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92_SB1285eng SB1285 Engrossed LRB9207332SMtm 1 AN ACT in relation to taxation. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The State Revenue Sharing Act is amended by 5 changing Section 12 as follows: 6 (30 ILCS 115/12) (from Ch. 85, par. 616) 7 Sec. 12. Personal Property Tax Replacement Fund. There 8 is hereby created the Personal Property Tax Replacement Fund, 9 a special fund in the State Treasury into which shall be paid 10 all revenue realized: 11 (a) all amounts realized from the additional personal 12 property tax replacement income tax imposed by subsections 13 (c) and (d) of Section 201 of the Illinois Income Tax Act, 14 except for those amounts deposited into the Income Tax Refund 15 Fund pursuant to subsection (c) of Section 901 of the 16 Illinois Income Tax Act; and 17 (b) all amounts realized from the additional personal 18 property replacement invested capital taxes imposed by 19 Section 2a.1 of the Messages Tax Act, Section 2a.1 of the Gas 20 Revenue Tax Act, Section 2a.1 of the Public Utilities 21 Revenue Act, and Section 3 of the Water Company Invested 22 Capital Tax Act, and amounts payable to the Department of 23 Revenue under the Telecommunications Municipal Infrastructure 24 Maintenance Fee Act. 25 As soon as may be after the end of each month, the 26 Department of Revenue shall certify to the Treasurer and the 27 Comptroller the amount of all refunds paid out of the General 28 Revenue Fund through the preceding month on account of 29 overpayment of liability on taxes paid into the Personal 30 Property Tax Replacement Fund. Upon receipt of such 31 certification, the Treasurer and the Comptroller shall SB1285 Engrossed -2- LRB9207332SMtm 1 transfer the amount so certified from the Personal Property 2 Tax Replacement Fund into the General Revenue Fund. 3 The payments of revenue into the Personal Property Tax 4 Replacement Fund shall be used exclusively for distribution 5 to taxing districts as provided in this Section, payment of 6 the expenses of the Department of Revenue incurred in 7 administering the collection and distribution of monies paid 8 into the Personal Property Tax Replacement Fund and transfers 9 due to refunds to taxpayers for overpayment of liability for 10 taxes paid into the Personal Property Tax Replacement Fund. 11 As soon as may be after the effective date of this 12 amendatory Act of 1980, the Department of Revenue shall 13 certify to the Treasurer the amount of net replacement 14 revenue paid into the General Revenue Fund prior to that 15 effective date from the additional tax imposed by Section 16 2a.1 of the Messages Tax Act; Section 2a.1 of the Gas Revenue 17 Tax Act; Section 2a.1 of the Public Utilities Revenue Act; 18 Section 3 of the Water Company Invested Capital Tax Act; 19 amounts collected by the Department of Revenue under the 20 Telecommunications Municipal Infrastructure Maintenance Fee 21 Act; and the additional personal property tax replacement 22 income tax imposed by the Illinois Income Tax Act, as amended 23 by Public Act 81-1st Special Session-1. Net replacement 24 revenue shall be defined as the total amount paid into and 25 remaining in the General Revenue Fund as a result of those 26 Acts minus the amount outstanding and obligated from the 27 General Revenue Fund in state vouchers or warrants prior to 28 the effective date of this amendatory Act of 1980 as refunds 29 to taxpayers for overpayment of liability under those Acts. 30 All interest earned by monies accumulated in the Personal 31 Property Tax Replacement Fund shall be deposited in such 32 Fund. All amounts allocated pursuant to this Section are 33 appropriated on a continuing basis. 34 Prior to December 31, 1980, as soon as may be after the SB1285 Engrossed -3- LRB9207332SMtm 1 end of each quarter beginning with the quarter ending 2 December 31, 1979, and on and after December 31, 1980, as 3 soon as may be after January 1, March 1, April 1, May 1, July 4 1, August 1, October 1 and December 1 of each year, the 5 Department of Revenue shall allocate to each taxing district 6 as defined in Section 1-150 of the Property Tax Code, in 7 accordance with the provisions of paragraph (2) of this 8 Section the portion of the funds held in the Personal 9 Property Tax Replacement Fund which is required to be 10 distributed, as provided in paragraph (1), for each quarter. 11 Provided, however, under no circumstances shall any taxing 12 district during each of the first two years of distribution 13 of the taxes imposed by this amendatory Act of 1979 be 14 entitled to an annual allocation which is less than the funds 15 such taxing district collected from the 1978 personal 16 property tax. Provided further that under no circumstances 17 shall any taxing district during the third year of 18 distribution of the taxes imposed by this amendatory Act of 19 1979 receive less than 60% of the funds such taxing district 20 collected from the 1978 personal property tax. In the event 21 that the total of the allocations made as above provided for 22 all taxing districts, during either of such 3 years, exceeds 23 the amount available for distribution the allocation of each 24 taxing district shall be proportionately reduced. Except as 25 provided in Section 13 of this Act, the Department shall then 26 certify, pursuant to appropriation, such allocations to the 27 State Comptroller who shall pay over to the several taxing 28 districts the respective amounts allocated to them. 29 Any township which receives an allocation based in whole 30 or in part upon personal property taxes which it levied 31 pursuant to Section 6-507 or 6-512 of the Illinois Highway 32 Code and which was previously required to be paid over to a 33 municipality shall immediately pay over to that municipality 34 a proportionate share of the personal property replacement SB1285 Engrossed -4- LRB9207332SMtm 1 funds which such township receives. 2 Any municipality or township, other than a municipality 3 with a population in excess of 500,000, which receives an 4 allocation based in whole or in part on personal property 5 taxes which it levied pursuant to Sections 3-1, 3-4 and 3-6 6 of the Illinois Local Library Act and which was previously 7 required to be paid over to a public library shall 8 immediately pay over to that library a proportionate share of 9 the personal property tax replacement funds which such 10 municipality or township receives; provided that if such a 11 public library has converted to a library organized under The 12 Illinois Public Library District Act, regardless of whether 13 such conversion has occurred on, after or before January 1, 14 1988, such proportionate share shall be immediately paid over 15 to the library district which maintains and operates the 16 library. However, any library that has converted prior to 17 January 1, 1988, and which hitherto has not received the 18 personal property tax replacement funds, shall receive such 19 funds commencing on January 1, 1988. 20 Any township which receives an allocation based in whole 21 or in part on personal property taxes which it levied 22 pursuant to Section 1c of the Public Graveyards Act and which 23 taxes were previously required to be paid over to or used for 24 such public cemetery or cemeteries shall immediately pay over 25 to or use for such public cemetery or cemeteries a 26 proportionate share of the personal property tax replacement 27 funds which the township receives. 28 Any taxing district which receives an allocation based in 29 whole or in part upon personal property taxes which it levied 30 for another governmental body or school district in Cook 31 County in 1976 or for another governmental body or school 32 district in the remainder of the State in 1977 shall 33 immediately pay over to that governmental body or school 34 district the amount of personal property replacement funds SB1285 Engrossed -5- LRB9207332SMtm 1 which such governmental body or school district would receive 2 directly under the provisions of paragraph (2) of this 3 Section, had it levied its own taxes. 4 (1) The portion of the Personal Property Tax Replacement 5 Fund required to be distributed as of the time allocation is 6 required to be made shall be the amount available in such 7 Fund as of the time allocation is required to be made. 8 The amount available for distribution shall be the total 9 amount in the fund at such time minus the necessary 10 administrative expenses as limited by the appropriation and 11 the amount determined by: (a) $2.8 million for fiscal year 12 1981; (b) for fiscal year 1982, .54% of the funds distributed 13 from the fund during the preceding fiscal year; (c) for 14 fiscal year 1983 through fiscal year 1988, .54% of the funds 15 distributed from the fund during the preceding fiscal year 16 less .02% of such fund for fiscal year 1983 and less .02% of 17 such funds for each fiscal year thereafter, or (d) for fiscal 18 year 1989 and beyond no more than 105% of the actual 19 administrative expenses of the prior fiscal year. Such 20 portion of the fund shall be determined after the transfer 21 into the General Revenue Fund due to refunds, if any, paid 22 from the General Revenue Fund during the preceding quarter. 23 If at any time, for any reason, there is insufficient amount 24 in the Personal Property Tax Replacement Fund for payment of 25 costs of administration or for transfers due to refunds at 26 the end of any particular month, the amount of such 27 insufficiency shall be carried over for the purposes of 28 transfers into the General Revenue Fund and for purposes of 29 costs of administration to the following month or months. 30 Net replacement revenue held, and defined above, shall be 31 transferred by the Treasurer and Comptroller to the Personal 32 Property Tax Replacement Fund within 10 days of such 33 certification. 34 (2) Each quarterly allocation shall first be apportioned SB1285 Engrossed -6- LRB9207332SMtm 1 in the following manner: 51.65% for taxing districts in Cook 2 County and 48.35% for taxing districts in the remainder of 3 the State. 4 The Personal Property Replacement Ratio of each taxing 5 district outside Cook County shall be the ratio which the Tax 6 Base of that taxing district bears to the Downstate Tax Base. 7 The Tax Base of each taxing district outside of Cook County 8 is the personal property tax collections for that taxing 9 district for the 1977 tax year. The Downstate Tax Base is 10 the personal property tax collections for all taxing 11 districts in the State outside of Cook County for the 1977 12 tax year. The Department of Revenue shall have authority to 13 review for accuracy and completeness the personal property 14 tax collections for each taxing district outside Cook County 15 for the 1977 tax year. 16 The Personal Property Replacement Ratio of each Cook 17 County taxing district shall be the ratio which the Tax Base 18 of that taxing district bears to the Cook County Tax Base. 19 The Tax Base of each Cook County taxing district is the 20 personal property tax collections for that taxing district 21 for the 1976 tax year. The Cook County Tax Base is the 22 personal property tax collections for all taxing districts in 23 Cook County for the 1976 tax year. The Department of Revenue 24 shall have authority to review for accuracy and completeness 25 the personal property tax collections for each taxing 26 district within Cook County for the 1976 tax year. 27 For all purposes of this Section 12, amounts paid to a 28 taxing district for such tax years as may be applicable by a 29 foreign corporation under the provisions of Section 7-202 of 30 the Public Utilities Act, as amended, shall be deemed to be 31 personal property taxes collected by such taxing district for 32 such tax years as may be applicable. The Director shall 33 determine from the Illinois Commerce Commission, for any tax 34 year as may be applicable, the amounts so paid by any such SB1285 Engrossed -7- LRB9207332SMtm 1 foreign corporation to any and all taxing districts. The 2 Illinois Commerce Commission shall furnish such information 3 to the Director. For all purposes of this Section 12, the 4 Director shall deem such amounts to be collected personal 5 property taxes of each such taxing district for the 6 applicable tax year or years. 7 Taxing districts located both in Cook County and in one 8 or more other counties shall receive both a Cook County 9 allocation and a Downstate allocation determined in the same 10 way as all other taxing districts. 11 If any taxing district in existence on July 1, 1979 12 ceases to exist, or discontinues its operations, its Tax Base 13 shall thereafter be deemed to be zero. If the powers, duties 14 and obligations of the discontinued taxing district are 15 assumed by another taxing district, the Tax Base of the 16 discontinued taxing district shall be added to the Tax Base 17 of the taxing district assuming such powers, duties and 18 obligations. 19 If two or more taxing districts in existence on July 1, 20 1979, or a successor or successors thereto shall consolidate 21 into one taxing district, the Tax Base of such consolidated 22 taxing district shall be the sum of the Tax Bases of each of 23 the taxing districts which have consolidated. 24 If a single taxing district in existence on July 1, 1979, 25 or a successor or successors thereto shall be divided into 26 two or more separate taxing districts, the tax base of the 27 taxing district so divided shall be allocated to each of the 28 resulting taxing districts in proportion to the then current 29 equalized assessed value of each resulting taxing district. 30 If a portion of the territory of a taxing district is 31 disconnected and annexed to another taxing district of the 32 same type, the Tax Base of the taxing district from which 33 disconnection was made shall be reduced in proportion to the 34 then current equalized assessed value of the disconnected SB1285 Engrossed -8- LRB9207332SMtm 1 territory as compared with the then current equalized 2 assessed value within the entire territory of the taxing 3 district prior to disconnection, and the amount of such 4 reduction shall be added to the Tax Base of the taxing 5 district to which annexation is made. 6 If a community college district is created after July 1, 7 1979, beginning on the effective date of this amendatory Act 8 of 1995, its Tax Base shall be 3.5% of the sum of the 9 personal property tax collected for the 1977 tax year within 10 the territorial jurisdiction of the district. 11 The amounts allocated and paid to taxing districts 12 pursuant to the provisions of this amendatory Act of 1979 13 shall be deemed to be substitute revenues for the revenues 14 derived from taxes imposed on personal property pursuant to 15 the provisions of the "Revenue Act of 1939" or "An Act for 16 the assessment and taxation of private car line companies", 17 approved July 22, 1943, as amended, or Section 414 of the 18 Illinois Insurance Code, prior to the abolition of such taxes 19 and shall be used for the same purposes as the revenues 20 derived from ad valorem taxes on real estate. 21 Monies received by any taxing districts from the Personal 22 Property Tax Replacement Fund shall be first applied toward 23 payment of the proportionate amount of debt service which was 24 previously levied and collected from extensions against 25 personal property on bonds outstanding as of December 31, 26 1978 and next applied toward payment of the proportionate 27 share of the pension or retirement obligations of the taxing 28 district which were previously levied and collected from 29 extensions against personal property. For each such 30 outstanding bond issue, the County Clerk shall determine the 31 percentage of the debt service which was collected from 32 extensions against real estate in the taxing district for 33 1978 taxes payable in 1979, as related to the total amount of 34 such levies and collections from extensions against both real SB1285 Engrossed -9- LRB9207332SMtm 1 and personal property. For 1979 and subsequent years' taxes, 2 the County Clerk shall levy and extend taxes against the real 3 estate of each taxing district which will yield the said 4 percentage or percentages of the debt service on such 5 outstanding bonds. The balance of the amount necessary to 6 fully pay such debt service shall constitute a first and 7 prior lien upon the monies received by each such taxing 8 district through the Personal Property Tax Replacement Fund 9 and shall be first applied or set aside for such purpose. In 10 counties having fewer than 3,000,000 inhabitants, the 11 amendments to this paragraph as made by this amendatory Act 12 of 1980 shall be first applicable to 1980 taxes to be 13 collected in 1981. 14 (Source: P.A. 89-327, eff. 1-1-96; 90-154, eff. 1-1-98.) 15 Section 10. The Illinois Income Tax Act is amended by 16 changing Section 201 as follows: 17 (35 ILCS 5/201) (from Ch. 120, par. 2-201) 18 Sec. 201. Tax Imposed. 19 (a) In general. A tax measured by net income is hereby 20 imposed on every individual, corporation, trust and estate 21 for each taxable year ending after July 31, 1969 on the 22 privilege of earning or receiving income in or as a resident 23 of Illinoisthis State. Such tax shall be in addition to all 24 other occupation or privilege taxes imposed by this State or 25 by any municipal corporation or political subdivision 26 thereof. 27 (b) Rates. The tax imposed by subsection (a) of this 28 Section shall be determined as follows, except as adjusted by 29 subsection (d-1): 30 (1) In the case of an individual, trust or estate, 31 for taxable years ending prior to July 1, 1989, an amount 32 equal to 2 1/2% of the taxpayer's net income for the SB1285 Engrossed -10- LRB9207332SMtm 1 taxable year. 2 (2) In the case of an individual, trust or estate, 3 for taxable years beginning prior to July 1, 1989 and 4 ending after June 30, 1989, an amount equal to the sum of 5 (i) 2 1/2% of the taxpayer's net income for the period 6 prior to July 1, 1989, as calculated under Section 202.3, 7 and (ii) 3% of the taxpayer's net income for the period 8 after June 30, 1989, as calculated under Section 202.3. 9 (3) In the case of an individual, trust or estate, 10 for taxable years beginning after June 30, 1989, an 11 amount equal to 3% of the taxpayer's net income for the 12 taxable year. 13 (4) (Blank). 14 (5) (Blank). 15 (6) In the case of a corporation, for taxable years 16 ending prior to July 1, 1989, an amount equal to 4% of 17 the taxpayer's net income for the taxable year. 18 (7) In the case of a corporation, for taxable years 19 beginning prior to July 1, 1989 and ending after June 30, 20 1989, an amount equal to the sum of (i) 4% of the 21 taxpayer's net income for the period prior to July 1, 22 1989, as calculated under Section 202.3, and (ii) 4.8% of 23 the taxpayer's net income for the period after June 30, 24 1989, as calculated under Section 202.3. 25 (8) In the case of a corporation, for taxable years 26 beginning after June 30, 1989, an amount equal to 4.8% of 27 the taxpayer's net income for the taxable year. 28 (c) Beginning on July 1, 1979 and thereafter, in 29 addition to such income tax, there is also hereby imposed the 30 Personal Property Tax Replacement Income Tax measured by net 31 income on every corporation (including Subchapter S 32 corporations), partnership and trust, for each taxable year 33 ending after June 30, 1979. Such taxes are imposed on the 34 privilege of earning or receiving income in or as a resident SB1285 Engrossed -11- LRB9207332SMtm 1 of this State. The Personal Property Tax Replacement Income 2 Tax shall be in addition to the income tax imposed by 3 subsections (a) and (b) of this Section and in addition to 4 all other occupation or privilege taxes imposed by this State 5 or by any municipal corporation or political subdivision 6 thereof. 7 (d) Additional Personal Property Tax Replacement Income 8 Tax Rates. The personal property tax replacement income tax 9 imposed by this subsection and subsection (c) of this Section 10 in the case of a corporation, other than a Subchapter S 11 corporation and except as adjusted by subsection (d-1), shall 12 be an additional amount equal to 2.85% of such taxpayer's net 13 income for the taxable year, except that beginning on January 14 1, 1981, and thereafter, the rate of 2.85% specified in this 15 subsection shall be reduced to 2.5%, and in the case of a 16 partnership, trust or a Subchapter S corporation shall be an 17 additional amount equal to 1.5% of such taxpayer's net income 18 for the taxable year. 19 (d-1) Rate reduction for certain foreign insurers. In 20 the case of a foreign insurer, as defined by Section 35A-5 of 21 the Illinois Insurance Code, whose state or country of 22 domicile imposes on insurers domiciled in Illinois a 23 retaliatory tax (excluding any insurer whose premiums from 24 reinsurance assumed are 50% or more of its total insurance 25 premiums as determined under paragraph (2) of subsection (b) 26 of Section 304, except that for purposes of this 27 determination premiums from reinsurance do not include 28 premiums from inter-affiliate reinsurance arrangements), 29 beginning with taxable years ending on or after December 31, 30 1999, the sum of the rates of tax imposed by subsections (b) 31 and (d) shall be reduced (but not increased) to the rate at 32 which the total amount of tax imposed under this Act, net of 33 all credits allowed under this Act, shall equal (i) the total 34 amount of tax that would be imposed on the foreign insurer's SB1285 Engrossed -12- LRB9207332SMtm 1 net income allocable to Illinois for the taxable year by such 2 foreign insurer's state or country of domicile if that net 3 income were subject to all income taxes and taxes measured by 4 net income imposed by such foreign insurer's state or country 5 of domicile, net of all credits allowed or (ii) a rate of 6 zero if no such tax is imposed on such income by the foreign 7 insurer's state of domicile. For the purposes of this 8 subsection (d-1), an inter-affiliate includes a mutual 9 insurer under common management. 10 (1) For the purposes of subsection (d-1), in no 11 event shall the sum of the rates of tax imposed by 12 subsections (b) and (d) be reduced below the rate at 13 which the sum of: 14 (A) the total amount of tax imposed on such 15 foreign insurer under this Act for a taxable year, 16 net of all credits allowed under this Act, plus 17 (B) the privilege tax imposed by Section 409 18 of the Illinois Insurance Code, the fire insurance 19 company tax imposed by Section 12 of the Fire 20 Investigation Act, and the fire department taxes 21 imposed under Section 11-10-1 of the Illinois 22 Municipal Code, 23 equals 1.25% of the net taxable premiums written for the 24 taxable year, as described by subsection (1) of Section 25 409 of the Illinois Insurance Code. This paragraph will 26 in no event increase the rates imposed under subsections 27 (b) and (d). 28 (2) Any reduction in the rates of tax imposed by 29 this subsection shall be applied first against the rates 30 imposed by subsection (b) and only after the tax imposed 31 by subsection (a) net of all credits allowed under this 32 Section other than the credit allowed under subsection 33 (i) has been reduced to zero, against the rates imposed 34 by subsection (d). SB1285 Engrossed -13- LRB9207332SMtm 1 This subsection (d-1) is exempt from the provisions of 2 Section 250. 3 (e) Investment credit. A taxpayer shall be allowed a 4 credit against the Personal Property Tax Replacement Income 5 Tax for investment in qualified property. 6 (1) A taxpayer shall be allowed a credit equal to 7 .5% of the basis of qualified property placed in service 8 during the taxable year, provided such property is placed 9 in service on or after July 1, 1984. There shall be 10 allowed an additional credit equal to .5% of the basis of 11 qualified property placed in service during the taxable 12 year, provided such property is placed in service on or 13 after July 1, 1986, and the taxpayer's base employment 14 within Illinois has increased by 1% or more over the 15 preceding year as determined by the taxpayer's employment 16 records filed with the Illinois Department of Employment 17 Security. Taxpayers who are new to Illinois shall be 18 deemed to have met the 1% growth in base employment for 19 the first year in which they file employment records with 20 the Illinois Department of Employment Security. The 21 provisions added to this Section by Public Act 85-1200 22 (and restored by Public Act 87-895) shall be construed as 23 declaratory of existing law and not as a new enactment. 24 If, in any year, the increase in base employment within 25 Illinois over the preceding year is less than 1%, the 26 additional credit shall be limited to that percentage 27 times a fraction, the numerator of which is .5% and the 28 denominator of which is 1%, but shall not exceed .5%. 29 The investment credit shall not be allowed to the extent 30 that it would reduce a taxpayer's liability in any tax 31 year below zero, nor may any credit for qualified 32 property be allowed for any year other than the year in 33 which the property was placed in service in Illinois. For 34 tax years ending on or after December 31, 1987, and on or SB1285 Engrossed -14- LRB9207332SMtm 1 before December 31, 1988, the credit shall be allowed for 2 the tax year in which the property is placed in service, 3 or, if the amount of the credit exceeds the tax liability 4 for that year, whether it exceeds the original liability 5 or the liability as later amended, such excess may be 6 carried forward and applied to the tax liability of the 5 7 taxable years following the excess credit years if the 8 taxpayer (i) makes investments which cause the creation 9 of a minimum of 2,000 full-time equivalent jobs in 10 Illinois, (ii) is located in an enterprise zone 11 established pursuant to the Illinois Enterprise Zone Act 12 and (iii) is certified by the Department of Commerce and 13 Community Affairs as complying with the requirements 14 specified in clause (i) and (ii) by July 1, 1986. The 15 Department of Commerce and Community Affairs shall notify 16 the Department of Revenue of all such certifications 17 immediately. For tax years ending after December 31, 18 1988, the credit shall be allowed for the tax year in 19 which the property is placed in service, or, if the 20 amount of the credit exceeds the tax liability for that 21 year, whether it exceeds the original liability or the 22 liability as later amended, such excess may be carried 23 forward and applied to the tax liability of the 5 taxable 24 years following the excess credit years. The credit shall 25 be applied to the earliest year for which there is a 26 liability. If there is credit from more than one tax year 27 that is available to offset a liability, earlier credit 28 shall be applied first. 29 (2) The term "qualified property" means property 30 which: 31 (A) is tangible, whether new or used, 32 including buildings and structural components of 33 buildings and signs that are real property, but not 34 including land or improvements to real property that SB1285 Engrossed -15- LRB9207332SMtm 1 are not a structural component of a building such as 2 landscaping, sewer lines, local access roads, 3 fencing, parking lots, and other appurtenances; 4 (B) is depreciable pursuant to Section 167 of 5 the Internal Revenue Code, except that "3-year 6 property" as defined in Section 168(c)(2)(A) of that 7 Code is not eligible for the credit provided by this 8 subsection (e); 9 (C) is acquired by purchase as defined in 10 Section 179(d) of the Internal Revenue Code; 11 (D) is used in Illinois by a taxpayer who is 12 primarily engaged in manufacturing, or in mining 13 coal or fluorite, or in retailing; and 14 (E) has not previously been used in Illinois 15 in such a manner and by such a person as would 16 qualify for the credit provided by this subsection 17 (e) or subsection (f). 18 (3) For purposes of this subsection (e), 19 "manufacturing" means the material staging and production 20 of tangible personal property by procedures commonly 21 regarded as manufacturing, processing, fabrication, or 22 assembling which changes some existing material into new 23 shapes, new qualities, or new combinations. For purposes 24 of this subsection (e) the term "mining" shall have the 25 same meaning as the term "mining" in Section 613(c) of 26 the Internal Revenue Code. For purposes of this 27 subsection (e), the term "retailing" means the sale of 28 tangible personal property or services rendered in 29 conjunction with the sale of tangible consumer goods or 30 commodities. 31 (4) The basis of qualified property shall be the 32 basis used to compute the depreciation deduction for 33 federal income tax purposes. 34 (5) If the basis of the property for federal income SB1285 Engrossed -16- LRB9207332SMtm 1 tax depreciation purposes is increased after it has been 2 placed in service in Illinois by the taxpayer, the amount 3 of such increase shall be deemed property placed in 4 service on the date of such increase in basis. 5 (6) The term "placed in service" shall have the 6 same meaning as under Section 46 of the Internal Revenue 7 Code. 8 (7) If during any taxable year, any property ceases 9 to be qualified property in the hands of the taxpayer 10 within 48 months after being placed in service, or the 11 situs of any qualified property is moved outside Illinois 12 within 48 months after being placed in service, the 13 Personal Property Tax Replacement Income Tax for such 14 taxable year shall be increased. Such increase shall be 15 determined by (i) recomputing the investment credit which 16 would have been allowed for the year in which credit for 17 such property was originally allowed by eliminating such 18 property from such computation and, (ii) subtracting such 19 recomputed credit from the amount of credit previously 20 allowed. For the purposes of this paragraph (7), a 21 reduction of the basis of qualified property resulting 22 from a redetermination of the purchase price shall be 23 deemed a disposition of qualified property to the extent 24 of such reduction. 25 (8) Unless the investment credit is extended by 26 law, the basis of qualified property shall not include 27 costs incurred after December 31, 2003, except for costs 28 incurred pursuant to a binding contract entered into on 29 or before December 31, 2003. 30 (9) Each taxable year ending before December 31, 31 2000, a partnership may elect to pass through to its 32 partners the credits to which the partnership is entitled 33 under this subsection (e) for the taxable year. A 34 partner may use the credit allocated to him or her under SB1285 Engrossed -17- LRB9207332SMtm 1 this paragraph only against the tax imposed in 2 subsections (c) and (d) of this Section. If the 3 partnership makes that election, those credits shall be 4 allocated among the partners in the partnership in 5 accordance with the rules set forth in Section 704(b) of 6 the Internal Revenue Code, and the rules promulgated 7 under that Section, and the allocated amount of the 8 credits shall be allowed to the partners for that taxable 9 year. The partnership shall make this election on its 10 Personal Property Tax Replacement Income Tax return for 11 that taxable year. The election to pass through the 12 credits shall be irrevocable. 13 For taxable years ending on or after December 31, 14 2000, a partner that qualifies its partnership for a 15 subtraction under subparagraph (I) of paragraph (2) of 16 subsection (d) of Section 203 or a shareholder that 17 qualifies a Subchapter S corporation for a subtraction 18 under subparagraph (S) of paragraph (2) of subsection (b) 19 of Section 203 shall be allowed a credit under this 20 subsection (e) equal to its share of the credit earned 21 under this subsection (e) during the taxable year by the 22 partnership or Subchapter S corporation, determined in 23 accordance with the determination of income and 24 distributive share of income under Sections 702 and 704 25 and Subchapter S of the Internal Revenue Code. This 26 paragraph is exempt from the provisions of Section 250. 27 (f) Investment credit; Enterprise Zone. 28 (1) A taxpayer shall be allowed a credit against 29 the tax imposed by subsections (a) and (b) of this 30 Section for investment in qualified property which is 31 placed in service in an Enterprise Zone created pursuant 32 to the Illinois Enterprise Zone Act. For partners, 33 shareholders of Subchapter S corporations, and owners of 34 limited liability companies, if the liability company is SB1285 Engrossed -18- LRB9207332SMtm 1 treated as a partnership for purposes of federal and 2 State income taxation, there shall be allowed a credit 3 under this subsection (f) to be determined in accordance 4 with the determination of income and distributive share 5 of income under Sections 702 and 704 and Subchapter S of 6 the Internal Revenue Code. The credit shall be .5% of the 7 basis for such property. The credit shall be available 8 only in the taxable year in which the property is placed 9 in service in the Enterprise Zone and shall not be 10 allowed to the extent that it would reduce a taxpayer's 11 liability for the tax imposed by subsections (a) and (b) 12 of this Section to below zero. For tax years ending on or 13 after December 31, 1985, the credit shall be allowed for 14 the tax year in which the property is placed in service, 15 or, if the amount of the credit exceeds the tax liability 16 for that year, whether it exceeds the original liability 17 or the liability as later amended, such excess may be 18 carried forward and applied to the tax liability of the 5 19 taxable years following the excess credit year. The 20 credit shall be applied to the earliest year for which 21 there is a liability. If there is credit from more than 22 one tax year that is available to offset a liability, the 23 credit accruing first in time shall be applied first. 24 (2) The term qualified property means property 25 which: 26 (A) is tangible, whether new or used, 27 including buildings and structural components of 28 buildings; 29 (B) is depreciable pursuant to Section 167 of 30 the Internal Revenue Code, except that "3-year 31 property" as defined in Section 168(c)(2)(A) of that 32 Code is not eligible for the credit provided by this 33 subsection (f); 34 (C) is acquired by purchase as defined in SB1285 Engrossed -19- LRB9207332SMtm 1 Section 179(d) of the Internal Revenue Code; 2 (D) is used in the Enterprise Zone by the 3 taxpayer; and 4 (E) has not been previously used in Illinois 5 in such a manner and by such a person as would 6 qualify for the credit provided by this subsection 7 (f) or subsection (e). 8 (3) The basis of qualified property shall be the 9 basis used to compute the depreciation deduction for 10 federal income tax purposes. 11 (4) If the basis of the property for federal income 12 tax depreciation purposes is increased after it has been 13 placed in service in the Enterprise Zone by the taxpayer, 14 the amount of such increase shall be deemed property 15 placed in service on the date of such increase in basis. 16 (5) The term "placed in service" shall have the 17 same meaning as under Section 46 of the Internal Revenue 18 Code. 19 (6) If during any taxable year, any property ceases 20 to be qualified property in the hands of the taxpayer 21 within 48 months after being placed in service, or the 22 situs of any qualified property is moved outside the 23 Enterprise Zone within 48 months after being placed in 24 service, the tax imposed under subsections (a) and (b) of 25 this Section for such taxable year shall be increased. 26 Such increase shall be determined by (i) recomputing the 27 investment credit which would have been allowed for the 28 year in which credit for such property was originally 29 allowed by eliminating such property from such 30 computation, and (ii) subtracting such recomputed credit 31 from the amount of credit previously allowed. For the 32 purposes of this paragraph (6), a reduction of the basis 33 of qualified property resulting from a redetermination of 34 the purchase price shall be deemed a disposition of SB1285 Engrossed -20- LRB9207332SMtm 1 qualified property to the extent of such reduction. 2 (g) Jobs Tax Credit; Enterprise Zone and Foreign Trade 3 Zone or Sub-Zone. 4 (1) A taxpayer conducting a trade or business in an 5 enterprise zone or a High Impact Business designated by 6 the Department of Commerce and Community Affairs 7 conducting a trade or business in a federally designated 8 Foreign Trade Zone or Sub-Zone shall be allowed a credit 9 against the tax imposed by subsections (a) and (b) of 10 this Section in the amount of $500 per eligible employee 11 hired to work in the zone during the taxable year. 12 (2) To qualify for the credit: 13 (A) the taxpayer must hire 5 or more eligible 14 employees to work in an enterprise zone or federally 15 designated Foreign Trade Zone or Sub-Zone during the 16 taxable year; 17 (B) the taxpayer's total employment within the 18 enterprise zone or federally designated Foreign 19 Trade Zone or Sub-Zone must increase by 5 or more 20 full-time employees beyond the total employed in 21 that zone at the end of the previous tax year for 22 which a jobs tax credit under this Section was 23 taken, or beyond the total employed by the taxpayer 24 as of December 31, 1985, whichever is later; and 25 (C) the eligible employees must be employed 26 180 consecutive days in order to be deemed hired for 27 purposes of this subsection. 28 (3) An "eligible employee" means an employee who 29 is: 30 (A) Certified by the Department of Commerce 31 and Community Affairs as "eligible for services" 32 pursuant to regulations promulgated in accordance 33 with Title II of the Job Training Partnership Act, 34 Training Services for the Disadvantaged or Title III SB1285 Engrossed -21- LRB9207332SMtm 1 of the Job Training Partnership Act, Employment and 2 Training Assistance for Dislocated Workers Program. 3 (B) Hired after the enterprise zone or 4 federally designated Foreign Trade Zone or Sub-Zone 5 was designated or the trade or business was located 6 in that zone, whichever is later. 7 (C) Employed in the enterprise zone or Foreign 8 Trade Zone or Sub-Zone. An employee is employed in 9 an enterprise zone or federally designated Foreign 10 Trade Zone or Sub-Zone if his services are rendered 11 there or it is the base of operations for the 12 services performed. 13 (D) A full-time employee working 30 or more 14 hours per week. 15 (4) For tax years ending on or after December 31, 16 1985 and prior to December 31, 1988, the credit shall be 17 allowed for the tax year in which the eligible employees 18 are hired. For tax years ending on or after December 31, 19 1988, the credit shall be allowed for the tax year 20 immediately following the tax year in which the eligible 21 employees are hired. If the amount of the credit exceeds 22 the tax liability for that year, whether it exceeds the 23 original liability or the liability as later amended, 24 such excess may be carried forward and applied to the tax 25 liability of the 5 taxable years following the excess 26 credit year. The credit shall be applied to the earliest 27 year for which there is a liability. If there is credit 28 from more than one tax year that is available to offset a 29 liability, earlier credit shall be applied first. 30 (5) The Department of Revenue shall promulgate such 31 rules and regulations as may be deemed necessary to carry 32 out the purposes of this subsection (g). 33 (6) The credit shall be available for eligible 34 employees hired on or after January 1, 1986. SB1285 Engrossed -22- LRB9207332SMtm 1 (h) Investment credit; High Impact Business. 2 (1) Subject to subsection (b) of Section 5.5 of the 3 Illinois Enterprise Zone Act, a taxpayer shall be allowed 4 a credit against the tax imposed by subsections (a) and 5 (b) of this Section for investment in qualified property 6 which is placed in service by a Department of Commerce 7 and Community Affairs designated High Impact Business. 8 The credit shall be .5% of the basis for such property. 9 The credit shall not be available until the minimum 10 investments in qualified property set forth in Section 11 5.5 of the Illinois Enterprise Zone Act have been 12 satisfied and shall not be allowed to the extent that it 13 would reduce a taxpayer's liability for the tax imposed 14 by subsections (a) and (b) of this Section to below zero. 15 The credit applicable to such minimum investments shall 16 be taken in the taxable year in which such minimum 17 investments have been completed. The credit for 18 additional investments beyond the minimum investment by a 19 designated high impact business shall be available only 20 in the taxable year in which the property is placed in 21 service and shall not be allowed to the extent that it 22 would reduce a taxpayer's liability for the tax imposed 23 by subsections (a) and (b) of this Section to below zero. 24 For tax years ending on or after December 31, 1987, the 25 credit shall be allowed for the tax year in which the 26 property is placed in service, or, if the amount of the 27 credit exceeds the tax liability for that year, whether 28 it exceeds the original liability or the liability as 29 later amended, such excess may be carried forward and 30 applied to the tax liability of the 5 taxable years 31 following the excess credit year. The credit shall be 32 applied to the earliest year for which there is a 33 liability. If there is credit from more than one tax 34 year that is available to offset a liability, the credit SB1285 Engrossed -23- LRB9207332SMtm 1 accruing first in time shall be applied first. 2 Changes made in this subdivision (h)(1) by Public 3 Act 88-670 restore changes made by Public Act 85-1182 and 4 reflect existing law. 5 (2) The term qualified property means property 6 which: 7 (A) is tangible, whether new or used, 8 including buildings and structural components of 9 buildings; 10 (B) is depreciable pursuant to Section 167 of 11 the Internal Revenue Code, except that "3-year 12 property" as defined in Section 168(c)(2)(A) of that 13 Code is not eligible for the credit provided by this 14 subsection (h); 15 (C) is acquired by purchase as defined in 16 Section 179(d) of the Internal Revenue Code; and 17 (D) is not eligible for the Enterprise Zone 18 Investment Credit provided by subsection (f) of this 19 Section. 20 (3) The basis of qualified property shall be the 21 basis used to compute the depreciation deduction for 22 federal income tax purposes. 23 (4) If the basis of the property for federal income 24 tax depreciation purposes is increased after it has been 25 placed in service in a federally designated Foreign Trade 26 Zone or Sub-Zone located in Illinois by the taxpayer, the 27 amount of such increase shall be deemed property placed 28 in service on the date of such increase in basis. 29 (5) The term "placed in service" shall have the 30 same meaning as under Section 46 of the Internal Revenue 31 Code. 32 (6) If during any taxable year ending on or before 33 December 31, 1996, any property ceases to be qualified 34 property in the hands of the taxpayer within 48 months SB1285 Engrossed -24- LRB9207332SMtm 1 after being placed in service, or the situs of any 2 qualified property is moved outside Illinois within 48 3 months after being placed in service, the tax imposed 4 under subsections (a) and (b) of this Section for such 5 taxable year shall be increased. Such increase shall be 6 determined by (i) recomputing the investment credit which 7 would have been allowed for the year in which credit for 8 such property was originally allowed by eliminating such 9 property from such computation, and (ii) subtracting such 10 recomputed credit from the amount of credit previously 11 allowed. For the purposes of this paragraph (6), a 12 reduction of the basis of qualified property resulting 13 from a redetermination of the purchase price shall be 14 deemed a disposition of qualified property to the extent 15 of such reduction. 16 (7) Beginning with tax years ending after December 17 31, 1996, if a taxpayer qualifies for the credit under 18 this subsection (h) and thereby is granted a tax 19 abatement and the taxpayer relocates its entire facility 20 in violation of the explicit terms and length of the 21 contract under Section 18-183 of the Property Tax Code, 22 the tax imposed under subsections (a) and (b) of this 23 Section shall be increased for the taxable year in which 24 the taxpayer relocated its facility by an amount equal to 25 the amount of credit received by the taxpayer under this 26 subsection (h). 27 (i) A credit shall be allowed against the tax imposed by 28 subsections (a) and (b) of this Section for the tax imposed 29 by subsections (c) and (d) of this Section. This credit 30 shall be computed by multiplying the tax imposed by 31 subsections (c) and (d) of this Section by a fraction, the 32 numerator of which is base income allocable to Illinois and 33 the denominator of which is Illinois base income, and further 34 multiplying the product by the tax rate imposed by SB1285 Engrossed -25- LRB9207332SMtm 1 subsections (a) and (b) of this Section. 2 Any credit earned on or after December 31, 1986 under 3 this subsection which is unused in the year the credit is 4 computed because it exceeds the tax liability imposed by 5 subsections (a) and (b) for that year (whether it exceeds the 6 original liability or the liability as later amended) may be 7 carried forward and applied to the tax liability imposed by 8 subsections (a) and (b) of the 5 taxable years following the 9 excess credit year. This credit shall be applied first to 10 the earliest year for which there is a liability. If there 11 is a credit under this subsection from more than one tax year 12 that is available to offset a liability the earliest credit 13 arising under this subsection shall be applied first. 14 If, during any taxable year ending on or after December 15 31, 1986, the tax imposed by subsections (c) and (d) of this 16 Section for which a taxpayer has claimed a credit under this 17 subsection (i) is reduced, the amount of credit for such tax 18 shall also be reduced. Such reduction shall be determined by 19 recomputing the credit to take into account the reduced tax 20 imposed by subsection (c) and (d). If any portion of the 21 reduced amount of credit has been carried to a different 22 taxable year, an amended return shall be filed for such 23 taxable year to reduce the amount of credit claimed. 24 (j) Training expense credit. Beginning with tax years 25 ending on or after December 31, 1986, a taxpayer shall be 26 allowed a credit against the tax imposed by subsection (a) 27 and (b) under this Section for all amounts paid or accrued, 28 on behalf of all persons employed by the taxpayer in Illinois 29 or Illinois residents employed outside of Illinois by a 30 taxpayer, for educational or vocational training in 31 semi-technical or technical fields or semi-skilled or skilled 32 fields, which were deducted from gross income in the 33 computation of taxable income. The credit against the tax 34 imposed by subsections (a) and (b) shall be 1.6% of such SB1285 Engrossed -26- LRB9207332SMtm 1 training expenses. For partners, shareholders of subchapter 2 S corporations, and owners of limited liability companies, if 3 the liability company is treated as a partnership for 4 purposes of federal and State income taxation, there shall be 5 allowed a credit under this subsection (j) to be determined 6 in accordance with the determination of income and 7 distributive share of income under Sections 702 and 704 and 8 subchapter S of the Internal Revenue Code. 9 Any credit allowed under this subsection which is unused 10 in the year the credit is earned may be carried forward to 11 each of the 5 taxable years following the year for which the 12 credit is first computed until it is used. This credit shall 13 be applied first to the earliest year for which there is a 14 liability. If there is a credit under this subsection from 15 more than one tax year that is available to offset a 16 liability the earliest credit arising under this subsection 17 shall be applied first. 18 (k) Research and development credit. 19 Beginning with tax years ending after July 1, 1990, a 20 taxpayer shall be allowed a credit against the tax imposed by 21 subsections (a) and (b) of this Section for increasing 22 research activities in this State. The credit allowed 23 against the tax imposed by subsections (a) and (b) shall be 24 equal to 6 1/2% of the qualifying expenditures for increasing 25 research activities in this State. For partners, shareholders 26 of subchapter S corporations, and owners of limited liability 27 companies, if the liability company is treated as a 28 partnership for purposes of federal and State income 29 taxation, there shall be allowed a credit under this 30 subsection to be determined in accordance with the 31 determination of income and distributive share of income 32 under Sections 702 and 704 and subchapter S of the Internal 33 Revenue Code. 34 For purposes of this subsection, "qualifying SB1285 Engrossed -27- LRB9207332SMtm 1 expenditures" means the qualifying expenditures as defined 2 for the federal credit for increasing research activities 3 which would be allowable under Section 41 of the Internal 4 Revenue Code and which are conducted in this State, 5 "qualifying expenditures for increasing research activities 6 in this State" means the excess of qualifying expenditures 7 for the taxable year in which incurred over qualifying 8 expenditures for the base period, "qualifying expenditures 9 for the base period" means the average of the qualifying 10 expenditures for each year in the base period, and "base 11 period" means the 3 taxable years immediately preceding the 12 taxable year for which the determination is being made. 13 Any credit in excess of the tax liability for the taxable 14 year may be carried forward. A taxpayer may elect to have the 15 unused credit shown on its final completed return carried 16 over as a credit against the tax liability for the following 17 5 taxable years or until it has been fully used, whichever 18 occurs first. 19 If an unused credit is carried forward to a given year 20 from 2 or more earlier years, that credit arising in the 21 earliest year will be applied first against the tax liability 22 for the given year. If a tax liability for the given year 23 still remains, the credit from the next earliest year will 24 then be applied, and so on, until all credits have been used 25 or no tax liability for the given year remains. Any 26 remaining unused credit or credits then will be carried 27 forward to the next following year in which a tax liability 28 is incurred, except that no credit can be carried forward to 29 a year which is more than 5 years after the year in which the 30 expense for which the credit is given was incurred. 31 Unless extended by law, the credit shall not include 32 costs incurred after December 31, 2004, except for costs 33 incurred pursuant to a binding contract entered into on or 34 before December 31, 2004. SB1285 Engrossed -28- LRB9207332SMtm 1 No inference shall be drawn from this amendatory Act of 2 the 91st General Assembly in construing this Section for 3 taxable years beginning before January 1, 1999. 4 (l) Environmental Remediation Tax Credit. 5 (i) For tax years ending after December 31, 1997 6 and on or before December 31, 2001, a taxpayer shall be 7 allowed a credit against the tax imposed by subsections 8 (a) and (b) of this Section for certain amounts paid for 9 unreimbursed eligible remediation costs, as specified in 10 this subsection. For purposes of this Section, 11 "unreimbursed eligible remediation costs" means costs 12 approved by the Illinois Environmental Protection Agency 13 ("Agency") under Section 58.14 of the Environmental 14 Protection Act that were paid in performing environmental 15 remediation at a site for which a No Further Remediation 16 Letter was issued by the Agency and recorded under 17 Section 58.10 of the Environmental Protection Act. The 18 credit must be claimed for the taxable year in which 19 Agency approval of the eligible remediation costs is 20 granted. The credit is not available to any taxpayer if 21 the taxpayer or any related party caused or contributed 22 to, in any material respect, a release of regulated 23 substances on, in, or under the site that was identified 24 and addressed by the remedial action pursuant to the Site 25 Remediation Program of the Environmental Protection Act. 26 After the Pollution Control Board rules are adopted 27 pursuant to the Illinois Administrative Procedure Act for 28 the administration and enforcement of Section 58.9 of the 29 Environmental Protection Act, determinations as to credit 30 availability for purposes of this Section shall be made 31 consistent with those rules. For purposes of this 32 Section, "taxpayer" includes a person whose tax 33 attributes the taxpayer has succeeded to under Section 34 381 of the Internal Revenue Code and "related party" SB1285 Engrossed -29- LRB9207332SMtm 1 includes the persons disallowed a deduction for losses by 2 paragraphs (b), (c), and (f)(1) of Section 267 of the 3 Internal Revenue Code by virtue of being a related 4 taxpayer, as well as any of its partners. The credit 5 allowed against the tax imposed by subsections (a) and 6 (b) shall be equal to 25% of the unreimbursed eligible 7 remediation costs in excess of $100,000 per site, except 8 that the $100,000 threshold shall not apply to any site 9 contained in an enterprise zone as determined by the 10 Department of Commerce and Community Affairs. The total 11 credit allowed shall not exceed $40,000 per year with a 12 maximum total of $150,000 per site. For partners and 13 shareholders of subchapter S corporations, there shall be 14 allowed a credit under this subsection to be determined 15 in accordance with the determination of income and 16 distributive share of income under Sections 702 and 704 17 andofsubchapter S of the Internal Revenue Code. 18 (ii) A credit allowed under this subsection that is 19 unused in the year the credit is earned may be carried 20 forward to each of the 5 taxable years following the year 21 for which the credit is first earned until it is used. 22 The term "unused credit" does not include any amounts of 23 unreimbursed eligible remediation costs in excess of the 24 maximum credit per site authorized under paragraph (i). 25 This credit shall be applied first to the earliest year 26 for which there is a liability. If there is a credit 27 under this subsection from more than one tax year that is 28 available to offset a liability, the earliest credit 29 arising under this subsection shall be applied first. A 30 credit allowed under this subsection may be sold to a 31 buyer as part of a sale of all or part of the remediation 32 site for which the credit was granted. The purchaser of 33 a remediation site and the tax credit shall succeed to 34 the unused credit and remaining carry-forward period of SB1285 Engrossed -30- LRB9207332SMtm 1 the seller. To perfect the transfer, the assignor shall 2 record the transfer in the chain of title for the site 3 and provide written notice to the Director of the 4 Illinois Department of Revenue of the assignor's intent 5 to sell the remediation site and the amount of the tax 6 credit to be transferred as a portion of the sale. In no 7 event may a credit be transferred to any taxpayer if the 8 taxpayer or a related party would not be eligible under 9 the provisions of subsection (i). 10 (iii) For purposes of this Section, the term "site" 11 shall have the same meaning as under Section 58.2 of the 12 Environmental Protection Act. 13 (m) Education expense credit. 14 Beginning with tax years ending after December 31, 1999, 15 a taxpayer who is the custodian of one or more qualifying 16 pupils shall be allowed a credit against the tax imposed by 17 subsections (a) and (b) of this Section for qualified 18 education expenses incurred on behalf of the qualifying 19 pupils. The credit shall be equal to 25% of qualified 20 education expenses, but in no event may the total credit 21 under this Section claimed by a family that is the custodian 22 of qualifying pupils exceed $500. In no event shall a credit 23 under this subsection reduce the taxpayer's liability under 24 this Act to less than zero. This subsection is exempt from 25 the provisions of Section 250 of this Act. 26 For purposes of this subsection; 27 "Qualifying pupils" means individuals who (i) are 28 residents of the State of Illinois, (ii) are under the age of 29 21 at the close of the school year for which a credit is 30 sought, and (iii) during the school year for which a credit 31 is sought were full-time pupils enrolled in a kindergarten 32 through twelfth grade education program at any school, as 33 defined in this subsection. 34 "Qualified education expense" means the amount incurred SB1285 Engrossed -31- LRB9207332SMtm 1 on behalf of a qualifying pupil in excess of $250 for 2 tuition, book fees, and lab fees at the school in which the 3 pupil is enrolled during the regular school year. 4 "School" means any public or nonpublic elementary or 5 secondary school in Illinois that is in compliance with Title 6 VI of the Civil Rights Act of 1964 and attendance at which 7 satisfies the requirements of Section 26-1 of the School 8 Code, except that nothing shall be construed to require a 9 child to attend any particular public or nonpublic school to 10 qualify for the credit under this Section. 11 "Custodian" means, with respect to qualifying pupils, an 12 Illinois resident who is a parent, the parents, a legal 13 guardian, or the legal guardians of the qualifying pupils. 14 (Source: P.A. 90-123, eff. 7-21-97; 90-458, eff. 8-17-97; 15 90-605, eff. 6-30-98; 90-655, eff. 7-30-98; 90-717, eff. 16 8-7-98; 90-792, eff. 1-1-99; 91-9, eff. 1-1-00; 91-357, eff. 17 7-29-99; 91-643, eff. 8-20-99; 91-644, eff. 8-20-99; 91-860, 18 eff. 6-22-00; 91-913, eff. 1-1-01; revised 10-24-00.) 19 Section 15. The Property Tax Code is amended by changing 20 Section 24-5 as follows: 21 (35 ILCS 200/24-5) 22 Sec. 24-5. Tax on personal property. Ad valorem personal 23 property taxes shall not be levied on any personal property 24 having tax situs in Illinoisthis State. However, this 25 Section shall not prohibit the collection after January 1, 26 1979 of any taxes levied under this Code prior to January 1, 27 1979, on personal property subject to assessment and taxation 28 under this Code prior to January 1, 1979. No property 29 lawfully assessed and taxed as personal property prior to 30 January 1, 1979, or property of like kind acquired or placed 31 in use after January 1, 1979, shall be classified as real 32 property subject to assessment and taxation. No property SB1285 Engrossed -32- LRB9207332SMtm 1 lawfully assessed and taxed as real property prior to January 2 1, 1979, or property of like kind acquired or placed in use 3 after January 1, 1979, shall be classified as personal 4 property. 5 (Source: P.A. 82-935; 88-455.) 6 Section 20. The Gas Revenue Tax Act is amended by 7 changing Section 2a.1 as follows: 8 (35 ILCS 615/2a.1) (from Ch. 120, par. 467.17a.1) 9 Sec. 2a.1. Imposition of tax on invested capital. In 10 addition to the taxes imposed by the Illinois Income Tax Act 11 and Section 2 of this Act, there is hereby imposed upon 12 persons engaged in the business of distributing, supplying, 13 furnishing or selling gas and subject to the tax imposed by 14 this Act (other than a school district or unit of local 15 government as defined in Section 1 of Article VII of the 16 Illinois Constitution of 1970), an additional tax in an 17 amount equal to .8% of such persons' invested capital for the 18 taxable period. If such persons are not liable for such 19 additional tax for the entire taxable period, such additional 20 tax shall be computed on the portion of the taxable period 21 during which such persons were liable for such additional 22 tax. The invested capital tax imposed by this Section shall 23 not be imposed upon persons who are not regulated by the 24 Illinois Commerce Commission. Provided, in the case of any 25 person whowhichis subject to the invested capital tax 26 imposed by this Section and whowhichis also subject to the 27 tax on the distribution of electricity imposed by Section 28 2a.1 of the Public Utilities Revenue Act, for taxable periods 29 beginning on or after January 1, 1998, the invested capital 30 tax imposed by this Section shall be the lesser of (i) an 31 amount equal to 0.8% of such person's invested capital for 32 the taxable period multiplied by a fraction the numerator of SB1285 Engrossed -33- LRB9207332SMtm 1 which is the average of the beginning and ending balances of 2 such person's gross gas utility plant in service and the 3 denominator of which is the average of the beginning and 4 ending balances of such person's gross electric and gas 5 utility plant in service, as set forth in such person's 6 annual report to the Illinois Commerce Commission for the 7 taxable period, or (ii) an amount equal to 0.8% of the 8 person's invested capital for the taxable period ended 9 December 31, 1996 multiplied by a fraction the numerator of 10 which is the average of the beginning and ending balances of 11 the person's gross gas utility plant in service and the 12 denominator of which is the average of the beginning and 13 ending balances of the person's gross electric and gas 14 utility plant in service as set forth in the person's annual 15 report to the Illinois Commerce Commission for the taxable 16 period ended December 31, 1996 modified by an adjustment 17 factor. The adjustment factor is a ratio the numerator of 18 which is the average of the beginning and ending balances of 19 the person's gross gas plant in service for the taxable 20 period and the denominator of which is the average of the 21 beginning and ending balances of the person's gross gas plant 22 in service for the taxable period ended December 31, 1996, as 23 set forth in the person's annual reports to the Illinois 24 Commerce Commission for such taxable periods. 25 (Source: P.A. 90-561, eff. 1-1-98; 91-596, eff. 1-1-00.). 26 Section 25. The Water Company Invested Capital Tax Act 27 is amended by changing Section 3 as follows: 28 (35 ILCS 625/3) (from Ch. 120, par. 1413) 29 Sec. 3. Imposition of tax on invested capital. 30 Beginning on July 1, 1979, in addition to the taxes imposed 31 by the Illinois Income Tax Act, there is hereby imposed upon 32 the water companies subject to the taxes imposed by the SB1285 Engrossed -34- LRB9207332SMtm 1 Illinois Income Tax Act, a tax in an amount equal to .8% of 2 thesuchwater companies' invested capital for the taxable 3 period. If any such water company is not liable for the 4 invested capital tax for the entire taxable period, thesuch5 invested capital tax shall be computed on the portion of the 6 taxable period during which thesuchwater company is liable 7 for thesuchinvested capital tax. The invested capital tax 8 imposed by this Section shall not be imposed upon persons who 9 are not regulated by the Illinois Commerce Commission and who 10 are subject to the tax imposed by this Act only with respect 11 to transactions between the seller and tenants of buildings 12 owned or operated by the seller. 13 (Source: P.A. 87-205.)