HB3418eng 103RD GENERAL ASSEMBLY

HB3418 Engrossed LRB103 29223 SPS 55610 b

AN ACT concerning employment.

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 Securing All Futures through Equitable Reinvestment (SAFER) Communities Act.

Section 5. Intent. To reverse the trend of high unemployment among formerly incarcerated individuals and to spur the economic recovery of small businesses in Illinois, it is necessary to provide financial incentives for employers to create new, full-time jobs for individuals with felony conviction records.

The intent of this Act is to facilitate the re-entry into society of formerly incarcerated individuals and to create financial incentives for employers that hire formerly incarcerated individuals.

Section 10. Definitions. As used in this Act:

"Average wage" means the average annual wage paid to individuals who are employed in the same occupation as the participant in the metropolitan or nonmetropolitan statistical area where the participant's primary job site is located. "Average annual wage" shall be determined by the Department using the most recent data published by the Bureau of Labor Statistics of the United States Department of Labor in its Occupational Outlook Handbook, or any similar Bureau of Labor Statistics publication, as of the effective date of the agreement for wage reimbursement under this Act.

"Barrier reduction funding" has the meaning given to that term in Section 605-415 of the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois.

"Date of hire" means the first date on which a participant begins working for an employer as a full-time employee.

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

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

"Disproportionately impacted area" means a census tract that is located in an R3 Area designated by the Restore, Reinvest, and Renew Program Board in accordance with Section 10-40 of the Cannabis Regulation and Tax Act.

"Employer" means an Illinois taxpayer that has an agreement with a Navigator to (i) hire at least one participant as a full-time employee and (ii) provide the employee with the knowledge or skills essential to the full and adequate performance of the job.

"Full-time employee" means an individual who is employed for at least 30 hours each week in (i) a position that is covered by a collective bargaining agreement between the union and an employer or (ii) a position for which the individual receives a wage that meets or exceeds the average wage for that occupation.

"Navigator" means any one or more of the following entities that has demonstrated expertise and effectiveness in administering workforce development programs for formerly incarcerated participants and is certified by the Department as a Navigator: a private nonprofit or not-for-profit organization, an industry association, an administrative entity under the federal Workforce Innovation and Opportunity Act, a community action agency, or a public or private educational institution.

"Participant" means an individual who:

(1) is an Illinois resident;

(2) was an unemployed or underemployed individual immediately before being hired by the employer;

(3) served a sentence of incarceration in a State or federal prison that (i) ends not more than 10 years before the date the employee is accepted by a Navigator to participate in the program and (ii) ends or is expected to end no later than 12 months after the employee is accepted by a Navigator to participate in the program; and

(4) has been accepted by a Navigator to participate in the program.

"Program" means the Securing All Futures through Equitable Reinvestment (SAFER) Communities Wage Reimbursement Pilot Program created in this Act.

"Underemployed individual" means an individual who:

(1) works part-time but desires full-time employment;

(2) works for wages not commensurate with the individual's demonstrated level of educational or skill achievement; or

(3) is employed and is eligible for assistance under Section 6 of the Energy Assistance Act.

"Unemployed individual" means an individual who is without a job and who wants and is available for work. The determination of whether an individual is without a job, for purposes of this definition, shall be made in accordance with the criteria used by the Bureau of Labor Statistics of the United States Department of Labor or as required by the relevant funding source and set forth in the Notice of Funding Opportunities.

"Wage reimbursement" means the amount awarded by the Department to a Navigator to compensate the employer for the employer's costs of employment for each participant hired by the employer.

Section 15. Powers of the Department. The Department is granted and shall have all the powers necessary or convenient to carry out the purposes and provisions of this Act, including, but not limited to, the power and authority to:

(1) adopt rules that are necessary and appropriate for the administration of this Act;

(2) establish forms for applications, notifications, contracts, or any other agreements needed to implement this Act;

(3) accept applications for the program under this Act at any time during the year and require that the applications be submitted through the Internet or by any other electronic means;

(4) provide guidance and assistance to Navigators for the purpose of carrying out this Act and cooperate with Navigators to promote, foster, and support job creation in the State;

(5) enter into agreements and memoranda of understanding with agencies of the federal government, units of local government, universities, research foundations or institutions, regional economic development corporations, not-for-profit organizations, or other organizations for the purpose of administering this Act;

(6) gather information about Navigators for the purpose of making any designations or certifications in furtherance of the purposes of this Act;

(7) provide for sufficient personnel to adequately discharge the Department's duties and responsibilities described in this Act from any funds appropriated by the General Assembly for the administration of this Act; and

(8) require Navigators, upon written request, to issue any necessary authorization to the appropriate federal, State, or local authority or any other person for the release to the Department of information requested by the Department, including, but not limited to, financial reports, returns, or records relating to the Navigators or to the amount of the wage reimbursement allowable under this Act.

Section 20. SAFER Communities Wage Reimbursement Pilot Program.

(a) The Department shall, subject to appropriation, create a program to award grants to Navigators for the purposes described in this Section.

(b) The Department shall award grants to Navigators for the following purposes:

(1) providing wage reimbursements to employers that hire participants, as provided in Sections 25 and 30;

(2) collaborating with employers to support participants who require on-the-job experience to gain job skills, develop a work history, and begin a network for entering the workforce; and

(3) providing barrier reduction funding, including, but not limited to, transportation, housing, childcare, and technology services to participants, as needed.

(c) The Department may also award grants for the following purposes to Navigators who are eligible to receive grants under subsection (b):

(1) establishing retention coaching programs that support worker retention by continuing the services described in subparagraph (3) of subsection (b) for one year after job placement, as needed; and

(2) supporting participants who aspire to participate in additional workforce development, training, and technical skills programs and opportunities.

(d) Navigators shall use the Department's system of record to maintain a record of all participants who are eligible for the Program. Navigators shall verify each applicant's employment and conviction history to determine whether the applicant is eligible for participation in the program. Navigators shall notify applicants by email of the denial or approval of the application. Navigators may also send a physical copy of the denial or approval by first-class mail if the application indicates that email is not the applicant's preferred method of communication. Each denial letter issued under this subsection shall state the reason why the individual's application is being denied. Navigators shall submit to the Department a record of each applicant's denial or approval. Navigators shall email qualified participants an electronic certification of eligibility with details about the wage subsidy program, which the participant may present to a prospective employer. The Navigator may also send a physical copy of the certification by first class mail if the application indicates that email is not the applicant's preferred method of communication.

Section 25. Eligibility and reporting.

(a) The Navigator shall enter into an agreement with the employer of an eligible participant to establish the general terms and conditions of wage reimbursements with respect to that participant. At a minimum, the agreement shall include:

(1) the participant's name, social security number or individual taxpayer identification number, job description, and salary;

(2) the physical address of the workplace at which the participant is based;

(3) the negotiated reimbursement rate for the wage the Navigator would receive under this Act with respect to the participant listed on the application; and

(4) any other information required by the Department.

(b) Wage reimbursements provided to employers must not directly or indirectly assist, promote, or deter union organizing.

(c) Navigators shall submit monthly reports in the form and manner required by the Department that include the employment status of each participant.

Section 30. Wage reimbursement.

(a) An employer may enter into a wage reimbursement agreement under Section 25 for each participant who is employed by the employer as a full-time employee for a full calendar month as of the date the agreement is entered into, provided that the following conditions are met:

(1) the participant shall be provided benefits and working conditions at the same level and to the same extent as other employees who have been employed by the employer for a similar length of time and do the same type of work as the participant;

(2) starting from the date of hire of the participant, the employer shall maintain or increase its total number of full-time Illinois employees; and

(3) the employer shall pay the participant a wage that, when annualized, meets or exceeds the average wage paid by the employer to other employees who have been employed by the employer for a similar length of time and do the same type of work as the participant.

(b) The wage reimbursement received by an employer shall be 50% of the wages earned by each participant as a result of his or her employment with the employer. However, if the participant's primary job site is located in a disproportionately impacted area, then the wage reimbursement shall be 75% of the wages earned by that participant. No employer shall receive a wage reimbursement for a particular participant for more than 12 consecutive months.

Section 35. Data collection and reporting. For years in which it receives an appropriation for purposes of this Act, the Department shall make publicly available an annual report on the use, outcomes, and impact of the program described in this Act, including, but not limited to, the total number of participants hired under the program, disaggregated by categories of race, age, gender, hourly wage, length of job retention, recidivism status, job location by region, and employment industry.

Section 40. Awareness promotion of the pilot program. The Department of Corrections shall implement procedures to promote awareness and participation in the program among eligible persons, including, but not limited to, the following:

(1) The Department of Corrections shall ensure that the wardens or superintendents of all correctional institutions and facilities visibly post information about the availability and registration process for the program in all common areas of their respective institutions, and shall broadcast the same via in-house institutional information television channels. The Department of Corrections shall ensure that updated information is distributed in a timely, visible, and accessible manner.

(2) The Department of Corrections shall ensure that each incarcerated individual, upon release as a committed person on parole, mandatory supervised release, aftercare release, final discharge, or pardon, shall be provided with written information about the availability and registration process for the program.

(3) The Department of Corrections shall provide to each parole office in this State information about the availability and application process for the program, which shall be posted in a visible and accessible manner.

(4) The Department of Corrections shall distribute written information about the availability and application process for the program to the Community Support Advisory Councils of the Department of Corrections for use in re-entry programs across this State.

Section 45. Funding. Implementation of this Act is subject to appropriation.

Section 50. Rulemaking authority. Upon an appropriation for the Program, the Department may adopt rules that are necessary to implement and administer this Act.

Section 55. Repeal. This Act is repealed on December 31, 2029.

Section 895. The Illinois Administrative Procedure Act is amended by adding Section 5-45.35 as follows:

(5 ILCS 100/5-45.35 new)

Sec. 5-45.35. Emergency rulemaking; Securing All Futures through Equitable Reinvestment (SAFER) Communities Act. To provide for the expeditious and timely implementation of the Securing All Futures through Equitable Reinvestment (SAFER) Communities Act, emergency rules implementing that Act may be adopted in accordance with Section 5-45 by the Department of Commerce and Economic Opportunity. The adoption of emergency rules authorized by Section 5-45 and this Section is deemed to be necessary for the public interest, safety, and welfare.

This Section is repealed one year after the effective date of this amendatory Act of the 103rd General Assembly.

Section 900. The Illinois Income Tax Act is amended by changing Section 216 and by adding Section 216.1 as follows:

(35 ILCS 5/216)

Sec. 216. Credit for wages paid to ex-felons.

(a) For each taxable year beginning on or after January 1, 2007 and before January 1, 2024, each taxpayer is entitled to a credit against the tax imposed by subsections (a) and (b) of Section 201 of this Act in an amount equal to 5% of qualified wages paid by the taxpayer during the taxable year to one or more Illinois residents who are qualified ex-offenders. The total credit allowed to a taxpayer with respect to each qualified ex-offender may not exceed $1,500 for all taxable years. For partners, shareholders of Subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there shall be allowed a credit under this Section to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code.

(b) For purposes of this Section, "qualified wages":

(1) includes only wages that are subject to federal unemployment tax under Section 3306 of the Internal Revenue Code, without regard to any dollar limitation contained in that Section;

(2) does not include any amounts paid or incurred by an employer for any period to any qualified ex-offender for whom the employer receives federally funded payments for on-the-job training of that qualified ex-offender for that period; and

(3) includes only wages attributable to service rendered during the one-year period beginning with the day the qualified ex-offender begins work for the employer.

If the taxpayer has received any payment from a program established under Section 482(e)(1) of the federal Social Security Act with respect to a qualified ex-offender, then, for purposes of calculating the credit under this Section, the amount of the qualified wages paid to that qualified ex-offender must be reduced by the amount of the payment.

(c) For purposes of this Section, "qualified ex-offender" means any person who:

(1) has been convicted of a crime in this State or of an offense in any other jurisdiction, not including any offense or attempted offense that would subject a person to registration under the Sex Offender Registration Act;

(2) was sentenced to a period of incarceration in an Illinois adult correctional center; and

(3) was hired by the taxpayer within 3 years after being released from an Illinois adult correctional center.

(d) In no event shall a credit under this Section reduce the taxpayer's liability to less than zero. If the amount of the credit exceeds the tax liability for the year, the excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year. The tax credit shall be applied to the earliest year for which there is a tax liability. If there are credits for more than one year that are available to offset a liability, the earlier credit shall be applied first.

(e) This Section is exempt from the provisions of Section 250.

(Source: P.A. 98-165, eff. 8-5-13.)

(35 ILCS 5/216.1 new)

Sec. 216.1. Credit for wages paid to ex-offenders.

(a) In this Section:

"Qualified ex-offender" means any person who was hired by the taxpayer within 10 years after being released from a correctional center in the State.

"Qualified wages" includes only wages that are attributable to service rendered during the one-year period beginning with the day the qualified ex-offender begins work for the employer and are subject to federal unemployment tax under Section 3306 of the Internal Revenue Code, without regard to any dollar limitation contained in that Section. "Qualified wages" does not include any amounts paid or incurred by an employer for any period to any qualified ex-offender for whom the employer receives State-funded or federally funded payments for on-the-job training of that qualified ex-offender for that period. If the taxpayer has received any payment from a program established under Section 482(e)(1) of the federal Social Security Act with respect to a qualified ex-offender, then the amount of the qualified wages paid to that qualified ex-offender must be reduced, for purposes of calculating the credit under this Section, by the amount of the payment.

(b) For each taxable year beginning on or after January 1, 2024, each taxpayer is entitled to a credit against the tax imposed by subsections (a) and (b) of Section 201 of this Act in an amount equal to 10% of the qualified wages paid by the taxpayer during the taxable year to one or more Illinois residents who are qualified ex-offenders. For taxpayers employing 100 or more employees on the last day of the taxable year, the total credit allowed with respect to each qualified ex-offender may not exceed $1,500 for all taxable years. For taxpayers employing fewer than 100 employees on the last day of the taxable year, the total credit allowed with respect to each qualified ex-offender may not exceed $5,000 for all taxable years.

(c) For partners and shareholders of Subchapter S corporations, there shall be allowed a credit under this Section to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code.

(d) In no event shall a credit under this Section reduce the taxpayer's liability to less than zero. If the amount of the credit exceeds the tax liability for the year, the excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year. The tax credit shall be applied to the earliest year for which there is a tax liability. If there are credits for more than one year that are available to offset a liability, the earlier credit shall be applied first.

(e) This Section is exempt from the provisions of Section 250.

Section 999. Effective date. This Act takes effect upon becoming law.