101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB5433

 

Introduced , by Rep. Tony McCombie - Grant Wehrli - Deanne M. Mazzochi - Amy Grant, Lindsay Parkhurst, et al.

 

SYNOPSIS AS INTRODUCED:
 
New Act
35 ILCS 5/704A

    Creates the Industrial New Jobs Training Act. Provides that community college may enter into an agreement with an employer in which the employer provides certain education and job-training services. Provides that the program shall be funded by: (1) a new jobs credit from withholding to be received or derived from new employment resulting from the project; (2) tuition, student fees, or special charges fixed by the Board to defray program costs in whole or in part; or(3) a guarantee of payments to be received under paragraph (1) or (2). Provides that the community college may issue certificates for funding of the program. Amends the Illinois Income Tax Act to make conforming changes.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the
5Industrial New Jobs Training Act.
 
6    Section 5. Definitions.
7    "Board" means the board of trustees of a community college
8in the State.
9    "Department" means the Department of Revenue.
10    "Program services" means, but is not limited to, the
11following:
12        (1) new jobs training;
13        (2) adult basic education and job-related instruction;
14        (3) career and technical skill-assessment services and
15    testing;
16        (4) training facilities, equipment, materials, and
17    supplies;
18        (5) on-the-job training;
19        (6) administrative expenses;
20        (7) subcontracted services with institutions governed
21    by the Board, private colleges or universities, or other
22    federal, State, or local agencies; and
23        (8) costs associated with the issuance of

 

 

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1    certificates.
2    "Project" means a training arrangement that is the subject
3of an agreement between the community college and an employer
4to provide program services.
 
5    Section 10. Agreement.
6    (a) A community college may enter into an agreement with an
7employer to establish a project. If an agreement is entered
8into, the community college and the employer shall notify the
9Department as soon as possible. An agreement shall provide for
10the costs of program services, including deferred costs, which
11may be paid from one or a combination of the following sources:
12        (1) a new jobs credit from withholding to be received
13    or derived from new employment resulting from the project;
14        (2) tuition, student fees, or special charges fixed by
15    the Board to defray program costs in whole or in part; or
16        (3) a guarantee of payments to be received under
17    paragraph (1) or (2).
18    (b) Payment of program costs shall not be deferred for a
19period longer than 10 years from the date of commencement of
20the project.
21    (c) Costs of on-the-job training for employees shall not
22exceed 50% of the annual gross payroll costs for up to one year
23of the new jobs. For purposes of this subsection, "gross
24payroll" means the gross wages, salaries, and benefits for the
25jobs in training in the project.
 

 

 

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1    Section 15. New jobs credit from withholding. If an
2agreement provides that all or part of program costs are to be
3met by receipt of new jobs credit from withholding, it shall be
4done as follows:
5        (1) The new jobs credit from withholding shall be based
6    upon the wages paid to the employees in the new jobs.
7        (2) An amount equal to 1.5% of the gross wages paid by
8    the employer to each employee participating in a project
9    shall be credited from the payment made by an employer
10    pursuant to Article 7 of the Illinois Income Tax Act. The
11    employer shall remit the amount of the credit quarterly in
12    the same manner as withholding payments are reported to the
13    Department, and the credit shall be deposited into the
14    Industrial New Jobs Training Fund, a special Fund created
15    in the State treasury. Moneys in the Industrial New Jobs
16    Training Fund shall be allocated to the community college
17    to be used to pay the principal of and interest on
18    certificates issued by the community college to finance or
19    refinance, in whole or in part, the project. When the
20    principal and interest on the certificates have been paid,
21    the employer credits shall cease, and any money received
22    after the certificates have been paid shall be remitted to
23    the State Treasurer to be deposited in the manner provided
24    for payments under Article 7 of the Illinois Income Tax
25    Act.

 

 

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1        (3) The new jobs credit from withholding and the
2    special fund into which it is paid, may be irrevocably
3    pledged by a community college for the payment of the
4    principal of and interest on the certificate issued by a
5    community college to finance or refinance, in whole or in
6    part, the project.
7        (4) The employer shall certify to the Department that
8    the credit in withholding is in accordance with an
9    agreement and shall provide other information the
10    Department may require.
11        (5) A community college shall certify to the Department
12    the amount of new jobs credit from withholding an employer
13    has remitted to the special fund and shall provide other
14    information the department may require.
15        (6) An employee participating in a project will receive
16    full credit for the amount withheld as provided in Article
17    7.
 
18    Section 20. Certificates. To provide funds for the present
19payment of the costs of new jobs training programs, a community
20college may borrow money and issue and sell certificates
21payable from a sufficient portion of the future receipts of
22payments authorized by the agreement. The receipts shall be
23pledged to the payment of principal of and interest on the
24certificates.
25    Certificates may be sold at public sale or at private sale

 

 

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1at par, premium, or discount at the discretion of the Board.
2Certificates may be issued with respect to a single project or
3multiple projects and may contain terms or conditions as the
4Board may provide by resolution authorizing the issuance of the
5certificates. Certificates issued to refund other certificates
6may be sold at public sale or at private sale as provided in
7this Section with the proceeds from the sale to be used for the
8payment of the certificates being refunded. The refunding
9certificates may be exchanged in payment and discharge of the
10certificates being refunded, in installments at different
11times or an entire issue or series at one time. Refunding
12certificates may be sold or exchanged at any time on, before,
13or after the maturity of the outstanding certificates to be
14refunded, may be issued for the purpose of refunding a like,
15greater, or lesser principal amount of certificates and may
16bear a higher, lower, or equivalent rate of interest than the
17certificates being renewed or refunded.
18    To further secure the payment of the certificates, the
19Board shall provide for the assessment of an annual levy of an
20additional property tax upon all taxable property within the
21project area. The revenues from the tax shall be deposited in a
22special fund and shall be expended only for the payment of
23principal of and interest on the certificates issued as
24provided in this Section, when the receipt of payment for
25program costs as provided in the agreement is insufficient.
26    If payments are necessary and made from the special fund,

 

 

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1the amount of the payments shall be promptly repaid into the
2special fund from the first available payments received for
3program costs as provided in the agreement which are not
4required for the payment of principal of or interest on
5certificates due. No reserves may be built up in this fund in
6anticipation of a projected default.
7    The Board shall adjust the annual tax levy for each year to
8reflect the amount of revenues in the special fund and the
9amount of principal and interest which is due in that year.
10    Before certificates are issued, the Board shall publish
11once a notice of its intention to issue the certificates,
12stating the amount, the purpose, and the project or projects
13for which the certificates are to be issued. A person may,
14within 15 days after the publication of the notice, by action
15in the circuit court of the county in which the community
16college is located, appeal the decision of the Board in
17proposing to issue the certificates. The action of the Board in
18determining to issue the certificates is final unless the court
19finds that the Board has exceeded its legal authority. An
20action shall not be brought which questions the legality of the
21certificates, the power of the Board to issue the certificates,
22the effectiveness of any proceedings relating to the
23authorization of the project, or the authorization and issuance
24of the certificates from and after 15 days from the publication
25of the notice of intention to issue.
26    The Board shall determine if revenues are sufficient to

 

 

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1secure the faithful performance of obligations in the
2agreement.
 
3    Section 90. The Illinois Income Tax Act is amended by
4changing Section 704A as follows:
 
5    (35 ILCS 5/704A)
6    Sec. 704A. Employer's return and payment of tax withheld.
7    (a) In general, every employer who deducts and withholds or
8is required to deduct and withhold tax under this Act on or
9after January 1, 2008 shall make those payments and returns as
10provided in this Section.
11    (b) Returns. Every employer shall, in the form and manner
12required by the Department, make returns with respect to taxes
13withheld or required to be withheld under this Article 7 for
14each quarter beginning on or after January 1, 2008, on or
15before the last day of the first month following the close of
16that quarter.
17    (c) Payments. With respect to amounts withheld or required
18to be withheld on or after January 1, 2008:
19        (1) Semi-weekly payments. For each calendar year, each
20    employer who withheld or was required to withhold more than
21    $12,000 during the one-year period ending on June 30 of the
22    immediately preceding calendar year, payment must be made:
23            (A) on or before each Friday of the calendar year,
24        for taxes withheld or required to be withheld on the

 

 

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1        immediately preceding Saturday, Sunday, Monday, or
2        Tuesday;
3            (B) on or before each Wednesday of the calendar
4        year, for taxes withheld or required to be withheld on
5        the immediately preceding Wednesday, Thursday, or
6        Friday.
7        Beginning with calendar year 2011, payments made under
8    this paragraph (1) of subsection (c) must be made by
9    electronic funds transfer.
10        (2) Semi-weekly payments. Any employer who withholds
11    or is required to withhold more than $12,000 in any quarter
12    of a calendar year is required to make payments on the
13    dates set forth under item (1) of this subsection (c) for
14    each remaining quarter of that calendar year and for the
15    subsequent calendar year.
16        (3) Monthly payments. Each employer, other than an
17    employer described in items (1) or (2) of this subsection,
18    shall pay to the Department, on or before the 15th day of
19    each month the taxes withheld or required to be withheld
20    during the immediately preceding month.
21        (4) Payments with returns. Each employer shall pay to
22    the Department, on or before the due date for each return
23    required to be filed under this Section, any tax withheld
24    or required to be withheld during the period for which the
25    return is due and not previously paid to the Department.
26    (d) Regulatory authority. The Department may, by rule:

 

 

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1        (1) Permit employers, in lieu of the requirements of
2    subsections (b) and (c), to file annual returns due on or
3    before January 31 of the year for taxes withheld or
4    required to be withheld during the previous calendar year
5    and, if the aggregate amounts required to be withheld by
6    the employer under this Article 7 (other than amounts
7    required to be withheld under Section 709.5) do not exceed
8    $1,000 for the previous calendar year, to pay the taxes
9    required to be shown on each such return no later than the
10    due date for such return.
11        (2) Provide that any payment required to be made under
12    subsection (c)(1) or (c)(2) is deemed to be timely to the
13    extent paid by electronic funds transfer on or before the
14    due date for deposit of federal income taxes withheld from,
15    or federal employment taxes due with respect to, the wages
16    from which the Illinois taxes were withheld.
17        (3) Designate one or more depositories to which payment
18    of taxes required to be withheld under this Article 7 must
19    be paid by some or all employers.
20        (4) Increase the threshold dollar amounts at which
21    employers are required to make semi-weekly payments under
22    subsection (c)(1) or (c)(2).
23    (e) Annual return and payment. Every employer who deducts
24and withholds or is required to deduct and withhold tax from a
25person engaged in domestic service employment, as that term is
26defined in Section 3510 of the Internal Revenue Code, may

 

 

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1comply with the requirements of this Section with respect to
2such employees by filing an annual return and paying the taxes
3required to be deducted and withheld on or before the 15th day
4of the fourth month following the close of the employer's
5taxable year. The Department may allow the employer's return to
6be submitted with the employer's individual income tax return
7or to be submitted with a return due from the employer under
8Section 1400.2 of the Unemployment Insurance Act.
9    (f) Magnetic media and electronic filing. With respect to
10taxes withheld in calendar years prior to 2017, any W-2 Form
11that, under the Internal Revenue Code and regulations
12promulgated thereunder, is required to be submitted to the
13Internal Revenue Service on magnetic media or electronically
14must also be submitted to the Department on magnetic media or
15electronically for Illinois purposes, if required by the
16Department.
17    With respect to taxes withheld in 2017 and subsequent
18calendar years, the Department may, by rule, require that any
19return (including any amended return) under this Section and
20any W-2 Form that is required to be submitted to the Department
21must be submitted on magnetic media or electronically.
22    The due date for submitting W-2 Forms shall be as
23prescribed by the Department by rule.
24    (g) For amounts deducted or withheld after December 31,
252009, a taxpayer who makes an election under subsection (f) of
26Section 5-15 of the Economic Development for a Growing Economy

 

 

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1Tax Credit Act for a taxable year shall be allowed a credit
2against payments due under this Section for amounts withheld
3during the first calendar year beginning after the end of that
4taxable year equal to the amount of the credit for the
5incremental income tax attributable to full-time employees of
6the taxpayer awarded to the taxpayer by the Department of
7Commerce and Economic Opportunity under the Economic
8Development for a Growing Economy Tax Credit Act for the
9taxable year and credits not previously claimed and allowed to
10be carried forward under Section 211(4) of this Act as provided
11in subsection (f) of Section 5-15 of the Economic Development
12for a Growing Economy Tax Credit Act. The credit or credits may
13not reduce the taxpayer's obligation for any payment due under
14this Section to less than zero. If the amount of the credit or
15credits exceeds the total payments due under this Section with
16respect to amounts withheld during the calendar year, the
17excess may be carried forward and applied against the
18taxpayer's liability under this Section in the succeeding
19calendar years as allowed to be carried forward under paragraph
20(4) of Section 211 of this Act. The credit or credits shall be
21applied to the earliest year for which there is a tax
22liability. If there are credits from more than one taxable year
23that are available to offset a liability, the earlier credit
24shall be applied first. Each employer who deducts and withholds
25or is required to deduct and withhold tax under this Act and
26who retains income tax withholdings under subsection (f) of

 

 

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1Section 5-15 of the Economic Development for a Growing Economy
2Tax Credit Act must make a return with respect to such taxes
3and retained amounts in the form and manner that the
4Department, by rule, requires and pay to the Department or to a
5depositary designated by the Department those withheld taxes
6not retained by the taxpayer. For purposes of this subsection
7(g), the term taxpayer shall include taxpayer and members of
8the taxpayer's unitary business group as defined under
9paragraph (27) of subsection (a) of Section 1501 of this Act.
10This Section is exempt from the provisions of Section 250 of
11this Act. No credit awarded under the Economic Development for
12a Growing Economy Tax Credit Act for agreements entered into on
13or after January 1, 2015 may be credited against payments due
14under this Section.
15    (h) An employer may claim a credit against payments due
16under this Section for amounts withheld during the first
17calendar year ending after the date on which a tax credit
18certificate was issued under Section 35 of the Small Business
19Job Creation Tax Credit Act. The credit shall be equal to the
20amount shown on the certificate, but may not reduce the
21taxpayer's obligation for any payment due under this Section to
22less than zero. If the amount of the credit exceeds the total
23payments due under this Section with respect to amounts
24withheld during the calendar year, the excess may be carried
25forward and applied against the taxpayer's liability under this
26Section in the 5 succeeding calendar years. The credit shall be

 

 

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1applied to the earliest year for which there is a tax
2liability. If there are credits from more than one calendar
3year that are available to offset a liability, the earlier
4credit shall be applied first. This Section is exempt from the
5provisions of Section 250 of this Act.
6    (i) Each employer with 50 or fewer full-time equivalent
7employees during the reporting period may claim a credit
8against the payments due under this Section for each qualified
9employee in an amount equal to the maximum credit allowable.
10The credit may be taken against payments due for reporting
11periods that begin on or after January 1, 2020, and end on or
12before December 31, 2027. An employer may not claim a credit
13for an employee who has worked fewer than 90 consecutive days
14immediately preceding the reporting period; however, such
15credits may accrue during that 90-day period and be claimed
16against payments under this Section for future reporting
17periods after the employee has worked for the employer at least
1890 consecutive days. In no event may the credit exceed the
19employer's liability for the reporting period. Each employer
20who deducts and withholds or is required to deduct and withhold
21tax under this Act and who retains income tax withholdings
22under this subsection must make a return with respect to such
23taxes and retained amounts in the form and manner that the
24Department, by rule, requires and pay to the Department or to a
25depositary designated by the Department those withheld taxes
26not retained by the employer.

 

 

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1    For each reporting period, the employer may not claim a
2credit or credits for more employees than the number of
3employees making less than the minimum or reduced wage for the
4current calendar year during the last reporting period of the
5preceding calendar year. Notwithstanding any other provision
6of this subsection, an employer shall not be eligible for
7credits for a reporting period unless the average wage paid by
8the employer per employee for all employees making less than
9$55,000 during the reporting period is greater than the average
10wage paid by the employer per employee for all employees making
11less than $55,000 during the same reporting period of the prior
12calendar year.
13    For purposes of this subsection (i):
14    "Compensation paid in Illinois" has the meaning ascribed to
15that term under Section 304(a)(2)(B) of this Act.
16    "Employer" and "employee" have the meaning ascribed to
17those terms in the Minimum Wage Law, except that "employee"
18also includes employees who work for an employer with fewer
19than 4 employees. Employers that operate more than one
20establishment pursuant to a franchise agreement or that
21constitute members of a unitary business group shall aggregate
22their employees for purposes of determining eligibility for the
23credit.
24    "Full-time equivalent employees" means the ratio of the
25number of paid hours during the reporting period and the number
26of working hours in that period.

 

 

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1    "Maximum credit" means the percentage listed below of the
2difference between the amount of compensation paid in Illinois
3to employees who are paid not more than the required minimum
4wage reduced by the amount of compensation paid in Illinois to
5employees who were paid less than the current required minimum
6wage during the reporting period prior to each increase in the
7required minimum wage on January 1. If an employer pays an
8employee more than the required minimum wage and that employee
9previously earned less than the required minimum wage, the
10employer may include the portion that does not exceed the
11required minimum wage as compensation paid in Illinois to
12employees who are paid not more than the required minimum wage.
13        (1) 25% for reporting periods beginning on or after
14    January 1, 2020 and ending on or before December 31, 2020;
15        (2) 21% for reporting periods beginning on or after
16    January 1, 2021 and ending on or before December 31, 2021;
17        (3) 17% for reporting periods beginning on or after
18    January 1, 2022 and ending on or before December 31, 2022;
19        (4) 13% for reporting periods beginning on or after
20    January 1, 2023 and ending on or before December 31, 2023;
21        (5) 9% for reporting periods beginning on or after
22    January 1, 2024 and ending on or before December 31, 2024;
23        (6) 5% for reporting periods beginning on or after
24    January 1, 2025 and ending on or before December 31, 2025.
25    The amount computed under this subsection may continue to
26be claimed for reporting periods beginning on or after January

 

 

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11, 2026 and:
2        (A) ending on or before December 31, 2026 for employers
3    with more than 5 employees; or
4        (B) ending on or before December 31, 2027 for employers
5    with no more than 5 employees.
6    "Qualified employee" means an employee who is paid not more
7than the required minimum wage and has an average wage paid per
8hour by the employer during the reporting period equal to or
9greater than his or her average wage paid per hour by the
10employer during each reporting period for the immediately
11preceding 12 months. A new qualified employee is deemed to have
12earned the required minimum wage in the preceding reporting
13period.
14    "Reporting period" means the quarter for which a return is
15required to be filed under subsection (b) of this Section.
16    (j) This Article 7 is subject to the provisions of the
17Industrial New Jobs Training Act.
18(Source: P.A. 100-303, eff. 8-24-17; 100-511, eff. 9-18-17;
19100-863, eff. 8-14-18; 101-1, eff. 2-19-19.)