SB0007eng 94TH GENERAL ASSEMBLY

SB0007 Engrossed LRB094 05531 BDD 37102 b

AN ACT concerning revenue.

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

Section 1. Short title. This Act may be cited as the Health Care Enterprise Zone Act.

Section 5. Legislative intent and policy. The General Assembly finds that citizens around the State are increasingly faced with problems in accessing necessary health care. The closure of hospitals, the inability of these areas to attract new physicians, the elimination of existing physicians, and the lack of systems of emergency medical care contribute to the access problems experienced by residents in medically underserved areas. While Illinois is not unique in experiencing these problems, the need to maintain or enhance the economies of these areas of the State requires that new and innovative strategies be identified and implemented to respond to the health care needs of residents of these areas. It is therefore the intent of this General Assembly to create a program to respond to this problem.

Section 10. Definitions. As used in this Act:

"Advanced practice nurse" has the meaning set forth in Section 15-5 of the Nursing and Advanced Practice Nursing Act.

"Dentist" has the meaning set forth in Section 4 of the Illinois Dental Practice Act.

"Department" means the Department of Public Health.

"General practitioner" means any physician who is not a specialist.

"Good standing" means that the individual has a good disciplinary record and has no more than 3 medical malpractice judgments or settlements in the preceding 4 years.

"Health care professional" means a physician, advanced practice nurse, physician assistant, dentist, optometrist, or pharmacist.

"Optometrist" means a person licensed to practice optometry under the Illinois Optometric Practice Act of 1987.

"Pharmacist" has the meaning set forth in Section 3 of the Pharmacy Practice Act of 1987.

"Physician" means a person licensed to practice medicine in all its branches under the Medical Practice Act of 1987.

"Physician assistant" has the meaning set forth in Section 4 of the Physician Assistant Practice Act of 1987.

"Practice" means the actual time spent each year by an individual in an office located within a shortage area. Such time may only apply to an individual, not the practice, hospital, or clinic in which they are involved.

"Specialist" means a physician who has a certification to practice a medical specialty.

Section 15. Certification of health care enterprise zones; certification of needed specialty shortage zones.

(a) If an area in the State is a medically underserved area or is a "health manpower shortage area", as defined by the U.S. Department of Health and Human Services, then the Department may certify that area as a health care enterprise zone. Once an area has been declared to be a health care enterprise zone, it shall retain that certification for 10 years, which may be renewed.

(b) If an area has not been certified as a health care enterprise zone, but the Department determines that there is a shortage of specialists practicing in a needed specialty in that area, then the Department may certify that area as a specialty shortage zone with respect to the needed specialty.

(c) The Department must annually review the provision of health care services in the State to determine whether to certify areas in the State as health care enterprise zones or specialty shortage zones.

Section 20. Income tax credit.

(a) For the taxable years ending on or after December 31, 2006, a health care professional who practices at least 50% of the year in an area of Illinois that has been certified as a health care enterprise zone or as a specialty shortage zone may apply to the Department requesting a certification of an income tax credit. The application must provide affirmative evidence of the applicant's practice in a health care enterprise zone or as a specialty shortage zone and must provide any other information reasonably required by the Department.

(b) The amount of the income tax credit under this Section is:

(i) $10,000 per taxable year for a specialist practicing in a specialty shortage zone;

(ii) $7,500 per taxable year for a general practitioner or for a specialist practicing in a health care enterprise zone; and

(iii) $5,000 for an advanced practice nurse, a physician assistant, a dentist, an optometrist, or a pharmacist practicing in a health care enterprise zone.

(c) Upon satisfactory review of the application, the Department shall issue an Income Tax Credit Certificate stating the amount of the tax credit to which the applicant is entitled.

Section 25. Revocation of benefits. All benefits granted to individuals by this Act are subject to revocation if:

(i) the individual practices less than 50% of his or her time in the health care enterprise zone or the specialty shortage zone;

(ii) the individual ceases to practice medicine;

(iii) the individual is no longer in good standing; or

(iv) the area is no longer designated a health care enterprise zone or the specialty shortage zone.

Section 40. Rules. The Department, in consultation with the Department of Revenue, must adopt any rules necessary to implement and administer the provisions of this Act.

Section 900. The Illinois Income Tax Act is amended by adding Section 216 as follows:

(35 ILCS 5/216 new)

Sec. 216. Health care enterprise zone credit. For tax years ending on or after December 31, 2006, a taxpayer who has been awarded an income tax credit under the Health Care Enterprise Zone Act is entitled to a credit against the taxes imposed under subsections (a) and (b) of Section 201 of this Act in an amount determined by the Department of Public Health under Section 20 of the Health Care Enterprise Zone Act.

If the taxpayer is a partnership or Subchapter S corporation, the credit is allowed to the partners or shareholders in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code.

The Department, in cooperation with the Department of Public Health, must adopt rules to enforce and administer the provisions of this Section.

The credit may not be carried forward or back. In no event shall a credit under this Section reduce the taxpayer's liability to less than zero.

This Section is exempt from the provisions of Section 250 of this Act.

Section 905. The Property Tax Code is amended by changing Section 18-165 as follows:

(35 ILCS 200/18-165)

Sec. 18-165. Abatement of taxes.

(a) Any taxing district, upon a majority vote of its governing authority, may, after the determination of the assessed valuation of its property, order the clerk of that county to abate any portion of its taxes on the following types of property:

(1) Commercial and industrial.

(A) The property of any commercial or industrial firm, including but not limited to the property of (i) any firm that is used for collecting, separating, storing, or processing recyclable materials, locating within the taxing district during the immediately preceding year from another state, territory, or country, or having been newly created within this State during the immediately preceding year, or expanding an existing facility, or (ii) any firm that is used for the generation and transmission of electricity locating within the taxing district during the immediately preceding year or expanding its presence within the taxing district during the immediately preceding year by construction of a new electric generating facility that uses natural gas as its fuel, or any firm that is used for production operations at a new, expanded, or reopened coal mine within the taxing district, that has been certified as a High Impact Business by the Illinois Department of Commerce and Economic Opportunity Community Affairs. The property of any firm used for the generation and transmission of electricity shall include all property of the firm used for transmission facilities as defined in Section 5.5 of the Illinois Enterprise Zone Act. The abatement shall not exceed a period of 10 years and the aggregate amount of abated taxes for all taxing districts combined shall not exceed $4,000,000.

(A-5) Any property in the taxing district of a new electric generating facility, as defined in Section 605-332 of the Department of Commerce and Economic Opportunity Community Affairs Law of the Civil Administrative Code of Illinois. The abatement shall not exceed a period of 10 years. The abatement shall be subject to the following limitations:

(i) if the equalized assessed valuation of the new electric generating facility is equal to or greater than $25,000,000 but less than $50,000,000, then the abatement may not exceed (i) over the entire term of the abatement, 5% of the taxing district's aggregate taxes from the new electric generating facility and (ii) in any one year of abatement, 20% of the taxing district's taxes from the new electric generating facility;

(ii) if the equalized assessed valuation of the new electric generating facility is equal to or greater than $50,000,000 but less than $75,000,000, then the abatement may not exceed (i) over the entire term of the abatement, 10% of the taxing district's aggregate taxes from the new electric generating facility and (ii) in any one year of abatement, 35% of the taxing district's taxes from the new electric generating facility;

(iii) if the equalized assessed valuation of the new electric generating facility is equal to or greater than $75,000,000 but less than $100,000,000, then the abatement may not exceed (i) over the entire term of the abatement, 20% of the taxing district's aggregate taxes from the new electric generating facility and (ii) in any one year of abatement, 50% of the taxing district's taxes from the new electric generating facility;

(iv) if the equalized assessed valuation of the new electric generating facility is equal to or greater than $100,000,000 but less than $125,000,000, then the abatement may not exceed (i) over the entire term of the abatement, 30% of the taxing district's aggregate taxes from the new electric generating facility and (ii) in any one year of abatement, 60% of the taxing district's taxes from the new electric generating facility;

(v) if the equalized assessed valuation of the new electric generating facility is equal to or greater than $125,000,000 but less than $150,000,000, then the abatement may not exceed (i) over the entire term of the abatement, 40% of the taxing district's aggregate taxes from the new electric generating facility and (ii) in any one year of abatement, 60% of the taxing district's taxes from the new electric generating facility;

(vi) if the equalized assessed valuation of the new electric generating facility is equal to or greater than $150,000,000, then the abatement may not exceed (i) over the entire term of the abatement, 50% of the taxing district's aggregate taxes from the new electric generating facility and (ii) in any one year of abatement, 60% of the taxing district's taxes from the new electric generating facility.

The abatement is not effective unless the owner of the new electric generating facility agrees to repay to the taxing district all amounts previously abated, together with interest computed at the rate and in the manner provided for delinquent taxes, in the event that the owner of the new electric generating facility closes the new electric generating facility before the expiration of the entire term of the abatement.

The authorization of taxing districts to abate taxes under this subdivision (a)(1)(A-5) expires on January 1, 2010.

(B) The property of any commercial or industrial development of at least 500 acres having been created within the taxing district. The abatement shall not exceed a period of 20 years and the aggregate amount of abated taxes for all taxing districts combined shall not exceed $12,000,000.

(C) The property of any commercial or industrial firm currently located in the taxing district that expands a facility or its number of employees. The abatement shall not exceed a period of 10 years and the aggregate amount of abated taxes for all taxing districts combined shall not exceed $4,000,000. The abatement period may be renewed at the option of the taxing districts.

(2) Horse racing. Any property in the taxing district which is used for the racing of horses and upon which capital improvements consisting of expansion, improvement or replacement of existing facilities have been made since July 1, 1987. The combined abatements for such property from all taxing districts in any county shall not exceed $5,000,000 annually and shall not exceed a period of 10 years.

(3) Auto racing. Any property designed exclusively for the racing of motor vehicles. Such abatement shall not exceed a period of 10 years.

(4) Academic or research institute. The property of any academic or research institute in the taxing district that (i) is an exempt organization under paragraph (3) of Section 501(c) of the Internal Revenue Code, (ii) operates for the benefit of the public by actually and exclusively performing scientific research and making the results of the research available to the interested public on a non-discriminatory basis, and (iii) employs more than 100 employees. An abatement granted under this paragraph shall be for at least 15 years and the aggregate amount of abated taxes for all taxing districts combined shall not exceed $5,000,000.

(5) Housing for older persons. Any property in the taxing district that is devoted exclusively to affordable housing for older households. For purposes of this paragraph, "older households" means those households (i) living in housing provided under any State or federal program that the Department of Human Rights determines is specifically designed and operated to assist elderly persons and is solely occupied by persons 55 years of age or older and (ii) whose annual income does not exceed 80% of the area gross median income, adjusted for family size, as such gross income and median income are determined from time to time by the United States Department of Housing and Urban Development. The abatement shall not exceed a period of 15 years, and the aggregate amount of abated taxes for all taxing districts shall not exceed $3,000,000.

(6) Historical society. For assessment years 1998 through 2008, the property of an historical society qualifying as an exempt organization under Section 501(c)(3) of the federal Internal Revenue Code.

(7) Recreational facilities. Any property in the taxing district (i) that is used for a municipal airport, (ii) that is subject to a leasehold assessment under Section 9-195 of this Code and (iii) which is sublet from a park district that is leasing the property from a municipality, but only if the property is used exclusively for recreational facilities or for parking lots used exclusively for those facilities. The abatement shall not exceed a period of 10 years.

(8) Relocated corporate headquarters. If approval occurs within 5 years after the effective date of this amendatory Act of the 92nd General Assembly, any property or a portion of any property in a taxing district that is used by an eligible business for a corporate headquarters as defined in the Corporate Headquarters Relocation Act. Instead of an abatement under this paragraph (8), a taxing district may enter into an agreement with an eligible business to make annual payments to that eligible business in an amount not to exceed the property taxes paid directly or indirectly by that eligible business to the taxing district and any other taxing districts for premises occupied pursuant to a written lease and may make those payments without the need for an annual appropriation. No school district, however, may enter into an agreement with, or abate taxes for, an eligible business unless the municipality in which the corporate headquarters is located agrees to provide funding to the school district in an amount equal to the amount abated or paid by the school district as provided in this paragraph (8). Any abatement ordered or agreement entered into under this paragraph (8) may be effective for the entire term specified by the taxing district, except the term of the abatement or annual payments may not exceed 20 years.

(9) Health care facilities. The property of any facility operated by a health care professional, as defined by the Health Care Enterprise Zone Act, as part of his or her practice, including, but not limited to, clinics, medical offices, pharmacies, and treatment facilities, in a health care enterprise zone or specialty shortage zone certified under the Health Care Enterprise Zone Act. The abatement shall continue until a revocation of benefits occurs under Section 25 of the Health Care Enterprise Zone Act. The aggregate amount of abated taxes for all taxing districts in any county may not exceed $5,000,000 per year.

(b) Upon a majority vote of its governing authority, any municipality may, after the determination of the assessed valuation of its property, order the county clerk to abate any portion of its taxes on any property that is located within the corporate limits of the municipality in accordance with Section 8-3-18 of the Illinois Municipal Code.

(Source: P.A. 92-12, eff. 7-1-01; 92-207, eff. 8-1-01; 92-247, eff. 8-3-01; 92-651, eff. 7-11-02; 93-270, eff. 7-22-03; revised 12-6-03.)