093_HB0235ham002

 










                                     LRB093 02644 SJM 14448 a

 1                     AMENDMENT TO HOUSE BILL 235

 2        AMENDMENT NO.     .  Amend House Bill 235, AS AMENDED, by
 3    replacing everything  after  the  enacting  clause  with  the
 4    following:

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

 7        Section 5. Definitions. As used in this Act:
 8        "Base years" means the first 2  complete  calendar  years
 9    following   the  effective  date  of  a  recipient  receiving
10    development assistance.
11        "Date of assistance" means the commencement date  of  the
12    assistance  agreement,  which date triggers the period during
13    which the recipient is obligated to create or retain jobs and
14    continue operations at the specific project site.
15        "Default" means that a recipient has not achieved its job
16    creation,  job  retention,  or  wage  or  benefit  goals,  as
17    applicable, during the prescribed period therefor.
18        "Department"   means,   unless   otherwise   noted,   the
19    Department of Commerce and Community Affairs or any successor
20    agency.
21        "Development assistance" means (1) tax  credits  and  tax
22    exemptions  (other  than given under tax increment financing)
 
                            -2-      LRB093 02644 SJM 14448 a
 1    given as an incentive to a  recipient  business  organization
 2    pursuant  to  a  certification  or  designation  made  by the
 3    Department under  the  Economic  Development  for  a  Growing
 4    Economy  Tax Credit Act and the Illinois Enterprise Zone Act,
 5    including the High Impact Business  program,  (2)  grants  or
 6    loans  given  to  a  recipient  as an incentive to a business
 7    organization  pursuant  to  the  Large  Business  Development
 8    Program,  the  Business  Development  Public   Infrastructure
 9    Program,  or  the  Industrial Training Program, (3) the State
10    Treasurer's  Economic  Program  Loans,   (4)   the   Illinois
11    Department  of  Transportation  Economic Development Program,
12    and (5) all successor and subsequent programs and tax credits
13    designed  to   promote   large   business   relocations   and
14    expansions.  "Development  assistance"  does  not include tax
15    increment  financing,  participation  loans,   or   financial
16    transactions   through   statutorily   authorized   financial
17    intermediaries   in  support  of  small  business  loans  and
18    investments or given in connection with  the  development  of
19    affordable housing.
20        "Full-time,   permanent   job"   means  either:  (1)  the
21    definition  therefor  in  the  legislation  authorizing   the
22    programs   described   in   the   definition  of  development
23    assistance in the Act or (2) if there is no such  definition,
24    then  as  defined  in  administrative rules implementing such
25    legislation, provided the administrative rules were in  place
26    prior  to  the  effective  date of this Act. On and after the
27    effective date of this Act, if  there  is  no  definition  of
28    "full-time,   permanent   job"   in  either  the  legislation
29    authorizing a program that constitutes  economic  development
30    assistance  under  this  Act  or  in  any administrative rule
31    implementing such legislation that was in place prior to  the
32    effective  date  of this Act, then "full-time, permanent job"
33    means a job in which the new employee works for the recipient
34    at a rate of at least 35 hours per week.
 
                            -3-      LRB093 02644 SJM 14448 a
 1        "Granting  body"  means   the   Department,   any   State
 2    department  or  agency  that  provides development assistance
 3    that has reporting  requirements  under  this  Act,  and  any
 4    successor agencies to any of the preceding.
 5        "New  employee" means either: (1) the definition therefor
 6    in the legislation authorizing the programs described in  the
 7    definition  of  development  assistance  in the Act or (2) if
 8    there  is  no   such   definition,   then   as   defined   in
 9    administrative  rules implementing such legislation, provided
10    the administrative rules were in place prior to the effective
11    date of this Act. On and after the  effective  date  of  this
12    Act,  if  there  is no definition of "new employee" in either
13    the  legislation  authorizing  a  program  that   constitutes
14    economic  development  assistance  under  this Act nor in any
15    administrative rule implementing such legislation that was in
16    place prior to the effective date  of  this  Act,  then  "new
17    employee"   means   a   full-time,   permanent  employee  who
18    represents a net increase in the number  of  the  recipient's
19    employees  statewide. "New employee" includes an employee who
20    previously filled a new employee position with the  recipient
21    who  was  rehired  or  called  back from a layoff that occurs
22    during or following the base years.
23        The term "New Employee"  does  not  include  any  of  the
24    following:
25             (1)  An employee of the recipient who performs a job
26        that was previously performed  by  another  employee,  if
27        that  job existed for at least 6 months before hiring the
28        employee.
29             (2) A child, grandchild, parent,  or  spouse,  other
30        than   a   spouse  who  is  legally  separated  from  the
31        individual,  of  any  individual  who  has  a  direct  or
32        indirect  ownership  interest  of  at  least  5%  in  the
33        profits,  capital,  or  value  of  any  member   of   the
34        recipient.
 
                            -4-      LRB093 02644 SJM 14448 a
 1        "Part-time job" means either: (1) the definition therefor
 2    in  the legislation authorizing the programs described in the
 3    definition of development assistance in the  Act  or  (2)  if
 4    there   is   no   such   definition,   then   as  defined  in
 5    administrative rules implementing such legislation,  provided
 6    the administrative rules were in place prior to the effective
 7    date  of  this  Act.  On and after the effective date of this
 8    Act, if there is no definition of "part-time job"  in  either
 9    the   legislation  authorizing  a  program  that  constitutes
10    economic development assistance under  this  Act  or  in  any
11    administrative rule implementing such legislation that was in
12    place   prior  to  the  effective  date  of  this  Act,  then
13    "part-time job" means a job in which the new  employee  works
14    for the recipient at a rate of less than 35 hours per week.
15        "Permanent job" means either: (1) the definition therefor
16    in  the legislation authorizing the programs described in the
17    definition of development assistance in the  Act  or  (2)  if
18    there   is   no   such   definition,   then   as  defined  in
19    administrative rules implementing such legislation,  provided
20    the administrative rules were in place prior to the effective
21    date  of  this  Act.  On and after the effective date of this
22    Act, if there is no definition of "permanent job"  in  either
23    the   legislation  authorizing  a  program  that  constitutes
24    economic development assistance under  this  Act  or  in  any
25    administrative rule implementing such legislation that was in
26    place   prior  to  the  effective  date  of  this  Act,  then
27    "permanent job" means a job in which a new employee works for
28    the recipient, not as  an  independent  contractor  or  on  a
29    consulting  basis,  at  a  rate of at least 35 hours per week
30    with the intention that such employment  shall  continue  and
31    that the employee will receive all health insurance, pension,
32    profit   sharing,   and   other  benefits  offered  to  other
33    full-time, permanent employees.
34        "Recipient" means any  business  that  receives  economic
 
                            -5-      LRB093 02644 SJM 14448 a
 1    development   assistance.  A  business  is  any  corporation,
 2    limited  liability  company,  partnership,   joint   venture,
 3    association, sole proprietorship, or other legally recognized
 4    entity.
 5        "Retained  employee"  means  either:  (1)  the definition
 6    therefor  in  the  legislation   authorizing   the   programs
 7    described  in the definition of development assistance in the
 8    Act or (2) if there is no such definition, then as defined in
 9    administrative rules implementing such legislation,  provided
10    the administrative rules were in place prior to the effective
11    date  of  this  Act.  On and after the effective date of this
12    Act, if there is no  definition  of  "retained  employee"  in
13    either the legislation authorizing a program that constitutes
14    economic  development  assistance  under  this  Act or in any
15    administrative rule implementing such legislation that was in
16    place prior to the effective date of this Act, then "retained
17    employee" means any employee defined as having a full-time or
18    full-time equivalent job preserved at a specific facility  or
19    site,  the  continuance  of which is threatened by a specific
20    and demonstrable threat, which  shall  be  specified  in  the
21    application for development assistance.
22        "Specific  project  site" means that distinct operational
23    unit to which any development assistance is applied.
24        "Temporary job" means either: (1) the definition therefor
25    in the legislation authorizing the programs described in  the
26    definition  of  development  assistance  in the Act or (2) if
27    there  is  no   such   definition,   then   as   defined   in
28    administrative  rules implementing such legislation, provided
29    the administrative rules were in place prior to the effective
30    date of this Act. On and after the  effective  date  of  this
31    Act,  if  there is no definition of "temporary job" in either
32    the  legislation  authorizing  a  program  that   constitutes
33    economic  development  assistance  under  this  Act or in any
34    administrative rule implementing such legislation that was in
 
                            -6-      LRB093 02644 SJM 14448 a
 1    place  prior  to  the  effective  date  of  this  Act,   then
 2    "temporary  job"  means  a  job  in which the new employee is
 3    hired for a specific duration of time or season.
 4        "Value of assistance" means the face value of any form of
 5    development assistance.

 6        Section 10. Unified Economic Development Budget.
 7        (a)  For each State fiscal year ending on or  after  June
 8    30,  2005,  the  Department  shall  submit  an annual Unified
 9    Economic Development Budget  to  the  General  Assembly.  The
10    Unified  Economic  Development  Budget  shall be due within 3
11    months after the end of the fiscal year,  and  shall  present
12    all types of development assistance granted during the fiscal
13    year, including:
14             (1)  The aggregate amount of uncollected or diverted
15        State   tax   revenues   resulting   from  each  type  of
16        development assistance provided in the tax  statutes,  as
17        reported  to  the  Department  of  Revenue on tax returns
18        filed during the fiscal year.
19             (2)  All State on-budget development assistance.
20        (b)  All  data  contained   in   the   Unified   Economic
21    Development Budget presented to the General Assembly shall be
22    fully subject to the Freedom of Information Act.
23        (c)  The  Department  of Revenue shall submit a report of
24    the amounts in subdivision (a)(1)  of  this  Section  to  the
25    Department,  which  may  append  such  report  to the Unified
26    Economic Development Budget rather than separately  reporting
27    such amounts.

28        Section 15. Standardized applications for State on-budget
29    development assistance.
30        (a)  All  applications  utilized by the Department or any
31    other State granting body regarding requests for  development
32    assistance shall contain, at a minimum:
 
                            -7-      LRB093 02644 SJM 14448 a
 1             (1)  An application tracking number that is specific
 2        to  both  the  State  granting   agency   and   to   each
 3        application.
 4             (2)  The  name,  street and mailing addresses, phone
 5        number, and chief officer of the granting body.
 6             (3) The name, street and  mailing  addresses,  phone
 7        number,  4-digit  SIC  number,  and  chief officer of the
 8        applicant  at  the  specific  project  site   for   which
 9        development assistance is sought.
10             (4) The applicant's total number of employees at the
11        specific  project  site  on  the date of the application,
12        broken  down  by  full-time,  permanent,  part-time,  and
13        temporary.
14             (5) The kind of development assistance and value  of
15        assistance being applied for.
16             (6) The number of jobs to be created and retained or
17        both  created and retained by the development assistance,
18        broken  down  by  full-time,  permanent,  part-time,  and
19        temporary.
20             (7)  A  detailed  list  of  the  occupation  or  job
21        classifications and number of new or  retained  employees
22        to  be  hired  in  full-time job positions, a schedule of
23        anticipated starting dates  of  the  new  hires  and  the
24        average  wage  by  occupation  or  job classification and
25        total  payroll  to  be  created  as  a  result   of   the
26        development assistance.
27             (8)  A  list  of  all  other  forms  of  development
28        assistance  the  applicant  is  seeking  for the specific
29        project site and the name of  each  State  granting  body
30        from which that development assistance is being sought.
31             (9)  A  narrative,  if necessary, describing why the
32        development assistance is needed and how the  applicant's
33        use of the development assistance may reduce unemployment
34        at any site in Illinois.
 
                            -8-      LRB093 02644 SJM 14448 a
 1             (10) Individual certifications by the chief officers
 2        of  the  applicant  and the State granting body as to the
 3        accuracy of the information contained in the application,
 4        under penalty of perjury.
 5        (b) Every State granting body either shall  complete,  or
 6    shall  require the applicant to complete, an application form
 7    that meets the minimum requirements  as  prescribed  in  this
 8    Section  each  time  an  applicant  applies  for  development
 9    assistance covered by this Act.

10        Section   20.   State  on-budget  development  assistance
11    disclosure.
12        (a) Beginning February 1, 2005 and each year  thereafter,
13    every  State  granting  body in the State shall submit to the
14    Department copies of all  application  forms  that  meet  the
15    requirements  referenced  in  Section  15  of  this  Act  for
16    development  assistance  that  it  approved  in  the previous
17    calendar year.  Upon  each  form,  the  granting  body  shall
18    designate the date on which assistance will commence.
19        (b)  For each development assistance application that was
20    approved, and for which the date of assistance  has  occurred
21    in  a  reporting  year,  each  recipient  shall submit to the
22    Department a progress report  that  shall  include,  but  not
23    limited to, the following:
24             (1) The application tracking number.
25             (2)  The  name,  street and mailing addresses, phone
26        number, and chief officer of the granting body.
27             (3) The name, street and  mailing  addresses,  phone
28        number,  4-digit  SIC  number,  and  chief officer of the
29        applicant at the specific  project  site  for  which  the
30        development assistance was approved.
31             (4)  The  kind of development assistance program and
32        value of assistance that was approved.
33             (5) The applicant's total level of employment at the
 
                            -9-      LRB093 02644 SJM 14448 a
 1        specific project site on the date of the application  and
 2        the applicant's total level of employment at the specific
 3        project  site  on  the date of the report, broken down by
 4        full-time, permanent, part-time,  and  temporary,  and  a
 5        computation of the gain or loss in each category.
 6             (6)   The  number  of  new  and  retained  jobs  the
 7        applicant stated in its development assistance agreement,
 8        if any, if not, then in its application, would be created
 9        by the development assistance broken down  by  full-time,
10        permanent, part-time, and temporary.
11             (7)  A  declaration  of  whether  the  recipient  is
12        satisfying  all  job  creation  and  retention  or  other
13        economic development requirements the recipient committed
14        to  when receiving development assistance covered by this
15        Act.
16             (8)  A  detailed  list  of  the  occupation  or  job
17        classifications and number of new or  retained  employees
18        to  be  hired  in  full-time job positions, a schedule of
19        anticipated starting dates  of  the  new  hires  and  the
20        average  wage  by  occupation  or  job classification and
21        total  payroll  to  be  created  as  a  result   of   the
22        development assistance.
23             (9)  A  narrative,  if necessary, describing how the
24        recipient's use of the development assistance during  the
25        reporting  year  has  reduced unemployment at any site in
26        Illinois.
27             (10) Signed individual certifications by  the  chief
28        officer  of  the  applicant  as  to  the  accuracy of the
29        progress report, under penalty of perjury.
30        (c) The State granting body  and  the  Department,  or  a
31    successor  agency, shall have full investigative authority to
32    verify the applicant's progress report  data,  including  but
33    not  limited  to  inspection of the specific project site and
34    analysis of tax and payroll records.
 
                            -10-     LRB093 02644 SJM 14448 a
 1        (d)  By  June  1,  2005  and  by  June  1  of  each  year
 2    thereafter, the Department shall compile and publish all data
 3    in all of the development assistance progress reports in both
 4    written and electronic form.
 5        (e) Every aspect of all approved  development  assistance
 6    applications,   progress   reports,   and   compilations   of
 7    applications  and  progress reports shall be fully subject to
 8    the Freedom of Information Act.
 9        (f) If a recipient of  development  assistance  fails  to
10    comply  with  subsections  (a)  and  (b) of this Section, the
11    Department shall, within 20 working days after the  reporting
12    submittal   deadlines   set  forth  in  (i)  the  legislation
13    authorizing, (ii) the administrative rules  implementing,  or
14    (iii)   specific   provisions   in   development   assistance
15    agreements pertaining to the development assistance programs,
16    suspend  within  33  working  days  any  current  development
17    assistance  to  the recipient under its control, and shall be
18    prohibited from  completing  any  current  or  providing  any
19    future  development  assistance  until it receives proof that
20    the recipient has come into compliance with the  requirements
21    of subsection (a) and (b) of this Section.

22        Section 25. Recapture.
23        (a) All recipients of development assistance must execute
24    agreements   that   contain,  at  a  minimum,  the  following
25    recapture provisions:
26             (1) The recipient must (i) make the level of capital
27        investment in the economic development project  specified
28        in  the  development assistance agreement; (ii) create or
29        retain, or both, the requisite number of jobs, paying not
30        less than specified wages for the  created  and  retained
31        jobs,  within  and  for  the  duration of the time period
32        specified  in  the  legislation   authorizing,   or   the
33        administrative   rules   implementing,   the  development
 
                            -11-     LRB093 02644 SJM 14448 a
 1        assistance  programs  and  the   development   assistance
 2        agreement.
 3             (2)  If  the recipient fails to create or retain the
 4        requisite number of jobs within and for the  time  period
 5        specified,   in   the  legislation  authorizing,  or  the
 6        administrative  rules   implementing,   the   development
 7        assistance   programs   and  the  development  assistance
 8        agreement, the recipient shall be  deemed  to  no  longer
 9        qualify   for  the  State  economic  assistance  and  the
10        applicable recapture provisions shall take effect.
11             (3)  If  the  recipient  receives   State   economic
12        assistance   in  the  form  of  a  High  Impact  Business
13        designation pursuant  to  Section  5.5  of  the  Illinois
14        Enterprise Zone Act and the business receives the benefit
15        of  the  exemption  authorized  under  Section  5l of the
16        Retailers' Occupation Tax Act (for the sale  of  building
17        materials   incorporated  into  a  High  Impact  Business
18        location) and the recipient fails to create or retain the
19        requisite  number  of  jobs,   as   determined   by   the
20        legislation   authorizing   the   development  assistance
21        programs or the administrative  rules  implementing  such
22        legislation,  or  both,  within  the  requisite period of
23        time, the recipient shall be required to pay to the State
24        the full amount  of  the  State  tax  exemption  that  it
25        received   as  a  result  of  the  High  Impact  Business
26        designation.
27             (4) If  the  recipient  receives  a  grant  or  loan
28        pursuant  to  the Large Business Development Program, the
29        Business Development Public  Infrastructure  Program,  or
30        the  Industrial  Training Program and the recipient fails
31        to create or retain the requisite number of jobs for  the
32        requisite  time  period,  as  provided in the legislation
33        authorizing the development assistance  programs  or  the
34        administrative  rules  implementing  such legislation, or
 
                            -12-     LRB093 02644 SJM 14448 a
 1        both, or in the  development  assistance  agreement,  the
 2        recipient  shall  be required to repay to the State a pro
 3        rata amount of the grant; that amount shall  reflect  the
 4        percentage of the deficiency between the requisite number
 5        of  jobs  to  be created or retained by the recipient and
 6        the actual number of such jobs in  existence  as  of  the
 7        date the Department determines the recipient is in breach
 8        of  the  job creation or retention covenants contained in
 9        the development assistance agreement. If the recipient of
10        development   assistance   under   the   Large   Business
11        Development  Program,  the  Business  Development  Public
12        Infrastructure  Program,  or  the   Industrial   Training
13        Program  ceases  operations at the specific project site,
14        during the  5-year  period  commencing  on  the  date  of
15        assistance,  the recipient shall be required to repay the
16        entire amount of the grant or to accelerate repayment  of
17        the loan back to the State.
18             (5) If the recipient receives a tax credit under the
19        Economic  Development  for  a  Growing Economy tax credit
20        program,  the  development  assistance   agreement   must
21        provide  that  (i)  if  the  number  of  new  or retained
22        employees falls below the requisite number set  forth  in
23        the  development  assistance  agreement, the allowance of
24        the credit shall be  automatically  suspended  until  the
25        number  of  new  and retained employees equals or exceeds
26        the  requisite  number  in  the  development   assistance
27        agreement;  (ii) if the recipient discontinues operations
28        at the specific project site during the first 5 years  of
29        the 10-year term of the development assistance agreement,
30        the  recipient  shall  forfeit  all  credits taken by the
31        recipient during such 5-year period;  and  (iii)  in  the
32        event  of  a  revocation or suspension of the credit, the
33        Department shall  contact  the  Director  of  Revenue  to
34        initiate  proceedings  against  the  recipient to recover
 
                            -13-     LRB093 02644 SJM 14448 a
 1        wrongfully exempted Illinois State income taxes  and  the
 2        recipient  shall  promptly  repay  to  the  Department of
 3        Revenue any wrongfully  exempted  Illinois  State  income
 4        taxes.  The  forfeited  amount of credits shall be deemed
 5        assessed  on  the  date  the  Department   contacts   the
 6        Department  of  Revenue  and the recipient shall promptly
 7        repay  to  the  Department  of  Revenue  any   wrongfully
 8        exempted Illinois State income taxes.
 9        (b)  The  Director  may elect to waive enforcement of any
10    contractual right arising out of the  development  assistance
11    agreement  required  by  this Act based on a finding that the
12    waiver is necessary to avert an imminent,  demonstrable,  and
13    material  hardship  to  the recipient that may result in such
14    recipient's  insolvency  or   discharge   of   workers.   The
15    recipient's request for waiver and the justification therefor
16    must  be published in electronic form by the Department for a
17    period of 30 days before the Director may take action on  the
18    waiver  request.  If  a waiver is granted, the recipient must
19    agree to  a  contractual  modification,  including  recapture
20    provisions,  to  the  development  assistance  agreement. The
21    existence of any waiver granted pursuant to  this  subsection
22    (c),  the  date  of  the granting of such waiver, and a brief
23    summary of the reasons supporting the granting of such waiver
24    shall be disclosed consistent with the provisions of  Section
25    25 of this Act.
26        (c)    Beginning  June  1,  2004,  the  Department  shall
27    annually  compile  a report on the outcomes and effectiveness
28    of recapture provisions by program, including but not limited
29    to:  (i)  the  total  number  of   companies   that   receive
30    development assistance as defined in this Act; (ii) the total
31    number  of  recipients in violation of development agreements
32    with the Department; (iii)  the  total  number  of  completed
33    recapture efforts; (iv) the total number of recapture efforts
34    initiated; and (v) the number of waivers granted. This report
 
                            -14-     LRB093 02644 SJM 14448 a
 1    shall  be disclosed consistent with the provisions of Section
 2    20 of this Act.
 3        (d) For the purposes of this Act, recapture provisions do
 4    not  include  the  Illinois  Department   of   Transportation
 5    Economic  Development  Program  or  any successor programs as
 6    described in the term "development assistance" in  Section  5
 7    of this Act.

 8        Section  99.  Effective  date. This Act takes effect upon
 9    becoming law.".