Bill Text: IL SB3704 | 2009-2010 | 96th General Assembly | Introduced

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Bill Title: Creates the Job Creation and Education Act. Creates the Job Creation Through Education Opportunity Program to reimburse education-related expenses for students who obtain an associate or bachelor's degree in the State and who live, work, and pay taxes in the State thereafter. Contains provisions concerning the administration of the program. Creates an income tax credit based on student loan payments. Contains other provisions.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2010-03-08 - Rule 3-9(a) / Re-referred to Assignments [SB3704 Detail]

Download: Illinois-2009-SB3704-Introduced.html

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96TH GENERAL ASSEMBLY State of Illinois 2009 and 2010 SB3704 Introduced 2/11/2010, by Sen. Edward D. Maloney SYNOPSIS AS INTRODUCED:
New Act
Creates the Job Creation and Education Act. Creates the Job Creation Through Education Opportunity Program to reimburse education-related expenses for students who obtain an associate or bachelor's degree in the State and who live, work, and pay taxes in the State thereafter. Contains provisions concerning the administration of the program. Creates an income tax credit based on student loan payments. Contains other provisions.
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FISCAL NOTE ACT MAY APPLY
A BILL FOR
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AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Short title. This Act may be cited as the Job
Creation and Education Act.
Section 5. Definitions. As used in this Act:
"Accredited junior college, college, or university" means:
(1) any campus of the State community college system;
(2) any State university; and
(3) any educational institution that is located in this
State and has authorization to confer an associate degree
or a bachelor's degree.
"Benchmark Loan Payment" means the figure described in
Section 10 of this Act.
"Educational opportunity tax credit" means the tax credit
provided for in Section 15 of this Act.
"Resident" means a resident of this State.
"Opportunity contract" means the contract described in
Section 10 of this Act.
"Principal cap" means the cap described in Section 10 of
this Act.
"State Board" means the Illinois State Board of Education.

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Section 10. Job Creation Through Educational Opportunity
Program established.
(a) The Job Creation Through Educational Opportunity
Program, referred to in this Act as "the program," is created
to reimburse education-related costs for residents of this
State who obtain an associate degree or a bachelor's degree in
this State, and live, work, and pay taxes in this State
thereafter. The program is designed to achieve the following
goals:
(1) promote economic opportunity for people in this
State by ensuring access to the training and higher
education that higher-paying jobs require;
(2) bring more and higher-paying jobs to this State by
increasing the skill level of this State's workforce;
(3) offer educational opportunity and retraining to
people impacted by job loss, workplace injury, disability
or other hardship;
(4) keep young people in this State through incentives
for educational opportunity and creation of more
high-paying jobs; and
(5) accomplish all of the goals in this subsection with
as little bureaucracy as possible.
(b) A principal cap limits the loan principal that can
serve as the basis for claiming the Educational Opportunity Tax
Credit. The cap is based on in-state tuition and mandatory fees
for either the State community college system or the State

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University system, depending on whether the opportunity
contract is for pursuit of an associate degree or of a
bachelor's degree, respectively.
(c) For an individual earning a degree from the State
community college system or from a State University, the
relevant financial aid office shall certify, once the
individual has earned the degree, whether or not the total
principal of loans the individual received as part of that
individual's financial aid package exceeds the cost of in-state
tuition and mandatory fees incurred in pursuit of the degree.
That cost constitutes the principal cap for such an individual.
(d) For an individual earning a degree from any other
accredited State junior college, college, or university, the
relevant financial aid office shall certify, once the
individual has earned the degree, whether or not the total
principal of loans the individual received as part of that
individual's financial aid package exceeds the published
in-state tuition and mandatory fees for full-time enrollment in
the State community college system or in the State university
system, depending on whether the degree is an associate degree
or a bachelor's degree, respectively, during the relevant
years. The published in-state tuition and mandatory fees
constitute the principal cap for such an individual. If the
individual has not attended full time throughout the pursuit of
that individual's degree, an appropriate principal cap must be
determined in a manner consistent with the principles set out

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in this subsection.
(e) For an individual whose student loans exceed the
principal cap, a benchmark loan payment must be calculated as
follows. The financial aid office shall calculate what the
monthly payment would be on a loan for the amount of the
principal cap, to be paid over the years and at the interest
rate offered for federal Stafford loans under United States
Code, Section 1077a, during the individual's last year of
enrollment. The benchmark loan payment must be specified on the
individual's Opportunity Contract.
(f) The State Board shall draft an Opportunity Contract for
use in enrolling people in the program. The terms of the
Opportunity Contract must require an individual who wishes to
participate in the program to:
(1) certify that that individual is a resident of this
state;
(2) agree to attend and to obtain a specified degree,
either an associate degree or a bachelor's degree, from an
accredited State junior college, college, or university.
The individual need not obtain the degree from the
institution in which that individual originally enrolled,
so long as all course work toward the degree is performed
at accredited State junior colleges, colleges or
universities;
(3) agree to live in this State while pursuing the
degree. The individual shall also agree to live in this

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state after obtaining the degree during any period when
that individual seeks to take advantage of the Educational
Opportunity Tax Credit;
(4) agree to maintain records relating to loan payments
claimed under the Educational Opportunity Tax Credit for 5
years after those payments are claimed; and
(5) with respect to educational loans, agree to the
following:
(A) the individual may claim the Educational
Opportunity Tax Credit only with respect to loans that
are part of that individual's financial aid package and
that have a term of at least 8 years;
(B) if the individual in any way accelerates
repayment, the individual forfeits any right to claim
an Educational Opportunity Tax Credit for that taxable
year or any future taxable year; and
(C) the individual may refinance the loans only if
they remain separate from other debt and if the effect
of the refinancing is to decrease both the annual
repayment and the total remaining indebtedness. In
exchange for the consideration outlined in this
subsection, the State shall agree to permit the
individual to take advantage of the Educational
Opportunity Tax Credit.
(g) The Opportunity Contract must leave space for the
accredited State junior college, college, or university to

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certify that the individual has obtained the relevant degree,
and to certify whether or not the loan principal that the
individual incurs in pursuing the relevant degree exceeds the
principal cap.
(h) The Program must be administered as follows:
(i) Any resident of this state who gains admission to an
accredited state junior college, college or university and who
receives financial aid in the form of loans must have the
opportunity to participate in the program. The financial aid
office of the relevant institution shall offer to such people
the chance to sign an Opportunity Contract with the State. The
financial aid office shall retain the Opportunity Contract
until the individual obtains the degree.
(j) When the individual obtains the degree, the individual
shall specify on the Opportunity Contract the source, principal
amount, interest rate, and term of any loans that are part of
the individual's financial aid package. The Opportunity
Contract must contain certification that the individual has
obtained the relevant degree and must specify whether the
individual's loans exceed the principal cap and, if
appropriate, what the benchmark loan payment is. The individual
shall then file the Opportunity Contract with the Secretary of
State. Every accredited State public junior college, college,
and university located in this State shall develop procedures
to facilitate this process, in consultation with the Secretary
of State.

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(k) When the individual files the Opportunity Contract with
the Secretary of State, that individual becomes eligible to
claim the Educational Opportunity Tax Credit, subject to the
requirements of this Act. The individual may thereafter take
advantage of any forbearance or deferment provisions in the
relevant loan agreements without forfeiting the right to claim
the Educational Opportunity Tax Credit when the individual
resumes repayment. The program must commence the first semester
after the effective date of this Act. State residents who, when
the program commences, are enrolled in an associate or a
bachelor's degree program at an accredited junior college,
college, or university, may participate, subject to the same
essential terms as other program participants. When such an
individual obtains the relevant degree, it must be specified in
the individual's Opportunity Contract what percentage of the
course work completed in pursuit of the degree was performed
while the individual was participating in the program. The
principal cap and benchmark loan payment must be calculated in
the ordinary way as provided in this Act, but the individual
must then apply the percentage in this subsection to actual
payments or to the benchmark loan payment, whichever applies,
in determining the amount the individual can claim under the
Educational Opportunity Tax Credit for a given year.
It is the intent of the General Assembly that neither the
existence of the program nor the benefits provided under the
Educational Opportunity Tax Credit serve as justification to

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decrease other funds appropriated or allocated to accredited
State junior colleges, colleges, or universities, including
institutions in the State community college system and the
State university system, or to other higher education programs.
The State board shall adopt rules as necessary to carry out
the purposes of this Act.
Section 15. Credit for Educational Opportunity.
(a) Definitions. As used in this section of this Act:
"Benchmark loan payment" has the same meaning as in
Section 5 of this Act.
"Full Time" employment means employment with a normal
work week of 32 hours or more.
"Part Time" employment means employment with a normal
work week of between 16 and 32 hours.
"Qualified Employee" means an employee who is eligible
for the credit provided in this Section and who is employed
at least part time.
"Opportunity Contract" means the contract described in
Section 10 of this Act.
"Opportunity Program Participant" means an individual
who enters into an Opportunity Contract with the State,
obtains the specified degree and complies with the
requirements under Section 10 of this Act.
"Resident Individual" means a resident of the State.
"Term of Employment" includes all months when the

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individual is actually employed. It includes time periods
when an individual is on leave or vacation. It extends to
the full year for people working for employers who
customarily operate only during a regularly recurring
period of 9 months or more in a calendar year. For people
working for employers who customarily operate only during
regularly recurring periods of less than 9 months in a
calendar year, including seasonal employment, the Term of
Employment extends only to time periods when the individual
is actually working.
(b) A taxpayer constituting an Opportunity Program
Participant or an employer of a qualified employee is allowed a
credit against the tax imposed by subsections (a) and (b) of
Section 201 of the Illinois Income Tax Act for each taxable
year under the terms established in this Section. The credit is
created to implement the Job Creation Through Educational
Opportunity Program established under Section 10 of this Act.
The credit may not reduce the tax otherwise due under the
Illinois Income Tax Act to less than zero. A taxpayer entitled
to the credit for any taxable year may carry over and apply to
the tax liability for any one or more of the next succeeding 10
years the portion, as reduced from year to year, of any unused
credits. More than one taxpayer may claim a credit based on
loan payments actually made to a relevant lender or lenders to
benefit a single opportunity program participant, but no 2
taxpayers may claim the credit based on the same payment.

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(c) The following provisions govern the calculation of the
credit in this Section.
(1) If the relevant Opportunity Program Participant's
Opportunity Contract limits the amount of the credit to a
benchmark loan payment, and the relevant Opportunity
Program Participant's actual monthly payment due is higher
than that amount, then the credit claimed may not exceed
the product of the benchmark loan payment and the number of
months in which the taxpayer made loan payments.
(2) If the relevant Opportunity Program Participant's
Opportunity Contract certifies that the principal for the
relevant loans is at or below the level of the principal
cap, or if the relevant opportunity program participant's
actual monthly payment is below the benchmark loan payment,
the taxpayer may claim a credit based only on regularly
scheduled loan payments actually made.
(3) If the credit is claimed on behalf of an individual
who was already enrolled in an associate or a bachelor's
degree program at an accredited junior college, college, or
university, as defined in Section 5 of this Act, on the
commencement of the Job Creation Through Educational
Opportunity Program under Section 10 of this Act, the
percentage figure listed in the Opportunity Contract must
be applied to the amount determined under paragraph (1) or
(2).
(d) An Opportunity Program Participant may claim the credit

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only if the participant is a resident individual. The
participant may claim the credit based only on regular payments
made during months in which the individual was working for an
employer located in this state. A married couple filing jointly
under the Illinois Income Tax Act may claim the credit only to
the extent that the spouse on whose behalf the credit is
claimed meets these requirements.
(e) A taxpayer constituting an employer may claim the
credit under this Section under the following circumstances.
The employer may undertake to make partial or full loan
payments directly to the relevant lender or lenders on behalf
of a qualified employee, having taken reasonable steps to
ascertain that the employee is in fact a qualified employee,
and may claim a credit based on amounts that came due and were
paid by the employer during the term of employment. To receive
the credit, the employer must retain for 5 years any proof of
eligibility that the employee or independent contractor
provides.
(f) The employer may claim a credit for the amount that the
qualified employee could have claimed during any months when
the qualified employee was employed, had the qualified employee
made the partial or full loan payments instead, under
conditions where the qualified employee had sufficient income
to claim the full credit for the taxable year. If the qualified
employee is employed only on a part-time basis, the employer
may claim a credit only up to half of the total that the

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qualified employee could have claimed had the qualified
employee made all payments and earned sufficient income to
claim the full credit for the taxable year, but the amount the
employer claims must still be based on amounts actually paid.
Section 97. Severability. The provisions of this Act are
severable under Section 1.31 of the Statute on Statutes.