Public Act 095-0375
 
SB0499 Enrolled LRB095 09029 BDD 29220 b

    AN ACT concerning revenue.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Economic Development for a Growing Economy
Tax Credit Act is amended by changing Sections 5-5 and 5-15 as
follows:
 
    (35 ILCS 10/5-5)
    Sec. 5-5. Definitions. As used in this Act:
    "Agreement" means the Agreement between a Taxpayer and the
Department under the provisions of Section 5-50 of this Act.
    "Applicant" means a Taxpayer that is operating a business
located or that the Taxpayer plans to locate within the State
of Illinois and that is engaged in interstate or intrastate
commerce for the purpose of manufacturing, processing,
assembling, warehousing, or distributing products, conducting
research and development, providing tourism services, or
providing services in interstate commerce, office industries,
or agricultural processing, but excluding retail, retail food,
health, or professional services. "Applicant" does not include
a Taxpayer who closes or substantially reduces an operation at
one location in the State and relocates substantially the same
operation to another location in the State. This does not
prohibit a Taxpayer from expanding its operations at another
location in the State, provided that existing operations of a
similar nature located within the State are not closed or
substantially reduced. This also does not prohibit a Taxpayer
from moving its operations from one location in the State to
another location in the State for the purpose of expanding the
operation provided that the Department determines that
expansion cannot reasonably be accommodated within the
municipality in which the business is located, or in the case
of a business located in an incorporated area of the county,
within the county in which the business is located, after
conferring with the chief elected official of the municipality
or county and taking into consideration any evidence offered by
the municipality or county regarding the ability to accommodate
expansion within the municipality or county.
    "Committee" means the Illinois Business Investment
Committee created under Section 5-25 of this Act within the
Illinois Economic Development Board.
    "Credit" means the amount agreed to between the Department
and Applicant under this Act, but not to exceed the Incremental
Income Tax attributable to the Applicant's project.
    "Department" means the Department of Commerce and Economic
Opportunity.
    "Director" means the Director of Commerce and Economic
Opportunity.
    "Full-time Employee" means an individual who is employed
for consideration for at least 35 hours each week or who
renders any other standard of service generally accepted by
industry custom or practice as full-time employment. An
individual for whom a W-2 is issued by a Professional Employer
Organization (PEO) is a full-time employee if employed in the
service of the Applicant for consideration for at least 35
hours each week or who renders any other standard of service
generally accepted by industry custom or practice as full-time
employment to Applicant.
    "Incremental Income Tax" means the total amount withheld
during the taxable year from the compensation of New Employees
under Article 7 of the Illinois Income Tax Act arising from
employment at a project that is the subject of an Agreement.
    "New Employee" means:
        (a) A Full-time Employee first employed by a Taxpayer
    in the project that is the subject of an Agreement and who
    is hired after the Taxpayer enters into the tax credit
    Agreement.
        (b) The term "New Employee" does not include:
            (1) an employee of the Taxpayer who performs a job
        that was previously performed by another employee, if
        that job existed for at least 6 months before hiring
        the employee;
            (2) an employee of the Taxpayer who was previously
        employed in Illinois by a Related Member of the
        Taxpayer and whose employment was shifted to the
        Taxpayer after the Taxpayer entered into the tax credit
        Agreement; or
            (3) 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 an
        indirect ownership interest of at least 5% in the
        profits, capital, or value of the Taxpayer.
        (c) Notwithstanding paragraph (1) of subsection (b),
    an employee may be considered a New Employee under the
    Agreement if the employee performs a job that was
    previously performed by an employee who was:
            (1) treated under the Agreement as a New Employee;
        and
            (2) promoted by the Taxpayer to another job.
        (d) Notwithstanding subsection (a), the Department may
    award Credit to an Applicant with respect to an employee
    hired prior to the date of the Agreement if:
            (1) the Applicant is in receipt of a letter from
        the Department stating an intent to enter into a credit
        Agreement;
            (2) the letter described in paragraph (1) is issued
        by the Department not later than 15 days after the
        effective date of this Act; and
            (3) the employee was hired after the date the
        letter described in paragraph (1) was issued.
    "Noncompliance Date" means, in the case of a Taxpayer that
is not complying with the requirements of the Agreement or the
provisions of this Act, the day following the last date upon
which the Taxpayer was in compliance with the requirements of
the Agreement and the provisions of this Act, as determined by
the Director, pursuant to Section 5-65.
    "Pass Through Entity" means an entity that is exempt from
the tax under subsection (b) or (c) of Section 205 of the
Illinois Income Tax Act.
    "Professional Employer Organization" (PEO) means an
employee leasing company, as defined in Section 206.1(A)(2) of
the Illinois Unemployment Insurance Act.
    "Related Member" means a person that, with respect to the
Taxpayer during any portion of the taxable year, is any one of
the following:
        (1) An individual stockholder, if the stockholder and
    the members of the stockholder's family (as defined in
    Section 318 of the Internal Revenue Code) own directly,
    indirectly, beneficially, or constructively, in the
    aggregate, at least 50% of the value of the Taxpayer's
    outstanding stock.
        (2) A partnership, estate, or trust and any partner or
    beneficiary, if the partnership, estate, or trust, and its
    partners or beneficiaries own directly, indirectly,
    beneficially, or constructively, in the aggregate, at
    least 50% of the profits, capital, stock, or value of the
    Taxpayer.
        (3) A corporation, and any party related to the
    corporation in a manner that would require an attribution
    of stock from the corporation to the party or from the
    party to the corporation under the attribution rules of
    Section 318 of the Internal Revenue Code, if the Taxpayer
    owns directly, indirectly, beneficially, or constructively
    at least 50% of the value of the corporation's outstanding
    stock.
        (4) A corporation and any party related to that
    corporation in a manner that would require an attribution
    of stock from the corporation to the party or from the
    party to the corporation under the attribution rules of
    Section 318 of the Internal Revenue Code, if the
    corporation and all such related parties own in the
    aggregate at least 50% of the profits, capital, stock, or
    value of the Taxpayer.
        (5) A person to or from whom there is attribution of
    stock ownership in accordance with Section 1563(e) of the
    Internal Revenue Code, except, for purposes of determining
    whether a person is a Related Member under this paragraph,
    20% shall be substituted for 5% wherever 5% appears in
    Section 1563(e) of the Internal Revenue Code.
    "Taxpayer" means an individual, corporation, partnership,
or other entity that has any Illinois Income Tax liability.
(Source: P.A. 94-793, eff. 5-19-06.)
 
    (35 ILCS 10/5-15)
    Sec. 5-15. Tax Credit Awards. Subject to the conditions set
forth in this Act, a Taxpayer is entitled to a Credit against
taxes imposed pursuant to subsections (a) and (b) of Section
201 of the Illinois Income Tax Act that may be imposed on the
Taxpayer for a taxable year beginning on or after January 1,
1999, if the Taxpayer is awarded a Credit by the Department
under this Act for that taxable year.
    (a) The Department shall make Credit awards under this Act
to foster job creation and retention in Illinois.
    (b) A person that proposes a project to create new jobs in
Illinois must enter into an Agreement with the Department for
the Credit under this Act.
    (c) The Credit shall be claimed for the taxable years
specified in the Agreement.
    (d) The Credit shall not exceed the Incremental Income Tax
attributable to the project that is the subject of the
Agreement.
    (e) Nothing herein shall prohibit a Tax Credit Award to an
Applicant that uses a PEO if all other award criteria are
satisfied.
(Source: P.A. 91-476, eff. 8-11-99.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.