SB 2015 — NEW MARKETS DEVELOPMENT

For applications received on the same day and deemed complete, the Department shall certify, consistent with remaining tax credit capacity, qualified equity investments in proportionate percentages based upon the ratio of the amount of qualified equity SB2015 Enrolled - 9 - LRB095 17253 BDD 43313 b investment requested in an application to the total amount of qualified equity investments requested in all applications received on the same day.

(e) Once the Department has certified qualified equity investments that, on a cumulative basis, are eligible for $10,000,000 in tax credits, the Department may not certify any more qualified equity investments.

If a pending request cannot be fully certified, the Department shall certify the portion that may be certified unless the qualified community development entity elects to withdraw its request rather than receive partial credit.

(f) Within 30 days after receiving notice of certification, the qualified community development entity shall issue the qualified equity investment and receive cash in the amount of the certified amount.

The qualified community development entity must provide the Department with evidence of the receipt of the cash investment within 10 business days after receipt.

If the qualified community development entity does not receive the cash investment and issue the qualified equity investment within 30 days following receipt of the certification notice, the certification shall lapse and the entity may not issue the qualified equity investment without reapplying to the Department for certification.

A certification that lapses reverts back to the Department and may be reissued only in accordance with the application process outline in this Section 25.

SB2015 Enrolled - 10 - LRB095 17253 BDD 43313 b Section 40.

The Department of Revenue shall recapture, from the taxpayer that claimed the credit on a return, the tax credit allowed under this Act if:

(1) any amount of the federal tax credit available with respect to a qualified equity investment that is eligible SB2015 Engrossed - 7 - LRB095 17253 BDD 43313 b for a tax credit under this Act is recaptured under Section 45D of the Internal Revenue Code of 1986, as amended.

In that case, the Department’sDepartment of Revenue's recapture shall be proportionate to the federal recapture with respect to that qualified equity investment;

or (2) the issuer redeems or makes principal repayment with respect to a qualified equity investment prior to the 7th anniversary of the issuance of the qualified equity investment.

In that case, the Department’sDepartment of Revenue's recapture shall be proportionate to the amount of the redemption or repayment with respect to the qualified equity investment.investment;

Sectionor 40.(3) the issuer fails to invest at least 85% of the cash purchase price of the qualified equity investment in qualified low-income community investments in the State of Illinois within 12 months of the issuance of the qualified 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.

RecaptureSB2015 avoidedEnrolled for- re-investment.11 - LRB095 17253 BDD 43313 b For purposes of this Section, an investment shall be considered held by an issuer even if the investment has been sold or repaid;

Anprovided exceptionthat the issuer reinvests an amount equal to the provisionscapital ofreturned itemto (2)or ofrecovered Sectionby 35the shallissuer existfrom whereinthe anoriginal investmentinvestment, shallexclusive beof consideredany heldprofits byrealized, anin issueranother evenqualified iflow-income thecommunity investment hasin beenthis soldState orwithin repaid;12 months after the receipt of that capital.

providedAn that the issuer reinvestsis annot amountrequired equal to thereinvest capital returned tofrom orqualified recoveredlow-income bycommunity investments after the issuer6th fromanniversary of the originalissuance of the qualified equity investment, exclusivethe proceeds of anywhich profitswere realized,used into anothermake the qualified low-income community investment, and the qualified low-income community investment withinshall 12be monthsconsidered afterheld by the receiptissuer through the 7th anniversary of thatthe capital.qualified equity investment's issuance.

AnThe issuerDepartment is not required to reinvest capital returned from qualified low-income community investments after the 6th anniversary of theRevenue issuanceshall ofprovide thenotice qualified equity investment, the proceeds of which were used to make the qualified low-income community investment,development andentity theof qualifiedany low-incomeproposed communityrecapture investment shall be considered SB2015 Engrossed - 8 - LRB095 17253 BDD 43313 b held by the issuer through the 7th anniversary of thetax qualifiedcredits equitypursuant investment’sto issuance.this Section.

The entity shall have 90 days to cure any deficiency indicated in the Department of Revenue's original recapture notice and avoid such recapture.

If the entity fails or is unable to cure such deficiency with the 90-day period, the Department of Revenue shall provide the entity and the taxpayer from whom the credit is to be recaptured with a final order of recapture.

Any tax credit for which a final recapture order has been issued shall be recaptured by the Department of Revenue from the taxpayer SB2015 Enrolled - 12 - LRB095 17253 BDD 43313 b who claimed the tax credit on a tax return.

Rules.Examination and Rulemaking.

(a) The Department may promulgateconduct rulesexaminations to implementverify that the provisionstax ofcredits under this Act have been received and toapplied administeraccording to the allocationrequirements of taxthis creditsAct issuedand forto qualifiedverify equitythat investments,no whichevent shallhas beoccurred conductedthat onwould result in a first-come,recapture first-serveof basis.tax credits under Section 40.

Section(b) 50.Neither the Department nor the Department of Revenue shall have the authority to promulgate rules under the Act, but the Department and the Department of Revenue shall have the authority to issue advisory letters to individual qualified community development entities and their investors that are limited to the specific facts outlined in an advisory letter request from a qualified community development entity.

Such rulings cannot be relied upon by any person or entity other than the qualified community development entity that requested the letter and the taxpayers that are entitled to any tax credits generated from investments in such entity.

For purposes of this subsection, "rules" is given the meaning contained in Section 1-70 of the Illinois Administrative Procedure Act.

(c) In rendering advisory letters and making other determinations under this Act, to the extent applicable, the Department and the Department of Revenue shall look for guidance to Section 45D of the Internal Revenue Code of 1986, as amended, and the rules and regulations issued thereunder.

SB2015 Enrolled - 13 - LRB095 17253 BDD 43313 b Section 50.

SB2015 Engrossed - 9 - LRB095 17253 BDD 43313 b Section 99.75.

The Illinois Insurance Code is amended by changing Sections 409, 444, and 444.1 as follows:

(215 ILCS 5/409) (from Ch.

73, par.

1021) Sec.

409.

Annual privilege tax payable by companies.

(1) As of January 1, 1999 for all health maintenance organization premiums written;

as of July 1, 1998 for all SB2015 Enrolled - 14 - LRB095 17253 BDD 43313 b premiums written as accident and health business, voluntary health service plan business, dental service plan business, or limited health service organization business;

and as of January 1, 1998 for all other types of insurance premiums written, every company doing any form of insurance business in this State, including, but not limited to, every risk retention group, and excluding all fraternal benefit societies, all farm mutual companies, all religious charitable risk pooling trusts, and excluding all statutory residual market and special purpose entities in which companies are statutorily required to participate, whether incorporated or otherwise, shall pay, for the privilege of doing business in this State, to the Director for the State treasury a State tax equal to 0.5% of the net taxable premium written, together with any amounts due under Section 444 of this Code, except that the tax to be paid on any premium derived from any accident and health insurance or on any insurance business written by any company operating as a health maintenance organization, voluntary health service plan, dental service plan, or limited health service organization shall be equal to 0.4% of such net taxable premium written, together with any amounts due under Section 444.

Upon the failure of any company to pay any such tax due, the Director may, by order, revoke or suspend the company's certificate of authority after giving 20 days written notice to the company, or commence proceedings for the suspension of business in this State under the procedures set forth by SB2015 Enrolled - 15 - LRB095 17253 BDD 43313 b Section 401.1 of this Code.

The gross taxable premium written shall be the gross amount of premiums received on direct business during the calendar year on contracts covering risks in this State, except premiums on annuities, premiums on which State premium taxes are prohibited by federal law, premiums paid by the State for health care coverage for Medicaid eligible insureds as described in Section 5-2 of the Illinois Public Aid Code, premiums paid for health care services included as an element of tuition charges at any university or college owned and operated by the State of Illinois, premiums on group insurance contracts under the State Employees Group Insurance Act of 1971, and except premiums for deferred compensation plans for employees of the State, units of local government, or school districts.

The net taxable premium shall be the gross taxable premium written reduced only by the following:

(a) the amount of premiums returned thereon which shall be limited to premiums returned during the same preceding calendar year and shall not include the return of cash surrender values or death benefits on life policies including annuities;

(b) dividends on such direct business that have been paid in cash, applied in reduction of premiums or left to accumulate to the credit of policyholders or annuitants.

In the case of life insurance, no deduction shall be made for the payment of deferred dividends paid in cash to SB2015 Enrolled - 16 - LRB095 17253 BDD 43313 b policyholders on maturing policies;

dividends left to accumulate to the credit of policyholders or annuitants shall be included as gross taxable premium written when such dividend accumulations are applied to purchase paid-up insurance or to shorten the endowment or premium paying period.

(2) The annual privilege tax payment due from a company under subsection (4) of this Section may be reduced by:

(a) the excess amount, if any, by which the aggregate income taxes paid by the company, on a cash basis, for the preceding calendar year under subsections (a) through (d) of Section 201 of the Illinois Income Tax Act exceed 1.5% of the company's net taxable premium written for that prior calendar year, as determined under subsection (1) of this Section;

and (b) the amount of any fire department taxes paid by the company during the preceding calendar year under Section 11-10-1 of the Illinois Municipal Code.

Any deductible amount or offset allowed under items (a) and (b) of this subsection for any calendar year will not be allowed as a deduction or offset against the company's privilege tax liability for any other taxing period or calendar year.

(3) If a company survives or was formed by a merger, consolidation, reorganization, or reincorporation, the premiums received and amounts returned or paid by all companies party to the merger, consolidation, reorganization, or reincorporation shall, for purposes of determining the amount SB2015 Enrolled - 17 - LRB095 17253 BDD 43313 b of the tax imposed by this Section, be regarded as received, returned, or paid by the surviving or new company.

(4)(a) All companies subject to the provisions of this Section shall make an annual return for the preceding calendar year on or before March 15 setting forth such information on such forms as the Director may reasonably require.

Payments of quarterly installments of the taxpayer's total estimated tax for the current calendar year shall be due on or before April 15, June 15, September 15, and December 15 of such year, except that all companies transacting insurance in this State whose annual tax for the immediately preceding calendar year was less than $5,000 shall make only an annual return.

Failure of a company to make the annual payment, or to make the quarterly payments, if required, of at least 25% of either (i) the total tax paid during the previous calendar year or (ii) 80% of the actual tax for the current calendar year shall subject it to the penalty provisions set forth in Section 412 of this Code.

(b) Notwithstanding the foregoing provisions, no annual return shall be required or made on March 15, 1998, under this subsection.

For the calendar year 1998:

(i) each health maintenance organization shall have no estimated tax installments;

(ii) all companies subject to the tax as of July 1, 1998 as set forth in subsection (1) shall have estimated tax installments due on September 15 and December 15 of 1998 which installments shall each amount to no less than SB2015 Enrolled - 18 - LRB095 17253 BDD 43313 b one-half of 80% of the actual tax on its net taxable premium written during the period July 1, 1998, through December 31, 1998;

and (iii) all other companies shall have estimated tax installments due on June 15, September 15, and December 15 of 1998 which installments shall each amount to no less than one-third of 80% of the actual tax on its net taxable premium written during the calendar year 1998.

In the year 1999 and thereafter all companies shall make annual and quarterly installments of their estimated tax as provided by paragraph (a) of this subsection.

(5) In addition to the authority specifically granted under Article XXV of this Code, the Director shall have such authority to adopt rules and establish forms as may be reasonably necessary for purposes of determining the allocation of Illinois corporate income taxes paid under subsections (a) through (d) of Section 201 of the Illinois Income Tax Act amongst members of a business group that files an Illinois corporate income tax return on a unitary basis, for purposes of regulating the amendment of tax returns, for purposes of defining terms, and for purposes of enforcing the provisions of Article XXV of this Code.

The Director shall also have authority to defer, waive, or abate the tax imposed by this Section if in his opinion the company's solvency and ability to meet its insured obligations would be immediately threatened by payment of the tax due.

SB2015 Enrolled - 19 - LRB095 17253 BDD 43313 b (c) This Section is subject to the provisions of Section 10 of the New Markets Development Program Act.

(Source:

P.A.

90-583, eff.

5-29-98.) (215 ILCS 5/444) (from Ch.

73, par.

1056) Sec.

444.

Retaliation.

(1) Whenever the existing or future laws of any other state or country shall require of companies incorporated or organized under the laws of this State as a condition precedent to their doing business in such other state or country, compliance with laws, rules, regulations, and prohibitions more onerous or burdensome than the rules and regulations imposed by this State on foreign or alien companies, or shall require any deposit of securities or other obligations in such state or country, for the protection of policyholders or otherwise or require of such companies or agents thereof or brokers the payment of penalties, fees, charges, or taxes greater than the penalties, fees, charges, or taxes required in the aggregate for like purposes by this Code or any other law of this State, of foreign or alien companies, agents thereof or brokers, then such laws, rules, regulations, and prohibitions of said other state or country shall apply to companies incorporated or organized under the laws of such state or country doing business in this State, and all such companies, agents thereof, or brokers doing business in this State, shall be required to make deposits, pay penalties, fees, charges, and taxes, in SB2015 Enrolled - 20 - LRB095 17253 BDD 43313 b amounts equal to those required in the aggregate for like purposes of Illinois companies doing business in such state or country, agents thereof or brokers.

Whenever any other state or country shall refuse to permit any insurance company incorporated or organized under the laws of this State to transact business according to its usual plan in such other state or country, the director may, if satisfied that such company of this State is solvent, properly managed, and can operate legally under the laws of such other state or country, forthwith suspend or cancel the license of every insurance company doing business in this State which is incorporated or organized under the laws of such other state or country to the extent that it insures in this State against any of the risks or hazards which are sought to be insured against by the company of this State in such other state or country.

(2) The provisions of this Section shall not apply to residual market or special purpose assessments or guaranty fund or guaranty association assessments, both under the laws of this State and under the laws of any other state or country, and any tax offset or credit for any such assessment shall, for purposes of this Section, be treated as a tax paid both under the laws of this State and under the laws of any other state or country.

(3) The terms "penalties", "fees", "charges", and "taxes" in subsection (1) of this Section shall include:

the penalties, fees, charges, and taxes collected under State law and SB2015 Enrolled - 21 - LRB095 17253 BDD 43313 b referenced within Article XXV exclusive of any items referenced by subsection (2) of this Section, but including any tax offset allowed under Section 531.13 of this Code;

the Illinois corporate income taxes imposed under subsections (a) through (d) of Section 201 of the Illinois Income Tax Act after any tax offset allowed under Section 531.13 of this Code;

income or personal property taxes imposed by other states or countries;

penalties, fees, charges, and taxes of other states or countries imposed for purposes like those of the penalties, fees, charges, and taxes specified in Article XXV of this Code exclusive of any item referenced in subsection (2) of this Section;

and any penalties, fees, charges, and taxes required as a franchise, privilege, or licensing tax for conducting the business of insurance whether calculated as a percentage of income, gross receipts, premium, or otherwise.

(4) Nothing contained in this Section or Section 409 or Section 444.1 is intended to authorize or expand any power of local governmental units or municipalities to impose taxes, fees, or charges.

(5) This Section is subject to the provisions of Section 10 of the New Markets Development Program Act.

(Source:

P.A.

90-583, eff.

5-29-98.) (215 ILCS 5/444.1) (from Ch.

73, par.

1056.1) Sec.

444.1.

Payment of retaliatory taxes.

(1) Every foreign or alien company doing insurance business SB2015 Enrolled - 22 - LRB095 17253 BDD 43313 b in this State shall pay the Director the retaliatory tax determined in accordance with Section 444.

(2) (a) All companies subject to the provisions of this Section shall make an annual return for the preceding calendar year on or before March 15 setting forth such information on such forms as the Director may reasonably require.

Payments of quarterly installments of the taxpayer's total estimated retaliatory tax for the current calendar year shall be due on or before April 15, June 15, September 15, and December 15 of such year, except that all companies transacting insurance business in this State whose annual tax for the immediately preceding calendar year was less than $5,000 shall make only an annual return.

Failure of a company to make the annual payment, or to make the quarterly payments, if required, of at least one-fourth of either (i) the total tax paid during the previous calendar year or (ii) 80% of the actual tax for the current calendar year shall subject it to the penalty provisions set forth in Section 412 of this Code.

(b) Notwithstanding the foregoing provisions of paragraph (a) of this subsection, the retaliatory tax liability of companies under Section 444 of this Code for the calendar year ended December 31, 1997 shall be determined in accordance with this amendatory Act of 1998 and shall include in the aggregate comparative tax burden for the State of Illinois, any tax offset allowed under Section 531.13 of this Code and any income taxes paid for the year 1997 under subsections (a) through (d) SB2015 Enrolled - 23 - LRB095 17253 BDD 43313 b of Section 201 of the Illinois Income Tax Act after any tax offset allowed under Section 531.13 of this Code.

(i) Any annual retaliatory tax returns and payments made for the year ended December 31, 1997 and any quarterly installments of the taxpayer's total estimated 1998 retaliatory tax liability paid prior to the effective date of this Amendatory Act of 1998 that do not include the items specified by subsection (1) of this Section shall be amended and restated, at the taxpayer's election, on forms prepared by the Director so as to provide for the inclusion of such items.

An amended and restated return for the year ended December 31, 1997 filed under this subparagraph shall treat any payment of estimated privilege taxes under Section 409 as in effect prior to October 23, 1997 as a payment of estimated retaliatory taxes for the year ended December 31, 1997.

(ii) Any overpayment resulting from such amended return and restated tax liability shall be allowed as a credit against any subsequent privilege or retaliatory tax obligations of the taxpayer.

(iii) In the year 1999 and thereafter all companies shall make annual and quarterly installments of their estimated tax as provided by paragraph (a) of this subsection.

(3) Any tax payment made under this Section and any tax returns prepared in compliance with Section 410 shall give full SB2015 Enrolled - 24 - LRB095 17253 BDD 43313 b consideration to the impact of any future reduction in or elimination of a taxpayer's liability under Section 409, whether such reduction or elimination is due to an operation of law or an Act of the General Assembly.

(4) Any foreign or alien taxpayer who makes, under protest, a tax payment required by Section 409 shall, at the time of payment, file a retaliatory tax return sufficient to disclose the full amount of retaliatory taxes which would be due and owing for the tax period in question if the protest were upheld.

Notwithstanding the provisions of the State Officers and Employees Money Disposition Act or any other laws of this State, the protested payment, to the extent of the retaliatory tax so disclosed, shall be deposited directly in the General Revenue Fund;

and the balance of the payment, if any, shall be deposited in a protest account pursuant to the provisions of the aforesaid Act, as now or hereafter amended.

(5) The failure of a company to make the annual payment or to make the quarterly payments, if required, of at least one-fourth of either (i) the total tax paid during the preceding calendar year or (ii) 80% of the actual tax for the current calendar year shall subject it to the penalty provisions set forth in Section 412 of this Code.

(6) This Section is subject to the provisions of Section 10 of the New Markets Development Program Act.

(Source:

P.A.

90-583, eff.

5-29-98.) Section 99.

This Act takes effect upon SB2015 Enrolled - 25 - LRB095 17253 BDD 43313 b becoming law.