Rep. Jay Hoffman

Filed: 5/15/2024

 

 


 

 


 
10300HB5545ham001LRB103 38926 HLH 73484 a

1
AMENDMENT TO HOUSE BILL 5545

2    AMENDMENT NO. ______. Amend House Bill 5545 by replacing
3everything after the enacting clause with the following:
 
4    "Section 3. The Department of Commerce and Economic
5Opportunity Law of the Civil Administrative Code of Illinois
6is amended by adding Section 605-1115 as follows:
 
7    (20 ILCS 605/605-1115 new)
8    Sec. 605-1115. Megaproject building materials exemption.
9    (a) The Department may certify a taxpayer for an exemption
10from any State or local use tax or retailers' occupation tax on
11building materials that will be incorporated into real estate
12at a megaproject site. The taxpayer must meet all of the
13criteria for certification set forth in Division 22 of Article
1410 of the Property Tax Code. This certification is in addition
15to and does not replace or amend the megaproject certificate
16under Division 22 of Article 10 of the Property Tax Code. The

 

 

10300HB5545ham001- 2 -LRB103 38926 HLH 73484 a

1Department shall not issue exemptions under this Section after
2December 31, 2030.
3    (b) The Department shall determine the period during which
4the exemption from State and local use taxes and retailers'
5occupation taxes is in effect, but in no event shall the
6initial period exceed 10 years. The certificate may be renewed
7for a period not to exceed 5 years. Upon certification by the
8Department under this Section, the Department shall notify the
9Department of Revenue of the certification. The exemption
10status shall take effect within 3 months after certification
11of the taxpayer and notice to the Department of Revenue by the
12Department.
13    (c) If the Department determines, in accordance with the
14Administrative Review Law and the Illinois Administrative
15Procedure Act, that the taxpayer is not in compliance with
16Division 22 of Article 10 of the Property Tax Code, the
17Department shall revoke the certification under this Section
18by written notice to the taxpayer. The Department shall
19transmit a copy of the revocation to the Department of
20Revenue. If the taxpayer's certification is revoked, the
21taxpayer must repay any exempted amount of State or local use
22tax or retailers' occupation tax.
23    (d) The Department may adopt rules as are reasonable and
24necessary to implement the provisions of this Section.
 
25    Section 5. The Use Tax Act is amended by changing Section

 

 

10300HB5545ham001- 3 -LRB103 38926 HLH 73484 a

112 as follows:
 
2    (35 ILCS 105/12)  (from Ch. 120, par. 439.12)
3    Sec. 12. Applicability of Retailers' Occupation Tax Act
4and Uniform Penalty and Interest Act. All of the provisions of
5Sections 1d, 1e, 1f, 1i, 1j, 1j.1, 1k, 1m, 1n, 1o, 2-6, 2-12,
62-28, 2-54, 2a, 2b, 2c, 3, 4 (except that the time limitation
7provisions shall run from the date when the tax is due rather
8than from the date when gross receipts are received), 5
9(except that the time limitation provisions on the issuance of
10notices of tax liability shall run from the date when the tax
11is due rather than from the date when gross receipts are
12received and except that in the case of a failure to file a
13return required by this Act, no notice of tax liability shall
14be issued on and after each July 1 and January 1 covering tax
15due with that return during any month or period more than 6
16years before that July 1 or January 1, respectively), 5a, 5b,
175c, 5d, 5e, 5f, 5g, 5h, 5j, 5k, 5l, 5m, 5n, 7, 8, 9, 10, 11 and
1812 of the Retailers' Occupation Tax Act and Section 3-7 of the
19Uniform Penalty and Interest Act, which are not inconsistent
20with this Act, shall apply, as far as practicable, to the
21subject matter of this Act to the same extent as if such
22provisions were included herein.
23(Source: P.A. 102-700, eff. 4-19-22; 103-9, eff. 6-7-23.)
 
24    Section 10. The Service Use Tax Act is amended by changing

 

 

10300HB5545ham001- 4 -LRB103 38926 HLH 73484 a

1Section 12 as follows:
 
2    (35 ILCS 110/12)  (from Ch. 120, par. 439.42)
3    Sec. 12. Applicability of Retailers' Occupation Tax Act
4and Uniform Penalty and Interest Act. All of the provisions of
5Sections 1d, 1e, 1f, 1i, 1j, 1j.1, 1k, 1m, 1n, 1o, 2-6, 2-12,
62-28, 2-54, 2a, 2b, 2c, 3 (except as to the disposition by the
7Department of the money collected under this Act), 4 (except
8that the time limitation provisions shall run from the date
9when gross receipts are received), 5 (except that the time
10limitation provisions on the issuance of notices of tax
11liability shall run from the date when the tax is due rather
12than from the date when gross receipts are received and except
13that in the case of a failure to file a return required by this
14Act, no notice of tax liability shall be issued on and after
15July 1 and January 1 covering tax due with that return during
16any month or period more than 6 years before that July 1 or
17January 1, respectively), 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5j, 5k,
185l, 5m, 5n, 6d, 7, 8, 9, 10, 11 and 12 of the Retailers'
19Occupation Tax Act which are not inconsistent with this Act,
20and Section 3-7 of the Uniform Penalty and Interest Act, shall
21apply, as far as practicable, to the subject matter of this Act
22to the same extent as if such provisions were included herein.
23(Source: P.A. 102-700, eff. 4-19-22; 103-9, eff. 6-7-23.)
 
24    Section 15. The Service Occupation Tax Act is amended by

 

 

10300HB5545ham001- 5 -LRB103 38926 HLH 73484 a

1changing Section 12 as follows:
 
2    (35 ILCS 115/12)  (from Ch. 120, par. 439.112)
3    Sec. 12. All of the provisions of Sections 1d, 1e, 1f, 1i,
41j, 1j.1, 1k, 1m, 1n, 1o, 2-6, 2-12, 2-28, 2-54, 2a, 2b, 2c, 3
5(except as to the disposition by the Department of the tax
6collected under this Act), 4 (except that the time limitation
7provisions shall run from the date when the tax is due rather
8than from the date when gross receipts are received), 5
9(except that the time limitation provisions on the issuance of
10notices of tax liability shall run from the date when the tax
11is due rather than from the date when gross receipts are
12received), 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5j, 5k, 5l, 5m, 5n, 6d,
137, 8, 9, 10, 11, and 12 of the "Retailers' Occupation Tax Act"
14which are not inconsistent with this Act, and Section 3-7 of
15the Uniform Penalty and Interest Act shall apply, as far as
16practicable, to the subject matter of this Act to the same
17extent as if such provisions were included herein.
18(Source: P.A. 102-700, eff. 4-19-22; 103-9, eff. 6-7-23;
19revised 9-26-23.)
 
20    Section 20. The Retailers' Occupation Tax Act is amended
21by adding Section 2-28 as follows:
 
22    (35 ILCS 120/2-28 new)
23    Sec. 2-28. Megaproject building materials exemption.

 

 

10300HB5545ham001- 6 -LRB103 38926 HLH 73484 a

1    (a) Each retailer that makes a qualified sale of building
2materials to be incorporated into real estate at a megaproject
3site certified by the Department of Commerce and Economic
4Opportunity under Section 605-1115 of the Department of
5Commerce and Economic Opportunity Law of the Civil
6Administrative Code of Illinois may deduct receipts from such
7sales when calculating the tax imposed by this Act.
8Megaproject Building Materials Exemption Certificates shall be
9issued for an initial period not to exceed 10 years and can be
10renewed for a period not to exceed 5 years.
11    (b) No retailer who is eligible for the deduction or
12credit for a given sale under Section 5k of this Act related to
13enterprise zones, Section 5l of this Act related to High
14Impact Businesses, Section 5m of this Act related to REV
15Illinois projects, or Section 5n of this Act related to MICRO
16facilities shall be eligible for the deduction or credit
17authorized under this Section for that same sale.
18    (c) A construction contractor or other entity shall not
19make tax-free purchases unless it has an active Exemption
20Certificate issued by the Department at the time of the
21purchase.
22    (d) The megaproject administrator shall submit a request
23to the Department for an initial certification or renewal of
24the Megaproject Building Materials Exemption Certificate. Upon
25request from the megaproject administrator, the Department
26shall issue a Megaproject Building Materials Exemption

 

 

10300HB5545ham001- 7 -LRB103 38926 HLH 73484 a

1Certificate for each construction contractor or other entity
2identified by the megaproject administrator. The Department
3shall make the Megaproject Building Materials Exemption
4Certificates available to each construction contractor or
5other entity identified by the megaproject administrator and
6to the megaproject administrator. The request for Megaproject
7Building Materials Exemption Certificates under this Section
8must include the following information:
9        (1) the name and address of the construction
10    contractor or other entity;
11        (2) the name and location or address of the building
12    project site;
13        (3) the estimated amount of the exemption for each
14    construction contractor or other entity for which a
15    request for a Megaproject Building Materials Exemption
16    Certificate is made, based on a stated estimated average
17    tax rate and the percentage of the contract that consists
18    of materials;
19        (4) the period of time during which supplies for the
20    project are expected to be purchased; and
21        (5) other reasonable information as the Department may
22    require, including, but not limited to, FEIN numbers, to
23    determine if the contractor or other entity, or any
24    partner, corporate officer, or, in the case of a limited
25    liability company, any manager or member of the
26    construction contractor or other entity is or has been the

 

 

10300HB5545ham001- 8 -LRB103 38926 HLH 73484 a

1    owner, partner, corporate officer, or, in the case of a
2    limited liability company, manager or member of a person
3    that is in default for moneys due to the Department under
4    this Act or any other tax or fee Act administered by the
5    Department.
6    The Department, in its discretion, may require that the
7request for a Megaproject Building Materials Exemption
8Certificate be submitted electronically. The Department may,
9in its discretion, issue Exemption Certificates
10electronically.
11    (e) To document the exemption allowed under this Section,
12the retailer must obtain from the purchaser the certification
13required under this Section, which must contain the
14Megaproject Building Materials Exemption Certificate number
15issued to the purchaser by the Department. In addition, the
16retailer must obtain certification from the purchaser that
17contains:
18        (1) a statement that the building materials are being
19    purchased for incorporation into real estate located in a
20    megaproject site;
21        (2) the location or address of the real estate into
22    which the building materials will be incorporated;
23        (3) the name of the megaproject in which that real
24    estate is located;
25        (4) a description of the building materials being
26    purchased;

 

 

10300HB5545ham001- 9 -LRB103 38926 HLH 73484 a

1        (5) the purchaser's Megaproject Building Materials
2    Exemption Certificate number issued by the Department; and
3        (6) the purchaser's signature and date of purchase.
4    (f) The Department shall issue the Megaproject Building
5Materials Exemption Certificates within 3 business days after
6receipt of the request from the megaproject administrator.
7This requirement does not apply if the Department, for
8reasonable cause, is unable to issue the Exemption Certificate
9within 3 business days. The Department may refuse to issue a
10Megaproject Building Materials Exemption Certificate if the
11owner, any partner, or a corporate officer, and in the case of
12a limited liability company, any manager or member, of the
13construction contractor or other entity is or has been the
14owner, a partner, a corporate officer, and in the case of a
15limited liability company, a manager or member, of a person
16that is in default for moneys due to the Department under this
17Act or any other tax or fee Act administered by the Department.
18    (g) The Megaproject Building Materials Exemption
19Certificate shall contain:
20        (1) a unique identifying number that shall be designed
21    in such a way that the Department can identify from the
22    unique number on the Exemption Certificate issued to a
23    given construction contractor or other entity, the name of
24    the megaproject site and the construction contractor or
25    other entity to whom the Exemption Certificate is issued;
26        (2) the name of the construction contractor or entity

 

 

10300HB5545ham001- 10 -LRB103 38926 HLH 73484 a

1    to whom the Exemption Certificate is issued;
2        (3) issuance date, effective date, and expiration
3    date; and
4        (4) language stating that, if the construction
5    contractor or other entity who is issued the Exemption
6    Certificate makes a tax-exempt purchase, as described in
7    this Section, that is not eligible for exemption under
8    this Section or allows another person to make a tax-exempt
9    purchase, as described in this Section, that is not
10    eligible for exemption under this Section, then, in
11    addition to any tax or other penalty imposed, the
12    construction contractor or other entity is subject to a
13    penalty equal to the tax that would have been paid by the
14    retailer under this Act as well as any applicable local
15    retailers' occupation tax on the purchase that is not
16    eligible for the exemption.
17    (h) After the Department issues Exemption Certificates for
18a given megaproject, the megaproject administrator may notify
19the Department of additional construction contractors or other
20entities that are eligible for a Megaproject Building
21Materials Exemption Certificate. Upon receiving such a
22notification and subject to the other provisions of this
23Section, the Department shall issue a Megaproject Building
24Materials Exemption Certificate to each additional
25construction contractor or other entity so identified.
26    (i) A megaproject administrator may ask the Department to

 

 

10300HB5545ham001- 11 -LRB103 38926 HLH 73484 a

1rescind a Megaproject Building Materials Exemption Certificate
2previously issued by the Department to a construction
3contractor or other entity working at that certified
4megaproject site if that Megaproject Building Materials
5Exemption Certificate has not yet expired. Upon receiving such
6a request and subject to the other provisions of this Section,
7the Department shall issue the rescission of the Megaproject
8Building Materials Exemption Certificate to the construction
9contractor or other entity identified by the megaproject
10administrator and provide a copy of the rescission to the
11construction contractor or other entity and to the megaproject
12administrator.
13    (j) If the Department of Revenue determines that a
14construction contractor or other entity that was issued an
15Exemption Certificate under this Section made a tax-exempt
16purchase, as described in this Section, that was not eligible
17for exemption under this Section or allowed another person to
18make a tax-exempt purchase, as described in this Section, that
19was not eligible for exemption under this Section, then, in
20addition to any tax or other penalty imposed, the construction
21contractor or other entity is subject to a penalty equal to the
22tax that would have been paid by the retailer under this Act as
23well as any applicable local retailers' occupation tax on the
24purchase that was not eligible for the exemption.
25    (k) Each contractor or other entity that has been issued a
26Megaproject Building Materials Exemption Certificate under

 

 

10300HB5545ham001- 12 -LRB103 38926 HLH 73484 a

1this Section shall annually report to the Department the total
2value of the Megaproject building materials exemption from
3State taxes. Reports shall contain information reasonably
4required by the Department to enable it to verify and
5calculate the total tax benefits for taxes imposed by the
6State and shall be broken down by megaproject site. Reports
7are due no later than May 31 of each year and shall cover the
8previous calendar year. Failure to report data may result in
9revocation of the Megaproject Building Materials Exemption
10Certificate issued to the contractor or other entity. The
11Department is authorized to adopt rules governing revocation
12determinations, including the length of revocation. Factors to
13be considered in revocations shall include, but are not
14limited to, prior compliance with the reporting requirements,
15cooperation in discontinuing and correcting violations, and
16whether the certificate was used unlawfully during the
17preceding year. The Department, in its discretion, may require
18that the reports filed under this Section be submitted
19electronically.
20    (l) The Department shall have the authority to adopt rules
21as are reasonable and necessary to implement the provisions of
22this Section.
23    (m) This Section is exempt from the provisions of Section
242-70.
25    (n) This exemption applies to the Use Tax Act, the Service
26Use Tax Act, and the Service Occupation Tax Act and is

 

 

10300HB5545ham001- 13 -LRB103 38926 HLH 73484 a

1incorporated by reference in Section 12 of each of those
2respective Acts.
3    (o) As used in this Section:
4    "Qualified sale" means a sale of building materials that
5will be incorporated into real estate as part of a building
6project for which a Megaproject Building Materials Exemption
7Certificate has been issued to the purchaser by the
8Department.
 
9    Section 25. The Property Tax Code is amended by adding
10Division 22 to Article 10 and changing as follows:

 
11    (35 ILCS 200/Art. 10 Div. 22 heading new)
12
Division 22. Megaprojects

 
13    (35 ILCS 200/10-910 new)
14    Sec. 10-910. Megaproject Assessment Freeze and Payment
15Law; definitions. This Division 22 may be cited as the
16Megaproject Assessment Freeze and Payment Law.
17    As used in this Division:
18    "Assessment officer" means the chief county assessment
19officer of the county in which the megaproject is located.
20    "Assessment period" means the period beginning on the
21first day of the calendar year after the calendar year in which
22a megaproject is placed in service and ending on the date when
23the megaproject no longer qualifies as a megaproject under

 

 

10300HB5545ham001- 14 -LRB103 38926 HLH 73484 a

1this Division.
2    "Base tax year" means the tax year prior to the first
3calendar year during which the Department issues a megaproject
4certificate under this Division.
5    "Base year" means:
6        (1) the calendar year prior to the calendar year in
7    which the Department issues the megaproject certificate,
8    if the Department issues a megaproject certificate for a
9    project located on the property without granting
10    preliminary approval for the project pursuant to Section
11    10-940; or
12        (2) the calendar year prior to the calendar year in
13    which the Department grants that preliminary approval, if
14    the Department grants preliminary approval pursuant to
15    Section 10-940 for a megaproject located on the property.
16    "Base year valuation" means the assessed value, in the
17base year, of the property comprising the megaproject.
18    "Company" means one or more entities whose aggregate
19investment in the megaproject meets the minimum investment
20required under this Division. The term "company" includes a
21company affiliate unless the context clearly indicates
22otherwise.
23    "Company affiliate" means an entity that joins with or is
24an affiliate of a company and that participates in the
25investment in, or financing of, a megaproject.
26    "Consumer Price Index" means the index published by the

 

 

10300HB5545ham001- 15 -LRB103 38926 HLH 73484 a

1Bureau of Labor Statistics of the United States Department of
2Labor that measures the average change in prices of goods and
3services purchased by all urban consumers, United States city
4average, all items, 1982-84 = 100.
5    "Department" means the Department of Commerce and Economic
6Opportunity.
7    "Eligible costs" means all costs incurred by or on behalf
8of, or allocated to, a company, prior to the Department's
9issuance of the megaproject certificate or during the
10investment period, to create or construct a megaproject.
11"Eligible costs" includes, without limitation:
12        (1) the purchase, site preparation, renovation,
13    rehabilitation, and construction of land, buildings,
14    structures, equipment, and furnishings used for or in the
15    megaproject;
16        (2) any goods or services for the megaproject that are
17    purchased and capitalized under generally accepted
18    accounting principles, including any organizational costs
19    and research and development costs incurred in Illinois;
20        (3) capitalized lease costs for land, buildings,
21    structures, and equipment valued at their present value
22    using the interest rate at which the company borrows funds
23    prevailing at the time the company entered into the lease;
24        (4) infrastructure development costs;
25        (5) debt service and project financing costs;
26        (6) noncapitalized research and development costs;

 

 

10300HB5545ham001- 16 -LRB103 38926 HLH 73484 a

1        (7) job training and education costs;
2        (8) lease and relocation costs; and
3        (9) amounts expended by a company or company affiliate
4    as a nonresponsible party pursuant to a voluntary program
5    of site remediation, including amounts expended to obtain
6    a No Further Remediation Letter from the Illinois
7    Environmental Protection Agency.
8    "Entity" means a sole proprietor, partnership, firm,
9corporation, limited liability company, association, or other
10business enterprise.
11    "Full-time employee" means an individual who is employed
12for consideration for at least 35 hours each week or who
13renders any other standard of service generally accepted by
14industry custom or practice as a full-time employee. An
15individual for whom a W-2 is issued by a professional employer
16organization is a full-time employee if he or she is employed
17in the service of the applicant for at least 35 hours each week
18or renders any other standard of service generally accepted by
19industry custom or practice as a full-time employment. An
20owner, operator, or tenant who employs labor or services at a
21specific site or facility under contract with another may
22declare one full-time job for every 1,820 man-hours worked per
23year under the contract. Vacations, paid holidays, and sick
24time are included in this computation, but overtime is not
25considered a part of regular hours.
26    "High Impact Business" means a project that has been

 

 

10300HB5545ham001- 17 -LRB103 38926 HLH 73484 a

1designated by the Department as a High Impact Business under
2Section 5.5 of the Illinois Enterprise Zone Act.
3    "Incentive agreement" means an agreement between a
4company, a local municipality, and the taxing districts
5obligating the company to make the special payment under this
6Division, in addition to paying property taxes, during the
7incentive period for a megaproject.
8    "Incentive period" means the period beginning on the first
9day of the calendar year after the calendar year in which the
10megaproject is placed in service and each calendar year
11thereafter until the earlier of (i) the expiration or
12termination of the incentive agreement or (ii) the revocation
13of the megaproject certificate.
14    "Inducement resolution" means a resolution adopted by the
15local municipality setting forth the commitment of the local
16municipality to enter into an incentive agreement.
17    "Investment period" means the period ending 7 years after
18the date on which the Department issues the megaproject
19certificate, or such other longer period of time as the local
20municipality, the taxing districts, and the company may agree
21to, not to exceed an initial period of 10 years.
22    "Local municipality" means the city, village, or
23incorporated town in which the megaproject is located or, if
24the megaproject is located in an unincorporated area, the
25county in which the megaproject is located.
26    "Megaproject" means the project set forth in the company's

 

 

10300HB5545ham001- 18 -LRB103 38926 HLH 73484 a

1tax credit agreement or high impact business designation.
2    "Megaproject certificate" means a certificate issued by
3the Department that authorizes an assessment freeze as
4provided in this Division.
5    "Minimum investment" means an investment in the
6megaproject of at least $100,000,000 in eligible costs within
7the investment period.
8    "Minority person" means a person who is a citizen or
9lawful permanent resident of the United States and who is any
10of the following:
11        (1) American Indian or Alaska Native (a person having
12    origins in any of the original peoples of North and South
13    America, including Central America, and who maintains
14    tribal affiliation or community attachment).
15        (2) Asian (a person having origins in any of the
16    original peoples of the Far East, Southeast Asia, or the
17    Indian subcontinent, including, but not limited to,
18    Cambodia, China, India, Japan, Korea, Malaysia, Pakistan,
19    the Philippine Islands, Thailand, and Vietnam).
20        (3) Black or African American (a person having origins
21    in any of the black racial groups of Africa).
22        (4) Hispanic or Latino (a person of Cuban, Mexican,
23    Puerto Rican, South or Central American, or other Spanish
24    culture or origin, regardless of race).
25        (5) Native Hawaiian or Other Pacific Islander (a
26    person having origins in any of the original peoples of

 

 

10300HB5545ham001- 19 -LRB103 38926 HLH 73484 a

1    Hawaii, Guam, Samoa, or other Pacific Islands).
2    "Minority-owned business" means a business that is at
3least 51% owned by one or more minority persons, or that, in
4the case of a corporation, has at least 51% of its stock owned
5by one or more minority persons, and that, in either case, is
6managed and operated on a daily basis by one or more of the
7minority individuals who own the business.
8    "New full-time employee" means a full-time employee who
9first became employed by the owner, operator, contractor, or
10tenant of the megaproject during the incentive period or
11investment period and whose hiring results in a net increase
12in the owner, operator, contractor, or tenant's total number
13of full-time Illinois employees.
14    "New full-time employee" does not include:
15        (1) a person who was previously employed in Illinois
16    by the applicant or a related family member prior to the
17    onset of the investment or incentive period; or
18        (2) an individual who has a direct or indirect
19    ownership interest of at least 5% in the profits, capital,
20    or value of the applicant.
21    "Placed in service" means that the company has commenced
22its business operations at the megaproject site and has met
23its job creation requirements under this Section by hiring or
24causing to be hired at least 100 new full-time employees who
25provide support to the megaproject's business operations and
26work in the State of Illinois. If a company pauses or shuts

 

 

10300HB5545ham001- 20 -LRB103 38926 HLH 73484 a

1down its business operations for a period of more than 30 days,
2then the megaproject shall no longer be considered placed in
3service.
4    "Project" means land, buildings, and other improvements on
5the land, including water facilities, sewage treatment and
6disposal facilities, and all other machinery, apparatuses,
7equipment, office facilities, related infrastructure, and
8furnishings that are considered necessary, suitable, or useful
9by a company and comprise the megaproject, including all such
10property subject to assessment under the Property Tax Code.
11    "Special payment" means the annual amount paid in addition
12to property taxes paid during the incentive period as provided
13in the incentive agreement.
14    "Sports stadium" means a facility, stadium, arena, or
15other structure where athletic contests are held and sports
16teams practice and perform.
17    "Tax credit agreement" means an agreement entered into by
18the company and the Department under the Economic Development
19for Growing Economy Tax Credit Act, the Reimagining Energy and
20Vehicles in Illinois Act, or the Manufacturing Illinois Chips
21for Real Opportunity (MICRO) Act.
22    "Taxing district" has the meaning given to that term in
23Section 1-150.
24    "Termination date" means the last day of a calendar year
25that is no later than the 23rd year following the first
26calendar year in which a megaproject is placed in service. A

 

 

10300HB5545ham001- 21 -LRB103 38926 HLH 73484 a

1company may apply to the local municipality and taxing
2districts prior to the termination date for an extension of
3the termination date beyond the 23rd year for up to 17
4additional years, for a total of 40 years. The corporate
5authorities of the local municipality and the taxing districts
6shall approve an extension by resolution upon a finding of
7substantial public benefit. A copy of the resolution must be
8delivered to the Department within 30 days of the date the
9resolution was adopted. If the incentive agreement is
10terminated under Section 10-937, then the termination date is
11the date the agreement is terminated.
 
12    (35 ILCS 200/10-915 new)
13    Sec. 10-915. Valuation during incentive period;
14eligibility.
15    (a) Property that receives a megaproject certificate from
16the Department is eligible for an assessment freeze, as
17provided in this Division, eliminating from consideration, for
18assessment purposes during the incentive period, the value
19added to the property by the project and limiting the total
20valuation of the property during the incentive period to the
21base year valuation. If the company does not anticipate
22completing the project within the investment period, then the
23local municipality and taxing districts may approve one or
24more extensions of time to complete the project. However, the
25local municipality and taxing districts may not extend the

 

 

10300HB5545ham001- 22 -LRB103 38926 HLH 73484 a

1project for a period that exceeds 5 years after the last day of
2the investment period. Unless approved as part of the original
3incentive agreement, the corporate authorities of the local
4municipality and taxing districts may approve an extension
5under this subsection by resolution, a copy of which must be
6delivered to the Department within 30 days after the date the
7resolution is adopted.
8    (b) To qualify for a megaproject certificate, the company
9must:
10        (1) make the minimum investment in the megaproject
11    during the investment period;
12        (2) enter into an incentive agreement with the local
13    municipality and taxing districts as described in this
14    Division;
15        (3) enter into a project labor agreement with the
16    applicable local building trades council prior to the
17    commencement of any demolition, building construction, or
18    building renovation related to the megaproject;
19        (4) establish the goal of awarding 20% of the total
20    dollar amount of contracts that are related to the
21    megaproject and are awarded by the company during each
22    calendar year to minority-owned businesses;
23        (5) create at least 100 new full-time jobs as a result
24    of the megaproject; and
25        (6) have executed a tax credit agreement with the
26    Department or received a high impact business designation

 

 

10300HB5545ham001- 23 -LRB103 38926 HLH 73484 a

1    from the Department.
2    (c) For purposes of this Division, if a single company
3enters into a financing arrangement of the type described in
4subsection (b) of Section 10-950, the investment in or
5financing of the property by a developer, lessor, financing
6entity, or other third party in accordance with this
7arrangement is considered investment by the company.
8Investment by a related person to the company is considered
9investment by the company.
 
10    (35 ILCS 200/10-920 new)
11    Sec. 10-920. Incentive agreement; assessment freeze for
12megaprojects; incentive period; inducement resolution;
13location of the project; criteria to qualify.
14    (a) To obtain the benefits provided in this Division, the
15company shall apply in writing to the local municipality and
16taxing districts to enter into an incentive agreement with the
17municipality and taxing districts, in the form and manner
18required by the local municipality and taxing districts,
19respectively, and shall certify to the facts asserted in the
20application.
21    (b) The corporate authorities of the local municipality,
22prior to entering into an incentive agreement under this
23Section, shall hold a public hearing to consider the
24application. The amount and terms of the proposed special
25payment and the duration of the incentive agreement shall be

 

 

10300HB5545ham001- 24 -LRB103 38926 HLH 73484 a

1considered at the public hearing.
2    (c) Copies of the completed application shall be provided
3to each taxing district for which property taxes were assessed
4on the property for the immediately preceding tax year. Those
5copies shall be provided at least 30 days prior to the
6scheduled public hearing at which the corporate authorities of
7the local municipality will consider the application.
8    (d) The company, the local municipality, and the taxing
9districts shall enter into an incentive agreement requiring
10the special payment described in Section 10-925. The corporate
11authorities of the local municipality shall adopt an ordinance
12approving the incentive agreement.
13    (e) If an incentive agreement is not executed within 5
14years after the local municipality's adoption of an inducement
15resolution, expenditures incurred by the company more than 5
16years prior to the execution of the incentive agreement shall
17not qualify as part of the minimum investment.
18    (f) To be eligible to enter into an incentive agreement
19under this Division, the company must commit to a project that
20meets the investment and new job creation requirements set
21forth in the company's tax credit agreement or high impact
22business designation. In no event shall the company be
23required to invest less than $100,000,000 or create fewer than
24100 new full-time jobs.
 
25    (35 ILCS 200/10-925 new)

 

 

10300HB5545ham001- 25 -LRB103 38926 HLH 73484 a

1    Sec. 10-925. Contents of incentive agreement.
2    (a) The incentive agreement under Section 10-920 must
3require the company to pay, or be responsible for the payment
4of, an annual special payment to the local municipality and
5the taxing districts, beginning with the first tax year for
6which the assessment freeze under this Division is applied to
7the megaproject. The amount of the special payment shall be
8established by the local municipality and taxing districts in
9the incentive agreement and may be a fixed amount for the
10duration of the incentive period or may be subject to
11adjustment (downward or upward) based on factors memorialized
12in the incentive agreement.
13    Unless the special payment is negotiated as a fixed
14payment for the duration of the incentive period, the parties
15shall conduct an impact analysis study on the megaproject
16every 5 years, and the special payment shall be adjusted based
17on the results of that study; provided, however, the
18adjustment shall not be less than the initial special payment
19adjusted for inflation as measured by the Consumer Price
20Index.
21    The portion of the special payment due to the local school
22districts shall be increased annually by the lesser of (i) 5%
23or (ii) the percentage increase, if any, in the Consumer Price
24Index for the 12 months ending in September of the immediately
25preceding calendar year, and may be further increased or
26decreased every 5 years based on the results of the impact

 

 

10300HB5545ham001- 26 -LRB103 38926 HLH 73484 a

1analysis study.
2    (b) The incentive agreement shall obligate the company to
3operate the megaproject at the designated project location for
4a minimum of 20 years.
5    (c) The incentive agreement may contain such other terms
6and conditions as are mutually agreeable to the local
7municipality, the taxing districts, and the company and are
8consistent with the requirements of this Division, including,
9without limitation, operational and additional job creation
10requirements.
11    (d) In addition, all incentive agreements entered into
12pursuant to Section 10-920 must include, as the first portion
13of the document, a recapitulation of the remaining contents of
14the document, which shall include the following:
15        (1) the legal name of each party to the agreement;
16        (2) the street address of the project and the property
17    subject to the agreement;
18        (3) the agreed minimum investment, which shall not be
19    less than the investment amount required in the tax credit
20    agreement or high impact business designation;
21        (3.5) the agreed number of new jobs to be created,
22    which shall not be less than the number of new jobs
23    required in the tax credit agreement or high impact
24    business designation;
25        (4) the term of the agreement;
26        (5) a schedule showing the amount of the special

 

 

10300HB5545ham001- 27 -LRB103 38926 HLH 73484 a

1    payment and its calculation for each year of the
2    agreement;
3        (6) a schedule showing the amount to be distributed
4    annually to each taxing district, as set forth in the
5    incentive agreement;
6        (7) any other feature or aspect of the agreement which
7    may affect the calculation of items (5) and (6) of this
8    subsection; and
9        (8) the party or parties to the agreement who are
10    responsible for updating the information contained in the
11    summary document.
 
12    (35 ILCS 200/10-927 new)
13    Sec. 10-927. Minimum job creation requirements.
14    (a) The company must hire the same number of new full-time
15employees as is required in the company's tax credit agreement
16or high impact business designation, which in no event shall
17be less than 100. These new full-time employees must be hired
18to support the business operations of the megaproject and be
19located within the State of Illinois.
20    (b) A company may not satisfy the requirements of this
21Section by relocating jobs from one site in Illinois to
22another site in Illinois.
 
23    (35 ILCS 200/10-930 new)
24    Sec. 10-930. Installment bills; distribution of special

 

 

10300HB5545ham001- 28 -LRB103 38926 HLH 73484 a

1payments.
2    (a) The local municipality shall prepare a bill for the
3company for each installment of the special payment according
4to the schedule set forth in paragraph (5) of subsection (d) of
5Section 10-925, or as modified pursuant to paragraph (7) of
6subsection (d) of Section 10-925, and the company shall make
7direct payments to the affected taxing entities according to
8the schedule in paragraph (6) of subsection (d) of Section
910-925 or as modified in paragraph (7) of subsection (d) of
10Section 10-925.
11    (b) The company shall make direct payments of the special
12payment to the taxing districts associated with the
13megaproject within 30 days after receipt by the company of the
14bill prepared by the local municipality.
15    (c) Misallocations of the special payments may be
16corrected by adjusting later distributions, but these
17adjustments must be made in the next succeeding year following
18identification and resolution of the misallocation. To the
19extent that distributions have been made improperly in
20previous years, claims for adjustment must be made within one
21year of the distribution.
 
22    (35 ILCS 200/10-937 new)
23    Sec. 10-937. Termination of incentive agreement; automatic
24termination; minimum level of investment and new job creation
25required to remain qualified for assessment freeze.

 

 

10300HB5545ham001- 29 -LRB103 38926 HLH 73484 a

1    (a) The local municipality, the taxing districts, and the
2company may mutually agree to terminate the incentive
3agreement at any time. From the date of termination, the
4megaproject is subject to assessment on the basis of the
5then-current fair cash value.
6    (b) An incentive agreement shall be terminated if the
7company fails to satisfy the minimum investment level or the
8job creation requirements provided in this Division. If the
9incentive agreement is terminated under this subsection, the
10megaproject is subject to assessment on the basis of the
11then-current fair cash value beginning in the tax year during
12which the termination occurs.
13    (c) An incentive agreement shall terminate if, at any
14time, the company no longer has the minimum level of new job
15creation and investment as provided in this Division, without
16regard to depreciation.
 
17    (35 ILCS 200/10-938 new)
18    Sec. 10-938. Megaproject administration. The
19administration of a megaproject shall be under the
20jurisdiction of the local municipality that approved the
21incentive agreement by ordinance. Each local municipality that
22approves an incentive agreement by ordinance shall, by
23ordinance, designate a Megaproject Administrator for the
24megaproject within its jurisdiction. A Megaproject
25Administrator must be an officer or employee of the

 

 

10300HB5545ham001- 30 -LRB103 38926 HLH 73484 a

1municipality or county. The Megaproject Administrator shall be
2the liaison between the approving municipality or county, the
3Department, and the Department of Revenue.
 
4    (35 ILCS 200/10-940 new)
5    Sec. 10-940. Megaproject applications; certification as a
6megaproject and revocation of certification.
7    (a) The Department shall receive applications for
8megaproject certificates under this Division. The Department
9shall promptly notify the assessment officer when the
10Department receives an application under this Section. The
11Department's rules shall provide that an applicant may request
12preliminary approval of the megaproject before the project
13begins, before the applicant has entered into a fully executed
14incentive agreement with the local municipality and taxing
15districts, or before the project has been placed in service.
16    (b) An applicant for a megaproject certificate under this
17Division must provide evidence to the Department of a fully
18executed incentive agreement between the company, the local
19municipality, and the taxing districts as described in this
20Division.
21    (c) An applicant for a megaproject certificate under this
22Division must provide evidence to the Department of a fully
23executed project labor agreement entered into with the
24applicable local building trades council prior to the
25commencement of any demolition, building construction, or

 

 

10300HB5545ham001- 31 -LRB103 38926 HLH 73484 a

1building renovation at the project. If the demolition,
2building construction, or building renovation begins after the
3application is approved, then the applicant must transmit a
4copy of the fully executed project labor agreement to the
5Department as soon as possible after the agreement is
6executed.
7    (d) An applicant for a megaproject certificate under this
8Division must provide evidence to the Department that the
9company has established the goal of awarding 20% of the total
10dollar amount of contracts awarded during each calendar year
11by the company, that are related to the project, to
12minority-owned businesses.
13    (e) The Department shall approve an application for a
14megaproject certificate if the Department finds that the
15project meets the requirements of this Division.
16    (f) Upon approval of the application, the Department shall
17issue a megaproject certificate to the applicant and transmit
18a copy to the assessment officer and the Department of
19Revenue. The certificate shall identify the property on which
20the megaproject is located.
21    (g) For each calendar year following issuance of the
22megaproject certificate, until the minimum investment and new
23job creation requirements have been met and the megaproject
24has been placed in service, the company shall deliver a report
25to the Department on the status of construction or creation of
26the megaproject and the amount of minimum investment made in

 

 

10300HB5545ham001- 32 -LRB103 38926 HLH 73484 a

1the megaproject during the preceding calendar year. If the
2Department determines, in accordance with the Administrative
3Review Law and the Illinois Administrative Procedure Act, that
4a project for which a certificate has been issued has not met
5the minimum investment and job creation requirements of this
6Division within the investment period, the Department shall
7revoke the certificate by written notice to the taxpayer of
8record and transmit a copy of the revocation to the assessment
9officer.
10    (h) If the local municipality notifies the Department that
11the incentive agreement between the company, the local
12municipality, and the taxing districts has been terminated,
13the Department shall revoke the certificate by written notice
14to the taxpayer of record and transmit a copy of the revocation
15to the assessment officer.
 
16    (35 ILCS 200/10-945 new)
17    Sec. 10-945. Computation of valuation.
18    (a) Upon receipt of the megaproject certificate from the
19Department, the assessment officer shall determine the base
20year valuation and shall make a notation on each statement of
21assessment during the assessment period that the valuation of
22the project is based upon the issuance of a megaproject
23certificate.
24    (b) Upon revocation of a megaproject certificate, the
25assessment officer shall compute the assessed valuation of the

 

 

10300HB5545ham001- 33 -LRB103 38926 HLH 73484 a

1project on the basis of the then-current fair cash value of the
2property.
 
3    (35 ILCS 200/10-950 new)
4    Sec. 10-950. Transfers of interest in a megaproject;
5sale-leaseback arrangement; requirements.
6    (a) Subject to the terms of the incentive agreement
7between the company, the local municipality, and the taxing
8district, ownership of or any interest in the megaproject and
9any and all related project property, including, without
10limitation, transfers of indirect beneficial interests and
11equity interests in a company owning a megaproject, shall not
12affect the assessment freeze or the validity of the
13megaproject certificate issued under this Division.
14Notwithstanding the provisions of this subsection, the
15incentive agreement shall be a covenant running with the land.
16    (b) A company may enter into lending, financing, security,
17leasing, or similar arrangements, or a succession of such
18arrangements, with a financing entity concerning all or part
19of a project including, without limitation, a sale-leaseback
20arrangement, equipment lease, build-to-suit lease, synthetic
21lease, nordic lease, defeased tax benefit, or transfer lease,
22an assignment, sublease, or similar arrangement, or succession
23of those arrangements, with one or more financing entities
24concerning all or part of a project, regardless of the
25identity of the income tax or fee owner of the megaproject.

 

 

10300HB5545ham001- 34 -LRB103 38926 HLH 73484 a

1Neither the original transfer to the financing entity nor the
2later transfer from the financing entity back to the company,
3pursuant to terms in the sale-leaseback agreement, shall
4affect the assessment freeze or the validity of the
5megaproject certificate issued under this Division, regardless
6of whether the income tax basis is changed for income tax
7purposes.
8    (c) The Department must receive notice of all transfers
9undertaken with respect to other projects to effect a
10financing. Notice shall be made in writing within 60 days
11after the transfer, shall identify each transferee, and shall
12contain other information required by the Department with the
13appropriate returns. Failure to meet this notice requirement
14does not adversely affect the assessment freeze.
 
15    (35 ILCS 200/10-955 new)
16    Sec. 10-955. Minimum investment by company affiliates. To
17be eligible for the benefits of this Division, a company must
18invest the minimum investment. Investments by company
19affiliates during the investment period may be applied toward
20the minimum investment under this Division regardless of
21whether the company affiliate was part of the project. To
22qualify for the assessment freeze, the minimum investment must
23be made in connection with the megaproject.
 
24    (35 ILCS 200/10-960 new)

 

 

10300HB5545ham001- 35 -LRB103 38926 HLH 73484 a

1    Sec. 10-960. Projects to be valued at fair cash value for
2purposes of bonded indebtedness and limitations on property
3tax extensions. Projects to which an assessment freeze applies
4pursuant to this Division shall be valued at their fair cash
5value for purposes of calculating a municipality's general
6obligation bond limits and a taxing district's limitation on
7tax extensions.
 
8    (35 ILCS 200/10-965 new)
9    Sec. 10-965. Abatements. Any taxing district, upon a
10majority vote of its governing authority, may, after the
11determination of the assessed valuation as set forth in this
12Division, order the clerk of the appropriate municipality or
13county to abate any portion of real property taxes otherwise
14levied or extended by the taxing district on a megaproject.
 
15    (35 ILCS 200/10-970 new)
16    Sec. 10-970. Filing of returns, contracts, and other
17information; due date of payments and returns.
18    (a) The company and the local municipality shall file
19notices, reports, and other information as required by the
20Department.
21    (b) Special payments are due at the same time as property
22tax payments and property tax returns are due for the
23megaproject property.
24    (c) Failure to make a timely special payment results in

 

 

10300HB5545ham001- 36 -LRB103 38926 HLH 73484 a

1the assessment of penalties as if the payment were a
2delinquent property tax payment or return.
3    (d) Within 30 days after the date of execution of an
4incentive agreement, a copy of the incentive agreement must be
5filed with the Department, the chief county assessment
6officer, and the county auditor for the county in which the
7megaproject is located.
 
8    (35 ILCS 200/10-980 new)
9    Sec. 10-980. Rules. The Department may issue rulings and
10adopt rules as necessary to carry out the purpose of this
11Division.
 
12    (35 ILCS 200/10-985 new)
13    Sec. 10-985. Prohibition on multiple credits, exemptions,
14and freezes. An applicant for a megaproject certificate who
15qualifies for an assessment freeze under this Section is not
16entitled to any other property tax credits, exemptions, or
17assessment freezes relating to the megaproject.
 
18    (35 ILCS 200/10-987 new)
19    Sec. 10-987. Building materials exemption for
20megaprojects. An applicant that is eligible for a megaproject
21certificate under this Division 22 of Article 10 is also
22eligible for the building materials exemption under Section
23605-1115 of the Civil Administrative Code of Illinois.
 

 

 

10300HB5545ham001- 37 -LRB103 38926 HLH 73484 a

1    (35 ILCS 200/10-990 new)
2    Sec. 10-990. Sports stadiums. An applicant is not
3eligible for a megaproject assessment freeze under this
4Section for the construction or development of a sports
5stadium unless, prior to the approval of the megaproject by
6the Department, the General Assembly approves the megaproject
7by joint resolution.
 
8    (35 ILCS 200/10-995 new)
9    Sec. 10-995. Tax Increment Financing districts. A project
10that is located and operated in a Tax Increment Financing
11(TIF) district or TIF designated area is not eligible for a
12megaproject assessment freeze under this Section. The
13agreement shall provide that the megaproject certificate is
14void if an area on which the megaproject is located is
15designated as a TIF district or TIF designated area.
 
16    (35 ILCS 200/10-1000 new)
17    Sec. 10-1000. Invalidity. If all or any part of this
18Division is determined to be unconstitutional or otherwise
19unenforceable by a court of competent jurisdiction, a company
20has 180 days from the date of the determination to transfer the
21megaproject's title to an authorized economic development
22authority that qualifies for property tax assessment under
23this Division.
 

 

 

10300HB5545ham001- 38 -LRB103 38926 HLH 73484 a

1    Section 97. Severability. The provisions of this Act are
2severable under Section 1.31 of the Statute on Statutes.
 
3    Section 99. Effective date. This Act takes effect July 1,
42024.".