PREVAILING WAGE-TAX CREDITS

Illinois General Assembly - Full Text of HB2632

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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB2632

Introduced 2/6/2025, by Rep. Marcus C. Evans, Jr.

SYNOPSIS AS INTRODUCED:

35 ILCS 5/213
35 ILCS 5/214
35 ILCS 5/222
35 ILCS 5/223
35 ILCS 5/240
820 ILCS 130/2

Amends the Illinois Income Tax Act and the Prevailing Wage Act.
Provides that certain transferable tax credits are considered public works
within the meaning of the Prevailing Wage Act. Effective immediately.
LRB104 09586 HLH 19649 b

A BILL FOR

HB2632
LRB104 09586 HLH 19649 b
1

AN ACT concerning revenue.

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 Sections 213, 214, 222, 223, and 240 as follows:

6

(35 ILCS 5/213)
7

Sec. 213.
Film production services credit.

8

(a) For tax years beginning on or after January 1, 2004, a
9
taxpayer who has been awarded a tax credit under the Film
10
Production Services Tax Credit Act or under the Film
11
Production Services Tax Credit Act of 2008 is entitled to a
12
credit against the taxes imposed under subsections (a) and (b)
13
of Section 201 of this Act in an amount determined by the
14
Department of Commerce and Economic Opportunity under those
15
Acts. If the taxpayer is a partnership or Subchapter S
16
corporation, the credit is allowed to the partners or
17
shareholders in accordance with the determination of income
18
and distributive share of income under Sections 702 and 704
19
and Subchapter S of the Internal Revenue Code.
20

(b) Beginning July 1, 2024, taxpayers who have been
21
awarded a tax credit under the Film Production Services Tax
22
Credit Act of 2008 shall pay to the Department of Commerce and
23
Economic Opportunity, after determination of the tax credit

HB2632
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1
amount but prior to the issuance of a tax credit certificate
2
pursuant to Section 35 of the Film Production Services Tax
3
Credit Act of 2008, a fee equal to 2.5% of the credit amount
4
awarded to the taxpayer under the Film Production Services Tax
5
Credit Act of 2008 that is attributable to wages paid to
6
nonresidents, as described in Section 10 of the Film
7
Production Services Tax Credit Act of 2008, and an additional
8
fee equal to 0.25% of the amount generated by subtracting the
9
credit amount awarded to the taxpayer under the Film
10
Production Services Tax Credit Act of 2008 that is
11
attributable to wages paid to nonresidents from the total
12
credit amount awarded to the taxpayer under that Act. All fees
13
collected under this subsection shall be deposited into the
14
Illinois Production Workforce Development Fund. No tax credit
15
certificate shall be issued by the Department of Commerce and
16
Economic Opportunity until the total fees owed according to
17
this subsection have been received by the Department of
18
Commerce and Economic Opportunity.
19

(c) A transfer of this credit may be made by the taxpayer
20
earning the credit within one year after the credit is awarded
21
in accordance with rules adopted by the Department of Commerce
22
and Economic Opportunity. Beginning July 1, 2023 and through
23
June 30, 2024, if a credit is transferred under this Section by
24
the taxpayer, then the transferor taxpayer shall pay to the
25
Department of Commerce and Economic Opportunity, upon
26
notification of a transfer, a fee equal to 2.5% of the

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LRB104 09586 HLH 19649 b
1
transferred credit amount eligible for nonresident wages, as
2
described in Section 10 of the Film Production Services Tax
3
Credit Act of 2008, and an additional fee of 0.25% of the total
4
amount of the transferred credit that is not calculated on
5
nonresident wages, which shall be deposited into the Illinois
6
Production Workforce Development Fund.
Projects funded in
7
whole or in part by the proceeds of tax credits transferred
8
pursuant to this subsection shall be considered public works
9
within the meaning of the Prevailing Wage Act.

10

(d) The Department, in cooperation with the Department of
11
Commerce and Economic Opportunity, must prescribe rules to
12
enforce and administer the provisions of this Section. This
13
Section is exempt from the provisions of Section 250 of this
14
Act.
15

(e) The credit may not be carried back. If the amount of
16
the credit exceeds the tax liability for the year, the excess
17
may be carried forward and applied to the tax liability of the
18
5 taxable years following the excess credit year. The credit
19
shall be applied to the earliest year for which there is a tax
20
liability. If there are credits from more than one tax year
21
that are available to offset a liability, the earlier credit
22
shall be applied first. In no event shall a credit under this
23
Section reduce the taxpayer's liability to less than zero.
24
(Source: P.A. 102-700, eff. 4-19-22; 103-595, eff. 6-26-24.)

25

(35 ILCS 5/214)

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LRB104 09586 HLH 19649 b
1

Sec. 214.
Tax credit for affordable housing donations.
2

(a) Beginning with taxable years ending on or after
3
December 31, 2001 and until the taxable year ending on
4
December 31, 2026, a taxpayer who makes a donation under
5
Section 7.28 of the Illinois Housing Development Act is
6
entitled to a credit against the tax imposed by subsections
7
(a) and (b) of Section 201 in an amount equal to 50% of the
8
value of the donation. For taxable years ending before
9
December 31, 2023, partners, shareholders of subchapter S
10
corporations, and owners of limited liability companies (if
11
the limited liability company is treated as a partnership for
12
purposes of federal and State income taxation) are entitled to
13
a credit under this Section to be determined in accordance
14
with the determination of income and distributive share of
15
income under Sections 702 and 703 and subchapter S of the
16
Internal Revenue Code. For taxable years ending on or after
17
December 31, 2023, partners and shareholders of subchapter S
18
corporations are entitled to a credit under this Section as
19
provided in Section 251. Persons or entities not subject to
20
the tax imposed by subsections (a) and (b) of Section 201 and
21
who make a donation under Section 7.28 of the Illinois Housing
22
Development Act are entitled to a credit as described in this
23
subsection and may transfer that credit as described in
24
subsection (c).
25

(b) If the amount of the credit exceeds the tax liability
26
for the year, the excess may be carried forward and applied to

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LRB104 09586 HLH 19649 b
1
the tax liability of the 5 taxable years following the excess
2
credit year. The tax credit shall be applied to the earliest
3
year for which there is a tax liability. If there are credits
4
for more than one year that are available to offset a
5
liability, the earlier credit shall be applied first.
6

(c) The transfer of the tax credit allowed under this
7
Section may be made (i) to the purchaser of land that has been
8
designated solely for affordable housing projects in
9
accordance with the Illinois Housing Development Act or (ii)
10
to another donor who has also made a donation in accordance
11
with Section 7.28 of the Illinois Housing Development Act.
12
Projects funded in whole or in part by the proceeds of tax
13
credits transferred pursuant to this subsection shall be
14
considered public works within the meaning of the Prevailing
15
Wage Act.

16

(d) A taxpayer claiming the credit provided by this
17
Section must maintain and record any information that the
18
Department may require by regulation regarding the project for
19
which the credit is claimed. When claiming the credit provided
20
by this Section, the taxpayer must provide information
21
regarding the taxpayer's donation to the project under the
22
Illinois Housing Development Act.
23
(Source: P.A. 102-16, eff. 6-17-21; 102-175, eff. 7-29-21;
24
103-396, eff. 1-1-24
.)

25

(35 ILCS 5/222)

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LRB104 09586 HLH 19649 b
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Sec. 222.
Live theater production credit.

2

(a) For tax years beginning on or after January 1, 2012 and
3
beginning prior to January 1, 2027, a taxpayer who has
4
received a tax credit award under the Live Theater Production
5
Tax Credit Act for a long-run production, a pre-Broadway
6
production, or a commercial Broadway touring show is entitled
7
to a credit against the taxes imposed under subsections (a)
8
and (b) of Section 201 of this Act in an amount determined
9
under that Act by the Department of Commerce and Economic
10
Opportunity.
11

(b) For taxable years ending before December 31, 2023, if
12
the taxpayer is a partnership, limited liability partnership,
13
limited liability company, or Subchapter S corporation, the
14
tax credit award is allowed to the partners, unit holders, or
15
shareholders in accordance with the determination of income
16
and distributive share of income under Sections 702 and 704
17
and Subchapter S of the Internal Revenue Code. For taxable
18
years ending on or after December 31, 2023, if the taxpayer is
19
a partnership or Subchapter S corporation, then the provisions
20
of Section 251 apply.
21

(c) A sale, assignment, or transfer of the tax credit
22
award may be made by the taxpayer earning the credit within one
23
year after the credit is awarded in accordance with rules
24
adopted by the Department of Commerce and Economic
25
Opportunity.
Projects funded in whole or in part by the
26
proceeds of tax credits transferred pursuant to this

HB2632
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LRB104 09586 HLH 19649 b
1
subsection shall be considered public works within the meaning
2
of the Prevailing Wage Act.

3

(d) The Department of Revenue, in cooperation with the
4
Department of Commerce and Economic Opportunity, shall adopt
5
rules to enforce and administer the provisions of this
6
Section.
7

(e) The tax credit award may not be carried back. If the
8
amount of the credit exceeds the tax liability for the year,
9
the excess may be carried forward and applied to the tax
10
liability of the 5 tax years following the excess credit year.
11
The tax credit award shall be applied to the earliest year for
12
which there is a tax liability. If there are credits from more
13
than one tax year that are available to offset liability, the
14
earlier credit shall be applied first. In no event may a credit
15
under this Section reduce the taxpayer's liability to less
16
than zero.
17
(Source: P.A. 102-16, eff. 6-17-21; 103-396, eff. 1-1-24;
18
103-592, eff. 6-7-24.)

19

(35 ILCS 5/223)
20

Sec. 223.
Hospital credit.

21

(a) For tax years ending on or after December 31, 2012 and
22
ending on or before December 31, 2027, a taxpayer that is the
23
owner of a hospital licensed under the Hospital Licensing Act,
24
but not including an organization that is exempt from federal
25
income taxes under the Internal Revenue Code, is entitled to a

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LRB104 09586 HLH 19649 b
1
credit against the taxes imposed under subsections (a) and (b)
2
of Section 201 of this Act in an amount equal to the lesser of
3
the amount of real property taxes paid during the tax year on
4
real property used for hospital purposes during the prior tax
5
year or the cost of free or discounted services provided
6
during the tax year pursuant to the hospital's charitable
7
financial assistance policy, measured at cost.
8

(b) If the taxpayer is a partnership or Subchapter S
9
corporation, the credit is allowed to the partners or
10
shareholders in accordance with the determination of income
11
and distributive share of income under Sections 702 and 704
12
and Subchapter S of the Internal Revenue Code. A transfer of
13
this credit may be made by the taxpayer earning the credit
14
within one year after the credit is earned in accordance with
15
rules adopted by the Department.
Projects funded in whole or
16
in part by the proceeds of tax credits transferred pursuant to
17
this subsection shall be considered public works within the
18
meaning of the Prevailing Wage Act.
The Department shall
19
prescribe rules to enforce and administer provisions of this
20
Section. If the amount of the credit exceeds the tax liability
21
for the year, then the excess credit may be carried forward and
22
applied to the tax liability of the 5 taxable years following
23
the excess credit year. The credit shall be applied to the
24
earliest year for which there is a tax liability. If there are
25
credits from more than one tax year that are available to
26
offset a liability, the earlier credit shall be applied first.

HB2632
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LRB104 09586 HLH 19649 b
1
In no event shall a credit under this Section reduce the
2
taxpayer's liability to less than zero.
3
(Source: P.A. 102-700, eff. 4-19-22; 102-886, eff. 5-17-22.)

4

(35 ILCS 5/240)
5

Sec. 240.
Hydrogen fuel replacement tax credits.
6

(a) For tax years ending on or after December 31, 2027 and
7
beginning before January 1, 2029, an eligible taxpayer who
8
qualifies for a credit under the Hydrogen Fuel Replacement Tax
9
Credit Act is entitled to a credit against the taxes imposed
10
under subsections (a) and (b) of Section 201 of this Act as
11
provided in that Act. If the eligible taxpayer is a
12
partnership or Subchapter S corporation, the credit shall be
13
allowed to the partners or shareholders in accordance with the
14
determination of income and distributive share of income under
15
Sections 702 and 704 and Subchapter S of the Internal Revenue
16
Code.
17

(b) If the amount of the credit exceeds the tax liability
18
for the year, the excess may be carried forward and applied to
19
the tax liability of the 5 taxable years following the excess
20
credit year. The credit shall be applied to the earliest year
21
for which there is a tax liability. If there are credits from
22
more than one tax year that are available to offset a
23
liability, the earlier credit shall be applied first. In no
24
event shall a credit under this Section reduce the taxpayer's
25
liability to less than zero.

HB2632
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LRB104 09586 HLH 19649 b
1

(c) A sale, assignment, or transfer of the tax credit may
2
be made by the taxpayer earning the credit within one year
3
after the credit is awarded in accordance with rules adopted
4
by the Department of Commerce and Economic Opportunity.
5
Projects funded in whole or in part by the proceeds of tax
6
credits transferred pursuant to this subsection shall be
7
considered public works within the meaning of the Prevailing
8
Wage Act.

9

(d) A person claiming the credit allowed under this
10
Section shall attach to its Illinois income tax return a copy
11
of the tax credit certificate or the transfer certificate
12
issued by the Department of Commerce and Economic Opportunity.
13
(Source: P.A. 103-268, eff. 7-25-23.)

14

Section 20.
The Prevailing Wage Act is amended by changing
15
Section 2 as follows:

16

(820 ILCS 130/2)
17

Sec. 2.
This Act applies to the wages of laborers,
18
mechanics and other workers employed in any public works, as
19
hereinafter defined, by any public body and to anyone under
20
contracts for public works. This includes any maintenance,
21
repair, assembly, or disassembly work performed on equipment
22
whether owned, leased, or rented.
23

As used in this Act, unless the context indicates
24
otherwise:

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LRB104 09586 HLH 19649 b
1

"Public works" means all fixed works constructed or
2
demolished by any public body, or paid for wholly or in part
3
out of public funds. "Public works" as defined herein includes
4
all projects financed in whole or in part with bonds, grants,
5
loans, or other funds made available by or through the State or
6
any of its political subdivisions, including but not limited
7
to: bonds issued under the Industrial Project Revenue Bond Act
8
(Article 11, Division 74 of the Illinois Municipal Code), the
9
Industrial Building Revenue Bond Act, the Illinois Finance
10
Authority Act, the Illinois Sports Facilities Authority Act,
11
or the Build Illinois Bond Act; loans or other funds made
12
available pursuant to the Build Illinois Act; loans or other
13
funds made available pursuant to the Riverfront Development
14
Fund under Section 10-15 of the River Edge Redevelopment Zone
15
Act;
funds received from the sale or transfer of tax credits
16
awarded by the State;
or funds from the Fund for Illinois'
17
Future under Section 6z-47 of the State Finance Act, funds for
18
school construction under Section 5 of the General Obligation
19
Bond Act, funds authorized under Section 3 of the School
20
Construction Bond Act, funds for school infrastructure under
21
Section 6z-45 of the State Finance Act, and funds for
22
transportation purposes under Section 4 of the General
23
Obligation Bond Act. "Public works" also includes (i) all
24
projects financed in whole or in part with funds from the
25
Environmental Protection Agency under the Illinois Renewable
26
Fuels Development Program Act for which there is no project

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LRB104 09586 HLH 19649 b
1
labor agreement; (ii) all work performed pursuant to a public
2
private agreement under the Public Private Agreements for the
3
Illiana Expressway Act or the Public-Private Agreements for
4
the South Suburban Airport Act; (iii) all projects undertaken
5
under a public-private agreement under the Public-Private
6
Partnerships for Transportation Act or the Department of
7
Natural Resources World Shooting and Recreational Complex Act;
8
and (iv) all transportation facilities undertaken under a
9
design-build contract or a Construction Manager/General
10
Contractor contract under the Innovations for Transportation
11
Infrastructure Act. "Public works" also includes all projects
12
at leased facility property used for airport purposes under
13
Section 35 of the Local Government Facility Lease Act. "Public
14
works" also includes the construction of a new wind power
15
facility by a business designated as a High Impact Business
16
under Section 5.5(a)(3)(E) and the construction of a new
17
utility-scale solar power facility by a business designated as
18
a High Impact Business under Section 5.5(a)(3)(E-5) of the
19
Illinois Enterprise Zone Act. "Public works" also includes
20
electric vehicle charging station projects financed pursuant
21
to the Electric Vehicle Act and renewable energy projects
22
required to pay the prevailing wage pursuant to the Illinois
23
Power Agency Act. "Public works" also includes power washing
24
projects by a public body or paid for wholly or in part out of
25
public funds in which steam or pressurized water, with or
26
without added abrasives or chemicals, is used to remove paint

HB2632
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LRB104 09586 HLH 19649 b
1
or other coatings, oils or grease, corrosion, or debris from a
2
surface or to prepare a surface for a coating. "Public works"
3
does not include work done directly by any public utility
4
company, whether or not done under public supervision or
5
direction, or paid for wholly or in part out of public funds.
6
"Public works" also includes construction projects performed
7
by a third party contracted by any public utility, as
8
described in subsection (a) of Section 2.1, in public
9
rights-of-way, as defined in Section 21-201 of the Public
10
Utilities Act, whether or not done under public supervision or
11
direction, or paid for wholly or in part out of public funds.
12
"Public works" also includes construction projects that exceed
13
15 aggregate miles of new fiber optic cable, performed by a
14
third party contracted by any public utility, as described in
15
subsection (b) of Section 2.1, in public rights-of-way, as
16
defined in Section 21-201 of the Public Utilities Act, whether
17
or not done under public supervision or direction, or paid for
18
wholly or in part out of public funds. "Public works" also
19
includes any corrective action performed pursuant to Title XVI
20
of the Environmental Protection Act for which payment from the
21
Underground Storage Tank Fund is requested. "Public works"
22
also includes all construction projects involving fixtures or
23
permanent attachments affixed to light poles that are owned by
24
a public body, including street light poles, traffic light
25
poles, and other lighting fixtures, whether or not done under
26
public supervision or direction, or paid for wholly or in part

HB2632
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LRB104 09586 HLH 19649 b
1
out of public funds, unless the project is performed by
2
employees employed directly by the public body. "Public works"
3
also includes work performed subject to the Mechanical
4
Insulation Energy and Safety Assessment Act. "Public works"
5
also includes the removal, hauling, and transportation of
6
biosolids, lime sludge, and lime residue from a water
7
treatment plant or facility and the disposal of biosolids,
8
lime sludge, and lime residue removed from a water treatment
9
plant or facility at a landfill. "Public works" does not
10
include projects undertaken by the owner at an owner-occupied
11
single-family residence or at an owner-occupied unit of a
12
multi-family residence. "Public works" does not include work
13
performed for soil and water conservation purposes on
14
agricultural lands, whether or not done under public
15
supervision or paid for wholly or in part out of public funds,
16
done directly by an owner or person who has legal control of
17
those lands.
18

"Construction" means all work on public works involving
19
laborers, workers or mechanics. This includes any maintenance,
20
repair, assembly, or disassembly work performed on equipment
21
whether owned, leased, or rented.
22

"Locality" means the county where the physical work upon
23
public works is performed, except (1) that if there is not
24
available in the county a sufficient number of competent
25
skilled laborers, workers and mechanics to construct the
26
public works efficiently and properly, "locality" includes any

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LRB104 09586 HLH 19649 b
1
other county nearest the one in which the work or construction
2
is to be performed and from which such persons may be obtained
3
in sufficient numbers to perform the work and (2) that, with
4
respect to contracts for highway work with the Department of
5
Transportation of this State, "locality" may at the discretion
6
of the Secretary of the Department of Transportation be
7
construed to include two or more adjacent counties from which
8
workers may be accessible for work on such construction.
9

"Public body" means the State or any officer, board or
10
commission of the State or any political subdivision or
11
department thereof, or any institution supported in whole or
12
in part by public funds, and includes every county, city,
13
town, village, township, school district, irrigation, utility,
14
reclamation improvement or other district and every other
15
political subdivision, district or municipality of the state
16
whether such political subdivision, municipality or district
17
operates under a special charter or not.
18

"Labor organization" means an organization that is the
19
exclusive representative of an employer's employees recognized
20
or certified pursuant to the National Labor Relations Act.
21

The terms "general prevailing rate of hourly wages",
22
"general prevailing rate of wages" or "prevailing rate of
23
wages" when used in this Act mean the hourly cash wages plus
24
annualized fringe benefits for training and apprenticeship
25
programs approved by the U.S. Department of Labor, Bureau of
26
Apprenticeship and Training, health and welfare, insurance,

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1
vacations and pensions paid generally, in the locality in
2
which the work is being performed, to employees engaged in
3
work of a similar character on public works.
4
(Source: P.A. 102-9, eff. 1-1-22; 102-444, eff. 8-20-21;
5
102-673, eff. 11-30-21; 102-813, eff. 5-13-22; 102-1094, eff.
6
6-15-22; 103-8, eff. 6-7-23; 103-327, eff. 1-1-24; 103-346,
7
eff. 1-1-24; 103-359, eff. 7-28-23; 103-447, eff. 8-4-23;
8
103-605, eff. 7-1-24.)

9

Section 99.
Effective date.
This Act takes effect upon
10
becoming law.

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