HB4599 EnrolledLRB096 13427 HLH 28156 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Small Business Job Creation Tax Credit Act
5is amended by changing Sections 10, 25, and 35 as follows:
 
6    (35 ILCS 25/10)
7    Sec. 10. Definitions. In this Act:
8    "Applicant" means a person that is operating a business
9located within the State of Illinois that is engaged in
10interstate or intrastate commerce and either:
11        (1) has no more than 50 full-time employees, without
12    regard to the location of employment of such employees at
13    the beginning of the incentive period; or .
14        (2) hired within the incentive period an employee who
15    had participated as worker-trainee in the Put Illinois to
16    Work Program during 2010.
17    In the case of any person that is a member of a unitary
18business group within the meaning of subdivision (a)(27) of
19Section 1501 of the Illinois Income Tax Act, "applicant" refers
20to the unitary business group.
21    "Certificate" means the tax credit certificate issued by
22the Department under Section 35 of this Act.
23    "Certificate of eligibility" means the certificate issued

 

 

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1by the Department under Section 20 of this Act.
2    "Credit" means the amount awarded by the Department to an
3applicant by issuance of a certificate under Section 35 of this
4Act for each new full-time equivalent employee hired or job
5created.
6    "Department" means the Department of Commerce and Economic
7Opportunity.
8    "Director" means the Director of the Department.
9    "Full-time employee" means an individual who is employed
10for a basic wage for at least 35 hours each week or who renders
11any other standard of service generally accepted by industry
12custom or practice as full-time employment.
13    "Incentive period" means the period beginning July 1, 2010
14and ending on June 30, 2011.
15    "Basic wage" means compensation for employment that is no
16less than $10 $13.75 per hour or the equivalent salary for a
17new employee.
18    "New employee" means a full-time employee:
19        (1) who first became employed by an applicant with less
20    than 50 full-time employees within the incentive period
21    whose hire results in a net increase in the applicant's
22    full-time Illinois employees and who is receiving a basic
23    wage as compensation; or .
24        (2) who participated as a worker-trainee in the Put
25    Illinois to Work Program during 2010 and who is
26    subsequently hired during the incentive period by an

 

 

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1    applicant and who is receiving a basic wage as
2    compensation.
3    The term "new employee" does not include:
4        (1) a person who was previously employed in Illinois by
5    the applicant or a related member prior to the onset of the
6    incentive period; or
7        (2) any individual who has a direct or indirect
8    ownership interest of at least 5% in the profits, capital,
9    or value of the applicant or a related member.
10    "Noncompliance date" means, in the case of an applicant
11that is not complying with the requirements of the provisions
12of this Act, the day following the last date upon which the
13taxpayer was in compliance with the requirements of the
14provisions of this Act, as determined by the Director, pursuant
15to Section 45 of this Act.
16    "Put Illinois to Work Program" means a worker training and
17employment program that was established by the State of
18Illinois with funding from the United States Department of
19Health and Human Services of Emergency Temporary Assistance to
20Needy Families funds authorized by the American Recovery and
21Reinvestment Act of 2009 (ARRA TANF Funds). These ARRA TANF
22funds were in turn used by the State of Illinois to fund the
23Put Illinois to Work Program.
24    "Related member" means a person that, with respect to the
25applicant during any portion of the incentive period, is any
26one of the following,

 

 

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1        (1) An individual, if the individual and the members of
2    the individual's family (as defined in Section 318 of the
3    Internal Revenue Code) own directly, indirectly,
4    beneficially, or constructively, in the aggregate, at
5    least 50% of the value of the outstanding profits, capital,
6    stock, or other ownership interest in the applicant.
7        (2) A partnership, estate, or trust and any partner or
8    beneficiary, if the partnership, estate, or trust and its
9    partners or beneficiaries own directly, indirectly,
10    beneficially, or constructively, in the aggregate, at
11    least 50% of the profits, capital, stock, or other
12    ownership interest in the applicant.
13        (3) A corporation, and any party related to the
14    corporation in a manner that would require an attribution
15    of stock from the corporation under the attribution rules
16    of Section 318 of the Internal Revenue Code, if the
17    applicant and any other related member own, in the
18    aggregate, directly, indirectly, beneficially, or
19    constructively, at least 50% of the value of the
20    corporation's outstanding stock.
21        (4) A corporation and any party related to that
22    corporation in a manner that would require an attribution
23    of stock from the corporation to the party or from the
24    party to the corporation under the attribution rules of
25    Section 318 of the Internal Revenue Code, if the
26    corporation and all such related parties own, in the

 

 

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1    aggregate, at least 50% of the profits, capital, stock, or
2    other ownership interest in the applicant.
3        (5) A person to or from whom there is attribution of
4    stock ownership in accordance with Section 1563(e) of the
5    Internal Revenue Code, except that for purposes of
6    determining whether a person is a related member under this
7    paragraph, "20%" shall be substituted for "5%" whenever
8    "5%" appears in Section 1563(e) of the Internal Revenue
9    Code.
10(Source: P.A. 96-888, eff. 4-13-10.)
 
11    (35 ILCS 25/25)
12    Sec. 25. Tax credit.
13    (a) Subject to the conditions set forth in this Act, an
14applicant is entitled to a credit against payment of taxes
15withheld under Section 704A of the Illinois Income Tax Act:
16        (1) for new employees who participated as
17    worker-trainees in the Put Illinois to Work Program during
18    2010:
19            (A) in the first calendar year ending on or after
20        the date that is 6 months after December 31, 2010, or
21        the date of hire, whichever is later. Under this
22        subparagraph, the applicant is entitled to one-half of
23        the credit allowable for each new employee who is
24        employed for at least 6 months after the date of hire;
25        and

 

 

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1            (B) in the first calendar year ending on or after
2        the date that is 12 months after December 31, 2010, or
3        the date of hire, whichever is later. Under this
4        subparagraph, the applicant is entitled to one-half of
5        the credit allowable for each new employee who is
6        employed for at least 12 months after the date of hire;
7         (2) for all other new employees, in the first calendar
8    year years ending on or after the date that is 12 months
9    after the date of hire of a new employee. The credit shall
10    be allowed as a credit to an applicant for each full-time
11    employee hired during the incentive period that results in
12    a net increase in full-time Illinois employees, where the
13    net increase in the employer's full-time Illinois
14    employees is maintained for at least 12 months.
15    (b) The Department shall make credit awards under this Act
16to further job creation.
17    (c) The credit shall be claimed for the first calendar year
18ending on or after the date on which the certificate is issued
19by the Department.
20    (d) The credit shall not exceed $2,500 per new employee
21hired.
22    (e) The net increase in full-time Illinois employees,
23measured on an annual full-time equivalent basis, shall be the
24total number of full-time Illinois employees of the applicant
25on June 30, 2011, minus the number of full-time Illinois
26employees employed by the employer on July 1, 2010. For

 

 

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1purposes of the calculation, an employer that begins doing
2business in this State during the incentive period, as
3determined by the Director, shall be treated as having zero
4Illinois employees on July 1, 2010.
5    (f) The net increase in the number of full-time Illinois
6employees of the applicant under subsection (e) must be
7sustained continuously for at least 12 months, starting with
8the date of hire of a new employee during the incentive period.
9Eligibility for the credit does not depend on the continuous
10employment of any particular individual. For purposes of this
11subsection (f), if a new employee ceases to be employed before
12the completion of the 12-month period for any reason, the net
13increase in the number of full-time Illinois employees shall be
14treated as continuous if a different new employee is hired as a
15replacement within a reasonable time for the same position.
16(Source: P.A. 96-888, eff. 4-13-10.)
 
17    (35 ILCS 25/35)
18    Sec. 35. Application for award of tax credit; tax credit
19certificate.
20    (a) On or after the conclusion of the 12-month period (or
216-month period, for purposes of subparagraph (A) of item (1) of
22subsection (a) of Section 25) after a new employee has been
23hired, an applicant shall file with the Department an
24application for award of a credit. The application shall
25include the following:

 

 

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1        (1) The names, Social Security numbers, job
2    descriptions, salary or wage rates, and dates of hire of
3    the new employees with respect to whom the credit is being
4    requested, and an indication of whether each new employee
5    listed participated as a worker-trainee in the Put Illinois
6    to Work Program.
7        (2) A certification that each new employee listed has
8    been retained on the job for one year (or 6 months, for
9    purposes of subparagraph (A) of item (1) of subsection (a)
10    of Section 25) from the date of hire.
11        (3) The number of new employees hired by the applicant
12    during the incentive period.
13        (4) The net increase in the number of full-time
14    Illinois employees of the applicant (including the new
15    employees listed in the request) between the beginning of
16    the incentive period and the dates on which the new
17    employees listed in the request were hired. This
18    requirement does not apply for tax credits the applicant is
19    seeking because the new employee had participated as a
20    worker-trainee in the Put Illinois to Work Program.
21        (5) An agreement that the Director is authorized to
22    verify with the appropriate State agencies the information
23    contained in the request before issuing a certificate to
24    the applicant.
25        (6) Any other information the Department determines to
26    be appropriate.

 

 

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1    (b) Although an application may be filed at any time after
2the conclusion of the 12-month period (or 6-month period, for
3purposes of subparagraph (A) of item (1) of subsection (a) of
4Section 25) after a new employee was hired, an application
5filed more than 90 days after the earliest date on which it
6could have been filed shall not be awarded any credit if, prior
7to the date it is filed, the Department has received
8applications under this Section for credits totaling more than
9$50,000,000.
10    (c) The Department shall issue a certificate to each
11applicant awarded a credit under this Act. The certificate
12shall include the following:
13        (1) The name and taxpayer identification number of the
14    applicant.
15        (2) The date on which the certificate is issued.
16        (3) The credit amount that will be allowed.
17        (4) Any other information the Department determines to
18    be appropriate.
19(Source: P.A. 96-888, eff. 4-13-10.)
 
20    Section 99. Effective date. This Act takes effect upon
21becoming law.