102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB5479

 

Introduced 1/31/2022, by Rep. David A. Welter

 

SYNOPSIS AS INTRODUCED:
 
New Act
35 ILCS 5/232 new

    Creates the Grocery Store New Construction Tax Credit Act. Creates a tax credit for taxpayers who undertake a project to construct a new grocery store in the State, subject to certain capital investment and employment requirements. Amends the Illinois Income Tax Act to make conforming changes. Effective immediately.


LRB102 25059 HLH 34319 b

 

 

A BILL FOR

 

HB5479LRB102 25059 HLH 34319 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
5Grocery Store New Construction Tax Credit Act.
 
6    Section 5. Definitions. As used in this Act:
7    "Credit" means the amount agreed to between the Department
8and applicant under this Act, but not to exceed the lesser of:
9(1) the sum of (i) 50% of the incremental income tax
10attributable to new employees at the applicant's project and
11(ii) 10% of the training costs of new employees; or (2) 100% of
12the incremental income tax attributable to new employees at
13the applicant's project. However, if the project is located in
14an underserved area, then the amount of the credit may not
15exceed the lesser of: (1) the sum of (i) 75% of the incremental
16income tax attributable to new employees at the applicant's
17project and (ii) 10% of the training costs of new employees; or
18(2) 100% of the incremental income tax attributable to new
19employees at the applicant's project.
20    "Department" means the Department of Commerce and Economic
21Opportunity.
22    "Full-time employee" means an individual who is employed
23for consideration for at least 35 hours each week or who

 

 

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1renders any other standard of service generally accepted by
2industry custom or practice as full-time employment. An
3individual for whom a W-2 is issued by a Professional Employer
4Organization (PEO) is a full-time employee if employed in the
5service of the applicant for consideration for at least 35
6hours each week or who renders any other standard of service
7generally accepted by industry custom or practice as full-time
8employment to the applicant.
9    "Grocery store" means a retail establishment located in
10this State that primarily sells food and beverages for
11consumption off the premises of the establishment.
12    "Incremental income tax" means the total amount withheld
13during the taxable year from the compensation of new employees
14arising from employment at a project that is the subject of an
15Agreement.
16    "New employee" means:
17        (1) a full-time employee first employed by a taxpayer
18    in the project that is the subject of an agreement who is
19    hired after the taxpayer enters into the tax credit
20    agreement.
21        (2) The term "new employee" does not include:
22            (A) an employee of the taxpayer who performs a job
23        that was previously performed by another employee, if
24        that job existed for at least 6 months before hiring
25        the employee;
26            (B) an employee of the taxpayer who was previously

 

 

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1        employed in Illinois by a related member of the
2        taxpayer and whose employment was shifted to the
3        taxpayer after the taxpayer entered into the tax
4        credit agreement; or
5            (C) a child, grandchild, parent, or spouse, other
6        than a spouse who is legally separated from the
7        individual, of any individual who has a direct or an
8        indirect ownership interest of at least 5% in the
9        profits, capital, or value of the taxpayer.
10    An employee may be considered a new employee under the
11agreement if the employee performs a job that was previously
12performed by an employee who was:
13        (1) treated under the agreement as a new employee; and
14        (2) promoted by the taxpayer to another job.
15    "Project" means the construction of a new grocery store in
16the State.
17    "Related member" has the meaning given to that term in
18Section 5-5 of the Economic Development for a Growing Economy
19Tax Credit Act.
20    "Underserved area" means a geographic area that meets one
21or more of the following conditions:
22        (1) the area has a poverty rate of at least 20%
23    according to the latest federal decennial census;
24        (2) 75% or more of the children in the area
25    participate in the federal free lunch program according to
26    reported statistics from the State Board of Education;

 

 

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1        (3) at least 20% of the households in the area receive
2    assistance under the Supplemental Nutrition Assistance
3    Program (SNAP); or
4        (4) the area has an average unemployment rate, as
5    determined by the Illinois Department of Employment
6    Security, that is more than 120% of the national
7    unemployment average, as determined by the U.S. Department
8    of Labor, for a period of at least 2 consecutive calendar
9    years preceding the date of the application.
 
10    Section 10. Tax credit awards.
11    (a) Subject to the conditions set forth in this Act, a
12taxpayer is entitled to a credit against taxes imposed
13pursuant to subsections (a), (b), and (p) of Section 201 of the
14Illinois Income Tax Act for taxable years beginning on or
15after January 1, 2023 if the taxpayer is awarded a credit by
16the Department under this Act for that taxable year.
17    (b) The Department shall make credit awards under this Act
18to encourage job creation and to facilitate the construction
19of new grocery stores in the State.
20    (c) A person that proposes a project to construct a new
21grocery store in Illinois must enter into an agreement with
22the Department for the credit under this Act.
23    (d) The credit shall be claimed for the taxable years
24specified in the agreement.
25    (e) The credit shall not exceed the incremental income tax

 

 

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1attributable to the project that is the subject of the
2agreement.
3    (f) Nothing in this Act shall prohibit a tax credit award
4to an applicant that uses a PEO if all other award criteria are
5satisfied.
 
6    Section 15. Application for a project to create and retain
7new jobs.
8    (a) Any taxpayer proposing a project located or planned to
9be located in Illinois may request consideration for
10designation of its project, by formal written letter of
11request or by formal application to the Department, in which
12the applicant states its intent to make at least a specified
13level of investment and intends to hire or retain a specified
14number of full-time employees at a designated location in
15Illinois. As circumstances require, the Department may require
16a formal application from an applicant and a formal letter of
17request for assistance.
18    (b) In order to qualify for credits under this Act, an
19applicant's project must conform to each of the following:
20        (1) If the applicant has more than 100 employees, the
21    applicant's project must involve an investment of at least
22    $2,500,000 in capital improvements to be placed in service
23    within the State as a direct result of the project. If the
24    applicant has 100 or fewer employees, then there is no
25    capital investment requirement.

 

 

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1        (2) If the applicant has more than 100 employees, the
2    applicant's project must employ a number of new employees
3    in the State equal to the lesser of: (A) 10% of the number
4    of full-time employees employed by the applicant
5    world-wide on the date the application is filed with the
6    Department; or (B) 50 new employees. If the applicant has
7    100 or fewer employees, the applicant's project must
8    employ a number of new employees in the State equal to the
9    lesser of: (A) 5% of the number of full-time employees
10    employed by the applicant world-wide on the date the
11    application is filed with the Department; or (B) 50 new
12    employees.
13    (c) The Department shall determine which projects will
14benefit the State. In making its recommendation that an
15Applicant's application for Credit should or should not be
16accepted, which shall occur within a reasonable time frame as
17determined by the nature of the application.
18    (d) After receipt of an application, the Department may
19enter into an agreement with the applicant if the application
20is accepted.
 
21    Section 20. Amount and duration of the credit.
22    (a) The Department shall determine the amount and duration
23of the credit awarded under this Act. The duration of the
24credit may not exceed 10 taxable years. The credit may be
25stated as a percentage of the incremental income tax

 

 

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1attributable to the applicant's project and may include a
2fixed dollar limitation.
3    (b) Notwithstanding subsection (a), and except as the
4credit may be applied in a carryover year, the credit may be
5applied against the State income tax liability in more than 10
6taxable years but not in more than 15 taxable years for an
7eligible business that (i) qualifies under this Act and the
8Corporate Headquarters Relocation Act and has in fact
9undertaken a qualifying project within the time frame
10specified by the Department of Commerce and Economic
11Opportunity under that Act, and (ii) applies against its State
12income tax liability, during the entire 15-year period, no
13more than 60% of the maximum credit per year that would
14otherwise be available under this Act.
15    (c) Nothing in this Section shall prevent the Department,
16in consultation with the Department of Revenue, from adopting
17rules to extend the sunset of any earned, existing, and unused
18tax credit or credits.
19    (d) The credit under this Act is exempt from the
20provisions of Section 250 of the Illinois Income Tax Act.
 
21    Section 25. Relocation of jobs in Illinois. A taxpayer is
22not entitled to claim the credit provided by this Act with
23respect to any jobs that the taxpayer relocates from one site
24in Illinois to another site in Illinois. A taxpayer with
25respect to a qualifying project certified under the Corporate

 

 

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1Headquarters Relocation Act, however, is not subject to the
2requirements of this Section but is nevertheless considered an
3applicant for purposes of this Act. Moreover, any full-time
4employee of an eligible business relocated to Illinois in
5connection with that qualifying project is deemed to be a new
6employee for purposes of this Act. Determinations under this
7Section shall be made by the Department.
 
8    Section 30. Powers of the Department. In addition to those
9powers granted under the Civil Administrative Code of
10Illinois, the Department is granted and shall have all the
11powers necessary or convenient to carry out and effectuate the
12purposes and provisions of this Act, including, but not
13limited to, the power to adopt rules and the powers set forth
14in Section 5-10 of the Economic Development for a Growing
15Economy Tax Credit Act, provided that those powers are not
16inconsistent with this Act.
 
17    Section 35. Sexual harassment policy report. Each taxpayer
18claiming a credit under this Act shall, no later than April 15
19of each taxable year for which the taxpayer claims a credit
20under this Act, submit to the Department of Commerce and
21Economic Opportunity a report detailing that taxpayer's sexual
22harassment policy, which contains, at a minimum, the following
23information: (i) the illegality of sexual harassment; (ii) the
24definition of sexual harassment under State law; (iii) a

 

 

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1description of sexual harassment, utilizing examples; (iv) the
2vendor's internal complaint process, including penalties; (v)
3the legal recourse, and investigative and complaint processes
4available through the Department; (vi) directions on how to
5contact the Department; and (vii) protection against
6retaliation as provided by Section 6-101 of the Illinois Human
7Rights Act. A copy of the policy shall be provided to the
8Department upon request. The reports required under this
9Section shall be submitted in a form and manner determined by
10the Department of Commerce and Economic Opportunity.
 
11    Section 50. The Illinois Income Tax Act is amended by
12adding Section 232 as follows:
 
13    (35 ILCS 5/232 new)
14    Sec. 232. Grocery Store New Construction Tax Credit Act. A
15taxpayer who is awarded a credit under the Grocery Store New
16Construction Tax Credit Act is entitled to a credit against
17the taxes imposed by subsections (a), (b), and (p) of Section
18201 as provided in that Act.
 
19    Section 99. Effective date. This Act takes effect upon
20becoming law.