State of Illinois
91st General Assembly
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[ Senate Amendment 001 ]

91_SB1431

 
                                               LRB9112520REdv

 1        AN   ACT  concerning  corporate  accountability  for  tax
 2    expenditures.

 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 Accountability for Tax Expenditures 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-                LRB9112520REdv
 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-                LRB9112520REdv
 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,  2001,  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-                LRB9112520REdv
 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, 2001, 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-                LRB9112520REdv
 1        administration.
 2        (b)  Beginning  April  1,  2001   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, 2001 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-compliant  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-                LRB9112520REdv
 1    development.
 2        (a)  On or  before  April  1,  2001,  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-                LRB9112520REdv
 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-                LRB9112520REdv
 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, 2001, 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, 2002 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-                LRB9112520REdv
 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-               LRB9112520REdv
 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,  2002  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-               LRB9112520REdv
 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-               LRB9112520REdv
 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-               LRB9112520REdv
 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-               LRB9112520REdv
 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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