SB3711 EngrossedLRB097 20174 HLH 65583 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Corporate Accountability for Tax
5Expenditures Act is amended by changing Section 25 as follows:
 
6    (20 ILCS 715/25)
7    Sec. 25. Recapture.
8    (a) All development assistance agreements shall contain,
9at a minimum, the following recapture provisions:
10        (1) The recipient must (i) make the level of capital
11    investment in the economic development project specified
12    in the development assistance agreement; (ii) create or
13    retain, or both, the requisite number of jobs, paying not
14    less than specified wages for the created and retained
15    jobs, within and for the duration of the time period
16    specified in the legislation authorizing, or the
17    administrative rules implementing, the development
18    assistance programs and the development assistance
19    agreement.
20        (2) If the recipient fails to create or retain the
21    requisite number of jobs within and for the time period
22    specified, in the legislation authorizing, or the
23    administrative rules implementing, the development

 

 

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1    assistance programs and the development assistance
2    agreement, the recipient shall be deemed to no longer
3    qualify for the State economic assistance and the
4    applicable recapture provisions shall take effect.
5        (3) If the recipient receives State economic
6    assistance in the form of a High Impact Business
7    designation pursuant to Section 5.5 of the Illinois
8    Enterprise Zone Act and the business receives the benefit
9    of the exemption authorized under Section 5l of the
10    Retailers' Occupation Tax Act (for the sale of building
11    materials incorporated into a High Impact Business
12    location) and the recipient fails to create or retain the
13    requisite number of jobs, as determined by the legislation
14    authorizing the development assistance programs or the
15    administrative rules implementing such legislation, or
16    both, within the requisite period of time, the recipient
17    shall be required to pay to the State the full amount of
18    the State tax exemption that it received as a result of the
19    High Impact Business designation.
20        (4) If the recipient receives a grant or loan pursuant
21    to the Large Business Development Program, the Business
22    Development Public Infrastructure Program, or the
23    Industrial Training Program and the recipient fails to
24    create or retain the requisite number of jobs for the
25    requisite time period, as provided in the legislation
26    authorizing the development assistance programs or the

 

 

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1    administrative rules implementing such legislation, or
2    both, or in the development assistance agreement, the
3    recipient shall be required to repay to the State a pro
4    rata amount of the grant; that amount shall reflect the
5    percentage of the deficiency between the requisite number
6    of jobs to be created or retained by the recipient and the
7    actual number of such jobs in existence as of the date the
8    Department determines the recipient is in breach of the job
9    creation or retention covenants contained in the
10    development assistance agreement. If the recipient of
11    development assistance under the Large Business
12    Development Program, the Business Development Public
13    Infrastructure Program, or the Industrial Training Program
14    ceases operations at the specific project site, during the
15    5-year period commencing on the date of assistance, the
16    recipient shall be required to repay the entire amount of
17    the grant or to accelerate repayment of the loan back to
18    the State.
19        (5) If the recipient receives a tax credit under the
20    Economic Development for a Growing Economy tax credit
21    program, the development assistance agreement must provide
22    that (i) if the number of new or retained employees falls
23    below the requisite number set forth in the development
24    assistance agreement, the allowance of the credit shall be
25    automatically suspended until the number of new and
26    retained employees equals or exceeds the requisite number

 

 

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1    in the development assistance agreement; (ii) if the
2    recipient discontinues operations at the specific project
3    site during the 5-year period after the beginning of the
4    first tax year for which the Department issues a tax credit
5    certificate, the recipient shall forfeit all credits taken
6    by the recipient during such 5-year period; and (iii) in
7    the event of a revocation or suspension of the credit, the
8    Department shall contact the Director of Revenue to
9    initiate proceedings against the recipient to recover
10    wrongfully exempted Illinois State income taxes and the
11    recipient shall promptly repay to the Department of Revenue
12    any wrongfully exempted Illinois State income taxes. The
13    forfeited amount of credits shall be deemed assessed on the
14    date the Department contacts the Department of Revenue and
15    the recipient shall promptly repay to the Department of
16    Revenue any wrongfully exempted Illinois State income
17    taxes.
18    (b) The Director may elect to waive enforcement of any
19contractual provision arising out of the development
20assistance agreement required by this Act based on a finding
21that the waiver is necessary to avert an imminent and
22demonstrable hardship to the recipient that may result in such
23recipient's insolvency or discharge of workers. If a waiver is
24granted, the recipient must agree to a contractual
25modification, including recapture provisions, to the
26development assistance agreement. The existence of any waiver

 

 

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1granted pursuant to this subsection (c), the date of the
2granting of such waiver, and a brief summary of the reasons
3supporting the granting of such waiver shall be disclosed
4consistent with the provisions of Section 25 of this Act.
5    (b-5) The Department shall publish, on its website, (i) the
6identity of each recipient from whom amounts were recaptured
7under this Section, (ii) the amount recaptured, and (iii) the
8identity of each recipient receiving a waiver under subsection
9(b) of this Section.
10    (c) Beginning June 1, 2004, the Department shall annually
11compile a report on the outcomes and effectiveness of recapture
12provisions by program, including but not limited to: (i) the
13total number of companies that receive development assistance
14as defined in this Act; (ii) the total number of recipients in
15violation of development agreements with the Department; (iii)
16the total number of completed recapture efforts; (iv) the total
17number of recapture efforts initiated; and (v) the number of
18waivers granted. This report shall be disclosed consistent with
19the provisions of Section 20 of this Act.
20    (d) For the purposes of this Act, recapture provisions do
21not include the Illinois Department of Transportation Economic
22Development Program, any grants under the Industrial Training
23Program that are not given as an incentive to a recipient
24business organization, or any successor programs as described
25in the term "development assistance" in Section 5 of this Act.
26(Source: P.A. 97-2, eff. 5-6-11.)