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92_HB3364 LRB9207395SMpk 1 AN ACT concerning corporate accountability for tax 2 expenditures. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Section 1. Short title. This Act may be cited as the 6 Corporate Accountability for Tax Expenditures Act. 7 Section 5. Definitions. In this Act: 8 "Development assistance" means any form of public 9 assistance, including both on-budget and off-budget 10 assistance, including tax expenditures, made for the purpose 11 of stimulating economic development of a given corporation, 12 industry, geographic jurisdiction, or other subset of the 13 State's economy, including but not limited to industrial 14 development bonds, training grants, loans, loan guarantees, 15 enterprise zones, empowerment zones, tax increment financing, 16 grants, fee waivers, land price subsidies, infrastructure 17 whose principal beneficiary is a single business or defined 18 group of businesses at the time it is built or improved, 19 matching funds, tax abatements, tax credits, and tax 20 discounts of every kind, including corporate income, personal 21 income, sales, use, raw materials, job creation, industrial 22 investment, excise, utility, inventory, accelerated 23 depreciation, and research and development tax credits and 24 discounts. 25 "Granting body" means any public entity within the State, 26 including local governments, regional development 27 organizations, State and local public corporations, the State 28 government, and any State department or agency that provides 29 development assistance, including but not limited to the 30 Department of Commerce and Community Affairs, Department of 31 Employment Security, workforce development boards, economic -2- LRB9207395SMpk 1 development commissions, industrial development authorities, 2 regional development authorities, and finance authorities. 3 "Date of assistance" means the date upon which a granting 4 body transmits the first dollar value of development 5 assistance to a recipient corporation. 6 "Property-taxing entity" means every entity in the State 7 that levies taxes upon real property. 8 "Corporate parent" means any person or legal entity, 9 organization, business, partnership, group, or corporate 10 entity recognized by law, or combination thereof, that 11 possesses, owns, or controls an interest greater than 50% of 12 the recipient corporation. 13 "Small Businesses" means those corporations whose 14 corporate parents, and all subsidiaries thereof, employed 15 fewer than an average of 20 full-time equivalent employees or 16 that had gross receipts of less than $1,000,000 in all United 17 States jurisdictions during the calendar year for which 18 disclosure is required. 19 "In effect" refers to any calendar year within the 20 duration of the development assistance, including but not 21 limited to the duration of any loan, loan guarantee, tax 22 credit or tax credit carryforward, property tax reduction or 23 abatement, or tax increment financing. For one-time forms of 24 development assistance such as grants and land price 25 subsidies, "in effect" refers to a period of not less than 5 26 years from the date of assistance. 27 "Value of assistance" means the face value of any form of 28 development assistance, such as a bond amount. 29 "Specific project site" means that distinct operational 30 unit to which any development assistance is applied. 31 "Full-time job" means a job in which the new employee 32 works for the recipient corporation at a rate of at least 35 33 hours per week. 34 "Part-time job" means a job in which the new employee -3- LRB9207395SMpk 1 works for the recipient corporation at a rate of less than 35 2 hours per week. 3 "Temporary job" means a job in which the new employee is 4 hired for a specific duration of time or season. 5 Section 10. Disclosure of State tax expenditures. 6 (a) Beginning July 1, 2001, and for each succeeding 7 year, the Department of Revenue shall provide a detailed tax 8 expenditure budget to the General Assembly, derived from 9 State income tax filings, or other relevant filings, for the 10 previous calendar year. The disclosure report shall provide, 11 but not be limited to, the following data: 12 (1) The dollar amount of tax expenditures made by 13 the State, in the form of uncollected revenues, for each 14 individual tax credit provided by the State, including 15 credits for the wages of certain qualified employees, 16 enterprise zones, empowerment zones, tax increment 17 financing, grants, matching funds, tax abatements, and 18 tax credits and tax discounts of every kind, including 19 corporate income, personal income, sales, use, raw 20 materials, job creation, industrial investment, excise, 21 utility, inventory, accelerated depreciation, and 22 research and development tax credits or discounts. 23 (2) For each of the tax expenditures, except as 24 specified in item (3), an itemization of the name of each 25 individual corporate taxpayer that claimed the credit of 26 any value equal to or greater than $5,000, and the 27 specific dollar amount credited to the corporation's tax 28 liability under that credit for that year. 29 (3) Credits claimed by individual corporations of 30 less than $5,000 shall not be itemized as required in 31 item (2). Instead, in reporting credits for each tax 32 expenditure, the Department of Revenue shall aggregate 33 all claims of less than $5,000 and report them as a -4- LRB9207395SMpk 1 single non-specified group, with the number of claimants 2 stated. 3 (b) All data produced by the Department of Revenue and 4 received by the General Assembly in compliance with this Act 5 shall be fully subject to the Freedom of Information Act. 6 Section 15. Disclosure of property tax reductions and 7 abatements. 8 (a) On or before April 1, 2002, the State Department of 9 Revenue shall promulgate a standardized disclosure registry 10 for use by all property-taxing entities. The form shall 11 require, but not be limited to, the following data: 12 (1) The name of the property owner. 13 (2) The address and description of the property. 14 (3) The date upon which any individual property tax 15 reduction or abatement first took effect. 16 (4) The date upon which any individual property tax 17 reduction or abatement is scheduled to expire. 18 (5) The rate or schedule of each individual 19 property tax reduction or abatement for the period 20 between the date it took effect and the date it is 21 scheduled to expire. 22 (6) The entity's aggregate foregone revenue for the 23 calendar year as a result of each property tax reduction 24 or abatement. 25 (7) A compilation and summary of the entity's total 26 foregone revenue as a result of all property tax 27 reductions or abatements, including a summary of foregone 28 revenue for each kind of reduction or abatement. 29 (8) The respective shares of the entity's property 30 tax revenues in the reported year that went to each 31 designated public agency, including but not limited to 32 school boards, general funds, public safety agencies, 33 fire departments, park districts, and general -5- LRB9207395SMpk 1 administration. 2 (b) Beginning April 1, 2002 and for each year 3 thereafter, every property-taxing entity in the State shall 4 employ this standardized registry to report to the State 5 Department of Revenue all property tax reductions or 6 abatements which had effect during the previous calendar 7 year. 8 (c) The Department of Revenue shall, by June 1, 2002 and 9 each year thereafter, compile and publish all data in all of 10 the disclosure registries in both written and electronic 11 form. 12 (d) If a property-taxing entity fails to comply with 13 subsection (b), the Department of Revenue shall, within 10 14 working days of the April 1 filing deadline, notify the 15 Department of Commerce and Community Affairs of that failure. 16 Upon receipt of the notice, the Department of Commerce and 17 Community Affairs shall suspend within 33 working days any 18 current development assistance activities under its control 19 in the property-taxing entity's jurisdiction, and shall be 20 prohibited from completing any current development assistance 21 or providing any future development assistance in the 22 non-compliant jurisdiction until it receives proof from the 23 Department of Revenue that the property taxing entity has 24 complied with subsection (b). 25 (e) If any of the State's various agencies fails to 26 enforce this Section, any person who filed an income tax 27 return with the State in the calendar year prior to the year 28 in dispute shall have standing to sue to compel the State to 29 enforce this Section. 30 (f) All data generated in compliance with subsections 31 (a) and (b) are fully subject to the Freedom of Information 32 Act. 33 Section 20. Standardized applications for on-budget -6- LRB9207395SMpk 1 development. 2 (a) On or before April 1, 2002, the Department of 3 Commerce and Community Affairs shall promulgate a 4 standardized application form for on-budget development 5 assistance for use by all granting bodies. The form shall 6 require, but not be limited to, the following data: 7 (1) An application tracking number that is specific 8 to both the granting agency and to each application. 9 (2) The name, street and mailing addresses, phone 10 number, and chief officer of the granting body. 11 (3) The name, street and mailing addresses, phone 12 number, and chief officer of the corporate parent of the 13 applicant corporation. 14 (4) The name, street and mailing addresses, phone 15 number, 4-digit SIC number, and chief officer of the 16 applicant corporation at the specific project site for 17 which development assistance is sought. 18 (5) The applicant corporation's total number of 19 employees at the specific project site on the date of the 20 application, broken down by full-time, part-time, and 21 temporary. 22 (6) The total number of employees in the State of 23 the applicant corporation's corporate parent, and all 24 subsidiaries thereof, as of December 1 of the year 25 preceding the date of application, broken down by 26 full-time, part-time, and temporary; 27 (7) The kind of development assistance and value of 28 assistance being applied for. 29 (8) The number of new jobs to be created by the 30 development assistance, broken down by full-time, 31 part-time, and temporary. 32 (9) The average hourly wage to be paid within one 33 year of hiring to the new employees, broken down by 34 number of full-time, part-time, and temporary employees, -7- LRB9207395SMpk 1 and broken down by wage bands as follows: $6 or less an 2 hour, $6.01 to $7 an hour, $7.01 to $8 an hour, $8.01 to 3 $9 an hour, $9.01 to $10 an hour, $10.01 to $11 an hour, 4 $11.01 to $12 an hour, $12.01 to $13 an hour, $13.01 to 5 $14 an hour, and $14.01 or more per hour. 6 (10) For applicant project sites located in a 7 Metropolitan Statistical Area, as defined by the U.S. 8 Census Bureau, the average hourly wage paid to 9 non-managerial employees in the applicant's industry in 10 the State, as most recently provided by the U.S. Bureau 11 of Labor Statistics to the 2 or 3-digit SIC number 12 specification, as available. 13 (11) For applicant project sites located outside of 14 Metropolitan Statistical Areas, the average weekly wage 15 paid in the county, as most recently reported by the U.S. 16 Department of Commerce in its County Business Patterns 17 reports. 18 (12) The nature of employer-paid health care 19 coverage to be provided within 90 days of hiring to the 20 employees filling the new jobs, including any costs to be 21 borne by the new employees. 22 (13) A list of all other forms of development 23 assistance the applicant corporation is seeking for the 24 specific project site, and the name of each granting body 25 from which that development assistance is being sought. 26 (14) A narrative, if necessary, describing how the 27 applicant's use of the development assistance may reduce 28 employment at any site in any United States jurisdiction 29 controlled by the applicant corporation or its corporate 30 parent, including but not limited to events such as 31 automation, consolidation, merger, acquisition, product 32 line movement, business activity movement, or 33 restructuring by either the applicant corporation or its 34 corporate parent. -8- LRB9207395SMpk 1 (15) Individual certifications by the chief 2 officers of both the applicant corporation and the 3 granting body as to the accuracy of the application, 4 under penalty of perjury. 5 (b) Beginning April 1, 2002, every granting body in the 6 State, jointly with applicant corporations, shall fill out 7 the standardized application form as prescribed in this 8 Section each time a corporation applies for development 9 assistance. 10 Section 25. On-budget development assistance disclosure. 11 (a) Beginning February 1, 2003 and each year thereafter, 12 every granting body in the State shall submit to the 13 Department of Commerce and Community Affairs copies of all 14 the standardized applications forms for development 15 assistance that it has received in the previous calendar 16 year. Upon each form, the granting body shall designate 17 whether the development assistance is pending, was approved, 18 or was not approved, and for those applications that were 19 approved, the date of assistance if the date of assistance 20 occurred in the previous calendar year. 21 (b) For those applications that were approved but for 22 which the date of assistance did not occur in the same 23 calendar year, each granting body shall report in its next 24 subsequent February 1 annual report to the Department 25 relevant dates of assistance. 26 (c) For each development assistance application that was 27 approved, and for which the date of assistance has occurred 28 in a reporting year, each granting agency shall submit to the 29 Department of Commerce and Community Affairs a progress 30 report that shall include, but not limited to, the following 31 data: 32 (1) The application tracking number. 33 (2) The name, street and mailing addresses, phone -9- LRB9207395SMpk 1 number, and chief officer of the granting body. 2 (3) The name, street and mailing addresses, phone 3 number, 4-digit SIC number, and chief officer of the 4 corporation at the specific project site for which the 5 development assistance was approved. 6 (4) The kind of development assistance and value of 7 assistance that was approved; 8 (5) The applicant's total level of employment at 9 the specific project site on the date of the application 10 and the applicant's total level of employment at the 11 specific project site on the date of the report, broken 12 down by full-time, part-time, and temporary, and a 13 computation of the gain or loss in each category. 14 (6) The number of new jobs the applicant 15 corporation stated in its application would be created by 16 the development assistance, broken down by full-time, 17 part-time, and temporary. 18 (7) The total level of employment in the State of 19 the applicant's corporate parent, and all subsidiaries 20 thereof, as of December 31 of the year preceding the date 21 of application and the total level of employment in the 22 State of the applicant's corporate parent, and all 23 subsidiaries thereof, as of each December 31 up through 24 the reporting year, broken down by full-time, part-time, 25 and temporary, and a statement of the gain or loss in 26 each category from the earliest reported year to the most 27 recent; 28 (8) The average hourly wage paid as of December 31 29 of the reporting year to employees filling the new jobs 30 at the specific project site, broken down by full-time, 31 part-time, and temporary. 32 (9) The nature of employer-paid health care 33 coverage being provided within 90 days of hiring to the 34 employees filling the new jobs, including any costs being -10- LRB9207395SMpk 1 borne by the new employees. 2 (10) A narrative, if necessary, describing how the 3 recipient corporation's use of the development assistance 4 during the reporting year has reduced employment at any 5 site in any United States jurisdiction controlled by the 6 applicant or its corporate parent, including but not 7 limited to events such as automation, consolidation, 8 merger, acquisition, product line movement, business 9 activity movement, or restructuring by either the 10 applicant or its corporate parent. 11 (11) Signed individual certifications by the chief 12 officers of both the applicant corporation and the 13 granting body as to the accuracy of the progress report, 14 under penalty of perjury. 15 (d) The granting body and the Department of Commerce and 16 Community Affairs all have full investigative authority to 17 verify the applicant's progress report data, including but 18 not limited to inspection of the specific project site and 19 analysis of tax and payroll records. 20 (e) By June 1, 2003 and by June 1 of each year 21 thereafter, the Department of Commerce and Community Affairs 22 of shall compile and publish all data in all of the 23 development assistance progress reports in both written and 24 electronic form. 25 (f) Every aspect all development assistance 26 applications, progress reports, and the Department of 27 Commerce and Community Affairs' compilation of applications 28 and progress reports shall be fully subject to the Freedom of 29 Information Act. 30 (g) If a granting body fails to comply with subsections 31 (a) through (c), the Department of Commerce and Community 32 Affairs shall, within 10 working days of the February 1 33 filing deadline, suspend any current development assistance 34 activities under its control in the body's jurisdiction, and -11- LRB9207395SMpk 1 shall be prohibited from proceeding with any current or 2 future development assistance activities under its control in 3 the granting body's jurisdiction, until it receives proof 4 that the negligent granting body or recipient corporation has 5 complied with this Act. 6 Section 30. Job creation and job quality standards. 7 (a) In considering development assistance applications, 8 all granting bodies shall perform 2 analyses concerning the 9 projected wages and benefits. Specifically: 10 (1) In considering development assistance 11 applications, all granting bodies shall compare the 12 aggregate projected wage with existing wages. To derive 13 the aggregate projected wage, the granting body shall 14 compute the weighted hourly average wage for all new 15 employees, including full-time, part-time, and temporary 16 employees. If the aggregate projected wage is less than 17 85% of existing wages, the application shall be denied. 18 For small businesses, if the aggregate projected wage is 19 less than 75% of existing wages, the application shall be 20 denied. 21 (2) In considering development assistance 22 applications, all granting bodies shall perform a second 23 wage computation to consider the value of health care 24 coverage provided to full-time employees. If the 25 applicant corporation is not providing health care 26 coverage to full-time employees, the granting body shall 27 subtract $1.50 an hour from the projected wage. If the 28 recipient corporation projects some health care costs to 29 be borne by the new full-time employees, the granting 30 body shall, based on data from the applicant corporation, 31 estimate the hourly cost to the new full-time employee of 32 those costs and subtract that amount from the projected 33 wage. If the amount resulting from the subtraction is -12- LRB9207395SMpk 1 less than 80% of existing wages, the application shall be 2 denied. For small businesses, if the amount resulting 3 from the subtraction is less than 70% of existing wages, 4 the application shall be denied. 5 (b) Granting bodies shall perform a third eligibility 6 analysis. In considering development assistance applications, 7 all granting bodies shall divide the value of assistance by 8 the number of projected full-time jobs. If the resulting sum 9 exceeds $35,000, the application shall be denied. 10 (c) A granting body's requirement under this Section may 11 be waived in a bona fide collective bargaining agreement that 12 covers employees at the specific project site of the 13 applicant corporation, but only if the waiver is explicitly 14 set forth in the collective bargaining agreement in clear and 15 unambiguous terms. Unilateral implementation of terms and 16 conditions of employment by either party to a collective 17 bargaining agreement shall not constitute, or be permitted, 18 as a waiver. 19 Section 35. Recapture. 20 (a) Recipient corporations are required to achieve their 21 job creation and wage and benefit goals within 2 years of the 22 date of assistance. They are also required to maintain their 23 wage and benefit goals as long as the benefit is in effect. 24 Corporate parents of recipient corporations are required to 25 maintain at least 90% of their original State employment. 26 (b) Granting bodies shall within 10 working days after 27 the second anniversary of the date of assistance, fill out a 28 standardized progress report and the recipient corporation 29 shall sign it and certify its accuracy under penalty of 30 perjury. This second anniversary progress report shall be 31 filed by the granting body with the Department of Commerce 32 and Community Affairs along with the granting body's next 33 annual filing of progress reports. -13- LRB9207395SMpk 1 (c) The granting body shall indicate on this second 2 anniversary progress report whether the recipient corporation 3 has achieved its job creation and wage and benefit goals, and 4 whether the corporate parent has maintained 90% of its State 5 employment. 6 (d) On all subsequent annual progress reports, the 7 granting body shall indicate whether or not the recipient 8 corporation is still in compliance with its job creation and 9 wage and benefit goals, and whether the corporate parent is 10 still in compliance with its State employment maintenance 11 requirement. 12 (e) If on any progress report occasion, beginning with 13 the second anniversary progress report, a granting body finds 14 that a recipient corporation has not achieved its job 15 creation or wage or benefit goals, or the corporate parent 16 has not maintained 90% of its State employment the granting 17 body must, within 10 working days, file a finding of 18 development assistance default with the State Department of 19 and the recipient corporation. 20 (f) If a recipient corporation defaults on its 21 development assistance because the recipient corporation has 22 laid off or terminated employees on or after January 1, 2001, 23 the recipient corporation must pay back to the granting body 24 a share of the value of the assistance. The share must be 25 equal to the same percentage of the recipient corporation's 26 workforce that was laid off or fired. Moneys paid back to 27 the granting body under this subsection must be deposited by 28 the granting body into the Development Assistance Recapture 29 Fund, a special fund created in the State treasury. Moneys 30 in the Fund may be used by the Department of Commerce and 31 Community Affairs and the Department of Employment Security, 32 subject to appropriation, for the purpose of job training or 33 retraining programs for terminated or laid off workers. 34 (g) If a recipient corporation defaults on development -14- LRB9207395SMpk 1 assistance, it must pay back to the granting body that 2 fraction of the development assistance that accrued to its 3 benefit for the calendar year in which the default occurred. 4 For one time forms of development assistance such as grants 5 or land price discounts, a defaulting recipient corporation 6 must pay back to the granting body one-fifth of the value of 7 assistance. Remittance of the payback by the recipient 8 corporation to the granting body shall take place within 60 9 calendar days of the delivery of the default notice to the 10 recipient corporation. 11 (h) If a recipient corporation defaults on development 12 assistance, in 3 consecutive calendar years, the granting 13 body shall declare the development assistance void, and shall 14 so notify the Department of Commerce and Community Affairs 15 and the recipient corporation. Upon this declaration, the 16 recipient corporation must pay back to the granting body all 17 remaining value of the development assistance it has not 18 already paid back. Remittance of the void payback by the 19 recipient corporation to the granting body shall take place 20 within 180 calendar days of the delivery of the notice to the 21 recipient corporation. 22 (i) Every aspect of all development assistance default 23 notices, recapture remittances, associated correspondence, 24 and related proceedings shall be fully subject to the Freedom 25 of Information Act. 26 (j) If a granting body fails to enforce this Section, 27 any person who to the State in the calendar year prior to the 28 year in dispute, or any organization representing those 29 taxpayers, is entitled to bring a civil action in the circuit 30 court to compel enforcement under this Section. The court 31 shall award to any prevailing taxpayer plaintiff or 32 organizational plaintiff, reasonable attorney's fees and 33 actual incurred costs in pursuing the enforcement action. -15- LRB9207395SMpk 1 Section 800. The State Finance Act is amended by adding 2 Section 5.545 as follows: 3 (30 ILCS 105/5.545 new) 4 Sec. 5.545. The Development Assistance Recapture Fund. 5 Section 999. Effective date. This Act takes effect upon 6 becoming law.
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