Sen. John G. Mulroe

Filed: 3/10/2011

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 97

2    AMENDMENT NO. ______. Amend Senate Bill 97 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Small Business Job Creation Tax Credit Act
5is amended by changing Sections 10 and 25 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 (A) 50 full-time employees if the
12    applicant is applying for a credit for a new employee hired
13    on or after July 1, 2010 and on or before June 30, 2012 and
14    (B) 100 or fewer employees if the applicant is applying for
15    a credit for a new employee hired on or after July 1, 2011
16    and on or before June 30, 2012, without regard to the

 

 

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1    location of employment of such employees at the beginning
2    of the incentive period applicable to the applicant; or
3        (2) hired within the incentive period an employee who
4    had participated as worker-trainee in the Put Illinois to
5    Work Program during 2010.
6    In the case of any person that is a member of a unitary
7business group within the meaning of subdivision (a)(27) of
8Section 1501 of the Illinois Income Tax Act, "applicant" refers
9to the unitary business group.
10    "Certificate" means the tax credit certificate issued by
11the Department under Section 35 of this Act.
12    "Certificate of eligibility" means the certificate issued
13by the Department under Section 20 of this Act.
14    "Credit" means the amount awarded by the Department to an
15applicant by issuance of a certificate under Section 35 of this
16Act for each new full-time equivalent employee hired or job
17created.
18    "Department" means the Department of Commerce and Economic
19Opportunity.
20    "Director" means the Director of the Department.
21    "Full-time employee" means an individual who is employed
22for a basic wage for at least 35 hours each week or who renders
23any other standard of service generally accepted by industry
24custom or practice as full-time employment. An individual for
25whom a W-2 is issued by a Professional Employer Organization is
26a full-time employee if he or she is employed in the service of

 

 

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1the applicant for a basic wage for at least 35 hours each week
2or renders any other standard of service generally accepted by
3industry custom or practice as full-time employment. For the
4purposes of this Act, such an individual shall be considered a
5full-time employee of the applicant.
6    "Professional Employer Organization" (PEO) shall have the
7same meaning as defined in Section 5-5 of the Economic
8Development for a Growing Economy Tax Credit Act.
9    "Incentive period" means (i) for applicants with 50 or
10fewer employees on July 1, 2010, and for applicants who hired
11an employee who had participated as a worker-trainee in the Put
12Illinois to Work Program during 2010, the period beginning July
131, 2010 and ending on June 30, 2012 and (ii) for applicants
14with 100 or fewer employees on July 1, 2011, other than
15applicants who qualified under item (i) of this definition, the
16period beginning July 1, 2011 and ending June 30, 2012 June 30,
172011.
18    "Basic wage" means compensation for employment that is no
19less than $10 per hour or the equivalent salary for a new
20employee.
21    "New employee" means a full-time employee:
22        (1) who first became employed by an eligible applicant
23    with less than 50 full-time employees within the incentive
24    period whose hire results in a net increase in the
25    applicant's full-time Illinois employees and who is
26    receiving a basic wage as compensation; or

 

 

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1        (2) who participated as a worker-trainee in the Put
2    Illinois to Work Program during 2010 and who is
3    subsequently hired during the incentive period by an
4    applicant and who is receiving a basic wage as
5    compensation.
6    The term "new employee" does not include:
7        (1) a person who was previously employed in Illinois by
8    the applicant or a related member prior to the onset of the
9    incentive period; or
10        (2) any individual who has a direct or indirect
11    ownership interest of at least 5% in the profits, capital,
12    or value of the applicant or a related member.
13    "Noncompliance date" means, in the case of an applicant
14that is not complying with the requirements of the provisions
15of this Act, the day following the last date upon which the
16taxpayer was in compliance with the requirements of the
17provisions of this Act, as determined by the Director, pursuant
18to Section 45 of this Act.
19    "Put Illinois to Work Program" means a worker training and
20employment program that was established by the State of
21Illinois with funding from the United States Department of
22Health and Human Services of Emergency Temporary Assistance to
23Needy Families funds authorized by the American Recovery and
24Reinvestment Act of 2009 (ARRA TANF Funds). These ARRA TANF
25funds were in turn used by the State of Illinois to fund the
26Put Illinois to Work Program.

 

 

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

 

 

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1    party to the corporation under the attribution rules of
2    Section 318 of the Internal Revenue Code, if the
3    corporation and all such related parties own, in the
4    aggregate, at least 50% of the profits, capital, stock, or
5    other ownership interest in the applicant.
6        (5) A person to or from whom there is attribution of
7    stock ownership in accordance with Section 1563(e) of the
8    Internal Revenue Code, except that for purposes of
9    determining whether a person is a related member under this
10    paragraph, "20%" shall be substituted for "5%" whenever
11    "5%" appears in Section 1563(e) of the Internal Revenue
12    Code.
13(Source: P.A. 96-888, eff. 4-13-10; 96-1498, eff. 1-18-11.)
 
14    (35 ILCS 25/25)
15    Sec. 25. Tax credit.
16    (a) Subject to the conditions set forth in this Act, an
17applicant is entitled to a credit against payment of taxes
18withheld under Section 704A of the Illinois Income Tax Act:
19        (1) for new employees who participated as
20    worker-trainees in the Put Illinois to Work Program during
21    2010:
22            (A) in the first calendar year ending on or after
23        the date that is 6 months after December 31, 2010, or
24        the date of hire, whichever is later. Under this
25        subparagraph, the applicant is entitled to one-half of

 

 

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

 

 

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1for applicants that are eligible for entire the incentive
2period beginning on July 1, 2010 and ending on June 30, 2012,
3the maximum total number of full-time Illinois employees
4employed by the applicant for at least 12 consecutive months
5during any portion of the period running from July 1, 2010 to
6July 1, 2012, minus the number of full-time Illinois employees
7employed by the employer on July 1, 2010 and (ii) for
8applicants that are eligible only for the portion of the
9incentive period beginning July 1, 2011 and ending June 30,
102012, the total number of full-time Illinois employees employed
11by the applicant on June 30, 2012, minus the number of
12full-time Illinois employees employed by the applicant on July
131, 2011. total number of full-time Illinois employees of the
14applicant on June 30, 2011, minus the number of full-time
15Illinois employees employed by the employer on July 1, 2010.
16For purposes of these calculations the calculation, an employer
17that begins doing business in this State during the incentive
18period, as determined by the Director, shall be treated as
19having zero Illinois employees on July 1, 2010.
20    (f) The net increase in the number of full-time Illinois
21employees of the applicant under subsection (e) must be
22sustained continuously for at least 12 months, starting with
23the date of hire of a new employee during the incentive period.
24Eligibility for the credit does not depend on the continuous
25employment of any particular individual. For purposes of this
26subsection (f), if a new employee ceases to be employed before

 

 

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1the completion of the 12-month period for any reason, the net
2increase in the number of full-time Illinois employees shall be
3treated as continuous if a different new employee is hired as a
4replacement within a reasonable time for the same position.
5    (g) The Department shall promulgate rules to enable an
6applicant for which a PEO has been contracted to issue W-2s and
7make payment of taxes withheld under Section 704A of the
8Illinois Income Tax Act for new employees to retain the benefit
9of tax credits to which the applicant is otherwise entitled
10under this Act.
11(Source: P.A. 96-888, eff. 4-13-10; 96-1498, eff. 1-18-11.)
 
12    Section 99. Effective date. This Act takes effect upon
13becoming law.".