100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB5146

 

Introduced , by Rep. Rita Mayfield

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Creates the Chicago Casino Development Authority Act. Provides for the creation of the Chicago Casino Development Authority, whose duties include promotion and maintenance of a casino. Amends the Illinois Horse Racing Act of 1975 and the Riverboat Gambling Act to authorize electronic gaming at race tracks (and makes conforming changes in various Acts). Further amends the Illinois Horse Racing Act of 1975. Makes various changes concerning Board members. Indefinitely extends the authorization for advance deposit wagering. Contains provisions concerning testing of horses at county fairs and standardbred horses. Further amends the Riverboat Gambling Act. Changes the short title to the Illinois Gambling Act and changes corresponding references to the Act. Adds additional owners licenses, one of which authorizes the conduct of casino gambling in the City of Chicago. Makes changes in provisions concerning the admission tax and privilege tax. Makes other changes. Contains a severability provision. Effective immediately.


LRB100 18631 SMS 33856 b

CORRECTIONAL BUDGET AND IMPACT NOTE ACT MAY APPLY
FISCAL NOTE ACT MAY APPLY
HOME RULE NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB5146LRB100 18631 SMS 33856 b

1    AN ACT concerning gaming.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4
ARTICLE 1.

 
5    Section 1-1. Short title. This Article may be cited as the
6Chicago Casino Development Authority Act. References in this
7Article to "this Act" mean this Article.
 
8    Section 1-2. Legislative intent.
9    (a) This Act is intended to benefit the people of the City
10of Chicago and the State of Illinois by assisting economic
11development and promoting tourism and by increasing the amount
12of revenues available to the City and the State to assist and
13support the City's pension obligation in accordance with Public
14Act 99-506.
15    (b) While authorization of casino gambling in Chicago will
16enhance investment, development, and tourism in Illinois, it is
17recognized that it will do so successfully only if public
18confidence and trust in the credibility and integrity of the
19gambling operations and the regulatory process is maintained.
20Therefore, the provisions of this Act are designed to allow the
21Illinois Gaming Board to strictly regulate the facilities,
22persons, associations, and practices related to gambling

 

 

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1operations pursuant to the police powers of the State,
2including comprehensive law enforcement supervision.
3Consistent with the Gaming Board's authority, the Gaming Board
4alone shall regulate any Chicago casino, just as it now
5regulates every other casino in Illinois.
 
6    Section 1-5. Definitions. As used in this Act:
7    "Authority" means the Chicago Casino Development Authority
8created by this Act.
9    "Casino" means one temporary land-based or water-based
10facility and one permanent land-based or water-based facility
11and airport gaming locations pursuant to Section 1-67 of this
12Act at which lawful gambling is authorized and licensed as
13provided in the Illinois Gambling Act.
14    "Casino Board" means the board appointed pursuant to this
15Act to govern and control the Authority.
16    "Casino management contract" means a legally binding
17agreement between the Authority and a casino operator licensee
18to operate or manage a casino.
19    "Casino operator licensee" means any person or entity
20selected by the Authority and approved and licensed by the
21Gaming Board to manage and operate a casino within the City of
22Chicago pursuant to a casino management contract.
23    "City" means the City of Chicago.
24    "Entity" means a corporation, joint venture, partnership,
25limited liability company, trust, or unincorporated

 

 

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1association.
2    "Executive director" means the person appointed by the
3Casino Board to oversee the daily operations of the Authority.
4    "Gaming Board" means the Illinois Gaming Board created by
5the Illinois Gambling Act.
6    "Mayor" means the Mayor of the City.
 
7    Section 1-12. Creation of the Authority. There is hereby
8created a political subdivision, unit of local government with
9only the powers authorized by law, body politic, and municipal
10corporation, by the name and style of the Chicago Casino
11Development Authority.
 
12    Section 1-13. Duties of the Authority. It shall be the duty
13of the Authority, as an owners licensee under the Illinois
14Gambling Act, to promote and maintain a casino in the City. The
15Authority shall own, acquire, construct, lease, equip, and
16maintain grounds, buildings, and facilities for that purpose.
17However, the Authority shall contract with a casino operator
18licensee to manage and operate the casino and in no event shall
19the Authority or City manage or operate the casino. The
20Authority may contract pursuant to the procedures set forth in
21Section 1-115 with other third parties in order to fulfill its
22purpose. The Authority is responsible for the payment of any
23fees required of a casino operator under subsection (a) of
24Section 7.9 of the Illinois Gambling Act if the casino operator

 

 

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1licensee is late in paying any such fees. The Authority is
2granted all rights and powers necessary to perform such duties.
3Subject to the provisions of this Act, the Authority and casino
4operator licensee are subject to the Illinois Gambling Act and
5all of the rules of the Gaming Board, which shall be applied to
6the Authority and the casino operator licensee in a manner
7consistent with that of other owners licensees under the
8Illinois Gambling Act. Nothing in this Act shall confer
9regulatory authority on the Chicago Casino Development
10Authority. The Illinois Gaming Board shall have exclusive
11regulatory authority over all gambling operations governed by
12this Act.
 
13    Section 1-15. Casino Board.
14    (a) The governing and administrative powers of the
15Authority shall be vested in a body known as the Chicago Casino
16Development Board. The Casino Board shall consist of 5 members
17appointed by the Mayor. One of these members shall be
18designated by the Mayor to serve as chairperson. All of the
19members appointed by the Mayor shall be residents of the City.
20    Each Casino Board appointee shall be subject to a
21preliminary background investigation completed by the Gaming
22Board within 30 days after the appointee's submission of his or
23her application to the Gaming Board. If the Gaming Board
24determines that there is a substantial likelihood that it will
25not find the appointee to be suitable to serve on the Casino

 

 

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1Board (applying the same standards for suitability to the
2appointee as the Gaming Board would apply to an owners licensee
3key person under the Gaming Board's adopted rules), then the
4Gaming Board shall provide a written notice of such
5determination to the appointee and the Corporation Counsel of
6the City. The Mayor may then appoint a new candidate. If no
7such notice is delivered with respect to a particular
8appointee, then commencing on the 31st day following the date
9of the appointee's submission of his or her application to the
10Gaming Board, the appointee shall be deemed an acting member of
11the Casino Board and shall participate as a Casino Board
12member.
13    Each appointee shall be subject to a full background
14investigation and final approval by the Gaming Board prior to
15the opening of the casino. The Gaming Board shall complete its
16full background investigation of the Casino Board appointee
17within 3 months after the date of the appointee's submission of
18his or her application to the Gaming Board. If the Gaming Board
19does not complete its background investigation within the
203-month period, then the Gaming Board shall give a written
21explanation to the appointee, as well as the Mayor, the
22Governor, the President of the Senate, and the Speaker of the
23House of Representatives, as to why it has not reached a final
24determination and set forth a reasonable time when such
25determination shall be made.
26    (b) Casino Board members shall receive $300 for each day

 

 

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1the Authority meets and shall be entitled to reimbursement of
2reasonable expenses incurred in the performance of their
3official duties. A Casino Board member who serves in the office
4of secretary-treasurer may also receive compensation for
5services provided as that officer.
 
6    Section 1-20. Terms of appointments; resignation and
7removal.
8    (a) The Mayor shall appoint 2 members of the Casino Board
9for an initial term expiring July 1 of the year following final
10approval by the Gaming Board, 2 members for an initial term
11expiring July 1 three years following final approval by the
12Gaming Board, and one member for an initial term expiring July
131 five years following final approval by the Gaming Board.
14    (b) All successors shall be appointed by the Mayor to hold
15office for a term of 5 years from the first day of July of the
16year in which they are appointed, except in the case of an
17appointment to fill a vacancy. Each member, including the
18chairperson, shall hold office until the expiration of his or
19her term and until his or her successor is appointed and
20qualified. Nothing shall preclude a member from serving
21consecutive terms. Any member may resign from office, to take
22effect when a successor has been appointed and qualified. A
23vacancy in office shall occur in the case of a member's death
24or indictment, conviction, or plea of guilty to a felony. A
25vacancy shall be filled for the unexpired term by the Mayor

 

 

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1subject to the approval of the Gaming Board as provided in this
2Section.
3    (c) Members of the Casino Board shall serve at the pleasure
4of the Mayor. The Mayor or the Gaming Board may remove any
5member of the Casino Board upon a finding of incompetence,
6neglect of duty, or misfeasance or malfeasance in office or for
7a violation of this Act. The Gaming Board may remove any member
8of the Casino Board for any violation of the Illinois Gambling
9Act or the rules and regulations of the Gaming Board.
10    (d) No member of the Casino Board shall engage in any
11political activity. For the purpose of this Section, "political
12activity" means any activity in support of or in connection
13with any campaign for federal, State, or local elective office
14or any political organization, but does not include activities
15(i) relating to the support or opposition of any executive,
16legislative, or administrative action, as those terms are
17defined in Section 2 of the Lobbyist Registration Act, (ii)
18relating to collective bargaining, or (iii) that are otherwise
19in furtherance of the person's official duties or governmental
20and public service functions.
 
21    Section 1-25. Organization of Casino Board; meetings.
22After appointment by the Mayor, the Casino Board shall organize
23for the transaction of business, provided that the Casino Board
24shall not take any formal action until after the Gaming Board
25has completed its preliminary background investigation of at

 

 

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1least a quorum of the Casino Board as provided in subsection
2(a) of Section 1-15. The Casino Board shall prescribe the time
3and place for meetings, the manner in which special meetings
4may be called, and the notice that must be given to members.
5All actions and meetings of the Casino Board shall be subject
6to the provisions of the Open Meetings Act. Three members of
7the Casino Board shall constitute a quorum. All substantive
8action of the Casino Board shall be by resolution with an
9affirmative vote of a majority of the members.
 
10    Section 1-30. Executive director; officers.
11    (a) The Casino Board shall appoint an executive director,
12who shall be the chief executive officer of the Authority.
13    The executive director shall be subject to a preliminary
14background investigation to be completed by the Gaming Board
15within 30 days after the executive director's submission of his
16or her application to the Gaming Board. If the Gaming Board
17determines that there is a substantial likelihood that it will
18not find the executive director to be suitable to serve in that
19position (applying the same standards for suitability as the
20Gaming Board would apply to an owners licensee key person under
21the Gaming Board's adopted rules), then the Gaming Board shall
22provide a written notice of such determination to the appointee
23and the Corporation Counsel of the City. The Casino Board may
24then appoint a new executive director. If no such notice is
25delivered, then commencing on the 31st day following the date

 

 

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1of the executive director's submission of his or her
2application to the Gaming Board, the executive director shall
3commence all duties as the acting executive director of the
4Authority.
5    The executive director shall be subject to a full
6background investigation and final approval by the Gaming Board
7prior to the opening of the casino. The Gaming Board shall
8complete its full background investigation of the executive
9director within 3 months after the date of the executive
10director's submission of his or her application to the Gaming
11Board. If the Gaming Board does not complete its background
12investigation within the 3-month period, then the Gaming Board
13shall give a written explanation to the appointee, as well as
14the Mayor, the Governor, the President of the Senate, and the
15Speaker of the House of Representatives, as to why it has not
16reached a final determination and set forth a reasonable time
17when such determination shall be made.
18    (b) The Casino Board shall fix the compensation of the
19executive director. Subject to the general control of the
20Casino Board, the executive director shall be responsible for
21the management of the business, properties, and employees of
22the Authority. The executive director shall direct the
23enforcement of all resolutions, rules, and regulations of the
24Casino Board, and shall perform such other duties as may be
25prescribed from time to time by the Casino Board. All employees
26and independent contractors, consultants, engineers,

 

 

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1architects, accountants, attorneys, financial experts,
2construction experts and personnel, superintendents, managers,
3and other personnel appointed or employed pursuant to this Act
4shall report to the executive director. In addition to any
5other duties set forth in this Act, the executive director
6shall do or shall delegate to an employee or agent of the
7Authority to do all of the following:
8        (1) Direct and supervise the administrative affairs
9    and activities of the Authority in accordance with its
10    rules, regulations, and policies.
11        (2) Attend meetings of the Casino Board.
12        (3) Keep minutes of all proceedings of the Casino
13    Board.
14        (4) Approve all accounts for salaries, per diem
15    payments, and allowable expenses of the Casino Board and
16    its employees and consultants.
17        (5) Report and make recommendations to the Casino Board
18    concerning the terms and conditions of any casino
19    management contract.
20        (6) Perform any other duty that the Casino Board
21    requires for carrying out the provisions of this Act.
22        (7) Devote his or her full time to the duties of the
23    office and not hold any other office or employment.
24    (c) The Casino Board may select a secretary-treasurer and
25other officers to hold office at the pleasure of the Casino
26Board. The Casino Board shall fix the duties of such officers.
 

 

 

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1    Section 1-31. General rights and powers of the Authority.
2    (a) In addition to the duties and powers set forth in this
3Act, the Authority shall have the following rights and powers:
4        (1) Adopt and alter an official seal.
5        (2) Establish and change its fiscal year.
6        (3) Sue and be sued, plead and be impleaded, all in its
7    own name, and agree to binding arbitration of any dispute
8    to which it is a party.
9        (4) Adopt, amend, and repeal bylaws, rules, and
10    regulations consistent with the furtherance of the powers
11    and duties provided for.
12        (5) Maintain its principal office within the City and
13    such other offices as the Casino Board may designate.
14        (6) Select locations in the City for a temporary and a
15    permanent casino.
16        (7) Subject to the bidding procedures of Section 1-115
17    of this Act, retain or employ, either as regular employees
18    or independent contractors, consultants, engineers,
19    architects, accountants, attorneys, financial experts,
20    construction experts and personnel, superintendents,
21    managers and other professional personnel, and such other
22    personnel as may be necessary in the judgment of the Casino
23    Board, and fix their compensation; however, employees of
24    the Authority shall be hired pursuant to and in accordance
25    with the rules and policies the Authority may adopt.

 

 

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1        (8) Pursuant to Section 1-115 of this Act, own,
2    acquire, construct, equip, lease, operate, manage, and
3    maintain grounds, buildings, and facilities to carry out
4    its corporate purposes and duties.
5        (9) Pursuant to Section 1-115, and subject to the
6    oversight, review, and approval of the Gaming Board, enter
7    into, revoke, and modify contracts in accordance with the
8    rules of the Gaming Board as consistently applied to all
9    owners licensees under the Illinois Gambling Act, provided
10    that the Authority may enter into contracts for the design,
11    construction, and outfitting of a temporary casino prior to
12    the Gaming Board's final approval of the Authority's
13    executive director and the members of the Casino Board and
14    prior to the Gaming Board's issuance of the Authority's
15    owners license. Provided further that the entities
16    selected by the Authority for the design, construction, and
17    outfitting of the temporary casino shall be subject to a
18    preliminary background investigation to be completed by
19    the Gaming Board within 30 days after the Gaming Board is
20    provided the identities of the entities. If the Gaming
21    Board determines that there is a substantial likelihood
22    that the entities are not suitable or acceptable to perform
23    their respective functions, then the Gaming Board shall
24    immediately provide notice of that determination to the
25    Authority. If no such notice is delivered, then, commencing
26    on the 31st day following the date on which the information

 

 

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1    identifying such entities is provided to the Gaming Board,
2    such entities shall be permitted to commence the services
3    contemplated for the design, construction, and outfitting
4    of the temporary casino. In no event, however, shall the
5    Authority open a casino until after the Gaming Board has
6    finally approved the Authority's executive director and
7    the members of the Casino Board and the Gaming Board has
8    issued the Authority's owners license and the casino
9    operator's casino operator license.
10        (10) Enter into a casino management contract subject to
11    the provisions of Section 1-45 of this Act.
12        (11) Negotiate and enter into intergovernmental
13    agreements with the State and its agencies, the City, and
14    other units of local government, in furtherance of the
15    powers and duties of the Casino Board.
16        (12) Receive and disburse funds for its own corporate
17    purposes or as otherwise specified in this Act.
18        (13) Borrow money from any source, public or private,
19    for any corporate purpose, including, without limitation,
20    working capital for its operations, reserve funds, or
21    payment of interest, and to mortgage, pledge, or otherwise
22    encumber the property or funds of the Authority and to
23    contract with or engage the services of any person in
24    connection with any financing, including financial
25    institutions, issuers of letters of credit, or insurers and
26    enter into reimbursement agreements with this person or

 

 

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1    entity which may be secured as if money were borrowed from
2    the person or entity.
3        (14) Issue bonds as provided for under this Act.
4        (15) Receive and accept from any source, private or
5    public, contributions, gifts, or grants of money or
6    property to the Authority.
7        (16) Provide for the insurance of any property,
8    operations, officers, members, agents, or employees of the
9    Authority against any risk or hazard, to self-insure or
10    participate in joint self-insurance pools or entities to
11    insure against such risk or hazard, and to provide for the
12    indemnification of its officers, members, employees,
13    contractors, or agents against any and all risks.
14        (17) Exercise all the corporate powers granted
15    Illinois corporations under the Business Corporation Act
16    of 1983, except to the extent that powers are inconsistent
17    with those of a body politic and municipal corporation.
18        (18) Do all things necessary or convenient to carry out
19    the powers granted by this Act.
20    (b) The Casino Board shall comply with all applicable legal
21requirements imposed on other owners licensees to conduct all
22background investigations required under the Illinois Gambling
23Act and the rules of the Gaming Board. This requirement shall
24also extend to senior legal, financial, and administrative
25staff of the Authority.
 

 

 

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1    Section 1-32. Ethical conduct.
2    (a) Casino Board members and employees of the Authority
3must carry out their duties and responsibilities in such a
4manner as to promote and preserve public trust and confidence
5in the integrity and conduct of gaming.
6    (b) Except as may be required in the conduct of official
7duties, Casino Board members and employees of the Authority
8shall not engage in gambling on any riverboat, in any casino,
9or in an electronic gaming facility licensed by the Illinois
10Gaming Board or engage in legalized gambling in any
11establishment identified by Gaming Board action that, in the
12judgment of the Gaming Board, could represent a potential for a
13conflict of interest.
14    (c) A Casino Board member or employee of the Authority
15shall not use or attempt to use his or her official position to
16secure or attempt to secure any privilege, advantage, favor, or
17influence for himself or herself or others.
18    (d) Casino Board members and employees of the Authority
19shall not hold or pursue employment, office, position,
20business, or occupation that may conflict with his or her
21official duties. Employees may engage in other gainful
22employment so long as that employment does not interfere or
23conflict with their duties. Such employment must be disclosed
24to the executive director and approved by the Casino Board.
25    (e) Casino Board members, employees of the Authority, and
26elected officials and employees of the City may not engage in

 

 

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1employment, communications, or any activity identified by the
2Casino Board or Gaming Board that, in the judgment of either
3entity, could represent the potential for or the appearance of
4a conflict of interest.
5    (f) Casino Board members, employees of the Authority, and
6elected officials and employees of the City may not have a
7financial interest, directly or indirectly, in his or her own
8name or in the name of any other person, partnership,
9association, trust, corporation, or other entity in any
10contract or subcontract for the performance of any work for the
11Authority. This prohibition shall extend to the holding or
12acquisition of an interest in any entity identified by the
13Casino Board or the Gaming Board that, in the judgment of
14either entity, could represent the potential for or the
15appearance of a financial interest. The holding or acquisition
16of an interest in such entities through an indirect means, such
17as through a mutual fund, shall not be prohibited, except that
18the Gaming Board may identify specific investments or funds
19that, in its judgment, are so influenced by gaming holdings as
20to represent the potential for or the appearance of a conflict
21of interest.
22    (g) Casino Board members, employees of the Authority, and
23elected officials and employees of the City may not accept any
24gift, gratuity, service, compensation, travel, lodging, or
25thing of value, with the exception of unsolicited items of an
26incidental nature, from any person, corporation, or entity

 

 

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1doing business with the Authority.
2    (h) No Casino Board member, employee of the Authority, or
3elected official or employee of the City may, during employment
4or within a period of 2 years immediately after termination of
5employment, knowingly accept employment or receive
6compensation or fees for services from a person or entity, or
7its parent or affiliate, that has engaged in business with the
8Authority that resulted in contracts with an aggregate value of
9at least $25,000 or if that Casino Board member or employee has
10made a decision that directly applied to the person or entity,
11or its parent or affiliate.
12    (i) A spouse, child, or parent of a Casino Board member,
13employee of the Authority, or elected official or employee of
14the City may not have a financial interest, directly or
15indirectly, in his or her own name or in the name of any other
16person, partnership, association, trust, corporation, or other
17entity in any contract or subcontract for the performance of
18any work for the Authority. This prohibition shall extend to
19the holding or acquisition of an interest in any entity
20identified by the Casino Board or Gaming Board that, in the
21judgment of either entity, could represent the potential for or
22the appearance of a conflict of interest. The holding or
23acquisition of an interest in such entities through an indirect
24means, such as through a mutual fund, shall not be prohibited,
25except that the Gaming Board may identify specific investments
26or funds that, in its judgment, are so influenced by gaming

 

 

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1holdings as to represent the potential for or the appearance of
2a conflict of interest.
3    (j) A spouse, child, or parent of a Casino Board member,
4employee of the Authority, or elected official or employee of
5the City may not accept any gift, gratuity, service,
6compensation, travel, lodging, or thing of value, with the
7exception of unsolicited items of an incidental nature, from
8any person, corporation, or entity doing business with the
9Authority.
10    (k) A spouse, child, or parent of a Casino Board member,
11employee of the Authority, or elected official or employee of
12the City may not, while the person is a Board member or
13employee of the spouse or within a period of 2 years
14immediately after termination of employment, knowingly accept
15employment or receive compensation or fees for services from a
16person or entity, or its parent or affiliate, that has engaged
17in business with the Authority that resulted in contracts with
18an aggregate value of at least $25,000 or if that Casino Board
19member, employee, or elected official or employee of the City
20has made a decision that directly applied to the person or
21entity, or its parent or affiliate.
22    (l) No Casino Board member, employee of the Authority, or
23elected official or employee of the City may attempt, in any
24way, to influence any person or entity doing business with the
25Authority or any officer, agent, or employee thereof to hire or
26contract with any person or entity for any compensated work.

 

 

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1    (m) No Casino Board member, employee of the Authority, or
2elected official or employee of the City shall use or attempt
3to use his or her official position to secure, or attempt to
4secure, any privilege, advantage, favor, or influence for
5himself or herself or others. No Casino Board member, employee
6of the Authority, or elected official or employee of the City
7shall, within one year immediately preceding appointment by the
8Mayor or employment, have been employed or received
9compensation or fees for services from a person or entity, or
10its parent or affiliate, that has engaged in business with the
11Casino Board, a licensee under this Act, or a licensee under
12the Illinois Gambling Act.
13    (n) Any communication between an elected official of the
14City and any applicant for or party to a casino management
15contract with the Authority, or an officer, director, or
16employee thereof, concerning any matter relating in any way to
17gaming or the Authority shall be disclosed to the Casino Board
18and the Gaming Board. Such disclosure shall be in writing by
19the official within 30 days after the communication and shall
20be filed with the Casino Board and the Gaming Board. Disclosure
21must consist of the date of the communication, the identity and
22job title of the person with whom the communication was made, a
23brief summary of the communication, the action requested or
24recommended, all responses made, the identity and job title of
25the person making the response, and any other pertinent
26information. In addition, if the communication is written or

 

 

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1digital, then the entire communication shall be disclosed.
2    Public disclosure of the written summary provided to the
3Casino Board and the Gaming Board shall be subject to the
4exemptions provided under Section 7 of the Freedom of
5Information Act.
6    This subsection (n) shall not apply to communications
7regarding traffic, law enforcement, security, environmental
8issues, City services, transportation, or other routine
9matters concerning the ordinary operations of the casino.
10    (o) For purposes of this Section:
11    "Ordinary operations" means operations relating to the
12casino facility other than the conduct of gambling activities.
13    "Routine matters" includes the application for, issuance,
14renewal, and other processes associated with City permits and
15licenses.
16    "Employee of the City" means only those employees of the
17City who provide services to the Authority or otherwise
18influence the decisions of the Authority or the Casino Board.
19    (p) Any Casino Board member or employee of the Authority
20who violates any provision of this Section is guilty of a Class
214 felony.
 
22    Section 1-45. Casino management contracts.
23    (a) The Casino Board shall enter into a casino management
24contract with a casino operator subject to a background
25investigation and approval by the Gaming Board and payment by

 

 

HB5146- 21 -LRB100 18631 SMS 33856 b

1the proposed casino operator of a fee of $50,000,000, which
2shall be deposited into the Gaming Facilities Fee Revenue Fund.
3The Gaming Board shall complete its background investigation
4and approval of the casino operator within 6 months after the
5date that the proposed casino operator submits its application
6to the Gaming Board. If the Gaming Board does not complete its
7background investigation and approval within the 6-month
8period, then the Gaming Board shall give a written explanation
9to the proposed casino operator and the chief legal officer of
10the Authority as to why it has not reached a final
11determination and when it reasonably expects to make a final
12determination. Validity of the casino management contract is
13contingent upon the issuance of a casino operator license. If
14the Gaming Board grants a casino operator license, the Casino
15Board shall transmit a copy of the executed casino management
16contract to the Gaming Board.
17    (b) After (1) the Authority has been issued an owners
18license, (2) the Gaming Board has issued a casino operator
19license, and (3) the Gaming Board has approved the members of
20the Casino Board, the Authority may conduct gaming operations
21at a temporary facility, subject to the adopted rules of the
22Gaming Board, for no longer than 24 months after gaming
23operations begin. The Gaming Board may, after holding a public
24hearing, grant an extension so long as a permanent facility is
25not operational and the Authority is working in good faith to
26complete the permanent facility. The Gaming Board may grant

 

 

HB5146- 22 -LRB100 18631 SMS 33856 b

1additional extensions following further public hearings. Each
2extension may be for a period of no longer than 6 months.
 
3    Section 1-47. Freedom of Information Act. The Authority
4shall be a public body as defined in the Freedom of Information
5Act and shall be subject to the provisions of the Freedom of
6Information Act.
 
7    Section 1-50. Transfer of funds. The revenues received by
8the Authority (other than amounts required to be paid pursuant
9to the Illinois Gambling Act and amounts required to pay the
10operating expenses of the Authority, to pay amounts due the
11casino operator licensee pursuant to a casino management
12contract, to repay any borrowing of the Authority made pursuant
13to Section 1-31, to pay debt service on any bonds issued under
14Section 1-75, and to pay any expenses in connection with the
15issuance of such bonds pursuant to Section 1-75 or derivative
16products pursuant to Section 1-85) shall be transferred to the
17City by the Authority. Moneys transferred to the City pursuant
18to this Section shall be expended or obligated by the City for
19pension payments in accordance with Public Act 99-506.
 
20    Section 1-60. Auditor General.
21    (a) Prior to the issuance of bonds under this Act, the
22Authority shall submit to the Auditor General a certification
23that:

 

 

HB5146- 23 -LRB100 18631 SMS 33856 b

1        (1) it is legally authorized to issue bonds;
2        (2) scheduled annual payments of principal and
3    interest on the bonds to be issued meet the requirements of
4    Section 1-75 of this Act;
5        (3) no bond shall mature later than 30 years; and
6        (4) after payment of costs of issuance and necessary
7    deposits to funds and accounts established with respect to
8    debt service on the bonds, the net bond proceeds (exclusive
9    of any proceeds to be used to refund outstanding bonds)
10    will be used only for the purposes set forth in this Act.
11    The Authority also shall submit to the Auditor General its
12projections on revenues to be generated and pledged to
13repayment of the bonds as scheduled and such other information
14as the Auditor General may reasonably request.
15    The Auditor General shall examine the certifications and
16information submitted and submit a report to the Authority and
17the Gaming Board indicating whether the required
18certifications, projections, and other information have been
19submitted by the Authority and whether the assumptions
20underlying the projections are not unreasonable in the
21aggregate. The Auditor General shall submit the report no later
22than 60 days after receiving the information required to be
23submitted by the Authority.
24    The Auditor General shall submit a bill to the Authority
25for costs associated with the examinations and report required
26under this Section. The Authority shall reimburse in a timely

 

 

HB5146- 24 -LRB100 18631 SMS 33856 b

1manner.
2    (b) The Authority shall enter into an intergovernmental
3agreement with the Auditor General authorizing the Auditor
4General to, every 2 years, (i) review the financial audit of
5the Authority performed by the Authority's certified public
6accountants, (ii) perform a management audit of the Authority,
7and (iii) perform a management audit of the casino operator
8licensee. The Auditor General shall provide the Authority and
9the General Assembly with the audits and shall post on his or
10her Internet website such portions of the audit or other
11financial information as generally would be made publicly
12available for other owners licensees under the Illinois
13Gambling Act. The Auditor General shall submit a bill to the
14Authority for costs associated with the review and the audit
15required under this Section, which costs shall not exceed
16$100,000, and the Authority shall reimburse the Auditor General
17for such costs in a timely manner.
 
18    Section 1-62. Advisory committee. An Advisory Committee is
19established to monitor, review, and report on (1) the
20Authority's utilization of minority-owned business enterprises
21and female-owned business enterprises, (2) employment of
22females, and (3) employment of minorities with regard to the
23development and construction of the casino as authorized under
24Section 7 of the Illinois Gambling Act. The Authority shall
25work with the Advisory Committee in accumulating necessary

 

 

HB5146- 25 -LRB100 18631 SMS 33856 b

1information for the Committee to submit reports, as necessary,
2to the General Assembly and to the City.
3    The Committee shall consist of 9 members as provided in
4this Section. Five members shall be selected by the Governor
5and 4 members shall be selected by the Mayor. The Governor and
6Mayor shall each appoint at least one current member of the
7General Assembly. The Advisory Committee shall meet
8periodically and shall report the information to the Mayor of
9the City and to the General Assembly by December 31st of every
10year.
11    The Advisory Committee shall be dissolved on the date that
12casino gambling operations are first conducted at a permanent
13facility under the license authorized under Section 7 of the
14Illinois Gambling Act. For the purposes of this Section, the
15terms "female" and "minority person" have the meanings provided
16in Section 2 of the Business Enterprise for Minorities,
17Females, and Persons with Disabilities Act.
 
18    Section 1-65. Acquisition of property; eminent domain
19proceedings. For the lawful purposes of this Act, the City may
20acquire, by eminent domain or by condemnation proceedings in
21the manner provided by the Eminent Domain Act, real or personal
22property or interests in real or personal property located in
23the City, and the City may convey to the Authority property so
24acquired. The acquisition of property under this Section is
25declared to be for a public use.
 

 

 

HB5146- 26 -LRB100 18631 SMS 33856 b

1    Section 1-67. Limitations on gaming at Chicago airports.
2The Authority may conduct gaming operations in an airport under
3the administration or control of the Chicago Department of
4Aviation. Gaming operations may be conducted pursuant to this
5Section so long as (i) gaming operations are conducted in a
6secured area that is beyond the Transportation Security
7Administration security checkpoints and only available to
8airline passengers at least 21 years of age who are members of
9a private club, and not to the general public, (ii) gaming
10operations are limited to slot machines, as defined in Section
114 of the Illinois Gambling Act, and (iii) the combined number
12of gaming positions operating in the City at the airports and
13at the temporary and permanent casino facility does not exceed
14the maximum number of gaming positions authorized pursuant to
15subsection (h) of Section 7 of the Illinois Gambling Act.
16Gaming operations at an airport are subject to all applicable
17laws and rules that apply to any other gaming facility under
18this Act or the Illinois Gambling Act.
 
19    Section 1-70. Local regulation. In addition to this Act,
20the Illinois Gambling Act, and all of the rules of the Gaming
21Board, the casino facilities and operations therein shall be
22subject to all ordinances and regulations of the City. The
23construction, development, and operation of the casino shall
24comply with all ordinances, regulations, rules, and controls of

 

 

HB5146- 27 -LRB100 18631 SMS 33856 b

1the City, including, but not limited to, those relating to
2zoning and planned development, building, fire prevention, and
3land use. However, the regulation of gaming operations is
4subject to the exclusive jurisdiction of the Gaming Board. The
5Gaming Board shall be responsible for the investigation for and
6issuance of all licenses required by this Act and the Illinois
7Gambling Act.
 
8    Section 1-75. Borrowing.
9    (a) The Authority may borrow money and issue bonds as
10provided in this Section. Bonds of the Authority may be issued
11to provide funds for land acquisition, site assembly and
12preparation, and the design and construction of the casino, as
13defined in the Illinois Gambling Act, all ancillary and related
14facilities comprising the casino complex, and all on-site and
15off-site infrastructure improvements required in connection
16with the development of the casino; to refund (at the time or
17in advance of any maturity or redemption) or redeem any bonds
18of the Authority; to provide or increase a debt service reserve
19fund or other reserves with respect to any or all of its bonds;
20or to pay the legal, financial, administrative, bond insurance,
21credit enhancement, and other legal expenses of the
22authorization, issuance, or delivery of bonds. In this Act, the
23term "bonds" also includes notes of any kind, interim
24certificates, refunding bonds, or any other evidence of
25obligation for borrowed money issued under this Section. Bonds

 

 

HB5146- 28 -LRB100 18631 SMS 33856 b

1may be issued in one or more series and may be payable and
2secured either on a parity with or separately from other bonds.
3    (b) The bonds of the Authority shall be payable from one or
4more of the following sources: (i) the property or revenues of
5the Authority; (ii) revenues derived from the casino; (iii)
6revenues derived from any casino operator licensee; (iv) fees,
7bid proceeds, charges, lease payments, payments required
8pursuant to any casino management contract or other revenues
9payable to the Authority, or any receipts of the Authority; (v)
10payments by financial institutions, insurance companies, or
11others pursuant to letters or lines of credit, policies of
12insurance, or purchase agreements; (vi) investment earnings
13from funds or accounts maintained pursuant to a bond resolution
14or trust indenture; (vii) proceeds of refunding bonds; (viii)
15any other revenues derived from or payments by the City; and
16(ix) any payments by any casino operator licensee or others
17pursuant to any guaranty agreement.
18    (c) Bonds shall be authorized by a resolution of the
19Authority and may be secured by a trust indenture by and
20between the Authority and a corporate trustee or trustees,
21which may be any trust company or bank having the powers of a
22trust company within or without the State. Bonds shall meet the
23following requirements:
24        (1) Bonds may bear interest payable at any time or
25    times and at any rate or rates, notwithstanding any other
26    provision of law to the contrary, and may be subject to

 

 

HB5146- 29 -LRB100 18631 SMS 33856 b

1    such other terms and conditions as may be provided by the
2    resolution or indenture authorizing the issuance of such
3    bonds.
4        (2) Bonds issued pursuant to this Section may be
5    payable on such dates and times as may be provided for by
6    the resolution or indenture authorizing the issuance of
7    such bonds; provided, however, that such bonds shall mature
8    no later than 30 years from the date of issuance.
9        (3) Bonds issued pursuant to this Section may be sold
10    pursuant to notice of sale and public bid or by negotiated
11    sale.
12        (4) Bonds shall be payable at a time or times, in the
13    denominations and form, including book entry form, either
14    coupon, registered, or both, and carry the registration and
15    privileges as to exchange, transfer or conversion, and
16    replacement of mutilated, lost, or destroyed bonds as the
17    resolution or trust indenture may provide.
18        (5) Bonds shall be payable in lawful money of the
19    United States at a designated place.
20        (6) Bonds shall be subject to the terms of purchase,
21    payment, redemption, refunding, or refinancing that the
22    resolution or trust indenture provides.
23        (7) Bonds shall be executed by the manual or facsimile
24    signatures of the officers of the Authority designated by
25    the Board, which signatures shall be valid at delivery even
26    for one who has ceased to hold office.

 

 

HB5146- 30 -LRB100 18631 SMS 33856 b

1        (8) Bonds shall be sold at public or private sale in
2    the manner and upon the terms determined by the Authority.
3        (9) Bonds shall be issued in accordance with the
4    provisions of the Local Government Debt Reform Act.
5    (d) The Authority shall adopt a procurement program with
6respect to contracts relating to underwriters, bond counsel,
7financial advisors, and accountants. The program shall include
8goals for the payment of not less than 30% of the total dollar
9value of the fees from these contracts to minority-owned
10businesses and female-owned businesses as defined in the
11Business Enterprise for Minorities, Females, and Persons with
12Disabilities Act. The Authority shall conduct outreach to
13minority-owned businesses and female-owned businesses.
14Outreach shall include, but is not limited to, advertisements
15in periodicals and newspapers, mailings, and other appropriate
16media. The Authority shall submit to the General Assembly a
17comprehensive report that shall include, at a minimum, the
18details of the procurement plan, outreach efforts, and the
19results of the efforts to achieve goals for the payment of
20fees.
21    (e) Subject to the Illinois Gambling Act and rules of the
22Gaming Board regarding pledging of interests in holders of
23owners licenses, any resolution or trust indenture may contain
24provisions that may be a part of the contract with the holders
25of the bonds as to the following:
26        (1) Pledging, assigning, or directing the use,

 

 

HB5146- 31 -LRB100 18631 SMS 33856 b

1    investment, or disposition of revenues of the Authority or
2    proceeds or benefits of any contract, including without
3    limitation any rights in any casino management contract.
4        (2) The setting aside of loan funding deposits, debt
5    service reserves, replacement or operating reserves, cost
6    of issuance accounts and sinking funds, and the regulation,
7    investment, and disposition thereof.
8        (3) Limitations on the purposes to which or the
9    investments in which the proceeds of sale of any issue of
10    bonds or the Authority's revenues and receipts may be
11    applied or made.
12        (4) Limitations on the issue of additional bonds, the
13    terms upon which additional bonds may be issued and
14    secured, the terms upon which additional bonds may rank on
15    a parity with, or be subordinate or superior to, other
16    bonds.
17        (5) The refunding, advance refunding, or refinancing
18    of outstanding bonds.
19        (6) The procedure, if any, by which the terms of any
20    contract with bondholders may be altered or amended and the
21    amount of bonds and holders of which must consent thereto
22    and the manner in which consent shall be given.
23        (7) Defining the acts or omissions that shall
24    constitute a default in the duties of the Authority to
25    holders of bonds and providing the rights or remedies of
26    such holders in the event of a default, which may include

 

 

HB5146- 32 -LRB100 18631 SMS 33856 b

1    provisions restricting individual rights of action by
2    bondholders.
3        (8) Providing for guarantees, pledges of property,
4    letters of credit, or other security, or insurance for the
5    benefit of bondholders.
6    (f) No member of the Casino Board, nor any person executing
7the bonds, shall be liable personally on the bonds or subject
8to any personal liability by reason of the issuance of the
9bonds.
10    (g) The Authority may issue and secure bonds in accordance
11with the provisions of the Local Government Credit Enhancement
12Act.
13    (h) A pledge by the Authority of revenues and receipts as
14security for an issue of bonds or for the performance of its
15obligations under any casino management contract shall be valid
16and binding from the time when the pledge is made. The revenues
17and receipts pledged shall immediately be subject to the lien
18of the pledge without any physical delivery or further act, and
19the lien of any pledge shall be valid and binding against any
20person having any claim of any kind in tort, contract, or
21otherwise against the Authority, irrespective of whether the
22person has notice. No resolution, trust indenture, management
23agreement or financing statement, continuation statement, or
24other instrument adopted or entered into by the Authority need
25be filed or recorded in any public record other than the
26records of the Authority in order to perfect the lien against

 

 

HB5146- 33 -LRB100 18631 SMS 33856 b

1third persons, regardless of any contrary provision of law.
2    (i) Bonds that are being paid or retired by issuance, sale,
3or delivery of bonds, and bonds for which sufficient funds have
4been deposited with the paying agent or trustee to provide for
5payment of principal and interest thereon, and any redemption
6premium, as provided in the authorizing resolution, shall not
7be considered outstanding for the purposes of this subsection.
8    (j) The bonds of the Authority shall not be indebtedness of
9the State. The bonds of the Authority are not general
10obligations of the State and are not secured by a pledge of the
11full faith and credit of the State and the holders of bonds of
12the Authority may not require the application of State revenues
13or funds to the payment of bonds of the Authority. The
14foregoing non-recourse language must be printed in bold-face
15type on the face of the bonds and in the preliminary and final
16official statements on the bonds.
17    (k) The State of Illinois pledges and agrees with the
18owners of the bonds that it will not limit or alter the rights
19and powers vested in the Authority by this Act so as to impair
20the terms of any contract made by the Authority with the owners
21or in any way impair the rights and remedies of the owners
22until the bonds, together with interest on them, and all costs
23and expenses in connection with any action or proceedings by or
24on behalf of the owners, are fully met and discharged. The
25Authority is authorized to include this pledge and agreement in
26any contract with the owners of bonds issued under this

 

 

HB5146- 34 -LRB100 18631 SMS 33856 b

1Section.
2    (l) No person holding an elective office in the City, in
3Cook County, or in this State, holding a seat in the General
4Assembly, or serving as a board member, trustee, officer, or
5employee of the Authority, including the spouse of that person,
6may receive a legal, banking, consulting, or other fee related
7to the issuance of bonds. This prohibition shall also apply to
8a company or firm that employs a person holding an elective
9office in the City, in Cook County, or in this State, holding a
10seat in the General Assembly, or serving as a board member,
11trustee, officer, or employee of the Authority, including the
12spouse of that person, if the person or his or her spouse has
13greater than 7.5% ownership of the company or firm.
 
14    Section 1-85. Derivative products. With respect to all or
15part of any issue of its bonds, the Authority may enter into
16agreements or contracts with any necessary or appropriate
17person, which will have the benefit of providing to the
18Authority an interest rate basis, cash flow basis, or other
19basis different from that provided in the bonds for the payment
20of interest. Such agreements or contracts may include, without
21limitation, agreements or contracts commonly known as
22"interest rate swap agreements", "forward payment conversion
23agreements", "futures", "options", "puts", or "calls" and
24agreements or contracts providing for payments based on levels
25of or changes in interest rates, agreements or contracts to

 

 

HB5146- 35 -LRB100 18631 SMS 33856 b

1exchange cash flows or a series of payments, or to hedge
2payment, rate spread, or similar exposure. Any such agreement
3or contract shall be solely an obligation or indebtedness of
4the Authority and shall not be an obligation or indebtedness of
5the State, nor shall any party thereto have any recourse
6against the State in connection with the agreement or contract.
 
7    Section 1-90. Legality for investment. The State of
8Illinois, all governmental entities, all public officers,
9banks, bankers, trust companies, savings banks and
10institutions, building and loan associations, savings and loan
11associations, investment companies, and other persons carrying
12on a banking business, insurance companies, insurance
13associations, and other persons carrying on an insurance
14business, and all executors, administrators, guardians,
15trustees, and other fiduciaries may legally invest any sinking
16funds, moneys, or other funds belonging to them or within their
17control in any bonds issued under this Act. However, nothing in
18this Section shall be construed as relieving any person or
19entity from any duty of exercising reasonable care in selecting
20securities for purchase or investment.
 
21    Section 1-105. Budgets and reporting.
22    (a) The Casino Board shall annually adopt a budget for each
23fiscal year. The budget may be modified from time to time in
24the same manner and upon the same vote as it may be adopted.

 

 

HB5146- 36 -LRB100 18631 SMS 33856 b

1The budget shall include the Authority's available funds and
2estimated revenues and shall provide for payment of its
3obligations and estimated expenditures for the fiscal year,
4including, without limitation, expenditures for
5administration, operation, maintenance and repairs, debt
6service, and deposits into reserve and other funds and capital
7projects.
8    (b) The Casino Board shall annually cause the finances of
9the Authority to be audited by a firm of certified public
10accountants selected by the Casino Board in accordance with the
11rules of the Gaming Board and post on the Authority's Internet
12website such financial information as is required to be posted
13by all other owners licensees under the Illinois Gambling Act.
14    (c) The Casino Board shall, for each fiscal year, prepare
15an annual report setting forth information concerning its
16activities in the fiscal year and the status of the development
17of the casino. The annual report shall include financial
18information of the Authority consistent with that which is
19required for all other owners licensees under the Illinois
20Gambling Act, the budget for the succeeding fiscal year, and
21the current capital plan as of the date of the report. Copies
22of the annual report shall be made available to persons who
23request them and shall be submitted not later than 120 days
24after the end of the Authority's fiscal year or, if the audit
25of the Authority's financial statements is not completed within
26120 days after the end of the Authority's fiscal year, as soon

 

 

HB5146- 37 -LRB100 18631 SMS 33856 b

1as practical after completion of the audit, to the Governor,
2the Mayor, the General Assembly, and the Commission on
3Government Forecasting and Accountability.
 
4    Section 1-110. Deposit and withdrawal of funds.
5    (a) All funds deposited by the Authority in any bank or
6savings and loan association shall be placed in the name of the
7Authority and shall be withdrawn or paid out only by check or
8draft upon the bank or savings and loan association, signed by
92 officers or employees designated by the Casino Board.
10Notwithstanding any other provision of this Section, the Casino
11Board may designate any of its members or any officer or
12employee of the Authority to authorize the wire transfer of
13funds deposited by the secretary-treasurer of funds in a bank
14or savings and loan association for the payment of payroll and
15employee benefits-related expenses.
16    No bank or savings and loan association shall receive
17public funds as permitted by this Section unless it has
18complied with the requirements established pursuant to Section
196 of the Public Funds Investment Act.
20    (b) If any officer or employee whose signature appears upon
21any check or draft issued pursuant to this Act ceases (after
22attaching his signature) to hold his or her office before the
23delivery of such a check or draft to the payee, his or her
24signature shall nevertheless be valid and sufficient for all
25purposes with the same effect as if he or she had remained in

 

 

HB5146- 38 -LRB100 18631 SMS 33856 b

1office until delivery thereof.
 
2    Section 1-112. Contracts with the Authority or casino
3operator licensee; disclosure requirements.
4    (a) A bidder, respondent, offeror, or contractor for
5contracts with the Authority or casino operator licensee shall
6disclose the identity of all officers and directors and every
7owner, beneficiary, or person with beneficial interest of more
8than 1% or shareholder entitled to receive more than 1% of the
9total distributable income of any corporation having any
10interest in the contract or in the bidder, respondent, offeror,
11or contractor. The disclosure shall be in writing and attested
12to by an owner, trustee, corporate official, or agent. If stock
13in a corporation is publicly traded and there is no readily
14known individual having greater than a 1% interest, then a
15statement to that effect attested to by an officer or agent of
16the corporation shall fulfill the disclosure statement
17requirement of this Section. A bidder, respondent, offeror, or
18contractor shall notify the Authority of any changes in
19officers, directors, ownership, or individuals having a
20beneficial interest of more than 1%. Notwithstanding the
21provisions of this subsection (a), the Gaming Board may adopt
22rules in connection with contractors for contracts with the
23Authority or the casino operator licensee.
24    (b) A bidder, respondent, offeror, or contractor for
25contracts with an annual value of $25,000 or more or for a

 

 

HB5146- 39 -LRB100 18631 SMS 33856 b

1period to exceed one year shall disclose all political
2contributions of the bidder, respondent, offeror, or
3contractor and any affiliated person or entity. Disclosure
4shall include at least the names and addresses of the
5contributors and the dollar amounts of any contributions to any
6political committee made within the previous 2 years. The
7disclosure must be submitted to the Gaming Board with a copy of
8the contract. All such disclosures shall be posted on the
9websites of the Authority and the Gaming Board.
10    (c) As used in this Section:
11    "Contribution" means contribution as defined in Section
129-1.4 of the Election Code.
13    "Affiliated person" means (i) any person with any ownership
14interest or distributive share of the bidding, responding, or
15contracting entity in excess of 1%, (ii) executive employees of
16the bidding, responding, or contracting entity, and (iii) the
17spouse, minor children, and parents of any such persons.
18    "Affiliated entity" means (i) any parent or subsidiary of
19the bidding or contracting entity, (ii) any member of the same
20unitary business group, or (iii) any political committee for
21which the bidding, responding, or contracting entity is the
22sponsoring entity.
23    (d) The Gaming Board may direct the Authority or a casino
24operator licensee to void a contract if a violation of this
25Section occurs. The Authority may direct a casino operator
26licensee to void a contract if a violation of this Section

 

 

HB5146- 40 -LRB100 18631 SMS 33856 b

1occurs.
2    (e) All contracts pertaining to the actual operation of the
3casino and related gaming activities shall be entered into by
4the casino operator licensee and not the Authority and shall be
5subject to the regulation, oversight, and approval of the
6Gaming Board, applying the same regulation, oversight, and
7approval requirements as would be applied to any other owners
8licensee under the Illinois Gambling Act.
 
9    Section 1-115. Purchasing.
10    (a) The Casino Board shall designate an officer of the
11Authority to serve as the Chief Procurement Officer for the
12Authority. The Chief Procurement Officer shall have all powers
13and duties set forth in Section 15 of Division 10 of Article 8
14of the Illinois Municipal Code. Except as otherwise provided in
15this Section, the Chief Procurement Officer of the Authority
16shall conduct procurements on behalf of the Authority subject
17to Title 2, Chapter 92 of the Municipal Code of Chicago, which
18by its terms incorporates Division 10 of Article 8 of the
19Illinois Municipal Code.
20    (b) All contracts for amounts greater than $25,000 must be
21approved by the Casino Board and executed by the chairperson of
22the Casino Board and executive director of the Authority.
23Contracts for amounts of $25,000 or less may be approved and
24executed by the Chief Procurement Officer for the Authority and
25executive director of the Authority, with approval by the chief

 

 

HB5146- 41 -LRB100 18631 SMS 33856 b

1legal counsel for the Authority as to form and legality.
2    (c) All construction contracts and contracts for supplies,
3materials, equipment, and services for amounts greater than
4$25,000 shall be let by a competitive selection process to the
5lowest responsible proposer, after advertising for proposals,
6except for the following:
7        (1) when repair parts, accessories, equipment, or
8    services are required for equipment or services previously
9    furnished or contracted for;
10        (2) when services such as water, light, heat, power,
11    telephone (other than long-distance service), or telegraph
12    are required;
13        (3) casino management contracts, which shall be
14    awarded as set forth in Section 1-45 of this Act;
15        (4) contracts where there is only one economically
16    feasible source;
17        (5) when a purchase is needed on an immediate,
18    emergency basis because there exists a threat to public
19    health or public safety, or when immediate expenditure is
20    necessary for repairs to Authority property in order to
21    protect against further loss of or damage to Authority
22    property, to prevent or minimize serious disruption in
23    Authority services or to ensure the integrity of Authority
24    records;
25        (6) contracts for professional services other than for
26    management of the casino, except such contracts described

 

 

HB5146- 42 -LRB100 18631 SMS 33856 b

1    in subsection (d) of this Section; and
2        (7) contracts for the use, purchase, delivery,
3    movement, or installation of (i) data processing
4    equipment, software, and services and (ii)
5    telecommunications equipment, software, and services.
6    (d) Contracts for professional services for a term of more
7than one year or contracts that may require payment in excess
8of $25,000 in one year shall be let by a competitive bidding
9process to the most highly qualified firm that agrees to
10compensation and other terms of engagement that are both
11reasonable and acceptable to the Casino Board.
12    (e) All contracts involving less than $25,000 shall be let
13by competitive selection process whenever possible, and in any
14event in a manner calculated to ensure the best interests of
15the public.
16    (f) In determining the responsibility of any proposer, the
17Authority may take into account the proposer's (or an
18individual having a beneficial interest, directly or
19indirectly, of more than 1% in such proposing entity) past
20record of dealings with the Authority, the proposer's
21experience, adequacy of equipment, and ability to complete
22performance within the time set, and other factors besides
23financial responsibility. No such contract shall be awarded to
24any proposer other than the lowest proposer (in case of
25purchase or expenditure) unless authorized or approved by a
26vote of at least 3 members of the Casino Board and such action

 

 

HB5146- 43 -LRB100 18631 SMS 33856 b

1is accompanied by a written statement setting forth the reasons
2for not awarding the contract to the highest or lowest
3proposer, as the case may be. The statement shall be kept on
4file in the principal office of the Authority and open to
5public inspection.
6    (g) The Authority shall have the right to reject all
7proposals and to re-advertise for proposals. If after any such
8re-advertisement, no responsible and satisfactory proposals,
9within the terms of the re-advertisement, is received, the
10Authority may award such contract without competitive
11selection. The contract must not be less advantageous to the
12Authority than any valid proposal received pursuant to
13advertisement.
14    (h) Advertisements for proposals and re-proposals shall be
15published at least once in a daily newspaper of general
16circulation published in the City at least 10 calendar days
17before the time for receiving proposals and in an online
18bulletin published on the Authority's website. Such
19advertisements shall state the time and place for receiving and
20opening of proposals and, by reference to plans and
21specifications on file at the time of the first publication or
22in the advertisement itself, shall describe the character of
23the proposed contract in sufficient detail to fully advise
24prospective proposers of their obligations and to ensure free
25and open competitive selection.
26    (i) All proposals in response to advertisements shall be

 

 

HB5146- 44 -LRB100 18631 SMS 33856 b

1sealed and shall be publicly opened by the Authority. All
2proposers shall be entitled to be present in person or by
3representatives. Cash or a certified or satisfactory cashier's
4check, as a deposit of good faith, in a reasonable amount to be
5fixed by the Authority before advertising for proposals, shall
6be required with the proposal. A bond for faithful performance
7of the contract with surety or sureties satisfactory to the
8Authority and adequate insurance may be required in reasonable
9amounts to be fixed by the Authority before advertising for
10proposals.
11    (j) The contract shall be awarded as promptly as possible
12after the opening of proposals. The proposal of the successful
13proposer, as well as the bids of the unsuccessful proposers,
14shall be placed on file and be open to public inspection
15subject to the exemptions from disclosure provided under
16Section 7 of the Freedom of Information Act. All proposals
17shall be void if any disclosure of the terms of any proposals
18in response to an advertisement is made or permitted to be made
19by the Authority before the time fixed for opening proposals.
20    (k) Notice of each and every contract that is offered,
21including renegotiated contracts and change orders, shall be
22published in an online bulletin. The online bulletin must
23include at least the date first offered, the date submission of
24offers is due, the location that offers are to be submitted to,
25a brief purchase description, the method of source selection,
26information of how to obtain a comprehensive purchase

 

 

HB5146- 45 -LRB100 18631 SMS 33856 b

1description and any disclosure and contract forms, and
2encouragement to prospective vendors to hire qualified
3veterans, as defined by Section 45-67 of the Illinois
4Procurement Code, and Illinois residents discharged from any
5Illinois adult correctional center subject to Gaming Board
6licensing and eligibility rules. Notice of each and every
7contract that is let or awarded, including renegotiated
8contracts and change orders, shall be published in the online
9bulletin and must include at least all of the information
10specified in this subsection (k), as well as the name of the
11successful responsible proposer or offeror, the contract
12price, and the number of unsuccessful responsive proposers and
13any other disclosure specified in this Section. This notice
14must be posted in the online electronic bulletin prior to
15execution of the contract.
 
16    Section 1-130. Affirmative action and equal opportunity
17obligations of Authority.
18    (a) The Authority is subject to the requirements of Article
19IV of Chapter 2-92 (Sections 2-92-650 through 2-92-720
20inclusive) of the Chicago Municipal Code, as now or hereafter
21amended, renumbered, or succeeded, concerning a Minority-Owned
22and Women-Owned Business Enterprise Procurement Program for
23construction contracts, and Section 2-92-420 et seq. of the
24Chicago Municipal Code, as now or hereafter amended,
25renumbered, or succeeded, concerning a Minority-Owned and

 

 

HB5146- 46 -LRB100 18631 SMS 33856 b

1Women-Owned Business Enterprise Procurement Program.
2    (b) The Authority is authorized to enter into agreements
3with contractors' associations, labor unions, and the
4contractors working on the development of the casino to
5establish an apprenticeship preparedness training program to
6provide for an increase in the number of minority and female
7journeymen and apprentices in the building trades and to enter
8into agreements with community college districts or other
9public or private institutions to provide readiness training.
10The Authority is further authorized to enter into contracts
11with public and private educational institutions and persons in
12the gaming, entertainment, hospitality, and tourism industries
13to provide training for employment in those industries.
 
14    Section 1-135. Transfer of interest. Neither the Authority
15nor the City may sell, lease, rent, transfer, exchange, or
16otherwise convey any interest that they have in the casino
17without prior approval of the General Assembly.
 
18    Section 1-140. Home rule. The regulation and licensing of
19casinos and casino gaming, casino gaming facilities, and casino
20operator licensees under this Act are exclusive powers and
21functions of the State. A home rule unit may not regulate or
22license casinos, casino gaming, casino gaming facilities, or
23casino operator licensees under this Act, except as provided
24under this Act. This Section is a denial and limitation of home

 

 

HB5146- 47 -LRB100 18631 SMS 33856 b

1rule powers and functions under subsection (h) of Section 6 of
2Article VII of the Illinois Constitution.
 
3
ARTICLE 90.

 
4    Section 90-1. Findings. The General Assembly makes all of
5the following findings:
6        (1) That the cumulative reduction to pre-K through 12
7    education funding since 2009 is approximately
8    $861,000,000.
9        (2) That general state aid to Illinois common schools
10    has been underfunded as a result of budget cuts, resulting
11    in pro-rated payments to school districts that are less
12    than the foundational level of $6,119 per pupil, which
13    represents the minimum each pupil needs to be educated.
14        (3) That a significant infusion of new revenue is
15    necessary in order to fully fund the foundation level and
16    to maintain and support education in Illinois.
17        (4) That the decline of the Illinois horse racing and
18    breeding program, a $2.5 billion industry, would be
19    reversed if this amendatory Act of the 100th General
20    Assembly would be enacted.
21        (5) That the Illinois horse racing industry is on the
22    verge of extinction due to fierce competition from fully
23    developed horse racing and gaming operations in other
24    states.

 

 

HB5146- 48 -LRB100 18631 SMS 33856 b

1        (6) That allowing the State's horse racing venues,
2    currently licensed gaming destinations, to maximize their
3    capacities with gaming machines, would generate up to $120
4    million to $200 million for the State in the form of extra
5    licensing fees, plus an additional $100 million to $300
6    million in recurring annual tax revenue for the State to
7    help ensure that school, road, and other building projects
8    promised under the capital plan occur on schedule.
9        (7) That Illinois agriculture and other businesses
10    that support and supply the horse racing industry, already
11    a sector that employs over 37,000 Illinoisans, also stand
12    to substantially benefit and would be much more likely to
13    create additional jobs should Illinois horse racing once
14    again become competitive with other states.
15        (8) That by keeping these projects on track, the State
16    can be sure that significant job and economic growth will
17    in fact result from the previously enacted legislation.
18        (9) That gaming machines at Illinois horse racing
19    tracks would create an estimated 1,200 to 1,500 permanent
20    jobs, and an estimated capital investment of up to $200
21    million to $400 million at these race tracks would prompt
22    additional trade organization jobs necessary to construct
23    new facilities or remodel race tracks to operate electronic
24    gaming.
 
25    Section 90-3. The State Officials and Employees Ethics Act

 

 

HB5146- 49 -LRB100 18631 SMS 33856 b

1is amended by changing Section 5-45 as follows:
 
2    (5 ILCS 430/5-45)
3    Sec. 5-45. Procurement; revolving door prohibition.
4    (a) No former officer, member, or State employee, or spouse
5or immediate family member living with such person, shall,
6within a period of one year immediately after termination of
7State employment, knowingly accept employment or receive
8compensation or fees for services from a person or entity if
9the officer, member, or State employee, during the year
10immediately preceding termination of State employment,
11participated personally and substantially in the award of State
12contracts, or the issuance of State contract change orders,
13with a cumulative value of $25,000 or more to the person or
14entity, or its parent or subsidiary.
15    (b) No former officer of the executive branch or State
16employee of the executive branch with regulatory or licensing
17authority, or spouse or immediate family member living with
18such person, shall, within a period of one year immediately
19after termination of State employment, knowingly accept
20employment or receive compensation or fees for services from a
21person or entity if the officer or State employee, during the
22year immediately preceding termination of State employment,
23participated personally and substantially in making a
24regulatory or licensing decision that directly applied to the
25person or entity, or its parent or subsidiary.

 

 

HB5146- 50 -LRB100 18631 SMS 33856 b

1    (c) Within 6 months after the effective date of this
2amendatory Act of the 96th General Assembly, each executive
3branch constitutional officer and legislative leader, the
4Auditor General, and the Joint Committee on Legislative Support
5Services shall adopt a policy delineating which State positions
6under his or her jurisdiction and control, by the nature of
7their duties, may have the authority to participate personally
8and substantially in the award of State contracts or in
9regulatory or licensing decisions. The Governor shall adopt
10such a policy for all State employees of the executive branch
11not under the jurisdiction and control of any other executive
12branch constitutional officer.
13    The policies required under subsection (c) of this Section
14shall be filed with the appropriate ethics commission
15established under this Act or, for the Auditor General, with
16the Office of the Auditor General.
17    (d) Each Inspector General shall have the authority to
18determine that additional State positions under his or her
19jurisdiction, not otherwise subject to the policies required by
20subsection (c) of this Section, are nonetheless subject to the
21notification requirement of subsection (f) below due to their
22involvement in the award of State contracts or in regulatory or
23licensing decisions.
24    (e) The Joint Committee on Legislative Support Services,
25the Auditor General, and each of the executive branch
26constitutional officers and legislative leaders subject to

 

 

HB5146- 51 -LRB100 18631 SMS 33856 b

1subsection (c) of this Section shall provide written
2notification to all employees in positions subject to the
3policies required by subsection (c) or a determination made
4under subsection (d): (1) upon hiring, promotion, or transfer
5into the relevant position; and (2) at the time the employee's
6duties are changed in such a way as to qualify that employee.
7An employee receiving notification must certify in writing that
8the person was advised of the prohibition and the requirement
9to notify the appropriate Inspector General in subsection (f).
10    (f) Any State employee in a position subject to the
11policies required by subsection (c) or to a determination under
12subsection (d), but who does not fall within the prohibition of
13subsection (h) below, who is offered non-State employment
14during State employment or within a period of one year
15immediately after termination of State employment shall, prior
16to accepting such non-State employment, notify the appropriate
17Inspector General. Within 10 calendar days after receiving
18notification from an employee in a position subject to the
19policies required by subsection (c), such Inspector General
20shall make a determination as to whether the State employee is
21restricted from accepting such employment by subsection (a) or
22(b). In making a determination, in addition to any other
23relevant information, an Inspector General shall assess the
24effect of the prospective employment or relationship upon
25decisions referred to in subsections (a) and (b), based on the
26totality of the participation by the former officer, member, or

 

 

HB5146- 52 -LRB100 18631 SMS 33856 b

1State employee in those decisions. A determination by an
2Inspector General must be in writing, signed and dated by the
3Inspector General, and delivered to the subject of the
4determination within 10 calendar days or the person is deemed
5eligible for the employment opportunity. For purposes of this
6subsection, "appropriate Inspector General" means (i) for
7members and employees of the legislative branch, the
8Legislative Inspector General; (ii) for the Auditor General and
9employees of the Office of the Auditor General, the Inspector
10General provided for in Section 30-5 of this Act; and (iii) for
11executive branch officers and employees, the Inspector General
12having jurisdiction over the officer or employee. Notice of any
13determination of an Inspector General and of any such appeal
14shall be given to the ultimate jurisdictional authority, the
15Attorney General, and the Executive Ethics Commission.
16    (g) An Inspector General's determination regarding
17restrictions under subsection (a) or (b) may be appealed to the
18appropriate Ethics Commission by the person subject to the
19decision or the Attorney General no later than the 10th
20calendar day after the date of the determination.
21    On appeal, the Ethics Commission or Auditor General shall
22seek, accept, and consider written public comments regarding a
23determination. In deciding whether to uphold an Inspector
24General's determination, the appropriate Ethics Commission or
25Auditor General shall assess, in addition to any other relevant
26information, the effect of the prospective employment or

 

 

HB5146- 53 -LRB100 18631 SMS 33856 b

1relationship upon the decisions referred to in subsections (a)
2and (b), based on the totality of the participation by the
3former officer, member, or State employee in those decisions.
4The Ethics Commission shall decide whether to uphold an
5Inspector General's determination within 10 calendar days or
6the person is deemed eligible for the employment opportunity.
7    (h) The following officers, members, or State employees
8shall not, within a period of one year immediately after
9termination of office or State employment, knowingly accept
10employment or receive compensation or fees for services from a
11person or entity if the person or entity or its parent or
12subsidiary, during the year immediately preceding termination
13of State employment, was a party to a State contract or
14contracts with a cumulative value of $25,000 or more involving
15the officer, member, or State employee's State agency, or was
16the subject of a regulatory or licensing decision involving the
17officer, member, or State employee's State agency, regardless
18of whether he or she participated personally and substantially
19in the award of the State contract or contracts or the making
20of the regulatory or licensing decision in question:
21        (1) members or officers;
22        (2) members of a commission or board created by the
23    Illinois Constitution;
24        (3) persons whose appointment to office is subject to
25    the advice and consent of the Senate;
26        (4) the head of a department, commission, board,

 

 

HB5146- 54 -LRB100 18631 SMS 33856 b

1    division, bureau, authority, or other administrative unit
2    within the government of this State;
3        (5) chief procurement officers, State purchasing
4    officers, and their designees whose duties are directly
5    related to State procurement; and
6        (6) chiefs of staff, deputy chiefs of staff, associate
7    chiefs of staff, assistant chiefs of staff, and deputy
8    governors; .
9        (7) employees of the Illinois Racing Board; and
10        (8) employees of the Illinois Gaming Board.
11    (i) For the purposes of this Section, with respect to
12officers or employees of a regional transit board, as defined
13in this Act, the phrase "person or entity" does not include:
14(i) the United States government, (ii) the State, (iii)
15municipalities, as defined under Article VII, Section 1 of the
16Illinois Constitution, (iv) units of local government, as
17defined under Article VII, Section 1 of the Illinois
18Constitution, or (v) school districts.
19(Source: P.A. 96-555, eff. 8-18-09; 97-653, eff. 1-13-12.)
 
20    Section 90-5. The Alcoholism and Other Drug Abuse and
21Dependency Act is amended by changing Section 5-20 as follows:
 
22    (20 ILCS 301/5-20)
23    Sec. 5-20. Compulsive gambling program.
24    (a) Subject to appropriation, the Department shall

 

 

HB5146- 55 -LRB100 18631 SMS 33856 b

1establish a program for public education, research, and
2training regarding problem and compulsive gambling and the
3treatment and prevention of problem and compulsive gambling.
4Subject to specific appropriation for these stated purposes,
5the program must include all of the following:
6        (1) Establishment and maintenance of a toll-free "800"
7    telephone number to provide crisis counseling and referral
8    services to families experiencing difficulty as a result of
9    problem or compulsive gambling.
10        (2) Promotion of public awareness regarding the
11    recognition and prevention of problem and compulsive
12    gambling.
13        (3) Facilitation, through in-service training and
14    other means, of the availability of effective assistance
15    programs for problem and compulsive gamblers.
16        (4) Conducting studies to identify adults and
17    juveniles in this State who are, or who are at risk of
18    becoming, problem or compulsive gamblers.
19    (b) Subject to appropriation, the Department shall either
20establish and maintain the program or contract with a private
21or public entity for the establishment and maintenance of the
22program. Subject to appropriation, either the Department or the
23private or public entity shall implement the toll-free
24telephone number, promote public awareness, and conduct
25in-service training concerning problem and compulsive
26gambling.

 

 

HB5146- 56 -LRB100 18631 SMS 33856 b

1    (c) Subject to appropriation, the Department shall produce
2and supply the signs specified in Section 10.7 of the Illinois
3Lottery Law, Section 34.1 of the Illinois Horse Racing Act of
41975, Section 4.3 of the Bingo License and Tax Act, Section 8.1
5of the Charitable Games Act, and Section 13.1 of the Illinois
6Riverboat Gambling Act.
7(Source: P.A. 89-374, eff. 1-1-96; 89-626, eff. 8-9-96.)
 
8    Section 90-6. The Department of Commerce and Economic
9Opportunity Law of the Civil Administrative Code of Illinois is
10amended by adding Sections 605-530 and 605-535 as follows:
 
11    (20 ILCS 605/605-530 new)
12    Sec. 605-530. The Depressed Communities Economic
13Development Board.
14    (a) The Depressed Communities Economic Development Board
15is created as an advisory board within the Department of
16Commerce and Economic Opportunity. The Board shall consist of
17the following members:
18        (1) 3 members appointed by the Governor, one of whom
19    shall be appointed to serve an initial term of one year and
20    2 of whom shall be appointed to serve an initial term of 2
21    years;
22        (2) 2 members appointed by the Speaker of the House of
23    Representatives, one of whom shall be appointed to serve an
24    initial term of one year and one of whom shall be appointed

 

 

HB5146- 57 -LRB100 18631 SMS 33856 b

1    to serve an initial term of 2 years;
2        (3) 2 members appointed by the President of the Senate,
3    one of whom shall be appointed to serve an initial term of
4    one year and one of whom shall be appointed to serve an
5    initial term of 2 years;
6        (4) 2 members appointed by the Minority Leader of the
7    House of Representatives, one of whom shall be appointed to
8    serve an initial term of one year and one of whom shall be
9    appointed to serve an initial term of 2 years; and
10        (5) 2 members appointed by the Minority Leader of the
11    Senate, one of whom shall be appointed to serve an initial
12    term of one year and one of whom shall be appointed to
13    serve an initial term of 2 years.
14    The members of the Board shall elect a member to serve as
15chair of the Board. The members of the Board shall reflect the
16composition of the Illinois population with regard to ethnic
17and racial composition.
18    After the initial terms, each member shall be appointed to
19serve a term of 2 years and until his or her successor has been
20appointed and assumes office. If a vacancy occurs in the Board
21membership, then the vacancy shall be filled in the same manner
22as the initial appointment. No member of the Board shall, at
23the time of his or her appointment or within 2 years before the
24appointment, hold elected office or be appointed to a State
25board, commission, or agency. All Board members are subject to
26the State Officials and Employees Ethics Act.

 

 

HB5146- 58 -LRB100 18631 SMS 33856 b

1    (b) Board members shall serve without compensation, but may
2be reimbursed for their reasonable travel expenses from funds
3available for that purpose. The Department of Commerce and
4Economic Opportunity shall provide staff and administrative
5support services to the Board.
6    (c) The Board must make recommendations, which must be
7approved by a majority of the Board, to the Department of
8Commerce and Economic Opportunity concerning the award of
9grants from amounts appropriated to the Department from the
10Depressed Communities Economic Development Fund, a special
11fund created in the State treasury. The Department must make
12grants to public or private entities submitting proposals to
13the Board to revitalize an Illinois depressed community. Grants
14may be used by these entities only for those purposes
15conditioned with the grant. For the purposes of this subsection
16(c), plans for revitalizing an Illinois depressed community
17include plans intended to curb high levels of poverty,
18unemployment, job and population loss, and general distress. An
19Illinois depressed community is an area where the poverty rate,
20as determined by using the most recent data released by the
21United States Census Bureau, is at least 3% greater than the
22State poverty rate as determined by using the most recent data
23released by the United States Census Bureau.
 
24    (20 ILCS 605/605-535 new)
25    Sec. 605-535. The Commission on the Future of Economic

 

 

HB5146- 59 -LRB100 18631 SMS 33856 b

1Development of the Latino Community.
2    (a) There is hereby created the Commission on the Future of
3Economic Development of the Latino Community within the
4Department. The purpose of the Commission shall be to maintain
5and develop the economy of Latinos and to provide opportunities
6for this community, which will enhance and expand the quality
7of their lives.
8    The Commission shall concentrate its major efforts on
9strategic planning, policy research and analysis, advocacy,
10evaluation, and promoting coordination and collaboration.
11    During each regular legislative session, the Commission
12must consult with appropriate legislative committees about the
13State's economic development needs and opportunities in the
14Latino community.
15    By October 1st of each even-numbered year, the Commission
16must submit to the Governor and the General Assembly a biennial
17comprehensive statewide economic development strategy for the
18Latino community with a report on progress from the previous
19comprehensive strategy.
20    The comprehensive statewide economic development strategy
21may include, but is not limited to:
22        (1) an assessment of the Latino community's economic
23    vitality;
24        (2) recommended goals, objectives, and priorities for
25    the next biennium and the future;
26        (3) a common set of outcomes and benchmarks for the

 

 

HB5146- 60 -LRB100 18631 SMS 33856 b

1    economic development system as a whole for the Latino
2    community;
3        (4) recommendations for removing barriers for Latinos
4    in employment;
5        (5) an inventory of existing relevant programs
6    compiled by the Commission from materials submitted by
7    agencies;
8        (6) recommendations for expanding, discontinuing, or
9    redirecting existing programs or adding new programs to
10    better serve the Latino community; and
11        (7) recommendations of best practices and public and
12    private sector roles in implementing the comprehensive
13    statewide economic development strategy.
14    In developing the biennial statewide economic development
15strategy, goals, objectives, priorities, and recommendations,
16the Commission shall consult, collaborate, and coordinate with
17relevant State agencies, private sector business, nonprofit
18organizations involved in economic development, trade
19associations, associate development organizations, and
20relevant local organizations in order to avoid duplication of
21effort.
22    State agencies shall cooperate with the Commission and
23provide information as the Commission may reasonably request.
24    The Commission shall review and make budget
25recommendations to the Governor's Office of Management and
26Budget and the General Assembly in areas relating to the

 

 

HB5146- 61 -LRB100 18631 SMS 33856 b

1economic development in the State's Latino community.
2    The Commission shall evaluate its own performance on a
3regular basis.
4    The Commission may accept gifts, grants, donations,
5sponsorships, or contributions from any federal, State, or
6local governmental agency or program, or any private source,
7and expend the same for any purpose consistent with this
8Section.
9    (b) The Commission shall consist of 12 voting members,
10appointed by the Governor, 4 of whom shall be appointed to
11serve an initial term of one year, 4 of whom shall be appointed
12to serve an initial term of 2 years, and 4 of whom shall be
13appointed to serve an initial term of 3 years. After the
14initial term, each member shall be appointed to a term of 3
15years. Members of the Commission shall serve at the pleasure of
16the Governor for not more than 2 consecutive 3-year terms. In
17appointing members, the Governor shall appoint individuals
18from the following private industry sectors:
19        (1) production agriculture;
20        (2) at least 2 individuals from manufacturing, one of
21    whom shall represent a company with no more than 75
22    employees;
23        (3) transportation, construction, and logistics;
24        (4) travel and tourism;
25        (5) financial services and insurance;
26        (6) information technology and communications; and

 

 

HB5146- 62 -LRB100 18631 SMS 33856 b

1        (7) biotechnology.
2    The members of the Commission shall choose a member to
3serve as chair of the Commission. The members of the Commission
4shall be representative, to the extent possible, of the various
5geographic areas of the State. The Director shall serve as an
6ad hoc nonvoting member of the Commission. Vacancies shall be
7filled in the same manner as the original appointments. The
8members of the Commission shall serve without compensation.
9    (c) The Commission shall meet at least 4 times per year,
10with at least one meeting each calendar quarter, at the call of
11the director or 4 voting members of the Commission. The staff
12and support for the Commission shall be provided by the
13Department.
14    (d) The Commission and Department are encouraged to involve
15other essential groups in the work of the Commission,
16including, but not limited to:
17        (1) public universities;
18        (2) community colleges;
19        (3) other educational institutions; and
20        (4) the Department of Labor.
21    (e) The Commission shall make recommendations, which must
22be approved by a majority of the members of the Commission, to
23the Department concerning the award of grants from amounts
24appropriated to the Department from the Latino Community
25Economic Development Fund, a special fund in the State
26treasury. The Department shall make grants to public or private

 

 

HB5146- 63 -LRB100 18631 SMS 33856 b

1entities submitting proposals to the Commission to assist in
2the economic development of the Latino community. Grants may be
3used by these entities only for those purposes conditioned with
4the grant. The Commission shall coordinate with the Department
5to develop grant criteria.
6    (f) For the purposes of this Section:
7    "Department" means the Department of Commerce and Economic
8Development.
9    "Director" means the Director of Commerce and Economic
10Development.
11    "Educational institutions" means nonprofit public and
12private colleges, community colleges, State colleges, and
13universities in this State.
 
14    Section 90-8. The Illinois Lottery Law is amended by
15changing Section 9.1 as follows:
 
16    (20 ILCS 1605/9.1)
17    Sec. 9.1. Private manager and management agreement.
18    (a) As used in this Section:
19    "Offeror" means a person or group of persons that responds
20to a request for qualifications under this Section.
21    "Request for qualifications" means all materials and
22documents prepared by the Department to solicit the following
23from offerors:
24        (1) Statements of qualifications.

 

 

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1        (2) Proposals to enter into a management agreement,
2    including the identity of any prospective vendor or vendors
3    that the offeror intends to initially engage to assist the
4    offeror in performing its obligations under the management
5    agreement.
6    "Final offer" means the last proposal submitted by an
7offeror in response to the request for qualifications,
8including the identity of any prospective vendor or vendors
9that the offeror intends to initially engage to assist the
10offeror in performing its obligations under the management
11agreement.
12    "Final offeror" means the offeror ultimately selected by
13the Governor to be the private manager for the Lottery under
14subsection (h) of this Section.
15    (b) By September 15, 2010, the Governor shall select a
16private manager for the total management of the Lottery with
17integrated functions, such as lottery game design, supply of
18goods and services, and advertising and as specified in this
19Section.
20    (c) Pursuant to the terms of this subsection, the
21Department shall endeavor to expeditiously terminate the
22existing contracts in support of the Lottery in effect on the
23effective date of this amendatory Act of the 96th General
24Assembly in connection with the selection of the private
25manager. As part of its obligation to terminate these contracts
26and select the private manager, the Department shall establish

 

 

HB5146- 65 -LRB100 18631 SMS 33856 b

1a mutually agreeable timetable to transfer the functions of
2existing contractors to the private manager so that existing
3Lottery operations are not materially diminished or impaired
4during the transition. To that end, the Department shall do the
5following:
6        (1) where such contracts contain a provision
7    authorizing termination upon notice, the Department shall
8    provide notice of termination to occur upon the mutually
9    agreed timetable for transfer of functions;
10        (2) upon the expiration of any initial term or renewal
11    term of the current Lottery contracts, the Department shall
12    not renew such contract for a term extending beyond the
13    mutually agreed timetable for transfer of functions; or
14        (3) in the event any current contract provides for
15    termination of that contract upon the implementation of a
16    contract with the private manager, the Department shall
17    perform all necessary actions to terminate the contract on
18    the date that coincides with the mutually agreed timetable
19    for transfer of functions.
20    If the contracts to support the current operation of the
21Lottery in effect on the effective date of this amendatory Act
22of the 96th General Assembly are not subject to termination as
23provided for in this subsection (c), then the Department may
24include a provision in the contract with the private manager
25specifying a mutually agreeable methodology for incorporation.
26    (c-5) The Department shall include provisions in the

 

 

HB5146- 66 -LRB100 18631 SMS 33856 b

1management agreement whereby the private manager shall, for a
2fee, and pursuant to a contract negotiated with the Department
3(the "Employee Use Contract"), utilize the services of current
4Department employees to assist in the administration and
5operation of the Lottery. The Department shall be the employer
6of all such bargaining unit employees assigned to perform such
7work for the private manager, and such employees shall be State
8employees, as defined by the Personnel Code. Department
9employees shall operate under the same employment policies,
10rules, regulations, and procedures, as other employees of the
11Department. In addition, neither historical representation
12rights under the Illinois Public Labor Relations Act, nor
13existing collective bargaining agreements, shall be disturbed
14by the management agreement with the private manager for the
15management of the Lottery.
16    (d) The management agreement with the private manager shall
17include all of the following:
18        (1) A term not to exceed 10 years, including any
19    renewals.
20        (2) A provision specifying that the Department:
21            (A) shall exercise actual control over all
22        significant business decisions;
23            (A-5) has the authority to direct or countermand
24        operating decisions by the private manager at any time;
25            (B) has ready access at any time to information
26        regarding Lottery operations;

 

 

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1            (C) has the right to demand and receive information
2        from the private manager concerning any aspect of the
3        Lottery operations at any time; and
4            (D) retains ownership of all trade names,
5        trademarks, and intellectual property associated with
6        the Lottery.
7        (3) A provision imposing an affirmative duty on the
8    private manager to provide the Department with material
9    information and with any information the private manager
10    reasonably believes the Department would want to know to
11    enable the Department to conduct the Lottery.
12        (4) A provision requiring the private manager to
13    provide the Department with advance notice of any operating
14    decision that bears significantly on the public interest,
15    including, but not limited to, decisions on the kinds of
16    games to be offered to the public and decisions affecting
17    the relative risk and reward of the games being offered, so
18    the Department has a reasonable opportunity to evaluate and
19    countermand that decision.
20        (5) A provision providing for compensation of the
21    private manager that may consist of, among other things, a
22    fee for services and a performance based bonus as
23    consideration for managing the Lottery, including terms
24    that may provide the private manager with an increase in
25    compensation if Lottery revenues grow by a specified
26    percentage in a given year.

 

 

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1        (6) (Blank).
2        (7) A provision requiring the deposit of all Lottery
3    proceeds to be deposited into the State Lottery Fund except
4    as otherwise provided in Section 20 of this Act.
5        (8) A provision requiring the private manager to locate
6    its principal office within the State.
7        (8-5) A provision encouraging that at least 20% of the
8    cost of contracts entered into for goods and services by
9    the private manager in connection with its management of
10    the Lottery, other than contracts with sales agents or
11    technical advisors, be awarded to businesses that are a
12    minority-owned business, a women-owned business, or a
13    business owned by a person with disability, as those terms
14    are defined in the Business Enterprise for Minorities,
15    Women, and Persons with Disabilities Act.
16        (9) A requirement that so long as the private manager
17    complies with all the conditions of the agreement under the
18    oversight of the Department, the private manager shall have
19    the following duties and obligations with respect to the
20    management of the Lottery:
21            (A) The right to use equipment and other assets
22        used in the operation of the Lottery.
23            (B) The rights and obligations under contracts
24        with retailers and vendors.
25            (C) The implementation of a comprehensive security
26        program by the private manager.

 

 

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1            (D) The implementation of a comprehensive system
2        of internal audits.
3            (E) The implementation of a program by the private
4        manager to curb compulsive gambling by persons playing
5        the Lottery.
6            (F) A system for determining (i) the type of
7        Lottery games, (ii) the method of selecting winning
8        tickets, (iii) the manner of payment of prizes to
9        holders of winning tickets, (iv) the frequency of
10        drawings of winning tickets, (v) the method to be used
11        in selling tickets, (vi) a system for verifying the
12        validity of tickets claimed to be winning tickets,
13        (vii) the basis upon which retailer commissions are
14        established by the manager, and (viii) minimum
15        payouts.
16        (10) A requirement that advertising and promotion must
17    be consistent with Section 7.8a of this Act.
18        (11) A requirement that the private manager market the
19    Lottery to those residents who are new, infrequent, or
20    lapsed players of the Lottery, especially those who are
21    most likely to make regular purchases on the Internet as
22    permitted by law.
23        (12) A code of ethics for the private manager's
24    officers and employees.
25        (13) A requirement that the Department monitor and
26    oversee the private manager's practices and take action

 

 

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1    that the Department considers appropriate to ensure that
2    the private manager is in compliance with the terms of the
3    management agreement, while allowing the manager, unless
4    specifically prohibited by law or the management
5    agreement, to negotiate and sign its own contracts with
6    vendors.
7        (14) A provision requiring the private manager to
8    periodically file, at least on an annual basis, appropriate
9    financial statements in a form and manner acceptable to the
10    Department.
11        (15) Cash reserves requirements.
12        (16) Procedural requirements for obtaining the prior
13    approval of the Department when a management agreement or
14    an interest in a management agreement is sold, assigned,
15    transferred, or pledged as collateral to secure financing.
16        (17) Grounds for the termination of the management
17    agreement by the Department or the private manager.
18        (18) Procedures for amendment of the agreement.
19        (19) A provision requiring the private manager to
20    engage in an open and competitive bidding process for any
21    procurement having a cost in excess of $50,000 that is not
22    a part of the private manager's final offer. The process
23    shall favor the selection of a vendor deemed to have
24    submitted a proposal that provides the Lottery with the
25    best overall value. The process shall not be subject to the
26    provisions of the Illinois Procurement Code, unless

 

 

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1    specifically required by the management agreement.
2        (20) The transition of rights and obligations,
3    including any associated equipment or other assets used in
4    the operation of the Lottery, from the manager to any
5    successor manager of the lottery, including the
6    Department, following the termination of or foreclosure
7    upon the management agreement.
8        (21) Right of use of copyrights, trademarks, and
9    service marks held by the Department in the name of the
10    State. The agreement must provide that any use of them by
11    the manager shall only be for the purpose of fulfilling its
12    obligations under the management agreement during the term
13    of the agreement.
14        (22) The disclosure of any information requested by the
15    Department to enable it to comply with the reporting
16    requirements and information requests provided for under
17    subsection (p) of this Section.
18    (e) Notwithstanding any other law to the contrary, the
19Department shall select a private manager through a competitive
20request for qualifications process consistent with Section
2120-35 of the Illinois Procurement Code, which shall take into
22account:
23        (1) the offeror's ability to market the Lottery to
24    those residents who are new, infrequent, or lapsed players
25    of the Lottery, especially those who are most likely to
26    make regular purchases on the Internet;

 

 

HB5146- 72 -LRB100 18631 SMS 33856 b

1        (2) the offeror's ability to address the State's
2    concern with the social effects of gambling on those who
3    can least afford to do so;
4        (3) the offeror's ability to provide the most
5    successful management of the Lottery for the benefit of the
6    people of the State based on current and past business
7    practices or plans of the offeror; and
8        (4) the offeror's poor or inadequate past performance
9    in servicing, equipping, operating or managing a lottery on
10    behalf of Illinois, another State or foreign government and
11    attracting persons who are not currently regular players of
12    a lottery.
13    (f) The Department may retain the services of an advisor or
14advisors with significant experience in financial services or
15the management, operation, and procurement of goods, services,
16and equipment for a government-run lottery to assist in the
17preparation of the terms of the request for qualifications and
18selection of the private manager. Any prospective advisor
19seeking to provide services under this subsection (f) shall
20disclose any material business or financial relationship
21during the past 3 years with any potential offeror, or with a
22contractor or subcontractor presently providing goods,
23services, or equipment to the Department to support the
24Lottery. The Department shall evaluate the material business or
25financial relationship of each prospective advisor. The
26Department shall not select any prospective advisor with a

 

 

HB5146- 73 -LRB100 18631 SMS 33856 b

1substantial business or financial relationship that the
2Department deems to impair the objectivity of the services to
3be provided by the prospective advisor. During the course of
4the advisor's engagement by the Department, and for a period of
5one year thereafter, the advisor shall not enter into any
6business or financial relationship with any offeror or any
7vendor identified to assist an offeror in performing its
8obligations under the management agreement. Any advisor
9retained by the Department shall be disqualified from being an
10offeror. The Department shall not include terms in the request
11for qualifications that provide a material advantage whether
12directly or indirectly to any potential offeror, or any
13contractor or subcontractor presently providing goods,
14services, or equipment to the Department to support the
15Lottery, including terms contained in previous responses to
16requests for proposals or qualifications submitted to
17Illinois, another State or foreign government when those terms
18are uniquely associated with a particular potential offeror,
19contractor, or subcontractor. The request for proposals
20offered by the Department on December 22, 2008 as
21"LOT08GAMESYS" and reference number "22016176" is declared
22void.
23    (g) The Department shall select at least 2 offerors as
24finalists to potentially serve as the private manager no later
25than August 9, 2010. Upon making preliminary selections, the
26Department shall schedule a public hearing on the finalists'

 

 

HB5146- 74 -LRB100 18631 SMS 33856 b

1proposals and provide public notice of the hearing at least 7
2calendar days before the hearing. The notice must include all
3of the following:
4        (1) The date, time, and place of the hearing.
5        (2) The subject matter of the hearing.
6        (3) A brief description of the management agreement to
7    be awarded.
8        (4) The identity of the offerors that have been
9    selected as finalists to serve as the private manager.
10        (5) The address and telephone number of the Department.
11    (h) At the public hearing, the Department shall (i) provide
12sufficient time for each finalist to present and explain its
13proposal to the Department and the Governor or the Governor's
14designee, including an opportunity to respond to questions
15posed by the Department, Governor, or designee and (ii) allow
16the public and non-selected offerors to comment on the
17presentations. The Governor or a designee shall attend the
18public hearing. After the public hearing, the Department shall
19have 14 calendar days to recommend to the Governor whether a
20management agreement should be entered into with a particular
21finalist. After reviewing the Department's recommendation, the
22Governor may accept or reject the Department's recommendation,
23and shall select a final offeror as the private manager by
24publication of a notice in the Illinois Procurement Bulletin on
25or before September 15, 2010. The Governor shall include in the
26notice a detailed explanation and the reasons why the final

 

 

HB5146- 75 -LRB100 18631 SMS 33856 b

1offeror is superior to other offerors and will provide
2management services in a manner that best achieves the
3objectives of this Section. The Governor shall also sign the
4management agreement with the private manager.
5    (i) Any action to contest the private manager selected by
6the Governor under this Section must be brought within 7
7calendar days after the publication of the notice of the
8designation of the private manager as provided in subsection
9(h) of this Section.
10    (j) The Lottery shall remain, for so long as a private
11manager manages the Lottery in accordance with provisions of
12this Act, a Lottery conducted by the State, and the State shall
13not be authorized to sell or transfer the Lottery to a third
14party.
15    (k) Any tangible personal property used exclusively in
16connection with the lottery that is owned by the Department and
17leased to the private manager shall be owned by the Department
18in the name of the State and shall be considered to be public
19property devoted to an essential public and governmental
20function.
21    (l) The Department may exercise any of its powers under
22this Section or any other law as necessary or desirable for the
23execution of the Department's powers under this Section.
24    (m) Neither this Section nor any management agreement
25entered into under this Section prohibits the General Assembly
26from authorizing forms of gambling that are not in direct

 

 

HB5146- 76 -LRB100 18631 SMS 33856 b

1competition with the Lottery. The forms of gambling authorized
2by this amendatory Act of the 100th General Assembly constitute
3authorized forms of gambling that are not in direct competition
4with the Lottery.
5    (n) The private manager shall be subject to a complete
6investigation in the third, seventh, and tenth years of the
7agreement (if the agreement is for a 10-year term) by the
8Department in cooperation with the Auditor General to determine
9whether the private manager has complied with this Section and
10the management agreement. The private manager shall bear the
11cost of an investigation or reinvestigation of the private
12manager under this subsection.
13    (o) The powers conferred by this Section are in addition
14and supplemental to the powers conferred by any other law. If
15any other law or rule is inconsistent with this Section,
16including, but not limited to, provisions of the Illinois
17Procurement Code, then this Section controls as to any
18management agreement entered into under this Section. This
19Section and any rules adopted under this Section contain full
20and complete authority for a management agreement between the
21Department and a private manager. No law, procedure,
22proceeding, publication, notice, consent, approval, order, or
23act by the Department or any other officer, Department, agency,
24or instrumentality of the State or any political subdivision is
25required for the Department to enter into a management
26agreement under this Section. This Section contains full and

 

 

HB5146- 77 -LRB100 18631 SMS 33856 b

1complete authority for the Department to approve any contracts
2entered into by a private manager with a vendor providing
3goods, services, or both goods and services to the private
4manager under the terms of the management agreement, including
5subcontractors of such vendors.
6    Upon receipt of a written request from the Chief
7Procurement Officer, the Department shall provide to the Chief
8Procurement Officer a complete and un-redacted copy of the
9management agreement or any contract that is subject to the
10Department's approval authority under this subsection (o). The
11Department shall provide a copy of the agreement or contract to
12the Chief Procurement Officer in the time specified by the
13Chief Procurement Officer in his or her written request, but no
14later than 5 business days after the request is received by the
15Department. The Chief Procurement Officer must retain any
16portions of the management agreement or of any contract
17designated by the Department as confidential, proprietary, or
18trade secret information in complete confidence pursuant to
19subsection (g) of Section 7 of the Freedom of Information Act.
20The Department shall also provide the Chief Procurement Officer
21with reasonable advance written notice of any contract that is
22pending Department approval.
23    Notwithstanding any other provision of this Section to the
24contrary, the Chief Procurement Officer shall adopt
25administrative rules, including emergency rules, to establish
26a procurement process to select a successor private manager if

 

 

HB5146- 78 -LRB100 18631 SMS 33856 b

1a private management agreement has been terminated. The
2selection process shall at a minimum take into account the
3criteria set forth in items (1) through (4) of subsection (e)
4of this Section and may include provisions consistent with
5subsections (f), (g), (h), and (i) of this Section. The Chief
6Procurement Officer shall also implement and administer the
7adopted selection process upon the termination of a private
8management agreement. The Department, after the Chief
9Procurement Officer certifies that the procurement process has
10been followed in accordance with the rules adopted under this
11subsection (o), shall select a final offeror as the private
12manager and sign the management agreement with the private
13manager.
14    Except as provided in Sections 21.5, 21.6, 21.7, 21.8, and
1521.9, the Department shall distribute all proceeds of lottery
16tickets and shares sold in the following priority and manner:
17        (1) The payment of prizes and retailer bonuses.
18        (2) The payment of costs incurred in the operation and
19    administration of the Lottery, including the payment of
20    sums due to the private manager under the management
21    agreement with the Department.
22        (3) On the last day of each month or as soon thereafter
23    as possible, the State Comptroller shall direct and the
24    State Treasurer shall transfer from the State Lottery Fund
25    to the Common School Fund an amount that is equal to the
26    proceeds transferred in the corresponding month of fiscal

 

 

HB5146- 79 -LRB100 18631 SMS 33856 b

1    year 2009, as adjusted for inflation, to the Common School
2    Fund.
3        (4) On or before the last day of each fiscal year,
4    deposit any remaining proceeds, subject to payments under
5    items (1), (2), and (3) into the Capital Projects Fund each
6    fiscal year.
7    (p) The Department shall be subject to the following
8reporting and information request requirements:
9        (1) the Department shall submit written quarterly
10    reports to the Governor and the General Assembly on the
11    activities and actions of the private manager selected
12    under this Section;
13        (2) upon request of the Chief Procurement Officer, the
14    Department shall promptly produce information related to
15    the procurement activities of the Department and the
16    private manager requested by the Chief Procurement
17    Officer; the Chief Procurement Officer must retain
18    confidential, proprietary, or trade secret information
19    designated by the Department in complete confidence
20    pursuant to subsection (g) of Section 7 of the Freedom of
21    Information Act; and
22        (3) at least 30 days prior to the beginning of the
23    Department's fiscal year, the Department shall prepare an
24    annual written report on the activities of the private
25    manager selected under this Section and deliver that report
26    to the Governor and General Assembly.

 

 

HB5146- 80 -LRB100 18631 SMS 33856 b

1(Source: P.A. 99-933, eff. 1-27-17; 100-391, eff. 8-25-17.)
 
2    Section 90-10. The Department of Revenue Law of the Civil
3Administrative Code of Illinois is amended by changing Section
42505-305 as follows:
 
5    (20 ILCS 2505/2505-305)  (was 20 ILCS 2505/39b15.1)
6    Sec. 2505-305. Investigators.
7    (a) The Department has the power to appoint investigators
8to conduct all investigations, searches, seizures, arrests,
9and other duties imposed under the provisions of any law
10administered by the Department. Except as provided in
11subsection (c), these investigators have and may exercise all
12the powers of peace officers solely for the purpose of
13enforcing taxing measures administered by the Department.
14    (b) The Director must authorize to each investigator
15employed under this Section and to any other employee of the
16Department exercising the powers of a peace officer a distinct
17badge that, on its face, (i) clearly states that the badge is
18authorized by the Department and (ii) contains a unique
19identifying number. No other badge shall be authorized by the
20Department.
21    (c) The Department may enter into agreements with the
22Illinois Gaming Board providing that investigators appointed
23under this Section shall exercise the peace officer powers set
24forth in paragraph (20.6) of subsection (c) of Section 5 of the

 

 

HB5146- 81 -LRB100 18631 SMS 33856 b

1Illinois Riverboat Gambling Act.
2(Source: P.A. 96-37, eff. 7-13-09.)
 
3    Section 90-12. The Illinois State Auditing Act is amended
4by changing Section 3-1 as follows:
 
5    (30 ILCS 5/3-1)  (from Ch. 15, par. 303-1)
6    Sec. 3-1. Jurisdiction of Auditor General. The Auditor
7General has jurisdiction over all State agencies to make post
8audits and investigations authorized by or under this Act or
9the Constitution.
10    The Auditor General has jurisdiction over local government
11agencies and private agencies only:
12        (a) to make such post audits authorized by or under
13    this Act as are necessary and incidental to a post audit of
14    a State agency or of a program administered by a State
15    agency involving public funds of the State, but this
16    jurisdiction does not include any authority to review local
17    governmental agencies in the obligation, receipt,
18    expenditure or use of public funds of the State that are
19    granted without limitation or condition imposed by law,
20    other than the general limitation that such funds be used
21    for public purposes;
22        (b) to make investigations authorized by or under this
23    Act or the Constitution; and
24        (c) to make audits of the records of local government

 

 

HB5146- 82 -LRB100 18631 SMS 33856 b

1    agencies to verify actual costs of state-mandated programs
2    when directed to do so by the Legislative Audit Commission
3    at the request of the State Board of Appeals under the
4    State Mandates Act.
5    In addition to the foregoing, the Auditor General may
6conduct an audit of the Metropolitan Pier and Exposition
7Authority, the Regional Transportation Authority, the Suburban
8Bus Division, the Commuter Rail Division and the Chicago
9Transit Authority and any other subsidized carrier when
10authorized by the Legislative Audit Commission. Such audit may
11be a financial, management or program audit, or any combination
12thereof.
13    The audit shall determine whether they are operating in
14accordance with all applicable laws and regulations. Subject to
15the limitations of this Act, the Legislative Audit Commission
16may by resolution specify additional determinations to be
17included in the scope of the audit.
18    In addition to the foregoing, the Auditor General must also
19conduct a financial audit of the Illinois Sports Facilities
20Authority's expenditures of public funds in connection with the
21reconstruction, renovation, remodeling, extension, or
22improvement of all or substantially all of any existing
23"facility", as that term is defined in the Illinois Sports
24Facilities Authority Act.
25    The Auditor General may also conduct an audit, when
26authorized by the Legislative Audit Commission, of any hospital

 

 

HB5146- 83 -LRB100 18631 SMS 33856 b

1which receives 10% or more of its gross revenues from payments
2from the State of Illinois, Department of Healthcare and Family
3Services (formerly Department of Public Aid), Medical
4Assistance Program.
5    The Auditor General is authorized to conduct financial and
6compliance audits of the Illinois Distance Learning Foundation
7and the Illinois Conservation Foundation.
8    As soon as practical after the effective date of this
9amendatory Act of 1995, the Auditor General shall conduct a
10compliance and management audit of the City of Chicago and any
11other entity with regard to the operation of Chicago O'Hare
12International Airport, Chicago Midway Airport and Merrill C.
13Meigs Field. The audit shall include, but not be limited to, an
14examination of revenues, expenses, and transfers of funds;
15purchasing and contracting policies and practices; staffing
16levels; and hiring practices and procedures. When completed,
17the audit required by this paragraph shall be distributed in
18accordance with Section 3-14.
19    The Auditor General shall conduct a financial and
20compliance and program audit of distributions from the
21Municipal Economic Development Fund during the immediately
22preceding calendar year pursuant to Section 8-403.1 of the
23Public Utilities Act at no cost to the city, village, or
24incorporated town that received the distributions.
25    The Auditor General must conduct an audit of the Health
26Facilities and Services Review Board pursuant to Section 19.5

 

 

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1of the Illinois Health Facilities Planning Act.
2    The Auditor General must conduct an audit of the Chicago
3Casino Development Authority pursuant to Section 1-60 of the
4Chicago Casino Development Authority Act.
5    The Auditor General of the State of Illinois shall annually
6conduct or cause to be conducted a financial and compliance
7audit of the books and records of any county water commission
8organized pursuant to the Water Commission Act of 1985 and
9shall file a copy of the report of that audit with the Governor
10and the Legislative Audit Commission. The filed audit shall be
11open to the public for inspection. The cost of the audit shall
12be charged to the county water commission in accordance with
13Section 6z-27 of the State Finance Act. The county water
14commission shall make available to the Auditor General its
15books and records and any other documentation, whether in the
16possession of its trustees or other parties, necessary to
17conduct the audit required. These audit requirements apply only
18through July 1, 2007.
19    The Auditor General must conduct audits of the Rend Lake
20Conservancy District as provided in Section 25.5 of the River
21Conservancy Districts Act.
22    The Auditor General must conduct financial audits of the
23Southeastern Illinois Economic Development Authority as
24provided in Section 70 of the Southeastern Illinois Economic
25Development Authority Act.
26    The Auditor General shall conduct a compliance audit in

 

 

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1accordance with subsections (d) and (f) of Section 30 of the
2Innovation Development and Economy Act.
3(Source: P.A. 95-331, eff. 8-21-07; 96-31, eff. 6-30-09;
496-939, eff. 6-24-10.)
 
5    Section 90-15. The State Finance Act is amended by adding
6Sections 5.886, 5.887, 5.888, and 6z-105 and by changing
7Section 6z-45 as follows:
 
8    (30 ILCS 105/5.886 new)
9    Sec. 5.886. The Gaming Facilities Fee Revenue Fund.
 
10    (30 ILCS 105/5.887 new)
11    Sec. 5.887. The Depressed Communities Economic Development
12Fund.
 
13    (30 ILCS 105/5.888 new)
14    Sec. 5.888. The Latino Community Economic Development
15Fund.
 
16    (30 ILCS 105/6z-45)
17    Sec. 6z-45. The School Infrastructure Fund.
18    (a) The School Infrastructure Fund is created as a special
19fund in the State Treasury.
20    In addition to any other deposits authorized by law,
21beginning January 1, 2000, on the first day of each month, or

 

 

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1as soon thereafter as may be practical, the State Treasurer and
2State Comptroller shall transfer the sum of $5,000,000 from the
3General Revenue Fund to the School Infrastructure Fund, except
4that, notwithstanding any other provision of law, and in
5addition to any other transfers that may be provided for by
6law, before June 30, 2012, the Comptroller and the Treasurer
7shall transfer $45,000,000 from the General Revenue Fund into
8the School Infrastructure Fund, and, for fiscal year 2013 only,
9the Treasurer and the Comptroller shall transfer $1,250,000
10from the General Revenue Fund to the School Infrastructure Fund
11on the first day of each month; provided, however, that no such
12transfers shall be made from July 1, 2001 through June 30,
132003.
14    (a-5) Money in the School Infrastructure Fund may be used
15to pay the expenses of the State Board of Education, the
16Governor's Office of Management and Budget, and the Capital
17Development Board in administering programs under the School
18Construction Law, the total expenses not to exceed $1,315,000
19in any fiscal year.
20    (b) Subject to the transfer provisions set forth below,
21money in the School Infrastructure Fund shall, if and when the
22State of Illinois incurs any bonded indebtedness for the
23construction of school improvements under subsection (e) of
24Section 5 of the General Obligation Bond Act, be set aside and
25used for the purpose of paying and discharging annually the
26principal and interest on that bonded indebtedness then due and

 

 

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1payable, and for no other purpose.
2    In addition to other transfers to the General Obligation
3Bond Retirement and Interest Fund made pursuant to Section 15
4of the General Obligation Bond Act, upon each delivery of bonds
5issued for construction of school improvements under the School
6Construction Law, the State Comptroller shall compute and
7certify to the State Treasurer the total amount of principal
8of, interest on, and premium, if any, on such bonds during the
9then current and each succeeding fiscal year. With respect to
10the interest payable on variable rate bonds, such
11certifications shall be calculated at the maximum rate of
12interest that may be payable during the fiscal year, after
13taking into account any credits permitted in the related
14indenture or other instrument against the amount of such
15interest required to be appropriated for that period.
16    On or before the last day of each month, the State
17Treasurer and State Comptroller shall transfer from the School
18Infrastructure Fund to the General Obligation Bond Retirement
19and Interest Fund an amount sufficient to pay the aggregate of
20the principal of, interest on, and premium, if any, on the
21bonds payable on their next payment date, divided by the number
22of monthly transfers occurring between the last previous
23payment date (or the delivery date if no payment date has yet
24occurred) and the next succeeding payment date. Interest
25payable on variable rate bonds shall be calculated at the
26maximum rate of interest that may be payable for the relevant

 

 

HB5146- 88 -LRB100 18631 SMS 33856 b

1period, after taking into account any credits permitted in the
2related indenture or other instrument against the amount of
3such interest required to be appropriated for that period.
4Interest for which moneys have already been deposited into the
5capitalized interest account within the General Obligation
6Bond Retirement and Interest Fund shall not be included in the
7calculation of the amounts to be transferred under this
8subsection.
9    (b-5) The money deposited into the School Infrastructure
10Fund from transfers pursuant to subsections (c-30) and (c-35)
11of Section 13 of the Illinois Riverboat Gambling Act shall be
12applied, without further direction, as provided in subsection
13(b-3) of Section 5-35 of the School Construction Law.
14    (c) The surplus, if any, in the School Infrastructure Fund
15after payments made pursuant to subsections (a-5), (b), and
16(b-5) of this Section shall, subject to appropriation, be used
17as follows:
18    First - to make 3 payments to the School Technology
19Revolving Loan Fund as follows:
20        Transfer of $30,000,000 in fiscal year 1999;
21        Transfer of $20,000,000 in fiscal year 2000; and
22        Transfer of $10,000,000 in fiscal year 2001.
23    Second - to pay any amounts due for grants for school
24construction projects and debt service under the School
25Construction Law.
26    Third - to pay any amounts due for grants for school

 

 

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1maintenance projects under the School Construction Law.
2(Source: P.A. 100-23, eff. 7-6-17.)
 
3    (30 ILCS 105/6z-105 new)
4    Sec. 6z-105. The Gaming Facilities Fee Revenue Fund.
5    (a) The Gaming Facilities Fee Revenue Fund is created as a
6special fund in the State treasury.
7    (b) The revenues in the Fund shall be used, subject to
8appropriation, by the Comptroller for the purpose of providing
9appropriations to the Illinois Gaming Board for the
10administration and enforcement of the Illinois Gambling Act and
11the applicable provisions of the Chicago Casino Development
12Authority Act, with any remaining amounts being transferred to
13the General Revenue Fund.
14    (c) The Fund shall consist of fee revenues received
15pursuant to subsection (a) of Section 1-45 of the Chicago
16Casino Development Authority Act and pursuant to subsections
17(e-10), (e-15), (h), and (h-5) of Section 7 and subsections
18(b), (c), (d), and (k) of Section 7.7 of the Illinois Gambling
19Act. All interest earned on moneys in the Fund shall be
20deposited into the Fund.
21    (d) The Fund shall not be subject to administrative charges
22or chargebacks, including, but not limited to, those authorized
23under subsection (h) of Section 8 of this Act.
 
24    Section 90-20. The Illinois Income Tax Act is amended by

 

 

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1changing Sections 201, 303, 304 and 710 as follows:
 
2    (35 ILCS 5/201)  (from Ch. 120, par. 2-201)
3    Sec. 201. Tax imposed.
4    (a) In general. A tax measured by net income is hereby
5imposed on every individual, corporation, trust and estate for
6each taxable year ending after July 31, 1969 on the privilege
7of earning or receiving income in or as a resident of this
8State. Such tax shall be in addition to all other occupation or
9privilege taxes imposed by this State or by any municipal
10corporation or political subdivision thereof.
11    (b) Rates. The tax imposed by subsection (a) of this
12Section shall be determined as follows, except as adjusted by
13subsection (d-1):
14        (1) In the case of an individual, trust or estate, for
15    taxable years ending prior to July 1, 1989, an amount equal
16    to 2 1/2% of the taxpayer's net income for the taxable
17    year.
18        (2) In the case of an individual, trust or estate, for
19    taxable years beginning prior to July 1, 1989 and ending
20    after June 30, 1989, an amount equal to the sum of (i) 2
21    1/2% of the taxpayer's net income for the period prior to
22    July 1, 1989, as calculated under Section 202.3, and (ii)
23    3% of the taxpayer's net income for the period after June
24    30, 1989, as calculated under Section 202.3.
25        (3) In the case of an individual, trust or estate, for

 

 

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1    taxable years beginning after June 30, 1989, and ending
2    prior to January 1, 2011, an amount equal to 3% of the
3    taxpayer's net income for the taxable year.
4        (4) In the case of an individual, trust, or estate, for
5    taxable years beginning prior to January 1, 2011, and
6    ending after December 31, 2010, an amount equal to the sum
7    of (i) 3% of the taxpayer's net income for the period prior
8    to January 1, 2011, as calculated under Section 202.5, and
9    (ii) 5% of the taxpayer's net income for the period after
10    December 31, 2010, as calculated under Section 202.5.
11        (5) In the case of an individual, trust, or estate, for
12    taxable years beginning on or after January 1, 2011, and
13    ending prior to January 1, 2015, an amount equal to 5% of
14    the taxpayer's net income for the taxable year.
15        (5.1) In the case of an individual, trust, or estate,
16    for taxable years beginning prior to January 1, 2015, and
17    ending after December 31, 2014, an amount equal to the sum
18    of (i) 5% of the taxpayer's net income for the period prior
19    to January 1, 2015, as calculated under Section 202.5, and
20    (ii) 3.75% of the taxpayer's net income for the period
21    after December 31, 2014, as calculated under Section 202.5.
22        (5.2) In the case of an individual, trust, or estate,
23    for taxable years beginning on or after January 1, 2015,
24    and ending prior to July 1, 2017, an amount equal to 3.75%
25    of the taxpayer's net income for the taxable year.
26        (5.3) In the case of an individual, trust, or estate,

 

 

HB5146- 92 -LRB100 18631 SMS 33856 b

1    for taxable years beginning prior to July 1, 2017, and
2    ending after June 30, 2017, an amount equal to the sum of
3    (i) 3.75% of the taxpayer's net income for the period prior
4    to July 1, 2017, as calculated under Section 202.5, and
5    (ii) 4.95% of the taxpayer's net income for the period
6    after June 30, 2017, as calculated under Section 202.5.
7        (5.4) In the case of an individual, trust, or estate,
8    for taxable years beginning on or after July 1, 2017, an
9    amount equal to 4.95% of the taxpayer's net income for the
10    taxable year.
11        (6) In the case of a corporation, for taxable years
12    ending prior to July 1, 1989, an amount equal to 4% of the
13    taxpayer's net income for the taxable year.
14        (7) In the case of a corporation, for taxable years
15    beginning prior to July 1, 1989 and ending after June 30,
16    1989, an amount equal to the sum of (i) 4% of the
17    taxpayer's net income for the period prior to July 1, 1989,
18    as calculated under Section 202.3, and (ii) 4.8% of the
19    taxpayer's net income for the period after June 30, 1989,
20    as calculated under Section 202.3.
21        (8) In the case of a corporation, for taxable years
22    beginning after June 30, 1989, and ending prior to January
23    1, 2011, an amount equal to 4.8% of the taxpayer's net
24    income for the taxable year.
25        (9) In the case of a corporation, for taxable years
26    beginning prior to January 1, 2011, and ending after

 

 

HB5146- 93 -LRB100 18631 SMS 33856 b

1    December 31, 2010, an amount equal to the sum of (i) 4.8%
2    of the taxpayer's net income for the period prior to
3    January 1, 2011, as calculated under Section 202.5, and
4    (ii) 7% of the taxpayer's net income for the period after
5    December 31, 2010, as calculated under Section 202.5.
6        (10) In the case of a corporation, for taxable years
7    beginning on or after January 1, 2011, and ending prior to
8    January 1, 2015, an amount equal to 7% of the taxpayer's
9    net income for the taxable year.
10        (11) In the case of a corporation, for taxable years
11    beginning prior to January 1, 2015, and ending after
12    December 31, 2014, an amount equal to the sum of (i) 7% of
13    the taxpayer's net income for the period prior to January
14    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
15    of the taxpayer's net income for the period after December
16    31, 2014, as calculated under Section 202.5.
17        (12) In the case of a corporation, for taxable years
18    beginning on or after January 1, 2015, and ending prior to
19    July 1, 2017, an amount equal to 5.25% of the taxpayer's
20    net income for the taxable year.
21        (13) In the case of a corporation, for taxable years
22    beginning prior to July 1, 2017, and ending after June 30,
23    2017, an amount equal to the sum of (i) 5.25% of the
24    taxpayer's net income for the period prior to July 1, 2017,
25    as calculated under Section 202.5, and (ii) 7% of the
26    taxpayer's net income for the period after June 30, 2017,

 

 

HB5146- 94 -LRB100 18631 SMS 33856 b

1    as calculated under Section 202.5.
2        (14) In the case of a corporation, for taxable years
3    beginning on or after July 1, 2017, an amount equal to 7%
4    of the taxpayer's net income for the taxable year.
5    The rates under this subsection (b) are subject to the
6provisions of Section 201.5.
7    (b-5) Surcharge; sale or exchange of assets, properties,
8and intangibles of electronic gaming licensees. For each of
9taxable years 2018 through 2026, a surcharge is imposed on all
10taxpayers on income arising from the sale or exchange of
11capital assets, depreciable business property, real property
12used in the trade or business, and Section 197 intangibles (i)
13of an organization licensee under the Illinois Horse Racing Act
14of 1975 and (ii) of an electronic gaming licensee under the
15Illinois Gambling Act. The amount of the surcharge is equal to
16the amount of federal income tax liability for the taxable year
17attributable to those sales and exchanges. The surcharge
18imposed shall not apply if:
19        (1) the electronic gaming license, organization
20    license, or race track property is transferred as a result
21    of any of the following:
22            (A) bankruptcy, a receivership, or a debt
23        adjustment initiated by or against the initial
24        licensee or the substantial owners of the initial
25        licensee;
26            (B) cancellation, revocation, or termination of

 

 

HB5146- 95 -LRB100 18631 SMS 33856 b

1        any such license by the Illinois Gaming Board or the
2        Illinois Racing Board;
3            (C) a determination by the Illinois Gaming Board
4        that transfer of the license is in the best interests
5        of Illinois gaming;
6            (D) the death of an owner of the equity interest in
7        a licensee;
8            (E) the acquisition of a controlling interest in
9        the stock or substantially all of the assets of a
10        publicly traded company;
11            (F) a transfer by a parent company to a wholly
12        owned subsidiary; or
13            (G) the transfer or sale to or by one person to
14        another person where both persons were initial owners
15        of the license when the license was issued; or
16        (2) the controlling interest in the electronic gaming
17    license, organization license, or race track property is
18    transferred in a transaction to lineal descendants in which
19    no gain or loss is recognized or as a result of a
20    transaction in accordance with Section 351 of the Internal
21    Revenue Code in which no gain or loss is recognized; or
22        (3) live horse racing was not conducted in 2011 under a
23    license issued pursuant to the Illinois Horse Racing Act of
24    1975.
25    The transfer of an electronic gaming license, organization
26license, or race track property by a person other than the

 

 

HB5146- 96 -LRB100 18631 SMS 33856 b

1initial licensee to receive the electronic gaming license is
2not subject to a surcharge. The Department shall adopt rules
3necessary to implement and administer this subsection.
4    (c) Personal Property Tax Replacement Income Tax.
5Beginning on July 1, 1979 and thereafter, in addition to such
6income tax, there is also hereby imposed the Personal Property
7Tax Replacement Income Tax measured by net income on every
8corporation (including Subchapter S corporations), partnership
9and trust, for each taxable year ending after June 30, 1979.
10Such taxes are imposed on the privilege of earning or receiving
11income in or as a resident of this State. The Personal Property
12Tax Replacement Income Tax shall be in addition to the income
13tax imposed by subsections (a) and (b) of this Section and in
14addition to all other occupation or privilege taxes imposed by
15this State or by any municipal corporation or political
16subdivision thereof.
17    (d) Additional Personal Property Tax Replacement Income
18Tax Rates. The personal property tax replacement income tax
19imposed by this subsection and subsection (c) of this Section
20in the case of a corporation, other than a Subchapter S
21corporation and except as adjusted by subsection (d-1), shall
22be an additional amount equal to 2.85% of such taxpayer's net
23income for the taxable year, except that beginning on January
241, 1981, and thereafter, the rate of 2.85% specified in this
25subsection shall be reduced to 2.5%, and in the case of a
26partnership, trust or a Subchapter S corporation shall be an

 

 

HB5146- 97 -LRB100 18631 SMS 33856 b

1additional amount equal to 1.5% of such taxpayer's net income
2for the taxable year.
3    (d-1) Rate reduction for certain foreign insurers. In the
4case of a foreign insurer, as defined by Section 35A-5 of the
5Illinois Insurance Code, whose state or country of domicile
6imposes on insurers domiciled in Illinois a retaliatory tax
7(excluding any insurer whose premiums from reinsurance assumed
8are 50% or more of its total insurance premiums as determined
9under paragraph (2) of subsection (b) of Section 304, except
10that for purposes of this determination premiums from
11reinsurance do not include premiums from inter-affiliate
12reinsurance arrangements), beginning with taxable years ending
13on or after December 31, 1999, the sum of the rates of tax
14imposed by subsections (b) and (d) shall be reduced (but not
15increased) to the rate at which the total amount of tax imposed
16under this Act, net of all credits allowed under this Act,
17shall equal (i) the total amount of tax that would be imposed
18on the foreign insurer's net income allocable to Illinois for
19the taxable year by such foreign insurer's state or country of
20domicile if that net income were subject to all income taxes
21and taxes measured by net income imposed by such foreign
22insurer's state or country of domicile, net of all credits
23allowed or (ii) a rate of zero if no such tax is imposed on such
24income by the foreign insurer's state of domicile. For the
25purposes of this subsection (d-1), an inter-affiliate includes
26a mutual insurer under common management.

 

 

HB5146- 98 -LRB100 18631 SMS 33856 b

1        (1) For the purposes of subsection (d-1), in no event
2    shall the sum of the rates of tax imposed by subsections
3    (b) and (d) be reduced below the rate at which the sum of:
4            (A) the total amount of tax imposed on such foreign
5        insurer under this Act for a taxable year, net of all
6        credits allowed under this Act, plus
7            (B) the privilege tax imposed by Section 409 of the
8        Illinois Insurance Code, the fire insurance company
9        tax imposed by Section 12 of the Fire Investigation
10        Act, and the fire department taxes imposed under
11        Section 11-10-1 of the Illinois Municipal Code,
12    equals 1.25% for taxable years ending prior to December 31,
13    2003, or 1.75% for taxable years ending on or after
14    December 31, 2003, of the net taxable premiums written for
15    the taxable year, as described by subsection (1) of Section
16    409 of the Illinois Insurance Code. This paragraph will in
17    no event increase the rates imposed under subsections (b)
18    and (d).
19        (2) Any reduction in the rates of tax imposed by this
20    subsection shall be applied first against the rates imposed
21    by subsection (b) and only after the tax imposed by
22    subsection (a) net of all credits allowed under this
23    Section other than the credit allowed under subsection (i)
24    has been reduced to zero, against the rates imposed by
25    subsection (d).
26    This subsection (d-1) is exempt from the provisions of

 

 

HB5146- 99 -LRB100 18631 SMS 33856 b

1Section 250.
2    (e) Investment credit. A taxpayer shall be allowed a credit
3against the Personal Property Tax Replacement Income Tax for
4investment in qualified property.
5        (1) A taxpayer shall be allowed a credit equal to .5%
6    of the basis of qualified property placed in service during
7    the taxable year, provided such property is placed in
8    service on or after July 1, 1984. There shall be allowed an
9    additional credit equal to .5% of the basis of qualified
10    property placed in service during the taxable year,
11    provided such property is placed in service on or after
12    July 1, 1986, and the taxpayer's base employment within
13    Illinois has increased by 1% or more over the preceding
14    year as determined by the taxpayer's employment records
15    filed with the Illinois Department of Employment Security.
16    Taxpayers who are new to Illinois shall be deemed to have
17    met the 1% growth in base employment for the first year in
18    which they file employment records with the Illinois
19    Department of Employment Security. The provisions added to
20    this Section by Public Act 85-1200 (and restored by Public
21    Act 87-895) shall be construed as declaratory of existing
22    law and not as a new enactment. If, in any year, the
23    increase in base employment within Illinois over the
24    preceding year is less than 1%, the additional credit shall
25    be limited to that percentage times a fraction, the
26    numerator of which is .5% and the denominator of which is

 

 

HB5146- 100 -LRB100 18631 SMS 33856 b

1    1%, but shall not exceed .5%. The investment credit shall
2    not be allowed to the extent that it would reduce a
3    taxpayer's liability in any tax year below zero, nor may
4    any credit for qualified property be allowed for any year
5    other than the year in which the property was placed in
6    service in Illinois. For tax years ending on or after
7    December 31, 1987, and on or before December 31, 1988, the
8    credit shall be allowed for the tax year in which the
9    property is placed in service, or, if the amount of the
10    credit exceeds the tax liability for that year, whether it
11    exceeds the original liability or the liability as later
12    amended, such excess may be carried forward and applied to
13    the tax liability of the 5 taxable years following the
14    excess credit years if the taxpayer (i) makes investments
15    which cause the creation of a minimum of 2,000 full-time
16    equivalent jobs in Illinois, (ii) is located in an
17    enterprise zone established pursuant to the Illinois
18    Enterprise Zone Act and (iii) is certified by the
19    Department of Commerce and Community Affairs (now
20    Department of Commerce and Economic Opportunity) as
21    complying with the requirements specified in clause (i) and
22    (ii) by July 1, 1986. The Department of Commerce and
23    Community Affairs (now Department of Commerce and Economic
24    Opportunity) shall notify the Department of Revenue of all
25    such certifications immediately. For tax years ending
26    after December 31, 1988, the credit shall be allowed for

 

 

HB5146- 101 -LRB100 18631 SMS 33856 b

1    the tax year in which the property is placed in service,
2    or, if the amount of the credit exceeds the tax liability
3    for that year, whether it exceeds the original liability or
4    the liability as later amended, such excess may be carried
5    forward and applied to the tax liability of the 5 taxable
6    years following the excess credit years. The credit shall
7    be applied to the earliest year for which there is a
8    liability. If there is credit from more than one tax year
9    that is available to offset a liability, earlier credit
10    shall be applied first.
11        (2) The term "qualified property" means property
12    which:
13            (A) is tangible, whether new or used, including
14        buildings and structural components of buildings and
15        signs that are real property, but not including land or
16        improvements to real property that are not a structural
17        component of a building such as landscaping, sewer
18        lines, local access roads, fencing, parking lots, and
19        other appurtenances;
20            (B) is depreciable pursuant to Section 167 of the
21        Internal Revenue Code, except that "3-year property"
22        as defined in Section 168(c)(2)(A) of that Code is not
23        eligible for the credit provided by this subsection
24        (e);
25            (C) is acquired by purchase as defined in Section
26        179(d) of the Internal Revenue Code;

 

 

HB5146- 102 -LRB100 18631 SMS 33856 b

1            (D) is used in Illinois by a taxpayer who is
2        primarily engaged in manufacturing, or in mining coal
3        or fluorite, or in retailing, or was placed in service
4        on or after July 1, 2006 in a River Edge Redevelopment
5        Zone established pursuant to the River Edge
6        Redevelopment Zone Act; and
7            (E) has not previously been used in Illinois in
8        such a manner and by such a person as would qualify for
9        the credit provided by this subsection (e) or
10        subsection (f).
11        (3) For purposes of this subsection (e),
12    "manufacturing" means the material staging and production
13    of tangible personal property by procedures commonly
14    regarded as manufacturing, processing, fabrication, or
15    assembling which changes some existing material into new
16    shapes, new qualities, or new combinations. For purposes of
17    this subsection (e) the term "mining" shall have the same
18    meaning as the term "mining" in Section 613(c) of the
19    Internal Revenue Code. For purposes of this subsection (e),
20    the term "retailing" means the sale of tangible personal
21    property for use or consumption and not for resale, or
22    services rendered in conjunction with the sale of tangible
23    personal property for use or consumption and not for
24    resale. For purposes of this subsection (e), "tangible
25    personal property" has the same meaning as when that term
26    is used in the Retailers' Occupation Tax Act, and, for

 

 

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1    taxable years ending after December 31, 2008, does not
2    include the generation, transmission, or distribution of
3    electricity.
4        (4) The basis of qualified property shall be the basis
5    used to compute the depreciation deduction for federal
6    income tax purposes.
7        (5) If the basis of the property for federal income tax
8    depreciation purposes is increased after it has been placed
9    in service in Illinois by the taxpayer, the amount of such
10    increase shall be deemed property placed in service on the
11    date of such increase in basis.
12        (6) The term "placed in service" shall have the same
13    meaning as under Section 46 of the Internal Revenue Code.
14        (7) If during any taxable year, any property ceases to
15    be qualified property in the hands of the taxpayer within
16    48 months after being placed in service, or the situs of
17    any qualified property is moved outside Illinois within 48
18    months after being placed in service, the Personal Property
19    Tax Replacement Income Tax for such taxable year shall be
20    increased. Such increase shall be determined by (i)
21    recomputing the investment credit which would have been
22    allowed for the year in which credit for such property was
23    originally allowed by eliminating such property from such
24    computation and, (ii) subtracting such recomputed credit
25    from the amount of credit previously allowed. For the
26    purposes of this paragraph (7), a reduction of the basis of

 

 

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1    qualified property resulting from a redetermination of the
2    purchase price shall be deemed a disposition of qualified
3    property to the extent of such reduction.
4        (8) Unless the investment credit is extended by law,
5    the basis of qualified property shall not include costs
6    incurred after December 31, 2018, except for costs incurred
7    pursuant to a binding contract entered into on or before
8    December 31, 2018.
9        (9) Each taxable year ending before December 31, 2000,
10    a partnership may elect to pass through to its partners the
11    credits to which the partnership is entitled under this
12    subsection (e) for the taxable year. A partner may use the
13    credit allocated to him or her under this paragraph only
14    against the tax imposed in subsections (c) and (d) of this
15    Section. If the partnership makes that election, those
16    credits shall be allocated among the partners in the
17    partnership in accordance with the rules set forth in
18    Section 704(b) of the Internal Revenue Code, and the rules
19    promulgated under that Section, and the allocated amount of
20    the credits shall be allowed to the partners for that
21    taxable year. The partnership shall make this election on
22    its Personal Property Tax Replacement Income Tax return for
23    that taxable year. The election to pass through the credits
24    shall be irrevocable.
25        For taxable years ending on or after December 31, 2000,
26    a partner that qualifies its partnership for a subtraction

 

 

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1    under subparagraph (I) of paragraph (2) of subsection (d)
2    of Section 203 or a shareholder that qualifies a Subchapter
3    S corporation for a subtraction under subparagraph (S) of
4    paragraph (2) of subsection (b) of Section 203 shall be
5    allowed a credit under this subsection (e) equal to its
6    share of the credit earned under this subsection (e) during
7    the taxable year by the partnership or Subchapter S
8    corporation, determined in accordance with the
9    determination of income and distributive share of income
10    under Sections 702 and 704 and Subchapter S of the Internal
11    Revenue Code. This paragraph is exempt from the provisions
12    of Section 250.
13    (f) Investment credit; Enterprise Zone; River Edge
14Redevelopment Zone.
15        (1) A taxpayer shall be allowed a credit against the
16    tax imposed by subsections (a) and (b) of this Section for
17    investment in qualified property which is placed in service
18    in an Enterprise Zone created pursuant to the Illinois
19    Enterprise Zone Act or, for property placed in service on
20    or after July 1, 2006, a River Edge Redevelopment Zone
21    established pursuant to the River Edge Redevelopment Zone
22    Act. For partners, shareholders of Subchapter S
23    corporations, and owners of limited liability companies,
24    if the liability company is treated as a partnership for
25    purposes of federal and State income taxation, there shall
26    be allowed a credit under this subsection (f) to be

 

 

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1    determined in accordance with the determination of income
2    and distributive share of income under Sections 702 and 704
3    and Subchapter S of the Internal Revenue Code. The credit
4    shall be .5% of the basis for such property. The credit
5    shall be available only in the taxable year in which the
6    property is placed in service in the Enterprise Zone or
7    River Edge Redevelopment Zone and shall not be allowed to
8    the extent that it would reduce a taxpayer's liability for
9    the tax imposed by subsections (a) and (b) of this Section
10    to below zero. For tax years ending on or after December
11    31, 1985, the credit shall be allowed for the tax year in
12    which the property is placed in service, or, if the amount
13    of the credit exceeds the tax liability for that year,
14    whether it exceeds the original liability or the liability
15    as later amended, such excess may be carried forward and
16    applied to the tax liability of the 5 taxable years
17    following the excess credit year. The credit shall be
18    applied to the earliest year for which there is a
19    liability. If there is credit from more than one tax year
20    that is available to offset a liability, the credit
21    accruing first in time shall be applied first.
22        (2) The term qualified property means property which:
23            (A) is tangible, whether new or used, including
24        buildings and structural components of buildings;
25            (B) is depreciable pursuant to Section 167 of the
26        Internal Revenue Code, except that "3-year property"

 

 

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1        as defined in Section 168(c)(2)(A) of that Code is not
2        eligible for the credit provided by this subsection
3        (f);
4            (C) is acquired by purchase as defined in Section
5        179(d) of the Internal Revenue Code;
6            (D) is used in the Enterprise Zone or River Edge
7        Redevelopment Zone by the taxpayer; and
8            (E) has not been previously used in Illinois in
9        such a manner and by such a person as would qualify for
10        the credit provided by this subsection (f) or
11        subsection (e).
12        (3) The basis of qualified property shall be the basis
13    used to compute the depreciation deduction for federal
14    income tax purposes.
15        (4) If the basis of the property for federal income tax
16    depreciation purposes is increased after it has been placed
17    in service in the Enterprise Zone or River Edge
18    Redevelopment Zone by the taxpayer, the amount of such
19    increase shall be deemed property placed in service on the
20    date of such increase in basis.
21        (5) The term "placed in service" shall have the same
22    meaning as under Section 46 of the Internal Revenue Code.
23        (6) If during any taxable year, any property ceases to
24    be qualified property in the hands of the taxpayer within
25    48 months after being placed in service, or the situs of
26    any qualified property is moved outside the Enterprise Zone

 

 

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1    or River Edge Redevelopment Zone within 48 months after
2    being placed in service, the tax imposed under subsections
3    (a) and (b) of this Section for such taxable year shall be
4    increased. Such increase shall be determined by (i)
5    recomputing the investment credit which would have been
6    allowed for the year in which credit for such property was
7    originally allowed by eliminating such property from such
8    computation, and (ii) subtracting such recomputed credit
9    from the amount of credit previously allowed. For the
10    purposes of this paragraph (6), a reduction of the basis of
11    qualified property resulting from a redetermination of the
12    purchase price shall be deemed a disposition of qualified
13    property to the extent of such reduction.
14        (7) There shall be allowed an additional credit equal
15    to 0.5% of the basis of qualified property placed in
16    service during the taxable year in a River Edge
17    Redevelopment Zone, provided such property is placed in
18    service on or after July 1, 2006, and the taxpayer's base
19    employment within Illinois has increased by 1% or more over
20    the preceding year as determined by the taxpayer's
21    employment records filed with the Illinois Department of
22    Employment Security. Taxpayers who are new to Illinois
23    shall be deemed to have met the 1% growth in base
24    employment for the first year in which they file employment
25    records with the Illinois Department of Employment
26    Security. If, in any year, the increase in base employment

 

 

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1    within Illinois over the preceding year is less than 1%,
2    the additional credit shall be limited to that percentage
3    times a fraction, the numerator of which is 0.5% and the
4    denominator of which is 1%, but shall not exceed 0.5%.
5    (g) (Blank).
6    (h) Investment credit; High Impact Business.
7        (1) Subject to subsections (b) and (b-5) of Section 5.5
8    of the Illinois Enterprise Zone Act, a taxpayer shall be
9    allowed a credit against the tax imposed by subsections (a)
10    and (b) of this Section for investment in qualified
11    property which is placed in service by a Department of
12    Commerce and Economic Opportunity designated High Impact
13    Business. The credit shall be .5% of the basis for such
14    property. The credit shall not be available (i) until the
15    minimum investments in qualified property set forth in
16    subdivision (a)(3)(A) of Section 5.5 of the Illinois
17    Enterprise Zone Act have been satisfied or (ii) until the
18    time authorized in subsection (b-5) of the Illinois
19    Enterprise Zone Act for entities designated as High Impact
20    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
21    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
22    Act, and shall not be allowed to the extent that it would
23    reduce a taxpayer's liability for the tax imposed by
24    subsections (a) and (b) of this Section to below zero. The
25    credit applicable to such investments shall be taken in the
26    taxable year in which such investments have been completed.

 

 

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1    The credit for additional investments beyond the minimum
2    investment by a designated high impact business authorized
3    under subdivision (a)(3)(A) of Section 5.5 of the Illinois
4    Enterprise Zone Act shall be available only in the taxable
5    year in which the property is placed in service and shall
6    not be allowed to the extent that it would reduce a
7    taxpayer's liability for the tax imposed by subsections (a)
8    and (b) of this Section to below zero. For tax years ending
9    on or after December 31, 1987, the credit shall be allowed
10    for the tax year in which the property is placed in
11    service, or, if the amount of the credit exceeds the tax
12    liability for that year, whether it exceeds the original
13    liability or the liability as later amended, such excess
14    may be carried forward and applied to the tax liability of
15    the 5 taxable years following the excess credit year. The
16    credit shall be applied to the earliest year for which
17    there is a liability. If there is credit from more than one
18    tax year that is available to offset a liability, the
19    credit accruing first in time shall be applied first.
20        Changes made in this subdivision (h)(1) by Public Act
21    88-670 restore changes made by Public Act 85-1182 and
22    reflect existing law.
23        (2) The term qualified property means property which:
24            (A) is tangible, whether new or used, including
25        buildings and structural components of buildings;
26            (B) is depreciable pursuant to Section 167 of the

 

 

HB5146- 111 -LRB100 18631 SMS 33856 b

1        Internal Revenue Code, except that "3-year property"
2        as defined in Section 168(c)(2)(A) of that Code is not
3        eligible for the credit provided by this subsection
4        (h);
5            (C) is acquired by purchase as defined in Section
6        179(d) of the Internal Revenue Code; and
7            (D) is not eligible for the Enterprise Zone
8        Investment Credit provided by subsection (f) of this
9        Section.
10        (3) The basis of qualified property shall be the basis
11    used to compute the depreciation deduction for federal
12    income tax purposes.
13        (4) If the basis of the property for federal income tax
14    depreciation purposes is increased after it has been placed
15    in service in a federally designated Foreign Trade Zone or
16    Sub-Zone located in Illinois by the taxpayer, the amount of
17    such increase shall be deemed property placed in service on
18    the date of such increase in basis.
19        (5) The term "placed in service" shall have the same
20    meaning as under Section 46 of the Internal Revenue Code.
21        (6) If during any taxable year ending on or before
22    December 31, 1996, any property ceases to be qualified
23    property in the hands of the taxpayer within 48 months
24    after being placed in service, or the situs of any
25    qualified property is moved outside Illinois within 48
26    months after being placed in service, the tax imposed under

 

 

HB5146- 112 -LRB100 18631 SMS 33856 b

1    subsections (a) and (b) of this Section for such taxable
2    year shall be increased. Such increase shall be determined
3    by (i) recomputing the investment credit which would have
4    been allowed for the year in which credit for such property
5    was originally allowed by eliminating such property from
6    such computation, and (ii) subtracting such recomputed
7    credit from the amount of credit previously allowed. For
8    the purposes of this paragraph (6), a reduction of the
9    basis of qualified property resulting from a
10    redetermination of the purchase price shall be deemed a
11    disposition of qualified property to the extent of such
12    reduction.
13        (7) Beginning with tax years ending after December 31,
14    1996, if a taxpayer qualifies for the credit under this
15    subsection (h) and thereby is granted a tax abatement and
16    the taxpayer relocates its entire facility in violation of
17    the explicit terms and length of the contract under Section
18    18-183 of the Property Tax Code, the tax imposed under
19    subsections (a) and (b) of this Section shall be increased
20    for the taxable year in which the taxpayer relocated its
21    facility by an amount equal to the amount of credit
22    received by the taxpayer under this subsection (h).
23    (i) Credit for Personal Property Tax Replacement Income
24Tax. For tax years ending prior to December 31, 2003, a credit
25shall be allowed against the tax imposed by subsections (a) and
26(b) of this Section for the tax imposed by subsections (c) and

 

 

HB5146- 113 -LRB100 18631 SMS 33856 b

1(d) of this Section. This credit shall be computed by
2multiplying the tax imposed by subsections (c) and (d) of this
3Section by a fraction, the numerator of which is base income
4allocable to Illinois and the denominator of which is Illinois
5base income, and further multiplying the product by the tax
6rate imposed by subsections (a) and (b) of this Section.
7    Any credit earned on or after December 31, 1986 under this
8subsection which is unused in the year the credit is computed
9because it exceeds the tax liability imposed by subsections (a)
10and (b) for that year (whether it exceeds the original
11liability or the liability as later amended) may be carried
12forward and applied to the tax liability imposed by subsections
13(a) and (b) of the 5 taxable years following the excess credit
14year, provided that no credit may be carried forward to any
15year ending on or after December 31, 2003. This credit shall be
16applied first to the earliest year for which there is a
17liability. If there is a credit under this subsection from more
18than one tax year that is available to offset a liability the
19earliest credit arising under this subsection shall be applied
20first.
21    If, during any taxable year ending on or after December 31,
221986, the tax imposed by subsections (c) and (d) of this
23Section for which a taxpayer has claimed a credit under this
24subsection (i) is reduced, the amount of credit for such tax
25shall also be reduced. Such reduction shall be determined by
26recomputing the credit to take into account the reduced tax

 

 

HB5146- 114 -LRB100 18631 SMS 33856 b

1imposed by subsections (c) and (d). If any portion of the
2reduced amount of credit has been carried to a different
3taxable year, an amended return shall be filed for such taxable
4year to reduce the amount of credit claimed.
5    (j) Training expense credit. Beginning with tax years
6ending on or after December 31, 1986 and prior to December 31,
72003, a taxpayer shall be allowed a credit against the tax
8imposed by subsections (a) and (b) under this Section for all
9amounts paid or accrued, on behalf of all persons employed by
10the taxpayer in Illinois or Illinois residents employed outside
11of Illinois by a taxpayer, for educational or vocational
12training in semi-technical or technical fields or semi-skilled
13or skilled fields, which were deducted from gross income in the
14computation of taxable income. The credit against the tax
15imposed by subsections (a) and (b) shall be 1.6% of such
16training expenses. For partners, shareholders of subchapter S
17corporations, and owners of limited liability companies, if the
18liability company is treated as a partnership for purposes of
19federal and State income taxation, there shall be allowed a
20credit under this subsection (j) to be determined in accordance
21with the determination of income and distributive share of
22income under Sections 702 and 704 and subchapter S of the
23Internal Revenue Code.
24    Any credit allowed under this subsection which is unused in
25the year the credit is earned may be carried forward to each of
26the 5 taxable years following the year for which the credit is

 

 

HB5146- 115 -LRB100 18631 SMS 33856 b

1first computed until it is used. This credit shall be applied
2first to the earliest year for which there is a liability. If
3there is a credit under this subsection from more than one tax
4year that is available to offset a liability the earliest
5credit arising under this subsection shall be applied first. No
6carryforward credit may be claimed in any tax year ending on or
7after December 31, 2003.
8    (k) Research and development credit. For tax years ending
9after July 1, 1990 and prior to December 31, 2003, and
10beginning again for tax years ending on or after December 31,
112004, and ending prior to January 1, 2022, a taxpayer shall be
12allowed a credit against the tax imposed by subsections (a) and
13(b) of this Section for increasing research activities in this
14State. The credit allowed against the tax imposed by
15subsections (a) and (b) shall be equal to 6 1/2% of the
16qualifying expenditures for increasing research activities in
17this State. For partners, shareholders of subchapter S
18corporations, and owners of limited liability companies, if the
19liability company is treated as a partnership for purposes of
20federal and State income taxation, there shall be allowed a
21credit under this subsection to be determined in accordance
22with the determination of income and distributive share of
23income under Sections 702 and 704 and subchapter S of the
24Internal Revenue Code.
25    For purposes of this subsection, "qualifying expenditures"
26means the qualifying expenditures as defined for the federal

 

 

HB5146- 116 -LRB100 18631 SMS 33856 b

1credit for increasing research activities which would be
2allowable under Section 41 of the Internal Revenue Code and
3which are conducted in this State, "qualifying expenditures for
4increasing research activities in this State" means the excess
5of qualifying expenditures for the taxable year in which
6incurred over qualifying expenditures for the base period,
7"qualifying expenditures for the base period" means the average
8of the qualifying expenditures for each year in the base
9period, and "base period" means the 3 taxable years immediately
10preceding the taxable year for which the determination is being
11made.
12    Any credit in excess of the tax liability for the taxable
13year may be carried forward. A taxpayer may elect to have the
14unused credit shown on its final completed return carried over
15as a credit against the tax liability for the following 5
16taxable years or until it has been fully used, whichever occurs
17first; provided that no credit earned in a tax year ending
18prior to December 31, 2003 may be carried forward to any year
19ending on or after December 31, 2003.
20    If an unused credit is carried forward to a given year from
212 or more earlier years, that credit arising in the earliest
22year will be applied first against the tax liability for the
23given year. If a tax liability for the given year still
24remains, the credit from the next earliest year will then be
25applied, and so on, until all credits have been used or no tax
26liability for the given year remains. Any remaining unused

 

 

HB5146- 117 -LRB100 18631 SMS 33856 b

1credit or credits then will be carried forward to the next
2following year in which a tax liability is incurred, except
3that no credit can be carried forward to a year which is more
4than 5 years after the year in which the expense for which the
5credit is given was incurred.
6    No inference shall be drawn from this amendatory Act of the
791st General Assembly in construing this Section for taxable
8years beginning before January 1, 1999.
9    It is the intent of the General Assembly that the research
10and development credit under this subsection (k) shall apply
11continuously for all tax years ending on or after December 31,
122004 and ending prior to January 1, 2022, including, but not
13limited to, the period beginning on January 1, 2016 and ending
14on the effective date of this amendatory Act of the 100th
15General Assembly. All actions taken in reliance on the
16continuation of the credit under this subsection (k) by any
17taxpayer are hereby validated.
18    (l) Environmental Remediation Tax Credit.
19        (i) For tax years ending after December 31, 1997 and on
20    or before December 31, 2001, a taxpayer shall be allowed a
21    credit against the tax imposed by subsections (a) and (b)
22    of this Section for certain amounts paid for unreimbursed
23    eligible remediation costs, as specified in this
24    subsection. For purposes of this Section, "unreimbursed
25    eligible remediation costs" means costs approved by the
26    Illinois Environmental Protection Agency ("Agency") under

 

 

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1    Section 58.14 of the Environmental Protection Act that were
2    paid in performing environmental remediation at a site for
3    which a No Further Remediation Letter was issued by the
4    Agency and recorded under Section 58.10 of the
5    Environmental Protection Act. The credit must be claimed
6    for the taxable year in which Agency approval of the
7    eligible remediation costs is granted. The credit is not
8    available to any taxpayer if the taxpayer or any related
9    party caused or contributed to, in any material respect, a
10    release of regulated substances on, in, or under the site
11    that was identified and addressed by the remedial action
12    pursuant to the Site Remediation Program of the
13    Environmental Protection Act. After the Pollution Control
14    Board rules are adopted pursuant to the Illinois
15    Administrative Procedure Act for the administration and
16    enforcement of Section 58.9 of the Environmental
17    Protection Act, determinations as to credit availability
18    for purposes of this Section shall be made consistent with
19    those rules. For purposes of this Section, "taxpayer"
20    includes a person whose tax attributes the taxpayer has
21    succeeded to under Section 381 of the Internal Revenue Code
22    and "related party" includes the persons disallowed a
23    deduction for losses by paragraphs (b), (c), and (f)(1) of
24    Section 267 of the Internal Revenue Code by virtue of being
25    a related taxpayer, as well as any of its partners. The
26    credit allowed against the tax imposed by subsections (a)

 

 

HB5146- 119 -LRB100 18631 SMS 33856 b

1    and (b) shall be equal to 25% of the unreimbursed eligible
2    remediation costs in excess of $100,000 per site, except
3    that the $100,000 threshold shall not apply to any site
4    contained in an enterprise zone as determined by the
5    Department of Commerce and Community Affairs (now
6    Department of Commerce and Economic Opportunity). The
7    total credit allowed shall not exceed $40,000 per year with
8    a maximum total of $150,000 per site. For partners and
9    shareholders of subchapter S corporations, there shall be
10    allowed a credit under this subsection to be determined in
11    accordance with the determination of income and
12    distributive share of income under Sections 702 and 704 and
13    subchapter S of the Internal Revenue Code.
14        (ii) A credit allowed under this subsection that is
15    unused in the year the credit is earned may be carried
16    forward to each of the 5 taxable years following the year
17    for which the credit is first earned until it is used. The
18    term "unused credit" does not include any amounts of
19    unreimbursed eligible remediation costs in excess of the
20    maximum credit per site authorized under paragraph (i).
21    This credit shall be applied first to the earliest year for
22    which there is a liability. If there is a credit under this
23    subsection from more than one tax year that is available to
24    offset a liability, the earliest credit arising under this
25    subsection shall be applied first. A credit allowed under
26    this subsection may be sold to a buyer as part of a sale of

 

 

HB5146- 120 -LRB100 18631 SMS 33856 b

1    all or part of the remediation site for which the credit
2    was granted. The purchaser of a remediation site and the
3    tax credit shall succeed to the unused credit and remaining
4    carry-forward period of the seller. To perfect the
5    transfer, the assignor shall record the transfer in the
6    chain of title for the site and provide written notice to
7    the Director of the Illinois Department of Revenue of the
8    assignor's intent to sell the remediation site and the
9    amount of the tax credit to be transferred as a portion of
10    the sale. In no event may a credit be transferred to any
11    taxpayer if the taxpayer or a related party would not be
12    eligible under the provisions of subsection (i).
13        (iii) For purposes of this Section, the term "site"
14    shall have the same meaning as under Section 58.2 of the
15    Environmental Protection Act.
16    (m) Education expense credit. Beginning with tax years
17ending after December 31, 1999, a taxpayer who is the custodian
18of one or more qualifying pupils shall be allowed a credit
19against the tax imposed by subsections (a) and (b) of this
20Section for qualified education expenses incurred on behalf of
21the qualifying pupils. The credit shall be equal to 25% of
22qualified education expenses, but in no event may the total
23credit under this subsection claimed by a family that is the
24custodian of qualifying pupils exceed (i) $500 for tax years
25ending prior to December 31, 2017, and (ii) $750 for tax years
26ending on or after December 31, 2017. In no event shall a

 

 

HB5146- 121 -LRB100 18631 SMS 33856 b

1credit under this subsection reduce the taxpayer's liability
2under this Act to less than zero. Notwithstanding any other
3provision of law, for taxable years beginning on or after
4January 1, 2017, no taxpayer may claim a credit under this
5subsection (m) if the taxpayer's adjusted gross income for the
6taxable year exceeds (i) $500,000, in the case of spouses
7filing a joint federal tax return or (ii) $250,000, in the case
8of all other taxpayers. This subsection is exempt from the
9provisions of Section 250 of this Act.
10    For purposes of this subsection:
11    "Qualifying pupils" means individuals who (i) are
12residents of the State of Illinois, (ii) are under the age of
1321 at the close of the school year for which a credit is
14sought, and (iii) during the school year for which a credit is
15sought were full-time pupils enrolled in a kindergarten through
16twelfth grade education program at any school, as defined in
17this subsection.
18    "Qualified education expense" means the amount incurred on
19behalf of a qualifying pupil in excess of $250 for tuition,
20book fees, and lab fees at the school in which the pupil is
21enrolled during the regular school year.
22    "School" means any public or nonpublic elementary or
23secondary school in Illinois that is in compliance with Title
24VI of the Civil Rights Act of 1964 and attendance at which
25satisfies the requirements of Section 26-1 of the School Code,
26except that nothing shall be construed to require a child to

 

 

HB5146- 122 -LRB100 18631 SMS 33856 b

1attend any particular public or nonpublic school to qualify for
2the credit under this Section.
3    "Custodian" means, with respect to qualifying pupils, an
4Illinois resident who is a parent, the parents, a legal
5guardian, or the legal guardians of the qualifying pupils.
6    (n) River Edge Redevelopment Zone site remediation tax
7credit.
8        (i) For tax years ending on or after December 31, 2006,
9    a taxpayer shall be allowed a credit against the tax
10    imposed by subsections (a) and (b) of this Section for
11    certain amounts paid for unreimbursed eligible remediation
12    costs, as specified in this subsection. For purposes of
13    this Section, "unreimbursed eligible remediation costs"
14    means costs approved by the Illinois Environmental
15    Protection Agency ("Agency") under Section 58.14a of the
16    Environmental Protection Act that were paid in performing
17    environmental remediation at a site within a River Edge
18    Redevelopment Zone for which a No Further Remediation
19    Letter was issued by the Agency and recorded under Section
20    58.10 of the Environmental Protection Act. The credit must
21    be claimed for the taxable year in which Agency approval of
22    the eligible remediation costs is granted. The credit is
23    not available to any taxpayer if the taxpayer or any
24    related party caused or contributed to, in any material
25    respect, a release of regulated substances on, in, or under
26    the site that was identified and addressed by the remedial

 

 

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1    action pursuant to the Site Remediation Program of the
2    Environmental Protection Act. Determinations as to credit
3    availability for purposes of this Section shall be made
4    consistent with rules adopted by the Pollution Control
5    Board pursuant to the Illinois Administrative Procedure
6    Act for the administration and enforcement of Section 58.9
7    of the Environmental Protection Act. For purposes of this
8    Section, "taxpayer" includes a person whose tax attributes
9    the taxpayer has succeeded to under Section 381 of the
10    Internal Revenue Code and "related party" includes the
11    persons disallowed a deduction for losses by paragraphs
12    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
13    Code by virtue of being a related taxpayer, as well as any
14    of its partners. The credit allowed against the tax imposed
15    by subsections (a) and (b) shall be equal to 25% of the
16    unreimbursed eligible remediation costs in excess of
17    $100,000 per site.
18        (ii) A credit allowed under this subsection that is
19    unused in the year the credit is earned may be carried
20    forward to each of the 5 taxable years following the year
21    for which the credit is first earned until it is used. This
22    credit shall be applied first to the earliest year for
23    which there is a liability. If there is a credit under this
24    subsection from more than one tax year that is available to
25    offset a liability, the earliest credit arising under this
26    subsection shall be applied first. A credit allowed under

 

 

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1    this subsection may be sold to a buyer as part of a sale of
2    all or part of the remediation site for which the credit
3    was granted. The purchaser of a remediation site and the
4    tax credit shall succeed to the unused credit and remaining
5    carry-forward period of the seller. To perfect the
6    transfer, the assignor shall record the transfer in the
7    chain of title for the site and provide written notice to
8    the Director of the Illinois Department of Revenue of the
9    assignor's intent to sell the remediation site and the
10    amount of the tax credit to be transferred as a portion of
11    the sale. In no event may a credit be transferred to any
12    taxpayer if the taxpayer or a related party would not be
13    eligible under the provisions of subsection (i).
14        (iii) For purposes of this Section, the term "site"
15    shall have the same meaning as under Section 58.2 of the
16    Environmental Protection Act.
17    (o) For each of taxable years during the Compassionate Use
18of Medical Cannabis Pilot Program, a surcharge is imposed on
19all taxpayers on income arising from the sale or exchange of
20capital assets, depreciable business property, real property
21used in the trade or business, and Section 197 intangibles of
22an organization registrant under the Compassionate Use of
23Medical Cannabis Pilot Program Act. The amount of the surcharge
24is equal to the amount of federal income tax liability for the
25taxable year attributable to those sales and exchanges. The
26surcharge imposed does not apply if:

 

 

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1        (1) the medical cannabis cultivation center
2    registration, medical cannabis dispensary registration, or
3    the property of a registration is transferred as a result
4    of any of the following:
5            (A) bankruptcy, a receivership, or a debt
6        adjustment initiated by or against the initial
7        registration or the substantial owners of the initial
8        registration;
9            (B) cancellation, revocation, or termination of
10        any registration by the Illinois Department of Public
11        Health;
12            (C) a determination by the Illinois Department of
13        Public Health that transfer of the registration is in
14        the best interests of Illinois qualifying patients as
15        defined by the Compassionate Use of Medical Cannabis
16        Pilot Program Act;
17            (D) the death of an owner of the equity interest in
18        a registrant;
19            (E) the acquisition of a controlling interest in
20        the stock or substantially all of the assets of a
21        publicly traded company;
22            (F) a transfer by a parent company to a wholly
23        owned subsidiary; or
24            (G) the transfer or sale to or by one person to
25        another person where both persons were initial owners
26        of the registration when the registration was issued;

 

 

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1        or
2        (2) the cannabis cultivation center registration,
3    medical cannabis dispensary registration, or the
4    controlling interest in a registrant's property is
5    transferred in a transaction to lineal descendants in which
6    no gain or loss is recognized or as a result of a
7    transaction in accordance with Section 351 of the Internal
8    Revenue Code in which no gain or loss is recognized.
9(Source: P.A. 100-22, eff. 7-6-17.)
 
10    (35 ILCS 5/303)  (from Ch. 120, par. 3-303)
11    Sec. 303. (a) In general. Any item of capital gain or loss,
12and any item of income from rents or royalties from real or
13tangible personal property, interest, dividends, and patent or
14copyright royalties, and prizes awarded under the Illinois
15Lottery Law, and, for taxable years ending on or after December
1631, 2018, wagering and gambling winnings from Illinois sources
17as set forth in subsection (e-1) of this Section, to the extent
18such item constitutes nonbusiness income, together with any
19item of deduction directly allocable thereto, shall be
20allocated by any person other than a resident as provided in
21this Section.
22    (b) Capital gains and losses.
23        (1) Real property. Capital gains and losses from sales
24    or exchanges of real property are allocable to this State
25    if the property is located in this State.

 

 

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1        (2) Tangible personal property. Capital gains and
2    losses from sales or exchanges of tangible personal
3    property are allocable to this State if, at the time of
4    such sale or exchange:
5            (A) The property had its situs in this State; or
6            (B) The taxpayer had its commercial domicile in
7        this State and was not taxable in the state in which
8        the property had its situs.
9        (3) Intangibles. Capital gains and losses from sales or
10    exchanges of intangible personal property are allocable to
11    this State if the taxpayer had its commercial domicile in
12    this State at the time of such sale or exchange.
13    (c) Rents and royalties.
14        (1) Real property. Rents and royalties from real
15    property are allocable to this State if the property is
16    located in this State.
17        (2) Tangible personal property. Rents and royalties
18    from tangible personal property are allocable to this
19    State:
20            (A) If and to the extent that the property is
21        utilized in this State; or
22            (B) In their entirety if, at the time such rents or
23        royalties were paid or accrued, the taxpayer had its
24        commercial domicile in this State and was not organized
25        under the laws of or taxable with respect to such rents
26        or royalties in the state in which the property was

 

 

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1        utilized. The extent of utilization of tangible
2        personal property in a state is determined by
3        multiplying the rents or royalties derived from such
4        property by a fraction, the numerator of which is the
5        number of days of physical location of the property in
6        the state during the rental or royalty period in the
7        taxable year and the denominator of which is the number
8        of days of physical location of the property everywhere
9        during all rental or royalty periods in the taxable
10        year. If the physical location of the property during
11        the rental or royalty period is unknown or
12        unascertainable by the taxpayer, tangible personal
13        property is utilized in the state in which the property
14        was located at the time the rental or royalty payer
15        obtained possession.
16    (d) Patent and copyright royalties.
17        (1) Allocation. Patent and copyright royalties are
18    allocable to this State:
19            (A) If and to the extent that the patent or
20        copyright is utilized by the payer in this State; or
21            (B) If and to the extent that the patent or
22        copyright is utilized by the payer in a state in which
23        the taxpayer is not taxable with respect to such
24        royalties and, at the time such royalties were paid or
25        accrued, the taxpayer had its commercial domicile in
26        this State.

 

 

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1        (2) Utilization.
2            (A) A patent is utilized in a state to the extent
3        that it is employed in production, fabrication,
4        manufacturing or other processing in the state or to
5        the extent that a patented product is produced in the
6        state. If the basis of receipts from patent royalties
7        does not permit allocation to states or if the
8        accounting procedures do not reflect states of
9        utilization, the patent is utilized in this State if
10        the taxpayer has its commercial domicile in this State.
11            (B) A copyright is utilized in a state to the
12        extent that printing or other publication originates
13        in the state. If the basis of receipts from copyright
14        royalties does not permit allocation to states or if
15        the accounting procedures do not reflect states of
16        utilization, the copyright is utilized in this State if
17        the taxpayer has its commercial domicile in this State.
18    (e) Illinois lottery prizes. Prizes awarded under the
19Illinois Lottery Law are allocable to this State. Payments
20received in taxable years ending on or after December 31, 2013,
21from the assignment of a prize under Section 13.1 of the
22Illinois Lottery Law are allocable to this State.
23    (e-1) Wagering and gambling winnings. Payments received in
24taxable years ending on or after December 31, 2018 of winnings
25from pari-mutuel wagering conducted at a wagering facility
26licensed under the Illinois Horse Racing Act of 1975 and from

 

 

HB5146- 130 -LRB100 18631 SMS 33856 b

1gambling games conducted on a riverboat or in a casino or
2electronic gaming facility licensed under the Illinois
3Gambling Act are allocable to this State.
4    (e-5) Unemployment benefits. Unemployment benefits paid by
5the Illinois Department of Employment Security are allocable to
6this State.
7    (f) Taxability in other state. For purposes of allocation
8of income pursuant to this Section, a taxpayer is taxable in
9another state if:
10        (1) In that state he is subject to a net income tax, a
11    franchise tax measured by net income, a franchise tax for
12    the privilege of doing business, or a corporate stock tax;
13    or
14        (2) That state has jurisdiction to subject the taxpayer
15    to a net income tax regardless of whether, in fact, the
16    state does or does not.
17    (g) Cross references.
18        (1) For allocation of interest and dividends by persons
19    other than residents, see Section 301(c)(2).
20        (2) For allocation of nonbusiness income by residents,
21    see Section 301(a).
22(Source: P.A. 97-709, eff. 7-1-12; 98-496, eff. 1-1-14.)
 
23    (35 ILCS 5/304)  (from Ch. 120, par. 3-304)
24    Sec. 304. Business income of persons other than residents.
25    (a) In general. The business income of a person other than

 

 

HB5146- 131 -LRB100 18631 SMS 33856 b

1a resident shall be allocated to this State if such person's
2business income is derived solely from this State. If a person
3other than a resident derives business income from this State
4and one or more other states, then, for tax years ending on or
5before December 30, 1998, and except as otherwise provided by
6this Section, such person's business income shall be
7apportioned to this State by multiplying the income by a
8fraction, the numerator of which is the sum of the property
9factor (if any), the payroll factor (if any) and 200% of the
10sales factor (if any), and the denominator of which is 4
11reduced by the number of factors other than the sales factor
12which have a denominator of zero and by an additional 2 if the
13sales factor has a denominator of zero. For tax years ending on
14or after December 31, 1998, and except as otherwise provided by
15this Section, persons other than residents who derive business
16income from this State and one or more other states shall
17compute their apportionment factor by weighting their
18property, payroll, and sales factors as provided in subsection
19(h) of this Section.
20    (1) Property factor.
21        (A) The property factor is a fraction, the numerator of
22    which is the average value of the person's real and
23    tangible personal property owned or rented and used in the
24    trade or business in this State during the taxable year and
25    the denominator of which is the average value of all the
26    person's real and tangible personal property owned or

 

 

HB5146- 132 -LRB100 18631 SMS 33856 b

1    rented and used in the trade or business during the taxable
2    year.
3        (B) Property owned by the person is valued at its
4    original cost. Property rented by the person is valued at 8
5    times the net annual rental rate. Net annual rental rate is
6    the annual rental rate paid by the person less any annual
7    rental rate received by the person from sub-rentals.
8        (C) The average value of property shall be determined
9    by averaging the values at the beginning and ending of the
10    taxable year but the Director may require the averaging of
11    monthly values during the taxable year if reasonably
12    required to reflect properly the average value of the
13    person's property.
14    (2) Payroll factor.
15        (A) The payroll factor is a fraction, the numerator of
16    which is the total amount paid in this State during the
17    taxable year by the person for compensation, and the
18    denominator of which is the total compensation paid
19    everywhere during the taxable year.
20        (B) Compensation is paid in this State if:
21            (i) The individual's service is performed entirely
22        within this State;
23            (ii) The individual's service is performed both
24        within and without this State, but the service
25        performed without this State is incidental to the
26        individual's service performed within this State; or

 

 

HB5146- 133 -LRB100 18631 SMS 33856 b

1            (iii) Some of the service is performed within this
2        State and either the base of operations, or if there is
3        no base of operations, the place from which the service
4        is directed or controlled is within this State, or the
5        base of operations or the place from which the service
6        is directed or controlled is not in any state in which
7        some part of the service is performed, but the
8        individual's residence is in this State.
9            (iv) Compensation paid to nonresident professional
10        athletes.
11            (a) General. The Illinois source income of a
12        nonresident individual who is a member of a
13        professional athletic team includes the portion of the
14        individual's total compensation for services performed
15        as a member of a professional athletic team during the
16        taxable year which the number of duty days spent within
17        this State performing services for the team in any
18        manner during the taxable year bears to the total
19        number of duty days spent both within and without this
20        State during the taxable year.
21            (b) Travel days. Travel days that do not involve
22        either a game, practice, team meeting, or other similar
23        team event are not considered duty days spent in this
24        State. However, such travel days are considered in the
25        total duty days spent both within and without this
26        State.

 

 

HB5146- 134 -LRB100 18631 SMS 33856 b

1            (c) Definitions. For purposes of this subpart
2        (iv):
3                (1) The term "professional athletic team"
4            includes, but is not limited to, any professional
5            baseball, basketball, football, soccer, or hockey
6            team.
7                (2) The term "member of a professional
8            athletic team" includes those employees who are
9            active players, players on the disabled list, and
10            any other persons required to travel and who travel
11            with and perform services on behalf of a
12            professional athletic team on a regular basis.
13            This includes, but is not limited to, coaches,
14            managers, and trainers.
15                (3) Except as provided in items (C) and (D) of
16            this subpart (3), the term "duty days" means all
17            days during the taxable year from the beginning of
18            the professional athletic team's official
19            pre-season training period through the last game
20            in which the team competes or is scheduled to
21            compete. Duty days shall be counted for the year in
22            which they occur, including where a team's
23            official pre-season training period through the
24            last game in which the team competes or is
25            scheduled to compete, occurs during more than one
26            tax year.

 

 

HB5146- 135 -LRB100 18631 SMS 33856 b

1                    (A) Duty days shall also include days on
2                which a member of a professional athletic team
3                performs service for a team on a date that does
4                not fall within the foregoing period (e.g.,
5                participation in instructional leagues, the
6                "All Star Game", or promotional "caravans").
7                Performing a service for a professional
8                athletic team includes conducting training and
9                rehabilitation activities, when such
10                activities are conducted at team facilities.
11                    (B) Also included in duty days are game
12                days, practice days, days spent at team
13                meetings, promotional caravans, preseason
14                training camps, and days served with the team
15                through all post-season games in which the team
16                competes or is scheduled to compete.
17                    (C) Duty days for any person who joins a
18                team during the period from the beginning of
19                the professional athletic team's official
20                pre-season training period through the last
21                game in which the team competes, or is
22                scheduled to compete, shall begin on the day
23                that person joins the team. Conversely, duty
24                days for any person who leaves a team during
25                this period shall end on the day that person
26                leaves the team. Where a person switches teams

 

 

HB5146- 136 -LRB100 18631 SMS 33856 b

1                during a taxable year, a separate duty-day
2                calculation shall be made for the period the
3                person was with each team.
4                    (D) Days for which a member of a
5                professional athletic team is not compensated
6                and is not performing services for the team in
7                any manner, including days when such member of
8                a professional athletic team has been
9                suspended without pay and prohibited from
10                performing any services for the team, shall not
11                be treated as duty days.
12                    (E) Days for which a member of a
13                professional athletic team is on the disabled
14                list and does not conduct rehabilitation
15                activities at facilities of the team, and is
16                not otherwise performing services for the team
17                in Illinois, shall not be considered duty days
18                spent in this State. All days on the disabled
19                list, however, are considered to be included in
20                total duty days spent both within and without
21                this State.
22                (4) The term "total compensation for services
23            performed as a member of a professional athletic
24            team" means the total compensation received during
25            the taxable year for services performed:
26                    (A) from the beginning of the official

 

 

HB5146- 137 -LRB100 18631 SMS 33856 b

1                pre-season training period through the last
2                game in which the team competes or is scheduled
3                to compete during that taxable year; and
4                    (B) during the taxable year on a date which
5                does not fall within the foregoing period
6                (e.g., participation in instructional leagues,
7                the "All Star Game", or promotional caravans).
8                This compensation shall include, but is not
9            limited to, salaries, wages, bonuses as described
10            in this subpart, and any other type of compensation
11            paid during the taxable year to a member of a
12            professional athletic team for services performed
13            in that year. This compensation does not include
14            strike benefits, severance pay, termination pay,
15            contract or option year buy-out payments,
16            expansion or relocation payments, or any other
17            payments not related to services performed for the
18            team.
19                For purposes of this subparagraph, "bonuses"
20            included in "total compensation for services
21            performed as a member of a professional athletic
22            team" subject to the allocation described in
23            Section 302(c)(1) are: bonuses earned as a result
24            of play (i.e., performance bonuses) during the
25            season, including bonuses paid for championship,
26            playoff or "bowl" games played by a team, or for

 

 

HB5146- 138 -LRB100 18631 SMS 33856 b

1            selection to all-star league or other honorary
2            positions; and bonuses paid for signing a
3            contract, unless the payment of the signing bonus
4            is not conditional upon the signee playing any
5            games for the team or performing any subsequent
6            services for the team or even making the team, the
7            signing bonus is payable separately from the
8            salary and any other compensation, and the signing
9            bonus is nonrefundable.
10    (3) Sales factor.
11        (A) The sales factor is a fraction, the numerator of
12    which is the total sales of the person in this State during
13    the taxable year, and the denominator of which is the total
14    sales of the person everywhere during the taxable year.
15        (B) Sales of tangible personal property are in this
16    State if:
17            (i) The property is delivered or shipped to a
18        purchaser, other than the United States government,
19        within this State regardless of the f. o. b. point or
20        other conditions of the sale; or
21            (ii) The property is shipped from an office, store,
22        warehouse, factory or other place of storage in this
23        State and either the purchaser is the United States
24        government or the person is not taxable in the state of
25        the purchaser; provided, however, that premises owned
26        or leased by a person who has independently contracted

 

 

HB5146- 139 -LRB100 18631 SMS 33856 b

1        with the seller for the printing of newspapers,
2        periodicals or books shall not be deemed to be an
3        office, store, warehouse, factory or other place of
4        storage for purposes of this Section. Sales of tangible
5        personal property are not in this State if the seller
6        and purchaser would be members of the same unitary
7        business group but for the fact that either the seller
8        or purchaser is a person with 80% or more of total
9        business activity outside of the United States and the
10        property is purchased for resale.
11        (B-1) Patents, copyrights, trademarks, and similar
12    items of intangible personal property.
13            (i) Gross receipts from the licensing, sale, or
14        other disposition of a patent, copyright, trademark,
15        or similar item of intangible personal property, other
16        than gross receipts governed by paragraph (B-7) of this
17        item (3), are in this State to the extent the item is
18        utilized in this State during the year the gross
19        receipts are included in gross income.
20            (ii) Place of utilization.
21                (I) A patent is utilized in a state to the
22            extent that it is employed in production,
23            fabrication, manufacturing, or other processing in
24            the state or to the extent that a patented product
25            is produced in the state. If a patent is utilized
26            in more than one state, the extent to which it is

 

 

HB5146- 140 -LRB100 18631 SMS 33856 b

1            utilized in any one state shall be a fraction equal
2            to the gross receipts of the licensee or purchaser
3            from sales or leases of items produced,
4            fabricated, manufactured, or processed within that
5            state using the patent and of patented items
6            produced within that state, divided by the total of
7            such gross receipts for all states in which the
8            patent is utilized.
9                (II) A copyright is utilized in a state to the
10            extent that printing or other publication
11            originates in the state. If a copyright is utilized
12            in more than one state, the extent to which it is
13            utilized in any one state shall be a fraction equal
14            to the gross receipts from sales or licenses of
15            materials printed or published in that state
16            divided by the total of such gross receipts for all
17            states in which the copyright is utilized.
18                (III) Trademarks and other items of intangible
19            personal property governed by this paragraph (B-1)
20            are utilized in the state in which the commercial
21            domicile of the licensee or purchaser is located.
22            (iii) If the state of utilization of an item of
23        property governed by this paragraph (B-1) cannot be
24        determined from the taxpayer's books and records or
25        from the books and records of any person related to the
26        taxpayer within the meaning of Section 267(b) of the

 

 

HB5146- 141 -LRB100 18631 SMS 33856 b

1        Internal Revenue Code, 26 U.S.C. 267, the gross
2        receipts attributable to that item shall be excluded
3        from both the numerator and the denominator of the
4        sales factor.
5        (B-2) Gross receipts from the license, sale, or other
6    disposition of patents, copyrights, trademarks, and
7    similar items of intangible personal property, other than
8    gross receipts governed by paragraph (B-7) of this item
9    (3), may be included in the numerator or denominator of the
10    sales factor only if gross receipts from licenses, sales,
11    or other disposition of such items comprise more than 50%
12    of the taxpayer's total gross receipts included in gross
13    income during the tax year and during each of the 2
14    immediately preceding tax years; provided that, when a
15    taxpayer is a member of a unitary business group, such
16    determination shall be made on the basis of the gross
17    receipts of the entire unitary business group.
18        (B-5) For taxable years ending on or after December 31,
19    2008, except as provided in subsections (ii) through (vii),
20    receipts from the sale of telecommunications service or
21    mobile telecommunications service are in this State if the
22    customer's service address is in this State.
23            (i) For purposes of this subparagraph (B-5), the
24        following terms have the following meanings:
25            "Ancillary services" means services that are
26        associated with or incidental to the provision of

 

 

HB5146- 142 -LRB100 18631 SMS 33856 b

1        "telecommunications services", including but not
2        limited to "detailed telecommunications billing",
3        "directory assistance", "vertical service", and "voice
4        mail services".
5            "Air-to-Ground Radiotelephone service" means a
6        radio service, as that term is defined in 47 CFR 22.99,
7        in which common carriers are authorized to offer and
8        provide radio telecommunications service for hire to
9        subscribers in aircraft.
10            "Call-by-call Basis" means any method of charging
11        for telecommunications services where the price is
12        measured by individual calls.
13            "Communications Channel" means a physical or
14        virtual path of communications over which signals are
15        transmitted between or among customer channel
16        termination points.
17            "Conference bridging service" means an "ancillary
18        service" that links two or more participants of an
19        audio or video conference call and may include the
20        provision of a telephone number. "Conference bridging
21        service" does not include the "telecommunications
22        services" used to reach the conference bridge.
23            "Customer Channel Termination Point" means the
24        location where the customer either inputs or receives
25        the communications.
26            "Detailed telecommunications billing service"

 

 

HB5146- 143 -LRB100 18631 SMS 33856 b

1        means an "ancillary service" of separately stating
2        information pertaining to individual calls on a
3        customer's billing statement.
4            "Directory assistance" means an "ancillary
5        service" of providing telephone number information,
6        and/or address information.
7            "Home service provider" means the facilities based
8        carrier or reseller with which the customer contracts
9        for the provision of mobile telecommunications
10        services.
11            "Mobile telecommunications service" means
12        commercial mobile radio service, as defined in Section
13        20.3 of Title 47 of the Code of Federal Regulations as
14        in effect on June 1, 1999.
15            "Place of primary use" means the street address
16        representative of where the customer's use of the
17        telecommunications service primarily occurs, which
18        must be the residential street address or the primary
19        business street address of the customer. In the case of
20        mobile telecommunications services, "place of primary
21        use" must be within the licensed service area of the
22        home service provider.
23            "Post-paid telecommunication service" means the
24        telecommunications service obtained by making a
25        payment on a call-by-call basis either through the use
26        of a credit card or payment mechanism such as a bank

 

 

HB5146- 144 -LRB100 18631 SMS 33856 b

1        card, travel card, credit card, or debit card, or by
2        charge made to a telephone number which is not
3        associated with the origination or termination of the
4        telecommunications service. A post-paid calling
5        service includes telecommunications service, except a
6        prepaid wireless calling service, that would be a
7        prepaid calling service except it is not exclusively a
8        telecommunication service.
9            "Prepaid telecommunication service" means the
10        right to access exclusively telecommunications
11        services, which must be paid for in advance and which
12        enables the origination of calls using an access number
13        or authorization code, whether manually or
14        electronically dialed, and that is sold in
15        predetermined units or dollars of which the number
16        declines with use in a known amount.
17            "Prepaid Mobile telecommunication service" means a
18        telecommunications service that provides the right to
19        utilize mobile wireless service as well as other
20        non-telecommunication services, including but not
21        limited to ancillary services, which must be paid for
22        in advance that is sold in predetermined units or
23        dollars of which the number declines with use in a
24        known amount.
25            "Private communication service" means a
26        telecommunication service that entitles the customer

 

 

HB5146- 145 -LRB100 18631 SMS 33856 b

1        to exclusive or priority use of a communications
2        channel or group of channels between or among
3        termination points, regardless of the manner in which
4        such channel or channels are connected, and includes
5        switching capacity, extension lines, stations, and any
6        other associated services that are provided in
7        connection with the use of such channel or channels.
8            "Service address" means:
9                (a) The location of the telecommunications
10            equipment to which a customer's call is charged and
11            from which the call originates or terminates,
12            regardless of where the call is billed or paid;
13                (b) If the location in line (a) is not known,
14            service address means the origination point of the
15            signal of the telecommunications services first
16            identified by either the seller's
17            telecommunications system or in information
18            received by the seller from its service provider
19            where the system used to transport such signals is
20            not that of the seller; and
21                (c) If the locations in line (a) and line (b)
22            are not known, the service address means the
23            location of the customer's place of primary use.
24            "Telecommunications service" means the electronic
25        transmission, conveyance, or routing of voice, data,
26        audio, video, or any other information or signals to a

 

 

HB5146- 146 -LRB100 18631 SMS 33856 b

1        point, or between or among points. The term
2        "telecommunications service" includes such
3        transmission, conveyance, or routing in which computer
4        processing applications are used to act on the form,
5        code or protocol of the content for purposes of
6        transmission, conveyance or routing without regard to
7        whether such service is referred to as voice over
8        Internet protocol services or is classified by the
9        Federal Communications Commission as enhanced or value
10        added. "Telecommunications service" does not include:
11                (a) Data processing and information services
12            that allow data to be generated, acquired, stored,
13            processed, or retrieved and delivered by an
14            electronic transmission to a purchaser when such
15            purchaser's primary purpose for the underlying
16            transaction is the processed data or information;
17                (b) Installation or maintenance of wiring or
18            equipment on a customer's premises;
19                (c) Tangible personal property;
20                (d) Advertising, including but not limited to
21            directory advertising;
22                (e) Billing and collection services provided
23            to third parties;
24                (f) Internet access service;
25                (g) Radio and television audio and video
26            programming services, regardless of the medium,

 

 

HB5146- 147 -LRB100 18631 SMS 33856 b

1            including the furnishing of transmission,
2            conveyance and routing of such services by the
3            programming service provider. Radio and television
4            audio and video programming services shall include
5            but not be limited to cable service as defined in
6            47 USC 522(6) and audio and video programming
7            services delivered by commercial mobile radio
8            service providers, as defined in 47 CFR 20.3;
9                (h) "Ancillary services"; or
10                (i) Digital products "delivered
11            electronically", including but not limited to
12            software, music, video, reading materials or ring
13            tones.
14            "Vertical service" means an "ancillary service"
15        that is offered in connection with one or more
16        "telecommunications services", which offers advanced
17        calling features that allow customers to identify
18        callers and to manage multiple calls and call
19        connections, including "conference bridging services".
20            "Voice mail service" means an "ancillary service"
21        that enables the customer to store, send or receive
22        recorded messages. "Voice mail service" does not
23        include any "vertical services" that the customer may
24        be required to have in order to utilize the "voice mail
25        service".
26            (ii) Receipts from the sale of telecommunications

 

 

HB5146- 148 -LRB100 18631 SMS 33856 b

1        service sold on an individual call-by-call basis are in
2        this State if either of the following applies:
3                (a) The call both originates and terminates in
4            this State.
5                (b) The call either originates or terminates
6            in this State and the service address is located in
7            this State.
8            (iii) Receipts from the sale of postpaid
9        telecommunications service at retail are in this State
10        if the origination point of the telecommunication
11        signal, as first identified by the service provider's
12        telecommunication system or as identified by
13        information received by the seller from its service
14        provider if the system used to transport
15        telecommunication signals is not the seller's, is
16        located in this State.
17            (iv) Receipts from the sale of prepaid
18        telecommunications service or prepaid mobile
19        telecommunications service at retail are in this State
20        if the purchaser obtains the prepaid card or similar
21        means of conveyance at a location in this State.
22        Receipts from recharging a prepaid telecommunications
23        service or mobile telecommunications service is in
24        this State if the purchaser's billing information
25        indicates a location in this State.
26            (v) Receipts from the sale of private

 

 

HB5146- 149 -LRB100 18631 SMS 33856 b

1        communication services are in this State as follows:
2                (a) 100% of receipts from charges imposed at
3            each channel termination point in this State.
4                (b) 100% of receipts from charges for the total
5            channel mileage between each channel termination
6            point in this State.
7                (c) 50% of the total receipts from charges for
8            service segments when those segments are between 2
9            customer channel termination points, 1 of which is
10            located in this State and the other is located
11            outside of this State, which segments are
12            separately charged.
13                (d) The receipts from charges for service
14            segments with a channel termination point located
15            in this State and in two or more other states, and
16            which segments are not separately billed, are in
17            this State based on a percentage determined by
18            dividing the number of customer channel
19            termination points in this State by the total
20            number of customer channel termination points.
21            (vi) Receipts from charges for ancillary services
22        for telecommunications service sold to customers at
23        retail are in this State if the customer's primary
24        place of use of telecommunications services associated
25        with those ancillary services is in this State. If the
26        seller of those ancillary services cannot determine

 

 

HB5146- 150 -LRB100 18631 SMS 33856 b

1        where the associated telecommunications are located,
2        then the ancillary services shall be based on the
3        location of the purchaser.
4            (vii) Receipts to access a carrier's network or
5        from the sale of telecommunication services or
6        ancillary services for resale are in this State as
7        follows:
8                (a) 100% of the receipts from access fees
9            attributable to intrastate telecommunications
10            service that both originates and terminates in
11            this State.
12                (b) 50% of the receipts from access fees
13            attributable to interstate telecommunications
14            service if the interstate call either originates
15            or terminates in this State.
16                (c) 100% of the receipts from interstate end
17            user access line charges, if the customer's
18            service address is in this State. As used in this
19            subdivision, "interstate end user access line
20            charges" includes, but is not limited to, the
21            surcharge approved by the federal communications
22            commission and levied pursuant to 47 CFR 69.
23                (d) Gross receipts from sales of
24            telecommunication services or from ancillary
25            services for telecommunications services sold to
26            other telecommunication service providers for

 

 

HB5146- 151 -LRB100 18631 SMS 33856 b

1            resale shall be sourced to this State using the
2            apportionment concepts used for non-resale
3            receipts of telecommunications services if the
4            information is readily available to make that
5            determination. If the information is not readily
6            available, then the taxpayer may use any other
7            reasonable and consistent method.
8        (B-7) For taxable years ending on or after December 31,
9    2008, receipts from the sale of broadcasting services are
10    in this State if the broadcasting services are received in
11    this State. For purposes of this paragraph (B-7), the
12    following terms have the following meanings:
13            "Advertising revenue" means consideration received
14        by the taxpayer in exchange for broadcasting services
15        or allowing the broadcasting of commercials or
16        announcements in connection with the broadcasting of
17        film or radio programming, from sponsorships of the
18        programming, or from product placements in the
19        programming.
20            "Audience factor" means the ratio that the
21        audience or subscribers located in this State of a
22        station, a network, or a cable system bears to the
23        total audience or total subscribers for that station,
24        network, or cable system. The audience factor for film
25        or radio programming shall be determined by reference
26        to the books and records of the taxpayer or by

 

 

HB5146- 152 -LRB100 18631 SMS 33856 b

1        reference to published rating statistics provided the
2        method used by the taxpayer is consistently used from
3        year to year for this purpose and fairly represents the
4        taxpayer's activity in this State.
5            "Broadcast" or "broadcasting" or "broadcasting
6        services" means the transmission or provision of film
7        or radio programming, whether through the public
8        airwaves, by cable, by direct or indirect satellite
9        transmission, or by any other means of communication,
10        either through a station, a network, or a cable system.
11            "Film" or "film programming" means the broadcast
12        on television of any and all performances, events, or
13        productions, including but not limited to news,
14        sporting events, plays, stories, or other literary,
15        commercial, educational, or artistic works, either
16        live or through the use of video tape, disc, or any
17        other type of format or medium. Each episode of a
18        series of films produced for television shall
19        constitute separate "film" notwithstanding that the
20        series relates to the same principal subject and is
21        produced during one or more tax periods.
22            "Radio" or "radio programming" means the broadcast
23        on radio of any and all performances, events, or
24        productions, including but not limited to news,
25        sporting events, plays, stories, or other literary,
26        commercial, educational, or artistic works, either

 

 

HB5146- 153 -LRB100 18631 SMS 33856 b

1        live or through the use of an audio tape, disc, or any
2        other format or medium. Each episode in a series of
3        radio programming produced for radio broadcast shall
4        constitute a separate "radio programming"
5        notwithstanding that the series relates to the same
6        principal subject and is produced during one or more
7        tax periods.
8                (i) In the case of advertising revenue from
9            broadcasting, the customer is the advertiser and
10            the service is received in this State if the
11            commercial domicile of the advertiser is in this
12            State.
13                (ii) In the case where film or radio
14            programming is broadcast by a station, a network,
15            or a cable system for a fee or other remuneration
16            received from the recipient of the broadcast, the
17            portion of the service that is received in this
18            State is measured by the portion of the recipients
19            of the broadcast located in this State.
20            Accordingly, the fee or other remuneration for
21            such service that is included in the Illinois
22            numerator of the sales factor is the total of those
23            fees or other remuneration received from
24            recipients in Illinois. For purposes of this
25            paragraph, a taxpayer may determine the location
26            of the recipients of its broadcast using the

 

 

HB5146- 154 -LRB100 18631 SMS 33856 b

1            address of the recipient shown in its contracts
2            with the recipient or using the billing address of
3            the recipient in the taxpayer's records.
4                (iii) In the case where film or radio
5            programming is broadcast by a station, a network,
6            or a cable system for a fee or other remuneration
7            from the person providing the programming, the
8            portion of the broadcast service that is received
9            by such station, network, or cable system in this
10            State is measured by the portion of recipients of
11            the broadcast located in this State. Accordingly,
12            the amount of revenue related to such an
13            arrangement that is included in the Illinois
14            numerator of the sales factor is the total fee or
15            other total remuneration from the person providing
16            the programming related to that broadcast
17            multiplied by the Illinois audience factor for
18            that broadcast.
19                (iv) In the case where film or radio
20            programming is provided by a taxpayer that is a
21            network or station to a customer for broadcast in
22            exchange for a fee or other remuneration from that
23            customer the broadcasting service is received at
24            the location of the office of the customer from
25            which the services were ordered in the regular
26            course of the customer's trade or business.

 

 

HB5146- 155 -LRB100 18631 SMS 33856 b

1            Accordingly, in such a case the revenue derived by
2            the taxpayer that is included in the taxpayer's
3            Illinois numerator of the sales factor is the
4            revenue from such customers who receive the
5            broadcasting service in Illinois.
6                (v) In the case where film or radio programming
7            is provided by a taxpayer that is not a network or
8            station to another person for broadcasting in
9            exchange for a fee or other remuneration from that
10            person, the broadcasting service is received at
11            the location of the office of the customer from
12            which the services were ordered in the regular
13            course of the customer's trade or business.
14            Accordingly, in such a case the revenue derived by
15            the taxpayer that is included in the taxpayer's
16            Illinois numerator of the sales factor is the
17            revenue from such customers who receive the
18            broadcasting service in Illinois.
19        (B-8) Gross receipts from winnings under the Illinois
20    Lottery Law from the assignment of a prize under Section
21    13.1 of the Illinois Lottery Law are received in this
22    State. This paragraph (B-8) applies only to taxable years
23    ending on or after December 31, 2013.
24        (B-9) For taxable years ending on or after December 31,
25    2018, gross receipts from winnings from pari-mutuel
26    wagering conducted at a wagering facility licensed under

 

 

HB5146- 156 -LRB100 18631 SMS 33856 b

1    the Illinois Horse Racing Act of 1975 or from winnings from
2    gambling games conducted on a riverboat or in a casino or
3    electronic gaming facility licensed under the Illinois
4    Gambling Act are in this State.
5        (C) For taxable years ending before December 31, 2008,
6    sales, other than sales governed by paragraphs (B), (B-1),
7    (B-2), and (B-8) are in this State if:
8            (i) The income-producing activity is performed in
9        this State; or
10            (ii) The income-producing activity is performed
11        both within and without this State and a greater
12        proportion of the income-producing activity is
13        performed within this State than without this State,
14        based on performance costs.
15        (C-5) For taxable years ending on or after December 31,
16    2008, sales, other than sales governed by paragraphs (B),
17    (B-1), (B-2), (B-5), and (B-7), are in this State if any of
18    the following criteria are met:
19            (i) Sales from the sale or lease of real property
20        are in this State if the property is located in this
21        State.
22            (ii) Sales from the lease or rental of tangible
23        personal property are in this State if the property is
24        located in this State during the rental period. Sales
25        from the lease or rental of tangible personal property
26        that is characteristically moving property, including,

 

 

HB5146- 157 -LRB100 18631 SMS 33856 b

1        but not limited to, motor vehicles, rolling stock,
2        aircraft, vessels, or mobile equipment are in this
3        State to the extent that the property is used in this
4        State.
5            (iii) In the case of interest, net gains (but not
6        less than zero) and other items of income from
7        intangible personal property, the sale is in this State
8        if:
9                (a) in the case of a taxpayer who is a dealer
10            in the item of intangible personal property within
11            the meaning of Section 475 of the Internal Revenue
12            Code, the income or gain is received from a
13            customer in this State. For purposes of this
14            subparagraph, a customer is in this State if the
15            customer is an individual, trust or estate who is a
16            resident of this State and, for all other
17            customers, if the customer's commercial domicile
18            is in this State. Unless the dealer has actual
19            knowledge of the residence or commercial domicile
20            of a customer during a taxable year, the customer
21            shall be deemed to be a customer in this State if
22            the billing address of the customer, as shown in
23            the records of the dealer, is in this State; or
24                (b) in all other cases, if the
25            income-producing activity of the taxpayer is
26            performed in this State or, if the

 

 

HB5146- 158 -LRB100 18631 SMS 33856 b

1            income-producing activity of the taxpayer is
2            performed both within and without this State, if a
3            greater proportion of the income-producing
4            activity of the taxpayer is performed within this
5            State than in any other state, based on performance
6            costs.
7            (iv) Sales of services are in this State if the
8        services are received in this State. For the purposes
9        of this section, gross receipts from the performance of
10        services provided to a corporation, partnership, or
11        trust may only be attributed to a state where that
12        corporation, partnership, or trust has a fixed place of
13        business. If the state where the services are received
14        is not readily determinable or is a state where the
15        corporation, partnership, or trust receiving the
16        service does not have a fixed place of business, the
17        services shall be deemed to be received at the location
18        of the office of the customer from which the services
19        were ordered in the regular course of the customer's
20        trade or business. If the ordering office cannot be
21        determined, the services shall be deemed to be received
22        at the office of the customer to which the services are
23        billed. If the taxpayer is not taxable in the state in
24        which the services are received, the sale must be
25        excluded from both the numerator and the denominator of
26        the sales factor. The Department shall adopt rules

 

 

HB5146- 159 -LRB100 18631 SMS 33856 b

1        prescribing where specific types of service are
2        received, including, but not limited to, publishing,
3        and utility service.
4        (D) For taxable years ending on or after December 31,
5    1995, the following items of income shall not be included
6    in the numerator or denominator of the sales factor:
7    dividends; amounts included under Section 78 of the
8    Internal Revenue Code; and Subpart F income as defined in
9    Section 952 of the Internal Revenue Code. No inference
10    shall be drawn from the enactment of this paragraph (D) in
11    construing this Section for taxable years ending before
12    December 31, 1995.
13        (E) Paragraphs (B-1) and (B-2) shall apply to tax years
14    ending on or after December 31, 1999, provided that a
15    taxpayer may elect to apply the provisions of these
16    paragraphs to prior tax years. Such election shall be made
17    in the form and manner prescribed by the Department, shall
18    be irrevocable, and shall apply to all tax years; provided
19    that, if a taxpayer's Illinois income tax liability for any
20    tax year, as assessed under Section 903 prior to January 1,
21    1999, was computed in a manner contrary to the provisions
22    of paragraphs (B-1) or (B-2), no refund shall be payable to
23    the taxpayer for that tax year to the extent such refund is
24    the result of applying the provisions of paragraph (B-1) or
25    (B-2) retroactively. In the case of a unitary business
26    group, such election shall apply to all members of such

 

 

HB5146- 160 -LRB100 18631 SMS 33856 b

1    group for every tax year such group is in existence, but
2    shall not apply to any taxpayer for any period during which
3    that taxpayer is not a member of such group.
4    (b) Insurance companies.
5        (1) In general. Except as otherwise provided by
6    paragraph (2), business income of an insurance company for
7    a taxable year shall be apportioned to this State by
8    multiplying such income by a fraction, the numerator of
9    which is the direct premiums written for insurance upon
10    property or risk in this State, and the denominator of
11    which is the direct premiums written for insurance upon
12    property or risk everywhere. For purposes of this
13    subsection, the term "direct premiums written" means the
14    total amount of direct premiums written, assessments and
15    annuity considerations as reported for the taxable year on
16    the annual statement filed by the company with the Illinois
17    Director of Insurance in the form approved by the National
18    Convention of Insurance Commissioners or such other form as
19    may be prescribed in lieu thereof.
20        (2) Reinsurance. If the principal source of premiums
21    written by an insurance company consists of premiums for
22    reinsurance accepted by it, the business income of such
23    company shall be apportioned to this State by multiplying
24    such income by a fraction, the numerator of which is the
25    sum of (i) direct premiums written for insurance upon
26    property or risk in this State, plus (ii) premiums written

 

 

HB5146- 161 -LRB100 18631 SMS 33856 b

1    for reinsurance accepted in respect of property or risk in
2    this State, and the denominator of which is the sum of
3    (iii) direct premiums written for insurance upon property
4    or risk everywhere, plus (iv) premiums written for
5    reinsurance accepted in respect of property or risk
6    everywhere. For purposes of this paragraph, premiums
7    written for reinsurance accepted in respect of property or
8    risk in this State, whether or not otherwise determinable,
9    may, at the election of the company, be determined on the
10    basis of the proportion which premiums written for
11    reinsurance accepted from companies commercially domiciled
12    in Illinois bears to premiums written for reinsurance
13    accepted from all sources, or, alternatively, in the
14    proportion which the sum of the direct premiums written for
15    insurance upon property or risk in this State by each
16    ceding company from which reinsurance is accepted bears to
17    the sum of the total direct premiums written by each such
18    ceding company for the taxable year. The election made by a
19    company under this paragraph for its first taxable year
20    ending on or after December 31, 2011, shall be binding for
21    that company for that taxable year and for all subsequent
22    taxable years, and may be altered only with the written
23    permission of the Department, which shall not be
24    unreasonably withheld.
25    (c) Financial organizations.
26        (1) In general. For taxable years ending before

 

 

HB5146- 162 -LRB100 18631 SMS 33856 b

1    December 31, 2008, business income of a financial
2    organization shall be apportioned to this State by
3    multiplying such income by a fraction, the numerator of
4    which is its business income from sources within this
5    State, and the denominator of which is its business income
6    from all sources. For the purposes of this subsection, the
7    business income of a financial organization from sources
8    within this State is the sum of the amounts referred to in
9    subparagraphs (A) through (E) following, but excluding the
10    adjusted income of an international banking facility as
11    determined in paragraph (2):
12            (A) Fees, commissions or other compensation for
13        financial services rendered within this State;
14            (B) Gross profits from trading in stocks, bonds or
15        other securities managed within this State;
16            (C) Dividends, and interest from Illinois
17        customers, which are received within this State;
18            (D) Interest charged to customers at places of
19        business maintained within this State for carrying
20        debit balances of margin accounts, without deduction
21        of any costs incurred in carrying such accounts; and
22            (E) Any other gross income resulting from the
23        operation as a financial organization within this
24        State. In computing the amounts referred to in
25        paragraphs (A) through (E) of this subsection, any
26        amount received by a member of an affiliated group

 

 

HB5146- 163 -LRB100 18631 SMS 33856 b

1        (determined under Section 1504(a) of the Internal
2        Revenue Code but without reference to whether any such
3        corporation is an "includible corporation" under
4        Section 1504(b) of the Internal Revenue Code) from
5        another member of such group shall be included only to
6        the extent such amount exceeds expenses of the
7        recipient directly related thereto.
8        (2) International Banking Facility. For taxable years
9    ending before December 31, 2008:
10            (A) Adjusted Income. The adjusted income of an
11        international banking facility is its income reduced
12        by the amount of the floor amount.
13            (B) Floor Amount. The floor amount shall be the
14        amount, if any, determined by multiplying the income of
15        the international banking facility by a fraction, not
16        greater than one, which is determined as follows:
17                (i) The numerator shall be:
18                The average aggregate, determined on a
19            quarterly basis, of the financial organization's
20            loans to banks in foreign countries, to foreign
21            domiciled borrowers (except where secured
22            primarily by real estate) and to foreign
23            governments and other foreign official
24            institutions, as reported for its branches,
25            agencies and offices within the state on its
26            "Consolidated Report of Condition", Schedule A,

 

 

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1            Lines 2.c., 5.b., and 7.a., which was filed with
2            the Federal Deposit Insurance Corporation and
3            other regulatory authorities, for the year 1980,
4            minus
5                The average aggregate, determined on a
6            quarterly basis, of such loans (other than loans of
7            an international banking facility), as reported by
8            the financial institution for its branches,
9            agencies and offices within the state, on the
10            corresponding Schedule and lines of the
11            Consolidated Report of Condition for the current
12            taxable year, provided, however, that in no case
13            shall the amount determined in this clause (the
14            subtrahend) exceed the amount determined in the
15            preceding clause (the minuend); and
16                (ii) the denominator shall be the average
17            aggregate, determined on a quarterly basis, of the
18            international banking facility's loans to banks in
19            foreign countries, to foreign domiciled borrowers
20            (except where secured primarily by real estate)
21            and to foreign governments and other foreign
22            official institutions, which were recorded in its
23            financial accounts for the current taxable year.
24            (C) Change to Consolidated Report of Condition and
25        in Qualification. In the event the Consolidated Report
26        of Condition which is filed with the Federal Deposit

 

 

HB5146- 165 -LRB100 18631 SMS 33856 b

1        Insurance Corporation and other regulatory authorities
2        is altered so that the information required for
3        determining the floor amount is not found on Schedule
4        A, lines 2.c., 5.b. and 7.a., the financial institution
5        shall notify the Department and the Department may, by
6        regulations or otherwise, prescribe or authorize the
7        use of an alternative source for such information. The
8        financial institution shall also notify the Department
9        should its international banking facility fail to
10        qualify as such, in whole or in part, or should there
11        be any amendment or change to the Consolidated Report
12        of Condition, as originally filed, to the extent such
13        amendment or change alters the information used in
14        determining the floor amount.
15        (3) For taxable years ending on or after December 31,
16    2008, the business income of a financial organization shall
17    be apportioned to this State by multiplying such income by
18    a fraction, the numerator of which is its gross receipts
19    from sources in this State or otherwise attributable to
20    this State's marketplace and the denominator of which is
21    its gross receipts everywhere during the taxable year.
22    "Gross receipts" for purposes of this subparagraph (3)
23    means gross income, including net taxable gain on
24    disposition of assets, including securities and money
25    market instruments, when derived from transactions and
26    activities in the regular course of the financial

 

 

HB5146- 166 -LRB100 18631 SMS 33856 b

1    organization's trade or business. The following examples
2    are illustrative:
3            (i) Receipts from the lease or rental of real or
4        tangible personal property are in this State if the
5        property is located in this State during the rental
6        period. Receipts from the lease or rental of tangible
7        personal property that is characteristically moving
8        property, including, but not limited to, motor
9        vehicles, rolling stock, aircraft, vessels, or mobile
10        equipment are from sources in this State to the extent
11        that the property is used in this State.
12            (ii) Interest income, commissions, fees, gains on
13        disposition, and other receipts from assets in the
14        nature of loans that are secured primarily by real
15        estate or tangible personal property are from sources
16        in this State if the security is located in this State.
17            (iii) Interest income, commissions, fees, gains on
18        disposition, and other receipts from consumer loans
19        that are not secured by real or tangible personal
20        property are from sources in this State if the debtor
21        is a resident of this State.
22            (iv) Interest income, commissions, fees, gains on
23        disposition, and other receipts from commercial loans
24        and installment obligations that are not secured by
25        real or tangible personal property are from sources in
26        this State if the proceeds of the loan are to be

 

 

HB5146- 167 -LRB100 18631 SMS 33856 b

1        applied in this State. If it cannot be determined where
2        the funds are to be applied, the income and receipts
3        are from sources in this State if the office of the
4        borrower from which the loan was negotiated in the
5        regular course of business is located in this State. If
6        the location of this office cannot be determined, the
7        income and receipts shall be excluded from the
8        numerator and denominator of the sales factor.
9            (v) Interest income, fees, gains on disposition,
10        service charges, merchant discount income, and other
11        receipts from credit card receivables are from sources
12        in this State if the card charges are regularly billed
13        to a customer in this State.
14            (vi) Receipts from the performance of services,
15        including, but not limited to, fiduciary, advisory,
16        and brokerage services, are in this State if the
17        services are received in this State within the meaning
18        of subparagraph (a)(3)(C-5)(iv) of this Section.
19            (vii) Receipts from the issuance of travelers
20        checks and money orders are from sources in this State
21        if the checks and money orders are issued from a
22        location within this State.
23            (viii) Receipts from investment assets and
24        activities and trading assets and activities are
25        included in the receipts factor as follows:
26                (1) Interest, dividends, net gains (but not

 

 

HB5146- 168 -LRB100 18631 SMS 33856 b

1            less than zero) and other income from investment
2            assets and activities from trading assets and
3            activities shall be included in the receipts
4            factor. Investment assets and activities and
5            trading assets and activities include but are not
6            limited to: investment securities; trading account
7            assets; federal funds; securities purchased and
8            sold under agreements to resell or repurchase;
9            options; futures contracts; forward contracts;
10            notional principal contracts such as swaps;
11            equities; and foreign currency transactions. With
12            respect to the investment and trading assets and
13            activities described in subparagraphs (A) and (B)
14            of this paragraph, the receipts factor shall
15            include the amounts described in such
16            subparagraphs.
17                    (A) The receipts factor shall include the
18                amount by which interest from federal funds
19                sold and securities purchased under resale
20                agreements exceeds interest expense on federal
21                funds purchased and securities sold under
22                repurchase agreements.
23                    (B) The receipts factor shall include the
24                amount by which interest, dividends, gains and
25                other income from trading assets and
26                activities, including but not limited to

 

 

HB5146- 169 -LRB100 18631 SMS 33856 b

1                assets and activities in the matched book, in
2                the arbitrage book, and foreign currency
3                transactions, exceed amounts paid in lieu of
4                interest, amounts paid in lieu of dividends,
5                and losses from such assets and activities.
6                (2) The numerator of the receipts factor
7            includes interest, dividends, net gains (but not
8            less than zero), and other income from investment
9            assets and activities and from trading assets and
10            activities described in paragraph (1) of this
11            subsection that are attributable to this State.
12                    (A) The amount of interest, dividends, net
13                gains (but not less than zero), and other
14                income from investment assets and activities
15                in the investment account to be attributed to
16                this State and included in the numerator is
17                determined by multiplying all such income from
18                such assets and activities by a fraction, the
19                numerator of which is the gross income from
20                such assets and activities which are properly
21                assigned to a fixed place of business of the
22                taxpayer within this State and the denominator
23                of which is the gross income from all such
24                assets and activities.
25                    (B) The amount of interest from federal
26                funds sold and purchased and from securities

 

 

HB5146- 170 -LRB100 18631 SMS 33856 b

1                purchased under resale agreements and
2                securities sold under repurchase agreements
3                attributable to this State and included in the
4                numerator is determined by multiplying the
5                amount described in subparagraph (A) of
6                paragraph (1) of this subsection from such
7                funds and such securities by a fraction, the
8                numerator of which is the gross income from
9                such funds and such securities which are
10                properly assigned to a fixed place of business
11                of the taxpayer within this State and the
12                denominator of which is the gross income from
13                all such funds and such securities.
14                    (C) The amount of interest, dividends,
15                gains, and other income from trading assets and
16                activities, including but not limited to
17                assets and activities in the matched book, in
18                the arbitrage book and foreign currency
19                transactions (but excluding amounts described
20                in subparagraphs (A) or (B) of this paragraph),
21                attributable to this State and included in the
22                numerator is determined by multiplying the
23                amount described in subparagraph (B) of
24                paragraph (1) of this subsection by a fraction,
25                the numerator of which is the gross income from
26                such trading assets and activities which are

 

 

HB5146- 171 -LRB100 18631 SMS 33856 b

1                properly assigned to a fixed place of business
2                of the taxpayer within this State and the
3                denominator of which is the gross income from
4                all such assets and activities.
5                    (D) Properly assigned, for purposes of
6                this paragraph (2) of this subsection, means
7                the investment or trading asset or activity is
8                assigned to the fixed place of business with
9                which it has a preponderance of substantive
10                contacts. An investment or trading asset or
11                activity assigned by the taxpayer to a fixed
12                place of business without the State shall be
13                presumed to have been properly assigned if:
14                        (i) the taxpayer has assigned, in the
15                    regular course of its business, such asset
16                    or activity on its records to a fixed place
17                    of business consistent with federal or
18                    state regulatory requirements;
19                        (ii) such assignment on its records is
20                    based upon substantive contacts of the
21                    asset or activity to such fixed place of
22                    business; and
23                        (iii) the taxpayer uses such records
24                    reflecting assignment of such assets or
25                    activities for the filing of all state and
26                    local tax returns for which an assignment

 

 

HB5146- 172 -LRB100 18631 SMS 33856 b

1                    of such assets or activities to a fixed
2                    place of business is required.
3                    (E) The presumption of proper assignment
4                of an investment or trading asset or activity
5                provided in subparagraph (D) of paragraph (2)
6                of this subsection may be rebutted upon a
7                showing by the Department, supported by a
8                preponderance of the evidence, that the
9                preponderance of substantive contacts
10                regarding such asset or activity did not occur
11                at the fixed place of business to which it was
12                assigned on the taxpayer's records. If the
13                fixed place of business that has a
14                preponderance of substantive contacts cannot
15                be determined for an investment or trading
16                asset or activity to which the presumption in
17                subparagraph (D) of paragraph (2) of this
18                subsection does not apply or with respect to
19                which that presumption has been rebutted, that
20                asset or activity is properly assigned to the
21                state in which the taxpayer's commercial
22                domicile is located. For purposes of this
23                subparagraph (E), it shall be presumed,
24                subject to rebuttal, that taxpayer's
25                commercial domicile is in the state of the
26                United States or the District of Columbia to

 

 

HB5146- 173 -LRB100 18631 SMS 33856 b

1                which the greatest number of employees are
2                regularly connected with the management of the
3                investment or trading income or out of which
4                they are working, irrespective of where the
5                services of such employees are performed, as of
6                the last day of the taxable year.
7        (4) (Blank).
8        (5) (Blank).
9    (c-1) Federally regulated exchanges. For taxable years
10ending on or after December 31, 2012, business income of a
11federally regulated exchange shall, at the option of the
12federally regulated exchange, be apportioned to this State by
13multiplying such income by a fraction, the numerator of which
14is its business income from sources within this State, and the
15denominator of which is its business income from all sources.
16For purposes of this subsection, the business income within
17this State of a federally regulated exchange is the sum of the
18following:
19        (1) Receipts attributable to transactions executed on
20    a physical trading floor if that physical trading floor is
21    located in this State.
22        (2) Receipts attributable to all other matching,
23    execution, or clearing transactions, including without
24    limitation receipts from the provision of matching,
25    execution, or clearing services to another entity,
26    multiplied by (i) for taxable years ending on or after

 

 

HB5146- 174 -LRB100 18631 SMS 33856 b

1    December 31, 2012 but before December 31, 2013, 63.77%; and
2    (ii) for taxable years ending on or after December 31,
3    2013, 27.54%.
4        (3) All other receipts not governed by subparagraphs
5    (1) or (2) of this subsection (c-1), to the extent the
6    receipts would be characterized as "sales in this State"
7    under item (3) of subsection (a) of this Section.
8    "Federally regulated exchange" means (i) a "registered
9entity" within the meaning of 7 U.S.C. Section 1a(40)(A), (B),
10or (C), (ii) an "exchange" or "clearing agency" within the
11meaning of 15 U.S.C. Section 78c (a)(1) or (23), (iii) any such
12entities regulated under any successor regulatory structure to
13the foregoing, and (iv) all taxpayers who are members of the
14same unitary business group as a federally regulated exchange,
15determined without regard to the prohibition in Section
161501(a)(27) of this Act against including in a unitary business
17group taxpayers who are ordinarily required to apportion
18business income under different subsections of this Section;
19provided that this subparagraph (iv) shall apply only if 50% or
20more of the business receipts of the unitary business group
21determined by application of this subparagraph (iv) for the
22taxable year are attributable to the matching, execution, or
23clearing of transactions conducted by an entity described in
24subparagraph (i), (ii), or (iii) of this paragraph.
25    In no event shall the Illinois apportionment percentage
26computed in accordance with this subsection (c-1) for any

 

 

HB5146- 175 -LRB100 18631 SMS 33856 b

1taxpayer for any tax year be less than the Illinois
2apportionment percentage computed under this subsection (c-1)
3for that taxpayer for the first full tax year ending on or
4after December 31, 2013 for which this subsection (c-1) applied
5to the taxpayer.
6    (d) Transportation services. For taxable years ending
7before December 31, 2008, business income derived from
8furnishing transportation services shall be apportioned to
9this State in accordance with paragraphs (1) and (2):
10        (1) Such business income (other than that derived from
11    transportation by pipeline) shall be apportioned to this
12    State by multiplying such income by a fraction, the
13    numerator of which is the revenue miles of the person in
14    this State, and the denominator of which is the revenue
15    miles of the person everywhere. For purposes of this
16    paragraph, a revenue mile is the transportation of 1
17    passenger or 1 net ton of freight the distance of 1 mile
18    for a consideration. Where a person is engaged in the
19    transportation of both passengers and freight, the
20    fraction above referred to shall be determined by means of
21    an average of the passenger revenue mile fraction and the
22    freight revenue mile fraction, weighted to reflect the
23    person's
24            (A) relative railway operating income from total
25        passenger and total freight service, as reported to the
26        Interstate Commerce Commission, in the case of

 

 

HB5146- 176 -LRB100 18631 SMS 33856 b

1        transportation by railroad, and
2            (B) relative gross receipts from passenger and
3        freight transportation, in case of transportation
4        other than by railroad.
5        (2) Such business income derived from transportation
6    by pipeline shall be apportioned to this State by
7    multiplying such income by a fraction, the numerator of
8    which is the revenue miles of the person in this State, and
9    the denominator of which is the revenue miles of the person
10    everywhere. For the purposes of this paragraph, a revenue
11    mile is the transportation by pipeline of 1 barrel of oil,
12    1,000 cubic feet of gas, or of any specified quantity of
13    any other substance, the distance of 1 mile for a
14    consideration.
15        (3) For taxable years ending on or after December 31,
16    2008, business income derived from providing
17    transportation services other than airline services shall
18    be apportioned to this State by using a fraction, (a) the
19    numerator of which shall be (i) all receipts from any
20    movement or shipment of people, goods, mail, oil, gas, or
21    any other substance (other than by airline) that both
22    originates and terminates in this State, plus (ii) that
23    portion of the person's gross receipts from movements or
24    shipments of people, goods, mail, oil, gas, or any other
25    substance (other than by airline) that originates in one
26    state or jurisdiction and terminates in another state or

 

 

HB5146- 177 -LRB100 18631 SMS 33856 b

1    jurisdiction, that is determined by the ratio that the
2    miles traveled in this State bears to total miles
3    everywhere and (b) the denominator of which shall be all
4    revenue derived from the movement or shipment of people,
5    goods, mail, oil, gas, or any other substance (other than
6    by airline). Where a taxpayer is engaged in the
7    transportation of both passengers and freight, the
8    fraction above referred to shall first be determined
9    separately for passenger miles and freight miles. Then an
10    average of the passenger miles fraction and the freight
11    miles fraction shall be weighted to reflect the taxpayer's:
12            (A) relative railway operating income from total
13        passenger and total freight service, as reported to the
14        Surface Transportation Board, in the case of
15        transportation by railroad; and
16            (B) relative gross receipts from passenger and
17        freight transportation, in case of transportation
18        other than by railroad.
19        (4) For taxable years ending on or after December 31,
20    2008, business income derived from furnishing airline
21    transportation services shall be apportioned to this State
22    by multiplying such income by a fraction, the numerator of
23    which is the revenue miles of the person in this State, and
24    the denominator of which is the revenue miles of the person
25    everywhere. For purposes of this paragraph, a revenue mile
26    is the transportation of one passenger or one net ton of

 

 

HB5146- 178 -LRB100 18631 SMS 33856 b

1    freight the distance of one mile for a consideration. If a
2    person is engaged in the transportation of both passengers
3    and freight, the fraction above referred to shall be
4    determined by means of an average of the passenger revenue
5    mile fraction and the freight revenue mile fraction,
6    weighted to reflect the person's relative gross receipts
7    from passenger and freight airline transportation.
8    (e) Combined apportionment. Where 2 or more persons are
9engaged in a unitary business as described in subsection
10(a)(27) of Section 1501, a part of which is conducted in this
11State by one or more members of the group, the business income
12attributable to this State by any such member or members shall
13be apportioned by means of the combined apportionment method.
14    (f) Alternative allocation. If the allocation and
15apportionment provisions of subsections (a) through (e) and of
16subsection (h) do not, for taxable years ending before December
1731, 2008, fairly represent the extent of a person's business
18activity in this State, or, for taxable years ending on or
19after December 31, 2008, fairly represent the market for the
20person's goods, services, or other sources of business income,
21the person may petition for, or the Director may, without a
22petition, permit or require, in respect of all or any part of
23the person's business activity, if reasonable:
24        (1) Separate accounting;
25        (2) The exclusion of any one or more factors;
26        (3) The inclusion of one or more additional factors

 

 

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1    which will fairly represent the person's business
2    activities or market in this State; or
3        (4) The employment of any other method to effectuate an
4    equitable allocation and apportionment of the person's
5    business income.
6    (g) Cross reference. For allocation of business income by
7residents, see Section 301(a).
8    (h) For tax years ending on or after December 31, 1998, the
9apportionment factor of persons who apportion their business
10income to this State under subsection (a) shall be equal to:
11        (1) for tax years ending on or after December 31, 1998
12    and before December 31, 1999, 16 2/3% of the property
13    factor plus 16 2/3% of the payroll factor plus 66 2/3% of
14    the sales factor;
15        (2) for tax years ending on or after December 31, 1999
16    and before December 31, 2000, 8 1/3% of the property factor
17    plus 8 1/3% of the payroll factor plus 83 1/3% of the sales
18    factor;
19        (3) for tax years ending on or after December 31, 2000,
20    the sales factor.
21If, in any tax year ending on or after December 31, 1998 and
22before December 31, 2000, the denominator of the payroll,
23property, or sales factor is zero, the apportionment factor
24computed in paragraph (1) or (2) of this subsection for that
25year shall be divided by an amount equal to 100% minus the
26percentage weight given to each factor whose denominator is

 

 

HB5146- 180 -LRB100 18631 SMS 33856 b

1equal to zero.
2(Source: P.A. 99-642, eff. 7-28-16; 100-201, eff. 8-18-17.)
 
3    (35 ILCS 5/710)  (from Ch. 120, par. 7-710)
4    Sec. 710. Withholding from lottery winnings.
5    (a) In general.
6        (1) Any person making a payment to a resident or
7    nonresident of winnings under the Illinois Lottery Law and
8    not required to withhold Illinois income tax from such
9    payment under Subsection (b) of Section 701 of this Act
10    because those winnings are not subject to Federal income
11    tax withholding, must withhold Illinois income tax from
12    such payment at a rate equal to the percentage tax rate for
13    individuals provided in subsection (b) of Section 201,
14    provided that withholding is not required if such payment
15    of winnings is less than $1,000.
16        (2) In the case of an assignment of a lottery prize
17    under Section 13.1 of the Illinois Lottery Law, any person
18    making a payment of the purchase price after December 31,
19    2013, shall withhold from the amount of each payment at a
20    rate equal to the percentage tax rate for individuals
21    provided in subsection (b) of Section 201.
22        (3) Any person making a payment after December 31, 2018
23    to a resident or nonresident of winnings from pari-mutuel
24    wagering conducted at a wagering facility licensed under
25    the Illinois Horse Racing Act of 1975 or from gambling

 

 

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1    games conducted on a riverboat or in a casino or electronic
2    gaming facility licensed under the Illinois Gambling Act
3    must withhold Illinois income tax from such payment at a
4    rate equal to the percentage tax rate for individuals
5    provided in subsection (b) of Section 201, provided that
6    the person making the payment is required to withhold under
7    Section 3402(q) of the Internal Revenue Code.
8    (b) Credit for taxes withheld. Any amount withheld under
9Subsection (a) shall be a credit against the Illinois income
10tax liability of the person to whom the payment of winnings was
11made for the taxable year in which that person incurred an
12Illinois income tax liability with respect to those winnings.
13(Source: P.A. 98-496, eff. 1-1-14.)
 
14    Section 90-23. The Property Tax Code is amended by adding
15Section 15-144 as follows:
 
16    (35 ILCS 200/15-144 new)
17    Sec. 15-144. Chicago Casino Development Authority. All
18property owned by the Chicago Casino Development Authority is
19exempt. Any property owned by the Chicago Casino Development
20Authority and leased to any other entity is not exempt.
 
21    Section 90-24. The Illinois Municipal Code is amended by
22adding Section 8-10-2.6 as follows:
 

 

 

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1    (65 ILCS 5/8-10-2.6 new)
2    Sec. 8-10-2.6. Chicago Casino Development Authority.
3Except as otherwise provided in the Chicago Casino Development
4Authority Act, this Division 10 applies to purchase orders and
5contracts relating to the Chicago Casino Development
6Authority.
 
7    Section 90-25. The Joliet Regional Port District Act is
8amended by changing Section 5.1 as follows:
 
9    (70 ILCS 1825/5.1)  (from Ch. 19, par. 255.1)
10    Sec. 5.1. Riverboat and casino gambling. Notwithstanding
11any other provision of this Act, the District may not regulate
12the operation, conduct, or navigation of any riverboat gambling
13casino licensed under the Illinois Riverboat Gambling Act, and
14the District may not license, tax, or otherwise levy any
15assessment of any kind on any riverboat gambling casino
16licensed under the Illinois Riverboat Gambling Act. The General
17Assembly declares that the powers to regulate the operation,
18conduct, and navigation of riverboat gambling casinos and to
19license, tax, and levy assessments upon riverboat gambling
20casinos are exclusive powers of the State of Illinois and the
21Illinois Gaming Board as provided in the Illinois Riverboat
22Gambling Act.
23(Source: P.A. 87-1175.)
 

 

 

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1    Section 90-30. The Consumer Installment Loan Act is amended
2by changing Section 12.5 as follows:
 
3    (205 ILCS 670/12.5)
4    Sec. 12.5. Limited purpose branch.
5    (a) Upon the written approval of the Director, a licensee
6may maintain a limited purpose branch for the sole purpose of
7making loans as permitted by this Act. A limited purpose branch
8may include an automatic loan machine. No other activity shall
9be conducted at the site, including but not limited to,
10accepting payments, servicing the accounts, or collections.
11    (b) The licensee must submit an application for a limited
12purpose branch to the Director on forms prescribed by the
13Director with an application fee of $300. The approval for the
14limited purpose branch must be renewed concurrently with the
15renewal of the licensee's license along with a renewal fee of
16$300 for the limited purpose branch.
17    (c) The books, accounts, records, and files of the limited
18purpose branch's transactions shall be maintained at the
19licensee's licensed location. The licensee shall notify the
20Director of the licensed location at which the books, accounts,
21records, and files shall be maintained.
22    (d) The licensee shall prominently display at the limited
23purpose branch the address and telephone number of the
24licensee's licensed location.
25    (e) No other business shall be conducted at the site of the

 

 

HB5146- 184 -LRB100 18631 SMS 33856 b

1limited purpose branch unless authorized by the Director.
2    (f) The Director shall make and enforce reasonable rules
3for the conduct of a limited purpose branch.
4    (g) A limited purpose branch may not be located within
51,000 feet of a facility operated by an inter-track wagering
6licensee or an organization licensee subject to the Illinois
7Horse Racing Act of 1975, on a riverboat or in a casino subject
8to the Illinois Riverboat Gambling Act, or within 1,000 feet of
9the location at which the riverboat docks or within 1,000 feet
10of a casino.
11(Source: P.A. 90-437, eff. 1-1-98.)
 
12    Section 90-35. The Illinois Horse Racing Act of 1975 is
13amended by changing Sections 1.2, 3.11, 3.12, 6, 9, 15, 18, 19,
1420, 21, 24, 25, 26, 26.8, 26.9, 27, 30, 30.5, 31, 32.1, 36, 40,
15and 54.75 and by adding Sections 3.31, 3.32, 3.33, 3.35, 3.36,
1634.3, and 56 as follows:
 
17    (230 ILCS 5/1.2)
18    Sec. 1.2. Legislative intent. This Act is intended to
19benefit the people of the State of Illinois by encouraging the
20breeding and production of race horses, assisting economic
21development and promoting Illinois tourism. The General
22Assembly finds and declares it to be the public policy of the
23State of Illinois to:
24    (a) support and enhance Illinois' horse racing industry,

 

 

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1which is a significant component within the agribusiness
2industry;
3    (b) ensure that Illinois' horse racing industry remains
4competitive with neighboring states;
5    (c) stimulate growth within Illinois' horse racing
6industry, thereby encouraging new investment and development
7to produce additional tax revenues and to create additional
8jobs;
9    (d) promote the further growth of tourism;
10    (e) encourage the breeding of thoroughbred and
11standardbred horses in this State; and
12    (f) ensure that public confidence and trust in the
13credibility and integrity of racing operations and the
14regulatory process is maintained.
15(Source: P.A. 91-40, eff. 6-25-99.)
 
16    (230 ILCS 5/3.11)  (from Ch. 8, par. 37-3.11)
17    Sec. 3.11. "Organization Licensee" means any person
18receiving an organization license from the Board to conduct a
19race meeting or meetings. With respect only to electronic
20gaming, "organization licensee" includes the authorization for
21an electronic gaming license under subsection (a) of Section 56
22of this Act.
23(Source: P.A. 79-1185.)
 
24    (230 ILCS 5/3.12)  (from Ch. 8, par. 37-3.12)

 

 

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1    Sec. 3.12. Pari-mutuel system of wagering. "Pari-mutuel
2system of wagering" means a form of wagering on the outcome of
3horse races in which wagers are made in various denominations
4on a horse or horses and all wagers for each race are pooled
5and held by a licensee for distribution in a manner approved by
6the Board. "Pari-mutuel system of wagering" shall not include
7wagering on historic races. Wagers may be placed via any method
8or at any location authorized under this Act.
9(Source: P.A. 96-762, eff. 8-25-09.)
 
10    (230 ILCS 5/3.31 new)
11    Sec. 3.31. Adjusted gross receipts. "Adjusted gross
12receipts" means the gross receipts less winnings paid to
13wagerers.
 
14    (230 ILCS 5/3.32 new)
15    Sec. 3.32. Gross receipts. "Gross receipts" means the total
16amount of money exchanged for the purchase of chips, tokens, or
17electronic cards by riverboat or casino patrons or electronic
18gaming patrons.
 
19    (230 ILCS 5/3.33 new)
20    Sec. 3.33. Electronic gaming. "Electronic gaming" means
21slot machine gambling, video game of chance gambling, or
22gambling with electronic gambling games as defined in the
23Illinois Gambling Act or defined by the Illinois Gaming Board

 

 

HB5146- 187 -LRB100 18631 SMS 33856 b

1that is conducted at a race track pursuant to an electronic
2gaming license.
 
3    (230 ILCS 5/3.35 new)
4    Sec. 3.35. Electronic gaming license. "Electronic gaming
5license" means a license issued by the Illinois Gaming Board
6under Section 7.7 of the Illinois Gambling Act authorizing
7electronic gaming at an electronic gaming facility.
 
8    (230 ILCS 5/3.36 new)
9    Sec. 3.36. Electronic gaming facility. "Electronic gaming
10facility" means that portion of an organization licensee's race
11track facility at which electronic gaming is conducted.
 
12    (230 ILCS 5/6)  (from Ch. 8, par. 37-6)
13    Sec. 6. Restrictions on Board members.
14    (a) No person shall be appointed a member of the Board or
15continue to be a member of the Board if the person or any
16member of their immediate family is a member of the Board of
17Directors, employee, or financially interested in any of the
18following: (i) any licensee or other person who has applied for
19racing dates to the Board, or the operations thereof including,
20but not limited to, concessions, data processing, track
21maintenance, track security, and pari-mutuel operations,
22located, scheduled or doing business within the State of
23Illinois, (ii) any race horse competing at a meeting under the

 

 

HB5146- 188 -LRB100 18631 SMS 33856 b

1Board's jurisdiction, or (iii) any licensee under the Illinois
2Gambling Act. No person shall be appointed a member of the
3Board or continue to be a member of the Board who is (or any
4member of whose family is) a member of the Board of Directors
5of, or who is a person financially interested in, any licensee
6or other person who has applied for racing dates to the Board,
7or the operations thereof including, but not limited to,
8concessions, data processing, track maintenance, track
9security and pari-mutuel operations, located, scheduled or
10doing business within the State of Illinois, or in any race
11horse competing at a meeting under the Board's jurisdiction. No
12Board member shall hold any other public office for which he
13shall receive compensation other than necessary travel or other
14incidental expenses.
15    (b) No person shall be a member of the Board who is not of
16good moral character or who has been convicted of, or is under
17indictment for, a felony under the laws of Illinois or any
18other state, or the United States.
19    (c) No member of the Board or employee shall engage in any
20political activity.
21    For the purposes of this subsection (c):
22    "Political" means any activity in support of or in
23connection with any campaign for State or local elective office
24or any political organization, but does not include activities
25(i) relating to the support or opposition of any executive,
26legislative, or administrative action (as those terms are

 

 

HB5146- 189 -LRB100 18631 SMS 33856 b

1defined in Section 2 of the Lobbyist Registration Act), (ii)
2relating to collective bargaining, or (iii) that are otherwise
3in furtherance of the person's official State duties or
4governmental and public service functions.
5    "Political organization" means a party, committee,
6association, fund, or other organization (whether or not
7incorporated) that is required to file a statement of
8organization with the State Board of Elections or county clerk
9under Section 9-3 of the Election Code, but only with regard to
10those activities that require filing with the State Board of
11Elections or county clerk.
12    (d) Board members and employees may not engage in
13communications or any activity that may cause or have the
14appearance of causing a conflict of interest. A conflict of
15interest exists if a situation influences or creates the
16appearance that it may influence judgment or performance of
17regulatory duties and responsibilities. This prohibition shall
18extend to any act identified by Board action that, in the
19judgment of the Board, could represent the potential for or the
20appearance of a conflict of interest.
21    (e) Board members and employees may not accept any gift,
22gratuity, service, compensation, travel, lodging, or thing of
23value, with the exception of unsolicited items of an incidental
24nature, from any person, corporation, limited liability
25company, or entity doing business with the Board.
26    (f) A Board member or employee shall not use or attempt to

 

 

HB5146- 190 -LRB100 18631 SMS 33856 b

1use his or her official position to secure, or attempt to
2secure, any privilege, advantage, favor, or influence for
3himself or herself or others. No Board member or employee,
4within a period of one year immediately preceding nomination by
5the Governor or employment, shall have been employed or
6received compensation or fees for services from a person or
7entity, or its parent or affiliate, that has engaged in
8business with the Board, a licensee or a licensee under the
9Illinois Gambling Act. In addition, all Board members and
10employees are subject to the restrictions set forth in Section
115-45 of the State Officials and Employees Ethics Act.
12(Source: P.A. 89-16, eff. 5-30-95.)
 
13    (230 ILCS 5/9)  (from Ch. 8, par. 37-9)
14    Sec. 9. The Board shall have all powers necessary and
15proper to fully and effectively execute the provisions of this
16Act, including, but not limited to, the following:
17    (a) The Board is vested with jurisdiction and supervision
18over all race meetings in this State, over all licensees doing
19business in this State, over all occupation licensees, and over
20all persons on the facilities of any licensee. Such
21jurisdiction shall include the power to issue licenses to the
22Illinois Department of Agriculture authorizing the pari-mutuel
23system of wagering on harness and Quarter Horse races held (1)
24at the Illinois State Fair in Sangamon County, and (2) at the
25DuQuoin State Fair in Perry County. The jurisdiction of the

 

 

HB5146- 191 -LRB100 18631 SMS 33856 b

1Board shall also include the power to issue licenses to county
2fairs which are eligible to receive funds pursuant to the
3Agricultural Fair Act, as now or hereafter amended, or their
4agents, authorizing the pari-mutuel system of wagering on horse
5races conducted at the county fairs receiving such licenses.
6Such licenses shall be governed by subsection (n) of this
7Section.
8    Upon application, the Board shall issue a license to the
9Illinois Department of Agriculture to conduct harness and
10Quarter Horse races at the Illinois State Fair and at the
11DuQuoin State Fairgrounds during the scheduled dates of each
12fair. The Board shall not require and the Department of
13Agriculture shall be exempt from the requirements of Sections
1415.3, 18 and 19, paragraphs (a)(2), (b), (c), (d), (e), (e-5),
15(e-10), (f), (g), and (h) of Section 20, and Sections 21, 24
16and 25. The Board and the Department of Agriculture may extend
17any or all of these exemptions to any contractor or agent
18engaged by the Department of Agriculture to conduct its race
19meetings when the Board determines that this would best serve
20the public interest and the interest of horse racing.
21    Notwithstanding any provision of law to the contrary, it
22shall be lawful for any licensee to operate pari-mutuel
23wagering or contract with the Department of Agriculture to
24operate pari-mutuel wagering at the DuQuoin State Fairgrounds
25or for the Department to enter into contracts with a licensee,
26employ its owners, employees or agents and employ such other

 

 

HB5146- 192 -LRB100 18631 SMS 33856 b

1occupation licensees as the Department deems necessary in
2connection with race meetings and wagerings.
3    (b) The Board is vested with the full power to promulgate
4reasonable rules and regulations for the purpose of
5administering the provisions of this Act and to prescribe
6reasonable rules, regulations and conditions under which all
7horse race meetings or wagering in the State shall be
8conducted. Such reasonable rules and regulations are to provide
9for the prevention of practices detrimental to the public
10interest and to promote the best interests of horse racing and
11to impose penalties for violations thereof.
12    (c) The Board, and any person or persons to whom it
13delegates this power, is vested with the power to enter the
14facilities and other places of business of any licensee to
15determine whether there has been compliance with the provisions
16of this Act and its rules and regulations.
17    (d) The Board, and any person or persons to whom it
18delegates this power, is vested with the authority to
19investigate alleged violations of the provisions of this Act,
20its reasonable rules and regulations, orders and final
21decisions; the Board shall take appropriate disciplinary
22action against any licensee or occupation licensee for
23violation thereof or institute appropriate legal action for the
24enforcement thereof.
25    (e) The Board, and any person or persons to whom it
26delegates this power, may eject or exclude from any race

 

 

HB5146- 193 -LRB100 18631 SMS 33856 b

1meeting or the facilities of any licensee, or any part thereof,
2any occupation licensee or any other individual whose conduct
3or reputation is such that his presence on those facilities
4may, in the opinion of the Board, call into question the
5honesty and integrity of horse racing or wagering or interfere
6with the orderly conduct of horse racing or wagering; provided,
7however, that no person shall be excluded or ejected from the
8facilities of any licensee solely on the grounds of race,
9color, creed, national origin, ancestry, or sex. The power to
10eject or exclude an occupation licensee or other individual may
11be exercised for just cause by the licensee or the Board,
12subject to subsequent hearing by the Board as to the propriety
13of said exclusion.
14    (f) The Board is vested with the power to acquire,
15establish, maintain and operate (or provide by contract to
16maintain and operate) testing laboratories and related
17facilities, for the purpose of conducting saliva, blood, urine
18and other tests on the horses run or to be run in any horse race
19meeting, including races run at county fairs, and to purchase
20all equipment and supplies deemed necessary or desirable in
21connection with any such testing laboratories and related
22facilities and all such tests.
23    (g) The Board may require that the records, including
24financial or other statements of any licensee or any person
25affiliated with the licensee who is involved directly or
26indirectly in the activities of any licensee as regulated under

 

 

HB5146- 194 -LRB100 18631 SMS 33856 b

1this Act to the extent that those financial or other statements
2relate to such activities be kept in such manner as prescribed
3by the Board, and that Board employees shall have access to
4those records during reasonable business hours. Within 120 days
5of the end of its fiscal year, each licensee shall transmit to
6the Board an audit of the financial transactions and condition
7of the licensee's total operations. All audits shall be
8conducted by certified public accountants. Each certified
9public accountant must be registered in the State of Illinois
10under the Illinois Public Accounting Act. The compensation for
11each certified public accountant shall be paid directly by the
12licensee to the certified public accountant. A licensee shall
13also submit any other financial or related information the
14Board deems necessary to effectively administer this Act and
15all rules, regulations, and final decisions promulgated under
16this Act.
17    (h) The Board shall name and appoint in the manner provided
18by the rules and regulations of the Board: an Executive
19Director; a State director of mutuels; State veterinarians and
20representatives to take saliva, blood, urine and other tests on
21horses; licensing personnel; revenue inspectors; and State
22seasonal employees (excluding admission ticket sellers and
23mutuel clerks). All of those named and appointed as provided in
24this subsection shall serve during the pleasure of the Board;
25their compensation shall be determined by the Board and be paid
26in the same manner as other employees of the Board under this

 

 

HB5146- 195 -LRB100 18631 SMS 33856 b

1Act.
2    (i) The Board shall require that there shall be 3 stewards
3at each horse race meeting, at least 2 of whom shall be named
4and appointed by the Board. Stewards appointed or approved by
5the Board, while performing duties required by this Act or by
6the Board, shall be entitled to the same rights and immunities
7as granted to Board members and Board employees in Section 10
8of this Act.
9    (j) The Board may discharge any Board employee who fails or
10refuses for any reason to comply with the rules and regulations
11of the Board, or who, in the opinion of the Board, is guilty of
12fraud, dishonesty or who is proven to be incompetent. The Board
13shall have no right or power to determine who shall be
14officers, directors or employees of any licensee, or their
15salaries except the Board may, by rule, require that all or any
16officials or employees in charge of or whose duties relate to
17the actual running of races be approved by the Board.
18    (k) The Board is vested with the power to appoint delegates
19to execute any of the powers granted to it under this Section
20for the purpose of administering this Act and any rules or
21regulations promulgated in accordance with this Act.
22    (l) The Board is vested with the power to impose civil
23penalties of up to $5,000 against an individual and up to
24$10,000 against a licensee for each violation of any provision
25of this Act, any rules adopted by the Board, any order of the
26Board or any other action which, in the Board's discretion, is

 

 

HB5146- 196 -LRB100 18631 SMS 33856 b

1a detriment or impediment to horse racing or wagering.
2Beginning on the date when any organization licensee begins
3conducting electronic gaming pursuant to an electronic gaming
4license issued under the Illinois Gambling Act, the power
5granted to the Board pursuant to this subsection (l) shall
6authorize the Board to impose penalties of up to $10,000
7against an individual and up to $25,000 against a licensee. All
8such civil penalties shall be deposited into the Horse Racing
9Fund.
10    (m) The Board is vested with the power to prescribe a form
11to be used by licensees as an application for employment for
12employees of each licensee.
13    (n) The Board shall have the power to issue a license to
14any county fair, or its agent, authorizing the conduct of the
15pari-mutuel system of wagering. The Board is vested with the
16full power to promulgate reasonable rules, regulations and
17conditions under which all horse race meetings licensed
18pursuant to this subsection shall be held and conducted,
19including rules, regulations and conditions for the conduct of
20the pari-mutuel system of wagering. The rules, regulations and
21conditions shall provide for the prevention of practices
22detrimental to the public interest and for the best interests
23of horse racing, and shall prescribe penalties for violations
24thereof. Any authority granted the Board under this Act shall
25extend to its jurisdiction and supervision over county fairs,
26or their agents, licensed pursuant to this subsection. However,

 

 

HB5146- 197 -LRB100 18631 SMS 33856 b

1the Board may waive any provision of this Act or its rules or
2regulations which would otherwise apply to such county fairs or
3their agents.
4    (o) Whenever the Board is authorized or required by law to
5consider some aspect of criminal history record information for
6the purpose of carrying out its statutory powers and
7responsibilities, then, upon request and payment of fees in
8conformance with the requirements of Section 2605-400 of the
9Department of State Police Law (20 ILCS 2605/2605-400), the
10Department of State Police is authorized to furnish, pursuant
11to positive identification, such information contained in
12State files as is necessary to fulfill the request.
13    (p) To insure the convenience, comfort, and wagering
14accessibility of race track patrons, to provide for the
15maximization of State revenue, and to generate increases in
16purse allotments to the horsemen, the Board shall require any
17licensee to staff the pari-mutuel department with adequate
18personnel.
19(Source: P.A. 97-1060, eff. 8-24-12.)
 
20    (230 ILCS 5/15)  (from Ch. 8, par. 37-15)
21    Sec. 15. (a) The Board shall, in its discretion, issue
22occupation licenses to horse owners, trainers, harness
23drivers, jockeys, agents, apprentices, grooms, stable foremen,
24exercise persons, veterinarians, valets, blacksmiths,
25concessionaires and others designated by the Board whose work,

 

 

HB5146- 198 -LRB100 18631 SMS 33856 b

1in whole or in part, is conducted upon facilities within the
2State. Such occupation licenses will be obtained prior to the
3persons engaging in their vocation upon such facilities. The
4Board shall not license pari-mutuel clerks, parking
5attendants, security guards and employees of concessionaires.
6No occupation license shall be required of any person who works
7at facilities within this State as a pari-mutuel clerk, parking
8attendant, security guard or as an employee of a
9concessionaire. Concessionaires of the Illinois State Fair and
10DuQuoin State Fair and employees of the Illinois Department of
11Agriculture shall not be required to obtain an occupation
12license by the Board.
13    (b) Each application for an occupation license shall be on
14forms prescribed by the Board. Such license, when issued, shall
15be for the period ending December 31 of each year, except that
16the Board in its discretion may grant 3-year licenses. The
17application shall be accompanied by a fee of not more than $25
18per year or, in the case of 3-year occupation license
19applications, a fee of not more than $60. Each applicant shall
20set forth in the application his full name and address, and if
21he had been issued prior occupation licenses or has been
22licensed in any other state under any other name, such name,
23his age, whether or not a permit or license issued to him in
24any other state has been suspended or revoked and if so whether
25such suspension or revocation is in effect at the time of the
26application, and such other information as the Board may

 

 

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1require. Fees for registration of stable names shall not exceed
2$50.00. Beginning on the date when any organization licensee
3begins conducting electronic gaming pursuant to an electronic
4gambling license issued under the Illinois Gambling Act, the
5fee for registration of stable names shall not exceed $150, and
6the application fee for an occupation license shall not exceed
7$75, per year or, in the case of a 3-year occupation license
8application, the fee shall not exceed $180.
9    (c) The Board may in its discretion refuse an occupation
10license to any person:
11        (1) who has been convicted of a crime;
12        (2) who is unqualified to perform the duties required
13    of such applicant;
14        (3) who fails to disclose or states falsely any
15    information called for in the application;
16        (4) who has been found guilty of a violation of this
17    Act or of the rules and regulations of the Board; or
18        (5) whose license or permit has been suspended, revoked
19    or denied for just cause in any other state.
20    (d) The Board may suspend or revoke any occupation license:
21        (1) for violation of any of the provisions of this Act;
22    or
23        (2) for violation of any of the rules or regulations of
24    the Board; or
25        (3) for any cause which, if known to the Board, would
26    have justified the Board in refusing to issue such

 

 

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1    occupation license; or
2        (4) for any other just cause.
3    (e)   Each applicant shall submit his or her fingerprints
4to the Department of State Police in the form and manner
5prescribed by the Department of State Police. These
6fingerprints shall be checked against the fingerprint records
7now and hereafter filed in the Department of State Police and
8Federal Bureau of Investigation criminal history records
9databases. The Department of State Police shall charge a fee
10for conducting the criminal history records check, which shall
11be deposited in the State Police Services Fund and shall not
12exceed the actual cost of the records check. The Department of
13State Police shall furnish, pursuant to positive
14identification, records of conviction to the Board. Each
15applicant for licensure shall submit with his occupation
16license application, on forms provided by the Board, 2 sets of
17his fingerprints. All such applicants shall appear in person at
18the location designated by the Board for the purpose of
19submitting such sets of fingerprints; however, with the prior
20approval of a State steward, an applicant may have such sets of
21fingerprints taken by an official law enforcement agency and
22submitted to the Board.
23    (f) The Board may, in its discretion, issue an occupation
24license without submission of fingerprints if an applicant has
25been duly licensed in another recognized racing jurisdiction
26after submitting fingerprints that were subjected to a Federal

 

 

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1Bureau of Investigation criminal history background check in
2that jurisdiction.
3    (g) Beginning on the date when any organization licensee
4begins conducting electronic gaming pursuant to an electronic
5gaming license issued under the Illinois Gambling Act, the
6Board may charge each applicant a reasonable non-refundable fee
7to defray the costs associated with the background
8investigation conducted by the Board. This fee shall be
9exclusive of any other fee or fees charged in connection with
10an application for and, if applicable, the issuance of, an
11electronic gaming license. If the costs of the investigation
12exceed the amount of the fee charged, the Board shall
13immediately notify the applicant of the additional amount owed,
14payment of which must be submitted to the Board within 7 days
15after such notification. All information, records, interviews,
16reports, statements, memoranda, or other data supplied to or
17used by the Board in the course of its review or investigation
18of an applicant for a license or renewal under this Act shall
19be privileged, strictly confidential, and shall be used only
20for the purpose of evaluating an applicant for a license or a
21renewal. Such information, records, interviews, reports,
22statements, memoranda, or other data shall not be admissible as
23evidence, nor discoverable, in any action of any kind in any
24court or before any tribunal, board, agency, or person, except
25for any action deemed necessary by the Board.
26(Source: P.A. 93-418, eff. 1-1-04.)
 

 

 

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1    (230 ILCS 5/18)  (from Ch. 8, par. 37-18)
2    Sec. 18. (a) Together with its application, each applicant
3for racing dates shall deliver to the Board a certified check
4or bank draft payable to the order of the Board for $1,000. In
5the event the applicant applies for racing dates in 2 or 3
6successive calendar years as provided in subsection (b) of
7Section 21, the fee shall be $2,000. Filing fees shall not be
8refunded in the event the application is denied. Beginning on
9the date when any organization licensee begins conducting
10electronic gaming pursuant to an electronic gaming license
11issued under the Illinois Gambling Act, the application fee for
12racing dates imposed by this subsection (a) shall be $10,000
13and the application fee for racing dates in 2 or 3 successive
14calendar years as provided in subsection (b) of Section 21
15shall be $20,000. All filing fees shall be deposited into the
16Horse Racing Fund.
17    (b) In addition to the filing fee imposed by subsection (a)
18of $1000 and the fees provided in subsection (j) of Section 20,
19each organization licensee shall pay a license fee of $100 for
20each racing program on which its daily pari-mutuel handle is
21$400,000 or more but less than $700,000, and a license fee of
22$200 for each racing program on which its daily pari-mutuel
23handle is $700,000 or more. The additional fees required to be
24paid under this Section by this amendatory Act of 1982 shall be
25remitted by the organization licensee to the Illinois Racing

 

 

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1Board with each day's graduated privilege tax or pari-mutuel
2tax and breakage as provided under Section 27. Beginning on the
3date when any organization licensee begins conducting
4electronic gaming pursuant to an electronic gaming license
5issued under the Illinois Gambling Act, the license fee imposed
6by this subsection (b) shall be $200 for each racing program on
7which the organization licensee's daily pari-mutuel handle is
8$100,000 or more, but less than $400,000, and the license fee
9imposed by this subsection (b) shall be $400 for each racing
10program on which the organization licensee's daily pari-mutuel
11handle is $400,000 or more.
12    (c) Sections 11-42-1, 11-42-5, and 11-54-1 of the "Illinois
13Municipal Code," approved May 29, 1961, as now or hereafter
14amended, shall not apply to any license under this Act.
15(Source: P.A. 97-1060, eff. 8-24-12.)
 
16    (230 ILCS 5/19)  (from Ch. 8, par. 37-19)
17    Sec. 19. (a) No organization license may be granted to
18conduct a horse race meeting:
19        (1) except as provided in subsection (c) of Section 21
20    of this Act, to any person at any place within 35 miles of
21    any other place licensed by the Board to hold a race
22    meeting on the same date during the same hours, the mileage
23    measurement used in this subsection (a) shall be certified
24    to the Board by the Bureau of Systems and Services in the
25    Illinois Department of Transportation as the most commonly

 

 

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1    used public way of vehicular travel;
2        (2) to any person in default in the payment of any
3    obligation or debt due the State under this Act, provided
4    no applicant shall be deemed in default in the payment of
5    any obligation or debt due to the State under this Act as
6    long as there is pending a hearing of any kind relevant to
7    such matter;
8        (3) to any person who has been convicted of the
9    violation of any law of the United States or any State law
10    which provided as all or part of its penalty imprisonment
11    in any penal institution; to any person against whom there
12    is pending a Federal or State criminal charge; to any
13    person who is or has been connected with or engaged in the
14    operation of any illegal business; to any person who does
15    not enjoy a general reputation in his community of being an
16    honest, upright, law-abiding person; provided that none of
17    the matters set forth in this subparagraph (3) shall make
18    any person ineligible to be granted an organization license
19    if the Board determines, based on circumstances of any such
20    case, that the granting of a license would not be
21    detrimental to the interests of horse racing and of the
22    public;
23        (4) to any person who does not at the time of
24    application for the organization license own or have a
25    contract or lease for the possession of a finished race
26    track suitable for the type of racing intended to be held

 

 

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1    by the applicant and for the accommodation of the public.
2    (b) (Blank) Horse racing on Sunday shall be prohibited
3unless authorized by ordinance or referendum of the
4municipality in which a race track or any of its appurtenances
5or facilities are located, or utilized.
6    (c) If any person is ineligible to receive an organization
7license because of any of the matters set forth in subsection
8(a) (2) or subsection (a) (3) of this Section, any other or
9separate person that either (i) controls, directly or
10indirectly, such ineligible person or (ii) is controlled,
11directly or indirectly, by such ineligible person or by a
12person which controls, directly or indirectly, such ineligible
13person shall also be ineligible.
14(Source: P.A. 88-495; 89-16, eff. 5-30-95.)
 
15    (230 ILCS 5/20)  (from Ch. 8, par. 37-20)
16    Sec. 20. (a) Any person desiring to conduct a horse race
17meeting may apply to the Board for an organization license. The
18application shall be made on a form prescribed and furnished by
19the Board. The application shall specify:
20        (1) the dates on which it intends to conduct the horse
21    race meeting, which dates shall be provided under Section
22    21;
23        (2) the hours of each racing day between which it
24    intends to hold or conduct horse racing at such meeting;
25        (3) the location where it proposes to conduct the

 

 

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1    meeting; and
2        (4) any other information the Board may reasonably
3    require.
4    (b) A separate application for an organization license
5shall be filed for each horse race meeting which such person
6proposes to hold. Any such application, if made by an
7individual, or by any individual as trustee, shall be signed
8and verified under oath by such individual. If the application
9is made by individuals, then it shall be signed and verified
10under oath by at least 2 of the individuals; if the application
11is made by or a partnership, it shall be signed and verified
12under oath by at least 2 of such individuals or members of such
13partnership as the case may be. If made by an association, a
14corporation, a corporate trustee, a limited liability company,
15or any other entity, it shall be signed by an authorized
16officer, a partner, a member, or a manager, as the case may be,
17of the entity the president and attested by the secretary or
18assistant secretary under the seal of such association, trust
19or corporation if it has a seal, and shall also be verified
20under oath by one of the signing officers.
21    (c) The application shall specify:
22