State of Illinois
91st General Assembly
Legislation

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91_HB2259

 
                                               LRB9105205PTdv

 1        AN  ACT  concerning  corporate  welfare  disclosure   and
 2    taxpayer protection.

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

 5        Section 1.  Short title.  This Act may be  cited  as  the
 6    Corporate Welfare Disclosure and Taxpayer Protection Act.

 7        Section 5.  Definitions.  In this Act:
 8        "Development   assistance"   means  any  form  of  public
 9    assistance,   including   both   on-budget   and   off-budget
10    assistance, including tax expenditures, made for the  purpose
11    of  stimulating  economic development of a given corporation,
12    industry, geographic jurisdiction, or  other  subset  of  the
13    State's  economy,  including  but  not  limited to industrial
14    development bonds, training grants, loans,  loan  guarantees,
15    enterprise zones, empowerment zones, tax increment financing,
16    grants,  fee  waivers,  land  price subsidies, infrastructure
17    whose principal beneficiary is a single business  or  defined
18    group  of  businesses  at  the  time it is built or improved,
19    matching  funds,  tax  abatements,  tax  credits,   and   tax
20    discounts of every kind, including corporate income, personal
21    income,  sales,  use, raw materials, job creation, industrial
22    investment,   excise,   utility,    inventory,    accelerated
23    depreciation,  and  research  and development tax credits and
24    discounts.
25        "Granting body" means any public entity within the State,
26    including    local    governments,    regional    development
27    organizations, State and local public corporations, the State
28    government, and any State department or agency that  provides
29    development  assistance,  including  but  not  limited to the
30    Department of Commerce and Community Affairs,  Department  of
31    Employment  Security,  workforce development boards, economic
 
                            -2-                LRB9105205PTdv
 1    development commissions, industrial development  authorities,
 2    regional development authorities, and finance authorities.
 3        "Date of assistance" means the date upon which a granting
 4    body   transmits   the  first  dollar  value  of  development
 5    assistance to a recipient corporation.
 6        "Property-taxing entity" means every entity in the  State
 7    that levies taxes upon real property.
 8        "Corporate  parent"  means  any  person  or legal entity,
 9    organization,  business,  partnership,  group,  or  corporate
10    entity  recognized  by  law,  or  combination  thereof,  that
11    possesses, owns, or controls an interest greater than 50%  of
12    the recipient corporation.
13        "Small   Businesses"   means   those  corporations  whose
14    corporate parents, and  all  subsidiaries  thereof,  employed
15    fewer than an average of 20 full-time equivalent employees or
16    that had gross receipts of less than $1,000,000 in all United
17    States  jurisdictions  during  the  calendar  year  for which
18    disclosure is required.
19        "In effect"  refers  to  any  calendar  year  within  the
20    duration  of  the  development  assistance, including but not
21    limited to the duration of  any  loan,  loan  guarantee,  tax
22    credit  or tax credit carryforward, property tax reduction or
23    abatement, or tax increment financing. For one-time forms  of
24    development   assistance   such  as  grants  and  land  price
25    subsidies, "in effect" refers to a period of not less than  5
26    years from the date of assistance.
27        "Value of assistance" means the face value of any form of
28    development assistance, such as a bond amount.
29        "Specific  project  site" means that distinct operational
30    unit to which any development assistance is applied.
31        "Full-time job" means a job in  which  the  new  employee
32    works  for the recipient corporation at a rate of at least 35
33    hours per week.
34        "Part-time job" means a job in  which  the  new  employee
 
                            -3-                LRB9105205PTdv
 1    works for the recipient corporation at a rate of less than 35
 2    hours per week.
 3        "Temporary  job" means a job in which the new employee is
 4    hired for a specific duration of time or season.

 5        Section 10.  Disclosure of State tax expenditures.
 6        (a)  Beginning July 1,  2000,  and  for  each  succeeding
 7    year,  the Department of Revenue shall provide a detailed tax
 8    expenditure budget to  the  General  Assembly,  derived  from
 9    State  income tax filings, or other relevant filings, for the
10    previous calendar year. The disclosure report shall  provide,
11    but not be limited to, the following data:
12             (1)  The  dollar  amount of tax expenditures made by
13        the State, in the form of uncollected revenues, for  each
14        individual  tax  credit  provided by the State, including
15        credits for the wages  of  certain  qualified  employees,
16        enterprise   zones,   empowerment  zones,  tax  increment
17        financing, grants, matching funds,  tax  abatements,  and
18        tax  credits  and  tax discounts of every kind, including
19        corporate  income,  personal  income,  sales,  use,   raw
20        materials,  job  creation, industrial investment, excise,
21        utility,   inventory,   accelerated   depreciation,   and
22        research and development tax credits or discounts.
23             (2)  For each of the  tax  expenditures,  except  as
24        specified in item (3), an itemization of the name of each
25        individual  corporate taxpayer that claimed the credit of
26        any value equal  to  or  greater  than  $5,000,  and  the
27        specific  dollar amount credited to the corporation's tax
28        liability under that credit for that year.
29             (3)  Credits claimed by individual  corporations  of
30        less  than  $5,000  shall  not be itemized as required in
31        item (2).  Instead, in reporting  credits  for  each  tax
32        expenditure,  the  Department  of Revenue shall aggregate
33        all claims of less than  $5,000  and  report  them  as  a
 
                            -4-                LRB9105205PTdv
 1        single  non-specified group, with the number of claimants
 2        stated.
 3        (b)  All data produced by the Department of Revenue   and
 4    received  by the General Assembly in compliance with this Act
 5    shall be fully subject to the Freedom of Information Act.

 6        Section 15.  Disclosure of property  tax  reductions  and
 7    abatements.
 8        (a)  On  or before April 1, 2000, the State Department of
 9    Revenue shall promulgate a standardized  disclosure  registry
10    for  use  by  all  property-taxing  entities.  The form shall
11    require, but not be limited to, the following data:
12             (1)  The name of the property owner.
13             (2)  The address and description of the property.
14             (3)  The date upon which any individual property tax
15        reduction or abatement first took effect.
16             (4)  The date upon which any individual property tax
17        reduction or abatement is scheduled to expire.
18             (5)  The  rate  or  schedule  of   each   individual
19        property  tax  reduction  or  abatement  for  the  period
20        between  the  date  it  took  effect  and  the date it is
21        scheduled to expire.
22             (6)  The entity's aggregate foregone revenue for the
23        calendar year as a result of each property tax  reduction
24        or abatement.
25             (7)  A compilation and summary of the entity's total
26        foregone   revenue  as  a  result  of  all  property  tax
27        reductions or abatements, including a summary of foregone
28        revenue for each kind of reduction or abatement.
29             (8)  The respective shares of the entity's  property
30        tax  revenues  in  the  reported  year  that went to each
31        designated public agency, including but  not  limited  to
32        school  boards,  general  funds,  public safety agencies,
33        fire   departments,   park   districts,    and    general
 
                            -5-                LRB9105205PTdv
 1        administration.
 2        (b)  Beginning   April   1,   2000   and  for  each  year
 3    thereafter, every property-taxing entity in the  State  shall
 4    employ  this  standardized  registry  to  report to the State
 5    Department  of  Revenue  all  property  tax   reductions   or
 6    abatements  which  had  effect  during  the previous calendar
 7    year.
 8        (c)  The Department of Revenue shall, by June 1, 2000 and
 9    each year thereafter, compile and publish all data in all  of
10    the  disclosure  registries  in  both  written and electronic
11    form.
12        (d)  If a property-taxing entity  fails  to  comply  with
13    subsection  (b),  the  Department of Revenue shall, within 10
14    working days of the  April  1  filing  deadline,  notify  the
15    Department of Commerce and Community Affairs of that failure.
16    Upon  receipt  of  the notice, the Department of Commerce and
17    Community Affairs shall suspend within 33  working  days  any
18    current  development  assistance activities under its control
19    in the property-taxing entity's jurisdiction,  and  shall  be
20    prohibited from completing any current development assistance
21    or   providing  any  future  development  assistance  in  the
22    non-complaint jurisdiction until it receives proof  from  the
23    Department  of  Revenue  that  the property taxing entity has
24    complied with subsection (b).
25        (e)  If any of the  State's  various  agencies  fails  to
26    enforce  this  Section,  any  person  who filed an income tax
27    return with the State in the calendar year prior to the  year
28    in  dispute shall have standing to sue to compel the State to
29    enforce this Section.
30        (f)  All data generated in  compliance  with  subsections
31    (a)  and  (b) are fully subject to the Freedom of Information
32    Act.

33        Section  20.  Standardized  applications  for   on-budget
 
                            -6-                LRB9105205PTdv
 1    development.
 2        (a)  On  or  before  April  1,  2000,  the  Department of
 3    Commerce   and   Community   Affairs   shall   promulgate   a
 4    standardized  application  form  for  on-budget   development
 5    assistance  for  use  by  all granting bodies. The form shall
 6    require, but not be limited to, the following data:
 7             (1)  An application tracking number that is specific
 8        to both the granting agency and to each application.
 9             (2)  The name, street and mailing  addresses,  phone
10        number, and chief officer of the granting body.
11             (3)  The  name,  street and mailing addresses, phone
12        number, and chief officer of the corporate parent of  the
13        applicant corporation.
14             (4)  The  name,  street and mailing addresses, phone
15        number, 4-digit SIC number,  and  chief  officer  of  the
16        applicant  corporation  at  the specific project site for
17        which development assistance is sought.
18             (5)  The applicant  corporation's  total  number  of
19        employees at the specific project site on the date of the
20        application,  broken  down  by  full-time, part-time, and
21        temporary.
22             (6)  The total number of employees in the  State  of
23        the  applicant  corporation's  corporate  parent, and all
24        subsidiaries thereof,  as  of  December  1  of  the  year
25        preceding   the  date  of  application,  broken  down  by
26        full-time, part-time, and temporary;
27             (7)  The kind of development assistance and value of
28        assistance being applied for.
29             (8)  The number of new jobs to  be  created  by  the
30        development   assistance,   broken   down  by  full-time,
31        part-time, and temporary.
32             (9)  The average hourly wage to be paid  within  one
33        year  of  hiring  to  the  new  employees, broken down by
34        number of full-time, part-time, and temporary  employees,
 
                            -7-                LRB9105205PTdv
 1        and  broken  down by wage bands as follows: $6 or less an
 2        hour, $6.01 to $7 an hour, $7.01 to $8 an hour, $8.01  to
 3        $9  an hour, $9.01 to $10 an hour, $10.01 to $11 an hour,
 4        $11.01 to $12 an hour, $12.01 to $13 an hour,  $13.01  to
 5        $14 an hour, and $14.01 or more per hour.
 6             (10)  For  applicant  project  sites  located  in  a
 7        Metropolitan  Statistical  Area,  as  defined by the U.S.
 8        Census  Bureau,  the  average   hourly   wage   paid   to
 9        non-managerial  employees  in the applicant's industry in
10        the State, as most recently provided by the  U.S.  Bureau
11        of  Labor  Statistics  to  the  2  or  3-digit SIC number
12        specification, as available.
13             (11)  For applicant project sites located outside of
14        Metropolitan Statistical Areas, the average  weekly  wage
15        paid in the county, as most recently reported by the U.S.
16        Department  of  Commerce  in its County Business Patterns
17        reports.
18             (12)  The  nature  of  employer-paid   health   care
19        coverage  to  be provided within 90 days of hiring to the
20        employees filling the new jobs, including any costs to be
21        borne by the new employees.
22             (13)  A list  of  all  other  forms  of  development
23        assistance  the  applicant corporation is seeking for the
24        specific project site, and the name of each granting body
25        from which that development assistance is being sought.
26             (14)  A narrative, if necessary, describing how  the
27        applicant's  use of the development assistance may reduce
28        employment at any site in any United States  jurisdiction
29        controlled  by the applicant corporation or its corporate
30        parent, including but  not  limited  to  events  such  as
31        automation,  consolidation,  merger, acquisition, product
32        line   movement,   business   activity    movement,    or
33        restructuring  by either the applicant corporation or its
34        corporate parent.
 
                            -8-                LRB9105205PTdv
 1             (15)  Individual   certifications   by   the   chief
 2        officers  of  both  the  applicant  corporation  and  the
 3        granting body as to  the  accuracy  of  the  application,
 4        under penalty of perjury.
 5        (b)  Beginning  April 1, 2000, every granting body in the
 6    State, jointly with applicant corporations,  shall  fill  out
 7    the  standardized  application  form  as  prescribed  in this
 8    Section each  time  a  corporation  applies  for  development
 9    assistance.

10        Section 25. On-budget development assistance disclosure.
11        (a)  Beginning February 1, 2001 and each year thereafter,
12    every  granting  body  in  the  State  shall  submit  to  the
13    Department  of  Commerce  and Community Affairs copies of all
14    the   standardized   applications   forms   for   development
15    assistance that it has  received  in  the  previous  calendar
16    year.  Upon  each  form,  the  granting  body shall designate
17    whether the development assistance is pending, was  approved,
18    or  was  not  approved,  and for those applications that were
19    approved, the date of assistance if the  date  of  assistance
20    occurred in the previous calendar year.
21        (b)  For  those  applications  that were approved but for
22    which the date of  assistance  did  not  occur  in  the  same
23    calendar  year,  each  granting body shall report in its next
24    subsequent  February  1  annual  report  to  the   Department
25    relevant dates of assistance.
26        (c)  For each development assistance application that was
27    approved,  and  for which the date of assistance has occurred
28    in a reporting year, each granting agency shall submit to the
29    Department of  Commerce  and  Community  Affairs  a  progress
30    report  that shall include, but not limited to, the following
31    data:
32             (1)  The application tracking number.
33             (2)  The name, street and mailing  addresses,  phone
 
                            -9-                LRB9105205PTdv
 1        number, and chief officer of the granting body.
 2             (3)  The  name,  street and mailing addresses, phone
 3        number, 4-digit SIC number,  and  chief  officer  of  the
 4        corporation  at  the  specific project site for which the
 5        development assistance was approved.
 6             (4)  The kind of development assistance and value of
 7        assistance that was approved;
 8             (5)  The applicant's total level  of  employment  at
 9        the  specific project site on the date of the application
10        and the applicant's total  level  of  employment  at  the
11        specific  project  site on the date of the report, broken
12        down  by  full-time,  part-time,  and  temporary,  and  a
13        computation of the gain or loss in each category.
14             (6)  The  number   of   new   jobs   the   applicant
15        corporation stated in its application would be created by
16        the  development  assistance,  broken  down by full-time,
17        part-time, and temporary.
18             (7)  The total level of employment in the  State  of
19        the  applicant's  corporate  parent, and all subsidiaries
20        thereof, as of December 31 of the year preceding the date
21        of application and the total level of employment  in  the
22        State  of  the  applicant's  corporate  parent,  and  all
23        subsidiaries  thereof,  as of each December 31 up through
24        the reporting year, broken down by full-time,  part-time,
25        and  temporary,  and  a  statement of the gain or loss in
26        each category from the earliest reported year to the most
27        recent;
28             (8)  The average hourly wage paid as of December  31
29        of  the  reporting year to employees filling the new jobs
30        at the specific project site, broken down  by  full-time,
31        part-time, and temporary.
32             (9)  The   nature   of   employer-paid  health  care
33        coverage being provided within 90 days of hiring  to  the
34        employees filling the new jobs, including any costs being
 
                            -10-               LRB9105205PTdv
 1        borne by the new employees.
 2             (10)  A  narrative, if necessary, describing how the
 3        recipient corporation's use of the development assistance
 4        during the reporting year has reduced employment  at  any
 5        site  in any United States jurisdiction controlled by the
 6        applicant or its  corporate  parent,  including  but  not
 7        limited  to  events  such  as  automation, consolidation,
 8        merger,  acquisition,  product  line  movement,  business
 9        activity  movement,  or  restructuring  by   either   the
10        applicant or its corporate parent.
11             (11)  Signed  individual certifications by the chief
12        officers  of  both  the  applicant  corporation  and  the
13        granting body as to the accuracy of the progress  report,
14        under penalty of perjury.
15        (d)  The granting body and the Department of Commerce and
16    Community  Affairs  all  have full investigative authority to
17    verify the applicant's progress report  data,  including  but
18    not  limited  to  inspection of the specific project site and
19    analysis of tax and payroll records.
20        (e)  By  June  1,  2001  and  by  June  1  of  each  year
21    thereafter, the Department of Commerce and Community  Affairs
22    of  shall  compile  and  publish  all  data  in  all  of  the
23    development  assistance  progress reports in both written and
24    electronic form.
25        (f)  Every    aspect    all    development     assistance
26    applications,   progress   reports,  and  the  Department  of
27    Commerce and Community Affairs' compilation  of  applications
28    and progress reports shall be fully subject to the Freedom of
29    Information Act.
30        (g)  If  a granting body fails to comply with subsections
31    (a) through (c), the Department  of  Commerce  and  Community
32    Affairs  shall,  within  10  working  days  of the February 1
33    filing deadline, suspend any current  development  assistance
34    activities  under its control in the body's jurisdiction, and
 
                            -11-               LRB9105205PTdv
 1    shall be prohibited  from  proceeding  with  any  current  or
 2    future development assistance activities under its control in
 3    the  granting  body's  jurisdiction,  until it receives proof
 4    that the negligent granting body or recipient corporation has
 5    complied with this Act.

 6        Section 30.  Job creation and job quality standards.
 7        (a)  In considering development assistance  applications,
 8    all  granting  bodies shall perform 2 analyses concerning the
 9    projected wages and benefits. Specifically:
10             (1)  In    considering    development     assistance
11        applications,  all  granting  bodies  shall  compare  the
12        aggregate  projected  wage with existing wages. To derive
13        the aggregate projected wage,  the  granting  body  shall
14        compute  the  weighted  hourly  average  wage for all new
15        employees, including full-time, part-time, and  temporary
16        employees.  If  the aggregate projected wage is less than
17        85% of existing wages, the application shall  be  denied.
18        For  small businesses, if the aggregate projected wage is
19        less than 75% of existing wages, the application shall be
20        denied.
21             (2)  In    considering    development     assistance
22        applications,  all granting bodies shall perform a second
23        wage computation to consider the  value  of  health  care
24        coverage   provided   to   full-time  employees.  If  the
25        applicant  corporation  is  not  providing  health   care
26        coverage  to full-time employees, the granting body shall
27        subtract $1.50 an hour from the projected  wage.  If  the
28        recipient  corporation projects some health care costs to
29        be borne by the new  full-time  employees,  the  granting
30        body shall, based on data from the applicant corporation,
31        estimate the hourly cost to the new full-time employee of
32        those  costs  and subtract that amount from the projected
33        wage. If the amount resulting  from  the  subtraction  is
 
                            -12-               LRB9105205PTdv
 1        less than 80% of existing wages, the application shall be
 2        denied.   For  small  businesses, if the amount resulting
 3        from the subtraction is less than 70% of existing  wages,
 4        the application shall be denied.
 5        (b)  Granting  bodies  shall  perform a third eligibility
 6    analysis. In considering development assistance applications,
 7    all granting bodies shall divide the value of  assistance  by
 8    the  number of projected full-time jobs. If the resulting sum
 9    exceeds $35,000, the application shall be denied.
10        (c)  A granting body's requirement under this Section may
11    be waived in a bona fide collective bargaining agreement that
12    covers  employees  at  the  specific  project  site  of   the
13    applicant  corporation,  but only if the waiver is explicitly
14    set forth in the collective bargaining agreement in clear and
15    unambiguous terms. Unilateral  implementation  of  terms  and
16    conditions  of  employment  by  either  party to a collective
17    bargaining agreement shall not constitute, or  be  permitted,
18    as a waiver.

19        Section 35.  Recapture.
20        (a)  Recipient corporations are required to achieve their
21    job creation and wage and benefit goals within 2 years of the
22    date  of assistance. They are also required to maintain their
23    wage and benefit goals as long as the benefit is  in  effect.
24    Corporate  parents  of recipient corporations are required to
25    maintain at least 90% of their original State employment.
26        (b)  Granting bodies shall within 10 working  days  after
27    the  second anniversary of the date of assistance, fill out a
28    standardized progress report and  the  recipient  corporation
29    shall  sign  it  and  certify  its  accuracy under penalty of
30    perjury. This second anniversary  progress  report  shall  be
31    filed  by  the  granting body with the Department of Commerce
32    and Community Affairs along with  the  granting  body's  next
33    annual filing of progress reports.
 
                            -13-               LRB9105205PTdv
 1        (c)  The  granting  body  shall  indicate  on this second
 2    anniversary progress report whether the recipient corporation
 3    has achieved its job creation and wage and benefit goals, and
 4    whether the corporate parent has maintained 90% of its  State
 5    employment.
 6        (d)  On  all  subsequent  annual  progress  reports,  the
 7    granting  body  shall  indicate  whether or not the recipient
 8    corporation is still in compliance with its job creation  and
 9    wage  and  benefit goals, and whether the corporate parent is
10    still in compliance with  its  State  employment  maintenance
11    requirement.
12        (e)  If  on  any progress report occasion, beginning with
13    the second anniversary progress report, a granting body finds
14    that  a  recipient  corporation  has  not  achieved  its  job
15    creation or wage or benefit goals, or  the  corporate  parent
16    has  not  maintained 90% of its State employment the granting
17    body  must,  within  10  working  days,  file  a  finding  of
18    development assistance default with the State  Department  of
19    and the recipient corporation.
20        (f)  If  a  recipient corporation defaults on development
21    assistance, it must  pay  back  to  the  granting  body  that
22    fraction  of  the  development assistance that accrued to its
23    benefit for the calendar year in which the default  occurred.
24    For  one  time forms of development assistance such as grants
25    or land price discounts, a defaulting  recipient  corporation
26    must  pay back to the granting body one-fifth of the value of
27    assistance.  Remittance  of  the  payback  by  the  recipient
28    corporation to the granting body shall take place  within  60
29    calendar  days  of  the delivery of the default notice to the
30    recipient corporation.
31        (g)  If a recipient corporation defaults  on  development
32    assistance,  in  3  consecutive  calendar years, the granting
33    body shall declare the development assistance void, and shall
34    so notify the Department of Commerce  and  Community  Affairs
 
                            -14-               LRB9105205PTdv
 1    and  the  recipient  corporation.  Upon this declaration, the
 2    recipient corporation must pay  back to the granting body all
 3    remaining value of the  development  assistance  it  has  not
 4    already  paid  back.   Remittance  of the void payback by the
 5    recipient corporation to the granting body shall  take  place
 6    within 180 calendar days of the delivery of the notice to the
 7    recipient corporation.
 8        (h)  Every  aspect  of all development assistance default
 9    notices, recapture  remittances,  associated  correspondence,
10    and related proceedings shall be fully subject to the Freedom
11    of Information Act.
12        (i)  If  a  granting  body fails to enforce this Section,
13    any person who to the State in the calendar year prior to the
14    year in  dispute,  or  any  organization  representing  those
15    taxpayers, is entitled to bring a civil action in the circuit
16    court  to  compel  enforcement  under this Section. The court
17    shall  award  to  any  prevailing   taxpayer   plaintiff   or
18    organizational  plaintiff,  reasonable  attorney's  fees  and
19    actual incurred costs in pursuing the enforcement action.

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