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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 education.
14    (b) While authorization of casino gambling in Chicago will
15enhance investment, development, and tourism in Illinois, it is
16recognized that it will do so successfully only if public
17confidence and trust in the credibility and integrity of the
18gambling operations and the regulatory process is maintained.
19Therefore, the provisions of this Act are designed to allow the
20Illinois Gaming Board to strictly regulate the facilities,
21persons, associations, and practices related to gambling
22operations pursuant to the police powers of the State,

 

 

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

 

 

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1    "Executive director" means the person appointed by the
2Casino Board to oversee the daily operations of the Authority.
3    "Gaming Board" means the Illinois Gaming Board created by
4the Illinois Gambling Act.
5    "Mayor" means the Mayor of the City.
 
6    Section 1-12. Creation of the Authority. There is hereby
7created a political subdivision, unit of local government with
8only the powers authorized by law, body politic, and municipal
9corporation, by the name and style of the Chicago Casino
10Development Authority.
 
11    Section 1-13. Duties of the Authority. It shall be the duty
12of the Authority, as an owners licensee under the Illinois
13Gambling Act, to promote and maintain a casino in the City. The
14Authority shall own, acquire, construct, lease, equip, and
15maintain grounds, buildings, and facilities for that purpose.
16However, the Authority shall contract with a casino operator
17licensee to manage and operate the casino and in no event shall
18the Authority or City manage or operate the casino. The
19Authority may contract pursuant to the procedures set forth in
20Section 1-115 with other third parties in order to fulfill its
21purpose. The Authority is responsible for the payment of any
22fees required of a casino operator under subsection (a) of
23Section 7.8 of the Illinois Gambling Act if the casino operator
24licensee is late in paying any such fees. The Authority is

 

 

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

 

 

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1appointee as the Gaming Board would apply to an owners licensee
2key person under the Gaming Board's adopted rules), then the
3Gaming Board shall provide a written notice of such
4determination to the appointee and the Corporation Counsel of
5the City. The Mayor may then appoint a new candidate. If no
6such notice is delivered with respect to a particular
7appointee, then commencing on the 31st day following the date
8of the appointee's submission of his or her application to the
9Gaming Board, the appointee shall be deemed an acting member of
10the Casino Board and shall participate as a Casino Board
11member.
12    Each appointee shall be subject to a full background
13investigation and final approval by the Gaming Board prior to
14the opening of the casino. The Gaming Board shall complete its
15full background investigation of the Casino Board appointee
16within 3 months after the date of the appointee's submission of
17his or her application to the Gaming Board. If the Gaming Board
18does not complete its background investigation within the
193-month period, then the Gaming Board shall give a written
20explanation to the appointee, as well as the Mayor, the
21Governor, the President of the Senate, and the Speaker of the
22House of Representatives, as to why it has not reached a final
23determination and set forth a reasonable time when such
24determination shall be made.
25    (b) Casino Board members shall receive $300 for each day
26the Authority meets and shall be entitled to reimbursement of

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1construction experts and personnel, superintendents, managers,
2and other personnel appointed or employed pursuant to this Act
3shall report to the executive director. In addition to any
4other duties set forth in this Act, the executive director
5shall do or shall delegate to an employee or agent of the
6Authority to do all of the following:
7        (1) Direct and supervise the administrative affairs
8    and activities of the Authority in accordance with its
9    rules, regulations, and policies.
10        (2) Attend meetings of the Casino Board.
11        (3) Keep minutes of all proceedings of the Casino
12    Board.
13        (4) Approve all accounts for salaries, per diem
14    payments, and allowable expenses of the Casino Board and
15    its employees and consultants.
16        (5) Report and make recommendations to the Casino Board
17    concerning the terms and conditions of any casino
18    management contract.
19        (6) Perform any other duty that the Casino Board
20    requires for carrying out the provisions of this Act.
21        (7) Devote his or her full time to the duties of the
22    office and not hold any other office or employment.
23    (c) The Casino Board may select a secretary-treasurer and
24other officers to hold office at the pleasure of the Casino
25Board. 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.
26        (8) Pursuant to Section 1-115 of this Act, own,

 

 

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

 

 

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

 

 

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1    the person or entity.
2        (14) Issue bonds as provided for under this Act.
3        (15) Receive and accept from any source, private or
4    public, contributions, gifts, or grants of money or
5    property to the Authority.
6        (16) Provide for the insurance of any property,
7    operations, officers, members, agents, or employees of the
8    Authority against any risk or hazard, to self-insure or
9    participate in joint self-insurance pools or entities to
10    insure against such risk or hazard, and to provide for the
11    indemnification of its officers, members, employees,
12    contractors, or agents against any and all risks.
13        (17) Exercise all the corporate powers granted
14    Illinois corporations under the Business Corporation Act
15    of 1983, except to the extent that powers are inconsistent
16    with those of a body politic and municipal corporation.
17        (18) Do all things necessary or convenient to carry out
18    the powers granted by this Act.
19    (b) The Casino Board shall comply with all applicable legal
20requirements imposed on other owners licensees to conduct all
21background investigations required under the Illinois Gambling
22Act and the rules of the Gaming Board. This requirement shall
23also extend to senior legal, financial, and administrative
24staff of the Authority.
 
25    Section 1-32. Ethical conduct.

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    Public disclosure of the written summary provided to the
2Casino Board and the Gaming Board shall be subject to the
3exemptions provided under Section 7 of the Freedom of
4Information Act.
5    This subsection (n) shall not apply to communications
6regarding traffic, law enforcement, security, environmental
7issues, City services, transportation, or other routine
8matters concerning the ordinary operations of the casino.
9    (o) For purposes of this Section:
10    "Ordinary operations" means operations relating to the
11casino facility other than the conduct of gambling activities.
12    "Routine matters" includes the application for, issuance,
13renewal, and other processes associated with City permits and
14licenses.
15    "Employee of the City" means only those employees of the
16City who provide services to the Authority or otherwise
17influence the decisions of the Authority or the Casino Board.
18    (p) Any Casino Board member or employee of the Authority
19who violates any provision of this Section is guilty of a Class
204 felony.
 
21    Section 1-45. Casino management contracts.
22    (a) In accordance with all applicable procurement laws and
23rules, the Casino Board shall develop and administer a
24competitive sealed bidding process for the selection of a
25potential casino operator licensee to develop or operate a

 

 

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1casino within the City. The Casino Board shall issue one or
2more requests for proposals. The Casino Board may establish
3minimum financial and investment requirements to determine the
4eligibility of persons to respond to the Casino Board's
5requests for proposals, and may establish and consider such
6other criteria as it deems appropriate. The Casino Board may
7impose a reasonable fee upon persons who respond to requests
8for proposals, in order to reimburse the Casino Board for its
9costs in preparing and issuing the requests and reviewing the
10proposals. At least 30 days prior to the commencement of the
11competitive bidding process, the Gaming Board shall be given an
12opportunity to review the competitive bidding process
13established by the Casino Board. During the competitive bidding
14process, the Casino Board shall keep the Gaming Board apprised
15of the process and the responses received in connection with
16the Casino Board's requests for proposals.
17    (b) Within 5 business days after the time limit for
18submitting bids and proposals has passed, the Casino Board
19shall make all bids and proposals public, provided, however,
20the Casino Board shall not be required to disclose any
21information which would be exempt from disclosure under Section
227 of the Freedom of Information Act. Thereafter, the Casino
23Board shall evaluate the responses to its requests for
24proposals and the ability of all persons or entities responding
25to its requests for proposals to meet the requirements of this
26Act and any relevant provisions of the Illinois Gambling Act

 

 

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1and to undertake and perform the obligations set forth in its
2requests for proposals.
3    (c) After reviewing proposals and selecting a successful
4bidder, the Casino Board shall enter into a casino management
5contract with the successful bidder authorizing the operation
6of a casino. The casino operator shall be subject to a
7background investigation and approval by the Gaming Board. The
8Gaming Board shall complete its background investigation and
9approval of the casino operator within 6 months after the date
10that the proposed casino operator submits its application to
11the Gaming Board. If the Gaming Board does not complete its
12background investigation and approval within the 6-month
13period, then the Gaming Board shall give a written explanation
14to the proposed casino operator and the chief legal officer of
15the Authority as to why it has not reached a final
16determination and when it reasonably expects to make a final
17determination. Validity of the casino management contract is
18contingent upon the issuance of a casino operator license to
19the successful bidder. If the Gaming Board grants a casino
20operator license, the Casino Board shall transmit a copy of the
21executed casino management contract to the Gaming Board.
22    (d) After (1) the Authority has been issued an owners
23license, (2) the Gaming Board has issued a casino operator
24license, and (3) the Gaming Board has approved the members of
25the Casino Board, the Authority may conduct gaming operations
26at a temporary facility, subject to the adopted rules of the

 

 

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1Gaming Board, for no longer than 24 months after gaming
2operations begin. The Gaming Board may, after holding a public
3hearing, grant an extension so long as a permanent facility is
4not operational and the Authority is working in good faith to
5complete the permanent facility. The Gaming Board may grant
6additional extensions following further public hearings. Each
7extension may be for a period of no longer than 6 months.
8    (e) Fifty percent of any initial consideration received by
9the Authority that was paid as an inducement pursuant to a bid
10for a casino management contract or an executed casino
11management contract must be transmitted to the State and
12deposited into the Gaming Facilities Fee Revenue Fund. The
13initial consideration shall not include (1) any amounts paid to
14the Authority as reimbursement for its costs in preparing or
15issuing the requests for proposals and reviewing the proposals
16or (2) any amounts loaned to the Authority or paid by an entity
17on behalf of the Authority for the design, construction,
18outfitting, or equipping of the casino, pre-opening expenses,
19bank roll or similar expenses required to open and operate the
20casino, or any license or per position fees imposed pursuant to
21the Illinois Gambling Act or any other financial obligation of
22the Authority.
 
23    Section 1-47. Freedom of Information Act. The Authority
24shall be a public body as defined in the Freedom of Information
25Act and shall be subject to the provisions of the Freedom of

 

 

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1Information Act.
 
2    Section 1-50. Transfer of funds. The revenues received by
3the Authority (other than amounts required to be paid pursuant
4to the Illinois Gambling Act and amounts required to pay the
5operating expenses of the Authority, to pay amounts due the
6casino operator licensee pursuant to a casino management
7contract, to repay any borrowing of the Authority made pursuant
8to Section 1-31, to pay debt service on any bonds issued under
9Section 1-75, and to pay any expenses in connection with the
10issuance of such bonds pursuant to Section 1-75 or derivative
11products pursuant to Section 1-85) shall be transferred to the
12City by the Authority. Moneys transferred to the City pursuant
13to this Section shall be expended or obligated by the City for
14the construction, maintenance, and modernization of schools.
 
15    Section 1-60. Auditor General.
16    (a) Prior to the issuance of bonds under this Act, the
17Authority shall submit to the Auditor General a certification
18that:
19        (1) it is legally authorized to issue bonds;
20        (2) scheduled annual payments of principal and
21    interest on the bonds to be issued meet the requirements of
22    Section 1-75 of this Act;
23        (3) no bond shall mature later than 30 years; and
24        (4) after payment of costs of issuance and necessary

 

 

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1    deposits to funds and accounts established with respect to
2    debt service on the bonds, the net bond proceeds (exclusive
3    of any proceeds to be used to refund outstanding bonds)
4    will be used only for the purposes set forth in this Act.
5    The Authority also shall submit to the Auditor General its
6projections on revenues to be generated and pledged to
7repayment of the bonds as scheduled and such other information
8as the Auditor General may reasonably request.
9    The Auditor General shall examine the certifications and
10information submitted and submit a report to the Authority and
11the Gaming Board indicating whether the required
12certifications, projections, and other information have been
13submitted by the Authority and whether the assumptions
14underlying the projections are not unreasonable in the
15aggregate. The Auditor General shall submit the report no later
16than 60 days after receiving the information required to be
17submitted by the Authority.
18    The Auditor General shall submit a bill to the Authority
19for costs associated with the examinations and report required
20under this Section. The Authority shall reimburse in a timely
21manner.
22    (b) The Authority shall enter into an intergovernmental
23agreement with the Auditor General authorizing the Auditor
24General to, every 2 years, (i) review the financial audit of
25the Authority performed by the Authority's certified public
26accountants, (ii) perform a management audit of the Authority,

 

 

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1and (iii) perform a management audit of the casino operator
2licensee. The Auditor General shall provide the Authority and
3the General Assembly with the audits and shall post on his or
4her Internet website such portions of the audit or other
5financial information as generally would be made publicly
6available for other owners licensees under the Illinois
7Gambling Act. The Auditor General shall submit a bill to the
8Authority for costs associated with the review and the audit
9required under this Section, which costs shall not exceed
10$100,000, and the Authority shall reimburse the Auditor General
11for such costs in a timely manner.
 
12    Section 1-62. Advisory committee. An Advisory Committee is
13established to monitor, review, and report on (1) the
14Authority's utilization of minority-owned business enterprises
15and female-owned business enterprises, (2) employment of
16females, and (3) employment of minorities with regard to the
17development and construction of the casino as authorized under
18Section 7 of the Illinois Gambling Act. The Authority shall
19work with the Advisory Committee in accumulating necessary
20information for the Committee to submit reports, as necessary,
21to the General Assembly and to the City.
22    The Committee shall consist of 9 members as provided in
23this Section. Five members shall be selected by the Governor
24and 4 members shall be selected by the Mayor. The Governor and
25Mayor shall each appoint at least one current member of the

 

 

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1General Assembly. The Advisory Committee shall meet
2periodically and shall report the information to the Mayor of
3the City and to the General Assembly by December 31st of every
4year.
5    The Advisory Committee shall be dissolved on the date that
6casino gambling operations are first conducted at a permanent
7facility under the license authorized under Section 7 of the
8Illinois Gambling Act. For the purposes of this Section, the
9terms "female" and "minority person" have the meanings provided
10in Section 2 of the Business Enterprise for Minorities,
11Females, and Persons with Disabilities Act.
 
12    Section 1-65. Acquisition of property; eminent domain
13proceedings. For the lawful purposes of this Act, the City may
14acquire, by eminent domain or by condemnation proceedings in
15the manner provided by the Eminent Domain Act, real or personal
16property or interests in real or personal property located in
17the City, and the City may convey to the Authority property so
18acquired. The acquisition of property under this Section is
19declared to be for a public use.
 
20    Section 1-67. Limitations on gaming at Chicago airports.
21The Authority may conduct gaming operations in an airport under
22the administration or control of the Chicago Department of
23Aviation. Gaming operations may be conducted pursuant to this
24Section so long as (i) gaming operations are conducted in a

 

 

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1secured area that is beyond the Transportation Security
2Administration security checkpoints and only available to
3airline passengers at least 21 years of age who are members of
4a private club, and not to the general public, (ii) gaming
5operations are limited to slot machines, as defined in Section
64 of the Illinois Gambling Act, and (iii) the combined number
7of gaming positions operating in the City at the airports and
8at the temporary and permanent casino facility does not exceed
9the maximum number of gaming positions authorized pursuant to
10subsection (h) of Section 7 of the Illinois Gambling Act.
11Gaming operations at an airport are subject to all applicable
12laws and rules that apply to any other gaming facility under
13this Act or the Illinois Gambling Act.
 
14    Section 1-70. Local regulation. In addition to this Act,
15the Illinois Gambling Act, and all of the rules of the Gaming
16Board, the casino facilities and operations therein shall be
17subject to all ordinances and regulations of the City. The
18construction, development, and operation of the casino shall
19comply with all ordinances, regulations, rules, and controls of
20the City, including, but not limited to, those relating to
21zoning and planned development, building, fire prevention, and
22land use. However, the regulation of gaming operations is
23subject to the exclusive jurisdiction of the Gaming Board. The
24Gaming Board shall be responsible for the investigation for and
25issuance of all licenses required by this Act and the Illinois

 

 

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1Gambling Act.
 
2    Section 1-75. Borrowing.
3    (a) The Authority may borrow money and issue bonds as
4provided in this Section. Bonds of the Authority may be issued
5to provide funds for land acquisition, site assembly and
6preparation, and the design and construction of the casino, as
7defined in the Illinois Gambling Act, all ancillary and related
8facilities comprising the casino complex, and all on-site and
9off-site infrastructure improvements required in connection
10with the development of the casino; to refund (at the time or
11in advance of any maturity or redemption) or redeem any bonds
12of the Authority; to provide or increase a debt service reserve
13fund or other reserves with respect to any or all of its bonds;
14or to pay the legal, financial, administrative, bond insurance,
15credit enhancement, and other legal expenses of the
16authorization, issuance, or delivery of bonds. In this Act, the
17term "bonds" also includes notes of any kind, interim
18certificates, refunding bonds, or any other evidence of
19obligation for borrowed money issued under this Section. Bonds
20may be issued in one or more series and may be payable and
21secured either on a parity with or separately from other bonds.
22    (b) The bonds of the Authority shall be payable from one or
23more of the following sources: (i) the property or revenues of
24the Authority; (ii) revenues derived from the casino; (iii)
25revenues derived from any casino operator licensee; (iv) fees,

 

 

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

 

 

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

 

 

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1financial advisors, and accountants. The program shall include
2goals for the payment of not less than 30% of the total dollar
3value of the fees from these contracts to minority-owned
4businesses and female-owned businesses as defined in the
5Business Enterprise for Minorities, Females, and Persons with
6Disabilities Act. The Authority shall conduct outreach to
7minority-owned businesses and female-owned businesses.
8Outreach shall include, but is not limited to, advertisements
9in periodicals and newspapers, mailings, and other appropriate
10media. The Authority shall submit to the General Assembly a
11comprehensive report that shall include, at a minimum, the
12details of the procurement plan, outreach efforts, and the
13results of the efforts to achieve goals for the payment of
14fees.
15    (e) Subject to the Illinois Gambling Act and rules of the
16Gaming Board regarding pledging of interests in holders of
17owners licenses, any resolution or trust indenture may contain
18provisions that may be a part of the contract with the holders
19of the bonds as to the following:
20        (1) Pledging, assigning, or directing the use,
21    investment, or disposition of revenues of the Authority or
22    proceeds or benefits of any contract, including without
23    limitation any rights in any casino management contract.
24        (2) The setting aside of loan funding deposits, debt
25    service reserves, replacement or operating reserves, cost
26    of issuance accounts and sinking funds, and the regulation,

 

 

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1    investment, and disposition thereof.
2        (3) Limitations on the purposes to which or the
3    investments in which the proceeds of sale of any issue of
4    bonds or the Authority's revenues and receipts may be
5    applied or made.
6        (4) Limitations on the issue of additional bonds, the
7    terms upon which additional bonds may be issued and
8    secured, the terms upon which additional bonds may rank on
9    a parity with, or be subordinate or superior to, other
10    bonds.
11        (5) The refunding, advance refunding, or refinancing
12    of outstanding bonds.
13        (6) The procedure, if any, by which the terms of any
14    contract with bondholders may be altered or amended and the
15    amount of bonds and holders of which must consent thereto
16    and the manner in which consent shall be given.
17        (7) Defining the acts or omissions that shall
18    constitute a default in the duties of the Authority to
19    holders of bonds and providing the rights or remedies of
20    such holders in the event of a default, which may include
21    provisions restricting individual rights of action by
22    bondholders.
23        (8) Providing for guarantees, pledges of property,
24    letters of credit, or other security, or insurance for the
25    benefit of bondholders.
26    (f) No member of the Casino Board, nor any person executing

 

 

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1the bonds, shall be liable personally on the bonds or subject
2to any personal liability by reason of the issuance of the
3bonds.
4    (g) The Authority may issue and secure bonds in accordance
5with the provisions of the Local Government Credit Enhancement
6Act.
7    (h) A pledge by the Authority of revenues and receipts as
8security for an issue of bonds or for the performance of its
9obligations under any casino management contract shall be valid
10and binding from the time when the pledge is made. The revenues
11and receipts pledged shall immediately be subject to the lien
12of the pledge without any physical delivery or further act, and
13the lien of any pledge shall be valid and binding against any
14person having any claim of any kind in tort, contract, or
15otherwise against the Authority, irrespective of whether the
16person has notice. No resolution, trust indenture, management
17agreement or financing statement, continuation statement, or
18other instrument adopted or entered into by the Authority need
19be filed or recorded in any public record other than the
20records of the Authority in order to perfect the lien against
21third persons, regardless of any contrary provision of law.
22    (i) Bonds that are being paid or retired by issuance, sale,
23or delivery of bonds, and bonds for which sufficient funds have
24been deposited with the paying agent or trustee to provide for
25payment of principal and interest thereon, and any redemption
26premium, as provided in the authorizing resolution, shall not

 

 

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1be considered outstanding for the purposes of this subsection.
2    (j) The bonds of the Authority shall not be indebtedness of
3the State. The bonds of the Authority are not general
4obligations of the State and are not secured by a pledge of the
5full faith and credit of the State and the holders of bonds of
6the Authority may not require the application of State revenues
7or funds to the payment of bonds of the Authority. The
8foregoing non-recourse language must be printed in bold-face
9type on the face of the bonds and in the preliminary and final
10official statements on the bonds.
11    (k) The State of Illinois pledges and agrees with the
12owners of the bonds that it will not limit or alter the rights
13and powers vested in the Authority by this Act so as to impair
14the terms of any contract made by the Authority with the owners
15or in any way impair the rights and remedies of the owners
16until the bonds, together with interest on them, and all costs
17and expenses in connection with any action or proceedings by or
18on behalf of the owners, are fully met and discharged. The
19Authority is authorized to include this pledge and agreement in
20any contract with the owners of bonds issued under this
21Section.
22    (l) No person holding an elective office in the City, in
23Cook County, or in this State, holding a seat in the General
24Assembly, or serving as a board member, trustee, officer, or
25employee of the Authority, including the spouse of that person,
26may receive a legal, banking, consulting, or other fee related

 

 

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1to the issuance of bonds. This prohibition shall also apply to
2a company or firm that employs a person holding an elective
3office in the City, in Cook County, or in this State, holding a
4seat in the General Assembly, or serving as a board member,
5trustee, officer, or employee of the Authority, including the
6spouse of that person, if the person or his or her spouse has
7greater than 7.5% ownership of the company or firm.
 
8    Section 1-85. Derivative products. With respect to all or
9part of any issue of its bonds, the Authority may enter into
10agreements or contracts with any necessary or appropriate
11person, which will have the benefit of providing to the
12Authority an interest rate basis, cash flow basis, or other
13basis different from that provided in the bonds for the payment
14of interest. Such agreements or contracts may include, without
15limitation, agreements or contracts commonly known as
16"interest rate swap agreements", "forward payment conversion
17agreements", "futures", "options", "puts", or "calls" and
18agreements or contracts providing for payments based on levels
19of or changes in interest rates, agreements or contracts to
20exchange cash flows or a series of payments, or to hedge
21payment, rate spread, or similar exposure. Any such agreement
22or contract shall be solely an obligation or indebtedness of
23the Authority and shall not be an obligation or indebtedness of
24the State, nor shall any party thereto have any recourse
25against the State in connection with the agreement or contract.
 

 

 

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1    Section 1-90. Legality for investment. The State of
2Illinois, all governmental entities, all public officers,
3banks, bankers, trust companies, savings banks and
4institutions, building and loan associations, savings and loan
5associations, investment companies, and other persons carrying
6on a banking business, insurance companies, insurance
7associations, and other persons carrying on an insurance
8business, and all executors, administrators, guardians,
9trustees, and other fiduciaries may legally invest any sinking
10funds, moneys, or other funds belonging to them or within their
11control in any bonds issued under this Act. However, nothing in
12this Section shall be construed as relieving any person or
13entity from any duty of exercising reasonable care in selecting
14securities for purchase or investment.
 
15    Section 1-105. Budgets and reporting.
16    (a) The Casino Board shall annually adopt a budget for each
17fiscal year. The budget may be modified from time to time in
18the same manner and upon the same vote as it may be adopted.
19The budget shall include the Authority's available funds and
20estimated revenues and shall provide for payment of its
21obligations and estimated expenditures for the fiscal year,
22including, without limitation, expenditures for
23administration, operation, maintenance and repairs, debt
24service, and deposits into reserve and other funds and capital

 

 

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1projects.
2    (b) The Casino Board shall annually cause the finances of
3the Authority to be audited by a firm of certified public
4accountants selected by the Casino Board in accordance with the
5rules of the Gaming Board and post on the Authority's Internet
6website such financial information as is required to be posted
7by all other owners licensees under the Illinois Gambling Act.
8    (c) The Casino Board shall, for each fiscal year, prepare
9an annual report setting forth information concerning its
10activities in the fiscal year and the status of the development
11of the casino. The annual report shall include financial
12information of the Authority consistent with that which is
13required for all other owners licensees under the Illinois
14Gambling Act, the budget for the succeeding fiscal year, and
15the current capital plan as of the date of the report. Copies
16of the annual report shall be made available to persons who
17request them and shall be submitted not later than 120 days
18after the end of the Authority's fiscal year or, if the audit
19of the Authority's financial statements is not completed within
20120 days after the end of the Authority's fiscal year, as soon
21as practical after completion of the audit, to the Governor,
22the Mayor, the General Assembly, and the Commission on
23Government Forecasting and Accountability.
 
24    Section 1-110. Deposit and withdrawal of funds.
25    (a) All funds deposited by the Authority in any bank or

 

 

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1savings and loan association shall be placed in the name of the
2Authority and shall be withdrawn or paid out only by check or
3draft upon the bank or savings and loan association, signed by
42 officers or employees designated by the Casino Board.
5Notwithstanding any other provision of this Section, the Casino
6Board may designate any of its members or any officer or
7employee of the Authority to authorize the wire transfer of
8funds deposited by the secretary-treasurer of funds in a bank
9or savings and loan association for the payment of payroll and
10employee benefits-related expenses.
11    No bank or savings and loan association shall receive
12public funds as permitted by this Section unless it has
13complied with the requirements established pursuant to Section
146 of the Public Funds Investment Act.
15    (b) If any officer or employee whose signature appears upon
16any check or draft issued pursuant to this Act ceases (after
17attaching his signature) to hold his or her office before the
18delivery of such a check or draft to the payee, his or her
19signature shall nevertheless be valid and sufficient for all
20purposes with the same effect as if he or she had remained in
21office until delivery thereof.
 
22    Section 1-112. Contracts with the Authority or casino
23operator licensee; disclosure requirements.
24    (a) A bidder, respondent, offeror, or contractor for
25contracts with the Authority or casino operator licensee shall

 

 

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1disclose the identity of all officers and directors and every
2owner, beneficiary, or person with beneficial interest of more
3than 1% or shareholder entitled to receive more than 1% of the
4total distributable income of any corporation having any
5interest in the contract or in the bidder, respondent, offeror,
6or contractor. The disclosure shall be in writing and attested
7to by an owner, trustee, corporate official, or agent. If stock
8in a corporation is publicly traded and there is no readily
9known individual having greater than a 1% interest, then a
10statement to that effect attested to by an officer or agent of
11the corporation shall fulfill the disclosure statement
12requirement of this Section. A bidder, respondent, offeror, or
13contractor shall notify the Authority of any changes in
14officers, directors, ownership, or individuals having a
15beneficial interest of more than 1%. Notwithstanding the
16provisions of this subsection (a), the Gaming Board may adopt
17rules in connection with contractors for contracts with the
18Authority or the casino operator licensee.
19    (b) A bidder, respondent, offeror, or contractor for
20contracts with an annual value of $25,000 or more or for a
21period to exceed one year shall disclose all political
22contributions of the bidder, respondent, offeror, or
23contractor and any affiliated person or entity. Disclosure
24shall include at least the names and addresses of the
25contributors and the dollar amounts of any contributions to any
26political committee made within the previous 2 years. The

 

 

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1disclosure must be submitted to the Gaming Board with a copy of
2the contract. All such disclosures shall be posted on the
3websites of the Authority and the Gaming Board.
4    (c) As used in this Section:
5    "Contribution" means contribution as defined in Section
69-1.4 of the Election Code.
7    "Affiliated person" means (i) any person with any ownership
8interest or distributive share of the bidding, responding, or
9contracting entity in excess of 1%, (ii) executive employees of
10the bidding, responding, or contracting entity, and (iii) the
11spouse, minor children, and parents of any such persons.
12    "Affiliated entity" means (i) any parent or subsidiary of
13the bidding or contracting entity, (ii) any member of the same
14unitary business group, or (iii) any political committee for
15which the bidding, responding, or contracting entity is the
16sponsoring entity.
17    (d) The Gaming Board may direct the Authority or a casino
18operator licensee to void a contract if a violation of this
19Section occurs. The Authority may direct a casino operator
20licensee to void a contract if a violation of this Section
21occurs.
22    (e) All contracts pertaining to the actual operation of the
23casino and related gaming activities shall be entered into by
24the casino operator licensee and not the Authority and shall be
25subject to the regulation, oversight, and approval of the
26Gaming Board, applying the same regulation, oversight, and

 

 

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1approval requirements as would be applied to any other owners
2licensee under the Illinois Gambling Act.
 
3    Section 1-115. Purchasing.
4    (a) The Casino Board shall designate an officer of the
5Authority to serve as the Chief Procurement Officer for the
6Authority. The Chief Procurement Officer shall have all powers
7and duties set forth in Section 15 of Division 10 of Article 8
8of the Illinois Municipal Code. Except as otherwise provided in
9this Section, the Chief Procurement Officer of the Authority
10shall conduct procurements on behalf of the Authority subject
11to Title 2, Chapter 92 of the Municipal Code of Chicago, which
12by its terms incorporates Division 10 of Article 8 of the
13Illinois Municipal Code.
14    (b) All contracts for amounts greater than $25,000 must be
15approved by the Casino Board and executed by the chairperson of
16the Casino Board and executive director of the Authority.
17Contracts for amounts of $25,000 or less may be approved and
18executed by the Chief Procurement Officer for the Authority and
19executive director of the Authority, with approval by the chief
20legal counsel for the Authority as to form and legality.
21    (c) All construction contracts and contracts for supplies,
22materials, equipment, and services for amounts greater than
23$25,000 shall be let by a competitive selection process to the
24lowest responsible proposer, after advertising for proposals,
25except for the following:

 

 

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1        (1) when repair parts, accessories, equipment, or
2    services are required for equipment or services previously
3    furnished or contracted for;
4        (2) when services such as water, light, heat, power,
5    telephone (other than long-distance service), or telegraph
6    are required;
7        (3) casino management contracts, which shall be
8    awarded as set forth in Section 1-45 of this Act;
9        (4) contracts where there is only one economically
10    feasible source;
11        (5) when a purchase is needed on an immediate,
12    emergency basis because there exists a threat to public
13    health or public safety, or when immediate expenditure is
14    necessary for repairs to Authority property in order to
15    protect against further loss of or damage to Authority
16    property, to prevent or minimize serious disruption in
17    Authority services or to ensure the integrity of Authority
18    records;
19        (6) contracts for professional services other than for
20    management of the casino, except such contracts described
21    in subsection (d) of this Section; and
22        (7) contracts for the use, purchase, delivery,
23    movement, or installation of (i) data processing
24    equipment, software, and services and (ii)
25    telecommunications equipment, software, and services.
26    (d) Contracts for professional services for a term of more

 

 

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1than one year or contracts that may require payment in excess
2of $25,000 in one year shall be let by a competitive bidding
3process to the most highly qualified firm that agrees to
4compensation and other terms of engagement that are both
5reasonable and acceptable to the Casino Board.
6    (e) All contracts involving less than $25,000 shall be let
7by competitive selection process whenever possible, and in any
8event in a manner calculated to ensure the best interests of
9the public.
10    (f) In determining the responsibility of any proposer, the
11Authority may take into account the proposer's (or an
12individual having a beneficial interest, directly or
13indirectly, of more than 1% in such proposing entity) past
14record of dealings with the Authority, the proposer's
15experience, adequacy of equipment, and ability to complete
16performance within the time set, and other factors besides
17financial responsibility. No such contract shall be awarded to
18any proposer other than the lowest proposer (in case of
19purchase or expenditure) unless authorized or approved by a
20vote of at least 3 members of the Casino Board and such action
21is accompanied by a written statement setting forth the reasons
22for not awarding the contract to the highest or lowest
23proposer, as the case may be. The statement shall be kept on
24file in the principal office of the Authority and open to
25public inspection.
26    (g) The Authority shall have the right to reject all

 

 

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1proposals and to re-advertise for proposals. If after any such
2re-advertisement, no responsible and satisfactory proposals,
3within the terms of the re-advertisement, is received, the
4Authority may award such contract without competitive
5selection. The contract must not be less advantageous to the
6Authority than any valid proposal received pursuant to
7advertisement.
8    (h) Advertisements for proposals and re-proposals shall be
9published at least once in a daily newspaper of general
10circulation published in the City at least 10 calendar days
11before the time for receiving proposals and in an online
12bulletin published on the Authority's website. Such
13advertisements shall state the time and place for receiving and
14opening of proposals and, by reference to plans and
15specifications on file at the time of the first publication or
16in the advertisement itself, shall describe the character of
17the proposed contract in sufficient detail to fully advise
18prospective proposers of their obligations and to ensure free
19and open competitive selection.
20    (i) All proposals in response to advertisements shall be
21sealed and shall be publicly opened by the Authority. All
22proposers shall be entitled to be present in person or by
23representatives. Cash or a certified or satisfactory cashier's
24check, as a deposit of good faith, in a reasonable amount to be
25fixed by the Authority before advertising for proposals, shall
26be required with the proposal. A bond for faithful performance

 

 

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1of the contract with surety or sureties satisfactory to the
2Authority and adequate insurance may be required in reasonable
3amounts to be fixed by the Authority before advertising for
4proposals.
5    (j) The contract shall be awarded as promptly as possible
6after the opening of proposals. The proposal of the successful
7proposer, as well as the bids of the unsuccessful proposers,
8shall be placed on file and be open to public inspection
9subject to the exemptions from disclosure provided under
10Section 7 of the Freedom of Information Act. All proposals
11shall be void if any disclosure of the terms of any proposals
12in response to an advertisement is made or permitted to be made
13by the Authority before the time fixed for opening proposals.
14    (k) Notice of each and every contract that is offered,
15including renegotiated contracts and change orders, shall be
16published in an online bulletin. The online bulletin must
17include at least the date first offered, the date submission of
18offers is due, the location that offers are to be submitted to,
19a brief purchase description, the method of source selection,
20information of how to obtain a comprehensive purchase
21description and any disclosure and contract forms, and
22encouragement to prospective vendors to hire qualified
23veterans, as defined by Section 45-67 of the Illinois
24Procurement Code, and Illinois residents discharged from any
25Illinois adult correctional center subject to Gaming Board
26licensing and eligibility rules. Notice of each and every

 

 

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1contract that is let or awarded, including renegotiated
2contracts and change orders, shall be published in the online
3bulletin and must include at least all of the information
4specified in this subsection (k), as well as the name of the
5successful responsible proposer or offeror, the contract
6price, and the number of unsuccessful responsive proposers and
7any other disclosure specified in this Section. This notice
8must be posted in the online electronic bulletin prior to
9execution of the contract.
 
10    Section 1-130. Affirmative action and equal opportunity
11obligations of Authority.
12    (a) The Authority is subject to the requirements of Article
13IV of Chapter 2-92 (Sections 2-92-650 through 2-92-720
14inclusive) of the Chicago Municipal Code, as now or hereafter
15amended, renumbered, or succeeded, concerning a Minority-Owned
16and Women-Owned Business Enterprise Procurement Program for
17construction contracts, and Section 2-92-420 et seq. of the
18Chicago Municipal Code, as now or hereafter amended,
19renumbered, or succeeded, concerning a Minority-Owned and
20Women-Owned Business Enterprise Procurement Program.
21    (b) The Authority is authorized to enter into agreements
22with contractors' associations, labor unions, and the
23contractors working on the development of the casino to
24establish an apprenticeship preparedness training program to
25provide for an increase in the number of minority and female

 

 

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1journeymen and apprentices in the building trades and to enter
2into agreements with community college districts or other
3public or private institutions to provide readiness training.
4The Authority is further authorized to enter into contracts
5with public and private educational institutions and persons in
6the gaming, entertainment, hospitality, and tourism industries
7to provide training for employment in those industries.
 
8    Section 1-135. Transfer of interest. Neither the Authority
9nor the City may sell, lease, rent, transfer, exchange, or
10otherwise convey any interest that they have in the casino
11without prior approval of the General Assembly.
 
12    Section 1-140. Home rule. The regulation and licensing of
13casinos and casino gaming, casino gaming facilities, and casino
14operator licensees under this Act are exclusive powers and
15functions of the State. A home rule unit may not regulate or
16license casinos, casino gaming, casino gaming facilities, or
17casino operator licensees under this Act, except as provided
18under this Act. This Section is a denial and limitation of home
19rule powers and functions under subsection (h) of Section 6 of
20Article VII of the Illinois Constitution.
 
21    Section 1-145. Prohibition of political contributions from
22casino operator licensees and applicants.
23    (a) The General Assembly has a compelling interest in

 

 

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1protecting the integrity of both the electoral process and the
2legislative process by preventing corruption and the
3appearance of corruption which may arise through permitting
4certain political campaign contributions by certain persons
5involved in the gaming industry and regulated by the State.
6Unlike most other regulated industries, gaming is especially
7susceptible to corruption and potential criminal influence. In
8Illinois, only licensed gaming activities are legal and all
9other gaming activities are strictly prohibited. Given these
10circumstances, it is imperative to eliminate any potential
11corrupt influence in the gaming industry and the electoral
12process.
13    Banning political campaign contributions by certain
14persons subject to this Section to State officeholders and
15candidates for such offices and to county and municipal
16officeholders and candidates for such offices in counties and
17municipalities that receive financial benefits from gaming
18activities is necessary to prevent corruption and the
19appearance of corruption that may arise when political campaign
20contributions and gaming that is regulated by the State and
21that confers benefits on counties and municipalities are
22intermingled.
23    The General Assembly has prohibited political campaign
24contributions to certain State and local officeholders and
25candidates for such offices by certain persons with State of
26Illinois and Metropolitan Pier and Exposition Authority

 

 

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1contracts and pending bids or proposals for contracts of over
2$50,000 and certain individuals and entities affiliated with
3such persons. Certain gaming licensees will receive receipts
4far in excess of the base level of contract amounts subject to
5such other campaign contribution prohibitions.
6    (b) As used in this Section:
7    "Affiliated entity" means (i) any corporate parent and
8operating subsidiary of the business entity applying for or
9holding a license, (ii) each operating subsidiary of the
10corporate parent of the business entity applying for or holding
11a license, (iii) any organization recognized by the United
12States Internal Revenue Service as a tax-exempt organization
13described in Section 501(c) of the Internal Revenue Code of
141986 (or any successor provision of federal tax law)
15established by one or more business entities seeking or holding
16a license, any affiliated entity of such business entity, or
17any affiliated person of such business entity, and (iv) any
18political committee for which the business entity applying for
19or holding a license, or any 501(c) organization described in
20item (iii) related to that business entity, is the sponsoring
21entity as defined in Section 9-3 of the Election Code. For
22purposes of item (iv), the funding of all business entities
23applying for or holding a license shall be aggregated in
24determining whether such political committee is an affiliated
25entity.
26    "Affiliated person" means (i) any person with any ownership

 

 

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1interest or distributive share in excess of 7.5% of any
2business entity applying for or holding a license, (ii)
3executive employees of any such business entity, (iii) any
4person designated as a key person under the Illinois Gambling
5Act, and (iv) the spouse of the persons described in items (i)
6through (iii).
7    "Business entity" means any entity doing business for
8profit, whether organized as a corporation, partnership, sole
9proprietorship, limited liability company, or partnership or
10otherwise.
11    "Contribution" means a contribution as defined in Section
129-1.4 of the Election Code.
13    "Declared candidate" means a person who has filed a
14statement of candidacy and petition for nomination or election
15in the principal office of the State Board of Elections, or in
16the office of the appropriate election authority for any county
17or municipality in which a casino is located or proposed or
18which receives any gaming revenue.
19    "Executive employee" means (i) any person who is an officer
20or director or who fulfills duties equivalent to those of an
21officer or director of a business entity applying for or
22holding a license and (ii) any employee of such business entity
23who is required to register under the Lobbyist Registration
24Act.
25    "License" means the casino operator license issued
26pursuant to this Act.

 

 

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1    "Officeholder" means the Governor, Lieutenant Governor,
2Attorney General, Secretary of State, Comptroller, Treasurer,
3member of the General Assembly, or any officeholder in any
4county or municipality in which a riverboat, casino, or
5electronic gaming device is located or proposed or that
6receives any gaming revenue.
7    (c) Any person or business entity applying for or holding a
8license, any affiliated entities or persons of such business
9entity, and any entities or persons soliciting a contribution
10or causing a contribution to be made on behalf of such person
11or business entity, are prohibited from making any contribution
12to any officeholder or declared candidate or any political
13committee affiliated with any officeholder or declared
14candidate, as defined in Section 9-1.8 of the Election Code.
15This prohibition shall commence upon filing of an application
16for a license and shall continue for a period of 2 years after
17termination, suspension or revocation of the license.
18    The Gaming Board shall have authority to suspend, revoke,
19or restrict the license and to impose civil penalties of up to
20$100,000 for each violation of this subsection (c). A notice of
21each such violation and the penalty imposed shall be published
22on the Gaming Board's Internet website and in the Illinois
23Register. Payments received by the State pursuant to this
24subsection (c) shall be deposited into the General Revenue
25Fund.
26    Any officeholder or declared candidate or any political

 

 

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1committee affiliated with any officeholder or declared
2candidate that has received a contribution in violation of this
3subsection (c) shall pay an amount equal to the value of the
4contribution to the State no more than 30 days after notice of
5the violation concerning the contribution appears in the
6Illinois Register. Payments received by the State pursuant to
7this subsection (c) shall be deposited into the General Revenue
8Fund.
9    (d) The Gaming Board shall post on its Internet website a
10list of all persons, business entities, and affiliated entities
11prohibited from making contributions to any officeholder or
12declared candidate political committee pursuant to subsection
13(c), which list shall be updated and published, at a minimum,
14every 6 months.
15    Any person, business entity, or affiliated entity
16prohibited from making contributions to any officeholder or
17declared candidate political committee pursuant to subsection
18(c) shall notify the Gaming Board within 7 days after
19discovering any necessary change or addition to the information
20relating to that person, business entity, or affiliated entity
21contained in the list.
22    An individual who acts in good faith and in reliance on any
23information contained in the list shall not be subject to any
24penalties or liability imposed for a violation of this Section.
25    (e) If any provision of this Section is held invalid or its
26application to any person or circumstance is held invalid, the

 

 

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1invalidity of that provision or application does not affect the
2other provisions or applications of this Section that can be
3given effect without the invalid application or provision.
 
4
ARTICLE 90.

 
5    Section 90-1. Findings. The General Assembly makes all of
6the following findings:
7        (1) That the cumulative reduction to pre-K through 12
8    education funding since 2009 is approximately
9    $861,000,000.
10        (2) That during the last 2 years, general state aid to
11    Illinois common schools has been underfunded as a result of
12    budget cuts, resulting in pro-rated payments to school
13    districts that are less than the foundational level of
14    $6,119 per pupil, which represents the minimum each pupil
15    needs to be educated.
16        (3) That a significant infusion of new revenue is
17    necessary in order to fully fund the foundation level and
18    to maintain and support education in Illinois.
19        (4) That the decline of the Illinois horse racing and
20    breeding program, a $2.5 billion industry, would be
21    reversed if this amendatory Act of the 98th General
22    Assembly would be enacted.
23        (5) That the Illinois horse racing industry is on the
24    verge of extinction due to fierce competition from fully

 

 

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

 

 

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1    Section 90-3. The State Officials and Employees Ethics Act
2is amended by changing Sections 5-45 and 20-10 as follows:
 
3    (5 ILCS 430/5-45)
4    Sec. 5-45. Procurement; revolving door prohibition.
5    (a) No former officer, member, or State employee, or spouse
6or immediate family member living with such person, shall,
7within a period of one year immediately after termination of
8State employment, knowingly accept employment or receive
9compensation or fees for services from a person or entity if
10the officer, member, or State employee, during the year
11immediately preceding termination of State employment,
12participated personally and substantially in the award of State
13contracts, or the issuance of State contract change orders,
14with a cumulative value of $25,000 or more to the person or
15entity, or its parent or subsidiary.
16    (b) No former officer of the executive branch or State
17employee of the executive branch with regulatory or licensing
18authority, or spouse or immediate family member living with
19such person, shall, within a period of one year immediately
20after termination of State employment, knowingly accept
21employment or receive compensation or fees for services from a
22person or entity if the officer or State employee, during the
23year immediately preceding termination of State employment,
24participated personally and substantially in making a

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    the advice and consent of the Senate;
2        (4) the head of a department, commission, board,
3    division, bureau, authority, or other administrative unit
4    within the government of this State;
5        (5) chief procurement officers, State purchasing
6    officers, and their designees whose duties are directly
7    related to State procurement; and
8        (6) chiefs of staff, deputy chiefs of staff, associate
9    chiefs of staff, assistant chiefs of staff, and deputy
10    governors; .
11        (7) employees of the Illinois Racing Board; and
12        (8) employees of the Illinois Gaming Board.
13    (i) For the purposes of this Section, with respect to
14officers or employees of a regional transit board, as defined
15in this Act, the phrase "person or entity" does not include:
16(i) the United States government, (ii) the State, (iii)
17municipalities, as defined under Article VII, Section 1 of the
18Illinois Constitution, (iv) units of local government, as
19defined under Article VII, Section 1 of the Illinois
20Constitution, or (v) school districts.
21(Source: P.A. 96-555, eff. 8-18-09; 97-653, eff. 1-13-12.)
 
22    (5 ILCS 430/20-10)
23    Sec. 20-10. Offices of Executive Inspectors General.
24    (a) Six Five independent Offices of the Executive Inspector
25General are created, one each for the Governor, the Attorney

 

 

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1General, the Secretary of State, the Comptroller, and the
2Treasurer and one for gaming activities. Each Office shall be
3under the direction and supervision of an Executive Inspector
4General and shall be a fully independent office with separate
5appropriations.
6    (b) The Governor, Attorney General, Secretary of State,
7Comptroller, and Treasurer shall each appoint an Executive
8Inspector General, and the Governor shall appoint an Executive
9Inspector General for gaming activities. Each appointment must
10be made without regard to political affiliation and solely on
11the basis of integrity and demonstrated ability. Appointments
12shall be made by and with the advice and consent of the Senate
13by three-fifths of the elected members concurring by record
14vote. Any nomination not acted upon by the Senate within 60
15session days of the receipt thereof shall be deemed to have
16received the advice and consent of the Senate. If, during a
17recess of the Senate, there is a vacancy in an office of
18Executive Inspector General, the appointing authority shall
19make a temporary appointment until the next meeting of the
20Senate when the appointing authority shall make a nomination to
21fill that office. No person rejected for an office of Executive
22Inspector General shall, except by the Senate's request, be
23nominated again for that office at the same session of the
24Senate or be appointed to that office during a recess of that
25Senate.
26    Nothing in this Article precludes the appointment by the

 

 

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1Governor, Attorney General, Secretary of State, Comptroller,
2or Treasurer of any other inspector general required or
3permitted by law. The Governor, Attorney General, Secretary of
4State, Comptroller, and Treasurer each may appoint an existing
5inspector general as the Executive Inspector General required
6by this Article, provided that such an inspector general is not
7prohibited by law, rule, jurisdiction, qualification, or
8interest from serving as the Executive Inspector General
9required by this Article. An appointing authority may not
10appoint a relative as an Executive Inspector General.
11    Each Executive Inspector General shall have the following
12qualifications:
13        (1) has not been convicted of any felony under the laws
14    of this State, another State, or the United States;
15        (2) has earned a baccalaureate degree from an
16    institution of higher education; and
17        (3) has 5 or more years of cumulative service (A) with
18    a federal, State, or local law enforcement agency, at least
19    2 years of which have been in a progressive investigatory
20    capacity; (B) as a federal, State, or local prosecutor; (C)
21    as a senior manager or executive of a federal, State, or
22    local agency; (D) as a member, an officer, or a State or
23    federal judge; or (E) representing any combination of (A)
24    through (D).
25    The term of each initial Executive Inspector General shall
26commence upon qualification and shall run through June 30,

 

 

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12008. The initial appointments shall be made within 60 days
2after the effective date of this Act.
3    After the initial term, each Executive Inspector General
4shall serve for 5-year terms commencing on July 1 of the year
5of appointment and running through June 30 of the fifth
6following year. An Executive Inspector General may be
7reappointed to one or more subsequent terms.
8    A vacancy occurring other than at the end of a term shall
9be filled by the appointing authority only for the balance of
10the term of the Executive Inspector General whose office is
11vacant.
12    Terms shall run regardless of whether the position is
13filled.
14    (c) The Executive Inspector General appointed by the
15Attorney General shall have jurisdiction over the Attorney
16General and all officers and employees of, and vendors and
17others doing business with, State agencies within the
18jurisdiction of the Attorney General. The Executive Inspector
19General appointed by the Secretary of State shall have
20jurisdiction over the Secretary of State and all officers and
21employees of, and vendors and others doing business with, State
22agencies within the jurisdiction of the Secretary of State. The
23Executive Inspector General appointed by the Comptroller shall
24have jurisdiction over the Comptroller and all officers and
25employees of, and vendors and others doing business with, State
26agencies within the jurisdiction of the Comptroller. The

 

 

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1Executive Inspector General appointed by the Treasurer shall
2have jurisdiction over the Treasurer and all officers and
3employees of, and vendors and others doing business with, State
4agencies within the jurisdiction of the Treasurer. The
5Executive Inspector General appointed by the Governor shall
6have jurisdiction over (i) the Governor, (ii) the Lieutenant
7Governor, (iii) all officers and employees of, and vendors and
8others doing business with, executive branch State agencies
9under the jurisdiction of the Executive Ethics Commission and
10not within the jurisdiction of the Attorney General, the
11Secretary of State, the Comptroller, or the Treasurer, or the
12Executive Inspector General for gaming activities, and (iv) all
13board members and employees of the Regional Transit Boards and
14all vendors and others doing business with the Regional Transit
15Boards. The Executive Inspector General for gaming activities
16appointed by the Governor has jurisdiction over the Illinois
17Gaming Board, all officers and employees of the Illinois Gaming
18Board, and all activities of the Illinois Gaming Board.
19    The jurisdiction of each Executive Inspector General is to
20investigate allegations of fraud, waste, abuse, mismanagement,
21misconduct, nonfeasance, misfeasance, malfeasance, or
22violations of this Act or violations of other related laws and
23rules.
24    (d) The compensation for each Executive Inspector General
25shall be determined by the Executive Ethics Commission and
26shall be made from appropriations made to the Comptroller for

 

 

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1this purpose. Subject to Section 20-45 of this Act, each
2Executive Inspector General has full authority to organize his
3or her Office of the Executive Inspector General, including the
4employment and determination of the compensation of staff, such
5as deputies, assistants, and other employees, as
6appropriations permit. A separate appropriation shall be made
7for each Office of Executive Inspector General.
8    (e) No Executive Inspector General or employee of the
9Office of the Executive Inspector General may, during his or
10her term of appointment or employment:
11        (1) become a candidate for any elective office;
12        (2) hold any other elected or appointed public office
13    except for appointments on governmental advisory boards or
14    study commissions or as otherwise expressly authorized by
15    law;
16        (3) be actively involved in the affairs of any
17    political party or political organization; or
18        (4) advocate for the appointment of another person to
19    an appointed or elected office or position or actively
20    participate in any campaign for any elective office.
21    In this subsection an appointed public office means a
22position authorized by law that is filled by an appointing
23authority as provided by law and does not include employment by
24hiring in the ordinary course of business.
25    (e-1) No Executive Inspector General or employee of the
26Office of the Executive Inspector General may, for one year

 

 

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1after the termination of his or her appointment or employment:
2        (1) become a candidate for any elective office;
3        (2) hold any elected public office; or
4        (3) hold any appointed State, county, or local judicial
5    office.
6    (e-2) The requirements of item (3) of subsection (e-1) may
7be waived by the Executive Ethics Commission.
8    (f) An Executive Inspector General may be removed only for
9cause and may be removed only by the appointing constitutional
10officer. At the time of the removal, the appointing
11constitutional officer must report to the Executive Ethics
12Commission the justification for the removal.
13(Source: P.A. 96-555, eff. 8-18-09; 96-1528, eff. 7-1-11.)
 
14    Section 90-5. The Alcoholism and Other Drug Abuse and
15Dependency Act is amended by changing Section 5-20 as follows:
 
16    (20 ILCS 301/5-20)
17    Sec. 5-20. Compulsive gambling program.
18    (a) Subject to appropriation, the Department shall
19establish a program for public education, research, and
20training regarding problem and compulsive gambling and the
21treatment and prevention of problem and compulsive gambling.
22Subject to specific appropriation for these stated purposes,
23the program must include all of the following:
24        (1) Establishment and maintenance of a toll-free "800"

 

 

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1    telephone number to provide crisis counseling and referral
2    services to families experiencing difficulty as a result of
3    problem or compulsive gambling.
4        (2) Promotion of public awareness regarding the
5    recognition and prevention of problem and compulsive
6    gambling.
7        (3) Facilitation, through in-service training and
8    other means, of the availability of effective assistance
9    programs for problem and compulsive gamblers.
10        (4) Conducting studies to identify adults and
11    juveniles in this State who are, or who are at risk of
12    becoming, problem or compulsive gamblers.
13    (b) Subject to appropriation, the Department shall either
14establish and maintain the program or contract with a private
15or public entity for the establishment and maintenance of the
16program. Subject to appropriation, either the Department or the
17private or public entity shall implement the toll-free
18telephone number, promote public awareness, and conduct
19in-service training concerning problem and compulsive
20gambling.
21    (c) Subject to appropriation, the Department shall produce
22and supply the signs specified in Section 10.7 of the Illinois
23Lottery Law, Section 34.1 of the Illinois Horse Racing Act of
241975, Section 4.3 of the Bingo License and Tax Act, Section 8.1
25of the Charitable Games Act, and Section 13.1 of the Illinois
26Riverboat Gambling Act.

 

 

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1(Source: P.A. 89-374, eff. 1-1-96; 89-626, eff. 8-9-96.)
 
2    Section 90-6. The Department of Commerce and Economic
3Opportunity Law of the Civil Administrative Code of Illinois is
4amended by adding Sections 605-530 and 605-535 as follows:
 
5    (20 ILCS 605/605-530 new)
6    Sec. 605-530. The Depressed Communities Economic
7Development Board.
8    (a) The Depressed Communities Economic Development Board
9is created as an advisory board within the Department of
10Commerce and Economic Opportunity. The Board shall consist of
11the following members:
12        (1) 3 members appointed by the Governor, one of whom
13    shall be appointed to serve an initial term of one year and
14    2 of whom shall be appointed to serve an initial term of 2
15    years;
16        (2) 2 members appointed by the Speaker of the House of
17    Representatives, one of whom shall be appointed to serve an
18    initial term of one year and one of whom shall be appointed
19    to serve an initial term of 2 years;
20        (3) 2 members appointed by the President of the Senate,
21    one of whom shall be appointed to serve an initial term of
22    one year and one of whom shall be appointed to serve an
23    initial term of 2 years;
24        (4) 2 members appointed by the Minority Leader of the

 

 

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1    House of Representatives, one of whom shall be appointed to
2    serve an initial term of one year and one of whom shall be
3    appointed to serve an initial term of 2 years; and
4        (5) 2 members appointed by the Minority Leader of the
5    Senate, one of whom shall be appointed to serve an initial
6    term of one year and one of whom shall be appointed to
7    serve an initial term of 2 years.
8    The members of the Board shall elect a member to serve as
9chair of the Board. The members of the Board shall reflect the
10composition of the Illinois population with regard to ethnic
11and racial composition.
12    After the initial terms, each member shall be appointed to
13serve a term of 2 years and until his or her successor has been
14appointed and assumes office. If a vacancy occurs in the Board
15membership, then the vacancy shall be filled in the same manner
16as the initial appointment. No member of the Board shall, at
17the time of his or her appointment or within 2 years before the
18appointment, hold elected office or be appointed to a State
19board, commission, or agency. All Board members are subject to
20the State Officials and Employees Ethics Act.
21    (b) Board members shall serve without compensation, but may
22be reimbursed for their reasonable travel expenses from funds
23available for that purpose. The Department of Commerce and
24Economic Opportunity shall provide staff and administrative
25support services to the Board.
26    (c) The Board must make recommendations, which must be

 

 

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1approved by a majority of the Board, to the Department of
2Commerce and Economic Opportunity concerning the award of
3grants from amounts appropriated to the Department from the
4Depressed Communities Economic Development Fund, a special
5fund created in the State treasury. The Department must make
6grants to public or private entities submitting proposals to
7the Board to revitalize an Illinois depressed community. Grants
8may be used by these entities only for those purposes
9conditioned with the grant. For the purposes of this subsection
10(c), plans for revitalizing an Illinois depressed community
11include plans intended to curb high levels of poverty,
12unemployment, job and population loss, and general distress. An
13Illinois depressed community is an area where the poverty rate,
14as determined by using the most recent data released by the
15United States Census Bureau, is at least 3% greater than the
16State poverty rate as determined by using the most recent data
17released by the United States Census Bureau.
 
18    (20 ILCS 605/605-535 new)
19    Sec. 605-535. The Commission on the Future of Economic
20Development of the Latino Community.
21    (a) There is hereby created the Commission on the Future of
22Economic Development of the Latino Community within the
23Department. The purpose of the Commission shall be to maintain
24and develop the economy of Latinos and to provide opportunities
25for this community, which will enhance and expand the quality

 

 

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1of their lives.
2    The Commission shall concentrate its major efforts on
3strategic planning, policy research and analysis, advocacy,
4evaluation, and promoting coordination and collaboration.
5    During each regular legislative session, the Commission
6must consult with appropriate legislative committees about the
7State's economic development needs and opportunities in the
8Latino community.
9    By October 1st of each even-numbered year, the Commission
10must submit to the Governor and the General Assembly a biennial
11comprehensive statewide economic development strategy for the
12Latino community with a report on progress from the previous
13comprehensive strategy.
14    The comprehensive statewide economic development strategy
15may include, but is not limited to:
16        (1) an assessment of the Latino community's economic
17    vitality;
18        (2) recommended goals, objectives, and priorities for
19    the next biennium and the future;
20        (3) a common set of outcomes and benchmarks for the
21    economic development system as a whole for the Latino
22    community;
23        (4) recommendations for removing barriers for Latinos
24    in employment;
25        (5) an inventory of existing relevant programs
26    compiled by the Commission from materials submitted by

 

 

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1    agencies;
2        (6) recommendations for expanding, discontinuing, or
3    redirecting existing programs or adding new programs to
4    better serve the Latino community; and
5        (7) recommendations of best practices and public and
6    private sector roles in implementing the comprehensive
7    statewide economic development strategy.
8    In developing the biennial statewide economic development
9strategy, goals, objectives, priorities, and recommendations,
10the Commission shall consult, collaborate, and coordinate with
11relevant State agencies, private sector business, nonprofit
12organizations involved in economic development, trade
13associations, associate development organizations, and
14relevant local organizations in order to avoid duplication of
15effort.
16    State agencies shall cooperate with the Commission and
17provide information as the Commission may reasonably request.
18    The Commission shall review and make budget
19recommendations to the Governor's Office of Management and
20Budget and the General Assembly in areas relating to the
21economic development in the State's Latino community.
22    The Commission shall evaluate its own performance on a
23regular basis.
24    The Commission may accept gifts, grants, donations,
25sponsorships, or contributions from any federal, State, or
26local governmental agency or program, or any private source,

 

 

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1and expend the same for any purpose consistent with this
2Section.
3    (b) The Commission shall consist of 12 voting members,
4appointed by the Governor, 4 of whom shall be appointed to
5serve an initial term of one year, 4 of whom shall be appointed
6to serve an initial term of 2 years, and 4 of whom shall be
7appointed to serve an initial term of 3 years. After the
8initial term, each member shall be appointed to a term of 3
9years. Members of the Commission shall serve at the pleasure of
10the Governor for not more than 2 consecutive 3-year terms. In
11appointing members, the Governor shall appoint individuals
12from the following private industry sectors:
13        (1) production agriculture;
14        (2) at least 2 individuals from manufacturing, one of
15    whom shall represent a company with no more than 75
16    employees;
17        (3) transportation, construction, and logistics;
18        (4) travel and tourism;
19        (5) financial services and insurance;
20        (6) information technology and communications; and
21        (7) biotechnology.
22    The members of the Commission shall choose a member to
23serve as chair of the Commission. The members of the Commission
24shall be representative, to the extent possible, of the various
25geographic areas of the State. The Director shall serve as an
26ad hoc nonvoting member of the Commission. Vacancies shall be

 

 

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1filled in the same manner as the original appointments. The
2members of the Commission shall serve without compensation.
3    (c) The Commission shall meet at least 4 times per year,
4with at least one meeting each calendar quarter, at the call of
5the director or 4 voting members of the Commission. The staff
6and support for the Commission shall be provided by the
7Department.
8    (d) The Commission and Department are encouraged to involve
9other essential groups in the work of the Commission,
10including, but not limited to:
11        (1) public universities;
12        (2) community colleges;
13        (3) other educational institutions; and
14        (4) the Department of Labor.
15    (e) The Commission shall make recommendations, which must
16be approved by a majority of the members of the Commission, to
17the Department concerning the award of grants from amounts
18appropriated to the Department from the Latino Community
19Economic Development Fund, a special fund in the State
20treasury. The Department shall make grants to public or private
21entities submitting proposals to the Commission to assist in
22the economic development of the Latino community. Grants may be
23used by these entities only for those purposes conditioned with
24the grant. The Commission shall coordinate with the Department
25to develop grant criteria.
26    (f) For the purposes of this Section:

 

 

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1    "Department" means the Department of Commerce and Economic
2Development.
3    "Director" means the Director of Commerce and Economic
4Development.
5    "Educational institutions" means nonprofit public and
6private colleges, community colleges, State colleges, and
7universities in this State.
 
8    Section 90-8. The Illinois Lottery Law is amended by
9changing Section 9.1 as follows:
 
10    (20 ILCS 1605/9.1)
11    Sec. 9.1. Private manager and management agreement.
12    (a) As used in this Section:
13    "Offeror" means a person or group of persons that responds
14to a request for qualifications under this Section.
15    "Request for qualifications" means all materials and
16documents prepared by the Department to solicit the following
17from offerors:
18        (1) Statements of qualifications.
19        (2) Proposals to enter into a management agreement,
20    including the identity of any prospective vendor or vendors
21    that the offeror intends to initially engage to assist the
22    offeror in performing its obligations under the management
23    agreement.
24    "Final offer" means the last proposal submitted by an

 

 

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1offeror in response to the request for qualifications,
2including the identity of any prospective vendor or vendors
3that the offeror intends to initially engage to assist the
4offeror in performing its obligations under the management
5agreement.
6    "Final offeror" means the offeror ultimately selected by
7the Governor to be the private manager for the Lottery under
8subsection (h) of this Section.
9    (b) By September 15, 2010, the Governor shall select a
10private manager for the total management of the Lottery with
11integrated functions, such as lottery game design, supply of
12goods and services, and advertising and as specified in this
13Section.
14    (c) Pursuant to the terms of this subsection, the
15Department shall endeavor to expeditiously terminate the
16existing contracts in support of the Lottery in effect on the
17effective date of this amendatory Act of the 96th General
18Assembly in connection with the selection of the private
19manager. As part of its obligation to terminate these contracts
20and select the private manager, the Department shall establish
21a mutually agreeable timetable to transfer the functions of
22existing contractors to the private manager so that existing
23Lottery operations are not materially diminished or impaired
24during the transition. To that end, the Department shall do the
25following:
26        (1) where such contracts contain a provision

 

 

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1    authorizing termination upon notice, the Department shall
2    provide notice of termination to occur upon the mutually
3    agreed timetable for transfer of functions;
4        (2) upon the expiration of any initial term or renewal
5    term of the current Lottery contracts, the Department shall
6    not renew such contract for a term extending beyond the
7    mutually agreed timetable for transfer of functions; or
8        (3) in the event any current contract provides for
9    termination of that contract upon the implementation of a
10    contract with the private manager, the Department shall
11    perform all necessary actions to terminate the contract on
12    the date that coincides with the mutually agreed timetable
13    for transfer of functions.
14    If the contracts to support the current operation of the
15Lottery in effect on the effective date of this amendatory Act
16of the 96th General Assembly are not subject to termination as
17provided for in this subsection (c), then the Department may
18include a provision in the contract with the private manager
19specifying a mutually agreeable methodology for incorporation.
20    (c-5) The Department shall include provisions in the
21management agreement whereby the private manager shall, for a
22fee, and pursuant to a contract negotiated with the Department
23(the "Employee Use Contract"), utilize the services of current
24Department employees to assist in the administration and
25operation of the Lottery. The Department shall be the employer
26of all such bargaining unit employees assigned to perform such

 

 

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1work for the private manager, and such employees shall be State
2employees, as defined by the Personnel Code. Department
3employees shall operate under the same employment policies,
4rules, regulations, and procedures, as other employees of the
5Department. In addition, neither historical representation
6rights under the Illinois Public Labor Relations Act, nor
7existing collective bargaining agreements, shall be disturbed
8by the management agreement with the private manager for the
9management of the Lottery.
10    (d) The management agreement with the private manager shall
11include all of the following:
12        (1) A term not to exceed 10 years, including any
13    renewals.
14        (2) A provision specifying that the Department:
15            (A) shall exercise actual control over all
16        significant business decisions;
17            (A-5) has the authority to direct or countermand
18        operating decisions by the private manager at any time;
19            (B) has ready access at any time to information
20        regarding Lottery operations;
21            (C) has the right to demand and receive information
22        from the private manager concerning any aspect of the
23        Lottery operations at any time; and
24            (D) retains ownership of all trade names,
25        trademarks, and intellectual property associated with
26        the Lottery.

 

 

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1        (3) A provision imposing an affirmative duty on the
2    private manager to provide the Department with material
3    information and with any information the private manager
4    reasonably believes the Department would want to know to
5    enable the Department to conduct the Lottery.
6        (4) A provision requiring the private manager to
7    provide the Department with advance notice of any operating
8    decision that bears significantly on the public interest,
9    including, but not limited to, decisions on the kinds of
10    games to be offered to the public and decisions affecting
11    the relative risk and reward of the games being offered, so
12    the Department has a reasonable opportunity to evaluate and
13    countermand that decision.
14        (5) A provision providing for compensation of the
15    private manager that may consist of, among other things, a
16    fee for services and a performance based bonus as
17    consideration for managing the Lottery, including terms
18    that may provide the private manager with an increase in
19    compensation if Lottery revenues grow by a specified
20    percentage in a given year.
21        (6) (Blank).
22        (7) A provision requiring the deposit of all Lottery
23    proceeds to be deposited into the State Lottery Fund except
24    as otherwise provided in Section 20 of this Act.
25        (8) A provision requiring the private manager to locate
26    its principal office within the State.

 

 

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1        (8-5) A provision encouraging that at least 20% of the
2    cost of contracts entered into for goods and services by
3    the private manager in connection with its management of
4    the Lottery, other than contracts with sales agents or
5    technical advisors, be awarded to businesses that are a
6    minority owned business, a female owned business, or a
7    business owned by a person with disability, as those terms
8    are defined in the Business Enterprise for Minorities,
9    Females, and Persons with Disabilities Act.
10        (9) A requirement that so long as the private manager
11    complies with all the conditions of the agreement under the
12    oversight of the Department, the private manager shall have
13    the following duties and obligations with respect to the
14    management of the Lottery:
15            (A) The right to use equipment and other assets
16        used in the operation of the Lottery.
17            (B) The rights and obligations under contracts
18        with retailers and vendors.
19            (C) The implementation of a comprehensive security
20        program by the private manager.
21            (D) The implementation of a comprehensive system
22        of internal audits.
23            (E) The implementation of a program by the private
24        manager to curb compulsive gambling by persons playing
25        the Lottery.
26            (F) A system for determining (i) the type of

 

 

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1        Lottery games, (ii) the method of selecting winning
2        tickets, (iii) the manner of payment of prizes to
3        holders of winning tickets, (iv) the frequency of
4        drawings of winning tickets, (v) the method to be used
5        in selling tickets, (vi) a system for verifying the
6        validity of tickets claimed to be winning tickets,
7        (vii) the basis upon which retailer commissions are
8        established by the manager, and (viii) minimum
9        payouts.
10        (10) A requirement that advertising and promotion must
11    be consistent with Section 7.8a of this Act.
12        (11) A requirement that the private manager market the
13    Lottery to those residents who are new, infrequent, or
14    lapsed players of the Lottery, especially those who are
15    most likely to make regular purchases on the Internet as
16    permitted by law.
17        (12) A code of ethics for the private manager's
18    officers and employees.
19        (13) A requirement that the Department monitor and
20    oversee the private manager's practices and take action
21    that the Department considers appropriate to ensure that
22    the private manager is in compliance with the terms of the
23    management agreement, while allowing the manager, unless
24    specifically prohibited by law or the management
25    agreement, to negotiate and sign its own contracts with
26    vendors.

 

 

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

 

 

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1    upon the management agreement.
2        (21) Right of use of copyrights, trademarks, and
3    service marks held by the Department in the name of the
4    State. The agreement must provide that any use of them by
5    the manager shall only be for the purpose of fulfilling its
6    obligations under the management agreement during the term
7    of the agreement.
8        (22) The disclosure of any information requested by the
9    Department to enable it to comply with the reporting
10    requirements and information requests provided for under
11    subsection (p) of this Section.
12    (e) Notwithstanding any other law to the contrary, the
13Department shall select a private manager through a competitive
14request for qualifications process consistent with Section
1520-35 of the Illinois Procurement Code, which shall take into
16account:
17        (1) the offeror's ability to market the Lottery to
18    those residents who are new, infrequent, or lapsed players
19    of the Lottery, especially those who are most likely to
20    make regular purchases on the Internet;
21        (2) the offeror's ability to address the State's
22    concern with the social effects of gambling on those who
23    can least afford to do so;
24        (3) the offeror's ability to provide the most
25    successful management of the Lottery for the benefit of the
26    people of the State based on current and past business

 

 

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1    practices or plans of the offeror; and
2        (4) the offeror's poor or inadequate past performance
3    in servicing, equipping, operating or managing a lottery on
4    behalf of Illinois, another State or foreign government and
5    attracting persons who are not currently regular players of
6    a lottery.
7    (f) The Department may retain the services of an advisor or
8advisors with significant experience in financial services or
9the management, operation, and procurement of goods, services,
10and equipment for a government-run lottery to assist in the
11preparation of the terms of the request for qualifications and
12selection of the private manager. Any prospective advisor
13seeking to provide services under this subsection (f) shall
14disclose any material business or financial relationship
15during the past 3 years with any potential offeror, or with a
16contractor or subcontractor presently providing goods,
17services, or equipment to the Department to support the
18Lottery. The Department shall evaluate the material business or
19financial relationship of each prospective advisor. The
20Department shall not select any prospective advisor with a
21substantial business or financial relationship that the
22Department deems to impair the objectivity of the services to
23be provided by the prospective advisor. During the course of
24the advisor's engagement by the Department, and for a period of
25one year thereafter, the advisor shall not enter into any
26business or financial relationship with any offeror or any

 

 

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1vendor identified to assist an offeror in performing its
2obligations under the management agreement. Any advisor
3retained by the Department shall be disqualified from being an
4offeror. The Department shall not include terms in the request
5for qualifications that provide a material advantage whether
6directly or indirectly to any potential offeror, or any
7contractor or subcontractor presently providing goods,
8services, or equipment to the Department to support the
9Lottery, including terms contained in previous responses to
10requests for proposals or qualifications submitted to
11Illinois, another State or foreign government when those terms
12are uniquely associated with a particular potential offeror,
13contractor, or subcontractor. The request for proposals
14offered by the Department on December 22, 2008 as
15"LOT08GAMESYS" and reference number "22016176" is declared
16void.
17    (g) The Department shall select at least 2 offerors as
18finalists to potentially serve as the private manager no later
19than August 9, 2010. Upon making preliminary selections, the
20Department shall schedule a public hearing on the finalists'
21proposals and provide public notice of the hearing at least 7
22calendar days before the hearing. The notice must include all
23of the following:
24        (1) The date, time, and place of the hearing.
25        (2) The subject matter of the hearing.
26        (3) A brief description of the management agreement to

 

 

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1    be awarded.
2        (4) The identity of the offerors that have been
3    selected as finalists to serve as the private manager.
4        (5) The address and telephone number of the Department.
5    (h) At the public hearing, the Department shall (i) provide
6sufficient time for each finalist to present and explain its
7proposal to the Department and the Governor or the Governor's
8designee, including an opportunity to respond to questions
9posed by the Department, Governor, or designee and (ii) allow
10the public and non-selected offerors to comment on the
11presentations. The Governor or a designee shall attend the
12public hearing. After the public hearing, the Department shall
13have 14 calendar days to recommend to the Governor whether a
14management agreement should be entered into with a particular
15finalist. After reviewing the Department's recommendation, the
16Governor may accept or reject the Department's recommendation,
17and shall select a final offeror as the private manager by
18publication of a notice in the Illinois Procurement Bulletin on
19or before September 15, 2010. The Governor shall include in the
20notice a detailed explanation and the reasons why the final
21offeror is superior to other offerors and will provide
22management services in a manner that best achieves the
23objectives of this Section. The Governor shall also sign the
24management agreement with the private manager.
25    (i) Any action to contest the private manager selected by
26the Governor under this Section must be brought within 7

 

 

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1calendar days after the publication of the notice of the
2designation of the private manager as provided in subsection
3(h) of this Section.
4    (j) The Lottery shall remain, for so long as a private
5manager manages the Lottery in accordance with provisions of
6this Act, a Lottery conducted by the State, and the State shall
7not be authorized to sell or transfer the Lottery to a third
8party.
9    (k) Any tangible personal property used exclusively in
10connection with the lottery that is owned by the Department and
11leased to the private manager shall be owned by the Department
12in the name of the State and shall be considered to be public
13property devoted to an essential public and governmental
14function.
15    (l) The Department may exercise any of its powers under
16this Section or any other law as necessary or desirable for the
17execution of the Department's powers under this Section.
18    (m) Neither this Section nor any management agreement
19entered into under this Section prohibits the General Assembly
20from authorizing forms of gambling that are not in direct
21competition with the Lottery. The forms of gambling authorized
22by this amendatory Act of the 98th General Assembly constitute
23authorized forms of gambling that are not in direct competition
24with the Lottery.
25    (n) The private manager shall be subject to a complete
26investigation in the third, seventh, and tenth years of the

 

 

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1agreement (if the agreement is for a 10-year term) by the
2Department in cooperation with the Auditor General to determine
3whether the private manager has complied with this Section and
4the management agreement. The private manager shall bear the
5cost of an investigation or reinvestigation of the private
6manager under this subsection.
7    (o) The powers conferred by this Section are in addition
8and supplemental to the powers conferred by any other law. If
9any other law or rule is inconsistent with this Section,
10including, but not limited to, provisions of the Illinois
11Procurement Code, then this Section controls as to any
12management agreement entered into under this Section. This
13Section and any rules adopted under this Section contain full
14and complete authority for a management agreement between the
15Department and a private manager. No law, procedure,
16proceeding, publication, notice, consent, approval, order, or
17act by the Department or any other officer, Department, agency,
18or instrumentality of the State or any political subdivision is
19required for the Department to enter into a management
20agreement under this Section. This Section contains full and
21complete authority for the Department to approve any contracts
22entered into by a private manager with a vendor providing
23goods, services, or both goods and services to the private
24manager under the terms of the management agreement, including
25subcontractors of such vendors.
26    Upon receipt of a written request from the Chief

 

 

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1Procurement Officer, the Department shall provide to the Chief
2Procurement Officer a complete and un-redacted copy of the
3management agreement or any contract that is subject to the
4Department's approval authority under this subsection (o). The
5Department shall provide a copy of the agreement or contract to
6the Chief Procurement Officer in the time specified by the
7Chief Procurement Officer in his or her written request, but no
8later than 5 business days after the request is received by the
9Department. The Chief Procurement Officer must retain any
10portions of the management agreement or of any contract
11designated by the Department as confidential, proprietary, or
12trade secret information in complete confidence pursuant to
13subsection (g) of Section 7 of the Freedom of Information Act.
14The Department shall also provide the Chief Procurement Officer
15with reasonable advance written notice of any contract that is
16pending Department approval.
17    Notwithstanding any other provision of this Section to the
18contrary, the Chief Procurement Officer shall adopt
19administrative rules, including emergency rules, to establish
20a procurement process to select a successor private manager if
21a private management agreement has been terminated. The
22selection process shall at a minimum take into account the
23criteria set forth in items (1) through (4) of subsection (e)
24of this Section and may include provisions consistent with
25subsections (f), (g), (h), and (i) of this Section. The Chief
26Procurement Officer shall also implement and administer the

 

 

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1adopted selection process upon the termination of a private
2management agreement. The Department, after the Chief
3Procurement Officer certifies that the procurement process has
4been followed in accordance with the rules adopted under this
5subsection (o), shall select a final offeror as the private
6manager and sign the management agreement with the private
7manager.
8    Except as provided in Sections 21.2, 21.5, 21.6, 21.7, and
921.8, the Department shall distribute all proceeds of lottery
10tickets and shares sold in the following priority and manner:
11        (1) The payment of prizes and retailer bonuses.
12        (2) The payment of costs incurred in the operation and
13    administration of the Lottery, including the payment of
14    sums due to the private manager under the management
15    agreement with the Department.
16        (3) On the last day of each month or as soon thereafter
17    as possible, the State Comptroller shall direct and the
18    State Treasurer shall transfer from the State Lottery Fund
19    to the Common School Fund an amount that is equal to the
20    proceeds transferred in the corresponding month of fiscal
21    year 2009, as adjusted for inflation, to the Common School
22    Fund.
23        (4) On or before the last day of each fiscal year,
24    deposit any remaining proceeds, subject to payments under
25    items (1), (2), and (3) into the Capital Projects Fund each
26    fiscal year.

 

 

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1    (p) The Department shall be subject to the following
2reporting and information request requirements:
3        (1) the Department shall submit written quarterly
4    reports to the Governor and the General Assembly on the
5    activities and actions of the private manager selected
6    under this Section;
7        (2) upon request of the Chief Procurement Officer, the
8    Department shall promptly produce information related to
9    the procurement activities of the Department and the
10    private manager requested by the Chief Procurement
11    Officer; the Chief Procurement Officer must retain
12    confidential, proprietary, or trade secret information
13    designated by the Department in complete confidence
14    pursuant to subsection (g) of Section 7 of the Freedom of
15    Information Act; and
16        (3) at least 30 days prior to the beginning of the
17    Department's fiscal year, the Department shall prepare an
18    annual written report on the activities of the private
19    manager selected under this Section and deliver that report
20    to the Governor and General Assembly.
21(Source: P.A. 96-34, eff. 7-13-09; 96-37, eff. 7-13-09; 96-840,
22eff. 12-23-09; 97-464, eff. 8-19-11; revised 10-17-12.)
 
23    Section 90-10. The Department of Revenue Law of the Civil
24Administrative Code of Illinois is amended by changing Section
252505-305 as follows:
 

 

 

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1    (20 ILCS 2505/2505-305)  (was 20 ILCS 2505/39b15.1)
2    Sec. 2505-305. Investigators.
3    (a) The Department has the power to appoint investigators
4to conduct all investigations, searches, seizures, arrests,
5and other duties imposed under the provisions of any law
6administered by the Department. Except as provided in
7subsection (c), these investigators have and may exercise all
8the powers of peace officers solely for the purpose of
9enforcing taxing measures administered by the Department.
10    (b) The Director must authorize to each investigator
11employed under this Section and to any other employee of the
12Department exercising the powers of a peace officer a distinct
13badge that, on its face, (i) clearly states that the badge is
14authorized by the Department and (ii) contains a unique
15identifying number. No other badge shall be authorized by the
16Department.
17    (c) The Department may enter into agreements with the
18Illinois Gaming Board providing that investigators appointed
19under this Section shall exercise the peace officer powers set
20forth in paragraph (20.6) of subsection (c) of Section 5 of the
21Illinois Riverboat Gambling Act.
22(Source: P.A. 96-37, eff. 7-13-09.)
 
23    Section 90-12. The Illinois State Auditing Act is amended
24by changing Section 3-1 as follows:
 

 

 

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1    (30 ILCS 5/3-1)  (from Ch. 15, par. 303-1)
2    Sec. 3-1. Jurisdiction of Auditor General. The Auditor
3General has jurisdiction over all State agencies to make post
4audits and investigations authorized by or under this Act or
5the Constitution.
6    The Auditor General has jurisdiction over local government
7agencies and private agencies only:
8        (a) to make such post audits authorized by or under
9    this Act as are necessary and incidental to a post audit of
10    a State agency or of a program administered by a State
11    agency involving public funds of the State, but this
12    jurisdiction does not include any authority to review local
13    governmental agencies in the obligation, receipt,
14    expenditure or use of public funds of the State that are
15    granted without limitation or condition imposed by law,
16    other than the general limitation that such funds be used
17    for public purposes;
18        (b) to make investigations authorized by or under this
19    Act or the Constitution; and
20        (c) to make audits of the records of local government
21    agencies to verify actual costs of state-mandated programs
22    when directed to do so by the Legislative Audit Commission
23    at the request of the State Board of Appeals under the
24    State Mandates Act.
25    In addition to the foregoing, the Auditor General may

 

 

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1conduct an audit of the Metropolitan Pier and Exposition
2Authority, the Regional Transportation Authority, the Suburban
3Bus Division, the Commuter Rail Division and the Chicago
4Transit Authority and any other subsidized carrier when
5authorized by the Legislative Audit Commission. Such audit may
6be a financial, management or program audit, or any combination
7thereof.
8    The audit shall determine whether they are operating in
9accordance with all applicable laws and regulations. Subject to
10the limitations of this Act, the Legislative Audit Commission
11may by resolution specify additional determinations to be
12included in the scope of the audit.
13    In addition to the foregoing, the Auditor General must also
14conduct a financial audit of the Illinois Sports Facilities
15Authority's expenditures of public funds in connection with the
16reconstruction, renovation, remodeling, extension, or
17improvement of all or substantially all of any existing
18"facility", as that term is defined in the Illinois Sports
19Facilities Authority Act.
20    The Auditor General may also conduct an audit, when
21authorized by the Legislative Audit Commission, of any hospital
22which receives 10% or more of its gross revenues from payments
23from the State of Illinois, Department of Healthcare and Family
24Services (formerly Department of Public Aid), Medical
25Assistance Program.
26    The Auditor General is authorized to conduct financial and

 

 

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1compliance audits of the Illinois Distance Learning Foundation
2and the Illinois Conservation Foundation.
3    As soon as practical after the effective date of this
4amendatory Act of 1995, the Auditor General shall conduct a
5compliance and management audit of the City of Chicago and any
6other entity with regard to the operation of Chicago O'Hare
7International Airport, Chicago Midway Airport and Merrill C.
8Meigs Field. The audit shall include, but not be limited to, an
9examination of revenues, expenses, and transfers of funds;
10purchasing and contracting policies and practices; staffing
11levels; and hiring practices and procedures. When completed,
12the audit required by this paragraph shall be distributed in
13accordance with Section 3-14.
14    The Auditor General shall conduct a financial and
15compliance and program audit of distributions from the
16Municipal Economic Development Fund during the immediately
17preceding calendar year pursuant to Section 8-403.1 of the
18Public Utilities Act at no cost to the city, village, or
19incorporated town that received the distributions.
20    The Auditor General must conduct an audit of the Health
21Facilities and Services Review Board pursuant to Section 19.5
22of the Illinois Health Facilities Planning Act.
23    The Auditor General must conduct an audit of the Chicago
24Casino Development Authority pursuant to Section 1-60 of the
25Chicago Casino Development Authority Act.
26    The Auditor General of the State of Illinois shall annually

 

 

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1conduct or cause to be conducted a financial and compliance
2audit of the books and records of any county water commission
3organized pursuant to the Water Commission Act of 1985 and
4shall file a copy of the report of that audit with the Governor
5and the Legislative Audit Commission. The filed audit shall be
6open to the public for inspection. The cost of the audit shall
7be charged to the county water commission in accordance with
8Section 6z-27 of the State Finance Act. The county water
9commission shall make available to the Auditor General its
10books and records and any other documentation, whether in the
11possession of its trustees or other parties, necessary to
12conduct the audit required. These audit requirements apply only
13through July 1, 2007.
14    The Auditor General must conduct audits of the Rend Lake
15Conservancy District as provided in Section 25.5 of the River
16Conservancy Districts Act.
17    The Auditor General must conduct financial audits of the
18Southeastern Illinois Economic Development Authority as
19provided in Section 70 of the Southeastern Illinois Economic
20Development Authority Act.
21    The Auditor General shall conduct a compliance audit in
22accordance with subsections (d) and (f) of Section 30 of the
23Innovation Development and Economy Act.
24(Source: P.A. 95-331, eff. 8-21-07; 96-31, eff. 6-30-09;
2596-939, eff. 6-24-10.)
 

 

 

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1    Section 90-15. The State Finance Act is amended by adding
2Sections 5.826, 5.829, 5.830, 5.831, 6z-98, and 6z-99 as
3follows:
 
4    (30 ILCS 105/5.826 new)
5    Sec. 5.826. The Gaming Facilities Fee Revenue Fund.
 
6    (30 ILCS 105/5.829 new)
7    Sec. 5.829. The State Fairgrounds Capital Improvement
8Fund.
 
9    (30 ILCS 105/5.830 new)
10    Sec. 5.830. The Depressed Communities Economic Development
11Fund.
 
12    (30 ILCS 105/5.831 new)
13    Sec. 5.831. The Latino Community Economic Development
14Fund.
 
15    (30 ILCS 105/6z-98 new)
16    Sec. 6z-98. The Gaming Facilities Fee Revenue Fund.
17    (a) The Gaming Facilities Fee Revenue Fund is created as a
18special fund in the State treasury.
19    (b) The revenues in the Fund shall be used, subject to
20appropriation, by the Comptroller for the purpose of (i)
21providing appropriations to the Illinois Gaming Board for the

 

 

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1administration and enforcement of the Illinois Gambling Act and
2the applicable provisions of the Chicago Casino Development
3Authority Act and (ii) payment of vouchers that are outstanding
4for more than 60 days. Whenever practical, the Comptroller must
5prioritize voucher payments for expenses related to medical
6assistance under the Illinois Public Aid Code, the Children's
7Health Insurance Program Act, the Covering ALL KIDS Health
8Insurance Act, and the Senior Citizens and Disabled Persons
9Property Tax Relief and Pharmaceutical Assistance Act.
10    (c) The Fund shall consist of fee revenues received
11pursuant to subsection (e) of Section 1-45 of the Chicago
12Casino Development Authority Act and pursuant to subsections
13(e-10), (e-15), (e-25), and (h-5) of Section 7 and subsections
14(b), (c), (d), and (k) of Section 7.6 of the Illinois Gambling
15Act. All interest earned on moneys in the Fund shall be
16deposited into the Fund.
17    (d) The Fund shall not be subject to administrative charges
18or chargebacks, including, but not limited to, those authorized
19under subsection (h) of Section 8 of this Act.
 
20    (30 ILCS 105/6z-99 new)
21    Sec. 6z-99. The State Fairgrounds Capital Improvement
22Fund. There is created the State Fairgrounds Capital
23Improvement Fund, a special fund in the State treasury. Moneys
24in the Fund may be used by the Department of Agriculture,
25subject to appropriation, solely for infrastructure

 

 

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1improvements to the Illinois State Fairgrounds in Sangamon
2County, including, but not limited to, track surfaces (main
3track and practice track), grandstands, audio and visual
4systems, paddocks and barns and associated surface areas,
5restroom facilities on the backstretch, and roadway surfaces
6around the racing facility. In addition, no more than 5% of the
7moneys annually transferred into the Fund may be used by the
8Department for all costs associated with fire protection and
9fire protection services for the Illinois State Fairgrounds.
10The State Fairgrounds Capital Improvement Fund is not subject
11to administrative chargebacks, including, but not limited to,
12those authorized under Section 8h of the State Finance Act.
 
13    Section 90-20. The Illinois Income Tax Act is amended by
14changing Sections 201, 303, 304 and 710 as follows:
 
15    (35 ILCS 5/201)  (from Ch. 120, par. 2-201)
16    Sec. 201. Tax Imposed.
17    (a) In general. A tax measured by net income is hereby
18imposed on every individual, corporation, trust and estate for
19each taxable year ending after July 31, 1969 on the privilege
20of earning or receiving income in or as a resident of this
21State. Such tax shall be in addition to all other occupation or
22privilege taxes imposed by this State or by any municipal
23corporation or political subdivision thereof.
24    (b) Rates. The tax imposed by subsection (a) of this

 

 

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1Section shall be determined as follows, except as adjusted by
2subsection (d-1):
3        (1) In the case of an individual, trust or estate, for
4    taxable years ending prior to July 1, 1989, an amount equal
5    to 2 1/2% of the taxpayer's net income for the taxable
6    year.
7        (2) In the case of an individual, trust or estate, for
8    taxable years beginning prior to July 1, 1989 and ending
9    after June 30, 1989, an amount equal to the sum of (i) 2
10    1/2% of the taxpayer's net income for the period prior to
11    July 1, 1989, as calculated under Section 202.3, and (ii)
12    3% of the taxpayer's net income for the period after June
13    30, 1989, as calculated under Section 202.3.
14        (3) In the case of an individual, trust or estate, for
15    taxable years beginning after June 30, 1989, and ending
16    prior to January 1, 2011, an amount equal to 3% of the
17    taxpayer's net income for the taxable year.
18        (4) In the case of an individual, trust, or estate, for
19    taxable years beginning prior to January 1, 2011, and
20    ending after December 31, 2010, an amount equal to the sum
21    of (i) 3% of the taxpayer's net income for the period prior
22    to January 1, 2011, as calculated under Section 202.5, and
23    (ii) 5% of the taxpayer's net income for the period after
24    December 31, 2010, as calculated under Section 202.5.
25        (5) In the case of an individual, trust, or estate, for
26    taxable years beginning on or after January 1, 2011, and

 

 

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1    ending prior to January 1, 2015, an amount equal to 5% of
2    the taxpayer's net income for the taxable year.
3        (5.1) In the case of an individual, trust, or estate,
4    for taxable years beginning prior to January 1, 2015, and
5    ending after December 31, 2014, an amount equal to the sum
6    of (i) 5% of the taxpayer's net income for the period prior
7    to January 1, 2015, as calculated under Section 202.5, and
8    (ii) 3.75% of the taxpayer's net income for the period
9    after December 31, 2014, as calculated under Section 202.5.
10        (5.2) In the case of an individual, trust, or estate,
11    for taxable years beginning on or after January 1, 2015,
12    and ending prior to January 1, 2025, an amount equal to
13    3.75% of the taxpayer's net income for the taxable year.
14        (5.3) In the case of an individual, trust, or estate,
15    for taxable years beginning prior to January 1, 2025, and
16    ending after December 31, 2024, an amount equal to the sum
17    of (i) 3.75% of the taxpayer's net income for the period
18    prior to January 1, 2025, as calculated under Section
19    202.5, and (ii) 3.25% of the taxpayer's net income for the
20    period after December 31, 2024, as calculated under Section
21    202.5.
22        (5.4) In the case of an individual, trust, or estate,
23    for taxable years beginning on or after January 1, 2025, an
24    amount equal to 3.25% of the taxpayer's net income for the
25    taxable year.
26        (6) In the case of a corporation, for taxable years

 

 

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1    ending prior to July 1, 1989, an amount equal to 4% of the
2    taxpayer's net income for the taxable year.
3        (7) In the case of a corporation, for taxable years
4    beginning prior to July 1, 1989 and ending after June 30,
5    1989, an amount equal to the sum of (i) 4% of the
6    taxpayer's net income for the period prior to July 1, 1989,
7    as calculated under Section 202.3, and (ii) 4.8% of the
8    taxpayer's net income for the period after June 30, 1989,
9    as calculated under Section 202.3.
10        (8) In the case of a corporation, for taxable years
11    beginning after June 30, 1989, and ending prior to January
12    1, 2011, an amount equal to 4.8% of the taxpayer's net
13    income for the taxable year.
14        (9) In the case of a corporation, for taxable years
15    beginning prior to January 1, 2011, and ending after
16    December 31, 2010, an amount equal to the sum of (i) 4.8%
17    of the taxpayer's net income for the period prior to
18    January 1, 2011, as calculated under Section 202.5, and
19    (ii) 7% of the taxpayer's net income for the period after
20    December 31, 2010, as calculated under Section 202.5.
21        (10) In the case of a corporation, for taxable years
22    beginning on or after January 1, 2011, and ending prior to
23    January 1, 2015, an amount equal to 7% of the taxpayer's
24    net income for the taxable year.
25        (11) In the case of a corporation, for taxable years
26    beginning prior to January 1, 2015, and ending after

 

 

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1    December 31, 2014, an amount equal to the sum of (i) 7% of
2    the taxpayer's net income for the period prior to January
3    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
4    of the taxpayer's net income for the period after December
5    31, 2014, as calculated under Section 202.5.
6        (12) In the case of a corporation, for taxable years
7    beginning on or after January 1, 2015, and ending prior to
8    January 1, 2025, an amount equal to 5.25% of the taxpayer's
9    net income for the taxable year.
10        (13) In the case of a corporation, for taxable years
11    beginning prior to January 1, 2025, and ending after
12    December 31, 2024, an amount equal to the sum of (i) 5.25%
13    of the taxpayer's net income for the period prior to
14    January 1, 2025, as calculated under Section 202.5, and
15    (ii) 4.8% of the taxpayer's net income for the period after
16    December 31, 2024, as calculated under Section 202.5.
17        (14) In the case of a corporation, for taxable years
18    beginning on or after January 1, 2025, an amount equal to
19    4.8% of the taxpayer's net income for the taxable year.
20    The rates under this subsection (b) are subject to the
21provisions of Section 201.5.
22    (b-5) Surcharge; sale or exchange of assets, properties,
23and intangibles of electronic gaming licensees. For each of
24taxable years 2013 through 2021, a surcharge is imposed on all
25taxpayers on income arising from the sale or exchange of
26capital assets, depreciable business property, real property

 

 

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1used in the trade or business, and Section 197 intangibles (i)
2of an organization licensee under the Illinois Horse Racing Act
3of 1975 and (ii) of an electronic gaming licensee under the
4Illinois Gambling Act. The amount of the surcharge is equal to
5the amount of federal income tax liability for the taxable year
6attributable to those sales and exchanges. The surcharge
7imposed shall not apply if:
8        (1) the electronic gaming license, organization
9    license, or race track property is transferred as a result
10    of any of the following:
11            (A) bankruptcy, a receivership, or a debt
12        adjustment initiated by or against the initial
13        licensee or the substantial owners of the initial
14        licensee;
15            (B) cancellation, revocation, or termination of
16        any such license by the Illinois Gaming Board or the
17        Illinois Racing Board;
18            (C) a determination by the Illinois Gaming Board
19        that transfer of the license is in the best interests
20        of Illinois gaming;
21            (D) the death of an owner of the equity interest in
22        a licensee;
23            (E) the acquisition of a controlling interest in
24        the stock or substantially all of the assets of a
25        publicly traded company;
26            (F) a transfer by a parent company to a wholly

 

 

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1        owned subsidiary; or
2            (G) the transfer or sale to or by one person to
3        another person where both persons were initial owners
4        of the license when the license was issued; or
5        (2) the controlling interest in the electronic gaming
6    license, organization license, or race track property is
7    transferred in a transaction to lineal descendants in which
8    no gain or loss is recognized or as a result of a
9    transaction in accordance with Section 351 of the Internal
10    Revenue Code in which no gain or loss is recognized; or
11        (3) live horse racing was not conducted in 2011 under a
12    license issued pursuant to the Illinois Horse Racing Act of
13    1975.
14    The transfer of an electronic gaming license, organization
15license, or race track property by a person other than the
16initial licensee to receive the electronic gaming license is
17not subject to a surcharge. The Department shall adopt rules
18necessary to implement and administer this subsection.
19    (c) Personal Property Tax Replacement Income Tax.
20Beginning on July 1, 1979 and thereafter, in addition to such
21income tax, there is also hereby imposed the Personal Property
22Tax Replacement Income Tax measured by net income on every
23corporation (including Subchapter S corporations), partnership
24and trust, for each taxable year ending after June 30, 1979.
25Such taxes are imposed on the privilege of earning or receiving
26income in or as a resident of this State. The Personal Property

 

 

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1Tax Replacement Income Tax shall be in addition to the income
2tax imposed by subsections (a) and (b) of this Section and in
3addition to all other occupation or privilege taxes imposed by
4this State or by any municipal corporation or political
5subdivision thereof.
6    (d) Additional Personal Property Tax Replacement Income
7Tax Rates. The personal property tax replacement income tax
8imposed by this subsection and subsection (c) of this Section
9in the case of a corporation, other than a Subchapter S
10corporation and except as adjusted by subsection (d-1), shall
11be an additional amount equal to 2.85% of such taxpayer's net
12income for the taxable year, except that beginning on January
131, 1981, and thereafter, the rate of 2.85% specified in this
14subsection shall be reduced to 2.5%, and in the case of a
15partnership, trust or a Subchapter S corporation shall be an
16additional amount equal to 1.5% of such taxpayer's net income
17for the taxable year.
18    (d-1) Rate reduction for certain foreign insurers. In the
19case of a foreign insurer, as defined by Section 35A-5 of the
20Illinois Insurance Code, whose state or country of domicile
21imposes on insurers domiciled in Illinois a retaliatory tax
22(excluding any insurer whose premiums from reinsurance assumed
23are 50% or more of its total insurance premiums as determined
24under paragraph (2) of subsection (b) of Section 304, except
25that for purposes of this determination premiums from
26reinsurance do not include premiums from inter-affiliate

 

 

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1reinsurance arrangements), beginning with taxable years ending
2on or after December 31, 1999, the sum of the rates of tax
3imposed by subsections (b) and (d) shall be reduced (but not
4increased) to the rate at which the total amount of tax imposed
5under this Act, net of all credits allowed under this Act,
6shall equal (i) the total amount of tax that would be imposed
7on the foreign insurer's net income allocable to Illinois for
8the taxable year by such foreign insurer's state or country of
9domicile if that net income were subject to all income taxes
10and taxes measured by net income imposed by such foreign
11insurer's state or country of domicile, net of all credits
12allowed or (ii) a rate of zero if no such tax is imposed on such
13income by the foreign insurer's state of domicile. For the
14purposes of this subsection (d-1), an inter-affiliate includes
15a mutual insurer under common management.
16        (1) For the purposes of subsection (d-1), in no event
17    shall the sum of the rates of tax imposed by subsections
18    (b) and (d) be reduced below the rate at which the sum of:
19            (A) the total amount of tax imposed on such foreign
20        insurer under this Act for a taxable year, net of all
21        credits allowed under this Act, plus
22            (B) the privilege tax imposed by Section 409 of the
23        Illinois Insurance Code, the fire insurance company
24        tax imposed by Section 12 of the Fire Investigation
25        Act, and the fire department taxes imposed under
26        Section 11-10-1 of the Illinois Municipal Code,

 

 

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1    equals 1.25% for taxable years ending prior to December 31,
2    2003, or 1.75% for taxable years ending on or after
3    December 31, 2003, of the net taxable premiums written for
4    the taxable year, as described by subsection (1) of Section
5    409 of the Illinois Insurance Code. This paragraph will in
6    no event increase the rates imposed under subsections (b)
7    and (d).
8        (2) Any reduction in the rates of tax imposed by this
9    subsection shall be applied first against the rates imposed
10    by subsection (b) and only after the tax imposed by
11    subsection (a) net of all credits allowed under this
12    Section other than the credit allowed under subsection (i)
13    has been reduced to zero, against the rates imposed by
14    subsection (d).
15    This subsection (d-1) is exempt from the provisions of
16Section 250.
17    (e) Investment credit. A taxpayer shall be allowed a credit
18against the Personal Property Tax Replacement Income Tax for
19investment in qualified property.
20        (1) A taxpayer shall be allowed a credit equal to .5%
21    of the basis of qualified property placed in service during
22    the taxable year, provided such property is placed in
23    service on or after July 1, 1984. There shall be allowed an
24    additional credit equal to .5% of the basis of qualified
25    property placed in service during the taxable year,
26    provided such property is placed in service on or after

 

 

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1    July 1, 1986, and the taxpayer's base employment within
2    Illinois has increased by 1% or more over the preceding
3    year as determined by the taxpayer's employment records
4    filed with the Illinois Department of Employment Security.
5    Taxpayers who are new to Illinois shall be deemed to have
6    met the 1% growth in base employment for the first year in
7    which they file employment records with the Illinois
8    Department of Employment Security. The provisions added to
9    this Section by Public Act 85-1200 (and restored by Public
10    Act 87-895) shall be construed as declaratory of existing
11    law and not as a new enactment. If, in any year, the
12    increase in base employment within Illinois over the
13    preceding year is less than 1%, the additional credit shall
14    be limited to that percentage times a fraction, the
15    numerator of which is .5% and the denominator of which is
16    1%, but shall not exceed .5%. The investment credit shall
17    not be allowed to the extent that it would reduce a
18    taxpayer's liability in any tax year below zero, nor may
19    any credit for qualified property be allowed for any year
20    other than the year in which the property was placed in
21    service in Illinois. For tax years ending on or after
22    December 31, 1987, and on or before December 31, 1988, the
23    credit shall be allowed for the tax year in which the
24    property is placed in service, or, if the amount of the
25    credit exceeds the tax liability for that year, whether it
26    exceeds the original liability or the liability as later

 

 

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1    amended, such excess may be carried forward and applied to
2    the tax liability of the 5 taxable years following the
3    excess credit years if the taxpayer (i) makes investments
4    which cause the creation of a minimum of 2,000 full-time
5    equivalent jobs in Illinois, (ii) is located in an
6    enterprise zone established pursuant to the Illinois
7    Enterprise Zone Act and (iii) is certified by the
8    Department of Commerce and Community Affairs (now
9    Department of Commerce and Economic Opportunity) as
10    complying with the requirements specified in clause (i) and
11    (ii) by July 1, 1986. The Department of Commerce and
12    Community Affairs (now Department of Commerce and Economic
13    Opportunity) shall notify the Department of Revenue of all
14    such certifications immediately. For tax years ending
15    after December 31, 1988, the credit shall be allowed for
16    the tax year in which the property is placed in service,
17    or, if the amount of the credit exceeds the tax liability
18    for that year, whether it exceeds the original liability or
19    the liability as later amended, such excess may be carried
20    forward and applied to the tax liability of the 5 taxable
21    years following the excess credit years. The credit shall
22    be applied to the earliest year for which there is a
23    liability. If there is credit from more than one tax year
24    that is available to offset a liability, earlier credit
25    shall be applied first.
26        (2) The term "qualified property" means property

 

 

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1    which:
2            (A) is tangible, whether new or used, including
3        buildings and structural components of buildings and
4        signs that are real property, but not including land or
5        improvements to real property that are not a structural
6        component of a building such as landscaping, sewer
7        lines, local access roads, fencing, parking lots, and
8        other appurtenances;
9            (B) is depreciable pursuant to Section 167 of the
10        Internal Revenue Code, except that "3-year property"
11        as defined in Section 168(c)(2)(A) of that Code is not
12        eligible for the credit provided by this subsection
13        (e);
14            (C) is acquired by purchase as defined in Section
15        179(d) of the Internal Revenue Code;
16            (D) is used in Illinois by a taxpayer who is
17        primarily engaged in manufacturing, or in mining coal
18        or fluorite, or in retailing, or was placed in service
19        on or after July 1, 2006 in a River Edge Redevelopment
20        Zone established pursuant to the River Edge
21        Redevelopment Zone Act; and
22            (E) has not previously been used in Illinois in
23        such a manner and by such a person as would qualify for
24        the credit provided by this subsection (e) or
25        subsection (f).
26        (3) For purposes of this subsection (e),

 

 

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1    "manufacturing" means the material staging and production
2    of tangible personal property by procedures commonly
3    regarded as manufacturing, processing, fabrication, or
4    assembling which changes some existing material into new
5    shapes, new qualities, or new combinations. For purposes of
6    this subsection (e) the term "mining" shall have the same
7    meaning as the term "mining" in Section 613(c) of the
8    Internal Revenue Code. For purposes of this subsection (e),
9    the term "retailing" means the sale of tangible personal
10    property for use or consumption and not for resale, or
11    services rendered in conjunction with the sale of tangible
12    personal property for use or consumption and not for
13    resale. For purposes of this subsection (e), "tangible
14    personal property" has the same meaning as when that term
15    is used in the Retailers' Occupation Tax Act, and, for
16    taxable years ending after December 31, 2008, does not
17    include the generation, transmission, or distribution of
18    electricity.
19        (4) The basis of qualified property shall be the basis
20    used to compute the depreciation deduction for federal
21    income tax purposes.
22        (5) If the basis of the property for federal income tax
23    depreciation purposes is increased after it has been placed
24    in service in Illinois by the taxpayer, the amount of such
25    increase shall be deemed property placed in service on the
26    date of such increase in basis.

 

 

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1        (6) The term "placed in service" shall have the same
2    meaning as under Section 46 of the Internal Revenue Code.
3        (7) If during any taxable year, any property ceases to
4    be qualified property in the hands of the taxpayer within
5    48 months after being placed in service, or the situs of
6    any qualified property is moved outside Illinois within 48
7    months after being placed in service, the Personal Property
8    Tax Replacement Income Tax for such taxable year shall be
9    increased. Such increase shall be determined by (i)
10    recomputing the investment credit which would have been
11    allowed for the year in which credit for such property was
12    originally allowed by eliminating such property from such
13    computation and, (ii) subtracting such recomputed credit
14    from the amount of credit previously allowed. For the
15    purposes of this paragraph (7), a reduction of the basis of
16    qualified property resulting from a redetermination of the
17    purchase price shall be deemed a disposition of qualified
18    property to the extent of such reduction.
19        (8) Unless the investment credit is extended by law,
20    the basis of qualified property shall not include costs
21    incurred after December 31, 2018, except for costs incurred
22    pursuant to a binding contract entered into on or before
23    December 31, 2018.
24        (9) Each taxable year ending before December 31, 2000,
25    a partnership may elect to pass through to its partners the
26    credits to which the partnership is entitled under this

 

 

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1    subsection (e) for the taxable year. A partner may use the
2    credit allocated to him or her under this paragraph only
3    against the tax imposed in subsections (c) and (d) of this
4    Section. If the partnership makes that election, those
5    credits shall be allocated among the partners in the
6    partnership in accordance with the rules set forth in
7    Section 704(b) of the Internal Revenue Code, and the rules
8    promulgated under that Section, and the allocated amount of
9    the credits shall be allowed to the partners for that
10    taxable year. The partnership shall make this election on
11    its Personal Property Tax Replacement Income Tax return for
12    that taxable year. The election to pass through the credits
13    shall be irrevocable.
14        For taxable years ending on or after December 31, 2000,
15    a partner that qualifies its partnership for a subtraction
16    under subparagraph (I) of paragraph (2) of subsection (d)
17    of Section 203 or a shareholder that qualifies a Subchapter
18    S corporation for a subtraction under subparagraph (S) of
19    paragraph (2) of subsection (b) of Section 203 shall be
20    allowed a credit under this subsection (e) equal to its
21    share of the credit earned under this subsection (e) during
22    the taxable year by the partnership or Subchapter S
23    corporation, determined in accordance with the
24    determination of income and distributive share of income
25    under Sections 702 and 704 and Subchapter S of the Internal
26    Revenue Code. This paragraph is exempt from the provisions

 

 

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1    of Section 250.
2    (f) Investment credit; Enterprise Zone; River Edge
3Redevelopment Zone.
4        (1) A taxpayer shall be allowed a credit against the
5    tax imposed by subsections (a) and (b) of this Section for
6    investment in qualified property which is placed in service
7    in an Enterprise Zone created pursuant to the Illinois
8    Enterprise Zone Act or, for property placed in service on
9    or after July 1, 2006, a River Edge Redevelopment Zone
10    established pursuant to the River Edge Redevelopment Zone
11    Act. For partners, shareholders of Subchapter S
12    corporations, and owners of limited liability companies,
13    if the liability company is treated as a partnership for
14    purposes of federal and State income taxation, there shall
15    be allowed a credit under this subsection (f) to be
16    determined in accordance with the determination of income
17    and distributive share of income under Sections 702 and 704
18    and Subchapter S of the Internal Revenue Code. The credit
19    shall be .5% of the basis for such property. The credit
20    shall be available only in the taxable year in which the
21    property is placed in service in the Enterprise Zone or
22    River Edge Redevelopment Zone and shall not be allowed to
23    the extent that it would reduce a taxpayer's liability for
24    the tax imposed by subsections (a) and (b) of this Section
25    to below zero. For tax years ending on or after December
26    31, 1985, the credit shall be allowed for the tax year in

 

 

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1    which the property is placed in service, or, if the amount
2    of the credit exceeds the tax liability for that year,
3    whether it exceeds the original liability or the liability
4    as later amended, such excess may be carried forward and
5    applied to the tax liability of the 5 taxable years
6    following the excess credit year. The credit shall be
7    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, the credit
10    accruing first in time shall be applied first.
11        (2) The term qualified property means property which:
12            (A) is tangible, whether new or used, including
13        buildings and structural components of buildings;
14            (B) is depreciable pursuant to Section 167 of the
15        Internal Revenue Code, except that "3-year property"
16        as defined in Section 168(c)(2)(A) of that Code is not
17        eligible for the credit provided by this subsection
18        (f);
19            (C) is acquired by purchase as defined in Section
20        179(d) of the Internal Revenue Code;
21            (D) is used in the Enterprise Zone or River Edge
22        Redevelopment Zone by the taxpayer; and
23            (E) has not been previously used in Illinois in
24        such a manner and by such a person as would qualify for
25        the credit provided by this subsection (f) or
26        subsection (e).

 

 

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1        (3) The basis of qualified property shall be the basis
2    used to compute the depreciation deduction for federal
3    income tax purposes.
4        (4) If the basis of the property for federal income tax
5    depreciation purposes is increased after it has been placed
6    in service in the Enterprise Zone or River Edge
7    Redevelopment Zone by the taxpayer, the amount of such
8    increase shall be deemed property placed in service on the
9    date of such increase in basis.
10        (5) The term "placed in service" shall have the same
11    meaning as under Section 46 of the Internal Revenue Code.
12        (6) If during any taxable year, any property ceases to
13    be qualified property in the hands of the taxpayer within
14    48 months after being placed in service, or the situs of
15    any qualified property is moved outside the Enterprise Zone
16    or River Edge Redevelopment Zone within 48 months after
17    being placed in service, the tax imposed under subsections
18    (a) and (b) of this Section for such taxable year shall be
19    increased. Such increase shall be determined by (i)
20    recomputing the investment credit which would have been
21    allowed for the year in which credit for such property was
22    originally allowed by eliminating such property from such
23    computation, and (ii) subtracting such recomputed credit
24    from the amount of credit previously allowed. For the
25    purposes of this paragraph (6), a reduction of the basis of
26    qualified property resulting from a redetermination of the

 

 

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1    purchase price shall be deemed a disposition of qualified
2    property to the extent of such reduction.
3        (7) There shall be allowed an additional credit equal
4    to 0.5% of the basis of qualified property placed in
5    service during the taxable year in a River Edge
6    Redevelopment Zone, provided such property is placed in
7    service on or after July 1, 2006, and the taxpayer's base
8    employment within Illinois has increased by 1% or more over
9    the preceding year as determined by the taxpayer's
10    employment records filed with the Illinois Department of
11    Employment Security. Taxpayers who are new to Illinois
12    shall be deemed to have met the 1% growth in base
13    employment for the first year in which they file employment
14    records with the Illinois Department of Employment
15    Security. If, in any year, the increase in base employment
16    within Illinois over the preceding year is less than 1%,
17    the additional credit shall be limited to that percentage
18    times a fraction, the numerator of which is 0.5% and the
19    denominator of which is 1%, but shall not exceed 0.5%.
20    (g) Jobs Tax Credit; River Edge Redevelopment Zone and
21Foreign Trade Zone or Sub-Zone.
22        (1) A taxpayer conducting a trade or business, for
23    taxable years ending on or after December 31, 2006, in a
24    River Edge Redevelopment Zone or conducting a trade or
25    business in a federally designated Foreign Trade Zone or
26    Sub-Zone shall be allowed a credit against the tax imposed

 

 

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1    by subsections (a) and (b) of this Section in the amount of
2    $500 per eligible employee hired to work in the zone during
3    the taxable year.
4        (2) To qualify for the credit:
5            (A) the taxpayer must hire 5 or more eligible
6        employees to work in a River Edge Redevelopment Zone or
7        federally designated Foreign Trade Zone or Sub-Zone
8        during the taxable year;
9            (B) the taxpayer's total employment within the
10        River Edge Redevelopment Zone or federally designated
11        Foreign Trade Zone or Sub-Zone must increase by 5 or
12        more full-time employees beyond the total employed in
13        that zone at the end of the previous tax year for which
14        a jobs tax credit under this Section was taken, or
15        beyond the total employed by the taxpayer as of
16        December 31, 1985, whichever is later; and
17            (C) the eligible employees must be employed 180
18        consecutive days in order to be deemed hired for
19        purposes of this subsection.
20        (3) An "eligible employee" means an employee who is:
21            (A) Certified by the Department of Commerce and
22        Economic Opportunity as "eligible for services"
23        pursuant to regulations promulgated in accordance with
24        Title II of the Job Training Partnership Act, Training
25        Services for the Disadvantaged or Title III of the Job
26        Training Partnership Act, Employment and Training

 

 

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1        Assistance for Dislocated Workers Program.
2            (B) Hired after the River Edge Redevelopment Zone
3        or federally designated Foreign Trade Zone or Sub-Zone
4        was designated or the trade or business was located in
5        that zone, whichever is later.
6            (C) Employed in the River Edge Redevelopment Zone
7        or Foreign Trade Zone or Sub-Zone. An employee is
8        employed in a federally designated Foreign Trade Zone
9        or Sub-Zone if his services are rendered there or it is
10        the base of operations for the services performed.
11            (D) A full-time employee working 30 or more hours
12        per week.
13        (4) For tax years ending on or after December 31, 1985
14    and prior to December 31, 1988, the credit shall be allowed
15    for the tax year in which the eligible employees are hired.
16    For tax years ending on or after December 31, 1988, the
17    credit shall be allowed for the tax year immediately
18    following the tax year in which the eligible employees are
19    hired. If the amount of the credit exceeds the tax
20    liability for that year, whether it exceeds the original
21    liability or the liability as later amended, such excess
22    may be carried forward and applied to the tax liability of
23    the 5 taxable years following the excess credit year. The
24    credit shall be applied to the earliest year for which
25    there is a liability. If there is credit from more than one
26    tax year that is available to offset a liability, earlier

 

 

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1    credit shall be applied first.
2        (5) The Department of Revenue shall promulgate such
3    rules and regulations as may be deemed necessary to carry
4    out the purposes of this subsection (g).
5        (6) The credit shall be available for eligible
6    employees hired on or after January 1, 1986.
7    (h) Investment credit; High Impact Business.
8        (1) Subject to subsections (b) and (b-5) of Section 5.5
9    of the Illinois Enterprise Zone Act, a taxpayer shall be
10    allowed a credit against the tax imposed by subsections (a)
11    and (b) of this Section for investment in qualified
12    property which is placed in service by a Department of
13    Commerce and Economic Opportunity designated High Impact
14    Business. The credit shall be .5% of the basis for such
15    property. The credit shall not be available (i) until the
16    minimum investments in qualified property set forth in
17    subdivision (a)(3)(A) of Section 5.5 of the Illinois
18    Enterprise Zone Act have been satisfied or (ii) until the
19    time authorized in subsection (b-5) of the Illinois
20    Enterprise Zone Act for entities designated as High Impact
21    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
22    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
23    Act, and shall not be allowed to the extent that it would
24    reduce a taxpayer's liability for the tax imposed by
25    subsections (a) and (b) of this Section to below zero. The
26    credit applicable to such investments shall be taken in the

 

 

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

 

 

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1            (B) is depreciable pursuant to Section 167 of the
2        Internal Revenue Code, except that "3-year property"
3        as defined in Section 168(c)(2)(A) of that Code is not
4        eligible for the credit provided by this subsection
5        (h);
6            (C) is acquired by purchase as defined in Section
7        179(d) of the Internal Revenue Code; and
8            (D) is not eligible for the Enterprise Zone
9        Investment Credit provided by subsection (f) of this
10        Section.
11        (3) The basis of qualified property shall be the basis
12    used to compute the depreciation deduction for federal
13    income tax purposes.
14        (4) If the basis of the property for federal income tax
15    depreciation purposes is increased after it has been placed
16    in service in a federally designated Foreign Trade Zone or
17    Sub-Zone located in Illinois by the taxpayer, the amount of
18    such increase shall be deemed property placed in service on
19    the date of such increase in basis.
20        (5) The term "placed in service" shall have the same
21    meaning as under Section 46 of the Internal Revenue Code.
22        (6) If during any taxable year ending on or before
23    December 31, 1996, any property ceases to be qualified
24    property in the hands of the taxpayer within 48 months
25    after being placed in service, or the situs of any
26    qualified property is moved outside Illinois within 48

 

 

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

 

 

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1(b) of this Section for the tax imposed by subsections (c) and
2(d) of this Section. This credit shall be computed by
3multiplying the tax imposed by subsections (c) and (d) of this
4Section by a fraction, the numerator of which is base income
5allocable to Illinois and the denominator of which is Illinois
6base income, and further multiplying the product by the tax
7rate imposed by subsections (a) and (b) of this Section.
8    Any credit earned on or after December 31, 1986 under this
9subsection which is unused in the year the credit is computed
10because it exceeds the tax liability imposed by subsections (a)
11and (b) for that year (whether it exceeds the original
12liability or the liability as later amended) may be carried
13forward and applied to the tax liability imposed by subsections
14(a) and (b) of the 5 taxable years following the excess credit
15year, provided that no credit may be carried forward to any
16year ending on or after December 31, 2003. This credit shall be
17applied first to the earliest year for which there is a
18liability. If there is a credit under this subsection from more
19than one tax year that is available to offset a liability the
20earliest credit arising under this subsection shall be applied
21first.
22    If, during any taxable year ending on or after December 31,
231986, the tax imposed by subsections (c) and (d) of this
24Section for which a taxpayer has claimed a credit under this
25subsection (i) is reduced, the amount of credit for such tax
26shall also be reduced. Such reduction shall be determined by

 

 

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1recomputing the credit to take into account the reduced tax
2imposed by subsections (c) and (d). If any portion of the
3reduced amount of credit has been carried to a different
4taxable year, an amended return shall be filed for such taxable
5year to reduce the amount of credit claimed.
6    (j) Training expense credit. Beginning with tax years
7ending on or after December 31, 1986 and prior to December 31,
82003, a taxpayer shall be allowed a credit against the tax
9imposed by subsections (a) and (b) under this Section for all
10amounts paid or accrued, on behalf of all persons employed by
11the taxpayer in Illinois or Illinois residents employed outside
12of Illinois by a taxpayer, for educational or vocational
13training in semi-technical or technical fields or semi-skilled
14or skilled fields, which were deducted from gross income in the
15computation of taxable income. The credit against the tax
16imposed by subsections (a) and (b) shall be 1.6% of such
17training expenses. 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 (j) 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    Any credit allowed under this subsection which is unused in
26the year the credit is earned may be carried forward to each of

 

 

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1the 5 taxable years following the year for which the credit is
2first computed until it is used. This credit shall be applied
3first to the earliest year for which there is a liability. If
4there is a credit under this subsection from more than one tax
5year that is available to offset a liability the earliest
6credit arising under this subsection shall be applied first. No
7carryforward credit may be claimed in any tax year ending on or
8after December 31, 2003.
9    (k) Research and development credit. For tax years ending
10after July 1, 1990 and prior to December 31, 2003, and
11beginning again for tax years ending on or after December 31,
122004, and ending prior to January 1, 2016, a taxpayer shall be
13allowed a credit against the tax imposed by subsections (a) and
14(b) of this Section for increasing research activities in this
15State. The credit allowed against the tax imposed by
16subsections (a) and (b) shall be equal to 6 1/2% of the
17qualifying expenditures for increasing research activities in
18this State. For partners, shareholders of subchapter S
19corporations, and owners of limited liability companies, if the
20liability company is treated as a partnership for purposes of
21federal and State income taxation, there shall be allowed a
22credit under this subsection to be determined in accordance
23with the determination of income and distributive share of
24income under Sections 702 and 704 and subchapter S of the
25Internal Revenue Code.
26    For purposes of this subsection, "qualifying expenditures"

 

 

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

 

 

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1liability for the given year remains. Any remaining unused
2credit or credits then will be carried forward to the next
3following year in which a tax liability is incurred, except
4that no credit can be carried forward to a year which is more
5than 5 years after the year in which the expense for which the
6credit is given was incurred.
7    No inference shall be drawn from this amendatory Act of the
891st General Assembly in construing this Section for taxable
9years beginning before January 1, 1999.
10    (l) Environmental Remediation Tax Credit.
11        (i) For tax years ending after December 31, 1997 and on
12    or before December 31, 2001, a taxpayer shall be allowed a
13    credit against the tax imposed by subsections (a) and (b)
14    of this Section for certain amounts paid for unreimbursed
15    eligible remediation costs, as specified in this
16    subsection. For purposes of this Section, "unreimbursed
17    eligible remediation costs" means costs approved by the
18    Illinois Environmental Protection Agency ("Agency") under
19    Section 58.14 of the Environmental Protection Act that were
20    paid in performing environmental remediation at a site for
21    which a No Further Remediation Letter was issued by the
22    Agency and recorded under Section 58.10 of the
23    Environmental Protection Act. The credit must be claimed
24    for the taxable year in which Agency approval of the
25    eligible remediation costs is granted. The credit is not
26    available to any taxpayer if the taxpayer or any related

 

 

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1    party caused or contributed to, in any material respect, a
2    release of regulated substances on, in, or under the site
3    that was identified and addressed by the remedial action
4    pursuant to the Site Remediation Program of the
5    Environmental Protection Act. After the Pollution Control
6    Board rules are adopted pursuant to the Illinois
7    Administrative Procedure Act for the administration and
8    enforcement of Section 58.9 of the Environmental
9    Protection Act, determinations as to credit availability
10    for purposes of this Section shall be made consistent with
11    those rules. For purposes of this Section, "taxpayer"
12    includes a person whose tax attributes the taxpayer has
13    succeeded to under Section 381 of the Internal Revenue Code
14    and "related party" includes the persons disallowed a
15    deduction for losses by paragraphs (b), (c), and (f)(1) of
16    Section 267 of the Internal Revenue Code by virtue of being
17    a related taxpayer, as well as any of its partners. The
18    credit allowed against the tax imposed by subsections (a)
19    and (b) shall be equal to 25% of the unreimbursed eligible
20    remediation costs in excess of $100,000 per site, except
21    that the $100,000 threshold shall not apply to any site
22    contained in an enterprise zone as determined by the
23    Department of Commerce and Community Affairs (now
24    Department of Commerce and Economic Opportunity). The
25    total credit allowed shall not exceed $40,000 per year with
26    a maximum total of $150,000 per site. For partners and

 

 

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1    shareholders of subchapter S corporations, there shall be
2    allowed a credit under this subsection to be determined in
3    accordance with the determination of income and
4    distributive share of income under Sections 702 and 704 and
5    subchapter S of the Internal Revenue Code.
6        (ii) A credit allowed under this subsection that is
7    unused in the year the credit is earned may be carried
8    forward to each of the 5 taxable years following the year
9    for which the credit is first earned until it is used. The
10    term "unused credit" does not include any amounts of
11    unreimbursed eligible remediation costs in excess of the
12    maximum credit per site authorized under paragraph (i).
13    This credit shall be applied first to the earliest year for
14    which there is a liability. If there is a credit under this
15    subsection from more than one tax year that is available to
16    offset a liability, the earliest credit arising under this
17    subsection shall be applied first. A credit allowed under
18    this subsection may be sold to a buyer as part of a sale of
19    all or part of the remediation site for which the credit
20    was granted. The purchaser of a remediation site and the
21    tax credit shall succeed to the unused credit and remaining
22    carry-forward period of the seller. To perfect the
23    transfer, the assignor shall record the transfer in the
24    chain of title for the site and provide written notice to
25    the Director of the Illinois Department of Revenue of the
26    assignor's intent to sell the remediation site and the

 

 

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1    amount of the tax credit to be transferred as a portion of
2    the sale. In no event may a credit be transferred to any
3    taxpayer if the taxpayer or a related party would not be
4    eligible under the provisions of subsection (i).
5        (iii) For purposes of this Section, the term "site"
6    shall have the same meaning as under Section 58.2 of the
7    Environmental Protection Act.
8    (m) Education expense credit. Beginning with tax years
9ending after December 31, 1999, a taxpayer who is the custodian
10of one or more qualifying pupils shall be allowed a credit
11against the tax imposed by subsections (a) and (b) of this
12Section for qualified education expenses incurred on behalf of
13the qualifying pupils. The credit shall be equal to 25% of
14qualified education expenses, but in no event may the total
15credit under this subsection claimed by a family that is the
16custodian of qualifying pupils exceed $500. In no event shall a
17credit under this subsection reduce the taxpayer's liability
18under this Act to less than zero. This subsection is exempt
19from the provisions of Section 250 of this Act.
20    For purposes of this subsection:
21    "Qualifying pupils" means individuals who (i) are
22residents of the State of Illinois, (ii) are under the age of
2321 at the close of the school year for which a credit is
24sought, and (iii) during the school year for which a credit is
25sought were full-time pupils enrolled in a kindergarten through
26twelfth grade education program at any school, as defined in

 

 

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1this subsection.
2    "Qualified education expense" means the amount incurred on
3behalf of a qualifying pupil in excess of $250 for tuition,
4book fees, and lab fees at the school in which the pupil is
5enrolled during the regular school year.
6    "School" means any public or nonpublic elementary or
7secondary school in Illinois that is in compliance with Title
8VI of the Civil Rights Act of 1964 and attendance at which
9satisfies the requirements of Section 26-1 of the School Code,
10except that nothing shall be construed to require a child to
11attend any particular public or nonpublic school to qualify for
12the credit under this Section.
13    "Custodian" means, with respect to qualifying pupils, an
14Illinois resident who is a parent, the parents, a legal
15guardian, or the legal guardians of the qualifying pupils.
16    (n) River Edge Redevelopment Zone site remediation tax
17credit.
18        (i) For tax years ending on or after December 31, 2006,
19    a taxpayer shall be allowed a credit against the tax
20    imposed by subsections (a) and (b) of this Section for
21    certain amounts paid for unreimbursed eligible remediation
22    costs, as specified in this subsection. For purposes of
23    this Section, "unreimbursed eligible remediation costs"
24    means costs approved by the Illinois Environmental
25    Protection Agency ("Agency") under Section 58.14a of the
26    Environmental Protection Act that were paid in performing

 

 

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

 

 

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1    $100,000 per site.
2        (ii) A credit allowed under this subsection that is
3    unused in the year the credit is earned may be carried
4    forward to each of the 5 taxable years following the year
5    for which the credit is first earned until it is used. This
6    credit shall be applied first to the earliest year for
7    which there is a liability. If there is a credit under this
8    subsection from more than one tax year that is available to
9    offset a liability, the earliest credit arising under this
10    subsection shall be applied first. A credit allowed under
11    this subsection may be sold to a buyer as part of a sale of
12    all or part of the remediation site for which the credit
13    was granted. The purchaser of a remediation site and the
14    tax credit shall succeed to the unused credit and remaining
15    carry-forward period of the seller. To perfect the
16    transfer, the assignor shall record the transfer in the
17    chain of title for the site and provide written notice to
18    the Director of the Illinois Department of Revenue of the
19    assignor's intent to sell the remediation site and the
20    amount of the tax credit to be transferred as a portion of
21    the sale. In no event may a credit be transferred to any
22    taxpayer if the taxpayer or a related party would not be
23    eligible under the provisions of subsection (i).
24        (iii) For purposes of this Section, the term "site"
25    shall have the same meaning as under Section 58.2 of the
26    Environmental Protection Act.

 

 

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1(Source: P.A. 96-115, eff. 7-31-09; 96-116, eff. 7-31-09;
296-937, eff. 6-23-10; 96-1000, eff. 7-2-10; 96-1496, eff.
31-13-11; 97-2, eff. 5-6-11; 97-636, eff. 6-1-12; 97-905, eff.
48-7-12.)
 
5    (35 ILCS 5/303)  (from Ch. 120, par. 3-303)
6    Sec. 303. (a) In general. Any item of capital gain or loss,
7and any item of income from rents or royalties from real or
8tangible personal property, interest, dividends, and patent or
9copyright royalties, and prizes awarded under the Illinois
10Lottery Law, and, for taxable years ending on or after December
1131, 2013, wagering and gambling winnings from Illinois sources
12as set forth in subsection (e-1) of this Section, to the extent
13such item constitutes nonbusiness income, together with any
14item of deduction directly allocable thereto, shall be
15allocated by any person other than a resident as provided in
16this Section.
17    (b) Capital gains and losses.
18        (1) Real property. Capital gains and losses from sales
19    or exchanges of real property are allocable to this State
20    if the property is located in this State.
21        (2) Tangible personal property. Capital gains and
22    losses from sales or exchanges of tangible personal
23    property are allocable to this State if, at the time of
24    such sale or exchange:
25            (A) The property had its situs in this State; or

 

 

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

 

 

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

 

 

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1        state. If the basis of receipts from patent royalties
2        does not permit allocation to states or if the
3        accounting procedures do not reflect states of
4        utilization, the patent is utilized in this State if
5        the taxpayer has its commercial domicile in this State.
6            (B) A copyright is utilized in a state to the
7        extent that printing or other publication originates
8        in the state. If the basis of receipts from copyright
9        royalties does not permit allocation to states or if
10        the accounting procedures do not reflect states of
11        utilization, the copyright is utilized in this State if
12        the taxpayer has its commercial domicile in this State.
13    (e) Illinois lottery prizes. Prizes awarded under the
14"Illinois Lottery Law", approved December 14, 1973, are
15allocable to this State.
16    (e-1) Wagering and gambling winnings. Payments received in
17taxable years ending on or after December 31, 2013 of winnings
18from pari-mutuel wagering conducted at a wagering facility
19licensed under the Illinois Horse Racing Act of 1975 and from
20gambling games conducted on a riverboat or in a casino or
21electronic gaming facility licensed under the Illinois
22Gambling Act are allocable to this State.
23    (e-5) Unemployment benefits. Unemployment benefits paid by
24the Illinois Department of Employment Security are allocable to
25this State.
26    (f) Taxability in other state. For purposes of allocation

 

 

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1of income pursuant to this Section, a taxpayer is taxable in
2another state if:
3        (1) In that state he is subject to a net income tax, a
4    franchise tax measured by net income, a franchise tax for
5    the privilege of doing business, or a corporate stock tax;
6    or
7        (2) That state has jurisdiction to subject the taxpayer
8    to a net income tax regardless of whether, in fact, the
9    state does or does not.
10    (g) Cross references.
11        (1) For allocation of interest and dividends by persons
12    other than residents, see Section 301(c)(2).
13        (2) For allocation of nonbusiness income by residents,
14    see Section 301(a).
15(Source: P.A. 97-709, eff. 7-1-12.)
 
16    (35 ILCS 5/304)  (from Ch. 120, par. 3-304)
17    Sec. 304. Business income of persons other than residents.
18    (a) In general. The business income of a person other than
19a resident shall be allocated to this State if such person's
20business income is derived solely from this State. If a person
21other than a resident derives business income from this State
22and one or more other states, then, for tax years ending on or
23before December 30, 1998, and except as otherwise provided by
24this Section, such person's business income shall be
25apportioned to this State by multiplying the income by a

 

 

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1fraction, the numerator of which is the sum of the property
2factor (if any), the payroll factor (if any) and 200% of the
3sales factor (if any), and the denominator of which is 4
4reduced by the number of factors other than the sales factor
5which have a denominator of zero and by an additional 2 if the
6sales factor has a denominator of zero. For tax years ending on
7or after December 31, 1998, and except as otherwise provided by
8this Section, persons other than residents who derive business
9income from this State and one or more other states shall
10compute their apportionment factor by weighting their
11property, payroll, and sales factors as provided in subsection
12(h) of this Section.
13    (1) Property factor.
14        (A) The property factor is a fraction, the numerator of
15    which is the average value of the person's real and
16    tangible personal property owned or rented and used in the
17    trade or business in this State during the taxable year and
18    the denominator of which is the average value of all the
19    person's real and tangible personal property owned or
20    rented and used in the trade or business during the taxable
21    year.
22        (B) Property owned by the person is valued at its
23    original cost. Property rented by the person is valued at 8
24    times the net annual rental rate. Net annual rental rate is
25    the annual rental rate paid by the person less any annual
26    rental rate received by the person from sub-rentals.

 

 

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1        (C) The average value of property shall be determined
2    by averaging the values at the beginning and ending of the
3    taxable year but the Director may require the averaging of
4    monthly values during the taxable year if reasonably
5    required to reflect properly the average value of the
6    person's property.
7    (2) Payroll factor.
8        (A) The payroll factor is a fraction, the numerator of
9    which is the total amount paid in this State during the
10    taxable year by the person for compensation, and the
11    denominator of which is the total compensation paid
12    everywhere during the taxable year.
13        (B) Compensation is paid in this State if:
14            (i) The individual's service is performed entirely
15        within this State;
16            (ii) The individual's service is performed both
17        within and without this State, but the service
18        performed without this State is incidental to the
19        individual's service performed within this State; or
20            (iii) Some of the service is performed within this
21        State and either the base of operations, or if there is
22        no base of operations, the place from which the service
23        is directed or controlled is within this State, or the
24        base of operations or the place from which the service
25        is directed or controlled is not in any state in which
26        some part of the service is performed, but the

 

 

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1        individual's residence is in this State.
2            (iv) Compensation paid to nonresident professional
3        athletes.
4            (a) General. The Illinois source income of a
5        nonresident individual who is a member of a
6        professional athletic team includes the portion of the
7        individual's total compensation for services performed
8        as a member of a professional athletic team during the
9        taxable year which the number of duty days spent within
10        this State performing services for the team in any
11        manner during the taxable year bears to the total
12        number of duty days spent both within and without this
13        State during the taxable year.
14            (b) Travel days. Travel days that do not involve
15        either a game, practice, team meeting, or other similar
16        team event are not considered duty days spent in this
17        State. However, such travel days are considered in the
18        total duty days spent both within and without this
19        State.
20            (c) Definitions. For purposes of this subpart
21        (iv):
22                (1) The term "professional athletic team"
23            includes, but is not limited to, any professional
24            baseball, basketball, football, soccer, or hockey
25            team.
26                (2) The term "member of a professional

 

 

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1            athletic team" includes those employees who are
2            active players, players on the disabled list, and
3            any other persons required to travel and who travel
4            with and perform services on behalf of a
5            professional athletic team on a regular basis.
6            This includes, but is not limited to, coaches,
7            managers, and trainers.
8                (3) Except as provided in items (C) and (D) of
9            this subpart (3), the term "duty days" means all
10            days during the taxable year from the beginning of
11            the professional athletic team's official
12            pre-season training period through the last game
13            in which the team competes or is scheduled to
14            compete. Duty days shall be counted for the year in
15            which they occur, including where a team's
16            official pre-season training period through the
17            last game in which the team competes or is
18            scheduled to compete, occurs during more than one
19            tax year.
20                    (A) Duty days shall also include days on
21                which a member of a professional athletic team
22                performs service for a team on a date that does
23                not fall within the foregoing period (e.g.,
24                participation in instructional leagues, the
25                "All Star Game", or promotional "caravans").
26                Performing a service for a professional

 

 

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1                athletic team includes conducting training and
2                rehabilitation activities, when such
3                activities are conducted at team facilities.
4                    (B) Also included in duty days are game
5                days, practice days, days spent at team
6                meetings, promotional caravans, preseason
7                training camps, and days served with the team
8                through all post-season games in which the team
9                competes or is scheduled to compete.
10                    (C) Duty days for any person who joins a
11                team during the period from the beginning of
12                the professional athletic team's official
13                pre-season training period through the last
14                game in which the team competes, or is
15                scheduled to compete, shall begin on the day
16                that person joins the team. Conversely, duty
17                days for any person who leaves a team during
18                this period shall end on the day that person
19                leaves the team. Where a person switches teams
20                during a taxable year, a separate duty-day
21                calculation shall be made for the period the
22                person was with each team.
23                    (D) Days for which a member of a
24                professional athletic team is not compensated
25                and is not performing services for the team in
26                any manner, including days when such member of

 

 

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1                a professional athletic team has been
2                suspended without pay and prohibited from
3                performing any services for the team, shall not
4                be treated as duty days.
5                    (E) Days for which a member of a
6                professional athletic team is on the disabled
7                list and does not conduct rehabilitation
8                activities at facilities of the team, and is
9                not otherwise performing services for the team
10                in Illinois, shall not be considered duty days
11                spent in this State. All days on the disabled
12                list, however, are considered to be included in
13                total duty days spent both within and without
14                this State.
15                (4) The term "total compensation for services
16            performed as a member of a professional athletic
17            team" means the total compensation received during
18            the taxable year for services performed:
19                    (A) from the beginning of the official
20                pre-season training period through the last
21                game in which the team competes or is scheduled
22                to compete during that taxable year; and
23                    (B) during the taxable year on a date which
24                does not fall within the foregoing period
25                (e.g., participation in instructional leagues,
26                the "All Star Game", or promotional caravans).

 

 

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1                This compensation shall include, but is not
2            limited to, salaries, wages, bonuses as described
3            in this subpart, and any other type of compensation
4            paid during the taxable year to a member of a
5            professional athletic team for services performed
6            in that year. This compensation does not include
7            strike benefits, severance pay, termination pay,
8            contract or option year buy-out payments,
9            expansion or relocation payments, or any other
10            payments not related to services performed for the
11            team.
12                For purposes of this subparagraph, "bonuses"
13            included in "total compensation for services
14            performed as a member of a professional athletic
15            team" subject to the allocation described in
16            Section 302(c)(1) are: bonuses earned as a result
17            of play (i.e., performance bonuses) during the
18            season, including bonuses paid for championship,
19            playoff or "bowl" games played by a team, or for
20            selection to all-star league or other honorary
21            positions; and bonuses paid for signing a
22            contract, unless the payment of the signing bonus
23            is not conditional upon the signee playing any
24            games for the team or performing any subsequent
25            services for the team or even making the team, the
26            signing bonus is payable separately from the

 

 

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1            salary and any other compensation, and the signing
2            bonus is nonrefundable.
3    (3) Sales factor.
4        (A) The sales factor is a fraction, the numerator of
5    which is the total sales of the person in this State during
6    the taxable year, and the denominator of which is the total
7    sales of the person everywhere during the taxable year.
8        (B) Sales of tangible personal property are in this
9    State if:
10            (i) The property is delivered or shipped to a
11        purchaser, other than the United States government,
12        within this State regardless of the f. o. b. point or
13        other conditions of the sale; or
14            (ii) The property is shipped from an office, store,
15        warehouse, factory or other place of storage in this
16        State and either the purchaser is the United States
17        government or the person is not taxable in the state of
18        the purchaser; provided, however, that premises owned
19        or leased by a person who has independently contracted
20        with the seller for the printing of newspapers,
21        periodicals or books shall not be deemed to be an
22        office, store, warehouse, factory or other place of
23        storage for purposes of this Section. Sales of tangible
24        personal property are not in this State if the seller
25        and purchaser would be members of the same unitary
26        business group but for the fact that either the seller

 

 

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1        or purchaser is a person with 80% or more of total
2        business activity outside of the United States and the
3        property is purchased for resale.
4        (B-1) Patents, copyrights, trademarks, and similar
5    items of intangible personal property.
6            (i) Gross receipts from the licensing, sale, or
7        other disposition of a patent, copyright, trademark,
8        or similar item of intangible personal property, other
9        than gross receipts governed by paragraph (B-7) of this
10        item (3), are in this State to the extent the item is
11        utilized in this State during the year the gross
12        receipts are included in gross income.
13            (ii) Place of utilization.
14                (I) A patent is utilized in a state to the
15            extent that it is employed in production,
16            fabrication, manufacturing, or other processing in
17            the state or to the extent that a patented product
18            is produced in the state. If a patent is utilized
19            in more than one state, the extent to which it is
20            utilized in any one state shall be a fraction equal
21            to the gross receipts of the licensee or purchaser
22            from sales or leases of items produced,
23            fabricated, manufactured, or processed within that
24            state using the patent and of patented items
25            produced within that state, divided by the total of
26            such gross receipts for all states in which the

 

 

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

 

 

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1    gross receipts governed by paragraph (B-7) of this item
2    (3), may be included in the numerator or denominator of the
3    sales factor only if gross receipts from licenses, sales,
4    or other disposition of such items comprise more than 50%
5    of the taxpayer's total gross receipts included in gross
6    income during the tax year and during each of the 2
7    immediately preceding tax years; provided that, when a
8    taxpayer is a member of a unitary business group, such
9    determination shall be made on the basis of the gross
10    receipts of the entire unitary business group.
11        (B-5) For taxable years ending on or after December 31,
12    2008, except as provided in subsections (ii) through (vii),
13    receipts from the sale of telecommunications service or
14    mobile telecommunications service are in this State if the
15    customer's service address is in this State.
16            (i) For purposes of this subparagraph (B-5), the
17        following terms have the following meanings:
18            "Ancillary services" means services that are
19        associated with or incidental to the provision of
20        "telecommunications services", including but not
21        limited to "detailed telecommunications billing",
22        "directory assistance", "vertical service", and "voice
23        mail services".
24            "Air-to-Ground Radiotelephone service" means a
25        radio service, as that term is defined in 47 CFR 22.99,
26        in which common carriers are authorized to offer and

 

 

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1        provide radio telecommunications service for hire to
2        subscribers in aircraft.
3            "Call-by-call Basis" means any method of charging
4        for telecommunications services where the price is
5        measured by individual calls.
6            "Communications Channel" means a physical or
7        virtual path of communications over which signals are
8        transmitted between or among customer channel
9        termination points.
10            "Conference bridging service" means an "ancillary
11        service" that links two or more participants of an
12        audio or video conference call and may include the
13        provision of a telephone number. "Conference bridging
14        service" does not include the "telecommunications
15        services" used to reach the conference bridge.
16            "Customer Channel Termination Point" means the
17        location where the customer either inputs or receives
18        the communications.
19            "Detailed telecommunications billing service"
20        means an "ancillary service" of separately stating
21        information pertaining to individual calls on a
22        customer's billing statement.
23            "Directory assistance" means an "ancillary
24        service" of providing telephone number information,
25        and/or address information.
26            "Home service provider" means the facilities based

 

 

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1        carrier or reseller with which the customer contracts
2        for the provision of mobile telecommunications
3        services.
4            "Mobile telecommunications service" means
5        commercial mobile radio service, as defined in Section
6        20.3 of Title 47 of the Code of Federal Regulations as
7        in effect on June 1, 1999.
8            "Place of primary use" means the street address
9        representative of where the customer's use of the
10        telecommunications service primarily occurs, which
11        must be the residential street address or the primary
12        business street address of the customer. In the case of
13        mobile telecommunications services, "place of primary
14        use" must be within the licensed service area of the
15        home service provider.
16            "Post-paid telecommunication service" means the
17        telecommunications service obtained by making a
18        payment on a call-by-call basis either through the use
19        of a credit card or payment mechanism such as a bank
20        card, travel card, credit card, or debit card, or by
21        charge made to a telephone number which is not
22        associated with the origination or termination of the
23        telecommunications service. A post-paid calling
24        service includes telecommunications service, except a
25        prepaid wireless calling service, that would be a
26        prepaid calling service except it is not exclusively a

 

 

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1        telecommunication service.
2            "Prepaid telecommunication service" means the
3        right to access exclusively telecommunications
4        services, which must be paid for in advance and which
5        enables the origination of calls using an access number
6        or authorization code, whether manually or
7        electronically dialed, and that is sold in
8        predetermined units or dollars of which the number
9        declines with use in a known amount.
10            "Prepaid Mobile telecommunication service" means a
11        telecommunications service that provides the right to
12        utilize mobile wireless service as well as other
13        non-telecommunication services, including but not
14        limited to ancillary services, which must be paid for
15        in advance that is sold in predetermined units or
16        dollars of which the number declines with use in a
17        known amount.
18            "Private communication service" means a
19        telecommunication service that entitles the customer
20        to exclusive or priority use of a communications
21        channel or group of channels between or among
22        termination points, regardless of the manner in which
23        such channel or channels are connected, and includes
24        switching capacity, extension lines, stations, and any
25        other associated services that are provided in
26        connection with the use of such channel or channels.

 

 

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1            "Service address" means:
2                (a) The location of the telecommunications
3            equipment to which a customer's call is charged and
4            from which the call originates or terminates,
5            regardless of where the call is billed or paid;
6                (b) If the location in line (a) is not known,
7            service address means the origination point of the
8            signal of the telecommunications services first
9            identified by either the seller's
10            telecommunications system or in information
11            received by the seller from its service provider
12            where the system used to transport such signals is
13            not that of the seller; and
14                (c) If the locations in line (a) and line (b)
15            are not known, the service address means the
16            location of the customer's place of primary use.
17            "Telecommunications service" means the electronic
18        transmission, conveyance, or routing of voice, data,
19        audio, video, or any other information or signals to a
20        point, or between or among points. The term
21        "telecommunications service" includes such
22        transmission, conveyance, or routing in which computer
23        processing applications are used to act on the form,
24        code or protocol of the content for purposes of
25        transmission, conveyance or routing without regard to
26        whether such service is referred to as voice over

 

 

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1        Internet protocol services or is classified by the
2        Federal Communications Commission as enhanced or value
3        added. "Telecommunications service" does not include:
4                (a) Data processing and information services
5            that allow data to be generated, acquired, stored,
6            processed, or retrieved and delivered by an
7            electronic transmission to a purchaser when such
8            purchaser's primary purpose for the underlying
9            transaction is the processed data or information;
10                (b) Installation or maintenance of wiring or
11            equipment on a customer's premises;
12                (c) Tangible personal property;
13                (d) Advertising, including but not limited to
14            directory advertising.
15                (e) Billing and collection services provided
16            to third parties;
17                (f) Internet access service;
18                (g) Radio and television audio and video
19            programming services, regardless of the medium,
20            including the furnishing of transmission,
21            conveyance and routing of such services by the
22            programming service provider. Radio and television
23            audio and video programming services shall include
24            but not be limited to cable service as defined in
25            47 USC 522(6) and audio and video programming
26            services delivered by commercial mobile radio

 

 

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1            service providers, as defined in 47 CFR 20.3;
2                (h) "Ancillary services"; or
3                (i) Digital products "delivered
4            electronically", including but not limited to
5            software, music, video, reading materials or ring
6            tones.
7            "Vertical service" means an "ancillary service"
8        that is offered in connection with one or more
9        "telecommunications services", which offers advanced
10        calling features that allow customers to identify
11        callers and to manage multiple calls and call
12        connections, including "conference bridging services".
13            "Voice mail service" means an "ancillary service"
14        that enables the customer to store, send or receive
15        recorded messages. "Voice mail service" does not
16        include any "vertical services" that the customer may
17        be required to have in order to utilize the "voice mail
18        service".
19            (ii) Receipts from the sale of telecommunications
20        service sold on an individual call-by-call basis are in
21        this State if either of the following applies:
22                (a) The call both originates and terminates in
23            this State.
24                (b) The call either originates or terminates
25            in this State and the service address is located in
26            this State.

 

 

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1            (iii) Receipts from the sale of postpaid
2        telecommunications service at retail are in this State
3        if the origination point of the telecommunication
4        signal, as first identified by the service provider's
5        telecommunication system or as identified by
6        information received by the seller from its service
7        provider if the system used to transport
8        telecommunication signals is not the seller's, is
9        located in this State.
10            (iv) Receipts from the sale of prepaid
11        telecommunications service or prepaid mobile
12        telecommunications service at retail are in this State
13        if the purchaser obtains the prepaid card or similar
14        means of conveyance at a location in this State.
15        Receipts from recharging a prepaid telecommunications
16        service or mobile telecommunications service is in
17        this State if the purchaser's billing information
18        indicates a location in this State.
19            (v) Receipts from the sale of private
20        communication services are in this State as follows:
21                (a) 100% of receipts from charges imposed at
22            each channel termination point in this State.
23                (b) 100% of receipts from charges for the total
24            channel mileage between each channel termination
25            point in this State.
26                (c) 50% of the total receipts from charges for

 

 

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

 

 

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1                (a) 100% of the receipts from access fees
2            attributable to intrastate telecommunications
3            service that both originates and terminates in
4            this State.
5                (b) 50% of the receipts from access fees
6            attributable to interstate telecommunications
7            service if the interstate call either originates
8            or terminates in this State.
9                (c) 100% of the receipts from interstate end
10            user access line charges, if the customer's
11            service address is in this State. As used in this
12            subdivision, "interstate end user access line
13            charges" includes, but is not limited to, the
14            surcharge approved by the federal communications
15            commission and levied pursuant to 47 CFR 69.
16                (d) Gross receipts from sales of
17            telecommunication services or from ancillary
18            services for telecommunications services sold to
19            other telecommunication service providers for
20            resale shall be sourced to this State using the
21            apportionment concepts used for non-resale
22            receipts of telecommunications services if the
23            information is readily available to make that
24            determination. If the information is not readily
25            available, then the taxpayer may use any other
26            reasonable and consistent method.

 

 

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1        (B-7) For taxable years ending on or after December 31,
2    2008, receipts from the sale of broadcasting services are
3    in this State if the broadcasting services are received in
4    this State. For purposes of this paragraph (B-7), the
5    following terms have the following meanings:
6            "Advertising revenue" means consideration received
7        by the taxpayer in exchange for broadcasting services
8        or allowing the broadcasting of commercials or
9        announcements in connection with the broadcasting of
10        film or radio programming, from sponsorships of the
11        programming, or from product placements in the
12        programming.
13            "Audience factor" means the ratio that the
14        audience or subscribers located in this State of a
15        station, a network, or a cable system bears to the
16        total audience or total subscribers for that station,
17        network, or cable system. The audience factor for film
18        or radio programming shall be determined by reference
19        to the books and records of the taxpayer or by
20        reference to published rating statistics provided the
21        method used by the taxpayer is consistently used from
22        year to year for this purpose and fairly represents the
23        taxpayer's activity in this State.
24            "Broadcast" or "broadcasting" or "broadcasting
25        services" means the transmission or provision of film
26        or radio programming, whether through the public

 

 

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1        airwaves, by cable, by direct or indirect satellite
2        transmission, or by any other means of communication,
3        either through a station, a network, or a cable system.
4            "Film" or "film programming" means the broadcast
5        on television of any and all performances, events, or
6        productions, including but not limited to news,
7        sporting events, plays, stories, or other literary,
8        commercial, educational, or artistic works, either
9        live or through the use of video tape, disc, or any
10        other type of format or medium. Each episode of a
11        series of films produced for television shall
12        constitute separate "film" notwithstanding that the
13        series relates to the same principal subject and is
14        produced during one or more tax periods.
15            "Radio" or "radio programming" means the broadcast
16        on radio of any and all performances, events, or
17        productions, including but not limited to news,
18        sporting events, plays, stories, or other literary,
19        commercial, educational, or artistic works, either
20        live or through the use of an audio tape, disc, or any
21        other format or medium. Each episode in a series of
22        radio programming produced for radio broadcast shall
23        constitute a separate "radio programming"
24        notwithstanding that the series relates to the same
25        principal subject and is produced during one or more
26        tax periods.

 

 

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1                (i) In the case of advertising revenue from
2            broadcasting, the customer is the advertiser and
3            the service is received in this State if the
4            commercial domicile of the advertiser is in this
5            State.
6                (ii) In the case where film or radio
7            programming is broadcast by a station, a network,
8            or a cable system for a fee or other remuneration
9            received from the recipient of the broadcast, the
10            portion of the service that is received in this
11            State is measured by the portion of the recipients
12            of the broadcast located in this State.
13            Accordingly, the fee or other remuneration for
14            such service that is included in the Illinois
15            numerator of the sales factor is the total of those
16            fees or other remuneration received from
17            recipients in Illinois. For purposes of this
18            paragraph, a taxpayer may determine the location
19            of the recipients of its broadcast using the
20            address of the recipient shown in its contracts
21            with the recipient or using the billing address of
22            the recipient in the taxpayer's records.
23                (iii) In the case where film or radio
24            programming is broadcast by a station, a network,
25            or a cable system for a fee or other remuneration
26            from the person providing the programming, the

 

 

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1            portion of the broadcast service that is received
2            by such station, network, or cable system in this
3            State is measured by the portion of recipients of
4            the broadcast located in this State. Accordingly,
5            the amount of revenue related to such an
6            arrangement that is included in the Illinois
7            numerator of the sales factor is the total fee or
8            other total remuneration from the person providing
9            the programming related to that broadcast
10            multiplied by the Illinois audience factor for
11            that broadcast.
12                (iv) In the case where film or radio
13            programming is provided by a taxpayer that is a
14            network or station to a customer for broadcast in
15            exchange for a fee or other remuneration from that
16            customer the broadcasting service is received at
17            the location of the office of the customer from
18            which the services were ordered in the regular
19            course of the customer's trade or business.
20            Accordingly, in such a case the revenue derived by
21            the taxpayer that is included in the taxpayer's
22            Illinois numerator of the sales factor is the
23            revenue from such customers who receive the
24            broadcasting service in Illinois.
25                (v) In the case where film or radio programming
26            is provided by a taxpayer that is not a network or

 

 

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1            station to another person for broadcasting in
2            exchange for a fee or other remuneration from that
3            person, the broadcasting service is received at
4            the location of the office of the customer from
5            which the services were ordered in the regular
6            course of the customer's trade or business.
7            Accordingly, in such a case the revenue derived by
8            the taxpayer that is included in the taxpayer's
9            Illinois numerator of the sales factor is the
10            revenue from such customers who receive the
11            broadcasting service in Illinois.
12        (B-8) For taxable years ending on or after December 31,
13    2013, gross receipts from winnings from pari-mutuel
14    wagering conducted at a wagering facility licensed under
15    the Illinois Horse Racing Act of 1975 or from winnings from
16    gambling games conducted on a riverboat or in a casino or
17    electronic gaming facility licensed under the Illinois
18    Gambling Act are in this State.
19        (C) For taxable years ending before December 31, 2008,
20    sales, other than sales governed by paragraphs (B), (B-1),
21    and (B-2), are in this State if:
22            (i) The income-producing activity is performed in
23        this State; or
24            (ii) The income-producing activity is performed
25        both within and without this State and a greater
26        proportion of the income-producing activity is

 

 

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1        performed within this State than without this State,
2        based on performance costs.
3        (C-5) For taxable years ending on or after December 31,
4    2008, sales, other than sales governed by paragraphs (B),
5    (B-1), (B-2), (B-5), and (B-7), are in this State if any of
6    the following criteria are met:
7            (i) Sales from the sale or lease of real property
8        are in this State if the property is located in this
9        State.
10            (ii) Sales from the lease or rental of tangible
11        personal property are in this State if the property is
12        located in this State during the rental period. Sales
13        from the lease or rental of tangible personal property
14        that is characteristically moving property, including,
15        but not limited to, motor vehicles, rolling stock,
16        aircraft, vessels, or mobile equipment are in this
17        State to the extent that the property is used in this
18        State.
19            (iii) In the case of interest, net gains (but not
20        less than zero) and other items of income from
21        intangible personal property, the sale is in this State
22        if:
23                (a) in the case of a taxpayer who is a dealer
24            in the item of intangible personal property within
25            the meaning of Section 475 of the Internal Revenue
26            Code, the income or gain is received from a

 

 

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1            customer in this State. For purposes of this
2            subparagraph, a customer is in this State if the
3            customer is an individual, trust or estate who is a
4            resident of this State and, for all other
5            customers, if the customer's commercial domicile
6            is in this State. Unless the dealer has actual
7            knowledge of the residence or commercial domicile
8            of a customer during a taxable year, the customer
9            shall be deemed to be a customer in this State if
10            the billing address of the customer, as shown in
11            the records of the dealer, is in this State; or
12                (b) in all other cases, if the
13            income-producing activity of the taxpayer is
14            performed in this State or, if the
15            income-producing activity of the taxpayer is
16            performed both within and without this State, if a
17            greater proportion of the income-producing
18            activity of the taxpayer is performed within this
19            State than in any other state, based on performance
20            costs.
21            (iv) Sales of services are in this State if the
22        services are received in this State. For the purposes
23        of this section, gross receipts from the performance of
24        services provided to a corporation, partnership, or
25        trust may only be attributed to a state where that
26        corporation, partnership, or trust has a fixed place of

 

 

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1        business. If the state where the services are received
2        is not readily determinable or is a state where the
3        corporation, partnership, or trust receiving the
4        service does not have a fixed place of business, the
5        services shall be deemed to be received at the location
6        of the office of the customer from which the services
7        were ordered in the regular course of the customer's
8        trade or business. If the ordering office cannot be
9        determined, the services shall be deemed to be received
10        at the office of the customer to which the services are
11        billed. If the taxpayer is not taxable in the state in
12        which the services are received, the sale must be
13        excluded from both the numerator and the denominator of
14        the sales factor. The Department shall adopt rules
15        prescribing where specific types of service are
16        received, including, but not limited to, publishing,
17        and utility service.
18        (D) For taxable years ending on or after December 31,
19    1995, the following items of income shall not be included
20    in the numerator or denominator of the sales factor:
21    dividends; amounts included under Section 78 of the
22    Internal Revenue Code; and Subpart F income as defined in
23    Section 952 of the Internal Revenue Code. No inference
24    shall be drawn from the enactment of this paragraph (D) in
25    construing this Section for taxable years ending before
26    December 31, 1995.

 

 

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1        (E) Paragraphs (B-1) and (B-2) shall apply to tax years
2    ending on or after December 31, 1999, provided that a
3    taxpayer may elect to apply the provisions of these
4    paragraphs to prior tax years. Such election shall be made
5    in the form and manner prescribed by the Department, shall
6    be irrevocable, and shall apply to all tax years; provided
7    that, if a taxpayer's Illinois income tax liability for any
8    tax year, as assessed under Section 903 prior to January 1,
9    1999, was computed in a manner contrary to the provisions
10    of paragraphs (B-1) or (B-2), no refund shall be payable to
11    the taxpayer for that tax year to the extent such refund is
12    the result of applying the provisions of paragraph (B-1) or
13    (B-2) retroactively. In the case of a unitary business
14    group, such election shall apply to all members of such
15    group for every tax year such group is in existence, but
16    shall not apply to any taxpayer for any period during which
17    that taxpayer is not a member of such group.
18    (b) Insurance companies.
19        (1) In general. Except as otherwise provided by
20    paragraph (2), business income of an insurance company for
21    a taxable year shall be apportioned to this State by
22    multiplying such income by a fraction, the numerator of
23    which is the direct premiums written for insurance upon
24    property or risk in this State, and the denominator of
25    which is the direct premiums written for insurance upon
26    property or risk everywhere. For purposes of this

 

 

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1    subsection, the term "direct premiums written" means the
2    total amount of direct premiums written, assessments and
3    annuity considerations as reported for the taxable year on
4    the annual statement filed by the company with the Illinois
5    Director of Insurance in the form approved by the National
6    Convention of Insurance Commissioners or such other form as
7    may be prescribed in lieu thereof.
8        (2) Reinsurance. If the principal source of premiums
9    written by an insurance company consists of premiums for
10    reinsurance accepted by it, the business income of such
11    company shall be apportioned to this State by multiplying
12    such income by a fraction, the numerator of which is the
13    sum of (i) direct premiums written for insurance upon
14    property or risk in this State, plus (ii) premiums written
15    for reinsurance accepted in respect of property or risk in
16    this State, and the denominator of which is the sum of
17    (iii) direct premiums written for insurance upon property
18    or risk everywhere, plus (iv) premiums written for
19    reinsurance accepted in respect of property or risk
20    everywhere. For purposes of this paragraph, premiums
21    written for reinsurance accepted in respect of property or
22    risk in this State, whether or not otherwise determinable,
23    may, at the election of the company, be determined on the
24    basis of the proportion which premiums written for
25    reinsurance accepted from companies commercially domiciled
26    in Illinois bears to premiums written for reinsurance

 

 

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1    accepted from all sources, or, alternatively, in the
2    proportion which the sum of the direct premiums written for
3    insurance upon property or risk in this State by each
4    ceding company from which reinsurance is accepted bears to
5    the sum of the total direct premiums written by each such
6    ceding company for the taxable year. The election made by a
7    company under this paragraph for its first taxable year
8    ending on or after December 31, 2011, shall be binding for
9    that company for that taxable year and for all subsequent
10    taxable years, and may be altered only with the written
11    permission of the Department, which shall not be
12    unreasonably withheld.
13    (c) Financial organizations.
14        (1) In general. For taxable years ending before
15    December 31, 2008, business income of a financial
16    organization shall be apportioned to this State by
17    multiplying such income by a fraction, the numerator of
18    which is its business income from sources within this
19    State, and the denominator of which is its business income
20    from all sources. For the purposes of this subsection, the
21    business income of a financial organization from sources
22    within this State is the sum of the amounts referred to in
23    subparagraphs (A) through (E) following, but excluding the
24    adjusted income of an international banking facility as
25    determined in paragraph (2):
26            (A) Fees, commissions or other compensation for

 

 

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1        financial services rendered within this State;
2            (B) Gross profits from trading in stocks, bonds or
3        other securities managed within this State;
4            (C) Dividends, and interest from Illinois
5        customers, which are received within this State;
6            (D) Interest charged to customers at places of
7        business maintained within this State for carrying
8        debit balances of margin accounts, without deduction
9        of any costs incurred in carrying such accounts; and
10            (E) Any other gross income resulting from the
11        operation as a financial organization within this
12        State. In computing the amounts referred to in
13        paragraphs (A) through (E) of this subsection, any
14        amount received by a member of an affiliated group
15        (determined under Section 1504(a) of the Internal
16        Revenue Code but without reference to whether any such
17        corporation is an "includible corporation" under
18        Section 1504(b) of the Internal Revenue Code) from
19        another member of such group shall be included only to
20        the extent such amount exceeds expenses of the
21        recipient directly related thereto.
22        (2) International Banking Facility. For taxable years
23    ending before December 31, 2008:
24            (A) Adjusted Income. The adjusted income of an
25        international banking facility is its income reduced
26        by the amount of the floor amount.

 

 

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1            (B) Floor Amount. The floor amount shall be the
2        amount, if any, determined by multiplying the income of
3        the international banking facility by a fraction, not
4        greater than one, which is determined as follows:
5                (i) The numerator shall be:
6                The average aggregate, determined on a
7            quarterly basis, of the financial organization's
8            loans to banks in foreign countries, to foreign
9            domiciled borrowers (except where secured
10            primarily by real estate) and to foreign
11            governments and other foreign official
12            institutions, as reported for its branches,
13            agencies and offices within the state on its
14            "Consolidated Report of Condition", Schedule A,
15            Lines 2.c., 5.b., and 7.a., which was filed with
16            the Federal Deposit Insurance Corporation and
17            other regulatory authorities, for the year 1980,
18            minus
19                The average aggregate, determined on a
20            quarterly basis, of such loans (other than loans of
21            an international banking facility), as reported by
22            the financial institution for its branches,
23            agencies and offices within the state, on the
24            corresponding Schedule and lines of the
25            Consolidated Report of Condition for the current
26            taxable year, provided, however, that in no case

 

 

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1            shall the amount determined in this clause (the
2            subtrahend) exceed the amount determined in the
3            preceding clause (the minuend); and
4                (ii) the denominator shall be the average
5            aggregate, determined on a quarterly basis, of the
6            international banking facility's loans to banks in
7            foreign countries, to foreign domiciled borrowers
8            (except where secured primarily by real estate)
9            and to foreign governments and other foreign
10            official institutions, which were recorded in its
11            financial accounts for the current taxable year.
12            (C) Change to Consolidated Report of Condition and
13        in Qualification. In the event the Consolidated Report
14        of Condition which is filed with the Federal Deposit
15        Insurance Corporation and other regulatory authorities
16        is altered so that the information required for
17        determining the floor amount is not found on Schedule
18        A, lines 2.c., 5.b. and 7.a., the financial institution
19        shall notify the Department and the Department may, by
20        regulations or otherwise, prescribe or authorize the
21        use of an alternative source for such information. The
22        financial institution shall also notify the Department
23        should its international banking facility fail to
24        qualify as such, in whole or in part, or should there
25        be any amendment or change to the Consolidated Report
26        of Condition, as originally filed, to the extent such

 

 

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1        amendment or change alters the information used in
2        determining the floor amount.
3        (3) For taxable years ending on or after December 31,
4    2008, the business income of a financial organization shall
5    be apportioned to this State by multiplying such income by
6    a fraction, the numerator of which is its gross receipts
7    from sources in this State or otherwise attributable to
8    this State's marketplace and the denominator of which is
9    its gross receipts everywhere during the taxable year.
10    "Gross receipts" for purposes of this subparagraph (3)
11    means gross income, including net taxable gain on
12    disposition of assets, including securities and money
13    market instruments, when derived from transactions and
14    activities in the regular course of the financial
15    organization's trade or business. The following examples
16    are illustrative:
17            (i) Receipts from the lease or rental of real or
18        tangible personal property are in this State if the
19        property is located in this State during the rental
20        period. Receipts from the lease or rental of tangible
21        personal property that is characteristically moving
22        property, including, but not limited to, motor
23        vehicles, rolling stock, aircraft, vessels, or mobile
24        equipment are from sources in this State to the extent
25        that the property is used in this State.
26            (ii) Interest income, commissions, fees, gains on

 

 

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1        disposition, and other receipts from assets in the
2        nature of loans that are secured primarily by real
3        estate or tangible personal property are from sources
4        in this State if the security is located in this State.
5            (iii) Interest income, commissions, fees, gains on
6        disposition, and other receipts from consumer loans
7        that are not secured by real or tangible personal
8        property are from sources in this State if the debtor
9        is a resident of this State.
10            (iv) Interest income, commissions, fees, gains on
11        disposition, and other receipts from commercial loans
12        and installment obligations that are not secured by
13        real or tangible personal property are from sources in
14        this State if the proceeds of the loan are to be
15        applied in this State. If it cannot be determined where
16        the funds are to be applied, the income and receipts
17        are from sources in this State if the office of the
18        borrower from which the loan was negotiated in the
19        regular course of business is located in this State. If
20        the location of this office cannot be determined, the
21        income and receipts shall be excluded from the
22        numerator and denominator of the sales factor.
23            (v) Interest income, fees, gains on disposition,
24        service charges, merchant discount income, and other
25        receipts from credit card receivables are from sources
26        in this State if the card charges are regularly billed

 

 

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1        to a customer in this State.
2            (vi) Receipts from the performance of services,
3        including, but not limited to, fiduciary, advisory,
4        and brokerage services, are in this State if the
5        services are received in this State within the meaning
6        of subparagraph (a)(3)(C-5)(iv) of this Section.
7            (vii) Receipts from the issuance of travelers
8        checks and money orders are from sources in this State
9        if the checks and money orders are issued from a
10        location within this State.
11            (viii) Receipts from investment assets and
12        activities and trading assets and activities are
13        included in the receipts factor as follows:
14                (1) Interest, dividends, net gains (but not
15            less than zero) and other income from investment
16            assets and activities from trading assets and
17            activities shall be included in the receipts
18            factor. Investment assets and activities and
19            trading assets and activities include but are not
20            limited to: investment securities; trading account
21            assets; federal funds; securities purchased and
22            sold under agreements to resell or repurchase;
23            options; futures contracts; forward contracts;
24            notional principal contracts such as swaps;
25            equities; and foreign currency transactions. With
26            respect to the investment and trading assets and

 

 

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1            activities described in subparagraphs (A) and (B)
2            of this paragraph, the receipts factor shall
3            include the amounts described in such
4            subparagraphs.
5                    (A) The receipts factor shall include the
6                amount by which interest from federal funds
7                sold and securities purchased under resale
8                agreements exceeds interest expense on federal
9                funds purchased and securities sold under
10                repurchase agreements.
11                    (B) The receipts factor shall include the
12                amount by which interest, dividends, gains and
13                other income from trading assets and
14                activities, including but not limited to
15                assets and activities in the matched book, in
16                the arbitrage book, and foreign currency
17                transactions, exceed amounts paid in lieu of
18                interest, amounts paid in lieu of dividends,
19                and losses from such assets and activities.
20                (2) The numerator of the receipts factor
21            includes interest, dividends, net gains (but not
22            less than zero), and other income from investment
23            assets and activities and from trading assets and
24            activities described in paragraph (1) of this
25            subsection that are attributable to this State.
26                    (A) The amount of interest, dividends, net

 

 

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1                gains (but not less than zero), and other
2                income from investment assets and activities
3                in the investment account to be attributed to
4                this State and included in the numerator is
5                determined by multiplying all such income from
6                such assets and activities by a fraction, the
7                numerator of which is the gross income from
8                such assets and activities which are properly
9                assigned to a fixed place of business of the
10                taxpayer within this State and the denominator
11                of which is the gross income from all such
12                assets and activities.
13                    (B) The amount of interest from federal
14                funds sold and purchased and from securities
15                purchased under resale agreements and
16                securities sold under repurchase agreements
17                attributable to this State and included in the
18                numerator is determined by multiplying the
19                amount described in subparagraph (A) of
20                paragraph (1) of this subsection from such
21                funds and such securities by a fraction, the
22                numerator of which is the gross income from
23                such funds and such securities which are
24                properly assigned to a fixed place of business
25                of the taxpayer within this State and the
26                denominator of which is the gross income from

 

 

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1                all such funds and such securities.
2                    (C) The amount of interest, dividends,
3                gains, and other income from trading assets and
4                activities, including but not limited to
5                assets and activities in the matched book, in
6                the arbitrage book and foreign currency
7                transactions (but excluding amounts described
8                in subparagraphs (A) or (B) of this paragraph),
9                attributable to this State and included in the
10                numerator is determined by multiplying the
11                amount described in subparagraph (B) of
12                paragraph (1) of this subsection by a fraction,
13                the numerator of which is the gross income from
14                such trading assets and activities which are
15                properly assigned to a fixed place of business
16                of the taxpayer within this State and the
17                denominator of which is the gross income from
18                all such assets and activities.
19                    (D) Properly assigned, for purposes of
20                this paragraph (2) of this subsection, means
21                the investment or trading asset or activity is
22                assigned to the fixed place of business with
23                which it has a preponderance of substantive
24                contacts. An investment or trading asset or
25                activity assigned by the taxpayer to a fixed
26                place of business without the State shall be

 

 

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1                presumed to have been properly assigned if:
2                        (i) the taxpayer has assigned, in the
3                    regular course of its business, such asset
4                    or activity on its records to a fixed place
5                    of business consistent with federal or
6                    state regulatory requirements;
7                        (ii) such assignment on its records is
8                    based upon substantive contacts of the
9                    asset or activity to such fixed place of
10                    business; and
11                        (iii) the taxpayer uses such records
12                    reflecting assignment of such assets or
13                    activities for the filing of all state and
14                    local tax returns for which an assignment
15                    of such assets or activities to a fixed
16                    place of business is required.
17                    (E) The presumption of proper assignment
18                of an investment or trading asset or activity
19                provided in subparagraph (D) of paragraph (2)
20                of this subsection may be rebutted upon a
21                showing by the Department, supported by a
22                preponderance of the evidence, that the
23                preponderance of substantive contacts
24                regarding such asset or activity did not occur
25                at the fixed place of business to which it was
26                assigned on the taxpayer's records. If the

 

 

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1                fixed place of business that has a
2                preponderance of substantive contacts cannot
3                be determined for an investment or trading
4                asset or activity to which the presumption in
5                subparagraph (D) of paragraph (2) of this
6                subsection does not apply or with respect to
7                which that presumption has been rebutted, that
8                asset or activity is properly assigned to the
9                state in which the taxpayer's commercial
10                domicile is located. For purposes of this
11                subparagraph (E), it shall be presumed,
12                subject to rebuttal, that taxpayer's
13                commercial domicile is in the state of the
14                United States or the District of Columbia to
15                which the greatest number of employees are
16                regularly connected with the management of the
17                investment or trading income or out of which
18                they are working, irrespective of where the
19                services of such employees are performed, as of
20                the last day of the taxable year.
21        (4) (Blank).
22        (5) (Blank).
23    (c-1) Federally regulated exchanges. For taxable years
24ending on or after December 31, 2012, business income of a
25federally regulated exchange shall, at the option of the
26federally regulated exchange, be apportioned to this State by

 

 

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1multiplying such income by a fraction, the numerator of which
2is its business income from sources within this State, and the
3denominator of which is its business income from all sources.
4For purposes of this subsection, the business income within
5this State of a federally regulated exchange is the sum of the
6following:
7        (1) Receipts attributable to transactions executed on
8    a physical trading floor if that physical trading floor is
9    located in this State.
10        (2) Receipts attributable to all other matching,
11    execution, or clearing transactions, including without
12    limitation receipts from the provision of matching,
13    execution, or clearing services to another entity,
14    multiplied by (i) for taxable years ending on or after
15    December 31, 2012 but before December 31, 2013, 63.77%; and
16    (ii) for taxable years ending on or after December 31,
17    2013, 27.54%.
18        (3) All other receipts not governed by subparagraphs
19    (1) or (2) of this subsection (c-1), to the extent the
20    receipts would be characterized as "sales in this State"
21    under item (3) of subsection (a) of this Section.
22    "Federally regulated exchange" means (i) a "registered
23entity" within the meaning of 7 U.S.C. Section 1a(40)(A), (B),
24or (C), (ii) an "exchange" or "clearing agency" within the
25meaning of 15 U.S.C. Section 78c (a)(1) or (23), (iii) any such
26entities regulated under any successor regulatory structure to

 

 

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1the foregoing, and (iv) all taxpayers who are members of the
2same unitary business group as a federally regulated exchange,
3determined without regard to the prohibition in Section
41501(a)(27) of this Act against including in a unitary business
5group taxpayers who are ordinarily required to apportion
6business income under different subsections of this Section;
7provided that this subparagraph (iv) shall apply only if 50% or
8more of the business receipts of the unitary business group
9determined by application of this subparagraph (iv) for the
10taxable year are attributable to the matching, execution, or
11clearing of transactions conducted by an entity described in
12subparagraph (i), (ii), or (iii) of this paragraph.
13    In no event shall the Illinois apportionment percentage
14computed in accordance with this subsection (c-1) for any
15taxpayer for any tax year be less than the Illinois
16apportionment percentage computed under this subsection (c-1)
17for that taxpayer for the first full tax year ending on or
18after December 31, 2013 for which this subsection (c-1) applied
19to the taxpayer.
20    (d) Transportation services. For taxable years ending
21before December 31, 2008, business income derived from
22furnishing transportation services shall be apportioned to
23this State in accordance with paragraphs (1) and (2):
24        (1) Such business income (other than that derived from
25    transportation by pipeline) shall be apportioned to this
26    State by multiplying such income by a fraction, the

 

 

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1    numerator of which is the revenue miles of the person in
2    this State, and the denominator of which is the revenue
3    miles of the person everywhere. For purposes of this
4    paragraph, a revenue mile is the transportation of 1
5    passenger or 1 net ton of freight the distance of 1 mile
6    for a consideration. Where a person is engaged in the
7    transportation of both passengers and freight, the
8    fraction above referred to shall be determined by means of
9    an average of the passenger revenue mile fraction and the
10    freight revenue mile fraction, weighted to reflect the
11    person's
12            (A) relative railway operating income from total
13        passenger and total freight service, as reported to the
14        Interstate Commerce Commission, 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        (2) Such business income derived from transportation
20    by pipeline shall be apportioned to this State by
21    multiplying such income by a fraction, the numerator of
22    which is the revenue miles of the person in this State, and
23    the denominator of which is the revenue miles of the person
24    everywhere. For the purposes of this paragraph, a revenue
25    mile is the transportation by pipeline of 1 barrel of oil,
26    1,000 cubic feet of gas, or of any specified quantity of

 

 

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1    any other substance, the distance of 1 mile for a
2    consideration.
3        (3) For taxable years ending on or after December 31,
4    2008, business income derived from providing
5    transportation services other than airline services shall
6    be apportioned to this State by using a fraction, (a) the
7    numerator of which shall be (i) all receipts from any
8    movement or shipment of people, goods, mail, oil, gas, or
9    any other substance (other than by airline) that both
10    originates and terminates in this State, plus (ii) that
11    portion of the person's gross receipts from movements or
12    shipments of people, goods, mail, oil, gas, or any other
13    substance (other than by airline) that originates in one
14    state or jurisdiction and terminates in another state or
15    jurisdiction, that is determined by the ratio that the
16    miles traveled in this State bears to total miles
17    everywhere and (b) the denominator of which shall be all
18    revenue derived from the movement or shipment of people,
19    goods, mail, oil, gas, or any other substance (other than
20    by airline). Where a taxpayer is engaged in the
21    transportation of both passengers and freight, the
22    fraction above referred to shall first be determined
23    separately for passenger miles and freight miles. Then an
24    average of the passenger miles fraction and the freight
25    miles fraction shall be weighted to reflect the taxpayer's:
26            (A) relative railway operating income from total

 

 

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1        passenger and total freight service, as reported to the
2        Surface Transportation Board, in the case of
3        transportation by railroad; and
4            (B) relative gross receipts from passenger and
5        freight transportation, in case of transportation
6        other than by railroad.
7        (4) For taxable years ending on or after December 31,
8    2008, business income derived from furnishing airline
9    transportation services shall be apportioned to this State
10    by multiplying such income by a fraction, the numerator of
11    which is the revenue miles of the person in this State, and
12    the denominator of which is the revenue miles of the person
13    everywhere. For purposes of this paragraph, a revenue mile
14    is the transportation of one passenger or one net ton of
15    freight the distance of one mile for a consideration. If a
16    person is engaged in the transportation of both passengers
17    and freight, the fraction above referred to shall be
18    determined by means of an average of the passenger revenue
19    mile fraction and the freight revenue mile fraction,
20    weighted to reflect the person's relative gross receipts
21    from passenger and freight airline transportation.
22    (e) Combined apportionment. Where 2 or more persons are
23engaged in a unitary business as described in subsection
24(a)(27) of Section 1501, a part of which is conducted in this
25State by one or more members of the group, the business income
26attributable to this State by any such member or members shall

 

 

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1be apportioned by means of the combined apportionment method.
2    (f) Alternative allocation. If the allocation and
3apportionment provisions of subsections (a) through (e) and of
4subsection (h) do not fairly represent the extent of a person's
5business activity in this State, the person may petition for,
6or the Director may, without a petition, permit or require, in
7respect of all or any part of the person's business activity,
8if reasonable:
9        (1) Separate accounting;
10        (2) The exclusion of any one or more factors;
11        (3) The inclusion of one or more additional factors
12    which will fairly represent the person's business
13    activities in this State; or
14        (4) The employment of any other method to effectuate an
15    equitable allocation and apportionment of the person's
16    business income.
17    (g) Cross reference. For allocation of business income by
18residents, see Section 301(a).
19    (h) For tax years ending on or after December 31, 1998, the
20apportionment factor of persons who apportion their business
21income to this State under subsection (a) shall be equal to:
22        (1) for tax years ending on or after December 31, 1998
23    and before December 31, 1999, 16 2/3% of the property
24    factor plus 16 2/3% of the payroll factor plus 66 2/3% of
25    the sales factor;
26        (2) for tax years ending on or after December 31, 1999

 

 

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1    and before December 31, 2000, 8 1/3% of the property factor
2    plus 8 1/3% of the payroll factor plus 83 1/3% of the sales
3    factor;
4        (3) for tax years ending on or after December 31, 2000,
5    the sales factor.
6If, in any tax year ending on or after December 31, 1998 and
7before December 31, 2000, the denominator of the payroll,
8property, or sales factor is zero, the apportionment factor
9computed in paragraph (1) or (2) of this subsection for that
10year shall be divided by an amount equal to 100% minus the
11percentage weight given to each factor whose denominator is
12equal to zero.
13(Source: P.A. 96-763, eff. 8-25-09; 97-507, eff. 8-23-11;
1497-636, eff. 6-1-12.)
 
15    (35 ILCS 5/710)  (from Ch. 120, par. 7-710)
16    Sec. 710. Withholding from lottery winnings.
17    (a) In General.
18        (1) Any person making a payment to a resident or
19    nonresident of winnings under the Illinois Lottery Law and
20    not required to withhold Illinois income tax from such
21    payment under Subsection (b) of Section 701 of this Act
22    because those winnings are not subject to Federal income
23    tax withholding, must withhold Illinois income tax from
24    such payment at a rate equal to the percentage tax rate for
25    individuals provided in subsection (b) of Section 201,

 

 

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1    provided that withholding is not required if such payment
2    of winnings is less than $1,000.
3        (2) Any person making a payment after December 31, 2013
4    to a resident or nonresident of winnings from pari-mutuel
5    wagering conducted at a wagering facility licensed under
6    the Illinois Horse Racing Act of 1975 or from gambling
7    games conducted on a riverboat or in a casino or electronic
8    gaming facility licensed under the Illinois Gambling Act
9    must withhold Illinois income tax from such payment at a
10    rate equal to the percentage tax rate for individuals
11    provided in subsection (b) of Section 201, provided that
12    the person making the payment is required to withhold under
13    Section 3402(q) of the Internal Revenue Code.
14    (b) Credit for taxes withheld. Any amount withheld under
15Subsection (a) shall be a credit against the Illinois income
16tax liability of the person to whom the payment of winnings was
17made for the taxable year in which that person incurred an
18Illinois income tax liability with respect to those winnings.
19(Source: P.A. 85-731.)
 
20    Section 90-23. The Property Tax Code is amended by adding
21Section 15-144 as follows:
 
22    (35 ILCS 200/15-144 new)
23    Sec. 15-144. Chicago Casino Development Authority. All
24property owned by the Chicago Casino Development Authority is

 

 

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1exempt. Any property owned by the Chicago Casino Development
2Authority and leased to any other entity is not exempt.
 
3    Section 90-24. The Illinois Municipal Code is amended by
4adding Section 8-10-2.6 as follows:
 
5    (65 ILCS 5/8-10-2.6 new)
6    Sec. 8-10-2.6. Chicago Casino Development Authority.
7Except as otherwise provided in the Chicago Casino Development
8Authority Act, this Division 10 applies to purchase orders and
9contracts relating to the Chicago Casino Development
10Authority.
 
11    Section 90-25. The Joliet Regional Port District Act is
12amended by changing Section 5.1 as follows:
 
13    (70 ILCS 1825/5.1)  (from Ch. 19, par. 255.1)
14    Sec. 5.1. Riverboat and casino gambling. Notwithstanding
15any other provision of this Act, the District may not regulate
16the operation, conduct, or navigation of any riverboat gambling
17casino licensed under the Illinois Riverboat Gambling Act, and
18the District may not license, tax, or otherwise levy any
19assessment of any kind on any riverboat gambling casino
20licensed under the Illinois Riverboat Gambling Act. The General
21Assembly declares that the powers to regulate the operation,
22conduct, and navigation of riverboat gambling casinos and to

 

 

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1license, tax, and levy assessments upon riverboat gambling
2casinos are exclusive powers of the State of Illinois and the
3Illinois Gaming Board as provided in the Illinois Riverboat
4Gambling Act.
5(Source: P.A. 87-1175.)
 
6    Section 90-30. The Consumer Installment Loan Act is amended
7by changing Section 12.5 as follows:
 
8    (205 ILCS 670/12.5)
9    Sec. 12.5. Limited purpose branch.
10    (a) Upon the written approval of the Director, a licensee
11may maintain a limited purpose branch for the sole purpose of
12making loans as permitted by this Act. A limited purpose branch
13may include an automatic loan machine. No other activity shall
14be conducted at the site, including but not limited to,
15accepting payments, servicing the accounts, or collections.
16    (b) The licensee must submit an application for a limited
17purpose branch to the Director on forms prescribed by the
18Director with an application fee of $300. The approval for the
19limited purpose branch must be renewed concurrently with the
20renewal of the licensee's license along with a renewal fee of
21$300 for the limited purpose branch.
22    (c) The books, accounts, records, and files of the limited
23purpose branch's transactions shall be maintained at the
24licensee's licensed location. The licensee shall notify the

 

 

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1Director of the licensed location at which the books, accounts,
2records, and files shall be maintained.
3    (d) The licensee shall prominently display at the limited
4purpose branch the address and telephone number of the
5licensee's licensed location.
6    (e) No other business shall be conducted at the site of the
7limited purpose branch unless authorized by the Director.
8    (f) The Director shall make and enforce reasonable rules
9for the conduct of a limited purpose branch.
10    (g) A limited purpose branch may not be located within
111,000 feet of a facility operated by an inter-track wagering
12licensee or an organization licensee subject to the Illinois
13Horse Racing Act of 1975, on a riverboat or in a casino subject
14to the Illinois Riverboat Gambling Act, or within 1,000 feet of
15the location at which the riverboat docks or within 1,000 feet
16of a casino.
17(Source: P.A. 90-437, eff. 1-1-98.)
 
18    Section 90-35. The Illinois Horse Racing Act of 1975 is
19amended by changing Sections 1.2, 3.11, 3.12, 6, 9, 15, 18, 19,
2020, 21, 24, 25, 26, 27, 30, 30.5, 31, 31.1, 32.1, 36, 40, and
2154.75 and by adding Sections 3.31, 3.32, 3.33, 3.35, 3.36,
2234.3, 39.2, and 56 as follows:
 
23    (230 ILCS 5/1.2)
24    Sec. 1.2. Legislative intent. This Act is intended to

 

 

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

 

 

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1gaming, "organization licensee" includes the authorization for
2an electronic gaming license under subsection (a) of Section 56
3of this Act.
4(Source: P.A. 79-1185.)
 
5    (230 ILCS 5/3.12)  (from Ch. 8, par. 37-3.12)
6    Sec. 3.12. Pari-mutuel system of wagering. "Pari-mutuel
7system of wagering" means a form of wagering on the outcome of
8horse races in which wagers are made in various denominations
9on a horse or horses and all wagers for each race are pooled
10and held by a licensee for distribution in a manner approved by
11the Board. "Pari-mutuel system of wagering" shall not include
12wagering on historic races. Wagers may be placed via any method
13or at any location authorized under this Act.
14(Source: P.A. 96-762, eff. 8-25-09.)
 
15    (230 ILCS 5/3.31 new)
16    Sec. 3.31. Adjusted gross receipts. "Adjusted gross
17receipts" means the gross receipts less winnings paid to
18wagerers.
 
19    (230 ILCS 5/3.32 new)
20    Sec. 3.32. Gross receipts. "Gross receipts" means the total
21amount of money exchanged for the purchase of chips, tokens, or
22electronic cards by riverboat or casino patrons or electronic
23gaming patrons.
 

 

 

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1    (230 ILCS 5/3.33 new)
2    Sec. 3.33. Electronic gaming. "Electronic gaming" means
3slot machine gambling, video game of chance gambling, or
4gambling with electronic gambling games as defined in the
5Illinois Gambling Act or defined by the Illinois Gaming Board
6that is conducted at a race track pursuant to an electronic
7gaming license.
 
8    (230 ILCS 5/3.35 new)
9    Sec. 3.35. Electronic gaming license. "Electronic gaming
10license" means a license issued by the Illinois Gaming Board
11under Section 7.6 of the Illinois Gambling Act authorizing
12electronic gaming at an electronic gaming facility.
 
13    (230 ILCS 5/3.36 new)
14    Sec. 3.36. Electronic gaming facility. "Electronic gaming
15facility" means that portion of an organization licensee's race
16track facility at which electronic gaming is conducted.
 
17    (230 ILCS 5/6)  (from Ch. 8, par. 37-6)
18    Sec. 6. Restrictions on Board members.
19    (a) No person shall be appointed a member of the Board or
20continue to be a member of the Board if the person or any
21member of their immediate family is a member of the Board of
22Directors, employee, or financially interested in any of the

 

 

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

 

 

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1    For the purposes of this subsection (c):
2    "Political" means any activity in support of or in
3connection with any campaign for State or local elective office
4or any political organization, but does not include activities
5(i) relating to the support or opposition of any executive,
6legislative, or administrative action (as those terms are
7defined in Section 2 of the Lobbyist Registration Act), (ii)
8relating to collective bargaining, or (iii) that are otherwise
9in furtherance of the person's official State duties or
10governmental and public service functions.
11    "Political organization" means a party, committee,
12association, fund, or other organization (whether or not
13incorporated) that is required to file a statement of
14organization with the State Board of Elections or county clerk
15under Section 9-3 of the Election Code, but only with regard to
16those activities that require filing with the State Board of
17Elections or county clerk.
18    (d) Board members and employees may not engage in
19communications or any activity that may cause or have the
20appearance of causing a conflict of interest. A conflict of
21interest exists if a situation influences or creates the
22appearance that it may influence judgment or performance of
23regulatory duties and responsibilities. This prohibition shall
24extend to any act identified by Board action that, in the
25judgment of the Board, could represent the potential for or the
26appearance of a conflict of interest.

 

 

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1    (e) Board members and employees may not accept any gift,
2gratuity, service, compensation, travel, lodging, or thing of
3value, with the exception of unsolicited items of an incidental
4nature, from any person, corporation, limited liability
5company, or entity doing business with the Board.
6    (f) A Board member or employee shall not use or attempt to
7use his or her official position to secure, or attempt to
8secure, any privilege, advantage, favor, or influence for
9himself or herself or others. No Board member or employee,
10within a period of one year immediately preceding nomination by
11the Governor or employment, shall have been employed or
12received compensation or fees for services from a person or
13entity, or its parent or affiliate, that has engaged in
14business with the Board, a licensee or a licensee under the
15Illinois Gambling Act. In addition, all Board members and
16employees are subject to the restrictions set forth in Section
175-45 of the State Officials and Employees Ethics Act.
18(Source: P.A. 89-16, eff. 5-30-95.)
 
19    (230 ILCS 5/9)  (from Ch. 8, par. 37-9)
20    Sec. 9. The Board shall have all powers necessary and
21proper to fully and effectively execute the provisions of this
22Act, including, but not limited to, the following:
23    (a) The Board is vested with jurisdiction and supervision
24over all race meetings in this State, over all licensees doing
25business in this State, over all occupation licensees, and over

 

 

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1all persons on the facilities of any licensee. Such
2jurisdiction shall include the power to issue licenses to the
3Illinois Department of Agriculture authorizing the pari-mutuel
4system of wagering on harness and Quarter Horse races held (1)
5at the Illinois State Fair in Sangamon County, and (2) at the
6DuQuoin State Fair in Perry County. The jurisdiction of the
7Board shall also include the power to issue licenses to county
8fairs which are eligible to receive funds pursuant to the
9Agricultural Fair Act, as now or hereafter amended, or their
10agents, authorizing the pari-mutuel system of wagering on horse
11races conducted at the county fairs receiving such licenses.
12Such licenses shall be governed by subsection (n) of this
13Section.
14    Upon application, the Board shall issue a license to the
15Illinois Department of Agriculture to conduct harness and
16Quarter Horse races at the Illinois State Fair and at the
17DuQuoin State Fairgrounds during the scheduled dates of each
18fair. The Board shall not require and the Department of
19Agriculture shall be exempt from the requirements of Sections
2015.3, 18 and 19, paragraphs (a)(2), (b), (c), (d), (e), (e-5),
21(e-10), (f), (g), and (h) of Section 20, and Sections 21, 24
22and 25. The Board and the Department of Agriculture may extend
23any or all of these exemptions to any contractor or agent
24engaged by the Department of Agriculture to conduct its race
25meetings when the Board determines that this would best serve
26the public interest and the interest of horse racing.

 

 

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1    Notwithstanding any provision of law to the contrary, it
2shall be lawful for any licensee to operate pari-mutuel
3wagering or contract with the Department of Agriculture to
4operate pari-mutuel wagering at the DuQuoin State Fairgrounds
5or for the Department to enter into contracts with a licensee,
6employ its owners, employees or agents and employ such other
7occupation licensees as the Department deems necessary in
8connection with race meetings and wagerings.
9    (b) The Board is vested with the full power to promulgate
10reasonable rules and regulations for the purpose of
11administering the provisions of this Act and to prescribe
12reasonable rules, regulations and conditions under which all
13horse race meetings or wagering in the State shall be
14conducted. Such reasonable rules and regulations are to provide
15for the prevention of practices detrimental to the public
16interest and to promote the best interests of horse racing and
17to impose penalties for violations thereof.
18    (c) The Board, and any person or persons to whom it
19delegates this power, is vested with the power to enter the
20facilities and other places of business of any licensee to
21determine whether there has been compliance with the provisions
22of this Act and its rules and regulations.
23    (d) The Board, and any person or persons to whom it
24delegates this power, is vested with the authority to
25investigate alleged violations of the provisions of this Act,
26its reasonable rules and regulations, orders and final

 

 

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

 

 

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1connection with any such testing laboratories and related
2facilities and all such tests.
3    (g) The Board may require that the records, including
4financial or other statements of any licensee or any person
5affiliated with the licensee who is involved directly or
6indirectly in the activities of any licensee as regulated under
7this Act to the extent that those financial or other statements
8relate to such activities be kept in such manner as prescribed
9by the Board, and that Board employees shall have access to
10those records during reasonable business hours. Within 120 days
11of the end of its fiscal year, each licensee shall transmit to
12the Board an audit of the financial transactions and condition
13of the licensee's total operations. All audits shall be
14conducted by certified public accountants. Each certified
15public accountant must be registered in the State of Illinois
16under the Illinois Public Accounting Act. The compensation for
17each certified public accountant shall be paid directly by the
18licensee to the certified public accountant. A licensee shall
19also submit any other financial or related information the
20Board deems necessary to effectively administer this Act and
21all rules, regulations, and final decisions promulgated under
22this Act.
23    (h) The Board shall name and appoint in the manner provided
24by the rules and regulations of the Board: an Executive
25Director; a State director of mutuels; State veterinarians and
26representatives to take saliva, blood, urine and other tests on

 

 

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1horses; licensing personnel; revenue inspectors; and State
2seasonal employees (excluding admission ticket sellers and
3mutuel clerks). All of those named and appointed as provided in
4this subsection shall serve during the pleasure of the Board;
5their compensation shall be determined by the Board and be paid
6in the same manner as other employees of the Board under this
7Act.
8    (i) The Board shall require that there shall be 3 stewards
9at each horse race meeting, at least 2 of whom shall be named
10and appointed by the Board. Stewards appointed or approved by
11the Board, while performing duties required by this Act or by
12the Board, shall be entitled to the same rights and immunities
13as granted to Board members and Board employees in Section 10
14of this Act.
15    (j) The Board may discharge any Board employee who fails or
16refuses for any reason to comply with the rules and regulations
17of the Board, or who, in the opinion of the Board, is guilty of
18fraud, dishonesty or who is proven to be incompetent. The Board
19shall have no right or power to determine who shall be
20officers, directors or employees of any licensee, or their
21salaries except the Board may, by rule, require that all or any
22officials or employees in charge of or whose duties relate to
23the actual running of races be approved by the Board.
24    (k) The Board is vested with the power to appoint delegates
25to execute any of the powers granted to it under this Section
26for the purpose of administering this Act and any rules or

 

 

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1regulations promulgated in accordance with this Act.
2    (l) The Board is vested with the power to impose civil
3penalties of up to $5,000 against an individual and up to
4$10,000 against a licensee for each violation of any provision
5of this Act, any rules adopted by the Board, any order of the
6Board or any other action which, in the Board's discretion, is
7a detriment or impediment to horse racing or wagering.
8Beginning on the date when any organization licensee begins
9conducting electronic gaming pursuant to an electronic gaming
10license issued under the Illinois Gambling Act, the power
11granted to the Board pursuant to this subsection (l) shall
12authorize the Board to impose penalties of up to $10,000
13against an individual and up to $25,000 against a licensee. All
14such civil penalties shall be deposited into the Horse Racing
15Fund.
16    (m) The Board is vested with the power to prescribe a form
17to be used by licensees as an application for employment for
18employees of each licensee.
19    (n) The Board shall have the power to issue a license to
20any county fair, or its agent, authorizing the conduct of the
21pari-mutuel system of wagering