Illinois General Assembly - Full Text of HB4229
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Full Text of HB4229  102nd General Assembly




State of Illinois
2021 and 2022


Introduced 1/5/2022, by Rep. Deb Conroy


New Act
35 ILCS 5/232 new

    Creates the Recovery and Mental Health Tax Credit Act. Provides that the Department of Human Services shall establish and administer a recovery tax credit program to provide tax incentives to qualified employers who employ eligible individuals in recovery from a substance use disorder or mental illness in part-time and full-time positions within Illinois. Creates the Advisory Council on Mental Illness and Substance Use Disorder Impacts on Employment Opportunities within Minority Communities. Sets forth the membership of the Council. Provides that the Council shall advise the Department of Human Services regarding employment of persons with mental illnesses and substance use disorders in minority communities. Amends the Illinois Income Tax Act to make conforming changes.

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1    AN ACT concerning revenue.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 1. Short title. This Act may be cited as the
5Recovery and Mental Health Tax Credit Act.
6    Section 5. Findings.
7    (a) In the interest of reducing stigma and increasing the
8available pool of potential employees, the General Assembly
9finds and declares that those residents of Illinois diagnosed
10with mental illness and substance use disorders should be
11eligible for and encouraged to seek gainful employment.
12    (b) The General Assembly finds and declares that minority
13communities in the State have been more negatively impacted in
14employment opportunities for minority residents diagnosed with
15mental illness and substance use disorders and should receive
16additional employment opportunities and incentives for
17employing minority residents diagnosed with mental illness or
18substance use disorders.
19    (c) Due to the COVID-19 public health emergency, employers
20in the State of Illinois have suffered negative economic
21impacts, a loss in workforce, staffing difficulties, and have
22found it difficult to recruit new workers.
23    (d) In the interest of providing additional employment



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1opportunities for those residents of Illinois diagnosed with
2mental illness or substance use disorders and expanding the
3pool of potential workers in the State, the General Assembly
4finds and declares that certain qualified employers who employ
5eligible individuals should be eligible for a tax credit.
6    Section 10. Definitions. As used in this Act:
7    "Department" means the Department of Human Services.
8    "Eligible individual" means an individual with a substance
9use disorder, as that term is defined under Section 1-10 of the
10Substance Use Disorder Act, or an individual with a mental
11illness as that term is defined under Section 1-129 of the
12Mental Health and Developmental Disabilities Code, who is in a
13state of wellness and recovery where there is an abatement of
14signs and symptoms that characterize active substance use
15disorder or mental illness and has demonstrated to the
16qualified employer's satisfaction, pursuant to regulations
17promulgated by the Department, that he or she has completed a
18course of treatment or is currently in receipt of treatment
19for such substance use disorder or mental illness. A relapse
20in an individual's state of wellness shall not make the
21individual ineligible, so long as the individual shows a
22continued commitment to recovery that aligns with an
23individual's relapse prevention plan discharge plan or
24recovery plan.
25    "Qualified employer" means an employer operating within



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1the State that has received a certificate of tax credit from
2the Department after the Department has determined that the
4        (1) provides a recovery supportive environment for
5    their employees evidenced by a formal working relationship
6    with a substance use disorder treatment provider or
7    facility or mental health provider or facility, each as
8    may be licensed or certified within the State of Illinois,
9    and providing reasonable accommodation to the employees to
10    address their substance use disorder or mental illness,
11    all at no cost or expense to the eligible individual; and
12        (2) satisfies all other criteria in this Section and
13    established by the Department to participate in the
14    recovery tax program created hereunder.
15    "Taxpayer" means any individual, corporation, partnership,
16trust, or other entity subject to the Illinois income tax. For
17the purposes of this Act, 2 individuals filing a joint return
18shall be considered one taxpayer.
19    Section 15. Authorization of tax credit program for
20individuals in recovery from substance use disorders or mental
22    (a) For taxable years beginning on or after January 1,
232023, the Department is authorized to and shall establish and
24administer a recovery tax credit program to provide tax
25incentives to qualified employers who employ eligible



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1individuals in recovery from a substance use disorder or
2mental illness in part-time and full-time positions within
3Illinois. The Department shall award the tax credit by
4issuance of a certificate of tax credit to the qualified
5employer, who will present the certificate of tax credit to
6the Department of Revenue as a credit against the qualified
7employer's tax obligation in accordance with this Act.
8    (b) To be a qualified employer, an employer must apply
9annually to the Department to claim a credit based upon
10eligible individuals employed during the preceding calendar
11year, using the forms prescribed by the Department. To be
12approved for a credit under this Act, the employer must:
13        (1) agree to provide to the Department the information
14    necessary to demonstrate that the employer has satisfied
15    program eligibility requirements and provided all
16    information requested or needed by the Department,
17    including the number of hours worked by the eligible
18    individual and other information necessary for the
19    Department to calculate the amount of credit permitted;
20    and
21        (2) agree to provide names, employer identification
22    numbers, amounts that the employer may claim, and other
23    information necessary for the Department to calculate any
24    tax credit.
25    (c) To be an eligible individual, the individual must be
26diagnosed with or have been diagnosed with a substance use



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1disorder or mental illness. Disclosure by the eligible
2individual of his or her mental illness or substance use
3disorder shall be completely voluntary and his or her health
4information may not be shared or disclosed under this Act
5without the eligible individual's express written consent. The
6eligible individual must have been employed by the qualified
7employer in the State for a minimum of 500 hours during the
8applicable calendar year and the tax credit may only begin on
9the date the eligible individual is hired by the qualified
10employer and ending on December 31 of that calendar year or the
11date that the eligible individual's employment with the
12qualified employer ends, whichever occurs first. Only one tax
13credit may be awarded for any eligible individual while
14employed by the same or related qualified employer. The hours
15of employment of 2 or more eligible individuals may not be
16aggregated to reach the minimum number of hours. If an
17eligible individual has worked in excess of 500 hours between
18the date of hiring and December 31 of that year, a qualified
19employer can elect to compute and claim a credit for such
20eligible individual in that year based on the hours worked by
21December 31. Alternatively, the qualified employer may elect
22to include such individual in the computation of the credit in
23the year immediately succeeding the year in which the eligible
24individual was hired. In that case, the credit shall be
25computed on the basis of all hours worked by the eligible
26individual from the date of hire to the earlier of the last day



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1of employment or December 31 of the succeeding year.
2    (d) The aggregate amount of all credits the Department may
3award under this Act in any calendar year may not exceed
5    (e) If the qualified employer's taxable year is a calendar
6year, the employer shall be entitled to claim the credit as
7shown on the certificate of tax credit on the calendar year
8return for which the certificate of tax credit was issued. If
9the certified employer's taxable year is a fiscal year, the
10qualified employer shall be entitled to claim the credit as
11shown on the certificate of tax credit on the return for the
12fiscal year that includes the last day of the calendar year
13covered by the certificate of tax credit.
14    (f) If Department criteria and all other requirements are
15met, a qualified employer shall be entitled to a tax credit
16equal to the product of $1 and the number of hours worked by
17each eligible individual during the eligible individual's
18period of employment with the qualified employer. The tax
19credit awarded hereunder may not exceed $2,000 per eligible
20individual employed by the qualified employer in the State. In
21determining the amount of tax credit that any qualified
22employer may claim, the Department shall review all claims
23submitted for credit by all employers and, to the extent that
24the total amount claimed by employers exceeds the amount
25allocated for this program in that calendar year, shall issue
26tax credits on a pro rata basis corresponding to each



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1qualified employer's share of the total amount claimed.
2    (g) No credit shall be taken under this Act if the taxpayer
3claims a federal income tax deduction for the employment of
4the eligible individual by a qualified employer.
5    (h) No tax credit awarded under this Act may reduce a
6qualified employer's tax obligation to less than zero.
7    (i) The Department of Revenue shall review and accept the
8tax credit certificates issued by the Department and apply the
9tax credit towards the qualified employer's income tax
10obligation. A taxpayer that is a qualified employer that has
11received a certificate of tax credit from the Department shall
12be allowed a credit against the tax imposed equal to the amount
13shown on such certificate of tax credit. If the taxpayer is (i)
14a corporation having an election in effect under Subchapter S
15of the federal Internal Revenue Code, (ii) a partnership, or
16(iii) a limited liability company, the credit provided under
17this Act may be claimed by the shareholders of the
18corporation, the partners of the partnership, or the members
19of the limited liability company in the same manner as those
20shareholders, partners, or members account for their
21proportionate shares of the income or losses of the
22corporation, partnership, or limited liability company, or as
23provided in the bylaws or other executed agreement of the
24corporation, partnership, or limited liability company. In
25carrying out this Act, no patient-specific information shall
26be shared or disclosed. Any information collected by the



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1Department or the Department of Revenue shall not be subject
2to public disclosure or Freedom of Information Act requests.
3    (j) The credit under this Act is exempt from the
4provisions of Section 250 of the Illinois Income Tax Act.
5    Section 20. Advisory Council on Mental Illness and
6Substance Use Disorder Impacts on Employment Opportunities
7within Minority Communities. The Secretary of the Department
8shall appoint the Advisory Council on Mental Illness and
9Substance Use Disorder Impacts on Employment Opportunities
10within Minority Communities, to be composed of 15 members,
11which shall include a balanced representation of recipients,
12services providers, employers, local governmental units,
13community and welfare advocacy groups, academia, and the
14general public. The Advisory Council shall advise the
15Department regarding all aspects of employment impacts
16resulting from mental illnesses and substance use disorders
17within minority communities, tax credits, outreach, marketing,
18and education about the tax credit and employment
19opportunities, and other areas as deemed appropriate by the
20Secretary. In appointing the first Council, the Secretary
21shall name 8 members to terms of 2 years and 7 members to serve
22terms of 4 years, all of whom shall be appointed within 6
23months of the effective date of this Act. All members
24appointed thereafter shall serve terms of 4 years. Members
25shall serve without compensation other than reimbursement of



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1expenses actually incurred in the performance of their
2official duties. At its first meeting, the Advisory Council
3shall select a chair from among its members. The Advisory
4Council shall meet at least quarterly and at other times at the
5call of the chair.
6    Section 25. Powers. The Department shall adopt rules for
7the administration of this Act. The Department may enter into
8an intergovernmental agreement with the Department of Revenue
9for the administration of this Act.
10    Section 90. The Illinois Income Tax Act is amended by
11adding Section 232 as follows:
12    (35 ILCS 5/232 new)
13    Sec. 232. Recovery and Mental Health Tax Credit Act. A
14taxpayer who has been awarded a credit under the Recovery and
15Mental Health Tax Credit Act is entitled to a credit against
16the tax imposed by subsections (a) and (b) of Section 201 as
17provided in that Act. This Section is exempt from the
18provisions of Section 250.