SB3849 101ST GENERAL ASSEMBLY

LRB101 19299 RJF 68766 b

101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB3849

Introduced 2/14/2020, by Sen. Ann Gillespie

SYNOPSIS AS INTRODUCED:

20 ILCS 655/5.1	from Ch. 67 1/2, par. 606
20 ILCS 655/5.4	from Ch. 67 1/2, par. 609
20 ILCS 655/8.1

Amends the Illinois Enterprise Zone Act. Contains provisions concerning provisional certification and provisional decertification of Enterprise Zones. Further provides that if the Department of Commerce and Economic Opportunity determines that 60% or more of the businesses receiving tax incentives because of their location within a particular Enterprise Zone fail to submit specified required information to the Department in any calendar year, then the Enterprise Zone may be decertified by the Department. Makes conforming.

A BILL FOR

AN ACT concerning State government.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Enterprise Zone Act is amended by changing Sections 5.1, 5.4, and 8.1 as follows:

(20 ILCS 655/5.1) (from Ch. 67 1/2, par. 606)

Sec. 5.1. Application to Department.

(a) A county or municipality which has adopted an ordinance designating an area as an enterprise zone shall make written application to the Department to have such proposed enterprise zone certified by the Department as an Enterprise Zone. The application shall include:

(i) a certified copy of the ordinance designating the proposed zone;

(ii) a map of the proposed enterprise zone, showing existing streets and highways;

(iii) an analysis, and any appropriate supporting documents and statistics, demonstrating that the proposed zone area is qualified in accordance with Section 4;

(iv) a statement detailing any tax, grant, and other financial incentives or benefits, and any programs, to be provided by the municipality or county to business enterprises within the zone, other than those provided in the designating ordinance, which are not to be provided throughout the municipality or county;

(v) a statement setting forth the economic development and planning objectives for the zone;

(vi) a statement describing the functions, programs, and services to be performed by designated zone organizations within the zone;

(vii) an estimate of the economic impact of the zone, considering all of the tax incentives, financial benefits and programs contemplated, upon the revenues of the municipality or county;

(viii) a transcript of all public hearings on the zone;

(ix) in the case of a joint application, a statement detailing the need for a zone covering portions of more than one municipality or county and a description of the agreement between joint applicants; and

(x) such additional information as the Department by regulation may require.

(b) The Department may provide for provisional certification of substantially complete applications pending the receipt of any of the items identified in subsection (a) of this Section or any additional information requested by the Department.

(Source: P.A. 82-1019.)

(20 ILCS 655/5.4) (from Ch. 67 1/2, par. 609)

Sec. 5.4. Amendment and Decertification of Enterprise Zones.

(a) The terms of a certified enterprise zone designating ordinance may be amended to

(i) alter the boundaries of the Enterprise Zone, or

(ii) expand, limit or repeal tax incentives or benefits provided in the ordinance, or

(iii) alter the termination date of the zone, or

(iv) make technical corrections in the enterprise zone designating ordinance; but such amendment shall not be effective unless the Department issues an amended certificate for the Enterprise Zone, approving the amended designating ordinance. Upon the adoption of any ordinance amending or repealing the terms of a certified enterprise zone designating ordinance, the municipality or county shall promptly file with the Department an application for approval thereof, containing substantially the same information as required for an application under Section 5.1 insofar as material to the proposed changes. The municipality or county must hold a public hearing on the proposed changes as specified in Section 5 and, if the amendment is to effectuate the limitation of tax abatements under Section 5.4.1, then the public notice of the hearing shall state that property that is in both the enterprise zone and a redevelopment project area may not receive tax abatements unless within 60 days after the adoption of the amendment to the designating ordinance the municipality has determined that eligibility for tax abatements has been established,

(v) include an area within another municipality or county as part of the designated enterprise zone provided the requirements of Section 4 are complied with, or

(vi) effectuate the limitation of tax abatements under Section 5.4.1.

(b) The Department shall approve or disapprove a proposed amendment to a certified enterprise zone within 90 days of its receipt of the application from the municipality or county. The Department may not approve changes in a Zone which are not in conformity with this Act, as now or hereafter amended, or with other applicable laws. If the Department issues an amended certificate for an Enterprise Zone, the amended certificate, together with the amended zone designating ordinance, shall be filed, recorded and transmitted as provided in Section 5.3.

(c) An Enterprise Zone may be decertified by joint action of the Department and the designating county or municipality in accordance with this Section. The designating county or municipality shall conduct at least one public hearing within the zone prior to its adoption of an ordinance of de-designation. The mayor of the designating municipality or the chairman of the county board of the designating county shall execute a joint decertification agreement with the Department. A decertification of an Enterprise Zone shall not become effective until at least 6 months after the execution of the decertification agreement, which shall be filed in the office of the Secretary of State.

(d) An Enterprise Zone may be decertified for cause by the Department in accordance with this Section. Prior to decertification: (1) the Department shall notify the chief elected official of the designating county or municipality in writing of the specific deficiencies which provide cause for decertification; (2) the Department shall place the designating county or municipality on probationary status for at least 6 months during which time corrective action may be achieved in the enterprise zone by the designating county or municipality; and, (3) the Department shall conduct at least one public hearing within the zone. If such corrective action is not achieved during the probationary period, the Department shall issue an amended certificate signed by the Director of the Department decertifying the enterprise zone, which certificate shall be filed in the office of the Secretary of State. A certified copy of the amended enterprise zone certificate, or a duplicate original thereof, shall be recorded in the office of recorder of the county in which the enterprise zone lies, and shall be provided to the chief elected official of the designating county or municipality. Decertification of an Enterprise Zone shall not become effective until 60 days after the date of filing.

(d-5) The Department shall provisionally decertify any Enterprise Zone that fails to report any capital investment, job creation or retention, or State tax expenditures for 3 consecutive calendar years. Prior to provisional decertification: (1) the Department shall notify the chief elected official of the designating county or municipality in writing of the specific deficiencies which provide cause for decertification; (2) the Department shall place the designating county or municipality on probationary status for at least 6 months during which time corrective action may be achieved in the Enterprise Zone by the designating county or municipality; and (3) the Department shall conduct at least one public hearing within the Zone. If such corrective action is not achieved during the probationary period, the Department shall issue an amended certificate signed by the Director of the Department provisionally decertifying the Enterprise Zone as of the scheduled termination date of the then-current designation. If the provisionally-decertified Zone was approved and designated after the 101st General Assembly and has been in existence for less than 15 years, such Zone shall not be eligible for an additional 10-year designation after the expiration date of the original Zone set forth in subsection (c) of Section 5.3. Further, if such corrective action is not achieved during the probationary period provided for in this Section, following such probationary period the Zone becomes available for a different area to compete for designation.

(e) In the event of a decertification, provisional decertification, or an amendment reducing the length of the term or the area of an Enterprise Zone or the adoption of an ordinance reducing or eliminating tax benefits in an Enterprise Zone, all benefits previously extended within the Zone pursuant to this Act or pursuant to any other Illinois law providing benefits specifically to or within Enterprise Zones shall remain in effect for the original stated term of the Enterprise Zone, with respect to business enterprises within the Zone on the effective date of such decertification, provisional decertification, or amendment, and with respect to individuals participating in urban homestead programs under this Act.

(f) Except as otherwise provided in Section 5.4.1, with respect to business enterprises (or expansions thereof) which are proposed or under development within a Zone at the time of a decertification or an amendment reducing the length of the term of the Zone, or excluding from the Zone area the site of the proposed enterprise, or an ordinance reducing or eliminating tax benefits in a Zone, such business enterprise shall be entitled to the benefits previously applicable within the Zone for the original stated term of the Zone, if the business enterprise establishes:

(i) that the proposed business enterprise or expansion has been committed to be located within the Zone;

(ii) that substantial and binding financial obligations have been made towards the development of such enterprise; and

(iii) that such commitments have been made in reasonable reliance on the benefits and programs which were to have been applicable to the enterprise by reason of the Zone, including in the case of a reduction in term of a zone, the original length of the term.

In declaratory judgment actions under this paragraph, the Department and the designating municipality or county shall be necessary parties defendant.

(Source: P.A. 90-258, eff. 7-30-97.)

(20 ILCS 655/8.1)

Sec. 8.1. Accounting.

(a) Any business receiving tax incentives due to its location within an Enterprise Zone or its designation as a High Impact Business must annually report to the Department of Revenue information reasonably required by the Department of Revenue to enable the Department to verify and calculate the total Enterprise Zone or High Impact Business tax benefits for property taxes and taxes imposed by the State that are received by the business, broken down by incentive category and enterprise zone, if applicable. Reports will be due no later than May 31 of each year and shall cover the previous calendar year. The first report will be for the 2012 calendar year and will be due no later than May 31, 2013. Failure to report data may result in ineligibility to receive incentives. To the extent that a business receiving tax incentives has obtained an Enterprise Zone Building Materials Exemption Certificate or a High Impact Business Building Materials Exemption Certificate, that business is required to report those building materials exemption benefits only under subsection (a-5) of this Section. No additional reporting for those building materials exemption benefits is required under this subsection (a). In addition, if the Department determines that 60% or more of the businesses receiving tax incentives because of their location within a particular Enterprise Zone failed to submit the information required under this subsection (a) to the Department in any calendar year, then the Enterprise Zone may be decertified by the Department. The Department, in consultation with the Department of Revenue, is authorized to adopt rules governing ineligibility to receive exemptions, including the length of ineligibility. Factors to be considered in determining whether a business is ineligible shall include, but are not limited to, prior compliance with the reporting requirements, cooperation in discontinuing and correcting violations, the extent of the violation, and whether the violation was willful or inadvertent.

(a-5) Each contractor or other entity that has been issued an Enterprise Zone Building Materials Exemption Certificate under Section 5k of the Retailers' Occupation Tax Act or a High Impact Business Building Materials Exemption Certificate under Section 5l of the Retailers' Occupation Tax Act shall annually report to the Department of Revenue the total value of the Enterprise Zone or High Impact Business building materials exemption from State taxes. Reports shall contain information reasonably required by the Department of Revenue to enable it to verify and calculate the total tax benefits for taxes imposed by the State, and shall be broken down by Enterprise Zone. Reports are due no later than May 31 of each year and shall cover the previous calendar year. The first report will be for the 2013 calendar year and will be due no later than May 31, 2014. Failure to report data may result in revocation of the Enterprise Zone Building Materials Exemption Certificate or High Impact Business Building Materials Exemption Certificate issued to the contractor or other entity.

The Department of Revenue is authorized to adopt rules governing revocation determinations, including the length of revocation. Factors to be considered in revocations shall include, but are not limited to, prior compliance with the reporting requirements, cooperation in discontinuing and correcting violations, and whether the certificate was used unlawfully during the preceding year.

(b) Each person required to file a return under the Gas Revenue Tax Act, the Gas Use Tax Act, the Electricity Excise Tax Act, or the Telecommunications Excise Tax Act shall file, on or before May 31 of each year, a report with the Department of Revenue, in the manner and form required by the Department of Revenue, containing information reasonably required by the Department of Revenue to enable the Department of Revenue to calculate the amount of the deduction for taxes imposed by the State that is taken under each Act, respectively, due to the location of a business in an Enterprise Zone or its designation as a High Impact Business. The report shall be itemized by business and the business location address.

(c) Employers shall report their job creation, retention, and capital investment numbers within the zone annually to the Department of Revenue no later than May 31 of each calendar year. High Impact Businesses shall report their job creation, retention, and capital investment numbers to the Department of Revenue no later than May 31 of each year.

(d) The Department of Revenue will aggregate and collect the tax, job, and capital investment data by Enterprise Zone and High Impact Business and report this information, formatted to exclude company-specific proprietary information, to the Department and the Board by August 1, 2013, and by August 1 of every calendar year thereafter. The Department will include this information in their required reports under Section 6 of this Act. The Board shall consider this information during the reviews required under subsection (d-5) of Section 5.4 of this Act and subsection (c) of Section 5.3 of this Act.

(e) The Department of Revenue, in its discretion, may require that the reports filed under this Section be submitted electronically.

(f) The Department of Revenue shall have the authority to adopt rules as are reasonable and necessary to implement the provisions of this Section.

(Source: P.A. 97-905, eff. 8-7-12; 98-109, eff. 7-25-13.)