SB 652 — NEW MARKETS-REQUIREMENTS

SB0652 EngrossedEnrolled LRB100 06360 HLH 16399 b AN ACT concerning revenue.

"Long-term debt security" means any debt instrument issued by a qualified community development entity, at par value or a premium, with an original maturity date of at least 7 years from the date of its issuance, with no acceleration of SB0652 EngrossedEnrolled - 2 - LRB100 06360 HLH 16399 b repayment, amortization, or prepayment features prior to its original maturity date.

This exception does not apply to a business that is controlled by or under common control with another business if the second business (i) does not derive or project to derive 15% or more of its annual revenue from the rental or sale of real estate and (ii) is the primary tenant of the real estate leased from SB0652 EngrossedEnrolled - 3 - LRB100 06360 HLH 16399 b the initial business.

(2) with respect to qualified equity investments made before January 1, 2017, has at least 85% of its cash purchase price used by the issuer to make qualified low-income community investments in the State of Illinois, SB0652 EngrossedEnrolled - 4 - LRB100 06360 HLH 16399 b and, with respect to qualified equity investments made on or after January 1, 2017, has 100% of the cash purchase price used by the issuer to make qualified low-income community investments in the State of Illinois;

"Tax credit" means a credit against any income, franchise, SB0652 EngrossedEnrolled - 5 - LRB100 06360 HLH 16399 b or insurance premium taxes, including insurance retaliatory taxes, otherwise due under Illinois law.

The Department shall limit the monetary amount of qualified equity investments permitted under this Act to a level necessary to limit tax credit use at no more than $50,000,000 $20,000,000 of tax credits in any fiscal year.

(1) The name, address, tax identification number of the SB0652 EngrossedEnrolled - 6 - LRB100 06360 HLH 16399 b entity, and evidence of the entity's certification as a qualified community development entity.

(8) With respect to qualified equity investments made on or after January 1, 2017, the amount of qualified equity investment authority the applicant agrees to designate as a federal qualified equity investment under Section 45D of the Internal Revenue Code, including a copy of the screen shot from the Community Development Financial Institutions SB0652 EngrossedEnrolled - 7 - LRB100 06360 HLH 16399 b Fund's Allocation Tracking System of the applicant's remaining federal qualified equity investment authority.

The notice shall include the names of those taxpayers who are eligible to utilize the credits and their SB0652 EngrossedEnrolled - 8 - LRB100 06360 HLH 16399 b respective credit amounts.

(d-5) With respect to applications received on or after January 1, 2017, the Department shall certify applications by applicants that agree to designate qualified equity investments as federal qualified equity investments in accordance with item (8) of subsection (a) of this Section in proportionate percentages based upon the ratio of the amount of qualified equity investments requested in an application to be designated as federal qualified equity investments to the total amount of qualified equity investments to be designated as SB0652 EngrossedEnrolled - 9 - LRB100 06360 HLH 16399 b federal qualified equity investments requested in all applications received on the same day.

(f) Within 30 days after receiving notice of certification, the qualified community development entity shall (i) issue the qualified equity investment and receive cash in the amount of the certified amount and (ii) with respect to qualified equity investments made on or after January 1, 2017, if applicable, SB0652 EngrossedEnrolled - 10 - LRB100 06360 HLH 16399 b designate the required amount of qualified equity investment authority as a federal qualified equity investment.

(g) Allocation rounds enabled by this Act shall be applied for according to the following schedule:

(1) on January 2, 2019, $125,000,000 of qualified equity investments;

and (2) on January 2, 2020, $125,000,000 of qualified equity investments.

7-1-10.) SB0652 Enrolled - 11 - LRB100 06360 HLH 16399 b (20 ILCS 663/40) Sec.

(1) any amount of the federal tax credit available with respect to a qualified equity investment that is eligible SB0652 Engrossed - 11 - LRB100 06360 HLH 16399 b for a tax credit under this Act is recaptured under Section 45D of the Internal Revenue Code of 1986, as amended.

or (3) the issuer fails to invest at least 85% of the cash purchase price of the qualified equity investment with respect to qualified equity investments made before January 1, 2017 and 100% of the cash purchase price of the qualified equity investment with respect to qualified equity investments made on or after January 1, 2017 in qualified low-income community investments in the State of Illinois within 12 months of the issuance of the qualified SB0652 Enrolled - 12 - LRB100 06360 HLH 16399 b equity investment and maintain such level of investment in qualified low-income community investments in Illinois until the last credit allowance date for such qualified equity investment;

(4) with respect to qualified equity investments made on or after January 1, 2017, the issuer violates Section 43 SB0652 Engrossed - 12 - LRB100 06360 HLH 16399 b of this Act.

The entity shall have 90 days to cure any deficiency indicated in the SB0652 Enrolled - 13 - LRB100 06360 HLH 16399 b Department of Revenue's original recapture notice and avoid such recapture.

Any tax credit for which a final recapture order has been issued shall SB0652 Engrossed - 13 - LRB100 06360 HLH 16399 b be recaptured by the Department of Revenue from the taxpayer who claimed the tax credit on a tax return.

For qualified equity investments made on or after January 1, 2017, no qualified active low-income community business that receives a qualified low-income community investment from a qualified community development entity that issues qualified equity investments under this Act, or any affiliates of such a qualified active low-income community business, may directly or indirectly (i) own or have the right to acquire an ownership interest in a qualified community development entity or member or affiliate of a qualified community development entity, including, but not limited to, a holder of a qualified equity investment issued by the qualified community development entity or (ii) loan to or invest in a qualified community development entity or member or affiliate of a qualified community development entity, including, but not limited to, a SB0652 Enrolled - 14 - LRB100 06360 HLH 16399 b holder of a qualified equity investment issued by a qualified community development entity, where the proceeds of such loan or investment are directly or indirectly used to fund or refinance the purchase of a qualified equity investment under this Act.

For purposes of this Section, "affiliate" means an entity that directly, or indirectly through one or more SB0652 Engrossed - 14 - LRB100 06360 HLH 16399 b intermediaries, controls, is controlled by, or is under common control with another entity.

This Section is not intended to affect ownership or affiliate interests that arise following the sixth anniversary of the issuance of the qualified equity investment.

For all fiscal years following fiscal year 2021 2017, unless the General Assembly adopts a joint resolution granting SB0652 Enrolled - 15 - LRB100 06360 HLH 16399 b authority to the Department to approve qualified equity investments for the Illinois new markets development program and clearly describing the amount of tax credits available for the next fiscal year, or otherwise complies with the provisions of this Section, no qualified equity investments may be permitted to be made under this Act.

Nothing in this Section precludes a taxpayer who makes a qualified equity investment SB0652 Engrossed - 15 - LRB100 06360 HLH 16399 b prior to the expiration of authority to make qualified equity investments from claiming tax credits relating to that qualified equity investment for each applicable credit allowance date.

Annual job creation report.

Each qualified community development entity shall submit an annual job creation report to the Department within 45 days after the beginning of theeach calendar year during the compliance period.

(1) thean numberattestation from an authorized officer of employmentthe positionsqualified createdcommunity anddevelopment retainedentity asthat athe resultentity has not been the subject of qualifiedany low-incomeinvestigation communityby investments;a government SB0652 Enrolled - 16 - LRB100 06360 HLH 16399 b agency relating to tax credits or financial services during the preceding calendar year;

and (2) theinformation averagewith annualrespect salaryto ofall positionsqualified describedlow-income incommunity iteminvestments (1).made by the qualified community development entity, including:

(A) the date and amount of, and bank statements or wire transfer reports documenting, such qualified low-income community investments;

(B) the name, address, and EIN of each qualified active low-income community business funded by the qualified community development entity, the number of persons employed by such business at the time of the initial investment, and a brief description of the business, the financing, and community benefits of the financing;

and (C) the number of employment positions maintained by each qualified active low-income community business as of the date of report or the end of the preceding calendar year and the average annual salaries of such positions;

and (D) the total number of employment positions created and retained as a result of qualified low-income community investments and the average annual salaries of those positions;

and (3) any changes with respect to the taxpayers entitled to claim tax credits with respect to qualified equity SB0652 Enrolled - 17 - LRB100 06360 HLH 16399 b investments issued by the qualified community development entity since its last report pursuant to this Section.