Full Text of SB0517 99th General Assembly
SB0517sam001 99TH GENERAL ASSEMBLY | Sen. James F. Clayborne, Jr. Filed: 4/14/2016
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| 1 | | AMENDMENT TO SENATE BILL 517
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 517 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 1. Short title. This Act may be cited as the | 5 | | Targeted Tax Credit Act. | 6 | | Section 5. Purpose. The General Assembly finds that the | 7 | | Illinois economy is highly vulnerable to other states that have | 8 | | financial incentive programs for business relocations. Because | 9 | | of the incentive programs of these competitor locations, | 10 | | Illinois must move aggressively with new business development | 11 | | tools so that Illinois is more competitive in site location | 12 | | decision-making. The State must not only continue to work with | 13 | | firms to help them locate their new plants and facilities in | 14 | | this State, but must also provide competitive location tax | 15 | | credits in support of the location and expansion of operations | 16 | | of commerce and industry. Illinois must create an atmosphere to |
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| 1 | | retain talent within their borders to maintain a global | 2 | | competitiveness. In an increasingly global economy, Illinois | 3 | | would benefit from rational and strategic use of State | 4 | | resources in support of business development, business | 5 | | retention, and growth.
| 6 | | Additionally, there are areas within Illinois' borders | 7 | | that have struggled to combat long-term joblessness and are in | 8 | | need of special business assistance to bring them back to | 9 | | viable economic units that are able to keep and attract | 10 | | business with the rational use of tax credits. It is no longer | 11 | | acceptable for these economic pockets to remain economically | 12 | | unproductive, impoverished, and underdeveloped.
| 13 | | Furthermore, the State must do more to encourage | 14 | | entrepreneurship and small business growth with the transfer of | 15 | | tax credits to the small business sector. This will cause | 16 | | ripple effects and strong secondary economic growth with | 17 | | further investment and job creation in Illinois. New and | 18 | | expanding industries have economic benefits beyond the jobs and | 19 | | income generated by original investments. These small business | 20 | | enterprises have historically provided a major source of new | 21 | | jobs in this State and their efforts must be vigorously | 22 | | supported.
| 23 | | Section 10. Definitions. As used in this Act:
| 24 | | "Agreement" means the Agreement between a Taxpayer and the | 25 | | Department.
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| 1 | | "Applicant" means a Taxpayer who is operating a business, | 2 | | or plans to operate a business, in this State and is engaged in | 3 | | interstate or intrastate commerce for the purpose of | 4 | | manufacturing, processing, assembling, warehousing or | 5 | | distributing products, conducting research and development, | 6 | | providing tourism services, office industries, or agricultural | 7 | | processing, excluding retail, retail food, health, or | 8 | | professional services. "Applicant" does not include a Taxpayer | 9 | | who closes or substantially reduces an operation at one | 10 | | location in this State and relocates substantially the same | 11 | | operation to another location in this State. This does not | 12 | | prohibit a Taxpayer from expanding its operations at another | 13 | | location in the State, provided the existing operations of a | 14 | | similar location within the State are not closed or | 15 | | substantially reduced. This also does not prohibit a Taxpayer | 16 | | from moving its operations from one location in this State to | 17 | | another location in this State for the purpose of expanding the | 18 | | operation, provided that the Department determines that the | 19 | | expansion cannot reasonably be accommodated within the | 20 | | municipality in which the business is located, or in the case | 21 | | of a business located in an incorporated area of the county, | 22 | | within the county in which the business in located, after | 23 | | conferring with the chief elected official of the municipality | 24 | | or county and taking into consideration any evidence offered by | 25 | | the municipality or county regarding the ability to accommodate | 26 | | expansion within the municipality or county. |
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| 1 | | "Border County" means any county in this State sharing a | 2 | | boundary with another state.
| 3 | | "Census Tract" means a geographic unit whose boundaries are | 4 | | determined by the United States Census Bureau.
| 5 | | "Committee" means the Targeted Tax Credit Committee.
| 6 | | "Credit" means the amount agreed to between the Department | 7 | | and Applicant under this Act, but not to exceed the Incremental | 8 | | Income Tax attributable to the Applicant's project.
| 9 | | "Department" means the Department of Commerce and Economic | 10 | | Opportunity.
| 11 | | "Director" means the Director of the Department of Commerce | 12 | | and Economic Opportunity.
| 13 | | "Full-time employee" means an individual who is employed | 14 | | for consideration for at least 35 hours each week or who | 15 | | renders any other standard of service generally accepted by | 16 | | industry custom or practice as full-time employment. | 17 | | Vacations, paid holidays, and sick time are included in this | 18 | | computation. Overtime is not considered a part of regular | 19 | | hours. An individual for whom a W-2 is issued by a Professional | 20 | | Employment Organization is a full-time employee if employed in | 21 | | the service of the Applicant for consideration for at least 35 | 22 | | hour each week or who renders any other standard of service | 23 | | generally accepted by industry custom or practice as full-time | 24 | | employment to Applicant.
| 25 | | "Incremental Income Tax" means the total amount withheld | 26 | | during the taxable year from the compensation of New Employees |
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| 1 | | under Article 7 of the Illinois Income Tax Act arising from | 2 | | employment at a project that is the subject of an Agreement.
| 3 | | "New Employee" means:
| 4 | | (a) A full-time employee first employed by a Taxpayer | 5 | | in a project that is the subject of an Agreement and who is | 6 | | hired after the Taxpayer enters into the Tax Credit | 7 | | Agreement.
| 8 | | (b) "New Employee" does not include:
| 9 | | (1) an employee of the Taxpayer who performs a job | 10 | | that was previously performed by another employee of | 11 | | that job; | 12 | | (2) an employee of the Taxpayer employed for at | 13 | | least 6 months before hiring the employee or an | 14 | | individual previously employed in Illinois by a | 15 | | Related Member of the Taxpayer and whose employment was | 16 | | shifted to the Taxpayer after the Taxpayer entered into | 17 | | the Tax Credit Agreement; or
| 18 | | (3) a child, grandchild, parent, or spouse not | 19 | | legally separated from the individual, of any | 20 | | individual who has a direct or an indirect ownership | 21 | | interest of at least 5% in the profits, capital, or | 22 | | value of the Taxpayer.
| 23 | | (c) Notwithstanding paragraph (1) of subsection (b) of | 24 | | this definition, an employee may be considered a New | 25 | | Employee under the Agreement if the employee performs a job | 26 | | that was previously performed by an employee who was:
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| 1 | | (1) treated under the Agreement as a New Employee; | 2 | | and
| 3 | | (2) promoted by the Taxpayer to another job.
| 4 | | (d) Notwithstanding subsection (a) of this definition, | 5 | | the Department may award Credit to an Applicant for an | 6 | | employee hired prior to the date of the Agreement if:
| 7 | | (1) the Applicant receives a letter from the | 8 | | Department stating an intent to enter into a Credit | 9 | | Agreement;
| 10 | | (2) the letter described in paragraph (1) of | 11 | | subsection (d) of this definition is issued by the | 12 | | Department no later than 15 days after the effective | 13 | | date of this Act; and
| 14 | | (3) the employee was hired after the date the | 15 | | letter described in paragraph (1) of subsection (d) of | 16 | | this definition was issued.
| 17 | | "Noncompliance Date" means the day following the last date | 18 | | upon which the Taxpayer was in compliance with the requirements | 19 | | of the Agreement and the provisions of this Act, as determined | 20 | | by the Director under Section 75.
| 21 | | "Pass-through entity" means an entity that is exempt from | 22 | | the tax under subsection (b) or (c) of Section 205 of the | 23 | | Illinois Income Tax Act.
| 24 | | "Professional Employer Organization" or "(PEO)" means an | 25 | | employee leasing company as defined in Section 206.1 of the | 26 | | Unemployment Insurance Act. |
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| 1 | | "Qualifying Border County" is a Border County with an | 2 | | unemployment rate that is at least 120% of any adjoining county | 3 | | located outside of this State.
| 4 | | "Qualifying Census Tract" is a Census Tract with an | 5 | | unemployment rate that is at least 120% of the unemployment | 6 | | rate of this State.
| 7 | | "Qualifying Small Business" is a Small Business that has | 8 | | increased employment over its previous 2 tax year employment | 9 | | levels.
| 10 | | "Related Member" means a person, with respect to the | 11 | | Taxpayer during any portion of the taxable year, is any one of | 12 | | the following:
| 13 | | (1) An individual stockholder if the stockholder and | 14 | | the members of the stockholder's family (under Section 318 | 15 | | of the Internal Revenue Code) own directly, indirectly, | 16 | | beneficially, or constructively, in the aggregate, at | 17 | | least 50% of the value of the Taxpayer's outstanding stock.
| 18 | | (2) A partnership, estate, or trust and any partner or | 19 | | beneficiary if, in the aggregate, at least 50% of the | 20 | | profits, capital, stock, or value of the Taxpayer are owned | 21 | | directly, indirectly, beneficially, or constructively.
| 22 | | (3) A corporation and any party related to the | 23 | | corporation in a manner that would require an attribution | 24 | | of stock from the corporation to the party or from the | 25 | | party to the corporation under the attribution rules of | 26 | | Section 318 of the Internal Revenue Code, if the Taxpayer |
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| 1 | | owns directly, indirectly, beneficially, or constructively | 2 | | at least 50% of the value of the corporation's outstanding | 3 | | stock.
| 4 | | (4) A corporation and any party related to the | 5 | | corporation in a manner that would require an attribution | 6 | | of stock from the corporation to the party or from the | 7 | | party to the corporation under the attribution rules of | 8 | | Section 318 of the Internal Revenue Code, if the | 9 | | corporation and all such related parties own in the | 10 | | aggregate at least 50% of the profits, capital, stock, or | 11 | | value of the Taxpayer.
| 12 | | (5) A person to or from whom there is attribution of | 13 | | stock ownership in accordance with Section 1563(e) of the | 14 | | Internal Revenue Code, except, for purposes of determining | 15 | | whether a person is a Related Member under this paragraph | 16 | | (5), 20% shall be substituted for 5% wherever 5% appears in | 17 | | Section 1563(e) of the Internal Revenue Code.
| 18 | | "Rule" means each agency statement of general | 19 | | applicability that implements, applies, interprets or | 20 | | prescribes law or policy, but does not include: (i) statements | 21 | | concerning only the internal management of an agency and not | 22 | | affecting private rights or procedures available to persons or | 23 | | entities outside the agency; (ii) intra-agency memoranda; or | 24 | | (iii) the prescription of standardized forms.
| 25 | | "Small business" means any for profit entity, | 26 | | independently owned and operated, that has 500 or fewer |
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| 1 | | full-time employees.
| 2 | | "Taxpayer" means an individual, corporation, partnership, | 3 | | or other entity that has any Illinois Income Tax liability.
| 4 | | Section 15. Powers of the Department. The Department, in | 5 | | addition to those powers granted under the Civil Administrative | 6 | | Code of Illinois, is granted powers necessary to carry out the | 7 | | provisions of this Act, including, but not limited to, power | 8 | | to:
| 9 | | (a) Promulgate procedures, rules, or regulations deemed | 10 | | necessary for the administration of the programs, establish | 11 | | forms for applications, notifications, contracts, or any other | 12 | | agreements, and accept applications.
| 13 | | (b) Assist Taxpayers under this Act and cooperate with | 14 | | Taxpayers who are parties to Agreements in order to promote, | 15 | | foster, and support economic development, capital investment, | 16 | | and job creation or retention within the State.
| 17 | | (c) Enter into agreements and memoranda of understanding | 18 | | for participation with federal government agencies, local | 19 | | units of government, universities, research foundations or | 20 | | institutions, regional economic development corporations, or | 21 | | other organizations for the purposes of this Act.
| 22 | | (d) Gather information and conduct inquiries, including, | 23 | | but not limited to, information concerning Applicants for the | 24 | | purpose of making any necessary designations or certifications | 25 | | or to gather information to assist the Committee with any |
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| 1 | | recommendations in the furtherance of the purposes of this Act.
| 2 | | (e) Establish, negotiate, and effectuate any term, | 3 | | agreement, or other document with any person, and to consent, | 4 | | subject to the provisions of any Agreement with another party, | 5 | | to the modification of any Agreement to which the Department is | 6 | | a party.
| 7 | | (f) Fix, determine, charge, and collect any premiums, fees, | 8 | | charges, costs, and expenses from Applicants, including, but | 9 | | not limited to, any application fees, commitment fees, program | 10 | | fees, tax credit transfer fees, financing charges, any | 11 | | reasonable fees to defray the cost of certifying eligible | 12 | | Applicants, publication fees to pay expenses for the | 13 | | administration, staffing, or operation of the Department's or | 14 | | Committee's activities under this Act, or preparation, | 15 | | implementation, and enforcement of the terms of an Agreement, | 16 | | or for consultation, advisory and legal fees, and other costs. | 17 | | The Department shall determine the amount of the fees and the | 18 | | payment schedule. The amount of the fees need not be uniform | 19 | | among the various programs administered, however, all fees | 20 | | shall be the responsibility of the Applicant.
| 21 | | (g) Provide sufficient personnel to permit administration, | 22 | | staffing, operation, and related contractual support from | 23 | | funds made available through charges to Applicants, acquired | 24 | | through other means, or funds as may be appropriated by the | 25 | | General Assembly for the administration of products or services | 26 | | under this Act.
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| 1 | | (h) Require Applicants, upon written request, to issue any | 2 | | necessary authorization to the appropriate federal, state, or | 3 | | local authority for the release of information concerning a | 4 | | project being considered under the provisions of this Act, | 5 | | including, but not be limited to, financial reports, returns, | 6 | | or records relating to Taxpayers or their projects. All | 7 | | Applicants must consent to have any written Agreement posted on | 8 | | the Department's web site.
| 9 | | (i) Require that a Taxpayer shall at all times keep proper | 10 | | books of record and account in accordance with generally | 11 | | accepted accounting principles consistently applied for the | 12 | | books, records, or papers related to the Agreement in the | 13 | | custody or control of the Taxpayer and open for reasonable | 14 | | Department inspection and audits, including, but not limited | 15 | | to, the making of copies of the books, records, or papers, and | 16 | | the inspection or appraisal of any of the Taxpayer or project | 17 | | assets.
| 18 | | (j) Take whatever actions necessary to protect the State's | 19 | | interest in the event of bankruptcy, default, foreclosure, or | 20 | | noncompliance with the terms and conditions of financial | 21 | | assistance or participation required under this Act, including | 22 | | the power to sell, dispose, lease, or rent real or personal | 23 | | property that the Department may receive as a result of these | 24 | | actions.
| 25 | | Section 20. Tax Credit Awards. Subject to the conditions |
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| 1 | | set forth in this Act, a Taxpayer is entitled to a Credit | 2 | | against or a payment towards taxes imposed under subsections | 3 | | (a) and (b) of Section 201 of the Illinois Income Tax Act that | 4 | | may be imposed on the Taxpayer for a taxable year beginning on | 5 | | or after January 1, 2017, if the Taxpayer is awarded a Credit | 6 | | by the Department under this Act for that taxable year.
| 7 | | (a) The Department shall make Credit awards under this Act | 8 | | to foster job creation and retention in Illinois.
| 9 | | (b) A person that proposes a project to create new jobs in | 10 | | Illinois must enter into an Agreement with the Department for | 11 | | the Credit under this Act.
| 12 | | (c) The Credit shall be claimed for the taxable years | 13 | | specified in the Agreement.
| 14 | | (d) The Credit shall not exceed the Incremental Income Tax | 15 | | attributable to the project that is the subject of the | 16 | | Agreement.
| 17 | | (e) Nothing herein shall prohibit a Tax Credit Award to an | 18 | | Applicant that uses a PEO if all other award criteria are | 19 | | satisfied.
| 20 | | (f) A pass-through entity, or its shareholders or partners, | 21 | | that have been awarded a credit under this Act may treat some | 22 | | or all of the Credit awarded as a tax payment for purposes of | 23 | | the Illinois Income Tax Act. For purposes of this subsection | 24 | | (f), the term "tax payment" means a payment under Article 6 or | 25 | | Article 8 of the Illinois Income Tax Act or a composite payment | 26 | | made by a pass-through entity on behalf of any of its |
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| 1 | | shareholders or partners to satisfy such shareholders' or | 2 | | partners' taxes imposed under subsections (a) and (b) of | 3 | | Section 201 of the Illinois Income Tax Act. In no event shall | 4 | | the amount of the award credited under this Act exceed the | 5 | | Illinois income tax liability of the pass-through entity, or | 6 | | its shareholders or partners, for the taxable year. | 7 | |
(g) Tax Credits awarded under this Act may be sold, | 8 | | assigned, or transferred, in whole or in part, to an Illinois | 9 | | Small Business Taxpayer, subject to the following conditions:
| 10 | | (1) A Taxpayer awarded an income tax Credit under this | 11 | | Act may make only a single sale, assignment, or transfer of | 12 | | the tax Credit earned in a taxable year; however, the | 13 | | Credit may be sold, assigned, or transferred to one or more | 14 | | transferees.
| 15 | | (2) The tax Credit earned by the transferor may be | 16 | | transferred before the due date, including extensions, of | 17 | | the Illinois income tax return of the transferor. The | 18 | | amount of the Credit transferred to the transferee or | 19 | | transferees may not exceed the amount of the Credit earned | 20 | | by the transferor in the transferor's taxable year.
| 21 | | (3) Written notification of the transfer or sale of | 22 | | Credits awarded under this Act shall be submitted to the | 23 | | Department of Commerce and Economic Opportunity and the | 24 | | Department of Revenue within 30 days after the sale, | 25 | | assignment, or transfer. The Department of Revenue shall | 26 | | provide by rule the information required to be provided in |
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| 1 | | such written notification.
| 2 | | (4) The transfer or sale of tax Credits under this | 3 | | subsection does not extend the time during which those tax | 4 | | Credits can be used. The carry-forward period for a tax | 5 | | Credit that is transferred or sold shall begin on the date | 6 | | on which the tax Credit was originally issued.
| 7 | | (5) A transferee shall have only those rights to claim | 8 | | and use the Credit that were available to the Taxpayer that | 9 | | earned the Credit, except that Credits sold or transferred | 10 | | may not be used against a transferee's withholding tax | 11 | | liability.
| 12 | | (6) If the Taxpayer earning the Credit fails to comply | 13 | | with the terms and requirements of the Agreement, and, | 14 | | under this Act, notice is provided to the Department of | 15 | | Revenue of the Taxpayer's non-compliance, the Department | 16 | | shall hold the transferor liable for any tax, penalty, or | 17 | | interest due as a result of non-compliance with the | 18 | | Agreement.
| 19 | | Section 25. Tax Credit transfer. The Department shall | 20 | | establish a tax Credit exchange to allow Taxpayers who are a | 21 | | party to an Agreement to negotiate with Qualifying Small | 22 | | Businesses. A one-time transfer of any Credits earned is | 23 | | allowed. Credits may be transferred to more than one Qualifying | 24 | | Small Business. The Department must certify that a Small | 25 | | Business is qualified before they may enter the exchange. The |
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| 1 | | Department shall charge a fee for such transfer. | 2 | | Section 30. Application for a project to create and retain | 3 | | new jobs.
| 4 | | (a) Any Taxpayer proposing a project located or planned to | 5 | | be located in a Qualifying Border County or Qualifying Census | 6 | | Tract may request consideration for designation of its project | 7 | | by formal written letter of request and by formal application | 8 | | to the Department, in which the Applicant states its intent to | 9 | | make at least a specified level of investment and intends to | 10 | | hire or retain a specified number of full-time employees at a | 11 | | designated location in Illinois. Retention is only necessary in | 12 | | cases where there is an existing facility. The Department shall | 13 | | require a formal application from an Applicant and a formal | 14 | | letter of request for assistance.
| 15 | | (b) In order to qualify for Credits under this Act, an | 16 | | Applicant's project must:
| 17 | | (1) involve an investment of at least $5,000,000 in | 18 | | capital improvements to be placed in service and to employ | 19 | | at least 25 New Employees within the State as a direct | 20 | | result of the project;
| 21 | | (2) involve an investment, in an amount expressly | 22 | | specified by the Department, in capital improvements to be | 23 | | placed in service and will employ, in at least an amount | 24 | | expressly specified by the Department, New Employees | 25 | | within the State, provided that the Department and the |
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| 1 | | Committee have determined that the project will provide a | 2 | | substantial economic benefit to the State; or
| 3 | | (3) if the Applicant has 100 or fewer employees, | 4 | | involve an investment of at least $1,000,000 in capital | 5 | | improvements to be placed in service and to employ at least | 6 | | 5 New Employees within the State as a direct result of the | 7 | | project.
| 8 | | (c) After receipt of an application, the Department may | 9 | | enter into an Agreement with the Applicant if the application | 10 | | is approved in accordance with Section 35. | 11 | | Section 35. Review of Application.
| 12 | | (a) The Targeted Tax Credit Review Committee is hereby | 13 | | created and shall be composed of the following 5 members: | 14 | | (1) the Director of the Department of Commerce and | 15 | | Economic Opportunity; | 16 | | (2) the Director of the Governor's Office of Management | 17 | | and Budget, or his or her designee; | 18 | | (3) the Director of the Department of Revenue, or his | 19 | | or her designee; | 20 | | (4) the State Treasurer, or his or her designee; and | 21 | | (5) an individual who is the chief executive officer of | 22 | | a not for profit public/private economic development | 23 | | corporation, appointed by the Governor. | 24 | | (b) The Director shall serve as Chairman of the Committee | 25 | | and all members, except the State Treasurer, shall serve at the |
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| 1 | | pleasure of the Governor. | 2 | | (c) The Committee shall convene on a quarterly basis to | 3 | | competitively review all applications received. It shall | 4 | | conduct studies, review information with respect to | 5 | | Applicants, and make decisions for projects to benefit the | 6 | | State, all in a manner it deems necessary. The Department shall | 7 | | provide, or contract to provide, staff and resources necessary | 8 | | for the review process.
The Committee shall compare and | 9 | | evaluate each application based upon the total economic impact | 10 | | on the Border County or Census Tract and the State.
In making | 11 | | its decision that an Applicant's application for Tax Credits | 12 | | should or should not be approved, the Committee shall determine | 13 | | that the following conditions exist:
| 14 | | (1) The Applicant's project is located in a Qualifying | 15 | | Border County or Qualifying Census Tract or has a direct | 16 | | and substantial employment impact on such Counties or | 17 | | Census Tracts.
| 18 | | (2) The Applicant's project intends, as required by | 19 | | subsection (b) of Section 30, to make the required | 20 | | investment in the State and intends to hire the required | 21 | | number of New Employees in Illinois as a result of that | 22 | | project.
| 23 | | (3) The Applicant's project is economically sound and | 24 | | will benefit the people of this State by increasing | 25 | | opportunities for employment and strengthening the economy | 26 | | of this State.
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| 1 | | (4) The political subdivisions affected by the project | 2 | | have committed local incentives with respect to the | 3 | | project, considering local ability to assist.
| 4 | | (5) Awarding the Credit will result in an overall | 5 | | positive fiscal impact to the State, as certified by the | 6 | | Committee using the best available data.
| 7 | | (6) The Credit is not prohibited by Section 45 of this | 8 | | Act.
| 9 | | (7) The jobs to be created or retained must meet or | 10 | | exceed the median income in the County where the project is | 11 | | located by 20%.
| 12 | | (d) A majority of the Committee shall determine whether an | 13 | | application is approved or denied.
| 14 | | (e) If it is determined by the Director that a project has | 15 | | a substantial benefit to the State, the Director shall a have | 16 | | the power to call special meetings of the Committee upon due | 17 | | notice.
| 18 | | Section 40. Limitation to amount of costs of specified | 19 | | items. The total amount of the Credit allowed during all tax | 20 | | years may not exceed the aggregate amount of costs incurred by | 21 | | the Taxpayer during all prior tax years for the following | 22 | | items, to the extent provided in the Agreement:
| 23 | | (1) capital investment, including, but not limited to, | 24 | | equipment, buildings, or land;
| 25 | | (2) infrastructure development;
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| 1 | | (3) debt service, except refinancing of current debt;
| 2 | | (4) research and development;
| 3 | | (5) job training and education;
| 4 | | (6) lease costs; or
| 5 | | (7) relocation costs.
| 6 | | Section 45. Relocation of jobs in Illinois. A Taxpayer is | 7 | | not entitled to claim Credit with respect to any jobs that the | 8 | | Taxpayer relocates from one site in Illinois to another site in | 9 | | Illinois. Moreover, any full-time employee of an eligible | 10 | | business relocated to Illinois in connection with that | 11 | | qualifying project is deemed to be a New Employee for purposes | 12 | | of this Act. Determinations under this Section shall be made by | 13 | | the Department. | 14 | | Section 50. Determination of amount of the Credit. In | 15 | | determining the amount of the Credit that should be awarded, | 16 | | the Committee shall take into consideration the following | 17 | | factors:
| 18 | | (1) The number and location of jobs created or retained in | 19 | | relation to the economy of the Qualifying Border County or | 20 | | Qualifying Census Tract and where the projected investment is | 21 | | to occur.
| 22 | | (2) The potential impact on the economy of Illinois.
| 23 | | (3) The quality of the jobs to be created or retained in | 24 | | the area, including, but not limited to, how much the jobs |
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| 1 | | created or retained exceed the median income, benefits in the | 2 | | County, and the quality of the employee benefits.
| 3 | | (4) The incremental payroll attributable to the project.
| 4 | | (5) The capital investment attributable to the project.
| 5 | | (6) The costs to Illinois and to the affected political | 6 | | subdivisions with respect to the project.
| 7 | | (7) The financial assistance that is otherwise provided by | 8 | | Illinois and the affected political subdivisions.
| 9 | | Section 55. Amount and duration of the Credit.
| 10 | | (a) The Committee shall determine the specific amount of | 11 | | Tax Credits awarded under this Act each fiscal year. However, | 12 | | the Agreements executed in any fiscal year shall not exceed a | 13 | | maximum ten-year commitment of $50,000,000. The duration of the | 14 | | Credit may not exceed 10 taxable years, however, awarded | 15 | | Credits may be carried forward for up to 5 years from the date | 16 | | they were issued. The Credit shall be stated as a percentage of | 17 | | the Incremental Income Tax attributable to the Applicant's | 18 | | project and shall include a fixed dollar limitation for each | 19 | | year of any such Agreement.
| 20 | | Section 60. Contents of Agreements with Applicants. The | 21 | | Department shall enter into an Agreement with an Applicant that | 22 | | is awarded a Credit under this Act. The Agreement shall include | 23 | | all of the following:
| 24 | | (1) A detailed description of the project that is the |
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| 1 | | subject of the Agreement, including the location and amount | 2 | | of the investment and jobs created or retained.
| 3 | | (2) The duration of the Credit and the first taxable | 4 | | year for which the Credit may be claimed.
| 5 | | (3) The maximum Credit amount that will be allowed for | 6 | | each taxable year.
| 7 | | (4) A requirement that the Taxpayer shall maintain | 8 | | operations at the project location for 5 years after the | 9 | | project is placed in service.
| 10 | | (5) A specific method for determining the number of New | 11 | | Employees employed during a taxable year.
| 12 | | (6) A requirement that the Taxpayer shall annually | 13 | | report to the Department the number of New Employees, the | 14 | | Incremental Income Tax withheld in connection with the New | 15 | | Employees, and any other information the Director needs to | 16 | | perform its duties under this Act.
| 17 | | (7) A requirement that the Director is authorized to | 18 | | verify, with the appropriate State agencies, the amounts | 19 | | reported under paragraph (6) of this Section, and, upon | 20 | | verification, shall issue a certificate to the Taxpayer | 21 | | stating that the amounts have been verified.
| 22 | | (8) A requirement that the Taxpayer shall provide | 23 | | written notification to the Director not more than 30 days | 24 | | after the Taxpayer makes or receives a proposal that would | 25 | | transfer the Taxpayer's State tax liability obligations to | 26 | | a successor Taxpayer.
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| 1 | | (9) A detailed description of the number of New | 2 | | Employees to be hired, and the occupation and payroll of | 3 | | the full-time jobs to be created or retained as a result of | 4 | | the project.
| 5 | | (10) The minimum investment the business enterprise | 6 | | will make in capital improvements, the time period for | 7 | | placing the property in service, and the designated | 8 | | location in Illinois for the investment.
| 9 | | (11) A requirement that the Taxpayer shall provide | 10 | | written notification to the Director and the Committee not | 11 | | more than 30 days after the Taxpayer determines that the | 12 | | minimum job creation or retention, employment payroll, or | 13 | | investment is no longer or will no longer be achieved or | 14 | | maintained, as set forth in the terms and conditions of the | 15 | | Agreement.
| 16 | | (12) A provision that, if the total number of New | 17 | | Employees falls below a specified level, the allowance of | 18 | | Credit shall be suspended until the number of New Employees | 19 | | equals or exceeds the Agreement amount.
| 20 | | (13) A detailed description of the items for which the | 21 | | costs incurred by the Taxpayer will be included in the | 22 | | limitation on the Credit provided in Section 40.
| 23 | | (14) A provision that, if the Taxpayer never meets | 24 | | either the investment or job creation and retention | 25 | | requirements specified in the Agreement during the entire | 26 | | 5-year period beginning on the first day of the first |
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| 1 | | taxable year in which the Agreement is executed and ending | 2 | | on the last day of the fifth taxable year after the | 3 | | Agreement is executed, then the Agreement is automatically | 4 | | terminated on the last day of the fifth taxable year after | 5 | | the Agreement is executed and the Taxpayer is not entitled | 6 | | to the award of any Credits for any of that 5-year period.
| 7 | | (15) Any other performance conditions or contract | 8 | | provisions as the Department determines are appropriate.
| 9 | | The Department shall post on its website the terms of each | 10 | | Agreement entered into under this Act on or after the effective | 11 | | date of this Act.
| 12 | | Section 65. Certificate of verification; submission to the | 13 | | Department of Revenue. A Taxpayer claiming a Credit under this | 14 | | Act shall submit to the Department of Revenue a copy of the | 15 | | Director's certificate of verification under this Act for the | 16 | | taxable year. Failure to submit a copy of the certificate with | 17 | | the Taxpayer's tax return shall not invalidate a claim for a | 18 | | Credit.
For a Taxpayer to be eligible for a certificate of | 19 | | verification, the Taxpayer shall provide proof as required by | 20 | | the Department prior to the end of each calendar year, | 21 | | including, but not limited to, attestation by the Taxpayer | 22 | | that:
| 23 | | (1) The project has substantially achieved the level of | 24 | | new full-time jobs specified in its Agreement.
| 25 | | (2) The project has substantially achieved the level of |
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| 1 | | annual payroll in Illinois specified in its Agreement.
| 2 | | (3) The project has substantially achieved the level of | 3 | | capital investment in Illinois specified in its Agreement.
| 4 | | Section 70. Pass-through entity.
| 5 | | (a) The shareholders or partners of a Taxpayer that is a | 6 | | pass-through entity shall be entitled to the Credit allowed | 7 | | under the Agreement.
| 8 | | (b) The Credit provided under subsection (a) of this | 9 | | Section is in addition to any Credit to which a shareholder or | 10 | | partner is otherwise entitled under a separate Agreement under | 11 | | this Act. A pass-through entity, and a shareholder or partner | 12 | | of the pass-through entity, may not claim more than one Credit | 13 | | under the same Agreement.
| 14 | | Section 75. Noncompliance; notice; assessment. If the | 15 | | Director determines that a Taxpayer who has received a Credit | 16 | | under this Act is not complying with the requirements of the | 17 | | Agreement or all of the provisions of this Act, the Director | 18 | | shall provide notice to the Taxpayer of the alleged | 19 | | noncompliance, and allow the Taxpayer a hearing under the | 20 | | Illinois Administrative Procedure Act. If, after such notice | 21 | | and any hearing, the Director determines that a noncompliance | 22 | | exists, the Director shall issue to the Department of Revenue | 23 | | notice to that effect, stating the Noncompliance Date. |
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| 1 | | Section 80. Annual report. On or before July 1 each year, | 2 | | the Committee shall submit a report to the Department on the | 3 | | Tax Credit program under this Act. The report shall include | 4 | | information on the number of Agreements that were entered into | 5 | | under this Act during the preceding calendar year, a | 6 | | description of the project that is the subject of each | 7 | | Agreement, an update on the status of projects under Agreements | 8 | | entered into before the preceding calendar year, and the sum of | 9 | | the Credits awarded under this Act. A copy of the report shall | 10 | | be delivered to the Governor and to each member of the General | 11 | | Assembly. | 12 | | Section 85. Evaluation of Tax Credit program. The | 13 | | Department shall evaluate the Tax Credit program on a biennial | 14 | | basis. The evaluation shall include an assessment of the | 15 | | effectiveness of the program in creating or retaining jobs in | 16 | | Illinois and of the revenue impact of the program, and may | 17 | | include a review of the practices and experiences of other | 18 | | states with similar programs. The Director shall submit a | 19 | | report on the evaluation to the Governor and the General | 20 | | Assembly after June 30 and before November 1 of each | 21 | | odd-numbered year. | 22 | | Section 90. Sunset of new Agreements. The Department shall | 23 | | not enter into any new Agreements under the provisions of | 24 | | Section 60 of this Act after December 31, 2029. |
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| 1 | | Section 95. Adoption of rules. The Department shall adopt | 2 | | rules necessary to implement this Act. The rules may provide | 3 | | for recipients of Credits under this Act to be charged fees to | 4 | | cover administrative costs of the Tax Credit Program. Fees | 5 | | collected shall be deposited into the Targeted Tax Credit Fund. | 6 | | Section 100. The Targeted Tax Credit Fund.
| 7 | | (a) The Targeted Tax Credit Fund is established to be used | 8 | | exclusively for the purposes of this Act, including paying for | 9 | | the costs of promoting and administering the Targeted Tax | 10 | | Credit Program. The Fund shall be administered by the | 11 | | Department.
| 12 | | (b) The Fund consists of collected fees, appropriations | 13 | | from the General Assembly, and gifts and grants to the Fund.
| 14 | | (c) The State Treasurer shall invest the money in the Fund | 15 | | not currently needed to meet the obligations of the Fund in the | 16 | | same manner as other public funds may be invested. Interest | 17 | | that accrues from these investments shall be deposited into the | 18 | | Fund.
| 19 | | (d) The money in the Fund at the end of a State fiscal year | 20 | | remains in the Fund to be used exclusively for the purposes of | 21 | | this Act. Expenditures from the Fund are subject to | 22 | | appropriation by the General Assembly.
| 23 | | Section 105. Program terms and conditions.
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| 1 | | (a) Any documentary materials or data made available or | 2 | | received by any member of a Committee or any agent or employee | 3 | | of the Department shall be deemed confidential and shall not be | 4 | | deemed public records to the extent that the materials or data | 5 | | consist of trade secrets, commercial or financial information | 6 | | regarding the operation of the business conducted by the | 7 | | Applicant or recipient of any tax Credit under this Act, or any | 8 | | information regarding the competitive position of a business in | 9 | | a particular field of endeavor.
| 10 | | (b) Nothing in this Act shall be construed as creating any | 11 | | rights in any Applicant to enter into an Agreement or in any | 12 | | person to challenge the terms of any Agreement.
| 13 | | Section 900. The State Finance Act is amended by adding | 14 | | Section 5.875 as follows: | 15 | | (30 ILCS 105/5.875 new) | 16 | | Sec. 5.875. The Targeted Tax Credit Fund. | 17 | | (35 ILCS 10/Act rep.) | 18 | | Section 905. The Economic Development for a Growing Economy | 19 | | Tax Credit Act is repealed.
| 20 | | Section 999. Effective date. This Act takes effect upon | 21 | | becoming law, except that Section 905 takes effect one year | 22 | | after this Act becomes law.".
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