Illinois General Assembly - Full Text of SB3619
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Full Text of SB3619  97th General Assembly



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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 Illinois Income Tax Act is amended by
5changing Section 220 as follows:
6    (35 ILCS 5/220)
7    Sec. 220. Angel investment credit.
8    (a) As used in this Section:
9    "Applicant" means a corporation, partnership, limited
10liability company, or a natural person that makes an investment
11in a qualified new business venture. The term "applicant" does
12not include a corporation, partnership, limited liability
13company, or a natural person who has a direct or indirect
14ownership interest of at least 51% in the profits, capital, or
15value of the investment or a related member.
16    "Claimant" means an applicant certified by the Department
17who files a claim for a credit under this Section.
18    "Department" means the Department of Commerce and Economic
20    "Qualified new business venture" means a business that is
21registered with the Department under this Section.
22    "Related member" means a person that, with respect to the
23investment, is any one 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    (b) For taxable years beginning after December 31, 2010,
11and ending on or before December 31, 2016, subject to the
12limitations provided in this Section, a claimant may claim, as
13a credit against the tax imposed under subsections (a) and (b)
14of Section 201 of this Act, an amount equal to 25% of the
15claimant's investment made directly in a qualified new business
16venture. In order for an investment in a qualified new business
17venture to be eligible for tax credits, the business must have
18applied for and received certification under subsection (e) for
19the taxable year in which the investment was made prior to the
20date on which the investment was made. The credit under this
21Section may not exceed the taxpayer's Illinois income tax
22liability for the taxable year. If the amount of the credit
23exceeds the tax liability for the year, the excess may be
24carried forward and applied to the tax liability of the 5
25taxable years following the excess credit year. The credit
26shall be applied to the earliest year for which there is a tax



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1liability. If there are credits from more than one tax year
2that are available to offset a liability, the earlier credit
3shall be applied first. In the case of a partnership or
4Subchapter S Corporation, the credit is allowed to the partners
5or shareholders in accordance with the determination of income
6and distributive share of income under Sections 702 and 704 and
7Subchapter S of the Internal Revenue Code.
8    (c) The maximum amount of an applicant's investment that
9may be used as the basis for a credit under this Section is
10$2,000,000 for each investment made directly in a qualified new
11business venture.
12    (d) The Department shall implement a program to certify an
13applicant for an angel investment credit. Upon satisfactory
14review, the Department shall issue a tax credit certificate
15stating the amount of the tax credit to which the applicant is
16entitled. The Department shall annually certify that the
17claimant's investment has been made and remains in the
18qualified new business venture for no less than 3 years.
19    If an investment for which a claimant is allowed a credit
20under subsection (b) is held by the claimant for less than 3
21years, or, if within that period of time the qualified new
22business venture is moved from the State of Illinois, the
23claimant shall pay to the Department of Revenue, in the manner
24prescribed by the Department of Revenue, the amount of the
25credit that the claimant received related to the investment.
26    (e) The Department shall implement a program to register



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1qualified new business ventures for purposes of this Section. A
2business desiring registration shall submit an application to
3the Department in each taxable year for which the business
4desires registration. The Department may register the business
5only if the business satisfies all of the following conditions:
6        (1) it has its headquarters in this State;
7        (2) at least 51% of the employees employed by the
8    business are employed in this State;
9        (3) it has the potential for increasing jobs in this
10    State, increasing capital investment in this State, or
11    both, and either of the following apply:
12            (A) it is principally engaged in innovation in any
13        of the following: manufacturing; biotechnology;
14        nanotechnology; communications; agricultural sciences;
15        clean energy creation or storage technology;
16        processing or assembling products, including medical
17        devices, pharmaceuticals, computer software, computer
18        hardware, semiconductors, other innovative technology
19        products, or other products that are produced using
20        manufacturing methods that are enabled by applying
21        proprietary technology; or providing services that are
22        enabled by applying proprietary technology; or
23            (B) it is undertaking pre-commercialization
24        activity related to proprietary technology that
25        includes conducting research, developing a new product
26        or business process, or developing a service that is



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1        principally reliant on applying proprietary
2        technology;
3        (4) it is not principally engaged in real estate
4    development, insurance, banking, lending, lobbying,
5    political consulting, professional services provided by
6    attorneys, accountants, business consultants, physicians,
7    or health care consultants, wholesale or retail trade,
8    leisure, hospitality, transportation, or construction,
9    except construction of power production plants that derive
10    energy from a renewable energy resource, as defined in
11    Section 1 of the Illinois Power Agency Act;
12        (5) at the time it is first certified:
13            (A) it has fewer than 100 employees;
14            (B) it has been in operation in Illinois for not
15        more than 10 consecutive years prior to the year of
16        certification; and
17            (C) it has received not more than $10,000,000 in
18        aggregate private equity investment in cash;
19        (6) (blank); it has been in operation in Illinois for
20    not more than 10 consecutive years prior to the year of
21    certification; and
22        (7) it has received not more than (i) $10,000,000 in
23    aggregate private equity investment in cash or (ii)
24    $4,000,000 in investments that qualified for tax credits
25    under this Section.
26    (f) The Department, in consultation with the Department of



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1Revenue, shall adopt rules to administer this Section. The
2aggregate amount of the tax credits that may be claimed under
3this Section for investments made in qualified new business
4ventures shall be limited at $10,000,000 per calendar year.
5    (g) A claimant may not sell or otherwise transfer a credit
6awarded under this Section to another person.
7    (h) On or before March 1 of each year, the Department shall
8report to the Governor and to the General Assembly on the tax
9credit certificates awarded under this Section for the prior
10calendar year.
11        (1) This report must include, for each tax credit
12    certificate awarded:
13            (A) the name of the claimant and the amount of
14        credit awarded or allocated to that claimant;
15            (B) the name and address of the qualified new
16        business venture that received the investment giving
17        rise to the credit and the county in which the
18        qualified new business venture is located; and
19            (C) the date of approval by the Department of the
20        applications for the tax credit certificate.
21        (2) The report must also include:
22            (A) the total number of applicants and amount for
23        tax credit certificates awarded under this Section in
24        the prior calendar year;
25            (B) the total number of applications and amount for
26        which tax credit certificates were issued in the prior



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1        calendar year; and
2            (C) the total tax credit certificates and amount
3        authorized under this Section for all calendar years.
4(Source: P.A. 96-939, eff. 1-1-11; 97-507, eff. 8-23-11.)
5    Section 10. The Business Location Efficiency Incentive Act
6is amended by adding Section 21 as follows:
7    (35 ILCS 11/21 new)
8    Sec. 21. Continuation of Act; validation.
9    (a) The General Assembly finds and declares that:
10        (1) Public Act 97-636, which takes effect on June 1,
11    2012, changed the repeal date set for the Business Location
12    Efficiency Incentive Act from December 31, 2011 to December
13    31, 2016.
14        (2) The Statute on Statutes sets forth general rules on
15    the repeal of statutes and the construction of multiple
16    amendments, but Section 1 of that Act also states that
17    these rules will not be observed when the result would be
18    "inconsistent with the manifest intent of the General
19    Assembly or repugnant to the context of the statute".
20        (3) This amendatory Act of the 97th General Assembly
21    manifests the intention of the General Assembly to extend
22    the repeal of the Business Location Efficiency Incentive
23    Act and have the Business Location Efficiency Incentive Act
24    continue in effect until December 31, 2016.



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1        (4) The Business Location Efficiency Incentive Act was
2    originally enacted to protect, promote, and preserve the
3    general welfare. Any construction of this Act that results
4    in the repeal of this Act on December 31, 2011 would be
5    inconsistent with the manifest intent of the General
6    Assembly and repugnant to the context of the Business
7    Location Efficiency Incentive Act.
8    (b) It is hereby declared to have been the intent of the
9General Assembly that the Business Location Efficiency
10Incentive Act not be subject to repeal on December 31, 2011.
11    (c) The Business Location Efficiency Incentive Act shall be
12deemed to have been in continuous effect since January 1, 2007
13(the effective date of Public Act 94-966), and it shall
14continue to be in effect henceforward until it is otherwise
15lawfully repealed. All previously enacted amendments to the Act
16taking effect on or after December 31, 2011, are hereby
18    (d) All actions taken in reliance on or pursuant to the
19Business Location Efficiency Incentive Act by the Department of
20Revenue, the Department of Commerce and Economic Opportunity,
21or any other person or entity are hereby validated.
22    (e) In order to ensure the continuing effectiveness of the
23Business Location Efficiency Incentive Act, it is set forth in
24full and re-enacted by this amendatory Act of the 97th General
25Assembly. This re-enactment is intended as a continuation of
26the Act. It is not intended to supersede any amendment to the



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1Act that is enacted by the 97th General Assembly.
2    (f) The Business Location Efficiency Incentive Act applies
3to all claims, civil actions, and proceedings pending on or
4filed on or before the effective date of this Act.
5    Section 15. The Business Location Efficiency Incentive Act
6is re-enacted as follows:
7    (35 ILCS 11/Act title)
8An Act concerning business incentives.
9    (35 ILCS 11/1)
10    (Section scheduled to be repealed on December 31, 2011)
11    Sec. 1. Short title. This Act may be cited as the Business
12Location Efficiency Incentive Act.
13(Source: P.A. 94-966, eff. 1-1-07.)
14    (35 ILCS 11/5)
15    (Section scheduled to be repealed on December 31, 2011)
16    Sec. 5. Definitions. In this Act:
17    "Location efficient" means a project that maximizes the use
18of existing investments in infrastructure, avoids or minimizes
19additional government expenditures for new infrastructure, and
20has nearby housing affordable to the permanent workforce of the
21project or has accessible and affordable mass transit or its
22equivalent or some combination of both.



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1    "Location efficiency report" means a report that is
2prepared by an applicant for increased State economic
3development assistance under Section 10 and follows this Act
4and any related Department guidelines, and that describes the
5existence of (i) affordable workforce housing or (ii)
6accessible and affordable mass transit or its equivalent.
7    "Employee housing or transportation remediation plan"
8means a plan to increase affordable housing or transportation
9options, or both, for employees earning up to the median annual
10salary of the workforce at the project. The plan may include,
11but is not limited to, an employer-financed or assisted housing
12program that can be supplemented by State or federal grants,
13shuttle services between the place of employment and existing
14transit stops or other reasonably accessible places,
15facilitation of employee carpooling, or similar services.
16     "Accessible and affordable mass transit" means access to
17transit stops with regular and frequent service within one mile
18from the project site and pedestrian access to transit stops.
19    "Affordable workforce housing" means owner-occupied or
20rental housing that costs, based on current census data for the
21municipality where the project is located or any municipality
22within 3 miles of the municipality where the project is
23located, no more than 35% of the median salary at the project
24site, exclusive of the highest 10% of the site's salaries. If
25the project is located in an unincorporated area, "affordable
26workforce housing" means no more than 35% of the median salary



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1at the project site, excluding the highest 10% of the site's
2salaries, based on the median cost of rental or of
3owner-occupied housing in the county where the unincorporated
4area is located.
5    "Department" means the Department of Commerce and Economic
6Opportunity (DCEO) or its successor agency.
7    "Applicant" means a company or its representative that
8negotiates or applies for economic development assistance from
10    "Economic development assistance" means State tax credits
11and tax exemptions given as an incentive to an eligible company
12after certification by DCEO under the Economic Development for
13a Growing Economy Tax Credit Act (EDGE).
14    "Existence of infrastructure" means the existence within
151,500 feet of the proposed site of roads, sewers, sidewalks,
16and other utilities and a description of the investments or
17improvements, if any, that an applicant expects State or local
18government to make to that infrastructure.
19(Source: P.A. 94-966, eff. 1-1-07.)
20    (35 ILCS 11/10)
21    (Section scheduled to be repealed on December 31, 2011)
22    Sec. 10. Economic development assistance awards.
23    (a) An applicant that also wants to be considered for
24increased economic development assistance under this Act shall
25submit a location efficiency report.



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1    (b) DCEO may give an applicant an increased tax credit or
2extension if the applicant's location efficiency report
3demonstrates that the applicant is seeking assistance for a
4project to be located in an area that satisfies this Act's
5standards for affordable workforce housing or affordable and
6accessible mass transit. If the Department determines from the
7location efficiency report that the applicant is seeking
8assistance in an area that is not location efficient, the
9Department may award an increase in State economic development
10assistance if an applicant (i) submits, and the Department
11accepts, an applicant's employee housing and transportation
12remediation plan or (ii) creates jobs in a labor surplus area
13as defined by the Department of Employment Security at the end
14of each calendar year.
15    (c) Applicants locating or expanding at location-efficient
16sites, with approved location efficiency plans, or creating
17jobs in labor surplus areas may receive (i) up to 10% more than
18the maximum allowable tax credits for which they are eligible
19under the Economic Development for a Growing Economy Tax Credit
20Act (EDGE), but not to equal or exceed 100% of the applicant's
21tax liability, or (ii) such other adjustment of those tax
22credits, including but not limited to extensions, as the
23Department deems appropriate.
24    (d) The Department may provide technical assistance to
25employers requesting assistance in developing an appropriate
26employee housing or transportation plan.



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1(Source: P.A. 94-966, eff. 1-1-07.)
2    (35 ILCS 11/15)
3    (Section scheduled to be repealed on December 31, 2011)
4    Sec. 15. Summaries; progress reports.
5    (a) DCEO shall include summaries of the initial employee
6housing or transportation plans for each assisted project in
7the annual compilation and publication of project progress
8reports required under subsection (d) of Section 20 of the
9Corporate Accountability for Tax Expenditures Act. Companies
10that fail to do so or that make inadequate progress shall have
11their increased tax credit or extension eliminated. Applicants
12and submitted data are subject to all disclosure, reporting,
13and recapture provisions set forth in Public Act 93-552.
14    (b) By June 1, 2008 and by June 1 of each year thereafter
15through 2011, the Department shall include, when appropriate,
16data on the outcomes or status of approved employee housing or
17transportation plans in the project progress reports required
18under the Corporate Accountability for Tax Expenditure Act.
19(Source: P.A. 94-966, eff. 1-1-07.)
20    (35 ILCS 11/20)
21    (Section scheduled to be repealed on December 31, 2011)
22    Sec. 20. Duration of incentives; report to General
24    (a) Any multi-year incentive awarded under this Act shall



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1continue for the time period called for in the agreement with
2the Department and shall not be altered by the repeal of this
4    (b) By January 1, 2011, the Department shall submit to the
5Speaker of the House of Representatives and the President of
6the Senate, for assignment to the appropriate committees, a
7report on the incentives awarded under this Act and the
8Department's activities, findings, and recommendations with
9respect to this Act and its extension, amendment, or repeal.
10The report, when acted upon by those committees, shall be
11distributed to each member of the General Assembly.
12(Source: P.A. 94-966, eff. 1-1-07.)
13    (35 ILCS 11/25)
14    (Section scheduled to be repealed on December 31, 2011)
15    Sec. 25. Repeal. This Act is repealed on December 31, 2016.
16(Source: P.A. 97-636, eff. 6-1-12.)
17    (35 ILCS 11/99)
18    (Section scheduled to be repealed on December 31, 2011)
19    Sec. 99. Effective date. This Act takes effect January 1,
21(Source: P.A. 94-966, eff. 1-1-07.)
22    Section 99. Effective date. This Act takes effect upon
23becoming law.