Full Text of SB0517 99th General Assembly
SB0517sam002 99TH GENERAL ASSEMBLY | Sen. James F. Clayborne, Jr. Filed: 5/3/2016
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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 its 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 restore their status as | 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 that 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 its | 18 | | operations, 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 the applicant under this Act, but not to exceed the | 8 | | incremental income tax attributable to the applicant's | 9 | | project.
| 10 | | "Department" means the Department of Commerce and Economic | 11 | | Opportunity.
| 12 | | "Director" means the Director of Commerce and Economic | 13 | | Opportunity.
| 14 | | "Full-time employee" means an individual who is employed | 15 | | for consideration for at least 35 hours each week or who | 16 | | renders any other standard of service generally accepted by | 17 | | industry custom or practice as full-time employment. | 18 | | Vacations, paid holidays, and sick time are included in this | 19 | | computation. Overtime is not considered a part of regular | 20 | | hours. An individual for whom a W-2 is issued by a Professional | 21 | | Employment Organization is a full-time employee if employed in | 22 | | the service of the applicant for consideration for at least 35 | 23 | | hours each week or who renders any other standard of service | 24 | | generally accepted by industry custom or practice as full-time | 25 | | employment to the applicant.
| 26 | | "Incremental income tax" means the total amount withheld |
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| 1 | | during the taxable year from the compensation of new employees | 2 | | under Article 7 of the Illinois Income Tax Act arising from | 3 | | employment at a project that is the subject of an agreement.
| 4 | | "New employee". | 5 | | (1) "New employee" means a full-time employee first | 6 | | employed by a taxpayer in a project that is the subject of | 7 | | an agreement and who is hired after the taxpayer enters | 8 | | into the tax credit agreement.
| 9 | | (2) "New employee" does not include:
| 10 | | (A) an employee of the taxpayer who performs a job | 11 | | that was previously performed by another employee of | 12 | | that job; | 13 | | (B) an employee of the taxpayer employed for at | 14 | | least 6 months before hiring the employee or an | 15 | | individual previously employed in Illinois by a | 16 | | related member of the taxpayer and whose employment was | 17 | | shifted to the taxpayer after the taxpayer entered into | 18 | | the tax credit agreement; or
| 19 | | (C) a child, grandchild, parent, or spouse not | 20 | | legally separated from the individual, of any | 21 | | individual who has a direct or an indirect ownership | 22 | | interest of at least 5% in the profits, capital, or | 23 | | value of the taxpayer.
| 24 | | (3) Notwithstanding subparagraph (A) of paragraph (2) | 25 | | of this definition, an employee may be considered a new | 26 | | employee under the agreement if the employee performs a job |
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| 1 | | that was previously performed by an employee who was:
| 2 | | (A) treated under the agreement as a new | 3 | | employee; and
| 4 | | (B) promoted by the taxpayer to another job.
| 5 | | (4) Notwithstanding paragraph (1) of this definition, | 6 | | the Department may award a credit to an applicant for an | 7 | | employee hired prior to the date of the agreement if:
| 8 | | (A) the applicant receives a letter from the | 9 | | Department stating an intent to enter into a credit | 10 | | agreement;
| 11 | | (B) the letter described in subparagraph (A) | 12 | | is issued by the Department no later than 15 days after | 13 | | the effective date of this Act; and
| 14 | | (C) the employee was hired after the date the | 15 | | letter described in subparagraph (A) was issued.
| 16 | | "Noncompliance date" means the day following the last date | 17 | | upon which the taxpayer was in compliance with the requirements | 18 | | of the agreement and the provisions of this Act, as determined | 19 | | by the Director under Section 75.
| 20 | | "Pass-through entity" means an entity that is exempt from | 21 | | the tax under subsection (b) or (c) of Section 205 of the | 22 | | Illinois Income Tax Act.
| 23 | | "Professional Employer Organization" or "PEO" means an | 24 | | employee leasing company as defined in Section 206.1 of the | 25 | | Unemployment Insurance Act. | 26 | | "Qualifying border county" is a border county with an |
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| 1 | | unemployment rate that is at least 120% of any adjoining county | 2 | | located outside of this State.
| 3 | | "Qualifying census tract" is a census tract with an | 4 | | unemployment rate that is at least 120% of the unemployment | 5 | | rate of this State.
| 6 | | "Qualifying small business" is a small business that has | 7 | | increased employment over the employment levels of its previous | 8 | | 2 tax years.
| 9 | | "Related member" means a person who, with respect to the | 10 | | taxpayer during any portion of the taxable year, is any one of | 11 | | the following:
| 12 | | (1) an individual stockholder if the stockholder and | 13 | | the members of the stockholder's family (under Section 318 | 14 | | of the Internal Revenue Code) own directly, indirectly, | 15 | | beneficially, or constructively, in the aggregate, at | 16 | | least 50% of the value of the taxpayer's outstanding stock; | 17 | | (2) a partnership, estate, or trust and any partner or | 18 | | beneficiary if, in the aggregate, at least 50% of the | 19 | | profits, capital, stock, or value of the taxpayer are owned | 20 | | directly, indirectly, beneficially, or constructively; | 21 | | (3) a corporation and any party related to the | 22 | | corporation in a manner that would require an attribution | 23 | | of stock from the corporation to the party or from the | 24 | | party to the corporation under the attribution rules of | 25 | | Section 318 of the Internal Revenue Code, if the taxpayer | 26 | | owns directly, indirectly, beneficially, or constructively |
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| 1 | | at least 50% of the value of the corporation's outstanding | 2 | | stock; | 3 | | (4) a corporation and any party related to the | 4 | | corporation in a manner that would require an attribution | 5 | | of stock from the corporation to the party or from the | 6 | | party to the corporation under the attribution rules of | 7 | | Section 318 of the Internal Revenue Code, if the | 8 | | corporation and all such related parties own in the | 9 | | aggregate at least 50% of the profits, capital, stock, or | 10 | | value of the taxpayer; or | 11 | | (5) a person to or from whom there is attribution of | 12 | | stock ownership in accordance with Section 1563(e) of the | 13 | | Internal Revenue Code, except, for purposes of determining | 14 | | whether a person is a related member under this paragraph | 15 | | (5), 20% shall be substituted for 5% wherever 5% appears in | 16 | | Section 1563(e) of the Internal Revenue Code.
| 17 | | "Rule" means each agency statement of general | 18 | | applicability that implements, applies, interprets, or | 19 | | prescribes law or policy, but does not include: (i) statements | 20 | | concerning only the internal management of an agency and not | 21 | | affecting private rights or procedures available to persons or | 22 | | entities outside the agency; (ii) intra-agency memoranda; or | 23 | | (iii) the prescription of standardized forms.
| 24 | | "Small business" means any for-profit entity, | 25 | | independently owned and operated, that has 500 or fewer | 26 | | full-time employees.
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| 1 | | "Taxpayer" means an individual, corporation, partnership, | 2 | | or other entity that has any Illinois income tax liability.
| 3 | | Section 15. Powers of the Department. The Department, in | 4 | | addition to those powers granted under the Civil Administrative | 5 | | Code of Illinois, is granted powers necessary to carry out the | 6 | | provisions of this Act, including, but not limited to, power | 7 | | to:
| 8 | | (1) Promulgate procedures, rules, or regulations | 9 | | deemed necessary for the administration of the programs, | 10 | | establish forms for applications, notifications, | 11 | | contracts, or any other agreements, and accept | 12 | | applications.
| 13 | | (2) Assist taxpayers under this Act and cooperate with | 14 | | taxpayers that are parties to agreements in order to | 15 | | promote, foster, and support economic development, capital | 16 | | investment, and job creation or retention within this | 17 | | State.
| 18 | | (3) Enter into agreements and memoranda of | 19 | | understanding for participation with federal government | 20 | | agencies, local units of government, universities, | 21 | | research foundations or institutions, regional economic | 22 | | development corporations, or other organizations for the | 23 | | purposes of this Act.
| 24 | | (4) Gather information and conduct inquiries, | 25 | | including, but not limited to, information concerning |
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| 1 | | applicants for the purpose of making any necessary | 2 | | designations or certifications or to gather information to | 3 | | assist the Committee with any recommendations in the | 4 | | furtherance of the purposes of this Act.
| 5 | | (5) Establish, negotiate, and effectuate any term, | 6 | | agreement, or other document with any person, and to | 7 | | consent, subject to the provisions of any agreement with | 8 | | another party, to the modification of any agreement to | 9 | | which the Department is a party.
| 10 | | (6) Fix, determine, charge, and collect any premiums, | 11 | | fees, charges, costs, and expenses from applicants, | 12 | | including, but not limited to, any application fees, | 13 | | commitment fees, program fees, tax credit transfer fees, | 14 | | financing charges, any reasonable fees to defray the cost | 15 | | of certifying eligible applicants, publication fees to pay | 16 | | expenses for the administration, staffing, or operation of | 17 | | the Department's or Committee's activities under this Act, | 18 | | or preparation, implementation, and enforcement of the | 19 | | terms of an agreement, or for consultation, advisory and | 20 | | legal fees, and other costs. The Department shall determine | 21 | | the amount of the fees and the payment schedule. The amount | 22 | | of the fees need not be uniform among the various programs | 23 | | administered; however, all fees shall be the | 24 | | responsibility of the applicant.
| 25 | | (7) Provide sufficient personnel to permit | 26 | | administration, staffing, operation, and related |
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| 1 | | contractual support from funds made available through | 2 | | charges to applicants, acquired through other means, or | 3 | | funds as may be appropriated by the General Assembly for | 4 | | the administration of products or services under this Act.
| 5 | | (8) Require applicants, upon written request, to issue | 6 | | any necessary authorization to the appropriate federal, | 7 | | State, or local authority for the release of information | 8 | | concerning a project being considered under the provisions | 9 | | of this Act, including, but not be limited to, financial | 10 | | reports, returns, or records relating to taxpayers or their | 11 | | projects. All applicants must consent to have any written | 12 | | agreement posted on the Department's website.
| 13 | | (9) Require that a taxpayer shall at all times keep | 14 | | proper books of record and account in accordance with | 15 | | generally accepted accounting principles consistently | 16 | | applied for the books, records, or papers related to the | 17 | | agreement in the custody or control of the taxpayer and | 18 | | open for reasonable Department inspection and audits, | 19 | | including, but not limited to, the making of copies of the | 20 | | books, records, or papers, and the inspection or appraisal | 21 | | of any of the taxpayer or project assets.
| 22 | | (10) Take whatever actions necessary to protect the | 23 | | State's interest in the event of bankruptcy, default, | 24 | | foreclosure, or noncompliance with the terms and | 25 | | conditions of financial assistance or participation | 26 | | required under this Act, including the power to sell, |
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| 1 | | dispose, lease, or rent real or personal property that the | 2 | | Department may receive as a result of these actions.
| 3 | | Section 20. Tax credit awards. | 4 | | (a) Subject to the conditions set forth in this Act, a | 5 | | taxpayer is entitled to a credit against or, as described in | 6 | | subsection (g) of this Section, a payment towards taxes imposed | 7 | | under subsections (a) and (b) of Section 201 of the Illinois | 8 | | Income Tax Act that may be imposed on the taxpayer for a | 9 | | taxable year beginning on or after January 1, 2017, if the | 10 | | taxpayer is awarded a credit by the Department under this Act | 11 | | for that taxable year.
| 12 | | (b) The Department shall make credit awards under this Act | 13 | | to foster job creation and retention in Illinois.
| 14 | | (c) A person that proposes a project to create new jobs in | 15 | | Illinois must enter into an agreement with the Department for | 16 | | the credit under this Act.
| 17 | | (d) The credit shall be claimed for the taxable years | 18 | | specified in the agreement.
| 19 | | (e) The credit shall not exceed the incremental income tax | 20 | | attributable to the project that is the subject of the | 21 | | agreement.
| 22 | | (f) Nothing herein shall prohibit a tax credit award to an | 23 | | applicant that uses a PEO if all other award criteria are | 24 | | satisfied.
| 25 | | (g) A pass-through entity, or its shareholders or partners, |
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| 1 | | that have been awarded a credit under this Act may treat some | 2 | | or all of the credit awarded as a tax payment for purposes of | 3 | | the Illinois Income Tax Act. For purposes of this subsection | 4 | | (g), the term "tax payment" means a payment under Article 6 or | 5 | | Article 8 of the Illinois Income Tax Act or a composite payment | 6 | | made by a pass-through entity on behalf of any of its | 7 | | shareholders or partners to satisfy such shareholders' or | 8 | | partners' taxes imposed under subsections (a) and (b) of | 9 | | Section 201 of the Illinois Income Tax Act. In no event shall | 10 | | the amount of the award credited under this Act exceed the | 11 | | Illinois income tax liability of the pass-through entity, or | 12 | | its shareholders or partners, for the taxable year. | 13 | |
(h) Tax credits awarded under this Act may be sold, | 14 | | assigned, or transferred, in whole or in part, to an Illinois | 15 | | small business taxpayer, subject to the following conditions:
| 16 | | (1) A taxpayer awarded an income tax credit under this | 17 | | Act may make only a single sale, assignment, or transfer of | 18 | | the tax credit earned in a taxable year; however, the | 19 | | credit may be sold, assigned, or transferred to one or more | 20 | | transferees.
| 21 | | (2) The tax credit earned by the transferor may be | 22 | | transferred before the due date, including extensions, of | 23 | | the Illinois income tax return of the transferor. The | 24 | | amount of the credit transferred to the transferee or | 25 | | transferees may not exceed the amount of the credit earned | 26 | | by the transferor in the transferor's taxable year.
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| 1 | | (3) Written request for the transfer or sale of credits | 2 | | awarded under this Act shall be submitted to the | 3 | | Department. The Department shall provide by rule the | 4 | | information required to be provided in such written | 5 | | notification.
| 6 | | (4) The transfer or sale of tax credits under this | 7 | | subsection does not extend the time during which those tax | 8 | | credits can be used. The carry-forward period for a tax | 9 | | credit that is transferred or sold shall begin on the date | 10 | | on which the tax credit was originally issued.
| 11 | | (5) A transferee shall have only those rights to claim | 12 | | and use the credit that were available to the taxpayer that | 13 | | earned the credit, except that credits sold or transferred | 14 | | may not be used against a transferee's withholding tax | 15 | | liability.
| 16 | | (6) If the taxpayer earning the credit fails to comply | 17 | | with the terms and requirements of the agreement, and, | 18 | | under this Act, notice is provided to the Department of | 19 | | Revenue of the taxpayer's non-compliance, the Department | 20 | | shall hold the transferor liable for any tax, penalty, or | 21 | | interest due as a result of noncompliance with the | 22 | | agreement.
| 23 | | Section 25. Tax credit transfer. The Department shall | 24 | | establish a tax credit exchange to allow taxpayers that are a | 25 | | party to an agreement to negotiate with qualifying small |
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| 1 | | businesses. A one-time transfer of any credits earned is | 2 | | allowed. Credits may be transferred to more than one qualifying | 3 | | small business. The Department must certify that a small | 4 | | business is qualified before they may enter the exchange. The | 5 | | Department shall charge a fee for such transfer. | 6 | | Section 30. Application for a project to create and retain | 7 | | new jobs.
| 8 | | (a) Any taxpayer proposing a project located or planned to | 9 | | be located in a qualifying border county or qualifying census | 10 | | tract, or proposing a project having a direct and substantial | 11 | | employment impact on such counties or census tracts, may | 12 | | request consideration for designation of its project by formal | 13 | | written letter of request and by formal application to the | 14 | | Department, in which the applicant states its intent to make at | 15 | | least a specified level of investment and intends to hire, | 16 | | retain, or both hire and retain a specified number of full-time | 17 | | employees at a designated location in Illinois. Retention is | 18 | | necessary only in cases in which there is an existing facility. | 19 | | The Department shall require a formal application from an | 20 | | applicant and a formal letter of request for assistance.
| 21 | | (b) In order to qualify for credits under this Act, an | 22 | | applicant's project must be located in a qualifying border | 23 | | county or qualifying census tract or have a direct and | 24 | | substantial employment impact on such counties or census tracts | 25 | | and:
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| 1 | | (1) involve an investment of at least $5,000,000 in | 2 | | capital improvements to be placed in service and employ at | 3 | | least 25 new employees within this State as a direct result | 4 | | of the project;
| 5 | | (2) involve an investment, in an amount expressly | 6 | | specified by the Department, in capital improvements to be | 7 | | placed in service and employ, in at least an amount | 8 | | expressly specified by the Department, new employees | 9 | | within this State, provided that the Department or the | 10 | | Committee has determined that the project will provide a | 11 | | substantial economic benefit to this State and either a | 12 | | qualifying border county or a qualifying census tract; this | 13 | | shall be established using econometric modeling; or
| 14 | | (3) if the applicant has 100 or fewer employees, | 15 | | involve an investment of at least $1,000,000 in capital | 16 | | improvements to be placed in service and employ at least 5 | 17 | | new employees within this State as a direct result of the | 18 | | project.
| 19 | | (c) After receipt of an application, the Department may | 20 | | enter into an agreement with the applicant if the application | 21 | | is approved in accordance with Section 35. | 22 | | Section 35. Review of application.
| 23 | | (a) The Targeted Tax Credit Review Committee is hereby | 24 | | created and shall be composed of the following 5 members: | 25 | | (1) the Director of the Department of Commerce and |
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| 1 | | Economic Opportunity or his or her designee; | 2 | | (2) the Director of the Governor's Office of Management | 3 | | and Budget, or his or her designee; | 4 | | (3) the Director of the Department of Revenue, or his | 5 | | or her designee; | 6 | | (4) the State Treasurer, or his or her designee; and | 7 | | (5) an individual who is the chief executive officer of | 8 | | a not-for-profit economic development corporation, | 9 | | appointed by the Governor. | 10 | | (b) The Director shall serve as Chairman of the Committee | 11 | | and all members, except the State Treasurer, shall serve at the | 12 | | pleasure of the Governor. | 13 | | (c) The Committee shall convene on a quarterly basis to | 14 | | review all applications received that are requesting tax | 15 | | credits in excess of $10,000,000 over a 10-year period. It | 16 | | shall conduct studies, econometric modeling, review | 17 | | information with respect to applicants, and make decisions for | 18 | | projects to benefit this State, all in a manner it deems | 19 | | necessary. The Department shall provide, or contract to | 20 | | provide, staff and resources necessary for the review process.
| 21 | | The Committee shall compare and evaluate each application based | 22 | | upon the total economic impact on the border county or census | 23 | | tract and this State.
In making its decision that an | 24 | | applicant's application for tax credits should or should not be | 25 | | approved, the Committee shall determine that the following | 26 | | conditions exist:
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| 1 | | (1) The applicant's project is located in a qualifying | 2 | | border county or qualifying census tract or has a direct | 3 | | and substantial employment impact on such counties or | 4 | | census tracts.
| 5 | | (2) The applicant's project intends, as required by | 6 | | subsection (b) of Section 30, to make the required | 7 | | investment in this State and intends to hire the required | 8 | | number of new employees in Illinois as a result of that | 9 | | project.
| 10 | | (3) The applicant's project is economically sound and | 11 | | will benefit the people of this State by increasing | 12 | | opportunities for employment and strengthening the economy | 13 | | of this State.
| 14 | | (4) The political subdivisions affected by the project | 15 | | have committed local incentives with respect to the | 16 | | project, considering local ability to assist.
| 17 | | (5) Awarding the credit will result in an overall | 18 | | positive fiscal impact to this State, as certified by the | 19 | | Committee using the best available data.
| 20 | | (6) The credit is not prohibited by Section 45 of this | 21 | | Act.
| 22 | | (7) The jobs to be created or retained must meet or | 23 | | exceed the median income in the county where the project is | 24 | | located by 20%. | 25 | | For applicants requesting tax credits of $10,000,000 or | 26 | | less over a 10-year period, in making its decision that an |
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| 1 | | applicant's application for tax credits should or should not be | 2 | | approved, the Department shall determine whether the | 3 | | conditions set forth in paragraphs (1) through (7) exist. | 4 | | (d) For applicants that are requesting tax credits in | 5 | | excess of $10,000,000 over a 10-year period, a majority of the | 6 | | Committee shall determine whether an application is approved or | 7 | | denied.
For applicants requesting tax credits of $10,000,000 or | 8 | | less over a 10-year period, the Department shall determine | 9 | | whether an application is approved or denied. | 10 | | (e) For applicants that are requesting tax credits in | 11 | | excess of $10,000,000 over a 10-year period, if it is | 12 | | determined by the Director that a project has a substantial | 13 | | benefit to this State, the Director shall have the power to | 14 | | call special meetings of the Committee upon due notice.
| 15 | | Section 40. Limitation to amount of costs of specified | 16 | | items. The total amount of the credit allowed during all tax | 17 | | years may not exceed the aggregate amount of costs incurred by | 18 | | the taxpayer during all prior tax years for the following | 19 | | items, to the extent provided in the agreement:
| 20 | | (1) capital investment, including, but not limited to, | 21 | | equipment, buildings, or land;
| 22 | | (2) infrastructure development;
| 23 | | (3) debt service, except refinancing of current debt;
| 24 | | (4) research and development;
| 25 | | (5) job training and education;
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| 1 | | (6) lease costs; or
| 2 | | (7) relocation costs.
| 3 | | Section 45. Relocation of jobs in Illinois. A taxpayer is | 4 | | not entitled to claim a credit with respect to any jobs that | 5 | | the Taxpayer relocates from one site in Illinois to another | 6 | | site in Illinois. Moreover, any full-time employee of an | 7 | | eligible business relocated to Illinois in connection with that | 8 | | qualifying project is deemed to be a new employee for purposes | 9 | | of this Act. Determinations under this Section shall be made by | 10 | | the Department. | 11 | | Section 50. Determination of amount of the credit. In | 12 | | determining the amount of the credit that should be awarded, | 13 | | the Committee or, in the case of requests for tax credits of | 14 | | $10,000,000 or less over a 10-year period, the Department shall | 15 | | take into consideration all of the following factors: | 16 | | (1) the number and location of jobs created or retained | 17 | | in relation to the economy of the qualifying border county | 18 | | or qualifying census tract and where the projected | 19 | | investment is to occur; | 20 | | (2) the amount of the credit requested by the taxpayer; | 21 | | (3) the potential impact on the economy of Illinois; | 22 | | (4) the quality of the jobs to be created or retained | 23 | | in the area, including, but not limited to, how much the | 24 | | jobs created or retained exceed the median income, benefits |
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| 1 | | in the county, and the quality of the employee benefits; | 2 | | (5) the incremental payroll attributable to the | 3 | | project; | 4 | | (6) the capital investment attributable to the | 5 | | project; | 6 | | (7) the costs to Illinois and to the affected political | 7 | | subdivisions with respect to the project; and | 8 | | (8) the financial assistance that is otherwise | 9 | | provided by Illinois and the affected political | 10 | | subdivisions.
| 11 | | Section 55. Amount and duration of the credit.
The | 12 | | Committee or, in the case of requests for tax credits of | 13 | | $10,000,000 or less over a 10-year period, the Department shall | 14 | | determine the specific amount of tax credits awarded under this | 15 | | Act each fiscal year. The agreements executed in any fiscal | 16 | | year for applications requesting $10,000,000 or less over a | 17 | | 10-year period shall not exceed a maximum 10-year commitment of | 18 | | $50,000,000. The duration of the credit may not exceed 10 | 19 | | taxable years, however, awarded credits may be carried forward | 20 | | for up to 5 years from the date they were issued. The credit | 21 | | shall be stated as a percentage of the incremental income tax | 22 | | attributable to the applicant's project and shall include a | 23 | | fixed dollar limitation for each year of any such agreement. | 24 | | Section 60. Contents of agreements with applicants. The |
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| 1 | | Department shall enter into an agreement with an applicant that | 2 | | is awarded a credit under this Act. The agreement shall include | 3 | | all of the following:
| 4 | | (1) A detailed description of the project that is the | 5 | | subject of the agreement, including the location and amount | 6 | | of the investment and jobs created or retained.
| 7 | | (2) The duration of the credit and the first taxable | 8 | | year for which the credit may be claimed.
| 9 | | (3) The maximum credit amount that will be allowed for | 10 | | each taxable year.
| 11 | | (4) A requirement that the taxpayer shall maintain | 12 | | operations at the project location for 5 years after the | 13 | | project is placed in service.
| 14 | | (5) A specific method for determining the number of new | 15 | | employees employed during a taxable year.
| 16 | | (6) A requirement that the taxpayer shall annually | 17 | | report to the Department the number of new employees, the | 18 | | incremental income tax withheld in connection with the new | 19 | | employees, and any other information the Director needs to | 20 | | perform its duties under this Act.
| 21 | | (7) A requirement that the Director is authorized to | 22 | | verify, with the appropriate State agencies, the amounts | 23 | | reported under paragraph (6) of this Section, and, upon | 24 | | verification, shall issue a certificate to the taxpayer | 25 | | stating that the amounts have been verified.
| 26 | | (8) A requirement that the taxpayer shall provide |
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| 1 | | written notification to the Director not more than 30 days | 2 | | after the taxpayer makes or receives a proposal that would | 3 | | transfer the taxpayer's State tax liability obligations to | 4 | | a successor Taxpayer.
| 5 | | (9) A detailed description of the number of new | 6 | | employees to be hired, and the occupation and payroll of | 7 | | the full-time jobs to be created or retained as a result of | 8 | | the project.
| 9 | | (10) The minimum investment the business enterprise | 10 | | will make in capital improvements, the time period for | 11 | | placing the property in service, and the designated | 12 | | location in Illinois for the investment.
| 13 | | (11) A requirement that the taxpayer shall provide | 14 | | written notification to the Director and the Committee not | 15 | | more than 30 days after the Taxpayer determines that the | 16 | | minimum job creation or retention, employment payroll, or | 17 | | investment is no longer or will no longer be achieved or | 18 | | maintained, as set forth in the terms and conditions of the | 19 | | agreement.
| 20 | | (12) A provision that, if the total number of new | 21 | | employees falls below a specified level, the allowance of | 22 | | the credit shall be suspended until the number of new | 23 | | employees equals or exceeds the agreement amount.
| 24 | | (13) A detailed description of the items for which the | 25 | | costs incurred by the taxpayer will be included in the | 26 | | limitation on the credit provided in Section 40.
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| 1 | | (14) A provision that, if the taxpayer never meets | 2 | | either the investment or job creation and retention | 3 | | requirements specified in the agreement during the entire | 4 | | 5-year period beginning on the first day of the first | 5 | | taxable year in which the agreement is executed and ending | 6 | | on the last day of the fifth taxable year after the | 7 | | agreement is executed, then the agreement is automatically | 8 | | terminated on the last day of the fifth taxable year after | 9 | | the agreement is executed and the taxpayer is not entitled | 10 | | to the award of any credits for any of that 5-year period.
| 11 | | (15) Any other performance conditions or contract | 12 | | provisions as the Department determines are appropriate.
| 13 | | The Department shall post on its website the terms of each | 14 | | agreement entered into under this Act on or after the effective | 15 | | date of this Act.
| 16 | | Section 65. Certificate of verification; submission to the | 17 | | Department of Revenue. A taxpayer claiming a credit under this | 18 | | Act shall submit to the Department of Revenue a copy of the | 19 | | Director's certificate of verification under this Act for the | 20 | | taxable year. Failure to submit a copy of the certificate with | 21 | | the taxpayer's tax return shall not invalidate a claim for a | 22 | | credit.
For a taxpayer to be eligible for a certificate of | 23 | | verification, the taxpayer shall provide proof as required by | 24 | | the Department prior to the end of each calendar year, | 25 | | including, but not limited to, attestation by the taxpayer |
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| 1 | | that:
| 2 | | (1) The project has substantially achieved the level of | 3 | | new full-time jobs specified in its agreement.
| 4 | | (2) The project has substantially achieved the level of | 5 | | annual payroll in Illinois specified in its agreement.
| 6 | | (3) The project has substantially achieved the level of | 7 | | capital investment in Illinois specified in its agreement.
| 8 | | Section 70. Pass-through entity.
| 9 | | (a) The shareholders or partners of a taxpayer that is a | 10 | | pass-through entity shall be entitled to the credit allowed | 11 | | under the agreement.
| 12 | | (b) The credit provided under subsection (a) of this | 13 | | Section is in addition to any credit to which a shareholder or | 14 | | partner is otherwise entitled under a separate agreement under | 15 | | this Act. A pass-through entity, and a shareholder or partner | 16 | | of the pass-through entity, may not claim more than one credit | 17 | | under the same agreement.
| 18 | | Section 75. Noncompliance; notice; assessment. If the | 19 | | Director determines that a taxpayer that has received a credit | 20 | | under this Act is not complying with the requirements of the | 21 | | agreement or all of the provisions of this Act, the Director | 22 | | shall provide notice to the taxpayer of the alleged | 23 | | noncompliance, and allow the taxpayer a hearing under the | 24 | | Illinois Administrative Procedure Act. If, after such notice |
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| 1 | | and any hearing, the Director determines that a noncompliance | 2 | | exists, the Director shall issue to the Department of Revenue | 3 | | notice to that effect, stating the noncompliance date. | 4 | | Section 80. Annual report. On or before July 1 each year, | 5 | | the Committee shall submit a report the Department containing | 6 | | the following information with respect to applications | 7 | | considered by the Committee. The report shall include | 8 | | information on the number of agreements that were entered into | 9 | | under this Act during the preceding calendar year, a | 10 | | description of the project that is the subject of each | 11 | | agreement, an update on the status of projects under agreements | 12 | | entered into before the preceding calendar year, and the sum of | 13 | | the credits awarded under this Act. A copy of the report shall | 14 | | be delivered to the Governor and to each member of the General | 15 | | Assembly. | 16 | | Section 85. Evaluation of Targeted Tax Credit Program. The | 17 | | Department shall evaluate the Targeted Tax Credit Program on a | 18 | | biennial basis. The evaluation shall include an assessment of | 19 | | the effectiveness of the program in creating or retaining jobs | 20 | | in Illinois and of the revenue impact of the Program, and may | 21 | | include a review of the practices and experiences of other | 22 | | states with similar programs. The Director shall submit a | 23 | | report on the evaluation to the Governor and the General | 24 | | Assembly after June 30 and before November 1 of each |
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| 1 | | odd-numbered year. | 2 | | Section 90. No new agreements after December 31, 2029. The | 3 | | Department shall not enter into any new agreements under the | 4 | | provisions of Section 60 of this Act after December 31, 2029. | 5 | | Section 95. Adoption of rules. The Department shall adopt | 6 | | rules necessary to implement this Act. The rules may provide | 7 | | for recipients of credits under this Act to be charged fees to | 8 | | cover administrative costs of the Targeted Tax Credit Program. | 9 | | Fees collected shall be deposited into the Targeted Tax Credit | 10 | | Fund. | 11 | | Section 100. The Targeted Tax Credit Fund.
| 12 | | (a) The Targeted Tax Credit Fund is established to be used | 13 | | exclusively for the purposes of this Act, including paying for | 14 | | the costs of promoting and administering the Targeted Tax | 15 | | Credit Program. The Fund shall be administered by the | 16 | | Department.
| 17 | | (b) The Fund consists of collected fees, appropriations | 18 | | from the General Assembly, and gifts and grants to the Fund.
| 19 | | (c) The State Treasurer shall invest the money in the Fund | 20 | | not currently needed to meet the obligations of the Fund in the | 21 | | same manner as other public funds may be invested. Interest | 22 | | that accrues from these investments shall be deposited into the | 23 | | Fund.
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| 1 | | (d) The money in the Fund at the end of a State fiscal year | 2 | | remains in the Fund to be used exclusively for the purposes of | 3 | | this Act. Expenditures from the Fund are subject to | 4 | | appropriation by the General Assembly.
| 5 | | Section 105. Program terms and conditions.
| 6 | | (a) Any documentary materials or data made available or | 7 | | received by any member of a Committee or any agent or employee | 8 | | of the Department shall be deemed confidential and shall not be | 9 | | deemed public records to the extent that the materials or data | 10 | | consist of trade secrets, commercial or financial information | 11 | | regarding the operation of the business conducted by the | 12 | | Applicant or recipient of any tax credit under this Act, or any | 13 | | information regarding the competitive position of a business in | 14 | | a particular field of endeavor.
| 15 | | (b) Nothing in this Act shall be construed as creating any | 16 | | rights in any applicant to enter into an agreement or in any | 17 | | person to challenge the terms of any agreement.
| 18 | | Section 900. The State Finance Act is amended by adding | 19 | | Section 5.875 as follows: | 20 | | (30 ILCS 105/5.875 new) | 21 | | Sec. 5.875. The Targeted Tax Credit Fund. | 22 | | (35 ILCS 10/Act rep.) |
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| 1 | | Section 905. The Economic Development for a Growing Economy | 2 | | Tax Credit Act is repealed.
| 3 | | Section 999. Effective date. This Act takes effect upon | 4 | | becoming law, except that Section 905 takes effect one year | 5 | | after this Act becomes law.".
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