HB 4793 — NEW MARKETS DEVELOPMENT

*LRB09517254BDD43314b* HB4793 95THEngrossed GENERALLRB095 ASSEMBLY17254 StateBDD of43314 Illinoisb andAN 2008ACT HB4793concerning byeconomic Rep.development.

Arthur L.

Turner SYNOPSIS AS INTRODUCED:

New Act Creates the New Markets Development Program Act.

Defines terms.

Provides that taxpayers that make a qualified equity investment earn a vested right to certain tax credits against income, franchise, and insurance premium taxes.

Credits are not transferable.

Sets annual caps on credits.

Provides for recapture.

Authorizes the Department of Commerce and Economic Opportunity to promulgate rules.

Sunsets after fiscal year 2012 unless reauthorized by the General Assembly.

Contains other provisions.

Effective immediately.

LRB095 17254 BDD 43314 b FISCAL NOTE ACT MAY APPLY A BILL FOR HB4793 LRB095 17254 BDD 43314 b AN ACT concerning economic development.

"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 HB4793 Engrossed - 2 - LRB095 17254 BDD 43314 b from the date of its issuance, with no acceleration of repayment, amortization, or prepayment features prior to its original maturity date, and with no distribution, payment, or interest features related to the profitability of the qualified community development entity or the performance of the qualified community development entity’s investment portfolio.

Treasury Department with respect to credits authorized by Section 45D of the HB4793 Engrossed - 3 - LRB095 17254 BDD 43314 b Internal Revenue Code of 1986, as amended, that includes the State of Illinois within the service area set forth in that allocation agreement.

With respect to any one qualified active low-income community business, the maximum amount of qualified low-income community investments made in that business, on a collective basis with all of its affiliates, shall be $10,000,000 whether issued to one or HB4793 Engrossed - 4 - LRB095 17254 BDD 43314 b several qualified community development entities.

Tax credits earned by a partnership, limited liability company, S-corporation, or other "pass-through" entity may be allocated to the partners, members, or shareholders of that entity for HB4793 Engrossed - 5 - LRB095 17254 BDD 43314 b their direct use in accordance with the provisions of any agreement among the partners, members, or shareholders.

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 $40,000,000$10,000,000 of tax credits in any fiscal year.

HB4793 Engrossed - 6 - LRB095 17254 BDD 43314 b (1) Provided that the proceeds of a qualified equity investment are invested completely in qualified low-income community investments in Illinois, the purchase price, for the purpose of calculating the credit created by this Act, shall equal 100% of the qualified equity investment, regardless of the location of investments made with the proceeds of other qualified equity investments issued by the same community development entity.

(1) any amount of the federal tax credit available with respect to a qualified equity investment that is eligible HB4793 Engrossed - 7 - LRB095 17254 BDD 43314 b for a tax credit under this Act is recaptured under Section 45D of the Internal Revenue Code of 1986, as amended.

An issuer is not required to reinvest capital returned from qualified low-income community investments after the 6th anniversary of the issuance of the qualified equity investment, the proceeds of which were used to make the qualified low-income community investment, and the qualified low-income community investment shall be considered HB4793 Engrossed - 8 - LRB095 17254 BDD 43314 b held by the issuer through the 7th anniversary of the qualified equity investment’s issuance.

Rules.No Rulemaking.

TheNotwithstanding Departmentany mayother promulgaterulemaking rulesauthority tothat implementmay exist, neither the provisionsGovernor ofnor thisany Actagency andor toagency administerhead under the allocationjurisdiction of taxthe creditsGovernor issuedhas forany qualifiedauthority equityto investments,make whichor shallpromulgate berules conductedto onimplement aor first-come,enforce first-servethe basis.provisions of this Act.

SectionIf, 50.however, the Governor believes that rules are necessary to implement or enforce the provisions of this Act, the Governor may suggest rules to the General Assembly by filing them with the Clerk of the House and the Secretary of the Senate and by requesting that the General Assembly authorize such rulemaking by law, enact those suggested rules into law, or take any other appropriate action in the General Assembly’s discretion.

Nothing contained in this Act shall be interpreted to grant rulemaking authority under any other Illinois statute where such authority is not otherwise explicitly given.

For the purposes of this Section, "rules" is given the meaning contained in Section 1-70 of the Illinois Administrative Procedure Act, and "agency" and "agency head" are given the meanings contained in Sections 1-20 and 1-25 of the Illinois Administrative Procedure Act to the extent that such definitions apply to agencies or agency heads under the jurisdiction of the Governor.

HB4793 Engrossed - 9 - LRB095 17254 BDD 43314 b Section 50.

HB4793 - 9 - LRB095 17254 BDD 43314 b Section 99.