HB3967 102ND GENERAL ASSEMBLY

LRB102 14276 SPS 19628 b

102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB3967

Introduced 3/4/2021, by Rep. Rita Mayfield and Kelly M. Cassidy

SYNOPSIS AS INTRODUCED:

See Index

Creates the Energy Community Reinvestment Act. Provides that the Department of Commerce and Economic Opportunity shall designate certain regions impacted by the decline of coal generation, gas generation, nuclear generation, and coal mining as Clean Energy Empowerment Zones. Creates the Energy Workforce Development Program and Energy Community Development Program. Creates the Clean Energy Empowerment Zone Tax Credit Act. Creates a tax credit for applicants operating a business in the State that hires a former energy worker or graduate or trainee from an equity-focused workforce training program designated by the Illinois Power Agency as a new employee. Creates a tax credit for applicants operating a renewable energy enterprise that proposes a project to create new jobs and invest in the development of a renewable energy production facility in a Clean Energy Empowerment Zone. Creates the Coal Severance Fee Act. Provides for a tax upon any person engaged in the business of severing or preparing coal for sale, profit, or commercial use if the coal is severed from a mine located in the State. Amends the Illinois Administrative Procedure Act to allow for emergency rulemaking. Amends the State Finance Act to create the Energy Community Reinvestment Fund. Amends the Illinois Income Tax Act, the Public Utilities Act, the Environmental Protection Act, and the Illinois Nuclear Facility Safety Act by making changes to implement certain programs. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

ARTICLE 1. Findings

Section 1-5. Findings. The General Assembly finds that:

(a) The growing clean energy economy in Illinois can be a vehicle for expanding equitable access to public health, safety, a cleaner environment, quality jobs, economic opportunity, and wealth-building, particularly in economically disadvantaged communities and communities of black, indigenous, and people of color that have had to bear the disproportionate burden of dirty fossil fuel pollution.

(b) Placing Illinois on a path to 100% renewable energy is vital to a clean energy future. To bring this vision to fruition, our energy policy must prioritize a just transition that incentivizes renewable development and other carbon-reducing policies, such as energy efficiency, beneficial electrification, and peak demand reduction, while ensuring that the benefits and opportunities of a carbon-free future are accessible in economically disadvantaged communities, environmental justice communities, and communities of black, indigenous, and people of color.

(c) In the wake of federal reversals on climate action, the State of Illinois should pursue immediate action on policies that will ensure a just and responsible phase out of fossil fuels from the power sector to reduce harmful emissions from Illinois power plants, support power plant communities and workers, and allow the clean energy economy to continue growing in every corner of Illinois.

(d) Illinois needs to adopt a broad-based policy approach to decarbonize Illinois' electric sector (including electricity production and consumption) in a just and equitable manner that puts our State on track to phase out carbon dioxide emitting power plants by 2030.

(e) Illinois' policy approach must ensure the reduction of co-pollutant emissions that cause serious local health impacts, prioritizing environmental justice communities near power plants.

(f) As we decarbonize Illinois' electric sector, Illinois must create new investment to stimulate the economic and environmental well-being of communities disproportionately impacted by the historical operation of, and recent or expected closures of, fossil fuel power plants and coal mining operations.

ARTICLE 5. Energy Community Reinvestment Act

Section 5-1. Short title. This Article may be cited as the Energy Community Reinvestment Act. References in this Article to "this Act" mean this Article.

Section 5-5. Findings. The General Assembly finds that, as part of putting Illinois on a path to 100% renewable energy, the State of Illinois should ensure a just transition to that goal, providing support for the transition of Illinois' communities and workers impacted by closures or reduced use of fossil fuel power plants, nuclear power plants, or coal mines by allocating new economic development resources for business tax incentives, workforce training, site clean-up and reuse, and local tax revenue replacement.

The General Assembly finds and declares that the health, safety, and welfare of the people of this State are dependent upon a healthy economy and vibrant communities; that the closure of fossil fuel power plants, nuclear power plants, and coal mines across the State have a significant impact on their surrounding communities; that the expansion of renewable energy creates significant job growth and contributes significantly to the health, safety, and welfare of the people of this State; that the continual encouragement, development, growth, and expansion of renewable energy within the State requires a cooperative and continuous partnership between government and the renewable energy sector; and that there are certain areas in this State that have lost, or will lose, jobs due to the closure of fossil fuel power plants, nuclear power plants, and coal mines and need the particular attention of government, labor, and the residents of Illinois to help attract new investment into these areas and directly aid the local community and its residents.

Therefore, it is declared to be the purpose of this Act to explore ways of stimulating the growth of new private investment, including renewable energy investment, in this State and to foster job growth in areas impacted by the closure of coal energy plants, coal mines, and nuclear energy plants.

Section 5-10. Definitions. As used in this Act, unless the context otherwise requires:

"State agencies" or "agencies" has the same meaning as "State agencies" under Section 1-7 of the Illinois State Auditing Act.

"Board" means the Clean Energy Empowerment Zone Board created in Section 5-20.

"Clean Energy Empowerment Zone" or "Empowerment Zones" means an area of the State certified by the Department as a Clean Energy Empowerment Zone under this Act.

"Commission" means the Energy Transition Workforce Commission created in Section 5-45.

"Department" means the Department of Commerce and Economic Opportunity.

"Displaced energy worker" means an energy worker who has lost employment, or is anticipated by the Department to lose employment within the next 2 years, due to the reduced operation or closure of a fossil fuel power plant, nuclear power plant, or coal mine.

"Energy worker" means a person who has been employed full-time for a period of one year or longer, and within the previous 5 years, at a fossil fuel power plant, a nuclear power plant, or a coal mine located within the State of Illinois, whether or not they are employed by the owner of the power plant or mine. Energy workers are considered to be full-time if they work at least 35 hours per week for 45 weeks a year or the 1,820 work-hour equivalent with vacations, paid holidays, and sick time, but not overtime, included in this computation. Classification of an individual as an energy worker continues for 5 years from the latest date of employment or the effective date of this Act, whichever is later.

"Environmental justice communities" means the definition of that term based on existing methodologies and findings, used and as may be updated by the Illinois Power Agency and its program administrator in the Illinois Solar for All Program.

"Fossil fuel power plant" means an electric generating facility powered by gas, coal, other fossil fuels, or a combination thereof.

"Low-income" means persons and families whose income does not exceed 80% of area median income, adjusted for family size and revised every 2 years.

"Local labor market area" means an economically integrated area within which individuals reside and find employment within a reasonable distance of their places of residence or can readily change jobs without changing their places of residence.

"Renewable energy enterprise" means a company that is engaged in the production, manufacturing, distribution, or development of renewable energy resources and associated technologies.

"Renewable energy project" means a project conducted by a renewable energy enterprise for the purpose of generating renewable energy resources or energy storage.

"Renewable energy resources" has the meaning set forth in Section 1-10 of the Illinois Power Agency Act.

"Rule" has the meaning set forth in Section 1-70 of the Illinois Administrative Procedure Act.

Section 5-15. Designation of Clean Energy Empowerment Zones.

(a) Purpose. It is the intent of the General Assembly that designation of a community as a Clean Energy Empowerment Zone shall be reserved for communities that have experienced economic or environmental hardship due to the energy transition or fossil fuel power generation and extraction. The purpose of this Section 5-45 is to establish an efficient and equitable process by which the Department and communities across the State may seek the designation of Clean Energy Empowerment Zones, thereby allowing for economic and environmental benefits of the clean energy economy to be obtained by communities that have been deprived of these benefits. The process conducted by the Department, the Board, and participating units of local government shall be as transparent and inclusive as is reasonably practical.

(b) Notification of local governments. Within 30 days after the effective date of this Act, the Department shall publish a notice on its website stating its intention to begin the review of potential locations for Clean Energy Empowerment Zone regional designations, and solicit information from the public on this topic. Within 45 days after the effective date of this Act, the Department shall submit a notice to the county board of each jurisdiction in which a fossil fuel power plant, coal mine, or nuclear power plant is located, informing the local governments of their intention to develop a list of Clean Energy Empowerment Zones, providing a basic explanation of the benefits of designation as a Clean Energy Empowerment Zone, and informing them of participation opportunities in the designation process. The Department may notify other persons or local government units of this process at any time.

(c) Proposed list of Clean Energy Empowerment Zones. Within 120 days after the effective date of this Act, the Department of Commerce and Economic Opportunity shall develop a proposed list of geographic regions in Illinois that qualify as Clean Energy Empowerment Zones. The Department shall work with the Illinois Environmental Protection Agency, the Commission on Environmental Justice, the Department of Labor, the Department of Natural Resources, and community organizations to identify regions impacted by the decline of coal generation, gas generation, nuclear generation, and coal mining to develop the recommended list of regions that qualify for Clean Energy Empowerment Zone designations. The Department shall furnish maps that identify the proposed boundaries of proposed Clean Energy Empowerment Zones, and include justification for the inclusion or exclusion of certain locations or regions. The proposed list shall be subject to the notice and comment process established in subsection (e).

(d) Criteria for designation as a Clean Energy Empowerment Zone. A region shall be proposed by the Department, and certified by the Board as a Clean Energy Empowerment Zone if it meets all of the following characteristics listed in paragraphs (1) through (3) of this subsection (d).

(1) The region is a contiguous area, provided that a Zone area may exclude wholly surrounded territory within its boundaries;

(2) The region satisfies any additional criteria established by the Department consistent with the purposes of this Act; and

(3) The region meets one or more of the following:

(A) the area contains a fossil fuel or nuclear power plant that was retired from service or has significantly reduced service within 10 years before the application for designation or will be retired or have service significantly reduced within 5 years following the application for designation;

(B) the area contains a coal mine that was closed or had operations significantly reduced within 10 years before the application for designation or is anticipated to be closed or have operations significantly reduced within 5 years following the application for designation; or

(C) the area contains a nuclear power plant that was decommissioned, but continued storing nuclear waste before the effective date of this Act.

(e) Review and comment process. After developing the proposed list of regions to be designated as Clean Energy Empowerment Zones, or proposing additions to the list, the Department shall conduct a 60-day public comment process, in partnership with the other agencies, departments, and units of local government where beneficial for the purposes of this Section. The public comment process shall include, at a minimum, 2 public hearings that are accessible to working residents, shall prioritize the solicitation of feedback from environmental justice communities and communities directly impacted by the Clean Energy Empowerment Zone designation, and shall provide for the submission of written comments through the Internet.

Within 30 days after concluding the public comment process, the Department shall modify or finalize the proposed list of geographic regions that qualify as Clean Energy Empowerment Zones and submit the list to the Clean Energy Empowerment Zone Board for approval or modification as described in Section 5-20.

(f) Local government self-designation. After the Department submits its first list of proposed Clean Energy Empowerment Zones to the Board, units of local government may, on an ongoing basis, submit applications to the Department to designate an area wholly or partially in their jurisdiction as a Clean Energy Empowerment Zone if the Department has not proposed the region as a potential Clean Energy Empowerment Zone to the Board. Multiple units of local government may submit a joint application for designation if the proposed region or regions fall partially or wholly within their combined jurisdictions. A unit of local government may submit an application to the Department if:

(1) the area meets the criteria for designation as a Clean Energy Empowerment Zone established in subsection (d); and

(2) the unit of local government has conducted at least one public hearing within the proposed Zone area considering all of the following questions: (A) whether to create the Zone; (B) what local plans, tax incentives, and other programs should be established in connection with the zone; and (C) what the boundaries of the Zone should be. Public notice of the hearing shall be published in at least one newspaper of general circulation within the Zone area, not more than 21 days nor less than 7 days before the hearing.

An application submitted under this subsection (f) shall include a certified copy of the ordinance designating the proposed Zone; a map of the proposed Clean Energy Empowerment Zone, showing existing streets and highways; an analysis, and any appropriate supporting documents and statistics, demonstrating that the proposed zone area is qualified in accordance with subsection (d); a statement detailing any tax, grant, and other financial incentives or benefits, and any programs, to be provided by the municipality or county to renewable energy enterprises within the Zone, which are not otherwise provided throughout the municipality or county; a statement setting forth the economic development and planning objectives for the Zone; an estimate of the economic impact of the Zone, considering all of the tax incentives, financial benefits and programs contemplated, upon the revenues of the municipality or county; a specific definition of the applicant's local labor market area; a transcript of all public hearings on the Zone; and any additional information as the Department may by rule require.

Within 60 days after receiving an application from a unit of local government, the Department shall review the application to determine whether the designated area qualifies as a Clean Energy Empowerment Zone under this Section, and submit its recommendation to the Clean Energy Empowerment Zone Board including all necessary information and records for the Board to review, as described in Section 5-20. Within 7 days after submitting the recommendation to the Board, the Department shall provide a copy of its recommendation to the applicant, including all supporting documents and information submitted to the Board.

(g) Application process. The Department shall, no later than July 1, 2021, develop an ongoing application process for Clean Energy Empowerment Zone applications by units of local government. The application process shall be open during the period of July 1, 2021 through January 1, 2050. The Department, or any predecessor of the Department, may extend the application process beyond that date if it deems it is necessary or prudent to accomplish the purpose of this Act.

(h) Length of designation. A Clean Energy Empowerment Zone designation lasts for 10 years from the effective date of the designation and shall be subject to review by the Board after 10 years for an additional 10-year designation beginning on the expiration date of the Clean Energy Empowerment Zone. During the review process, the Board shall consider the costs incurred by the State and units of local government as a result of benefits received by the Clean Energy Empowerment Zone.

(i) Emergency rulemaking. The Department has emergency rulemaking authority for the purpose of implementation of this Section until 12 months after the effective date of this Act as provided under Section 5-45 of the Illinois Administrative Procedure Act.

Section 5-20. Clean Energy Empowerment Zone Board.

(a) A Clean Energy Empowerment Zone Board is hereby created within the Department.

(b) The Board shall consist of 8 voting members, one of whom shall be the Director of Commerce and Economic Opportunity, or his or her designee, who shall serve as chairperson; one of whom shall be the Director of Revenue, or his or her designee; 2 of whom shall be members appointed by the Governor, with the advice and consent of the Senate; one of whom shall be appointed by the Speaker of the House of Representatives; one of whom shall be appointed by the President of the Senate; one of whom shall be appointed by the Minority Leader of the House; and one of whom shall be appointed by the Minority Leader of the Senate. Designees shall be appointed within 60 days after a vacancy. No fewer than 4 of the 8 voting members shall consist of low-income residents or residents of environmental justice communities. At least one of the Board members shall be a representative of organized labor. All meetings shall be accessible, with rotating locations, call-in options, and materials and agendas circulated well in advance, and there shall also be opportunities for input outside of meetings from those with limited capacity and ability to attend, via one-on-one meetings, surveys, and calls.

Board members shall serve without compensation, but may be reimbursed for necessary expenses incurred in the performance of their duties from funds appropriated for that purpose. Each member appointed shall have at least 5 years of experience in business development or economic development. The Department of Commerce and Economic Opportunity shall provide administrative support to the Board, including the selection of a Department staff member to serve as a Board Liaison between the Department and the Advisory Board.

(c) All final actions by the Board pursuant to this subsection (c) shall require approval by a simple majority of the Board. The Board shall have the following duties:

(1) reviewing applications and extensions for designation as a Clean Energy Empowerment Zone, including Department recommendations, testimony from public hearings, public comment, and supporting materials;

(2) voting to approve, disapprove, or modify applications for designation and extensions as a Clean Energy Empowerment Zones;

(3) the approval of tax credits under the Clean Energy Empowerment Zone Tax Credit Act; and

(4) modifying applications for designation or extensions as a Clean Energy Empowerment Zone before approval.

(d) Deadlines for responses by the Board. Within 60 days after submission of applications or tax credits, pursuant to subsection (c) of this Section, to the Board by the Department, the Board shall approve, disapprove, or modify applications for certification of regions as Clean Energy Empowerment Zones. If the Board does not take final action on a submission within 60 days after the submission, the application submitted by the Department shall be considered approved, and the regions proposed in the application shall be certified as Clean Energy Empowerment Zones.

Section 5-25. Incentives for renewable energy enterprises located within a Clean Energy Empowerment Zone.

(a) Renewable energy enterprises located in Clean Energy Empowerment Zones are eligible to apply for a State income tax credit under the Clean Energy Empowerment Zone Tax Credit Act.

(b) Renewable energy enterprises located in Clean Energy Empowerment Zones are eligible to receive an investment credit subject to the requirements of paragraph (1) of subsection (f) of Section 201 of the Illinois Income Tax Act.

(c) Renewable energy enterprises are eligible to purchase building materials exempt from use and occupation taxes to be incorporated into their renewable energy projects within the Clean Energy Empowerment Zone when purchased from a retailer within the Clean Energy Empowerment Zone under Section 5k-5 of the Retailers' Occupation Tax Act.

(d) Renewable energy enterprises located in a Clean Energy Empowerment Zone that meet the qualifications of Section 9-222.1B of the Public Utilities Act are exempt, in part or in whole, from State and local taxes on gas and electricity.

(e) Preference for procurements shall be conducted by the Illinois Power Agency as described in subparagraph (P) of paragraph (1) of subsection (c) of Section 1-75 of the Illinois Power Agency Act.

Section 5-30. State incentives regarding public services and physical infrastructure.

(a) The State Treasurer is authorized and encouraged to place deposits of State funds with financial institutions doing business in a Clean Energy Empowerment Zone.

(b) This Act does not restrict tax incentive financing under Division 74.4 of Article 11 of the Illinois Municipal Code.

Section 5-35. Supporting impacted communities.

(a) No later than July 1, 2021, the Department shall develop a process for accepting applications from units of local government included in Clean Energy Empowerment Zones to mitigate the impact of an annual reduction of at least 30% in the sum of property tax revenue or other direct payments, or both, from fossil fuel power plants or coal mines to local governments due to the retirement, or reduced operation, of the power plant or mine that occurred after January 1, 2016. In the case of reduced operation, the proposal may only be accepted if the reduction in operation is reasonably expected to be permanent. The Department shall accept applications on an ongoing basis after beginning the program. Local government units may submit applications jointly.

(b) The Department shall use available funds from the Energy Community Reinvestment Fund, subject to the provisions of subsection (c) of Section 5-70, to provide payments to communities for a period of no longer than 5 years from the approval of their proposal, subject to the following restrictions:

(1) Payments shall be assessed based on need, taking into consideration the net amount of any increase in payments from any other State source, including, but not limited to, funding provided based on an evidence-based funding formula developed by the Illinois State Board of Education.

(2) The highest annual payment to the unit of local government cannot exceed the lower value of either (i) the average annual sum of property tax and other direct payments from the fossil fuel power plant or coal mine to the unit of local government from the most recent 3 taxable years before the reduction or cessation of operation of the fossil fuel power plant or coal mine, or (ii) the difference between projected local government revenue for the years for which assistance is requested (taking into account reasonably anticipated new revenue sources) and the average local government revenue from the most recent 3 taxable years before the reduction or cessation of fossil fuel power plant or coal mine operation. The Department may choose to consider budget information from prior years if doing so allows the Department to better measure the revenue impacts of the energy transition.

(3) The Department shall not provide funding under this Program that exceeds the amount specified in this paragraph (3) to any local government unit. Each unit of local government shall not be granted by the Department a total amount of funding over the lifetime of this Program, for each fossil fuel power plant or coal mine, that is greater than 5 times the average annual sum of property tax payments and other direct payments from the fossil fuel power plant or coal mine to the unit of local government, calculated based on the most recent 3 taxable years that occurred before the reduction or cessation of operation of the fossil fuel power plant or coal mine.

(4) The Department may develop a payment schedule that phases out support over time, based on its analysis of available present and anticipated future funding in the Energy Community Reinvestment Fund or other reasons consistent with the purposes of this Act.

(5) If the total amount of qualified proposals exceeds the available present and anticipated future funding in the Energy Community Reinvestment Fund, the Department may prorate payments to units of local government, or prioritize communities for investment based on an environmental justice screen in coordination with the Commission on Environmental Justice, and input from stakeholders. The Department shall allocate funding in an equitable and effective manner. Nothing in this Act shall be interpreted to infer that units of local government have a right to revenue replacement from the State.

(6) Funding allocated under this program may not be used to support fossil fuel power plants, nuclear power plants, or coal mines in any form. Any local government unit that uses funds provided under this Act to support fossil fuel power plants, nuclear power plants, or coal mines shall reimburse the State for all funding used for that purpose. If requested, the Department shall provide guidance to local government units on whether a proposed use of funds is considered a violation of this requirement.

(7) At least once every 2 years following the allocation of funds for this program, the Department shall publish a document available online detailing the allocation of funds, including a map that shows the geographic distribution of the funds and the locations of Clean Energy Empowerment Zones.

(c) The Department shall contact all units of local government in Clean Energy Empowerment Zones and provide information on the application process for funding under this Section and a reasonable estimate of total funding that will be available for this program. The Department shall request that applications for funding contain the information necessary for the Department to evaluate the fiscal impact of the energy transition on communities located in Clean Energy Empowerment Zones; however the Department shall allow for reasonable flexibility in the applications to accommodate local government units that may have less resources available to prepare an application. The Department shall, to the extent practical, assist local government units in the application process.

(d) The Department shall develop rules to implement the provisions of this Section.

Section 5-40. Clean Energy Empowerment Task Forces.

(a) The Department and the Board shall work with local stakeholders in Clean Energy Empowerment Zones to support the convening of local Clean Energy Empowerment Task Forces.

(b) Local Clean Energy Empowerment Task Forces shall include a broad range of local stakeholders to inform transition needs and include, at a minimum, elected representatives from municipal and State governments, operators of local power plants or mines, multiple representatives from community-based organizations, local environmental, fish, or wildlife groups, organized labor, and the Illinois Environmental Protection Agency.

(c) The Board shall put forward requests for proposals for third-party facilitators for Task Forces in prioritized Clean Energy Empowerment Zones based on need and those facing recent or near-term retirements of plants or mines.

(d) The Department shall work with local Task Forces to develop local transition plans that identify economic, workforce, and environmental health needs with strategies to mitigate energy transition impacts and any accompanying funding requests from the Energy Community Reinvestment Fund.

(e) As part of developing local transition plans, the Department shall work with third-party facilitators and Task Force members to gather and incorporate public comment and feedback into a finalized transition plan.

(f) If the Department determines that a fossil fuel power plant owner has failed to engage productively in stakeholder meetings and with Clean Energy Empowerment Zone Task Forces, the Department shall submit a notification to the Illinois Environmental Protection Agency for enforcement actions and the assessment of fees as described in Section 9.16 of the Environmental Protection Act.

Section 5-45. Energy Transition Workforce Commission.

(a) The Energy Transition Workforce Commission is hereby created within the Department of Commerce and Economic Opportunity.

(b) The Commission shall consist of the following 5 members:

(1) the Director of Commerce and Economic Opportunity, or his or her designee, who shall serve as chairperson;

(2) the Director of Labor, or his or her designee; and

(3) 3 members appointed by the Governor, with the advice and consent of the Senate, of which at least one shall be from organized labor and at least one shall be a resident of an environmental justice community.

Designees shall be appointed within 60 days after a vacancy.

(c) Members of the Commission shall serve without compensation, but may be reimbursed for necessary expenses incurred in the performance of their duties from funds appropriated for that purpose. The Department of Commerce and Economic Opportunity shall provide administrative support to the Commission.

(d) Within 120 days after the effective date of this Act, the Commission shall produce an Energy Transition Workforce Report regarding the anticipated impact of the energy transition and a comprehensive set of recommendations to address changes to the Illinois workforce during the period of 2020 through 2050, or a later year. The report shall contain the following elements, designed to be used for the programs created in this Act:

(1) Information related to the impact on current workers, including:

(A) a comprehensive accounting of all employees who currently work in fossil fuel energy generation, nuclear energy generation, and coal mining in the State; this shall include information on their location, employer, salary ranges, full-time or part-time status, nature of their work, educational attainment, union status, and other factors the Commission finds relevant; the Commission shall keep a confidential list of these employees and the information necessary to identify them for the purpose of their eligibility to participate in programs designed for their benefit;

(B) the anticipated schedule of closures of fossil fuel power plants, nuclear power plants, and coal mines across the State; when information is unavailable to provide exact data, the report shall include approximations based upon the best available information;

(C) an estimate of worker impacts due to scheduled closures, including layoffs, early retirements, salary changes, and other factors the Commission finds relevant; and

(D) the likely outcome for workers who are employed by facilities that are anticipated to close or have significant layoffs during their tenure or lifetime.

(2) Information regarding impact on communities and local governments, including:

(A) changes in the revenue for units of local government in areas that currently or recently have had a closure or reduction in operation of a fossil fuel power plant, nuclear power plant, coal mine, or related industry;

(B) environmental impacts in areas that currently or recently have had fossil fuel power plants, coal mines, nuclear power plants, or related industry; and

(C) economic impacts of the energy transition, including, but not limited to, the supply chain impacts of the energy transition shift toward new energy sources across the State.

(3) Information on emerging industries and State economic development opportunities in regions that have historically been the site of fossil fuel power plants, nuclear power plants, or coal mining.

(e) Following the completion of each report, or if the Department finds that it is prudent to begin before the completion of a report, the Department shall coordinate with the Commission to create a comprehensive draft plan for designing, maintaining, and funding programs established under this Act, including the Energy Workforce Development Program created under Section 5-50, the Energy Community Development Program created under Section 5-55, and the Displaced Energy Workers Bill of Rights provided under Section 5-60. The draft plan shall include, at a minimum, the following information:

(1) A detailed accounting of the anticipated costs for each program and the anticipated amount of funding that will be provided for each program.

(2) Information on the locations at which each program shall have services provided. If this information is not yet known by the Department at the time of the plan's drafting, the Department shall generally explain how they intend to determine the program locations.

Within 120 days after the effective date of this Act, the Department shall publish the draft plan online. The Department shall take public comments on the draft plan for a period of no less than 45 days and publish the final plan within 30 days after the closing of the comment period.

(f) The Department shall periodically review its findings in the developed reports and make modifications to the report and programs based on new findings. The Department shall conduct a comprehensive reevaluation of the report, and publish a modified version along with a new draft plan, on each of the following years following initial publication: 2023; 2027; 2030; 2035; 2040; and any year thereafter which the Department determines is necessary or prudent.

Section 5-50. Energy Workforce Development Program.

(a) The purpose of the Energy Workforce Development Program is to proactively assist energy workers in their search for economic opportunity.

(b) The Director of Commerce and Economic Opportunity shall design, develop, and administer the Energy Workforce Development Program. The Energy Workforce Development Program shall include the following elements:

(1) comprehensive career services for displaced energy workers, including advising displaced energy workers looking for new positions on finding new employment or preparing for retirement;

(2) communication services to provide displaced energy workers advance notice of any power plant or coal mine closures that are likely to result in a loss of employment for the energy worker;

(3) administrative assistance for displaced energy workers in applying for programs provided by the State, the federal government, nonprofit organizations, or other programs that are designed to offer career or financial assistance;

(4) the creation and maintenance of a registry of all persons in Illinois who qualify as an energy worker to use for coordination with programs created under this Act or other benefits for those workers, including all information necessary or beneficial for the implementation of this Act;

(5) the management of funding for services outlined in this Section; and

(6) financial advice for displaced energy workers designed to assist workers with retirement, a change in positions, pursuing an education, or other goals that the energy worker has identified.

(c) In administering the Energy Workforce Development Program, the Department shall develop and implement the Program with the following goals:

(1) to use the recommendations and information contained in the report created under Section 5-45 to proactively plan for each phase of the energy transition in Illinois;

(2) to increase access to the services contained in this Program by locating services in different regions of the State as dictated by the anticipated schedule of power plant and coal mine closures and regional economic changes;

(3) to maximize the efficiency of resources used;

(4) to design the Energy Workforce Development Program to work in collaboration with the Displaced Energy Workers Bill of Rights; and

(5) any other goals identified by the Department.

Section 5-55. Energy Community Development Program.

(a) The purpose of the Energy Community Development Program is to proactively assist Clean Energy Empowerment Zone communities in their search for economic opportunities leading up to and after the closure of a fossil fuel power plant, nuclear power plant, or coal mine.

(b) The Director of Commerce and Economic Opportunity shall, subject to appropriation, administer the Energy Community Development Program. In administering the Energy Community Development Program, the Department shall:

(1) assist local governments in Clean Energy Empowerment Zones in finding private and public sector partners to invest in regional development;

(2) assist units of local government in finding and negotiating terms with businesses willing to relocate or open new enterprises in regions impacted;

(3) provide coordination services to connect organizations or persons seeking to use tax credits created under Act with units of local government;

(4) conduct outreach and educational events for private sector organizations for the purpose of attracting investment in Clean Energy Empowerment Zones; and

(5) gather and incorporate public comment and feedback so that local knowledge, priorities, and strengths help shape and guide private and public development.

(c) In administering the Energy Community Development Program, the Department shall develop and implement the Program with the following goals:

(1) to increase private sector development in Clean Energy Empowerment Zones;

(2) to replace and improve employment opportunities in Clean Energy Empowerment Zones for community members;

(3) to provide resources for Clean Energy Empowerment Zone communities across the State, and avoid geographic preferences in the allocation of resources; and

(4) to create a healthful environment for community members in Clean Energy Empowerment Zones.

Section 5-60. Displaced Energy Workers Bill of Rights.

(a) The Department of Commerce and Economic Opportunity shall implement the Displaced Energy Workers Bill of Rights and shall be responsible for the implementation of the Displaced Energy Workers Bill of Rights programs and rights created under this Section. The Department shall provide the following benefits to displaced energy workers listed in paragraphs (1) through (4) of this subsection:

(1) Advance notice of power plant or coal mine closure.

(A) The Department of Commerce and Economic Opportunity shall notify all energy workers of the upcoming closure of any qualifying facility at least 2 years in advance of the scheduled closing date.

(B) In providing the advance notice described in this paragraph (1), the Department shall take reasonable steps to ensure that all displaced energy workers are educated on the various programs available through the Department to assist with the energy transition.

(2) Employment assistance and career services. The Department shall provide displaced energy workers with assistance in finding new sources of employment through the Energy Workforce Development Program established in this Act.

(3) Full-tuition scholarship for Illinois institutions and trade schools.

(A) The Department shall provide any displaced energy worker with a full-tuition scholarship to any of the following programs: (i) public universities in this State; (ii) trade schools in this State; (iii) community college programs in this State; or (iv) union training programs in this State. The Department may set cost caps on the maximum amount of tuition that may be funded.

(B) The Department shall provide information and consultation to displaced energy workers on the various educational opportunities available through this Program, and advise workers on which opportunities meet their needs and preferences.

(C) Displaced energy workers who are eligible for scholarships created under this Section by the date of their enrollment shall be considered eligible for scholarship funding for up to 4 years or until completion of their degree or certification, whichever is the shorter duration.

(4) Financial Planning Services. Displaced energy workers shall be entitled to services as described in the energy worker Programs in this subsection, including financial planning services.

(b) The owners of power plants with a nameplate capacity of greater than 300 megawatts and the owners of coal mines located in Illinois shall be required to comply with the requirements set out in this subsection (b). The owners shall be required to take the following actions:

(1) provide employment information for energy workers; prior to the closure of an electric generating unit or mine, the owners of the power plant or mine shall provide energy workers information on whether there are employment opportunities provided by their employer;

(2) provide extended health insurance for displaced energy workers who are former employees of the power plant owner that (A) costs no more than the average monthly premium paid by the worker over the last 12 months and (B) offers the same level of benefits, including, but not limited to, coverage, in-network providers, deductibles, and copayments covered during the previous 12 months; companies that sell energy into auctions managed by the Illinois Power Agency shall be required to offer 2 years of health insurance following closure of an electric generating unit to employees who are not employed in new positions that offer health insurance upon: (i) plant closure; or (ii) employment termination; the Department may require funding for health insurance to be provided in advance of employment termination; and

(3) maintain responsible retirement account portfolios; employees of qualifying facilities shall have their retirement funds backed by financial tools that are not economically dependent upon the success of their employer's business.

Section 5-65. Consideration of energy worker employment.

(a) All State departments and agencies shall conduct a review of the Department of Commerce and Economic Opportunity's registry of energy workers to determine whether any qualified candidates are displaced energy workers before making a final hiring decision for a position in State employment.

(b) The Department of Commerce and Economic Opportunity shall inform all State agencies and departments of the obligations created by this Section and take steps to ensure compliance.

(c) Nothing in this Section shall be interpreted to indicate that the State is required to hire displaced energy workers for any position.

(d) No part of this Section shall be interpreted to be in conflict with federal or State civil rights or employment law.

Section 5-70. Energy Community Reinvestment Fund.

(a) The General Assembly hereby declares that management of several economic development programs requires a consolidated funding source to improve resource efficiency. The General Assembly specifically recognizes that properly serving communities and workers impacted by the energy transition requires that the Department of Commerce and Economic Opportunity have access to the resources required for the execution of the programs in this Act.

The intent of the General Assembly is that the Energy Community Reinvestment Fund is able to provide all funding for development programs created in this Act, and that no additional charge is borne by the taxpayers or ratepayers of Illinois absent a deficiency.

(b) The Energy Community Reinvestment Fund is created as a special fund in the State treasury to be used by the Department of Commerce and Economic Opportunity for purposes provided under this Section. The Fund shall be used to fund programs specified under subsection (c). The objective of the Fund is to bring economic development to communities in this State in a manner that equitably maximizes economic opportunity in all communities by increasing efficiency of resource allocation across the programs listed in subsection (c). The Department shall include a description of its proposed approach to the design, administration, implementation, and evaluation of the Fund, as part of the Energy Transition Workforce Plan described in this Act. Contracts that will be paid with moneys in the Fund shall be executed by the Department.

(c) The Department shall be responsible for the administration of the Fund and shall allocate funding on the basis of priorities established in this Section. Each year, the Department shall determine the available amount of resources in the Fund that can be allocated to the programs identified in this Section, and allocate the funding accordingly. The Department shall, to the extent practical, consider both the short-term and long-term costs of the programs and allocate, save, or invest funding so that the Department is able to cover both the short-term and long-term costs of these programs using projected revenue.

The available funding for each year shall be allocated from the Fund in the following order of priority:

(1) for costs related to the Energy Community Development programs in this Act, up to $2,000,000 annually or 2% of the available funding, whichever is less;

(2) for costs related to the Energy Workforce Development programs and the Displaced Energy Workers Bill of Rights in this Act, including all programs created by the Energy Transition Workforce Commission, up to $13,000,000 annually or 21% of the available funding, whichever is less. If 21% of the available funding is more than $13,000,000, the amount over $13,000,000 is allocated to the items in (1) through (3) by their relative percentages until those programs are fully funded;

(3) for costs, up to $100,000,000 annually, to support units of local government in Clean Energy Empowerment Zones, as described in Section 5-35;

(4) if the programs identified in paragraphs (1) through (7) are fully funded and the Department reasonably predicts they will be adequately funded in future years, the Department shall transfer an amount equal to the year's tax credits awarded through the programs of up to $22,500,000 annually go the General Revenue Fund to offset revenue reductions from tax credits provided under the Clean Energy Empowerment Zone Tax Credit Act;

(5) to support the Low Income Home Energy Assistance Program, up to $30,000,000 annually, to support additional costs from the Percentage of Income Payment Program expansion and energy assistance expansion;

(6) if the programs identified in paragraphs (1) through (6) are fully funded and the Department reasonably predicts they shall be adequately funded in future years, the Department shall transfer all surplus to the General Revenue Fund.

(d) No later than June 1, 2021, and by June 1 of each year thereafter, the Department shall submit a notification to the Illinois Environmental Protection Agency for the purpose of implementing the energy community reinvestment fee as described in Section 9.16 of the Environmental Protection Act. The notification shall include the revenue and spending requirements for the programs identified under the Energy Community Reinvestment Act for the upcoming fiscal year, as well as the projected spending for all program years through Fiscal Year 2036. The projected revenue and spending need identified for any program year shall be no less than $200,000,000 per year for the calendar years 2021 through 2025 and $100,000,000 per year for all calendar years starting in 2026 that the Illinois electric sector generates greenhouse gas emissions.

(e) If there is a funding shortfall for items identified in paragraphs (1) through (4) of subsection (c), the Department shall submit a request for funds to applicable electric utilities for funds collected under subsection (k) of Section 1-75 of the Illinois Power Agency Act up to $25,000,000 per year to cover the shortfall. Upon notification by utilities that sufficient funds are available for use under the terms of paragraph (7) of subsection (k) of Section 1-75 of the Illinois Power Agency Act, the Department shall send an invoice to the applicable utilities for the amount requested. Upon receipt, the funds shall be deposited into the Energy Community Reinvestment Fund.

(f) The Department shall, on an ongoing basis, seek out and apply for funding from alternative sources to cover the costs of these programs. Alternative sources may include the federal government, other State programs, private foundations, donors, or other opportunities for funding. The Department shall, as described in subsection (c), use any additional funding obtained for these programs to reduce or eliminate any costs borne by taxpayers and ratepayers. Nothing in this subsection (f) shall be interpreted to reduce or remove the revenue requirements obtained by the Illinois Environmental Protection Agency as described in subsection (d).

(g) Notwithstanding any other law to the contrary, the Energy Community Reinvestment Fund is not subject to sweeps, administrative chargebacks, or any other fiscal or budgetary maneuver that would in any way transfer any amounts from the Energy Community Reinvestment Fund into any other fund of the State.

(h) The Department is granted all powers necessary for the implementation of this Section.

Section 5-75. Administrative review. All final administrative decisions, including, but not limited to, funding allocation and rules issued by the Department under this Act are subject to judicial review under the Administrative Review Law. No action may be commenced under this Section prior to 60 days after the complainant has given notice in writing of the action to the Department.

ARTICLE 10. Clean Energy Empowerment Zone Tax Credit Act

Section 10-1. Short title. This Article may be cited as the Clean Energy Empowerment Zone Tax Credit Act. References in this Article to "this Act" mean this Article.

Part 1.

Section 10-100. Definitions. As used in this Part 1:

"Applicant" means a person that is operating a business located within the State of Illinois and has applied for an income tax credit through a program under this Act.

"Basic wage" means compensation for employment that meets the prevailing wage standards as defined by the Department.

"Certificate" means the tax credit certificate issued by the Department under Section 10-125.

"Certificate of eligibility" means the certificate issued by the Department under Section 10-110.

"Credit" means the amount awarded by the Department to an applicant by issuance of a certificate under Section 10-125 for each new full-time equivalent employee hired or job created.

"Department" means the Department of Commerce and Economic Opportunity.

"Director" means the Director of Commerce and Economic Opportunity.

"Former energy worker" means an individual who is employed, or was employed, at a fossil fuel power plant, nuclear power plant, or coal mine, and is listed in the registry of energy workers developed by the Department of Commerce and Economic Opportunity pursuant to Section 5-50 of the Energy Community Reinvestment Act.

"Full-time employee" means an individual who is employed at a prevailing wage for at least 35 hours each week, and provided standard worker benefits, or who renders any other standard of service generally accepted by industry custom or practice as full-time employment. An individual for whom a W-2 is issued by a Professional Employer Organization is a full-time employee if he or she is employed in the service of the applicant for a basic wage for at least 35 hours each week or renders any other standard of service generally accepted by industry custom or practice as full-time employment. For the purposes of this Act, such an individual shall be considered a full-time employee of the applicant.

"Incentive period" means the period beginning on July 1 and ending on June 30 of the following year. The first incentive period shall begin on July 1, 2021 and the last incentive period shall end on June 30, 2040.

"New employee" means a full-time employee:

(1) who first became employed by an applicant within the incentive period whose hire results in a net increase in the applicant's full-time Illinois employees and who is receiving a prevailing wage as compensation; and

(2) who was previously employed in a fossil fuel power plant, nuclear power plant, or coal mine in the State of Illinois that has since closed.

"New employee" does not include:

(1) a person who was previously employed in Illinois by the applicant or a related member prior to the onset of the incentive period, unless the new employee is hired for site remediation work; or

(2) a person who has a direct or indirect ownership interest of at least 5% in the profits, capital, or value of the applicant or a related member; or

(3) a person who has been hired to assist in the production of fossil fuel derived energy directly or indirectly, unless that person has been hired to assist in the deconstruction of a fossil fuel power plant, the deconstruction of a coal mine, the remediation of a site formerly used for fossil fuel power production, or the remediation of a coal mine.

"Noncompliance date" means, in the case of an applicant that is not complying with the requirements of this Act, the day following the last date upon which the taxpayer was in compliance with the requirements of this Act, as determined by the Director under Section 10-135.

"Professional Employer Organization" has the same meaning as ascribed to that term under Section 5-5 of the Economic Development for a Growing Economy Tax Credit Act. "Professional Employer Organization" does not include a day and temporary labor service agency regulated under the Day and Temporary Labor Services Act.

"Related member" means a person that, with respect to the applicant during any portion of the incentive period, is any one of the following:

(1) An individual, if the individual and the members of the individual's family, as defined in Section 318 of the Internal Revenue Code, own directly, indirectly, beneficially, or constructively, in the aggregate, at least 50% of the value of the outstanding profits, capital, stock, or other ownership interest in the applicant.

(2) A partnership, estate, or trust and any partner or beneficiary, if the partnership, estate, or trust and its partners or beneficiaries own directly, indirectly, beneficially, or constructively, in the aggregate, at least 50% of the profits, capital, stock, or other ownership interest in the applicant.

(3) A corporation, and any party related to the corporation, in a manner that would require an attribution of stock from the corporation under the attribution rules of Section 318 of the Internal Revenue Code, if the applicant and any other related member own, in the aggregate, directly, indirectly, beneficially, or constructively, at least 50% of the value of the corporation's outstanding stock.

(4) A corporation and any party related to that corporation in a manner that would require an attribution of stock from the corporation to the party or from the party to the corporation under the attribution rules of Section 318 of the Internal Revenue Code, if the corporation and all such related parties own, in the aggregate, at least 50% of the profits, capital, stock, or other ownership interest in the applicant.

(5) A person to or from whom there is attribution of stock ownership in accordance with subsection (e) of Section 1563 of the Internal Revenue Code, except that for purposes of determining whether a person is a related member under this paragraph (5):

(A) stock owned, directly or indirectly, by or for a partnership shall be considered as owned by any partner having an interest of 20% or more in either the capital or profits of the partnership in proportion to his or her interest in capital or profits, whichever such proportion is the greater;

(B) stock owned, directly or indirectly, by or for an estate or trust shall be considered as owned by any beneficiary who has an actuarial interest of 20% or more in such stock, to the extent of such actuarial interest. For purposes of this subparagraph, the actuarial interest of each beneficiary shall be determined by assuming the maximum exercise of discretion by the fiduciary in favor of such beneficiary and the maximum use of such stock to satisfy his or her rights as a beneficiary; and

(C) stock owned, directly or indirectly, by or for a corporation shall be considered as owned by any person who owns 20% or more in value of its stock in that proportion which the value of the stock which the person so owns bears to the value of all the stock in the corporation.

Section 10-105. Powers of the Department. The Department, in addition to those powers granted under the Civil Administrative Code of Illinois, is granted and shall have all the powers necessary or convenient to carry out and effectuate the purposes and provisions of this Act, including, but not limited to, power and authority to:

(1) Adopt rules deemed necessary and appropriate for the administration of this Act; establish forms for applications, notifications, contracts, or any other agreements; and accept applications at any time during the year and require that all applications be submitted electronically through the Internet.

(2) Provide guidance and assistance to applicants under the provisions of this Act, and cooperate with applicants to promote, foster, and support job creation within this State.

(3) Enter into agreements and memoranda of understanding for participation of and engage in cooperation with agencies of the federal government, units of local government, universities, research foundations or institutions, regional economic development corporations, or other organizations for the purposes of this Act.

(4) Gather information and conduct inquiries, in the manner and by the methods it deems desirable, including, without limitation, gathering information with respect to applicants for the purpose of making any designations or certifications necessary or desirable or to gather information in furtherance of the purposes of this Act.

(5) Establish, negotiate, and effectuate any term, agreement, or other document with any person necessary or appropriate to accomplish the purposes of this Act, and consent, subject to the provisions of any agreement with another party, to the modification or restructuring of any agreement to which the Department is a party.

(6) Provide for sufficient personnel to permit administration, staffing, operation, and related support required to adequately discharge its duties and responsibilities described in this Act from funds made available through charges to applicants or from funds as may be appropriated by the General Assembly for the administration of this Act.

(7) Require applicants, upon written request, to issue any necessary authorization to the appropriate federal, State, or local authority or any other person for the release to the Department of information requested by the Department, with the information requested to include, but not be limited to, financial reports, returns, or records relating to the applicant or to the amount of credit allowable under this Act.

(8) Require that an applicant shall at all times keep proper books of record and account in accordance with generally accepted accounting principles consistently applied, with the books, records, or papers related to the agreement in the custody or control of the applicant open for reasonable Department inspection and audits, and including, without limitation, the making of copies of the books, records, or papers.

(9) Take whatever actions are necessary or appropriate to protect the State's interest in the event of bankruptcy, default, foreclosure, or noncompliance with the terms and conditions of financial assistance or participation required under this Act, including the power to sell, dispose of, lease, or rent, upon terms and conditions determined by the Director to be appropriate, real or personal property that the Department may recover as a result of these actions.

Section 10-110. Certificate of eligibility for tax credit.

(a) An applicant that has hired a former energy worker or a graduate or trainee from an equity-focused workforce training program designated by the Illinois Power Agency as a new employee during the incentive period may apply for a certificate of eligibility for the credit with respect to that position on or after the date of hire of the new employee. The date of hire shall be the first day on which the employee begins providing services for basic wage compensation.

(b) An applicant may apply for a certificate of eligibility for the credit for more than one new employee on or after the date of hire of each qualifying new employee.

(c) After receipt of an application under this Section, the Department shall issue a certificate of eligibility to the applicant that states the following:

(1) the date and time on which the application was received by the Department and an identifying number assigned to the applicant by the Department;

(2) the maximum amount of the credit the applicant could potentially receive under this Act with respect to the new employees listed on the application; and

(3) the maximum amount of the credit potentially allowable on certificates of eligibility issued for applications received prior to the application for which the certificate of eligibility is issued.

Section 10-115. Tax credit.

(a) Subject to the conditions set forth in this Act, an applicant is entitled to a credit against payment of taxes withheld under Section 704A of the Illinois Income Tax Act:

(1) for former energy workers or graduates of Clean Jobs Workforce programs hired as new employees who the applicant hires and retains for a minimum of one year; and

(2) in the amount of:

(A) 20% of the salary paid to the new employee for employees hired and retained for between the time of hiring and one year;

(B) 15% of the salary paid to the new employee for employees hired and retained between one year and 2 years; and

(C) 10% of the salary paid to the new employee for employees hired and retained between 2 years and 3 years.

(b) The Department shall make credit awards under this Act to further job creation.

(c) The credit shall be claimed for the first calendar year ending on or after the date on which the certificate is issued by the Department.

(d) The net increase in full-time Illinois employees, measured on an annual full-time equivalent basis, shall be the total number of full-time Illinois employees of the applicant on the final day of the incentive period, minus the number of full-time Illinois employees employed by the employer on the first day of that same incentive period. For purposes of the calculation, an employer that begins doing business in this State during the incentive period, as determined by the Director, shall be treated as having zero Illinois employees on the first day of the incentive period.

(e) The net increase in the number of full-time Illinois employees of the applicant under subsection (d) must be sustained continuously for at least 12 months, starting with the date of hire of a new employee during the incentive period. Eligibility for the credit does not depend on the continuous employment of any particular individual. For purposes of this subsection (e), if a new employee ceases to be employed before the completion of the 12-month period for any reason, the net increase in the number of full-time Illinois employees shall be treated as continuous if a different new employee is hired as a replacement within a reasonable time for the same position. The new employees must be hired to fill positions that the applicant reasonably anticipates will be available for the new employee as a long-term position. For the purposes of this subsection (e), "long-term position" means a position that will be available for 3 years or longer.

(f) The Department shall adopt rules to enable an applicant for which a Professional Employer Organization has been contracted to issue W-2s and make payment of taxes withheld under Section 704A of the Illinois Income Tax Act for new employees to retain the benefit of tax credits to which the applicant is otherwise entitled under this Act.

Section 10-120. Maximum amount of credits allowed. The Department shall limit the monetary amount of credits awarded under this Act to no more than $18,000,000 annually during the incentive period. If applications for a greater amount are received, credits shall be allowed on a first-come, first-served basis, based on the date on which each properly completed application for a certificate of eligibility is received by the Department. If more than one certificate of eligibility is received on the same day, the credits shall be awarded based on the time of submission for that particular day.

Section 10-125. Application for award of tax credit; tax credit certificate.

(a) On or after the conclusion of the 12-month period, or other period, after a new employee has been hired, for the purposes of subsection (a) of Section 10-115, an applicant shall file with the Department an application for award of a credit. The application shall include the following:

(1) the names, Social Security numbers, job descriptions, salary or wage rates, and dates of hire of the new employees with respect to whom the credit is being requested;

(2) a certification that each new employee listed has been retained on the job for at least one year from the date of hire;

(3) the number of new employees hired by the applicant during the incentive period;

(4) the net increase in the number of full-time Illinois employees of the applicant, including the new employees listed in the request, between the beginning of the incentive period and the dates on which the new employees listed in the request were hired;

(5) an agreement that the Director is authorized to verify with the appropriate State agencies the information contained in the request before issuing a certificate to the applicant; and

(6) any other information the Department determines to be appropriate.

(b) Although an application may be filed at any time after the conclusion of the 12-month period after a new employee was hired, an application filed more than 90 days after the earliest date on which it could have been filed shall not be awarded any credit if, prior to the date it is filed, the Department has received applications under this Section for credits totaling more than $20,000,000.

(c) The Department shall issue a certificate to each applicant awarded a credit under this Act. The certificate shall include the following:

(1) the name and taxpayer identification number of the applicant;

(2) the date on which the certificate is issued;

(3) the credit amount that will be allowed; and

(4) any other information the Department determines to be appropriate.

Section 10-130. Submission of tax credit certificate to the Department of Revenue. An applicant claiming a credit under this Act shall submit to the Department of Revenue a copy of each certificate issued under Section 10-125 with the first tax return for which the credit shown on the certificate is claimed. Failure to submit a copy of the certificate with the applicant's tax return shall not invalidate a claim for a credit.

Section 10-135. Administrative review.

(a) If the Director determines that an applicant who has received a credit under this Act is not complying with the requirements of this Act, the Director shall provide notice to the applicant of the alleged noncompliance, and allow the taxpayer a hearing under the provisions of the Illinois Administrative Procedure Act. If, after the notice and hearing, the Director determines that noncompliance exists, the Director shall issue to the Department of Revenue notice to that effect, and state the date of noncompliance.

(b) All final administrative decisions, including, but not limited to, funding allocation and rules issued by the Department under this Act are subject to judicial review under the Administrative Review Law. No action may be commenced under this Section prior to 60 days after the complainant has given notice in writing of the action to the Department.

Section 10-140. Rules. The Department may adopt rules necessary to implement this Part 1. The rules may provide for recipients of credits under this Part 1 to be charged fees to cover administrative costs of the tax credit program.

Part 2.

Section 10-200. Definitions. As used in this Part 2:

"Agreement" means the agreement between a taxpayer and the Department entered into for a tax credit awarded under Section 10-210.

"Applicant" means a taxpayer operating a renewable energy enterprise, as determined under the Energy Community Reinvestment Act, located within or that the renewable energy enterprise plans to locate within a Clean Energy Empowerment Zone. "Applicant" does not include a taxpayer who closes or substantially reduces an operation at one location in this State and relocates substantially the same operation to a location in a Clean Energy Empowerment Zone. A taxpayer is not prohibited from expanding its operations at a location in a Clean Energy Empowerment Zone, provided that existing operations of a similar nature located within the State are not closed or substantially reduced. A taxpayer is also not prohibited from moving operations from one location in this State to a Clean Energy Empowerment Zone for the purpose of expanding the operation provided that the Department determines that expansion cannot reasonably be accommodated within the municipality in which the business is located, or in the case of a business located in an incorporated area of the county, within the county in which the business is located, after conferring with the chief elected official of the municipality or county and taking into consideration any evidence offered by the municipality or county regarding the ability to accommodate expansion within the municipality or county.

"Board" means the Clean Energy Empowerment Zone Board created under Section 5-20 of the Illinois Energy Community Reinvestment Act.

"Credit" means the amount agreed to between the Department and the Applicant under this Act, but not to exceed the lesser of: (1) the sum of (i) 50% of the incremental income tax attributable to new employees at the applicant's project and (ii) 10% of the training costs of new employees; or (2) 100% of the incremental income tax attributable to new employees at the applicant's project. If the project is located in an underserved area, then the amount of the credit may not exceed the lesser of: (1) the sum of (i) 75% of the incremental income tax attributable to new employees at the applicant's project and (ii) 10% of the training costs of new employees; or (2) 100% of the incremental income tax attributable to new employees at the applicant's project. If an applicant agrees to hire the required number of new employees, then the maximum amount of the credit for that applicant may be increased by an amount not to exceed 25% of the incremental income tax attributable to retained employees at the applicant's project; provided that, in order to receive the increase for retained employees, the applicant must provide the additional evidence required under paragraph (3) of subsection (c) of Section 10-215.

"Department" means the Department of Commerce and Economic Opportunity.

"Director" means the Director of Commerce and Economic Opportunity.

"Full-time employee" means an individual who is employed for consideration for at least 35 hours each week or who renders any other standard of service generally accepted by industry custom or practice as full-time employment. An individual for whom a W-2 is issued by a Professional Employer Organization is a full-time employee if employed in the service of the applicant for consideration for at least 35 hours each week or who renders any other standard of service generally accepted by industry custom or practice as full-time employment to the applicant.

"Incremental income tax" means the total amount withheld during the taxable year from the compensation of new employees and, if applicable, retained employees under Article 7 of the Illinois Income Tax Act arising from employment at a project that is the subject of an agreement.

"New employee" means a full-time employee first employed by a taxpayer in the project that is the subject of an agreement and who is hired after the taxpayer enters into the agreement.

"New employee" does not include:

(1) an employee of the taxpayer who performs a job that was previously performed by another employee, if that job existed for at least 6 months before hiring the employee;

(2) an employee of the taxpayer who was previously employed in Illinois by a related member of the taxpayer and whose employment was shifted to the taxpayer after the taxpayer entered into the agreement; or

(3) a child, grandchild, parent, or spouse, other than a spouse who is legally separated from the individual, of any individual who has a direct or an indirect ownership interest of at least 5% in the profits, capital, or value of the taxpayer.

Notwithstanding any other provisions of this Section, an employee may be considered a new employee under the agreement if the employee performs a job that was previously performed by an employee who was: (i) treated under the agreement as a new employee; and (ii) promoted by the taxpayer to another job.

Notwithstanding any other provisions of this Section, the Department may award a credit to an applicant with respect to an employee hired prior to the date of the agreement if: (i) the applicant is in receipt of a letter from the Department stating an intent to enter into a credit agreement; (ii) the letter described in item (i) of this paragraph is issued by the Department not later than 15 days after the effective date of this Act; and (iii) the employee was hired after the date the letter described in item (i) of this paragraph was issued.

"Pass-through entity" means an entity that is exempt from the tax under subsection (b) or (c) of Section 205 of the Illinois Income Tax Act.

"Related member" means a person that, with respect to the taxpayer during any portion of the taxable year, is any one of the following:

(1) An individual stockholder, if the stockholder and the members of the stockholder's family, as defined in Section 318 of the Internal Revenue Code, own directly, indirectly, beneficially, or constructively, in the aggregate, at least 50% of the value of the taxpayer's outstanding stock.

(2) A partnership, estate, or trust and any partner or beneficiary, if the partnership, estate, or trust, and its partners or beneficiaries own directly, indirectly, beneficially, or constructively, in the aggregate, at least 50% of the profits, capital, stock, or value of the taxpayer.

(3) A corporation, and any party related to the corporation in a manner that would require an attribution of stock from the corporation to the party or from the party to the corporation under the attribution rules of Section 318 of the Internal Revenue Code, if the taxpayer owns directly, indirectly, beneficially, or constructively at least 50% of the value of the corporation's outstanding stock.

(4) A corporation and any party related to that corporation in a manner that would require an attribution of stock from the corporation to the party or from the party to the corporation under the attribution rules of Section 318 of the Internal Revenue Code, if the corporation and all such related parties own in the aggregate at least 50% of the profits, capital, stock, or value of the taxpayer.

(5) A person to or from whom there is attribution of stock ownership in accordance with subsection (e) of Section 1563 of the Internal Revenue Code, except that for purposes of determining whether a person is a related member under this paragraph (5):

(A) stock owned, directly or indirectly, by or for a partnership shall be considered as owned by any partner having an interest of 20% or more in either the capital or profits of the partnership in proportion to his or her interest in capital or profits, whichever such proportion is the greater;

(B) stock owned, directly or indirectly, by or for an estate or trust shall be considered as owned by any beneficiary who has an actuarial interest of 20% or more in such stock, to the extent of such actuarial interest. For purposes of this subparagraph, the actuarial interest of each beneficiary shall be determined by assuming the maximum exercise of discretion by the fiduciary in favor of such beneficiary and the maximum use of such stock to satisfy his or her rights as a beneficiary; and

(C) stock owned, directly or indirectly, by or for a corporation shall be considered as owned by any person who owns 20% or more in value of its stock in that proportion which the value of the stock which the person so owns bears to the value of all the stock in the corporation.

"Renewable energy" means solar energy, wind energy, water energy, geothermal energy, bioenergy, or hydrogen fuel and cells.

"Renewable energy production facility" means a facility owned by a company that is engaged in and used such a facility for the production of solar energy, wind energy, water energy, geothermal energy, bioenergy, or hydrogen fuel and cells.

"Taxpayer" means an individual, corporation, partnership, or other entity that has any Illinois income tax liability.

"Underserved area" means a geographic area that meets one or more of the following conditions:

(1) the area has a poverty rate of at least 20% according to the latest federal decennial census;

(2) 75% or more of the children in the area participate in the federal free lunch program according to reported statistics from the State Board of Education;

(3) at least 20% of the households in the area receive assistance under the Supplemental Nutrition Assistance Program; or

(4) the area has an average unemployment rate, as determined by the Department of Employment Security, that is more than 120% of the national unemployment average, as determined by the United States Department of Labor, for a period of at least 2 consecutive calendar years preceding the date of the application.

Section 10-205. Powers of the Department. The Department, in addition to those powers granted under the Civil Administrative Code of Illinois and Part 1 of this Act, is granted and has all the powers necessary or convenient to carry out and effectuate the purposes and provisions of this Act, including, but not limited to, power and authority to:

(a) Adopt rules deemed necessary and appropriate for the administration of programs; establish forms for applications, notifications, contracts, or any other agreements; and accept applications at any time during the year.

(b) Provide and assist taxpayers pursuant to the provisions of this Act, and cooperate with taxpayers that are parties to agreements to promote, foster, and support economic development, capital investment, and job creation or retention within the Clean Energy Empowerment Zone.

(c) Enter into agreements and memoranda of understanding for participation of and engage in cooperation with agencies of the federal government, units of local government, universities, research foundations or institutions, regional economic development corporations, or other organizations for the purposes of this Act.

(d) Gather information and conduct inquiries, in the manner and by the methods as it deems desirable, including, without limitation, gathering information with respect to applicants for the purpose of making any designations or certifications necessary or desirable or to gather information to assist the Board with any recommendation or guidance in the furtherance of the purposes of this Act.

(e) Establish, negotiate and effectuate any term, agreement or other document with any person, necessary or appropriate to accomplish the purposes of this Act, and consent, subject to the provisions of any agreement with another party, to the modification or restructuring of any agreement to which the Department is a party.

(f) Fix, determine, charge, and collect any premiums, fees, charges, costs, and expenses from applicants, including, without limitation, any application fees, commitment fees, program fees, financing charges, or publication fees as deemed appropriate to pay expenses necessary or incident to the administration, staffing, or operation in connection with the Department's or Board's activities under this Act, or for preparation, implementation, and enforcement of the terms of the agreement, or for consultation, advisory and legal fees, and other costs. All fees and expenses incident thereto shall be the responsibility of the applicant.

(g) Provide for sufficient personnel to permit administration, staffing, operation, and related support required to adequately discharge its duties and responsibilities described in this Act from funds made available through charges to applicants or from funds as may be appropriated by the General Assembly for the administration of this Act.

(h) Require applicants, upon written request, to issue any necessary authorization to the appropriate federal, State, or local authority for the release of information concerning a project being considered under the provisions of this Act, with the information requested to include, but not be limited to, financial reports, returns, or records relating to the taxpayer or its project.

(i) Require that a taxpayer shall at all times keep proper books of record and account in accordance with generally accepted accounting principles consistently applied, with the books, records, or papers related to the agreement in the custody or control of the taxpayer open for reasonable Department inspection and audits, and including, without limitation, the making of copies of the books, records, or papers, and the inspection or appraisal of any of the taxpayer or project assets.

(j) Take whatever actions are necessary or appropriate to protect the State's interest in the event of bankruptcy, default, foreclosure, or noncompliance with the terms and conditions of financial assistance or participation required under this Act, including the power to sell, dispose, lease, or rent, upon terms and conditions determined by the Director to be appropriate, real or personal property that the Department may receive as a result of these actions.

Section 10-210. Tax credit awards.

(a) Subject to the conditions set forth in this Act, a taxpayer is entitled to a credit against or, as described in subsection (g), a payment toward taxes imposed pursuant to subsections (a) and (b) of Section 201 of the Illinois Income Tax Act that may be imposed on the taxpayer for a taxable year beginning on or after January 1, 2019, if the taxpayer is awarded a credit by the Department under this Act for that taxable year.

(b) The Department shall make credit awards under this Act to foster job creation and the development of renewable energy in Clean Energy Empowerment Zones.

(c) A person that proposes a project to create new jobs and to invest in the development of a renewable energy production facility in a Clean Energy Empowerment Zone must enter into an agreement with the Department for the credit under this Act.

(d) The credit shall be claimed for the taxable years specified in the agreement.

(e) The credit shall not exceed the incremental income tax attributable to the project that is the subject of the agreement.

(f) Nothing herein shall prohibit a tax credit award to an applicant that uses a Professional Employer Organization if all other award criteria are satisfied.

(g) A pass-through entity that has been awarded a credit under this Act, its shareholders, or its partners may treat some or all of the credit awarded under this Act as a tax payment for purposes of the Illinois Income Tax Act. In no event shall the amount of the award credited under this Act exceed the Illinois income tax liability of the pass-through entity or its shareholders or partners for the taxable year.

For the purposes of this subsection (g), "tax payment" means a payment as described in Article 6 or Article 8 of the Illinois Income Tax Act or a composite payment made by a pass-through entity on behalf of any of its shareholders or partners to satisfy such shareholders' or partners' taxes imposed pursuant to subsections (a) and (b) of Section 201 of the Illinois Income Tax Act.

Section 10-215. Application for a project to create and retain new jobs and to develop renewable energy.

(a) Any renewable energy enterprise proposing a project to build a renewable energy production facility located or planned to be located in a Clean Energy Empowerment Zone may request consideration for designation of its project, by formal written letter of request or by formal application to the Department, in which the applicant states its intent to make at least a specified level of investment and intends to hire or retain a specified number of full-time employees at a designated location in Illinois. As circumstances require, the Department may require a formal application from an applicant and a formal letter of request for assistance.

(b) In order to qualify for credits under this Act, an applicant's project must:

(1) be for the purpose of producing renewable energy;

(2) if the applicant has more than 100 employees, involve an investment of at least $2,500,000 in capital improvements to be placed in service within a Clean Energy Empowerment Zone as a direct result of the project. If the applicant has 100 or fewer employees, then there is no capital investment requirement; and

(3) if the applicant has more than 100 employees, employ a number of new employees in the Clean Energy Empowerment Zone equal to the lesser of (A) 10% of the number of full-time employees employed by the applicant world-wide on the date the application is filed with the Department; or (B) 50 new employees. If the applicant has 100 or fewer employees, employ a number of new employees in the State equal to the lesser of (A) 5% of the number of full-time employees employed by the applicant world-wide on the date the application is filed with the Department or (B) 50 New Employees.

(c) After receipt of an application, the Department shall review the application, make inquiries, and conduct studies in the manner and by the methods as it deems desirable, and consult with and make a recommendation to the Clean Energy Empowerment Zone Board created under the Energy Community Reinvestment Act. The Department and the Board shall make its recommendations and approvals based on whether they determine that all of the following conditions exist:

(1) The applicant's project will make the required investment in the State and the applicant intends to hire the required number of new employees in Illinois as a result of that project, as described in this Act.

(2) The applicant's project is economically sound and will benefit the people of the State of Illinois by increasing opportunities for employment and strengthening the economy of Illinois.

(3) That, if not for the credit, the project would not occur in Illinois or in the Clean Energy Empowerment Zone, which may be demonstrated by evidence that receipt of the credit is essential to the applicant's decision to create new jobs in the State, such as the magnitude of the cost differential between Illinois and a competing state;

(4) The political subdivisions affected by the project have committed local incentives or other support with respect to the project, considering local ability to assist.

(5) Awarding the credit will result in an overall positive fiscal impact to the State, as certified by the Board using the best available data.

(6) The credit is not prohibited by Section 10-225.

(d) After approval by the Board, the Department may enter into an agreement with the applicant.

Section 10-220. Relocation of jobs to Clean Energy Empowerment Zone. A taxpayer is not entitled to claim the credit provided by this Act with respect to any jobs that the taxpayer relocates from one site in Illinois to another site in a Clean Energy Empowerment Zone. A taxpayer with respect to a qualifying project certified under the Corporate Headquarters Relocation Act, however, is not subject to the requirements of this Section, but is nevertheless considered an applicant for purposes of this Act. Moreover, any full-time employee of an eligible renewable energy enterprise relocated to a Clean Energy Empowerment Zone in connection with that qualifying project is deemed to be a new employee for purposes of this Act. Determinations under this Section shall be made by the Department.

Section 10-225. Determination of the amount of credit. In determining the amount of credit that should be awarded, the Board shall provide guidance on, and the Department shall take into consideration, all of the following factors:

(1) the number and location of jobs created and retained in relation to the economy of the Clean Energy Empowerment Zone where the projected investment is to occur;

(2) the potential impact on the economy of the Clean Energy Empowerment Zone;

(3) the advancement of renewable energy in the Clean Energy Empowerment Zone;

(4) the incremental payroll attributable to the project;

(5) the capital investment attributable to the project;

(6) the amount of the average wage and benefits paid by the applicant in relation to the wage and benefits of the Clean Energy Empowerment Zone;

(7) the costs to Illinois and the affected political subdivisions with respect to the project; and

(8) the financial assistance that is otherwise provided by Illinois and the affected political subdivisions.

Section 10-230. Amount and duration of credit.

(a) The Department shall determine the amount and duration of the credit awarded under this Act. The duration of the credit may not exceed 10 taxable years. The credit may be stated as a percentage of the incremental income tax attributable to the applicant's project and may include a fixed dollar limitation. An agreement for the credit must be finalized and signed by all parties while the area in which the project is located is designated a Clean Energy Empowerment Zone. The credit may last longer than the applicable Clean Energy Empowerment Zone designation. Agreements entered into prior to the de-designation of a Clean Energy Empowerment Zone shall be honored for the length of the agreement.

(b) Notwithstanding subsection (a), and except as the credit may be applied in a carryover year as otherwise provided in this subsection (b), the credit may be applied against the State income tax liability in more than 10 taxable years, but not in more than 15 taxable years for an eligible green energy enterprise that: (i) qualifies under this Act and the Corporate Headquarters Relocation Act and has in fact undertaken a qualifying project within the time frame specified by the Department of Commerce and Economic Opportunity under that Act; and (ii) applies against its State income tax liability, during the entire 15-year period, no more than 60% of the maximum credit per year that would otherwise be available under this Act.

Any credit that is unused in the year the credit is computed may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year. The credit shall be applied to the earliest year for which there is a tax liability. If there are credits from more than one tax year that are available to offset a liability, the earlier credit shall be applied first.

Section 10-235. Contents of agreements with applicants. The Department shall enter into an agreement with an applicant that is awarded a credit under this Act.

Section 10-240. Certificate of verification; submission to the Department of Revenue. A taxpayer claiming a credit under this Act shall submit to the Department of Revenue a copy of the Director's certificate of verification under this Act for the taxable year. Failure to submit a copy of the certificate with the taxpayer's tax return shall not invalidate a claim for a credit.

Section 10-245. Supplier diversity. Each taxpayer claiming a credit under this Act shall, no later than April 15 of each taxable year for which the taxpayer claims a credit under this Act, submit to the Department of Commerce and Economic Opportunity an annual report containing the information described in subsections (b), (c), (d), and (e) of Section 5-117 of the Public Utilities Act. Those reports shall be submitted in the form and manner required by the Department of Commerce and Economic Opportunity.

Section 10-250. Pass-through entity. The shareholders or partners of a taxpayer that is a pass-through entity shall be entitled to the credit allowed under the agreement. The credit is in addition to any credit to which a shareholder or partner is otherwise entitled under a separate agreement under this Act. A pass-through entity and a shareholder or partner of the pass-through entity may not claim more than one credit under the same agreement.

Section 10-255. Rules. The Department may adopt rules necessary to implement this Part 2. The rules may provide for recipients of credits under this Part 2 to be charged fees to cover administrative costs of the tax credit program. Fees collected shall be deposited into the Energy Community Reinvestment Fund.

Section 10-260. Program terms and conditions.

(a) Any documentary materials or data made available or received by any member of a board or any agent or employee of the Department shall be deemed confidential and shall not be deemed public records to the extent that the materials or data consists of trade secrets, commercial or financial information regarding the operation of the business conducted by the applicant for or recipient of any tax credit under this Act, or any information regarding the competitive position of a business in a particular field of endeavor.

(b) Nothing in this Act shall be construed as creating any rights in any applicant to enter into an agreement or in any person to challenge the terms of any agreement.

ARTICLE 15. Coal Severance Fee Act

Section 15-1. Short title. This Article may be cited as the Coal Severance Fee Act. References in this Article to "this Act" mean this Article.

Section 15-5. Coal severance fee.

(a) Definitions. As used in this Act:

"Department" means the Department of Revenue.

"Person" means any natural individual, firm, partnership, association, joint stock company, joint adventure, public or private corporation, limited liability company, or a receiver, executor, trustee, guardian, or other representative appointed by order of any court.

(b) Tax imposed.

(1) On and after June 1, 2021, there is hereby imposed a tax upon any person engaged in the business of severing or preparing coal for sale, profit, or commercial use, if the coal is severed from a mine located in this State. The rate of the tax imposed under this Section is 6% of the gross value of the severed coal.

(2) The liability for the tax accrues at the time the coal is severed.

(c) Payment and collection of tax.

(1) The tax imposed under this Act shall be due and payable on or before the 20th day of the month following the month in which the coal is severed.

(2) The State shall have a lien on all coal severed in this State on or after June 1, 2021 to secure the payment of the tax.

(d) Registration. A person who is subject to the tax imposed under this Act shall register with the Department. Application for a certificate of registration shall be made to the Department upon forms furnished by the Department and shall contain any reasonable information the Department may require. Upon receipt of the application for a certificate of registration in proper form, the Department shall issue to the applicant a certificate of registration.

(e) Inspection of records by Department, subpoena power, contempt. For the purpose of computing the amount of the tax due under this Section, the Department has the following powers:

(1) to require any person who is subject to this tax to furnish any additional information deemed to be necessary for the computation of the tax;

(2) to examine books, records, and files of such person; and

(3) to issue subpoenas and examine witnesses under oath. If any witness fails or refuses to appear at the request of the Director, or if any witness refuses access to books, records, or files, the circuit court of the proper county, or the judge thereof, on application of the Department, shall compel obedience by proceedings for contempt, as in the case of disobedience of the requirements of a subpoena issued from that court or a refusal to testify therein.

(f) Returns. Each taxpayer shall make a return to the Department showing the following:

(1) the name of the taxpayer;

(2) the address of the taxpayer's principal place of business;

(3) the quantity of coal severed or prepared during the month for which the return is filed;

(4) the gross value of the severed coal;

(5) the amount of tax due;

(6) the signature of the taxpayer; and

(7) any other reasonable information as the Department may require.

(g) The return shall be filed on or before the 20th day of the month after the month during which the coal is severed. The Department may require any additional report or information it deems necessary for the proper administration of this Act.

(h) Returns due under this Section shall be filed electronically in the manner prescribed by the Department. Taxpayers shall make all payments of the tax to the Department under this Act by electronic funds transfer unless, as provided by rule, the Department grants an exception upon petition of a taxpayer. Returns must be accompanied by appropriate computer generated magnetic media supporting schedule data in the format required by the Department, unless, as provided by rule, the Department grants an exception upon petition of a taxpayer.

(i) Incorporation by reference. All of the provisions of Sections 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5j, 6, 13 6a, 6b, 6c, 7, 8, 9, 10, 11, 11a, 12, and 13 of the Retailers' Occupation Tax Act which are not inconsistent with this Act, and all provisions of the Uniform Penalty and Interest Act shall apply, as far as practicable, to the subject matter of this Act to the same extent as if such provisions were included herein.

(j) Rulemaking. The Department is hereby authorized to adopt rules as may be necessary to administer and enforce the provisions of this Act.

(k) Distribution of proceeds. All moneys received by the Department under this Act shall be paid into the Energy Community Reinvestment Fund.

Article 90. Amendatory Provisions

Section 90-5. The Illinois Administrative Procedure Act is amended by adding Section 45.8 as follows:

(5 ILCS 100/45.8 new)

Sec. 45.8. Emergency rulemaking; Energy Community Reinvestment Act. To provide for the expeditious and timely implementation of the Energy Community Reinvestment Act, emergency rules may be adopted in accordance with Section 5-45 by the Department of Commerce and Economic Opportunity to implement Section 5-15 of the Energy Community Reinvestment Act with respect to applications for designation as Clean Energy Empowerment Zones. The adoption of emergency rules authorized by Section 5-45 and this Section is deemed to be necessary for the public interest, safety, and welfare.

Section 90-10. The State Finance Act is amended by adding Section 5.935 as follows:

(30 ILCS 105/5.935 new)

Sec. 5.935. The Energy Community Reinvestment Fund.

Section 90-15. The Illinois Income Tax Act is amended by changing Section 201 as follows:

(35 ILCS 5/201)

(Text of Section without the changes made by P.A. 101-8, which did not take effect (see Section 99 of P.A. 101-8))

Sec. 201. Tax imposed.

(a) In general. A tax measured by net income is hereby imposed on every individual, corporation, trust and estate for each taxable year ending after July 31, 1969 on the privilege of earning or receiving income in or as a resident of this State. Such tax shall be in addition to all other occupation or privilege taxes imposed by this State or by any municipal corporation or political subdivision thereof.

(b) Rates. The tax imposed by subsection (a) of this Section shall be determined as follows, except as adjusted by subsection (d-1):

(1) In the case of an individual, trust or estate, for taxable years ending prior to July 1, 1989, an amount equal to 2 1/2% of the taxpayer's net income for the taxable year.

(2) In the case of an individual, trust or estate, for taxable years beginning prior to July 1, 1989 and ending after June 30, 1989, an amount equal to the sum of (i) 2 1/2% of the taxpayer's net income for the period prior to July 1, 1989, as calculated under Section 202.3, and (ii) 3% of the taxpayer's net income for the period after June 30, 1989, as calculated under Section 202.3.

(3) In the case of an individual, trust or estate, for taxable years beginning after June 30, 1989, and ending prior to January 1, 2011, an amount equal to 3% of the taxpayer's net income for the taxable year.

(4) In the case of an individual, trust, or estate, for taxable years beginning prior to January 1, 2011, and ending after December 31, 2010, an amount equal to the sum of (i) 3% of the taxpayer's net income for the period prior to January 1, 2011, as calculated under Section 202.5, and (ii) 5% of the taxpayer's net income for the period after December 31, 2010, as calculated under Section 202.5.

(5) In the case of an individual, trust, or estate, for taxable years beginning on or after January 1, 2011, and ending prior to January 1, 2015, an amount equal to 5% of the taxpayer's net income for the taxable year.

(5.1) In the case of an individual, trust, or estate, for taxable years beginning prior to January 1, 2015, and ending after December 31, 2014, an amount equal to the sum of (i) 5% of the taxpayer's net income for the period prior to January 1, 2015, as calculated under Section 202.5, and (ii) 3.75% of the taxpayer's net income for the period after December 31, 2014, as calculated under Section 202.5.

(5.2) In the case of an individual, trust, or estate, for taxable years beginning on or after January 1, 2015, and ending prior to July 1, 2017, an amount equal to 3.75% of the taxpayer's net income for the taxable year.

(5.3) In the case of an individual, trust, or estate, for taxable years beginning prior to July 1, 2017, and ending after June 30, 2017, an amount equal to the sum of (i) 3.75% of the taxpayer's net income for the period prior to July 1, 2017, as calculated under Section 202.5, and (ii) 4.95% of the taxpayer's net income for the period after June 30, 2017, as calculated under Section 202.5.

(5.4) In the case of an individual, trust, or estate, for taxable years beginning on or after July 1, 2017, an amount equal to 4.95% of the taxpayer's net income for the taxable year.

(6) In the case of a corporation, for taxable years ending prior to July 1, 1989, an amount equal to 4% of the taxpayer's net income for the taxable year.

(7) In the case of a corporation, for taxable years beginning prior to July 1, 1989 and ending after June 30, 1989, an amount equal to the sum of (i) 4% of the taxpayer's net income for the period prior to July 1, 1989, as calculated under Section 202.3, and (ii) 4.8% of the taxpayer's net income for the period after June 30, 1989, as calculated under Section 202.3.

(8) In the case of a corporation, for taxable years beginning after June 30, 1989, and ending prior to January 1, 2011, an amount equal to 4.8% of the taxpayer's net income for the taxable year.

(9) In the case of a corporation, for taxable years beginning prior to January 1, 2011, and ending after December 31, 2010, an amount equal to the sum of (i) 4.8% of the taxpayer's net income for the period prior to January 1, 2011, as calculated under Section 202.5, and (ii) 7% of the taxpayer's net income for the period after December 31, 2010, as calculated under Section 202.5.

(10) In the case of a corporation, for taxable years beginning on or after January 1, 2011, and ending prior to January 1, 2015, an amount equal to 7% of the taxpayer's net income for the taxable year.

(11) In the case of a corporation, for taxable years beginning prior to January 1, 2015, and ending after December 31, 2014, an amount equal to the sum of (i) 7% of the taxpayer's net income for the period prior to January 1, 2015, as calculated under Section 202.5, and (ii) 5.25% of the taxpayer's net income for the period after December 31, 2014, as calculated under Section 202.5.

(12) In the case of a corporation, for taxable years beginning on or after January 1, 2015, and ending prior to July 1, 2017, an amount equal to 5.25% of the taxpayer's net income for the taxable year.

(13) In the case of a corporation, for taxable years beginning prior to July 1, 2017, and ending after June 30, 2017, an amount equal to the sum of (i) 5.25% of the taxpayer's net income for the period prior to July 1, 2017, as calculated under Section 202.5, and (ii) 7% of the taxpayer's net income for the period after June 30, 2017, as calculated under Section 202.5.

(14) In the case of a corporation, for taxable years beginning on or after July 1, 2017, an amount equal to 7% of the taxpayer's net income for the taxable year.

The rates under this subsection (b) are subject to the provisions of Section 201.5.

(b-5) Surcharge; sale or exchange of assets, properties, and intangibles of organization gaming licensees. For each of taxable years 2019 through 2027, a surcharge is imposed on all taxpayers on income arising from the sale or exchange of capital assets, depreciable business property, real property used in the trade or business, and Section 197 intangibles (i) of an organization licensee under the Illinois Horse Racing Act of 1975 and (ii) of an organization gaming licensee under the Illinois Gambling Act. The amount of the surcharge is equal to the amount of federal income tax liability for the taxable year attributable to those sales and exchanges. The surcharge imposed shall not apply if:

(1) the organization gaming license, organization license, or racetrack property is transferred as a result of any of the following:

(A) bankruptcy, a receivership, or a debt adjustment initiated by or against the initial licensee or the substantial owners of the initial licensee;

(B) cancellation, revocation, or termination of any such license by the Illinois Gaming Board or the Illinois Racing Board;

(C) a determination by the Illinois Gaming Board that transfer of the license is in the best interests of Illinois gaming;

(D) the death of an owner of the equity interest in a licensee;

(E) the acquisition of a controlling interest in the stock or substantially all of the assets of a publicly traded company;

(F) a transfer by a parent company to a wholly owned subsidiary; or

(G) the transfer or sale to or by one person to another person where both persons were initial owners of the license when the license was issued; or

(2) the controlling interest in the organization gaming license, organization license, or racetrack property is transferred in a transaction to lineal descendants in which no gain or loss is recognized or as a result of a transaction in accordance with Section 351 of the Internal Revenue Code in which no gain or loss is recognized; or

(3) live horse racing was not conducted in 2010 at a racetrack located within 3 miles of the Mississippi River under a license issued pursuant to the Illinois Horse Racing Act of 1975.

The transfer of an organization gaming license, organization license, or racetrack property by a person other than the initial licensee to receive the organization gaming license is not subject to a surcharge. The Department shall adopt rules necessary to implement and administer this subsection.

(c) Personal Property Tax Replacement Income Tax. Beginning on July 1, 1979 and thereafter, in addition to such income tax, there is also hereby imposed the Personal Property Tax Replacement Income Tax measured by net income on every corporation (including Subchapter S corporations), partnership and trust, for each taxable year ending after June 30, 1979. Such taxes are imposed on the privilege of earning or receiving income in or as a resident of this State. The Personal Property Tax Replacement Income Tax shall be in addition to the income tax imposed by subsections (a) and (b) of this Section and in addition to all other occupation or privilege taxes imposed by this State or by any municipal corporation or political subdivision thereof.

(d) Additional Personal Property Tax Replacement Income Tax Rates. The personal property tax replacement income tax imposed by this subsection and subsection (c) of this Section in the case of a corporation, other than a Subchapter S corporation and except as adjusted by subsection (d-1), shall be an additional amount equal to 2.85% of such taxpayer's net income for the taxable year, except that beginning on January 1, 1981, and thereafter, the rate of 2.85% specified in this subsection shall be reduced to 2.5%, and in the case of a partnership, trust or a Subchapter S corporation shall be an additional amount equal to 1.5% of such taxpayer's net income for the taxable year.

(d-1) Rate reduction for certain foreign insurers. In the case of a foreign insurer, as defined by Section 35A-5 of the Illinois Insurance Code, whose state or country of domicile imposes on insurers domiciled in Illinois a retaliatory tax (excluding any insurer whose premiums from reinsurance assumed are 50% or more of its total insurance premiums as determined under paragraph (2) of subsection (b) of Section 304, except that for purposes of this determination premiums from reinsurance do not include premiums from inter-affiliate reinsurance arrangements), beginning with taxable years ending on or after December 31, 1999, the sum of the rates of tax imposed by subsections (b) and (d) shall be reduced (but not increased) to the rate at which the total amount of tax imposed under this Act, net of all credits allowed under this Act, shall equal (i) the total amount of tax that would be imposed on the foreign insurer's net income allocable to Illinois for the taxable year by such foreign insurer's state or country of domicile if that net income were subject to all income taxes and taxes measured by net income imposed by such foreign insurer's state or country of domicile, net of all credits allowed or (ii) a rate of zero if no such tax is imposed on such income by the foreign insurer's state of domicile. For the purposes of this subsection (d-1), an inter-affiliate includes a mutual insurer under common management.

(1) For the purposes of subsection (d-1), in no event shall the sum of the rates of tax imposed by subsections (b) and (d) be reduced below the rate at which the sum of:

(A) the total amount of tax imposed on such foreign insurer under this Act for a taxable year, net of all credits allowed under this Act, plus

(B) the privilege tax imposed by Section 409 of the Illinois Insurance Code, the fire insurance company tax imposed by Section 12 of the Fire Investigation Act, and the fire department taxes imposed under Section 11-10-1 of the Illinois Municipal Code,

equals 1.25% for taxable years ending prior to December 31, 2003, or 1.75% for taxable years ending on or after December 31, 2003, of the net taxable premiums written for the taxable year, as described by subsection (1) of Section 409 of the Illinois Insurance Code. This paragraph will in no event increase the rates imposed under subsections (b) and (d).

(2) Any reduction in the rates of tax imposed by this subsection shall be applied first against the rates imposed by subsection (b) and only after the tax imposed by subsection (a) net of all credits allowed under this Section other than the credit allowed under subsection (i) has been reduced to zero, against the rates imposed by subsection (d).

This subsection (d-1) is exempt from the provisions of Section 250.

(e) Investment credit. A taxpayer shall be allowed a credit against the Personal Property Tax Replacement Income Tax for investment in qualified property.

(1) A taxpayer shall be allowed a credit equal to .5% of the basis of qualified property placed in service during the taxable year, provided such property is placed in service on or after July 1, 1984. There shall be allowed an additional credit equal to .5% of the basis of qualified property placed in service during the taxable year, provided such property is placed in service on or after July 1, 1986, and the taxpayer's base employment within Illinois has increased by 1% or more over the preceding year as determined by the taxpayer's employment records filed with the Illinois Department of Employment Security. Taxpayers who are new to Illinois shall be deemed to have met the 1% growth in base employment for the first year in which they file employment records with the Illinois Department of Employment Security. The provisions added to this Section by Public Act 85-1200 (and restored by Public Act 87-895) shall be construed as declaratory of existing law and not as a new enactment. If, in any year, the increase in base employment within Illinois over the preceding year is less than 1%, the additional credit shall be limited to that percentage times a fraction, the numerator of which is .5% and the denominator of which is 1%, but shall not exceed .5%. The investment credit shall not be allowed to the extent that it would reduce a taxpayer's liability in any tax year below zero, nor may any credit for qualified property be allowed for any year other than the year in which the property was placed in service in Illinois. For tax years ending on or after December 31, 1987, and on or before December 31, 1988, the credit shall be allowed for the tax year in which the property is placed in service, or, if the amount of the credit exceeds the tax liability for that year, whether it exceeds the original liability or the liability as later amended, such excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit years if the taxpayer (i) makes investments which cause the creation of a minimum of 2,000 full-time equivalent jobs in Illinois, (ii) is located in an enterprise zone established pursuant to the Illinois Enterprise Zone Act and (iii) is certified by the Department of Commerce and Community Affairs (now Department of Commerce and Economic Opportunity) as complying with the requirements specified in clause (i) and (ii) by July 1, 1986. The Department of Commerce and Community Affairs (now Department of Commerce and Economic Opportunity) shall notify the Department of Revenue of all such certifications immediately. For tax years ending after December 31, 1988, the credit shall be allowed for the tax year in which the property is placed in service, or, if the amount of the credit exceeds the tax liability for that year, whether it exceeds the original liability or the liability as later amended, such excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit years. The credit shall be applied to the earliest year for which there is a liability. If there is credit from more than one tax year that is available to offset a liability, earlier credit shall be applied first.

(2) The term "qualified property" means property which:

(A) is tangible, whether new or used, including buildings and structural components of buildings and signs that are real property, but not including land or improvements to real property that are not a structural component of a building such as landscaping, sewer lines, local access roads, fencing, parking lots, and other appurtenances;

(B) is depreciable pursuant to Section 167 of the Internal Revenue Code, except that "3-year property" as defined in Section 168(c)(2)(A) of that Code is not eligible for the credit provided by this subsection (e);

(C) is acquired by purchase as defined in Section 179(d) of the Internal Revenue Code;

(D) is used in Illinois by a taxpayer who is primarily engaged in manufacturing, or in mining coal or fluorite, or in retailing, or was placed in service on or after July 1, 2006 in a River Edge Redevelopment Zone established pursuant to the River Edge Redevelopment Zone Act; and

(E) has not previously been used in Illinois in such a manner and by such a person as would qualify for the credit provided by this subsection (e) or subsection (f).

(3) For purposes of this subsection (e), "manufacturing" means the material staging and production of tangible personal property by procedures commonly regarded as manufacturing, processing, fabrication, or assembling which changes some existing material into new shapes, new qualities, or new combinations. For purposes of this subsection (e) the term "mining" shall have the same meaning as the term "mining" in Section 613(c) of the Internal Revenue Code. For purposes of this subsection (e), the term "retailing" means the sale of tangible personal property for use or consumption and not for resale, or services rendered in conjunction with the sale of tangible personal property for use or consumption and not for resale. For purposes of this subsection (e), "tangible personal property" has the same meaning as when that term is used in the Retailers' Occupation Tax Act, and, for taxable years ending after December 31, 2008, does not include the generation, transmission, or distribution of electricity.

(4) The basis of qualified property shall be the basis used to compute the depreciation deduction for federal income tax purposes.

(5) If the basis of the property for federal income tax depreciation purposes is increased after it has been placed in service in Illinois by the taxpayer, the amount of such increase shall be deemed property placed in service on the date of such increase in basis.

(6) The term "placed in service" shall have the same meaning as under Section 46 of the Internal Revenue Code.

(7) If during any taxable year, any property ceases to be qualified property in the hands of the taxpayer within 48 months after being placed in service, or the situs of any qualified property is moved outside Illinois within 48 months after being placed in service, the Personal Property Tax Replacement Income Tax for such taxable year shall be increased. Such increase shall be determined by (i) recomputing the investment credit which would have been allowed for the year in which credit for such property was originally allowed by eliminating such property from such computation and, (ii) subtracting such recomputed credit from the amount of credit previously allowed. For the purposes of this paragraph (7), a reduction of the basis of qualified property resulting from a redetermination of the purchase price shall be deemed a disposition of qualified property to the extent of such reduction.

(8) Unless the investment credit is extended by law, the basis of qualified property shall not include costs incurred after December 31, 2018, except for costs incurred pursuant to a binding contract entered into on or before December 31, 2018.

(9) Each taxable year ending before December 31, 2000, a partnership may elect to pass through to its partners the credits to which the partnership is entitled under this subsection (e) for the taxable year. A partner may use the credit allocated to him or her under this paragraph only against the tax imposed in subsections (c) and (d) of this Section. If the partnership makes that election, those credits shall be allocated among the partners in the partnership in accordance with the rules set forth in Section 704(b) of the Internal Revenue Code, and the rules promulgated under that Section, and the allocated amount of the credits shall be allowed to the partners for that taxable year. The partnership shall make this election on its Personal Property Tax Replacement Income Tax return for that taxable year. The election to pass through the credits shall be irrevocable.

For taxable years ending on or after December 31, 2000, a partner that qualifies its partnership for a subtraction under subparagraph (I) of paragraph (2) of subsection (d) of Section 203 or a shareholder that qualifies a Subchapter S corporation for a subtraction under subparagraph (S) of paragraph (2) of subsection (b) of Section 203 shall be allowed a credit under this subsection (e) equal to its share of the credit earned under this subsection (e) during the taxable year by the partnership or Subchapter S corporation, determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code. This paragraph is exempt from the provisions of Section 250.

(f) Investment credit; Enterprise Zone; River Edge Redevelopment Zone.

(1) A taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for investment in qualified property which is placed in service in an Enterprise Zone created pursuant to the Illinois Enterprise Zone Act or, for property placed in service on or after July 1, 2006, a River Edge Redevelopment Zone established pursuant to the River Edge Redevelopment Zone Act. For partners, shareholders of Subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there shall be allowed a credit under this subsection (f) to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code. The credit shall be .5% of the basis for such property. The credit shall be available only in the taxable year in which the property is placed in service in the Enterprise Zone or River Edge Redevelopment Zone and shall not be allowed to the extent that it would reduce a taxpayer's liability for the tax imposed by subsections (a) and (b) of this Section to below zero. For tax years ending on or after December 31, 1985, the credit shall be allowed for the tax year in which the property is placed in service, or, if the amount of the credit exceeds the tax liability for that year, whether it exceeds the original liability or the liability as later amended, such excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year. The credit shall be applied to the earliest year for which there is a liability. If there is credit from more than one tax year that is available to offset a liability, the credit accruing first in time shall be applied first.

(2) The term qualified property means property which:

(A) is tangible, whether new or used, including buildings and structural components of buildings;

(B) is depreciable pursuant to Section 167 of the Internal Revenue Code, except that "3-year property" as defined in Section 168(c)(2)(A) of that Code is not eligible for the credit provided by this subsection (f);

(C) is acquired by purchase as defined in Section 179(d) of the Internal Revenue Code;

(D) is used in the Enterprise Zone or River Edge Redevelopment Zone by the taxpayer; and

(E) has not been previously used in Illinois in such a manner and by such a person as would qualify for the credit provided by this subsection (f) or subsection (e).

(3) The basis of qualified property shall be the basis used to compute the depreciation deduction for federal income tax purposes.

(4) If the basis of the property for federal income tax depreciation purposes is increased after it has been placed in service in the Enterprise Zone or River Edge Redevelopment Zone by the taxpayer, the amount of such increase shall be deemed property placed in service on the date of such increase in basis.

(5) The term "placed in service" shall have the same meaning as under Section 46 of the Internal Revenue Code.

(6) If during any taxable year, any property ceases to be qualified property in the hands of the taxpayer within 48 months after being placed in service, or the situs of any qualified property is moved outside the Enterprise Zone or River Edge Redevelopment Zone within 48 months after being placed in service, the tax imposed under subsections (a) and (b) of this Section for such taxable year shall be increased. Such increase shall be determined by (i) recomputing the investment credit which would have been allowed for the year in which credit for such property was originally allowed by eliminating such property from such computation, and (ii) subtracting such recomputed credit from the amount of credit previously allowed. For the purposes of this paragraph (6), a reduction of the basis of qualified property resulting from a redetermination of the purchase price shall be deemed a disposition of qualified property to the extent of such reduction.

(7) There shall be allowed an additional credit equal to 0.5% of the basis of qualified property placed in service during the taxable year in a River Edge Redevelopment Zone, provided such property is placed in service on or after July 1, 2006, and the taxpayer's base employment within Illinois has increased by 1% or more over the preceding year as determined by the taxpayer's employment records filed with the Illinois Department of Employment Security. Taxpayers who are new to Illinois shall be deemed to have met the 1% growth in base employment for the first year in which they file employment records with the Illinois Department of Employment Security. If, in any year, the increase in base employment within Illinois over the preceding year is less than 1%, the additional credit shall be limited to that percentage times a fraction, the numerator of which is 0.5% and the denominator of which is 1%, but shall not exceed 0.5%.

(8) For taxable years beginning on or after January 1, 2021, there shall be allowed an Enterprise Zone construction jobs credit against the taxes imposed under subsections (a) and (b) of this Section as provided in Section 13 of the Illinois Enterprise Zone Act.

The credit or credits may not reduce the taxpayer's liability to less than zero. If the amount of the credit or credits exceeds the taxpayer's liability, the excess may be carried forward and applied against the taxpayer's liability in succeeding calendar years in the same manner provided under paragraph (4) of Section 211 of this Act. The credit or credits shall be applied to the earliest year for which there is a tax liability. If there are credits from more than one taxable year that are available to offset a liability, the earlier credit shall be applied first.

For partners, shareholders of Subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for the purposes of federal and State income taxation, there shall be allowed a credit under this Section to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code.

The total aggregate amount of credits awarded under the Blue Collar Jobs Act (Article 20 of Public Act 101-9 this amendatory Act of the 101st General Assembly) shall not exceed $20,000,000 in any State fiscal year.

This paragraph (8) is exempt from the provisions of Section 250.

(g) (Blank).

(h) Investment credit; High Impact Business.

(1) Subject to subsections (b) and (b-5) of Section 5.5 of the Illinois Enterprise Zone Act, a taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for investment in qualified property which is placed in service by a Department of Commerce and Economic Opportunity designated High Impact Business. The credit shall be .5% of the basis for such property. The credit shall not be available (i) until the minimum investments in qualified property set forth in subdivision (a)(3)(A) of Section 5.5 of the Illinois Enterprise Zone Act have been satisfied or (ii) until the time authorized in subsection (b-5) of the Illinois Enterprise Zone Act for entities designated as High Impact Businesses under subdivisions (a)(3)(B), (a)(3)(C), and (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone Act, and shall not be allowed to the extent that it would reduce a taxpayer's liability for the tax imposed by subsections (a) and (b) of this Section to below zero. The credit applicable to such investments shall be taken in the taxable year in which such investments have been completed. The credit for additional investments beyond the minimum investment by a designated high impact business authorized under subdivision (a)(3)(A) of Section 5.5 of the Illinois Enterprise Zone Act shall be available only in the taxable year in which the property is placed in service and shall not be allowed to the extent that it would reduce a taxpayer's liability for the tax imposed by subsections (a) and (b) of this Section to below zero. For tax years ending on or after December 31, 1987, the credit shall be allowed for the tax year in which the property is placed in service, or, if the amount of the credit exceeds the tax liability for that year, whether it exceeds the original liability or the liability as later amended, such excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year. The credit shall be applied to the earliest year for which there is a liability. If there is credit from more than one tax year that is available to offset a liability, the credit accruing first in time shall be applied first.

Changes made in this subdivision (h)(1) by Public Act 88-670 restore changes made by Public Act 85-1182 and reflect existing law.

(2) The term qualified property means property which:

(A) is tangible, whether new or used, including buildings and structural components of buildings;

(B) is depreciable pursuant to Section 167 of the Internal Revenue Code, except that "3-year property" as defined in Section 168(c)(2)(A) of that Code is not eligible for the credit provided by this subsection (h);

(C) is acquired by purchase as defined in Section 179(d) of the Internal Revenue Code; and

(D) is not eligible for the Enterprise Zone Investment Credit provided by subsection (f) of this Section.

(3) The basis of qualified property shall be the basis used to compute the depreciation deduction for federal income tax purposes.

(4) If the basis of the property for federal income tax depreciation purposes is increased after it has been placed in service in a federally designated Foreign Trade Zone or Sub-Zone located in Illinois by the taxpayer, the amount of such increase shall be deemed property placed in service on the date of such increase in basis.

(5) The term "placed in service" shall have the same meaning as under Section 46 of the Internal Revenue Code.

(6) If during any taxable year ending on or before December 31, 1996, any property ceases to be qualified property in the hands of the taxpayer within 48 months after being placed in service, or the situs of any qualified property is moved outside Illinois within 48 months after being placed in service, the tax imposed under subsections (a) and (b) of this Section for such taxable year shall be increased. Such increase shall be determined by (i) recomputing the investment credit which would have been allowed for the year in which credit for such property was originally allowed by eliminating such property from such computation, and (ii) subtracting such recomputed credit from the amount of credit previously allowed. For the purposes of this paragraph (6), a reduction of the basis of qualified property resulting from a redetermination of the purchase price shall be deemed a disposition of qualified property to the extent of such reduction.

(7) Beginning with tax years ending after December 31, 1996, if a taxpayer qualifies for the credit under this subsection (h) and thereby is granted a tax abatement and the taxpayer relocates its entire facility in violation of the explicit terms and length of the contract under Section 18-183 of the Property Tax Code, the tax imposed under subsections (a) and (b) of this Section shall be increased for the taxable year in which the taxpayer relocated its facility by an amount equal to the amount of credit received by the taxpayer under this subsection (h).

(h-5) High Impact Business construction constructions jobs credit. For taxable years beginning on or after January 1, 2021, there shall also be allowed a High Impact Business construction jobs credit against the tax imposed under subsections (a) and (b) of this Section as provided in subsections (i) and (j) of Section 5.5 of the Illinois Enterprise Zone Act.

The credit or credits may not reduce the taxpayer's liability to less than zero. If the amount of the credit or credits exceeds the taxpayer's liability, the excess may be carried forward and applied against the taxpayer's liability in succeeding calendar years in the manner provided under paragraph (4) of Section 211 of this Act. The credit or credits shall be applied to the earliest year for which there is a tax liability. If there are credits from more than one taxable year that are available to offset a liability, the earlier credit shall be applied first.

For partners, shareholders of Subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for the purposes of federal and State income taxation, there shall be allowed a credit under this Section to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code.

The total aggregate amount of credits awarded under the Blue Collar Jobs Act (Article 20 of Public Act 101-9 this amendatory Act of the 101st General Assembly) shall not exceed $20,000,000 in any State fiscal year.

This subsection (h-5) is exempt from the provisions of Section 250.

(i) Credit for Personal Property Tax Replacement Income Tax. For tax years ending prior to December 31, 2003, a credit shall be allowed against the tax imposed by subsections (a) and (b) of this Section for the tax imposed by subsections (c) and (d) of this Section. This credit shall be computed by multiplying the tax imposed by subsections (c) and (d) of this Section by a fraction, the numerator of which is base income allocable to Illinois and the denominator of which is Illinois base income, and further multiplying the product by the tax rate imposed by subsections (a) and (b) of this Section.

Any credit earned on or after December 31, 1986 under this subsection which is unused in the year the credit is computed because it exceeds the tax liability imposed by subsections (a) and (b) for that year (whether it exceeds the original liability or the liability as later amended) may be carried forward and applied to the tax liability imposed by subsections (a) and (b) of the 5 taxable years following the excess credit year, provided that no credit may be carried forward to any year ending on or after December 31, 2003. This credit shall be applied first to the earliest year for which there is a liability. If there is a credit under this subsection from more than one tax year that is available to offset a liability the earliest credit arising under this subsection shall be applied first.

If, during any taxable year ending on or after December 31, 1986, the tax imposed by subsections (c) and (d) of this Section for which a taxpayer has claimed a credit under this subsection (i) is reduced, the amount of credit for such tax shall also be reduced. Such reduction shall be determined by recomputing the credit to take into account the reduced tax imposed by subsections (c) and (d). If any portion of the reduced amount of credit has been carried to a different taxable year, an amended return shall be filed for such taxable year to reduce the amount of credit claimed.

(j) Training expense credit. Beginning with tax years ending on or after December 31, 1986 and prior to December 31, 2003, a taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) under this Section for all amounts paid or accrued, on behalf of all persons employed by the taxpayer in Illinois or Illinois residents employed outside of Illinois by a taxpayer, for educational or vocational training in semi-technical or technical fields or semi-skilled or skilled fields, which were deducted from gross income in the computation of taxable income. The credit against the tax imposed by subsections (a) and (b) shall be 1.6% of such training expenses. For partners, shareholders of subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there shall be allowed a credit under this subsection (j) to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and subchapter S of the Internal Revenue Code.

Any credit allowed under this subsection which is unused in the year the credit is earned may be carried forward to each of the 5 taxable years following the year for which the credit is first computed until it is used. This credit shall be applied first to the earliest year for which there is a liability. If there is a credit under this subsection from more than one tax year that is available to offset a liability, the earliest credit arising under this subsection shall be applied first. No carryforward credit may be claimed in any tax year ending on or after December 31, 2003.

(k) Research and development credit. For tax years ending after July 1, 1990 and prior to December 31, 2003, and beginning again for tax years ending on or after December 31, 2004, and ending prior to January 1, 2027, a taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for increasing research activities in this State. The credit allowed against the tax imposed by subsections (a) and (b) shall be equal to 6 1/2% of the qualifying expenditures for increasing research activities in this State. For partners, shareholders of subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there shall be allowed a credit under this subsection to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and subchapter S of the Internal Revenue Code.

For purposes of this subsection, "qualifying expenditures" means the qualifying expenditures as defined for the federal credit for increasing research activities which would be allowable under Section 41 of the Internal Revenue Code and which are conducted in this State, "qualifying expenditures for increasing research activities in this State" means the excess of qualifying expenditures for the taxable year in which incurred over qualifying expenditures for the base period, "qualifying expenditures for the base period" means the average of the qualifying expenditures for each year in the base period, and "base period" means the 3 taxable years immediately preceding the taxable year for which the determination is being made.

Any credit in excess of the tax liability for the taxable year may be carried forward. A taxpayer may elect to have the unused credit shown on its final completed return carried over as a credit against the tax liability for the following 5 taxable years or until it has been fully used, whichever occurs first; provided that no credit earned in a tax year ending prior to December 31, 2003 may be carried forward to any year ending on or after December 31, 2003.

If an unused credit is carried forward to a given year from 2 or more earlier years, that credit arising in the earliest year will be applied first against the tax liability for the given year. If a tax liability for the given year still remains, the credit from the next earliest year will then be applied, and so on, until all credits have been used or no tax liability for the given year remains. Any remaining unused credit or credits then will be carried forward to the next following year in which a tax liability is incurred, except that no credit can be carried forward to a year which is more than 5 years after the year in which the expense for which the credit is given was incurred.

No inference shall be drawn from Public Act 91-644 this amendatory Act of the 91st General Assembly in construing this Section for taxable years beginning before January 1, 1999.

It is the intent of the General Assembly that the research and development credit under this subsection (k) shall apply continuously for all tax years ending on or after December 31, 2004 and ending prior to January 1, 2027, including, but not limited to, the period beginning on January 1, 2016 and ending on July 6, 2017 (the effective date of Public Act 100-22) this amendatory Act of the 100th General Assembly. All actions taken in reliance on the continuation of the credit under this subsection (k) by any taxpayer are hereby validated.

(l) Environmental Remediation Tax Credit.

(i) For tax years ending after December 31, 1997 and on or before December 31, 2001, a taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for certain amounts paid for unreimbursed eligible remediation costs, as specified in this subsection. For purposes of this Section, "unreimbursed eligible remediation costs" means costs approved by the Illinois Environmental Protection Agency ("Agency") under Section 58.14 of the Environmental Protection Act that were paid in performing environmental remediation at a site for which a No Further Remediation Letter was issued by the Agency and recorded under Section 58.10 of the Environmental Protection Act. The credit must be claimed for the taxable year in which Agency approval of the eligible remediation costs is granted. The credit is not available to any taxpayer if the taxpayer or any related party caused or contributed to, in any material respect, a release of regulated substances on, in, or under the site that was identified and addressed by the remedial action pursuant to the Site Remediation Program of the Environmental Protection Act. After the Pollution Control Board rules are adopted pursuant to the Illinois Administrative Procedure Act for the administration and enforcement of Section 58.9 of the Environmental Protection Act, determinations as to credit availability for purposes of this Section shall be made consistent with those rules. For purposes of this Section, "taxpayer" includes a person whose tax attributes the taxpayer has succeeded to under Section 381 of the Internal Revenue Code and "related party" includes the persons disallowed a deduction for losses by paragraphs (b), (c), and (f)(1) of Section 267 of the Internal Revenue Code by virtue of being a related taxpayer, as well as any of its partners. The credit allowed against the tax imposed by subsections (a) and (b) shall be equal to 25% of the unreimbursed eligible remediation costs in excess of $100,000 per site, except that the $100,000 threshold shall not apply to any site contained in an enterprise zone as determined by the Department of Commerce and Community Affairs (now Department of Commerce and Economic Opportunity). The total credit allowed shall not exceed $40,000 per year with a maximum total of $150,000 per site. For partners and shareholders of subchapter S corporations, there shall be allowed a credit under this subsection to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and subchapter S of the Internal Revenue Code.

(ii) A credit allowed under this subsection that is unused in the year the credit is earned may be carried forward to each of the 5 taxable years following the year for which the credit is first earned until it is used. The term "unused credit" does not include any amounts of unreimbursed eligible remediation costs in excess of the maximum credit per site authorized under paragraph (i). This credit shall be applied first to the earliest year for which there is a liability. If there is a credit under this subsection from more than one tax year that is available to offset a liability, the earliest credit arising under this subsection shall be applied first. A credit allowed under this subsection may be sold to a buyer as part of a sale of all or part of the remediation site for which the credit was granted. The purchaser of a remediation site and the tax credit shall succeed to the unused credit and remaining carry-forward period of the seller. To perfect the transfer, the assignor shall record the transfer in the chain of title for the site and provide written notice to the Director of the Illinois Department of Revenue of the assignor's intent to sell the remediation site and the amount of the tax credit to be transferred as a portion of the sale. In no event may a credit be transferred to any taxpayer if the taxpayer or a related party would not be eligible under the provisions of subsection (i).

(iii) For purposes of this Section, the term "site" shall have the same meaning as under Section 58.2 of the Environmental Protection Act.

(m) Education expense credit. Beginning with tax years ending after December 31, 1999, a taxpayer who is the custodian of one or more qualifying pupils shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for qualified education expenses incurred on behalf of the qualifying pupils. The credit shall be equal to 25% of qualified education expenses, but in no event may the total credit under this subsection claimed by a family that is the custodian of qualifying pupils exceed (i) $500 for tax years ending prior to December 31, 2017, and (ii) $750 for tax years ending on or after December 31, 2017. In no event shall a credit under this subsection reduce the taxpayer's liability under this Act to less than zero. Notwithstanding any other provision of law, for taxable years beginning on or after January 1, 2017, no taxpayer may claim a credit under this subsection (m) if the taxpayer's adjusted gross income for the taxable year exceeds (i) $500,000, in the case of spouses filing a joint federal tax return or (ii) $250,000, in the case of all other taxpayers. This subsection is exempt from the provisions of Section 250 of this Act.

For purposes of this subsection:

"Qualifying pupils" means individuals who (i) are residents of the State of Illinois, (ii) are under the age of 21 at the close of the school year for which a credit is sought, and (iii) during the school year for which a credit is sought were full-time pupils enrolled in a kindergarten through twelfth grade education program at any school, as defined in this subsection.

"Qualified education expense" means the amount incurred on behalf of a qualifying pupil in excess of $250 for tuition, book fees, and lab fees at the school in which the pupil is enrolled during the regular school year.

"School" means any public or nonpublic elementary or secondary school in Illinois that is in compliance with Title VI of the Civil Rights Act of 1964 and attendance at which satisfies the requirements of Section 26-1 of the School Code, except that nothing shall be construed to require a child to attend any particular public or nonpublic school to qualify for the credit under this Section.

"Custodian" means, with respect to qualifying pupils, an Illinois resident who is a parent, the parents, a legal guardian, or the legal guardians of the qualifying pupils.

(n) River Edge Redevelopment Zone site remediation tax credit.

(i) For tax years ending on or after December 31, 2006, a taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for certain amounts paid for unreimbursed eligible remediation costs, as specified in this subsection. For purposes of this Section, "unreimbursed eligible remediation costs" means costs approved by the Illinois Environmental Protection Agency ("Agency") under Section 58.14a of the Environmental Protection Act that were paid in performing environmental remediation at a site within a River Edge Redevelopment Zone for which a No Further Remediation Letter was issued by the Agency and recorded under Section 58.10 of the Environmental Protection Act. The credit must be claimed for the taxable year in which Agency approval of the eligible remediation costs is granted. The credit is not available to any taxpayer if the taxpayer or any related party caused or contributed to, in any material respect, a release of regulated substances on, in, or under the site that was identified and addressed by the remedial action pursuant to the Site Remediation Program of the Environmental Protection Act. Determinations as to credit availability for purposes of this Section shall be made consistent with rules adopted by the Pollution Control Board pursuant to the Illinois Administrative Procedure Act for the administration and enforcement of Section 58.9 of the Environmental Protection Act. For purposes of this Section, "taxpayer" includes a person whose tax attributes the taxpayer has succeeded to under Section 381 of the Internal Revenue Code and "related party" includes the persons disallowed a deduction for losses by paragraphs (b), (c), and (f)(1) of Section 267 of the Internal Revenue Code by virtue of being a related taxpayer, as well as any of its partners. The credit allowed against the tax imposed by subsections (a) and (b) shall be equal to 25% of the unreimbursed eligible remediation costs in excess of $100,000 per site.

(ii) A credit allowed under this subsection that is unused in the year the credit is earned may be carried forward to each of the 5 taxable years following the year for which the credit is first earned until it is used. This credit shall be applied first to the earliest year for which there is a liability. If there is a credit under this subsection from more than one tax year that is available to offset a liability, the earliest credit arising under this subsection shall be applied first. A credit allowed under this subsection may be sold to a buyer as part of a sale of all or part of the remediation site for which the credit was granted. The purchaser of a remediation site and the tax credit shall succeed to the unused credit and remaining carry-forward period of the seller. To perfect the transfer, the assignor shall record the transfer in the chain of title for the site and provide written notice to the Director of the Illinois Department of Revenue of the assignor's intent to sell the remediation site and the amount of the tax credit to be transferred as a portion of the sale. In no event may a credit be transferred to any taxpayer if the taxpayer or a related party would not be eligible under the provisions of subsection (i).

(iii) For purposes of this Section, the term "site" shall have the same meaning as under Section 58.2 of the Environmental Protection Act.

(o) For each of taxable years during the Compassionate Use of Medical Cannabis Program, a surcharge is imposed on all taxpayers on income arising from the sale or exchange of capital assets, depreciable business property, real property used in the trade or business, and Section 197 intangibles of an organization registrant under the Compassionate Use of Medical Cannabis Program Act. The amount of the surcharge is equal to the amount of federal income tax liability for the taxable year attributable to those sales and exchanges. The surcharge imposed does not apply if:

(1) the medical cannabis cultivation center registration, medical cannabis dispensary registration, or the property of a registration is transferred as a result of any of the following:

(A) bankruptcy, a receivership, or a debt adjustment initiated by or against the initial registration or the substantial owners of the initial registration;

(B) cancellation, revocation, or termination of any registration by the Illinois Department of Public Health;

(C) a determination by the Illinois Department of Public Health that transfer of the registration is in the best interests of Illinois qualifying patients as defined by the Compassionate Use of Medical Cannabis Program Act;

(D) the death of an owner of the equity interest in a registrant;

(E) the acquisition of a controlling interest in the stock or substantially all of the assets of a publicly traded company;

(F) a transfer by a parent company to a wholly owned subsidiary; or

(G) the transfer or sale to or by one person to another person where both persons were initial owners of the registration when the registration was issued; or

(2) the cannabis cultivation center registration, medical cannabis dispensary registration, or the controlling interest in a registrant's property is transferred in a transaction to lineal descendants in which no gain or loss is recognized or as a result of a transaction in accordance with Section 351 of the Internal Revenue Code in which no gain or loss is recognized.

(Source: P.A. 100-22, eff. 7-6-17; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19; 101-207, eff. 8-2-19; 101-363, eff. 8-9-19; revised 11-18-20.)

(Text of Section with the changes made by P.A. 101-8, which did not take effect (see Section 99 of P.A. 101-8))

Sec. 201. Tax imposed.

(a) In general. A tax measured by net income is hereby imposed on every individual, corporation, trust and estate for each taxable year ending after July 31, 1969 on the privilege of earning or receiving income in or as a resident of this State. Such tax shall be in addition to all other occupation or privilege taxes imposed by this State or by any municipal corporation or political subdivision thereof.

(b) Rates. The tax imposed by subsection (a) of this Section shall be determined as follows, except as adjusted by subsection (d-1):

(1) In the case of an individual, trust or estate, for taxable years ending prior to July 1, 1989, an amount equal to 2 1/2% of the taxpayer's net income for the taxable year.

(2) In the case of an individual, trust or estate, for taxable years beginning prior to July 1, 1989 and ending after June 30, 1989, an amount equal to the sum of (i) 2 1/2% of the taxpayer's net income for the period prior to July 1, 1989, as calculated under Section 202.3, and (ii) 3% of the taxpayer's net income for the period after June 30, 1989, as calculated under Section 202.3.

(3) In the case of an individual, trust or estate, for taxable years beginning after June 30, 1989, and ending prior to January 1, 2011, an amount equal to 3% of the taxpayer's net income for the taxable year.

(4) In the case of an individual, trust, or estate, for taxable years beginning prior to January 1, 2011, and ending after December 31, 2010, an amount equal to the sum of (i) 3% of the taxpayer's net income for the period prior to January 1, 2011, as calculated under Section 202.5, and (ii) 5% of the taxpayer's net income for the period after December 31, 2010, as calculated under Section 202.5.

(5) In the case of an individual, trust, or estate, for taxable years beginning on or after January 1, 2011, and ending prior to January 1, 2015, an amount equal to 5% of the taxpayer's net income for the taxable year.

(5.1) In the case of an individual, trust, or estate, for taxable years beginning prior to January 1, 2015, and ending after December 31, 2014, an amount equal to the sum of (i) 5% of the taxpayer's net income for the period prior to January 1, 2015, as calculated under Section 202.5, and (ii) 3.75% of the taxpayer's net income for the period after December 31, 2014, as calculated under Section 202.5.

(5.2) In the case of an individual, trust, or estate, for taxable years beginning on or after January 1, 2015, and ending prior to July 1, 2017, an amount equal to 3.75% of the taxpayer's net income for the taxable year.

(5.3) In the case of an individual, trust, or estate, for taxable years beginning prior to July 1, 2017, and ending after June 30, 2017, an amount equal to the sum of (i) 3.75% of the taxpayer's net income for the period prior to July 1, 2017, as calculated under Section 202.5, and (ii) 4.95% of the taxpayer's net income for the period after June 30, 2017, as calculated under Section 202.5.

(5.4) In the case of an individual, trust, or estate, for taxable years beginning on or after July 1, 2017 and beginning prior to January 1, 2021, an amount equal to 4.95% of the taxpayer's net income for the taxable year.

(5.5) In the case of an individual, trust, or estate, for taxable years beginning on or after January 1, 2021, an amount calculated under the rate structure set forth in Section 201.1.

(6) In the case of a corporation, for taxable years ending prior to July 1, 1989, an amount equal to 4% of the taxpayer's net income for the taxable year.

(7) In the case of a corporation, for taxable years beginning prior to July 1, 1989 and ending after June 30, 1989, an amount equal to the sum of (i) 4% of the taxpayer's net income for the period prior to July 1, 1989, as calculated under Section 202.3, and (ii) 4.8% of the taxpayer's net income for the period after June 30, 1989, as calculated under Section 202.3.

(8) In the case of a corporation, for taxable years beginning after June 30, 1989, and ending prior to January 1, 2011, an amount equal to 4.8% of the taxpayer's net income for the taxable year.

(9) In the case of a corporation, for taxable years beginning prior to January 1, 2011, and ending after December 31, 2010, an amount equal to the sum of (i) 4.8% of the taxpayer's net income for the period prior to January 1, 2011, as calculated under Section 202.5, and (ii) 7% of the taxpayer's net income for the period after December 31, 2010, as calculated under Section 202.5.

(10) In the case of a corporation, for taxable years beginning on or after January 1, 2011, and ending prior to January 1, 2015, an amount equal to 7% of the taxpayer's net income for the taxable year.

(11) In the case of a corporation, for taxable years beginning prior to January 1, 2015, and ending after December 31, 2014, an amount equal to the sum of (i) 7% of the taxpayer's net income for the period prior to January 1, 2015, as calculated under Section 202.5, and (ii) 5.25% of the taxpayer's net income for the period after December 31, 2014, as calculated under Section 202.5.

(12) In the case of a corporation, for taxable years beginning on or after January 1, 2015, and ending prior to July 1, 2017, an amount equal to 5.25% of the taxpayer's net income for the taxable year.

(13) In the case of a corporation, for taxable years beginning prior to July 1, 2017, and ending after June 30, 2017, an amount equal to the sum of (i) 5.25% of the taxpayer's net income for the period prior to July 1, 2017, as calculated under Section 202.5, and (ii) 7% of the taxpayer's net income for the period after June 30, 2017, as calculated under Section 202.5.

(14) In the case of a corporation, for taxable years beginning on or after July 1, 2017 and beginning prior to January 1, 2021, an amount equal to 7% of the taxpayer's net income for the taxable year.

(15) In the case of a corporation, for taxable years beginning on or after January 1, 2021, an amount equal to 7.99% of the taxpayer's net income for the taxable year.

The rates under this subsection (b) are subject to the provisions of Section 201.5.

(b-5) Surcharge; sale or exchange of assets, properties, and intangibles of organization gaming licensees. For each of taxable years 2019 through 2027, a surcharge is imposed on all taxpayers on income arising from the sale or exchange of capital assets, depreciable business property, real property used in the trade or business, and Section 197 intangibles (i) of an organization licensee under the Illinois Horse Racing Act of 1975 and (ii) of an organization gaming licensee under the Illinois Gambling Act. The amount of the surcharge is equal to the amount of federal income tax liability for the taxable year attributable to those sales and exchanges. The surcharge imposed shall not apply if:

(1) the organization gaming license, organization license, or racetrack property is transferred as a result of any of the following:

(A) bankruptcy, a receivership, or a debt adjustment initiated by or against the initial licensee or the substantial owners of the initial licensee;

(B) cancellation, revocation, or termination of any such license by the Illinois Gaming Board or the Illinois Racing Board;

(C) a determination by the Illinois Gaming Board that transfer of the license is in the best interests of Illinois gaming;

(D) the death of an owner of the equity interest in a licensee;

(E) the acquisition of a controlling interest in the stock or substantially all of the assets of a publicly traded company;

(F) a transfer by a parent company to a wholly owned subsidiary; or

(G) the transfer or sale to or by one person to another person where both persons were initial owners of the license when the license was issued; or

(2) the controlling interest in the organization gaming license, organization license, or racetrack property is transferred in a transaction to lineal descendants in which no gain or loss is recognized or as a result of a transaction in accordance with Section 351 of the Internal Revenue Code in which no gain or loss is recognized; or

(3) live horse racing was not conducted in 2010 at a racetrack located within 3 miles of the Mississippi River under a license issued pursuant to the Illinois Horse Racing Act of 1975.

The transfer of an organization gaming license, organization license, or racetrack property by a person other than the initial licensee to receive the organization gaming license is not subject to a surcharge. The Department shall adopt rules necessary to implement and administer this subsection.

(c) Personal Property Tax Replacement Income Tax. Beginning on July 1, 1979 and thereafter, in addition to such income tax, there is also hereby imposed the Personal Property Tax Replacement Income Tax measured by net income on every corporation (including Subchapter S corporations), partnership and trust, for each taxable year ending after June 30, 1979. Such taxes are imposed on the privilege of earning or receiving income in or as a resident of this State. The Personal Property Tax Replacement Income Tax shall be in addition to the income tax imposed by subsections (a) and (b) of this Section and in addition to all other occupation or privilege taxes imposed by this State or by any municipal corporation or political subdivision thereof.

(d) Additional Personal Property Tax Replacement Income Tax Rates. The personal property tax replacement income tax imposed by this subsection and subsection (c) of this Section in the case of a corporation, other than a Subchapter S corporation and except as adjusted by subsection (d-1), shall be an additional amount equal to 2.85% of such taxpayer's net income for the taxable year, except that beginning on January 1, 1981, and thereafter, the rate of 2.85% specified in this subsection shall be reduced to 2.5%, and in the case of a partnership, trust or a Subchapter S corporation shall be an additional amount equal to 1.5% of such taxpayer's net income for the taxable year.

(d-1) Rate reduction for certain foreign insurers. In the case of a foreign insurer, as defined by Section 35A-5 of the Illinois Insurance Code, whose state or country of domicile imposes on insurers domiciled in Illinois a retaliatory tax (excluding any insurer whose premiums from reinsurance assumed are 50% or more of its total insurance premiums as determined under paragraph (2) of subsection (b) of Section 304, except that for purposes of this determination premiums from reinsurance do not include premiums from inter-affiliate reinsurance arrangements), beginning with taxable years ending on or after December 31, 1999, the sum of the rates of tax imposed by subsections (b) and (d) shall be reduced (but not increased) to the rate at which the total amount of tax imposed under this Act, net of all credits allowed under this Act, shall equal (i) the total amount of tax that would be imposed on the foreign insurer's net income allocable to Illinois for the taxable year by such foreign insurer's state or country of domicile if that net income were subject to all income taxes and taxes measured by net income imposed by such foreign insurer's state or country of domicile, net of all credits allowed or (ii) a rate of zero if no such tax is imposed on such income by the foreign insurer's state of domicile. For the purposes of this subsection (d-1), an inter-affiliate includes a mutual insurer under common management.

(1) For the purposes of subsection (d-1), in no event shall the sum of the rates of tax imposed by subsections (b) and (d) be reduced below the rate at which the sum of:

(A) the total amount of tax imposed on such foreign insurer under this Act for a taxable year, net of all credits allowed under this Act, plus

(B) the privilege tax imposed by Section 409 of the Illinois Insurance Code, the fire insurance company tax imposed by Section 12 of the Fire Investigation Act, and the fire department taxes imposed under Section 11-10-1 of the Illinois Municipal Code,

equals 1.25% for taxable years ending prior to December 31, 2003, or 1.75% for taxable years ending on or after December 31, 2003, of the net taxable premiums written for the taxable year, as described by subsection (1) of Section 409 of the Illinois Insurance Code. This paragraph will in no event increase the rates imposed under subsections (b) and (d).

(2) Any reduction in the rates of tax imposed by this subsection shall be applied first against the rates imposed by subsection (b) and only after the tax imposed by subsection (a) net of all credits allowed under this Section other than the credit allowed under subsection (i) has been reduced to zero, against the rates imposed by subsection (d).

This subsection (d-1) is exempt from the provisions of Section 250.

(e) Investment credit. A taxpayer shall be allowed a credit against the Personal Property Tax Replacement Income Tax for investment in qualified property.

(1) A taxpayer shall be allowed a credit equal to .5% of the basis of qualified property placed in service during the taxable year, provided such property is placed in service on or after July 1, 1984. There shall be allowed an additional credit equal to .5% of the basis of qualified property placed in service during the taxable year, provided such property is placed in service on or after July 1, 1986, and the taxpayer's base employment within Illinois has increased by 1% or more over the preceding year as determined by the taxpayer's employment records filed with the Illinois Department of Employment Security. Taxpayers who are new to Illinois shall be deemed to have met the 1% growth in base employment for the first year in which they file employment records with the Illinois Department of Employment Security. The provisions added to this Section by Public Act 85-1200 (and restored by Public Act 87-895) shall be construed as declaratory of existing law and not as a new enactment. If, in any year, the increase in base employment within Illinois over the preceding year is less than 1%, the additional credit shall be limited to that percentage times a fraction, the numerator of which is .5% and the denominator of which is 1%, but shall not exceed .5%. The investment credit shall not be allowed to the extent that it would reduce a taxpayer's liability in any tax year below zero, nor may any credit for qualified property be allowed for any year other than the year in which the property was placed in service in Illinois. For tax years ending on or after December 31, 1987, and on or before December 31, 1988, the credit shall be allowed for the tax year in which the property is placed in service, or, if the amount of the credit exceeds the tax liability for that year, whether it exceeds the original liability or the liability as later amended, such excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit years if the taxpayer (i) makes investments which cause the creation of a minimum of 2,000 full-time equivalent jobs in Illinois, (ii) is located in an enterprise zone established pursuant to the Illinois Enterprise Zone Act and (iii) is certified by the Department of Commerce and Community Affairs (now Department of Commerce and Economic Opportunity) as complying with the requirements specified in clause (i) and (ii) by July 1, 1986. The Department of Commerce and Community Affairs (now Department of Commerce and Economic Opportunity) shall notify the Department of Revenue of all such certifications immediately. For tax years ending after December 31, 1988, the credit shall be allowed for the tax year in which the property is placed in service, or, if the amount of the credit exceeds the tax liability for that year, whether it exceeds the original liability or the liability as later amended, such excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit years. The credit shall be applied to the earliest year for which there is a liability. If there is credit from more than one tax year that is available to offset a liability, earlier credit shall be applied first.

(2) The term "qualified property" means property which:

(A) is tangible, whether new or used, including buildings and structural components of buildings and signs that are real property, but not including land or improvements to real property that are not a structural component of a building such as landscaping, sewer lines, local access roads, fencing, parking lots, and other appurtenances;

(B) is depreciable pursuant to Section 167 of the Internal Revenue Code, except that "3-year property" as defined in Section 168(c)(2)(A) of that Code is not eligible for the credit provided by this subsection (e);

(C) is acquired by purchase as defined in Section 179(d) of the Internal Revenue Code;

(D) is used in Illinois by a taxpayer who is primarily engaged in manufacturing, or in mining coal or fluorite, or in retailing, or was placed in service on or after July 1, 2006 in a River Edge Redevelopment Zone established pursuant to the River Edge Redevelopment Zone Act; and

(E) has not previously been used in Illinois in such a manner and by such a person as would qualify for the credit provided by this subsection (e) or subsection (f).

(3) For purposes of this subsection (e), "manufacturing" means the material staging and production of tangible personal property by procedures commonly regarded as manufacturing, processing, fabrication, or assembling which changes some existing material into new shapes, new qualities, or new combinations. For purposes of this subsection (e) the term "mining" shall have the same meaning as the term "mining" in Section 613(c) of the Internal Revenue Code. For purposes of this subsection (e), the term "retailing" means the sale of tangible personal property for use or consumption and not for resale, or services rendered in conjunction with the sale of tangible personal property for use or consumption and not for resale. For purposes of this subsection (e), "tangible personal property" has the same meaning as when that term is used in the Retailers' Occupation Tax Act, and, for taxable years ending after December 31, 2008, does not include the generation, transmission, or distribution of electricity.

(4) The basis of qualified property shall be the basis used to compute the depreciation deduction for federal income tax purposes.

(5) If the basis of the property for federal income tax depreciation purposes is increased after it has been placed in service in Illinois by the taxpayer, the amount of such increase shall be deemed property placed in service on the date of such increase in basis.

(6) The term "placed in service" shall have the same meaning as under Section 46 of the Internal Revenue Code.

(7) If during any taxable year, any property ceases to be qualified property in the hands of the taxpayer within 48 months after being placed in service, or the situs of any qualified property is moved outside Illinois within 48 months after being placed in service, the Personal Property Tax Replacement Income Tax for such taxable year shall be increased. Such increase shall be determined by (i) recomputing the investment credit which would have been allowed for the year in which credit for such property was originally allowed by eliminating such property from such computation and, (ii) subtracting such recomputed credit from the amount of credit previously allowed. For the purposes of this paragraph (7), a reduction of the basis of qualified property resulting from a redetermination of the purchase price shall be deemed a disposition of qualified property to the extent of such reduction.

(8) Unless the investment credit is extended by law, the basis of qualified property shall not include costs incurred after December 31, 2018, except for costs incurred pursuant to a binding contract entered into on or before December 31, 2018.

(9) Each taxable year ending before December 31, 2000, a partnership may elect to pass through to its partners the credits to which the partnership is entitled under this subsection (e) for the taxable year. A partner may use the credit allocated to him or her under this paragraph only against the tax imposed in subsections (c) and (d) of this Section. If the partnership makes that election, those credits shall be allocated among the partners in the partnership in accordance with the rules set forth in Section 704(b) of the Internal Revenue Code, and the rules promulgated under that Section, and the allocated amount of the credits shall be allowed to the partners for that taxable year. The partnership shall make this election on its Personal Property Tax Replacement Income Tax return for that taxable year. The election to pass through the credits shall be irrevocable.

For taxable years ending on or after December 31, 2000, a partner that qualifies its partnership for a subtraction under subparagraph (I) of paragraph (2) of subsection (d) of Section 203 or a shareholder that qualifies a Subchapter S corporation for a subtraction under subparagraph (S) of paragraph (2) of subsection (b) of Section 203 shall be allowed a credit under this subsection (e) equal to its share of the credit earned under this subsection (e) during the taxable year by the partnership or Subchapter S corporation, determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code. This paragraph is exempt from the provisions of Section 250.

(f) Investment credit; Enterprise Zone; River Edge Redevelopment Zone; Clean Energy Empowerment Zone.

(1) A taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for investment in qualified property which is placed in service in an Enterprise Zone created pursuant to the Illinois Enterprise Zone Act or, for property placed in service on or after July 1, 2006, a River Edge Redevelopment Zone established pursuant to the River Edge Redevelopment Zone Act, or for investment in renewable energy enterprises located in Clean Energy Empowerment Zones created pursuant to the Energy Community Reinvestment Act. For partners, shareholders of Subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there shall be allowed a credit under this subsection (f) to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code. The credit shall be .5% of the basis for such property. The credit shall be available only in the taxable year in which the property is placed in service in the Enterprise Zone or River Edge Redevelopment Zone and shall not be allowed to the extent that it would reduce a taxpayer's liability for the tax imposed by subsections (a) and (b) of this Section to below zero. For tax years ending on or after December 31, 1985, the credit shall be allowed for the tax year in which the property is placed in service, or, if the amount of the credit exceeds the tax liability for that year, whether it exceeds the original liability or the liability as later amended, such excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year. The credit shall be applied to the earliest year for which there is a liability. If there is credit from more than one tax year that is available to offset a liability, the credit accruing first in time shall be applied first.

(2) The term qualified property means property which:

(A) is tangible, whether new or used, including buildings and structural components of buildings;

(B) is depreciable pursuant to Section 167 of the Internal Revenue Code, except that "3-year property" as defined in Section 168(c)(2)(A) of that Code is not eligible for the credit provided by this subsection (f);

(C) is acquired by purchase as defined in Section 179(d) of the Internal Revenue Code;

(D) is used in the Enterprise Zone or River Edge Redevelopment Zone by the taxpayer; and

(E) has not been previously used in Illinois in such a manner and by such a person as would qualify for the credit provided by this subsection (f) or subsection (e).

(3) The basis of qualified property shall be the basis used to compute the depreciation deduction for federal income tax purposes.

(4) If the basis of the property for federal income tax depreciation purposes is increased after it has been placed in service in the Enterprise Zone or River Edge Redevelopment Zone by the taxpayer, the amount of such increase shall be deemed property placed in service on the date of such increase in basis.

(5) The term "placed in service" shall have the same meaning as under Section 46 of the Internal Revenue Code.

(6) If during any taxable year, any property ceases to be qualified property in the hands of the taxpayer within 48 months after being placed in service, or the situs of any qualified property is moved outside the Enterprise Zone or River Edge Redevelopment Zone within 48 months after being placed in service, the tax imposed under subsections (a) and (b) of this Section for such taxable year shall be increased. Such increase shall be determined by (i) recomputing the investment credit which would have been allowed for the year in which credit for such property was originally allowed by eliminating such property from such computation, and (ii) subtracting such recomputed credit from the amount of credit previously allowed. For the purposes of this paragraph (6), a reduction of the basis of qualified property resulting from a redetermination of the purchase price shall be deemed a disposition of qualified property to the extent of such reduction.

(7) There shall be allowed an additional credit equal to 0.5% of the basis of qualified property placed in service during the taxable year in a River Edge Redevelopment Zone, provided such property is placed in service on or after July 1, 2006, and the taxpayer's base employment within Illinois has increased by 1% or more over the preceding year as determined by the taxpayer's employment records filed with the Illinois Department of Employment Security. Taxpayers who are new to Illinois shall be deemed to have met the 1% growth in base employment for the first year in which they file employment records with the Illinois Department of Employment Security. If, in any year, the increase in base employment within Illinois over the preceding year is less than 1%, the additional credit shall be limited to that percentage times a fraction, the numerator of which is 0.5% and the denominator of which is 1%, but shall not exceed 0.5%.

(8) For taxable years beginning on or after January 1, 2021, there shall be allowed an Enterprise Zone construction jobs credit against the taxes imposed under subsections (a) and (b) of this Section as provided in Section 13 of the Illinois Enterprise Zone Act.

The credit or credits may not reduce the taxpayer's liability to less than zero. If the amount of the credit or credits exceeds the taxpayer's liability, the excess may be carried forward and applied against the taxpayer's liability in succeeding calendar years in the same manner provided under paragraph (4) of Section 211 of this Act. The credit or credits shall be applied to the earliest year for which there is a tax liability. If there are credits from more than one taxable year that are available to offset a liability, the earlier credit shall be applied first.

For partners, shareholders of Subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for the purposes of federal and State income taxation, there shall be allowed a credit under this Section to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code.

The total aggregate amount of credits awarded under the Blue Collar Jobs Act (Article 20 of Public Act 101-9 this amendatory Act of the 101st General Assembly) shall not exceed $20,000,000 in any State fiscal year.

This paragraph (8) is exempt from the provisions of Section 250.

(g) (Blank).

(h) Investment credit; High Impact Business.

(1) Subject to subsections (b) and (b-5) of Section 5.5 of the Illinois Enterprise Zone Act, a taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for investment in qualified property which is placed in service by a Department of Commerce and Economic Opportunity designated High Impact Business. The credit shall be .5% of the basis for such property. The credit shall not be available (i) until the minimum investments in qualified property set forth in subdivision (a)(3)(A) of Section 5.5 of the Illinois Enterprise Zone Act have been satisfied or (ii) until the time authorized in subsection (b-5) of the Illinois Enterprise Zone Act for entities designated as High Impact Businesses under subdivisions (a)(3)(B), (a)(3)(C), and (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone Act, and shall not be allowed to the extent that it would reduce a taxpayer's liability for the tax imposed by subsections (a) and (b) of this Section to below zero. The credit applicable to such investments shall be taken in the taxable year in which such investments have been completed. The credit for additional investments beyond the minimum investment by a designated high impact business authorized under subdivision (a)(3)(A) of Section 5.5 of the Illinois Enterprise Zone Act shall be available only in the taxable year in which the property is placed in service and shall not be allowed to the extent that it would reduce a taxpayer's liability for the tax imposed by subsections (a) and (b) of this Section to below zero. For tax years ending on or after December 31, 1987, the credit shall be allowed for the tax year in which the property is placed in service, or, if the amount of the credit exceeds the tax liability for that year, whether it exceeds the original liability or the liability as later amended, such excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year. The credit shall be applied to the earliest year for which there is a liability. If there is credit from more than one tax year that is available to offset a liability, the credit accruing first in time shall be applied first.

Changes made in this subdivision (h)(1) by Public Act 88-670 restore changes made by Public Act 85-1182 and reflect existing law.

(2) The term qualified property means property which:

(A) is tangible, whether new or used, including buildings and structural components of buildings;

(B) is depreciable pursuant to Section 167 of the Internal Revenue Code, except that "3-year property" as defined in Section 168(c)(2)(A) of that Code is not eligible for the credit provided by this subsection (h);

(C) is acquired by purchase as defined in Section 179(d) of the Internal Revenue Code; and

(D) is not eligible for the Enterprise Zone Investment Credit provided by subsection (f) of this Section.

(3) The basis of qualified property shall be the basis used to compute the depreciation deduction for federal income tax purposes.

(4) If the basis of the property for federal income tax depreciation purposes is increased after it has been placed in service in a federally designated Foreign Trade Zone or Sub-Zone located in Illinois by the taxpayer, the amount of such increase shall be deemed property placed in service on the date of such increase in basis.

(5) The term "placed in service" shall have the same meaning as under Section 46 of the Internal Revenue Code.

(6) If during any taxable year ending on or before December 31, 1996, any property ceases to be qualified property in the hands of the taxpayer within 48 months after being placed in service, or the situs of any qualified property is moved outside Illinois within 48 months after being placed in service, the tax imposed under subsections (a) and (b) of this Section for such taxable year shall be increased. Such increase shall be determined by (i) recomputing the investment credit which would have been allowed for the year in which credit for such property was originally allowed by eliminating such property from such computation, and (ii) subtracting such recomputed credit from the amount of credit previously allowed. For the purposes of this paragraph (6), a reduction of the basis of qualified property resulting from a redetermination of the purchase price shall be deemed a disposition of qualified property to the extent of such reduction.

(7) Beginning with tax years ending after December 31, 1996, if a taxpayer qualifies for the credit under this subsection (h) and thereby is granted a tax abatement and the taxpayer relocates its entire facility in violation of the explicit terms and length of the contract under Section 18-183 of the Property Tax Code, the tax imposed under subsections (a) and (b) of this Section shall be increased for the taxable year in which the taxpayer relocated its facility by an amount equal to the amount of credit received by the taxpayer under this subsection (h).

(h-5) High Impact Business construction constructions jobs credit. For taxable years beginning on or after January 1, 2021, there shall also be allowed a High Impact Business construction jobs credit against the tax imposed under subsections (a) and (b) of this Section as provided in subsections (i) and (j) of Section 5.5 of the Illinois Enterprise Zone Act.

The credit or credits may not reduce the taxpayer's liability to less than zero. If the amount of the credit or credits exceeds the taxpayer's liability, the excess may be carried forward and applied against the taxpayer's liability in succeeding calendar years in the manner provided under paragraph (4) of Section 211 of this Act. The credit or credits shall be applied to the earliest year for which there is a tax liability. If there are credits from more than one taxable year that are available to offset a liability, the earlier credit shall be applied first.

For partners, shareholders of Subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for the purposes of federal and State income taxation, there shall be allowed a credit under this Section to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code.

The total aggregate amount of credits awarded under the Blue Collar Jobs Act (Article 20 of Public Act 101-9 this amendatory Act of the 101st General Assembly) shall not exceed $20,000,000 in any State fiscal year.

This subsection (h-5) is exempt from the provisions of Section 250.

(i) Credit for Personal Property Tax Replacement Income Tax. For tax years ending prior to December 31, 2003, a credit shall be allowed against the tax imposed by subsections (a) and (b) of this Section for the tax imposed by subsections (c) and (d) of this Section. This credit shall be computed by multiplying the tax imposed by subsections (c) and (d) of this Section by a fraction, the numerator of which is base income allocable to Illinois and the denominator of which is Illinois base income, and further multiplying the product by the tax rate imposed by subsections (a) and (b) of this Section.

Any credit earned on or after December 31, 1986 under this subsection which is unused in the year the credit is computed because it exceeds the tax liability imposed by subsections (a) and (b) for that year (whether it exceeds the original liability or the liability as later amended) may be carried forward and applied to the tax liability imposed by subsections (a) and (b) of the 5 taxable years following the excess credit year, provided that no credit may be carried forward to any year ending on or after December 31, 2003. This credit shall be applied first to the earliest year for which there is a liability. If there is a credit under this subsection from more than one tax year that is available to offset a liability the earliest credit arising under this subsection shall be applied first.

If, during any taxable year ending on or after December 31, 1986, the tax imposed by subsections (c) and (d) of this Section for which a taxpayer has claimed a credit under this subsection (i) is reduced, the amount of credit for such tax shall also be reduced. Such reduction shall be determined by recomputing the credit to take into account the reduced tax imposed by subsections (c) and (d). If any portion of the reduced amount of credit has been carried to a different taxable year, an amended return shall be filed for such taxable year to reduce the amount of credit claimed.

(j) Training expense credit. Beginning with tax years ending on or after December 31, 1986 and prior to December 31, 2003, a taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) under this Section for all amounts paid or accrued, on behalf of all persons employed by the taxpayer in Illinois or Illinois residents employed outside of Illinois by a taxpayer, for educational or vocational training in semi-technical or technical fields or semi-skilled or skilled fields, which were deducted from gross income in the computation of taxable income. The credit against the tax imposed by subsections (a) and (b) shall be 1.6% of such training expenses. For partners, shareholders of subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there shall be allowed a credit under this subsection (j) to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and subchapter S of the Internal Revenue Code.

Any credit allowed under this subsection which is unused in the year the credit is earned may be carried forward to each of the 5 taxable years following the year for which the credit is first computed until it is used. This credit shall be applied first to the earliest year for which there is a liability. If there is a credit under this subsection from more than one tax year that is available to offset a liability, the earliest credit arising under this subsection shall be applied first. No carryforward credit may be claimed in any tax year ending on or after December 31, 2003.

(k) Research and development credit. For tax years ending after July 1, 1990 and prior to December 31, 2003, and beginning again for tax years ending on or after December 31, 2004, and ending prior to January 1, 2027, a taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for increasing research activities in this State. The credit allowed against the tax imposed by subsections (a) and (b) shall be equal to 6 1/2% of the qualifying expenditures for increasing research activities in this State. For partners, shareholders of subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there shall be allowed a credit under this subsection to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and subchapter S of the Internal Revenue Code.

For purposes of this subsection, "qualifying expenditures" means the qualifying expenditures as defined for the federal credit for increasing research activities which would be allowable under Section 41 of the Internal Revenue Code and which are conducted in this State, "qualifying expenditures for increasing research activities in this State" means the excess of qualifying expenditures for the taxable year in which incurred over qualifying expenditures for the base period, "qualifying expenditures for the base period" means the average of the qualifying expenditures for each year in the base period, and "base period" means the 3 taxable years immediately preceding the taxable year for which the determination is being made.

Any credit in excess of the tax liability for the taxable year may be carried forward. A taxpayer may elect to have the unused credit shown on its final completed return carried over as a credit against the tax liability for the following 5 taxable years or until it has been fully used, whichever occurs first; provided that no credit earned in a tax year ending prior to December 31, 2003 may be carried forward to any year ending on or after December 31, 2003.

If an unused credit is carried forward to a given year from 2 or more earlier years, that credit arising in the earliest year will be applied first against the tax liability for the given year. If a tax liability for the given year still remains, the credit from the next earliest year will then be applied, and so on, until all credits have been used or no tax liability for the given year remains. Any remaining unused credit or credits then will be carried forward to the next following year in which a tax liability is incurred, except that no credit can be carried forward to a year which is more than 5 years after the year in which the expense for which the credit is given was incurred.

No inference shall be drawn from Public Act 91-644 this amendatory Act of the 91st General Assembly in construing this Section for taxable years beginning before January 1, 1999.

It is the intent of the General Assembly that the research and development credit under this subsection (k) shall apply continuously for all tax years ending on or after December 31, 2004 and ending prior to January 1, 2027, including, but not limited to, the period beginning on January 1, 2016 and ending on July 6, 2017 (the effective date of Public Act 100-22) this amendatory Act of the 100th General Assembly. All actions taken in reliance on the continuation of the credit under this subsection (k) by any taxpayer are hereby validated.

(l) Environmental Remediation Tax Credit.

(i) For tax years ending after December 31, 1997 and on or before December 31, 2001, a taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for certain amounts paid for unreimbursed eligible remediation costs, as specified in this subsection. For purposes of this Section, "unreimbursed eligible remediation costs" means costs approved by the Illinois Environmental Protection Agency ("Agency") under Section 58.14 of the Environmental Protection Act that were paid in performing environmental remediation at a site for which a No Further Remediation Letter was issued by the Agency and recorded under Section 58.10 of the Environmental Protection Act. The credit must be claimed for the taxable year in which Agency approval of the eligible remediation costs is granted. The credit is not available to any taxpayer if the taxpayer or any related party caused or contributed to, in any material respect, a release of regulated substances on, in, or under the site that was identified and addressed by the remedial action pursuant to the Site Remediation Program of the Environmental Protection Act. After the Pollution Control Board rules are adopted pursuant to the Illinois Administrative Procedure Act for the administration and enforcement of Section 58.9 of the Environmental Protection Act, determinations as to credit availability for purposes of this Section shall be made consistent with those rules. For purposes of this Section, "taxpayer" includes a person whose tax attributes the taxpayer has succeeded to under Section 381 of the Internal Revenue Code and "related party" includes the persons disallowed a deduction for losses by paragraphs (b), (c), and (f)(1) of Section 267 of the Internal Revenue Code by virtue of being a related taxpayer, as well as any of its partners. The credit allowed against the tax imposed by subsections (a) and (b) shall be equal to 25% of the unreimbursed eligible remediation costs in excess of $100,000 per site, except that the $100,000 threshold shall not apply to any site contained in an enterprise zone as determined by the Department of Commerce and Community Affairs (now Department of Commerce and Economic Opportunity). The total credit allowed shall not exceed $40,000 per year with a maximum total of $150,000 per site. For partners and shareholders of subchapter S corporations, there shall be allowed a credit under this subsection to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and subchapter S of the Internal Revenue Code.

(ii) A credit allowed under this subsection that is unused in the year the credit is earned may be carried forward to each of the 5 taxable years following the year for which the credit is first earned until it is used. The term "unused credit" does not include any amounts of unreimbursed eligible remediation costs in excess of the maximum credit per site authorized under paragraph (i). This credit shall be applied first to the earliest year for which there is a liability. If there is a credit under this subsection from more than one tax year that is available to offset a liability, the earliest credit arising under this subsection shall be applied first. A credit allowed under this subsection may be sold to a buyer as part of a sale of all or part of the remediation site for which the credit was granted. The purchaser of a remediation site and the tax credit shall succeed to the unused credit and remaining carry-forward period of the seller. To perfect the transfer, the assignor shall record the transfer in the chain of title for the site and provide written notice to the Director of the Illinois Department of Revenue of the assignor's intent to sell the remediation site and the amount of the tax credit to be transferred as a portion of the sale. In no event may a credit be transferred to any taxpayer if the taxpayer or a related party would not be eligible under the provisions of subsection (i).

(iii) For purposes of this Section, the term "site" shall have the same meaning as under Section 58.2 of the Environmental Protection Act.

(m) Education expense credit. Beginning with tax years ending after December 31, 1999, a taxpayer who is the custodian of one or more qualifying pupils shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for qualified education expenses incurred on behalf of the qualifying pupils. The credit shall be equal to 25% of qualified education expenses, but in no event may the total credit under this subsection claimed by a family that is the custodian of qualifying pupils exceed (i) $500 for tax years ending prior to December 31, 2017, and (ii) $750 for tax years ending on or after December 31, 2017. In no event shall a credit under this subsection reduce the taxpayer's liability under this Act to less than zero. Notwithstanding any other provision of law, for taxable years beginning on or after January 1, 2017, no taxpayer may claim a credit under this subsection (m) if the taxpayer's adjusted gross income for the taxable year exceeds (i) $500,000, in the case of spouses filing a joint federal tax return or (ii) $250,000, in the case of all other taxpayers. This subsection is exempt from the provisions of Section 250 of this Act.

For purposes of this subsection:

"Qualifying pupils" means individuals who (i) are residents of the State of Illinois, (ii) are under the age of 21 at the close of the school year for which a credit is sought, and (iii) during the school year for which a credit is sought were full-time pupils enrolled in a kindergarten through twelfth grade education program at any school, as defined in this subsection.

"Qualified education expense" means the amount incurred on behalf of a qualifying pupil in excess of $250 for tuition, book fees, and lab fees at the school in which the pupil is enrolled during the regular school year.

"School" means any public or nonpublic elementary or secondary school in Illinois that is in compliance with Title VI of the Civil Rights Act of 1964 and attendance at which satisfies the requirements of Section 26-1 of the School Code, except that nothing shall be construed to require a child to attend any particular public or nonpublic school to qualify for the credit under this Section.

"Custodian" means, with respect to qualifying pupils, an Illinois resident who is a parent, the parents, a legal guardian, or the legal guardians of the qualifying pupils.

(n) River Edge Redevelopment Zone site remediation tax credit.

(i) For tax years ending on or after December 31, 2006, a taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for certain amounts paid for unreimbursed eligible remediation costs, as specified in this subsection. For purposes of this Section, "unreimbursed eligible remediation costs" means costs approved by the Illinois Environmental Protection Agency ("Agency") under Section 58.14a of the Environmental Protection Act that were paid in performing environmental remediation at a site within a River Edge Redevelopment Zone for which a No Further Remediation Letter was issued by the Agency and recorded under Section 58.10 of the Environmental Protection Act. The credit must be claimed for the taxable year in which Agency approval of the eligible remediation costs is granted. The credit is not available to any taxpayer if the taxpayer or any related party caused or contributed to, in any material respect, a release of regulated substances on, in, or under the site that was identified and addressed by the remedial action pursuant to the Site Remediation Program of the Environmental Protection Act. Determinations as to credit availability for purposes of this Section shall be made consistent with rules adopted by the Pollution Control Board pursuant to the Illinois Administrative Procedure Act for the administration and enforcement of Section 58.9 of the Environmental Protection Act. For purposes of this Section, "taxpayer" includes a person whose tax attributes the taxpayer has succeeded to under Section 381 of the Internal Revenue Code and "related party" includes the persons disallowed a deduction for losses by paragraphs (b), (c), and (f)(1) of Section 267 of the Internal Revenue Code by virtue of being a related taxpayer, as well as any of its partners. The credit allowed against the tax imposed by subsections (a) and (b) shall be equal to 25% of the unreimbursed eligible remediation costs in excess of $100,000 per site.

(ii) A credit allowed under this subsection that is unused in the year the credit is earned may be carried forward to each of the 5 taxable years following the year for which the credit is first earned until it is used. This credit shall be applied first to the earliest year for which there is a liability. If there is a credit under this subsection from more than one tax year that is available to offset a liability, the earliest credit arising under this subsection shall be applied first. A credit allowed under this subsection may be sold to a buyer as part of a sale of all or part of the remediation site for which the credit was granted. The purchaser of a remediation site and the tax credit shall succeed to the unused credit and remaining carry-forward period of the seller. To perfect the transfer, the assignor shall record the transfer in the chain of title for the site and provide written notice to the Director of the Illinois Department of Revenue of the assignor's intent to sell the remediation site and the amount of the tax credit to be transferred as a portion of the sale. In no event may a credit be transferred to any taxpayer if the taxpayer or a related party would not be eligible under the provisions of subsection (i).

(iii) For purposes of this Section, the term "site" shall have the same meaning as under Section 58.2 of the Environmental Protection Act.

(o) For each of taxable years during the Compassionate Use of Medical Cannabis Program, a surcharge is imposed on all taxpayers on income arising from the sale or exchange of capital assets, depreciable business property, real property used in the trade or business, and Section 197 intangibles of an organization registrant under the Compassionate Use of Medical Cannabis Program Act. The amount of the surcharge is equal to the amount of federal income tax liability for the taxable year attributable to those sales and exchanges. The surcharge imposed does not apply if:

(1) the medical cannabis cultivation center registration, medical cannabis dispensary registration, or the property of a registration is transferred as a result of any of the following:

(A) bankruptcy, a receivership, or a debt adjustment initiated by or against the initial registration or the substantial owners of the initial registration;

(B) cancellation, revocation, or termination of any registration by the Illinois Department of Public Health;

(C) a determination by the Illinois Department of Public Health that transfer of the registration is in the best interests of Illinois qualifying patients as defined by the Compassionate Use of Medical Cannabis Program Act;

(D) the death of an owner of the equity interest in a registrant;

(E) the acquisition of a controlling interest in the stock or substantially all of the assets of a publicly traded company;

(F) a transfer by a parent company to a wholly owned subsidiary; or

(G) the transfer or sale to or by one person to another person where both persons were initial owners of the registration when the registration was issued; or

(2) the cannabis cultivation center registration, medical cannabis dispensary registration, or the controlling interest in a registrant's property is transferred in a transaction to lineal descendants in which no gain or loss is recognized or as a result of a transaction in accordance with Section 351 of the Internal Revenue Code in which no gain or loss is recognized.

(Source: P.A. 100-22, eff. 7-6-17; 101-8, see Section 99 for effective date; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19; 101-207, eff. 8-2-19; 101-363, eff. 8-9-19; revised 11-18-20.)

Section 90-20. The Retailers' Occupation Tax Act is amended by adding Section 5k-5 as follows:

(35 ILCS 120/5k-5 new)

Sec. 5k-5. Building materials exemption; Clean Energy Empowerment Zone. Each retailer who makes a sale of building materials to be incorporated into renewable energy projects in a Clean Energy Empowerment Zone established under the Energy Community Reinvestment Act may deduct receipts from such sales when calculating the tax imposed by this Act. A renewable energy enterprise or other entity shall not make tax-free purchases under this Section unless it has an active exemption certificate at the time of purchase, which shall be issued by the Department in a form prescribed by the Department. The Department shall adopt by rule all other requirements necessary for the implementation and operation of this Section.

Section 90-25. The Public Utilities Act is amended by adding Sections 9-222.1B and 16-108.9 as follows:

(220 ILCS 5/9-222.1B new)

Sec. 9-222.1B. Clean Energy Empowerment Zone exemption. A renewable energy enterprise that is located within a Clean Energy Empowerment Zone established under the Energy Community Reinvestment Act shall be exempt from the additional charges added to the renewable energy enterprise's utility bills as a pass-on of municipal and State utility taxes under Sections 9-221 and 9-222 of this Act, to the extent such charges are exempted by ordinance adopted in accordance with paragraph (e) of Section 8-11-2 of the Illinois Municipal Code in the case of municipal utility taxes, and to the extent such charges are exempted by the percentage specified by the Department of Commerce and Economic Opportunity in the case of State utility taxes, provided such renewable energy enterprise meets the following criteria:

(1) it (i) makes investments that cause the creation of a minimum of 200 full-time equivalent jobs in Illinois; (ii) makes investments of at least $175,000,000 that cause the creation of a minimum of 150 full-time equivalent jobs in Illinois; (iii) makes investments that cause the retention of a minimum of 300 full-time equivalent jobs in the manufacturing sector, as defined by the North American Industry Classification System, in an area in Illinois in which the unemployment rate is above 9% and makes an application to the Department within 3 months after the effective date of this amendatory Act of the 102nd General Assembly and certifies relocation of the 300 full-time equivalent jobs within 48 months after the application; or (iv) makes investments that cause the retention of a minimum of 1,000 full-time jobs in Illinois;

(2) it is located in a Clean Energy Empowerment Zone established under the Energy Community Reinvestment Act; and

(3) it is certified by the Department of Commerce and Economic Opportunity as complying with the requirements specified in clauses (1) and (2) of this Section.

The Department of Commerce and Economic Opportunity shall determine the period during which such exemption from the charges imposed under Section 9-222 is in effect which shall not exceed 30 years or the term of the Clean Energy Empowerment Zone, whichever period is shorter, except that the exemption period for a renewable energy enterprise qualifying under item (iii) of clause (1) of this Section shall not exceed 30 years.

The Department of Commerce and Economic Opportunity has the power to adopt rules to carry out the provisions of this Section including procedures for complying with the requirements specified in clauses (1) and (2) of this Section and procedures for applying for the exemptions authorized under this Section; to define the amounts and types of eligible investments that a renewable energy enterprise must make in order to receive State utility tax exemptions pursuant to Sections 9-222 and 9-222.1 of this Act; to approve such utility tax exemptions for renewable energy enterprise whose investments are not yet placed in service; and to require that renewable energy enterprise granted tax exemptions repay the exempted tax should the renewable energy enterprise fail to comply with the terms and conditions of the certification. However, no renewable energy enterprise shall be required, as a condition for certification under clause (3) of this Section, to attest that its decision to invest under clause (1) of this Section and to locate under clause (2) of this Section is predicated upon the availability of the exemptions authorized by this Section.

A renewable energy enterprise shall be exempt, in whole or in part, from the pass-on charges of municipal utility taxes imposed under Section 9-221, only if it meets the criteria specified in clauses (1) through (3) of this Section and the municipality has adopted an ordinance authorizing the exemption under paragraph (e) of Section 8-11-2 of the Illinois Municipal Code. Upon certification of the renewable energy enterprise by the Department of Commerce and Economic Opportunity, the Department of Commerce and Economic Opportunity shall notify the Department of Revenue of such certification. The Department of Revenue shall notify the public utilities of the exemption status of renewable energy enterprises from the pass-on charges of State and municipal utility taxes. Such exemption status shall be effective within 3 months after certification of the renewable energy enterprise.

(220 ILCS 5/16-108.9 new)

Sec. 16-108.9. Clean Energy Empowerment Zone pilot projects.

(a) The General Assembly finds that it is important to support the rapid transition in the energy sector to put Illinois on a path to 100% renewable energy. This will require leveraging new technologies and solutions to support grid reliability to address issues such as the shift from large, centralized, fossil generation to wind, solar, and distributed energy resources. To that end, the General Assembly sees the need for developing pilot projects in Clean Energy Empowerment Zones that enhance reliability while facilitating the transition toward clean energy.

(b) An electric utility serving more than 100,000 retail customers may propose one or more Clean Energy Empowerment Zone pilot projects to the Illinois Commerce Commission to conduct a competitive procurement for independently owned energy storage systems to be located in Clean Energy Empowerment Zones. The Commission shall evaluate the projects based on their ability to address present and future reliability needs identified by the Midcontinent Independent System Operator, PJM Interconnection, electric utilities, or independent analysts. In addition to supporting reliability, a qualifying project must support the transition toward or development of clean energy.

(c) The Clean Energy Empowerment Zones described in this Section shall be the same as defined by the Department of Commerce and Economic Opportunity in the Energy Community Reinvestment Act.

(d) The Clean Energy Empowerment Zone pilot projects shall closely coordinate with actual and expected development of new wind projects and new solar projects as described in Section 1-75 of the Illinois Power Agency Act, electric vehicle adoption, and Community Energy, Climate, and Jobs Plans as defined in the Community Energy, Climate, and Jobs Planning Act.

(e) Upon approval of a Clean Energy Empowerment Zone pilot project by the Illinois Commerce Commission, an electric utility is authorized to enter into a distribution services contract with new energy storage system projects in accordance with the approved project. Nothing in this Section or in the distribution services contract shall preclude the energy storage project from providing additional wholesale market services.

(f) An electric utility that elects to undertake the investment described in subsection (b) of this Section may, at its election, recover the costs of such investment through an automatic adjustment clause tariff or through a delivery services charge regardless of how the costs are classified on the utility's books and records of account.

(g) To the extent feasible and consistent with State and federal law, the investments made pursuant to this Section shall provide employment opportunities for former workers in fossil fuel industries.

(h) Nothing in this Section is intended to limit the ability of any other entity to develop, construct, or install an energy storage system. In addition, nothing in this Section is intended to limit or alter otherwise applicable interconnection requirements.

Section 90-30. The Environmental Protection Act is amended by changing Section 9.10 and by adding Section 9.18 as follows:

(415 ILCS 5/9.10)

Sec. 9.10. Fossil fuel-powered electric generating units Fossil fuel-fired electric generating plants.

(a) As used in this Section:

"Board" means the Illinois Pollution Control Board.

"BIPOC" and "black, indigenous, and people of color" are defined as people who are members of the groups described in subparagraphs (a) through (e) of paragraph (A) of subsection (1) of Section 2 of the Business Enterprise for Minorities, Women, and Persons with Disabilities Act.

"Emissions" means greenhouse gases, particulate matter, mercury, nitrogen oxides, sulfur dioxide, and any other pollutant that the Agency deems appropriate for regulation to protect health or land in the State.

"Frontline community" means any community or municipality within a 3-mile radius of a fossil fuel-powered electric generating unit.

"Meaningful involvement" means: (1) potentially affected populations have an appropriate opportunity to participate in decisions about a proposed regulatory action that may affect their environment or health; (2) the populations' contributions can influence the EPA's rulemaking decisions; (3) the concerns of all participants involved shall be considered in the decision-making process; and (4) the IEPA shall seek out and facilitate the involvement of populations potentially affected by the IEPA's proposed regulatory action.

(a-1) (a) The General Assembly finds and declares that:

(1) fossil fuel-powered electric generating units fossil fuel-fired electric generating plants are a significant source of air emissions in this State and have become the subject of a number of important new studies of their effects on the public health;

(2) existing state and federal policies, that allow older plants that meet federal standards to operate without meeting the more stringent requirements applicable to new plants, are being questioned on the basis of their environmental impacts and the economic distortions such policies cause in a deregulated energy market;

(3) fossil fuel-powered electric generating units fossil fuel-fired electric generating plants are, or may be, affected by a number of regulatory programs, some of which are under review or development on the state and national levels, and to a certain extent the international level, including the federal acid rain program, tropospheric ozone, mercury and other hazardous pollutant control requirements, regional haze, and global warming;

(4) scientific uncertainty regarding the formation of certain components of regional haze and the air quality modeling that predict impacts of control measures requires careful consideration of the timing of the control of some of the pollutants from these facilities, particularly sulfur dioxides and nitrogen oxides that each interact with ammonia and other substances in the atmosphere;

(5) the development of energy policies to promote a safe, sufficient, reliable, and affordable energy supply on the state and national levels is being affected by the on-going deregulation of the power generation industry and the evolving energy markets;

(6) the Governor's formation of an Energy Cabinet and the development of a State energy policy calls for actions by the Agency and the Board that are in harmony with the energy needs and policy of the State, while protecting the public health and the environment;

(7) reducing greenhouse gas emissions and other air pollutants such as particulate matter, sulfur dioxide, and nitrogen oxide is critical to improving the health and welfare of Illinois residents by decreasing respiratory diseases, cardiovascular diseases, and related mortalities; lowering customers' energy costs; and responding to the growing impacts of climate change from fossil fuel generation;

(8) through reductions in harmful emissions and strategic planning for Illinois residents currently employed by and communities reliant on fossil fuel-powered electric generating units, eliminating greenhouse gas emissions from the electricity generation sector is a priority for the State;

(9) The House of Representatives of the 100th General Assembly recognized this problem and, in adopting House Resolution 490 on June 26, 2017, it supported the Paris Climate Agreement and urged the State of Illinois to join the United States Climate Alliance and develop a plan to achieve 100% clean energy by 2045;

(7) Illinois coal is an abundant resource and an important component of Illinois' economy whose use should be encouraged to the greatest extent possible consistent with protecting the public health and the environment;

(8) renewable forms of energy should be promoted as an important element of the energy and environmental policies of the State and that it is a goal of the State that at least 5% of the State's energy production and use be derived from renewable forms of energy by 2010 and at least 15% from renewable forms of energy by 2020;

(10) (9) efforts on the state and federal levels are underway to consider the multiple environmental regulations affecting electric generating plants in order to improve the ability of government and the affected industry to engage in effective planning through the use of multi-pollutant strategies; and

(11) (10) these issues, taken together, call for a comprehensive review of the impact of these facilities on the public health, considering also the energy supply, reliability, and costs, the role of renewable forms of energy, and the developments in federal law and regulations that may affect any state actions, prior to making final decisions in Illinois.

(b) Taking into account the findings and declarations of the General Assembly contained in subsection (a) of this Section, the Agency shall, within 180 days after the effective date of this amendatory Act of the 102nd General Assembly, initiate a rulemaking to amend Title 35 of the Illinois Administrative Code to establish annual declining greenhouse gas pollution caps and caps on co-pollutants, including, but not limited to, particulate matter (including both PM₁₀ and PM_2.5), mercury, nitrogen oxides, and sulfur dioxide, beginning in 2023 from all fossil fuel-powered electric generating units (including, but not limited to, coal-fired, coal-derived, oil-fired, combustion turbine, integrated gasification combined cycle, and cogeneration facilities with a nameplate capacity that exceeds 25 MW) so as to progressively eliminate all emissions of those pollutants from Illinois' electric sector by the year 2030. No later than one year after receipt of the Agency's proposal under this Section, the Board shall adopt rules setting out declining annual emissions caps for greenhouse gases (CO₂ equivalent) and co-pollutants, including, but not limited to, particulate matter (including both PM₁₀ and PM_2.5), mercury, nitrogen oxides, and sulfur dioxide, for each individual fossil fuel-powered electric generating unit in Illinois as well as aggregate annual statewide emissions caps. The Board may set different declining caps for each plant, but caps must decline to zero emissions for all plants by 2030. As part of its rulemaking proposal, the Agency shall:

(1) ensure that power plants located near densely populated and environmental justice communities and those with sulfur dioxide emission rates above 0.0007 pounds per million Btu are prioritized for more rapid, mandatory, plant-specific emissions reductions for both greenhouse gases and co-pollutants;

(2) develop an environmental justice analysis, in partnership with the Illinois Commission on Environmental Justice and with frontline community feedback, to inform a draft rule proposal and identification of power plants of particular concern requiring priority emissions reductions. This analysis shall include a cumulative impacts assessment and use existing methodologies and findings, used and as may be updated by the Illinois Power Agency and its Administrator in its Illinois Solar for All Program, taking into account the following factors:

(A) Population density;

(B) National-Scale Air Toxics Assessment (NATA) air toxics cancer risk;

(C) NATA respiratory hazard index;

(D) NATA diesel PM;

(E) particulate matter;

(F) ozone;

(G) traffic proximity and volume;

(H) lead paint indicator;

(I) proximity to Risk Management Plan sites;

(J) proximity to Hazardous Waste Treatment, Storage, and Disposal Facilities;

(K) proximity to National Priorities List sites;

(L) Wastewater Dischargers Indicator;

(M) percent low-income;

(N) percent black, indigenous, and people of color;

(O) percent less than a high school education;

(P) linguistic isolation;

(Q) age (individuals under age 5 or over 64);

(R) number of asthma-related emergency department visits; and

(S) frequency of low birth weight infants;

(3) conduct a robust and inclusive stakeholder process prior to initiating a rulemaking proceeding before the Illinois Pollution Control Board that ensures the meaningful participation of Illinois residents, especially those most impacted by fossil fuel-powered electric generating units. To ensure meaningful involvement in its stakeholder process, the agency shall:

(A) include a formal public comment period with at least 4 public hearings located in communities geographically dispersed, where fossil fuel-powered electric generating units are located;

(B) ensure full and fair access for working residents by providing opportunity for public comment outside the workday; and

(C) issue a responsiveness summary with a draft rulemaking briefly describing and responding to, at a minimum, all frontline community comments raised during the stakeholder process and public comment period;

(4) participate in strategic planning efforts with the Department of Commerce and Economic Opportunity to identify needs and initiatives for communities and workers economically impacted by the decline in fossil fuel generation;

(5) evaluate individual units using the criteria above and set appropriate annually declining caps for emission reductions, which ultimately result in caps of zero emissions from all fossil fuel-powered electric generating units by January 1, 2030;

(6) include provisions to allow owners or operators of fossil fuel-powered electric generating units to continue operating while using their best efforts to resolve any reliability requirements with regional grid operators and cease operations as soon as practicable in situations where achieving the emission reductions required by the Agency's rulemaking proposal necessitates that a particular unit cease operations and a regional grid operator determines that operation of that unit is required to continue to maintain transmission reliability. The Agency's rulemaking proposal shall include mechanisms designed to limit, to the extent possible, any such disruption to the State's emission reduction program, including an evaluation of when and how advanced notice of intended unit closures should be given to regional grid operators; and

(7) establish emissions caps for (i) individual fossil fuel-powered electric generating units and (ii) the entire electric sector. The emissions caps shall include all emissions, including greenhouse gases and co-pollutants.

(A) Annual aggregate electric sector emissions caps. The aggregate emissions cap shall apply to the entire Illinois electric sector and include the sum of emissions from all fossil fuel-powered electric generating units. The Agency shall establish a schedule through which the aggregate cap shall decline annually. A baseline amount shall be calculated by averaging the emissions from 2017, 2018, and 2019 of plants operating as of the effective date of this amendatory Act of the 102nd General Assembly. To ensure consistent progress toward the goal of eliminating all emissions from Illinois' electric sector by 2030, the annual aggregate emissions cap shall decrease each year by no less than 7% of the baseline amount.

(B) Annual unit-specific emissions caps. Annual emissions caps shall apply to each fossil fuel-powered electric generating unit in the State and be consistent with achieving the aggregate emissions cap. Starting in 2023, the annual emissions cap for each plant shall be no greater than the highest emissions amount from any of the 3 previous years of operation. If a plant first became operational less than 3 years before being subject to a unit-specific emissions cap, then the annual emissions cap for such a plant shall be no greater than its previous year of operation; or if a fossil fuel-powered electric generating unit has been operational less than one year, then the Agency shall set a cap that is consistent with achieving the aggregate emissions cap and the goal of eliminating all emissions from Illinois' electric sector by 2030.

(C) Annual report. Each year, the Agency shall prepare and publish a report on the implementation, review, and updating of the schedules regulating annual emissions caps as described in this subsection. This report shall include:

(i) an accounting of all greenhouse gas and co-pollutant caps on, and actual emissions from, individual plants demonstrating the Agency's implementation of the requirements in this subsection; and

(ii) an accounting of the aggregate declining cap schedules demonstrating the adequacy of the schedules to achieve net-zero emissions in the electric sector by 2030, and any changes to the schedules.

In addition to the information required under items (i) and (ii), the 2025 report shall include a review of the Agency's rules regulating annual greenhouse gas pollution and co-pollutant caps in light of projected emissions for the remaining years until 2030 and demonstrate the adequacy of its rules and policies to achieve net-zero emissions in the electric sector by 2030. Should the Agency conclude its current rules and policies are insufficient to eliminate emissions from all fossil fuel-powered electric generating units by January 1, 2030 and comply with all other requirements in this Section, it shall initiate a rulemaking no later than 180 days from reaching this conclusion amending its rules to do so. before September 30, 2004, but not before September 30, 2003, issue to the House and Senate Committees on Environment and Energy findings that address the potential need for the control or reduction of emissions from fossil fuel-fired electric generating plants, including the following provisions:

(1) reduction of nitrogen oxide emissions, as appropriate, with consideration of maximum annual emissions rate limits or establishment of an emissions trading program and with consideration of the developments in federal law and regulations that may affect any State action, prior to making final decisions in Illinois;

(2) reduction of sulfur dioxide emissions, as appropriate, with consideration of maximum annual emissions rate limits or establishment of an emissions trading program and with consideration of the developments in federal law and regulations that may affect any State action, prior to making final decisions in Illinois;

(3) incentives to promote renewable sources of energy consistent with item (8) of subsection (a) of this Section;

(4) reduction of mercury as appropriate, consideration of the availability of control technology, industry practice requirements, or incentive programs, or some combination of these approaches that are sufficient to prevent unacceptable local impacts from individual facilities and with consideration of the developments in federal law and regulations that may affect any state action, prior to making final decisions in Illinois; and

(5) establishment of a banking system, consistent with the United States Department of Energy's voluntary reporting system, for certifying credits for voluntary offsets of emissions of greenhouse gases, as identified by the United States Environmental Protection Agency, or other voluntary reductions of greenhouse gases. Such reduction efforts may include, but are not limited to, carbon sequestration, technology-based control measures, energy efficiency measures, and the use of renewable energy sources.

The Agency shall consider the impact on the public health, considering also energy supply, reliability and costs, the role of renewable forms of energy, and developments in federal law and regulations that may affect any state actions, prior to making final decisions in Illinois.

(c) Nothing in this Section is intended to or should be interpreted in a manner to limit or restrict the authority of the Illinois Environmental Protection Agency to propose, or the Illinois Pollution Control Board to adopt, any regulations applicable or that may become applicable to the facilities covered by this Section that are required by federal law and other Illinois laws.

(d) The Agency may file proposed rules with the Board to effectuate the goals set forth in subsection (b) its findings provided to the Senate Committee on Environment and Energy and the House Committee on Environment and Energy in accordance with subsection (b) of this Section. Any such proposal shall not be submitted sooner than 90 days after the issuance of the findings provided for in subsection (b) of this Section. The Board shall take action on any such proposal within one year of the Agency's filing of the proposed rules.

(e) Enforcement.

(1) Any person may file with the Board a complaint, following the procedures contained in subsection (d) of Section 31 of this Act, against any person, the State of Illinois, or any government official for failure to perform any act or nondiscretionary duty under this Section or for allegedly violating this Section, any rule or regulation adopted under this Section, any permit or term or condition of a permit related to this Section, or any Board order issued pursuant to this Section. Any person shall have standing in an action under this Section before the Board. Any person may intervene as a party as a matter of right in any legal action concerning this Section, whichever the forum, if he or she is or may be adversely affected by any failure to perform any act or nondiscretionary duty under this Section or any alleged violation of this Section, any rule or regulation adopted under this Section, any permit or term or condition of a permit, or any Board order, by any person, the State of Illinois, or any government official.

(2) In an action brought pursuant to this Section, any person may request, and the Board or court may grant, injunctive relief, damages (including reasonable attorney and expert witness fees), and any other remedy available pursuant to Sections 33 or 42 of this Act. The Board or court may, if a temporary restraining order or preliminary injunction is sought, require the filing of a bond or equivalent security in accordance with the Illinois Code of Civil Procedure.

(3) No existing civil or criminal remedy shall be excluded or impaired by this Section. This Section shall apply only to those electrical generating units that are subject to the provisions of Subpart W of Part 217 of Title 35 of the Illinois Administrative Code, as promulgated by the Illinois Pollution Control Board on December 21, 2000.

(Source: P.A. 92-12, eff. 7-1-01; 92-279, eff. 8-7-01.)

(415 ILCS 5/9.18 new)

Sec. 9.18. Energy community reinvestment fee.

(a) As used in this Section:

"Carbon dioxide equivalent" means a unit of measure denoting the amount of emissions from a greenhouse gas, expressed as the amount of carbon dioxide by weight that produces the same global warming impact.

"Fossil fuel generating plant" means an electric generating unit or a co-generating unit that produces electricity using fossil fuels.

"Payment period" means the three-month period of time during which emissions are measured for the purpose of quarterly fee calculation.

(b) The General Assembly finds and declares that:

(1) the negative effects of fossil fuel-powered electric generating units on human health, environmental quality, and the climate of our planet require Illinois to swiftly retire all such plants and shift to 100% renewable energy;

(2) communities located near fossil fuel-powered electric generating units have experienced these health and environmental impacts most acutely;

(3) communities located near fossil fuel-powered electric generating units will also experience economic challenges as these plants retire;

(4) the assessment of a fee on the emissions of fossil fuel generating plants will lower the exposure of surrounding communities to harmful air pollutants by providing incentive for fossil fuel generating plants to reduce emissions;

(5) it is in the public interest that communities located near fossil fuel-fired electric generating plants should receive support in the form of economic reinvestment, as recompense for the negative impacts of the operation of fossil fuel-fired electric generating plants, to invest in clean energy developments that reduce the cumulative impacts of air pollution thus protecting the public health, and as a means for creating new economic growth and opportunity which is needed when the plants retire; and

(6) this support should be paid for by the owners and operators of fossil fuel-fired electric generating plants, the operation of which caused harm to the surrounding communities.

(c) Calculation of the Energy Community Reinvestment Fee. The Agency shall establish procedures for the collection of energy community reinvestment fees. Energy community reinvestment fees shall be paid at least quarterly (once every 3 months) by owners of all fossil fuel generating plants in Illinois, based on the share of each plant's contribution to the total amount of air pollution emitted by all fossil fuel generating plants in that payment period, as determined by the Agency and described in this subsection (c).

(1) Pollution Calculation. The energy community reinvestment fee shall be calculated to reflect the pollution burden from fossil fuel generating plants, based on the total emissions of greenhouse gases. The fee shall be calculated based solely on emissions of carbon dioxide, methane, and nitrous oxide measured in carbon dioxide equivalent tons. The exclusive use of carbon dioxide, methane, and nitrous oxide in the calculation of the fee is designed to reflect the overall pollution impact from each fossil fuel generating plant by using these pollutants as a proximate measurement of overall emissions.

(2) Fee Calculation. The Agency shall calculate the fee owed by each fossil fuel generating plant owner for each payment period by dividing (A) the total emissions of carbon dioxide equivalents in tons by each plant as described under paragraph (1) of this subsection (c) by (B) the total emissions of carbon dioxide equivalents in tons of all fossil fuel generating plants subject to the energy community reinvestment fee, and multiplying that figure by (C) the portion of the annual revenue requirements, established in subsection (d) of Section 5-70 of the Energy Community Reinvestment Act, for that payment period.

(3) Right to Fee Reduction. The owner of each plant liable to pay the energy community reinvestment fee shall have the right to reduce its liability based on electricity production as described in this paragraph (3). If requested, the total amount owed each payment period for any plant shall be no greater than the total amount of kilowatt hours of electricity produced by the plant during the payment period multiplied by one cent per kilowatt hour, adjusted for inflation from the year this Act takes effect. Upon request by a plant owner the Agency shall adjust the total amount owed for each payment period by the amount necessary to reflect a maximum cost calculated based on electricity production.

(4) Notification by the Agency. The first payment period shall begin June 1, 2021. No later than September 1, 2021, and every 3 months thereafter on the first of the month, the Agency shall notify each fossil fuel generating plant owner of the fee calculated pursuant to paragraph (2) of this subsection (c) for the quarterly period just concluded.

(5) Fee Collection. Plant owners shall remit payment of their fee to the Agency within 30 days after the close of each payment period, as established by the Agency. Funds collected from the energy community reinvestment fee shall be deposited into the Energy Community Reinvestment Fund.

(d) Clean Energy Empowerment Zone Task Force involvement. If the Agency receives notification from the Department of Commerce and Economic Opportunity that a plant owner has failed to engage productively in stakeholder meetings and with Clean Energy Empowerment Zone Task Forces, as described in the Energy Community Reinvestment Act, an enforcement action may be brought under Section 31 of this Act. In addition to any other relief that may be obtained as part of the enforcement action, the Agency may seek to recover the avoided engagement fees. The avoided engagement fees shall be calculated as double the amount that is owed by the plant owner under subsection (c) for the current payment period, and subsequent payment periods, until the Department of Commerce and Economic Opportunity sends notification to the Agency that the plant owner is in compliance with the stakeholder engagement requirements of the Energy Community Reinvestment Act. Avoided engagement fees (which, for clarity, are in addition to fees collected under subsection (c)) shall be deposited into the Energy Community Reinvestment Fund to be directed solely to support the local community's own planning efforts and investments, and the Agency shall transmit a notification to the Department of Commerce and Economic Opportunity of the amount collected, and the plant owner responsible.

(e) If a plant owner subject to a fee under this Section fails to pay the fee within 90 days after its due date, or makes the fee payment from an account with insufficient funds to cover the amount of the fee payment, the Agency shall notify the plant owner of the failure to pay the fee. If the plant owner fails to pay the fee within 60 days after such notification, the Agency may, by written notice, immediately revoke the air pollution operating permit. Failure of the Agency to notify the plant owner of failure to pay a fee due under this Section, or the payment of the fee from an account with insufficient funds to cover the amount of the fee payment, does not excuse or alter the duty of the plant owner to comply with the provisions of this Section.

(f) No later than November 30 of each year, the Agency shall submit a report to the Department of Commerce and Economic Opportunity describing the amount of fees collected from each fossil fuel-powered electric generating unit, the status of any delinquencies, and the total amount expected to be collected.

(g) Nothing in this Section shall be interpreted to mean that the sum owed by each fossil fuel generating plant due to the energy community reinvestment fee is equal to or greater than the financial valuation of the total harm created by air pollution from each plant.

(h) Enforcement.

(1) Any person may file with the Board a complaint, following the procedures contained in subsection (d) of Section 31 of this Act, against any person, the State of Illinois, or any government official for failure to perform any act or nondiscretionary duty under this Section or for allegedly violating this Section, any rule or regulation adopted under this Section, any permit or term or condition of a permit related to this Section, or any Board order issued pursuant to this Section. Any person shall have standing in an action under this Section before the Board. Any person may intervene as a party as a matter of right in any legal action concerning this Section, whichever the forum, if he or she is or may be adversely affected by any failure to perform any act or nondiscretionary duty under this Section or any alleged violation of this Section, any rule or regulation adopted under this Section, any permit or term or condition of a permit, or any Board order, by any person, the State of Illinois, or any government official. Any person with standing to commence an action pursuant to subsection (e) of Section 9.10 shall have standing to pursue enforcement under this Section.

(2) In an action brought pursuant to this Section, any person may request, and the Board or court may grant, injunctive relief, damages (including reasonable attorney and expert witness fees), and any other remedy available pursuant to Sections 33 or 42 of this Act. The Board or court may, if a temporary restraining order or preliminary injunction is sought, require the filing of a bond or equivalent security in accordance with the Illinois Code of Civil Procedure.

(3) No existing civil or criminal remedy shall be excluded or impaired by this Section.

(415 ILCS 5/9.15 rep.)

Section 90-35. The Environmental Protection Act is amended by repealing Section 9.15.

Section 90-40. The Illinois Nuclear Facility Safety Act is amended by adding Section 10 as follows:

(420 ILCS 10/10 new)

Sec. 10. Local government nuclear impact fees.

(a) As used in this Section:

"Local taxing body" means any unit of government that assesses and collects property taxes.

"Qualifying Nuclear Facility" means a facility playing or having played a direct role in the operation of commercial nuclear power reactors for the generation of electricity; including facilities used to process radioactive materials for nuclear fuel fabrication, nuclear power reactors, high-level and low-level radioactive waste treatment sites, and storage and disposal locations.

"Qualifying Nuclear Operator" means any entity that operates or has in the past 50 years operated a Qualifying Nuclear Facility.

(b) Notwithstanding any other provision of law to the contrary, any local taxing body may establish and collect an annual Nuclear Impact Fee from Qualifying Nuclear Facility within the boundaries of that local taxing body.

(c) The Nuclear Impact Fee shall be charged to the Qualifying Nuclear Operator.

(d) The Nuclear Impact Fee may only be applied prospectively on or after the effective date of this amendatory Act of the 102nd General Assembly, and may not be applied retroactively to a date before which this amendatory Act is passed.

(e) The Nuclear Impact Fee permission granted to local taxing bodies under these rules shall expire separately for each individual local taxing body. That date of expiration of the Nuclear Impact Fee permission for each local taxing body shall be either exactly 30 years after the effective date of this amendatory Act of the 102nd General Assembly, or 10 years following the permanent shutdown of the Qualifying Nuclear Facility from which the local taxing body collected property taxes, whichever date is later.

(f) In any calendar year, a local taxing body may not impose a Nuclear Impact Fee that exceeds 25% of the average annual amount of property taxes, or payments in lieu of taxes, paid to that local taxing body by the Qualifying Nuclear Facility over the most recent 5-year period that the Qualifying Nuclear Facility has been operational.

(g) Any failure by the Qualifying Nuclear Operator to pay a Nuclear Impact Fee within 180 days after the fee payment deadline shall be deemed a failure to comply, and shall automatically require the Qualifying Nuclear Operator to pay the Local Entity double the otherwise-allowable property taxes, up to 50% of the average annual amount of property taxes paid over the most recent 5-year period that the Qualifying Nuclear Facility was operational.

(h) To establish a Nuclear Impact Fee, the local taxing body shall adopt a resolution or ordinance describing the public need for economic transition, the annual amount of the fee, the Qualifying Nuclear Facility, the Qualifying Nuclear Operator to be assessed, and a description of projected expenses for the fee for the period the fee is in effect. The local taxing body shall conduct a public hearing before adopting a resolution or ordinance imposing a Nuclear Impact Fee permitted under this Section. The hearing shall be held within the boundaries of the local taxing body. Public notice of the time, place, and purpose of the hearing shall be given at least 10 business days before the date of the hearing.

(i) A local taxing body shall include in its resolution or ordinance the method for collection of payment of a Nuclear Impact Fee. A county which has adopted a resolution or ordinance imposing a Nuclear Impact Fee may collect such Fees in the regular property tax bills of the county. The county collector of the county in which a local taxing body has adopted a resolution or ordinance imposing a Nuclear Impact Fee may bill and collect such Fees with the regular property tax bills of the county if requested by a local taxing body within its jurisdiction.

(j) The revenue collected through the Nuclear Impact Fee by a local taxing body shall only be used for the purposes of supporting the "economic transition" of local communities that have experienced the closure of a Qualifying Nuclear Facility or will experience a Qualifying Nuclear Facility in the future. "Economic transition" uses may include tax base replacement, workforce development, public school funding, essential public service, or sustainable infrastructure projects.

(k) The revenue collected under this Section shall not be used either directly or indirectly to aid, subsidize, enact, support, or otherwise enable investment in any electricity generation infrastructure that processes or can process fossil or nuclear fuels.

(l) No later than November 30 of each calendar year, each local taxing body collecting a Nuclear Impact Fee pursuant to this Section shall remit to the Department of Revenue for deposit in the Energy Community Reinvestment Fund 20% of the annual revenue collection from any Nuclear Impact Fees in order to help fund state programs that support economic transition and workforce development, showing such information as the Department of Revenue may reasonably require.

(m) No later than November 30 of each calendar year, each local taxing body collecting a Nuclear Impact Fee pursuant to this Section shall submit to the Department of Commerce and Economic Opportunity and the Agency a report detailing the total amount of funds collected from any Nuclear Impact Fees, the planned expenditure of the funds, the coordination of expenditure with any Department economic transition activities and investments, copies of any adoption of or amendments to resolutions or ordinances impacting the assessment of Nuclear Impact Fees, and a certification of the remittance of the State portion of the funds collected to the Department of Revenue.

(n) The Department of Commerce and Economic Opportunity may establish such rules as it deems necessary to implement this Section.

Section 99. Effective date. This Act takes effect upon becoming law.