HB3333 102ND GENERAL ASSEMBLY

LRB102 14991 HLH 20346 b

102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB3333

Introduced 2/19/2021, by Rep. Jeff Keicher

SYNOPSIS AS INTRODUCED:

New Act

Creates the Community-Anchored Development Act. Provides that the Department of Commerce and Economic Opportunity may establish a Community-Anchored Development Program to invest in and incentivize the expansion of targeted industries in the State and the continued development of certain areas of the State through the provision of tax credits to anchor institutions. Provides that an "anchor institution" is a governmental entity or nonprofit entity that is a comprehensive health care system, a public research university, a private research university, a major cultural scientific, research, and philanthropic institution, or a public college which is separate from a public research university.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning revenue.

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

Section 1. Short title. This Act may be cited as the Community-Anchored Development Act.

Section 5. Purpose; tax credit awards. The purpose of this Act is for the Department of Commerce and Economic Opportunity to facilitate, in partnership with the Department of Revenue and the State's key not-for-profit and governmental anchor institutions, large-scale development projects with desirable employment and geographical characteristics that are able to impact a broader community. The General Assembly finds that, where a broad commonality of goals exists between anchor institutions and the State, the State can effectively utilize anchor institutions as investors in, and additional overseers of, projects that the Department seeks to incentivize. Under this Act, anchor institutions in the areas of education, health care, culture, community development, and economic development are provided with the opportunity to act as investors in targeted development, utilizing proceeds from the sale of State tax credits. This approach harnesses the deep experience of the numerous anchor institutions in the State, institutions that enjoy decades-long relationships with communities around the State, making them ideal partners for companies wanting to come to or expand in Illinois.

This Act seeks to overcome cost-of-occupancy differences Illinois and less expensive options in other jurisdictions for specific properties by reducing the cost of occupancy being offered to a targeted company.

This Act affords an opportunity for anchor institutions and the State to become partners in a project, with the State receiving a negotiated current or deferred economic return on the tax credit investment made by the anchor institution and ultimately the return of the amount initially invested. Through a competitive application process to the Department, a real estate partnership between an anchor institution and a partner business will make its case for an amount of tax credits necessary for that project to be able to establish occupancy costs at a competitive level.

The tax credits issued by the Department to an applicant anchor institution are to be issued pursuant to a tax credit agreement that sets forth negotiated terms on which the Department has agreed to issue the credits. The tax credit agreement is to include standards relating to the anticipated economic results of the community-anchored project and address accountability if the community-anchored project fails to meet the requirements specified in the tax credit agreement.

The General Assembly declares that 2 principal objectives underscore the policy approach of this Act: first, an incentive program cannot succeed as a one-size-fits-all structure, and therefore an award of tax credits is to be thoroughly underwritten by the Department and specifically designed for scenarios in which the Department finds that the award will be effective; and second, the State is better served where the State's financial support is characterized and treated as an investment rather than an explicit grant.

Section 10. Definitions. As used in this Act:

"Anchor institution" means a governmental entity or nonprofit entity designated by the Department and having a primary mission and specific policy goals that align with those of the Department under the program and that is a comprehensive health care system, a public research university, a private research university, a major cultural scientific, research and philanthropic institution, or public college which is separate from a public research university.

"Community-anchored project" means a capital project that is located in an area that is designated by the Department and will result in a capital investment of at least $10,000,000 in an opportunity zone or in any other area of the State; however, a project that is not located in an opportunity zone is to be primarily designed to result in the economic expansion of a targeted industry in this State.

"Department" means the Department of Commerce and Economic Opportunity.

"Opportunity zone" means a federal population census tract in this State that was eligible to be designated as a qualified opportunity zone pursuant to 26 U.S.C. 1400Z-1.

"Partner business" means a corporation, partnership, firm, enterprise, franchise, association, trust, sole proprietorship, or other legal entity, but shall not include a public entity that enters into an agreement with an anchor institution to rent and occupy commercial space within a community-anchored project. Under the program a partner business, subject to agreement with the anchor institution, may lease one or more portions of the partner business's space in the community-anchored project to one or more other persons or entities.

Section 15. Program established. The Community-Anchored Development Program is established under the jurisdiction of the Department. The Department shall administer the program to invest in and incentivize the expansion of targeted industries in the State and the continued development of certain areas of the State through the provision of tax credits to anchor institutions. The Department shall certify qualified anchor institutions based on the requirements of this Act, and may approve tax credits to anchor institutions pursuant to this Act. The value of all tax credits approved by the Department to anchor institutions under the program shall be subject to the limitations set forth in this Section.

The program shall invest in and incentivize the establishment of community-anchored projects by anchor institutions, independently or in collaboration with one or more partner businesses or governmental entities. The Department's investment in community-anchored projects shall be in the form of the award of tax credits to anchor institutions.

The Department may award no more than $200,000,000 in tax credits under this Act in any State fiscal year.

The Department may adopt rules to implement this Act.