Illinois General Assembly - Full Text of HB4691
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Full Text of HB4691  103rd General Assembly



State of Illinois
2023 and 2024


Introduced 2/6/2024, by Rep. Tim Ozinga


35 ILCS 5/224
35 ILCS 40/40
35 ILCS 40/65

    Amends the Illinois Income Tax Act and the Invest in Kids Act. Provides that the Invest in Kids credit applies for taxable years ending before January 1, 2035 (currently, January 1, 2024). Effective immediately.

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HB4691LRB103 36310 HLH 66408 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 224 as follows:
6    (35 ILCS 5/224)
7    Sec. 224. Invest in Kids credit.
8    (a) For taxable years beginning on or after January 1,
92018 and ending before January 1, 2035 January 1, 2024, each
10taxpayer for whom a tax credit has been awarded by the
11Department under the Invest in Kids Act is entitled to a credit
12against the tax imposed under subsections (a) and (b) of
13Section 201 of this Act in an amount equal to the amount
14awarded under the Invest in Kids Act.
15    (b) For taxable years ending before December 31, 2023, for
16partners, shareholders of subchapter S corporations, and
17owners of limited liability companies, if the liability
18company is treated as a partnership for purposes of federal
19and State income taxation, the credit under this Section shall
20be determined in accordance with the determination of income
21and distributive share of income under Sections 702 and 704
22and subchapter S of the Internal Revenue Code. For taxable
23years ending on or after December 31, 2023, partners and



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1shareholders of subchapter S corporations are entitled to a
2credit under this Section as provided in Section 251.
3    (c) The credit may not be carried back and may not reduce
4the taxpayer's liability to less than zero. If the amount of
5the credit exceeds the tax liability for the year, the excess
6may be carried forward and applied to the tax liability of the
75 taxable years following the excess credit year. The tax
8credit shall be applied to the earliest year for which there is
9a tax liability. If there are credits for more than one year
10that are available to offset the liability, the earlier credit
11shall be applied first.
12    (d) A tax credit awarded by the Department under the
13Invest in Kids Act may not be claimed for any qualified
14contribution for which the taxpayer claims a federal income
15tax deduction.
16(Source: P.A. 102-699, eff. 4-19-22; 103-396, eff. 1-1-24.)
17    Section 10. The Invest in Kids Act is amended by changing
18Sections 40 and 65 as follows:
19    (35 ILCS 40/40)
20    (Section scheduled to be repealed on January 1, 2025)
21    Sec. 40. Scholarship granting organization
23    (a) Before granting a scholarship for an academic year,
24all scholarship granting organizations shall assess and



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1document each student's eligibility for the academic year.
2    (b) A scholarship granting organization shall grant
3scholarships only to eligible students.
4    (c) A scholarship granting organization shall allow an
5eligible student to attend any qualified school of the
6student's choosing, subject to the availability of funds.
7    (d) In granting scholarships, beginning in the 2022-2023
8school year and for each school year thereafter, a scholarship
9granting organization shall give priority to eligible students
10who received a scholarship from a scholarship granting
11organization during the previous school year. Second priority
12shall be given to the following priority groups:
13        (1) (blank);
14        (2) eligible students who are members of a household
15    whose previous year's total annual income does not exceed
16    185% of the federal poverty level;
17        (3) eligible students who reside within a focus
18    district; and
19        (4) eligible students who are siblings of students
20    currently receiving a scholarship.
21    (d-5) A scholarship granting organization shall begin
22granting scholarships no later than February 1 preceding the
23school year for which the scholarship is sought. Each priority
24group identified in subsection (d) of this Section shall be
25eligible to receive scholarships on a first-come, first-served
26basis until April 1 immediately preceding the school year for



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1which the scholarship is sought, starting with the first
2priority group identified in subsection (d) of this Section.
3Applications for scholarships for eligible students meeting
4the qualifications of one or more priority groups that are
5received before April 1 must be either approved or denied
6within 10 business days after receipt. Beginning April 1, all
7eligible students shall be eligible to receive scholarships
8without regard to the priority groups identified in subsection
9(d) of this Section.
10    (e) Except as provided in subsection (e-5) of this
11Section, scholarships shall not exceed the lesser of (i) the
12statewide average operational expense per student among public
13schools or (ii) the necessary costs and fees for attendance at
14the qualified school. A qualified school may set a lower
15maximum scholarship amount for eligible students whose family
16income falls within paragraphs (2) and (3) of this subsection
17(e); that amount may not exceed the necessary costs and fees
18for attendance at the qualified school and is subject to the
19limitations on average scholarship amounts set forth in
20paragraphs (2) and (3) of this subsection, as applicable. The
21qualified school shall notify the scholarship granting
22organization of its necessary costs and fees as well as any
23maximum scholarship amount set by the school. Scholarships
24shall be prorated as follows:
25        (1) for eligible students whose household income is
26    less than 185% of the federal poverty level, the



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1    scholarship shall be 100% of the amount determined
2    pursuant to this subsection (e) and subsection (e-5) of
3    this Section;
4        (2) for eligible students whose household income is
5    185% or more of the federal poverty level but less than
6    250% of the federal poverty level, the average of
7    scholarships shall be 75% of the amount determined
8    pursuant to this subsection (e) and subsection (e-5) of
9    this Section; and
10        (3) for eligible students whose household income is
11    250% or more of the federal poverty level, the average of
12    scholarships shall be 50% of the amount determined
13    pursuant to this subsection (e) and subsection (e-5) of
14    this Section.
15    (e-5) The statewide average operational expense per
16student among public schools shall be multiplied by the
17following factors:
18        (1) for students determined eligible to receive
19    services under the federal Individuals with Disabilities
20    Education Act, 2;
21        (2) for students who are English learners, as defined
22    in subsection (d) of Section 14C-2 of the School Code,
23    1.2; and
24        (3) for students who are gifted and talented children,
25    as defined in Section 14A-20 of the School Code, 1.1.
26    (f) A scholarship granting organization shall distribute



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1scholarship payments to the participating school where the
2student is enrolled.
3    (g) For the 2018-2019 school year through the 2033-2034
42022-2023 school year, each scholarship granting organization
5shall expend no less than 75% of the qualified contributions
6received during the calendar year in which the qualified
7contributions were received. No more than 25% of the qualified
8contributions may be carried forward to the following calendar
10    (h) For the 2034-2035 2023-2024 school year, each
11scholarship granting organization shall expend all qualified
12contributions received during the calendar year in which the
13qualified contributions were received. No qualified
14contributions may be carried forward to the following calendar
16    (i) A scholarship granting organization shall allow an
17eligible student to transfer a scholarship during a school
18year to any other participating school of the custodian's
19choice. Such scholarships shall be prorated.
20    (j) With the prior approval of the Department, a
21scholarship granting organization may transfer funds to
22another scholarship granting organization if additional funds
23are required to meet scholarship demands at the receiving
24scholarship granting organization. All transferred funds must
25be deposited by the receiving scholarship granting
26organization into its scholarship accounts. All transferred



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1amounts received by any scholarship granting organization must
2be separately disclosed to the Department.
3    (k) If the approval of a scholarship granting organization
4is revoked as provided in Section 20 of this Act or the
5scholarship granting organization is dissolved, all remaining
6qualified contributions of the scholarship granting
7organization shall be transferred to another scholarship
8granting organization. All transferred funds must be deposited
9by the receiving scholarship granting organization into its
10scholarship accounts.
11    (l) Scholarship granting organizations shall make
12reasonable efforts to advertise the availability of
13scholarships to eligible students.
14(Source: P.A. 102-699, eff. 4-19-22; 102-1059, eff. 6-10-22;
15103-154, eff. 6-30-23.)
16    (35 ILCS 40/65)
17    (Section scheduled to be repealed on January 1, 2025)
18    Sec. 65. Credit period; repeal.
19    (a) A taxpayer may take a credit under this Act for tax
20years beginning on or after January 1, 2018 and ending before
21January 1, 2035 January 1, 2024. A taxpayer may not take a
22credit pursuant to this Act for tax years beginning on or after
23January 1, 2035 January 1, 2024. It is the intent of the
24General Assembly that the credit under this Act applies
25continuously for all periods beginning on or after January 1,



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12018 and ending before January 1, 2035, including, but not
2limited to, the period from January 1, 2024 through the
3effective date of this amendatory Act of the 103rd General
5    (b) This Act is repealed on January 1, 2036 January 1,
7(Source: P.A. 102-16, eff. 6-17-21.)
8    Section 99. Effective date. This Act takes effect upon
9becoming law.