HB1089 97TH GENERAL ASSEMBLY

LRB097 06434 HLH 46516 b

97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB1089

Introduced 02/04/11, by Rep. Thomas Holbrook

SYNOPSIS AS INTRODUCED:

New Act
35 ILCS 5/221 new

Creates the Efficient and Green Illinois Tax Credit Act. Authorizes the Department of Commerce and Economic Opportunity to award income tax credits based on 25% of the cost of qualifying expenditures for energy efficient projects, such as solar energy equipment, Energy Star certified heat pumps, lighting retrofit projects, and wind equipment. Authorizes the Department to adopt rules. Provides that the credit may be carried forward for up to 5 taxable years. Amends the Illinois Income Tax Act to make conforming changes. Provides that the credit is exempt from the Act's automatic sunset provisions. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning revenue.

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

Section 1. Short title. This Act may be cited as the Efficient and Green Illinois Tax Credit Act.

Section 5. Purpose. The General Assembly finds that the Illinois economy and environment are greatly enhanced by the installation of energy efficiency measures and by the support of renewable energy resources. The purpose of this Act is to expand the adoption of energy efficiency measures in the private sector, as well as to encourage use of renewable energy resources. It is the policy of this State to promote and encourage the adoption of energy efficiency measures as well as the voluntary use of renewable energy resources.

Section 10. Definitions. As used in this Act:

"Energy efficiency project" includes any of the following:

(A) Solar energy equipment that uses solar radiation as a substitute for traditional energy for water heating, active space heating and cooling, passive heating, day-lighting, generating electricity, distillation, desalinization, or the production of industrial or commercial process heat, as well as related devices necessary for collecting, storing, exchanging, conditioning, or converting solar energy to other useful forms of energy.

(B) Energy Star certified geothermal heat pump systems.

(C) Lighting retrofit projects. "Lighting retrofit project" means a lighting retrofit system that employs dual switching (ability to switch roughly half the lights off and still have fairly uniform light distribution), de-lamping, day-lighting, re-lamping, or other controls or processes that reduce annual energy and power consumption by 30% compared to the American Society of Heating, Refrigerating, and Air Conditioning Engineers 2004 standard (ASHRAE 90.1.2004).

(D) Wind equipment required to capture and convert wind energy into electricity or mechanical power as well as related devices that may be required for converting, conditioning, and storing the electricity produced by wind equipment.

"Cost" means:

(A) In the case of clean energy property owned by the taxpayer, cost is the aggregate funds actually invested and expended by a taxpayer in that taxable year to put into service the clean energy property.

(B) In the case of clean energy property the taxpayer leases from another, cost is 8 times the net annual rental rate, which is the annual rental rate paid by the taxpayer less any annual rental rate received by the taxpayer from sub-rentals.

"Credit" means:

(A) For an energy efficiency project approved by the Department, the amount equal to 25% of the cost of that project.

(B) For renewable energy resources usage approved by the Department, an amount equal to 25% of the cost paid for the environmental attributes of those renewable energy resources during the tax year.

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

"Renewable energy resources" means the same as it does in Section 1-10 of the Illinois Power Agency Act.

Section 15. Powers of the Department. The Department, in addition to those powers granted under the Civil Administrative Code of Illinois, 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:

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

(2) Assist applicants pursuant to the provisions of this Act to promote, foster, and support energy efficiency measures and renewable energy resources and related job creation or retention within the State.

(3) 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 as may be appropriated to the Department for the administration of this Act.

(4) Require that an applicant must 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 accredited production in the custody or control of the taxpayer open for reasonable Department inspection and audits.

Section 20. Tax credit awards. Subject to the conditions set forth in this Act, for taxable years beginning on or after January 1, 2011, an applicant is entitled to a credit against the tax imposed under subsections (a) and (b) of Section 201 of the Illinois Income Tax Act, in an amount approved by the Department under Section 40 of this Act.

Section 35. Issuance of tax credit certificate.

(a) In order to qualify for a tax credit under this Act, an applicant must file an application, on forms prescribed by the Department, providing information necessary to calculate the tax credit, and any additional information as required by the Department.

(b) Upon satisfactory review of the application, the Department shall issue a tax credit certificate.

Section 40. Amount and duration of the credit. The amount of the credit awarded under this Act is based on the cost of the qualifying expenditures under this Act. The credit shall be awarded for the taxable year in which the expenditure is made. The tax credit may not reduce the taxpayer's liability to less than zero. If the amount of the tax credit exceeds the taxpayer's Illinois income tax liability for the year, the excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year. The credit must 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, then the earlier credit must be applied first. This Act is exempt from the provisions of Section 250 of the Illinois Income Tax Act.

Section 80. The Illinois Income Tax Act is amended by adding Section 221 as follows:

(35 ILCS 5/221 new)

Sec. 221. Efficient and Green Illinois Tax Credit Act. For tax years beginning on or after January 1, 2011, a taxpayer who has been awarded a credit under the Efficient and Green Illinois Tax Credit Act is entitled to a credit against the taxes imposed under subsections (a) and (b) of Section 201 of this Act in an amount to be determined under that Act. If the taxpayer is a partnership or Subchapter S corporation, the credit shall be allowed to the partners or shareholders 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 Section is exempt from the provisions of Section 250 of this Act.

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