SB1362sam001 97TH GENERAL ASSEMBLY

Sen. Edward D. Maloney

Filed: 3/15/2011

09700SB1362sam001 LRB097 05997 HLH 51663 a

AMENDMENT TO SENATE BILL 1362

AMENDMENT NO. ______. Amend Senate Bill 1362 by replacing everything after the enacting clause with the following:

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

(35 ILCS 5/221 new)

Sec. 221. Credit for mechanical insulation. For each taxable year beginning on or after January 1, 2011, each taxpayer is entitled to a credit against the tax imposed by subsections (a) and (b) of Section 201 of this Act in an amount equal to the applicable percentage of the cost of mechanical insulation property placed in service in the State during the taxable year.

In no event shall a credit under this Section 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. The tax credit shall be applied to the earliest year for which there is a tax liability. If there are credits for more than one year that are available to offset a liability, the earlier credit shall be applied first.

In the case of mechanical insulation property installed by an entity described in paragraph (3) or (4) of Section 50(b) of the Internal Revenue Code, the person who is the primary contractor for the installation of the property shall be treated as the taxpayer that placed the property in service.

Energy savings shall be certified under rules promulgated by the Illinois Power Agency with the use of the National Institute of Building Sciences Mechanical Insulation Design Guide Energy Calculators or the 3E Plus Energy Efficiency Software developed by the North American Insulation Manufacturers Association.

For purposes of this Section:

"ASHRAE" means the American Society of Heating, Refrigerating, and Air-Conditioning Engineers.

"Mechanical insulation property" includes insulation materials, facings, and accessory products that are used for thermal requirements for mechanical piping and equipment, hot and cold applications, and heating, venting, and air conditioning applications and are placed in service in connection with a mechanical system that (i) is located in the State and (ii) is of a character subject to an allowance for depreciation under the Internal Revenue Code.

"Cost of mechanical insulation property" includes (i) any amount paid or incurred for the installation of mechanical insulation property for that incremental portion above the minimums in ASHRAE standard 90.1-2007 and the total insulation cost for maintenance applications, (ii) in the case of removal and disposal of the old mechanical insulation property, 10% of the cost of the new mechanical insulation property (determined without regard to this item), and (iii) expenditures for labor costs properly allocable to the preparation, assembly, and installation of mechanical insulation property.

"Applicable percentage" means the lesser of (i) 30% or (ii) the reduction in energy loss (expressed as a percentage) from the installed mechanical insulation property compared with mechanical insulation property that meets the minimum requirements of ASHRAE standard 90.1-2007.

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