97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB3333

 

Introduced 2/24/2011, by Rep. Eddie Lee Jackson, Sr.

 

SYNOPSIS AS INTRODUCED:
 
15 ILCS 405/10.05c new
35 ILCS 10/5-50
35 ILCS 10/5-67 new

    Amends the Economic Development for a Growing Economy (EDGE) Tax Credit Act. Requires EDGE tax credit agreements between the Department of Commerce and Economic Opportunity and applicants to contain a provision requiring the applicant to maintain, beyond the period during which it receives the EDGE tax credit, employment payrolls at an agreed upon level. Provides that if employment payrolls are not maintained at that level for the specified term, then the taxpayer must pay an administrative penalty to the Department and shall not, until having paid that penalty, be eligible for credits against obligations imposed by the Illinois Income Tax Act. Provides for an additional penalty for taxpayers that fail to maintain employment levels due to outsourcing. Requires the Department to deposit into the General Revenue Fund all moneys collected as a result of these penalties and to notify the Department of Revenue when a taxpayer, because of the operation of these provisions, becomes ineligible or eligible for credits against obligations imposed under the Illinois Income Tax Act. Amends the State Comptroller Act to require the Comptroller, at the direction of the Department of Commerce and Economic Opportunity, to deduct these penalties from certain warrants and payments made to the taxpayer, and to pay those amounts over to the Department for deposit into the General Revenue Fund. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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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 State Comptroller Act is amended by adding
5Section 10.05c as follows:
 
6    (15 ILCS 405/10.05c new)
7    Sec. 10.05c. Deductions from warrants and payments for
8satisfaction of EDGE employment penalty. At the direction of
9the Department of Commerce and Economic Opportunity, the
10Comptroller shall deduct from a warrant or other payment
11described in Section 10.05 of this Act, in accordance with the
12procedures provided therein, and pay over to the Department of
13Commerce and Economic Opportunity, for deposit into the General
14Revenue Fund, that amount certified as necessary to satisfy, in
15whole or in part, amounts due and owing from a Taxpayer under
16Section 5-67 of the Economic Development for a Growing Economy
17Tax Credit Act.
 
18    Section 10. The Economic Development for a Growing Economy
19Tax Credit Act is amended by changing Section 5-50 and by
20adding Section 5-67 as follows:
 
21    (35 ILCS 10/5-50)

 

 

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1    Sec. 5-50. Contents of Agreements with Applicants. The
2Department shall enter into an Agreement with an Applicant that
3is awarded a Credit under this Act. The Agreement must include
4all of the following:
5        (1) A detailed description of the project that is the
6    subject of the Agreement, including the location and amount
7    of the investment and jobs created or retained.
8        (2) The duration of the Credit and the first taxable
9    year for which the Credit may be claimed.
10        (3) The Credit amount that will be allowed for each
11    taxable year.
12        (4) A requirement that the Taxpayer shall maintain
13    operations at the project location that shall be stated as
14    a minimum number of years not to exceed 10.
15        (5) A specific method for determining the number of New
16    Employees employed during a taxable year.
17        (6) A requirement that the Taxpayer shall annually
18    report to the Department the number of New Employees, the
19    Incremental Income Tax withheld in connection with the New
20    Employees, and any other information the Director needs to
21    perform the Director's duties under this Act.
22        (7) A requirement that the Director is authorized to
23    verify with the appropriate State agencies the amounts
24    reported under paragraph (6), and after doing so shall
25    issue a certificate to the Taxpayer stating that the
26    amounts have been verified.

 

 

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1        (8) A requirement that the Taxpayer shall provide
2    written notification to the Director not more than 30 days
3    after the Taxpayer makes or receives a proposal that would
4    transfer the Taxpayer's State tax liability obligations to
5    a successor Taxpayer.
6        (9) A detailed description of the number of New
7    Employees to be hired, and the occupation and payroll of
8    the full-time jobs to be created or retained as a result of
9    the project.
10        (10) The minimum investment the business enterprise
11    will make in capital improvements, the time period for
12    placing the property in service, and the designated
13    location in Illinois for the investment.
14        (11) A requirement that the Taxpayer shall provide
15    written notification to the Director and the Committee not
16    more than 30 days after the Taxpayer determines that the
17    minimum job creation or retention, employment payroll, or
18    investment no longer is being or will be achieved or
19    maintained as set forth in the terms and conditions of the
20    Agreement.
21        (12) A provision that, if the total number of New
22    Employees falls below a specified level, the allowance of
23    Credit shall be suspended until the number of New Employees
24    equals or exceeds the Agreement amount.
25        (13) A detailed description of the items for which the
26    costs incurred by the Taxpayer will be included in the

 

 

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1    limitation on the Credit provided in Section 5-30.
2        (13.5) A provision (i) requiring the Taxpayer to
3    maintain, for an agreed upon term lasting beyond the term
4    during which the Credit is received, employment payrolls at
5    a level agreed upon with the Department and (ii) specifying
6    that the Taxpayer must pay the penalty specified in Section
7    5-67 if it does not maintain employment payrolls at that
8    level for the agreed upon term.
9        (14) Any other performance conditions or contract
10    provisions as the Department determines are appropriate.
11(Source: P.A. 91-476, eff. 8-11-99.)
 
12    (35 ILCS 10/5-67 new)
13    Sec. 5-67. EDGE employment penalty. If a Taxpayer fails to
14maintain employment payrolls at the level and for the term
15specified by agreement under item (13.5) of Section 5-50, then
16the Taxpayer must pay an administrative penalty to the
17Department in an amount that the Department shall establish by
18rule, and shall not, until having paid that penalty in full, be
19eligible for any credit to offset obligations imposed under the
20Illinois Income Tax Act. Taxpayers who fail to maintain
21employment payrolls at the level and for the term specified by
22agreement under item (13.5) of Section 5-50 due to labor
23outsourcing to other states, other countries, or both, shall
24pay an additional administrative penalty to the Department in
25an amount that the Department shall establish by rule. The

 

 

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1Department shall deposit into the General Revenue Fund all
2moneys collected under this Section 5-67, and shall notify the
3Department of Revenue when a Taxpayer, because of the operation
4of this Section, becomes ineligible or eligible for credits
5against obligations imposed under the Illinois Income Tax Act.
 
6    Section 99. Effective date. This Act takes effect upon
7becoming law.