103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB4299

 

Introduced 1/16/2024, by Rep. Paul Jacobs

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 40/40
35 ILCS 40/65
35 ILCS 5/224

    Amends the Invest in Kids Act. Provides that the credit under the Act is available for tax years ending before January 1, 2029 (currently, January 1, 2024). Effective immediately.


LRB103 35645 HLH 65720 b

 

 

A BILL FOR

 

HB4299LRB103 35645 HLH 65720 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 Invest in Kids Act is amended by changing
5Sections 40 and 65 as follows:
 
6    (35 ILCS 40/40)
7    (Section scheduled to be repealed on January 1, 2025)
8    Sec. 40. Scholarship granting organization
9responsibilities.
10    (a) Before granting a scholarship for an academic year,
11all scholarship granting organizations shall assess and
12document each student's eligibility for the academic year.
13    (b) A scholarship granting organization shall grant
14scholarships only to eligible students.
15    (c) A scholarship granting organization shall allow an
16eligible student to attend any qualified school of the
17student's choosing, subject to the availability of funds.
18    (d) In granting scholarships, beginning in the 2022-2023
19school year and for each school year thereafter, a scholarship
20granting organization shall give priority to eligible students
21who received a scholarship from a scholarship granting
22organization during the previous school year. Second priority
23shall be given to the following priority groups:

 

 

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1        (1) (blank);
2        (2) eligible students who are members of a household
3    whose previous year's total annual income does not exceed
4    185% of the federal poverty level;
5        (3) eligible students who reside within a focus
6    district; and
7        (4) eligible students who are siblings of students
8    currently receiving a scholarship.
9    (d-5) A scholarship granting organization shall begin
10granting scholarships no later than February 1 preceding the
11school year for which the scholarship is sought. Each priority
12group identified in subsection (d) of this Section shall be
13eligible to receive scholarships on a first-come, first-served
14basis until April 1 immediately preceding the school year for
15which the scholarship is sought, starting with the first
16priority group identified in subsection (d) of this Section.
17Applications for scholarships for eligible students meeting
18the qualifications of one or more priority groups that are
19received before April 1 must be either approved or denied
20within 10 business days after receipt. Beginning April 1, all
21eligible students shall be eligible to receive scholarships
22without regard to the priority groups identified in subsection
23(d) of this Section.
24    (e) Except as provided in subsection (e-5) of this
25Section, scholarships shall not exceed the lesser of (i) the
26statewide average operational expense per student among public

 

 

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1schools or (ii) the necessary costs and fees for attendance at
2the qualified school. A qualified school may set a lower
3maximum scholarship amount for eligible students whose family
4income falls within paragraphs (2) and (3) of this subsection
5(e); that amount may not exceed the necessary costs and fees
6for attendance at the qualified school and is subject to the
7limitations on average scholarship amounts set forth in
8paragraphs (2) and (3) of this subsection, as applicable. The
9qualified school shall notify the scholarship granting
10organization of its necessary costs and fees as well as any
11maximum scholarship amount set by the school. Scholarships
12shall be prorated as follows:
13        (1) for eligible students whose household income is
14    less than 185% of the federal poverty level, the
15    scholarship shall be 100% of the amount determined
16    pursuant to this subsection (e) and subsection (e-5) of
17    this Section;
18        (2) for eligible students whose household income is
19    185% or more of the federal poverty level but less than
20    250% of the federal poverty level, the average of
21    scholarships shall be 75% of the amount determined
22    pursuant to this subsection (e) and subsection (e-5) of
23    this Section; and
24        (3) for eligible students whose household income is
25    250% or more of the federal poverty level, the average of
26    scholarships shall be 50% of the amount determined

 

 

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1    pursuant to this subsection (e) and subsection (e-5) of
2    this Section.
3    (e-5) The statewide average operational expense per
4student among public schools shall be multiplied by the
5following factors:
6        (1) for students determined eligible to receive
7    services under the federal Individuals with Disabilities
8    Education Act, 2;
9        (2) for students who are English learners, as defined
10    in subsection (d) of Section 14C-2 of the School Code,
11    1.2; and
12        (3) for students who are gifted and talented children,
13    as defined in Section 14A-20 of the School Code, 1.1.
14    (f) A scholarship granting organization shall distribute
15scholarship payments to the participating school where the
16student is enrolled.
17    (g) For the 2018-2019 school year through the 2027-2028
182022-2023 school year, each scholarship granting organization
19shall expend no less than 75% of the qualified contributions
20received during the calendar year in which the qualified
21contributions were received. No more than 25% of the qualified
22contributions may be carried forward to the following calendar
23year.
24    (h) For the 2028-2029 2023-2024 school year, each
25scholarship granting organization shall expend all qualified
26contributions received during the calendar year in which the

 

 

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1qualified contributions were received. No qualified
2contributions may be carried forward to the following calendar
3year.
4    (i) A scholarship granting organization shall allow an
5eligible student to transfer a scholarship during a school
6year to any other participating school of the custodian's
7choice. Such scholarships shall be prorated.
8    (j) With the prior approval of the Department, a
9scholarship granting organization may transfer funds to
10another scholarship granting organization if additional funds
11are required to meet scholarship demands at the receiving
12scholarship granting organization. All transferred funds must
13be deposited by the receiving scholarship granting
14organization into its scholarship accounts. All transferred
15amounts received by any scholarship granting organization must
16be separately disclosed to the Department.
17    (k) If the approval of a scholarship granting organization
18is revoked as provided in Section 20 of this Act or the
19scholarship granting organization is dissolved, all remaining
20qualified contributions of the scholarship granting
21organization shall be transferred to another scholarship
22granting organization. All transferred funds must be deposited
23by the receiving scholarship granting organization into its
24scholarship accounts.
25    (l) Scholarship granting organizations shall make
26reasonable efforts to advertise the availability of

 

 

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1scholarships to eligible students.
2(Source: P.A. 102-699, eff. 4-19-22; 102-1059, eff. 6-10-22;
3103-154, eff. 6-30-23.)
 
4    (35 ILCS 40/65)
5    (Section scheduled to be repealed on January 1, 2025)
6    Sec. 65. Credit period; repeal.
7    (a) A taxpayer may take a credit under this Act for tax
8years beginning on or after January 1, 2018 and ending before
9January 1, 2029 January 1, 2024. A taxpayer may not take a
10credit pursuant to this Act for tax years beginning on or after
11January 1, 2029 January 1, 2024.
12    It is the intent of the General Assembly that the
13provisions of this Act apply continuously for tax years
14beginning on or after January 1, 2018 and ending before
15January 1, 2029, including, but not limited to, the period
16beginning on January 1, 2024 and ending on the effective date
17of this amendatory Act of the 103rd General Assembly.
18    (b) This Act is repealed on January 1, 2030 January 1,
192025.
20(Source: P.A. 102-16, eff. 6-17-21.)
 
21    Section 10. The Illinois Income Tax Act is amended by
22changing Section 224 as follows:
 
23    (35 ILCS 5/224)

 

 

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1    Sec. 224. Invest in Kids credit.
2    (a) For taxable years beginning on or after January 1,
32018 and ending before January 1, 2029 January 1, 2024, each
4taxpayer for whom a tax credit has been awarded by the
5Department under the Invest in Kids Act is entitled to a credit
6against the tax imposed under subsections (a) and (b) of
7Section 201 of this Act in an amount equal to the amount
8awarded under the Invest in Kids Act.
9    (b) For taxable years ending before December 31, 2023, for
10partners, shareholders of subchapter S corporations, and
11owners of limited liability companies, if the liability
12company is treated as a partnership for purposes of federal
13and State income taxation, the credit under this Section shall
14be determined in accordance with the determination of income
15and distributive share of income under Sections 702 and 704
16and subchapter S of the Internal Revenue Code. For taxable
17years ending on or after December 31, 2023, partners and
18shareholders of subchapter S corporations are entitled to a
19credit under this Section as provided in Section 251.
20    (c) The credit may not be carried back and may not reduce
21the taxpayer's liability to less than zero. If the amount of
22the credit exceeds the tax liability for the year, the excess
23may be carried forward and applied to the tax liability of the
245 taxable years following the excess credit year. The tax
25credit shall be applied to the earliest year for which there is
26a tax liability. If there are credits for more than one year

 

 

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1that are available to offset the liability, the earlier credit
2shall be applied first.
3    (d) A tax credit awarded by the Department under the
4Invest in Kids Act may not be claimed for any qualified
5contribution for which the taxpayer claims a federal income
6tax deduction.
7(Source: P.A. 102-699, eff. 4-19-22; 103-396, eff. 1-1-24.)
 
8    Section 99. Effective date. This Act takes effect upon
9becoming law.