HB5342 EngrossedLRB097 20175 HLH 65584 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 Corporate Accountability for Tax 
5Expenditures Act is amended  by changing Section 25 as follows:
 



6    (20 ILCS 715/25)



7    Sec. 25. Recapture. 

8    (a) All development assistance agreements
shall contain, 
9at a
minimum, the following recapture provisions:


10        (1) The recipient must (i) make the level of capital 
11    investment in the
economic
development project specified 
12    in the development assistance agreement; (ii)
create or

13    retain, or both, the requisite number of jobs, paying not 
14    less than specified
wages for the
created and retained 
15    jobs, within and for the duration of the time period

16    specified in the
legislation authorizing, or the 
17    administrative rules implementing, the
development

18    assistance programs and the development assistance 
19    agreement.


20        (2) If the recipient fails to create or retain the 
21    requisite number of
jobs within and
for the time period 
22    specified, in the legislation authorizing, or the

23    administrative rules
implementing, the development 
 
 
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1    assistance programs and the development
assistance

2    agreement, the recipient shall be deemed to no longer 
3    qualify for the State
economic
assistance and the 
4    applicable recapture provisions shall take effect.


5        (3) If the recipient receives State economic 
6    assistance in the form of a
High
Impact Business 
7    designation pursuant to Section 5.5 of the Illinois 
8    Enterprise
Zone Act
and the business receives the benefit 
9    of the exemption authorized under Section
5l of the

10    Retailers' Occupation Tax Act (for the sale of building 
11    materials incorporated
into a High
Impact Business 
12    location) and the recipient fails to create or retain the

13    requisite number
of jobs, as determined by the legislation 
14    authorizing the development
assistance
programs
or the 
15    administrative rules implementing such legislation, or 
16    both, within the
requisite
period of time, the recipient 
17    shall be required to pay to the State the full
amount of 
18    the
State tax exemption that it received as a result of the 
19    High Impact Business
designation.


20        (4) If the recipient receives a grant or loan pursuant 
21    to the Large
Business
Development Program, the Business 
22    Development Public Infrastructure Program, or
the

23    Industrial Training Program and the recipient fails to 
24    create or retain the
requisite number
of jobs for the 
25    requisite time period, as provided in the legislation

26    authorizing the
development assistance programs or the 
 
 
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1    administrative rules implementing such
legislation, or 
2    both, or in the development assistance agreement, the 
3    recipient
shall be
required to repay to the State a pro 
4    rata amount of the grant; that amount
shall
reflect
the 
5    percentage of the deficiency between the requisite number 
6    of jobs to be
created or
retained by the recipient and the 
7    actual number of such jobs in existence as of
the date the

8    Department determines the recipient is in breach of the job 
9    creation or
retention
covenants contained in the 
10    development assistance agreement. If the recipient
of

11    development assistance under the Large Business 
12    Development Program, the
Business
Development Public 
13    Infrastructure Program, or the Industrial Training Program

14    ceases
operations at the specific project site, during the 
15    5-year period commencing on
the date of
assistance, the 
16    recipient shall be required to repay the entire amount of 
17    the
grant or to
accelerate repayment of the loan back to 
18    the State.


19        (5) If the recipient receives a tax credit under the 
20    Economic
Development for a
Growing Economy tax credit 
21    program, the development assistance agreement must
provide 
22    that (i) if the number of new or retained employees falls 
23    below the
requisite
number set forth in the development 
24    assistance agreement, the allowance of the
credit
shall be 
25    automatically suspended until the number of new and 
26    retained employees
equals
or exceeds the requisite number 
 
 
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1    in the development assistance agreement; (ii)
if
the

2    recipient discontinues operations at the specific project 
3    site during the 5-year period after the beginning of the 
4    first tax year for which the Department issues a tax credit 
5    certificate, the recipient shall
forfeit all
credits taken 
6    by the recipient during such 5-year period; and (iii) in 
7    the
event
of a
revocation or suspension of the credit, the 
8    Department shall contact the
Director
of Revenue to 
9    initiate proceedings against the recipient to recover

10    wrongfully
exempted Illinois State income taxes and the 
11    recipient shall promptly repay to
the
Department of Revenue 
12    any wrongfully exempted Illinois State income taxes.
The 
13    forfeited amount of credits shall be deemed assessed on the 
14    date the
Department
contacts the Department of Revenue and 
15    the recipient shall promptly repay to
the
Department of 
16    Revenue any wrongfully exempted Illinois State income 
17    taxes.

18    (b) The Director may elect to waive enforcement of any 
19contractual provision
arising out of
the development 
20assistance agreement required by this Act based on a finding

21that the waiver is
necessary to avert an imminent and 
22demonstrable hardship to the
recipient that may
result in such 
23recipient's insolvency or discharge of workers.
If a waiver is

24granted, the recipient must agree to a contractual 
25modification, including
recapture provisions,
to the

26development assistance
agreement.
The existence of
any waiver

 
 
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1granted pursuant to this subsection (c), the date of the 
2granting of such
waiver, and a brief
summary of the reasons 
3supporting the granting of such waiver shall be
disclosed

4consistent with
the provisions of Section 25 of this Act.

5    (b-5)  The Department shall post, on its website, (i)  the 
6identity of each recipient from whom amounts were recaptured 
7under this Section on or after the effective date of this 
8amendatory Act of the 97th General Assembly, (ii)  the date of 
9the recapture,  (iii) a summary of the reasons supporting the 
10recapture, and (iv) the amount recaptured from those 
11recipients. 
12    (c) Beginning June 1, 2004, the Department shall annually 
13compile a report
on the
outcomes and effectiveness of recapture 
14provisions by program, including but
not limited
to: (i) the 
15total number of companies that receive development assistance 
16as
defined in
this Act; (ii) the total number of recipients in 
17violation of development
agreements with
the Department; (iii) 
18the total number of completed recapture efforts; (iv) the
total

19number of recapture efforts initiated; and (v) the number of 
20waivers granted.
This report
shall be disclosed consistent with 
21the provisions of Section 20 of this Act.

22    (d) For the purposes of this Act, recapture provisions do 
23not include the
Illinois
Department of Transportation Economic 
24Development Program, any grants under the
Industrial Training 
25Program that are not given as an incentive to a
recipient 
26business organization,
or any successor programs as described 
 
 
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1in the term "development assistance" in
Section 5
of this Act.

2(Source: P.A. 97-2, eff. 5-6-11.)