093_HB0235enr

 
HB0235 Enrolled                      LRB093 02644 ACG 02654 b

 1        AN ACT concerning corporations.

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

 4        Section  1.  Short  title.  This  Act may be cited as the
 5    Corporate Accountability for Tax Expenditures Act.

 6        Section 5. Definitions. As used in this Act:
 7        "Base years" means the first 2  complete  calendar  years
 8    following   the  effective  date  of  a  recipient  receiving
 9    development assistance.
10        "Date of assistance" means the commencement date  of  the
11    assistance  agreement,  which date triggers the period during
12    which the recipient is obligated to create or retain jobs and
13    continue operations at the specific project site.
14        "Default" means that a recipient has not achieved its job
15    creation,  job  retention,  or  wage  or  benefit  goals,  as
16    applicable, during the prescribed period therefor.
17        "Department"   means,   unless   otherwise   noted,   the
18    Department of Commerce and Community Affairs or any successor
19    agency.
20        "Development assistance" means (1) tax  credits  and  tax
21    exemptions  (other  than given under tax increment financing)
22    given as an incentive to a  recipient  business  organization
23    pursuant   to   an   initial   certification  or  an  initial
24    designation  made  by  the  Department  under  the   Economic
25    Development  for  a  Growing  Economy  Tax Credit Act and the
26    Illinois Enterprise  Zone  Act,  including  the  High  Impact
27    Business program, (2) grants or loans given to a recipient as
28    an incentive to a business organization pursuant to the Large
29    Business Development Program, the Business Development Public
30    Infrastructure  Program,  or the Industrial Training Program,
31    (3) the State Treasurer's Economic  Program  Loans,  (4)  the
 
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 1    Illinois  Department  of  Transportation Economic Development
 2    Program, and (5) all successor and  subsequent  programs  and
 3    tax  credits  designed  to promote large business relocations
 4    and expansions. "Development assistance" does not include tax
 5    increment financing, assistance provided under  the  Illinois
 6    Enterprise    Zone   Act   pursuant   to   local   ordinance,
 7    participation  loans,  or  financial   transactions   through
 8    statutorily authorized financial intermediaries in support of
 9    small  business  loans and investments or given in connection
10    with the development of affordable housing.
11        "Development assistance agreement"  means  any  agreement
12    executed by the State granting body and the recipient setting
13    forth  the  terms and conditions of development assistance to
14    be provided  to  the  recipient  consistent  with  the  final
15    application  for  development  assistance,  including but not
16    limited to the date of assistance, submitted to and  approved
17    by the State granting body.
18        "Full-time,   permanent   job"   means  either:  (1)  the
19    definition  therefor  in  the  legislation  authorizing   the
20    programs   described   in   the   definition  of  development
21    assistance in the Act or (2) if there is no such  definition,
22    then  as  defined  in  administrative rules implementing such
23    legislation, provided the administrative rules were in  place
24    prior  to  the  effective  date of this Act. On and after the
25    effective date of this Act, if  there  is  no  definition  of
26    "full-time,   permanent   job"   in  either  the  legislation
27    authorizing a program that constitutes  economic  development
28    assistance  under  this  Act  or  in  any administrative rule
29    implementing such legislation that was in place prior to  the
30    effective  date  of this Act, then "full-time, permanent job"
31    means a job in which the new employee works for the recipient
32    at a rate of at least 35 hours per week.
33        "New employee" means either: (1) the definition  therefor
34    in  the legislation authorizing the programs described in the
 
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 1    definition of development assistance in the  Act  or  (2)  if
 2    there   is   no   such   definition,   then   as  defined  in
 3    administrative rules implementing such legislation,  provided
 4    the administrative rules were in place prior to the effective
 5    date  of  this  Act.  On and after the effective date of this
 6    Act, if there is no definition of "new  employee"  in  either
 7    the   legislation  authorizing  a  program  that  constitutes
 8    economic development assistance under this  Act  nor  in  any
 9    administrative rule implementing such legislation that was in
10    place  prior  to  the  effective  date of this Act, then "new
11    employee"  means  a   full-time,   permanent   employee   who
12    represents  a  net  increase in the number of the recipient's
13    employees statewide. "New employee" includes an employee  who
14    previously  filled a new employee position with the recipient
15    who was rehired or called back  from  a  layoff  that  occurs
16    during or following the base years.
17        The  term  "New  Employee"  does  not  include any of the
18    following:
19             (1) An employee of the recipient who performs a  job
20        that was previously performed by another employee in this
21        State,  if  that job existed in this State for at least 6
22        months before hiring the employee.
23             (2) A child, grandchild, parent,  or  spouse,  other
24        than   a   spouse  who  is  legally  separated  from  the
25        individual,  of  any  individual  who  has  a  direct  or
26        indirect  ownership  interest  of  at  least  5%  in  the
27        profits,  capital,  or  value  of  any  member   of   the
28        recipient.
29        "Part-time job" means either: (1) the definition therefor
30    in  the legislation authorizing the programs described in the
31    definition of development assistance in the  Act  or  (2)  if
32    there   is   no   such   definition,   then   as  defined  in
33    administrative rules implementing such legislation,  provided
34    the administrative rules were in place prior to the effective
 
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 1    date  of  this  Act.  On and after the effective date of this
 2    Act, if there is no definition of "part-time job"  in  either
 3    the   legislation  authorizing  a  program  that  constitutes
 4    economic development assistance under  this  Act  or  in  any
 5    administrative rule implementing such legislation that was in
 6    place   prior  to  the  effective  date  of  this  Act,  then
 7    "part-time job" means a job in which the new  employee  works
 8    for the recipient at a rate of less than 35 hours per week.
 9        "Recipient"  means  any  business  that receives economic
10    development  assistance.  A  business  is  any   corporation,
11    limited   liability   company,  partnership,  joint  venture,
12    association, sole proprietorship, or other legally recognized
13    entity.
14        "Retained employee"  means  either:  (1)  the  definition
15    therefor   in   the   legislation  authorizing  the  programs
16    described in the definition of development assistance in  the
17    Act or (2) if there is no such definition, then as defined in
18    administrative  rules implementing such legislation, provided
19    the administrative rules were in place prior to the effective
20    date of this Act. On and after the  effective  date  of  this
21    Act,  if  there  is  no  definition of "retained employee" in
22    either the legislation authorizing a program that constitutes
23    economic development assistance under  this  Act  or  in  any
24    administrative rule implementing such legislation that was in
25    place prior to the effective date of this Act, then "retained
26    employee" means any employee defined as having a full-time or
27    full-time  equivalent job preserved at a specific facility or
28    site, the continuance of which is threatened  by  a  specific
29    and  demonstrable  threat,  which  shall  be specified in the
30    application for development assistance.
31        "Specific project site" means that  distinct  operational
32    unit to which any development assistance is applied.
33        "State  granting  body"  means  the Department, any State
34    department  or  State  agency   that   provides   development
 
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 1    assistance  that  has  reporting requirements under this Act,
 2    and any successor agencies to any of the preceding.
 3        "Temporary job" means either: (1) the definition therefor
 4    in the legislation authorizing the programs described in  the
 5    definition  of  development  assistance  in the Act or (2) if
 6    there  is  no   such   definition,   then   as   defined   in
 7    administrative  rules implementing such legislation, provided
 8    the administrative rules were in place prior to the effective
 9    date of this Act. On and after the  effective  date  of  this
10    Act,  if  there is no definition of "temporary job" in either
11    the  legislation  authorizing  a  program  that   constitutes
12    economic  development  assistance  under  this  Act or in any
13    administrative rule implementing such legislation that was in
14    place  prior  to  the  effective  date  of  this  Act,   then
15    "temporary  job"  means  a  job  in which the new employee is
16    hired for a specific duration of time or season.
17        "Value of assistance" means the face value of any form of
18    development assistance.

19        Section 10. Unified Economic Development Budget.
20        (a)  For each State fiscal year ending on or  after  June
21    30,  2005,  the  Department of Revenue shall submit an annual
22    Unified Economic Development Budget to the General  Assembly.
23    The Unified Economic Development Budget shall be due within 3
24    months  after  the  end of the fiscal year, and shall present
25    all types of development assistance granted during the  prior
26    fiscal year, including:
27             (1)  The aggregate amount of uncollected or diverted
28        State   tax   revenues   resulting   from  each  type  of
29        development assistance provided in the tax  statutes,  as
30        reported  to  the  Department  of  Revenue on tax returns
31        filed during the fiscal year.
32             (2)  All State development assistance.
33        (b)  All  data  contained   in   the   Unified   Economic
 
HB0235 Enrolled            -6-       LRB093 02644 ACG 02654 b
 1    Development Budget presented to the General Assembly shall be
 2    fully subject to the Freedom of Information Act.
 3        (c)  The  Department  of Revenue shall submit a report of
 4    the amounts in subdivision (a)(1)  of  this  Section  to  the
 5    Department,  which  may  append  such  report  to the Unified
 6    Economic Development Budget rather than separately  reporting
 7    such amounts.

 8        Section   15.   Standardized   applications   for   State
 9    development assistance.
10        (a) All final applications submitted to the Department or
11    any   other   State   granting  body  requesting  development
12    assistance shall contain, at a minimum:
13             (1) An application tracking number that is  specific
14        to   both   the   State   granting  agency  and  to  each
15        application.
16             (2) The office mailing addresses,  office  telephone
17        number, and chief officer of the granting body.
18             (3)  The  office  mailing address, telephone number,
19        4-digit SIC number or successor number, and the  name  of
20        the chief officer of the applicant or authorized designee
21        for  the  specific  project  site  for  which development
22        assistance is requested.
23             (4) The applicant's total number of employees at the
24        specific project site on the date that the application is
25        submitted to  the  State  granting  body,  including  the
26        number  of  full-time,  permanent  jobs,  the  number  of
27        part-time jobs, and the number of temporary jobs.
28             (5)  The type of development assistance and value of
29        assistance being requested.
30             (6) The number of jobs to be created and retained or
31        both created and retained by the applicant as a result of
32        the  development  assistance,  including  the  number  of
33        full-time, permanent jobs, the number of part-time  jobs,
 
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 1        and the number of temporary jobs.
 2             (7)  A  detailed  list  of  the  occupation  or  job
 3        classifications  and  number of new employees or retained
 4        employees to be hired in  full-time,  permanent  jobs,  a
 5        schedule  of  anticipated starting dates of the new hires
 6        and the anticipated average wage  by  occupation  or  job
 7        classification  and  total  payroll  to  be  created as a
 8        result of the development assistance.
 9             (8)  A  list  of  all  other  forms  of  development
10        assistance that  the  applicant  is  requesting  for  the
11        specific project site and the name of each State granting
12        body  from  which  that  development  assistance is being
13        requested.
14             (9) A narrative, if necessary,  describing  why  the
15        development  assistance is needed and how the applicant's
16        use of the development assistance may  reduce  employment
17        at any site in Illinois.
18             (10)  A  certification  by  the chief officer of the
19        applicant or his or  her  authorized  designee  that  the
20        information contained in the application submitted to the
21        granting  body  contains  no knowing misrepresentation of
22        material facts upon  which  eligibility  for  development
23        assistance is based.
24        (b)  Every  State granting body either shall complete, or
25    shall require the applicant to complete, an application  form
26    that  meets  the  minimum  requirements as prescribed in this
27    Section  each  time  an  applicant  applies  for  development
28    assistance covered by this Act.
29        (c)  The Department shall have the discretion  to  modify
30    any standardized application for State development assistance
31    required  under  subsection  (a)  for  any  grants  under the
32    Industrial  Training  Program  that  are  not  given  as   an
33    incentive to a recipient business organization.
 
HB0235 Enrolled            -8-       LRB093 02644 ACG 02654 b
 1        Section 20. State development assistance disclosure.
 2        (a)  Beginning February 1, 2005 and each year thereafter,
 3    every State granting body  shall  submit  to  the  Department
 4    copies  of  all  development  assistance  agreements  that it
 5    approved in the prior calendar year.
 6        (b) For each development assistance agreement  for  which
 7    the  date  of  assistance  has occurred in the prior calendar
 8    year,  each  recipient  shall  submit  to  the  Department  a
 9    progress report that shall include, but not  be  limited  to,
10    the following:
11             (1) The application tracking number.
12             (2)  The  office  mailing address, telephone number,
13        and the name of the chief officer of the granting body.
14             (3) The office mailing  address,  telephone  number,
15        4-digit  SIC  number or successor number, and the name of
16        the chief officer of the applicant or authorized designee
17        for the specific project site for which  the  development
18        assistance was approved by the State granting body.
19             (4)  The  type of development assistance program and
20        value of  assistance  that  was  approved  by  the  State
21        granting body.
22             (5) The applicant's total number of employees at the
23        specific  project  site  on the date that the application
24        was  submitted  to  the  State  granting  body  and   the
25        applicant's  total  number  of  employees at the specific
26        project site on the date of  the  report,  including  the
27        number  of  full-time,  permanent  jobs,  the  number  of
28        part-time  jobs,  and the number of temporary jobs, and a
29        computation of the gain or loss of jobs in each category.
30             (6)  The  number  of  new  employees  and   retained
31        employees   the   applicant  stated  in  its  development
32        assistance  agreement,  if  any,  if  not,  then  in  its
33        application,  would  be  created   by   the   development
34        assistance   broken   down   by   full-time,   permanent,
 
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 1        part-time, and temporary.
 2             (7)  A  declaration  of  whether the recipient is in
 3        compliance with the development assistance agreement.
 4             (8)  A  detailed  list  of  the  occupation  or  job
 5        classifications and number of new employees  or  retained
 6        employees  to  be  hired  in full-time, permanent jobs, a
 7        schedule of anticipated starting dates of the  new  hires
 8        and   the  actual  average  wage  by  occupation  or  job
 9        classification and total  payroll  to  be  created  as  a
10        result of the development assistance.
11             (9)  A  narrative,  if necessary, describing how the
12        recipient's use of the development assistance during  the
13        reporting  year  has  reduced  employment  at any site in
14        Illinois.
15             (10) A certification by the  chief  officer  of  the
16        applicant  or  his  or  her  authorized designee that the
17        information in the progress report  contains  no  knowing
18        misrepresentation    of   material   facts   upon   which
19        eligibility for development assistance is based.
20        (c) The State granting body, or a successor agency, shall
21    have full authority to verify information  contained  in  the
22    recipient's  progress  report,  including  the  authority  to
23    inspect  the specific project site and inspect the records of
24    the recipient that are subject to the development  assistance
25    agreement.
26        (d)  By  June  1,  2005  and  by  June  1  of  each  year
27    thereafter, the Department shall compile and publish all data
28    in all of the progress reports in both written and electronic
29    form.
30        (e)  If  a  recipient  of development assistance fails to
31    comply with subsection (b) of this  Section,  the  Department
32    shall,  within  20 working days after the reporting submittal
33    deadlines set forth in (i) the legislation authorizing,  (ii)
34    the  administrative  rules  implementing,  or  (iii) specific
 
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 1    provisions in development assistance agreements pertaining to
 2    the  development  assistance  programs,  suspend  within   33
 3    working  days  any  current  development  assistance  to  the
 4    recipient  under  its  control,  and shall be prohibited from
 5    completing any current or providing  any  future  development
 6    assistance  until  it  receives  proof that the recipient has
 7    come into compliance with the requirements of subsection  (b)
 8    of this Section.
 9        (f)  The  Department  shall have the discretion to modify
10    the information required  in  the  progress  report  required
11    under  subsection  (b) consistent with the disclosure purpose
12    of this Section for any grants under the Industrial  Training
13    Program  that  are  not  given as an incentive to a recipient
14    business organization.

15        Section 25. Recapture.
16        (a) All development assistance agreements shall  contain,
17    at a minimum, the following recapture provisions:
18             (1) The recipient must (i) make the level of capital
19        investment  in the economic development project specified
20        in the development assistance agreement; (ii)  create  or
21        retain, or both, the requisite number of jobs, paying not
22        less  than  specified  wages for the created and retained
23        jobs, within and for the  duration  of  the  time  period
24        specified   in   the   legislation  authorizing,  or  the
25        administrative  rules   implementing,   the   development
26        assistance   programs   and  the  development  assistance
27        agreement.
28             (2) If the recipient fails to create or  retain  the
29        requisite  number  of jobs within and for the time period
30        specified,  in  the  legislation  authorizing,   or   the
31        administrative   rules   implementing,   the  development
32        assistance  programs  and  the   development   assistance
33        agreement,  the  recipient  shall  be deemed to no longer
 
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 1        qualify  for  the  State  economic  assistance  and   the
 2        applicable recapture provisions shall take effect.
 3             (3)   If   the  recipient  receives  State  economic
 4        assistance  in  the  form  of  a  High  Impact   Business
 5        designation  pursuant  to  Section  5.5  of  the Illinois
 6        Enterprise Zone Act and the business receives the benefit
 7        of the exemption  authorized  under  Section  5l  of  the
 8        Retailers'  Occupation  Tax Act (for the sale of building
 9        materials  incorporated  into  a  High  Impact   Business
10        location) and the recipient fails to create or retain the
11        requisite   number   of   jobs,   as  determined  by  the
12        legislation  authorizing   the   development   assistance
13        programs  or  the  administrative rules implementing such
14        legislation, or both,  within  the  requisite  period  of
15        time, the recipient shall be required to pay to the State
16        the  full  amount  of  the  State  tax  exemption that it
17        received  as  a  result  of  the  High  Impact   Business
18        designation.
19             (4)  If  the  recipient  receives  a  grant  or loan
20        pursuant to the Large Business Development  Program,  the
21        Business  Development  Public  Infrastructure Program, or
22        the Industrial Training Program and the  recipient  fails
23        to  create or retain the requisite number of jobs for the
24        requisite time period, as  provided  in  the  legislation
25        authorizing  the  development  assistance programs or the
26        administrative rules implementing  such  legislation,  or
27        both,  or  in  the  development assistance agreement, the
28        recipient shall be required to repay to the State  a  pro
29        rata  amount  of the grant; that amount shall reflect the
30        percentage of the deficiency between the requisite number
31        of jobs to be created or retained by  the  recipient  and
32        the  actual  number  of  such jobs in existence as of the
33        date the Department determines the recipient is in breach
34        of the job creation or retention covenants  contained  in
 
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 1        the development assistance agreement. If the recipient of
 2        development   assistance   under   the   Large   Business
 3        Development  Program,  the  Business  Development  Public
 4        Infrastructure   Program,   or  the  Industrial  Training
 5        Program ceases operations at the specific  project  site,
 6        during  the  5-year  period  commencing  on  the  date of
 7        assistance, the recipient shall be required to repay  the
 8        entire  amount of the grant or to accelerate repayment of
 9        the loan back to the State.
10             (5) If the recipient receives a tax credit under the
11        Economic Development for a  Growing  Economy  tax  credit
12        program,   the   development  assistance  agreement  must
13        provide that  (i)  if  the  number  of  new  or  retained
14        employees  falls  below the requisite number set forth in
15        the development assistance agreement,  the  allowance  of
16        the  credit  shall  be  automatically suspended until the
17        number of new and retained employees  equals  or  exceeds
18        the   requisite  number  in  the  development  assistance
19        agreement; (ii) if the recipient discontinues  operations
20        at  the specific project site during the first 5 years of
21        the 10-year term of the development assistance agreement,
22        the recipient shall forfeit  all  credits  taken  by  the
23        recipient  during  such  5-year  period; and (iii) in the
24        event of a revocation or suspension of  the  credit,  the
25        Department  shall  contact  the  Director  of  Revenue to
26        initiate proceedings against  the  recipient  to  recover
27        wrongfully  exempted  Illinois State income taxes and the
28        recipient shall  promptly  repay  to  the  Department  of
29        Revenue  any  wrongfully  exempted  Illinois State income
30        taxes. The forfeited amount of credits  shall  be  deemed
31        assessed   on   the  date  the  Department  contacts  the
32        Department of Revenue and the  recipient  shall  promptly
33        repay   to  the  Department  of  Revenue  any  wrongfully
34        exempted Illinois State income taxes.
 
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 1        (b) The Director may elect to waive  enforcement  of  any
 2    contractual   provision   arising   out  of  the  development
 3    assistance agreement required by this Act based on a  finding
 4    that  the  waiver  is  necessary  to  avert  an  imminent and
 5    demonstrable hardship to the recipient  that  may  result  in
 6    such  recipient's  insolvency  or  discharge of workers. If a
 7    waiver is granted, the recipient must agree to a  contractual
 8    modification,   including   recapture   provisions,   to  the
 9    development assistance agreement. The existence of any waiver
10    granted pursuant to this subsection  (c),  the  date  of  the
11    granting  of  such waiver, and a brief summary of the reasons
12    supporting the granting of such  waiver  shall  be  disclosed
13    consistent with the provisions of Section 25 of this Act.
14        (c)    Beginning  June  1,  2004,  the  Department  shall
15    annually  compile  a report on the outcomes and effectiveness
16    of recapture provisions by program, including but not limited
17    to:  (i)  the  total  number  of   companies   that   receive
18    development assistance as defined in this Act; (ii) the total
19    number  of  recipients in violation of development agreements
20    with the Department; (iii)  the  total  number  of  completed
21    recapture efforts; (iv) the total number of recapture efforts
22    initiated; and (v) the number of waivers granted. This report
23    shall  be disclosed consistent with the provisions of Section
24    20 of this Act.
25        (d) For the purposes of this Act, recapture provisions do
26    not  include  the  Illinois  Department   of   Transportation
27    Economic Development Program, any grants under the Industrial
28    Training  Program  that  are  not  given as an incentive to a
29    recipient business organization, or any successor programs as
30    described in the term "development assistance" in  Section  5
31    of this Act.

32        Section  99.  Effective  date. This Act takes effect upon
33    becoming law.