State of Illinois
90th General Assembly
Legislation

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[ Engrossed ][ Enrolled ][ Senate Amendment 001 ]

90_HB1817

      SEE INDEX
          Amends the Environmental Protection Act.  Creates  a  new
      Title  of  the Act relating to the Brownfields Rehabilitation
      and Redevelopment Program.  Provides that the  Department  of
      Commerce  and  Community  Affairs  shall administer a program
      that  encourages  private  sector  voluntary  remediation  of
      environmentally-distressed  and  underutilized   sites   that
      demonstrate  the  potential  to  contribute  to  the economic
      growth if expanded, rehabilitated, or  redeveloped.  Provides
      that  the  Department,  in cooperation with the Environmental
      Protection Agency, the Department  of  Agriculture,  and  the
      Department  of  Natural  Resources, shall prescribe rules for
      the  implementation  of  the  program.  Provides   that   the
      provisions  of  the  title  are  repealed  5  years after the
      effective date of this amendatory Act.  Amends  the  Illinois
      Income  Tax  Act.    Creates  the Brownfields Remediation Tax
      Credit.  Provides  that  the  credit  is  available  to  each
      taxpayer  that  has  (1) entered into a development agreement
      with  Department  of  Commerce  and  Community  Affairs,  has
      received an allocation for the credit,  and  has  received  a
      certificate  of  eligibility  for  the  credit  or  (2)  is a
      transferee of the credit.  Provides that  the  Department  of
      Commerce  and Community Affairs shall determine the amount of
      the credit. Provides that the credit shall be  in  an  amount
      equal  to  the  lesser  of  (1) 100% of the remediation costs
      expended for an approved Brownfields project or (2)  100%  of
      the   projected  present  value  of  new  State  tax  revenue
      generated by an approved Brownfields project.   Exempts  this
      credit   from  the  sunset  provisions.   Creates  the  Small
      Business  Remediation Tax Credit for taxpayers that employ no
      more  than  50  employees  and   undertake   the   expansion,
      rehabilitation,   or  redevelopment  of  a  Brownfields  site
      project that generates measurable economic  growth  resulting
      in  either a revenue neutral benefit or a net fiscal benefit.
      Provides that the Department of Revenue and the Department of
      Commerce and Community  Affairs  shall  adopt  a  tax  credit
      schedule.   Provides  that  this  credit is available for tax
      years beginning on or after January 1,  1997.   Sunsets  this
      credit   after   5  years.   Provides  that  the  Brownfields
      Remediation Tax Credit and the Small Business Remediation Tax
      Credit may not be  taken  together.   Makes  other   changes.
      Effective immediately.
                                                     LRB9005182KDpc
                                               LRB9005182KDpc
 1        AN  ACT in relation to environmental protection, amending
 2    named Acts.
 3        Be it enacted by the People of  the  State  of  Illinois,
 4    represented in the General Assembly:
 5        Section  5.  The  Illinois  Income  Tax Act is amended by
 6    adding Sections 211 and 212 as follows:
 7        (35 ILCS 5/211 new)
 8        Sec. 211 Brownfields Remediation Tax Credit.
 9        (a)  Beginning with tax years ending on or after  January
10    1,  1997,  and subject to the requirements, restrictions, and
11    terms of the  Brownfields  Rehabilitation  and  Redevelopment
12    Program  in  Title XVIII of the Environmental Protection Act,
13    each  taxpayer  that  (i)  has  entered  into  a  development
14    agreement with  the  Department  of  Commerce  and  Community
15    Affairs,  has  received  a Brownfields Remediation Tax Credit
16    allocation, and receives a  certificate  of  eligibility,  or
17    (ii)  is  the transferee of any such credit, is entitled to a
18    credit against the tax imposed by subsections (a) and (b)  of
19    Section 201 of this Act.
20        (b)  The  amount of the credit shall be determined by the
21    Department of Commerce and Community Affairs upon review  and
22    approval  of  a  Brownfields Rehabilitation and Redevelopment
23    application  and  shall  be  provided  in   the   development
24    agreement.   If  applicable,  the  Department of Commerce and
25    Community  Affairs  shall  provide  an  annual   tax   credit
26    distribution   schedule   if  the  term  of  the  development
27    agreement  exceeds   one   year.    The   total   Brownfields
28    Remediation Tax Credit allocation shall be an amount equal to
29    the  lesser of (i) 100% of the remediation costs expended for
30    an approved Brownfields project or (ii) 100% of the projected
31    present value of new  State  tax  revenues  generated  by  an
                            -2-                LRB9005182KDpc
 1    approved Brownfields project.
 2        (c)  If  the  amount  of  the  tax credit exceeds the tax
 3    liability for the year, the excess may be carried forward and
 4    applied to the tax liability of any year within the  term  of
 5    the development agreement; however, in no case may the credit
 6    claimed under this Section in any taxable year exceed the new
 7    State tax revenue generated by the measurable economic growth
 8    for that year.
 9        (d)  The  credit  claimed under this Section may be sold,
10    transferred, or  assigned  in  the  year  the  Department  of
11    Commerce   and   Community   Affairs   grants  a  Brownfields
12    Remediation Tax Credit  allocation  or  any  time  thereafter
13    until   the  credit  has  been  claimed,  provided  that  the
14    transferee shall take the credits subject to the  development
15    agreement.
16        (e)  In no event shall a credit issued under this Section
17    reduce  the  taxpayer's liability under this Act to less than
18    zero.
19        (f)  No credit may be claimed under this Section  if  the
20    taxpayer  has  claimed  the  Small  Business  Remediation Tax
21    Credit under Section 212 of this Act.
22        (g)  This  Section  is  exempt  from  the  provisions  of
23    Section 250 of this Act.
24        (35 ILCS 5/212 new)
25        Sec. 212.  The Small  Business  Remediation  Tax  Credit.
26    For  tax  years  beginning  on  or  after January 1, 1997 and
27    ending on or  before  December  30,  2002,  a  taxpayer  that
28    employs   no  more  than  50  employees  and  undertakes  the
29    expansion, rehabilitation, or redevelopment of a  Brownfields
30    site   project   under   Title  XVIII  of  the  Environmental
31    Protection Act  that  generates  measurable  economic  growth
32    resulting in either a revenue neutral benefit or a net fiscal
33    benefit  is  entitled  to a credit against the tax imposed by
                            -3-                LRB9005182KDpc
 1    subsections (a) and (b) of Section 201  of  this  Act  in  an
 2    amount not to exceed $25,000 per project.  The Department, in
 3    cooperation  with  the  Department  of Commerce and Community
 4    Affairs, shall adopt a tax credit schedule  as prescribed  in
 5    Section  59.3  of Title XVIII of the Environmental Protection
 6    Act within 120 days of the effective date of this  amendatory
 7    Act  of  1997  that  shall  provide  the  amount  of  credits
 8    available  for  measurable economic growth.  No credit may be
 9    claimed under this Section if the taxpayer  has  claimed  the
10    Brownfields  Remediation Tax Credit under Section 211 of this
11    Act.
12        Section 10.  The Environmental Protection Act is  amended
13    by adding Title XVIII as follows:
14        (415 ILCS 5/Title XVIII heading new)
15               TITLE XVIII: BROWNFIELDS REHABILITATION
16                      AND REDEVELOPMENT PROGRAM
17        (415 ILCS 5/59 new)
18        Sec. 59.  Intent. It is the intent of this Title:
19        (1)  To encourage private sector voluntary remediation of
20    environmentally-distressed  and  underutilized  sites    that
21    demonstrate  a  potential  to  generate  measurable  economic
22    growth   in   Illinois   if   expanded,   rehabilitated,   or
23    redeveloped.
24        (2)  To  provide  the  private  sector with incentives to
25    undertake "Brownfields" projects that will have a net  fiscal
26    benefit  or  at  a minimum, a revenue neutral impact on State
27    tax revenue.
28        (3)  To establish criteria upon which the State may award
29    incentives.
30        (415 ILCS 5/59.1 new)
                            -4-                LRB9005182KDpc
 1        Sec. 59.1.  Definitions. As used in this Title:
 2        "Applicant" means any person as defined by this  Act  who
 3    applies to proceed under this Title.
 4        "Application"  means  an  application  submitted  to  the
 5    Agency  and  the Department of Commerce and Community Affairs
 6    for  enrollment  in  the   Brownfields   Rehabilitation   and
 7    Redevelopment Program.
 8        "Approved  Brownfields  Project" means a Brownfields site
 9    that is the  subject  of  an  expansion,  rehabilitation,  or
10    redevelopment  plan and that has been approved for incentives
11    under this Title.
12        "Brownfields Site" means any  site  that  is  subject  to
13    environmental  remediation or reclamation pursuant to a State
14    administered   environmental   remediation   or   reclamation
15    program, including but not limited to, programs  administered
16    by   the  Agency,  the  Department  of  Agriculture,  or  the
17    Department of  Natural  Resources  and  that  demonstrates  a
18    potential  for  expansion,  rehabilitation, or redevelopment.
19    Brownfields sites shall include, but not be limited to, sites
20    eligible  for  enrollment  in  the  Site  Investigation   and
21    Remedial Activities Program as provided in Title XVII of this
22    Act   administered  by  the  Agency,  facilities  subject  to
23    asbestos  or  lead  abatement  as  provided  in   this   Act,
24    facilities   eligible   for   remediation   pursuant  to  the
25    Agrichemical Facility Response Action Program as provided  in
26    the  Illinois  Pesticide  Act,  surface coal mines subject to
27    environmental  protection  reclamation  as  provided  in  the
28    Surface Coal Mining Land Conservation  and  Reclamation  Act,
29    and  abandoned  mined  lands and related water reclamation as
30    provided in the Abandoned Mined Lands and  Water  Reclamation
31    Act.
32        "Certificate  of Eligibility" means an annual certificate
33    issued by the Department of Commerce and Community Affairs at
34    the request of  an  applicant  or  transferee  to  claim  the
                            -5-                LRB9005182KDpc
 1    Brownfields  Remediation  Tax  Credit  granted in an approval
 2    letter and development agreement.
 3        "DCCA" means the  Illinois  Department  of  Commerce  and
 4    Community Affairs.
 5        "Development  Agreement"  means an agreement entered into
 6    between an applicant and DCCA providing  types,  amount,  and
 7    timing  of  incentives  available for an approved Brownfields
 8    project, and setting forth terms  and  conditions,  including
 9    benchmarks for achieving measurable economic growth.
10        "Measurable Economic Growth" includes, but is not limited
11    to, factors such as the number of jobs created, the number of
12    jobs  retained  if  demonstrated such jobs would otherwise be
13    lost, the capital  investment,    capital  improvements,  the
14    number   of   construction  related  jobs,  increased  sales,
15    material  purchases,  other    increases   in   service   and
16    operational  expenditures,  and  other factors established by
17    DCCA.
18        "Net  Fiscal  Benefit"  means  new  State   tax   revenue
19    resulting  from  implementation of a development agreement in
20    excess of the cost  of  any  incentives  granted  under  this
21    Title.
22        "Remediation   Costs"   includes  costs  associated  with
23    investigating the environmental condition of, remediating, or
24    performing corrective action on a Brownfields site  in  order
25    to  obtain a "No Further Remediation Letter" or other similar
26    State  authorization   or   approval   indicating   completed
27    investigation, remediation, or reclamation in satisfaction of
28    State  requirements  with  respect to an approved Brownfields
29    project.
30        "Revenue Neutral Impact"  means  new  State  tax  revenue
31    resulting  from  implementation  of  a  development agreement
32    equal to the cost of any incentives granted under this Title.
33        (415 ILCS 5/59.2 new)
                            -6-                LRB9005182KDpc
 1        Sec. 59.2  Brownfields Rehabilitation  and  Redevelopment
 2    Program. The General Assembly hereby establishes the Illinois
 3    Brownfields  Rehabilitation  and  Redevelopment Program.  The
 4    Program shall be administered by DCCA as provided under  this
 5    Title.
 6        (415 ILCS 5/59.3 new)
 7        Sec. 59.3 Program incentives.
 8        (a)  The   Brownfields   Remediation   Tax  Credit.   Any
 9    applicant  or  transferee  if  the  credit  has  been   sold,
10    transferred,    or   assigned,   claiming   the   Brownfields
11    Remediation Tax Credit available under  Section  211  of  the
12    Illinois Income Tax Act and granted in an approval letter and
13    development  agreement  under Section 59.5 of this Title, may
14    submit  a  request  to  DCCA  to  issue  a   certificate   of
15    eligibility to claim the credit.
16             (1)  The  applicant  or transferee shall provide, in
17        addition to any other information required by  DCCA,  the
18        amount   of  the  credit  requested  and  if  applicable,
19        pursuant to the annual tax credit distribution  schedule,
20        the  amount  of  carry  forward  from previous tax years,
21        certification that the benchmarks for measurable economic
22        growth established in the development agreement have been
23        satisfied, proof of  enrollment  or  participation  in  a
24        State-administered     environmental    remediation    or
25        reclamation program qualifying the  Brownfields  site  to
26        receive  incentives  under this Title, and an itemization
27        of the amount of remediation costs,  if  any,  that  were
28        incurred during the taxable year.
29             (2)  Within 30 days after receipt of the request and
30        all   required   information,   DCCA  shall  provide  the
31        applicant with a certificate of eligibility to claim  the
32        total  Brownfields Remediation Tax Credit, if any, or, if
33        applicable, the annual tax credit allowance as set  forth
                            -7-                LRB9005182KDpc
 1        in  the  development  agreement  tax  credit distribution
 2        schedule, including any amount of credit subject to carry
 3        forward.  The Department of Revenue shall  prescribe  the
 4        form  for  the certificate of eligibility, and DCCA shall
 5        file with the  Department  of  Revenue  a  copy  of  each
 6        certificate of eligibility.
 7             (3)  An  applicant  or  transferee  that  claims the
 8        credit  in  this  subsection  based   on   a   fraudulent
 9        Brownfields   Rehabilitation  and  Redevelopment  Program
10        application or request for a certificate  of  eligibility
11        or any other fraudulent statement submitted to DCCA shall
12        be  subject  to  prosecution  under  Section  1301 of the
13        Illinois Income Tax Act.
14        (b)  The Small Business Remediation Tax Credit.  For  tax
15    years  beginning on or after January 1, 1997 and ending on or
16    before December 30, 2002, an applicant that employs  no  more
17    than    50    employees   and   undertakes   the   expansion,
18    rehabilitation, or redevelopment of a Brownfields  site  that
19    generates  measurable  economic  growth resulting in either a
20    revenue neutral benefit or a net fiscal benefit may claim the
21    Small Business Remediation Tax Credit.
22             (1)  This  credit  shall  not  be  available  to  an
23        applicant that claimed the credit provided in  subsection
24        (a).
25             (2)  An applicant that claims the credit provided in
26        this Section based on a fraudulent statement submitted to
27        DCCA  shall  be subject to prosecution under Section 1301
28        of the Illinois Income Tax Act.
29             (3)  The Department of Revenue, in cooperation  with
30        the DCCA, shall adopt a tax credit schedule as prescribed
31        in  Section  59.3  of  Title  XVIII  of the Environmental
32        Protection Act within 120 days of the effective  date  of
33        this amendatory Act of 1997 that shall provide the amount
34        of credits available for measurable economic growth.
                            -8-                LRB9005182KDpc
 1        (c)  Additional   incentives.    The   Agency   or  other
 2    administrative   agency,   including   the   Department    of
 3    Agriculture  and  Department  of  Natural Resources, may make
 4    available  any  other  resources  deemed  appropriate  as   a
 5    financial  incentive to remediate and expand, rehabilitate or
 6    redevelop a Brownfields site.
 7        (415 ILCS 5/59.4 new)
 8        Sec. 59.4.  Brownfields Rehabilitation and  Redevelopment
 9    Program   application   submittal.   At  any  time  prior  to
10    commencement or  during  the  performance  of  investigation,
11    remediation,  or  reclamation  at  a Brownfields Site, but no
12    later than December 31, 2002, an application may be submitted
13    to DCCA providing the following available information:
14        (1)  Certification that a copy  of  the  application  has
15    been   submitted   to  the  State  agency  administering  the
16    environmental remediation or reclamation program  that  would
17    qualify the Brownfields site to receive incentives under this
18    Title,  or  if the investigation, remediation, or reclamation
19    has not yet commenced, certification that a site is  eligible
20    to participate or enroll in such program;
21        (2)  Information  relating  to  the  actual  or potential
22    impact of a regulated substance release on the site  that  is
23    the subject of the application;
24        (3)  A  summary of the investigation, remedial corrective
25    action, or reclamation plan for the Brownfields site;
26        (4)  Approximate budgets for the investigation,  remedial
27    corrective action, or reclamation plan;
28        (5)  A   timeline   for  investigation,  remediation,  or
29    reclamation  completion  and  receipt  of   a   "No   Further
30    Remediation  Letter"  or other similar State authorization or
31    approval indicating completed investigation or remediation in
32    satisfaction  of  State  requirements  with  respect  to  the
33    Brownfields Site;
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 1        (6)  A detailed explanation of  the  proposed  expansion,
 2    rehabilitation, or redevelopment plan;
 3        (7)  The factors indicating measurable economic growth;
 4        (8)  A timeline for achieving measurable economic growth;
 5    and
 6        (9)  Incentives requested under this Title.
 7        (415 ILCS 5/59.5 new)
 8        Sec.  59.5.  Application  review and decision; tax credit
 9    allocations; development agreement.
10        (a)  Within  30  days  after  receiving  a  copy  of  the
11    Brownfields Rehabilitation and Redevelopment application, the
12    State agency administering  the  remediation  or  reclamation
13    program shall forward to DCCA a letter indicating  agreement,
14    disagreement, or need for additional information with respect
15    to  the planned environmental investigation, remediation, and
16    reclamation.
17        (b)  Within 45 days after  receipt  of  the  application,
18    DCCA  shall  forward  to  the  applicant  a letter indicating
19    approval or disapproval  of  the  application,  or  need  for
20    additional  information,  and  providing  a  basis  for  such
21    decision.
22        (c)  If  the  application is approved, DCCA shall include
23    with the approval letter, a development agreement that  shall
24    contain the following:
25             (1)  A  determination of the projected present value
26        of new State tax revenues  generated  by  the  measurable
27        economic growth of the approved Brownfields project;
28             (2)  An   allocation   of   the   total   amount  of
29        Brownfields Remediation Tax  Credits  projected  for  the
30        approved Brownfields project;
31             (3)  A  determination  of  the net fiscal benefit or
32        revenue neutral impact that will be  generated  by    the
33        approved Brownfields project;
                            -10-               LRB9005182KDpc
 1             (4)  Measurable economic growth benchmarks;
 2             (5)  A  tax  credit  distribution schedule including
 3        annual maximum tax credit allowances for each year during
 4        the entire term of the development agreement;
 5             (6)  The term of the development agreement;
 6             (7)  Applicable conditions; and
 7             (8)  Any other  information  deemed  appropriate  by
 8        DCCA, including but not limited to, an explanation of how
 9        to claim the credits.
10        (415 ILCS 5/59.6 new)
11        Sec.  59.6.    Failure to meet measurable economic growth
12    benchmarks.
13        (a)  If an applicant determines that the  benchmarks  set
14    forth  in  the  development  agreement are not attainable, an
15    applicant may  submit  a  request  for  modification  of  the
16    development agreement to DCCA.
17        (b)  DCCA  may audit the approved Brownfields project and
18    may cancel any credits granted in the  development  agreement
19    that  have  not  been  claimed  when the approved Brownfields
20    project fails to meet measurable economic growth  benchmarks.
21    The  determination  shall  be  made  by  DCCA,  in  its  sole
22    discretion,  based  on  the  severity  of  the  benchmark not
23    achieved, actions taken to meet the benchmark, the  frequency
24    of any failure to meet the benchmark, and compliance with any
25    condition set forth in the development agreement.  DCCA shall
26    also  consider any changes in the general economic conditions
27    and any recommendation of the State agency administering  the
28    remediation   or  reclamation  program  concerning  severity,
29    scope, nature, frequency, and extent of  any  deviation  from
30    the   investigation,   remediation,   corrective  action,  or
31    reclamation plans.
32        (415 ILCS 5/59.7 new)
                            -11-               LRB9005182KDpc
 1        Sec. 59.7.  Regulations. DCCA shall, with the advice  and
 2    recommendation  of the Agency, the Department of Agriculture,
 3    and the Department of Natural  Resources,  issue  regulations
 4    within  120 days of the effective date of this amendatory Act
 5    of  1997  as  may be necessary to implement the provisions of
 6    this  Title,  including  but  not  limited  to  a   list   of
 7    State-administered  environmental remediation and reclamation
 8    programs that  would  qualify  a  site  to  be  considered  a
 9    Brownfields  site  under this Title, application forms, and a
10    schedule  of  remediation  costs  that  will  be   considered
11    qualifying  expenditures  for the Brownfields Remediation Tax
12    Credit.  The Agency, the Department of Agriculture,  and  the
13    Department of Natural Resources may adopt such administrative
14    regulations  as necessary to implement the provisions of this
15    Title. The Department of Revenue shall prescribe the form for
16    the  certificate  of  eligibility  and  promulgate  a   Small
17    Business  Remediation  Tax Credit Schedule within 120 days of
18    the effective date of this amendatory Act of 1997.
19        (415 ILCS 5/59.8 new)
20        Sec. 59.8.  Severability. The provisions  of  this  Title
21    are severable under Section 1.31 of the Statute on Statutes.
22        (415 ILCS 5/59.9 new)
23        Section 59.9.  Repealer. The provisions of this Title are
24    repealed  effective  5 years after the effective date of this
25    amendatory Act  of  1997.   This  Section  shall  not  impact
26    development  agreements  entered  into prior to the date this
27    Title is repealed.
28        Section 99.  Effective date.  This Act takes effect  upon
29    becoming law.
                            -12-               LRB9005182KDpc
 1                                INDEX
 2               Statutes amended in order of appearance
 3    35 ILCS 5/211 new
 4    35 ILCS 5/212 new
 5    415 ILCS 5/Title XVIII heading new
 6    415 ILCS 5/59 new
 7    415 ILCS 5/59.1 new
 8    415 ILCS 5/59.2 new
 9    415 ILCS 5/59.3 new
10    415 ILCS 5/59.4 new
11    415 ILCS 5/59.5 new
12    415 ILCS 5/59.6 new
13    415 ILCS 5/59.7 new
14    415 ILCS 5/59.8 new
15    415 ILCS 5/59.9 new

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