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91_HB1120enr HB1120 Enrolled LRB9100524PTpkA 1 AN ACT concerning victims of Nazi persecution. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Illinois Income Tax Act is amended by 5 changing Section 203 as follows: 6 (35 ILCS 5/203) (from Ch. 120, par. 2-203) 7 Sec. 203. Base income defined. 8 (a) Individuals. 9 (1) In general. In the case of an individual, base 10 income means an amount equal to the taxpayer's adjusted 11 gross income for the taxable year as modified by 12 paragraph (2). 13 (2) Modifications. The adjusted gross income 14 referred to in paragraph (1) shall be modified by adding 15 thereto the sum of the following amounts: 16 (A) An amount equal to all amounts paid or 17 accrued to the taxpayer as interest or dividends 18 during the taxable year to the extent excluded from 19 gross income in the computation of adjusted gross 20 income, except stock dividends of qualified public 21 utilities described in Section 305(e) of the 22 Internal Revenue Code; 23 (B) An amount equal to the amount of tax 24 imposed by this Act to the extent deducted from 25 gross income in the computation of adjusted gross 26 income for the taxable year; 27 (C) An amount equal to the amount received 28 during the taxable year as a recovery or refund of 29 real property taxes paid with respect to the 30 taxpayer's principal residence under the Revenue Act 31 of 1939 and for which a deduction was previously HB1120 Enrolled -2- LRB9100524PTpkA 1 taken under subparagraph (L) of this paragraph (2) 2 prior to July 1, 1991, the retrospective application 3 date of Article 4 of Public Act 87-17. In the case 4 of multi-unit or multi-use structures and farm 5 dwellings, the taxes on the taxpayer's principal 6 residence shall be that portion of the total taxes 7 for the entire property which is attributable to 8 such principal residence; 9 (D) An amount equal to the amount of the 10 capital gain deduction allowable under the Internal 11 Revenue Code, to the extent deducted from gross 12 income in the computation of adjusted gross income; 13 (D-5) An amount, to the extent not included in 14 adjusted gross income, equal to the amount of money 15 withdrawn by the taxpayer in the taxable year from a 16 medical care savings account and the interest earned 17 on the account in the taxable year of a withdrawal 18 pursuant to subsection (b) of Section 20 of the 19 Medical Care Savings Account Act; and 20 (D-10) For taxable years ending after December 21 31, 1997, an amount equal to any eligible 22 remediation costs that the individual deducted in 23 computing adjusted gross income and for which the 24 individual claims a credit under subsection (l) of 25 Section 201; 26 and by deducting from the total so obtained the sum of 27 the following amounts: 28 (E) Any amount included in such total in 29 respect of any compensation (including but not 30 limited to any compensation paid or accrued to a 31 serviceman while a prisoner of war or missing in 32 action) paid to a resident by reason of being on 33 active duty in the Armed Forces of the United States 34 and in respect of any compensation paid or accrued HB1120 Enrolled -3- LRB9100524PTpkA 1 to a resident who as a governmental employee was a 2 prisoner of war or missing in action, and in respect 3 of any compensation paid to a resident in 1971 or 4 thereafter for annual training performed pursuant to 5 Sections 502 and 503, Title 32, United States Code 6 as a member of the Illinois National Guard; 7 (F) An amount equal to all amounts included in 8 such total pursuant to the provisions of Sections 9 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and 10 408 of the Internal Revenue Code, or included in 11 such total as distributions under the provisions of 12 any retirement or disability plan for employees of 13 any governmental agency or unit, or retirement 14 payments to retired partners, which payments are 15 excluded in computing net earnings from self 16 employment by Section 1402 of the Internal Revenue 17 Code and regulations adopted pursuant thereto; 18 (G) The valuation limitation amount; 19 (H) An amount equal to the amount of any tax 20 imposed by this Act which was refunded to the 21 taxpayer and included in such total for the taxable 22 year; 23 (I) An amount equal to all amounts included in 24 such total pursuant to the provisions of Section 111 25 of the Internal Revenue Code as a recovery of items 26 previously deducted from adjusted gross income in 27 the computation of taxable income; 28 (J) An amount equal to those dividends 29 included in such total which were paid by a 30 corporation which conducts business operations in an 31 Enterprise Zone or zones created under the Illinois 32 Enterprise Zone Act, and conducts substantially all 33 of its operations in an Enterprise Zone or zones; 34 (K) An amount equal to those dividends HB1120 Enrolled -4- LRB9100524PTpkA 1 included in such total that were paid by a 2 corporation that conducts business operations in a 3 federally designated Foreign Trade Zone or Sub-Zone 4 and that is designated a High Impact Business 5 located in Illinois; provided that dividends 6 eligible for the deduction provided in subparagraph 7 (J) of paragraph (2) of this subsection shall not be 8 eligible for the deduction provided under this 9 subparagraph (K); 10 (L) For taxable years ending after December 11 31, 1983, an amount equal to all social security 12 benefits and railroad retirement benefits included 13 in such total pursuant to Sections 72(r) and 86 of 14 the Internal Revenue Code; 15 (M) With the exception of any amounts 16 subtracted under subparagraph (N), an amount equal 17 to the sum of all amounts disallowed as deductions 18 by Sections 171(a) (2), and 265(2) of the Internal 19 Revenue Code of 1954, as now or hereafter amended, 20 and all amounts of expenses allocable to interest 21 and disallowed as deductions by Section 265(1) of 22 the Internal Revenue Code of 1954, as now or 23 hereafter amended; 24 (N) An amount equal to all amounts included in 25 such total which are exempt from taxation by this 26 State either by reason of its statutes or 27 Constitution or by reason of the Constitution, 28 treaties or statutes of the United States; provided 29 that, in the case of any statute of this State that 30 exempts income derived from bonds or other 31 obligations from the tax imposed under this Act, the 32 amount exempted shall be the interest net of bond 33 premium amortization; 34 (O) An amount equal to any contribution made HB1120 Enrolled -5- LRB9100524PTpkA 1 to a job training project established pursuant to 2 the Tax Increment Allocation Redevelopment Act; 3 (P) An amount equal to the amount of the 4 deduction used to compute the federal income tax 5 credit for restoration of substantial amounts held 6 under claim of right for the taxable year pursuant 7 to Section 1341 of the Internal Revenue Code of 8 1986; 9 (Q) An amount equal to any amounts included in 10 such total, received by the taxpayer as an 11 acceleration in the payment of life, endowment or 12 annuity benefits in advance of the time they would 13 otherwise be payable as an indemnity for a terminal 14 illness; 15 (R) An amount equal to the amount of any 16 federal or State bonus paid to veterans of the 17 Persian Gulf War; 18 (S) An amount, to the extent included in 19 adjusted gross income, equal to the amount of a 20 contribution made in the taxable year on behalf of 21 the taxpayer to a medical care savings account 22 established under the Medical Care Savings Account 23 Act to the extent the contribution is accepted by 24 the account administrator as provided in that Act; 25 (T) An amount, to the extent included in 26 adjusted gross income, equal to the amount of 27 interest earned in the taxable year on a medical 28 care savings account established under the Medical 29 Care Savings Account Act on behalf of the taxpayer, 30 other than interest added pursuant to item (D-5) of 31 this paragraph (2); 32 (U) For one taxable year beginning on or after 33 January 1, 1994, an amount equal to the total amount 34 of tax imposed and paid under subsections (a) and HB1120 Enrolled -6- LRB9100524PTpkA 1 (b) of Section 201 of this Act on grant amounts 2 received by the taxpayer under the Nursing Home 3 Grant Assistance Act during the taxpayer's taxable 4 years 1992 and 1993; 5 (V) Beginning with tax years ending on or 6 after December 31, 1995 and ending with tax years 7 ending on or before December 31, 1999, an amount 8 equal to the amount paid by a taxpayer who is a 9 self-employed taxpayer, a partner of a partnership, 10 or a shareholder in a Subchapter S corporation for 11 health insurance or long-term care insurance for 12 that taxpayer or that taxpayer's spouse or 13 dependents, to the extent that the amount paid for 14 that health insurance or long-term care insurance 15 may be deducted under Section 213 of the Internal 16 Revenue Code of 1986, has not been deducted on the 17 federal income tax return of the taxpayer, and does 18 not exceed the taxable income attributable to that 19 taxpayer's income, self-employment income, or 20 Subchapter S corporation income; except that no 21 deduction shall be allowed under this item (V) if 22 the taxpayer is eligible to participate in any 23 health insurance or long-term care insurance plan of 24 an employer of the taxpayer or the taxpayer's 25 spouse. The amount of the health insurance and 26 long-term care insurance subtracted under this item 27 (V) shall be determined by multiplying total health 28 insurance and long-term care insurance premiums paid 29 by the taxpayer times a number that represents the 30 fractional percentage of eligible medical expenses 31 under Section 213 of the Internal Revenue Code of 32 1986 not actually deducted on the taxpayer's federal 33 income tax return;and34 (W) For taxable years beginning on or after HB1120 Enrolled -7- LRB9100524PTpkA 1 January 1, 1998, all amounts included in the 2 taxpayer's federal gross income in the taxable year 3 from amounts converted from a regular IRA to a Roth 4 IRA. This paragraph is exempt from the provisions of 5 Section 250; and.6 (X) For taxable year 1999 and thereafter, an 7 amount equal to the amount of any (i) distributions, 8 to the extent includible in gross income for federal 9 income tax purposes, made to the taxpayer because of 10 his or her status as a victim of persecution for 11 racial or religious reasons by Nazi Germany or any 12 other Axis regime or as an heir of the victim and 13 (ii) items of income, to the extent includible in 14 gross income for federal income tax purposes, 15 attributable to, derived from or in any way related 16 to assets stolen from, hidden from, or otherwise 17 lost to a victim of persecution for racial or 18 religious reasons by Nazi Germany or any other Axis 19 regime immediately prior to, during, and immediately 20 after World War II, including, but not limited to, 21 interest on the proceeds receivable as insurance 22 under policies issued to a victim of persecution for 23 racial or religious reasons by Nazi Germany or any 24 other Axis regime by European insurance companies 25 immediately prior to and during World War II; 26 provided, however, this subtraction from federal 27 adjusted gross income does not apply to assets 28 acquired with such assets or with the proceeds from 29 the sale of such assets; provided, further, this 30 paragraph shall only apply to a taxpayer who was the 31 first recipient of such assets after their recovery 32 and who is a victim of persecution for racial or 33 religious reasons by Nazi Germany or any other Axis 34 regime or as an heir of the victim. The amount of HB1120 Enrolled -8- LRB9100524PTpkA 1 and the eligibility for any public assistance, 2 benefit, or similar entitlement is not affected by 3 the inclusion of items (i) and (ii) of this 4 paragraph in gross income for federal income tax 5 purposes. This paragraph is exempt from the 6 provisions of Section 250. 7 (b) Corporations. 8 (1) In general. In the case of a corporation, base 9 income means an amount equal to the taxpayer's taxable 10 income for the taxable year as modified by paragraph (2). 11 (2) Modifications. The taxable income referred to 12 in paragraph (1) shall be modified by adding thereto the 13 sum of the following amounts: 14 (A) An amount equal to all amounts paid or 15 accrued to the taxpayer as interest and all 16 distributions received from regulated investment 17 companies during the taxable year to the extent 18 excluded from gross income in the computation of 19 taxable income; 20 (B) An amount equal to the amount of tax 21 imposed by this Act to the extent deducted from 22 gross income in the computation of taxable income 23 for the taxable year; 24 (C) In the case of a regulated investment 25 company, an amount equal to the excess of (i) the 26 net long-term capital gain for the taxable year, 27 over (ii) the amount of the capital gain dividends 28 designated as such in accordance with Section 29 852(b)(3)(C) of the Internal Revenue Code and any 30 amount designated under Section 852(b)(3)(D) of the 31 Internal Revenue Code, attributable to the taxable 32 year.(this amendatory Act of 1995 (Public Act 33 89-89) is declarative of existing law and is not a 34 new enactment);.HB1120 Enrolled -9- LRB9100524PTpkA 1 (D) The amount of any net operating loss 2 deduction taken in arriving at taxable income, other 3 than a net operating loss carried forward from a 4 taxable year ending prior to December 31, 1986;and5 (E) For taxable years in which a net operating 6 loss carryback or carryforward from a taxable year 7 ending prior to December 31, 1986 is an element of 8 taxable income under paragraph (1) of subsection (e) 9 or subparagraph (E) of paragraph (2) of subsection 10 (e), the amount by which addition modifications 11 other than those provided by this subparagraph (E) 12 exceeded subtraction modifications in such earlier 13 taxable year, with the following limitations applied 14 in the order that they are listed: 15 (i) the addition modification relating to 16 the net operating loss carried back or forward 17 to the taxable year from any taxable year 18 ending prior to December 31, 1986 shall be 19 reduced by the amount of addition modification 20 under this subparagraph (E) which related to 21 that net operating loss and which was taken 22 into account in calculating the base income of 23 an earlier taxable year, and 24 (ii) the addition modification relating 25 to the net operating loss carried back or 26 forward to the taxable year from any taxable 27 year ending prior to December 31, 1986 shall 28 not exceed the amount of such carryback or 29 carryforward; 30 For taxable years in which there is a net 31 operating loss carryback or carryforward from more 32 than one other taxable year ending prior to December 33 31, 1986, the addition modification provided in this 34 subparagraph (E) shall be the sum of the amounts HB1120 Enrolled -10- LRB9100524PTpkA 1 computed independently under the preceding 2 provisions of this subparagraph (E) for each such 3 taxable year;,and 4 (E-5) For taxable years ending after December 5 31, 1997, an amount equal to any eligible 6 remediation costs that the corporation deducted in 7 computing adjusted gross income and for which the 8 corporation claims a credit under subsection (l) of 9 Section 201; 10 and by deducting from the total so obtained the sum of 11 the following amounts: 12 (F) An amount equal to the amount of any tax 13 imposed by this Act which was refunded to the 14 taxpayer and included in such total for the taxable 15 year; 16 (G) An amount equal to any amount included in 17 such total under Section 78 of the Internal Revenue 18 Code; 19 (H) In the case of a regulated investment 20 company, an amount equal to the amount of exempt 21 interest dividends as defined in subsection (b) (5) 22 of Section 852 of the Internal Revenue Code, paid to 23 shareholders for the taxable year; 24 (I) With the exception of any amounts 25 subtracted under subparagraph (J), an amount equal 26 to the sum of all amounts disallowed as deductions 27 by Sections 171(a) (2), and 265(a)(2) and amounts 28 disallowed as interest expense by Section 291(a)(3) 29 of the Internal Revenue Code, as now or hereafter 30 amended, and all amounts of expenses allocable to 31 interest and disallowed as deductions by Section 32 265(a)(1) of the Internal Revenue Code, as now or 33 hereafter amended; 34 (J) An amount equal to all amounts included in HB1120 Enrolled -11- LRB9100524PTpkA 1 such total which are exempt from taxation by this 2 State either by reason of its statutes or 3 Constitution or by reason of the Constitution, 4 treaties or statutes of the United States; provided 5 that, in the case of any statute of this State that 6 exempts income derived from bonds or other 7 obligations from the tax imposed under this Act, the 8 amount exempted shall be the interest net of bond 9 premium amortization; 10 (K) An amount equal to those dividends 11 included in such total which were paid by a 12 corporation which conducts business operations in an 13 Enterprise Zone or zones created under the Illinois 14 Enterprise Zone Act and conducts substantially all 15 of its operations in an Enterprise Zone or zones; 16 (L) An amount equal to those dividends 17 included in such total that were paid by a 18 corporation that conducts business operations in a 19 federally designated Foreign Trade Zone or Sub-Zone 20 and that is designated a High Impact Business 21 located in Illinois; provided that dividends 22 eligible for the deduction provided in subparagraph 23 (K) of paragraph 2 of this subsection shall not be 24 eligible for the deduction provided under this 25 subparagraph (L); 26 (M) For any taxpayer that is a financial 27 organization within the meaning of Section 304(c) of 28 this Act, an amount included in such total as 29 interest income from a loan or loans made by such 30 taxpayer to a borrower, to the extent that such a 31 loan is secured by property which is eligible for 32 the Enterprise Zone Investment Credit. To determine 33 the portion of a loan or loans that is secured by 34 property eligible for a Section 201(h) investment HB1120 Enrolled -12- LRB9100524PTpkA 1 credit to the borrower, the entire principal amount 2 of the loan or loans between the taxpayer and the 3 borrower should be divided into the basis of the 4 Section 201(h) investment credit property which 5 secures the loan or loans, using for this purpose 6 the original basis of such property on the date that 7 it was placed in service in the Enterprise Zone. 8 The subtraction modification available to taxpayer 9 in any year under this subsection shall be that 10 portion of the total interest paid by the borrower 11 with respect to such loan attributable to the 12 eligible property as calculated under the previous 13 sentence; 14 (M-1) For any taxpayer that is a financial 15 organization within the meaning of Section 304(c) of 16 this Act, an amount included in such total as 17 interest income from a loan or loans made by such 18 taxpayer to a borrower, to the extent that such a 19 loan is secured by property which is eligible for 20 the High Impact Business Investment Credit. To 21 determine the portion of a loan or loans that is 22 secured by property eligible for a Section 201(i) 23 investment credit to the borrower, the entire 24 principal amount of the loan or loans between the 25 taxpayer and the borrower should be divided into the 26 basis of the Section 201(i) investment credit 27 property which secures the loan or loans, using for 28 this purpose the original basis of such property on 29 the date that it was placed in service in a 30 federally designated Foreign Trade Zone or Sub-Zone 31 located in Illinois. No taxpayer that is eligible 32 for the deduction provided in subparagraph (M) of 33 paragraph (2) of this subsection shall be eligible 34 for the deduction provided under this subparagraph HB1120 Enrolled -13- LRB9100524PTpkA 1 (M-1). The subtraction modification available to 2 taxpayers in any year under this subsection shall be 3 that portion of the total interest paid by the 4 borrower with respect to such loan attributable to 5 the eligible property as calculated under the 6 previous sentence; 7 (N) Two times any contribution made during the 8 taxable year to a designated zone organization to 9 the extent that the contribution (i) qualifies as a 10 charitable contribution under subsection (c) of 11 Section 170 of the Internal Revenue Code and (ii) 12 must, by its terms, be used for a project approved 13 by the Department of Commerce and Community Affairs 14 under Section 11 of the Illinois Enterprise Zone 15 Act; 16 (O) An amount equal to: (i) 85% for taxable 17 years ending on or before December 31, 1992, or, a 18 percentage equal to the percentage allowable under 19 Section 243(a)(1) of the Internal Revenue Code of 20 1986 for taxable years ending after December 31, 21 1992, of the amount by which dividends included in 22 taxable income and received from a corporation that 23 is not created or organized under the laws of the 24 United States or any state or political subdivision 25 thereof, including, for taxable years ending on or 26 after December 31, 1988, dividends received or 27 deemed received or paid or deemed paid under 28 Sections 951 through 964 of the Internal Revenue 29 Code, exceed the amount of the modification provided 30 under subparagraph (G) of paragraph (2) of this 31 subsection (b) which is related to such dividends; 32 plus (ii) 100% of the amount by which dividends, 33 included in taxable income and received, including, 34 for taxable years ending on or after December 31, HB1120 Enrolled -14- LRB9100524PTpkA 1 1988, dividends received or deemed received or paid 2 or deemed paid under Sections 951 through 964 of the 3 Internal Revenue Code, from any such corporation 4 specified in clause (i) that would but for the 5 provisions of Section 1504 (b) (3) of the Internal 6 Revenue Code be treated as a member of the 7 affiliated group which includes the dividend 8 recipient, exceed the amount of the modification 9 provided under subparagraph (G) of paragraph (2) of 10 this subsection (b) which is related to such 11 dividends; 12 (P) An amount equal to any contribution made 13 to a job training project established pursuant to 14 the Tax Increment Allocation Redevelopment Act; and 15 (Q) An amount equal to the amount of the 16 deduction used to compute the federal income tax 17 credit for restoration of substantial amounts held 18 under claim of right for the taxable year pursuant 19 to Section 1341 of the Internal Revenue Code of 20 1986. 21 (3) Special rule. For purposes of paragraph (2) 22 (A), "gross income" in the case of a life insurance 23 company, for tax years ending on and after December 31, 24 1994, shall mean the gross investment income for the 25 taxable year. 26 (c) Trusts and estates. 27 (1) In general. In the case of a trust or estate, 28 base income means an amount equal to the taxpayer's 29 taxable income for the taxable year as modified by 30 paragraph (2). 31 (2) Modifications. Subject to the provisions of 32 paragraph (3), the taxable income referred to in 33 paragraph (1) shall be modified by adding thereto the sum 34 of the following amounts: HB1120 Enrolled -15- LRB9100524PTpkA 1 (A) An amount equal to all amounts paid or 2 accrued to the taxpayer as interest or dividends 3 during the taxable year to the extent excluded from 4 gross income in the computation of taxable income; 5 (B) In the case of (i) an estate, $600; (ii) a 6 trust which, under its governing instrument, is 7 required to distribute all of its income currently, 8 $300; and (iii) any other trust, $100, but in each 9 such case, only to the extent such amount was 10 deducted in the computation of taxable income; 11 (C) An amount equal to the amount of tax 12 imposed by this Act to the extent deducted from 13 gross income in the computation of taxable income 14 for the taxable year; 15 (D) The amount of any net operating loss 16 deduction taken in arriving at taxable income, other 17 than a net operating loss carried forward from a 18 taxable year ending prior to December 31, 1986; 19 (E) For taxable years in which a net operating 20 loss carryback or carryforward from a taxable year 21 ending prior to December 31, 1986 is an element of 22 taxable income under paragraph (1) of subsection (e) 23 or subparagraph (E) of paragraph (2) of subsection 24 (e), the amount by which addition modifications 25 other than those provided by this subparagraph (E) 26 exceeded subtraction modifications in such taxable 27 year, with the following limitations applied in the 28 order that they are listed: 29 (i) the addition modification relating to 30 the net operating loss carried back or forward 31 to the taxable year from any taxable year 32 ending prior to December 31, 1986 shall be 33 reduced by the amount of addition modification 34 under this subparagraph (E) which related to HB1120 Enrolled -16- LRB9100524PTpkA 1 that net operating loss and which was taken 2 into account in calculating the base income of 3 an earlier taxable year, and 4 (ii) the addition modification relating 5 to the net operating loss carried back or 6 forward to the taxable year from any taxable 7 year ending prior to December 31, 1986 shall 8 not exceed the amount of such carryback or 9 carryforward; 10 For taxable years in which there is a net 11 operating loss carryback or carryforward from more 12 than one other taxable year ending prior to December 13 31, 1986, the addition modification provided in this 14 subparagraph (E) shall be the sum of the amounts 15 computed independently under the preceding 16 provisions of this subparagraph (E) for each such 17 taxable year; 18 (F) For taxable years ending on or after 19 January 1, 1989, an amount equal to the tax deducted 20 pursuant to Section 164 of the Internal Revenue Code 21 if the trust or estate is claiming the same tax for 22 purposes of the Illinois foreign tax credit under 23 Section 601 of this Act; 24 (G) An amount equal to the amount of the 25 capital gain deduction allowable under the Internal 26 Revenue Code, to the extent deducted from gross 27 income in the computation of taxable income; and 28 (G-5) For taxable years ending after December 29 31, 1997, an amount equal to any eligible 30 remediation costs that the trust or estate deducted 31 in computing adjusted gross income and for which the 32 trust or estate claims a credit under subsection (l) 33 of Section 201; 34 and by deducting from the total so obtained the sum of HB1120 Enrolled -17- LRB9100524PTpkA 1 the following amounts: 2 (H) An amount equal to all amounts included in 3 such total pursuant to the provisions of Sections 4 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and 5 408 of the Internal Revenue Code or included in such 6 total as distributions under the provisions of any 7 retirement or disability plan for employees of any 8 governmental agency or unit, or retirement payments 9 to retired partners, which payments are excluded in 10 computing net earnings from self employment by 11 Section 1402 of the Internal Revenue Code and 12 regulations adopted pursuant thereto; 13 (I) The valuation limitation amount; 14 (J) An amount equal to the amount of any tax 15 imposed by this Act which was refunded to the 16 taxpayer and included in such total for the taxable 17 year; 18 (K) An amount equal to all amounts included in 19 taxable income as modified by subparagraphs (A), 20 (B), (C), (D), (E), (F) and (G) which are exempt 21 from taxation by this State either by reason of its 22 statutes or Constitution or by reason of the 23 Constitution, treaties or statutes of the United 24 States; provided that, in the case of any statute of 25 this State that exempts income derived from bonds or 26 other obligations from the tax imposed under this 27 Act, the amount exempted shall be the interest net 28 of bond premium amortization; 29 (L) With the exception of any amounts 30 subtracted under subparagraph (K), an amount equal 31 to the sum of all amounts disallowed as deductions 32 by Sections 171(a) (2) and 265(a)(2) of the Internal 33 Revenue Code, as now or hereafter amended, and all 34 amounts of expenses allocable to interest and HB1120 Enrolled -18- LRB9100524PTpkA 1 disallowed as deductions by Section 265(1) of the 2 Internal Revenue Code of 1954, as now or hereafter 3 amended; 4 (M) An amount equal to those dividends 5 included in such total which were paid by a 6 corporation which conducts business operations in an 7 Enterprise Zone or zones created under the Illinois 8 Enterprise Zone Act and conducts substantially all 9 of its operations in an Enterprise Zone or Zones; 10 (N) An amount equal to any contribution made 11 to a job training project established pursuant to 12 the Tax Increment Allocation Redevelopment Act; 13 (O) An amount equal to those dividends 14 included in such total that were paid by a 15 corporation that conducts business operations in a 16 federally designated Foreign Trade Zone or Sub-Zone 17 and that is designated a High Impact Business 18 located in Illinois; provided that dividends 19 eligible for the deduction provided in subparagraph 20 (M) of paragraph (2) of this subsection shall not be 21 eligible for the deduction provided under this 22 subparagraph (O);and23 (P) An amount equal to the amount of the 24 deduction used to compute the federal income tax 25 credit for restoration of substantial amounts held 26 under claim of right for the taxable year pursuant 27 to Section 1341 of the Internal Revenue Code of 28 1986; and.29 (Q) For taxable year 1999 and thereafter, an 30 amount equal to the amount of any (i) distributions, 31 to the extent includible in gross income for federal 32 income tax purposes, made to the taxpayer because of 33 his or her status as a victim of persecution for 34 racial or religious reasons by Nazi Germany or any HB1120 Enrolled -19- LRB9100524PTpkA 1 other Axis regime or as an heir of the victim and 2 (ii) items of income, to the extent includible in 3 gross income for federal income tax purposes, 4 attributable to, derived from or in any way related 5 to assets stolen from, hidden from, or otherwise 6 lost to a victim of persecution for racial or 7 religious reasons by Nazi Germany or any other Axis 8 regime immediately prior to, during, and immediately 9 after World War II, including, but not limited to, 10 interest on the proceeds receivable as insurance 11 under policies issued to a victim of persecution for 12 racial or religious reasons by Nazi Germany or any 13 other Axis regime by European insurance companies 14 immediately prior to and during World War II; 15 provided, however, this subtraction from federal 16 adjusted gross income does not apply to assets 17 acquired with such assets or with the proceeds from 18 the sale of such assets; provided, further, this 19 paragraph shall only apply to a taxpayer who was the 20 first recipient of such assets after their recovery 21 and who is a victim of persecution for racial or 22 religious reasons by Nazi Germany or any other Axis 23 regime or as an heir of the victim. The amount of 24 and the eligibility for any public assistance, 25 benefit, or similar entitlement is not affected by 26 the inclusion of items (i) and (ii) of this 27 paragraph in gross income for federal income tax 28 purposes. This paragraph is exempt from the 29 provisions of Section 250. 30 (3) Limitation. The amount of any modification 31 otherwise required under this subsection shall, under 32 regulations prescribed by the Department, be adjusted by 33 any amounts included therein which were properly paid, 34 credited, or required to be distributed, or permanently HB1120 Enrolled -20- LRB9100524PTpkA 1 set aside for charitable purposes pursuant to Internal 2 Revenue Code Section 642(c) during the taxable year. 3 (d) Partnerships. 4 (1) In general. In the case of a partnership, base 5 income means an amount equal to the taxpayer's taxable 6 income for the taxable year as modified by paragraph (2). 7 (2) Modifications. The taxable income referred to 8 in paragraph (1) shall be modified by adding thereto the 9 sum of the following amounts: 10 (A) An amount equal to all amounts paid or 11 accrued to the taxpayer as interest or dividends 12 during the taxable year to the extent excluded from 13 gross income in the computation of taxable income; 14 (B) An amount equal to the amount of tax 15 imposed by this Act to the extent deducted from 16 gross income for the taxable year;and17 (C) The amount of deductions allowed to the 18 partnership pursuant to Section 707 (c) of the 19 Internal Revenue Code in calculating its taxable 20 income; and 21 (D) An amount equal to the amount of the 22 capital gain deduction allowable under the Internal 23 Revenue Code, to the extent deducted from gross 24 income in the computation of taxable income; 25 and by deducting from the total so obtained the following 26 amounts: 27 (E) The valuation limitation amount; 28 (F) An amount equal to the amount of any tax 29 imposed by this Act which was refunded to the 30 taxpayer and included in such total for the taxable 31 year; 32 (G) An amount equal to all amounts included in 33 taxable income as modified by subparagraphs (A), 34 (B), (C) and (D) which are exempt from taxation by HB1120 Enrolled -21- LRB9100524PTpkA 1 this State either by reason of its statutes or 2 Constitution or by reason of the Constitution, 3 treaties or statutes of the United States; provided 4 that, in the case of any statute of this State that 5 exempts income derived from bonds or other 6 obligations from the tax imposed under this Act, the 7 amount exempted shall be the interest net of bond 8 premium amortization; 9 (H) Any income of the partnership which 10 constitutes personal service income as defined in 11 Section 1348 (b) (1) of the Internal Revenue Code 12 (as in effect December 31, 1981) or a reasonable 13 allowance for compensation paid or accrued for 14 services rendered by partners to the partnership, 15 whichever is greater; 16 (I) An amount equal to all amounts of income 17 distributable to an entity subject to the Personal 18 Property Tax Replacement Income Tax imposed by 19 subsections (c) and (d) of Section 201 of this Act 20 including amounts distributable to organizations 21 exempt from federal income tax by reason of Section 22 501(a) of the Internal Revenue Code; 23 (J) With the exception of any amounts 24 subtracted under subparagraph (G), an amount equal 25 to the sum of all amounts disallowed as deductions 26 by Sections 171(a) (2), and 265(2) of the Internal 27 Revenue Code of 1954, as now or hereafter amended, 28 and all amounts of expenses allocable to interest 29 and disallowed as deductions by Section 265(1) of 30 the Internal Revenue Code, as now or hereafter 31 amended; 32 (K) An amount equal to those dividends 33 included in such total which were paid by a 34 corporation which conducts business operations in an HB1120 Enrolled -22- LRB9100524PTpkA 1 Enterprise Zone or zones created under the Illinois 2 Enterprise Zone Act, enacted by the 82nd General 3 Assembly, and which does not conduct such operations 4 other than in an Enterprise Zone or Zones; 5 (L) An amount equal to any contribution made 6 to a job training project established pursuant to 7 the Real Property Tax Increment Allocation 8 Redevelopment Act; 9 (M) An amount equal to those dividends 10 included in such total that were paid by a 11 corporation that conducts business operations in a 12 federally designated Foreign Trade Zone or Sub-Zone 13 and that is designated a High Impact Business 14 located in Illinois; provided that dividends 15 eligible for the deduction provided in subparagraph 16 (K) of paragraph (2) of this subsection shall not be 17 eligible for the deduction provided under this 18 subparagraph (M); and 19 (N) An amount equal to the amount of the 20 deduction used to compute the federal income tax 21 credit for restoration of substantial amounts held 22 under claim of right for the taxable year pursuant 23 to Section 1341 of the Internal Revenue Code of 24 1986. 25 (e) Gross income; adjusted gross income; taxable income. 26 (1) In general. Subject to the provisions of 27 paragraph (2) and subsection (b) (3), for purposes of 28 this Section and Section 803(e), a taxpayer's gross 29 income, adjusted gross income, or taxable income for the 30 taxable year shall mean the amount of gross income, 31 adjusted gross income or taxable income properly 32 reportable for federal income tax purposes for the 33 taxable year under the provisions of the Internal Revenue 34 Code. Taxable income may be less than zero. However, for HB1120 Enrolled -23- LRB9100524PTpkA 1 taxable years ending on or after December 31, 1986, net 2 operating loss carryforwards from taxable years ending 3 prior to December 31, 1986, may not exceed the sum of 4 federal taxable income for the taxable year before net 5 operating loss deduction, plus the excess of addition 6 modifications over subtraction modifications for the 7 taxable year. For taxable years ending prior to December 8 31, 1986, taxable income may never be an amount in excess 9 of the net operating loss for the taxable year as defined 10 in subsections (c) and (d) of Section 172 of the Internal 11 Revenue Code, provided that when taxable income of a 12 corporation (other than a Subchapter S corporation), 13 trust, or estate is less than zero and addition 14 modifications, other than those provided by subparagraph 15 (E) of paragraph (2) of subsection (b) for corporations 16 or subparagraph (E) of paragraph (2) of subsection (c) 17 for trusts and estates, exceed subtraction modifications, 18 an addition modification must be made under those 19 subparagraphs for any other taxable year to which the 20 taxable income less than zero (net operating loss) is 21 applied under Section 172 of the Internal Revenue Code or 22 under subparagraph (E) of paragraph (2) of this 23 subsection (e) applied in conjunction with Section 172 of 24 the Internal Revenue Code. 25 (2) Special rule. For purposes of paragraph (1) of 26 this subsection, the taxable income properly reportable 27 for federal income tax purposes shall mean: 28 (A) Certain life insurance companies. In the 29 case of a life insurance company subject to the tax 30 imposed by Section 801 of the Internal Revenue Code, 31 life insurance company taxable income, plus the 32 amount of distribution from pre-1984 policyholder 33 surplus accounts as calculated under Section 815a of 34 the Internal Revenue Code; HB1120 Enrolled -24- LRB9100524PTpkA 1 (B) Certain other insurance companies. In the 2 case of mutual insurance companies subject to the 3 tax imposed by Section 831 of the Internal Revenue 4 Code, insurance company taxable income; 5 (C) Regulated investment companies. In the 6 case of a regulated investment company subject to 7 the tax imposed by Section 852 of the Internal 8 Revenue Code, investment company taxable income; 9 (D) Real estate investment trusts. In the 10 case of a real estate investment trust subject to 11 the tax imposed by Section 857 of the Internal 12 Revenue Code, real estate investment trust taxable 13 income; 14 (E) Consolidated corporations. In the case of 15 a corporation which is a member of an affiliated 16 group of corporations filing a consolidated income 17 tax return for the taxable year for federal income 18 tax purposes, taxable income determined as if such 19 corporation had filed a separate return for federal 20 income tax purposes for the taxable year and each 21 preceding taxable year for which it was a member of 22 an affiliated group. For purposes of this 23 subparagraph, the taxpayer's separate taxable income 24 shall be determined as if the election provided by 25 Section 243(b) (2) of the Internal Revenue Code had 26 been in effect for all such years; 27 (F) Cooperatives. In the case of a 28 cooperative corporation or association, the taxable 29 income of such organization determined in accordance 30 with the provisions of Section 1381 through 1388 of 31 the Internal Revenue Code; 32 (G) Subchapter S corporations. In the case 33 of: (i) a Subchapter S corporation for which there 34 is in effect an election for the taxable year under HB1120 Enrolled -25- LRB9100524PTpkA 1 Section 1362 of the Internal Revenue Code, the 2 taxable income of such corporation determined in 3 accordance with Section 1363(b) of the Internal 4 Revenue Code, except that taxable income shall take 5 into account those items which are required by 6 Section 1363(b)(1) of the Internal Revenue Code to 7 be separately stated; and (ii) a Subchapter S 8 corporation for which there is in effect a federal 9 election to opt out of the provisions of the 10 Subchapter S Revision Act of 1982 and have applied 11 instead the prior federal Subchapter S rules as in 12 effect on July 1, 1982, the taxable income of such 13 corporation determined in accordance with the 14 federal Subchapter S rules as in effect on July 1, 15 1982; and 16 (H) Partnerships. In the case of a 17 partnership, taxable income determined in accordance 18 with Section 703 of the Internal Revenue Code, 19 except that taxable income shall take into account 20 those items which are required by Section 703(a)(1) 21 to be separately stated but which would be taken 22 into account by an individual in calculating his 23 taxable income. 24 (f) Valuation limitation amount. 25 (1) In general. The valuation limitation amount 26 referred to in subsections (a) (2) (G), (c) (2) (I) and 27 (d)(2) (E) is an amount equal to: 28 (A) The sum of the pre-August 1, 1969 29 appreciation amounts (to the extent consisting of 30 gain reportable under the provisions of Section 1245 31 or 1250 of the Internal Revenue Code) for all 32 property in respect of which such gain was reported 33 for the taxable year; plus 34 (B) The lesser of (i) the sum of the HB1120 Enrolled -26- LRB9100524PTpkA 1 pre-August 1, 1969 appreciation amounts (to the 2 extent consisting of capital gain) for all property 3 in respect of which such gain was reported for 4 federal income tax purposes for the taxable year, or 5 (ii) the net capital gain for the taxable year, 6 reduced in either case by any amount of such gain 7 included in the amount determined under subsection 8 (a) (2) (F) or (c) (2) (H). 9 (2) Pre-August 1, 1969 appreciation amount. 10 (A) If the fair market value of property 11 referred to in paragraph (1) was readily 12 ascertainable on August 1, 1969, the pre-August 1, 13 1969 appreciation amount for such property is the 14 lesser of (i) the excess of such fair market value 15 over the taxpayer's basis (for determining gain) for 16 such property on that date (determined under the 17 Internal Revenue Code as in effect on that date), or 18 (ii) the total gain realized and reportable for 19 federal income tax purposes in respect of the sale, 20 exchange or other disposition of such property. 21 (B) If the fair market value of property 22 referred to in paragraph (1) was not readily 23 ascertainable on August 1, 1969, the pre-August 1, 24 1969 appreciation amount for such property is that 25 amount which bears the same ratio to the total gain 26 reported in respect of the property for federal 27 income tax purposes for the taxable year, as the 28 number of full calendar months in that part of the 29 taxpayer's holding period for the property ending 30 July 31, 1969 bears to the number of full calendar 31 months in the taxpayer's entire holding period for 32 the property. 33 (C) The Department shall prescribe such 34 regulations as may be necessary to carry out the HB1120 Enrolled -27- LRB9100524PTpkA 1 purposes of this paragraph. 2 (g) Double deductions. Unless specifically provided 3 otherwise, nothing in this Section shall permit the same item 4 to be deducted more than once. 5 (h) Legislative intention. Except as expressly provided 6 by this Section there shall be no modifications or 7 limitations on the amounts of income, gain, loss or deduction 8 taken into account in determining gross income, adjusted 9 gross income or taxable income for federal income tax 10 purposes for the taxable year, or in the amount of such items 11 entering into the computation of base income and net income 12 under this Act for such taxable year, whether in respect of 13 property values as of August 1, 1969 or otherwise. 14 (Source: P.A. 89-89, eff. 6-30-95; 89-235, eff. 8-4-95; 15 89-418, eff. 11-15-95; 89-460, eff. 5-24-96; 89-626, eff. 16 8-9-96; 90-491, eff. 1-1-98; 90-717, eff. 8-7-98; 90-770, 17 eff. 8-14-98; revised 9-21-98.) 18 Section 10. The Illinois Public Aid Code is amended by 19 changing Sections 3-1.2, 3-5, 4-1.6, 4-2, 5-2, 5-4, 6-1.2, 20 and 6-2 as follows: 21 (305 ILCS 5/3-1.2) (from Ch. 23, par. 3-1.2) 22 Sec. 3-1.2. Need. Income available to the person, when 23 added to contributions in money, substance, or services from 24 other sources, including contributions from legally 25 responsible relatives, must be insufficient to equal the 26 grant amount established by Department regulation for such 27 person. 28 In determining earned income to be taken into account, 29 consideration shall be given to any expenses reasonably 30 attributable to the earning of such income. If federal law or 31 regulations permit or require exemption of earned or other HB1120 Enrolled -28- LRB9100524PTpkA 1 income and resources, the Illinois Department shall provide 2 by rule and regulation that the amount of income to be 3 disregarded be increased (1) to the maximum extent so 4 required and (2) to the maximum extent permitted by federal 5 law or regulation in effect as of the date this Amendatory 6 Act becomes law. The Illinois Department may also provide by 7 rule and regulation that the amount of resources to be 8 disregarded be increased to the maximum extent so permitted 9 or required. 10 In determining the resources of an individual or any 11 dependents, the Department shall exclude from consideration 12 the value of funeral and burial spaces, grave markers and 13 other funeral and burial merchandise, funeral and burial 14 insurance the proceeds of which can only be used to pay the 15 funeral and burial expenses of the insured and funds 16 specifically set aside for the funeral and burial 17 arrangements of the individual or his or her dependents, 18 including prepaid funeral and burial plans, to the same 19 extent that such items are excluded from consideration under 20 the federal Supplemental Security Income program. 21 The homestead shall be exempt from consideration except 22 to the extent that it meets the income and shelter needs of 23 the person. "Homestead" means the dwelling house and 24 contiguous real estate owned and occupied by the person, 25 regardless of its value. 26 Occasional or irregular gifts in cash, goods or services 27 from persons who are not legally responsible relatives which 28 are of nominal value or which do not have significant effect 29 in meeting essential requirements shall be disregarded. The 30 eligibility of any applicant for or recipient of public aid 31 under this Article is not affected by the payment of any 32 grant under the "Senior Citizens and Disabled Persons 33 Property Tax Relief and Pharmaceutical Assistance Act" or any 34 distributions or items of income described under subparagraph HB1120 Enrolled -29- LRB9100524PTpkA 1 (X) of paragraph (2) of subsection (a) of Section 203 of the 2 Illinois Income Tax Act. 3 The Illinois Department may, after appropriate 4 investigation, establish and implement a consolidated 5 standard to determine need and eligibility for and amount of 6 benefits under this Article or a uniform cash supplement to 7 the federal Supplemental Security Income program for all or 8 any part of the then current recipients under this Article; 9 provided, however, that the establishment or implementation 10 of such a standard or supplement shall not result in 11 reductions in benefits under this Article for the then 12 current recipients of such benefits. 13 (Source: P.A. 84-1308.) 14 (305 ILCS 5/3-5) (from Ch. 23, par. 3-5) 15 Sec. 3-5. Amount of aid. The amount and nature of 16 financial aid granted to or in behalf of aged, blind, or 17 disabled persons shall be determined in accordance with the 18 standards, grant amounts, rules and regulations of the 19 Illinois Department. Due regard shall be given to the 20 requirements and conditions existing in each case, and to the 21 amount of property owned and the income, money contributions, 22 and other support, and resources received or obtainable by 23 the person, from whatever source. However, the amount and 24 nature of any financial aid is not affected by the payment of 25 any grant under the "Senior Citizens and Disabled Persons 26 Property Tax Relief and Pharmaceutical Assistance Act" or any 27 distributions or items of income described under subparagraph 28 (X) of paragraph (2) of subsection (a) of Section 203 of the 29 Illinois Income Tax Act. The aid shall be sufficient, when 30 added to all other income, money contributions and support, 31 to provide the person with a grant in the amount established 32 by Department regulation for such a person, based upon 33 standards providing a livelihood compatible with health and HB1120 Enrolled -30- LRB9100524PTpkA 1 well-being. 2 (Source: P.A. 84-832.) 3 (305 ILCS 5/4-1.6) (from Ch. 23, par. 4-1.6) 4 Sec. 4-1.6. Need. Income available to the family as 5 defined by the Illinois Department by rule, or to the child 6 in the case of a child removed from his or her home, when 7 added to contributions in money, substance or services from 8 other sources, including income available from parents absent 9 from the home or from a stepparent, contributions made for 10 the benefit of the parent or other persons necessary to 11 provide care and supervision to the child, and contributions 12 from legally responsible relatives, must be insufficient to 13 equal the grant amount established by Department regulation 14 for such a person. 15 In considering income to be taken into account, 16 consideration shall be given to any expenses reasonably 17 attributable to the earning of such income. The Illinois 18 Department may also, subject to such limitations as may be 19 prescribed by federal law or regulation, permit all or any 20 portion of earned or other income to be set aside for the 21 future identifiable needs of a child. If federal law or 22 regulations permit or require exemption of other income of 23 recipients, the Illinois Department may provide by rule and 24 regulation for the exemptions thus permitted or required. 25 The eligibility of any applicant for or recipient of public 26 aid under this Article is not affected by the payment of any 27 grant under the "Senior Citizens and Disabled Persons 28 Property Tax Relief and Pharmaceutical Assistance Act" or any 29 distributions or items of income described under subparagraph 30 (X) of paragraph (2) of subsection (a) of Section 203 of the 31 Illinois Income Tax Act. 32 The Illinois Department may, by rule, set forth criteria 33 under which an assistance unit is ineligible for cash HB1120 Enrolled -31- LRB9100524PTpkA 1 assistance under this Article for a specified number of 2 months due to the receipt of a lump sum payment. 3 (Source: P.A. 90-17, eff. 7-1-97.) 4 (305 ILCS 5/4-2) (from Ch. 23, par. 4-2) 5 Sec. 4-2. Amount of aid. 6 (a) The amount and nature of financial aid shall be 7 determined in accordance with the grant amounts, rules and 8 regulations of the Illinois Department. Due regard shall be 9 given to the self-sufficiency requirements of the family and 10 to the income, money contributions and other support and 11 resources available, from whatever source. Beginning July 1, 12 1992, the supplementary grants previously paid under this 13 Section shall no longer be paid. However, the amount and 14 nature of any financial aid is not affected by the payment of 15 any grant under the "Senior Citizens and Disabled Persons 16 Property Tax Relief and Pharmaceutical Assistance Act" or any 17 distributions or items of income described under subparagraph 18 (X) of paragraph (2) of subsection (a) of Section 203 of the 19 Illinois Income Tax Act. The aid shall be sufficient, when 20 added to all other income, money contributions and support to 21 provide the family with a grant in the amount established by 22 Department regulation. 23 (b) The Illinois Department may conduct special 24 projects, which may be known as Grant Diversion Projects, 25 under which recipients of financial aid under this Article 26 are placed in jobs and their grants are diverted to the 27 employer who in turn makes payments to the recipients in the 28 form of salary or other employment benefits. The Illinois 29 Department shall by rule specify the terms and conditions of 30 such Grant Diversion Projects. Such projects shall take into 31 consideration and be coordinated with the programs 32 administered under the Illinois Emergency Employment 33 Development Act. HB1120 Enrolled -32- LRB9100524PTpkA 1 (c) The amount and nature of the financial aid for a 2 child requiring care outside his own home shall be determined 3 in accordance with the rules and regulations of the Illinois 4 Department, with due regard to the needs and requirements of 5 the child in the foster home or institution in which he has 6 been placed. 7 (d) If the Department establishes grants for family 8 units consisting exclusively of a pregnant woman with no 9 dependent child or including her husband if living with her, 10 the grant amount for such a unit shall be equal to the grant 11 amount for an assistance unit consisting of one adult, or 2 12 persons if the husband is included. Other than as herein 13 described, an unborn child shall not be counted in 14 determining the size of an assistance unit or for calculating 15 grants. 16 Payments for basic maintenance requirements of a child or 17 children and the relative with whom the child or children are 18 living shall be prescribed, by rule, by the Illinois 19 Department. 20 These grants may be increased in the following circumstances: 21 1. If the child is living with both parents or with 22 persons standing in the relationship of parents, and if 23 the grant is necessitated because of the unemployment or 24 insufficient earnings of the parent or parents and 25 neither parent is receiving benefits under "The 26 Unemployment Compensation Act", approved June 30, 1937, 27 as amended, the maximum may be increased by not more than 28 $25. 29 2. If a child is age 13 or over, the maximum may be 30 increased by not more than $15. 31 The allowances provided under Article IX for recipients 32 participating in the training and rehabilitation programs 33 shall be in addition to the maximum payments established in 34 this Section. HB1120 Enrolled -33- LRB9100524PTpkA 1 Grants under this Article shall not be supplemented by 2 General Assistance provided under Article VI. 3 (e) Grants shall be paid to the parent or other person 4 with whom the child or children are living, except for such 5 amount as is paid in behalf of the child or his parent or 6 other relative to other persons or agencies pursuant to this 7 Code or the rules and regulations of the Illinois Department. 8 (f) An assistance unit, receiving financial aid under 9 this Article or temporarily ineligible to receive aid under 10 this Article under a penalty imposed by the Illinois 11 Department for failure to comply with the eligibility 12 requirements or that voluntarily requests termination of 13 financial assistance under this Article and becomes 14 subsequently eligible for assistance within 9 months, shall 15 not receive any increase in the amount of aid solely on 16 account of the birth of a child; except that an increase is 17 not prohibited when the birth is (i) of a child of a pregnant 18 woman who became eligible for aid under this Article during 19 the pregnancy, or (ii) of a child born within 10 months after 20 the date of implementation of this subsection, or (iii) of a 21 child conceived after a family became ineligible for 22 assistance due to income or marriage and at least 3 months of 23 ineligibility expired before any reapplication for 24 assistance. This subsection does not, however, prevent a 25 unit from receiving a general increase in the amount of aid 26 that is provided to all recipients of aid under this Article. 27 The Illinois Department is authorized to transfer funds, 28 and shall use any budgetary savings attributable to not 29 increasing the grants due to the births of additional 30 children, to supplement existing funding for employment and 31 training services for recipients of aid under this Article 32 IV. The Illinois Department shall target, to the extent the 33 supplemental funding allows, employment and training services 34 to the families who do not receive a grant increase after the HB1120 Enrolled -34- LRB9100524PTpkA 1 birth of a child. In addition, the Illinois Department shall 2 provide, to the extent the supplemental funding allows, such 3 families with up to 24 months of transitional child care 4 pursuant to Illinois Department rules. All remaining 5 supplemental funds shall be used for employment and training 6 services or transitional child care support. 7 In making the transfers authorized by this subsection, 8 the Illinois Department shall first determine, pursuant to 9 regulations adopted by the Illinois Department for this 10 purpose, the amount of savings attributable to not increasing 11 the grants due to the births of additional children. 12 Transfers may be made from General Revenue Fund 13 appropriations for distributive purposes authorized by 14 Article IV of this Code only to General Revenue Fund 15 appropriations for employability development services 16 including operating and administrative costs and related 17 distributive purposes under Article IXA of this Code. The 18 Director, with the approval of the Governor, shall certify 19 the amount and affected line item appropriations to the State 20 Comptroller. 21 The Illinois Department shall apply for all waivers of 22 federal law and regulations necessary to implement this 23 subsection; implementation of this subsection is contingent 24 on the Illinois Department receiving all necessary federal 25 waivers. The Illinois Department may implement this 26 subsection through the use of emergency rules in accordance 27 with Section 5-45 of the Illinois Administrative Procedure 28 Act. For purposes of the Illinois Administrative Procedure 29 Act, the adoption of rules to implement this subsection shall 30 be considered an emergency and necessary for the public 31 interest, safety, and welfare. 32 Nothing in this subsection shall be construed to prohibit 33 the Illinois Department from using funds under this Article 34 IV to provide assistance in the form of vouchers that may be HB1120 Enrolled -35- LRB9100524PTpkA 1 used to pay for goods and services deemed by the Illinois 2 Department, by rule, as suitable for the care of the child 3 such as diapers, clothing, school supplies, and cribs. 4 (g) (Blank). 5 (h) Notwithstanding any other provision of this Code, 6 the Illinois Department is authorized to reduce payment 7 levels used to determine cash grants under this Article after 8 December 31 of any fiscal year if the Illinois Department 9 determines that the caseload upon which the appropriations 10 for the current fiscal year are based have increased by more 11 than 5% and the appropriation is not sufficient to ensure 12 that cash benefits under this Article do not exceed the 13 amounts appropriated for those cash benefits. Reductions in 14 payment levels may be accomplished by emergency rule under 15 Section 5-45 of the Illinois Administrative Procedure Act, 16 except that the limitation on the number of emergency rules 17 that may be adopted in a 24-month period shall not apply and 18 the provisions of Sections 5-115 and 5-125 of the Illinois 19 Administrative Procedure Act shall not apply. Increases in 20 payment levels shall be accomplished only in accordance with 21 Section 5-40 of the Illinois Administrative Procedure Act. 22 Before any rule to increase payment levels promulgated under 23 this Section shall become effective, a joint resolution 24 approving the rule must be adopted by a roll call vote by a 25 majority of the members elected to each chamber of the 26 General Assembly. 27 (Source: P.A. 89-6, eff. 3-6-95; 89-193, eff. 7-21-95; 28 89-641, eff. 8-9-96; 90-17, eff. 7-1-97; 90-372, eff. 7-1-98; 29 90-655, eff. 7-30-98.) 30 (305 ILCS 5/5-2) (from Ch. 23, par. 5-2) 31 Sec. 5-2. Classes of Persons Eligible. Medical 32 assistance under this Article shall be available to any of 33 the following classes of persons in respect to whom a plan HB1120 Enrolled -36- LRB9100524PTpkA 1 for coverage has been submitted to the Governor by the 2 Illinois Department and approved by him: 3 1. Recipients of basic maintenance grants under Articles 4 III and IV. 5 2. Persons otherwise eligible for basic maintenance 6 under Articles III and IV but who fail to qualify thereunder 7 on the basis of need, and who have insufficient income and 8 resources to meet the costs of necessary medical care, 9 including but not limited to, all persons who would be 10 determined eligible for such basic maintenance under Article 11 IV by disregarding the maximum earned income permitted by 12 federal law. 13 3. Persons who would otherwise qualify for Aid to the 14 Medically Indigent under Article VII. 15 4. Persons not eligible under any of the preceding 16 paragraphs who fall sick, are injured, or die, not having 17 sufficient money, property or other resources to meet the 18 costs of necessary medical care or funeral and burial 19 expenses. 20 5. (a) Women during pregnancy, after the fact of 21 pregnancy has been determined by medical diagnosis, and 22 during the 60-day period beginning on the last day of the 23 pregnancy, together with their infants and children born 24 after September 30, 1983, whose income and resources are 25 insufficient to meet the costs of necessary medical care 26 to the maximum extent possible under Title XIX of the 27 Federal Social Security Act. 28 (b) The Illinois Department and the Governor shall 29 provide a plan for coverage of the persons eligible under 30 paragraph 5(a) by April 1, 1990. Such plan shall provide 31 ambulatory prenatal care to pregnant women during a 32 presumptive eligibility period and establish an income 33 eligibility standard that is equal to 133% of the nonfarm 34 income official poverty line, as defined by the federal HB1120 Enrolled -37- LRB9100524PTpkA 1 Office of Management and Budget and revised annually in 2 accordance with Section 673(2) of the Omnibus Budget 3 Reconciliation Act of 1981, applicable to families of the 4 same size, provided that costs incurred for medical care 5 are not taken into account in determining such income 6 eligibility. 7 (c) The Illinois Department may conduct a 8 demonstration in at least one county that will provide 9 medical assistance to pregnant women, together with their 10 infants and children up to one year of age, where the 11 income eligibility standard is set up to 185% of the 12 nonfarm income official poverty line, as defined by the 13 federal Office of Management and Budget. The Illinois 14 Department shall seek and obtain necessary authorization 15 provided under federal law to implement such a 16 demonstration. Such demonstration may establish resource 17 standards that are not more restrictive than those 18 established under Article IV of this Code. 19 6. Persons under the age of 18 who fail to qualify as 20 dependent under Article IV and who have insufficient income 21 and resources to meet the costs of necessary medical care to 22 the maximum extent permitted under Title XIX of the Federal 23 Social Security Act. 24 7. Persons who are 18 years of age or younger and would 25 qualify as disabled as defined under the Federal Supplemental 26 Security Income Program, provided medical service for such 27 persons would be eligible for Federal Financial 28 Participation, and provided the Illinois Department 29 determines that: 30 (a) the person requires a level of care provided by 31 a hospital, skilled nursing facility, or intermediate 32 care facility, as determined by a physician licensed to 33 practice medicine in all its branches; 34 (b) it is appropriate to provide such care outside HB1120 Enrolled -38- LRB9100524PTpkA 1 of an institution, as determined by a physician licensed 2 to practice medicine in all its branches; 3 (c) the estimated amount which would be expended 4 for care outside the institution is not greater than the 5 estimated amount which would be expended in an 6 institution. 7 8. Persons who become ineligible for basic maintenance 8 assistance under Article IV of this Code in programs 9 administered by the Illinois Department due to employment 10 earnings and persons in assistance units comprised of adults 11 and children who become ineligible for basic maintenance 12 assistance under Article VI of this Code due to employment 13 earnings. The plan for coverage for this class of persons 14 shall: 15 (a) extend the medical assistance coverage for up 16 to 12 months following termination of basic maintenance 17 assistance; and 18 (b) offer persons who have initially received 6 19 months of the coverage provided in paragraph (a) above, 20 the option of receiving an additional 6 months of 21 coverage, subject to the following: 22 (i) such coverage shall be pursuant to 23 provisions of the federal Social Security Act; 24 (ii) such coverage shall include all services 25 covered while the person was eligible for basic 26 maintenance assistance; 27 (iii) no premium shall be charged for such 28 coverage; and 29 (iv) such coverage shall be suspended in the 30 event of a person's failure without good cause to 31 file in a timely fashion reports required for this 32 coverage under the Social Security Act and coverage 33 shall be reinstated upon the filing of such reports 34 if the person remains otherwise eligible. HB1120 Enrolled -39- LRB9100524PTpkA 1 9. Persons with acquired immunodeficiency syndrome 2 (AIDS) or with AIDS-related conditions with respect to whom 3 there has been a determination that but for home or 4 community-based services such individuals would require the 5 level of care provided in an inpatient hospital, skilled 6 nursing facility or intermediate care facility the cost of 7 which is reimbursed under this Article. Assistance shall be 8 provided to such persons to the maximum extent permitted 9 under Title XIX of the Federal Social Security Act. 10 10. Participants in the long-term care insurance 11 partnership program established under the Partnership for 12 Long-Term Care Act who meet the qualifications for protection 13 of resources described in Section 25 of that Act. 14 The Illinois Department and the Governor shall provide a 15 plan for coverage of the persons eligible under paragraph 7 16 as soon as possible after July 1, 1984. 17 The eligibility of any such person for medical assistance 18 under this Article is not affected by the payment of any 19 grant under the Senior Citizens and Disabled Persons Property 20 Tax Relief and Pharmaceutical Assistance Act or any 21 distributions or items of income described under subparagraph 22 (X) of paragraph (2) of subsection (a) of Section 203 of the 23 Illinois Income Tax Act. The Department shall by rule 24 establish the amounts of assets to be disregarded in 25 determining eligibility for medical assistance, which shall 26 at a minimum equal the amounts to be disregarded under the 27 Federal Supplemental Security Income Program. The amount of 28 assets of a single person to be disregarded shall not be less 29 than $2,000, and the amount of assets of a married couple to 30 be disregarded shall not be less than $3,000. 31 To the extent permitted under federal law, any person 32 found guilty of a second violation of Article VIIIA shall be 33 ineligible for medical assistance under this Article, as 34 provided in Section 8A-8. HB1120 Enrolled -40- LRB9100524PTpkA 1 The eligibility of any person for medical assistance 2 under this Article shall not be affected by the receipt by 3 the person of donations or benefits from fundraisers held for 4 the person in cases of serious illness, as long as neither 5 the person nor members of the person's family have actual 6 control over the donations or benefits or the disbursement of 7 the donations or benefits. 8 (Source: P.A. 89-525, eff. 7-19-96.) 9 (305 ILCS 5/5-4) (from Ch. 23, par. 5-4) 10 Sec. 5-4. Amount and nature of medical assistance. The 11 amount and nature of medical assistance shall be determined 12 by the County Departments in accordance with the standards, 13 rules, and regulations of the Illinois Department of Public 14 Aid, with due regard to the requirements and conditions in 15 each case, including contributions available from legally 16 responsible relatives. However, the amount and nature of 17 such medical assistance shall not be affected by the payment 18 of any grant under the Senior Citizens and Disabled Persons 19 Property Tax Relief and Pharmaceutical Assistance Act or any 20 distributions or items of income described under subparagraph 21 (X) of paragraph (2) of subsection (a) of Section 203 of the 22 Illinois Income Tax Act. The amount and nature of medical 23 assistance shall not be affected by the receipt of donations 24 or benefits from fundraisers in cases of serious illness, as 25 long as neither the person nor members of the person's family 26 have actual control over the donations or benefits or the 27 disbursement of the donations or benefits. 28 In determining the income and assets available to the 29 institutionalized spouse and to the community spouse, the 30 Illinois Department of Public Aid shall follow the procedures 31 established by federal law. The community spouse resource 32 allowance shall be established and maintained at the maximum 33 level permitted pursuant to Section 1924(f)(2) of the Social HB1120 Enrolled -41- LRB9100524PTpkA 1 Security Act, as now or hereafter amended, or an amount set 2 after a fair hearing, whichever is greater. The monthly 3 maintenance allowance for the community spouse shall be 4 established and maintained at the maximum level permitted 5 pursuant to Section 1924(d)(3)(C) of the Social Security Act, 6 as now or hereafter amended. Subject to the approval of the 7 Secretary of the United States Department of Health and Human 8 Services, the provisions of this Section shall be extended to 9 persons who but for the provision of home or community-based 10 services under Section 4.02 of the Illinois Act on the Aging, 11 would require the level of care provided in an institution, 12 as is provided for in federal law. 13 The Department of Human Services shall notify in writing 14 each institutionalized spouse who is a recipient of medical 15 assistance under this Article, and each such person's 16 community spouse, of the changes in treatment of income and 17 resources, including provisions for protecting income for a 18 community spouse and permitting the transfer of resources to 19 a community spouse, required by enactment of the federal 20 Medicare Catastrophic Coverage Act of 1988 (Public Law 21 100-360). The notification shall be in language likely to be 22 easily understood by those persons. The Department of Human 23 Services also shall reassess the amount of medical assistance 24 for which each such recipient is eligible as a result of the 25 enactment of that federal Act, whether or not a recipient 26 requests such a reassessment. 27 (Source: P.A. 89-507, eff. 7-1-97; 90-655, eff. 7-30-98.) 28 (305 ILCS 5/6-1.2) (from Ch. 23, par. 6-1.2) 29 Sec. 6-1.2. Need. Income available to the person, when 30 added to contributions in money, substance, or services from 31 other sources, including contributions from legally 32 responsible relatives, must be insufficient to equal the 33 grant amount established by Department regulation (or by HB1120 Enrolled -42- LRB9100524PTpkA 1 local governmental unit in units which do not receive State 2 funds) for such a person. 3 In determining income to be taken into account: 4 (1) The first $75 of earned income in income 5 assistance units comprised exclusively of one adult 6 person shall be disregarded, and for not more than 3 7 months in any 12 consecutive months that portion of 8 earned income beyond the first $75 that is the difference 9 between the standard of assistance and the grant amount, 10 shall be disregarded. 11 (2) For income assistance units not comprised 12 exclusively of one adult person, when authorized by rules 13 and regulations of the Illinois Department, a portion of 14 earned income, not to exceed the first $25 a month plus 15 50% of the next $75, may be disregarded for the purpose 16 of stimulating and aiding rehabilitative effort and 17 self-support activity. 18 "Earned income" means money earned in self-employment or 19 wages, salary, or commission for personal services performed 20 as an employee. The eligibility of any applicant for or 21 recipient of public aid under this Article is not affected by 22 the payment of any grant under the "Senior Citizens and 23 Disabled Persons Property Tax Relief and Pharmaceutical 24 Assistance Act",orany refund or payment of the federal 25 Earned Income Tax Credit, or any distributions or items of 26 income described under subparagraph (X) of paragraph (2) of 27 subsection (a) of Section 203 of the Illinois Income Tax Act. 28 If federal laws or regulations applicable to persons 29 receiving assistance under Articles III or IV of this Code 30 permit or require the exemption of earned income in excess of 31 the foregoing limitation on earned income exemptions or 32 permit or require the exemption of certain other income and 33 resources, the Illinois Department, may, by rule, authorize 34 comparable exemptions in determining need under this Section. HB1120 Enrolled -43- LRB9100524PTpkA 1 (Source: P.A. 90-457, eff. 1-1-98.) 2 (305 ILCS 5/6-2) (from Ch. 23, par. 6-2) 3 Sec. 6-2. Amount of aid. The amount and nature of 4 General Assistance for basic maintenance requirements shall 5 be determined in accordance with local budget standards for 6 local governmental units which do not receive State funds. 7 For local governmental units which do receive State funds, 8 the amount and nature of General Assistance for basic 9 maintenance requirements shall be determined in accordance 10 with the standards, rules and regulations of the Illinois 11 Department. Beginning July 1, 1992, the supplementary grants 12 previously paid under this Section shall no longer be paid. 13 However, the amount and nature of any financial aid is not 14 affected by the payment of any grant under the Senior 15 Citizens and Disabled Persons Property Tax Relief and 16 Pharmaceutical Assistance Act or any distributions or items 17 of income described under subparagraph (X) of paragraph (2) 18 of subsection (a) of Section 203 of the Illinois Income Tax 19 Act. Due regard shall be given to the requirements and the 20 conditions existing in each case, and to the income, money 21 contributions and other support and resources available, from 22 whatever source. In local governmental units which do not 23 receive State funds, the grant shall be sufficient when added 24 to all other income, money contributions and support in 25 excess of any excluded income or resources, to provide the 26 person with a grant in the amount established for such a 27 person by the local governmental unit based upon standards 28 meeting basic maintenance requirements. In local 29 governmental units which do receive State funds, the grant 30 shall be sufficient when added to all other income, money 31 contributions and support in excess of any excluded income or 32 resources, to provide the person with a grant in the amount 33 established for such a person by Department regulation based HB1120 Enrolled -44- LRB9100524PTpkA 1 upon standards providing a livelihood compatible with health 2 and well-being, as directed by Section 12-4.11 of this Code. 3 The Illinois Department may conduct special projects, 4 which may be known as Grant Diversion Projects, under which 5 recipients of financial aid under this Article are placed in 6 jobs and their grants are diverted to the employer who in 7 turn makes payments to the recipients in the form of salary 8 or other employment benefits. The Illinois Department shall 9 by rule specify the terms and conditions of such Grant 10 Diversion Projects. Such projects shall take into 11 consideration and be coordinated with the programs 12 administered under the Illinois Emergency Employment 13 Development Act. 14 The allowances provided under Article IX for recipients 15 participating in the training and rehabilitation programs 16 shall be in addition to such maximum payment. 17 Payments may also be made to provide persons receiving 18 basic maintenance support with necessary treatment, care and 19 supplies required because of illness or disability or with 20 acute medical treatment, care, and supplies. Payments for 21 necessary or acute medical care under this paragraph may be 22 made to or in behalf of the person. Obligations incurred for 23 such services but not paid for at the time of a recipient's 24 death may be paid, subject to the rules and regulations of 25 the Illinois Department, after the death of the recipient. 26 (Source: P.A. 89-646, eff. 1-1-97; 90-372, eff. 7-1-98.) 27 Section 15. The Senior Citizens and Disabled Persons 28 Property Tax Relief and Pharmaceutical Assistance Act is 29 amended by changing Section 3.07 as follows: 30 (320 ILCS 25/3.07) (from Ch. 67 1/2, par. 403.07) 31 Sec. 3.07. "Income" means adjusted gross income, 32 properly reportable for federal income tax purposes under the HB1120 Enrolled -45- LRB9100524PTpkA 1 provisions of the Internal Revenue Code, modified by adding 2 thereto the sum of the following amounts to the extent 3 deducted or excluded from gross income in the computation of 4 adjusted gross income: 5 (A) An amount equal to all amounts paid or accrued 6 as interest or dividends during the taxable year; 7 (B) An amount equal to the amount of tax imposed by 8 the Illinois Income Tax Act paid for the taxable year; 9 (C) An amount equal to all amounts received during 10 the taxable year as an annuity under an annuity, 11 endowment or life insurance contract or under any other 12 contract or agreement; 13 (D) An amount equal to the amount of benefits paid 14 under the Federal Social Security Act during the taxable 15 year; 16 (E) An amount equal to the amount of benefits paid 17 under the Railroad Retirement Act during the taxable 18 year; 19 (F) An amount equal to the total amount of cash 20 public assistance payments received from any governmental 21 agency during the taxable year other than benefits 22 received pursuant to this Act; 23 (G) An amount equal to any net operating loss 24 carryover deduction or capital loss carryover deduction 25 during the taxable year. 26 "Income" does not include any grant assistance received 27 under the Nursing Home Grant Assistance Act or any 28 distributions or items of income described under subparagraph 29 (X) of paragraph (2) of subsection (a) of Section 203 of the 30 Illinois Income Tax Act. 31 This amendatory Act of 1987 shall be effective for 32 purposes of this Section for tax years ending on or after 33 December 31, 1987. 34 (Source: P.A. 90-491, eff. 1-1-98.) HB1120 Enrolled -46- LRB9100524PTpkA 1 Section 99. Effective date. This Act takes effect upon 2 becoming law.