State of Illinois
2017 and 2018


Introduced 2/9/2017, by Sen. Steve Stadelman


35 ILCS 5/221
215 ILCS 5/409.1 new

    Amends the Illinois Income Tax Act and the Illinois Insurance Code. Provides that all or a portion of the income tax credit awarded for the restoration and preservation of a qualified historic structure located in a River Edge Redevelopment Zone may instead be taken as a credit against privilege and retaliatory taxes paid under the Illinois Insurance Code. Provides that the Historic Preservation Agency may issue a certification to the taxpayer stating that, if the project is completed as proposed, the project will qualify for the credits. Contains provisions concerning transfers of credits. Provides that the credit may be carried forward. Provides that the credit shall be based on qualified expenditures incurred by a qualified taxpayer (currently, qualified expenditures incurred by a qualified taxpayer during the taxable year). Provides that that the qualified expenditures must exceed the adjusted basis of the qualified historic structure on the first day the qualified rehabilitation plan begins (currently, 50% of the purchase price of the property). Provides that the rehabilitation must be approved by the Historic Preservation Agency and the National Park Service (currently, the Historic Preservation Agency only). Provides that the credit sunsets on December 31, 2021 (currently, December 31, 2017). Effective immediately.

LRB100 10546 HLH 20762 b






SB1783LRB100 10546 HLH 20762 b

1    AN ACT concerning revenue.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Income Tax Act is amended by
5changing Section 221 as follows:
6    (35 ILCS 5/221)
7    Sec. 221. Rehabilitation costs; qualified historic
8properties; River Edge Redevelopment Zone.
9    (a) For taxable years beginning on or after January 1, 2012
10and ending prior to January 1, 2022 January 1, 2018, there
11shall be allowed a tax credit against the tax imposed by (i)
12subsections (a) and (b) of Section 201 of this Act and (ii)
13taxes imposed under Sections 409, 413, 444, and 444.1 of the
14Illinois Insurance Code in an aggregate amount equal to 25% of
15qualified expenditures incurred by a qualified taxpayer during
16the taxable year in the restoration and preservation of a
17qualified historic structure located in a River Edge
18Redevelopment Zone pursuant to a qualified rehabilitation
19plan, provided that the total amount of such expenditures (i)
20must equal $5,000 or more and (ii) must exceed the adjusted
21basis of the qualified historic structure on the first day the
22qualified rehabilitation plan begins. If the qualified
23rehabilitation plan spans multiple years, the aggregate credit



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1for the entire project shall be allowed in the last taxable
2year. 50% of the purchase price of the property.
3    (b) To obtain a tax credit pursuant to this Section, the
4taxpayer must apply with the Department of Commerce and
5Economic Opportunity. The Department of Commerce and Economic
6Opportunity, in consultation with the Historic Preservation
7Agency, shall determine the amount of eligible rehabilitation
8costs and expenses. The Historic Preservation Agency and the
9National Park Service shall determine whether the
10rehabilitation is consistent with the standards of the
11Secretary of the United States Department of the Interior for
12rehabilitation. The Historic Preservation Agency may, after
13its approval of any plan of rehabilitation and prior to the
14completion of any project, issue a certification to the
15taxpayer stating that, if the project is completed as proposed,
16the rehabilitation work will qualify for the credits. Upon
17completion and review of the project, the Department of
18Commerce and Economic Opportunity shall issue a certificate in
19the amount of the eligible credits. At the time the certificate
20is issued, an issuance fee up to the maximum amount of 2% of
21the amount of the credits issued by the certificate may be
22collected from the applicant to administer the provisions of
23this Section. If collected, this issuance fee shall be
24deposited into the Historic Property Administrative Fund, a
25special fund created in the State treasury. Subject to
26appropriation, moneys in the Historic Property Administrative



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1Fund shall be evenly divided between the Department of Commerce
2and Economic Opportunity and the Historic Preservation Agency
3to reimburse the Department of Commerce and Economic
4Opportunity and the Historic Preservation Agency for the costs
5associated with administering this Section. The taxpayer must
6attach the certificate to the tax return on which the credits
7are to be claimed. The Department of Commerce and Economic
8Opportunity may adopt rules to implement this Section.
9    (c) The tax credit under this Section may not reduce the
10taxpayer's liability to less than zero. The credit may not be
11carried back. If the amount of the credit exceeds the tax
12liability for the year, the excess may be carried forward and
13applied to the tax liability of the 5 taxable years following
14the excess credit year. The credit shall be applied to the
15earliest year for which there is a tax liability. If there are
16credits from more than one tax year that are available to
17offset a liability, the earlier credit shall be applied first.
18    (c-5) Taxpayers who are eligible to claim the credit,
19including without limitation, any partners, shareholders of
20subchapter S corporations, and members who are eligible to
21claim the credit as provided in the definition of "qualified
22taxpayer" below, may transfer all or any portion of the credit
23to any individual or entity, within one year after the credit
24is awarded, in accordance with rules adopted by the Department
25of Commerce and Economic Opportunity. Any transferee of all or
26any portion of a credit shall have the right to claim the



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1credit, carry the credit forward as described in subsection (c)
2above, and allocate such credit to its partners, shareholders
3of subchapter S corporations, and members (and also through
4tiers of such entities) as described in the definition of
5"qualified taxpayer" below, as if the transferee had been
6originally issued such credit. The tax credit may not be
7transferred more than once. Allocations of credits to partners,
8shareholders of S corporations, members, or other owners
9(including through tiers of such entities) as described in the
10definition of "qualified taxpayer" below shall not be
11considered transfers under this subsection (c-5), and the
12one-time transfer limitation set forth in the immediately
13preceding sentence shall not apply to any such allocations.
14    (d) As used in this Section, the following terms have the
15following meanings.
16    "Qualified expenditure" means all the costs and expenses
17defined as qualified rehabilitation expenditures under Section
1847 of the federal Internal Revenue Code that were incurred in
19connection with a qualified historic structure.
20    "Qualified historic structure" means a certified historic
21structure as defined under Section 47 (c)(3) of the federal
22Internal Revenue Code.
23    "Qualified rehabilitation plan" means a project that is
24approved by the Historic Preservation Agency and the National
25Park Service as being consistent with the standards in effect
26on the effective date of this amendatory Act of the 97th



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1General Assembly for rehabilitation as adopted by the federal
2Secretary of the Interior.
3    "Qualified taxpayer" means the owner of the qualified
4historic structure or any other person who qualifies for the
5federal rehabilitation credit allowed by Section 47 of the
6federal Internal Revenue Code with respect to that qualified
7historic structure. Partners, shareholders of subchapter S
8corporations, and owners of limited liability companies (if the
9limited liability company is treated as a partnership for
10purposes of federal and State income taxation) are entitled to
11a credit under this Section to be determined in accordance with
12the determination of income and distributive share of income
13under Sections 702 and 703 and subchapter S of the Internal
14Revenue Code, provided that credits granted to a partnership, a
15limited liability company taxed as a partnership, or other
16multiple owners of property shall be passed through to the
17partners, members, or owners respectively (and shall be passed
18through more than once in the case of tiers of such entities)
19on a pro rata basis or pursuant to an executed agreement among
20the partners, members, or owners documenting any alternate
21distribution method (which need not be on a pro-rata basis).
22(Source: P.A. 99-914, eff. 12-20-16.)
23    Section 10. The Illinois Insurance Code is amended by
24adding Section 409.1 as follows:



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1    (215 ILCS 5/409.1 new)
2    Sec. 409.1. River Edge Redevelopment Zone Rehabilitation
3credit. For taxes payable after January 1, 2015, credits may be
4granted against the taxes imposed under Section 409, 413, 444,
5and 444.1 of this Act as provided in Section 221 of the
6Illinois Income Tax Act.
7    Section 99. Effective date. This Act takes effect upon
8becoming law.