Bill Text: IL SB3527 | 2017-2018 | 100th General Assembly | Enrolled
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Amends the Illinois Income Tax Act. Provides that taxpayers of a qualified historic structure located in a River Edge Redevelopment Zone shall be allowed a tax credit against certain provisions of the Illinois Insurance Code during a 48-month period. Provides that a taxpayer is required to provide a third-party cost certification regarding costs attributable to the rehabilitation of a historic building when the costs exceed $200,000. Defines "phased rehabilitation" and "placed in service". Amends the Illinois Insurance Code. Makes conforming changes. Effective immediately.
Spectrum: Slight Partisan Bill (Democrat 14-8)
Status: (Passed) 2018-07-26 - Public Act . . . . . . . . . 100-0629 [SB3527 Detail]
Download: Illinois-2017-SB3527-Enrolled.html
Bill Title: Amends the Illinois Income Tax Act. Provides that taxpayers of a qualified historic structure located in a River Edge Redevelopment Zone shall be allowed a tax credit against certain provisions of the Illinois Insurance Code during a 48-month period. Provides that a taxpayer is required to provide a third-party cost certification regarding costs attributable to the rehabilitation of a historic building when the costs exceed $200,000. Defines "phased rehabilitation" and "placed in service". Amends the Illinois Insurance Code. Makes conforming changes. Effective immediately.
Spectrum: Slight Partisan Bill (Democrat 14-8)
Status: (Passed) 2018-07-26 - Public Act . . . . . . . . . 100-0629 [SB3527 Detail]
Download: Illinois-2017-SB3527-Enrolled.html
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1 | AN ACT concerning revenue.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 1. Short title. This Act may be cited as the | ||||||
5 | Historic Preservation Tax Credit Act.
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6 | Section 5. Definitions. As used in this Act, unless the | ||||||
7 | context clearly indicates otherwise: | ||||||
8 | "Division" means the State Historic Preservation Office | ||||||
9 | within the Department of Natural Resources. | ||||||
10 | "Phased rehabilitation" means a project that is completed | ||||||
11 | in phases, as defined under Section 47 of the federal Internal | ||||||
12 | Revenue Code and pursuant to National Park Service regulations | ||||||
13 | at 36 C.F.R. 67. | ||||||
14 | "Placed in service" means the date when the property is | ||||||
15 | placed in a condition or state of readiness and availability | ||||||
16 | for a specifically assigned function as defined under Section | ||||||
17 | 47 of the federal Internal Revenue Code and federal Treasury | ||||||
18 | Regulation Sections 1.46 and 1.48. | ||||||
19 | "Qualified expenditures" means all the costs and expenses | ||||||
20 | defined as qualified rehabilitation expenditures under Section | ||||||
21 | 47 of the federal Internal Revenue Code that were incurred in | ||||||
22 | connection with a qualified historic structure. | ||||||
23 | "Qualified historic structure" means any structure that is |
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1 | located in Illinois and is defined as a certified historic | ||||||
2 | structure under Section 47 (c)(3) of the federal Internal | ||||||
3 | Revenue Code. | ||||||
4 | "Qualified rehabilitation plan" means a project that is | ||||||
5 | approved by the Department of Natural Resources and the | ||||||
6 | National Park Service as being consistent with the United | ||||||
7 | States Secretary of the Interior's Standards for | ||||||
8 | Rehabilitation. | ||||||
9 | "Qualified taxpayer" means the owner of the qualified | ||||||
10 | historic structure or any other person who may qualify for the | ||||||
11 | federal rehabilitation credit allowed by Section 47 of the | ||||||
12 | federal Internal Revenue Code. | ||||||
13 | "Recapture event" means any of the following events | ||||||
14 | occurring during the recapture period: | ||||||
15 | (1) failure to place in service the rehabilitated | ||||||
16 | portions of the qualified historic structure, or failure to | ||||||
17 | maintain the rehabilitated portions of the qualified | ||||||
18 | historic structure in service after they are placed in | ||||||
19 | service; provided that a recapture event under this | ||||||
20 | paragraph (1) shall not include a removal from service for | ||||||
21 | a reasonable period of time to conduct maintenance and | ||||||
22 | repairs that are reasonably necessary to protect the health | ||||||
23 | and safety of the public or to protect the structural | ||||||
24 | integrity of the qualified historic structure or a | ||||||
25 | neighboring structure; | ||||||
26 | (2) demolition or other alteration of the qualified |
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1 | historic structure in a manner that is inconsistent with | ||||||
2 | the qualified rehabilitation plan or the Secretary of the | ||||||
3 | Interior's Standards for Rehabilitation; | ||||||
4 | (3) disposition of the rehabilitated qualified | ||||||
5 | historic structure in whole or a proportional disposition | ||||||
6 | of a partnership interest therein, except as otherwise | ||||||
7 | permitted by this Section; or | ||||||
8 | (4) use of the qualified historic structure in a manner | ||||||
9 | that is inconsistent with the qualified rehabilitation | ||||||
10 | plan or that is otherwise inconsistent with the provisions | ||||||
11 | and intent of this Section. | ||||||
12 | A recapture event occurring in one taxable year shall be | ||||||
13 | deemed continuing to subsequent taxable years unless and until | ||||||
14 | corrected. | ||||||
15 | The following dispositions of a qualified historic | ||||||
16 | structure shall not be deemed to be a recapture event for | ||||||
17 | purposes of this Section: | ||||||
18 | (1) a transfer by reason of death; | ||||||
19 | (2) a transfer between spouses incident to divorce; | ||||||
20 | (3) a sale by and leaseback to an entity that, when the | ||||||
21 | rehabilitated portions of the qualified historic structure | ||||||
22 | are placed in service, will be a lessee of the qualified | ||||||
23 | historic structure, but only for so long as the entity | ||||||
24 | continues to be a lessee; and | ||||||
25 | (4) a mere change in the form of conducting the trade | ||||||
26 | or business by the owner (or, if applicable, the lessee) of |
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1 | the qualified historic structure, so long as the property | ||||||
2 | interest in such qualified historic structure is retained | ||||||
3 | in such trade or business and the owner or lessee retains a | ||||||
4 | substantial interest in such trade or business. | ||||||
5 | "Recapture period" means the 5-year period beginning on the | ||||||
6 | date that the qualified historic structure or rehabilitated | ||||||
7 | portions of the qualified historic structure are placed in | ||||||
8 | service. | ||||||
9 | "Substantial rehabilitation" means that the qualified | ||||||
10 | rehabilitation expenditures during the 24-month period | ||||||
11 | selected by the taxpayer at the time and in the manner | ||||||
12 | prescribed by rule and ending with or within the taxable year | ||||||
13 | exceed the greater of (i) the adjusted basis of the building | ||||||
14 | and its structural components or (ii) $5,000. The adjusted | ||||||
15 | basis of the building and its structural components shall be | ||||||
16 | determined as of the beginning of the first day of such | ||||||
17 | 24-month period or as of the beginning of the first day of the | ||||||
18 | holding period of the building, whichever is later. For | ||||||
19 | purposes of determining the adjusted basis, the determination | ||||||
20 | of the beginning of the holding period shall be made without | ||||||
21 | regard to any reconstruction by the taxpayer in connection with | ||||||
22 | the rehabilitation. In the case of any phased rehabilitation, | ||||||
23 | with phases set forth in architectural plans and specifications | ||||||
24 | completed before the rehabilitation begins, this definition | ||||||
25 | shall be applied by substituting "60-month period" for | ||||||
26 | "24-month period" wherever that term occurs in the definition.
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1 | Section 10. Allowable credit. | ||||||
2 | (a) To the extent authorized by this Act, for taxable years | ||||||
3 | beginning on or after January 1, 2019 and ending on or before | ||||||
4 | December 31, 2023, there shall be allowed a tax credit against | ||||||
5 | the tax imposed by subsections (a) and (b) of Section 201 of | ||||||
6 | the Illinois Income Tax Act in an aggregate amount equal to 25% | ||||||
7 | of qualified expenditures incurred by a qualified taxpayer | ||||||
8 | undertaking a qualified rehabilitation plan of a qualified | ||||||
9 | historic structure, provided that the total amount of such | ||||||
10 | expenditures must (i) equal $5,000 or more or (ii) exceed the | ||||||
11 | adjusted basis of the qualified historic structure on the first | ||||||
12 | day the qualified rehabilitation plan commenced. If the | ||||||
13 | qualified rehabilitation plan spans multiple years, the | ||||||
14 | aggregate credit for the entire project shall be allowed in the | ||||||
15 | last taxable year. | ||||||
16 | (b) To obtain a tax credit pursuant to this Section, the | ||||||
17 | taxpayer must apply with the Division. The Division shall | ||||||
18 | determine the amount of eligible rehabilitation expenditures | ||||||
19 | within 45 days after receipt of a complete application. The | ||||||
20 | taxpayer must provide to the Division a third-party cost | ||||||
21 | certification conducted by a certified public accountant | ||||||
22 | verifying (i) the qualified and non-qualified rehabilitation | ||||||
23 | expenses and (ii) that the qualified expenditures exceed the | ||||||
24 | adjusted basis of the qualified historic structure on the first | ||||||
25 | day the qualified rehabilitation plan commenced. The |
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1 | accountant shall provide appropriate review and testing of | ||||||
2 | invoices. The Division is authorized, but not required, to | ||||||
3 | accept this third-party cost certification to determine the | ||||||
4 | amount of qualified expenditures. The Division and the National | ||||||
5 | Park Service shall determine whether the rehabilitation is | ||||||
6 | consistent with the Standards of the Secretary of the United | ||||||
7 | States Department of the Interior. | ||||||
8 | (c) If the amount of any tax credit awarded under this Act | ||||||
9 | exceeds the qualified taxpayer's income tax liability for the | ||||||
10 | year in which the qualified rehabilitation plan was placed in | ||||||
11 | service, the excess amount may be carried forward for deduction | ||||||
12 | from the taxpayer's income tax liability in the next succeeding | ||||||
13 | year or years until the total amount of the credit has been | ||||||
14 | used, except that a credit may not be carried forward for | ||||||
15 | deduction after the tenth taxable year after the taxable year | ||||||
16 | in which the qualified rehabilitation plan was placed in | ||||||
17 | service. Upon completion and review of the project, the | ||||||
18 | Division shall issue a single certificate in the amount of the
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19 | eligible credits equal to 25% of the qualified expenditures | ||||||
20 | incurred during the eligible taxable years. At the time the | ||||||
21 | certificate is issued, an issuance fee up to the maximum amount | ||||||
22 | of 2% of the amount of the credits issued by the certificate | ||||||
23 | may be collected from the applicant to administer the Act. If | ||||||
24 | collected, this issuance fee shall be directed to the Division | ||||||
25 | Historic Property Administrative Fund or other such fund as | ||||||
26 | appropriate for use of the Division in the administration of |
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1 | the Historic Preservation Tax Credit Program. The taxpayer must | ||||||
2 | attach the certificate or legal documentation of her or his | ||||||
3 | proportional share of the certificate to the tax
return on | ||||||
4 | which the credits are to be claimed. The tax credit under this | ||||||
5 | Section may not reduce the taxpayer's liability to less than | ||||||
6 | zero. If the amount of the credit exceeds the tax liability for | ||||||
7 | the year, the excess credit may be carried forward and applied | ||||||
8 | to the tax liability of the 10 taxable years following the | ||||||
9 | excess credit year.
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10 | (d) If the taxpayer is (i) a corporation having an election | ||||||
11 | in effect under Subchapter S of the federal Internal Revenue | ||||||
12 | Code, (ii) a partnership, or (iii) a limited liability company, | ||||||
13 | the credit provided under this Act may be claimed by the | ||||||
14 | shareholders of the corporation, the partners of the | ||||||
15 | partnership, or the members of the limited liability company in | ||||||
16 | the same manner as those shareholders, partners, or members | ||||||
17 | account for their proportionate shares of the income or losses | ||||||
18 | of the corporation, partnership, or limited liability company, | ||||||
19 | or as provided in the bylaws or other executed agreement of the | ||||||
20 | corporation, partnership, or limited liability company. | ||||||
21 | Credits granted to a partnership, a limited liability company | ||||||
22 | taxed as a partnership, or other multiple owners of property | ||||||
23 | shall be passed through to the partners, members, or owners | ||||||
24 | respectively on a pro rata basis or pursuant to an executed | ||||||
25 | agreement among the partners, members, or owners documenting | ||||||
26 | any alternate distribution method. |
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1 | (e) If a recapture event occurs during the recapture period | ||||||
2 | with respect to a qualified historic structure, then for any | ||||||
3 | taxable year in which the credits are allowed as specified in | ||||||
4 | this Act, the tax under the applicable Section of this Act | ||||||
5 | shall be increased by applying the recapture percentage set | ||||||
6 | forth below to the tax decrease resulting from the application | ||||||
7 | of credits allowed under this Act to the taxable year in | ||||||
8 | question. | ||||||
9 | For the purposes of this subsection, the recapture | ||||||
10 | percentage shall be determined as follows: | ||||||
11 | (1) if the recapture event occurs within the first year | ||||||
12 | after commencement of the recapture period, then the | ||||||
13 | recapture percentage is 100%; | ||||||
14 | (2) if the recapture event occurs within the second | ||||||
15 | year after commencement of the recapture period, then the | ||||||
16 | recapture percentage is 80%; | ||||||
17 | (3) if the recapture event occurs within the third year | ||||||
18 | after commencement of the recapture period, then the | ||||||
19 | recapture percentage is 60%; | ||||||
20 | (4) if the recapture event occurs within the fourth | ||||||
21 | year after commencement of the recapture period, then the | ||||||
22 | recapture percentage is 40%; and | ||||||
23 | (5) if the recapture event occurs within the fifth year | ||||||
24 | after commencement of the recapture period, then the | ||||||
25 | recapture percentage is 20%.
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26 | In the case of any recapture event, the carryforwards under |
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1 | this Act shall be adjusted by reason of such event. | ||||||
2 | (d) The Division may adopt rules to implement this Section | ||||||
3 | in addition to the rules expressly authorized herein.
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4 | Section 20. Limitations, reporting, and monitoring. | ||||||
5 | (a) The Division shall award not more than an aggregate of | ||||||
6 | $15,000,000 in total annual tax credits pursuant to qualified | ||||||
7 | rehabilitation plans for qualified historic structures. The | ||||||
8 | Division shall award not more than $3,000,000 in tax credits | ||||||
9 | with regard to a single qualified rehabilitation plan. In | ||||||
10 | awarding tax credits under this Act, the Division must | ||||||
11 | prioritize projects that meet one or more of the following: | ||||||
12 | (1) the qualified historic structure is located in a | ||||||
13 | county that borders a State with a historic property | ||||||
14 | rehabilitation credit; | ||||||
15 | (2) the qualified historic structure was previously | ||||||
16 | owned by a federal, state, or local governmental entity; | ||||||
17 | (3) the qualified historic structure is located in a | ||||||
18 | census tract that has a median family income at or below | ||||||
19 | the State median family income; data from the most recent | ||||||
20 | 5-year estimate from the American Community Survey (ACS), | ||||||
21 | published by the U.S. Census Bureau, shall be used to | ||||||
22 | determine eligibility; | ||||||
23 | (4) the qualified rehabilitation plan includes in the | ||||||
24 | development partnership a Community Development Entity or | ||||||
25 | a low-profit (B Corporation) or not-for-profit |
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1 | organization, as defined by Section 501(c)(3) of the | ||||||
2 | Internal Revenue Code; or | ||||||
3 | (5) the qualified historic structure is located in an | ||||||
4 | area declared under an Emergency Declaration or Major | ||||||
5 | Disaster Declaration under the federal Robert T. Stafford | ||||||
6 | Disaster Relief and Emergency Assistance Act. | ||||||
7 | (b) The annual aggregate program allocation of $15,000,000 | ||||||
8 | set forth in subsection (a) shall be allocated by the Division, | ||||||
9 | in such proportion as determined by the Department, on a per | ||||||
10 | calendar basis twice in each year that the program is in | ||||||
11 | effect, provided that: (i) the amount initially allocated by | ||||||
12 | the Division for any one calendar application period shall not | ||||||
13 | exceed 65% of the total allowable amount and (ii) any portion | ||||||
14 | of the allocated allowable amount remaining unused as of the | ||||||
15 | end of any of the second calendar application period of a given | ||||||
16 | calendar year shall be rolled into and added to the total | ||||||
17 | allocated amount for the next available calendar year. The | ||||||
18 | qualified rehabilitation plan must meet a readiness test, as | ||||||
19 | defined in the rules created by the Division, in order for the | ||||||
20 | Applicant to qualify. Applicants that qualify under this Act | ||||||
21 | will be placed in a queue based on the date and time the | ||||||
22 | application is received until such time as the application | ||||||
23 | period total allowable amount is reached. Applicants must | ||||||
24 | reapply for each application period. | ||||||
25 | (c) On or before December 31, 2019,
and on or before | ||||||
26 | December 31 of each odd-numbered year thereafter through
2023, |
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1 | subject to appropriation and prior to equal disbursement to the | ||||||
2 | Division, moneys in the Historic Property Administrative Fund | ||||||
3 | shall be used, beginning at the end of the first fiscal year | ||||||
4 | after the effective date of this Act, to hire a qualified third | ||||||
5 | party to prepare a biennial report to assess the overall | ||||||
6 | effectiveness of this Act from the qualified rehabilitation | ||||||
7 | projects under this Act completed in that year and in previous | ||||||
8 | years. Baseline data of the metrics in the report shall be | ||||||
9 | collected at the initiation of a qualified rehabilitation | ||||||
10 | project. The overall economic impact shall include at least: | ||||||
11 | (1) the number of applications, project locations, and | ||||||
12 | proposed use of qualified historic structures; | ||||||
13 | (2) the amount of credits awarded and the number and | ||||||
14 | location of projects receiving credit allocations; | ||||||
15 | (3) the status of ongoing projects and projected | ||||||
16 | qualifying expenditures for ongoing projects;
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17 | (4) for completed projects, the total amount of | ||||||
18 | qualifying rehabilitation expenditures and non-qualifying | ||||||
19 | expenditures, the number of housing units created and the | ||||||
20 | number of housing units that qualify as affordable, and the | ||||||
21 | total square footage rehabilitated and developed; | ||||||
22 | (5) direct, indirect, and induced economic impacts; | ||||||
23 | (6) temporary, permanent, and construction jobs | ||||||
24 | created; and | ||||||
25 | (7) sales, income, and property tax generation before | ||||||
26 | construction, during construction, and after completion. |
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1 | The report to the General Assembly shall be filed with the | ||||||
2 | Clerk of the House of Representatives and the Secretary of the | ||||||
3 | Senate in electronic form only, in the manner that the Clerk | ||||||
4 | and the Secretary shall direct. | ||||||
5 | (d) Any time prior to issuance of a tax credit certificate, | ||||||
6 | the Director of the Division, the State Historic Preservation | ||||||
7 | Officer, or staff of the Division may, upon reasonable notice | ||||||
8 | to the project owner of not less than 3 business days, conduct | ||||||
9 | a site visit to the project to inspect and evaluate the | ||||||
10 | project. | ||||||
11 | (e) Any time prior to the issuance of a tax credit | ||||||
12 | certificate and for a period of 4 years following the effective | ||||||
13 | date of a project tax credit certificate, the Director may, | ||||||
14 | upon reasonable notice of not less than 30 calendar days, | ||||||
15 | request a status report from the Applicant consisting of | ||||||
16 | information and updates relevant to the status of the project. | ||||||
17 | Status reports shall not be requested more than twice yearly. | ||||||
18 | (f) In order to demonstrate sufficient evidence of | ||||||
19 | reviewable progress within 12 months after the date the | ||||||
20 | Applicant received notification of approval from the Division, | ||||||
21 | the Applicant shall provide all of the following: | ||||||
22 | (1) a viable financial plan which demonstrates by way | ||||||
23 | of an executed agreement that all financing has been | ||||||
24 | secured for the project; such financing shall include, but | ||||||
25 | not be limited to, equity investment as demonstrated by | ||||||
26 | letters of commitment from the owner of the property, |
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1 | investment partners, and equity investors; | ||||||
2 | (2) final construction drawings or approved building | ||||||
3 | permits that demonstrate the complete rehabilitation of | ||||||
4 | the full scope of the application; and | ||||||
5 | (3) all historic approvals, including all federal and | ||||||
6 | State rehabilitation documents required by the Division. | ||||||
7 | The Director shall review the submitted evidence and may | ||||||
8 | request additional documentation from the Applicant if | ||||||
9 | necessary. The Applicant will have 30 calendar days to provide | ||||||
10 | the information requested, otherwise the approval may be | ||||||
11 | rescinded at the discretion of the Director. | ||||||
12 | (g) In order to demonstrate sufficient evidence of | ||||||
13 | reviewable progress within 18 months after the date the | ||||||
14 | application received notification of approval from the | ||||||
15 | Division, the Applicant is required to provide detailed | ||||||
16 | evidence that the Applicant has secured and closed on financing | ||||||
17 | for the complete scope of rehabilitation for the project. To | ||||||
18 | demonstrate evidence that the Applicant has secured and closed | ||||||
19 | on financing, the Applicant will need to provide signed and | ||||||
20 | processed loan agreements, bank financing documents or other | ||||||
21 | legal and contractual evidence to demonstrate that adequate | ||||||
22 | financing is available to complete the project. The Director | ||||||
23 | shall review the submitted evidence and may request additional | ||||||
24 | documentation from the Applicant if necessary. The Applicant | ||||||
25 | will have 30 calendar days to provide the information | ||||||
26 | requested, otherwise the approval may be rescinded at the |
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1 | discretion of the Director. | ||||||
2 | If the Applicant fails to document reviewable progress | ||||||
3 | within 18 months of approval, the Director may notify the | ||||||
4 | Applicant that the application is rescinded. However, should | ||||||
5 | financing and construction be imminent, the Director may elect | ||||||
6 | to grant the Applicant no more than 5 months to close on | ||||||
7 | financing and commence construction. If the Applicant fails to | ||||||
8 | meet these conditions in the required timeframe, the Director | ||||||
9 | shall notify the Applicant that the application is rescinded. | ||||||
10 | Any such rescinded allocation shall be added to the aggregate | ||||||
11 | amount of credits available for allocation for the year in | ||||||
12 | which the forfeiture occurred. | ||||||
13 | The amount of the qualified expenditures identified in the | ||||||
14 | Applicant's certification of completion and reflected on the | ||||||
15 | Historic Preservation Tax Credit certificate issued by the | ||||||
16 | Director is subject to inspection, examination, and audit by | ||||||
17 | the Department of Revenue. | ||||||
18 | The Applicant shall establish and maintain for a period of | ||||||
19 | 4 years following the effective date on a project tax credit | ||||||
20 | certificate such records as required by the Director. Such | ||||||
21 | records include, but are not limited to, records documenting | ||||||
22 | project expenditures and compliance with the U.S. Secretary of | ||||||
23 | the Interior's Standards. The Applicant shall make such records | ||||||
24 | available for review and verification by the Director, the | ||||||
25 | State Historic Preservation Officer, the Department of | ||||||
26 | Revenue, or appropriate staff, as well as other appropriate |
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1 | State agencies. In the event the Director determines an | ||||||
2 | Applicant has submitted an annual report containing erroneous | ||||||
3 | information or data not supported by records established and | ||||||
4 | maintained under this Act, the Director may, after providing | ||||||
5 | notice, require the Applicant to resubmit corrected reports.
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6 | Section 25. Powers. The Division shall adopt rules for the | ||||||
7 | administration of this Act. The Division may enter into an | ||||||
8 | intergovernmental agreement with the Department of Commerce | ||||||
9 | and Economic Opportunity, the Department of Revenue, or both, | ||||||
10 | for the administration of this Act. Such intergovernmental | ||||||
11 | agreement may allow for the distribution of all or a portion of | ||||||
12 | the issuance fee imposed under Section 10 to the Department of | ||||||
13 | Commerce and Economic Opportunity or the Department of Revenue, | ||||||
14 | as applicable.
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15 | Section 900. The Illinois Income Tax Act is amended by | ||||||
16 | changing Section 221 and by adding Section 227 as follows:
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17 | (35 ILCS 5/221) | ||||||
18 | Sec. 221. Rehabilitation costs; qualified historic | ||||||
19 | properties; River Edge Redevelopment Zone. | ||||||
20 | (a) For taxable years that begin beginning on or after | ||||||
21 | January 1, 2012 and begin ending prior to January 1, 2018 | ||||||
22 | January 1, 2022 , there shall be allowed a tax credit against | ||||||
23 | the tax imposed by subsections (a) and (b) of Section 201 of |
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1 | this Act in an amount equal to 25% of qualified expenditures | ||||||
2 | incurred by a qualified taxpayer during the taxable year in the | ||||||
3 | restoration and preservation of a qualified historic structure | ||||||
4 | located in a River Edge Redevelopment Zone pursuant to a | ||||||
5 | qualified rehabilitation plan, provided that the total amount | ||||||
6 | of such expenditures (i) must equal $5,000 or more and (ii) | ||||||
7 | must exceed 50% of the purchase price of the property. | ||||||
8 | (a-1) For taxable years that begin on or after January 1, | ||||||
9 | 2018 and end prior to January 1, 2022, there shall be allowed a | ||||||
10 | tax credit against the tax imposed by subsections (a) and (b) | ||||||
11 | of Section 201 of this Act in an aggregate amount equal to 25% | ||||||
12 | of qualified expenditures incurred by a qualified taxpayer in | ||||||
13 | the restoration and preservation of a qualified historic | ||||||
14 | structure located in a River Edge Redevelopment Zone pursuant | ||||||
15 | to a qualified rehabilitation plan, provided that the total | ||||||
16 | amount of such expenditures must (i) equal $5,000 or more and | ||||||
17 | (ii) exceed the adjusted basis of the qualified historic | ||||||
18 | structure on the first day the qualified rehabilitation plan | ||||||
19 | begins. For any rehabilitation project, regardless of duration | ||||||
20 | or number of phases, the project's compliance with the | ||||||
21 | foregoing provisions (i) and (ii) shall be determined based on | ||||||
22 | the aggregate amount of qualified expenditures for the entire | ||||||
23 | project and may include expenditures incurred under subsection | ||||||
24 | (a), this subsection, or both subsection (a) and this | ||||||
25 | subsection. If the qualified rehabilitation plan spans | ||||||
26 | multiple years, the aggregate credit for the entire project |
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1 | shall be allowed in the last taxable year, except for phased | ||||||
2 | rehabilitation projects, which may receive credits upon | ||||||
3 | completion of each phase. Before obtaining the first phased | ||||||
4 | credit: (A) the total amount of such expenditures must meet the | ||||||
5 | requirements of provisions (i) and (ii) of this subsection; (B) | ||||||
6 | the rehabilitated portion of the qualified historic structure | ||||||
7 | must be placed in service; and (C) the requirements of | ||||||
8 | subsection (b) must be met. | ||||||
9 | (b) To obtain a tax credit pursuant to this Section, the | ||||||
10 | taxpayer must apply with the Department of Natural Resources | ||||||
11 | Commerce and Economic Opportunity . The Department of Natural | ||||||
12 | Resources Commerce and Economic Opportunity, in consultation | ||||||
13 | with the Historic Preservation Agency, shall determine the | ||||||
14 | amount of eligible rehabilitation costs and expenses within 45 | ||||||
15 | days of receipt of a complete application. The taxpayer must | ||||||
16 | submit a certification of costs prepared by an independent | ||||||
17 | certified public accountant that certifies (i) the project | ||||||
18 | expenses, (ii) whether those expenses are qualified | ||||||
19 | expenditures, and (iii) that the qualified expenditures exceed | ||||||
20 | the adjusted basis of the qualified historic structure on the | ||||||
21 | first day the qualified rehabilitation plan commenced. The | ||||||
22 | Department of Natural Resources is authorized, but not | ||||||
23 | required, to accept this certification of costs to determine | ||||||
24 | the amount of qualified expenditures and the amount of the | ||||||
25 | credit. The Department of Natural Resources shall provide | ||||||
26 | guidance as to the minimum standards to be followed in the |
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1 | preparation of such certification . The Department of Natural | ||||||
2 | Resources and the National Park Service Historic Preservation | ||||||
3 | Agency shall determine whether the rehabilitation is | ||||||
4 | consistent with the United States Secretary of the Interior's | ||||||
5 | Standards for Rehabilitation the standards of the Secretary of | ||||||
6 | the United States Department of the Interior for | ||||||
7 | rehabilitation . | ||||||
8 | (b-1) Upon completion and review of the project and | ||||||
9 | approval of the complete application , the Department of Natural | ||||||
10 | Resources Commerce and Economic Opportunity shall issue a | ||||||
11 | single certificate in the amount of the eligible credits equal | ||||||
12 | to 25% of qualified expenditures incurred during the eligible | ||||||
13 | taxable years, as defined in subsections (a) and (a-1), | ||||||
14 | excepting any credits awarded under subsection (a) prior to the | ||||||
15 | effective date of this amendatory Act of the 100th General | ||||||
16 | Assembly and any phased credits issued prior to the eligible | ||||||
17 | taxable year under subsection (a-1) . At the time the | ||||||
18 | certificate is issued, an issuance fee up to the maximum amount | ||||||
19 | of 2% of the amount of the credits issued by the certificate | ||||||
20 | may be collected from the applicant to administer the | ||||||
21 | provisions of this Section. If collected, this issuance fee | ||||||
22 | shall be deposited into the Historic Property Administrative | ||||||
23 | Fund, a special fund created in the State treasury. Subject to | ||||||
24 | appropriation, moneys in the Historic Property Administrative | ||||||
25 | Fund shall be provided to the Department of Natural Resources | ||||||
26 | as reimbursement evenly divided between the Department of |
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1 | Commerce and Economic Opportunity and the Historic | ||||||
2 | Preservation Agency to reimburse the Department of Commerce and | ||||||
3 | Economic Opportunity and the Historic Preservation Agency for | ||||||
4 | the costs associated with administering this Section. The | ||||||
5 | taxpayer must attach the certificate to the tax return on which | ||||||
6 | the credits are to be claimed. The Department of Commerce and | ||||||
7 | Economic Opportunity may adopt rules to implement this Section. | ||||||
8 | (c) The taxpayer must attach the certificate to the tax | ||||||
9 | return on which the credits are to be claimed. The tax credit | ||||||
10 | under this Section may not reduce the taxpayer's liability to | ||||||
11 | less than
zero. If the amount of the credit exceeds the tax | ||||||
12 | liability for the year, the excess credit may be carried | ||||||
13 | forward and applied to the tax liability of the 5 taxable years | ||||||
14 | following the excess credit year. | ||||||
15 | (c-1) Subject to appropriation, moneys in the Historic | ||||||
16 | Property Administrative Fund shall be used, on a biennial basis | ||||||
17 | beginning at the end of the second fiscal year after the | ||||||
18 | effective date of this amendatory Act of the 100th General | ||||||
19 | Assembly, to hire a qualified third party to prepare a biennial | ||||||
20 | report to assess the overall economic impact to the State from | ||||||
21 | the qualified rehabilitation projects under this Section | ||||||
22 | completed in that year and in previous years. The overall | ||||||
23 | economic impact shall include at least: (1) the direct and | ||||||
24 | indirect or induced economic impacts of completed projects; (2) | ||||||
25 | temporary, permanent, and construction jobs created; (3) | ||||||
26 | sales, income, and property tax generation before, during |
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1 | construction, and after completion; and (4) indirect | ||||||
2 | neighborhood impact after completion. The report shall be | ||||||
3 | submitted to the Governor and the General Assembly. The report | ||||||
4 | to the General Assembly shall be filed with the Clerk of the | ||||||
5 | House of Representatives and the Secretary of the Senate in | ||||||
6 | electronic form only, in the manner that the Clerk and the | ||||||
7 | Secretary shall direct. | ||||||
8 | (c-2) The Department of Natural Resources may adopt rules | ||||||
9 | to implement this Section in addition to the rules expressly | ||||||
10 | authorized in this Section. | ||||||
11 | (d) As used in this Section, the following terms have the | ||||||
12 | following meanings. | ||||||
13 | "Phased rehabilitation" means a project that is completed | ||||||
14 | in phases, as defined under Section 47 of the federal Internal | ||||||
15 | Revenue Code and pursuant to National Park Service regulations | ||||||
16 | at 36 C.F.R. 67. | ||||||
17 | "Placed in service" means the date when the property is | ||||||
18 | placed in a condition or state of readiness and availability | ||||||
19 | for a specifically assigned function as defined under Section | ||||||
20 | 47 of the federal Internal Revenue Code and federal Treasury | ||||||
21 | Regulation Sections 1.46 and 1.48. | ||||||
22 | "Qualified expenditure" means all the costs and expenses | ||||||
23 | defined as qualified rehabilitation expenditures under Section | ||||||
24 | 47 of the federal Internal Revenue Code that were incurred in | ||||||
25 | connection with a qualified historic structure. | ||||||
26 | "Qualified historic structure" means a certified historic |
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1 | structure as defined under Section 47(c)(3) of the federal | ||||||
2 | Internal Revenue Code. | ||||||
3 | "Qualified rehabilitation plan" means a project that is | ||||||
4 | approved by the Department of Natural Resources and the | ||||||
5 | National Park Service Historic Preservation Agency as being | ||||||
6 | consistent with the United States Secretary of the Interior's | ||||||
7 | Standards for Rehabilitation standards in effect on the | ||||||
8 | effective date of this amendatory Act of the 97th General | ||||||
9 | Assembly for rehabilitation as adopted by the federal Secretary | ||||||
10 | of the Interior . | ||||||
11 | "Qualified taxpayer" means the owner of the qualified | ||||||
12 | historic structure or any other person who qualifies for the | ||||||
13 | federal rehabilitation credit allowed by Section 47 of the | ||||||
14 | federal Internal Revenue Code with respect to that qualified | ||||||
15 | historic structure. Partners, shareholders of subchapter S | ||||||
16 | corporations, and owners of limited liability companies (if the | ||||||
17 | limited liability company is treated as a partnership for | ||||||
18 | purposes of federal and State income taxation) are entitled to | ||||||
19 | a credit under this Section to be determined in accordance with | ||||||
20 | the determination of income and distributive share of income | ||||||
21 | under Sections 702 and 703 and subchapter S of the Internal | ||||||
22 | Revenue Code, provided that credits granted to a partnership, a | ||||||
23 | limited liability company taxed as a partnership, or other | ||||||
24 | multiple owners of property shall be passed through to the | ||||||
25 | partners, members, or owners respectively on a pro rata basis | ||||||
26 | or pursuant to an executed agreement among the partners, |
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| |||||||
1 | members, or owners documenting any alternate distribution | ||||||
2 | method.
| ||||||
3 | (Source: P.A. 99-914, eff. 12-20-16; 100-236, eff. 8-18-17.)
| ||||||
4 | (35 ILCS 5/227 new) | ||||||
5 | Sec. 227. Historic preservation credit. For
tax years | ||||||
6 | beginning on or after January 1, 2019 and ending on
or before | ||||||
7 | December 31, 2023, a taxpayer who qualifies for a
credit under | ||||||
8 | the Historic Preservation Tax Credit Act is entitled to a | ||||||
9 | credit against the taxes
imposed under subsections (a) and (b) | ||||||
10 | of Section 201 of this
Act as provided in that Act. If the | ||||||
11 | taxpayer is a partnership
or Subchapter S corporation, the | ||||||
12 | credit shall be allowed to the
partners or shareholders in | ||||||
13 | accordance with the determination
of income and distributive | ||||||
14 | share of income under Sections 702
and 704 and Subchapter S of | ||||||
15 | the Internal Revenue Code.
If the amount of any tax credit | ||||||
16 | awarded under this Section
exceeds the qualified taxpayer's | ||||||
17 | income tax liability for the
year in which the qualified | ||||||
18 | rehabilitation plan was placed in
service, the excess amount | ||||||
19 | may be carried forward as
provided in the Historic Preservation | ||||||
20 | Tax Credit Act.
|