AUTHORITY: Implementing the Illinois Enterprise Zone Act [20 ILCS 655]; Section 201(f), (g) and (h) of the Illinois Income Tax Act [35 ILCS 5/201(f), (g) and (h)]; Sections 1d-1f, 1i-1j and 1o of the Retailers' Occupation Tax Act [35 ILCS 120/1d-1f, 1i-1j, and 1o]; and Sections 9-221, 9-222, and 9-222.1 of the Public Utilities Act [220 ILCS 5/9-221, 9-222 and 9-222.1]; and authorized by Section 605-95 of the Civil Administrative Code of Illinois [20 ILCS 605/605-95].

SOURCE: Adopted at 9 Ill. Reg. 11790, effective July 24, 1985; emergency amendments at 10 Ill. Reg. 4936, effective March 11, 1986, for a maximum of 150 days; amended at 10 Ill. Reg. 7323, effective April 18, 1986; amended at 10 Ill. Reg. 12563, effective July 7, 1986; amended at 10 Ill. Reg. 12915, effective July 22, 1986; amended at 10 Ill. Reg. 15200, effective September 8, 1986; amended at 10 Ill. Reg. 16580, effective September 24, 1986; amended at 10 Ill. Reg. 19718, effective November 6, 1986; amended at 11 Ill. Reg. 11054, effective June 5, 1987; emergency amendments at 11 Ill. Reg. 11174, effective June 8, 1987, for a maximum of 150 days; amended at 11 Ill. Reg. 16091, effective September 29, 1987; amended at 12 Ill. Reg. 4115, effective February 8, 1988; amended at 12 Ill. Reg. 11201, effective June 17, 1988; amended at 12 Ill. Reg. 17823, effective October 21, 1988; emergency amendment at 13 Ill. Reg. 16117, effective October 2, 1989, for a maximum of 150 days; amended at 13 Ill. Reg. 19936, effective December 7, 1989; amended at 14 Ill. Reg. 3445, effective February 27, 1990; amended at 15 Ill. Reg. 8683, effective May 30, 1991; amended at 16 Ill. Reg. 89, effective December 20, 1991; amended at 17 Ill. Reg. 1837, effective February 1, 1993; amended at 18 Ill. Reg. 5172, effective March 21, 1994; amended at 27 Ill. Reg. 3282, effective February 14, 2002; amended at 27 Ill. Reg. 6165, effective March 28, 2003; amended at 35 Ill. Reg. 13125, effective August 1, 2011; amended at 36 Ill. Reg. 16067, effective October 26, 2012; emergency amendment at 37 Ill. Reg. 5006, effective March 28, 2013, for a maximum of 150 days; emergency amendment repealed at 37 Ill. Reg. 13457, effective August 2, 2013, for the remainder of the 150 days; emergency amendment at 37 Ill. Reg. 13502, effective August 2, 2013, for a maximum of 150 days; amended at 38 Ill. Reg. 457, effective December 20, 2013; amended at 40 Ill. Reg. 10858, effective July 29, 2016; amended at 46 Ill. Reg. 1817, effective January 11, 2022.

SUBPART A: ENTERPRISE ZONES IN ILLINOIS

 

Section 520.100  Definitions

 

"Act" means the Illinois Enterprise Zone Act [20 ILCS 655].

 

"Agency" means each officer, board, commission, and agency created by the Constitution in the executive branch of State government, other than the State Board of Elections; each officer, department, board, commission, agency, institution, authority, university, body politic and corporate of the State; and each administrative unit or corporate outgrowth of the State government that is created by or pursuant to statute, other than units of local government and their officers, school districts and boards of election commissioners; each administrative unit or corporate outgrowth of the above and as may be created by executive order of the Governor.  No entity shall be considered an "agency" for the purposes of this Act unless authorized by law to make rules and regulations.

 

"Board" means the Enterprise Zone Board created in Section 5.2.1 of the Act.

 

"Department" means the Department of Commerce and Economic Opportunity.  

 

"Designated Zone Organization" or "DZO" means an association or entity:

 

The Members of which are substantially all residents of the Enterprise Zone;

 

The Board of Directors of which is elected by the members of the organization;

 

Which satisfies the criteria set forth in section 501(c)(3) or 501(c)(4) of the Internal Revenue Code (26 USC 501(c)(3) or (4)); and

 

Which exists primarily for the purpose of performing within such area or zone for the benefit of the residents and businesses therein any of the functions set forth in Section 8 of the Act [20 ILCS 655/3].

 

For the purpose of this definition, "resident" means an individual whose place of residence is within the Enterprise Zone, or a partnership, corporation, association, or sole proprietorship whose principal business office is within the Enterprise Zone.

 

"Enabling ordinance" means a certified ordinance passed by a city or county to designate, establish and provide for an Enterprise Zone as specified in Section 5(c) of the Act.

 

"Enterprise Zone" means an area of the State certified by the Department as an Enterprise Zone pursuant to the Act.

 

"Full-time equivalent job" means a job in which the new employee works for the recipient or for a corporation under contract to the recipient at a rate of at least 35 hours per week. A recipient who employs labor or services at a specific site or facility under contract with another may declare one full-time, permanent job for every 1,820 man hours worked per year under that contract. Vacations, paid holidays, and sick time are included in this computation. Overtime is not considered a part of regular hours. [20 ILCS 655/3(i)]

 

"Full-time retained job" means any employee defined as having a full-time or full-time equivalent job preserved at a specific facility or site, the continuance of which is threatened by a specific and demonstrable threat, which shall be specified in the application for development assistance. A recipient who employs labor or services at a specific site or facility under contract with another may declare one retained employee per year for every 1,750 man hours worked per year under that contract, even if different individuals perform on-site labor or services. [20 ILCS 655/3(j)]

 

"General projections" means number of jobs and amount of investments that are determined based upon general economic forecasting models. Overall, these totals are estimates and would include indirect, direct and induced figures based on trend of past area job growth, which may or may not be a result of the Enterprise Zone Designation.

 

"Latest federal decennial census" means the most recent American Community Survey released by the U.S. Census Bureau or other appropriate data source produced by the U.S. Census Bureau.

 

"Local labor market area" means an economically integrated area within which individuals can reside and find employment within a reasonable distance or can readily change jobs without changing their place of residence. [20 ILCS 655/3(h)] A local labor market area must be contiguous, compact and entirely within the State of Illinois and shall be, to the extent practicable, comprised of whole Census Tracts.  A local labor market area must, at a minimum, contain the entire area within the boundaries of the Enterprise Zone to which it relates.  A local labor market area may take into account communities of interest.

 

"New employee" means a full-time equivalent job that represents a net increase in the number of the recipient's employees statewide.

 

"New employee" includes an employee who previously filled a new employee position with the recipient who was rehired or called back from a layoff that occurs during or following the base years.  The term "new employee" does not include any of the following:

 

An employee of the recipient who performs a job that was previously performed by another employee in this State, if that job existed in this State for at least 6 months before hiring the employee;

 

Any individual who has a direct or indirect ownership interest of at least 5% in the profits, capital or value of any member of the recipient;

 

A child, grandchild, parent or spouse, other than a spouse who is legally separated from the individual, of any individual who has a direct or indirect ownership interest of at least 5% in the profits, capital or value of any member of the recipient;

 

Employee positions being filled or refilled as a result of strikes or layoffs or replacement workers to replace recipient company locked out employees.

 

"Public infrastructure" means local roads and streets, access roads, bridges and sidewalks; waste disposal systems; water and sewer line extensions, water distribution and purification facilities, and sewage treatment facilities; rail or air or water port improvements; gas and electric utility facilities; transit capital facilities; development and improvement of publicly owned industrial and commercial sites; or other public capital improvements that are an essential precondition to business retention, development or expansion.

 

"Specific commitments" means a written commitment from a specific company that has agreed to invest, create and/or retain a certain number of jobs as a condition of the Enterprise Zone designation.

 

(Source:  Amended at 40 Ill. Reg. 10858, effective July 29, 2016)

SUBPART B: ENTERPRISE ZONE: APPLICATION FOR CERTIFICATION

 

Section 520.200  Eligible Applicants

 

A municipality or county within the State of Illinois may apply to the Department for certification of an Enterprise Zone, in accordance with the requirements set forth in Sections 4 and 5 of the Act and this Part.

 

(Source:  Amended at 38 Ill. Reg. 457, effective December 20, 2013)

 

Section 520.210  Eligibility Criteria

 

A municipality or county may qualify an area for designation as an Enterprise Zone, subject to certification by the Department, in accordance with the criteria set forth in Section 4 of the Act and the following:

 

a)         Contiguous Area.  The area is contiguous, which means the area has a solid continuous boundary.  Boundaries shall be clearly defined and follow natural or man-made entities such as rivers, highways, and boundaries of units of government. The zone area may exclude wholly surrounded territory within its boundaries.

 

b)         Calculating Total Area.  For purposes of calculating total area, the minimum is one-half square mile and the maximum is 12 square miles, or 15 square miles if the zone is located within the jurisdiction of four or more counties or municipalities, excluding lakes or waterways.  Where the Enterprise Zone is a joint effort of three or more units of government, or two or more units of government, if located in a township divided by a municipality of 1,000,000 or more inhabitants, and where the certification has been in effect at least one year, the minimum is one-half square mile and the maximum is 13 square miles, excluding lakes and waterways. Boundaries that are connecting strips shall be not less than three, nor more than 10, feet wide.  Waterways shall not be used as connecting strips.

 

c)         Coverage of Area.  The areas must:

 

1)         be entirely within a municipality; or

 

2)         be entirely within the unincorporated areas of a county, except when reasonable need is established for the zone to cover parts of more than one municipality or county; or

 

3)         comprise all or part of a municipality and an unincorporated area of a county.       

 

d)         Required Tests.  The area must meet at least three of the following tests:

 

1)         Unemployment:  All or part of the local labor market area has had an annual average unemployment rate of at least 120% of the State's annual average unemployment rate for the most recent calendar year or the most recent fiscal year as reported by the Department of Employment Security. [20 ILCS 655/4(1)(f)(1)]

 

2)         Employment Opportunities:  Designation will result in the development of substantial employment opportunities by creating or retaining a minimum aggregate of 1,000 full-time equivalent jobs due to an aggregate investment of $100,000,000 or more, and will help alleviate the effects of poverty and unemployment within the local labor market area. [20 ILCS 655/4(1)(f)(2)]  Applicants shall specify the time periods over which full-time equivalent jobs will be created or retained and aggregate investments will be made.  These time periods should not exceed 15 years from the expected date of designation.  Applicants should submit as many written specific commitments as possible with respect to job creation or retention, as well as aggregate investment. While some consideration will be given to general projections, the Department allocates more weight for specific commitments.  Applicants are encouraged to describe how the creation and retention of full-time equivalent jobs and new investment will help alleviate the effects of poverty and unemployment with the local labor market area.

 

3)         Poverty:  All or part of the local labor market area has a poverty rate of at least 20% according to the latest data from the U.S. Census Bureau, 50% or more of children in the local labor market area are eligible to participate in the federal free or reduced-price meals program according to reported statistics from the State Board of Education, or 20% or more households in the local labor market area receive SNAP benefits according to the latest data from the U.S. Census Bureau. [20 ILCS 655/4(1)(f)(3)]

 

4)         Abandoned Coal Mine, Brownfield or Federal Disaster Area:  An abandoned coal mine or a brownfield (as defined in Section 58.2 of the Environmental Protection Act [415 ILCS 5]) is located in the proposed zone area, or all or a portion of the proposed zone was declared a federal disaster area in the 3 years preceding the date of application. [20 ILCS 655/4(1)(f)(4)]  To be considered an abandoned coal mine, the coal mine must be listed on the Illinois Department of Natural Resources Abandoned Mine Locator, or the federal Office of Surface Mining Reclamation and Enforcement's Abandoned Mine Lands Portal.  To document that a portion of the proposed zone was declared a federal disaster area in the three years preceding the date of the application, the applicant must provide the major disaster declaration number, the area designated as adversely affected by the major disaster, and the date of the declaration.  Applicants are encouraged to use copies of the appropriate notices in the Federal Register of a major disaster declaration and related determinations.  This does not include emergency declarations or fire management assistance declarations.  A brownfield site must be listed in the Illinois Environmental Protection Agency Site Remediation Program database.  Applicants are encouraged to provide the 10-digit Illinois Environmental Protection Agency identification number (LPC #) for the site.

 

5)         Large Scale Business Closings:  The local labor market area contains a presence of large employers that have downsized over the years, the local labor market area has experienced plant closures in the 5 years prior to the date of application affecting more than 50 workers, or the local labor market area has experienced State or federal facility closures in the 5 years prior to the date of application affecting more than 50 workers. [20 ILCS 655/4(1)(f)(5)]  Applicants are encouraged to use data from filings made pursuant to the Illinois Worker Adjustment and Retraining Notification Act [820 ILCS 65] and the State Facilities Closure Act [30 ILCS 608] as evidence of job losses under this test.

 

6)         Vacant Structures:  Based on data from Multiple Listing information or other suitable sources, the local labor market area contains a high floor vacancy rate of industrial or commercial properties, vacant or demolished commercial and industrial structures are prevalent in the local labor market area, or industrial structures in the local labor market area are not used because of age, deterioration, relocation of the former occupants, or cessation of operation. [20 ILCS 655/4(1)(f)(6)]  Vacancy prevalence rates are determined by dividing the total vacant and/or demolished square feet by the total square feet.  The applicant's vacancy rate and prevalence must meet or exceed the state's annual average vacancy rate and minimum prevalence base for each category.

 

7)         Tax Base Improvement 5 year Plan:  The applicant demonstrates a substantial plan, over the next five years from the date of designation, for using the designation to improve the State and local government tax base, including income, sales, and property taxes. [20 ILCS 655/4(1)(f)(7)]  Applicant should compare the current tax base to the final tax base after 5 years.  Applicant must address each tax category:  income, sales and property taxes.

 

8)         Public Infrastructure Improvement Plan:  Significant public infrastructure is present in the local labor market area in addition to a 5 year plan from date of designation for infrastructure development and improvement. [20 ILCS 655/4(1)(f)(8)]

 

9)         Career Skills Programs:  High schools or community colleges located within the local labor market area are engaged in ACT Work Keys, Manufacturing Skills Standard Certification, or industry-based credentials that prepare students for careers. [20 ILCS 655/4(1)(f)(9)]  The applicant must provide written documentation from more than one high school and/or community college within the local labor market area that the institution is providing ACT Work Keys, Manufacturing Skills Standard Certification, or industry-based credentials that prepare students for careers at some time during the current school year.

 

10)         Equalized Assessed Valuation:  The increase in equalized assessed valuation of industrial and/or commercial properties in the 5 years prior to the date of application in the local labor market area is equal to or less than 50% of the State average increase in equalized assessed valuation for industrial and/or commercial properties, as applicable, for the same period of time as reported by the Illinois Department of Revenue [20 ILCS 655/4(1)(f)(10)]; however, if the change in EAV in the State of industrial and/or commercial properties in the 5 years prior to the date of application is negative, then the applicant should instead demonstrate that the decrease in EAV of industrial and/or commercial properties in the 5 years prior to the date of application in the local labor market area is equal to or greater than 50% of the State average decrease in EAV for industrial and/or commercial properties, as applicable, for the same period of time as reported by the Department of Revenue.  Applicants are encouraged to use data on EAV of industrial and/or commercial properties in the local labor market area from the Illinois Department of Revenue, if the local labor market area is the entire county, or from the chief assessment official of the municipality, municipalities, county or counties in which at least a portion of the local labor market area is contained.

 

(Source:  Amended at 40 Ill. Reg. 10858, effective July 29, 2016)

 

Section 520.220  Form of Application

 

An application shall be submitted on the standard application form provided by the Department.  An application shall include:

 

a)         Eligibility Criteria.  Information establishing that the necessary eligibility criteria as specified in Section 520.210 has been met;

 

b)         Economic Development Goals of the Zone. A statement concerning the economic development goals and objectives of the zone, including:  specific three-year development goals and objectives of the zone, and a zone implementation plan describing the specific tasks, activities, and commitments that must be accomplished to achieve each three-year objective;

 

c)         Local Incentives and Programs. Information concerning each local incentive, program, special activity, or commitment to be provided in support of the zone, including:  a description of each, how it will be implemented, who will provide it, the estimated impact on the revenue of the local government, any special qualifications or conditions imposed on its applicability, and the period of availability and the effective date provided. However, each incentive, program, special activity, or commitment to be provided may not be offered on a case-by-case basis, and must assure that all taxpayers or participants eligible under similar circumstances are treated in a similar manner;

 

d)         Role of the DZO. A statement describing the role of the DZO, including the functions, programs and services to be performed by the DZO;

 

e)         Municipality or County Incentives.  A statement detailing any tax, grant, and other financial incentives or benefits, and any programs, to be provided by the municipality or county to business enterprises within the zone, other than those provided in the designating ordinance, which are not provided throughout the municipality or county;

 

f)         Economic Impact of the Zone.  An estimate of the economic impact of the zone, considering all of the tax incentives, financial benefits and programs contemplated, upon the revenues of the municipality or county;

 

g)         Management Structure of the Zone.  A statement describing the management structure of the zone;

 

h)         Transcript of Public Hearings.  A transcript of all public hearings;

 

i)          Copy of Public Notice.  A copy of the public notice;

 

j)          Designating Ordinance.  A certified copy of the local government designating ordinance;

 

k)         Joint Applicant Information.  In the case of a joint application, a statement detailing the need for a zone covering portions of more than one municipality or county, and a description of the agreement between joint applicants;

 

l)          Boundary Description.  A legal description of the Enterprise Zone and a map of the Enterprise Zone that clearly identifies the zone's boundaries and provides names of streets and highways; applicants are encouraged to submit geospatial data as ESRI ARCGIS Shape files; applicants shall clearly indicate any territory within the Enterprise Zone that is already within an existing Enterprise Zone; and

 

m)        Local Labor Market Area. A specific definition of the applicant's local labor market area, along with a statement explaining why the local labor market area used is appropriate for the Enterprise Zone to which it relates; applicants are encouraged to include data on commuting patterns and public transportation or other information demonstrating that for the local labor market area used individuals can reside and find employment within a reasonable distance or can readily change jobs without changing their place of residence. [20 ILCS 655/3(h)]

 

(Source:  Amended at 38 Ill. Reg. 457, effective December 20, 2013)

 

Section 520.230  Application Procedures

 

a)           Application Deadline.  Applications shall be submitted to the Department by December 31 for designation prior to September 30 of the following year. Any application received after December 31 of any calendar year shall be held by the Department for consideration and action during the following calendar year. [20 ILCS 655/5.2(a)]

 

b)         All applications for Enterprise Zones that expire on or before December 31, 2016, including the extension provided for in Section 520.315(b)(3), shall be submitted to the Department by December 31, 2014.  At that time, the zone becomes available for either the previously designated area or a different area to compete for designation.  No preference for designation as a zone will be given to the previously designated area. [20 ILCS 655/5.3(f)]

 

c)         For Enterprise Zones that are scheduled to expire on or after January 1, 2017, an application process shall begin 2 years prior to the year in which the zone expires. At that time, the zone becomes available for either the previously designated area or a different area to compete for designation.  No preference for designation as a zone will be given to the previously designated area. [20 ILCS 655/5.3(f)]

 

d)         All applications filed by December 31 of the preceding calendar year and deemed qualified by the Department shall be approved or denied by the Board. If such application is not approved by September 30, the application shall be considered denied. If an application is denied, the Board shall inform the applicant of the specific reasons for the denial. [20 ILCS 655/5.2.1(e)]

 

e)         A majority of the Board will determine whether an application is approved or denied. The Board is not, at any time, required to designate an Enterprise Zone. [20 ILCS 655/5.2.1(f)]

 

f)         In determining which designated areas shall be approved and certified as Enterprise Zones, the Board shall give preference to the extent to which the area meets the criteria set forth in Section 520.210. [20 ILCS 655/5.2.1(g)]

 

g)         Each Enterprise Zone that reapplies for certification but does not receive a new certification shall expire on its scheduled termination date. [20 ILCS 655/5.3(f)]

 

(Source:  Amended at 38 Ill. Reg. 457, effective December 20, 2013)

 

Section 520.240  Joint Application

 

a)         Joint Application. Under a joint application, two or more local governments are the applicants and share responsibility for operation of the Enterprise Zone. Other units of government may participate by offering or supplementing tax incentives and other benefits available in the Enterprise Zone.  Submission of a joint application is required in those instances where the proposed Enterprise Zone covers portions of more than one county or municipality. b)            Enabling Ordinance for Joint Applicants.  A joint application must be supported by enabling ordinances passed by participating units of local government in accordance with Section 5(a) and (b) of the Act.

 

b)         Enabling Ordinance for Joint Applicants.  A joint application must be supported by enabling ordinances passed by participating units of local government in accordance with Section 5(a) and (b) of the Act.

 

c)         Intergovernmental Agreement for Joint Applicants.  An intergovernmental agreement signed and approved by all joint applicants shall be executed and submitted as a part of the joint application package.  The intergovernmental agreement shall include:

 

1)         Duration. The duration of the Enterprise Zone;

 

2)         Description. A description of the Enterprise Zone;

 

3)         Incentives.  The provisions for the tax incentives, programs, and other benefits to be offered;

 

4)         Zone Administrator.  A provision for the position of Zone Administrator, and a description of the responsibilities of the position and the selection process;

 

5)         Management Structure. A management structure for the operation of the Enterprise Zone; and

 

6)         Designated Zone Organizations (DZO).  The methods of selecting Designated Zone Organizations and coordinating their activities with each designating unit of government.

 

(Source:  Amended at 38 Ill. Reg. 457, effective December 20, 2013)

 

Section 520.250  Application Evaluation and Ranking

 

a)         All applications submitted on or before the deadline established in Section 520.230 shall receive an initial review by the Department.  This initial review shall determine if the application contains all the information required pursuant to Section 520.220 and if the application meets at least three of the criteria in Section 520.210(d).  Upon meeting the minimum eligibility thresholds, applications will compete in a formalized ranking system.

 

b)         The Department shall issue recommendations to the Board by assigning a score to each application. The scores will be determined by the Department, based on the extent to which an application meets the criteria under Section 520.210.

 

1)         Up to 50 points for the extent to which the applicant meets or exceeds the criteria in Section 520.210(d)(1) with points awarded according to the severity of the unemployment as indicated by the percentage that the unemployment rate in the local labor market area exceeds 120% of the State's annual average unemployment rate for the most recent calendar year or the most recent fiscal year as reported by the Department of Employment Security. [20 ILCS 655/4.1(a)(1)]

 

2)         Up to 50 points for the extent to which the applicant meets or exceeds the criteria in Section 520.210(d)(2), with points awarded in accordance with the number of jobs created and retained and the aggregate amount of investment promised in the Enterprise Zone as well as the alleviation of the effects of poverty and unemployment within the local labor market area. [20 ILCS 655/4.1(a)(2)]  More points are awarded for specific commitments.

 

3)         Up to 40 points for the extent to which the applicant meets or exceeds the criteria in Section 520.210(d)(3). [20 ILCS 655/4.1(a)(3)]  Applicants will receive:

 

A)        up to 10 points for the poverty rate in the local labor market area, according to the latest data from the Census Bureau;

 

B)        up to 10 points for the percentage of children in participating schools and institutions in the local labor market area are eligible for free and reduced-price meals under the National School Lunch Program according to the most recent data available from the Illinois State Board of Education;

 

C)        up to 10 points for the percentage of households in the local labor market area that receive SNAP benefits, according to the latest data from the Census Bureau; and

 

D)        up to 10 points for the severity of the situations described in subsections (b)(3)(A) through (C).

 

4)         Up to 30 points for the extent to which the applicant meets or exceeds the criteria in Section 520.210(d)(4), with points awarded in accordance with the severity of the environmental impact of the abandoned coal mine, brownfield, or federal disaster area. [20 ILCS 655/4.1(a)(4)]  More points will be awarded for abandoned coal mines in the proposed Enterprise Zone that are a priority 1 or 2 site, as determined by the Illinois Department of Natural Resources, Office of Mines and Minerals, Division of Abandoned Mined Lands Reclamation or Federal Office of Surface Mines.  More points will be awarded for brownfields in the proposed Enterprise Zone that are listed on the U.S. Environmental Protection Agency's National Priorities List.  Points will be awarded for major disaster declarations when a county or counties in the proposed Enterprise Zone are included in the Federal Emergency Management Agency (FEMA)individual assistance program, the FEMA public assistance program, or both programs.  More points will be awarded for multiple major disaster declarations.

 

5)         Up to 50 points for the extent to which the applicant meets or exceeds the criteria in Section 520.210(d)(5), with points awarded in accordance with the severity of the applicable facility closures or downsizing. [20 ILCS 655/4.1(a)(5)]  Severity of the applicable facility closures or downsizing will be measured by the number of workers affected as shown by notices filed pursuant to the Illinois Worker Adjustment and Retraining Notification Act [820 ILCS 65] in the 10 years prior to the date of application, notices filed pursuant to the State Facilities Closure Act [30 ILCS 608] in the 5 years prior to the date of application, or reliable evidence of the number of workers affected by federal facility closures in the 5 years prior to the date of application.

 

6)         Up to 40 points for the extent to which the applicant meets or exceeds the criteria in Section 520.210(d)(6) with points awarded in accordance with the severity and extent of the high floor vacancy or deterioration. [20 ILCS 655/4.1(a)(6)]  Applicants shall list affected commercial or industrial parcels and/or units and describe how those parcels or units were determined to be vacant or deteriorated.  To show a vacancy rate or prevalence, applicants shall provide data of the total number or square feet of commercial and industrial parcels or units in the local labor market area in comparison to total number or square feet of vacant and demolished commercial and industrial parcels or units.  Applicants shall describe how that data was collected or determined. (See Section 520.210(d)(6).)

 

7)         Up to 30 points for the extent to which the applicant meets or exceeds the criteria in Section 520.210(d)(7) with points awarded in accordance with the extent to which the application addresses a plan to improve the State and local government tax base. [20 ILCS 655/4.1(a)(7)]  Applicants shall address the State and local sales tax base, the State income tax base, and the local property tax base.

 

8)         Up to 50 points for the extent to which the applicant meets or exceeds the criteria in Section 520.210(d)(8) with points awarded in accordance with the existence of significant public infrastructure in addition to a plan for infrastructure development and improvement. [20 ILCS 655/4.1(a)(8)]  Applicants shall provide an inventory of the public infrastructure that demonstrates that significant public infrastructure exists in the local labor market area to support economic development at the time of the application.  Applicants shall provide a three-year public infrastructure improvement and development plan for each municipality and/or county applicant government that provides for large, physical improvements that are permanent in nature and that are needed for the functioning of the community, including transportation, utilities, etc.  The plans shall include a listing of the capital improvement projects, the plan for financing the projects, a timetable for the construction or completion of the projects, and justification for the projects.  Points will be awarded for both the inventory of existing public infrastructure and the public infrastructure improvement and development plan, with a majority of the points awarded based on the public infrastructure improvement and development plan.

 

9)         Up to 40 points for the extent to which the applicant meets or exceeds the criteria in Section 520.210(d)(9) with points awarded in accordance with the extent to which educational programs exist for career preparation. Applicants shall list all high schools and community colleges in the local labor market area and indicate which high schools and community colleges are engaged in ACT Work Keys, Manufacturing Skills Standard Certification, or other industry-based credentials that prepare students for careers. Applicants shall provide documentation that high schools and community colleges in the local labor market are engaged in these programs.  More points will be awarded to applicants with a higher percentage of high schools and community colleges engaged in ACT Work Keys, Manufacturing Skills Standard Certification, or other industry-based credentials that prepare students for careers. [20 ILCS 655/4.1(a)(9)]

 

10)         Up to 40 points for the extent to which the applicant meets or exceeds the criteria in Section 520.210(d)(10) with points awarded according to the severity of the change in equalized assessed valuation. [20 ILCS 655/4.1(a)(10)]

 

A)        If the change in statewide equalized assessed valuation in the State of industrial and/or commercial properties in the 5 years prior to the date of application is positive, the applicant should demonstrate that the increase in EAV of industrial and/or commercial properties in the 5 years prior to the date of application in the local labor market area is equal to or less than 50% of the State average increase in EAV for industrial and/or commercial properties, as applicable, for the same period of time as reported by the Department of Revenue.

 

B)        If the change in statewide EAV of industrial and/or commercial properties in the 5 years prior to the date of application is negative, the applicant should demonstrate that the decrease in EAV of industrial and/or commercial properties in the 5 years prior to the date of application in the local labor market area is equal to or greater than 50% of the statewide average decrease in EAV for industrial and/or commercial properties, as applicable, for the same period of time as reported by the Department of Revenue.

 

C)        Applicants are encouraged to use data on EAV of industrial and/or commercial properties in the local labor market area from the Department of Revenue or from the chief assessment official of the municipality, municipalities, county or counties in which at least a portion of the local labor market area is contained.  Severity will be measured by the difference in the local labor market area's industrial and/or commercial EAV from the State average change in EAV for industrial and/or commercial properties beyond the threshold for this test.

 

c)       No later than June 30, the Department shall notify all applicant municipalities and counties of the Department's determination of the qualification of their respective designated Enterprise Zone areas, and shall send qualifying applications, including the applicant's scores for the items listed in subsection (b) and the applicant's final score under this Section, to the Board for the Board's consideration, along with supporting documentation of the basis for the Department's decision. [20 ILCS 655/5.2(c)]

 

(Source:  Amended at 40 Ill. Reg. 10858, effective July 29, 2016)

SUBPART C: ENTERPRISE ZONE: AMENDMENT AND DECERTIFICATION

 

Section 520.300  Application to Amend an Ordinance

 

a)         Amending an Ordinance.  An application for amending an approved ordinance that creates an Enterprise Zone shall follow the conditions set forth in Section 5.4 of the Act.  An amendment to such an ordinance is not effective unless and until the Department approves the application and the amending ordinance, and files an amended certificate and the designating ordinance with the Secretary of State and local recorder of deeds as provided in Section 5.3 of the Act.

 

b)         Standardized Application. The Department shall furnish upon request a standardized application form to a municipality or county that seeks to amend a certified designating ordinance.

 

c)         Joint Submissions. Where there are two or more designating units of government, an application for amending the terms of an approved Enterprise Zone ordinance shall be a joint submission, certified by the chief elected official or a representative of each designating municipality or county.

 

d)           Including Part of Another Municipality or County. An application for amending an approved ordinance to include a territory of another municipality or county shall be a joint submission, certified by the chief elected official or a representative of each designating municipality or county.

 

(Source:  Amended at 38 Ill. Reg. 457, effective December 20, 2013)

 

Section 520.310  Application to Change Boundaries

 

a)         Eligibility Criteria for Proposed Additions.  The boundaries of an approved Enterprise Zone may be amended to add areas on forms provided by the Department.  An area is eligible if it meets the qualifications described in Section 4 of the Act, and the application to amend the Enterprise Zone ordinance provides analyses and documentation that:

 

1)         Required Tests. The area meets at least three of the tests described in Section 520.210(d); or

 

2)         Immediate Benefit. The proposed addition provides an immediate benefit to the established Enterprise Zone and its residents within two years or less by:

 

A)        Full-Time Jobs. Creating or retaining permanent full-time jobs; or

 

B)        Removing Impediments. Removing or correcting an impediment to economic development that exists in the established Enterprise Zone; or

 

C)        Stimulating Revitalization. Stimulating neighborhood residential or commercial revitalization.

 

b)         Eligibility Criteria for Proposed Deletions.  The boundaries of an approved Enterprise Zone may be amended, on forms provided by the Department, to delete areas.  An area is eligible if it meets the qualifications described in Section 4 of the Act, and the application to amend the Enterprise Zone ordinance provides analyses and documentation that:

 

1)         Required Assurance.  The area does not meet any one of the tests described in Section 520.210(d); or

 

2)         Accomplishment of Local Objectives.  The area is an area in which the local objectives for economic development or neighborhood revitalization of the Enterprise Zone have been accomplished.

 

c)         Overlapping Territory.  Any territory that is part of an Enterprise Zone initially certified by the Department on or after January 1, 2015 that is part of a previously certified Enterprise Zone shall be deleted from the older Enterprise Zone and shall be part of the newly certified Enterprise Zone, provided that:

 

1)         An application to delete territory under this Section does not need to be filed with the Department for territory to be deleted pursuant to this subsection (c);

 

2)         The application for certification of the new Enterprise Zone and the designating ordinance must indicate any territory within the new Enterprise Zone that is to be deleted from the older Enterprise Zone; and

 

3)         The "benefit entitlement" provisions of Section 5.4(e) and (f) of the Act (described in Section 520.315(a)(2)(A), (B) and (C)) shall apply.

 

(Source:  Amended at 38 Ill. Reg. 457, effective December 20, 2013)

 

Section 520.315  Application to Change Incentives, Alter Termination Date, and Make Technical Corrections

 

a)         Application to Expand, Limit, or Repeal Incentives

 

1)         Changing Incentives. An applicant shall apply to the Department to expand, limit, or repeal the incentives provided in the ordinance on forms provided by the Department, and shall comply with the procedures described in Section 5.4 of the Act.

 

2)         Continuation of Incentives. Sections 5.4(e) and (f) of the Act provide that all incentives and benefits previously offered shall continue for the original term of the zone for three groups:

 

A)        Receiving Benefits.  Business enterprises that are receiving benefits or incentives in the zone on the effective date of the amending ordinance;

 

B)        Proposed Expansions. Business enterprises or expansions that are proposed or under development on the effective date of the amending ordinance, if the business enterprise demonstrates that:

 

i)          The proposed business enterprise or expansion has been committed to locating or expanding in the zone; and

 

ii)         Substantial and binding financial obligations have been made in reasonable reliance on the benefits and programs that would have been available because of the Enterprise Zone;

 

C)        Individuals in Homestead/Shopstead.  Individuals participating in urban homestead or shopstead programs.

 

3)         Local Government Duties. With respect to businesses that are already receiving Enterprise Zone benefits, the local government has the responsibility to attempt to inform eligible businesses through public notice or mailings, and to take administrative steps necessary to assure compliance.

 

4)         Evidence of Financial Commitment. Evidence of commitment under subsection (a)(2)(B)(ii) shall include, but not be limited to: internal memoranda; purchase orders; construction plans and schematics; evidence of financial commitment from financial institutions and/or State, local, or federal governments; and written contracts. Proposed business locations or expansions shall also demonstrate reliance on Enterprise Zone benefits by applying for the incentives, provided that all other requirements are met.

 

5)         Local Government Duties. With respect to homestead and shopstead programs, the local government shall inform affected parties and meet its obligations concerning transfer of title to the property and any other provisions that relate to the rights and privileges of the affected parties.

 

b)         Application to Alter Termination Date

 

1)         Altering Termination Date. An applicant shall apply to the Department to alter the termination date provided in the ordinance, on forms provided by the Department, and shall comply with the procedures described in Section 5.4 of the Act.

 

2)         Reducing Duration of Zone. If the amendatory ordinance reduces the duration of the Enterprise Zone, the "benefit entitlement" provisions of Section 5.4(e) and (f) of the Act and described in subsections (a)(2)(A), (B) and (C) shall apply.

 

3)         Any Enterprise Zone in existence on July 25, 2013 that has a term of 20 calendar years may be extended for an additional 10 calendar years upon amendment of the designating ordinance by the designating municipality or county and submission of the ordinance to the Department. The amended ordinance must be properly recorded in the Office of Recorder of Deeds of each county in which the Enterprise Zone lies. [20 ILCS 655/5.3(c)]

 

4)         Each Enterprise Zone in existence on August 7, 2012 that is scheduled to expire before July 1, 2016 may have its termination date extended until July 1, 2016 upon amendment of the designating ordinance by the designating municipality or county extending the termination date to July 1, 2016 and submission of the ordinance to the Department. The amended ordinance must be properly recorded in the Office of Recorder of Deeds of each county in which the Enterprise Zone lies. [20 ILCS 655/5.3(c)]

 

5)         Enterprise Zones designated after August 7, 2012, shall be in effect for a term of 15 calendar years, or for a lesser number of years specified in the certified designation ordinance.  Those Enterprise Zones shall be subject to review by the Board after 13 years for an additional 10-year designation.  During the review process, the Board shall consider the costs incurred by the State and units of local government as a result of tax benefits received by the Enterprise Zone. [20 ILCS 655/5.3(c)]  The application for the additional 10 years must be approved by majority vote of the Board.

 

c)         Application to Make Technical Corrections

 

1)         Making Technical Corrections. An applicant shall apply to the Department to make a technical correction in the ordinance, on forms provided by the Department, and shall comply with the procedures described in Section 5.4 of the Act.

 

2)         Definition of Technical Correction. A "technical correction" shall mean a non-substantive change that corrects or clarifies the wording, terms, or conditions of an Enterprise Zone ordinance or intergovernmental agreement.  A technical correction is not one that affects any rights and privileges accorded to residents of the zone.

 

(Source:  Amended at 38 Ill. Reg. 457, effective December 20, 2013)

 

Section 520.320  Decertification

 

a)         Decertification – Two Methods.  In accordance with Section 5.4 of the Act, an Enterprise Zone may be decertified in two ways:

 

1)         Joint Action.  By joint action of the Department and the designating county or municipality in accordance with Section 5.4(c) of the Act; or

 

2)         For Cause.  For cause by the Department in accordance with Section 5.4(d) of the Act.  Cause for decertification shall be defined as the designating unit of government's failure to implement the Enterprise Zone program, which can be evidenced by:  the lack of an economic development strategy (no clearly defined objectives or course of action for improving zone performance); the failure to implement a business retention and expansion plan (little or no contact with zone businesses, or zone benefits not explained or publicized to businesses); the failure to comply with program monitoring as set forth in Section 520.410; and the failure to implement incentives uniformly throughout the Enterprise Zone as described in Section 520.220(c).

 

b)         Notice of Probation. The Department shall notify each designating unit of government of the commencement of the probationary status pending action to decertify the Enterprise Zone.  Notice shall include:  the date the probationary term begins; the duration of the probationary term; the deficiencies involved; and the date and location of the public hearing. The probationary status shall commence on the date the notice is postmarked.

 

1)         Work Plan. Within 30 days after the date of the Department notice, the designating unit of government shall submit a work plan that explains corrective actions to be taken and any evidence refuting the deficiencies.

 

2)         Public Hearing. Upon expiration of the 30-day response period, the Department shall conduct a public hearing within the boundaries of the Enterprise Zone in order to receive evidence and testimony regarding decertification.  Written and oral testimony, including supporting documentation, will be accepted from any affected party, regardless of whether the party resides within the Enterprise Zone boundaries.  The Department shall place public notice of the public hearing in one newspaper of general circulation within the Enterprise Zone, not more than 20 days nor less than 5 days before the public hearing.  A tape recording of the public hearing shall be made. Interested persons may access the tape recordings of public hearings in accordance with procedures provided in the Department's Freedom of Information rules (2 Ill. Adm. Code 801).

 

3)         Corrective Steps. The Department shall be available to arrive at an agreement with the designating unit of government regarding the specific corrective steps to be taken.  Within 15 days after the date of the public hearing, the Department shall issue a letter to the designating unit of government stating the final terms of the plan for corrective action.

 

4)         Progress Reports. The designating unit of government shall submit written monthly progress reports and shall make personnel available for meetings and interviews to ensure compliance with the plan of corrective action.

 

5)         Notice of Decertification. The Department shall notify the designating unit of government, 21 days prior to the end of the probationary period, as to whether decertification will proceed.

 

(Source:  Amended at 38 Ill. Reg. 457, effective December 20, 2013)

SUBPART D: ENTERPRISE ZONE: LOCAL RESPONSIBILITIES

 

Section 520.400  Zone Administration

 

a)         The administration of an Enterprise Zone shall be under the jurisdiction of the designating municipality or county.  Each designating municipality or county shall, by ordinance, designate a Zone Administrator for the certified zones within its jurisdiction. A Zone Administrator must be an officer or employee of the municipality or county.  The Zone Administrator shall be the liaison between the designating municipality or county, the Department, and any Designated Zone Organizations within zones under his or her jurisdiction.  Where there are two or more designating units of government for an Enterprise Zone, only one Zone Administrator is required for designation. The Zone Administrator must be an officer or employee of at least one of the designating units of government and must be selected in accordance with the intergovernmental agreement (see Section 520.240(c)).

 

b)         Each Zone Administrator shall post a copy of the boundaries of the Enterprise Zone on its official Internet website and shall provide an electronic copy to the Department. The Department shall post each copy of the boundaries of an Enterprise Zone that it receives from a Zone Administrator on its official Internet website. [20 ILCS 655/8.2(a)]  Administrators are encouraged to submit geospatial data in the form of ESRI ARCGIS Shape files.

 

c)         The Zone Administrator shall collect and aggregate the following information:

 

1)         the estimated cost of each building project, broken down into labor and materials; and

 

2)         within 60 days after the end of the project, the estimated cost of each building project, broken down into labor and materials. [20 ILCS 655/8.2(b)]

 

d)         By April 1 of each year, each Zone Administrator shall file a copy of its fee schedule with the Department, and the Department shall post the fee schedule on its website.  Zone Administrators shall charge no more than 0.5% of the cost of building materials of the project associated with the specific Enterprise Zone, with a maximum fee of no more than $50,000. [20 ILCS 655/8.2(c)]

 

(Source:  Amended at 40 Ill. Reg. 10858, effective July 29, 2016)

 

Section 520.410  Reporting and Monitoring by Zone Administrators

 

a)         Reporting.  Zone administrators shall collect and report to the Department information required to meet the reporting requirement set forth in Section 6(A)(1) of the Act.  The data shall be summarized on forms provided by the Department. 

 

b)         Monitoring. The Zone Administrator shall monitor the accomplishment of local Enterprise Zone objectives.

 

(Source:  Amended at 27 Ill. Reg. 3282, effective February 14, 2003)

 

Section 520.420  Business Cessation Notification

 

a)         Notification of Business Cessation.  Section 11.1 of the Act requires a business located within an Enterprise Zone that has received tax credits or exemptions, regulatory relief, or any other benefits under the Act to notify the Department and the officials of the county and municipality in which the business is located, within 60 days after the cessation, of the cessation of business operations.  For purposes of this regulation, business cessation shall mean:

 

1)         Business Closed.  The business has closed and is not conducting business in any capacity within the boundaries of the Enterprise Zone;

 

2)         Business Relocated.  The business has relocated its operations in whole to another area outside the boundaries of the Enterprise Zone; or

 

3)         Business Acquired.  The acquisition or assumption of the existing business (which has been certified to receive either the Enterprise Zone Utility Tax Exemption or the Enterprise Zone Expanded Manufacturing Machinery and Equipment/Pollution Control Facilities Sales Tax Exemption) and/or assets by another entity.

 

b)         Notice for Closed or Relocated Businesses.  In the case of business cessation under the categories specified under subsections (a)(1) and (a)(2), notification shall consist of a letter from the person in charge at the affected facility identifying:

 

1)         Date of Cessation.  The date of business cessation; and

 

2)         Number of Employees.  The number of employees at the time of business cessation.

 

c)         Notice for Acquired Businesses.  In the case of a business cessation under the category specified in subsection (a)(3), notification shall consist of a letter from the person in charge at the affected facility identifying:

 

1)         Date of Purchase.  The date of purchase;

 

2)         Name of New Business.  The name of the new business; and

 

3)         Exemption the Acquired Business Received.  The type of exemption that the acquired or assumed business was receiving (either the Enterprise Zone Utility Tax Exemption or the Enterprise Zone Expanded Manufacturing Machinery and Equipment/Pollution Control Facilities Sales Tax Exemption).

 

d)         People to Notify.  Notification of the business cessation shall be submitted to:

 

1)         DCEO.  Office of Business Development, Department of Commerce and Economic Opportunity, 500 East Monroe, Springfield, Illinois 62701;

 

2)         Enterprise Zone.  The chief elected official of the Enterprise Zone community in which the business was located; and

 

3)         Joint Enterprise Zone.  In the case of a joint zone, the chief elected official of the municipality and the County Board Chairperson of the participating county.

 

(Source:  Amended at 38 Ill. Reg. 457, effective December 20, 2013)

SUBPART E: ENTERPRISE ZONE: DESIGNATED ZONE ORGANIZATIONS

 

Section 520.500  General

 

A designating municipality or county may designate one or more Designated Zone Organizations qualified under Section 3(d) of the Act to perform within the area or zone for the benefit of the residents and businesses in the zone.  The Department shall furnish a standard application to an entity or association seeking certification as a Designated Zone Organization (DZO).  No organization shall be considered a DZO unless and until the Department verifies eligibility in accordance with Section 3(d) of the Act, and the organization is authorized by local ordinance to function as a DZO.  Once certified, the DZO may provide services or perform functions in coordination with the municipality or county that is listed in Section 8 of the Act.

 

(Source:  Amended at 27 Ill. Reg. 3282, effective February 14, 2003)

 

Section 520.510  Project Eligibility and Approval

 

A business entity may receive a deduction against income subject to State taxes for a contribution to a DZO if the project for which the contribution is made has been specifically approved by the designating municipality or county, and by the Department. Any DZO seeking to have a project approved for contribution must submit an application to the Department describing the nature and benefit of the project and its potential contributors.

 

a)         Standard Applications.  The Department shall provide a standard application to any DZO seeking to qualify a project for contributions eligible for tax deductions in accordance with Section 11 of the Act.  The applications shall be processed in accordance with Section 11(e) of the Act.

 

b)         Project Approval Period.  Applications shall be approved for a period of one project fiscal year.  Continuation of project approval and eligibility for contributions in future years shall require a new application and current documentation including:

 

1)         Project Balance Sheet.  A project balance sheet showing assets and liabilities, in accordance with the most recent accounting standards of the Financial Standards Board of the American Institute of Certified Public Accountants as contained in the publication entitled AICPA Professional Standards, 1211 Avenue of the Americas, New York NY 10036-8775 (June 2011, no later editions are incorporated);

 

2)         Project Budget.  A project budget; and

 

3)         Accomplishment of Project Objectives.  Project information regarding the extent to which objectives have been accomplished.

 

c)         Renewal Applications.  All renewal applications shall be submitted at least 90 days prior to the start of the budget fiscal year or program year for which approval is requested.

 

1)         Notice of Project Renewal.  Within 15 days after receipt of the application, the Department shall notify the DZO in writing regarding project renewal.  In the event the renewal application is determined deficient, the Department will notify the DZO of the deficiencies.

 

2)         Notice of Deficiency.  The DZO shall have 15 days from the date of the notice of deficiency to submit corrected or additional information.

 

3)         Notice of Acceptance or Denial.  Within 5 days from the start of the budget fiscal year for which the project renewal is requested, the Department shall notify the DZO that the application is accepted and that the project shall be renewed, or that the application is deficient and the renewal is denied.

 

d)         Written Endorsement Requirement.  In no case shall a project be approved by the Department that does not have the written endorsement of the designating units of government.

 

e)         Project Proposal.  A proposed project shall enhance the Enterprise Zone in accordance with Section 11(c) of the Act.  In describing how the proposed project will enhance the Enterprise Zone, the DZO shall address the following:

 

1)         Assessment of Need.  The applicant shall identify the specific need, problem or objective that will be addressed by the proposed project.

 

2)         Project Objectives.  The applicant shall identify how the project will offer relief from the identified problems or meet the identified need.

 

3)         Project Criteria.  In accordance with Section 11(b) of the Act, a DZO must demonstrate that the proposed project meets all of the following criteria:

 

A)        Self-Help.  That the project will contribute to the self-help efforts of zone residents  (Self-help means the project can reasonably be expected to improve the ability of participating residents to live and/or work in the Enterprise Zone.);

 

B)        Participation by Zone Residents.  That the zone residents will actively participate in the project's planning and implementation;

 

C)        Lack of Sufficient Resources.  That the project lacks sufficient resources; and

 

D)        DZO is Fiscally Responsible.  That the DZO will be fiscally responsible for the project.

 

f)         Project Modifications.  Project modifications, either programmatic or budgetary, require the prior approval of the Department.

 

g)         DZO Project Administrative Responsibility.  The DZO shall furnish the Department an annual status report on each project.  The report must be submitted no later than 30 calendar days following the anniversary, and shall consist of the following information:

 

1)         Financial Statement.  A financial statement, in accordance with the most recent generally accepted accounting principles of the American Institute of Certified Public Accountants; and

 

2)         Achieving Objectives.  A statement describing the project's success in achieving the objectives outlined in the approved application.

 

(Source:  Amended at 36 Ill. Reg. 16067, effective October 26, 2012)

 

Section 520.520  Charitable Contributions

 

a)         Amount of Contributions.  The Department is authorized under Section 11(d) of the Act to specify the amount of contributions a DZO is eligible to receive for a project.  The Department will deny amounts requested if:

 

1)         Excessive/Inappropriate Items.  The amount requested or the items sought are excessive or inappropriate to the project goals and objectives; or

 

2)         Exceeding Contribution Limit.  Approval of the project would, in total, with all other project amounts approved in any calendar year, exceed the contribution limitation set or established in Section 11(g) of the Act.

 

b)         Eligibility of a Contribution for a Tax Deduction.  The DZO shall provide to the Department information necessary to determine the eligibility of a contribution for a tax deduction in accordance with Section 203(b)(2)(N) of the Illinois Income Tax Act [35 ILCS 5/203(b)(2)(N)] and Section 170(c) of the Internal Revenue Code (26 USC 170(c)).

 

c)         Claim for Tax Deduction.  In order to determine and certify the amount of contribution, a taxpayer may file a claim for a tax deduction.

 

1)         Request for Contribution Approval.  The taxpayer shall submit to the Department a request for contribution approval that shall include:

 

A)        Taxpayer Information.  The name of the taxpayer, the taxpayer's address, and the Federal Employer Identification Number (FEIN);

 

B)        Name of Zone, DZO, and Project.  The name of the Enterprise Zone, the DZO, and the project;

 

C)        Amount of Contribution.  The amount of cash or the value of the in-kind contribution as determined in accordance with Section 170(c) of the Internal Revenue Code; and

 

D)        In-Kind Contribution.  In the case of an in-kind contribution, the DZO must maintain documentation sufficient to support the claim, such as appraisals of fair market value.

 

2)         Receipt to Taxpayer.  The DZO shall issue a receipt to the taxpayer when a contribution is made.  The receipt shall include:

 

A)        Taxpayer Information.  The exact name of the taxpayer, the address, and the Federal Employer Identification Number (FEIN);

 

B)        Date of Contribution.  The date the contribution was made;

 

C)        Name of DZO and Project.  The name of the DZO and of the project to which the contribution has been made; and

 

D)        Amount of Contribution.  The amount and a description of the contribution made to the project.

 

3)         Verification of Contribution Value.  The DZO shall forward a copy of such receipt to the Department and verification of the contribution value as determined under Section 170(c) of the Internal Revenue Code and the most recent Accounting Standards of the Financial Accounting Standards Board of the American Institute of Certified Public Accountants (AICPA).

 

(Source:  Amended at 27 Ill. Reg. 3282, effective February 14, 2003)

SUBPART F: HIGH IMPACT BUSINESSES IN ILLINOIS

 

Section 520.600  Definitions

 

The following definitions are applicable to Subpart F.

 

"Department" means the Department of Commerce and Economic Opportunity.

 

"Eligible investment" means the required amount of investments in qualified property, as defined by Section 201(h) of the Illinois Income Tax Act [35 ILCS 5/201(h)] that qualifies a business for the High Impact Business designation.

 

"Fertilizer plant" means a newly constructed or upgraded plant utilizing gas used in the production of anhydrous ammonia and downstream nitrogen fertilizer products for resale. [20 ILCS 655/5.5(a)(3)(F)]

 

"Foreign Trade Zone" or "Foreign Trade Sub-Zone" means a geographic area designated by the federal government under the Foreign Trade Zone Act of 1934, as amended (19 USC 81(a)) or rules promulgated under that Act (15 CFR 400 (1986)).

 

"Full-time equivalent job" means a job in which the new employee works for the recipient or for a corporation under contract to the recipient at a rate of at least 35 hours per week. A recipient who employs labor or services at a specific site or facility under contract with another may declare one full-time, permanent job for every 1,820 man hours worked per year under that contract. Vacations, paid holidays, and sick time are included in this computation. Overtime is not considered a part of regular hours. [20 ILCS 655/3(i)]

 

"Full-time retained job" means any employee defined as having a full-time or full-time equivalent job preserved at a specific facility or site, the continuance of which is threatened by a specific and demonstrable threat, which shall be specified in the application for development assistance. A recipient who employs labor or services at a specific site or facility under contract with another may declare one retained employee per year for every 1,750 man hours worked per year under that contract, even if different individuals perform on-site labor or services. [20 ILCS 655/3(j)]

 

"High Impact Business" means a business located in Illinois designated as a High Impact Business by the Department pursuant to Section 5.5 of the Illinois Enterprise Zone Act [20 ILCS 655/5.5].

 

"Job creation" means at least 500 full-time equivalent employees are to be hired at a designated location in Illinois over the number of full-time equivalent employees that were employed by the applicant prior to January 1, 1989. Job titles being filled or refilled as a result of strikes or layoffs or replacement workers to replace company locked out employees cannot be counted as job creation.  Job creation must occur within 36 months after the designation date, except that, in the case of a High Impact business designated under Section 5.5(a)(3)(F) of the Act, job creation must occur within 48 months after the designation date.

 

"Job retention" means at least 1,500 full-time employees are to be retained by the High Impact Business as a direct result of the eligible investment, and that the employees would have lost their jobs had the eligible investment not been made.  Job retention means maintaining all full-time jobs of a company that existed at the designated locations at the time of application submittal.

 

"Large scale investment and development project" means a project of a High Impact Business that is the result of a minimum eligible investment of $12 million that will be placed in service in qualified property and causes the creation of 500 full-time equivalent jobs, or is the result of a minimum eligible investment of $30 million that will be placed in service in qualified property and causes the retention of 1,500 full-time jobs at a designated location in Illinois.

 

"New electric generating facility" means a newly-constructed electric generation plant or a newly-constructed generation capacity expansion at an existing electric generation plant, including the transmission lines and associated equipment that transfers electricity from points of supply to points of delivery, and for which such new foundation construction commenced not sooner than July 1, 2001.

 

"New employee" means a full-time equivalent job that represents a net increase in the number of the High Impact Business' employees statewide. "New employee" includes an employee who previously filled a new employee position with the recipient who was rehired or called back from a layoff that occurs during or following the base years.  The term "new employee" does not include any of the following:

 

An employee of the High Impact Business who performs a job that was previously performed by another employee in this State, if that job existed in this State for at least 6 months before hiring the employee;

 

Any individual who has a direct or indirect ownership interest of at least 5% in the profits, capital or value of any member of the High Impact Business;

 

A child, grandchild, parent or spouse, other than a spouse who is legally separated from the individual, of any individual who has a direct or indirect ownership interest of at least 5% in the profits, capital or value of any member of the High Impact Business;

 

Employee positions being filled or refilled as a result of strikes or layoffs or replacement workers to replace High Impact Business company locked out employees.

 

"New gasification facility" means a newly constructed coal gasification facility that generates chemical feedstocks or transportation fuels derived from coal (which may include, but are not limited to, methane, methanol, and nitrogen fertilizer) that supports the creation or retention of Illinois coal-mining jobs, and that qualifies for financial assistance from the Department before December 31, 2010. [20 ILCS 655/5.5(a)(3)(B-5)]

 

"New Illinois coal mining jobs" means coal mining jobs created in Illinois coal mines, not sooner than July 1, 2001, not including a call back from a layoff, supported by a "new electric generating facility" as described in this Section.  Alternatively, a "new Illinois coal mining job" can be indirectly determined from quantities of coal purchased, or to be purchased, annually, based on the average amount of coal produced per Illinois miner in calendar year 2000, as published in the Annual Statistical Report of the Division of Mines and Minerals, Illinois Department of Natural Resources.  Illinois miners produced an average of 9,691 tons of coal in calendar year 2000.

 

"New wind power facility" means a newly constructed electric generation facility, or a newly constructed expansion of an existing electric generation facility, placed in service on or after July 1, 2009, that generates electricity using wind energy devices, and such facility shall be deemed to include all associated transmission lines, substations, and other equipment related to the generation of electricity from wind energy devices. [20 ILCS 655/5.5(a)(3)(E)]

 

"Placed in service" means the state or condition of readiness and availability for a specifically assigned function.  An eligible investment in qualified property as defined in Section 201(h)(2) of the Illinois Income Tax Act [35 ILCS 5/201(h)(2)] shall be considered placed in service on the date the property is placed in a condition of readiness and availability for use, or the date on which the depreciation period of that property begins.

 

"Prevailing wage" means the hourly cash wages plus fringe benefits for training and apprenticeship programs approved by the U.S. Department of Labor, Bureau of Apprenticeship and Training, health and welfare, insurance, vacations and pensions paid generally, in the locality in which the work is being performed, to employees engaged in work of a similar character on public works. [20 ILCS 655/5.5(a)(3)(F)]

 

"Transmission facilities" means transmission lines with a voltage rating of 115 kilovolts or above, including associated equipment, that transfer electricity from points of supply to points of delivery and that transmit a majority of the electricity generated by a new electric generating facility designated as a High Impact Business in accordance with Section 5.5(d) of the Act.  

 

"Wind energy device" means any device, with a nameplate capacity of at least 0.5 megawatts, that is used in the process of converting kinetic energy from the wind to generate electricity. [20 ILCS 655/5.5(a)(3)(E)]

 

(Source:  Amended at 38 Ill. Reg. 457, effective December 20, 2013)

 

Section 520.610  Eligible Applicants

 

Any business located in Illinois, excluding businesses located in Illinois Enterprise Zones, may apply to the Department for designation as a High Impact Business pursuant to the provisions of Section 5.5 of the Act.  

 

(Source:  Added at 27 Ill. Reg. 3282, effective February 14, 2003)

 

Section 520.620  Eligibility Criteria

 

A business qualifies for designation by the Department as a High Impact Business if the business:

 

a)         Is located in Illinois and is not located in an Enterprise Zone; and

 

            b)         The business intends to do one or more of the following:

 

1)         Minimum Eligible Investment.  Intends to make a minimum eligible investment of $12 million that will be placed in service in qualified property in Illinois and intends to create 500 full-time equivalent jobs at a designated location in Illinois; or intends to make a minimum eligible investment of $30 million that will be placed in service in qualified property in Illinois and intends to retain 1,500 full-time equivalent jobs at a designated location in Illinois. The business must certify in writing that the investments would not be placed in service in qualified property and the job creation or job retention would not occur without the tax credits and exemptions set forth in Section 5.5(b) of the Act.  The terms "placed in service" and "qualified property" have the same meanings as described in Section 201(h) of the Illinois Income Tax Act [20 ILCS 655/5.5(a)(3)(A)]; or

 

2)         New Electric Generating Facility.  Intends to establish a new electric generating facility at a designated location in Illinois. Such facility shall be designed to provide baseload electric generation and shall operate on a continuous basis throughout the year; and shall have an aggregate rated generating capacity of at least 1,000 megawatts for all new units at one site if it uses natural gas as its primary fuel and foundation construction of the facility is commenced on or before December 31, 2004, or shall have an aggregate rated generating capacity of at least 400 megawatts for all new units at one site if it uses coal or gases derived from coal as its primary fuel and shall support the creation of at least 150 new Illinois coal mining jobs.  The business must certify in writing that the investments necessary to establish a new electric generating facility would not be placed in service and the job creation in the case of a coal-fueled plant would not occur without the tax credits and exemptions set forth in Section 5.5(b-5) of the Act [20 ILCS 655/5.5(a)(3)(B)]; or

 

3)         New Gasification Facility.  Intends to establish a new gasification facility at a designated location in Illinois.  A new gasification facility does not include a pilot project located within Jefferson County or within a county adjacent to Jefferson County for synthetic natural gas from coal [20 ILCS 655/5.5(a)(3)(B-5)]; or

 

4)         Production Operations at a New Coal Mine. Intends to establish production operations at a new coal mine, re-establish production operations at a closed coal mine, or expand production at an existing coal mine at a designated location in Illinois not sooner than July 1, 2001; provided that the production operations result in the creation of 150 new Illinois coal mining jobs as described in Section 5.5(a)(3)(B) of the Act; and further provided that the coal extracted from the mine is utilized as the predominant source for a new electric generating facility.  The business must certify in writing that the investments necessary to establish a new, expanded, or reopened coal mine would not be placed in service and the job creation would not occur without the tax credits and exemptions set forth in Section 5.5(b-5) of the Act.  The term "placed in service" has the same meaning as described in Section 201(h) of the Illinois Income Tax Act [20 ILCS 655/5.5(a)(3)(C)]; or

 

5)         New or Upgraded Transmission Facilities.  Intends to construct new transmission facilities or upgrade existing transmission facilities, at designated locations in Illinois, for which construction commenced not sooner than July 1, 2001.  The business must certify in writing that the investments necessary to construct new transmission facilities or upgrade existing transmission facilities would not be placed in service without the tax credits and exemptions set forth in Section 5.5(b-5) of the Act [20 ILCS 655/5.5(a)(3)(D)]; or

 

6)         New Wind Power Facility.  Intends to establish a new wind power facility at a designated location in Illinois. [20 ILCS 655/5.5(a)(3)(E)]  The construction of a new wind power facility by a business designated as a High Impact Business under Section 5.5(a)(3)(E) of the Act is a "public works" as defined by Section 2 of the Prevailing Wage Act [820 ILCS 130/2]; or

 

7)         Qualifying Fertilizer Plant

 

A)        The business commits to:

 

1)         make a minimum investment of $500,000,000, which will be placed in service in a qualified property;

 

2)         create 125 full-time equivalent jobs at a designated location in Illinois;

 

3)         establish a fertilizer plant at a designated location in Illinois that complies with the set-back standards described in Table 1: Initial Isolation and Protective Action Distances in the 2012 Emergency Response Guidebook published by the United States Department of Transportation (USDOT; 1200 New Jersey Avenue, SE, Washington DC 20590);

 

4)         pay a prevailing wage for employees at that location who are engaged in construction activities; and

 

5)         secure an appropriate level of general liability insurance to protect against catastrophic failure of the fertilizer plant or any of its constituent systems.

 

B)        In addition, the business must agree to enter into a construction project labor agreement including provisions establishing wages, benefits, and other compensation for employees performing work under the project labor agreement at that location. [20 ILCS 655/5.5(a)(3)(F)]

 

C)        This subsection (b)(7) applies only to businesses that submit an application to the Department within 60 days after July 25, 2013.

 

(Source:  Amended at 38 Ill. Reg. 457, effective December 20, 2013)

 

Section 520.630  Form of Application

 

An application shall be submitted on the standard application form provided by the Department.  The application shall include:

 

a)         Investment Information.  For each eligible investment, a description of the planned investment; documentation to substantiate that the investment is qualified (e.g., construction schedules, schematics, and specifications or lists, and approximate value of equipment to be purchased as provided by contractors and/or architects and engineers); and a statement of when the eligible investment will be placed in service in qualified property.

 

b)         Job Creation.  For investments in which full-time equivalent jobs are to be created, organized by job titles, the number of current and new full-time equivalent employees and the starting date of the new employees; and an explanation of how and why the investment causes additional full-time employment at the designated location in Illinois in which the investment is made.

 

c)         Job Retention.  For each designated location in Illinois in which full-time jobs are to be retained, organized by job titles, the number of full-time employees; and an explanation of how and why the investment causes the retention of full-time employees.

 

d)         Existing Illinois Businesses.  Existing Illinois businesses qualifying under the job retention criteria must provide a prospective plan that demonstrates that 1,500 full-time jobs would be eliminated in the event the business is not designated.  The prospective plan shall include, but is not limited to, written information such as non-Illinois sites under consideration, cost-benefit analyses of moving or closing the business, financial statements, internal memoranda, or any other financial documentation evidencing that the business would either relocate to a non-Illinois site or close down in the event the business is not designated. This provision does not apply to new wind power facilities.

 

e)         Newly Proposed Facilities.  Newly proposed facilities qualifying under the job creation criteria must provide proof of alternative non-Illinois sites that would receive the proposed investment and job creation in the event the business is not designated.  Such proof shall include, but is not limited to, incentive letters, prospective offers from other states, or other documentation indicating a firm interest in alternative non-Illinois locations. This provision does not apply to new wind power facilities.

 

f)         Certification.  A signed and dated statement that the investments would not be placed in service in qualified property and the job creation or retention would not occur without the tax credits and exemptions set forth in Section 5.5(b) of the Act; a signed and dated statement indicating application information is true and correct, and granting the Department access to material, documentation, and other data required to verify application information.  The signed and dated statement that the investments would not be placed in service in qualified property and the job exemptions set forth in Section 5.5(b) of the Act applies only to the initial application for designation and not to any subsequent renewals.  

 

(Source:  Amended at 38 Ill. Reg. 457, effective December 20, 2013)

 

Section 520.640  Application Approval Process

 

a)         Application Submissions.  Applications may be submitted to the Department at any time during the year.

 

b)         Approvals and Denials.  The Department shall approve or deny an application within 30 days.  If the Department denies the initial application, it will specify the reasons for the denial in writing and allow the applicant 30 days to amend and resubmit the application.  Resubmitted applications will be approved or denied in writing within 30 days after receipt.  In no event shall the review period last longer than 90 days.  In the event of a complaint by the applicant, the Department will follow the procedures outlined in 56 Ill. Adm. Code 2605 (Administrative Hearing Rules).

 

c)         Notification of Designation.  If the applicant is eligible, in accordance with Section 520.620, the Department will notify the applicant in writing of designation as a High Impact Business and transmit a copy of the designation to the Illinois Department of Revenue.

 

d)         Tax Credits and Exemptions (Investments).  Applicants designated as High Impact Business pursuant to Section 5.5(a)(3)(A) of the Act shall qualify for the credits and exemptions described in the following Acts:  Sections 9-222 and 9-222.1A of the Public Utilities Act [220 ILCS 5/9-222 and 9-222.1A]; Section 201(h) of the Illinois Income Tax Act [35 ILCS 5/201(h)]; and Sections 1d, 1e, and 5l of the Retailers' Occupation Tax Act [35 ILCS 120/1d, 1e and 5l]; provided that the credits and exemptions described in these Acts shall not be authorized until the minimum investments have been placed in service in qualified properties, and in the case of the exemptions described in the Public Utilities Act and the Retailers' Occupation Tax Act, the minimum full-time equivalent jobs or full-time jobs shall have been created or retained.

 

e)         Tax Credits and Exemptions (New Electric Generating Facility, New Coal Mine, and New Transmission Facility).  Applicants designated as High Impact Businesses pursuant to Section 5.5(a)(3)(B), (a)(3)(C), and (a)(3)(D) of the Act shall qualify for the credits and exemptions described in the following Acts: Section 5l of the Retailers' Occupation Tax Act, Sections 9-222 and 9-222.1A of the Public Utilities Act, and Section 201(h) of the Illinois Income Tax Act, however, the credits and exemptions authorized under Sections 9-222 and 9-222.1A of the Public Utilities Act, and Section 201(h) of the Illinois Income Tax Act, shall not be authorized until the new electric generating facility, the new transmission facility, or the new, expanded, or reopened coal mine is operational; and except that  a new electric generating facility whose primary fuel source is natural gas is eligible only for the exemption under Section 5l of the Retailers' Occupation Tax Act.

 

f)         Tax Credits and Exemptions (New Wind Power Facility).  Applicants designated as High Impact Businesses pursuant to Section 5.5(a)(3)(E) of the Act shall qualify for the exemptions described in Section 5l of the Retailers' Occupation Tax Act. [20 ILCS 655/5.5(b-6)]

 

g)         Additional Tax Credits and Exemptions (Foreign Trade Zones and Sub-Zones).  High Impact Businesses located in federally designated foreign trade zones or sub-zones are also eligible for additional credits, exemptions, and deductions as described in the following Acts:  Section 9-221 of the Public Utilities Act; Sections 201(g) and 203 of the Illinois Income Tax Act; and Section 51 of the Retailers' Occupation Tax Act.

 

h)         Duty to Notify of Investments.  Prior to authorization for the credits and exemptions described in Section 9-222 of the Public Utilities Act and Section 1d of the Retailers' Occupation Tax Act, businesses shall notify the Department, on forms provided by the Department, when the minimum eligible investment has been placed in service in qualified property and the minimum full-time equivalent or full-time jobs have been created or retained.

 

(Source:  Amended at 38 Ill. Reg. 457, effective December 20, 2013)

 

Section 520.650  Revocation of the High Impact Business Designation

 

a)         Failure to Need the Designation.  The Department shall revoke a High Impact Business designation in the event that it demonstrates that the business would have placed in service in qualified property the minimum eligible investment and created or retained the requisite number of jobs without the benefits of the High Impact Business designation.  Proof of this shall include, but is not limited to, correspondence, financial plans and prospectuses, internal memoranda, and other written documentation demonstrating that the business would have made the eligible investment without the designation.

 

b)         Failure to Comply with Certification.  The Department shall revoke a High Impact Business designation if the business fails to comply with the terms and conditions of the certification.

 

c)         Failure to Provide True Information on the Application.  The Department shall revoke a High Impact Business designation if it is determined upon investigation that the business falsified application information in violation of Section 520.630(f).

 

d)         Notification of Revocation.  The Department shall notify a High Impact Business in writing that it is subject to revocation. The notice shall include the reason for revocation and the date and location of a hearing to be held pursuant to 56 Ill. Adm. Code 2605 (Administrative Hearing Rules).

 

e)         Recovery of Wrongfully Exempted State Taxes.  Following revocation, the Department will contact the Director of the Illinois Department of Revenue and request he begin proceedings to recover wrongfully exempted State taxes with interest under the provisions of Sections 4 and 5 of the Retailers' Occupation Tax Act.

 

f)         Ineligibility for State Funded Programs.  Any business whose High Impact Business designation is revoked shall be ineligible for all State funded Department programs for 10 years.

 

g)         The penalties for new wind power facilities or Wind Energy Businesses for failure to comply with any of the terms or conditions of the Illinois Prevailing Wage Act shall be only those penalties identified in the Illinois Prevailing Wage Act, and the Department shall not revoke a High Impact Business designation as a result of the failure to comply with any of the terms or conditions of the Illinois Prevailing Wage Act in relation to a new wind power facility or a Wind Energy Business (a business generating electricity from wind kinetic energy devices with a nameplate capacity of at least 0.5 megawatts). [20 ILCS 655/5.5(g)]

 

(Source:  Amended at 38 Ill. Reg. 457, effective December 20, 2013)

SUBPART G: TAX INCENTIVES FOR ENTERPRISE ZONES AND HIGH IMPACT BUSINESSES

 

Section 520.700  List of Available Tax Incentives

 

a)         Several tax incentives are available to businesses in Enterprise Zones and those designated as a High Impact Business.  The following four are available to both Enterprise Zones and High Impact Businesses:

 

1)         Investment Tax Credit found in the Illinois Income Tax Act [35 ILCS 5/201(f) and (h)];

 

2)         Utility Tax Exemption found in the Public Utilities Act [220 ILCS 5/9-222.1 and 9-222.1A];

 

3)         Machinery and Equipment/Pollution Control Facilities Sales Tax Exemption found in the Retailers' Occupation Tax Act [35 ILCS 120/1d - 1f]; and

 

4)         Building Material Sales Tax Exemption found in the Retailers' Occupation Tax Act [35 ILCS 120/5k and 5l].

 

b)         Two tax incentives available to High Impact Businesses that are located within a Foreign Trade Zone or Sub-Zone:

 

1)         Dividend Income Deduction found in the Illinois Income Tax Act [35 ILCS 5/203(a)(2)(K), (b)(2)(L), (c)(2)(O) and (d)(2)(M)]; and

 

2)         Interest Income Deduction for Financial Institutions found in the Illinois Income Tax Act [35 ILCS 5/203(b)(2)(M) and (M-1).

 

c)         A tax incentive available to businesses in Enterprise Zones as well as High Impact Businesses located within a Foreign Trade Zone or Sub-Zone is the Telecommunications Excise Tax Exemption on Originating Calls found in the Telecommunications Excise Tax Act [35 ILCS 630].

 

d)         A special tax incentive exists that is limited only to a High Impact Business Service Facility in an Enterprise Zone.  This tax incentive is known as the High Impact Service Facility Machinery and Equipment Sales Tax Exemption and is found in the Retailers' Occupation Tax Act [35 ILCS 120/li and 1j].

 

e)         A tax incentive is available to a certified High Impact Business labeled the High Impact Business construction jobs credit, which is only available to businesses that have been designated as High Impact Businesses by the Department (see 35 ILCS 5/201(h-5)).

 

f)         A tax incentive available to businesses located within a certified Enterprise Zone is the Enterprise Zone construction jobs credit (see 35 ILCS 5/201(a) and (b)).

 

(Source:  Amended at 46 Ill. Reg. 1817, effective January 11, 2022)

 

Section 520.710  Eligible Applicants (Repealed)

 

(Source:  Repealed at 27 Ill. Reg. 3282, effective February 14, 2003)

 

Section 520.720  Eligibility Criteria (Repealed)

 

(Source:  Repealed at 27 Ill. Reg. 3282, effective February 14, 2003)

 

Section 520.730  Form of Application (Repealed)

 

(Source:  Repealed at 27 Ill. Reg. 3282, effective February 14, 2003)

 

Section 520.740  Application Review and Approval (Repealed)

 

(Source:  Repealed at 27 Ill. Reg. 3282, effective February 14, 2003)

 

Section 520.750  Revocation of the High Impact Business Designation (Repealed)

 

(Source:  Repealed at 27 Ill. Reg. 3282, effective February 14, 2003)

SUBPART H: INVESTMENT TAX CREDIT

 

Section 520.800 General

 

The Investment Tax Credit found in the Illinois Income Tax Act [35 ILCS 5/201(f) and (h)] provides for a 0.5% credit against the State income tax for investments made in qualified property that are placed in service in an Enterprise Zone [35 ILCS 5/201(f)] or by a High Impact Business [35 ILCS 5/201(h)].  The credit shall be 0.5% of the basis for such property.  The specific terms and conditions governing this tax credit are found in the Illinois Department of Revenue's regulations (86 Ill. Adm. Code 100.2110 and 86 Ill. Adm. Code 100.2130).

 

(Source:  Old Section repealed at 15 Ill. Reg. 8683, effective May 30, 1991; new Section adopted at 27 Ill. Reg. 3282, effective February 14, 2003)

 

Section 520.810  Eligibility Criteria (Repealed)

 

(Source:  Repealed at 15 Ill. Reg. 8683, effective May 30, 1991)

 

Section 520.820  Form of Application (Repealed)

 

(Source:  Repealed at 15 Ill. Reg. 8683, effective May 30, 1991)

 

Section 520.830  Application Review and Approval Process (Repealed)

 

(Source:  Repealed at 15 Ill. Reg. 8683, effective May 30, 1991)

SUBPART I: UTILITY TAX EXEMPTION

 

Section 520.900  Definitions

 

The following definitions are applicable to Subpart I.

 

"Act" means Sections 9-221, 9-222 and 9-222.1 of the Public Utilities Act [220 ILCS 5/9-221, 9-222 and 9-222.1].

 

"Department" means the Department of Commerce and Economic Opportunity.

 

"Eligible investment" means:

 

Investments in qualified property that are placed in service in an Enterprise Zone or by a designated High Impact Business in Illinois. Qualified properties are statutorily defined in Section 201(f) and (h) of the Illinois Income Tax Act [35 ILCS 5/201(f) and (h)]; or

 

Noncapital/nonroutine investments, and associated service costs (direct labor or contractual fees), placed in service in an Enterprise Zone and made for the improvement or renovation of qualified properties.  These activities are undertaken for the purpose of improving productive capacity, efficiency, product quality, or competitive position.  The investments cannot be repetitious, commonplace, or associated with regular maintenance expenditures, and would include, for example, rebuilt cast house furnaces, rebuilt soaking furnaces, a rebuilt hot line control system, a restructured plant layout, and installed equipment to rebuild a logeman baler. Noncapital/nonroutine investments are those that do not qualify for the investment tax credit pursuant to Section 201(f) of the Illinois Income Tax Act.

 

Businesses utilizing this definition must provide detailed information regarding the purpose, scope, justification, and benefits of these noncapital/nonroutine investments, including defined project start and completion target dates, and a level of expenditures of at least $40,000.

 

"Foreign Trade Zone" or "Foreign Trade Sub-Zone" means a geographic area designated by the federal government under the Foreign Trade Zone Act of 1934, as amended (19 USCA 81(a)) or rules promulgated under that Act (15 CFR 400 (1986)).

 

"Full-time equivalent job" means a job in which the new employee works for the recipient or for a corporation under contract to the recipient at a rate of at least 35 hours per week. A recipient who employs labor or services at a specific site or facility under contract with another may declare one full-time, permanent job for every 1,820 man hours worked per year under that contract. Vacations, paid holidays, and sick time are included in this computation. Overtime is not considered a part of regular hours. [20 ILCS 655/3(i)]

 

"Full-time retained job" means any employee defined as having a full-time or full-time equivalent job preserved at a specific facility or site, the continuance of which is threatened by a specific and demonstrable threat, which shall be specified in the application for development assistance. A recipient who employs labor or services at a specific site or facility under contract with another may declare one retained employee per year for every 1,750 man hours worked per year under that contract, even if different individuals perform on-site labor or services. [20 ILCS 655/3(j)]

 

"High Impact Business" means a business that designated as a High Impact Business by the Department pursuant to the provisions of Section 5.5 of the Illinois Enterprise Zone Act [20 ILCS 655/5.5] and 14 Ill. Adm. Code 520.600.

 

"Job creation" means at least 200 full-time equivalent employees have been hired over the number of full-time equivalent employees that were employed by the applicant as of January 1, 1986, or the date the Enterprise Zone was certified, whichever is later.  Job titles being filled or refilled as a result of strikes or layoffs or replacement workers to replace company locked out employees cannot be counted as job creation.  A majority of the "jobs created" must be made in the Enterprise Zone in which the eligible investment is made.

 

"Job retention" means that at least 1,000 full-time employees will remain employed in Illinois as a direct result of the eligible investment, and that the employees would have lost their jobs had the investment not been made.  A majority of the "jobs retained" must be in the Enterprise Zone in which the eligible investment was made.

 

"Minimum investment" means the amount of eligible investment that must be made to qualify for the exemption. Under the job creation criteria, the minimum eligible investment that must be made in an Enterprise Zone is $5 million.  Under the job retention criteria the minimum eligible investment that must be made in an Enterprise Zone is $20 million.

 

"New employee" means a full-time equivalent job that represents a net increase in the number of the recipient's employees statewide. "New employee" includes an employee who previously filled a new employee position with the recipient who was rehired or called back from a layoff that occurs during or following the base years.  The term "new employee" does not include any of the following:

 

An employee of the recipient who performs a job that was previously performed by another employee in this State, if that job existed in this State for at least 6 months before hiring the employee;

 

Any individual who has a direct or indirect ownership interest of at least 5% in the profits, capital or value of any member of the recipient;

 

A child, grandchild, parent or spouse, other than a spouse who is legally separated from the individual, of any individual who has a direct or indirect ownership interest of at least 5% in the profits, capital or value of any member of the recipient;

 

Employee positions being filled or refilled as a result of strikes or layoffs or replacement workers to replace recipient company locked out employees.

 

"Placed in service" means the state or condition of readiness and availability for a specifically assigned function.

 

(Source:  Amended at 38 Ill. Reg. 457, effective December 20, 2013)

 

Section 520.910  Eligibility Criteria

 

a)         Enterprise Zones

 

1)         Minimum Eligible Investment. Eligibility for the tax exemption is contingent on the business making a minimum eligible investment of $5 million in an Enterprise Zone, which causes the creation of a minimum of 200 full-time equivalent jobs in Illinois; or a minimum eligible investment of $20 million in an Enterprise Zone, which causes the retention of a minimum of 1,000 full-time jobs in Illinois.

 

2)         More Than One Facility.  Businesses owning and operating more than one facility located in Illinois Enterprise Zones shall qualify for this exemption by combining their investments and jobs created or retained if the business can demonstrate that the manufacturing processes at each location are interrelated.  The Department considers the manufacturing processes to be interrelated if the facilities act as one functional unit in the manufacture of the final product. Proof of such interrelationship shall include, but is not limited to, internal memoranda, flow charts, narrative descriptions, organization charts, annual reports, or any other written documentation that demonstrates that the manufacturing processes are interrelated.  The majority of jobs shall be located in one or more Illinois Enterprise Zones.

 

b)         High Impact Business

Minimum Eligible Investment.  In the case of a designated High Impact Business, eligibility is contingent on the business making a minimum eligible investment of $12 million placed in service in qualified property at a designated location in Illinois, which causes the creation of 500 full-time equivalent jobs at the designated location; or making a minimum eligible investment of $30 million placed in service in qualified property in a designated location in Illinois, which causes the retention of 1,500 full-time equivalent jobs at a designated location in Illinois.

 

(Source:  Amended at 38 Ill. Reg. 457, effective December 20, 2013)

 

Section 520.920  Form of Application

 

An application shall be submitted on the standard application form provided by the Department.  An application shall include:  

 

a)         Investment Information.  A summary of the eligible investment, and a statement of when the eligible investment in qualified property was or will be placed in service.

 

b)         Job Information

 

1)         Job Creation.  Information on new employment that will occur in the Enterprise Zone as a result of the investment, which includes, by job titles, the number of current and new employees, the starting date of new employees, and an explanation of how and why the investment causes additional employment, both inside and outside of the Enterprise Zone; or

 

2)         Job Retention.  Information on the full-time jobs that have been retained in an Enterprise Zone as a result of the investment, which includes, by job titles, the number of employees in and outside of the Enterprise Zone.

 

3)         Employment Requirement for Job Creation.  Applicants utilizing the job creation criterion for eligibility for the exemption must actually employ 200 full-time equivalent employees prior to certification for this exemption.

 

4)         Submit Applications Prior to Job Creation. Applicants are encouraged to submit applications to the Department prior to the actual creation of 200 full-time equivalent jobs.  The Department will conditionally approve the application subject to the requirements of Section 520.910 being met.

 

c)         Audit.  An examination by public accountants certified by the State of Illinois, in accordance with generally accepted accounting practices, containing the unqualified opinion of such public accountants that the minimum eligible investment has been made and that minimum jobs have been created or retained.

 

d)         Certification.  A signed and dated statement indicating that the data and information in the application is correct, that the Department will be provided access to any material, documentation, or other data required to verify application information, and a statement that the number of jobs created or retained shall be maintained for the term of exemption, otherwise the Department will be notified and the exemption terminated.

 

(Source:  Amended at 27 Ill. Reg. 3282, effective February 14, 2003)

 

Section 520.930  Application Approval Process

 

a)         Application Approval Requirements. Applications shall be submitted to the Department, which shall approve or deny the application in writing within 90 days after receipt. The application shall be approved if it meets the requirements of Sections 520.910 and 520.920, utilizing one of the two following options:

 

1)         Investments Placed in Service.  The applicant has substantiated, in accordance with Section 520.920(a), that the eligible investment in qualified property has been placed in service; or

 

2)         Spending Plan and Financial Commitments.  The applicant has not placed in service in qualified property the eligible investment. However, a spending plan and financial commitments for the proposed eligible investment have been submitted.  The spending plan must include a detailed "project by project" description, as well as the estimated eligible investment for each specific project.  The spending plan must further include the date when the eligible investment in each project will be placed in service.  The applicant's financial commitments must include the sources of financing for the project.  Should the applicant choose to follow this option, it must sign a written agreement with the Department obligating the business to place in service the eligible investment in qualified property within 12 months after certification pursuant to this Section.  Should the business fail to place in service the eligible investment in qualified property within 12 months after certification pursuant to this Section, the business shall be decertified for the tax exemption and required to repay the exempted taxes. Should the business place in service the eligible investment subsequent to this decertification, the business may reapply to the Department for recertification.  However, this reapplication must utilize the procedures set forth in subsection (a)(1), and contain the same information as required pursuant to Section 520.920.

 

b)         Application Denial Requirements.  When the Department denies an application, it shall specify in writing the reasons for denial and allow the applicant 45 days from the date of application denial to amend and resubmit the application.  Resubmitted applications shall be approved or denied in writing within 45 days after receipt.

 

c)         Certificates for "Investment" Applicants. Applicants determined eligible by the Department, in accordance with subsection (a)(1), will be issued a Certificate of Exemption.  The exemption shall take effect six months after certification.

 

d)         Certificates for "Spending Plan" Applicants.  Applicants determined eligible by the Department, in accordance with subsection (a)(2), will be issued a Certificate of Exemption 12 months prior to the eligible investment in qualified property being placed in service as set forth in the applicant's spending plan submitted pursuant to this Section.

 

e)         Department's Right to Inspect and Audit.  The Department shall have the right to inspect and conduct its own audit of all books and records relied upon by the business to demonstrate that the eligible investment in qualified property has been placed in service.  Certified businesses shall also submit information annually to the Department documenting the maintenance of the minimum job creation or job retention criterion.  Certified businesses that fail to comply with this subsection shall be decertified for the tax exemption and shall repay the exempted taxes.  The jobs created or retained must be documented through personnel records.

 

f)         Five-Year Exemption Period.  All certified businesses shall receive a five-year exemption from the State utility tax.

 

g)         Additional Exemption Period for Certified Businesses.  At the expiration of this initial five-year period, certified businesses may apply to the Department for renewals of the exemption for additional five-year time periods not to exceed the termination date of the Enterprise Zone.  The Department shall grant an exemption to a certified business for an additional five-year period at 100% of the State utility taxes provided that at the time of the application for each renewal:

 

1)         Jobs Retained are in an Enterprise Zone.  In the case of a business certified pursuant to the job creation criterion of Section 520.920, the business has retained a minimum of 200 full-time equivalent jobs in Illinois; or in the case of a business certified pursuant to the job retention criterion of Section 520.910, the business has retained a minimum of 1,000 full-time jobs in Illinois.  A majority of the "jobs retained" must be in the Enterprise Zone in which the eligible investment is made.

 

2)         Business is Located in an Enterprise Zone.  The business is located in an Enterprise Zone established pursuant to the Illinois Enterprise Zone Act [20 ILCS 655].

 

3)         Business Provides an Audited Financial Statement.  The business provides a financial statement, including balance sheets and income statements, audited according to generally accepted auditing standards by a public accountant certified in the State of Illinois as contained in the publication entitled AICPA Professional Standards, American Institute of Certified Public Accountants, 1211 Avenue of the Americas, New York NY 10036-8775 (June 2011, no later editions are incorporated).  In addition, the certified business' chief financial officer shall attest in writing that the certified business is not aware of a condition or occurrence that would result in a bankruptcy or closure.

 

4)         Maximum Period of Exemption.  This exemption shall not be allowed beyond the term of the certified Enterprise Zone.

 

h)         Exemptions for Certified Businesses Located in Enterprise Zones Successful in Reapplying for Designation.  Certified businesses located in Enterprise Zones that successfully reapplied for designation as an Enterprise Zone to be effective on or after January 1, 2016, and that expired or terminated solely by operation of Section 5.3(c) of the Act, shall continue to be eligible for the renewals of exemptions in accordance with subsection (g).  Any Certificate of Exemption issued under this Section shall not, after taking into account the time for which the exemption existed under the prior zone designation, exceed a total of five years.  Thereafter, certified businesses located in Enterprise Zones may apply to the Department in accordance with subsection (g).

 

(Source:  Amended at 40 Ill. Reg. 10858, effective July 29, 2016)

SUBPART J: MACHINERY AND EQUIPMENT/POLLUTION CONTROL FACILITIES SALES TAX EXEMPTION

 

Section 520.1000  Definitions

 

The following definitions are applicable to Subpart J.

 

"Act" means Sections 1d-1f of the Retailers' Occupation Tax Act [35 ILCS 120/1d-1f].

 

"Department" means the Department of Commerce and Economic Opportunity.

 

"Eligible investment" means:

 

Investments in qualified property that are placed in service in an Enterprise Zone or by a designated High Impact Business in Illinois.  Qualified properties are statutorily defined in Section 201(f) and (h) of the Illinois Income Tax Act [35 ILCS 5/201(f) and (h)]; and

 

Noncapital/nonroutine investments, and associated service costs (direct labor or contractual fees), placed in service in an Enterprise Zone and made for the improvement or renovation of qualified properties.  These activities are undertaken for the purposes of improving productive capacity, efficiency, product quality, or competitive position.  The investments cannot be repetitious, commonplace, or associated with regular maintenance expenditures, and would include, for example, rebuilt cast house furnaces, rebuilt soaking furnaces, a rebuilt hot line control system, a restructured plant layout, and installed equipment to rebuild a logeman baler.  Noncapital/nonroutine investments are those that do not qualify for the investment tax credit pursuant to Section 201(f) of the Illinois Income Tax Act.

 

Businesses utilizing this definition must provide detailed information regarding the purpose, scope, justification, and benefits of these noncapital/nonroutine investments, including defined project start and completion target dates, and a level of expenditures of at least $40,000.

 

"Full-time equivalent job" means a job in which the new employee works for the recipient or for a corporation under contract to the recipient at a rate of at least 35 hours per week. A recipient who employs labor or services at a specific site or facility under contract with another may declare one full-time, permanent job for every 1,820 man hours worked per year under that contract. Vacations, paid holidays, and sick time are included in this computation. Overtime is not considered a part of regular hours. [20 ILCS 655/3(i)]

 

"Full-time retained job" means any employee defined as having a full-time or full-time equivalent job preserved at a specific facility or site, the continuance of which is threatened by a specific and demonstrable threat, which shall be specified in the application for development assistance. A recipient who employs labor or services at a specific site or facility under contract with another may declare one retained employee per year for every 1,750 man hours worked per year under that contract, even if different individuals perform on-site labor or services. [20 ILCS 655/3(j)]

 

"High Impact Business" means a business that is designated as a High Impact Business by the Department pursuant to the provisions of Section 5.5 of the Illinois Enterprise Zone Act [20 ILCS 655/5.5].

 

"Job creation" means at least 200 full-time equivalent employees have been hired over the number of full-time equivalent employees that were employed by the applicant as of September 25, 1985 or the date the Enterprise Zone was certified, whichever is later. Job titles being filled or refilled as a result of strikes or layoffs or replacement workers to replace company locked out employees cannot be counted as job creation.  A majority of the "jobs created" must be made in the Enterprise Zone in which the eligible investment is made.

 

"Job retention" means:

 

At least 2,000 full-time employees, a majority of whom are located in the Enterprise Zone in which the eligible investment is made, will remain employed in Illinois as a direct result of the eligible investment, and would have lost their jobs had the investment not been made. The number originally retained in the Enterprise Zone must be retained for the duration of the exemption; or

 

At least 90% of the full-time jobs in place in the Enterprise Zone on the date on which the exemption is granted will remain in place in the Enterprise Zone for the duration of the exemption.  If the business utilizes full-time jobs retained at Illinois facilities outside of the Enterprise Zone to qualify for this exemption, 90% of the total full-time jobs must also be retained for the duration of the exemption.

 

"Minimum investment" means the amount of eligible investment that must be made to qualify for the exemption.  Under the job creation criteria, the minimum eligible investment that must be made in an Enterprise Zone is $5 million.  Under the job retention criteria, the minimum eligible investment that must be made in an Enterprise Zone is $40 million.

 

"New employee" means a full-time equivalent job that represents a net increase in the number of the recipient's employees statewide. "New employee" includes an employee who previously filled a new employee position with the recipient who was rehired or called back from a layoff that occurs during or following the base years.  The term "new employee" does not include any of the following:

 

An employee of the recipient who performs a job that was previously performed by another employee in this State, if that job existed in this State for at least 6 months before hiring the employee;

 

Any individual who has a direct or indirect ownership interest of at least 5% in the profits, capital or value of any member of the recipient;

 

A child, grandchild, parent or spouse, other than a spouse who is legally separated from the individual, of any individual who has a direct or indirect ownership interest of at least 5% in the profits, capital or value of any member of the recipient;

 

Employee positions being filled or refilled as a result of strikes or layoffs or replacement workers to replace recipient company locked out employees.

 

"Placed in service" means the state or condition of readiness and availability for a specifically assigned function as defined in 26 CFR 1.46-3(d) (July 1, 2012).  An eligible investment in qualified property as defined in Section 201(f) of the Illinois Income Tax Act shall be considered placed in service on the earlier of:

 

The date the property is placed in a condition of readiness and availability for use; or

 

The date on which the depreciation period of that property begins. Eligible noncapital/nonroutine investments shall be considered placed in service if 80% of the allocated monies have been expended.

 

(Source:  Amended at 38 Ill. Reg. 457, effective December 20, 2013)

 

Section 520.1010  Eligibility Criteria

 

a)         Enterprise Zone

 

1)         Minimum Eligible Investment.  Eligibility for the tax exemption is contingent on the business making:

 

A)        a minimum eligible investment of $5 million in an Enterprise Zone that causes the creation of a minimum of 200 full-time equivalent jobs in Illinois, or

 

B)        a minimum eligible investment of $40 million in an Enterprise Zone that causes the retention of a minimum of 2,000 full-time jobs in Illinois; or

 

C)        a minimum eligible investment of $40 million that causes the retention of at least 90% of the jobs in place on the date on which the exemption is granted for the duration of the exemption.

 

2)         More Than One Facility.  Businesses owning and operating more than one facility located in Illinois Enterprise Zones shall qualify for this exemption by combining their investments and jobs created or retained if the business can demonstrate that the manufacturing processes at each location are interrelated.  The Department considers the manufacturing processes to be interrelated if the facilities act as one functional unit in the manufacture of the final product. Proof of such interrelationship shall include, but is not limited to, internal memoranda, flow charts, narrative descriptions, organization charts, annual reports, or any other written documentation that demonstrates that the manufacturing processes are interrelated.  The majority of jobs shall be located in one or more Illinois Enterprise Zones.

 

b)         High Impact Business

Minimum.  In the case of a designated High Impact Business, eligibility is contingent on the business making a minimum eligible investment of $12 million placed in service in qualified property at a designated location in Illinois, which causes the creation of 500 full-time equivalent jobs at the designated location; or making a minimum eligible investment of $30 million placed in service in qualified property in a designated location in Illinois, which causes the retention of 1,500 full-time equivalent jobs at a designated location in Illinois.

 

(Source:  Amended at 38 Ill. Reg. 457, effective December 20, 2013)

 

Section 520.1020  Form of Application

 

An application shall be submitted on the standard application form provided by the Department.  An application shall include:

 

a)         Investment Information.  A summary of the eligible investment and a statement of when the eligible investment in qualified property was or will be placed in service.

 

b)         Job Information

 

1)         Job Creation.  Information on new employment that will occur in the Enterprise Zone as a result of the investment, which includes, by job titles, the number of current and new employees, the starting date of new employees, and an explanation of how and why the investment causes additional employment, both inside and outside of the Enterprise Zone.

 

2)         Job Retention.  Information on the full-time jobs that have been retained in an Enterprise Zone as a result of the investment, which includes, by job titles, the number of employees in and outside of the Enterprise Zone.

 

3)         Employment Requirements for Job Creation.  Applicants utilizing the job creation criterion for eligibility for the exemption must actually employ 200 full-time equivalent employees prior to certification for this exemption.

 

4)         Submit Applications Prior to Job Creation.  Applicants are encouraged to submit applications to the Department prior to the actual creation of 200 full-time equivalent jobs.  The Department will conditionally approve the application subject to the requirements of Section 520.1010 being met.

 

c)         Audit.  An examination by public accountants certified by the State of Illinois, in accordance with generally accepted accounting practices, containing the unqualified opinion of such public accountants that the minimum eligible investment has been made and that the minimum jobs have been created or retained.

 

d)           Certification.  A signed and dated statement indicating that the data and information in the application is correct, that the Department will be provided access to any material, documentation, or other data required to verify application information, and a statement that the number of jobs created or retained shall be maintained for the term of exemption, otherwise the Department will be notified and the exemption terminated.

 

(Source:  Amended at 27 Ill. Reg. 3282, effective February 14, 2003)

 

Section 520.1030  Application Approval Process

 

a)         Application Approval Requirements.  Applications shall be submitted to the Department, which shall approve or deny the application in writing within 90 days after receipt.  The application shall be approved if it meets the requirements of Sections 520.1010 and 520.1020.

 

b)         Application Denial Requirements.  When the Department denies an application, it shall specify in writing the reasons for denial and allow the applicant 45 days from the date of application denial to amend and resubmit the application. Resubmitted applications shall be approved or denied in writing within 45 days after receipt.

 

c)         Certificates of Exemption.  Applicants determined eligible by the Department, in accordance with Section 520.1010, will be issued a Certificate of Exemption.  A copy of the Certificate of Exemption will be filed by the Department with the Illinois Department of Revenue in accordance with Section 1f of the Retailers' Occupation Tax Act.

 

d)         Exemption Includes.  Subject to Section 520.1010, and in accordance with Section 1d of the Retailers' Occupation Tax Act, this exemption includes: 

 

1)         Tangible Personal Property.  All tangible personal property used or consumed in the process of manufacturing or assembling tangible personal property for wholesale or retail sale or lease, or in the process of graphic arts production;

 

2)         Repair and Replacement Parts.  Repair and replacement parts for machinery and equipment used in the manufacturing or assembling of tangible personal property, or in the process of graphic arts production for wholesale or retail sale or lease; and

 

3)         Equipment Manufacturing, Etc.  Equipment, manufacturing or graphic arts fuels, material, and supplies for the maintenance, repair, or operation of such manufacturing or assembling or graphic arts machinery or equipment.

 

e)         Department's Right to Inspect and Audit.  The Department shall have the right to inspect and conduct its own audit of all books and records relied upon by the business to demonstrate that the eligible investment in qualified property has been placed in service. Certified businesses shall also submit information annually to the Department documenting the maintenance of the minimum job creation or job retention criterion. Certified businesses that fail to comply with this subsection shall be decertified for the tax exemption and shall repay the exempted taxes.  The jobs created or retained must be documented through personnel records.

 

f)         Five-Year Exemption Period.  All certified businesses shall receive a five-year exemption from this tax.

 

g)         Additional Exemption Period for Certified Businesses.  At the expiration of this initial five-year period, certified businesses may apply to the Department for renewals of the exemption for additional five-year time periods not to exceed the termination date of the Enterprise Zone.  The Department shall grant an exemption to a certified business for an additional five-year period, provided that at the time of application for renewal:

 

1)         Job Creation/Retention Criteria.  The following job creation/retention criteria are met: 

 

A)        In the case of a business certified pursuant to the job creation criterion of Section 520.1010, the business has retained a minimum of 200 full-time equivalent jobs in Illinois.

 

B)        In the case of a business certified pursuant to the job retention criterion of Section 520.1010, the business has:

 

i)          Retained a minimum of 2,000 full-time jobs in Illinois; or

 

ii)         Has made an eligible investment of $40 million resulting in the retention of 90% of the full-time jobs in place on the date on which the exemption is granted for the duration of the exemption.

 

C)        A majority of the "jobs retained" must be in the Enterprise Zone in which the eligible investment is made.

 

2)         Business is Located in an Enterprise Zone.  The business is located in an Enterprise Zone established pursuant to the Illinois Enterprise Zone Act [20 ILCS 655].

 

3)         Business Provides an Audited Financial Statement. The business provides an audited Financial Statement, including balance sheets and income statements, audited according to generally accepted auditing standards by a public accountant certified in the State of Illinois as contained in the publication entitled AICPA Professional Standards, American Institute of Certified Public Accountants, 1211 Avenue of the Americas, New York NY 10036-8775 (June 2011, no later editions are incorporated).  In addition, the certified business' chief financial officer shall attest in writing that the certified business is not aware of a condition or occurrence that would result in a bankruptcy or closure.

 

4)         Maximum Period of Exemption.  This exemption shall not be allowed beyond the term of the certified Enterprise Zone. 

 

h)         Exemptions for Certified Businesses Located in Enterprise Zones Successful in Reapplying for Designation.  Certified businesses located in Enterprise Zones that successfully reapplied for designation as an Enterprise Zone to be effective on or after January 1, 2016, and that expired or terminated solely by operation of Section 5.3(c) of the Act, shall continue to be eligible for the renewals of exemptions in accordance with subection (g).  Any Certificate of Exemption issued under this Section shall not, after taking into account the time for which the exemption existed under the prior zone designation, exceed a total of five years.  Thereafter, certified businesses located in Enterprise Zones may apply to the Department in accordance with subection (g).

 

(Source:  Amended at 40 Ill. Reg. 10858, effective July 29, 2016)

SUBPART K: BUILDING MATERIAL SALES TAX EXEMPTION

 

Section 520.1100  General

 

The Building Material Sales Tax Exemption found in the Retailers' Occupation Tax Act [35 ILCS 120/5k and 5l] allows each retailer in Illinois who makes a sale of building materials to be incorporated into real estate in an Enterprise Zone (see 35 ILCS 120/5k) or a High Impact Business (see 35 ILCS 120/5l) to deduct the receipts from such sales when calculating the tax imposed by the Retailers' Occupation Tax Act.  The specific terms and conditions governing this tax exemption are found in the Illinois Department of Revenue's regulations (86 Ill. Adm. Code 130.1951 and 86 Ill. Adm. Code 130.1952).

 

(Source:  Amended at 27 Ill. Reg. 3282, effective February 14, 2003)

 

Section 520.1110  Eligibility Criteria (Repealed)

 

(Source:  Repealed at 27 Ill. Reg. 3282, effective February 14, 2003)

 

Section 520.1120  Form of Application (Repealed)

 

 (Source:  Repealed at 27 Ill. Reg. 3282, effective February 14, 2003)

 

Section 520.1130  Application and Approval Process (Repealed)

 

(Source:  Repealed at 27 Ill. Reg. 3282, effective February 14, 2003)

 

Section 520.1140  Use Tax Exemption (Repealed)

 

(Source:  Repealed at 27 Ill. Reg. 3282, effective February 14, 2003)

SUBPART L: JOBS TAX CREDIT