SB3527 100TH GENERAL ASSEMBLY

LRB100 20468 HLH 35824 b

100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB3527

Introduced 2/16/2018, by Sen. Steve Stadelman

SYNOPSIS AS INTRODUCED:

35 ILCS 5/221
215 ILCS 5/409.1 new

Amends the Illinois Income Tax Act. Provides that taxpayers of a qualified historic structure located in a River Edge Redevelopment Zone shall be allowed a tax credit against certain provisions of the Illinois Insurance Code during a 48-month period. Provides that a taxpayer is required to provide a third-party cost certification regarding costs attributable to the rehabilitation of a historic building when the costs exceed $200,000. Defines "phased rehabilitation" and "placed in service". Amends the Illinois Insurance Code. Makes conforming changes. Effective immediately.

A BILL FOR

AN ACT concerning revenue.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Income Tax Act is amended by changing Section 221 as follows:

(35 ILCS 5/221)

Sec. 221. Rehabilitation costs; qualified historic properties; River Edge Redevelopment Zone.

(a) For taxable years beginning on or after January 1, 2012 and ending prior to January 1, 2022, there shall be allowed a tax credit against (i) the tax imposed by subsections (a) and (b) of Section 201 and (ii) taxes imposed under Section 409, 413, 444, and 444.1 of the Illinois Insurance Code in an amount equal to 25% of qualified expenditures incurred by a qualified taxpayer during a 48-month period selected by the taxpayer the taxable year in the restoration and preservation of a qualified historic structure located in a River Edge Redevelopment Zone pursuant to a qualified rehabilitation plan, provided that the total amount of such expenditures (i) must equal $5,000 or more and (ii) must exceed 50% of the purchase price of the property. The tax credit shall be allowed in the tax year the qualified historic structure is placed in service; except in the case of a phased rehabilitation, where the tax credit shall be allowed in each tax year that a phase is placed in service.

(b) To obtain a tax credit pursuant to this Section, the taxpayer must apply with the Department of Commerce and Economic Opportunity. The Department of Commerce and Economic Opportunity shall require the taxpayer to provide a third-party cost certification by a certified public accountant of the actual costs attributed to the rehabilitation of the historic building when qualified rehabilitation expenditures exceed $200,000. The Department of Commerce and Economic Opportunity, in consultation with the Historic Preservation Agency, shall determine the amount of eligible rehabilitation costs and expenses. The Historic Preservation Agency shall determine whether the rehabilitation is consistent with the standards of the Secretary of the United States Department of the Interior for rehabilitation. Upon completion and review of the project, the Department of Commerce and Economic Opportunity shall issue a certificate in the amount of the eligible credits. At the time the certificate is issued, an issuance fee up to the maximum amount of 2% of the amount of the credits issued by the certificate may be collected from the applicant to administer the provisions of this Section. If collected, this issuance fee shall be deposited into the Historic Property Administrative Fund, a special fund created in the State treasury. Subject to appropriation, moneys in the Historic Property Administrative Fund shall be evenly divided between the Department of Commerce and Economic Opportunity and the Historic Preservation Agency to reimburse the Department of Commerce and Economic Opportunity and the Historic Preservation Agency for the costs associated with administering this Section. The taxpayer must attach the certificate to the tax return on which the credits are to be claimed. The Department of Commerce and Economic Opportunity may adopt rules to implement this Section.

(c) The tax credit under this Section may not reduce the taxpayer's liability to less than zero. If the amount of the credit exceeds the tax liability for the year, the excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year retroactive for any tax credit generated for taxable years beginning on or after January 1, 2012.

(d) As used in this Section, the following terms have the following meanings.

"Phased rehabilitation" means a phased rehabilitation as defined in item (ii) of subparagraph (b) of paragraph (1) of subsection (c) of Section 47 of the federal Internal Revenue Code.

"Placed in service" means the date the structure was placed in service for purposes of paragraph (1) of subsection (a) of Section 47 of the federal Internal Revenue Code.

"Qualified expenditure" means all the costs and expenses defined as qualified rehabilitation expenditures under Section 47 of the federal Internal Revenue Code that were incurred in connection with a qualified historic structure.

"Qualified historic structure" means a certified historic structure as defined under Section 47(c)(3) of the federal Internal Revenue Code.

"Qualified rehabilitation plan" means a project that is approved by the Historic Preservation Agency as being consistent with the standards in effect on the effective date of this amendatory Act of the 97th General Assembly for rehabilitation as adopted by the federal Secretary of the Interior.

"Qualified taxpayer" means the owner of the qualified historic structure or any other person who qualifies for the federal rehabilitation credit allowed by Section 47 of the federal Internal Revenue Code with respect to that qualified historic structure. Partners, shareholders of subchapter S corporations, and owners of limited liability companies (if the limited liability company is treated as a partnership for purposes of federal and State income taxation) are entitled to a credit under this Section to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 703 and subchapter S of the Internal Revenue Code, provided that credits granted to a partnership, a limited liability company taxed as a partnership, or other multiple owners of property shall be passed through to the partners, members, or owners respectively on a pro rata basis or pursuant to an executed agreement among the partners, members, or owners documenting any alternate distribution method.

(Source: P.A. 99-914, eff. 12-20-16; 100-236, eff. 8-18-17.)

Section 10. The Illinois Insurance Code is amended by adding Section 409.1 as follows:

(215 ILCS 5/409.1 new)

Sec. 409.1. River Edge Redevelopment Zone Rehabilitation credit. For taxes payable after January 1, 2018, credit may be granted against the taxes imposed under Sections 409, 413, 444, and 444.1 of this Act as provided in Section 221 of the Illinois Income Tax Act.

Section 99. Effective date. This Act takes effect upon becoming law.