102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB4634

 

Introduced 1/21/2022, by Rep. Tim Butler

 

SYNOPSIS AS INTRODUCED:
 
New Act
35 ILCS 5/238 new
35 ILCS 5/239 new
35 ILCS 5/704A
35 ILCS 120/5n new
35 ILCS 200/18-184.20 new
35 ILCS 630/2  from Ch. 120, par. 2002
35 ILCS 640/2-4
220 ILCS 5/9-222  from Ch. 111 2/3, par. 9-222

    Creates the Manufacturing Illinois Chips for Real Opportunity (MICRO) Act. Creates the Manufacturing Illinois Chips for Real Opportunity (MICRO) Program to be administered by the Department of Commerce and Economic Opportunity. Creates various tax incentives for manufacturers of semiconductors, microchips, or semiconductor or microchip component parts, subject to an agreement with the Department of Commerce and Economic Opportunity. Amends the Illinois Income Tax Act, the Retailers' Occupation Tax Act, the Property Tax Code, the Telecommunications Excise Tax Act, the Electricity Excise Tax Law, and the Public Utilities Act. Effective immediately.


LRB102 23012 HLH 32166 b

 

 

A BILL FOR

 

HB4634LRB102 23012 HLH 32166 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the
5Manufacturing Illinois Chips for Real Opportunity (MICRO) Act.
 
6    Section 5. Purpose. It is the intent of the General
7Assembly that Illinois should lead the nation in production of
8semiconductors and microchips as they become even more
9prevalent in everyday life. The General Assembly finds that,
10through investments in semiconductors and microchips, Illinois
11will be on the forefront of reshoring semiconductor and
12microchip production that fuels modern technologies that are
13essential to the operation of computers, phones, vehicles and
14any electric product that have become essential to modern
15life. This Act will create good paying jobs, and generate
16long-term economic investment in the Illinois business
17economy, in addition to ensuring a vital product is made in the
18United States. Illinois must aggressively adopt new business
19development investment tools so that Illinois can compete with
20domestic and foreign competitors for semiconductor and chip
21manufacturing.
 
22    Section 10. Definitions. As used in this Act:

 

 

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1    "Agreement" means the agreement between a taxpayer and the
2Department under the provisions of this Act.
3    "Applicant" means a taxpayer that: (i) operates a business
4in Illinois as a semiconductor manufacturer, a microchip
5manufacturer, or a manufacturer of semiconductor or microchip
6component parts; or (ii) is planning to locate a business
7within the State of Illinois as a semiconductor manufacturer,
8a microchip manufacturer, or a manufacturer of semiconductor
9or microchip component parts. "Applicant" does not include a
10taxpayer who closes or substantially reduces by more than 50%
11operations at one location in the State and relocates
12substantially the same operation to another location in the
13State. This does not prohibit a Taxpayer from expanding its
14operations at another location in the State. This also does
15not prohibit a Taxpayer from moving its operations from one
16location in the State to another location in the State for the
17purpose of expanding the operation, provided that the
18Department determines that expansion cannot reasonably be
19accommodated within the municipality or county in which the
20business is located, or, in the case of a business located in
21an incorporated area of the county, within the county in which
22the business is located, after conferring with the chief
23elected official of the municipality or county and taking into
24consideration any evidence offered by the municipality or
25county regarding the ability to accommodate expansion within
26the municipality or county.

 

 

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1    "Capital improvements" means the purchase, renovation,
2rehabilitation, or construction of permanent tangible land,
3buildings, structures, equipment, and furnishings in an
4approved project sited in Illinois and expenditures for goods
5or services that are normally capitalized, including
6organizational costs and research and development costs
7incurred in Illinois. For land, buildings, structures, and
8equipment that are leased, the lease must equal or exceed the
9term of the agreement, and the cost of the property shall be
10determined from the present value, using the corporate
11interest rate prevailing at the time of the application, of
12the lease payments.
13    "Credit" or "MICRO credit" means a credit agreed to
14between the Department and applicant under this Act.
15    "Department" means the Department of Commerce and Economic
16Opportunity.
17    "Director" means the Director of Commerce and Economic
18Opportunity.
19    "Energy Transition Area" means a county with less than
20100,000 people or a municipality that contains one or more of
21the following:
22        (1) a fossil fuel plant that was retired from service
23    or has significant reduced service within 6 years before
24    the time of the application or will be retired or have
25    service significantly reduced within 6 years following the
26    time of the application; or

 

 

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1        (2) a coal mine that was closed or had operations
2    significantly reduced within 6 years before the time of
3    the application or is anticipated to be closed or have
4    operations significantly reduced within 6 years following
5    the time of the application.
6    "Full-time employee" means an individual who is employed
7for consideration for at least 35 hours each week or who
8renders any other standard of service generally accepted by
9industry custom or practice as full-time employment. An
10individual for whom a W-2 is issued by a Professional Employer
11Organization (PEO) is a full-time employee if employed in the
12service of the applicant for consideration for at least 35
13hours each week.
14    "Incremental income tax" means the total amount withheld
15during the taxable year from the compensation of new employees
16and, if applicable, retained employees under Article 7 of the
17Illinois Income Tax Act arising from employment at a project
18that is the subject of an agreement.
19    "Institution of higher education" or "institution" means
20any accredited public or private university, college,
21community college, business, technical, or vocational school,
22or other accredited educational institution offering degrees
23and instruction beyond the secondary school level.
24    "MICRO construction jobs credit" means a credit agreed to
25between the Department and the applicant under this Act that
26is based on the incremental income tax attributable to

 

 

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1construction wages paid in connection with construction of the
2project facilities.
3    "MICRO credit" means a credit agreed to between the
4Department and the applicant under this Act that is based on
5the incremental income tax attributable to new employees and,
6if applicable, retained employees, and on training costs for
7such employees at the applicant's project.
8    "Microchip" means a wafer of semiconducting material that
9is less than 15 millimeters long and less than 5 millimeters
10wide and is used to make an integrated circuit.
11    "Microchip manufacturer" means a new or existing
12manufacturer that is focused on reequipping, expanding, or
13establishing a manufacturing facility in Illinois that
14produces microchips or key components that directly support
15the functions of microchips.
16    "Minority person" means a minority person as defined in
17the Business Enterprise for Minorities, Women, and Persons
18with Disabilities Act.
19    "New employee" means a newly-hired full-time employee
20employed to work at the project site and whose work is directly
21related to the project.
22    "Noncompliance date" means, in the case of a taxpayer that
23is not complying with the requirements of the agreement or the
24provisions of this Act, the day following the last date upon
25which the taxpayer was in compliance with the requirements of
26the agreement and the provisions of this Act, as determined by

 

 

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1the Director.
2    "Pass-through entity" means an entity that is exempt from
3the tax under subsection (b) or (c) of Section 205 of the
4Illinois Income Tax Act.
5    "Placed in service" means the state or condition of
6readiness, availability for a specifically assigned function,
7and the facility is constructed and ready to conduct its
8facility operations to manufacture goods.
9    "Professional employer organization" (PEO) means an
10employee leasing company, as defined in Section 206.1 of the
11Illinois Unemployment Insurance Act.
12    "Program" means the Manufacturing Illinois Chips for Real
13Opportunity (MICRO) program established in this Act.
14    "Project" means a for-profit economic development activity
15for the manufacture of semiconductors and microchips.
16    "Related member" means a person that, with respect to the
17taxpayer during any portion of the taxable year, is any one of
18the following:
19        (1) An individual stockholder, if the stockholder and
20    the members of the stockholder's family (as defined in
21    Section 318 of the Internal Revenue Code) own directly,
22    indirectly, beneficially, or constructively, in the
23    aggregate, at least 50% of the value of the taxpayer's
24    outstanding stock.
25        (2) A partnership, estate, trust and any partner or
26    beneficiary, if the partnership, estate, or trust, and its

 

 

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1    partners or beneficiaries own directly, indirectly,
2    beneficially, or constructively, in the aggregate, at
3    least 50% of the profits, capital, stock, or value of the
4    taxpayer.
5        (3) A corporation, and any party related to the
6    corporation in a manner that would require an attribution
7    of stock from the corporation under the attribution rules
8    of Section 318 of the Internal Revenue Code, if the
9    Taxpayer owns directly, indirectly, beneficially, or
10    constructively at least 50% of the value of the
11    corporation's outstanding stock.
12        (4) A corporation and any party related to that
13    corporation in a manner that would require an attribution
14    of stock from the corporation to the party or from the
15    party to the corporation under the attribution rules of
16    Section 318 of the Internal Revenue Code, if the
17    corporation and all such related parties own in the
18    aggregate at least 50% of the profits, capital, stock, or
19    value of the taxpayer.
20        (5) A person to or from whom there is an attribution of
21    stock ownership in accordance with Section 1563(e) of the
22    Internal Revenue Code, except, for purposes of determining
23    whether a person is a related member under this paragraph,
24    20% shall be substituted for 5% wherever 5% appears in
25    Section 1563(e) of the Internal Revenue Code.
26    "Retained employee" means a full-time employee employed by

 

 

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1the taxpayer prior to the term of the Agreement who continues
2to be employed during the term of the agreement whose job
3duties are directly and substantially related to the project.
4For purposes of this definition, "directly and substantially
5related to the project" means at least two-thirds of the
6employee's job duties must be directly related to the project
7and the employee must devote at least two-thirds of his or her
8time to the project. The term "retained employee" does not
9include any individual who has a direct or an indirect
10ownership interest of at least 5% in the profits, equity,
11capital, or value of the taxpayer or a child, grandchild,
12parent, or spouse, other than a spouse who is legally
13separated from the individual, of any individual who has a
14direct or indirect ownership of at least 5% in the profits,
15equity, capital, or value of the taxpayer.
16    "Semiconductor" means any class of crystalline solids
17intermediate in electrical conductivity between a conductor
18and an insulator.
19    "Semiconductor manufacturer" means a new or existing
20manufacturer that is focused on reequipping, expanding, or
21establishing a manufacturing facility in Illinois that
22produces semiconductors or key components that directly
23support the functions of semiconductors.
24    "Statewide baseline" means the total number of full-time
25employees of the applicant and any related member employed by
26such entities at the time of application for incentives under

 

 

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1this Act.
2    "Taxpayer" means an individual, corporation, partnership,
3or other entity that has a legal obligation to pay Illinois
4income taxes and file an Illinois income tax return.
5    "Training costs" means costs incurred to upgrade the
6technological skills of full-time employees in Illinois and
7includes: curriculum development; training materials
8(including scrap product costs); trainee domestic travel
9expenses; instructor costs (including wages, fringe benefits,
10tuition and domestic travel expenses); rent, purchase or lease
11of training equipment; and other usual and customary training
12costs. "Training costs" do not include costs associated with
13travel outside the United States (unless the Taxpayer receives
14prior written approval for the travel by the Director based on
15a showing of substantial need or other proof the training is
16not reasonably available within the United States), wages and
17fringe benefits of employees during periods of training, or
18administrative cost related to Full-Time Employees of the
19Taxpayer.
20    "Underserved area" means any geographic areas as defined
21in Section 5-5 of the Economic Development for a Growing
22Economy Tax Credit Act.
 
23    Section 15. Powers of the Department. The Department, in
24addition to those powers granted under the Civil
25Administrative Code of Illinois, is granted and shall have all

 

 

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1the powers necessary or convenient to administer the program
2under this Act and to carry out and effectuate the purposes and
3provisions of this Act, including, but not limited to, the
4power and authority to:
5        (1) adopt rules deemed necessary and appropriate for
6    the administration of the program, the designation of
7    projects, and the awarding of credits;
8        (2) establish forms for applications, notifications,
9    contracts, or any other agreements and accept applications
10    at any time during the year;
11        (3) assist taxpayers pursuant to the provisions of
12    this Act and cooperate with taxpayers that are parties to
13    agreements under this Act to promote, foster, and support
14    economic development, capital investment, and job creation
15    or retention within the State;
16        (4) enter into agreements and memoranda of
17    understanding for participation of, and engage in
18    cooperation with, agencies of the federal government,
19    units of local government, universities, research
20    foundations or institutions, regional economic development
21    corporations, or other organizations to implement the
22    requirements and purposes of this Act;
23        (5) gather information and conduct inquiries, in the
24    manner and by the methods it deems desirable, including
25    without limitation, gathering information with respect to
26    applicants for the purpose of making any designations or

 

 

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1    certifications necessary or desirable or to gather
2    information to assist the Department with any
3    recommendation or guidance in the furtherance of the
4    purposes of this Act;
5        (6) establish, negotiate and effectuate agreements and
6    any term, agreement, or other document with any person,
7    necessary or appropriate to accomplish the purposes of
8    this Act; and to consent, subject to the provisions of any
9    agreement with another party, to the modification or
10    restructuring of any agreement to which the Department is
11    a party;
12        (7) fix, determine, charge, and collect any premiums,
13    fees, charges, costs, and expenses from applicants,
14    including, without limitation, any application fees,
15    commitment fees, program fees, financing charges, or
16    publication fees as deemed appropriate to pay expenses
17    necessary or incident to the administration, staffing, or
18    operation in connection with the Department's activities
19    under this Act, or for preparation, implementation, and
20    enforcement of the terms of the agreement, or for
21    consultation, advisory and legal fees, and other costs;
22    however, all fees and expenses incident thereto shall be
23    the responsibility of the applicant;
24        (8) provide for sufficient personnel to permit
25    administration, staffing, operation, and related support
26    required to adequately discharge its duties and

 

 

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1    responsibilities described in this Act from funds made
2    available through charges to applicants or from funds as
3    may be appropriated by the General Assembly for the
4    administration of this Act;
5        (9) require applicants, upon written request, to issue
6    any necessary authorization to the appropriate federal,
7    State, or local authority for the release of information
8    concerning a project being considered under the provisions
9    of this Act, with the information requested to include,
10    but not be limited to, financial reports, returns, or
11    records relating to the taxpayer or its project;
12        (10) require that a taxpayer shall at all times keep
13    proper books of record and account in accordance with
14    generally accepted accounting principles consistently
15    applied, with the books, records, or papers related to the
16    agreement in the custody or control of the taxpayer open
17    for reasonable Department inspection and audits, and
18    including, without limitation, the making of copies of the
19    books, records, or papers, and the inspection or appraisal
20    of any of the taxpayer or project assets;
21        (11) take whatever actions are necessary or
22    appropriate to protect the State's interest in the event
23    of bankruptcy, default, foreclosure, or noncompliance with
24    the terms and conditions of financial assistance or
25    participation required under this Act, including the power
26    to sell, dispose, lease, or rent, upon terms and

 

 

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1    conditions determined by the Director to be appropriate,
2    real or personal property that the Department may receive
3    as a result of these actions.
 
4    Section 20. Manufacturing Illinois Chips for Real
5Opportunity (MICRO) Program; project applications.
6    (a) The Manufacturing Illinois Chips for Real Opportunity
7(MICRO) Program is hereby established and shall be
8administered by the Department. The Program will provide
9financial incentives to eligible semiconductor manufacturers
10and microchip manufacturers.
11    (b) Any taxpayer planning a project to be located in
12Illinois may request consideration for designation of its
13project as a MICRO project, by formal written letter of
14request or by formal application to the Department, in which
15the applicant states its intent to make at least a specified
16level of investment and intends to hire a specified number of
17full-time employees at a designated location in Illinois. As
18circumstances require, the Department shall require a formal
19application from an applicant and a formal letter of request
20for assistance.
21    (c) In order to qualify for credits under the program, an
22Applicant must:
23        (1) for a semiconductor manufacturer or microchip
24    manufacturer:
25            (A) make an investment of at least $1,500,000,000

 

 

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1        in capital improvements at the project site;
2            (B) to be placed in service within the State
3        within a 60-month period after approval of the
4        application; and
5            (C) create at least 500 new full-time employee
6        jobs; or
7        (2) for a semiconductor or microchip component parts
8    manufacturer:
9            (A) make an investment of at least $300,000,000 in
10        capital improvements at the project site;
11            (B) manufacture one or more parts that are
12        primarily used for the manufacture of semiconductors
13        or microchips;
14            (C) to be placed in service within the State
15        within a 60-month period after approval of the
16        application; and
17            (D) create at least 150 new full-time employee
18        jobs; or
19        (3) for a semiconductor manufacturer or microchip
20    manufacturer or a semiconductor or microchip component
21    parts manufacturer that does not quality under paragraph
22    (2) above:
23            (A) make an investment of at least $20,000,000 in
24        capital improvements at the project site;
25            (B) to be placed in service within the State
26        within a 48-month period after approval of the

 

 

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1        application; and
2            (C) create at least 50 new full-time employee
3        jobs; or
4        (4) for a semiconductor manufacturer or microchip
5    manufacturer or a semiconductor or microchip component
6    parts manufacturer with existing operations in Illinois
7    that intends to convert or expand, in whole or in part, the
8    existing facility from traditional manufacturing to
9    semiconductor manufacturing or microchip manufacturing or
10    semiconductor or microchip component parts manufacturing:
11            (A) make an investment of at least $100,000,000 in
12        capital improvements at the project site;
13            (B) to be placed in service within the State
14        within a 60-month period after approval of the
15        application; and
16            (C) create the lesser of 75 new full-time employee
17        jobs or new full-time employee jobs equivalent to 10%
18        of the Statewide baseline applicable to the taxpayer
19        and any related member at the time of application.
20    (d) For any applicant creating the full-time employee jobs
21noted in subsection (c), those jobs must have a total
22compensation equal to or greater than 120% of the average wage
23paid to full-time employees in the county where the project is
24located, as determined by the U.S. Bureau of Labor Statistics.
25    (e) Each applicant must outline its hiring plan and
26commitment to recruit and hire full-time employee positions at

 

 

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1the project site. The hiring plan may include a partnership
2with an institution of higher education to provide
3internships, including, but not limited to, internships
4supported by the Clean Jobs Workforce Network Program, or
5full-time permanent employment for students at the project
6site. Additionally, the applicant may create or utilize
7participants from apprenticeship programs that are approved by
8and registered with the United States Department of Labor's
9Bureau of Apprenticeship and Training. The Applicant may apply
10for apprenticeship education expense credits in accordance
11with the provisions set forth in 14 Ill. Admin. Code 522. Each
12applicant is required to report annually, on or before April
1315, on the diversity of its workforce in accordance with
14Section 50 of this Act. For existing facilities of applicants
15under paragraph (3) of subsection (b) above, if the taxpayer
16expects a reduction in force due to its transition to
17manufacturing semiconductors, microchips, or semiconductor or
18microchip component parts, the plan submitted under this
19Section must outline the taxpayer's plan to assist with
20retraining its workforce aligned with the taxpayer's adoption
21of new technologies and anticipated efforts to retrain
22employees through employment opportunities within the
23taxpayer's workforce.
24    (f) A taxpayer may not enter into more than one agreement
25under this Act with respect to a single address or location for
26the same period of time. Also, a taxpayer may not enter into an

 

 

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1agreement under this Act with respect to a single address or
2location for the same period of time for which the taxpayer
3currently holds an active agreement under the Economic
4Development for a Growing Economy Tax Credit Act. This
5provision does not preclude the applicant from entering into
6an additional agreement after the expiration or voluntary
7termination of an earlier agreement under this Act or under
8the Economic Development for a Growing Economy Tax Credit Act
9to the extent that the taxpayer's application otherwise
10satisfies the terms and conditions of this Act and is approved
11by the Department. An applicant with an existing agreement
12under the Economic Development for a Growing Economy Tax
13Credit Act may submit an application for an agreement under
14this Act after it terminates any existing agreement under the
15Economic Development for a Growing Economy Tax Credit Act with
16respect to the same address or location.
 
17    Section 25. Review of application. The Department shall
18determine which projects will benefit the State. In making its
19recommendation that an applicant's application for credit
20should or should not be accepted, which shall occur within a
21reasonable time frame as determined by the nature of the
22application, the Department shall determine that all the
23following conditions exist:
24        (1) the applicant intends to make the required
25    investment in the State and intends to hire the required

 

 

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1    number of full-time employees;
2        (2) the applicant's project is economically sound,
3    will benefit the people of the State by increasing
4    opportunities for employment, and will strengthen the
5    economy of the State;
6        (3) awarding the credit will result in an overall
7    positive fiscal impact to the State, as certified by the
8    Department using the best available data; and
9        (4) the credit is not prohibited under this Act.
 
10    Section 30. Tax credit awards.
11    (a) Subject to the conditions set forth in this Act, a
12taxpayer is entitled to a credit against the tax imposed
13pursuant to subsections (a) and (b) of Section 201 of the
14Illinois Income Tax Act for a taxable year beginning on or
15after January 1, 2026 if the taxpayer is awarded a credit by
16the Department in accordance with an agreement under this Act.
17The Department has authority to award credits under this Act
18on and after January 1, 2023.
19    (b) A taxpayer may receive a tax credit against the tax
20imposed under subsections (a) and (b) of Section 201 of the
21Illinois Income Tax Act, not to exceed the sum of (i) 75% of
22the incremental income tax attributable to new employees at
23the applicant's project and (ii) 10% of the training costs of
24the new employees. If the project is located in an underserved
25area or an energy transition area, then the amount of the

 

 

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1credit may not exceed the sum of (i) 100% of the incremental
2income tax attributable to new employees at the applicant's
3project; and (ii) 10% of the training costs of the new
4employees. The percentage of training costs includable in the
5calculation may be increased by an additional 15% for training
6costs associated with new employees that are recent (2 years
7or less) graduates, certificate holders, or credential
8recipients from an institution of higher education in
9Illinois, or, if the training is provided by an institution of
10higher education in Illinois, the Clean Jobs Workforce Network
11Program, or an apprenticeship and training program located in
12Illinois and approved by and registered with the United States
13Department of Labor's Bureau of Apprenticeship and Training.
14An applicant is also eligible for a training credit that shall
15not exceed 10% of the training costs of retained employees for
16the purpose of upskilling to meet the operational needs of the
17applicant or the project. The percentage of training costs
18includable in the calculation shall not exceed a total of 25%.
19If an applicant agrees to hire the required number of new
20employees, then the maximum amount of the credit for that
21applicant may be increased by an amount not to exceed 25% of
22the incremental income tax attributable to retained employees
23at the applicant's project; provided that, in order to receive
24the increase for retained employees, the applicant must, if
25applicable, meet or exceed the statewide baseline. If the
26Project is in an underserved area or an energy transition

 

 

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1area, the maximum amount of the credit attributable to
2retained employees for the applicant may be increased to an
3amount not to exceed 50% of the incremental income tax
4attributable to retained employees at the applicant's project;
5provided that, in order to receive the increase for retained
6employees, the applicant must meet or exceed the statewide
7baseline. Credits awarded may include credit earned for
8incremental income tax withheld and training costs incurred by
9the taxpayer beginning on or after January 1, 2023. Credits so
10earned and certified by the Department may be applied against
11the tax imposed by subsections (a) and (b) of Section 201 of
12the Illinois Income Tax Act for taxable years beginning on or
13after January 1, 2026.
14    (c) MICRO Construction Jobs Credit. For construction wages
15associated with a project that qualified for a credit under
16subsection (b), the taxpayer may receive a tax credit against
17the tax imposed under subsections (a) and (b) of Section 201 of
18the Illinois Income Tax Act in an amount equal to 50% of the
19incremental income tax attributable to construction wages paid
20in connection with construction of the project facilities, as
21a jobs credit for workers hired to construct the project.
22    The MICRO Construction Jobs Credit may not exceed 75% of
23the amount of the incremental income tax attributable to
24construction wages paid in connection with construction of the
25project facilities if the project is in an underserved area or
26an energy transition area.

 

 

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1    (d) The Department shall certify to the Department of
2Revenue: (1) the identity of Taxpayers that are eligible for
3the MICRO Credit and MICRO Construction Jobs Credit; (2) the
4amount of the MICRO Credits and MICRO Construction Jobs
5Credits awarded in each calendar year; and (3) the amount of
6the MICRO Credit and MICRO Construction Jobs Credit claimed in
7each calendar year. MICRO Credits awarded may include credit
8earned for Incremental Income Tax withheld and Training Costs
9incurred by the Taxpayer beginning on or after January 1,
102023. Credits so earned and certified by the Department may be
11applied against the tax imposed by Section 201(a) and (b) of
12the Illinois Income Tax Act for taxable years beginning on or
13after January 1, 2026.
14    (e) Applicants seeking certification for a tax credits
15related to the construction of the project facilities in the
16State shall require the contractor to enter into a project
17labor agreement that conforms with the Project Labor
18Agreements Act.
19    (f) Any applicant issued a certificate for a tax credit or
20tax exemption under this Act must annually report to the
21Department the total project tax benefits received. Reports
22are due no later than May 31 of each year and shall cover the
23previous calendar year. The first report is for the 2023
24calendar year and is due no later than May 31, 2023.
25    (g) Nothing in this Act shall prohibit an award of credit
26to an applicant that uses a PEO if all other award criteria are

 

 

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1satisfied.
2    (h) With respect to any portion of a Credit that is based
3on the incremental income tax attributable to new employees or
4retained employees, in lieu of the Credit allowed under this
5Act against the taxes imposed pursuant to subsections (a) and
6(b) of Section 201 of the Illinois Income Tax Act, a taxpayer
7that otherwise meets the criteria set forth in this Section,
8the taxpayer may elect to claim the credit, on or after January
91, 2025, against its obligation to pay over withholding under
10Section 704A of the Illinois Income Tax Act. The election
11shall be made in the manner prescribed by the Department of
12Revenue and once made shall be irrevocable.
 
13    Section 35. Relocation of jobs in Illinois. A taxpayer is
14not entitled to claim a credit provided by this Act with
15respect to any jobs that the Taxpayer relocates from one site
16in Illinois to another site in Illinois. Any full-time
17employee relocated to Illinois in connection with a qualifying
18project is deemed to be a new employee for purposes of this
19Act. Determinations under this Section shall be made by the
20Department.
 
21    Section 40. Amount and duration of the credits; limitation
22to amount of costs of specified items. The Department shall
23determine the amount and duration of the credit awarded under
24this Act, subject to the limitations set forth in this Act. For

 

 

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1a project that qualified under paragraph (1), (2), or (4) of
2subsection (c) of Section 20, the duration of the credit may
3not exceed 15 taxable years. For project that qualified under
4paragraph (3) of subsection (c) of Section 20, the duration of
5the credit may not exceed 10 taxable years. The credit may be
6stated as a percentage of the incremental income tax and
7training costs attributable to the applicant's project and may
8include a fixed dollar limitation.
9    Nothing in this Section shall prevent the Department, in
10consultation with the Department of Revenue, from adopting
11rules to extend the sunset of any earned, existing, and unused
12tax credit or credits a taxpayer may be in possession of.
 
13    Section 45. Contents of agreements with applicants.
14    (a) The Department shall enter into an agreement with an
15applicant that is awarded a credit under this Act. The
16agreement shall include all of the following:
17        (1) A detailed description of the project that is the
18    subject of the agreement, including the location and
19    amount of the investment and jobs created or retained.
20        (2) The duration of the credit, the first taxable year
21    for which the credit may be awarded, and the first taxable
22    year in which the credit may be used by the taxpayer.
23        (3) The credit amount that will be allowed for each
24    taxable year.
25        (4) For a project qualified under paragraphs (1), (2),

 

 

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1    or (4) of subsection (c) of Section 20, a requirement that
2    the taxpayer shall maintain operations at the project
3    location a minimum number of years not to exceed 15. For
4    project qualified under paragraph (3) of subsection (c) of
5    Section 20, a requirement that the taxpayer shall maintain
6    operations at the project location a minimum number of
7    years not to exceed 10.
8        (5) A specific method for determining the number of
9    new employees and, if applicable, retained employees,
10    employed during a taxable year.
11        (6) A requirement that the taxpayer shall annually
12    report to the Department the number of new employees, the
13    incremental income tax withheld in connection with the new
14    employees, and any other information the Department deems
15    necessary and appropriate to perform its duties under this
16    Act.
17        (7) A requirement that the Director is authorized to
18    verify with the appropriate State agencies the amounts
19    reported under paragraph (6), and after doing so shall
20    issue a certificate to the taxpayer stating that the
21    amounts have been verified.
22        (8) A requirement that the taxpayer shall provide
23    written notification to the Director not more than 30 days
24    after the taxpayer makes or receives a proposal that would
25    transfer the taxpayer's State tax liability obligations to
26    a successor taxpayer.

 

 

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1        (9) A detailed description of the number of new
2    employees to be hired, and the occupation and payroll of
3    full-time jobs to be created or retained because of the
4    project.
5        (10) The minimum investment the taxpayer will make in
6    capital improvements, the time period for placing the
7    property in service, and the designated location in
8    Illinois for the investment.
9        (11) A requirement that the taxpayer shall provide
10    written notification to the Director and the Director's
11    designee not more than 30 days after the taxpayer
12    determines that the minimum job creation or retention,
13    employment payroll, or investment no longer is or will be
14    achieved or maintained as set forth in the terms and
15    conditions of the agreement. Additionally, the
16    notification should outline to the Department the number
17    of layoffs, date of the layoffs, and detail taxpayer's
18    efforts to provide career and training counseling for the
19    impacted workers with industry-related certifications and
20    trainings.
21        (12) A provision that, if the total number of new
22    employees falls below a specified level, the allowance of
23    credit shall be suspended until the number of new
24    employees equals or exceeds the agreement amount.
25        (13) If applicable, a provision that specifies the
26    statewide baseline at the time of application for retained

 

 

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1    employees. Additionally, the agreement must have a
2    provision addressing if the total number retained
3    employees falls below the statewide baseline, the
4    allowance of the credit shall be suspended until the
5    number of retained employees equals or exceeds the
6    agreement amount.
7        (14) A detailed description of the items for which the
8    costs incurred by the Taxpayer will be included in the
9    limitation on the Credit.
10        (15) A provision stating that if the taxpayer fails to
11    meet either the investment or job creation and retention
12    requirements specified in the agreement during the entire
13    5-year period beginning on the first day of the first
14    taxable year in which the agreement is executed and ending
15    on the last day of the fifth taxable year after the
16    agreement is executed, then the agreement is automatically
17    terminated on the last day of the fifth taxable year after
18    the agreement is executed, and the taxpayer is not
19    entitled to the award of any credits for any of that 5-year
20    period.
21        (16) A provision stating that if the taxpayer ceases
22    principal operations with the intent to permanently shut
23    down the project in the State during the term of the
24    Agreement, then the entire credit amount awarded to the
25    taxpayer prior to the date the taxpayer ceases principal
26    operations shall be returned to the Department and shall

 

 

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1    be reallocated to the local workforce investment area in
2    which the project was located.
3        (17) A provision stating that the Taxpayer must
4    provide the reports outlined in Sections 50 and 55 on or
5    before April 15 each year.
6        (18) A provision requiring the taxpayer to report
7    annually its contractual obligations or otherwise with a
8    recycling facility for its operations.
9        (19) Any other performance conditions or contract
10    provisions the Department determines are necessary or
11    appropriate.
12        (20) Each taxpayer under paragraph (1) of subsection
13    (c) of Section 20 above shall maintain labor neutrality
14    toward any union organizing campaign for any employees of
15    the taxpayer assigned to work on the premises of the
16    project. This paragraph shall not apply to a manufacturer
17    who is subject to collective bargaining agreement entered
18    into prior to the taxpayer filing an application pursuant
19    to this Act.
20    (b) The Department shall post on its website the terms of
21each agreement entered into under this Act. Such information
22shall be posted within 10 days after entering into the
23agreement and must include the following:
24        (1) the name of the taxpayer;
25        (2) the location of the project;
26        (3) the estimated value of the credit;

 

 

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1        (4) the number of new employee jobs and, if
2    applicable, number of retained employee jobs at the
3    project; and
4        (5) whether or not the project is in an underserved
5    area or energy transition area.
 
6    Section 50. Diversity report on the taxpayer's workforce,
7board of directors, and vendors.
8    (a) Each taxpayer with a workforce of 100 or more
9employees and with an agreement for a credit under this Act
10shall, starting on April 15, 2026, and every year thereafter
11prior to April 15, for which the Taxpayer has an Agreement
12under this Act, submit to the Department an annual report
13detailing the diversity of the taxpayer's own workforce,
14including full-time and part-time employees, contractors, and
15board of directors' membership. Any taxpayer seeking to claim
16a credit under this Act that fails to timely submit the
17required report shall not receive a credit for that taxable
18year unless and until such report is finalized and submitted
19to the Department. The report should also address the
20Taxpayer's best efforts to meet or exceed the recruitment and
21hiring plan outlined in the application referenced in Section
2220. Those reports shall be submitted in the form and manner
23required by the Department.
24    (b) Vendor diversity and annual report. Each taxpayer with
25a workforce of 100 or more full-time employees shall, starting

 

 

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1on April 15, 2025 and every year thereafter for which the
2taxpayer has an Agreement under this Act, report on the
3diversity of the vendors that it utilizes, for publication on
4the Department's website, and include the following
5information:
6        (1) a point of contact for potential vendors to
7    register with the taxpayer's project;
8        (2) certifications that the taxpayer accepts or
9    recognizes for minority and women-owned businesses as
10    entities;
11        (3) the taxpayer's goals to contract with diverse
12    vendors, if any, for the next fiscal year for the entire
13    budget of the taxpayer's project;
14        (4) for the last fiscal year, the actual contractual
15    spending for the entire budget of the project and the
16    actual spending for minority-owned businesses and
17    women-owned businesses, expressed as a percentage of the
18    total budget for actual spending for the project;
19        (5) a narrative explaining the results of the report
20    and the taxpayer's plan to address the voluntary goals for
21    the next fiscal year; and
22        (6) a copy of the taxpayer's submission of vendor
23    diversity information to the federal government, including
24    but not limited to vendor diversity goals and actual
25    contractual spending for minority-and women-owned
26    businesses, if the Taxpayer is a federal contractor and is

 

 

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1    required by the federal government to submit such
2    information.
 
3    Section 55. Sexual harassment policy report. Each taxpayer
4claiming a credit under this Act shall, prior to April 15 of
5each taxable year for which the taxpayer claims a credit under
6this Act, submit to the Department a report detailing that
7taxpayer's sexual harassment policy, which contains, at a
8minimum, the following information: (i) the illegality of
9sexual harassment; (ii) the definition of sexual harassment
10under State law; (iii) a description of sexual harassment,
11utilizing examples; (iv) the vendor's internal complaint
12process, including penalties; (v) the legal recourse and
13investigative and complaint processes available through the
14Department; (vi) directions on how to contact the Department;
15and (vii) protection against retaliation as provided by
16Section 6-101 of the Illinois Human Rights Act. A copy of the
17policy shall be provided to the Department upon request. The
18reports required under this Section shall be submitted in a
19form and manner determined by the Department.
 
20    Section 60. Certificate of verification; submission to the
21Department of Revenue.
22    (a) A taxpayer claiming a credit under this Act shall
23submit to the Department of Revenue a copy of the Director's
24certificate of verification under this Act for the taxable

 

 

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1year. However, failure to submit a copy of the certificate
2with the taxpayer's tax return shall not invalidate a claim
3for a credit.
4    (b) For a taxpayer to be eligible for a certificate of
5verification, the taxpayer shall provide proof as required by
6the Department, prior to the end of each calendar year,
7including, but not limited to, attestation by the taxpayer
8that:
9        (1) The project has achieved the level of new employee
10    jobs specified in the agreement.
11        (2) The project has achieved the level of annual
12    payroll in Illinois specified in its agreement.
13        (3) The project has achieved the level of capital
14    improvements in Illinois specified in its agreement.
 
15    Section 65. Certified payroll.
16    (a) Each contractor and subcontractor that is engaged in
17construction work on project facilities for a taxpayer who
18seeks to apply for a MICRO Construction Jobs Credit shall:
19        (1) make and keep, for a period of 5 years from the
20    date of the last payment made on a contract or subcontract
21    for construction of facilities for a project pursuant to
22    an agreement, records of all laborers and other workers
23    employed by the contractor or subcontractor on the
24    project; the records shall include:
25            (A) the worker's name;

 

 

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1            (B) the worker's address;
2            (C) the worker's telephone number, if available;
3            (D) the worker's social security number;
4            (E) the worker's classification or
5        classifications;
6            (F) the worker's gross and net wages paid in each
7        pay period;
8            (G) the worker's number of hours worked in each
9        day;
10            (H) the worker's starting and ending times of work
11        each day;
12            (I) the worker's hourly wage rate; and
13            (J) the worker's hourly overtime wage rate; and
14        (2) no later than the 15th day of each calendar month,
15    provide a certified payroll for the immediately preceding
16    month to the taxpayer in charge of the project; within 5
17    business days after receiving the certified payroll, the
18    Taxpayer shall file the certified payroll with the
19    Department of Labor and the Department; a certified
20    payroll must be filed for only those calendar months
21    during which construction on the project facilities has
22    occurred; the certified payroll shall consist of a
23    complete copy of the records identified in paragraph (1),
24    but may exclude the starting and ending times of work each
25    day; the certified payroll shall be accompanied by a
26    statement signed by the contractor or subcontractor or an

 

 

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1    officer, employee, or agent of the contractor or
2    subcontractor which avers that:
3            (A) he or she has examined the certified payroll
4        records required to be submitted by the Act and such
5        records are true and accurate; and
6            (B) the contractor or subcontractor is aware that
7        filing a certified payroll that he or she knows to be
8        false is a Class A misdemeanor.
9    A general contractor is not prohibited from relying on a
10certified payroll of a lower-tier subcontractor, provided the
11general contractor does not knowingly rely upon a
12subcontractor's false certification.
13    (b) Any contractor or subcontractor subject to this
14Section, and any officer, employee, or agent of such
15contractor or subcontractor whose duty as an officer,
16employee, or agent it is to file a certified payroll under this
17Section, who willfully fails to file such a certified payroll,
18on or before the date such certified payroll is required to be
19filed and any person who willfully files a false certified
20payroll as to any material fact is in violation of this Act and
21guilty of a Class A misdemeanor and may be enforced by the
22Illinois Department of Labor or the Department. The Attorney
23General shall represented the Illinois Department of Labor or
24the Department in the proceeding.
25    (c) The taxpayer in charge of the project shall keep the
26records submitted in accordance with this Section for a period

 

 

HB4634- 34 -LRB102 23012 HLH 32166 b

1of 5 years from the date of the last payment for work on a
2contract or subcontract for the project.
3    (d) The records submitted in accordance with this Section
4shall be considered public records, except an employee's
5address, telephone number, and social security number, which
6shall be redacted. The records shall be made publicly
7available in accordance with the Freedom of Information Act.
8The contractor or subcontractor shall submit reports to the
9Department of Labor electronically that meet the requirements
10of this subsection and shall share the information with the
11Department to comply with the awarding of the MICRO
12Construction Jobs Credit. A contractor, subcontractor, or
13public body may retain records required under this Section in
14paper or electronic format.
15    (e) Upon 7 business days' notice, the contractor and each
16subcontractor shall make available for inspection and copying
17at a location within this State during reasonable hours, the
18records identified in paragraph (1) of this subsection to the
19Taxpayer in charge of the Project, its officers and agents,
20the Director of the Department of Labor and his/her deputies
21and agents, and to federal, State, or local law enforcement
22agencies and prosecutors.
 
23    Section 70. Noncompliance; notice; assessment. If the
24Director determines that a taxpayer who has received a credit
25under this Act is not complying with the requirements of the

 

 

HB4634- 35 -LRB102 23012 HLH 32166 b

1agreement or all of the provisions of this Act, the Director
2shall provide notice to the taxpayer of the alleged
3noncompliance and allow the taxpayer a hearing under the
4provisions of the Illinois Administrative Procedure Act. If,
5after such notice and any hearing, the Director determines
6that a noncompliance exists, the Director shall issue to the
7Department of Revenue notice to that effect, stating the
8noncompliance date. If, during the term of an agreement, the
9taxpayer ceases operations at a project location that is the
10subject of that agreement with the intent to terminate
11operations in the State, the Department and the Department of
12Revenue shall recapture from the taxpayer the entire credit
13amount awarded under that agreement prior to the date the
14taxpayer ceases operations. The Department shall, subject to
15appropriation, reallocate the recaptured amounts within 6
16months to the local workforce investment area in which the
17project was located for purposes of workforce development,
18expanded opportunities for unemployed persons, and expanded
19opportunities for women and minority persons in the workforce.
20The taxpayer will be ineligible for future funding under other
21State tax credit or exemption programs for a 36-month period.
22Noncompliance of the agreement with result in a default of
23other agreements for State tax credits and exemption programs
24for the project.
 
25    Section 75. Annual report.

 

 

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1    (a) On or before July 1 each year, the Department shall
2submit a report on the tax credit program under this Act to the
3Governor and the General Assembly. The report shall include
4information on the number of agreements that were entered into
5under this Act during the preceding calendar year, a
6description of the project that is the subject of each
7agreement, an update on the status of projects under
8agreements entered into before the preceding calendar year,
9and the sum of the credits awarded under this Act. A copy of
10the report shall be delivered to the Governor and to each
11member of the General Assembly.
12    (b) The report must include, for each agreement:
13        (1) the original estimates of the value of the credit
14    and the number of new employee jobs to be created and, if
15    applicable, the number of retained employee jobs;
16        (2) any relevant modifications to existing agreements;
17        (3) a statement of the progress made by each taxpayer
18    in meeting the terms of the original agreement;
19        (4) a statement of wages paid to new employees and, if
20    applicable, retained employees in the State; and
21        (5) a copy of the original agreement or link to the
22    agreement on the Department's website.
 
23    Section 80. Evaluation of tax credit program. The
24Department shall evaluate the tax credit program every three
25years and issue a report. The evaluation shall include an

 

 

HB4634- 37 -LRB102 23012 HLH 32166 b

1assessment of the effectiveness of the program in creating new
2jobs in Illinois and of the revenue impact of the program and
3may include a review of the practices and experiences of other
4states with similar programs. The Director shall submit a
5report on the evaluation to the Governor and the General
6Assembly three years after the Effective Date of the Act and
7every three years thereafter.
 
8    Section 85. Sunset of new agreements. The Department shall
9not enter into any new Agreements under the provisions of this
10Act after December 31, 2028.
 
11    Section 95. Utility tax exemptions for MICRO projects. The
12Department may certify a taxpayer with a credit for a project
13that meets the qualifications under Section paragraphs (1),
14(2), and (4) of subsection (c) of Section 20, subject to an
15agreement under this Act, for an exemption from the tax
16imposed at the project site by Section 2-4 of the Electricity
17Excise Tax Law. To receive such certification, the taxpayer
18must be registered to self-assess that tax. The taxpayer is
19also exempt from any additional charges added to the
20taxpayer's utility bills at the project site as a pass-on of
21State utility taxes under Section 9-222 of the Public
22Utilities Act. The taxpayer must meet any other the criteria
23for certification set by the Department.
24    The Department shall determine the period during which the

 

 

HB4634- 38 -LRB102 23012 HLH 32166 b

1exemption from the Electricity Excise Tax Law and the charges
2imposed under Section 9-222 of the Public Utilities Act are in
3effect, which shall not exceed 10 years from the date of the
4taxpayer's initial receipt of certification from the
5Department under this Section.
6    The Department is authorized to adopt rules to carry out
7the provisions of this Section, including procedures to apply
8for the exemptions; to define the amounts and types of
9eligible investments that an applicant must make in order to
10receive electricity excise tax exemptions or exemptions from
11the additional charges imposed under Section 9-222 and the
12Public Utilities Act; to approve such electricity excise tax
13exemptions for applicants whose investments are not yet placed
14in service; and to require that an applicant granted an
15electricity excise tax exemption or an exemption from
16additional charges under Section 9-222 of the Public Utilities
17Act repay the exempted amount if the Applicant fails to comply
18with the terms and conditions of the agreement.
19    Upon certification by the Department under this Section,
20the Department shall notify the Department of Revenue of the
21certification. The Department of Revenue shall notify the
22public utilities of the exempt status of any taxpayer
23certified for exemption under this Act from the electricity
24excise tax or pass-on charges. The exemption status shall take
25effect within 3 months after certification of the taxpayer and
26notice to the Department of Revenue by the Department.
 

 

 

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1    Section 100. Investment tax credits for MICRO projects.
2Subject to the conditions set forth in this Act, a Taxpayer is
3entitled to an investment tax credit toward taxes imposed
4pursuant to subsections (a) and (b) of Section 201 of the
5Illinois Income Tax Act for a taxable year in which the
6Taxpayer, in accordance with an Agreement under this Act for
7that taxable year, invests in qualified property which is
8placed in service at the site of a project. The Department has
9authority to certify the amount of such investment tax credits
10to the Department of Revenue. The credit shall be 0.5% of the
11basis for such property and shall be determined in accordance
12with Section 239 of the Illinois Income Tax Act. The credit
13shall be available only in the taxable year in which the
14property is placed in service and shall not be allowed to the
15extent that it would reduce a taxpayer's liability for the tax
16imposed by subsections (a) and (b) of Section 201 of the
17Illinois Income Tax Act to below zero. Unused credit may be
18carried forward in accordance with Section 239 of the Illinois
19Income Tax Act for use in future taxable years. Any taxpayer
20qualifying for the Investment Tax Credit shall not be eligible
21for either the investment tax credits in Section 201(e), (f),
22or (h) of the Illinois Income Tax Act.
 
23    Section 105. Building materials exemptions for project
24sites.

 

 

HB4634- 40 -LRB102 23012 HLH 32166 b

1    (a) The Department may certify a Taxpayer with a project
2that meets the qualifications under paragraphs (1), (2), or
3(4) of subsection (c) of Section 20, subject to an agreement
4under this Act, for an exemption from any State or local use
5tax or retailers' occupation tax on building materials for the
6construction of its project facilities. The taxpayer must meet
7any criteria for certification set by the Department under
8this Act.
9    The Department shall determine the period during which the
10exemption from State and local use tax and retailers'
11occupation tax are in effect, but in no event shall exceed 5
12years in accordance with Section 5m of the Retailers'
13Occupation Tax Act.
14    The Department is authorized to promulgate rules and
15regulations to carry out the provisions of this Section,
16including procedures to apply for the exemption; to define the
17amounts and types of eligible investments that an applicant
18must make in order to receive tax exemption; to approve such
19tax exemption for an applicant whose investments are not yet
20placed in service; and to require that an applicant granted
21exemption repay the exempted amount if the applicant fails to
22comply with the terms and conditions of the agreement with the
23Department.
24    Upon certification by the Department under this Section,
25the Department shall notify the Department of Revenue of the
26certification. The exemption status shall take effect within 3

 

 

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1months after certification of the taxpayer and notice to the
2Department of Revenue by the Department.
 
3    Section 905. The Illinois Income Tax Act is amended by
4changing Section 704A and by adding Sections 238 and 239 as
5follows:
 
6    (35 ILCS 5/238 new)
7    Sec. 238. MICRO credits.
8(a) For tax years beginning on or after January 1, 2026, a
9taxpayer who has entered into an agreement under the
10Manufacturing Illinois Chips for Real Opportunity (MICRO) Act
11is entitled to a credit against the taxes imposed under
12subsections (a) and (b) of Section 201 of this Act in an amount
13to be determined in the Agreement. The taxpayer may elect to
14claim the credit, on or after January 1, 2026, against its
15obligation to pay over withholding under Section 704A of this
16Act as provided in this Section. If the taxpayer is a
17partnership or Subchapter S corporation, the credit shall be
18allowed to the partners or shareholders in accordance with the
19determination of income and distributive share of income under
20Sections 702 and 704 and subchapter S of the Internal Revenue
21Code. The Department, in cooperation with the Department of
22Commerce and Economic Opportunity, shall adopt rules to
23enforce and administer the provisions of this Section. This
24Section is exempt from the provisions of Section 250 of this

 

 

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1Act.
2    (b) The credit is subject to the conditions set forth in
3the agreement and the following limitations:
4        (1) The tax credit may be in the form of either or both
5    the MICRO Illinois Credit or the MICRO Construction Jobs
6    Credit and shall not exceed the percentage of incremental
7    income tax and percentage of training costs permitted in
8    that Act and in the agreement with respect to the project.
9        (2) The amount of the credit allowed during a tax year
10    plus the sum of all amounts allowed in prior tax years
11    shall not exceed the maximum amount of credit established
12    in the agreement.
13        (3) The amount of the credit shall be determined on an
14    annual basis. Except as applied in a carryover year
15    pursuant to paragraph (4), the credit may not be applied
16    against any State income tax liability in more than 15
17    taxable years.
18        (4) The credit may not exceed the amount of taxes
19    imposed pursuant to subsections (a) and (b) of Section 201
20    of this Act. Any credit that is unused in the year the
21    credit is computed may be carried forward and applied to
22    the tax liability of the 5 taxable years following the
23    excess credit year. The credit shall be applied to the
24    earliest year for which there is a tax liability. If there
25    are credits from more than one tax year that are available
26    to offset a liability, the earlier credit shall be applied

 

 

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1    first.
2        (5) No credit shall be allowed with respect to any
3    agreement for any taxable year ending after the
4    noncompliance date. Upon receiving notification by the
5    Department of Commerce and Economic Opportunity of the
6    noncompliance of a taxpayer with an agreement, the
7    Department shall notify the taxpayer that no credit is
8    allowed with respect to that agreement for any taxable
9    year ending after the noncompliance date, as stated in
10    such notification. If any credit has been allowed with
11    respect to an agreement for a taxable year ending after
12    the noncompliance date for that agreement, any refund paid
13    to the taxpayer for that taxable year shall, to the extent
14    of that credit allowed, be an erroneous refund within the
15    meaning of Section 912 of this Act.
16        If, during any taxable year, a taxpayer ceases
17    operations at a project location that is the subject of
18    that agreement with the intent to terminate operations in
19    the State, the tax imposed under subsections (a) and (b)
20    of Section 201 of this Act for such taxable year shall be
21    increased by the amount of any credit allowed under the
22    Agreement for that Project location prior to the date the
23    Taxpayer ceases operations.
24        (6) Instead of claiming the credit against the taxes
25    imposed under subsections (a) and (b) of Section 201 of
26    this Act, with respect to the portion of a MICRO Illinois

 

 

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1    credit that is calculated based on the Incremental Income
2    Tax attributable to new employees and retained employees,
3    the taxpayer may elect, in accordance with the
4    Manufacturing Illinois Chips for Real Opportunity (MICRO)
5    Act, to claim the credit, on or after January 1, 2026,
6    against its obligation to pay over withholding under
7    Section 704A of the Illinois Income Tax Act. Any credit
8    for which a Taxpayer makes such an election shall not be
9    claimed against the taxes imposed under subsections (a)
10    and (b) of Section 201 of this Act.
 
11    (35 ILCS 5/239 new)
12    Sec. 239. MICRO Investment Tax credits.
13    (a) For tax years beginning on or after the effective date
14of this amendatory Act of the 102nd General Assembly, a
15taxpayer shall be allowed a credit against the tax imposed by
16subsections (a) and (b) of Section 201 for investment in
17qualified property which is placed in service at the site of a
18project that is subject to an agreement between the taxpayer
19and the Department of Commerce and Economic Opportunity
20pursuant to the Manufacturing Illinois Chips for Real
21Opportunity (MICRO) Act. For partners, shareholders of
22Subchapter S corporations, and owners of limited liability
23companies, if the liability company is treated as a
24partnership for purposes of federal and State income taxation,
25there shall be allowed a credit under this Section to be

 

 

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1determined in accordance with the determination of income and
2distributive share of income under Sections 702 and 704 and
3Subchapter S of the Internal Revenue Code. The credit shall be
40.5% of the basis for such property. The credit shall be
5available only in the taxable year in which the property is
6placed in service and shall not be allowed to the extent that
7it would reduce a taxpayer's liability for the tax imposed by
8subsections (a) and (b) of Section 201 to below zero. The
9credit shall be allowed for the tax year in which the property
10is placed in service, or, if the amount of the credit exceeds
11the tax liability for that year, whether it exceeds the
12original liability or the liability as later amended, such
13excess may be carried forward and applied to the tax liability
14of the 5 taxable years following the excess credit year. The
15credit shall be applied to the earliest year for which there is
16a liability. If there is credit from more than one tax year
17that is available to offset a liability, the credit accruing
18first in time shall be applied first.
19    (b) The term qualified property means property which:
20        (1) is tangible, whether new or used, including
21    buildings and structural components of buildings;
22        (2) is depreciable pursuant to Section 167 of the
23    Internal Revenue Code, except that "3-year property" as
24    defined in Section 168(c)(2)(A) of that Code is not
25    eligible for the credit provided by this Section;
26        (3) is acquired by purchase as defined in Section

 

 

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1    179(d) of the Internal Revenue Code;
2        (4) is used at the site of the MICRO Illinois project
3    by the taxpayer; and
4        (5) has not been previously used in Illinois in such a
5    manner and by such a person as would qualify for the credit
6    provided by this Section.
7    (c) The basis of qualified property shall be the basis
8used to compute the depreciation deduction for federal income
9tax purposes.
10    (d) If the basis of the property for federal income tax
11depreciation purposes is increased after it has been placed in
12service at the site of the project by the taxpayer, the amount
13of such increase shall be deemed property placed in service on
14the date of such increase in basis.
15    (e) The term "placed in service" shall have the same
16meaning as under Section 46 of the Internal Revenue Code.
17    (f) If during any taxable year, any property ceases to be
18qualified property in the hands of the taxpayer within 48
19months after being placed in service, or the situs of any
20qualified property is moved from the project site within 48
21months after being placed in service, the tax imposed under
22subsections (a) and (b) of Section 201 for such taxable year
23shall be increased. Such increase shall be determined by (i)
24recomputing the investment credit which would have been
25allowed for the year in which credit for such property was
26originally allowed by eliminating such property from such

 

 

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1computation, and (ii) subtracting such recomputed credit from
2the amount of credit previously allowed. For the purposes of
3this subsection (f), a reduction of the basis of qualified
4property resulting from a redetermination of the purchase
5price shall be deemed a disposition of qualified property to
6the extent of such reduction.
 
7    (35 ILCS 5/704A)
8    Sec. 704A. Employer's return and payment of tax withheld.
9    (a) In general, every employer who deducts and withholds
10or is required to deduct and withhold tax under this Act on or
11after January 1, 2008 shall make those payments and returns as
12provided in this Section.
13    (b) Returns. Every employer shall, in the form and manner
14required by the Department, make returns with respect to taxes
15withheld or required to be withheld under this Article 7 for
16each quarter beginning on or after January 1, 2008, on or
17before the last day of the first month following the close of
18that quarter.
19    (c) Payments. With respect to amounts withheld or required
20to be withheld on or after January 1, 2008:
21        (1) Semi-weekly payments. For each calendar year, each
22    employer who withheld or was required to withhold more
23    than $12,000 during the one-year period ending on June 30
24    of the immediately preceding calendar year, payment must
25    be made:

 

 

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1            (A) on or before each Friday of the calendar year,
2        for taxes withheld or required to be withheld on the
3        immediately preceding Saturday, Sunday, Monday, or
4        Tuesday;
5            (B) on or before each Wednesday of the calendar
6        year, for taxes withheld or required to be withheld on
7        the immediately preceding Wednesday, Thursday, or
8        Friday.
9        Beginning with calendar year 2011, payments made under
10    this paragraph (1) of subsection (c) must be made by
11    electronic funds transfer.
12        (2) Semi-weekly payments. Any employer who withholds
13    or is required to withhold more than $12,000 in any
14    quarter of a calendar year is required to make payments on
15    the dates set forth under item (1) of this subsection (c)
16    for each remaining quarter of that calendar year and for
17    the subsequent calendar year.
18        (3) Monthly payments. Each employer, other than an
19    employer described in items (1) or (2) of this subsection,
20    shall pay to the Department, on or before the 15th day of
21    each month the taxes withheld or required to be withheld
22    during the immediately preceding month.
23        (4) Payments with returns. Each employer shall pay to
24    the Department, on or before the due date for each return
25    required to be filed under this Section, any tax withheld
26    or required to be withheld during the period for which the

 

 

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1    return is due and not previously paid to the Department.
2    (d) Regulatory authority. The Department may, by rule:
3        (1) Permit employers, in lieu of the requirements of
4    subsections (b) and (c), to file annual returns due on or
5    before January 31 of the year for taxes withheld or
6    required to be withheld during the previous calendar year
7    and, if the aggregate amounts required to be withheld by
8    the employer under this Article 7 (other than amounts
9    required to be withheld under Section 709.5) do not exceed
10    $1,000 for the previous calendar year, to pay the taxes
11    required to be shown on each such return no later than the
12    due date for such return.
13        (2) Provide that any payment required to be made under
14    subsection (c)(1) or (c)(2) is deemed to be timely to the
15    extent paid by electronic funds transfer on or before the
16    due date for deposit of federal income taxes withheld
17    from, or federal employment taxes due with respect to, the
18    wages from which the Illinois taxes were withheld.
19        (3) Designate one or more depositories to which
20    payment of taxes required to be withheld under this
21    Article 7 must be paid by some or all employers.
22        (4) Increase the threshold dollar amounts at which
23    employers are required to make semi-weekly payments under
24    subsection (c)(1) or (c)(2).
25    (e) Annual return and payment. Every employer who deducts
26and withholds or is required to deduct and withhold tax from a

 

 

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1person engaged in domestic service employment, as that term is
2defined in Section 3510 of the Internal Revenue Code, may
3comply with the requirements of this Section with respect to
4such employees by filing an annual return and paying the taxes
5required to be deducted and withheld on or before the 15th day
6of the fourth month following the close of the employer's
7taxable year. The Department may allow the employer's return
8to be submitted with the employer's individual income tax
9return or to be submitted with a return due from the employer
10under Section 1400.2 of the Unemployment Insurance Act.
11    (f) Magnetic media and electronic filing. With respect to
12taxes withheld in calendar years prior to 2017, any W-2 Form
13that, under the Internal Revenue Code and regulations
14promulgated thereunder, is required to be submitted to the
15Internal Revenue Service on magnetic media or electronically
16must also be submitted to the Department on magnetic media or
17electronically for Illinois purposes, if required by the
18Department.
19    With respect to taxes withheld in 2017 and subsequent
20calendar years, the Department may, by rule, require that any
21return (including any amended return) under this Section and
22any W-2 Form that is required to be submitted to the Department
23must be submitted on magnetic media or electronically.
24    The due date for submitting W-2 Forms shall be as
25prescribed by the Department by rule.
26    (g) For amounts deducted or withheld after December 31,

 

 

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12009, a taxpayer who makes an election under subsection (f) of
2Section 5-15 of the Economic Development for a Growing Economy
3Tax Credit Act for a taxable year shall be allowed a credit
4against payments due under this Section for amounts withheld
5during the first calendar year beginning after the end of that
6taxable year equal to the amount of the credit for the
7incremental income tax attributable to full-time employees of
8the taxpayer awarded to the taxpayer by the Department of
9Commerce and Economic Opportunity under the Economic
10Development for a Growing Economy Tax Credit Act for the
11taxable year and credits not previously claimed and allowed to
12be carried forward under Section 211(4) of this Act as
13provided in subsection (f) of Section 5-15 of the Economic
14Development for a Growing Economy Tax Credit Act. The credit
15or credits may not reduce the taxpayer's obligation for any
16payment due under this Section to less than zero. If the amount
17of the credit or credits exceeds the total payments due under
18this Section with respect to amounts withheld during the
19calendar year, the excess may be carried forward and applied
20against the taxpayer's liability under this Section in the
21succeeding calendar years as allowed to be carried forward
22under paragraph (4) of Section 211 of this Act. The credit or
23credits shall be applied to the earliest year for which there
24is a tax liability. If there are credits from more than one
25taxable year that are available to offset a liability, the
26earlier credit shall be applied first. Each employer who

 

 

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1deducts and withholds or is required to deduct and withhold
2tax under this Act and who retains income tax withholdings
3under subsection (f) of Section 5-15 of the Economic
4Development for a Growing Economy Tax Credit Act must make a
5return with respect to such taxes and retained amounts in the
6form and manner that the Department, by rule, requires and pay
7to the Department or to a depositary designated by the
8Department those withheld taxes not retained by the taxpayer.
9For purposes of this subsection (g), the term taxpayer shall
10include taxpayer and members of the taxpayer's unitary
11business group as defined under paragraph (27) of subsection
12(a) of Section 1501 of this Act. This Section is exempt from
13the provisions of Section 250 of this Act. No credit awarded
14under the Economic Development for a Growing Economy Tax
15Credit Act for agreements entered into on or after January 1,
162015 may be credited against payments due under this Section.
17    (g-1) For amounts deducted or withheld after December 31,
182024, a taxpayer who makes an election under the Reimagining
19Electric Vehicles in Illinois Act shall be allowed a credit
20against payments due under this Section for amounts withheld
21during the first quarterly reporting period beginning after
22the certificate is issued equal to the portion of the REV
23Illinois Credit attributable to the incremental income tax
24attributable to new employees and retained employees as
25certified by the Department of Commerce and Economic
26Opportunity pursuant to an agreement with the taxpayer under

 

 

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1the Reimagining Electric Vehicles in Illinois Act for the
2taxable year. The credit or credits may not reduce the
3taxpayer's obligation for any payment due under this Section
4to less than zero. If the amount of the credit or credits
5exceeds the total payments due under this Section with respect
6to amounts withheld during the quarterly reporting period, the
7excess may be carried forward and applied against the
8taxpayer's liability under this Section in the succeeding
9quarterly reporting period as allowed to be carried forward
10under paragraph (4) of Section 211 of this Act. The credit or
11credits shall be applied to the earliest quarterly reporting
12period for which there is a tax liability. If there are credits
13from more than one quarterly reporting period that are
14available to offset a liability, the earlier credit shall be
15applied first. Each employer who deducts and withholds or is
16required to deduct and withhold tax under this Act and who
17retains income tax withholdings this subsection must make a
18return with respect to such taxes and retained amounts in the
19form and manner that the Department, by rule, requires and pay
20to the Department or to a depositary designated by the
21Department those withheld taxes not retained by the taxpayer.
22For purposes of this subsection (g-1), the term taxpayer shall
23include taxpayer and members of the taxpayer's unitary
24business group as defined under paragraph (27) of subsection
25(a) of Section 1501 of this Act. This Section is exempt from
26the provisions of Section 250 of this Act.

 

 

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1    (g-2) For amounts deducted or withheld after December 31,
22025, a taxpayer who makes an election under the Manufacturing
3Illinois Chips for Real Opportunity (MICRO) Act shall be
4allowed a credit against payments due under this Section for
5amounts withheld during the first quarterly reporting period
6beginning after the certificate is issued equal to the portion
7of the MICRO Illinois Credit attributable to the incremental
8income tax attributable to new employees and retained
9employees as certified by the Department of Commerce and
10Economic Opportunity pursuant to an agreement with the
11taxpayer under the Manufacturing Illinois Chips for Real
12Opportunity (MICRO) Act for the taxable year. The credit or
13credits may not reduce the taxpayer's obligation for any
14payment due under this Section to less than zero. If the amount
15of the credit or credits exceeds the total payments due under
16this Section with respect to amounts withheld during the
17quarterly reporting period, the excess may be carried forward
18and applied against the taxpayer's liability under this
19Section in the succeeding quarterly reporting period as
20allowed to be carried forward under paragraph (4) of Section
21211 of this Act. The credit or credits shall be applied to the
22earliest quarterly reporting period for which there is a tax
23liability. If there are credits from more than one quarterly
24reporting period that are available to offset a liability, the
25earlier credit shall be applied first. Each employer who
26deducts and withholds or is required to deduct and withhold

 

 

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1tax under this Act and who retains income tax withholdings
2this subsection must make a return with respect to such taxes
3and retained amounts in the form and manner that the
4Department, by rule, requires and pay to the Department or to a
5depositary designated by the Department those withheld taxes
6not retained by the taxpayer. For purposes of this subsection,
7the term taxpayer shall include taxpayer and members of the
8taxpayer's unitary business group as defined under paragraph
9(27) of subsection (a) of Section 1501 of this Act. This
10Section is exempt from the provisions of Section 250 of this
11Act.
12    (h) An employer may claim a credit against payments due
13under this Section for amounts withheld during the first
14calendar year ending after the date on which a tax credit
15certificate was issued under Section 35 of the Small Business
16Job Creation Tax Credit Act. The credit shall be equal to the
17amount shown on the certificate, but may not reduce the
18taxpayer's obligation for any payment due under this Section
19to less than zero. If the amount of the credit exceeds the
20total payments due under this Section with respect to amounts
21withheld during the calendar year, the excess may be carried
22forward and applied against the taxpayer's liability under
23this Section in the 5 succeeding calendar years. The credit
24shall be applied to the earliest year for which there is a tax
25liability. If there are credits from more than one calendar
26year that are available to offset a liability, the earlier

 

 

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1credit shall be applied first. This Section is exempt from the
2provisions of Section 250 of this Act.
3    (i) Each employer with 50 or fewer full-time equivalent
4employees during the reporting period may claim a credit
5against the payments due under this Section for each qualified
6employee in an amount equal to the maximum credit allowable.
7The credit may be taken against payments due for reporting
8periods that begin on or after January 1, 2020, and end on or
9before December 31, 2027. An employer may not claim a credit
10for an employee who has worked fewer than 90 consecutive days
11immediately preceding the reporting period; however, such
12credits may accrue during that 90-day period and be claimed
13against payments under this Section for future reporting
14periods after the employee has worked for the employer at
15least 90 consecutive days. In no event may the credit exceed
16the employer's liability for the reporting period. Each
17employer who deducts and withholds or is required to deduct
18and withhold tax under this Act and who retains income tax
19withholdings under this subsection must make a return with
20respect to such taxes and retained amounts in the form and
21manner that the Department, by rule, requires and pay to the
22Department or to a depositary designated by the Department
23those withheld taxes not retained by the employer.
24    For each reporting period, the employer may not claim a
25credit or credits for more employees than the number of
26employees making less than the minimum or reduced wage for the

 

 

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1current calendar year during the last reporting period of the
2preceding calendar year. Notwithstanding any other provision
3of this subsection, an employer shall not be eligible for
4credits for a reporting period unless the average wage paid by
5the employer per employee for all employees making less than
6$55,000 during the reporting period is greater than the
7average wage paid by the employer per employee for all
8employees making less than $55,000 during the same reporting
9period of the prior calendar year.
10    For purposes of this subsection (i):
11    "Compensation paid in Illinois" has the meaning ascribed
12to that term under Section 304(a)(2)(B) of this Act.
13    "Employer" and "employee" have the meaning ascribed to
14those terms in the Minimum Wage Law, except that "employee"
15also includes employees who work for an employer with fewer
16than 4 employees. Employers that operate more than one
17establishment pursuant to a franchise agreement or that
18constitute members of a unitary business group shall aggregate
19their employees for purposes of determining eligibility for
20the credit.
21    "Full-time equivalent employees" means the ratio of the
22number of paid hours during the reporting period and the
23number of working hours in that period.
24    "Maximum credit" means the percentage listed below of the
25difference between the amount of compensation paid in Illinois
26to employees who are paid not more than the required minimum

 

 

HB4634- 58 -LRB102 23012 HLH 32166 b

1wage reduced by the amount of compensation paid in Illinois to
2employees who were paid less than the current required minimum
3wage during the reporting period prior to each increase in the
4required minimum wage on January 1. If an employer pays an
5employee more than the required minimum wage and that employee
6previously earned less than the required minimum wage, the
7employer may include the portion that does not exceed the
8required minimum wage as compensation paid in Illinois to
9employees who are paid not more than the required minimum
10wage.
11        (1) 25% for reporting periods beginning on or after
12    January 1, 2020 and ending on or before December 31, 2020;
13        (2) 21% for reporting periods beginning on or after
14    January 1, 2021 and ending on or before December 31, 2021;
15        (3) 17% for reporting periods beginning on or after
16    January 1, 2022 and ending on or before December 31, 2022;
17        (4) 13% for reporting periods beginning on or after
18    January 1, 2023 and ending on or before December 31, 2023;
19        (5) 9% for reporting periods beginning on or after
20    January 1, 2024 and ending on or before December 31, 2024;
21        (6) 5% for reporting periods beginning on or after
22    January 1, 2025 and ending on or before December 31, 2025.
23    The amount computed under this subsection may continue to
24be claimed for reporting periods beginning on or after January
251, 2026 and:
26        (A) ending on or before December 31, 2026 for

 

 

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1    employers with more than 5 employees; or
2        (B) ending on or before December 31, 2027 for
3    employers with no more than 5 employees.
4    "Qualified employee" means an employee who is paid not
5more than the required minimum wage and has an average wage
6paid per hour by the employer during the reporting period
7equal to or greater than his or her average wage paid per hour
8by the employer during each reporting period for the
9immediately preceding 12 months. A new qualified employee is
10deemed to have earned the required minimum wage in the
11preceding reporting period.
12    "Reporting period" means the quarter for which a return is
13required to be filed under subsection (b) of this Section.
14(Source: P.A. 101-1, eff. 2-19-19; 102-669, eff. 11-16-21.)
 
15    Section 910. The Retailers' Occupation Tax Act is amended
16by adding Section 5n as follows:
 
17    (35 ILCS 120/5n new)
18    Sec. 5n. Building materials exemption; microchip and
19semiconductor manufacturing. Each retailer who makes a sale of
20building materials that will be incorporated into real estate
21in a qualified facility for which a certificate of exemption
22has been issued by the Department of Commerce and Economic
23Opportunity under Section 105 of the Manufacturing Illinois
24Chips for Real Opportunity (MICRO) Act, may deduct receipts

 

 

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1from such sales when calculating any State or local use and
2occupation taxes. No retailer who is eligible for the
3deduction or credit under Section 5k of this Act related to
4enterprise zones or Section 5l of this Act related to High
5Impact Businesses for a given sale shall be eligible for the
6deduction or credit authorized under this Section for that
7same sale.
8    In addition to any other requirements to document the
9exemption allowed under this Section, the retailer must obtain
10the purchaser's exemption certificate number issued by the
11Department. A construction contractor or other entity shall
12not make tax-free purchases unless it has an active exemption
13certificate issued by the Department at the time of purchase.
14    Upon request from a person that has been certified by the
15Department of Commerce and Economic Opportunity under the
16Manufacturing Illinois Chips for Real Opportunity (MICRO) Act,
17the Department shall issue a MICRO Illinois Building Materials
18Exemption Certificate for each construction contractor or
19other entity identified by the person so certified. The
20Department shall make the MICRO Illinois Building Materials
21Exemption Certificates available to each construction
22contractor or other entity as well as the person certified
23under the Manufacturing Illinois Chips for Real Opportunity
24(MICRO) Act. The request for MICRO Illinois Building Materials
25Exemption Certificates must include the following information:
26        (1) the name and address of the construction

 

 

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1    contractor or other entity;
2        (2) the name and location or address of the building
3    project site;
4        (3) the estimated amount of the exemption for each
5    construction contractor or other entity for which a
6    request for an exemption certificate is made, based on a
7    stated estimated average tax rate and the percentage of
8    the contract that consists of materials;
9        (4) the period of time over which supplies for the
10    project are expected to be purchased; and
11        (5) other reasonable information as the Department may
12    require, including but not limited to FEIN numbers, to
13    determine if the contractor or other entity, or any
14    partner, or a corporate officer, and in the case of a
15    limited liability company, any manager or member, of the
16    construction contractor or other entity, is or has been
17    the owner, a partner, a corporate officer, and in the case
18    of a limited liability company, a manager or member, of a
19    person that is in default for moneys due to the Department
20    under this Act or any other tax or fee Act administered by
21    the Department.
22    The Department shall issue the exemption certificate
23within 3 business days after receipt of request. This
24requirement does not apply in circumstances where the
25Department, for reasonable cause, is unable to issue the
26exemption certificate within 3 business days. The Department

 

 

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1may refuse to issue an exemption certificate under this
2Section if the owner, any partner, or a corporate officer, and
3in the case of a limited liability company, any manager or
4member, of the construction contractor or other entity is or
5has been the owner, a partner, a corporate officer, and in the
6case of a limited liability company, a manager or member, of a
7person that is in default for moneys due to the Department
8under this Act or any other tax or fee Act administered by the
9Department.
10    The MICRO Illinois Building Materials Exemption
11Certificate shall contain language stating that, if the
12construction contractor or other entity who is issued the
13exemption certificate makes a tax-exempt purchase, as
14described in this Section, that is not eligible for exemption
15under this Section or allows another person to make a
16tax-exempt purchase, as described in this Section, that is not
17eligible for exemption under this Section, then, in addition
18to any tax or other penalty imposed, the construction
19contractor or other entity is subject to a penalty equal to the
20tax that would have been paid by the retailer under this Act as
21well as any applicable local retailers' occupation tax on the
22purchase that is not eligible for the exemption.
23    The Department, in its discretion, may require that the
24request for a MICRO Illinois Exemption Certificate be
25submitted electronically. The Department may, in its
26discretion, issue the exemption certificates electronically.

 

 

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1The MICRO Illinois Building Materials Exemption Certificate
2number shall be designed in such a way that the Department can
3identify from the unique number on the exemption certificate
4issued to a given construction contractor or other entity, the
5name of the entity to whom the exemption certificate is
6issued. The MICRO Illinois Building Materials Exemption
7Certificate shall contain an expiration date, which shall be
8no more than 5 years after the date of issuance. At the request
9of the entity to whom the exemption certificate is issued, the
10Department may renew an exemption certificate issued under
11this Section. After the Department issues exemption
12certificates under this Section, the certified entity may
13notify the Department of additional construction contractors
14or other entities eligible for an exemption certificate under
15this Section. Upon such a notification and subject to the
16other provisions of this Section, the Department shall issue
17an exemption certificate to each additional qualified
18construction contractor or other entity so identified. A
19certified entity may notify the Department to rescind an
20exemption certificate previously issued by the Department that
21has not yet expired. Upon such a notification and subject to
22the other provisions of this Section, the Department shall
23rescind the exemption certificate.
24    If the Department of Revenue determines that a
25construction contractor or other entity that was issued an
26exemption certificate under this Section made a tax-exempt

 

 

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1purchase, as described in this Section, that was not eligible
2for exemption under this Section or allowed another person to
3make a tax-exempt purchase, as described in this Section, that
4was not eligible for exemption under this Section, then, in
5addition to any tax or other penalty imposed, the construction
6contractor or other entity is subject to a penalty equal to the
7tax that would have been paid by the retailer under this Act as
8well as any applicable local retailers' occupation tax on the
9purchase that was not eligible for the exemption.
10    This Section is exempt from the provisions of Section
112-70.
 
12    Section 915. The Property Tax Code is amended by adding
13Section 18-184.20 as follows:
 
14    (35 ILCS 200/18-184.20 new)
15    Sec. 18-184.20. MICRO Illinois project facilities. Any
16taxing district, upon a majority vote of its governing body,
17may, after determination of the assessed value as set forth in
18this Code, order the clerk of the appropriate municipality or
19county to abate any portion of real property taxes otherwise
20levied or extended by the taxing district on a MICRO Illinois
21Project facility owned by a semiconductor manufacturer or
22microchip manufacturer or a semiconductor or microchip
23component parts manufacturer that is subject to an agreement
24with the Department of Commerce and Economic Opportunity under

 

 

HB4634- 65 -LRB102 23012 HLH 32166 b

1the Manufacturing Illinois Chips for Real Opportunity (MICRO)
2Act, during the period of time such agreement is in effect as
3specified by the Department of Commerce and Economic
4Opportunity.
 
5    Section 920. The Telecommunications Excise Tax Act is
6amended by changing Section 2 as follows:
 
7    (35 ILCS 630/2)  (from Ch. 120, par. 2002)
8    Sec. 2. As used in this Article, unless the context
9clearly requires otherwise:
10    (a) "Gross charge" means the amount paid for the act or
11privilege of originating or receiving telecommunications in
12this State and for all services and equipment provided in
13connection therewith by a retailer, valued in money whether
14paid in money or otherwise, including cash, credits, services
15and property of every kind or nature, and shall be determined
16without any deduction on account of the cost of such
17telecommunications, the cost of materials used, labor or
18service costs or any other expense whatsoever. In case credit
19is extended, the amount thereof shall be included only as and
20when paid. "Gross charges" for private line service shall
21include charges imposed at each channel termination point
22within this State, charges for the channel mileage between
23each channel termination point within this State, and charges
24for that portion of the interstate inter-office channel

 

 

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1provided within Illinois. Charges for that portion of the
2interstate inter-office channel provided in Illinois shall be
3determined by the retailer as follows: (i) for interstate
4inter-office channels having 2 channel termination points,
5only one of which is in Illinois, 50% of the total charge
6imposed; or (ii) for interstate inter-office channels having
7more than 2 channel termination points, one or more of which
8are in Illinois, an amount equal to the total charge
9multiplied by a fraction, the numerator of which is the number
10of channel termination points within Illinois and the
11denominator of which is the total number of channel
12termination points. Prior to January 1, 2004, any method
13consistent with this paragraph or other method that reasonably
14apportions the total charges for interstate inter-office
15channels among the states in which channel terminations points
16are located shall be accepted as a reasonable method to
17determine the charges for that portion of the interstate
18inter-office channel provided within Illinois for that period.
19However, "gross charges" shall not include any of the
20following:
21        (1) Any amounts added to a purchaser's bill because of
22    a charge made pursuant to (i) the tax imposed by this
23    Article; (ii) charges added to customers' bills pursuant
24    to the provisions of Sections 9-221 or 9-222 of the Public
25    Utilities Act, as amended, or any similar charges added to
26    customers' bills by retailers who are not subject to rate

 

 

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1    regulation by the Illinois Commerce Commission for the
2    purpose of recovering any of the tax liabilities or other
3    amounts specified in such provisions of such Act; (iii)
4    the tax imposed by Section 4251 of the Internal Revenue
5    Code; (iv) 911 surcharges; or (v) the tax imposed by the
6    Simplified Municipal Telecommunications Tax Act.
7        (2) Charges for a sent collect telecommunication
8    received outside of the State.
9        (3) Charges for leased time on equipment or charges
10    for the storage of data or information for subsequent
11    retrieval or the processing of data or information
12    intended to change its form or content. Such equipment
13    includes, but is not limited to, the use of calculators,
14    computers, data processing equipment, tabulating equipment
15    or accounting equipment and also includes the usage of
16    computers under a time-sharing agreement.
17        (4) Charges for customer equipment, including such
18    equipment that is leased or rented by the customer from
19    any source, wherein such charges are disaggregated and
20    separately identified from other charges.
21        (5) Charges to business enterprises certified under
22    Section 9-222.1 of the Public Utilities Act, as amended,
23    or to electric vehicle manufacturers, electric vehicle
24    component parts manufacturers, or electric vehicle power
25    supply manufacturers at REV Illinois Project sites for
26    which a certificate of exemption has been issued by the

 

 

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1    Department of Commerce and Economic Opportunity under
2    Section 95 of the Reimagining Electric Vehicles in
3    Illinois Act, to the extent of such exemption and during
4    the period of time specified by the Department of Commerce
5    and Economic Opportunity.
6        (5.1) Charges to business enterprises certified under
7    the Manufacturing Illinois Chips for Real Opportunity
8    (MICRO) Act.
9        (6) Charges for telecommunications and all services
10    and equipment provided in connection therewith between a
11    parent corporation and its wholly owned subsidiaries or
12    between wholly owned subsidiaries when the tax imposed
13    under this Article has already been paid to a retailer and
14    only to the extent that the charges between the parent
15    corporation and wholly owned subsidiaries or between
16    wholly owned subsidiaries represent expense allocation
17    between the corporations and not the generation of profit
18    for the corporation rendering such service.
19        (7) Bad debts. Bad debt means any portion of a debt
20    that is related to a sale at retail for which gross charges
21    are not otherwise deductible or excludable that has become
22    worthless or uncollectable, as determined under applicable
23    federal income tax standards. If the portion of the debt
24    deemed to be bad is subsequently paid, the retailer shall
25    report and pay the tax on that portion during the
26    reporting period in which the payment is made.

 

 

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1        (8) Charges paid by inserting coins in coin-operated
2    telecommunication devices.
3        (9) Amounts paid by telecommunications retailers under
4    the Telecommunications Municipal Infrastructure
5    Maintenance Fee Act.
6        (10) Charges for nontaxable services or
7    telecommunications if (i) those charges are aggregated
8    with other charges for telecommunications that are
9    taxable, (ii) those charges are not separately stated on
10    the customer bill or invoice, and (iii) the retailer can
11    reasonably identify the nontaxable charges on the
12    retailer's books and records kept in the regular course of
13    business. If the nontaxable charges cannot reasonably be
14    identified, the gross charge from the sale of both taxable
15    and nontaxable services or telecommunications billed on a
16    combined basis shall be attributed to the taxable services
17    or telecommunications. The burden of proving nontaxable
18    charges shall be on the retailer of the
19    telecommunications.
20    (b) "Amount paid" means the amount charged to the
21taxpayer's service address in this State regardless of where
22such amount is billed or paid.
23    (c) "Telecommunications", in addition to the meaning
24ordinarily and popularly ascribed to it, includes, without
25limitation, messages or information transmitted through use of
26local, toll and wide area telephone service; private line

 

 

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1services; channel services; telegraph services;
2teletypewriter; computer exchange services; cellular mobile
3telecommunications service; specialized mobile radio;
4stationary two way radio; paging service; or any other form of
5mobile and portable one-way or two-way communications; or any
6other transmission of messages or information by electronic or
7similar means, between or among points by wire, cable,
8fiber-optics, laser, microwave, radio, satellite or similar
9facilities. As used in this Act, "private line" means a
10dedicated non-traffic sensitive service for a single customer,
11that entitles the customer to exclusive or priority use of a
12communications channel or group of channels, from one or more
13specified locations to one or more other specified locations.
14The definition of "telecommunications" shall not include value
15added services in which computer processing applications are
16used to act on the form, content, code and protocol of the
17information for purposes other than transmission.
18"Telecommunications" shall not include purchases of
19telecommunications by a telecommunications service provider
20for use as a component part of the service provided by him to
21the ultimate retail consumer who originates or terminates the
22taxable end-to-end communications. Carrier access charges,
23right of access charges, charges for use of inter-company
24facilities, and all telecommunications resold in the
25subsequent provision of, used as a component of, or integrated
26into end-to-end telecommunications service shall be

 

 

HB4634- 71 -LRB102 23012 HLH 32166 b

1non-taxable as sales for resale.
2    (d) "Interstate telecommunications" means all
3telecommunications that either originate or terminate outside
4this State.
5    (e) "Intrastate telecommunications" means all
6telecommunications that originate and terminate within this
7State.
8    (f) "Department" means the Department of Revenue of the
9State of Illinois.
10    (g) "Director" means the Director of Revenue for the
11Department of Revenue of the State of Illinois.
12    (h) "Taxpayer" means a person who individually or through
13his agents, employees or permittees engages in the act or
14privilege of originating or receiving telecommunications in
15this State and who incurs a tax liability under this Article.
16    (i) "Person" means any natural individual, firm, trust,
17estate, partnership, association, joint stock company, joint
18venture, corporation, limited liability company, or a
19receiver, trustee, guardian or other representative appointed
20by order of any court, the Federal and State governments,
21including State universities created by statute or any city,
22town, county or other political subdivision of this State.
23    (j) "Purchase at retail" means the acquisition,
24consumption or use of telecommunication through a sale at
25retail.
26    (k) "Sale at retail" means the transmitting, supplying or

 

 

HB4634- 72 -LRB102 23012 HLH 32166 b

1furnishing of telecommunications and all services and
2equipment provided in connection therewith for a consideration
3to persons other than the Federal and State governments, and
4State universities created by statute and other than between a
5parent corporation and its wholly owned subsidiaries or
6between wholly owned subsidiaries for their use or consumption
7and not for resale.
8    (l) "Retailer" means and includes every person engaged in
9the business of making sales at retail as defined in this
10Article. The Department may, in its discretion, upon
11application, authorize the collection of the tax hereby
12imposed by any retailer not maintaining a place of business
13within this State, who, to the satisfaction of the Department,
14furnishes adequate security to insure collection and payment
15of the tax. Such retailer shall be issued, without charge, a
16permit to collect such tax. When so authorized, it shall be the
17duty of such retailer to collect the tax upon all of the gross
18charges for telecommunications in this State in the same
19manner and subject to the same requirements as a retailer
20maintaining a place of business within this State. The permit
21may be revoked by the Department at its discretion.
22    (m) "Retailer maintaining a place of business in this
23State", or any like term, means and includes any retailer
24having or maintaining within this State, directly or by a
25subsidiary, an office, distribution facilities, transmission
26facilities, sales office, warehouse or other place of

 

 

HB4634- 73 -LRB102 23012 HLH 32166 b

1business, or any agent or other representative operating
2within this State under the authority of the retailer or its
3subsidiary, irrespective of whether such place of business or
4agent or other representative is located here permanently or
5temporarily, or whether such retailer or subsidiary is
6licensed to do business in this State.
7    (n) "Service address" means the location of
8telecommunications equipment from which the telecommunications
9services are originated or at which telecommunications
10services are received by a taxpayer. In the event this may not
11be a defined location, as in the case of mobile phones, paging
12systems, maritime systems, service address means the
13customer's place of primary use as defined in the Mobile
14Telecommunications Sourcing Conformity Act. For air-to-ground
15systems and the like, service address shall mean the location
16of a taxpayer's primary use of the telecommunications
17equipment as defined by telephone number, authorization code,
18or location in Illinois where bills are sent.
19    (o) "Prepaid telephone calling arrangements" mean the
20right to exclusively purchase telephone or telecommunications
21services that must be paid for in advance and enable the
22origination of one or more intrastate, interstate, or
23international telephone calls or other telecommunications
24using an access number, an authorization code, or both,
25whether manually or electronically dialed, for which payment
26to a retailer must be made in advance, provided that, unless

 

 

HB4634- 74 -LRB102 23012 HLH 32166 b

1recharged, no further service is provided once that prepaid
2amount of service has been consumed. Prepaid telephone calling
3arrangements include the recharge of a prepaid calling
4arrangement. For purposes of this subsection, "recharge" means
5the purchase of additional prepaid telephone or
6telecommunications services whether or not the purchaser
7acquires a different access number or authorization code.
8"Prepaid telephone calling arrangement" does not include an
9arrangement whereby a customer purchases a payment card and
10pursuant to which the service provider reflects the amount of
11such purchase as a credit on an invoice issued to that customer
12under an existing subscription plan.
13(Source: P.A. 102-669, eff. 11-16-21.)
 
14    Section 925. The Electricity Excise Tax Law is amended by
15changing Section 2-4 as follows:
 
16    (35 ILCS 640/2-4)
17    Sec. 2-4. Tax imposed.
18    (a) Except as provided in subsection (b), a tax is imposed
19on the privilege of using in this State electricity purchased
20for use or consumption and not for resale, other than by
21municipal corporations owning and operating a local
22transportation system for public service, at the following
23rates per kilowatt-hour delivered to the purchaser:
24        (i) For the first 2000 kilowatt-hours used or consumed

 

 

HB4634- 75 -LRB102 23012 HLH 32166 b

1    in a month: 0.330 cents per kilowatt-hour;
2        (ii) For the next 48,000 kilowatt-hours used or
3    consumed in a month: 0.319 cents per kilowatt-hour;
4        (iii) For the next 50,000 kilowatt-hours used or
5    consumed in a month: 0.303 cents per kilowatt-hour;
6        (iv) For the next 400,000 kilowatt-hours used or
7    consumed in a month: 0.297 cents per kilowatt-hour;
8        (v) For the next 500,000 kilowatt-hours used or
9    consumed in a month: 0.286 cents per kilowatt-hour;
10        (vi) For the next 2,000,000 kilowatt-hours used or
11    consumed in a month: 0.270 cents per kilowatt-hour;
12        (vii) For the next 2,000,000 kilowatt-hours used or
13    consumed in a month: 0.254 cents per kilowatt-hour;
14        (viii) For the next 5,000,000 kilowatt-hours used or
15    consumed in a month: 0.233 cents per kilowatt-hour;
16        (ix) For the next 10,000,000 kilowatt-hours used or
17    consumed in a month: 0.207 cents per kilowatt-hour;
18        (x) For all electricity in excess of 20,000,000
19    kilowatt-hours used or consumed in a month: 0.202 cents
20    per kilowatt-hour.
21    Provided, that in lieu of the foregoing rates, the tax is
22imposed on a self-assessing purchaser at the rate of 5.1% of
23the self-assessing purchaser's purchase price for all
24electricity distributed, supplied, furnished, sold,
25transmitted and delivered to the self-assessing purchaser in a
26month.

 

 

HB4634- 76 -LRB102 23012 HLH 32166 b

1    (b) A tax is imposed on the privilege of using in this
2State electricity purchased from a municipal system or
3electric cooperative, as defined in Article XVII of the Public
4Utilities Act, which has not made an election as permitted by
5either Section 17-200 or Section 17-300 of such Act, at the
6lesser of 0.32 cents per kilowatt hour of all electricity
7distributed, supplied, furnished, sold, transmitted, and
8delivered by such municipal system or electric cooperative to
9the purchaser or 5% of each such purchaser's purchase price
10for all electricity distributed, supplied, furnished, sold,
11transmitted, and delivered by such municipal system or
12electric cooperative to the purchaser, whichever is the lower
13rate as applied to each purchaser in each billing period.
14    (c) The tax imposed by this Section 2-4 is not imposed with
15respect to any use of electricity by business enterprises
16certified under Section 9-222.1 or 9-222.1A of the Public
17Utilities Act, as amended, to the extent of such exemption and
18during the time specified by the Department of Commerce and
19Economic Opportunity; or with respect to any transaction in
20interstate commerce, or otherwise, to the extent to which such
21transaction may not, under the Constitution and statutes of
22the United States, be made the subject of taxation by this
23State.
24    (d) The tax imposed by this Section 2-4 is not imposed with
25respect to any use of electricity at a REV Illinois Project
26site that has received a certification for tax exemption from

 

 

HB4634- 77 -LRB102 23012 HLH 32166 b

1the Department of Commerce and Economic Opportunity pursuant
2to Section 95 of the Reimagining Electric Vehicles in Illinois
3Act, to the extent of such exemption, which shall be no more
4than 10 years.
5    (e) The tax imposed by this Section 2-4 is not imposed with
6respect to any use of electricity at a project site that has
7received a certification for tax exemption from the Department
8of Commerce and Economic Opportunity pursuant to the
9Manufacturing Illinois Chips for Real Opportunity (MICRO) Act,
10to the extent of such exemption, which shall be no more than 10
11years.
12(Source: P.A. 102-669, eff. 11-16-21.)
 
13    Section 930. The Public Utilities Act is amended by
14changing Section 9-222 as follows:
 
15    (220 ILCS 5/9-222)  (from Ch. 111 2/3, par. 9-222)
16    Sec. 9-222. Whenever a tax is imposed upon a public
17utility engaged in the business of distributing, supplying,
18furnishing, or selling gas for use or consumption pursuant to
19Section 2 of the Gas Revenue Tax Act, or whenever a tax is
20required to be collected by a delivering supplier pursuant to
21Section 2-7 of the Electricity Excise Tax Act, or whenever a
22tax is imposed upon a public utility pursuant to Section 2-202
23of this Act, such utility may charge its customers, other than
24customers who are high impact businesses under Section 5.5 of

 

 

HB4634- 78 -LRB102 23012 HLH 32166 b

1the Illinois Enterprise Zone Act, electric vehicle
2manufacturers, electric vehicle component parts manufacturers,
3or electric vehicle power supply equipment manufacturers at
4REV Illinois Project sites as certified under Section 95 of
5the Reimagining Electric Vehicles in Illinois Act,
6manufacturers under the Manufacturing Illinois Chips for Real
7Opportunity (MICRO) Act, or certified business enterprises
8under Section 9-222.1 of this Act, to the extent of such
9exemption and during the period in which such exemption is in
10effect, in addition to any rate authorized by this Act, an
11additional charge equal to the total amount of such taxes. The
12exemption of this Section relating to high impact businesses
13shall be subject to the provisions of subsections (a), (b),
14and (b-5) of Section 5.5 of the Illinois Enterprise Zone Act.
15This requirement shall not apply to taxes on invested capital
16imposed pursuant to the Messages Tax Act, the Gas Revenue Tax
17Act and the Public Utilities Revenue Act. Such utility shall
18file with the Commission a supplemental schedule which shall
19specify such additional charge and which shall become
20effective upon filing without further notice. Such additional
21charge shall be shown separately on the utility bill to each
22customer. The Commission shall have the power to investigate
23whether or not such supplemental schedule correctly specifies
24such additional charge, but shall have no power to suspend
25such supplemental schedule. If the Commission finds, after a
26hearing, that such supplemental schedule does not correctly

 

 

HB4634- 79 -LRB102 23012 HLH 32166 b

1specify such additional charge, it shall by order require a
2refund to the appropriate customers of the excess, if any,
3with interest, in such manner as it shall deem just and
4reasonable, and in and by such order shall require the utility
5to file an amended supplemental schedule corresponding to the
6finding and order of the Commission. Except with respect to
7taxes imposed on invested capital, such tax liabilities shall
8be recovered from customers solely by means of the additional
9charges authorized by this Section.
10(Source: P.A. 102-669, eff. 11-16-21.)
 
11    Section 999. Effective date. This Act takes effect upon
12becoming law.