093_HB0235sam001

 










                                     LRB093 02644 SJM 15292 a

 1                     AMENDMENT TO HOUSE BILL 235

 2        AMENDMENT NO.     .  Amend House Bill  235  by  replacing
 3    everything after the enacting clause with the following:

 4        "Section  1.  Short  title.  This Act may be cited as the
 5    Corporate Accountability for Tax Expenditures Act.

 6        Section 5. Definitions. As used in this Act:
 7        "Base years" means the first 2  complete  calendar  years
 8    following   the  effective  date  of  a  recipient  receiving
 9    development assistance.
10        "Date of assistance" means the commencement date  of  the
11    assistance  agreement,  which date triggers the period during
12    which the recipient is obligated to create or retain jobs and
13    continue operations at the specific project site.
14        "Default" means that a recipient has not achieved its job
15    creation,  job  retention,  or  wage  or  benefit  goals,  as
16    applicable, during the prescribed period therefor.
17        "Department"   means,   unless   otherwise   noted,   the
18    Department of Commerce and Community Affairs or any successor
19    agency.
20        "Development assistance" means (1) tax  credits  and  tax
21    exemptions  (other  than given under tax increment financing)
22    given as an incentive to a  recipient  business  organization
 
                            -2-      LRB093 02644 SJM 15292 a
 1    pursuant   to   an   initial   certification  or  an  initial
 2    designation  made  by  the  Department  under  the   Economic
 3    Development  for  a  Growing  Economy  Tax Credit Act and the
 4    Illinois Enterprise  Zone  Act,  including  the  High  Impact
 5    Business program, (2) grants or loans given to a recipient as
 6    an incentive to a business organization pursuant to the Large
 7    Business Development Program, the Business Development Public
 8    Infrastructure  Program,  or the Industrial Training Program,
 9    (3) the State Treasurer's Economic  Program  Loans,  (4)  the
10    Illinois  Department  of  Transportation Economic Development
11    Program, and (5) all successor and  subsequent  programs  and
12    tax  credits  designed  to promote large business relocations
13    and expansions. "Development assistance" does not include tax
14    increment financing, assistance provided under  the  Illinois
15    Enterprise    Zone   Act   pursuant   to   local   ordinance,
16    participation  loans,  or  financial   transactions   through
17    statutorily authorized financial intermediaries in support of
18    small  business  loans and investments or given in connection
19    with the development of affordable housing.
20        "Development assistance agreement"  means  any  agreement
21    executed by the State granting body and the recipient setting
22    forth  the  terms and conditions of development assistance to
23    be provided  to  the  recipient  consistent  with  the  final
24    application  for  development  assistance,  including but not
25    limited to the date of assistance, submitted to and  approved
26    by the State granting body.
27        "Full-time,   permanent   job"   means  either:  (1)  the
28    definition  therefor  in  the  legislation  authorizing   the
29    programs   described   in   the   definition  of  development
30    assistance in the Act or (2) if there is no such  definition,
31    then  as  defined  in  administrative rules implementing such
32    legislation, provided the administrative rules were in  place
33    prior  to  the  effective  date of this Act. On and after the
34    effective date of this Act, if  there  is  no  definition  of
 
                            -3-      LRB093 02644 SJM 15292 a
 1    "full-time,   permanent   job"   in  either  the  legislation
 2    authorizing a program that constitutes  economic  development
 3    assistance  under  this  Act  or  in  any administrative rule
 4    implementing such legislation that was in place prior to  the
 5    effective  date  of this Act, then "full-time, permanent job"
 6    means a job in which the new employee works for the recipient
 7    at a rate of at least 35 hours per week.
 8        "New employee" means either: (1) the definition  therefor
 9    in  the legislation authorizing the programs described in the
10    definition of development assistance in the  Act  or  (2)  if
11    there   is   no   such   definition,   then   as  defined  in
12    administrative rules implementing such legislation,  provided
13    the administrative rules were in place prior to the effective
14    date  of  this  Act.  On and after the effective date of this
15    Act, if there is no definition of "new  employee"  in  either
16    the   legislation  authorizing  a  program  that  constitutes
17    economic development assistance under this  Act  nor  in  any
18    administrative rule implementing such legislation that was in
19    place  prior  to  the  effective  date of this Act, then "new
20    employee"  means  a   full-time,   permanent   employee   who
21    represents  a  net  increase in the number of the recipient's
22    employees statewide. "New employee" includes an employee  who
23    previously  filled a new employee position with the recipient
24    who was rehired or called back  from  a  layoff  that  occurs
25    during or following the base years.
26        The  term  "New  Employee"  does  not  include any of the
27    following:
28             (1) An employee of the recipient who performs a  job
29        that was previously performed by another employee in this
30        State,  if  that job existed in this State for at least 6
31        months before hiring the employee.
32             (2) A child, grandchild, parent,  or  spouse,  other
33        than   a   spouse  who  is  legally  separated  from  the
34        individual,  of  any  individual  who  has  a  direct  or
 
                            -4-      LRB093 02644 SJM 15292 a
 1        indirect  ownership  interest  of  at  least  5%  in  the
 2        profits,  capital,  or  value  of  any  member   of   the
 3        recipient.
 4        "Part-time job" means either: (1) the definition therefor
 5    in  the legislation authorizing the programs described in the
 6    definition of development assistance in the  Act  or  (2)  if
 7    there   is   no   such   definition,   then   as  defined  in
 8    administrative rules implementing such legislation,  provided
 9    the administrative rules were in place prior to the effective
10    date  of  this  Act.  On and after the effective date of this
11    Act, if there is no definition of "part-time job"  in  either
12    the   legislation  authorizing  a  program  that  constitutes
13    economic development assistance under  this  Act  or  in  any
14    administrative rule implementing such legislation that was in
15    place   prior  to  the  effective  date  of  this  Act,  then
16    "part-time job" means a job in which the new  employee  works
17    for the recipient at a rate of less than 35 hours per week.
18        "Recipient"  means  any  business  that receives economic
19    development  assistance.  A  business  is  any   corporation,
20    limited   liability   company,  partnership,  joint  venture,
21    association, sole proprietorship, or other legally recognized
22    entity.
23        "Retained employee"  means  either:  (1)  the  definition
24    therefor   in   the   legislation  authorizing  the  programs
25    described in the definition of development assistance in  the
26    Act or (2) if there is no such definition, then as defined in
27    administrative  rules implementing such legislation, provided
28    the administrative rules were in place prior to the effective
29    date of this Act. On and after the  effective  date  of  this
30    Act,  if  there  is  no  definition of "retained employee" in
31    either the legislation authorizing a program that constitutes
32    economic development assistance under  this  Act  or  in  any
33    administrative rule implementing such legislation that was in
34    place prior to the effective date of this Act, then "retained
 
                            -5-      LRB093 02644 SJM 15292 a
 1    employee" means any employee defined as having a full-time or
 2    full-time  equivalent job preserved at a specific facility or
 3    site, the continuance of which is threatened  by  a  specific
 4    and  demonstrable  threat,  which  shall  be specified in the
 5    application for development assistance.
 6        "Specific project site" means that  distinct  operational
 7    unit to which any development assistance is applied.
 8        "State  granting  body"  means  the Department, any State
 9    department  or  State  agency   that   provides   development
10    assistance  that  has  reporting requirements under this Act,
11    and any successor agencies to any of the preceding.
12        "Temporary job" means either: (1) the definition therefor
13    in the legislation authorizing the programs described in  the
14    definition  of  development  assistance  in the Act or (2) if
15    there  is  no   such   definition,   then   as   defined   in
16    administrative  rules implementing such legislation, provided
17    the administrative rules were in place prior to the effective
18    date of this Act. On and after the  effective  date  of  this
19    Act,  if  there is no definition of "temporary job" in either
20    the  legislation  authorizing  a  program  that   constitutes
21    economic  development  assistance  under  this  Act or in any
22    administrative rule implementing such legislation that was in
23    place  prior  to  the  effective  date  of  this  Act,   then
24    "temporary  job"  means  a  job  in which the new employee is
25    hired for a specific duration of time or season.
26        "Value of assistance" means the face value of any form of
27    development assistance.

28        Section 10. Unified Economic Development Budget.
29        (a)  For each State fiscal year ending on or  after  June
30    30,  2005,  the  Department of Revenue shall submit an annual
31    Unified Economic Development Budget to the General  Assembly.
32    The Unified Economic Development Budget shall be due within 3
33    months  after  the  end of the fiscal year, and shall present
 
                            -6-      LRB093 02644 SJM 15292 a
 1    all types of development assistance granted during the  prior
 2    fiscal year, including:
 3             (1)  The aggregate amount of uncollected or diverted
 4        State   tax   revenues   resulting   from  each  type  of
 5        development assistance provided in the tax  statutes,  as
 6        reported  to  the  Department  of  Revenue on tax returns
 7        filed during the fiscal year.
 8             (2)  All State on-budget development assistance.
 9        (b)  All  data  contained   in   the   Unified   Economic
10    Development Budget presented to the General Assembly shall be
11    fully subject to the Freedom of Information Act.
12        (c)  The  Department  of Revenue shall submit a report of
13    the amounts in subdivision (a)(1)  of  this  Section  to  the
14    Department,  which  may  append  such  report  to the Unified
15    Economic Development Budget rather than separately  reporting
16    such amounts.

17        Section 15. Standardized applications for State on-budget
18    development assistance.
19        (a) All final applications submitted to the Department or
20    any   other   State   granting  body  requesting  development
21    assistance shall contain, at a minimum:
22             (1) An application tracking number that is  specific
23        to   both   the   State   granting  agency  and  to  each
24        application.
25             (2) The office mailing addresses,  office  telephone
26        number, and chief officer of the granting body.
27             (3)  The  office  mailing address, telephone number,
28        4-digit SIC number or successor number, and the  name  of
29        the chief officer of the applicant or authorized designee
30        for  the  specific  project  site  for  which development
31        assistance is requested.
32             (4) The applicant's total number of employees at the
33        specific project site on the date that the application is
 
                            -7-      LRB093 02644 SJM 15292 a
 1        submitted to  the  State  granting  body,  including  the
 2        number  of  full-time,  permanent  jobs,  the  number  of
 3        part-time jobs, and the number of temporary jobs.
 4             (5)  The type of development assistance and value of
 5        assistance being requested.
 6             (6) The number of jobs to be created and retained or
 7        both created and retained by the applicant as a result of
 8        the  development  assistance,  including  the  number  of
 9        full-time, permanent jobs, the number of part-time  jobs,
10        and the number of temporary jobs.
11             (7)  A  detailed  list  of  the  occupation  or  job
12        classifications  and  number of new employees or retained
13        employees to be hired in  full-time,  permanent  jobs,  a
14        schedule  of  anticipated starting dates of the new hires
15        and the anticipated average wage  by  occupation  or  job
16        classification  and  total  payroll  to  be  created as a
17        result of the development assistance.
18             (8)  A  list  of  all  other  forms  of  development
19        assistance that  the  applicant  is  requesting  for  the
20        specific project site and the name of each State granting
21        body  from  which  that  development  assistance is being
22        requested.
23             (9) A narrative, if necessary,  describing  why  the
24        development  assistance is needed and how the applicant's
25        use of the development assistance may reduce unemployment
26        at any site in Illinois.
27             (10) A certification by the  chief  officer  of  the
28        applicant  or  his  or  her  authorized designee that the
29        information contained in the application submitted to the
30        granting body contains no  knowing  misrepresentation  of
31        material  facts  upon  which  eligibility for development
32        assistance is based.
33        (b) Every State granting body either shall  complete,  or
34    shall  require the applicant to complete, an application form
 
                            -8-      LRB093 02644 SJM 15292 a
 1    that meets the minimum requirements  as  prescribed  in  this
 2    Section  each  time  an  applicant  applies  for  development
 3    assistance covered by this Act.

 4        Section 20. State development assistance disclosure.
 5        (a)  Beginning February 1, 2005 and each year thereafter,
 6    every State granting body  shall  submit  to  the  Department
 7    copies  of  all  development  assistance  agreements  that it
 8    approved in the prior calendar year.
 9        (b) For each development assistance agreement  for  which
10    the  date  of  assistance  has occurred in the prior calendar
11    year,  each  recipient  shall  submit  to  the  Department  a
12    progress report that shall include, but not  be  limited  to,
13    the following:
14             (1) The application tracking number.
15             (2)  The  office  mailing address, telephone number,
16        and the name of the chief officer of the granting body.
17             (3) The office mailing  address,  telephone  number,
18        4-digit  SIC  number or successor number, and the name of
19        the chief officer of the applicant or authorized designee
20        for the specific project site for which  the  development
21        assistance was approved by the State granting body.
22             (4)  The  type of development assistance program and
23        value of  assistance  that  was  approved  by  the  State
24        granting body.
25             (5) The applicant's total number of employees at the
26        specific  project  site  on the date that the application
27        was  submitted  to  the  State  granting  body  and   the
28        applicant's  total  number  of  employees at the specific
29        project site on the date of  the  report,  including  the
30        number  of  full-time,  permanent  jobs,  the  number  of
31        part-time  jobs,  and the number of temporary jobs, and a
32        computation of the gain or loss of jobs in each category.
33             (6)  The  number  of  new  employees  and   retained
 
                            -9-      LRB093 02644 SJM 15292 a
 1        employees   the   applicant  stated  in  its  development
 2        assistance  agreement,  if  any,  if  not,  then  in  its
 3        application,  would  be  created   by   the   development
 4        assistance   broken   down   by   full-time,   permanent,
 5        part-time, and temporary.
 6             (7)  A  declaration  of  whether the recipient is in
 7        compliance with the development assistance agreement.
 8             (8)  A  detailed  list  of  the  occupation  or  job
 9        classifications and number of new employees  or  retained
10        employees  to  be  hired  in full-time, permanent jobs, a
11        schedule of anticipated starting dates of the  new  hires
12        and   the  actual  average  wage  by  occupation  or  job
13        classification and total  payroll  to  be  created  as  a
14        result of the development assistance.
15             (9)  A  narrative,  if necessary, describing how the
16        recipient's use of the development assistance during  the
17        reporting  year  has  reduced  employment  at any site in
18        Illinois.
19             (10) A certification by the  chief  officer  of  the
20        applicant  or  his  or  her  authorized designee that the
21        information in the progress report  contains  no  knowing
22        misrepresentation    of   material   facts   upon   which
23        eligibility for development assistance is based.
24        (c) The State granting body, or a successor agency, shall
25    have full authority to verify information  contained  in  the
26    recipient's  progress  report,  including  the  authority  to
27    inspect  the specific project site and inspect the records of
28    the recipient that are subject to the development  assistance
29    agreement.
30        (d)  By  June  1,  2005  and  by  June  1  of  each  year
31    thereafter, the Department shall compile and publish all data
32    in all of the progress reports in both written and electronic
33    form.
34        (e)  If  a  recipient  of development assistance fails to
 
                            -10-     LRB093 02644 SJM 15292 a
 1    comply with subsections (a) and  (b)  of  this  Section,  the
 2    Department  shall, within 20 working days after the reporting
 3    submittal  deadlines  set  forth  in  (i)   the   legislation
 4    authorizing,  (ii)  the administrative rules implementing, or
 5    (iii)   specific   provisions   in   development   assistance
 6    agreements pertaining to the development assistance programs,
 7    suspend  within  33  working  days  any  current  development
 8    assistance to the recipient under its control, and  shall  be
 9    prohibited  from  completing  any  current  or  providing any
10    future development assistance until it  receives  proof  that
11    the  recipient has come into compliance with the requirements
12    of subsections (a) and (b) of this Section.

13        Section 25. Recapture.
14        (a) All development assistance agreements shall  contain,
15    at a minimum, the following recapture provisions:
16             (1) The recipient must (i) make the level of capital
17        investment  in the economic development project specified
18        in the development assistance agreement; (ii)  create  or
19        retain, or both, the requisite number of jobs, paying not
20        less  than  specified  wages for the created and retained
21        jobs, within and for the  duration  of  the  time  period
22        specified   in   the   legislation  authorizing,  or  the
23        administrative  rules   implementing,   the   development
24        assistance   programs   and  the  development  assistance
25        agreement.
26             (2) If the recipient fails to create or  retain  the
27        requisite  number  of jobs within and for the time period
28        specified,  in  the  legislation  authorizing,   or   the
29        administrative   rules   implementing,   the  development
30        assistance  programs  and  the   development   assistance
31        agreement,  the  recipient  shall  be deemed to no longer
32        qualify  for  the  State  economic  assistance  and   the
33        applicable recapture provisions shall take effect.
 
                            -11-     LRB093 02644 SJM 15292 a
 1             (3)   If   the  recipient  receives  State  economic
 2        assistance  in  the  form  of  a  High  Impact   Business
 3        designation  pursuant  to  Section  5.5  of  the Illinois
 4        Enterprise Zone Act and the business receives the benefit
 5        of the exemption  authorized  under  Section  5l  of  the
 6        Retailers'  Occupation  Tax Act (for the sale of building
 7        materials  incorporated  into  a  High  Impact   Business
 8        location) and the recipient fails to create or retain the
 9        requisite   number   of   jobs,   as  determined  by  the
10        legislation  authorizing   the   development   assistance
11        programs  or  the  administrative rules implementing such
12        legislation, or both,  within  the  requisite  period  of
13        time, the recipient shall be required to pay to the State
14        the  full  amount  of  the  State  tax  exemption that it
15        received  as  a  result  of  the  High  Impact   Business
16        designation.
17             (4)  If  the  recipient  receives  a  grant  or loan
18        pursuant to the Large Business Development  Program,  the
19        Business  Development  Public  Infrastructure Program, or
20        the Industrial Training Program and the  recipient  fails
21        to  create or retain the requisite number of jobs for the
22        requisite time period, as  provided  in  the  legislation
23        authorizing  the  development  assistance programs or the
24        administrative rules implementing  such  legislation,  or
25        both,  or  in  the  development assistance agreement, the
26        recipient shall be required to repay to the State  a  pro
27        rata  amount  of the grant; that amount shall reflect the
28        percentage of the deficiency between the requisite number
29        of jobs to be created or retained by  the  recipient  and
30        the  actual  number  of  such jobs in existence as of the
31        date the Department determines the recipient is in breach
32        of the job creation or retention covenants  contained  in
33        the development assistance agreement. If the recipient of
34        development   assistance   under   the   Large   Business
 
                            -12-     LRB093 02644 SJM 15292 a
 1        Development  Program,  the  Business  Development  Public
 2        Infrastructure   Program,   or  the  Industrial  Training
 3        Program ceases operations at the specific  project  site,
 4        during  the  5-year  period  commencing  on  the  date of
 5        assistance, the recipient shall be required to repay  the
 6        entire  amount of the grant or to accelerate repayment of
 7        the loan back to the State.
 8             (5) If the recipient receives a tax credit under the
 9        Economic Development for a  Growing  Economy  tax  credit
10        program,   the   development  assistance  agreement  must
11        provide that  (i)  if  the  number  of  new  or  retained
12        employees  falls  below the requisite number set forth in
13        the development assistance agreement,  the  allowance  of
14        the  credit  shall  be  automatically suspended until the
15        number of new and retained employees  equals  or  exceeds
16        the   requisite  number  in  the  development  assistance
17        agreement; (ii) if the recipient discontinues  operations
18        at  the specific project site during the first 5 years of
19        the 10-year term of the development assistance agreement,
20        the recipient shall forfeit  all  credits  taken  by  the
21        recipient  during  such  5-year  period; and (iii) in the
22        event of a revocation or suspension of  the  credit,  the
23        Department  shall  contact  the  Director  of  Revenue to
24        initiate proceedings against  the  recipient  to  recover
25        wrongfully  exempted  Illinois State income taxes and the
26        recipient shall  promptly  repay  to  the  Department  of
27        Revenue  any  wrongfully  exempted  Illinois State income
28        taxes. The forfeited amount of credits  shall  be  deemed
29        assessed   on   the  date  the  Department  contacts  the
30        Department of Revenue and the  recipient  shall  promptly
31        repay   to  the  Department  of  Revenue  any  wrongfully
32        exempted Illinois State income taxes.
33        (b) The Director may elect to waive  enforcement  of  any
34    contractual   provision   arising   out  of  the  development
 
                            -13-     LRB093 02644 SJM 15292 a
 1    assistance agreement required by this Act based on a  finding
 2    that  the  waiver  is  necessary  to  avert  an  imminent and
 3    demonstrable hardship to the recipient  that  may  result  in
 4    such  recipient's  insolvency  or  discharge of workers. If a
 5    waiver is granted, the recipient must agree to a  contractual
 6    modification,   including   recapture   provisions,   to  the
 7    development assistance agreement. The existence of any waiver
 8    granted pursuant to this subsection  (c),  the  date  of  the
 9    granting  of  such waiver, and a brief summary of the reasons
10    supporting the granting of such  waiver  shall  be  disclosed
11    consistent with the provisions of Section 25 of this Act.
12        (c)    Beginning  June  1,  2004,  the  Department  shall
13    annually  compile  a report on the outcomes and effectiveness
14    of recapture provisions by program, including but not limited
15    to:  (i)  the  total  number  of   companies   that   receive
16    development assistance as defined in this Act; (ii) the total
17    number  of  recipients in violation of development agreements
18    with the Department; (iii)  the  total  number  of  completed
19    recapture efforts; (iv) the total number of recapture efforts
20    initiated; and (v) the number of waivers granted. This report
21    shall  be disclosed consistent with the provisions of Section
22    20 of this Act.
23        (d) For the purposes of this Act, recapture provisions do
24    not  include  the  Illinois  Department   of   Transportation
25    Economic Development Program, any grants under the Industrial
26    Training  Program  that  are  not  given as an incentive to a
27    recipient business organization, or any successor programs as
28    described in the term "development assistance" in  Section  5
29    of this Act.

30        Section  99.  Effective  date. This Act takes effect upon
31    becoming law.".