Section 524.10  Purpose

 

Identify and initiate 3 pilot River Edge Redevelopment Zones to stimulate the safe and cost-effective re-use of environmentally-challenged properties adjacent to or surrounding rivers by means of tax incentives or grants.

 

Section 524.20  Definitions

 

Act – The River Edge Redevelopment Zone Act [65 ILCS 115/Art. 10] that creates the River Edge Redevelopment Program.

 

Agency – 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, and body politic and corporate of the State; 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 board of election commissioners; and each administrative unit or corporate outgrowth of these entities and as may be created by executive order of the Governor. No entity is an "agency" for the purposes of the Act unless the entity is authorized by law to make rules or regulations.

 

Application – A request for program funds, including the required information and attachments.

 

"Blue Collar Jobs Act" means the Act created by Article 20 of P.A. 101-9 (portions related to this Part codified at 65 ILCS 115/10-3, 10-6, 10-10.3 and 10-10.4) that creates the Enterprise Zone construction jobs credit, the High Impact Business construction jobs credit, the River Edge construction jobs credit, and the New Construction EDGE credit.

 

Bondable Capital Improvements – As defined in 71 Ill. Adm. Code 50 and undertaken by a business organization, not-for-profit corporation or local government.

 

Business Organization – Any for-profit business entity, or association of business entities, duly authorized to conduct business in the State of Illinois.

 

Department − The Illinois Department of Commerce and Economic Opportunity.

 

Designated Zone Organization − An association or entity:

 

The members of which are substantially all residents of the River Edge Redevelopment Zone;

 

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

 

That 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

 

That exists primarily for the purpose of performing within the area or

Zone for the benefit of the residents and businesses in the area or Zone any of the functions set forth in Section 8 of the Act [65 ILCS 115/10-8].

 

Grant − Funds that require no repayment to be used by a qualified applicant. 

 

Incremental Income Tax – The total amount withheld during the taxable year from the compensation of River Edge Construction Jobs Employees.

 

Local Government − Any unit of local government as defined in Article VII, Section 1 of the 1970 Illinois Constitution.

 

Minority Person, Woman, and Person with a Disability – Have the meanings set forth under Section 2 of the Business Enterprise for Minorities, Women and Persons with Disabilities Act [30 ILCS 575/2].

 

Not-for-Profit Corporation – A corporation incorporated pursuant to the General Not For Profit Corporation Act of 1986 [805 ILCS 105] and in good standing with the Illinois Secretary of State.

 

Program – River Edge Redevelopment Grant Program.

 

Qualified Applicants − Local governments, not-for-profit corporations, and business organizations.

 

Redevelopment Project – An endeavor undertaken, during a specified time period, to improve cleared or undeveloped land, including, but not limited to, erection of buildings and other facilities by public or private entities, and site improvements installed by a local government in order to prepare the land for disposition to developers.

 

Recipient – Any eligible applicant receiving funds under this program.

 

River Edge Construction Jobs Credit – An amount equal to 50% of the incremental income tax attributable to River Edge construction employees employed on a River Edge construction jobs project. However, the amount may equal 75% of the incremental income tax attributable to River Edge construction employees employed on a River Edge construction jobs project located in an underserved area. The total aggregate amount of credits awarded under the Blue Collar Jobs Act (Article 20 of P.A. 101-9 (portions related to this Part codified at 65 ILCS 115/10-3, 10-10.3 and 10-10.4)) shall not exceed $20,000,000 in any State fiscal year. [65 ILCS 115/10-3]

 

River Edge Construction Jobs Employee – A laborer or worker who is employed by an Illinois contractor or subcontractor in the actual construction work on the site of a River Edge construction jobs project. [65 ILCS 115/10-3]

 

River Edge Construction Jobs Project – Building a structure or building, or making improvements of any kind to real property, in a River Edge Redevelopment Zone that is built or improved in the course of completing a qualified rehabilitation plan. "River Edge construction jobs project" does not include the routine operation, routine repair, or routine maintenance of existing structures, buildings, or real property. [65 ILCS 115/10-3]

 

River Edge Redevelopment Zone or Zone – An area of the State certified by the Department as a River Edge Redevelopment Zone, pursuant to the Act.

 

Rule − Each agency statement of general applicability that implements, applies, interprets, or prescribes law or policy, but does not include statements concerning only the internal management of an agency and not affecting rights or procedures available to persons or entities outside the agency; intra-agency memoranda; or the prescription of standardized forms.

 

Veteran – An Illinois resident who is a veteran as defined in 10 USC 1491(h).

 

(Source:  Amended at 46 Ill. Reg. 1834, effective January 11, 2022)

SUBPART B: APPLICATION FOR CERTIFICATION

 

Section 524.110  Eligible Applicants

 

A municipality that has environmentally challenged land within 1,500 yards of a riverfront in the State of Illinois may apply to the Department of Commerce and Economic Opportunity for certification of as a River Edge Redevelopment Zone, in accordance with the requirements set forth in Section 5 of the Act and this Part.

 

Section 524.120  Eligibility Criteria

 

a)         The area is contiguous and either adjacent to or surrounding a river [65 ILCS 115/10-4(1)];

 

b)         For purposes of calculating total area, the minimum is one-half square mile and the maximum is 12 square miles, exclusive of lakes and waterways [65 ILCS 115/10-4(2)];

 

c)         The area is entirely within one of the Cities of Aurora, East St. Louis, Elgin, Peoria, or Rockford and has at least 100 acres of environmentally challenged land within 1,500 yards of the riverfront [65 ILCS 115/10-4(4), 10-4(5) and 10-5.3(d)]; and

 

d)         The area is not located within the boundaries of an existing Illinois Enterprise Zone.

 

(Source:  Amended at 38 Ill. Reg. 3350, effective January 15, 2014)

 

Section 524.130  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 that the necessary eligibility criteria, as specified in Section 524.120, have been met;

 

b)         Characteristics of the Zone.  Information on the following physical,

economic and social characteristics of the zone:

 

1)         Master Plan. A specific plan that sets forth the effect of economic growth and expansion;

 

2)         Map of Zone. A map of the Redevelopment Zone that contains a precise description of the area comprising the zone, either in the form of a legal description or by reference to roadways, lakes and waterways, and municipal boundaries, along with geospatial data in the form of an ESRI ARCGIS Shape file;

 

3)         Qualification Issue. An analysis and appropriate supporting documents demonstrating that the proposed area is qualified under Section 10-4 of the Act;

 

4)         Duration of or Term of the River Edge Redevelopment Zone;

 

c)         Local Revitalization Efforts. A statement setting forth the economic

development and planning objectives of the zone;

 

d)         Local Incentives and Programs. A statement detailing tax, grant, and other

financial incentives or benefits, and any programs to be provided by the municipality to business River Edge Redevelopments or organizations within the zone, other than those provided in the designating ordinance, that are not to be provided throughout the municipality;

 

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

 

f)         Management Structure of the Zone. A statement describing the functions, program, and services to be performed by the designated zone organizations

within the zone.

 

(Source:  Amended at 38 Ill. Reg. 3350, effective January 15, 2014)

 

Section 524.140  Application Procedures

 

All applications must be considered and acted upon by the Department no later than 180 days after being received by the Department.

 

a)         Upon receipt of the application, the Department shall review the application to determine whether the designated area qualifies as a River Edge Redevelopment Zone under Section 10-4 of the Act;

 

b)         If an area is found to be qualified, the Department shall:

 

1)         Publish a notice in at least one newspaper of general circulation within the municipality to notify the general public of the application and the opportunity to comment.  The notice shall:

 

A)        include a description of the area;

 

B)        include a brief summary of the application, indicating locations where the applicant has copies for public inspection;

 

C)        indicate appropriate procedures for filing with the Department written comments from zone residents, business, civic and other organizations, and property owners;

 

2)         The Department shall either approve or deny an application within 180 days after receiving the application.

 

A)        If approval of an application is not received within 180 days, then the application is considered to be denied.

 

B)        If the application is denied, the Department shall inform the municipality of the specific reasons for denial.

 

Section 524.150  Application Evaluation and Ranking

 

a)         Ranking Applications. Consistent with Section 10-4 of the Act regarding

approval and certification of a River Edge Redevelopment Zone, the Department shall give preference to those areas:

 

1)         with high levels of environmentally challenged areas;

           

2)         that have evidenced the widest support from the municipality;

           

3)         for which a specific plan has been submitted to effect economic growth and expansion;

           

4)         for which there is evidence of prior consultation between the municipality and business, labor, and neighborhood organizations within the proposed zone;

           

5)         for which a specific plan has been submitted that will or may be expected to benefit zone residents and workers by increasing their ownership opportunities and participation in River Edge Redevelopment Zone developments.

 

b)         The Department's determination of whether to certify a River Edge Redevelopment Zone shall be based on the purposes of the Act, the criteria set forth in Section 10-4 of the Act and subsection (a) of this Section.

 

Section 524.160  Certification

 

Approval of designated River Edge Redevelopment Zones shall be effectuated by the Department by certification of the designating ordinance.

 

a)         The Department shall promptly issue a certificate for each approved zone.  The certificate shall:

 

1)         be signed by the Director of the Department;

 

2)         make specific reference to the designating ordinance, which shall be attached to the certificate;

 

3)         be filed in the Office of the Secretary of State Index Department; and

 

4)         be recorded in the office of the recorder of deeds in the county in which the River Edge Redevelopment Zone lies.

 

b)         A River Edge Redevelopment Zone shall be effective upon its certification.  A certified copy of the ordinance and certification shall be filed with the Legal Service Bureau of the Illinois Department of Revenue and with the designating municipality.  Upon certification, the terms and provisions of the ordinance shall be in effect and may not be amended or repealed, except in accordance with Section 10-5.4 of the Act.

 

c)         A River Edge Redevelopment Zone shall be in effect for the period stated in the certificate, which shall in no event exceed 30 years.  Zones shall terminate at midnight on December 31 of the final calendar year or the certified term, except as provided in Section 10-5.4 of the Act.

 

d)         In calendar years 2006 and 2007, the Department may certify one pilot River Edge Redevelopment Zone in the City of Aurora, one pilot River Edge Redevelopment Zone in the City of East St. Louis, and one pilot River Edge Redevelopment Zone in the City of Rockford.  The Department shall not certify any additional River Edge Redevelopment Zones, but may amend or rescind certifications of existing River Edge Redevelopment Zones in accordance with Section 10-5.4 of the Act.

 

e)         A municipality in which a River Edge Redevelopment Zone has been certified must submit to the Department, within 60 days after certification, a plan for encouraging the participation by minority persons, females, persons with disabilities, and veterans in the zone.

 

f)         The Department may assist the municipality in developing and implementing the master plan.

SUBPART C: AMENDMENT AND DECERTIFICATION

 

Section 524.210  Application to Amend an Ordinance

 

a)         Amending an Ordinance. An application for amending an approved ordinance that creates a River Edge Redevelopment Zone shall follow the     conditions set forth in Section 10-5.4 of the Act. An amendment to 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 the county recorder of deeds, as provided in Section 10-5.3 of the Act.

 

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

           

c)         Including Additional Territory of the Municipality. An application for amending an approved ordinance to include additional territory of the municipality, certified by the chief elected official of the designating municipality, shall contain all other information required under Section 10-5.1 of the Act and Section 524.130 of this Part. The application shall also demonstrate that the proposed additional territory meets the eligibility criteria set forth in Section 524.120(d) of this Part and Section 10-4 of the Act. Applications shall be submitted to the Department, which shall approve or deny the application in writing within 90 days after receipt. The application will be approved if it meets the requirements of this subsection (c) and Section 10-5.4 of the Act.

 

Section 524.220  Application to Change Boundaries

 

a)         Eligibility Criteria for Proposed Additions. The boundaries of an approved River Edge Redevelopment 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 10-4 of the Act and the application to amend the River Edge Redevelopment Zone ordinance provides analyses and documentation that the area being added is environmentally challenged.

 

b)         Eligibility Criteria for Proposed Deletions. The boundaries of an approved River Edge Redevelopment 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 10-4 of the Act and the application to amend the ordinance provides analyses and documentation that the area is an area in which the local objective for redevelopment of the zone has been accomplished.

 

Section 524.230  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 on forms provided by the Department to expand, limit, or repeal the incentives provided in the ordinance and shall comply with the procedures described in Section 10-5.4 of the Act.

 

2)         Continuation of Incentives. Section 10-5.4(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)        Businesses in the River Edge Redevelopment Zone that are receiving benefits or incentives in the zone on the effective date of the amending ordinance;

 

B)        Businesses in the zone or expansions that are proposed or under development on the effective date of the amending ordinance, if the business demonstrates that:

 

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

 

ii)         Substantial and binding financial obligations have been made towards the development of the River Edge Redevelopment; and

 

iii)        Commitments have been made in reasonable reliance on the benefits and programs that were to have been applicable to the River Edge Redevelopment by reason of the zone, including, in the case of reduction in the term of a zone, the original term of the zone.

 

3)         Local Government Duties. With respect to businesses that are already receiving River Edge Redevelopment 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 River Edge Redevelopment Zone benefits by applying for the incentives.

 

b)         Application to Alter Termination Date

           

1)         Altering Termination Date. An applicant shall apply on forms provided by the Department to alter the termination date provided in the ordinance and shall comply with the procedures described in Section 10-5.4 of the Act.

 

2)         Reducing Duration of Zone. If the amendatory ordinance reduces the duration of the River Edge Redevelopment Zone, the "benefit entitlement" described in Section 10-5.4(e) and (f) of the Act and subsections (a)(2)(A) and (B) shall apply.

 

c)         Application to Make Technical Corrections

 

1)         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 10-5.4 of the Act.

           

2)         A "technical correction" shall mean a non-substantive change that corrects or clarifies the wording, terms, or conditions of a River Edge Redevelopment Zone. A technical correction is not one that affects any rights or privileges accorded to residents of the zone.

 

Section 524.240  Decertification

 

a)         In accordance with Section 10-5.4 of the Act, a River Edge Redevelopment Zone may be decertified in two ways:

 

1)         Joint Action. By joint action of the Department and the designating municipality in accordance with Section 10-5.4(c) of the Act; or

 

2)         For Cause. For cause by the Department in accordance with Section 10-5.4(d) of the Act. Cause for decertification shall be defined as the designating unit of government's failure to implement the River Edge Redevelopment 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); and the failure to implement incentives uniformly throughout the River Edge Redevelopment Zone as described in Section 524.120(d).

 

b)         Notice of Probation. The Department shall notify the designating unit of government of the commencement of probationary status pending action to decertify the River Edge Redevelopment 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 River Edge Redevelopment 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 River Edge Redevelopment Zone boundaries. The Department shall place public notice of the public hearing in one newspaper of general circulation within the River Edge Redevelopment 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 titled Access to Information of the Department of Commerce and Community Affairs (2 Ill. Adm. Code 801).

 

3)         Corrective Steps. The Department may enter 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.

 

Section 524.250  Adoption of Tax Increment Financing

 

If a redevelopment project area is, will be, or has been created by a municipality under Division 74.4 of Article 11 of the Illinois Municipal Code [65 ILCS 5], the redevelopment project contains property that is located in a River Edge Redevelopment Zone, the municipality adopts an amendment to the River Edge Redevelopment Zone designating ordinance pursuant to Section 10-5.4 of the Act concerning the abatement of taxes on property located within a redevelopment  project area created pursuant to Division 74.4 of Article 11 of the Illinois Municipal Code, and the Department certifies the ordinance amendment, then the property that is located in both the River Edge Redevelopment Zone and redevelopment project area shall not be eligible for the abatement of taxes under Section 18-170 of the Property Tax Code [35 ILCS 200/18-170].

 

a)         No business enterprise or expansion or individual that has constructed a new improvement or renovated or rehabilitated an existing improvement and has received an abatement on the improvement under Section 18-170 of the Property Tax Code shall be denied any benefit previously extended within the zone pursuant to the Act or any other Illinois law providing benefits specifically to or within the River Edge Redevelopment Zone.

 

b)         Procedure

 

1)         Within 30 days after adoption of an amendment to the designating ordinance, a business enterprise or individual may present evidence to the municipality supporting the requirements of subsections (b)(1)(A)-(C). Within 30 days after receipt of the evidence, the municipal authorities shall determine that, before the date of the notice of the public hearing provided by the municipality regarding the amendment to the designating ordinance, the business or individual met the following qualifications:

 

A)        The business enterprise or expansion or individual was committed to locate within the River Edge Redevelopment Zone;

 

B)        Substantial and binding financial obligations were made towards the development of the enterprise; and

 

C)        The commitments in subsections (b)(1)(A) and (B) were made in reasonable reliance on the benefits and programs that were applicable to the enterprise or individual by reason of the River Edge Redevelopment Zone.

 

2)         If the municipality confirms the evidence presented, then the enterprise or expansion or individual shall not be denied any benefits previously extended within the zone pursuant to the Act or pursuant to any other Illinois law providing benefits specifically to or within River Edge Redevelopment Zones. (Section 10-5.4.1 of the Act)

SUBPART D: LOCAL RESPONSIBILITIES

 

Section 524.310  Zone Administration

 

The administration of a River Edge Redevelopment Zone shall be under the jurisdiction of the designating municipality. Each designating municipality shall, by ordinance, designate a Zone Administrator for the certified zone within its jurisdiction. A Zone Administrator must be an officer or employee of the municipality. The Zone Administrator shall be the liaison to the designating municipality, the Department, and any Designated Zone Organizations within zones under his or her jurisdiction.

 

Section 524.320  Business Cessation Notification

 

a)         Notification of Business Cessation. Section 10-9 of the Act requires a business located within a River Edge Redevelopment 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 cessation of business operations. For purposes of this Section, business cessation shall mean the business has:

 

1)         closed and is not conducting business in any capacity within the boundaries of the River Edge Redevelopment Zone;

 

2)         relocated its operations in whole to another area outside the boundaries of the River Edge Redevelopment Zone; or

 

3)         been acquired or assumed (existing business 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 of the affected facility identifying the date of business cessation and 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 of the affected facility identifying the date of purchase and name of the new business.

 

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

 

1)         DCEO. Office Chief, Office of Economic Development Programs, Department of Commerce and Economic Opportunity, 620 East Adams Street, Springfield, Illinois 62701.

 

2)         Local Government. The chief elected official of the designating unit of government of the River Edge Redevelopment Zone.

SUBPART E: DESIGNATED ZONE ORGANIZATIONS

 

Section 524.410  General

 

A designating municipality may designate one or more Designated Zone Organizations qualified under Section 10-3(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 10-3(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 that is listed in Section 10-8 of the Act.

 

Section 520.420  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 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 10-10 of the Act. Applications shall be processed in accordance with Section 10-10(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)         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, American Institute of Certified Public Accountants, Harborside Financial Center, 201 Plaza 3, Jersey City, New Jersey 07311 (June 2001, no later editions are incorporated);

 

2)         A project budget; and

 

3)         Information regarding the extent to which project objectives have been accomplished.

 

c)         Renewal Applications

 

1)         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.

 

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

 

3)         Within 5 days after 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 will 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 River Edge Redevelopment Zone in accordance with Section 10-10(c) of the Act. In describing how the proposed project will enhance the River Edge Redevelopment 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 10-10(b) of the Act, a DZO must demonstrate that the proposed project meets all of the following criteria:

           

A)        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 River Edge Redevelopment Zone.);

 

B)        That the zone residents will actively participate in the project's planning and implementation;

 

C)        That the project lacks sufficient resources; and

                                   

D)        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)         A financial statement, in accordance with the most recent generally accepted accounting principles of the AICPA; and

 

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

 

Section 524.430  Charitable Contributions

 

a)         Amount of Contributions. The Department is authorized under Section 10-10(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)         The amount requested or the items sought are excessive or inappropriate to the project goals and objectives; or

 

2)         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 10-10(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)        The name of the taxpayer, the taxpayer's address, and the Federal Employer Identification Number (FEIN);

           

B)        The name of the River Edge Redevelopment Zone, the DZO and the project;

           

C)        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 the case of an in-kind contribution, 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)        The exact name of the taxpayer, the address, and the FEIN;

 

B)        The date the contribution was made;

           

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

           

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

           

3)         Verification of Contribution Value.  The DZO shall forward to the Department a copy of the receipt issued under subsection (c)(2) 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 AICPA.

SUBPART F: TAX INCENTIVES

 

Section 524.510  List of Available Tax Incentives

 

Several tax incentives are available to businesses in a River Edge Redevelopment Zone:

 

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

 

b)         Environmental Remediation Tax Credit found in the Illinois Income Tax Act [35 ILCS 35/201(h)(1)(n)];

 

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

 

d)         Interest Income Deduction found in the IITA [35 ILCS 5/203(b)(2)(M)];

 

e)         Building Material Sales Tax Exemption found in the Retailers' Occupation Tax Act [35 ILCS 120/2-54]; and

 

f)         River Edge construction jobs tax credit found in the Illinois Income Tax Act [35 ILCS 5/221(a-2)].

 

(Source:  Amended at 46 Ill. Reg. 1834, effective January 11, 2022)

 

Section 524.520  Investment Tax Credit

 

The Investment Tax Credit found in the Illinois Income Tax Act [35 ILCS 5/201(e) and (f)] provides for a 0.5% credit against the State income tax for investment made in qualified property that is placed in service in a River Edge Redevelopment Zone [35 ILCS 5/201(e) and (f)]. 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 100.2130).

 

Section 524.530  River Edge Construction Jobs Tax Credit

 

a)         A business entity may receive a tax credit against the tax imposed under IITA Section 201(a) and (b) in an amount equal to 50% (or 75% if the project is located in an underserved area) of the amount of the incremental income tax attributable to River Edge construction jobs employees employed in the course of completing a River Edge construction jobs project. The credit allowed under Section 10-10.3 of the Act shall apply only to taxpayers that make a capital investment of at least $1,000,000 in a qualified rehabilitation plan. [65 ILCS 115/10-10.3(a)]  The Department will announce on its website funding availability and any relevant information regarding the application.  The amount of funding available will not exceed the total aggregate amount of credits that can be possibly awarded under the Blue Collar Jobs Act, which shall not exceed $20,000,000 in any fiscal year.  [65 ILCS 115/10-10.3(g)]  The credit may not reduce the taxpayer's liability to less than zero.  If the amount of the credit exceeds the taxpayer's liability, the excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year. [35 ILCS 5/221(a-2)]

 

b)         To qualify for a tax credit allowed under this Section, an applicant must adhere to the requirements established by the Department in this Part. The Department will provide interested applicants with information upon request. Submittal of a tax credit claimant application does not commit the Department to award a tax credit or to pay any costs incurred by the applicant in the preparation of an application. Applications are valid only for the calendar year quarter in which they are submitted to the Department. An application shall be submitted to the Department on a standard application form provided by the Department. An application shall, at a minimum, include:

 

1)         The name, address, email, and telephone number of applicants; key contact and title; applicant Social Security Number or Federal Employer Identification Number (FEIN);

 

2)         The total amount of investment the applicant has made in the River Edge construction jobs project;

 

3)         The nature and the benefit of the River Edge construction jobs project to the qualified rehabilitation project and the certified River Edge Redevelopment Zone; and

 

4)         Any other information the Department determines necessary to facilitate the Department's evaluation.

 

c)         The applicant is responsible for the accuracy of all data, information and documentation submitted to the Department. The Department will accept applications for River Edge construction jobs credits. Applications will be reviewed in the order received by the Department. Application tracking procedures shall be determined and established at the discretion of the Department.

 

d)         The Department, within 45 days after receiving a River Edge construction jobs credit application, will give notice to the applicant as to whether the application has been approved. If the Department disapproves the application, it will specify the reasons for this decision and allow 60 days for the applicant to amend and resubmit its application. The Department will provide assistance, upon request, to applicants. Resubmitted applications will receive the Department's approval or disapproval within 30 days after the application is resubmitted. Those resubmitted applications satisfying initial Department objectives will be approved unless reasonable circumstances warrant disapproval. [65 ILCS 115/10-10.3(c)] The objectives of the Department shall include selecting applicants that meet the statutory requirements of eligibility and the procedural requirements of an application made available by the Department.  The Department will disapprove an application if the applicant is ineligible, if the application is incomplete, or if the Department has reached the maximum amount of credits it can award for the State fiscal year.

 

e)         For a River Edge construction jobs project, the designated zone organization shall annually submit to the Department a statement on the program and financial status of any approved project. The designated zone organization shall also submit to the Department an audited financial statement regarding the project. [65 ILCS 115/10-10.3(d)]

 

f)         The Department will annually report and certify to the Department of Revenue:

 

1)         the identity of taxpayers that are eligible for a River Edge construction jobs credit; and

 

2)         the amount of River Edge construction jobs credits that is claimed pursuant to IITA Section 201. [65 ILCS 115/10-10.3(e)]

 

g)         The Department, in collaboration with the Department of Labor, will require certified payroll reporting be completed in order to verify the wages and any other necessary information the Department may deem necessary to ascertain and certify the total number of River Edge construction jobs employees and determine the amount of a River Edge construction jobs credit. [65 ILCS 115/10-10.3(f)]

 

h)         Each contractor and subcontractor engaged in, and that is executing, a River Edge construction jobs project for an applicant for a River Edge construction jobs tax credit shall complete the following:

 

1)         Make and keep, for a period of 5 years from the date of the last payment made on or after June 5, 2019, [65 ILCS 115/10-10.4] on a contract or subcontract for a River Edge construction jobs project, records for all laborers and other workers employed by the contractor or subcontractor on the project. The records shall include the worker's:

 

A)        Name;

 

B)        Address;

 

C)        Telephone number, if available;

 

D)        Social Security Number;

 

E)        Classification or classifications;

 

F)         Gross and net wages paid in each pay period;

 

G)        Number of hours worked each day;

 

H)        Starting and ending times of work each day;

 

I)         Hourly wage rate; and

 

J)         Hourly overtime wage rate [65 ILCS 115/10-10.4(a)(1)]; and

 

2)         No later than the 15^th day of each calendar month, provide a certified payroll for the immediately preceding month to the taxpayer in charge of the River Edge construction jobs project. The taxpayer shall file a copy of the certified payroll with the Department after Labor and the Department of Commerce and Economic Opportunity within 5 business days after receiving the monthly certified payroll from all contractors and subcontractors engaged in and executing a Rivers Edge construction jobs project. A certified payroll shall be filed for only those calendar months during which construction on a River Edge construction jobs project has occurred. The certified payroll shall consist of a complete copy of the records identified in subsection (h)(1), but may exclude the starting and ending times of work each day. The certified payroll shall be accompanied by a statement signed by the contractor or subcontractor, or an officer, employee, or agent of the contractor or subcontractor, stating that:

 

A)        the certified payroll records have been examined and are true and accurate; and

 

B)        the contractor or subcontractor is aware that filing a certified payroll that he or she knows to be false is a Class A misdemeanor. [65 ILCS 115/10-10.4(2)(B)] A general contractor is not prohibited from relying on a certified payroll of a lower-tier subcontractor, if the general contractor does not knowingly rely upon a subcontractor's false certification. [65 ILCS 115/10-10.4]

 

i)          The records submitted in accordance with subsection (h)(1), except an employee's address, telephone number, and Social Security Number, shall be considered public records and shall be made available in accordance with the Freedom of Information Act. A contractor, subcontractor, or public body may retain, in paper or electronic format, records required under this Section. The records submitted under subsection (h)(1) shall be kept and maintained by the taxpayer in charge of the project for 5 years from the date of last payment for work on a contract or subcontract for the project. [65 ILCS 115/10-10.4]

 

j)          Upon written or electronic notice, each contractor and subcontractor, within 7 business days, shall make all documents required by subsection (h)(1) available for inspection and copying, at a location within this State, during its regular business hours, to the following entities:

 

1)         The taxpayer in charge of the River Edge construction jobs project, its officers and agents;

 

2)         The Director of the Department of Labor or the Director's designee; and

 

3)         Federal, State, or local law enforcement agencies and prosecutors. [65 ILCS 115/10-10.4]

 

(Source:  Former Section 524.530 repealed at 38 Ill. Reg. 3350, effective January 15, 2014 and new Section added at 46 Ill. Reg. 1834, effective January 11, 2022)

 

Section 524.540  Environmental Remediation Tax Credit

 

The River Edge Redevelopment Zone Site Environmental Remediation Tax Credit found in the Illinois Income Tax Act [35 ILCS 5/201(n)] allows a taxpayer a credit against the tax imposed by subsections (a) and (b) for certain amounts paid for unreimbursed eligible remediation costs that were paid in performing remediation at a site within a River Edge Redevelopment Zone for which a No Further Remediation Letter was issued and recorded under Section 58.10 of the Environmental Protection Act [415 ILCS 5/58.10].

 

Section 524.550  Dividend Income Deduction

 

The Dividend Income Deduction found in the Illinois Income Tax Act [35 ILCS 5/20(a)(2)(J), (b)(2)(K), (c)(2)(M) and (d)(2)(k)] provides that taxpayers may deduct from their taxable income an amount equal to those dividends that were paid to them by a corporation that conducts substantially all of its operations in a River Edge Redevelopment Zone.  The terms and conditions governing this tax deduction are found in the Illinois Department of Revenue's regulations (86 Ill. Adm. Code 2480).

 

Section 524.560  Interest Income Deduction

 

The Interest Income Deduction for Financial Institutions found in the Illinois Income Tax Act [35 ILCS 5/203(b)(2)(M) and (M-1)] allows any taxpayer that is a financial organization within the meaning of Section 304(c) of the Illinois Income Tax Act to deduct from its Illinois corporate income tax return an amount equal to the interest received from a loan for development in a River Edge Redevelopment Zone (see 35 ILCS 5/203(b)(2)(M)). The specific terms and conditions governing this tax deduction are found in the Illinois Department of Revenue's regulations (86 Ill. Adm. Code 100.2110).

 

Section 524.570  Building Materials Sales Tax Exemption

 

The Building Materials Sales Tax Exemption found in the Retailers' Occupation Tax Act [35 ILCS 120/2-54] allows each retailer in Illinois who makes a sale of building materials to be incorporated into real estate in a River Edge Redevelopment to deduct the receipts from such sales when calculating the tax imposed by the Retailers' Occupation Tax Act.

SUBPART G: RIVER EDGE REDEVELOPMENT GRANT PROGRAM

 

Section 524.610  Purpose

 

Through the River Edge Redevelopment Zone Grant Program, the Department of Commerce and Economic Opportunity will provide grants to business organizations, local governments and not-for-profit agencies for the purpose of redevelopment within designated River Edge Redevelopment Zones.

 

Section 524.620  Application Cycle

 

The Department will supply interested qualified applicants with an application upon request.  Applications under this program will be accepted on an ongoing basis until funds are exhausted.

 

Section 524.630  Eligible Program Costs

 

Bondable capital improvements shall be eligible for reimbursement with grant proceeds when the improvements are necessitated by a redevelopment project within the zone.

 

Section 524.640  Grant Application

 

Applications for grants must include the following documentation:

 

a)         Project Summary.  A brief statement and description of the project for which funds are being sought.

 

b)         Evidence of Need.  A description of the conditions of the zone requiring action, such as absence of necessary infrastructure to support economic growth.

 

c)         Background of Applicant.  A brief discussion of the applicant's organization, purpose, history and capabilities to carry out the proposed project.

 

d)         Project Description.  A description of the proposed redevelopment project for which the grant would be used, including a project work statement detailing project objectives, work activities and deadlines as well as identification of the individuals or groups responsible for carrying out the project.

 

e)         Project Results.  Identification of the anticipated results of the proposed project in terms such as economic diversification, potential for creation or retention of jobs, or other public benefits.

 

f)         Project Management.  Identification and information on the staff and/or consultants to be involved in the proposed project, including qualifications and functional responsibilities.

 

g)         Financial Statements.  If necessary, financial statements of the applicant.

 

h)         Coordination.  Description of any cooperative working relationships that are or will be developed with other organizations involved in similar or related activities, and the relationship of the project to existing local, regional or State economic development plans.

 

i)                   Budget.  A project budget by cost categories, including monthly projections of fund requirements, as required in the Department's application package.

 

Section 524.650  Review of Grant Applications

 

a)         Application Screening.  The Department shall screen all grant applications to determine that all elements of the application package have been addressed.  Applicants will be notified of deficiencies in applications and given the opportunity to correct those deficiencies.  Complete applications will be reviewed and evaluated by Department staff in accordance with the criteria listed in subsections (b) through (f) of this Section.  This review and evaluation process will be completed within 45 working days after the due date for applications.

 

b)         Basic Eligibility Evaluation.  Each grant application will be reviewed to assure compliance with the Act and this Part.

 

c)         Evidence of Need

 

1)         The applicant must document need for the proposed redevelopment project.  For example, the applicant may show need based on absence of infrastructure, potential opportunity for economic benefit, etc.

 

2)         The applicant must provide proof of the project's inability to acquire financing in an amount adequate to complete the project, such as a letter of partial funding or indication that other program funding has been considered.

 

d)         Costs.  The applicant must demonstrate that the project costs are eligible program costs under the Act and this Part and can be substantiated given the amount of work to be undertaken and the results expected.

 

e)         Program Objectives and Methodology.  The applicant must demonstrate that the activities and outcomes of the project can be accomplished, in that:

 

1)         objectives are measurable and describe benefit to the area being served; and

 

2)         methods and sequence of activities logically address the problems or opportunities identified and achieve the objectives that have been set.

 

f)         Financial Evaluation Component.  The Department will conduct a financial analysis of each application received.  The financial evaluation will include an analysis of the applicant's financial statements, including the annual balance sheets and profit and loss statements, for the past three years; the most recent 90 days and a three year projected balance sheet and profit and loss statement; and a one year monthly cash flow statement.  A comprehensive business plan or company annual reports may be submitted in lieu of these materials.  These statements will be reviewed through a standard credit analysis that will determine the:  liquidity and debt coverage of the project; ability of the company to manage debt; business trends; and projected earnings.  This data will be compared to similar data for companies in the same industry using the 2006-2007 edition of "RMA Annual Statement Studies" published by the Risk Management Association, 1801 Market Street, Suite 300, Philadelphia PA 19103-1628 or by email at customers@rmahq.org, or comparable source that more closely matches the applicant's business operation if the applicant's industry is evaluated by such sources.  This standard credit analysis will determine the financial stability of the business organization.