SB1514 104TH GENERAL ASSEMBLY

LRB104 09539 HLH 19602 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB1514

Introduced 2/4/2025, by Sen. Mark L. Walker

SYNOPSIS AS INTRODUCED:

See Index

Amends the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois. Provides that the Department of Commerce and Economic Opportunity may certify a taxpayer for an exemption from any State or local use tax or retailers' occupation tax on building materials that will be incorporated into real estate at a megaproject site. Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that a retailer that makes a qualified sale of building materials to be incorporated into real estate at a megaproject site may deduct the receipts from such sales when calculating the taxes imposed by those Acts. Amends the Property Tax Code. Creates the Megaproject Assessment Freeze and Payment Law. Provides that a "megaproject" is a project that meets certain investment and job creation specifications. Provides that the megaproject property is eligible for an assessment freeze. Provides that megaproject property may be granted an abatement. Provides that a company that operates a megaproject shall enter into an agreement with the municipality in which the project is located and other local taxing districts to make certain special payments. Effective July 1, 2025.

A BILL FOR

AN ACT concerning revenue.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 3. The Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois is amended by adding Section 605-1118 as follows:

(20 ILCS 605/605-1118 new)

Sec. 605-1118. Megaproject building materials exemption.

(a) The Department may certify a taxpayer for an exemption from any State or local use tax or retailers' occupation tax on building materials that will be incorporated into real estate at a megaproject site. The taxpayer must meet all of the criteria for certification set forth in Division 22 of Article 10 of the Property Tax Code. This certification is in addition to and does not replace or amend the megaproject certificate under Division 22 of Article 10 of the Property Tax Code. The Department shall not issue exemptions under this Section after December 31, 2030.

(b) The Department shall determine the period during which the exemption from State and local use taxes and retailers' occupation taxes is in effect, but in no event shall the initial period exceed 10 years. The certificate may be renewed for a period not to exceed 5 years. Upon certification by the Department under this Section, the Department shall notify the Department of Revenue of the certification. The exemption status shall take effect within 3 months after certification of the taxpayer and notice to the Department of Revenue by the Department.

(c) If the Department determines, in accordance with the Administrative Review Law and the Illinois Administrative Procedure Act, that the taxpayer is not in compliance with Division 22 of Article 10 of the Property Tax Code, the Department shall revoke the certification under this Section by written notice to the taxpayer. The Department shall transmit a copy of the revocation to the Department of Revenue. If the taxpayer's certification is revoked, the taxpayer must repay any exempted amount of State or local use tax or retailers' occupation tax.

(d) The Department may adopt rules as are reasonable and necessary to implement the provisions of this Section.

Section 5. The Use Tax Act is amended by changing Section 12 as follows:

(35 ILCS 105/12) (from Ch. 120, par. 439.12)

Sec. 12. Applicability of Retailers' Occupation Tax Act and Uniform Penalty and Interest Act. All of the provisions of Sections 1d, 1e, 1f, 1i, 1j, 1j.1, 1k, 1m, 1n, 1o, 2-6, 2-12, 2-28, 2-29, 2-54, 2a, 2b, 2c, 3, 4 (except that the time limitation provisions shall run from the date when the tax is due rather than from the date when gross receipts are received), 5 (except that the time limitation provisions on the issuance of notices of tax liability shall run from the date when the tax is due rather than from the date when gross receipts are received and except that in the case of a failure to file a return required by this Act, no notice of tax liability shall be issued on and after each July 1 and January 1 covering tax due with that return during any month or period more than 6 years before that July 1 or January 1, respectively), 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5h, 5j, 5k, 5l, 5m, 5n, 7, 8, 9, 10, 11 and 12 of the Retailers' Occupation Tax Act and Section 3-7 of the Uniform Penalty and Interest Act, which are not inconsistent with this Act, shall apply, as far as practicable, to the subject matter of this Act to the same extent as if such provisions were included herein.

(Source: P.A. 102-700, eff. 4-19-22; 103-9, eff. 6-7-23; 103-595, eff. 6-26-24.)

Section 10. The Service Use Tax Act is amended by changing Section 12 as follows:

(35 ILCS 110/12) (from Ch. 120, par. 439.42)

Sec. 12. Applicability of Retailers' Occupation Tax Act and Uniform Penalty and Interest Act. All of the provisions of Sections 1d, 1e, 1f, 1i, 1j, 1j.1, 1k, 1m, 1n, 1o, 2-6, 2-12, 2-28, 2-29, 2-54, 2a, 2b, 2c, 3 (except as to the disposition by the Department of the money collected under this Act), 4 (except that the time limitation provisions shall run from the date when gross receipts are received), 5 (except that the time limitation provisions on the issuance of notices of tax liability shall run from the date when the tax is due rather than from the date when gross receipts are received and except that in the case of a failure to file a return required by this Act, no notice of tax liability shall be issued on and after July 1 and January 1 covering tax due with that return during any month or period more than 6 years before that July 1 or January 1, respectively), 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5j, 5k, 5l, 5m, 5n, 6d, 7, 8, 9, 10, 11 and 12 of the Retailers' Occupation Tax Act which are not inconsistent with this Act, and Section 3-7 of the Uniform Penalty and Interest Act, shall apply, as far as practicable, to the subject matter of this Act to the same extent as if such provisions were included herein.

(Source: P.A. 102-700, eff. 4-19-22; 103-9, eff. 6-7-23; 103-595, eff. 6-26-24.)

Section 15. The Service Occupation Tax Act is amended by changing Section 12 as follows:

(35 ILCS 115/12) (from Ch. 120, par. 439.112)

Sec. 12. All of the provisions of Sections 1d, 1e, 1f, 1i, 1j, 1j.1, 1k, 1m, 1n, 1o, 2-6, 2-12, 2-28, 2-29, 2-54, 2a, 2b, 2c, 3 (except as to the disposition by the Department of the tax collected under this Act), 4 (except that the time limitation provisions shall run from the date when the tax is due rather than from the date when gross receipts are received), 5 (except that the time limitation provisions on the issuance of notices of tax liability shall run from the date when the tax is due rather than from the date when gross receipts are received), 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5j, 5k, 5l, 5m, 5n, 6d, 7, 8, 9, 10, 11, and 12 of the Retailers' Occupation Tax Act which are not inconsistent with this Act, and Section 3-7 of the Uniform Penalty and Interest Act shall apply, as far as practicable, to the subject matter of this Act to the same extent as if such provisions were included herein.

(Source: P.A. 102-700, eff. 4-19-22; 103-9, eff. 6-7-23; 103-595, eff. 6-26-24; 103-605, eff. 7-1-24.)

Section 20. The Retailers' Occupation Tax Act is amended by adding Section 2-28 as follows:

(35 ILCS 120/2-28 new)

Sec. 2-28. Megaproject building materials exemption.

(a) Each retailer that makes a qualified sale of building materials to be incorporated into real estate at a megaproject site certified by the Department of Commerce and Economic Opportunity under Section 605-1118 of the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois may deduct receipts from such sales when calculating the tax imposed by this Act. Megaproject Building Materials Exemption Certificates shall be issued for an initial period not to exceed 10 years and can be renewed for a period not to exceed 5 years.

(b) No retailer who is eligible for the deduction or credit for a given sale under Section 5k of this Act related to enterprise zones, Section 5l of this Act related to High Impact Businesses, Section 5m of this Act related to REV Illinois projects, or Section 5n of this Act related to MICRO facilities shall be eligible for the deduction or credit authorized under this Section for that same sale.

(c) A construction contractor or other entity shall not make tax-free purchases unless it has an active Exemption Certificate issued by the Department at the time of the purchase.

(d) The megaproject administrator shall submit a request to the Department for an initial certification or renewal of the Megaproject Building Materials Exemption Certificate. Upon request from the megaproject administrator, the Department shall issue a Megaproject Building Materials Exemption Certificate for each construction contractor or other entity identified by the megaproject administrator. The Department shall make the Megaproject Building Materials Exemption Certificates available to each construction contractor or other entity identified by the megaproject administrator and to the megaproject administrator. The request for Megaproject Building Materials Exemption Certificates under this Section must include the following information:

(1) the name and address of the construction contractor or other entity;

(2) the name and location or address of the building project site;

(3) the estimated amount of the exemption for each construction contractor or other entity for which a request for a Megaproject Building Materials Exemption Certificate is made, based on a stated estimated average tax rate and the percentage of the contract that consists of materials;

(4) the period of time during which supplies for the project are expected to be purchased; and

(5) other reasonable information as the Department may require, including, but not limited to, FEIN numbers, to determine if the contractor or other entity, or any partner, corporate officer, or, in the case of a limited liability company, any manager or member of the construction contractor or other entity is or has been the owner, partner, corporate officer, or, in the case of a limited liability company, manager or member of a person that is in default for moneys due to the Department under this Act or any other tax or fee Act administered by the Department.

The Department, in its discretion, may require that the request for a Megaproject Building Materials Exemption Certificate be submitted electronically. The Department may, in its discretion, issue Exemption Certificates electronically.

(e) To document the exemption allowed under this Section, the retailer must obtain from the purchaser the certification required under this Section, which must contain the Megaproject Building Materials Exemption Certificate number issued to the purchaser by the Department. In addition, the retailer must obtain certification from the purchaser that contains:

(1) a statement that the building materials are being purchased for incorporation into real estate located in a megaproject site;

(2) the location or address of the real estate into which the building materials will be incorporated;

(3) the name of the megaproject in which that real estate is located;

(4) a description of the building materials being purchased;

(5) the purchaser's Megaproject Building Materials Exemption Certificate number issued by the Department; and

(6) the purchaser's signature and date of purchase.

(f) The Department shall issue the Megaproject Building Materials Exemption Certificates within 3 business days after receipt of the request from the megaproject administrator. This requirement does not apply if the Department, for reasonable cause, is unable to issue the Exemption Certificate within 3 business days. The Department may refuse to issue a Megaproject Building Materials Exemption Certificate if the owner, any partner, or a corporate officer, and in the case of a limited liability company, any manager or member, of the construction contractor or other entity is or has been the owner, a partner, a corporate officer, and in the case of a limited liability company, a manager or member, of a person that is in default for moneys due to the Department under this Act or any other tax or fee Act administered by the Department.

(g) The Megaproject Building Materials Exemption Certificate shall contain:

(1) a unique identifying number that shall be designed in such a way that the Department can identify from the unique number on the Exemption Certificate issued to a given construction contractor or other entity, the name of the megaproject site and the construction contractor or other entity to whom the Exemption Certificate is issued;

(2) the name of the construction contractor or entity to whom the Exemption Certificate is issued;

(3) issuance date, effective date, and expiration date; and

(4) language stating that, if the construction contractor or other entity who is issued the Exemption Certificate makes a tax-exempt purchase, as described in this Section, that is not eligible for exemption under this Section or allows another person to make a tax-exempt purchase, as described in this Section, that is not eligible for exemption under this Section, then, in addition to any tax or other penalty imposed, the construction contractor or other entity is subject to a penalty equal to the tax that would have been paid by the retailer under this Act as well as any applicable local retailers' occupation tax on the purchase that is not eligible for the exemption.

(h) After the Department issues Exemption Certificates for a given megaproject, the megaproject administrator may notify the Department of additional construction contractors or other entities that are eligible for a Megaproject Building Materials Exemption Certificate. Upon receiving such a notification and subject to the other provisions of this Section, the Department shall issue a Megaproject Building Materials Exemption Certificate to each additional construction contractor or other entity so identified.

(i) A megaproject administrator may ask the Department to rescind a Megaproject Building Materials Exemption Certificate previously issued by the Department to a construction contractor or other entity working at that certified megaproject site if that Megaproject Building Materials Exemption Certificate has not yet expired. Upon receiving such a request and subject to the other provisions of this Section, the Department shall issue the rescission of the Megaproject Building Materials Exemption Certificate to the construction contractor or other entity identified by the megaproject administrator and provide a copy of the rescission to the construction contractor or other entity and to the megaproject administrator.

(j) If the Department of Revenue determines that a construction contractor or other entity that was issued an Exemption Certificate under this Section made a tax-exempt purchase, as described in this Section, that was not eligible for exemption under this Section or allowed another person to make a tax-exempt purchase, as described in this Section, that was not eligible for exemption under this Section, then, in addition to any tax or other penalty imposed, the construction contractor or other entity is subject to a penalty equal to the tax that would have been paid by the retailer under this Act as well as any applicable local retailers' occupation tax on the purchase that was not eligible for the exemption.

(k) Each contractor or other entity that has been issued a Megaproject Building Materials Exemption Certificate under this Section shall annually report to the Department the total value of the Megaproject building materials exemption from State taxes. Reports shall contain information reasonably required by the Department to enable it to verify and calculate the total tax benefits for taxes imposed by the State and shall be broken down by megaproject site. Reports are due no later than May 31 of each year and shall cover the previous calendar year. Failure to report data may result in revocation of the Megaproject Building Materials Exemption Certificate issued to the contractor or other entity. The Department is authorized to adopt rules governing revocation determinations, including the length of revocation. Factors to be considered in revocations shall include, but are not limited to, prior compliance with the reporting requirements, cooperation in discontinuing and correcting violations, and whether the certificate was used unlawfully during the preceding year. The Department, in its discretion, may require that the reports filed under this Section be submitted electronically.

(l) The Department shall have the authority to adopt rules as are reasonable and necessary to implement the provisions of this Section.

(m) This Section is exempt from the provisions of Section 2-70.

(n) This exemption applies to the Use Tax Act, the Service Use Tax Act, and the Service Occupation Tax Act and is incorporated by reference in Section 12 of each of those respective Acts.

(o) As used in this Section:

"Qualified sale" means a sale of building materials that will be incorporated into real estate as part of a building project for which a Megaproject Building Materials Exemption Certificate has been issued to the purchaser by the Department.

Section 25. The Property Tax Code is amended by adding Division 22 to Article 10 and changing as follows:

(35 ILCS 200/Art. 10 Div. 22 heading new)

Division 22. Megaprojects

(35 ILCS 200/10-910 new)

Sec. 10-910. Megaproject Assessment Freeze and Payment Law; definitions. This Division 22 may be cited as the Megaproject Assessment Freeze and Payment Law.

As used in this Division:

"Assessment officer" means the chief county assessment officer of the county in which the megaproject is located.

"Assessment period" means the period beginning on the first day of the calendar year after the calendar year in which a megaproject is placed in service and ending on the date when the megaproject no longer qualifies as a megaproject under this Division.

"Base tax year" means the tax year prior to the first calendar year during which the Department issues a megaproject certificate under this Division.

"Base year" means:

(1) the calendar year prior to the calendar year in which the Department issues the megaproject certificate, if the Department issues a megaproject certificate for a project located on the property without granting preliminary approval for the project pursuant to Section 10-940; or

(2) the calendar year prior to the calendar year in which the Department grants that preliminary approval, if the Department grants preliminary approval pursuant to Section 10-940 for a megaproject located on the property.

"Base year valuation" means the assessed value, in the base year, of the property comprising the megaproject.

"Company" means one or more entities whose aggregate investment in the megaproject meets the minimum investment required under this Division. The term "company" includes a company affiliate unless the context clearly indicates otherwise.

"Company affiliate" means an entity that joins with or is an affiliate of a company and that participates in the investment in, or financing of, a megaproject.

"Consumer Price Index" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100.

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

"Eligible costs" means all costs incurred by or on behalf of, or allocated to, a company, prior to the Department's issuance of the megaproject certificate or during the investment period, to create or construct a megaproject. "Eligible costs" includes, without limitation:

(1) the purchase, site preparation, renovation, rehabilitation, and construction of land, buildings, structures, equipment, and furnishings used for or in the megaproject;

(2) any goods or services for the megaproject that are purchased and capitalized under generally accepted accounting principles, including any organizational costs and research and development costs incurred in Illinois;

(3) capitalized lease costs for land, buildings, structures, and equipment valued at their present value using the interest rate at which the company borrows funds prevailing at the time the company entered into the lease;

(4) infrastructure development costs;

(5) debt service and project financing costs;

(6) noncapitalized research and development costs;

(7) job training and education costs;

(8) lease and relocation costs; and

(9) amounts expended by a company or company affiliate as a nonresponsible party pursuant to a voluntary program of site remediation, including amounts expended to obtain a No Further Remediation Letter from the Illinois Environmental Protection Agency.

"Entity" means a sole proprietor, partnership, firm, corporation, limited liability company, association, or other business enterprise.

"Full-time employee" means an individual who is employed for consideration for at least 35 hours each week or who renders any other standard of service generally accepted by industry custom or practice as a full-time employee. An individual for whom a W-2 is issued by a professional employer organization is a full-time employee if he or she is employed in the service of the applicant for at least 35 hours each week or renders any other standard of service generally accepted by industry custom or practice as a full-time employment. An owner, operator, or tenant who employs labor or services at a specific site or facility under contract with another may declare one full-time job for every 1,820 man-hours worked per year under the contract. Vacations, paid holidays, and sick time are included in this computation, but overtime is not considered a part of regular hours.

"High Impact Business" means a project that has been designated by the Department as a High Impact Business under Section 5.5 of the Illinois Enterprise Zone Act.

"Incentive agreement" means an agreement between a company, a local municipality, and the taxing districts obligating the company to make the special payment under this Division, in addition to paying property taxes, during the incentive period for a megaproject.

"Incentive period" means the period beginning on the first day of the calendar year after the calendar year in which the megaproject is placed in service and each calendar year thereafter until the earlier of (i) the expiration or termination of the incentive agreement or (ii) the revocation of the megaproject certificate.

"Inducement resolution" means a resolution adopted by the local municipality setting forth the commitment of the local municipality to enter into an incentive agreement.

"Investment period" means the period ending 7 years after the date on which the Department issues the megaproject certificate, or such other longer period of time as the local municipality, the taxing districts, and the company may agree to, not to exceed an initial period of 10 years.

"Local municipality" means the city, village, or incorporated town in which the megaproject is located or, if the megaproject is located in an unincorporated area, the county in which the megaproject is located.

"Megaproject" means the project set forth in the company's tax credit agreement or high impact business designation.

"Megaproject certificate" means a certificate issued by the Department that authorizes an assessment freeze as provided in this Division.

"Minimum investment" means an investment in the megaproject of at least $100,000,000 in eligible costs within the investment period.

"Minority person" means a person who is a citizen or lawful permanent resident of the United States and who is any of the following:

(1) American Indian or Alaska Native (a person having origins in any of the original peoples of North and South America, including Central America, and who maintains tribal affiliation or community attachment).

(2) Asian (a person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian subcontinent, including, but not limited to, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the Philippine Islands, Thailand, and Vietnam).

(3) Black or African American (a person having origins in any of the black racial groups of Africa).

(4) Hispanic or Latino (a person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin, regardless of race).

(5) Native Hawaiian or Other Pacific Islander (a person having origins in any of the original peoples of Hawaii, Guam, Samoa, or other Pacific Islands).

"Minority-owned business" means a business that is at least 51% owned by one or more minority persons, or that, in the case of a corporation, has at least 51% of its stock owned by one or more minority persons, and that, in either case, is managed and operated on a daily basis by one or more of the minority individuals who own the business.

"New full-time employee" means a full-time employee who first became employed by the owner, operator, contractor, or tenant of the megaproject during the incentive period or investment period and whose hiring results in a net increase in the owner, operator, contractor, or tenant's total number of full-time Illinois employees.

"New full-time employee" does not include:

(1) a person who was previously employed in Illinois by the applicant or a related family member prior to the onset of the investment or incentive period; or

(2) an individual who has a direct or indirect ownership interest of at least 5% in the profits, capital, or value of the applicant.

"Placed in service" means that the company has commenced its business operations at the megaproject site and has met its job creation requirements under this Section by hiring or causing to be hired at least 100 new full-time employees who provide support to the megaproject's business operations and work in the State of Illinois. If a company pauses or shuts down its business operations for a period of more than 30 days, then the megaproject shall no longer be considered placed in service.

"Project" means land, buildings, and other improvements on the land, including water facilities, sewage treatment and disposal facilities, and all other machinery, apparatuses, equipment, office facilities, related infrastructure, and furnishings that are considered necessary, suitable, or useful by a company and comprise the megaproject, including all such property subject to assessment under the Property Tax Code.

"Special payment" means the annual amount paid in addition to property taxes paid during the incentive period as provided in the incentive agreement.

"Tax credit agreement" means an agreement entered into by the company and the Department under the Economic Development for Growing Economy Tax Credit Act, the Reimagining Energy and Vehicles in Illinois Act, or the Manufacturing Illinois Chips for Real Opportunity (MICRO) Act.

"Taxing district" has the meaning given to that term in Section 1-150.

"Termination date" means the last day of a calendar year that is no later than the 23rd year following the first calendar year in which a megaproject is placed in service. A company may apply to the local municipality and taxing districts prior to the termination date for an extension of the termination date beyond the 23rd year for up to 17 additional years, for a total of 40 years. The corporate authorities of the local municipality and the taxing districts shall approve an extension by resolution upon a finding of substantial public benefit. A copy of the resolution must be delivered to the Department within 30 days of the date the resolution was adopted. If the incentive agreement is terminated under Section 10-937, then the termination date is the date the agreement is terminated.

(35 ILCS 200/10-915 new)

Sec. 10-915. Valuation during incentive period; eligibility.

(a) Property that receives a megaproject certificate from the Department is eligible for an assessment freeze, as provided in this Division, eliminating from consideration, for assessment purposes during the incentive period, the value added to the property by the project and limiting the total valuation of the property during the incentive period to the base year valuation. If the company does not anticipate completing the project within the investment period, then the local municipality and taxing districts may approve one or more extensions of time to complete the project. However, the local municipality and taxing districts may not extend the project for a period that exceeds 5 years after the last day of the investment period. Unless approved as part of the original incentive agreement, the corporate authorities of the local municipality and taxing districts may approve an extension under this subsection by resolution, a copy of which must be delivered to the Department within 30 days after the date the resolution is adopted.

(b) To qualify for a megaproject certificate, the company must:

(1) make the minimum investment in the megaproject during the investment period;

(2) enter into an incentive agreement with the local municipality and taxing districts as described in this Division;

(3) enter into a project labor agreement with the applicable local building trades council prior to the commencement of any demolition, building construction, or building renovation related to the megaproject;

(4) establish the goal of awarding 20% of the total dollar amount of contracts that are related to the megaproject and are awarded by the company during each calendar year to minority-owned businesses;

(5) create at least 100 new full-time jobs as a result of the megaproject; and

(6) have executed a tax credit agreement with the Department or received a high impact business designation from the Department.

(c) For purposes of this Division, if a single company enters into a financing arrangement of the type described in subsection (b) of Section 10-950, the investment in or financing of the property by a developer, lessor, financing entity, or other third party in accordance with this arrangement is considered investment by the company. Investment by a related person to the company is considered investment by the company.

(35 ILCS 200/10-920 new)

Sec. 10-920. Incentive agreement; assessment freeze for megaprojects; incentive period; inducement resolution; location of the project; criteria to qualify.

(a) To obtain the benefits provided in this Division, the company shall apply in writing to the local municipality and taxing districts to enter into an incentive agreement with the municipality and taxing districts, in the form and manner required by the local municipality and taxing districts, respectively, and shall certify to the facts asserted in the application.

(b) The corporate authorities of the local municipality, prior to entering into an incentive agreement under this Section, shall hold a public hearing to consider the application. The amount and terms of the proposed special payment and the duration of the incentive agreement shall be considered at the public hearing.

(c) Copies of the completed application shall be provided to each taxing district for which property taxes were assessed on the property for the immediately preceding tax year. Those copies shall be provided at least 30 days prior to the scheduled public hearing at which the corporate authorities of the local municipality will consider the application.

(d) The company, the local municipality, and the taxing districts shall enter into an incentive agreement requiring the special payment described in Section 10-925. The corporate authorities of the local municipality shall adopt an ordinance approving the incentive agreement.

(e) If an incentive agreement is not executed within 5 years after the local municipality's adoption of an inducement resolution, expenditures incurred by the company more than 5 years prior to the execution of the incentive agreement shall not qualify as part of the minimum investment.

(f) To be eligible to enter into an incentive agreement under this Division, the company must commit to a project that meets the investment and new job creation requirements set forth in the company's tax credit agreement or high impact business designation. In no event shall the company be required to invest less than $100,000,000 or create fewer than 100 new full-time jobs.

(35 ILCS 200/10-925 new)

Sec. 10-925. Contents of incentive agreement.

(a) The incentive agreement under Section 10-920 must require the company to pay, or be responsible for the payment of, an annual special payment to the local municipality and the taxing districts, beginning with the first tax year for which the assessment freeze under this Division is applied to the megaproject. The amount of the special payment shall be established by the local municipality and taxing districts in the incentive agreement and may be a fixed amount for the duration of the incentive period or may be subject to adjustment (downward or upward) based on factors memorialized in the incentive agreement.

Unless the special payment is negotiated as a fixed payment for the duration of the incentive period, the parties shall conduct an impact analysis study on the megaproject every 5 years, and the special payment shall be adjusted based on the results of that study; provided, however, the adjustment shall not be less than the initial special payment adjusted for inflation as measured by the Consumer Price Index.

The portion of the special payment due to the local school districts shall be increased annually by the lesser of (i) 5% or (ii) the percentage increase, if any, in the Consumer Price Index for the 12 months ending in September of the immediately preceding calendar year, and may be further increased or decreased every 5 years based on the results of the impact analysis study.

(b) The incentive agreement shall obligate the company to operate the megaproject at the designated project location for a minimum of 20 years.

(c) The incentive agreement may contain such other terms and conditions as are mutually agreeable to the local municipality, the taxing districts, and the company and are consistent with the requirements of this Division, including, without limitation, operational and additional job creation requirements.

(d) In addition, all incentive agreements entered into pursuant to Section 10-920 must include, as the first portion of the document, a recapitulation of the remaining contents of the document, which shall include the following:

(1) the legal name of each party to the agreement;

(2) the street address of the project and the property subject to the agreement;

(3) the agreed minimum investment, which shall not be less than the investment amount required in the tax credit agreement or high impact business designation;

(3.5) the agreed number of new jobs to be created, which shall not be less than the number of new jobs required in the tax credit agreement or high impact business designation;

(4) the term of the agreement;

(5) a schedule showing the amount of the special payment and its calculation for each year of the agreement;

(6) a schedule showing the amount to be distributed annually to each taxing district, as set forth in the incentive agreement;

(7) any other feature or aspect of the agreement which may affect the calculation of items (5) and (6) of this subsection; and

(8) the party or parties to the agreement who are responsible for updating the information contained in the summary document.

(35 ILCS 200/10-927 new)

Sec. 10-927. Minimum job creation requirements.

(a) The company must hire the same number of new full-time employees as is required in the company's tax credit agreement or high impact business designation, which in no event shall be less than 100. These new full-time employees must be hired to support the business operations of the megaproject and be located within the State of Illinois.

(b) A company may not satisfy the requirements of this Section by relocating jobs from one site in Illinois to another site in Illinois.

(35 ILCS 200/10-930 new)

Sec. 10-930. Installment bills; distribution of special payments.

(a) The local municipality shall prepare a bill for the company for each installment of the special payment according to the schedule set forth in paragraph (5) of subsection (d) of Section 10-925, or as modified pursuant to paragraph (7) of subsection (d) of Section 10-925, and the company shall make direct payments to the affected taxing entities according to the schedule in paragraph (6) of subsection (d) of Section 10-925 or as modified in paragraph (7) of subsection (d) of Section 10-925.

(b) The company shall make direct payments of the special payment to the taxing districts associated with the megaproject within 30 days after receipt by the company of the bill prepared by the local municipality.

(c) Misallocations of the special payments may be corrected by adjusting later distributions, but these adjustments must be made in the next succeeding year following identification and resolution of the misallocation. To the extent that distributions have been made improperly in previous years, claims for adjustment must be made within one year of the distribution.

(35 ILCS 200/10-937 new)

Sec. 10-937. Termination of incentive agreement; automatic termination; minimum level of investment and new job creation required to remain qualified for assessment freeze.

(a) The local municipality, the taxing districts, and the company may mutually agree to terminate the incentive agreement at any time. From the date of termination, the megaproject is subject to assessment on the basis of the then-current fair cash value.

(b) An incentive agreement shall be terminated if the company fails to satisfy the minimum investment level or the job creation requirements provided in this Division. If the incentive agreement is terminated under this subsection, the megaproject is subject to assessment on the basis of the then-current fair cash value beginning in the tax year during which the termination occurs.

(c) An incentive agreement shall terminate if, at any time, the company no longer has the minimum level of new job creation and investment as provided in this Division, without regard to depreciation.

(35 ILCS 200/10-938 new)

Sec. 10-938. Megaproject administration. The administration of a megaproject shall be under the jurisdiction of the local municipality that approved the incentive agreement by ordinance. Each local municipality that approves an incentive agreement by ordinance shall, by ordinance, designate a Megaproject Administrator for the megaproject within its jurisdiction. A Megaproject Administrator must be an officer or employee of the municipality or county. The Megaproject Administrator shall be the liaison between the approving municipality or county, the Department, and the Department of Revenue.

(35 ILCS 200/10-940 new)

Sec. 10-940. Megaproject applications; certification as a megaproject and revocation of certification.

(a) The Department shall receive applications for megaproject certificates under this Division. The Department shall promptly notify the assessment officer when the Department receives an application under this Section. The Department's rules shall provide that an applicant may request preliminary approval of the megaproject before the project begins, before the applicant has entered into a fully executed incentive agreement with the local municipality and taxing districts, or before the project has been placed in service.

(b) An applicant for a megaproject certificate under this Division must provide evidence to the Department of a fully executed incentive agreement between the company, the local municipality, and the taxing districts as described in this Division.

(c) An applicant for a megaproject certificate under this Division must provide evidence to the Department of a fully executed project labor agreement entered into with the applicable local building trades council prior to the commencement of any demolition, building construction, or building renovation at the project. If the demolition, building construction, or building renovation begins after the application is approved, then the applicant must transmit a copy of the fully executed project labor agreement to the Department as soon as possible after the agreement is executed.

(d) An applicant for a megaproject certificate under this Division must provide evidence to the Department that the company has established the goal of awarding 20% of the total dollar amount of contracts awarded during each calendar year by the company, that are related to the project, to minority-owned businesses.

(e) The Department shall approve an application for a megaproject certificate if the Department finds that the project meets the requirements of this Division.

(f) Upon approval of the application, the Department shall issue a megaproject certificate to the applicant and transmit a copy to the assessment officer and the Department of Revenue. The certificate shall identify the property on which the megaproject is located.

(g) For each calendar year following issuance of the megaproject certificate, until the minimum investment and new job creation requirements have been met and the megaproject has been placed in service, the company shall deliver a report to the Department on the status of construction or creation of the megaproject and the amount of minimum investment made in the megaproject during the preceding calendar year. If the Department determines, in accordance with the Administrative Review Law and the Illinois Administrative Procedure Act, that a project for which a certificate has been issued has not met the minimum investment and job creation requirements of this Division within the investment period, the Department shall revoke the certificate by written notice to the taxpayer of record and transmit a copy of the revocation to the assessment officer.

(h) If the local municipality notifies the Department that the incentive agreement between the company, the local municipality, and the taxing districts has been terminated, the Department shall revoke the certificate by written notice to the taxpayer of record and transmit a copy of the revocation to the assessment officer.

(35 ILCS 200/10-945 new)

Sec. 10-945. Computation of valuation.

(a) Upon receipt of the megaproject certificate from the Department, the assessment officer shall determine the base year valuation and shall make a notation on each statement of assessment during the assessment period that the valuation of the project is based upon the issuance of a megaproject certificate.

(b) Upon revocation of a megaproject certificate, the assessment officer shall compute the assessed valuation of the project on the basis of the then-current fair cash value of the property.

(35 ILCS 200/10-950 new)

Sec. 10-950. Transfers of interest in a megaproject; sale-leaseback arrangement; requirements.

(a) Subject to the terms of the incentive agreement between the company, the local municipality, and the taxing district, ownership of or any interest in the megaproject and any and all related project property, including, without limitation, transfers of indirect beneficial interests and equity interests in a company owning a megaproject, shall not affect the assessment freeze or the validity of the megaproject certificate issued under this Division. Notwithstanding the provisions of this subsection, the incentive agreement shall be a covenant running with the land.

(b) A company may enter into lending, financing, security, leasing, or similar arrangements, or a succession of such arrangements, with a financing entity concerning all or part of a project including, without limitation, a sale-leaseback arrangement, equipment lease, build-to-suit lease, synthetic lease, nordic lease, defeased tax benefit, or transfer lease, an assignment, sublease, or similar arrangement, or succession of those arrangements, with one or more financing entities concerning all or part of a project, regardless of the identity of the income tax or fee owner of the megaproject. Neither the original transfer to the financing entity nor the later transfer from the financing entity back to the company, pursuant to terms in the sale-leaseback agreement, shall affect the assessment freeze or the validity of the megaproject certificate issued under this Division, regardless of whether the income tax basis is changed for income tax purposes.

(c) The Department must receive notice of all transfers undertaken with respect to other projects to effect a financing. Notice shall be made in writing within 60 days after the transfer, shall identify each transferee, and shall contain other information required by the Department with the appropriate returns. Failure to meet this notice requirement does not adversely affect the assessment freeze.

(35 ILCS 200/10-955 new)

Sec. 10-955. Minimum investment by company affiliates. To be eligible for the benefits of this Division, a company must invest the minimum investment. Investments by company affiliates during the investment period may be applied toward the minimum investment under this Division regardless of whether the company affiliate was part of the project. To qualify for the assessment freeze, the minimum investment must be made in connection with the megaproject.

(35 ILCS 200/10-960 new)

Sec. 10-960. Projects to be valued at fair cash value for purposes of bonded indebtedness and limitations on property tax extensions. Projects to which an assessment freeze applies pursuant to this Division shall be valued at their fair cash value for purposes of calculating a municipality's general obligation bond limits and a taxing district's limitation on tax extensions.

(35 ILCS 200/10-965 new)

Sec. 10-965. Abatements. Any taxing district, upon a majority vote of its governing authority, may, after the determination of the assessed valuation as set forth in this Division, order the clerk of the appropriate municipality or county to abate any portion of real property taxes otherwise levied or extended by the taxing district on a megaproject.

(35 ILCS 200/10-970 new)

Sec. 10-970. Filing of returns, contracts, and other information; due date of payments and returns.

(a) The company and the local municipality shall file notices, reports, and other information as required by the Department.

(b) Special payments are due at the same time as property tax payments and property tax returns are due for the megaproject property.

(c) Failure to make a timely special payment results in the assessment of penalties as if the payment were a delinquent property tax payment or return.

(d) Within 30 days after the date of execution of an incentive agreement, a copy of the incentive agreement must be filed with the Department, the chief county assessment officer, and the county auditor for the county in which the megaproject is located.

(35 ILCS 200/10-980 new)

Sec. 10-980. Rules. The Department may issue rulings and adopt rules as necessary to carry out the purpose of this Division.

(35 ILCS 200/10-985 new)

Sec. 10-985. Prohibition on multiple credits, exemptions, and freezes. An applicant for a megaproject certificate who qualifies for an assessment freeze under this Section is not entitled to any other property tax credits, exemptions, or assessment freezes relating to the megaproject.

(35 ILCS 200/10-987 new)

Sec. 10-987. Building materials exemption for megaprojects. An applicant that is eligible for a megaproject certificate under this Division 22 of Article 10 is also eligible for the building materials exemption under Section 605-1118 of the Civil Administrative Code of Illinois.

(35 ILCS 200/10-995 new)

Sec. 10-995. Tax Increment Financing districts. A project that is located and operated in a Tax Increment Financing (TIF) district or TIF designated area is not eligible for a megaproject assessment freeze under this Section. The agreement shall provide that the megaproject certificate is void if an area on which the megaproject is located is designated as a TIF district or TIF designated area.

(35 ILCS 200/10-1000 new)

Sec. 10-1000. Invalidity. If all or any part of this Division is determined to be unconstitutional or otherwise unenforceable by a court of competent jurisdiction, a company has 180 days from the date of the determination to transfer the megaproject's title to an authorized economic development authority that qualifies for property tax assessment under this Division.

Section 97. Severability. The provisions of this Act are severable under Section 1.31 of the Statute on Statutes.

Section 99. Effective date. This Act takes effect July 1, 2025.