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 HB0235 Enrolled -2- LRB093 02644 ACG 02654 b 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 HB0235 Enrolled -3- LRB093 02644 ACG 02654 b 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 HB0235 Enrolled -4- LRB093 02644 ACG 02654 b 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 HB0235 Enrolled -5- LRB093 02644 ACG 02654 b 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, HB0235 Enrolled -7- LRB093 02644 ACG 02654 b 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, HB0235 Enrolled -9- LRB093 02644 ACG 02654 b 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 HB0235 Enrolled -10- LRB093 02644 ACG 02654 b 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 HB0235 Enrolled -11- LRB093 02644 ACG 02654 b 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 HB0235 Enrolled -12- LRB093 02644 ACG 02654 b 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. HB0235 Enrolled -13- LRB093 02644 ACG 02654 b 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.