Public Act 93-0552

HB0235 Enrolled                      LRB093 02644 ACG 02654 b

    AN ACT concerning corporations.

    Be it enacted by the People of  the  State  of  Illinois,
represented in the General Assembly:

    Section  1.  Short  title.  This  Act may be cited as the
Corporate Accountability for Tax Expenditures Act.

    Section 5. Definitions. As used in this Act:
    "Base years" means the first 2  complete  calendar  years
following   the  effective  date  of  a  recipient  receiving
development assistance.
    "Date of assistance" means the commencement date  of  the
assistance  agreement,  which date triggers the period during
which the recipient is obligated to create or retain jobs and
continue operations at the specific project site.
    "Default" means that a recipient has not achieved its job
creation,  job  retention,  or  wage  or  benefit  goals,  as
applicable, during the prescribed period therefor.
    "Department"   means,   unless   otherwise   noted,   the
Department of Commerce and Community Affairs or any successor
agency.
    "Development assistance" means (1) tax  credits  and  tax
exemptions  (other  than given under tax increment financing)
given as an incentive to a  recipient  business  organization
pursuant   to   an   initial   certification  or  an  initial
designation  made  by  the  Department  under  the   Economic
Development  for  a  Growing  Economy  Tax Credit Act and the
Illinois Enterprise  Zone  Act,  including  the  High  Impact
Business program, (2) grants or loans given to a recipient as
an incentive to a business organization pursuant to the Large
Business Development Program, the Business Development Public
Infrastructure  Program,  or the Industrial Training Program,
(3) the State Treasurer's Economic  Program  Loans,  (4)  the
Illinois  Department  of  Transportation Economic Development
Program, and (5) all successor and  subsequent  programs  and
tax  credits  designed  to promote large business relocations
and expansions. "Development assistance" does not include tax
increment financing, assistance provided under  the  Illinois
Enterprise    Zone   Act   pursuant   to   local   ordinance,
participation  loans,  or  financial   transactions   through
statutorily authorized financial intermediaries in support of
small  business  loans and investments or given in connection
with the development of affordable housing.
    "Development assistance agreement"  means  any  agreement
executed by the State granting body and the recipient setting
forth  the  terms and conditions of development assistance to
be provided  to  the  recipient  consistent  with  the  final
application  for  development  assistance,  including but not
limited to the date of assistance, submitted to and  approved
by the State granting body.
    "Full-time,   permanent   job"   means  either:  (1)  the
definition  therefor  in  the  legislation  authorizing   the
programs   described   in   the   definition  of  development
assistance in the Act or (2) if there is no such  definition,
then  as  defined  in  administrative rules implementing such
legislation, provided the administrative rules were in  place
prior  to  the  effective  date of this Act. On and after the
effective date of this Act, if  there  is  no  definition  of
"full-time,   permanent   job"   in  either  the  legislation
authorizing a program that constitutes  economic  development
assistance  under  this  Act  or  in  any administrative rule
implementing such legislation that was in place prior to  the
effective  date  of this Act, then "full-time, permanent job"
means a job in which the new employee works for the recipient
at a rate of at least 35 hours per week.
    "New employee" means either: (1) the definition  therefor
in  the legislation authorizing the programs described in the
definition of development assistance in the  Act  or  (2)  if
there   is   no   such   definition,   then   as  defined  in
administrative rules implementing such legislation,  provided
the administrative rules were in place prior to the effective
date  of  this  Act.  On and after the effective date of this
Act, if there is no definition of "new  employee"  in  either
the   legislation  authorizing  a  program  that  constitutes
economic development assistance under this  Act  nor  in  any
administrative rule implementing such legislation that was in
place  prior  to  the  effective  date of this Act, then "new
employee"  means  a   full-time,   permanent   employee   who
represents  a  net  increase in the number of the recipient's
employees statewide. "New employee" includes an employee  who
previously  filled a new employee position with the recipient
who was rehired or called back  from  a  layoff  that  occurs
during or following the base years.
    The  term  "New  Employee"  does  not  include any of the
following:
         (1) An employee of the recipient who performs a  job
    that was previously performed by another employee in this
    State,  if  that job existed in this State for at least 6
    months before hiring the employee.
         (2) 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
    indirect  ownership  interest  of  at  least  5%  in  the
    profits,  capital,  or  value  of  any  member   of   the
    recipient.
    "Part-time job" means either: (1) the definition therefor
in  the legislation authorizing the programs described in the
definition of development assistance in the  Act  or  (2)  if
there   is   no   such   definition,   then   as  defined  in
administrative rules implementing such legislation,  provided
the administrative rules were in place prior to the effective
date  of  this  Act.  On and after the effective date of this
Act, if there is no definition of "part-time job"  in  either
the   legislation  authorizing  a  program  that  constitutes
economic development assistance under  this  Act  or  in  any
administrative rule implementing such legislation that was in
place   prior  to  the  effective  date  of  this  Act,  then
"part-time job" means a job in which the new  employee  works
for the recipient at a rate of less than 35 hours per week.
    "Recipient"  means  any  business  that receives economic
development  assistance.  A  business  is  any   corporation,
limited   liability   company,  partnership,  joint  venture,
association, sole proprietorship, or other legally recognized
entity.
    "Retained employee"  means  either:  (1)  the  definition
therefor   in   the   legislation  authorizing  the  programs
described in the definition of development assistance in  the
Act or (2) if there is no such definition, then as defined in
administrative  rules implementing such legislation, provided
the administrative rules were in place prior to the effective
date of this Act. On and after the  effective  date  of  this
Act,  if  there  is  no  definition of "retained employee" in
either the legislation authorizing a program that constitutes
economic development assistance under  this  Act  or  in  any
administrative rule implementing such legislation that was in
place prior to the effective date of this Act, then "retained
employee" means any employee defined as having a full-time or
full-time  equivalent job preserved at a specific facility or
site, the continuance of which is threatened  by  a  specific
and  demonstrable  threat,  which  shall  be specified in the
application for development assistance.
    "Specific project site" means that  distinct  operational
unit to which any development assistance is applied.
    "State  granting  body"  means  the Department, any State
department  or  State  agency   that   provides   development
assistance  that  has  reporting requirements under this Act,
and any successor agencies to any of the preceding.
    "Temporary job" means either: (1) the definition therefor
in the legislation authorizing the programs described in  the
definition  of  development  assistance  in the Act or (2) if
there  is  no   such   definition,   then   as   defined   in
administrative  rules implementing such legislation, provided
the administrative rules were in place prior to the effective
date of this Act. On and after the  effective  date  of  this
Act,  if  there is no definition of "temporary job" in either
the  legislation  authorizing  a  program  that   constitutes
economic  development  assistance  under  this  Act or in any
administrative rule implementing such legislation that was in
place  prior  to  the  effective  date  of  this  Act,   then
"temporary  job"  means  a  job  in which the new employee is
hired for a specific duration of time or season.
    "Value of assistance" means the face value of any form of
development assistance.

    Section 10. Unified Economic Development Budget.
    (a)  For each State fiscal year ending on or  after  June
30,  2005,  the  Department of Revenue shall submit an annual
Unified Economic Development Budget to the General  Assembly.
The Unified Economic Development Budget shall be due within 3
months  after  the  end of the fiscal year, and shall present
all types of development assistance granted during the  prior
fiscal year, including:
         (1)  The aggregate amount of uncollected or diverted
    State   tax   revenues   resulting   from  each  type  of
    development assistance provided in the tax  statutes,  as
    reported  to  the  Department  of  Revenue on tax returns
    filed during the fiscal year.
         (2)  All State development assistance.
    (b)  All  data  contained   in   the   Unified   Economic
Development Budget presented to the General Assembly shall be
fully subject to the Freedom of Information Act.
    (c)  The  Department  of Revenue shall submit a report of
the amounts in subdivision (a)(1)  of  this  Section  to  the
Department,  which  may  append  such  report  to the Unified
Economic Development Budget rather than separately  reporting
such amounts.

    Section   15.   Standardized   applications   for   State
development assistance.
    (a) All final applications submitted to the Department or
any   other   State   granting  body  requesting  development
assistance shall contain, at a minimum:
         (1) An application tracking number that is  specific
    to   both   the   State   granting  agency  and  to  each
    application.
         (2) The office mailing addresses,  office  telephone
    number, and chief officer of the granting body.
         (3)  The  office  mailing address, telephone number,
    4-digit SIC number or successor number, and the  name  of
    the chief officer of the applicant or authorized designee
    for  the  specific  project  site  for  which development
    assistance is requested.
         (4) The applicant's total number of employees at the
    specific project site on the date that the application is
    submitted to  the  State  granting  body,  including  the
    number  of  full-time,  permanent  jobs,  the  number  of
    part-time jobs, and the number of temporary jobs.
         (5)  The type of development assistance and value of
    assistance being requested.
         (6) The number of jobs to be created and retained or
    both created and retained by the applicant as a result of
    the  development  assistance,  including  the  number  of
    full-time, permanent jobs, the number of part-time  jobs,
    and the number of temporary jobs.
         (7)  A  detailed  list  of  the  occupation  or  job
    classifications  and  number of new employees or retained
    employees to be hired in  full-time,  permanent  jobs,  a
    schedule  of  anticipated starting dates of the new hires
    and the anticipated average wage  by  occupation  or  job
    classification  and  total  payroll  to  be  created as a
    result of the development assistance.
         (8)  A  list  of  all  other  forms  of  development
    assistance that  the  applicant  is  requesting  for  the
    specific project site and the name of each State granting
    body  from  which  that  development  assistance is being
    requested.
         (9) A narrative, if necessary,  describing  why  the
    development  assistance is needed and how the applicant's
    use of the development assistance may  reduce  employment
    at any site in Illinois.
         (10)  A  certification  by  the chief officer of the
    applicant or his or  her  authorized  designee  that  the
    information contained in the application submitted to the
    granting  body  contains  no knowing misrepresentation of
    material facts upon  which  eligibility  for  development
    assistance is based.
    (b)  Every  State granting body either shall complete, or
shall require the applicant to complete, an application  form
that  meets  the  minimum  requirements as prescribed in this
Section  each  time  an  applicant  applies  for  development
assistance covered by this Act.
    (c)  The Department shall have the discretion  to  modify
any standardized application for State development assistance
required  under  subsection  (a)  for  any  grants  under the
Industrial  Training  Program  that  are  not  given  as   an
incentive to a recipient business organization.
    Section 20. State development assistance disclosure.
    (a)  Beginning February 1, 2005 and each year thereafter,
every State granting body  shall  submit  to  the  Department
copies  of  all  development  assistance  agreements  that it
approved in the prior calendar year.
    (b) For each development assistance agreement  for  which
the  date  of  assistance  has occurred in the prior calendar
year,  each  recipient  shall  submit  to  the  Department  a
progress report that shall include, but not  be  limited  to,
the following:
         (1) The application tracking number.
         (2)  The  office  mailing address, telephone number,
    and the name of the chief officer of the granting body.
         (3) The office mailing  address,  telephone  number,
    4-digit  SIC  number or successor number, and the name of
    the chief officer of the applicant or authorized designee
    for the specific project site for which  the  development
    assistance was approved by the State granting body.
         (4)  The  type of development assistance program and
    value of  assistance  that  was  approved  by  the  State
    granting body.
         (5) The applicant's total number of employees at the
    specific  project  site  on the date that the application
    was  submitted  to  the  State  granting  body  and   the
    applicant's  total  number  of  employees at the specific
    project site on the date of  the  report,  including  the
    number  of  full-time,  permanent  jobs,  the  number  of
    part-time  jobs,  and the number of temporary jobs, and a
    computation of the gain or loss of jobs in each category.
         (6)  The  number  of  new  employees  and   retained
    employees   the   applicant  stated  in  its  development
    assistance  agreement,  if  any,  if  not,  then  in  its
    application,  would  be  created   by   the   development
    assistance   broken   down   by   full-time,   permanent,
    part-time, and temporary.
         (7)  A  declaration  of  whether the recipient is in
    compliance with the development assistance agreement.
         (8)  A  detailed  list  of  the  occupation  or  job
    classifications and number of new employees  or  retained
    employees  to  be  hired  in full-time, permanent jobs, a
    schedule of anticipated starting dates of the  new  hires
    and   the  actual  average  wage  by  occupation  or  job
    classification and total  payroll  to  be  created  as  a
    result of the development assistance.
         (9)  A  narrative,  if necessary, describing how the
    recipient's use of the development assistance during  the
    reporting  year  has  reduced  employment  at any site in
    Illinois.
         (10) A certification by the  chief  officer  of  the
    applicant  or  his  or  her  authorized designee that the
    information in the progress report  contains  no  knowing
    misrepresentation    of   material   facts   upon   which
    eligibility for development assistance is based.
    (c) The State granting body, or a successor agency, shall
have full authority to verify information  contained  in  the
recipient's  progress  report,  including  the  authority  to
inspect  the specific project site and inspect the records of
the recipient that are subject to the development  assistance
agreement.
    (d)  By  June  1,  2005  and  by  June  1  of  each  year
thereafter, the Department shall compile and publish all data
in all of the progress reports in both written and electronic
form.
    (e)  If  a  recipient  of development assistance fails to
comply with subsection (b) of this  Section,  the  Department
shall,  within  20 working days after the reporting submittal
deadlines set forth in (i) the legislation authorizing,  (ii)
the  administrative  rules  implementing,  or  (iii) specific
provisions in development assistance agreements pertaining to
the  development  assistance  programs,  suspend  within   33
working  days  any  current  development  assistance  to  the
recipient  under  its  control,  and shall be prohibited from
completing any current or providing  any  future  development
assistance  until  it  receives  proof that the recipient has
come into compliance with the requirements of subsection  (b)
of this Section.
    (f)  The  Department  shall have the discretion to modify
the information required  in  the  progress  report  required
under  subsection  (b) consistent with the disclosure purpose
of this Section for any grants under the Industrial  Training
Program  that  are  not  given as an incentive to a recipient
business organization.

    Section 25. Recapture.
    (a) All development assistance agreements shall  contain,
at a minimum, the following recapture provisions:
         (1) The recipient must (i) make the level of capital
    investment  in the economic development project specified
    in the development assistance agreement; (ii)  create  or
    retain, or both, the requisite number of jobs, paying not
    less  than  specified  wages for the created and retained
    jobs, within and for the  duration  of  the  time  period
    specified   in   the   legislation  authorizing,  or  the
    administrative  rules   implementing,   the   development
    assistance   programs   and  the  development  assistance
    agreement.
         (2) If the recipient fails to create or  retain  the
    requisite  number  of jobs within and for the time period
    specified,  in  the  legislation  authorizing,   or   the
    administrative   rules   implementing,   the  development
    assistance  programs  and  the   development   assistance
    agreement,  the  recipient  shall  be deemed to no longer
    qualify  for  the  State  economic  assistance  and   the
    applicable recapture provisions shall take effect.
         (3)   If   the  recipient  receives  State  economic
    assistance  in  the  form  of  a  High  Impact   Business
    designation  pursuant  to  Section  5.5  of  the Illinois
    Enterprise Zone Act and the business receives the benefit
    of the exemption  authorized  under  Section  5l  of  the
    Retailers'  Occupation  Tax Act (for the sale of building
    materials  incorporated  into  a  High  Impact   Business
    location) and the recipient fails to create or retain the
    requisite   number   of   jobs,   as  determined  by  the
    legislation  authorizing   the   development   assistance
    programs  or  the  administrative rules implementing such
    legislation, or both,  within  the  requisite  period  of
    time, the recipient shall be required to pay to the State
    the  full  amount  of  the  State  tax  exemption that it
    received  as  a  result  of  the  High  Impact   Business
    designation.
         (4)  If  the  recipient  receives  a  grant  or loan
    pursuant to the Large Business Development  Program,  the
    Business  Development  Public  Infrastructure Program, or
    the Industrial Training Program and the  recipient  fails
    to  create or retain the requisite number of jobs for the
    requisite time period, as  provided  in  the  legislation
    authorizing  the  development  assistance programs or the
    administrative rules implementing  such  legislation,  or
    both,  or  in  the  development assistance agreement, the
    recipient shall be required to repay to the State  a  pro
    rata  amount  of the grant; that amount shall reflect the
    percentage of the deficiency between the requisite number
    of jobs to be created or retained by  the  recipient  and
    the  actual  number  of  such jobs in existence as of the
    date the Department determines the recipient is in breach
    of the job creation or retention covenants  contained  in
    the development assistance agreement. If the recipient of
    development   assistance   under   the   Large   Business
    Development  Program,  the  Business  Development  Public
    Infrastructure   Program,   or  the  Industrial  Training
    Program ceases operations at the specific  project  site,
    during  the  5-year  period  commencing  on  the  date of
    assistance, the recipient shall be required to repay  the
    entire  amount of the grant or to accelerate repayment of
    the loan back to the State.
         (5) If the recipient receives a tax credit under the
    Economic Development for a  Growing  Economy  tax  credit
    program,   the   development  assistance  agreement  must
    provide that  (i)  if  the  number  of  new  or  retained
    employees  falls  below the requisite number set forth in
    the development assistance agreement,  the  allowance  of
    the  credit  shall  be  automatically suspended until the
    number of new and retained employees  equals  or  exceeds
    the   requisite  number  in  the  development  assistance
    agreement; (ii) if the recipient discontinues  operations
    at  the specific project site during the first 5 years of
    the 10-year term of the development assistance agreement,
    the recipient shall forfeit  all  credits  taken  by  the
    recipient  during  such  5-year  period; and (iii) in the
    event of a revocation or suspension of  the  credit,  the
    Department  shall  contact  the  Director  of  Revenue to
    initiate proceedings against  the  recipient  to  recover
    wrongfully  exempted  Illinois State income taxes and the
    recipient shall  promptly  repay  to  the  Department  of
    Revenue  any  wrongfully  exempted  Illinois State income
    taxes. The forfeited amount of credits  shall  be  deemed
    assessed   on   the  date  the  Department  contacts  the
    Department of Revenue and the  recipient  shall  promptly
    repay   to  the  Department  of  Revenue  any  wrongfully
    exempted Illinois State income taxes.
    (b) The Director may elect to waive  enforcement  of  any
contractual   provision   arising   out  of  the  development
assistance agreement required by this Act based on a  finding
that  the  waiver  is  necessary  to  avert  an  imminent and
demonstrable hardship to the recipient  that  may  result  in
such  recipient's  insolvency  or  discharge of workers. If a
waiver is granted, the recipient must agree to a  contractual
modification,   including   recapture   provisions,   to  the
development assistance agreement. The existence of any waiver
granted pursuant to this subsection  (c),  the  date  of  the
granting  of  such waiver, and a brief summary of the reasons
supporting the granting of such  waiver  shall  be  disclosed
consistent with the provisions of Section 25 of this Act.
    (c)    Beginning  June  1,  2004,  the  Department  shall
annually  compile  a report on the outcomes and effectiveness
of recapture provisions by program, including but not limited
to:  (i)  the  total  number  of   companies   that   receive
development assistance as defined in this Act; (ii) the total
number  of  recipients in violation of development agreements
with the Department; (iii)  the  total  number  of  completed
recapture efforts; (iv) the total number of recapture efforts
initiated; and (v) the number of waivers granted. This report
shall  be disclosed consistent with the provisions of Section
20 of this Act.
    (d) For the purposes of this Act, recapture provisions do
not  include  the  Illinois  Department   of   Transportation
Economic Development Program, any grants under the Industrial
Training  Program  that  are  not  given as an incentive to a
recipient business organization, or any successor programs as
described in the term "development assistance" in  Section  5
of this Act.

    Section  99.  Effective  date. This Act takes effect upon
becoming law.