97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB3934

 

Introduced 1/10/2012, by Rep. Jack D. Franks

 

SYNOPSIS AS INTRODUCED:
 
20 ILCS 2505/2505-503 new
35 ILCS 10/5-10
35 ILCS 10/5-20
35 ILCS 10/5-45
35 ILCS 10/5-50

    Amends the Department of Revenue Law of the Civil Administrative Code of Illinois. Creates the Economic Incentive Committee within the Department for the purpose of approving Agreements entered into under the Economic Development for a Growing Economy Tax Credit Act. Sets forth the membership of the Committee. Provides that the Department of Revenue shall post the terms of each Agreement entered into under the Economic Development for a Growing Economy Tax Credit Act on its website. Amends the Economic Development for a Growing Economy Tax Credit Act to provide that each Agreement is subject to final approval by the Economic Incentive Committee. Effective July 1, 2012.


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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 5. The Department of Revenue Law of the Civil
5Administrative Code of Illinois is amended by adding Section
62505-503 as follows:
 
7    (20 ILCS 2505/2505-503 new)
8    Sec. 2505-503. Economic Incentive Committee; creation;
9duties. An Economic Incentive Committee is created within the
10Department for the purpose of approving Agreements entered into
11under the Economic Development for a Growing Economy Tax Credit
12Act. The Committee shall consist of 5 members appointed as
13follows: one member shall be appointed by the Governor; one
14member shall be appointed by the Speaker of the House of
15Representatives; one member shall be appointed by the President
16of the Senate; one member shall be appointed by the House
17Minority Leader; and one member shall be appointed by the
18Senate Minority Leader. Each member of the Committee shall be a
19business owner or shall have expertise in economic development
20or academia.
21    The Committee shall approve or deny each Agreement within
2260 days after the Agreement is submitted to the Committee.
23Members shall serve without compensation, but may be reimbursed

 

 

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1for their necessary expenses. If a member has a conflict of
2interest with respect to any Agreement, he or she shall recuse
3himself or herself from consideration of that Agreement. The
4Committee shall consider each Agreement submitted on or before
5December 31, 2016 and shall be dissolved as soon after that
6date as possible.
7    The Department shall post the terms of each Agreement
8entered into under the Economic Development for a Growing
9Economy Tax Credit Act on its website.
 
10    Section 10. The Economic Development for a Growing Economy
11Tax Credit Act is amended by changing Sections 5-10, 5-20,
125-45, and 5-50 as follows:
 
13    (35 ILCS 10/5-10)
14    Sec. 5-10. Powers of the Department. The Department, in
15addition to those powers granted under the Civil Administrative
16Code of Illinois, is granted and shall have all the powers
17necessary or convenient to carry out and effectuate the
18purposes and provisions of this Act, including, but not limited
19to, power and authority to:
20    (a) Promulgate procedures, rules, or regulations deemed
21necessary and appropriate for the administration of the
22programs; establish forms for applications, notifications,
23contracts, or any other agreements; and accept applications at
24any time during the year.

 

 

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1    (b) Provide and assist Taxpayers pursuant to the provisions
2of this Act, and cooperate with Taxpayers that are parties to
3Agreements to promote, foster, and support economic
4development, capital investment, and job creation or retention
5within the State.
6    (c) Enter into agreements and memoranda of understanding
7for participation of and engage in cooperation with agencies of
8the federal government, local units of government,
9universities, research foundations or institutions, regional
10economic development corporations, or other organizations for
11the purposes of this Act.
12    (d) Gather information and conduct inquiries, in the manner
13and by the methods as it deems desirable, including without
14limitation, gathering information with respect to Applicants
15for the purpose of making any designations or certifications
16necessary or desirable or to gather information to assist the
17Committee with any recommendation or guidance in the
18furtherance of the purposes of this Act.
19    (e) Establish, negotiate and effectuate any term,
20agreement or other document with any person, necessary or
21appropriate to accomplish the purposes of this Act; and to
22consent, subject to the provisions of any Agreement with
23another party, to the modification or restructuring of any
24Agreement to which the Department is a party, provided that all
25Agreements entered into on or after the effective date of this
26amendatory Act of the 97th General Assembly, and all

 

 

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1modifications to or restructuring of Agreements occurring on or
2after the effective date of this amendatory Act of the 97th
3General Assembly, require the approval of the Economic
4Incentive Committee established under Section 2505-503 of the
5Department of Revenue Law of the Civil Administrative Code of
6Illinois.
7    (f) Fix, determine, charge, and collect any premiums, fees,
8charges, costs, and expenses from Applicants, including,
9without limitation, any application fees, commitment fees,
10program fees, financing charges, or publication fees as deemed
11appropriate to pay expenses necessary or incident to the
12administration, staffing, or operation in connection with the
13Department's or Committee's activities under this Act, or for
14preparation, implementation, and enforcement of the terms of
15the Agreement, or for consultation, advisory and legal fees,
16and other costs; however, all fees and expenses incident
17thereto shall be the responsibility of the Applicant.
18    (g) Provide for sufficient personnel to permit
19administration, staffing, operation, and related support
20required to adequately discharge its duties and
21responsibilities described in this Act from funds made
22available through charges to Applicants or from funds as may be
23appropriated by the General Assembly for the administration of
24this Act.
25    (h) Require Applicants, upon written request, to issue any
26necessary authorization to the appropriate federal, state, or

 

 

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1local authority for the release of information concerning a
2project being considered under the provisions of this Act, with
3the information requested to include, but not be limited to,
4financial reports, returns, or records relating to the
5Taxpayers' or its project.
6    (i) Require that a Taxpayer shall at all times keep proper
7books of record and account in accordance with generally
8accepted accounting principles consistently applied, with the
9books, records, or papers related to the Agreement in the
10custody or control of the Taxpayer open for reasonable
11Department inspection and audits, and including, without
12limitation, the making of copies of the books, records, or
13papers, and the inspection or appraisal of any of the Taxpayer
14or project assets.
15    (j) Take whatever actions are necessary or appropriate to
16protect the State's interest in the event of bankruptcy,
17default, foreclosure, or noncompliance with the terms and
18conditions of financial assistance or participation required
19under this Act, including the power to sell, dispose, lease, or
20rent, upon terms and conditions determined by the Director to
21be appropriate, real or personal property that the Department
22may receive as a result of these actions.
23(Source: P.A. 91-476, eff. 8-11-99.)
 
24    (35 ILCS 10/5-20)
25    Sec. 5-20. Application for a project to create and retain

 

 

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1new jobs.
2    (a) Any Taxpayer proposing a project located or planned to
3be located in Illinois may request consideration for
4designation of its project, by formal written letter of request
5or by formal application to the Department, in which the
6Applicant states its intent to make at least a specified level
7of investment and intends to hire or retain a specified number
8of full-time employees at a designated location in Illinois. As
9circumstances require, the Department may require a formal
10application from an Applicant and a formal letter of request
11for assistance.
12    (b) In order to qualify for Credits under this Act, an
13Applicant's project must:
14        (1) involve an investment of at least $5,000,000 in
15    capital improvements to be placed in service and to employ
16    at least 25 New Employees within the State as a direct
17    result of the project;
18        (2) involve an investment of at least an amount (to be
19    expressly specified by the Department and the Committee) in
20    capital improvements to be placed in service and will
21    employ at least an amount (to be expressly specified by the
22    Department and the Committee) of New Employees within the
23    State, provided that the Department and the Committee have
24    determined that the project will provide a substantial
25    economic benefit to the State; or
26        (3) if the applicant has 100 or fewer employees,

 

 

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1    involve an investment of at least $1,000,000 in capital
2    improvements to be placed in service and to employ at least
3    5 New Employees within the State as a direct result of the
4    project.
5    (c) After receipt of an application, the Department may
6enter into an Agreement with the Applicant if the application
7is accepted in accordance with Section 5-25 and the Agreement
8is approved by the Economic Incentive Committee established
9under Section 2505-503 of the Department of Revenue Law of the
10Civil Administrative Code of Illinois.
11(Source: P.A. 93-882, eff. 1-1-05.)
 
12    (35 ILCS 10/5-45)
13    Sec. 5-45. Amount and duration of the credit.
14    (a) The Department shall determine the amount and duration
15of the credit awarded under this Act. The duration of the
16credit may not exceed 10 taxable years. The credit may be
17stated as a percentage of the Incremental Income Tax
18attributable to the applicant's project and may include a fixed
19dollar limitation. With respect to Agreements entered into or
20modified on or after the effective date of this amendatory Act
21of the 97th General Assembly, the amount and duration of the
22credit is subject to final approval by the Economic Incentive
23Committee established under Section 2505-503 of the Department
24of Revenue Law of the Civil Administrative Code of Illinois.
25    (b) Notwithstanding subsection (a), and except as the

 

 

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1credit may be applied in a carryover year pursuant to Section
2211(4) of the Illinois Income Tax Act, the credit may be
3applied against the State income tax liability in more than 10
4taxable years but not in more than 15 taxable years for an
5eligible business that (i) qualifies under this Act and the
6Corporate Headquarters Relocation Act and has in fact
7undertaken a qualifying project within the time frame specified
8by the Department of Commerce and Economic Opportunity under
9that Act, and (ii) applies against its State income tax
10liability, during the entire 15-year period, no more than 60%
11of the maximum credit per year that would otherwise be
12available under this Act.
13(Source: P.A. 94-793, eff. 5-19-06.)
 
14    (35 ILCS 10/5-50)
15    Sec. 5-50. Contents of Agreements with Applicants. The
16Department shall enter into an Agreement with an Applicant that
17is awarded a Credit under this Act. The Agreement must include
18all of the following:
19        (1) A detailed description of the project that is the
20    subject of the Agreement, including the location and amount
21    of the investment and jobs created or retained.
22        (2) The duration of the Credit and the first taxable
23    year for which the Credit may be claimed.
24        (3) The Credit amount that will be allowed for each
25    taxable year.

 

 

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1        (4) A requirement that the Taxpayer shall maintain
2    operations at the project location that shall be stated as
3    a minimum number of years not to exceed 10.
4        (5) A specific method for determining the number of New
5    Employees employed during a taxable year.
6        (6) A requirement that the Taxpayer shall annually
7    report to the Department the number of New Employees, the
8    Incremental Income Tax withheld in connection with the New
9    Employees, and any other information the Director needs to
10    perform the Director's duties under this Act.
11        (7) A requirement that the Director is authorized to
12    verify with the appropriate State agencies the amounts
13    reported under paragraph (6), and after doing so shall
14    issue a certificate to the Taxpayer stating that the
15    amounts have been verified.
16        (8) A requirement that the Taxpayer shall provide
17    written notification to the Director not more than 30 days
18    after the Taxpayer makes or receives a proposal that would
19    transfer the Taxpayer's State tax liability obligations to
20    a successor Taxpayer.
21        (9) A detailed description of the number of New
22    Employees to be hired, and the occupation and payroll of
23    the full-time jobs to be created or retained as a result of
24    the project.
25        (10) The minimum investment the business enterprise
26    will make in capital improvements, the time period for

 

 

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1    placing the property in service, and the designated
2    location in Illinois for the investment.
3        (11) A requirement that the Taxpayer shall provide
4    written notification to the Director and the Committee not
5    more than 30 days after the Taxpayer determines that the
6    minimum job creation or retention, employment payroll, or
7    investment no longer is being or will be achieved or
8    maintained as set forth in the terms and conditions of the
9    Agreement.
10        (12) A provision that, if the total number of New
11    Employees falls below a specified level, the allowance of
12    Credit shall be suspended until the number of New Employees
13    equals or exceeds the Agreement amount.
14        (13) A detailed description of the items for which the
15    costs incurred by the Taxpayer will be included in the
16    limitation on the Credit provided in Section 5-30.
17        (13.5) A provision that, if the Taxpayer never meets
18    either the investment or job creation and retention
19    requirements specified in the Agreement during the entire
20    5-year period beginning on the first day of the first
21    taxable year in which the Agreement is executed and ending
22    on the last day of the fifth taxable year after the
23    Agreement is executed, then the Agreement is automatically
24    terminated on the last day of the fifth taxable year after
25    the Agreement is executed and the Taxpayer is not entitled
26    to the award of any credits for any of that 5-year period.

 

 

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1        (14) Any other performance conditions or contract
2    provisions as the Department determines are appropriate.
3    Any Agreement entered into on or after the effective date
4of this amendatory Act of the 97th General Assembly is subject
5to the approval of the Economic Incentive Committee established
6under Section 2505-503 of the Department of Revenue Law of the
7Civil Administrative Code of Illinois. Any modifications to an
8existing Agreement that take effect on or after the effective
9date of this amendatory Act of the 97th General Assembly are
10subject to the approval of the Economic Incentive Committee
11established under Section 2505-503 of the Department of Revenue
12Law of the Civil Administrative Code of Illinois. The
13Department must forward any proposed Agreements or
14modifications to the Economic Incentive Committee within 15
15days after the terms of the Agreement or modification are
16finalized.
17(Source: P.A. 97-2, eff. 5-6-11.)
 
18    Section 99. Effective date. This Act takes effect July 1,
192012.