35 ILCS 10/ Economic Development for a Growing Economy Tax Credit Act.

(35 ILCS 10/Art. 5 heading) ARTICLE 5.

(35 ILCS 10/5-1)

Sec. 5-1. Short title. This Article may be cited as the Economic Development for a Growing Economy Tax Credit Act.

(Source: P.A. 91-476, eff. 8-11-99.)

(35 ILCS 10/5-3)

Sec. 5-3. Purpose. The General Assembly finds that the Illinois economy, although currently strong, is still highly vulnerable to other states and nations that have major financial incentive programs for medium-sized and large firm relocations. Because of the incentive programs of these competitor locations, Illinois must move aggressively with new business development investment tools so that Illinois is more competitive in site location decision-making. The State must not only continue to work with firms to help them locate their new plants and facilities in Illinois but also must provide competitive investment location tax credits in support of the location and expansion of medium-sized and large operations of commerce and industry. In an increasingly global economy, Illinois' long-term development would benefit from rational, strategic use of State resources in support of business development and growth.

(Source: P.A. 91-476, eff. 8-11-99.)

(35 ILCS 10/5-5)

Sec. 5-5. Definitions. As used in this Act:

"Agreement" means the Agreement between a Taxpayer and the Department under the provisions of Section 5-50 of this Act.

"Applicant" means a Taxpayer that is operating a business located or that the Taxpayer plans to locate within the State of Illinois and that is engaged in interstate or intrastate commerce for the purpose of manufacturing, processing, assembling, warehousing, or distributing products, conducting research and development, providing tourism services, or providing services in interstate commerce, office industries, or agricultural processing, but excluding retail, retail food, health, professional services, and services delivered to business customer sites. "Applicant" does not include a Taxpayer who closes or substantially reduces an operation at one location in the State and relocates substantially the same operation to another location in the State. This does not prohibit a Taxpayer from expanding its operations at another location in the State, provided that existing operations of a similar nature located within the State are not closed or substantially reduced. This also does not prohibit a Taxpayer from moving its operations from one location in the State to another location in the State for the purpose of expanding the operation provided that the Department determines that expansion cannot reasonably be accommodated within the municipality in which the business is located, or in the case of a business located in an incorporated area of the county, within the county in which the business is located, after conferring with the chief elected official of the municipality or county and taking into consideration any evidence offered by the municipality or county regarding the ability to accommodate expansion within the municipality or county.

"Credit" means the amount agreed to between the Department and Applicant under this Act, but not to exceed the lesser of: (1) the sum of (i) 50% of the Incremental Income Tax attributable to New Employees at the Applicant's project and (ii) 10% of the training costs of New Employees; or (2) 100% of the Incremental Income Tax attributable to New Employees at the Applicant's project. However, if the project is located in an underserved area, then the amount of the Credit may not exceed the lesser of: (1) the sum of (i) 75% of the Incremental Income Tax attributable to New Employees at the Applicant's project and (ii) 10% of the training costs of New Employees; or (2) 100% of the Incremental Income Tax attributable to New Employees at the Applicant's project. If the project is not located in an underserved area and the Applicant agrees to hire the required number of New Employees, then the maximum amount of the Credit for that Applicant may be increased by an amount not to exceed 25% of the Incremental Income Tax attributable to retained employees at the Applicant's project. If the project is located in an underserved area and the Applicant agrees to hire the required number of New Employees, then the maximum amount of the credit for that Applicant may be increased by an amount not to exceed 50% of the Incremental Income Tax attributable to retained employees at the Applicant's project.

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

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

"Full-time Employee" means an individual who is employed for consideration for at least 35 hours each week or who renders any other standard of service generally accepted by industry custom or practice as full-time employment. An individual for whom a W-2 is issued by a Professional Employer Organization (PEO) is a full-time employee if employed in the service of the Applicant for consideration for at least 35 hours each week or who renders any other standard of service generally accepted by industry custom or practice as full-time employment to Applicant. The employee need not be physically present at the EDGE project location during the entire full-time workweek; however, the agreement shall set forth a minimum number of hours during which the employee is scheduled to be present at the EDGE project location.

"Incremental Income Tax" means the total amount withheld during the taxable year from the compensation of New Employees and, if applicable, retained employees under Article 7 of the Illinois Income Tax Act arising from employment at a project that is the subject of an Agreement.

"New Construction EDGE Agreement" means the Agreement between a Taxpayer and the Department under the provisions of Section 5-51 of this Act.

"New Construction EDGE Credit" means an amount agreed to between the Department and the Applicant under this Act as part of a New Construction EDGE Agreement that does not exceed 50% of the Incremental Income Tax attributable to New Construction EDGE Employees at the Applicant's project; however, if the New Construction EDGE Project is located in an underserved area, then the amount of the New Construction EDGE Credit may not exceed 75% of the Incremental Income Tax attributable to New Construction EDGE Employees at the Applicant's New Construction EDGE Project.

"New Construction EDGE Employee" means a laborer or worker who is employed by a contractor or subcontractor in the actual construction work on the site of a New Construction EDGE Project, pursuant to a New Construction EDGE Agreement.

"New Construction EDGE Incremental Income Tax" means the total amount withheld during the taxable year from the compensation of New Construction EDGE Employees.

"New Construction EDGE Project" means the building of a Taxpayer's structure or building, or making improvements of any kind to real property. "New Construction EDGE Project" does not include the routine operation, routine repair, or routine maintenance of existing structures, buildings, or real property.

"New Employee" means:

(a) A Full-time Employee first employed by a Taxpayer at the project, or assigned to the project as their primary work location, that is the subject of an Agreement and who is hired after the Taxpayer enters into the tax credit Agreement.

(b) The term "New Employee" does not include:

(1) an employee of the Taxpayer who performs a job that was previously performed by another employee, if that job existed for at least 6 months before hiring the employee;

(2) an employee of the Taxpayer who was previously employed in Illinois by a Related Member of the Taxpayer and whose employment was shifted to the Taxpayer after the Taxpayer entered into the tax credit Agreement; or

(3) a child, grandchild, parent, or spouse, other than a spouse who is legally separated from the individual, of any individual who has a direct or an indirect ownership interest of at least 5% in the profits, capital, or value of the Taxpayer.

(c) Notwithstanding paragraph (1) of subsection (b), an employee may be considered a New Employee under the Agreement if the employee performs a job that was previously performed by an employee who was:

(1) treated under the Agreement as a New Employee; and

(2) promoted by the Taxpayer to another job.

(d) Notwithstanding subsection (a), the Department may award Credit to an Applicant with respect to an employee hired prior to the date of the Agreement if:

(1) the Applicant is in receipt of a letter from the Department stating an intent to enter into a credit Agreement;

(2) the letter described in paragraph (1) is issued by the Department not later than 15 days after the effective date of this Act; and

(3) the employee was hired after the date the letter described in paragraph (1) was issued.

"Noncompliance Date" means, in the case of a Taxpayer that is not complying with the requirements of the Agreement or the provisions of this Act, the day following the last date upon which the Taxpayer was in compliance with the requirements of the Agreement and the provisions of this Act, as determined by the Director, pursuant to Section 5-65.

"Pass Through Entity" means an entity that is exempt from the tax under subsection (b) or (c) of Section 205 of the Illinois Income Tax Act.

"Professional Employer Organization" (PEO) means an employee leasing company, as defined in Section 206.1(A)(2) of the Illinois Unemployment Insurance Act.

"Related Member" means a person that, with respect to the Taxpayer during any portion of the taxable year, is any one of the following:

(1) An individual stockholder, if the stockholder and the members of the stockholder's family (as defined in Section 318 of the Internal Revenue Code) own directly, indirectly, beneficially, or constructively, in the aggregate, at least 50% of the value of the Taxpayer's outstanding stock.

(2) A partnership, estate, or trust and any partner or beneficiary, if the partnership, estate, or trust, and its partners or beneficiaries own directly, indirectly, beneficially, or constructively, in the aggregate, at least 50% of the profits, capital, stock, or value of the Taxpayer.

(3) A corporation, and any party related to the corporation in a manner that would require an attribution of stock from the corporation to the party or from the party to the corporation under the attribution rules of Section 318 of the Internal Revenue Code, if the Taxpayer owns directly, indirectly, beneficially, or constructively at least 50% of the value of the corporation's outstanding stock.

(4) A corporation and any party related to that corporation in a manner that would require an attribution of stock from the corporation to the party or from the party to the corporation under the attribution rules of Section 318 of the Internal Revenue Code, if the corporation and all such related parties own in the aggregate at least 50% of the profits, capital, stock, or value of the Taxpayer.

(5) A person to or from whom there is attribution of stock ownership in accordance with Section 1563(e) of the Internal Revenue Code, except, for purposes of determining whether a person is a Related Member under this paragraph, 20% shall be substituted for 5% wherever 5% appears in Section 1563(e) of the Internal Revenue Code.

"Startup taxpayer" means, for Agreements that are executed before the effective date of the changes made to this Section by this amendatory Act of the 103rd General Assembly, a corporation, partnership, or other entity incorporated or organized no more than 5 years before the filing of an application for an Agreement that has never had any Illinois income tax liability, excluding any Illinois income tax liability of a Related Member which shall not be attributed to the startup taxpayer. "Startup taxpayer" means, for Agreements that are executed on or after the effective date of this amendatory Act of the 103rd General Assembly, a corporation, partnership, or other entity that is incorporated or organized no more than 10 years before the filing of an application for an Agreement and that has never had any Illinois income tax liability. For the purpose of determining whether the taxpayer has had any Illinois income tax liability, the Illinois income tax liability of a Related Member shall not be attributed to the startup taxpayer.

"Taxpayer" means an individual, corporation, partnership, or other entity that has any Illinois Income Tax liability.

Until July 1, 2022, "underserved area" means a geographic area that meets one or more of the following conditions:

(1) the area has a poverty rate of at least 20% according to the latest federal decennial census;

(2) 75% or more of the children in the area participate in the federal free lunch program according to reported statistics from the State Board of Education;

(3) at least 20% of the households in the area receive assistance under the Supplemental Nutrition Assistance Program (SNAP); or

(4) the area has an average unemployment rate, as determined by the Illinois Department of Employment Security, that is more than 120% of the national unemployment average, as determined by the U.S. Department of Labor, for a period of at least 2 consecutive calendar years preceding the date of the application.

On and after July 1, 2022, "underserved area" means a geographic area that meets one or more of the following conditions:

(1) the area has a poverty rate of at least 20% according to the latest American Community Survey;

(2) 35% or more of the families with children in the area are living below 130% of the poverty line, according to the latest American Community Survey;

(3) at least 20% of the households in the area receive assistance under the Supplemental Nutrition Assistance Program (SNAP); or

(4) the area has an average unemployment rate, as determined by the Illinois Department of Employment Security, that is more than 120% of the national unemployment average, as determined by the U.S. Department of Labor, for a period of at least 2 consecutive calendar years preceding the date of the application.

(Source: P.A. 102-330, eff. 1-1-22; 102-700, eff. 4-19-22; 102-1125, eff. 2-3-23; 103-9, eff. 6-7-23; 103-595, eff. 6-26-24.)

(35 ILCS 10/5-10)

Sec. 5-10. Powers of the Department. The Department, in addition to those powers granted under the Civil Administrative Code of Illinois, is granted and shall have all the powers necessary or convenient to carry out and effectuate the purposes and provisions of this Act, including, but not limited to, power and authority to:

(a) Promulgate procedures, rules, or regulations deemed necessary and appropriate for the administration of the programs; establish forms for applications, notifications, contracts, or any other agreements; and accept applications at any time during the year.

(b) Provide and assist Taxpayers pursuant to the provisions of this Act, and cooperate with Taxpayers that are parties to Agreements to promote, foster, and support economic development, capital investment, and job creation or retention within the State.

(c) Enter into agreements and memoranda of understanding for participation of and engage in cooperation with agencies of the federal government, local units of government, universities, research foundations or institutions, regional economic development corporations, or other organizations for the purposes of this Act.

(d) Gather information and conduct inquiries, in the manner and by the methods as it deems desirable, including without limitation, gathering information with respect to Applicants for the purpose of making any designations or certifications necessary or desirable or to gather information to assist the Department with any recommendation or guidance in the furtherance of the purposes of this Act.

(e) Establish, negotiate and effectuate any term, agreement or other document with any person, necessary or appropriate to accomplish the purposes of this Act; and to consent, subject to the provisions of any Agreement with another party, to the modification or restructuring of any Agreement to which the Department is a party.

(f) Fix, determine, charge, and collect any premiums, fees, charges, costs, and expenses from Applicants, including, without limitation, any application fees, commitment fees, program fees, financing charges, or publication fees as deemed appropriate to pay expenses necessary or incident to the administration, staffing, or operation in connection with the Department's activities under this Act, or for preparation, implementation, and enforcement of the terms of the Agreement, or for consultation, advisory and legal fees, and other costs; however, all fees and expenses incident thereto shall be the responsibility of the Applicant.

(g) Provide for sufficient personnel to permit administration, staffing, operation, and related support required to adequately discharge its duties and responsibilities described in this Act from funds made available through charges to Applicants or from funds as may be appropriated by the General Assembly for the administration of this Act.

(h) Require Applicants, upon written request, to issue any necessary authorization to the appropriate federal, state, or local authority for the release of information concerning a project being considered under the provisions of this Act, with the information requested to include, but not be limited to, financial reports, returns, or records relating to the Taxpayers' or its project.

(i) Require that a Taxpayer shall at all times keep proper books of record and account in accordance with generally accepted accounting principles consistently applied, with the books, records, or papers related to the Agreement in the custody or control of the Taxpayer open for reasonable Department inspection and audits, and including, without limitation, the making of copies of the books, records, or papers, and the inspection or appraisal of any of the Taxpayer or project assets.

(j) Take whatever actions are necessary or appropriate to protect the State's interest in the event of bankruptcy, default, foreclosure, or noncompliance with the terms and conditions of financial assistance or participation required under this Act, including the power to sell, dispose, lease, or rent, upon terms and conditions determined by the Director to be appropriate, real or personal property that the Department may receive as a result of these actions.

(Source: P.A. 102-330, eff. 1-1-22.)

(35 ILCS 10/5-15)

Sec. 5-15. Tax Credit Awards. Subject to the conditions set forth in this Act, a Taxpayer is entitled to a Credit against or, as described in subsection (g) of this Section, a payment towards taxes imposed pursuant to subsections (a) and (b) of Section 201 of the Illinois Income Tax Act that may be imposed on the Taxpayer for a taxable year beginning on or after January 1, 1999, if the Taxpayer is awarded a Credit by the Department under this Act for that taxable year.

(a) The Department shall make Credit awards under this Act to foster job creation and retention in Illinois.

(b) A person that proposes a project to create new jobs in Illinois must enter into an Agreement with the Department for the Credit under this Act.

(c) The Credit shall be claimed for the taxable years specified in the Agreement.

(d) The Credit shall not exceed the Incremental Income Tax attributable to the project that is the subject of the Agreement.

(e) Nothing herein shall prohibit a Tax Credit Award to an Applicant that uses a PEO if all other award criteria are satisfied.

(f) In lieu of the Credit allowed under this Act against the taxes imposed pursuant to subsections (a) and (b) of Section 201 of the Illinois Income Tax Act for any taxable year ending on or after December 31, 2009, for Taxpayers that entered into Agreements prior to January 1, 2015 and otherwise meet the criteria set forth in this subsection (f), the Taxpayer may elect to claim the Credit against its obligation to pay over withholding under Section 704A of the Illinois Income Tax Act.

(1) The election under this subsection (f) may be made only by a Taxpayer that (i) is primarily engaged in one of the following business activities: water purification and treatment, motor vehicle metal stamping, automobile manufacturing, automobile and light duty motor vehicle manufacturing, motor vehicle manufacturing, light truck and utility vehicle manufacturing, heavy duty truck manufacturing, motor vehicle body manufacturing, cable television infrastructure design or manufacturing, or wireless telecommunication or computing terminal device design or manufacturing for use on public networks and (ii) meets the following criteria:

(A) the Taxpayer (i) had an Illinois net loss or an Illinois net loss deduction under Section 207 of the Illinois Income Tax Act for the taxable year in which the Credit is awarded, (ii) employed a minimum of 1,000 full-time employees in this State during the taxable year in which the Credit is awarded, (iii) has an Agreement under this Act on December 14, 2009 (the effective date of Public Act 96-834), and (iv) is in compliance with all provisions of that Agreement;

(B) the Taxpayer (i) had an Illinois net loss or an Illinois net loss deduction under Section 207 of the Illinois Income Tax Act for the taxable year in which the Credit is awarded, (ii) employed a minimum of 1,000 full-time employees in this State during the taxable year in which the Credit is awarded, and (iii) has applied for an Agreement within 365 days after December 14, 2009 (the effective date of Public Act 96-834);

(C) the Taxpayer (i) had an Illinois net operating loss carryforward under Section 207 of the Illinois Income Tax Act in a taxable year ending during calendar year 2008, (ii) has applied for an Agreement within 150 days after the effective date of this amendatory Act of the 96th General Assembly, (iii) creates at least 400 new jobs in Illinois, (iv) retains at least 2,000 jobs in Illinois that would have been at risk of relocation out of Illinois over a 10-year period, and (v) makes a capital investment of at least $75,000,000;

(D) the Taxpayer (i) had an Illinois net operating loss carryforward under Section 207 of the Illinois Income Tax Act in a taxable year ending during calendar year 2009, (ii) has applied for an Agreement within 150 days after the effective date of this amendatory Act of the 96th General Assembly, (iii) creates at least 150 new jobs, (iv) retains at least 1,000 jobs in Illinois that would have been at risk of relocation out of Illinois over a 10-year period, and (v) makes a capital investment of at least $57,000,000; or

(E) the Taxpayer (i) employed at least 2,500 full-time employees in the State during the year in which the Credit is awarded, (ii) commits to make at least $500,000,000 in combined capital improvements and project costs under the Agreement, (iii) applies for an Agreement between January 1, 2011 and June 30, 2011, (iv) executes an Agreement for the Credit during calendar year 2011, and (v) was incorporated no more than 5 years before the filing of an application for an Agreement.

(1.5) The election under this subsection (f) may also be made by a Taxpayer for any Credit awarded pursuant to an agreement that was executed between January 1, 2011 and June 30, 2011, if the Taxpayer (i) is primarily engaged in the manufacture of inner tubes or tires, or both, from natural and synthetic rubber, (ii) employs a minimum of 2,400 full-time employees in Illinois at the time of application, (iii) creates at least 350 full-time jobs and retains at least 250 full-time jobs in Illinois that would have been at risk of being created or retained outside of Illinois, and (iv) makes a capital investment of at least $200,000,000 at the project location.

(1.6) The election under this subsection (f) may also be made by a Taxpayer for any Credit awarded pursuant to an agreement that was executed within 150 days after the effective date of this amendatory Act of the 97th General Assembly, if the Taxpayer (i) is primarily engaged in the operation of a discount department store, (ii) maintains its corporate headquarters in Illinois, (iii) employs a minimum of 4,250 full-time employees at its corporate headquarters in Illinois at the time of application, (iv) retains at least 4,250 full-time jobs in Illinois that would have been at risk of being relocated outside of Illinois, (v) had a minimum of $40,000,000,000 in total revenue in 2010, and (vi) makes a capital investment of at least $300,000,000 at the project location.

(1.7) Notwithstanding any other provision of law, the election under this subsection (f) may also be made by a Taxpayer for any Credit awarded pursuant to an agreement that was executed or applied for on or after July 1, 2011 and on or before March 31, 2012, if the Taxpayer is primarily engaged in the manufacture of original and aftermarket filtration parts and products for automobiles, motor vehicles, light duty motor vehicles, light trucks and utility vehicles, and heavy duty trucks, (ii) employs a minimum of 1,000 full-time employees in Illinois at the time of application, (iii) creates at least 250 full-time jobs in Illinois, (iv) relocates its corporate headquarters to Illinois from another state, and (v) makes a capital investment of at least $4,000,000 at the project location.

(1.8) Notwithstanding any other provision of law, the election under this subsection (f) may also be made by a startup taxpayer for any Credit awarded pursuant to an Agreement that was executed on or after the effective date of this amendatory Act of the 102nd General Assembly. Any such election under this paragraph (1.8) shall be effective unless and until such startup taxpayer has any Illinois income tax liability. This election under this paragraph (1.8) shall automatically terminate when the startup taxpayer has any Illinois income tax liability at the end of any taxable year during the term of the Agreement. Thereafter, the startup taxpayer may receive a Credit, taking into account any benefits previously enjoyed or received by way of the election under this paragraph (1.8), so long as the startup taxpayer remains in compliance with the terms and conditions of the Agreement.

(1.9) Notwithstanding any other provision of law, the election under this subsection (f) may also be made by an applicant qualified under paragraph (1.7) of subsection (b) of Section 5-20 for any Credit awarded pursuant to an Agreement that was executed on or after the effective date of this amendatory Act of the 103rd General Assembly. Any such election under this paragraph (1.9) shall be effective unless and until such taxpayer has any Illinois income tax liability. This election under this paragraph (1.9) shall automatically terminate when the taxpayer has any Illinois income tax liability at the end of any taxable year during the term of the Agreement. Thereafter, the startup taxpayer may receive a Credit, taking into account any benefits previously enjoyed or received by way of the election under this paragraph (1.9), so long as the startup taxpayer remains in compliance with the terms and conditions of the Agreement.

(2) An election under this subsection shall allow the credit to be taken against payments otherwise due under Section 704A of the Illinois Income Tax Act during the first calendar quarter beginning after the end of the taxable quarter in which the credit is awarded under this Act.

(3) The election shall be made in the form and manner required by the Illinois Department of Revenue and, once made, shall be irrevocable.

(4) If a Taxpayer who meets the requirements of subparagraph (A) of paragraph (1) of this subsection (f) elects to claim the Credit against its withholdings as provided in this subsection (f), then, on and after the date of the election, the terms of the Agreement between the Taxpayer and the Department may not be further amended during the term of the Agreement.

(g) A pass-through entity that has been awarded a credit under this Act, its shareholders, or its partners may treat some or all of the credit awarded pursuant to this Act as a tax payment for purposes of the Illinois Income Tax Act. The term "tax payment" means a payment as described in Article 6 or Article 8 of the Illinois Income Tax Act or a composite payment made by a pass-through entity on behalf of any of its shareholders or partners to satisfy such shareholders' or partners' taxes imposed pursuant to subsections (a) and (b) of Section 201 of the Illinois Income Tax Act. In no event shall the amount of the award credited pursuant to this Act exceed the Illinois income tax liability of the pass-through entity or its shareholders or partners for the taxable year.

(Source: P.A. 102-700, eff. 4-19-22; 103-9, eff. 6-7-23; 103-595, eff. 6-26-24.)

(35 ILCS 10/5-20)

Sec. 5-20. Application for a project to create and retain new jobs.

(a) Any Taxpayer proposing a project located or planned to be located in Illinois may request consideration for designation of its project, by formal written letter of request or by formal application to the Department, in which the Applicant states its intent to make at least a specified level of investment and intends to hire or retain a specified number of full-time employees at a designated location in Illinois. As circumstances require, the Department may require a formal application from an Applicant and a formal letter of request for assistance.

(b) In order to qualify for Credits under this Act, an Applicant's project must:

(1) if the Applicant has more than 100 employees, involve an investment of at least $2,500,000 in capital improvements to be placed in service within the State as a direct result of the project; if the Applicant has 100 or fewer employees, then there is no capital investment requirement;

(1.5) if the Applicant has more than 100 employees, employ a number of new employees in the State equal to the lesser of (A) 10% of the number of full-time employees employed by the applicant world-wide on the date the application is filed with the Department or (B) 50 New Employees; and, if the Applicant has 100 or fewer employees, employ a number of new employees in the State equal to the lesser of (A) 5% of the number of full-time employees employed by the applicant world-wide on the date the application is filed with the Department or (B) 50 New Employees;

(1.6) if the Applicant is a startup taxpayer, the employees employed by Related Members shall not be attributed to the Applicant for purposes of determining the capital investment or job creation requirements under this subsection (b);

(1.7) if the agreement is entered into on or after the effective date of this amendatory Act of the 103rd General Assembly and the Applicant's project:

(A) makes an investment of at least $50,000,000 in capital improvements at the project site;

(B) is placed in service after approval of the application; and

(C) creates jobs for at least 100 new full-time employees.

(2) (blank);

(3) (blank); and

(4) include an annual sexual harassment policy report as provided under Section 5-58.

(c) After receipt of an application, the Department may enter into an Agreement with the Applicant if the application is accepted in accordance with Section 5-25.

(Source: P.A. 102-700, eff. 4-19-22; 103-595, eff. 6-26-24.)

(35 ILCS 10/5-25)

Sec. 5-25. Review of Application.

(a) (Blank).

(b) The Department shall determine which projects will benefit the State. In making its recommendation that an Applicant's application for Credit should or should not be accepted, which shall occur within a reasonable time frame as determined by the nature of the application, the Department shall determine that all the following conditions exist:

(1) The Applicant's project intends, as required by subsection (b) of Section 5-20 to make the required investment in the State and intends to hire the required number of New Employees in Illinois as a result of that project.

(2) The Applicant's project is economically sound and will benefit the people of the State of Illinois by increasing opportunities for employment and strengthen the economy of Illinois.

(3) The Applicant has certified that, if not for the Credit, the project would not occur in Illinois.

(4) A cost differential is identified, using best available data, in the projected costs for the Applicant's project compared to the costs in the competing state, including the impact of the competing state's incentive programs. The competing state's incentive programs shall include state, local, private, and federal funds available. This paragraph (4) applies only to agreements entered into before the effective date of this amendatory Act of the 102nd General Assembly.

(5) The political subdivisions affected by the project have committed local incentives with respect to the project, considering local ability to assist.

(6) Awarding the Credit will result in an overall positive fiscal impact to the State, as certified by the Department using the best available data.

(7) The Credit is not prohibited by Section 5-35 of this Act.

(Source: P.A. 102-330, eff. 1-1-22; 102-1125, eff. 2-3-23.)

(35 ILCS 10/5-30)

Sec. 5-30. Limitation to amount of costs of specified items. The total amount of the Credit allowed during all tax years may not exceed the aggregate amount of costs incurred by the Taxpayer during all prior tax years for the following items, to the extent provided in the Agreement:

(1) capital investment, including, but not limited to, equipment, buildings, or land;

(2) infrastructure development;

(3) debt service, except refinancing of current debt;

(4) research and development;

(5) job training and education;

(6) lease costs; or

(7) relocation costs.

(Source: P.A. 91-476, eff. 8-11-99.)

(35 ILCS 10/5-35)

Sec. 5-35. Relocation of jobs in Illinois. A taxpayer is not entitled to claim the credit provided by this Act with respect to any jobs that the taxpayer relocates from one site in Illinois unless the taxpayer has agreed to hire the minimum number of new employees and the Department has determined that the expansion cannot reasonably be accommodated within the municipality in which the business is located. Determinations under this Section shall be made by the Department.

(Source: P.A. 103-595, eff. 6-26-24.)

(35 ILCS 10/5-40)

Sec. 5-40. (Repealed).

(Source: P.A. 91-476, eff. 8-11-99. Repealed by P.A. 102-330, eff. 1-1-22.)

(35 ILCS 10/5-45)

Sec. 5-45. Amount and duration of the credit.

(a) The Department shall determine the amount and duration of the credit awarded under this Act. The duration of the credit may not exceed 10 taxable years for projects qualified under paragraph (1), (1.5), or (1.6) of subsection (b) of Section 5-20 or 15 taxable years for projects qualified under paragraph (1.7) of subsection (b) of Section 5-20. The credit may be stated as a percentage of the Incremental Income Tax attributable to the applicant's project and may include a fixed dollar limitation.

(b) Notwithstanding subsection (a), and except as the credit may be applied in a carryover year pursuant to Section 211(4) of the Illinois Income Tax Act, the credit may be applied against the State income tax liability in more than 10 taxable years but not in more than 15 taxable years for an eligible business that (i) qualifies under this Act and the Corporate Headquarters Relocation Act and has in fact undertaken a qualifying project within the time frame specified by the Department of Commerce and Economic Opportunity under that Act, and (ii) applies against its State income tax liability, during the entire 15-year period, no more than 60% of the maximum credit per year that would otherwise be available under this Act.

(c) Nothing in this Section shall prevent the Department, in consultation with the Department of Revenue, from adopting rules to extend the sunset of any earned, existing, and unused tax credit or credits a taxpayer may be in possession of, as provided for in Section 605-1070 of the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois, notwithstanding the carry-forward provisions pursuant to paragraph (4) of Section 211 of the Illinois Income Tax Act.

(Source: P.A. 102-16, eff. 6-17-21; 102-813, eff. 5-13-22; 103-595, eff. 6-26-24.)

(35 ILCS 10/5-50)

Sec. 5-50. Contents of Agreements with Applicants. The Department shall enter into an Agreement with an Applicant that is awarded a Credit under this Act. The Agreement must include all of the following:

(1) A detailed description of the project that is the subject of the Agreement, including the location and amount of the investment and jobs created or retained.

(2) The duration of the Credit and the first taxable year for which the Credit may be claimed.

(3) The Credit amount that will be allowed for each taxable year.

(4) A requirement that the Taxpayer shall maintain operations at the project location that shall be stated as a minimum number of years not to exceed 10.

(5) A specific method for determining the number of New Employees employed during a taxable year.

(6) A requirement that the Taxpayer shall annually report to the Department the number of New Employees, the Incremental Income Tax withheld in connection with the New Employees, and any other information the Director needs to perform the Director's duties under this Act.

(7) A requirement that the Director is authorized to verify with the appropriate State agencies the amounts reported under paragraph (6), and after doing so shall issue a certificate to the Taxpayer stating that the amounts have been verified.

(8) A requirement that the Taxpayer shall provide written notification to the Director not more than 30 days after the Taxpayer makes or receives a proposal that would transfer the Taxpayer's State tax liability obligations to a successor Taxpayer.

(9) A detailed description of the number of New Employees to be hired, and the occupation and payroll of the full-time jobs to be created or retained as a result of the project.

(10) The minimum investment the business enterprise will make in capital improvements, the time period for placing the property in service, and the designated location in Illinois for the investment.

(11) A requirement that the Taxpayer shall provide written notification to the Director and the Committee not more than 30 days after the Taxpayer determines that the minimum job creation or retention, employment payroll, or investment no longer is being or will be achieved or maintained as set forth in the terms and conditions of the Agreement.

(12) A provision that, if the total number of New Employees falls below a specified level, the allowance of Credit shall be suspended until the number of New Employees equals or exceeds the Agreement amount.

(13) A detailed description of the items for which the costs incurred by the Taxpayer will be included in the limitation on the Credit provided in Section 5-30.

(13.5) A provision that, if the Taxpayer never meets either the investment or job creation and retention requirements specified in the Agreement during the entire 5-year period beginning on the effective date of the Agreement and ending 5 years after the effective date of the Agreement, then the Agreement is automatically terminated on the last day of the fifth taxable year after the Agreement is executed and the Taxpayer is not entitled to the award of any credits for any of that 5-year period.

(13.7) A provision specifying that, if the Taxpayer ceases principal operations with the intent to shut down the project in the State permanently during the term of the Agreement, then the entire credit amount awarded to the Taxpayer prior to the date the Taxpayer ceases principal operations shall be returned to the Department and shall be reallocated to the local workforce investment area in which the project was located.

(14) Any other performance conditions or contract provisions as the Department determines are appropriate.

The Department shall post on its website the terms of each Agreement entered into under this Act on or after the effective date of this amendatory Act of the 97th General Assembly. Such information shall be posted within 10 days after entering into the Agreement and must include the following:

(1) the name of the recipient business;

(2) the location of the project;

(3) the estimated value of the credit;

(4) the number of new jobs and, if applicable, retained jobs pledged as a result of the project; and

(5) whether or not the project is located in an underserved area.

(Source: P.A. 102-1125, eff. 2-3-23.)

(35 ILCS 10/5-51)

Sec. 5-51. New Construction EDGE Agreement.

(a) Notwithstanding any other provisions of this Act, and in addition to any Credit otherwise allowed under this Act, beginning on January 1, 2021, there is allowed a New Construction EDGE Credit for eligible Applicants that meet the following criteria:

(1) the Department has certified that the Applicant meets all requirements of Sections 5-15, 5-20, and 5-25; and

(2) the Department has certified that, pursuant to Section 5-20, the Applicant's Agreement includes a capital investment of at least $10,000,000 in a New Construction EDGE Project to be placed in service within the State as a direct result of an Agreement entered into pursuant to this Section.

(b) The Department shall notify each Applicant during the application process that its project is eligible for a New Construction EDGE Credit. The Department shall create a separate application to be filled out by the Applicant regarding the New Construction EDGE credit. The Application shall include the following:

(1) a detailed description of the New Construction EDGE Project that is subject to the New Construction EDGE Agreement, including the location and amount of the investment and jobs created or retained;

(2) the duration of the New Construction EDGE Credit and the first taxable year for which the Credit may be claimed;

(3) the New Construction EDGE Credit amount that will be allowed for each taxable year;

(4) a requirement that the Director is authorized to verify with the appropriate State agencies the amount of the incremental income tax withheld by a Taxpayer, and after doing so, shall issue a certificate to the Taxpayer stating that the amounts have been verified;

(5) the amount of the capital investment, which may at no point be less than $10,000,000, the time period of placing the New Construction EDGE Project in service, and the designated location in Illinois for the investment;

(6) a requirement that the Taxpayer shall provide written notification to the Director not more than 30 days after the Taxpayer determines that the capital investment of at least $10,000,000 is not or will not be achieved or maintained as set forth in the terms and conditions of the Agreement;

(7) a detailed provision that the Taxpayer shall be awarded a New Construction EDGE Credit upon the verified completion and occupancy of a New Construction EDGE Project; and

(8) any other performance conditions, including the ability to verify that a New Construction EDGE Project is built and completed, or that contract provisions as the Department determines are appropriate.

(c) The Department shall post on its website the terms of each New Construction EDGE Agreement entered into under this Act on or after June 5, 2019 (the effective date of Public Act 101-9). Such information shall be posted within 10 days after entering into the Agreement and must include the following:

(1) the name of the recipient business;

(2) the location of the project;

(3) the estimated value of the credit; and

(4) whether or not the project is located in an underserved area.

(d) The Department, in collaboration with the Department of Labor, shall require that certified payroll reporting, pursuant to Section 5-56 of this Act, be completed in order to verify the wages and any other necessary information which the Department may deem necessary to ascertain and certify the total number of New Construction EDGE Employees subject to a New Construction EDGE Agreement and amount of a New Construction EDGE Credit.

(e) The total aggregate amount of credits awarded under the Blue Collar Jobs Act (Article 20 of Public Act 101-9) shall not exceed $20,000,000 in any State fiscal year.

(Source: P.A. 101-9, eff. 6-5-19; 102-558, eff. 8-20-21.)

(35 ILCS 10/5-55)

Sec. 5-55. Certificate of verification; submission to the Department of Revenue. A Taxpayer claiming a Credit under this Act shall submit to the Department of Revenue a copy of the Director's certificate of verification under this Act for the taxable year. However, failure to submit a copy of the certificate with the Taxpayer's tax return shall not invalidate a claim for a Credit.

For a Taxpayer to be eligible for a certificate of verification, the Taxpayer shall provide proof as required by the Department prior to the end of each calendar year, including, but not limited to, attestation by the Taxpayer that:

(1) The project has substantially achieved the level of new full-time jobs specified in its Agreement.

(2) The project has substantially achieved the level of annual payroll in Illinois specified in its Agreement.

(3) The project has substantially achieved the level of capital investment in Illinois specified in its Agreement.

(Source: P.A. 91-476, eff. 8-11-99.)

(35 ILCS 10/5-56)

Sec. 5-56. Annual report. Annually, until construction is completed, a company seeking New Construction EDGE Credits shall submit a report that, at a minimum, describes the projected project scope, timeline, and anticipated budget. Once the project has commenced, the annual report shall include actual data for the prior year as well as projections for each additional year through completion of the project. The Department shall issue detailed reporting guidelines prescribing the requirements of construction related reports. In order to receive credit for construction expenses, the company must provide the Department with evidence that a certified third-party executed an Agreed-Upon Procedure (AUP) verifying the construction expenses or accept the standard construction wage expense estimated by the Department.

Upon review of the final project scope, timeline, budget, and AUP, the Department shall issue a tax credit certificate reflecting a percentage of the total construction job wages paid throughout the completion of the project.

Upon 7 business days' notice, the taxpayer shall make available for inspection and copying at a location within this State during reasonable hours, the records identified in paragraph (1) of this Section to the taxpayer in charge of the project, its officers and agents, and to federal, State, or local law enforcement agencies and prosecutors.

(Source: P.A. 102-558, eff. 8-20-21; 103-595, eff. 6-26-24.)

(35 ILCS 10/5-57)

Sec. 5-57. Supplier diversity goals; reports. Each taxpayer claiming a credit under this Act shall, no later than April 15 of each taxable year for which the taxpayer claims a credit under this Act, submit to the Department of Commerce and Economic Opportunity an annual report containing the information described in subsections (b), (c), (d), and (e) of Section 5-117 of the Public Utilities Act. Those reports shall be submitted in the form and manner required by the Department of Commerce and Economic Opportunity.

(Source: P.A. 100-451, eff. 8-25-17; 100-511, eff. 9-18-17.)

(35 ILCS 10/5-58)

Sec. 5-58. Sexual harassment policy report. Each taxpayer claiming a credit under this Act shall, no later than April 15 of each taxable year for which the taxpayer claims a credit under this Act, submit to the Department of Commerce and Economic Opportunity a report detailing that taxpayer's sexual harassment policy, which contains, at a minimum, the following information: (i) the illegality of sexual harassment; (ii) the definition of sexual harassment under State law; (iii) a description of sexual harassment, utilizing examples; (iv) the vendor's internal complaint process, including penalties; (v) the legal recourse, and investigative and complaint processes available through the Department; (vi) directions on how to contact the Department; and (vii) protection against retaliation as provided by Section 6-101 of the Illinois Human Rights Act. A copy of the policy shall be provided to the Department upon request. The reports required under this Section shall be submitted in a form and manner determined by the Department of Commerce and Economic Opportunity.

(Source: P.A. 100-698, eff. 1-1-19.)

(35 ILCS 10/5-60)

Sec. 5-60. Pass through entity.

(a) The shareholders or partners of a Taxpayer that is a Pass Through Entity shall be entitled to the Credit allowed under the Agreement.

(b) The Credit provided under subsection (a) is in addition to any Credit to which a shareholder or partner is otherwise entitled under a separate Agreement under this Act. A Pass Through Entity and a shareholder or partner of the Pass Through Entity may not claim more than one Credit under the same Agreement.

(Source: P.A. 91-476, eff. 8-11-99.)

(35 ILCS 10/5-65)

Sec. 5-65. Noncompliance; notice; assessment. If the Director determines that a Taxpayer who has received a Credit under this Act is not complying with the requirements of the Agreement or all of the provisions of this Act, the Director shall provide notice to the Taxpayer of the alleged noncompliance, and allow the Taxpayer a hearing under the provisions of the Illinois Administrative Procedure Act. If, after such notice and any hearing, the Director determines that a noncompliance exists, the Director shall issue to the Department of Revenue notice to that effect, stating the Noncompliance Date. If, during the term of an Agreement, the Taxpayer ceases operations at a project location that is the subject of that Agreement with the intent to terminate operations in the State, the Department and the Department of Revenue shall recapture from the Taxpayer the entire Credit amount awarded under that Agreement prior to the date the taxpayer ceases operations. The Department shall, subject to appropriation, reallocate the recaptured amounts to the local workforce investment area in which the project was located for the purposes of workforce development, expanded opportunities for unemployed persons, and expanded opportunities for women and minorities in the workforce.

(Source: P.A. 100-511, eff. 9-18-17.)

(35 ILCS 10/5-70)

Sec. 5-70. Annual report. On or before July 1 each year, the Department shall submit a report on the tax credit program under this Act to the Governor and the General Assembly. The report shall include information on the number of Agreements that were entered into under this Act during the preceding calendar year, a description of the project that is the subject of each Agreement, an update on the status of projects under Agreements entered into before the preceding calendar year, and the sum of the Credits awarded under this Act. A copy of the report shall be delivered to the Governor and to each member of the General Assembly.

The report must include, for each Agreement:

(1) the original estimates of the value of the Credit and the number of new jobs to be created and, if applicable, the number of retained jobs;

(2) any relevant modifications to existing Agreements;

(3) a statement of the progress made by each Taxpayer in meeting the terms of the original Agreement;

(4) a statement of wages paid to New Employees and, if applicable, retained employees in the State;

(5) any information reported under Section 5-57 of this Act; and

(6) a copy of the original Agreement or a link to the Agreement on the Department's website.

(Source: P.A. 102-330, eff. 1-1-22.)

(35 ILCS 10/5-75)

Sec. 5-75. Evaluation of tax credit program. On a biennial basis, the Department shall evaluate the tax credit program. The evaluation shall include an assessment of the effectiveness of the program in creating new jobs in Illinois and of the revenue impact of the program, and may include a review of the practices and experiences of other states with similar programs. The Director shall submit a report on the evaluation to the Governor and the General Assembly after June 30 and before November 1 in each odd-numbered year.

(Source: P.A. 91-476, eff. 8-11-99.)

(35 ILCS 10/5-77)

Sec. 5-77. Sunset of new Agreements. The Department shall not enter into any new Agreements under the provisions of Section 5-50 of this Act after June 30, 2027.

(Source: P.A. 102-700, eff. 4-19-22.)

(35 ILCS 10/5-80)

Sec. 5-80. Adoption of rules. The Department may adopt rules necessary to implement this Act. The rules may provide for recipients of Credits under this Act to be charged fees to cover administrative costs of the tax credit program. Fees collected shall be deposited into the General Revenue Fund.

(Source: P.A. 100-621, eff. 7-20-18.)

(35 ILCS 10/5-85)

Sec. 5-85. (Repealed).

(Source: P.A. 91-476, eff. 8-11-99. Repealed by P.A. 100-621, eff. 7-20-18.)

(35 ILCS 10/5-90)

Sec. 5-90. Program terms and conditions.

(a) Any documentary materials or data made available or received by any agent or employee of the Department shall be deemed confidential and shall not be deemed public records to the extent that the materials or data consists of trade secrets, commercial or financial information regarding the operation of the business conducted by the Applicant for or recipient of any tax credit under this Act, or any information regarding the competitive position of a business in a particular field of endeavor.

(b) Nothing in this Act shall be construed as creating any rights in any Applicant to enter into an Agreement or in any person to challenge the terms of any Agreement.

(Source: P.A. 102-330, eff. 1-1-22.)

(35 ILCS 10/5-105)

Sec. 5-105. (Amendatory provisions; text omitted).

(Source: P.A. 91-476, eff. 8-11-99; text omitted.)

(35 ILCS 10/5-110)

Sec. 5-110. (Amendatory provisions; text omitted).

(Source: P.A. 91-476, eff. 8-11-99; text omitted.)

(35 ILCS 10/5-115)

Sec. 5-115. (Amendatory provisions; text omitted).

(Source: P.A. 91-476, eff. 8-11-99; text omitted.)

(35 ILCS 10/5-120)

Sec. 5-120. (Amendatory provisions; text omitted).

(Source: P.A. 91-476, eff. 8-11-99; text omitted.)

(35 ILCS 10/Art. 10 heading) ARTICLE 10. (Amendatory provisions; text omitted)

(35 ILCS 10/Art. 15 heading) ARTICLE 15. (This Article is compiled at 20 ILCS 3966/)

(35 ILCS 10/Art. 20 heading) ARTICLE 20 (This Article is compiled at 20 ILCS 695/)

(35 ILCS 10/Art. 999 heading) ARTICLE 999.

(35 ILCS 10/999-1)

Sec. 999-1. Effective date. This Act takes effect upon becoming law.

(Source: P.A. 91-476, eff. 8-11-99.)