Illinois General Assembly - Full Text of SB1690
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Full Text of SB1690  102nd General Assembly

SB1690enr 102ND GENERAL ASSEMBLY

  
  
  

 


 
SB1690 EnrolledLRB102 17107 HLH 22536 b

1    AN ACT concerning State government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Department of Commerce and Economic
5Opportunity Law of the Civil Administrative Code of Illinois
6is amended by adding Section 605-1055 as follows:
 
7    (20 ILCS 605/605-1055 new)
8    Sec. 605-1055. The Illinois Small Business Fund. The
9Illinois Small Business Fund is created as a nonappropriated
10separate and apart trust fund in the State Treasury. The
11Department shall use moneys in the Fund to manage proceeds
12that result from investments that the Department has
13undertaken through economic development programs, including,
14but not limited to, the Department's Venture Capital
15Investment Program. The Department may use moneys collected to
16reinvest in small business and economic development
17initiatives through grants or loans. The Fund may receive any
18grants or other moneys designated for small business growth
19from the State, or any unit of federal or local government, or
20any other person, firm, partnership, or corporation. Any
21interest earnings that are attributable to moneys in the Fund
22must be deposited into the Fund.
 

 

 

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1    (20 ILCS 605/605-320 rep.)
2    Section 10. The Department of Commerce and Economic
3Opportunity Law of the Civil Administrative Code of Illinois
4is amended by repealing Section 605-320.
 
5    Section 12. The State Finance Act is amended by adding
6Section 5.936 as follows:
 
7    (30 ILCS 105/5.936 new)
8    Sec. 5.936. Illinois Small Business Fund.
 
9    (30 ILCS 750/Art. 11 rep.)
10    Section 15. The Build Illinois Act is amended by repealing
11Article 11.
 
12    Section 20. The Economic Development for a Growing Economy
13Tax Credit Act is amended by changing Sections 5-5, 5-10,
145-25, 5-70, and 5-90 as follows:
 
15    (35 ILCS 10/5-5)
16    Sec. 5-5. Definitions. As used in this Act:
17    "Agreement" means the Agreement between a Taxpayer and the
18Department under the provisions of Section 5-50 of this Act.
19    "Applicant" means a Taxpayer that is operating a business
20located or that the Taxpayer plans to locate within the State
21of Illinois and that is engaged in interstate or intrastate

 

 

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1commerce for the purpose of manufacturing, processing,
2assembling, warehousing, or distributing products, conducting
3research and development, providing tourism services, or
4providing services in interstate commerce, office industries,
5or agricultural processing, but excluding retail, retail food,
6health, or professional services. "Applicant" does not include
7a Taxpayer who closes or substantially reduces an operation at
8one location in the State and relocates substantially the same
9operation to another location in the State. This does not
10prohibit a Taxpayer from expanding its operations at another
11location in the State, provided that existing operations of a
12similar nature located within the State are not closed or
13substantially reduced. This also does not prohibit a Taxpayer
14from moving its operations from one location in the State to
15another location in the State for the purpose of expanding the
16operation provided that the Department determines that
17expansion cannot reasonably be accommodated within the
18municipality in which the business is located, or in the case
19of a business located in an incorporated area of the county,
20within the county in which the business is located, after
21conferring with the chief elected official of the municipality
22or county and taking into consideration any evidence offered
23by the municipality or county regarding the ability to
24accommodate expansion within the municipality or county.
25    "Committee" means the Illinois Business Investment
26Committee created under Section 5-25 of this Act within the

 

 

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1Illinois Economic Development Board.
2    "Credit" means the amount agreed to between the Department
3and Applicant under this Act, but not to exceed the lesser of:
4(1) the sum of (i) 50% of the Incremental Income Tax
5attributable to New Employees at the Applicant's project and
6(ii) 10% of the training costs of New Employees; or (2) 100% of
7the Incremental Income Tax attributable to New Employees at
8the Applicant's project. However, if the project is located in
9an underserved area, then the amount of the Credit may not
10exceed the lesser of: (1) the sum of (i) 75% of the Incremental
11Income Tax attributable to New Employees at the Applicant's
12project and (ii) 10% of the training costs of New Employees; or
13(2) 100% of the Incremental Income Tax attributable to New
14Employees at the Applicant's project. If an Applicant agrees
15to hire the required number of New Employees, then the maximum
16amount of the Credit for that Applicant may be increased by an
17amount not to exceed 25% of the Incremental Income Tax
18attributable to retained employees at the Applicant's project;
19provided that, in order to receive the increase for retained
20employees, the Applicant must provide the additional evidence
21required under paragraph (3) of subsection (b) of Section
225-25.
23    "Department" means the Department of Commerce and Economic
24Opportunity.
25    "Director" means the Director of Commerce and Economic
26Opportunity.

 

 

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1    "Full-time Employee" means an individual who is employed
2for consideration for at least 35 hours each week or who
3renders any other standard of service generally accepted by
4industry custom or practice as full-time employment. An
5individual for whom a W-2 is issued by a Professional Employer
6Organization (PEO) is a full-time employee if employed in the
7service of the Applicant for consideration for at least 35
8hours each week or who renders any other standard of service
9generally accepted by industry custom or practice as full-time
10employment to Applicant.
11    "Incremental Income Tax" means the total amount withheld
12during the taxable year from the compensation of New Employees
13and, if applicable, retained employees under Article 7 of the
14Illinois Income Tax Act arising from employment at a project
15that is the subject of an Agreement.
16    "New Construction EDGE Agreement" means the Agreement
17between a Taxpayer and the Department under the provisions of
18Section 5-51 of this Act.
19    "New Construction EDGE Credit" means an amount agreed to
20between the Department and the Applicant under this Act as
21part of a New Construction EDGE Agreement that does not exceed
2250% of the Incremental Income Tax attributable to New
23Construction EDGE Employees at the Applicant's project;
24however, if the New Construction EDGE Project is located in an
25underserved area, then the amount of the New Construction EDGE
26Credit may not exceed 75% of the Incremental Income Tax

 

 

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1attributable to New Construction EDGE Employees at the
2Applicant's New Construction EDGE Project.
3    "New Construction EDGE Employee" means a laborer or worker
4who is employed by an Illinois contractor or subcontractor in
5the actual construction work on the site of a New Construction
6EDGE Project, pursuant to a New Construction EDGE Agreement.
7    "New Construction EDGE Incremental Income Tax" means the
8total amount withheld during the taxable year from the
9compensation of New Construction EDGE Employees.
10    "New Construction EDGE Project" means the building of a
11Taxpayer's structure or building, or making improvements of
12any kind to real property. "New Construction EDGE Project"
13does not include the routine operation, routine repair, or
14routine maintenance of existing structures, buildings, or real
15property.
16    "New Employee" means:
17        (a) A Full-time Employee first employed by a Taxpayer
18    in the project that is the subject of an Agreement and who
19    is hired after the Taxpayer enters into the tax credit
20    Agreement.
21        (b) The term "New Employee" does not include:
22            (1) an employee of the Taxpayer who performs a job
23        that was previously performed by another employee, if
24        that job existed for at least 6 months before hiring
25        the employee;
26            (2) an employee of the Taxpayer who was previously

 

 

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1        employed in Illinois by a Related Member of the
2        Taxpayer and whose employment was shifted to the
3        Taxpayer after the Taxpayer entered into the tax
4        credit Agreement; or
5            (3) a child, grandchild, parent, or spouse, other
6        than a spouse who is legally separated from the
7        individual, of any individual who has a direct or an
8        indirect ownership interest of at least 5% in the
9        profits, capital, or value of the Taxpayer.
10        (c) Notwithstanding paragraph (1) of subsection (b),
11    an employee may be considered a New Employee under the
12    Agreement if the employee performs a job that was
13    previously performed by an employee who was:
14            (1) treated under the Agreement as a New Employee;
15        and
16            (2) promoted by the Taxpayer to another job.
17        (d) Notwithstanding subsection (a), the Department may
18    award Credit to an Applicant with respect to an employee
19    hired prior to the date of the Agreement if:
20            (1) the Applicant is in receipt of a letter from
21        the Department stating an intent to enter into a
22        credit Agreement;
23            (2) the letter described in paragraph (1) is
24        issued by the Department not later than 15 days after
25        the effective date of this Act; and
26            (3) the employee was hired after the date the

 

 

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1        letter described in paragraph (1) was issued.
2    "Noncompliance Date" means, in the case of a Taxpayer that
3is not complying with the requirements of the Agreement or the
4provisions of this Act, the day following the last date upon
5which the Taxpayer was in compliance with the requirements of
6the Agreement and the provisions of this Act, as determined by
7the Director, pursuant to Section 5-65.
8    "Pass Through Entity" means an entity that is exempt from
9the tax under subsection (b) or (c) of Section 205 of the
10Illinois Income Tax Act.
11    "Professional Employer Organization" (PEO) means an
12employee leasing company, as defined in Section 206.1(A)(2) of
13the Illinois Unemployment Insurance Act.
14    "Related Member" means a person that, with respect to the
15Taxpayer during any portion of the taxable year, is any one of
16the following:
17        (1) An individual stockholder, if the stockholder and
18    the members of the stockholder's family (as defined in
19    Section 318 of the Internal Revenue Code) own directly,
20    indirectly, beneficially, or constructively, in the
21    aggregate, at least 50% of the value of the Taxpayer's
22    outstanding stock.
23        (2) A partnership, estate, or trust and any partner or
24    beneficiary, if the partnership, estate, or trust, and its
25    partners or beneficiaries own directly, indirectly,
26    beneficially, or constructively, in the aggregate, at

 

 

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1    least 50% of the profits, capital, stock, or value of the
2    Taxpayer.
3        (3) A corporation, and any party related to the
4    corporation in a manner that would require an attribution
5    of stock from the corporation to the party or from the
6    party to the corporation under the attribution rules of
7    Section 318 of the Internal Revenue Code, if the Taxpayer
8    owns directly, indirectly, beneficially, or constructively
9    at least 50% of the value of the corporation's outstanding
10    stock.
11        (4) A corporation and any party related to that
12    corporation in a manner that would require an attribution
13    of stock from the corporation to the party or from the
14    party to the corporation under the attribution rules of
15    Section 318 of the Internal Revenue Code, if the
16    corporation and all such related parties own in the
17    aggregate at least 50% of the profits, capital, stock, or
18    value of the Taxpayer.
19        (5) A person to or from whom there is attribution of
20    stock ownership in accordance with Section 1563(e) of the
21    Internal Revenue Code, except, for purposes of determining
22    whether a person is a Related Member under this paragraph,
23    20% shall be substituted for 5% wherever 5% appears in
24    Section 1563(e) of the Internal Revenue Code.
25    "Taxpayer" means an individual, corporation, partnership,
26or other entity that has any Illinois Income Tax liability.

 

 

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1    "Underserved area" means a geographic area that meets one
2or more of the following conditions:
3        (1) the area has a poverty rate of at least 20%
4    according to the latest federal decennial census;
5        (2) 75% or more of the children in the area
6    participate in the federal free lunch program according to
7    reported statistics from the State Board of Education;
8        (3) at least 20% of the households in the area receive
9    assistance under the Supplemental Nutrition Assistance
10    Program (SNAP); or
11        (4) the area has an average unemployment rate, as
12    determined by the Illinois Department of Employment
13    Security, that is more than 120% of the national
14    unemployment average, as determined by the U.S. Department
15    of Labor, for a period of at least 2 consecutive calendar
16    years preceding the date of the application.
17(Source: P.A. 100-511, eff. 9-18-17; 101-9, eff. 6-5-19.)
 
18    (35 ILCS 10/5-10)
19    Sec. 5-10. Powers of the Department. The Department, in
20addition to those powers granted under the Civil
21Administrative Code of Illinois, is granted and shall have all
22the powers necessary or convenient to carry out and effectuate
23the purposes and provisions of this Act, including, but not
24limited to, power and authority to:
25    (a) Promulgate procedures, rules, or regulations deemed

 

 

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

 

 

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1another party, to the modification or restructuring of any
2Agreement to which the Department is a party.
3    (f) Fix, determine, charge, and collect any premiums,
4fees, charges, costs, and expenses from Applicants, including,
5without limitation, any application fees, commitment fees,
6program fees, financing charges, or publication fees as deemed
7appropriate to pay expenses necessary or incident to the
8administration, staffing, or operation in connection with the
9Department's or Committee's activities under this Act, or for
10preparation, implementation, and enforcement of the terms of
11the Agreement, or for consultation, advisory and legal fees,
12and other costs; however, all fees and expenses incident
13thereto shall be the responsibility of the Applicant.
14    (g) Provide for sufficient personnel to permit
15administration, staffing, operation, and related support
16required to adequately discharge its duties and
17responsibilities described in this Act from funds made
18available through charges to Applicants or from funds as may
19be appropriated by the General Assembly for the administration
20of this Act.
21    (h) Require Applicants, upon written request, to issue any
22necessary authorization to the appropriate federal, state, or
23local authority for the release of information concerning a
24project being considered under the provisions of this Act,
25with the information requested to include, but not be limited
26to, financial reports, returns, or records relating to the

 

 

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1Taxpayers' or its project.
2    (i) Require that a Taxpayer shall at all times keep proper
3books of record and account in accordance with generally
4accepted accounting principles consistently applied, with the
5books, records, or papers related to the Agreement in the
6custody or control of the Taxpayer open for reasonable
7Department inspection and audits, and including, without
8limitation, the making of copies of the books, records, or
9papers, and the inspection or appraisal of any of the Taxpayer
10or project assets.
11    (j) Take whatever actions are necessary or appropriate to
12protect the State's interest in the event of bankruptcy,
13default, foreclosure, or noncompliance with the terms and
14conditions of financial assistance or participation required
15under this Act, including the power to sell, dispose, lease,
16or rent, upon terms and conditions determined by the Director
17to be appropriate, real or personal property that the
18Department may receive as a result of these actions.
19(Source: P.A. 91-476, eff. 8-11-99.)
 
20    (35 ILCS 10/5-25)
21    Sec. 5-25. Review of Application.
22    (a) (Blank). In addition to those duties granted under the
23Illinois Economic Development Board Act, the Illinois Economic
24Development Board shall form a Business Investment Committee
25for the purpose of making recommendations for applications. At

 

 

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1the request of the Board, the Director of Commerce and
2Economic Opportunity or his or her designee, the Director of
3the Governor's Office of Management and Budget or his or her
4designee, the Director of Revenue or his or her designee, the
5Director of Employment Security or his or her designee, and an
6elected official of the affected locality, such as the chair
7of the county board or the mayor, may serve as members of the
8Committee to assist with its analysis and deliberations.
9    (b) The Department shall determine which projects will At
10the Department's request, the Committee shall convene, make
11inquiries, and conduct studies in the manner and by the
12methods as it deems desirable, review information with respect
13to Applicants, and make recommendations for projects to
14benefit the State. In making its recommendation that an
15Applicant's application for Credit should or should not be
16accepted, which shall occur within a reasonable time frame as
17determined by the nature of the application, the Department
18Committee shall determine that all the following conditions
19exist:
20        (1) The Applicant's project intends, as required by
21    subsection (b) of Section 5-20 to make the required
22    investment in the State and intends to hire the required
23    number of New Employees in Illinois as a result of that
24    project.
25        (2) The Applicant's project is economically sound and
26    will benefit the people of the State of Illinois by

 

 

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1    increasing opportunities for employment and strengthen the
2    economy of Illinois.
3        (3) That, if not for the Credit, the project would not
4    occur in Illinois, which may be demonstrated by evidence
5    that receipt of the Credit is essential to the Applicant's
6    decision to create new jobs in the State, such as the
7    magnitude of the cost differential between Illinois and a
8    competing State; in addition, if the Applicant is seeking
9    an increase in the maximum amount of the Credit for
10    retained employees, the Applicant must provide evidence
11    the Applicant has multi-state location options and could
12    reasonably and efficiently locate outside of the State or
13    demonstrate that at least one other state is being
14    considered for the project.
15        (4) A cost differential is identified, using best
16    available data, in the projected costs for the Applicant's
17    project compared to the costs in the competing state,
18    including the impact of the competing state's incentive
19    programs. The competing state's incentive programs shall
20    include state, local, private, and federal funds
21    available.
22        (5) The political subdivisions affected by the project
23    have committed local incentives with respect to the
24    project, considering local ability to assist.
25        (6) Awarding the Credit will result in an overall
26    positive fiscal impact to the State, as certified by the

 

 

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1    Department Committee using the best available data.
2        (7) The Credit is not prohibited by Section 5-35 of
3    this Act.
4(Source: P.A. 100-511, eff. 9-18-17.)
 
5    (35 ILCS 10/5-70)
6    Sec. 5-70. Annual report. On or before July 1 each year,
7the Department Committee shall submit a report to the
8Department on the tax credit program under this Act to the
9Governor and the General Assembly. The report shall include
10information on the number of Agreements that were entered into
11under this Act during the preceding calendar year, a
12description of the project that is the subject of each
13Agreement, an update on the status of projects under
14Agreements entered into before the preceding calendar year,
15and the sum of the Credits awarded under this Act. A copy of
16the report shall be delivered to the Governor and to each
17member of the General Assembly.
18    The report must include, for each Agreement:
19        (1) the original estimates of the value of the Credit
20    and the number of new jobs to be created and, if
21    applicable, the number of retained jobs;
22        (2) any relevant modifications to existing Agreements;
23        (3) a statement of the progress made by each Taxpayer
24    in meeting the terms of the original Agreement;
25        (4) a statement of wages paid to New Employees and, if

 

 

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1    applicable, retained employees in the State;
2        (5) any information reported under Section 5-57 of
3    this Act; and
4        (6) a copy of the original Agreement or a link to the
5    Agreement on the Department's website.
6(Source: P.A. 100-511, eff. 9-18-17.)
 
7    (35 ILCS 10/5-90)
8    Sec. 5-90. Program Terms and Conditions.
9    (a) Any documentary materials or data made available or
10received by any member of a Committee or any agent or employee
11of the Department shall be deemed confidential and shall not
12be deemed public records to the extent that the materials or
13data consists of trade secrets, commercial or financial
14information regarding the operation of the business conducted
15by the Applicant for or recipient of any tax credit under this
16Act, or any information regarding the competitive position of
17a business in a particular field of endeavor.
18    (b) Nothing in this Act shall be construed as creating any
19rights in any Applicant to enter into an Agreement or in any
20person to challenge the terms of any Agreement.
21(Source: P.A. 91-476, eff. 8-11-99.)
 
22    (35 ILCS 10/5-40 rep.)
23    Section 25. The Economic Development for a Growing Economy
24Tax Credit Act is amended by repealing Section 5-40.