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1 | AN ACT concerning revenue.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 1. Short title. This Act may be cited as the | ||||||||||||||||||||||||||
5 | Theater Production Tax Credit Act. | ||||||||||||||||||||||||||
6 | Section 5. Purpose. The Illinois economy depends heavily on | ||||||||||||||||||||||||||
7 | the commercial for-profit theater industry and the | ||||||||||||||||||||||||||
8 | pre-Broadway and long-run shows that come to Illinois. Due to | ||||||||||||||||||||||||||
9 | competition from other prominent theater cities in attracting | ||||||||||||||||||||||||||
10 | and prolonging successful pre-Broadway and long-run shows, | ||||||||||||||||||||||||||
11 | Illinois must move aggressively with new business development | ||||||||||||||||||||||||||
12 | investment tools so that Illinois is more competitive in site | ||||||||||||||||||||||||||
13 | location decision making for show producers. In an increasingly | ||||||||||||||||||||||||||
14 | global economy, Illinois' long term development will benefit | ||||||||||||||||||||||||||
15 | from rational, strategic use of State resources in support of | ||||||||||||||||||||||||||
16 | pre-Broadway theater and long run show development and growth. | ||||||||||||||||||||||||||
17 | It is the purpose of this Act to preserve and expand the | ||||||||||||||||||||||||||
18 | existing human infrastructure for the presentation of live | ||||||||||||||||||||||||||
19 | theater in Illinois. It shall be the policy of this State to | ||||||||||||||||||||||||||
20 | promote and encourage the training and hiring of Illinois | ||||||||||||||||||||||||||
21 | residents who represent the diversity of the Illinois | ||||||||||||||||||||||||||
22 | population through the creation and implementation of | ||||||||||||||||||||||||||
23 | training, education, and recruitment programs organized in |
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1 | cooperation with Illinois colleges and universities, labor | ||||||
2 | organizations, and the commercial for-profit theater industry. | ||||||
3 | Section 10. Definitions. As used in this Act: | ||||||
4 | "Accredited theater production" means a for-profit live | ||||||
5 | stage presentation in theaters with a seating capacity of over | ||||||
6 | 1200 seats within the State of Illinois that is either (i) a | ||||||
7 | pre-Broadway production or (ii) a long-run production for which | ||||||
8 | the aggregate Illinois labor and marketing expenditures exceed | ||||||
9 | $100,000. | ||||||
10 | A "pre-Broadway production" means a live stage production | ||||||
11 | that is mounted and performed in an Illinois theater, with a | ||||||
12 | presentation scheduled for Broadway's Theater District in New | ||||||
13 | York City within 12 months after the Illinois presentation | ||||||
14 | A "long-run production" means a live stage production that | ||||||
15 | is performed in an Illinois theater for longer than 8 weeks, | ||||||
16 | with at least 6 performances per week. | ||||||
17 | "Accredited theater production certificate" means a | ||||||
18 | certificate issued by the Department certifying that the | ||||||
19 | production is an accredited theater production that meets the | ||||||
20 | guidelines of this Act.
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21 | "Applicant" means a taxpayer that is a theatre producer, | ||||||
22 | owner, operator, or presenter that is presenting or has | ||||||
23 | presented a stage presentation located within the State of | ||||||
24 | Illinois and that (i) owns the theatrical rights of the stage | ||||||
25 | presentation for the Illinois production period or (ii) has |
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1 | contracted directly with the owner of the theatrical rights or | ||||||
2 | a person acting on behalf of the owner to provide performances | ||||||
3 | of the production. | ||||||
4 | "Credit" means, for an accredited theater production | ||||||
5 | approved by the Department: | ||||||
6 | (i) 20% of the Illinois marketing and labor spending | ||||||
7 | for each taxable year; plus | ||||||
8 | (ii) 15% of the Illinois labor expenditures generated | ||||||
9 | by the employment of residents of geographic areas of high | ||||||
10 | poverty or high unemployment, as determined by the | ||||||
11 | Department.
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12 | "Department" means the Department of Commerce and Economic | ||||||
13 | Opportunity.
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14 | "Director" means the Director of Commerce and Economic | ||||||
15 | Opportunity.
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16 | "Illinois labor expenditure" means salary or wages paid to | ||||||
17 | employees of the applicant for services on the accredited | ||||||
18 | production. To qualify as an Illinois labor expenditure, the | ||||||
19 | expenditure must be:
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20 | (1) Reasonable in the circumstances.
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21 | (2) Incurred by the applicant for services on or after | ||||||
22 | January 1, 2008.
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23 | (3) Incurred for the production stages of the | ||||||
24 | accredited production, from the final script stage to the | ||||||
25 | end of the post-production stage.
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26 | (4) Limited to the first $100,000 of wages paid or |
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1 | incurred to each employee of a production commencing on or | ||||||
2 | after May 1, 2008.
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3 | (5) Exclusive of the salary or wages paid to or | ||||||
4 | incurred for the 2 highest paid employees of the | ||||||
5 | production.
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6 | (6) Directly attributable to the accredited | ||||||
7 | production.
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8 | (7) Paid in the tax year for which the applicant is | ||||||
9 | claiming the credit or no later than 60 days after the end | ||||||
10 | of the tax year.
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11 | (8) Paid to persons resident in Illinois at the time | ||||||
12 | the payments were made.
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13 | (9) Paid for services rendered in Illinois. | ||||||
14 | "Illinois production spending" means the expenses incurred | ||||||
15 | by the applicant for an accredited production, including, | ||||||
16 | without limitation, all of the following:
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17 | (1) Expenses to purchase, from vendors within | ||||||
18 | Illinois, tangible personal property that is used in the | ||||||
19 | accredited production.
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20 | (2) Expenses to acquire services, from vendors in | ||||||
21 | Illinois for a stage presentation.
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22 | (3) The compensation, not to exceed $100,000 for any | ||||||
23 | one employee, for contractual or salaried employees who are | ||||||
24 | Illinois residents performing services with respect to the | ||||||
25 | accredited production.
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26 | "Qualified production facility" means stage facilities in |
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1 | the State in which live theatrical shows are or are intended to | ||||||
2 | be regularly produced and that contain at least one stage and a | ||||||
3 | seating capacity of over 1200 seats.
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4 | Section 15. Powers of the Department. The Department, in | ||||||
5 | addition to those powers granted under the Civil Administrative | ||||||
6 | Code of Illinois, is granted and has all the powers necessary | ||||||
7 | or convenient to carry out and effectuate the purposes and | ||||||
8 | provisions of this Act, including, but not limited to, power | ||||||
9 | and authority to:
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10 | (1) Adopt rules deemed necessary and appropriate for the | ||||||
11 | administration of the tax credit program; establish forms for | ||||||
12 | applications, notifications, contracts, or any other | ||||||
13 | agreements; and accept applications at any time during the | ||||||
14 | year.
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15 | (2) Assist applicants pursuant to the provisions of this | ||||||
16 | Act to promote, foster, and support theater development and | ||||||
17 | production and its related job creation or retention within the | ||||||
18 | State.
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19 | (3) Gather information and conduct inquiries, in the manner | ||||||
20 | and by the methods as it deems desirable, including any | ||||||
21 | information required for the Department to comply with Section | ||||||
22 | 45 and, without limitation, gathering information with respect | ||||||
23 | to applicants for the purpose of making any designations or | ||||||
24 | certifications necessary or desirable or to gather information | ||||||
25 | to assist the Department with any recommendation or guidance in |
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1 | the furtherance of the purposes of this Act, including, but not | ||||||
2 | limited to, information as to whether the applicant | ||||||
3 | participated in training, education, and recruitment programs | ||||||
4 | that are organized in cooperation with Illinois colleges and | ||||||
5 | universities and labor organizations, and are designed to | ||||||
6 | promote and encourage the training and hiring of Illinois | ||||||
7 | residents who represent the diversity of the Illinois | ||||||
8 | population.
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9 | (4) Provide for sufficient personnel to permit | ||||||
10 | administration, staffing, operation, and related support | ||||||
11 | required to adequately discharge its duties and | ||||||
12 | responsibilities described in this Act from funds as may be | ||||||
13 | appropriated by the General Assembly for the administration of | ||||||
14 | this Act.
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15 | (5) Require applicants, upon written request, to issue any | ||||||
16 | necessary authorization to the appropriate federal, State, or | ||||||
17 | local authority for the release of information concerning a | ||||||
18 | project being considered under the provisions of this Act, with | ||||||
19 | the information requested to include, but not be limited to, | ||||||
20 | financial reports, returns, or records relating to the | ||||||
21 | applicant or the accredited theater production.
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22 | (6) Require that an applicant must at all times keep proper | ||||||
23 | books of record and account in accordance with generally | ||||||
24 | accepted accounting principles consistently applied, with the | ||||||
25 | books, records, or papers related to the accredited production | ||||||
26 | in the custody or control of the taxpayer open for reasonable |
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1 | Department inspection and audits, and including, without | ||||||
2 | limitation, the making of copies of the books, records, or | ||||||
3 | papers, and the inspection or appraisal of any of the assets of | ||||||
4 | the applicant or the accredited production.
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5 | (7) Take whatever actions are necessary or appropriate to | ||||||
6 | protect the State's interest in the event of bankruptcy, | ||||||
7 | default, foreclosure, or noncompliance with the terms and | ||||||
8 | conditions of financial assistance or participation required | ||||||
9 | under this Act, including the power to sell, dispose, lease, or | ||||||
10 | rent, upon terms and conditions determined by the Director to | ||||||
11 | be appropriate, real or personal property that the Department | ||||||
12 | may receive as a result of these actions.
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13 | Section 20. Tax credit awards. Subject to the conditions | ||||||
14 | set forth in this Act, an applicant is entitled to a credit as | ||||||
15 | approved by the Department under Section 40 of this Act.
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16 | Section 25. Application for certification of accredited | ||||||
17 | production. Any applicant proposing an accredited theater | ||||||
18 | production located or planned to be located in Illinois may | ||||||
19 | request an accredited theater production certificate by formal | ||||||
20 | application to the Department. | ||||||
21 | Section 30. Review of application for accredited theater | ||||||
22 | production certificate.
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23 | (a) In determining whether to issue an accredited theater |
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1 | production certificate, the Department must determine that a | ||||||
2 | preponderance of the following conditions exist: | ||||||
3 | (1) The applicant's production intends to make the | ||||||
4 | expenditure in the State required for certification.
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5 | (2) The applicant's production is economically sound | ||||||
6 | and will benefit the people of the State of Illinois by | ||||||
7 | increasing opportunities for employment and strengthen the | ||||||
8 | economy of Illinois.
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9 | (3) The applicant has filed a diversity plan with the | ||||||
10 | Department outlining specific goals (i) for hiring | ||||||
11 | minority persons and females, as defined in the Business | ||||||
12 | Enterprise for Minorities, Females, and Persons with | ||||||
13 | Disabilities Act, and (ii) for using vendors receiving | ||||||
14 | certification under the Business Enterprise for | ||||||
15 | Minorities, Females, and Persons with Disabilities Act; | ||||||
16 | the Department has approved the plan as meeting the | ||||||
17 | requirements established by the Department; and the | ||||||
18 | Department has verified that the applicant has met or made | ||||||
19 | good faith efforts in achieving those goals. The Department | ||||||
20 | must adopt any rules that are necessary to ensure | ||||||
21 | compliance with the provisions of this item (3) and that | ||||||
22 | are necessary to require that the applicant's plan reflects | ||||||
23 | the diversity of this State.
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24 | (4) The applicant's theater production application | ||||||
25 | indicates whether the applicant intends to participate in | ||||||
26 | training, education, and recruitment programs that are |
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1 | organized in cooperation with Illinois colleges and | ||||||
2 | universities, labor organizations, and the commercial | ||||||
3 | for-profit theater industry and are designed to promote and | ||||||
4 | encourage the training and hiring of Illinois residents who | ||||||
5 | represent the diversity of the Illinois population.
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6 | (5) That, if not for the credit, the applicant's | ||||||
7 | production would not occur in Illinois, which may be | ||||||
8 | demonstrated by any means including, but not limited to, | ||||||
9 | evidence that the applicant has multi-state or | ||||||
10 | international location options and could reasonably and | ||||||
11 | efficiently locate outside of the State, demonstration | ||||||
12 | that at least one other state or nation is being considered | ||||||
13 | for the production, evidence that the receipt of the credit | ||||||
14 | is a major factor in the applicant's decision and that | ||||||
15 | without the credit the applicant likely would not create or | ||||||
16 | retain jobs in Illinois, or demonstration that receiving | ||||||
17 | the credit is essential to the applicant's decision to | ||||||
18 | create or retain new jobs in the State.
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19 | (6) Awarding the credit will result in an overall | ||||||
20 | positive impact to the State, as determined by the | ||||||
21 | Department using the best available data.
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22 | (b) If any of the provisions in this Section conflict with | ||||||
23 | any existing collective bargaining agreements, the terms and | ||||||
24 | conditions of those collective bargaining agreements shall | ||||||
25 | control.
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1 | Section 35. Issuance of Tax Credit Certificate.
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2 | (a) In order to qualify for a tax credit under this Act, an | ||||||
3 | applicant must file an application, on forms prescribed by the | ||||||
4 | Department, providing information necessary to calculate the | ||||||
5 | tax credit, and any additional information as required by the | ||||||
6 | Department.
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7 | (b) Upon satisfactory review of the application, the | ||||||
8 | Department shall issue a Tax Credit Certificate stating the | ||||||
9 | amount of the tax credit to which the applicant is entitled.
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10 | Section 40. Amount and duration of the credit. The amount | ||||||
11 | of the credit awarded under this Act is based on the amount of | ||||||
12 | the Illinois labor expenditure and marketing spending in | ||||||
13 | support of the Illinois performances approved by the Department | ||||||
14 | for the accredited theater production as set forth under | ||||||
15 | Section 10. The duration of the credit may not exceed one | ||||||
16 | taxable year.
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17 | Section 45. Training programs for skills in critical | ||||||
18 | demand. To accomplish the purposes of this Act, the Department | ||||||
19 | may use the training programs provided for Illinois under | ||||||
20 | Section 605-800 of the Department of Commerce and Economic | ||||||
21 | Opportunity Law of the Civil Administrative Code of Illinois. | ||||||
22 | Section 50. Evaluation of tax credit program; reports to | ||||||
23 | the General Assembly.
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1 | (a) The Department shall evaluate the tax credit program. | ||||||
2 | The evaluation must include an assessment of the effectiveness | ||||||
3 | of the program in creating and retaining new jobs in Illinois | ||||||
4 | and of the revenue impact of the program, and may include a | ||||||
5 | review of the practices and experiences of other states or | ||||||
6 | nations with similar programs. Upon completion of this | ||||||
7 | evaluation, the Department shall determine the overall success | ||||||
8 | of the program, and may make a recommendation to extend, | ||||||
9 | modify, or not extend the program based on this evaluation.
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10 | (b) At the end of each fiscal quarter, the Department must | ||||||
11 | submit to the General Assembly a report that includes, without | ||||||
12 | limitation, the following information:
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13 | (1) the economic impact of the tax credit program, | ||||||
14 | including the number of jobs created and retained, | ||||||
15 | including whether the job positions are entry level, | ||||||
16 | management, talent related, vendor related, or production | ||||||
17 | related;
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18 | (2) the amount of accredited theater production | ||||||
19 | spending brought to Illinois, including the amount of | ||||||
20 | spending and type of Illinois vendors hired in connection | ||||||
21 | with an accredited theater production; and
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22 | (3) an overall picture of whether the human | ||||||
23 | infrastructure of the commercial for-profit theater | ||||||
24 | industry in Illinois reflects the geographical, racial and | ||||||
25 | ethnic, gender, and income level diversity of the State of | ||||||
26 | Illinois.
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1 | (c) At the end of each fiscal year, the Department must | ||||||
2 | submit to the General Assembly a report that includes, without | ||||||
3 | limitation, the following information:
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4 | (1) an identification of each vendor that provided | ||||||
5 | goods or services that were included in an accredited | ||||||
6 | production's Illinois production spending;
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7 | (2) the amount paid to each identified vendor by the | ||||||
8 | accredited theater production;
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9 | (3) for each identified vendor, a statement as to | ||||||
10 | whether the vendor is a minority owned business or a female | ||||||
11 | owned business, as defined under Section 2 of the Business | ||||||
12 | Enterprise for Minorities, Females, and Persons with | ||||||
13 | Disabilities Act; and
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14 | (4) a description of any steps taken by the Department | ||||||
15 | to encourage accredited productions to use vendors who are | ||||||
16 | a minority owned business or a female owned business.
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17 | Section 55. Repeal. This Act is repealed on January 1, | ||||||
18 | 2009. | ||||||
19 | Section 900. The Illinois Income Tax Act is amended by | ||||||
20 | adding Section 218 as follows: | ||||||
21 | (35 ILCS 5/218 new)
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22 | Sec. 218. Live theater production credit. | ||||||
23 | (a) For tax years beginning on or after January 1, 2008, a |
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1 | taxpayer who has been awarded a tax credit under the Theater | ||||||
2 | Production Tax Credit Act is entitled to a credit against the | ||||||
3 | taxes imposed under subsections (a) and (b) of Section 201 of | ||||||
4 | this Act in an amount determined by the Department of Commerce | ||||||
5 | and Economic Opportunity under that Act. | ||||||
6 | (b) If the taxpayer is a partnership or Subchapter S | ||||||
7 | corporation, the credit is allowed to the partners or | ||||||
8 | shareholders in accordance with the determination of income and | ||||||
9 | distributive share of income under Sections 702 and 704 and | ||||||
10 | Subchapter S of the Internal Revenue Code. | ||||||
11 | (c) A transfer of this credit may be made by the taxpayer | ||||||
12 | earning the credit within one year after the credit is awarded | ||||||
13 | in accordance with rules adopted by the Department of Commerce | ||||||
14 | and Economic Opportunity. | ||||||
15 | (d) The Department of Revenue, in cooperation with the | ||||||
16 | Department of Commerce and Economic Opportunity, must | ||||||
17 | prescribe rules to enforce and administer the provisions of | ||||||
18 | this Section. | ||||||
19 | (e) This Section is exempt from the provisions of Section | ||||||
20 | 250 of this Act. | ||||||
21 | (f) The credit may not be carried back. If the amount of | ||||||
22 | the credit exceeds the tax liability for the year, the excess | ||||||
23 | may be carried forward and applied to the tax liability of the | ||||||
24 | 5 taxable years following the excess credit year. The credit | ||||||
25 | shall be applied to the earliest year for which there is a tax | ||||||
26 | liability. If there are credits from more than one tax year |
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1 | that are available to offset a liability, the earlier credit | ||||||
2 | shall be applied first. In no event, may a credit under this | ||||||
3 | Section reduce the taxpayer's liability to less than zero.
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4 | Section 999. Effective date. This Act takes effect upon | ||||||
5 | becoming law.
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