, 2003, a credit
8shall be allowed against the tax imposed by subsections (a) and
9(b) of this Section for the tax imposed by subsections (c) and
10(d) of this Section. This credit shall be computed by
11multiplying the tax imposed by subsections (c) and (d) of this
12Section by a fraction, the numerator of which is base income
13allocable to Illinois and the denominator of which is Illinois
14base income, and further multiplying the product by the tax
15rate imposed by subsections (a) and (b) of this Section.
16 Any credit earned on or after December 31, 1986 under this
17subsection which is unused in the year the credit is computed
18because it exceeds the tax liability imposed by subsections (a)
19and (b) for that year (whether it exceeds the original
20liability or the liability as later amended) may be carried
21forward and applied to the tax liability imposed by subsections
22(a) and (b) of the 5 taxable years following the excess credit
23year, provided that no credit may be carried forward to any
24year ending on or after December 31, 2003. This credit shall be
25applied first to the earliest year for which there is a
26liability. If there is a credit under this subsection from more

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1than one tax year that is available to offset a liability the
2earliest credit arising under this subsection shall be applied
3first.
4 If, during any taxable year ending on or after December 31,
51986, the tax imposed by subsections (c) and (d) of this
6Section for which a taxpayer has claimed a credit under this
7subsection (i) is reduced, the amount of credit for such tax
8shall also be reduced. Such reduction shall be determined by
9recomputing the credit to take into account the reduced tax
10imposed by subsections (c) and (d). If any portion of the
11reduced amount of credit has been carried to a different
12taxable year, an amended return shall be filed for such taxable
13year to reduce the amount of credit claimed.
14 (j) Training expense credit. Beginning with tax years
15ending on or after December 31, 1986 and prior to December 31,
162003, a taxpayer shall be allowed a credit against the tax
17imposed by subsections (a) and (b) under this Section for all
18amounts paid or accrued, on behalf of all persons employed by
19the taxpayer in Illinois or Illinois residents employed outside
20of Illinois by a taxpayer, for educational or vocational
21training in semi-technical or technical fields or semi-skilled
22or skilled fields, which were deducted from gross income in the
23computation of taxable income. The credit against the tax
24imposed by subsections (a) and (b) shall be 1.6% of such
25training expenses. For partners, shareholders of subchapter S
26corporations, and owners of limited liability companies, if the

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1liability company is treated as a partnership for purposes of
2federal and State income taxation, there shall be allowed a
3credit under this subsection (j) to be determined in accordance
4with the determination of income and distributive share of
5income under Sections 702 and 704 and subchapter S of the
6Internal Revenue Code.
7 Any credit allowed under this subsection which is unused in
8the year the credit is earned may be carried forward to each of
9the 5 taxable years following the year for which the credit is
10first computed until it is used. This credit shall be applied
11first to the earliest year for which there is a liability. If
12there is a credit under this subsection from more than one tax
13year that is available to offset a liability the earliest
14credit arising under this subsection shall be applied first. No
15carryforward credit may be claimed in any tax year ending on or
16after December 31, 2003.
17 (k) Research and development credit. For tax years ending
18after July 1, 1990 and prior to December 31, 2003, and
19beginning again for tax years ending on or after December 31,
202004, and ending prior to January 1, 2027 January 1, 2022, a
21taxpayer shall be allowed a credit against the tax imposed by
22subsections (a) and (b) of this Section for increasing research
23activities in this State. The credit allowed against the tax
24imposed by subsections (a) and (b) shall be equal to 6 1/2% of
25the qualifying expenditures for increasing research activities
26in this State. For partners, shareholders of subchapter S

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1corporations, and owners of limited liability companies, if the
2liability company is treated as a partnership for purposes of
3federal and State income taxation, there shall be allowed a
4credit under this subsection to be determined in accordance
5with the determination of income and distributive share of
6income under Sections 702 and 704 and subchapter S of the
7Internal Revenue Code.
8 For purposes of this subsection, "qualifying expenditures"
9means the qualifying expenditures as defined for the federal
10credit for increasing research activities which would be
11allowable under Section 41 of the Internal Revenue Code and
12which are conducted in this State, "qualifying expenditures for
13increasing research activities in this State" means the excess
14of qualifying expenditures for the taxable year in which
15incurred over qualifying expenditures for the base period,
16"qualifying expenditures for the base period" means the average
17of the qualifying expenditures for each year in the base
18period, and "base period" means the 3 taxable years immediately
19preceding the taxable year for which the determination is being
20made.
21 Any credit in excess of the tax liability for the taxable
22year may be carried forward. A taxpayer may elect to have the
23unused credit shown on its final completed return carried over
24as a credit against the tax liability for the following 5
25taxable years or until it has been fully used, whichever occurs
26first; provided that no credit earned in a tax year ending

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1prior to December 31, 2003 may be carried forward to any year
2ending on or after December 31, 2003.
3 If an unused credit is carried forward to a given year from
42 or more earlier years, that credit arising in the earliest
5year will be applied first against the tax liability for the
6given year. If a tax liability for the given year still
7remains, the credit from the next earliest year will then be
8applied, and so on, until all credits have been used or no tax
9liability for the given year remains. Any remaining unused
10credit or credits then will be carried forward to the next
11following year in which a tax liability is incurred, except
12that no credit can be carried forward to a year which is more
13than 5 years after the year in which the expense for which the
14credit is given was incurred.
15 No inference shall be drawn from this amendatory Act of the
1691st General Assembly in construing this Section for taxable
17years beginning before January 1, 1999.
18 It is the intent of the General Assembly that the research
19and development credit under this subsection (k) shall apply
20continuously for all tax years ending on or after December 31,
212004 and ending prior to January 1, 2027 January 1, 2022,
22including, but not limited to, the period beginning on January
231, 2016 and ending on the effective date of this amendatory Act
24of the 100th General Assembly. All actions taken in reliance on
25the continuation of the credit under this subsection (k) by any
26taxpayer are hereby validated.

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1 (l) Environmental Remediation Tax Credit.
2 (i) For tax years ending after December 31, 1997 and on
3 or before December 31, 2001, a taxpayer shall be allowed a
4 credit against the tax imposed by subsections (a) and (b)
5 of this Section for certain amounts paid for unreimbursed
6 eligible remediation costs, as specified in this
7 subsection. For purposes of this Section, "unreimbursed
8 eligible remediation costs" means costs approved by the
9 Illinois Environmental Protection Agency ("Agency") under
10 Section 58.14 of the Environmental Protection Act that were
11 paid in performing environmental remediation at a site for
12 which a No Further Remediation Letter was issued by the
13 Agency and recorded under Section 58.10 of the
14 Environmental Protection Act. The credit must be claimed
15 for the taxable year in which Agency approval of the
16 eligible remediation costs is granted. The credit is not
17 available to any taxpayer if the taxpayer or any related
18 party caused or contributed to, in any material respect, a
19 release of regulated substances on, in, or under the site
20 that was identified and addressed by the remedial action
21 pursuant to the Site Remediation Program of the
22 Environmental Protection Act. After the Pollution Control
23 Board rules are adopted pursuant to the Illinois
24 Administrative Procedure Act for the administration and
25 enforcement of Section 58.9 of the Environmental
26 Protection Act, determinations as to credit availability

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1 for purposes of this Section shall be made consistent with
2 those rules. For purposes of this Section, "taxpayer"
3 includes a person whose tax attributes the taxpayer has
4 succeeded to under Section 381 of the Internal Revenue Code
5 and "related party" includes the persons disallowed a
6 deduction for losses by paragraphs (b), (c), and (f)(1) of
7 Section 267 of the Internal Revenue Code by virtue of being
8 a related taxpayer, as well as any of its partners. The
9 credit allowed against the tax imposed by subsections (a)
10 and (b) shall be equal to 25% of the unreimbursed eligible
11 remediation costs in excess of $100,000 per site, except
12 that the $100,000 threshold shall not apply to any site
13 contained in an enterprise zone as determined by the
14 Department of Commerce and Community Affairs (now
15 Department of Commerce and Economic Opportunity). The
16 total credit allowed shall not exceed $40,000 per year with
17 a maximum total of $150,000 per site. For partners and
18 shareholders of subchapter S corporations, there shall be
19 allowed a credit under this subsection to be determined in
20 accordance with the determination of income and
21 distributive share of income under Sections 702 and 704 and
22 subchapter S of the Internal Revenue Code.
23 (ii) A credit allowed under this subsection that is
24 unused in the year the credit is earned may be carried
25 forward to each of the 5 taxable years following the year
26 for which the credit is first earned until it is used. The

SB1591 Enrolled- 29 -LRB101 08762 HLH 53849 b
1 term "unused credit" does not include any amounts of
2 unreimbursed eligible remediation costs in excess of the
3 maximum credit per site authorized under paragraph (i).
4 This credit shall be applied first to the earliest year for
5 which there is a liability. If there is a credit under this
6 subsection from more than one tax year that is available to
7 offset a liability, the earliest credit arising under this
8 subsection shall be applied first. A credit allowed under
9 this subsection may be sold to a buyer as part of a sale of
10 all or part of the remediation site for which the credit
11 was granted. The purchaser of a remediation site and the
12 tax credit shall succeed to the unused credit and remaining
13 carry-forward period of the seller. To perfect the
14 transfer, the assignor shall record the transfer in the
15 chain of title for the site and provide written notice to
16 the Director of the Illinois Department of Revenue of the
17 assignor's intent to sell the remediation site and the
18 amount of the tax credit to be transferred as a portion of
19 the sale. In no event may a credit be transferred to any
20 taxpayer if the taxpayer or a related party would not be
21 eligible under the provisions of subsection (i).
22 (iii) For purposes of this Section, the term "site"
23 shall have the same meaning as under Section 58.2 of the
24 Environmental Protection Act.
25 (m) Education expense credit. Beginning with tax years
26ending after December 31, 1999, a taxpayer who is the custodian

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1of one or more qualifying pupils shall be allowed a credit
2against the tax imposed by subsections (a) and (b) of this
3Section for qualified education expenses incurred on behalf of
4the qualifying pupils. The credit shall be equal to 25% of
5qualified education expenses, but in no event may the total
6credit under this subsection claimed by a family that is the
7custodian of qualifying pupils exceed (i) $500 for tax years
8ending prior to December 31, 2017, and (ii) $750 for tax years
9ending on or after December 31, 2017. In no event shall a
10credit under this subsection reduce the taxpayer's liability
11under this Act to less than zero. Notwithstanding any other
12provision of law, for taxable years beginning on or after
13January 1, 2017, no taxpayer may claim a credit under this
14subsection (m) if the taxpayer's adjusted gross income for the
15taxable year exceeds (i) $500,000, in the case of spouses
16filing a joint federal tax return or (ii) $250,000, in the case
17of all other taxpayers. This subsection is exempt from the
18provisions of Section 250 of this Act.
19 For purposes of this subsection:
20 "Qualifying pupils" means individuals who (i) are
21residents of the State of Illinois, (ii) are under the age of
2221 at the close of the school year for which a credit is
23sought, and (iii) during the school year for which a credit is
24sought were full-time pupils enrolled in a kindergarten through
25twelfth grade education program at any school, as defined in
26this subsection.

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1 "Qualified education expense" means the amount incurred on
2behalf of a qualifying pupil in excess of $250 for tuition,
3book fees, and lab fees at the school in which the pupil is
4enrolled during the regular school year.
5 "School" means any public or nonpublic elementary or
6secondary school in Illinois that is in compliance with Title
7VI of the Civil Rights Act of 1964 and attendance at which
8satisfies the requirements of Section 26-1 of the School Code,
9except that nothing shall be construed to require a child to
10attend any particular public or nonpublic school to qualify for
11the credit under this Section.
12 "Custodian" means, with respect to qualifying pupils, an
13Illinois resident who is a parent, the parents, a legal
14guardian, or the legal guardians of the qualifying pupils.
15 (n) River Edge Redevelopment Zone site remediation tax
16credit.
17 (i) For tax years ending on or after December 31, 2006,
18 a taxpayer shall be allowed a credit against the tax
19 imposed by subsections (a) and (b) of this Section for
20 certain amounts paid for unreimbursed eligible remediation
21 costs, as specified in this subsection. For purposes of
22 this Section, "unreimbursed eligible remediation costs"
23 means costs approved by the Illinois Environmental
24 Protection Agency ("Agency") under Section 58.14a of the
25 Environmental Protection Act that were paid in performing
26 environmental remediation at a site within a River Edge

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1 Redevelopment Zone for which a No Further Remediation
2 Letter was issued by the Agency and recorded under Section
3 58.10 of the Environmental Protection Act. The credit must
4 be claimed for the taxable year in which Agency approval of
5 the eligible remediation costs is granted. The credit is
6 not available to any taxpayer if the taxpayer or any
7 related party caused or contributed to, in any material
8 respect, a release of regulated substances on, in, or under
9 the site that was identified and addressed by the remedial
10 action pursuant to the Site Remediation Program of the
11 Environmental Protection Act. Determinations as to credit
12 availability for purposes of this Section shall be made
13 consistent with rules adopted by the Pollution Control
14 Board pursuant to the Illinois Administrative Procedure
15 Act for the administration and enforcement of Section 58.9
16 of the Environmental Protection Act. For purposes of this
17 Section, "taxpayer" includes a person whose tax attributes
18 the taxpayer has succeeded to under Section 381 of the
19 Internal Revenue Code and "related party" includes the
20 persons disallowed a deduction for losses by paragraphs
21 (b), (c), and (f)(1) of Section 267 of the Internal Revenue
22 Code by virtue of being a related taxpayer, as well as any
23 of its partners. The credit allowed against the tax imposed
24 by subsections (a) and (b) shall be equal to 25% of the
25 unreimbursed eligible remediation costs in excess of
26 $100,000 per site.

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1 (ii) A credit allowed under this subsection that is
2 unused in the year the credit is earned may be carried
3 forward to each of the 5 taxable years following the year
4 for which the credit is first earned until it is used. This
5 credit shall be applied first to the earliest year for
6 which there is a liability. If there is a credit under this
7 subsection from more than one tax year that is available to
8 offset a liability, the earliest credit arising under this
9 subsection shall be applied first. A credit allowed under
10 this subsection may be sold to a buyer as part of a sale of
11 all or part of the remediation site for which the credit
12 was granted. The purchaser of a remediation site and the
13 tax credit shall succeed to the unused credit and remaining
14 carry-forward period of the seller. To perfect the
15 transfer, the assignor shall record the transfer in the
16 chain of title for the site and provide written notice to
17 the Director of the Illinois Department of Revenue of the
18 assignor's intent to sell the remediation site and the
19 amount of the tax credit to be transferred as a portion of
20 the sale. In no event may a credit be transferred to any
21 taxpayer if the taxpayer or a related party would not be
22 eligible under the provisions of subsection (i).
23 (iii) For purposes of this Section, the term "site"
24 shall have the same meaning as under Section 58.2 of the
25 Environmental Protection Act.
26 (o) For each of taxable years during the Compassionate Use

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1of Medical Cannabis Pilot Program, a surcharge is imposed on
2all taxpayers on income arising from the sale or exchange of
3capital assets, depreciable business property, real property
4used in the trade or business, and Section 197 intangibles of
5an organization registrant under the Compassionate Use of
6Medical Cannabis Pilot Program Act. The amount of the surcharge
7is equal to the amount of federal income tax liability for the
8taxable year attributable to those sales and exchanges. The
9surcharge imposed does not apply if:
10 (1) the medical cannabis cultivation center
11 registration, medical cannabis dispensary registration, or
12 the property of a registration is transferred as a result
13 of any of the following:
14 (A) bankruptcy, a receivership, or a debt
15 adjustment initiated by or against the initial
16 registration or the substantial owners of the initial
17 registration;
18 (B) cancellation, revocation, or termination of
19 any registration by the Illinois Department of Public
20 Health;
21 (C) a determination by the Illinois Department of
22 Public Health that transfer of the registration is in
23 the best interests of Illinois qualifying patients as
24 defined by the Compassionate Use of Medical Cannabis
25 Pilot Program Act;
26 (D) the death of an owner of the equity interest in

SB1591 Enrolled- 35 -LRB101 08762 HLH 53849 b
1 a registrant;
2 (E) the acquisition of a controlling interest in
3 the stock or substantially all of the assets of a
4 publicly traded company;
5 (F) a transfer by a parent company to a wholly
6 owned subsidiary; or
7 (G) the transfer or sale to or by one person to
8 another person where both persons were initial owners
9 of the registration when the registration was issued;
10 or
11 (2) the cannabis cultivation center registration,
12 medical cannabis dispensary registration, or the
13 controlling interest in a registrant's property is
14 transferred in a transaction to lineal descendants in which
15 no gain or loss is recognized or as a result of a
16 transaction in accordance with Section 351 of the Internal
17 Revenue Code in which no gain or loss is recognized.
18(Source: P.A. 100-22, eff. 7-6-17.)
19 (35 ILCS 5/229 new)
20 Sec. 229. Apprenticeship education expense credit.
21 (a) As used in this Section:
22 "Department" means the Department of Commerce and Economic
23Opportunity.
24 "Employer" means an Illinois taxpayer who is the employer
25of the qualifying apprentice.

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1 "Qualifying apprentice" means an individual who: (i) is a
2resident of the State of Illinois; (ii) is at least 16 years
3old at the close of the school year for which a credit is
4sought; (iii) during the school year for which a credit is
5sought, was a full-time apprentice enrolled in an
6apprenticeship program which is registered with the United
7States Department of Labor, Office of Apprenticeship; and (iv)
8is employed in Illinois by the taxpayer who is the employer.
9 "Qualified education expense" means the amount incurred on
10behalf of a qualifying apprentice not to exceed $3,500 for
11tuition, book fees, and lab fees at the school or community
12college in which the apprentice is enrolled during the regular
13school year.
14 "School" means any public or nonpublic secondary school in
15Illinois that is: (i) an institution of higher education that
16provides a program that leads to an industry-recognized
17postsecondary credential or degree; (ii) an entity that carries
18out programs registered under the federal National
19Apprenticeship Act; or (iii) another public or private provider
20of a program of training services, which may include a joint
21labor-management organization.
22 (b) For taxable years beginning on or after January 1,
232020, and beginning on or before January 1, 2025, the employer
24of one or more qualifying apprentices shall be allowed a credit
25against the tax imposed by subsections (a) and (b) of Section
26201 of the Illinois Income Tax Act for qualified education

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1expenses incurred on behalf of a qualifying apprentice. The
2credit shall be equal to 100% of the qualified education
3expenses, but in no event may the total credit amount awarded
4to a single taxpayer in a single taxable year exceed $3,500 per
5qualifying apprentice. A taxpayer shall be entitled to an
6additional $1,500 credit against the tax imposed by subsections
7(a) and (b) of Section 201 of the Illinois Income Tax Act if
8(i) the qualifying apprentice resides in an underserved area as
9defined in Section 5-5 of the Economic Development for a
10Growing Economy Tax Credit Act during the school year for which
11a credit is sought by an employer or (ii) the employer's
12principal place of business is located in an underserved area,
13as defined in Section 5-5 of the Economic Development for a
14Growing Economy Tax Credit Act. In no event shall a credit
15under this Section reduce the taxpayer's liability under this
16Act to less than zero. For partners, shareholders of Subchapter
17S corporations, and owners of limited liability companies, if
18the liability company is treated as a partnership for purposes
19of federal and State income taxation, there shall be allowed a
20credit under this Section to be determined in accordance with
21the determination of income and distributive share of income
22under Sections 702 and 704 and Subchapter S of the Internal
23Revenue Code.
24 (c) The Department shall implement a program to certify
25applicants for an apprenticeship credit under this Section.
26Upon satisfactory review, the Department shall issue a tax

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1credit certificate to an employer incurring costs on behalf of
2a qualifying apprentice stating the amount of the tax credit to
3which the employer is entitled. If the employer is seeking a
4tax credit for multiple qualifying apprentices, the Department
5may issue a single tax credit certificate that encompasses the
6aggregate total of tax credits for qualifying apprentices for a
7single employer.
8 (d) The Department, in addition to those powers granted
9under the Civil Administrative Code of Illinois, is granted and
10shall have all the powers necessary or convenient to carry out
11and effectuate the purposes and provisions of this Section,
12including, but not limited to, power and authority to:
13 (1) Adopt rules deemed necessary and appropriate for
14 the administration of this Section; establish forms for
15 applications, notifications, contracts, or any other
16 agreements; and accept applications at any time during the
17 year and require that all applications be submitted via the
18 Internet. The Department shall require that applications
19 be submitted in electronic form.
20 (2) Provide guidance and assistance to applicants
21 pursuant to the provisions of this Section and cooperate
22 with applicants to promote, foster, and support job
23 creation within the State.
24 (3) Enter into agreements and memoranda of
25 understanding for participation of and engage in
26 cooperation with agencies of the federal government, units

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1 of local government, universities, research foundations or
2 institutions, regional economic development corporations,
3 or other organizations for the purposes of this Section.
4 (4) Gather information and conduct inquiries, in the
5 manner and by the methods it deems desirable, including,
6 without limitation, gathering information with respect to
7 applicants for the purpose of making any designations or
8 certifications necessary or desirable or to gather
9 information in furtherance of the purposes of this Act.
10 (5) Establish, negotiate, and effectuate any term,
11 agreement, or other document with any person necessary or
12 appropriate to accomplish the purposes of this Section, and
13 consent, subject to the provisions of any agreement with
14 another party, to the modification or restructuring of any
15 agreement to which the Department is a party.
16 (6) Provide for sufficient personnel to permit
17 administration, staffing, operation, and related support
18 required to adequately discharge its duties and
19 responsibilities described in this Section from funds made
20 available through charges to applicants or from funds as
21 may be appropriated by the General Assembly for the
22 administration of this Section.
23 (7) Require applicants, upon written request, to issue
24 any necessary authorization to the appropriate federal,
25 State, or local authority or any other person for the
26 release to the Department of information requested by the

SB1591 Enrolled- 40 -LRB101 08762 HLH 53849 b
1 Department, including, but not be limited to, financial
2 reports, returns, or records relating to the applicant or
3 to the amount of credit allowable under this Section.
4 (8) Require that an applicant shall, at all times, keep
5 proper books of record and account in accordance with
6 generally accepted accounting principles consistently
7 applied, with the books, records, or papers related to the
8 agreement in the custody or control of the applicant open
9 for reasonable Department inspection and audits,
10 including, without limitation, the making of copies of the
11 books, records, or papers.
12 (9) Take whatever actions are necessary or appropriate
13 to protect the State's interest in the event of bankruptcy,
14 default, foreclosure, or noncompliance with the terms and
15 conditions of financial assistance or participation
16 required under this Section or any agreement entered into
17 under this Section, including the power to sell, dispose
18 of, lease, or rent, upon terms and conditions determined by
19 the Department to be appropriate, real or personal property
20 that the Department may recover as a result of these
21 actions.
22 (e) The Department, in consultation with the Department of
23Revenue, shall adopt rules to administer this Section. The
24aggregate amount of the tax credits that may be claimed under
25this Section for qualified education expenses incurred by an
26employer on behalf of a qualifying apprentice shall be limited

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1to $5,000,000 per calendar year. If applications for a greater
2amount are received, credits shall be allowed on a first-come
3first-served basis, based on the date on which each properly
4completed application for a certificate of eligibility is
5received by the Department. If more than one certificate is
6received on the same day, the credits will be awarded based on
7the time of submission for that particular day.
8 (f) An employer may not sell or otherwise transfer a credit
9awarded under this Section to another person or taxpayer.
10 (g) The employer shall provide the Department such
11information as the Department may require, including but not
12limited to: (i) the name, age, and taxpayer identification
13number of each qualifying apprentice employed by the taxpayer
14during the taxable year; (ii) the amount of qualified education
15expenses incurred with respect to each qualifying apprentice;
16and (iii) the name of the school at which the qualifying
17apprentice is enrolled and the qualified education expenses are
18incurred.
19 (h) On or before July 1 of each year, the Department shall
20report to the Governor and the General Assembly on the tax
21credit certificates awarded under this Section for the prior
22calendar year. The report must include:
23 (1) the name of each employer awarded or allocated a
24 credit;
25 (2) the number of qualifying apprentices for whom the
26 employer has incurred qualified education expenses;

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1 (3) the North American Industry Classification System
2 (NAICS) code applicable to each employer awarded or
3 allocated a credit;
4 (4) the amount of the credit awarded or allocated to
5 each employer;
6 (5) the total number of employers awarded or allocated
7 a credit;
8 (6) the total number of qualifying apprentices for whom
9 employers receiving credits under this Section incurred
10 qualified education expenses; and
11 (7) the average cost to the employer of all
12 apprenticeships receiving credits under this Section.
13 Section 99. Effective date. This Act takes effect upon
14becoming law.
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