97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB1160

 

Introduced 02/08/11, by Rep. Richard Morthland

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/221 new

    Amends the Illinois Income Tax Act. Creates the Hire Illinois Tax Credit. Provides that a business is eligible for a $1,500 tax credit for each recent graduate of an Illinois college or university it hires within a taxable year. Provides that the Department of Commerce and Economic Opportunity shall limit the monetary amount of these tax credits to $15,000,000. Provides for procedures for a business to apply for a certificate of eligibility for the credit and for procedures to apply for a tax credit certificate. Provides that a business shall submit a copy of the tax credit certificate to the Department of Revenue with its return. Grants the Department of Commerce and Economic Opportunity powers necessary or convenient to administer the tax credit. Applies only to taxable years 2011 and 2012. Effective immediately.


LRB097 07862 HLH 47976 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB1160LRB097 07862 HLH 47976 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by adding
5Section 221 as follows:
 
6    (35 ILCS 5/221 new)
7    Sec. 221. Hire Illinois Tax Credit.
8    (a) As used in this Section:
9    "Applicant" means a corporation, partnership, limited
10liability company, or natural person that hires a qualified
11employee.
12    "Basic wage" means compensation for employment that is no
13less than $10 per hour or the equivalent salary for a new
14employee.
15    "Certificate of eligibility" means the certificate issued
16by the Department under subsection (c).
17    "Credit" means the amount awarded by the Department to an
18applicant by issuance of a tax credit certificate under
19subsection (f) for each qualified employee hired.
20    "Department" means the Department of Commerce and Economic
21Opportunity.
22    "Director" means the Director of the Department.
23    "Full-time employee" means an individual who is employed

 

 

HB1160- 2 -LRB097 07862 HLH 47976 b

1for a basic wage for at least 35 hours each week or who renders
2any other standard of service generally accepted by industry
3custom or practice as full-time employment.
4    "Illinois college or university" means any public or
5private college or university located in the State of Illinois.
6    "Incentive period" means the period beginning January 1,
72012 and ending December 31, 2012.
8    "Qualified employee" means a full-time employee who has
9graduated from an Illinois college or university within a year
10prior to being hired by the applicant. "Qualified employee"
11does not include:
12        (1) a person who was previously employed by the
13    applicant or a related member prior to the onset of the
14    incentive period; or
15        (2) any individual who has a direct or indirect
16    ownership interest of at least 5% in the profits, capital,
17    or value of the applicant or a related member.
18    "Noncompliance date" means, in the case of an applicant
19that is not complying with the requirements of the provisions
20of this Section, the day following the last date upon which the
21taxpayer was in compliance with the requirements of the
22provisions of this Section, as determined by the Director,
23pursuant to subsection (h).
24    "Related member" means a person that, with respect to the
25applicant during any portion of the incentive period, is any
26one of the following:

 

 

HB1160- 3 -LRB097 07862 HLH 47976 b

1        (1) An individual, if the individual and the members of
2    the individual's family (as defined in Section 318 of the
3    Internal Revenue Code) own directly, indirectly,
4    beneficially, or constructively, in the aggregate, at
5    least 50% of the value of the outstanding profits, capital,
6    stock, or other ownership interest in the applicant.
7        (2) A partnership, estate, or trust and any partner or
8    beneficiary, if the partnership, estate, or trust and its
9    partners or beneficiaries own directly, indirectly,
10    beneficially, or constructively, in the aggregate, at
11    least 50% of the profits, capital, stock, or other
12    ownership interest in the applicant.
13        (3) A corporation, and any party related to the
14    corporation in a manner that would require an attribution
15    of stock from the corporation under the attribution rules
16    of Section 318 of the Internal Revenue Code, if the
17    applicant and any other related member own, in the
18    aggregate, directly, indirectly, beneficially, or
19    constructively, at least 50% of the value of the
20    corporation's outstanding stock.
21        (4) A corporation and any party related to that
22    corporation in a manner that would require an attribution
23    of stock from the corporation to the party or from the
24    party to the corporation under the attribution rules of
25    Section 318 of the Internal Revenue Code, if the
26    corporation and all such related parties own, in the

 

 

HB1160- 4 -LRB097 07862 HLH 47976 b

1    aggregate, at least 50% of the profits, capital, stock, or
2    other ownership interest in the applicant.
3        (5) A person to or from whom there is attribution of
4    stock ownership in accordance with Section 1563(e) of the
5    Internal Revenue Code, except that for purposes of
6    determining whether a person is a related member under this
7    paragraph, "20%" shall be substituted for "5%" whenever
8    "5%" appears in Section 1563(e) of the Internal Revenue
9    Code.
10    "Tax credit certificate" means the tax credit certificate
11issued by the Department under subsection (f).
12    (b) The Department, in addition to those powers granted
13under the Civil Administrative Code of Illinois, is granted and
14shall have all the powers necessary or convenient to carry out
15and effectuate the purposes and provisions of this Section,
16including, but not limited to, the power and authority to:
17        (1) Promulgate procedures, rules, or regulations
18    deemed necessary and appropriate for the administration of
19    this Section; establish forms for applications,
20    notifications, contracts, or any other agreements; and
21    accept applications at any time during the year and require
22    that all applications be submitted via the Internet. The
23    Department shall require that applications be submitted in
24    electronic form.
25        (2) Provide guidance and assistance to applicants
26    pursuant to the provisions of this Section, and cooperate

 

 

HB1160- 5 -LRB097 07862 HLH 47976 b

1    with applicants to promote, foster, and support job
2    creation within the State.
3        (3) Enter into agreements and memoranda of
4    understanding for participation of and engage in
5    cooperation with agencies of the federal government, units
6    of local government, universities, research foundations or
7    institutions, regional economic development corporations,
8    or other organizations for the purposes of this Section.
9        (4) Gather information and conduct inquiries, in the
10    manner and by the methods it deems desirable, including,
11    without limitation, gathering information with respect to
12    applicants for the purpose of making any designations or
13    certifications necessary or desirable or to gather
14    information in furtherance of the purposes of this Section.
15        (5) Establish, negotiate, and effectuate any term,
16    agreement, or other document with any person necessary or
17    appropriate to accomplish the purposes of this Section; and
18    consent, subject to the provisions of any agreement with
19    another party, to the modification or restructuring of any
20    agreement to which the Department is a party.
21        (6) Provide for sufficient personnel to permit
22    administration, staffing, operation, and related support
23    required to adequately discharge its duties and
24    responsibilities described in this Section from funds made
25    available through charges to applicants or from funds as
26    may be appropriated by the General Assembly for the

 

 

HB1160- 6 -LRB097 07862 HLH 47976 b

1    administration of this Section.
2        (7) Require applicants, upon written request, to issue
3    any necessary authorization to the appropriate federal,
4    State, or local authority or any other person for the
5    release to the Department of information requested by the
6    Department, with the information requested to include, but
7    not be limited to, financial reports, returns, or records
8    relating to the applicant or to the amount of credit
9    allowable under this Section.
10        (8) Require that an applicant shall at all times keep
11    proper books of record and account in accordance with
12    generally accepted accounting principles consistently
13    applied, with the books, records, or papers related to the
14    agreement in the custody or control of the applicant open
15    for reasonable Department inspection and audits, and
16    including, without limitation, the making of copies of the
17    books, records, or papers.
18        (9) Take whatever actions are necessary or appropriate
19    to protect the State's interest in the event of bankruptcy,
20    default, foreclosure, or noncompliance with the terms and
21    conditions of financial assistance or participation
22    required under this Section, including the power to sell,
23    dispose of, lease, or rent, upon terms and conditions
24    determined by the Director to be appropriate, real or
25    personal property that the Department may recover as a
26    result of these actions.

 

 

HB1160- 7 -LRB097 07862 HLH 47976 b

1    (c) An applicant that has hired a qualified employee during
2the incentive period may apply for a certificate of eligibility
3for the credit with respect to the qualified employee on or
4after the date of hire of the qualified employee. The date of
5hire shall be the first day on which the employee begins
6providing services for basic wage compensation.
7    An applicant may apply for a certificate of eligibility for
8the credit for more than one qualified employee on or after the
9date of hire of each qualified employee.
10    After receipt of an application under this subsection, the
11Department shall issue a certificate of eligibility to the
12applicant, stating the date and time on which the application
13was received by the Department and an identifying number
14assigned to the applicant by the Department.
15    (d) Subject to the conditions set forth in this Section, an
16applicant is entitled to a credit of an amount equal to $1,500
17against payment of taxes withheld under Section 704A of this
18Act for each qualified employee who is employed for at least 12
19months after the date of hire, in the first calendar year
20ending on or after the date that is 12 months after the date of
21hire of the qualified employee.
22    The credit shall be claimed for the first calendar year
23ending on or after the date on which the certificate is issued
24by the Department.
25    (e) The Department shall limit the monetary amount of
26credits awarded under this Section to no more than $15,000,000.

 

 

HB1160- 8 -LRB097 07862 HLH 47976 b

1If applications for a greater amount are received, credits
2shall be allowed on a first-come-first-served basis, based on
3the date on which each properly completed application for a
4certificate of eligibility is received by the Department. If
5more than one certificate of eligibility is received on the
6same day, the credits will be awarded based on the time of
7submission for that particular day.
8    (f) On or after the conclusion of the 12-month period after
9a qualified employee has been hired, an applicant shall file
10with the Department an application for award of a credit. The
11application shall include the following:
12        (1) The names, Social Security numbers, job
13    descriptions, salary or wage rates, and dates of hire of
14    the qualified employees with respect to whom the credit is
15    being requested, and an indication of whether each
16    qualified employee listed graduated from an Illinois
17    college or university within the past year.
18        (2) A certification that each new employee listed has
19    been retained on the job for one year from the date of
20    hire.
21        (3) The number of qualified employees hired by the
22    applicant during the incentive period.
23        (4) An agreement that the Director is authorized to
24    verify with the appropriate State agencies the information
25    contained in the request before issuing a certificate to
26    the applicant.

 

 

HB1160- 9 -LRB097 07862 HLH 47976 b

1        (5) Any other information the Department determines to
2    be appropriate.
3    Although an application may be filed at any time after the
4conclusion of the 12-month period after a new employee was
5hired, an application filed more than 90 days after the
6earliest date on which it could have been filed shall not be
7awarded any credit if, prior to the date it is filed, the
8Department has received applications under this subsection for
9credits totaling more than $15,000,000.
10    The Department shall issue a tax credit certificate to each
11applicant awarded a credit under this Section. The tax credit
12certificate shall include the following:
13        (1) The name and taxpayer identification number of the
14    applicant.
15        (2) The date on which the certificate is issued.
16        (3) The credit amount that will be allowed.
17        (4) Any other information the Department determines to
18    be appropriate.
19    (g) An applicant claiming a credit under this Section shall
20submit to the Department of Revenue a copy of each tax credit
21certificate issued under subsection (f) with the first return
22for which the credit shown on the tax credit certificate is
23claimed. However, failure to submit a copy of the tax credit
24certificate with the applicant's return shall not invalidate a
25claim for a credit.
26    (h) If the Director determines that an applicant who has

 

 

HB1160- 10 -LRB097 07862 HLH 47976 b

1received a credit under this Section is not complying with the
2requirements of the provisions of this Section, the Director
3shall provide notice to the applicant of the alleged
4noncompliance, and allow the taxpayer a hearing under the
5provisions of the Illinois Administrative Procedure Act. If,
6after such notice and any hearing, the Director determines that
7a noncompliance exists, the Director shall issue to the
8Department of Revenue notice to that effect, stating the
9noncompliance date.
10    (i) The Department may adopt rules necessary to implement
11this Section. The rules may provide for recipients of credits
12under this Section to be charged fees to cover administrative
13costs of the tax credit program.
14    (j) This Section applies only for taxable years 2011 and
152012.
 
16    Section 99. Effective date. This Act takes effect upon
17becoming law.