Illinois General Assembly - Full Text of HB0160
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Full Text of HB0160  100th General Assembly

HB0160ham003 100TH GENERAL ASSEMBLY

Rep. Michael J. Zalewski

Filed: 5/29/2017

 

 


 

 


 
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1
AMENDMENT TO HOUSE BILL 160

2    AMENDMENT NO. ______. Amend House Bill 160, AS AMENDED, in
3Article 5 of the bill, in the introductory clause to Section
45-5, by deleting "201," and by deleting "222,"; and
 
5in Article 5 of the bill, in the body of Section 5-5, by
6deleting all of Sec. 201; and
 
7in Article 5 of the bill, in the body of Section 5-5, by
8deleting all of Sec. 222; and
 
9in Article 10 of the bill, in the body of Section 10-5, by
10replacing all of Sec. 5-5 with the following:
 
11    "(35 ILCS 10/5-5)
12    Sec. 5-5. Definitions. As used in this Act:
13    "Agreement" means the Agreement between a Taxpayer and the
14Department under the provisions of Section 5-50 of this Act.

 

 

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

 

 

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1the municipality or county regarding the ability to accommodate
2expansion within the municipality or county.
3    "Committee" means the Illinois Business Investment
4Committee created under Section 5-25 of this Act within the
5Illinois Economic Development Board.
6    "Credit" means the amount agreed to between the Department
7and Applicant under this Act, but not to exceed the lesser of:
8(1) the sum of (i) 50% of the Incremental Income Tax
9attributable to the Applicant's project and (ii) 10% of the
10training costs of New Employees; or (2) 100% of the Incremental
11Income Tax attributable to the Applicant's project. However, if
12the project is located in an underserved area, then the amount
13of the Credit may not exceed the lesser of: (1) the sum of (i)
1475% of the Incremental Income Tax attributable to the
15Applicant's project and (ii) 10% of the training costs of New
16Employees; or (2) 100% of the Incremental Income Tax
17attributable to the Applicant's project.
18    "Department" means the Department of Commerce and Economic
19Opportunity.
20    "Director" means the Director of Commerce and Economic
21Opportunity.
22    "Full-time Employee" means an individual who is employed
23for consideration for at least 35 hours each week or who
24renders any other standard of service generally accepted by
25industry custom or practice as full-time employment. An
26individual for whom a W-2 is issued by a Professional Employer

 

 

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1Organization (PEO) is a full-time employee if employed in the
2service of the Applicant for consideration for at least 35
3hours each week or who renders any other standard of service
4generally accepted by industry custom or practice as full-time
5employment to Applicant.
6    "Incremental Income Tax" means the total amount withheld
7during the taxable year from the compensation of New Employees
8under Article 7 of the Illinois Income Tax Act arising from
9employment at a project that is the subject of an Agreement.
10    "New Employee" means:
11        (a) A Full-time Employee first employed by a Taxpayer
12    in the project that is the subject of an Agreement and who
13    is hired after the Taxpayer enters into the tax credit
14    Agreement.
15        (b) The term "New Employee" does not include:
16            (1) an employee of the Taxpayer who performs a job
17        that was previously performed by another employee, if
18        that job existed for at least 6 months before hiring
19        the employee;
20            (2) an employee of the Taxpayer who was previously
21        employed in Illinois by a Related Member of the
22        Taxpayer and whose employment was shifted to the
23        Taxpayer after the Taxpayer entered into the tax credit
24        Agreement; or
25            (3) a child, grandchild, parent, or spouse, other
26        than a spouse who is legally separated from the

 

 

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1        individual, of any individual who has a direct or an
2        indirect ownership interest of at least 5% in the
3        profits, capital, or value of the Taxpayer.
4        (c) Notwithstanding paragraph (1) of subsection (b),
5    an employee may be considered a New Employee under the
6    Agreement if the employee performs a job that was
7    previously performed by an employee who was:
8            (1) treated under the Agreement as a New Employee;
9        and
10            (2) promoted by the Taxpayer to another job.
11        (d) Notwithstanding subsection (a), the Department may
12    award Credit to an Applicant with respect to an employee
13    hired prior to the date of the Agreement if:
14            (1) the Applicant is in receipt of a letter from
15        the Department stating an intent to enter into a credit
16        Agreement;
17            (2) the letter described in paragraph (1) is issued
18        by the Department not later than 15 days after the
19        effective date of this Act; and
20            (3) the employee was hired after the date the
21        letter described in paragraph (1) was issued.
22    "Noncompliance Date" means, in the case of a Taxpayer that
23is not complying with the requirements of the Agreement or the
24provisions of this Act, the day following the last date upon
25which the Taxpayer was in compliance with the requirements of
26the Agreement and the provisions of this Act, as determined by

 

 

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1the Director, pursuant to Section 5-65.
2    "Pass Through Entity" means an entity that is exempt from
3the tax under subsection (b) or (c) of Section 205 of the
4Illinois Income Tax Act.
5    "Professional Employer Organization" (PEO) means an
6employee leasing company, as defined in Section 206.1(A)(2) of
7the Illinois Unemployment Insurance Act.
8    "Related Member" means a person that, with respect to the
9Taxpayer during any portion of the taxable year, is any one of
10the following:
11        (1) An individual stockholder, if the stockholder and
12    the members of the stockholder's family (as defined in
13    Section 318 of the Internal Revenue Code) own directly,
14    indirectly, beneficially, or constructively, in the
15    aggregate, at least 50% of the value of the Taxpayer's
16    outstanding stock.
17        (2) A partnership, estate, or trust and any partner or
18    beneficiary, if the partnership, estate, or trust, and its
19    partners or beneficiaries own directly, indirectly,
20    beneficially, or constructively, in the aggregate, at
21    least 50% of the profits, capital, stock, or value of the
22    Taxpayer.
23        (3) A corporation, and any party related to the
24    corporation in a manner that would require an attribution
25    of stock from the corporation to the party or from the
26    party to the corporation under the attribution rules of

 

 

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

 

 

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1    statistics from the State Board of Education;
2        (3) at least 20% of the households in the area receive
3    assistance under the Supplemental Nutrition Assistance
4    Program (SNAP); or
5        (4) the area has an average unemployment rate, as
6    determined by the Illinois Department of Employment
7    Security, that is more than 120% of the national
8    unemployment average, as determined by the U.S. Department
9    of Labor, for a period of at least 2 consecutive calendar
10    years preceding the date of the application.
11(Source: P.A. 94-793, eff. 5-19-06; 95-375, eff. 8-23-07.)";
12and
 
13by replacing all of Article 15 of the bill with the following:
 
14
"ARTICLE 15. FILM AND THEATER TAX CREDITS

 
15    Section 15-5. The Film Production Services Tax Credit Act
16of 2008 is amended by changing Sections 35 and 45 as follows:
 
17    (35 ILCS 16/35)
18    Sec. 35. Issuance of Tax Credit Certificate.
19    (a) In order to qualify for a tax credit under this Act, an
20applicant must file an application, on forms prescribed by the
21Department, providing information necessary to calculate the
22tax credit, and any additional information as required by the

 

 

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1Department. As part of the application, the applicant must
2commit to supplying the Department with the following
3information, at a minimum:
4        (1) an identification of each vendor that provides
5    goods or services that were included in the accredited
6    production's Illinois production spending;
7        (2) the amount of Illinois production spending
8    attributable to each vendor; and
9        (3) for each vendor identified under item (1), a
10    statement as to whether the vendor is a minority-owned
11    business or a female-owned business, as defined under
12    Section 2 of the Business Enterprise for Minorities,
13    Females, and Persons with Disabilities Act.
14    (b) Upon satisfactory review of the application, the
15Department shall issue a Tax Credit Certificate stating the
16amount of the tax credit to which the applicant is entitled.
17(Source: P.A. 95-720, eff. 5-27-08.)
 
18    (35 ILCS 16/45)
19    Sec. 45. Evaluation of tax credit program; reports to the
20General Assembly.
21    (a) The Department shall evaluate the tax credit program.
22The evaluation must include an assessment of the effectiveness
23of the program in creating and retaining new jobs in Illinois
24and of the revenue impact of the program, and may include a
25review of the practices and experiences of other states or

 

 

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1nations with similar programs. Upon completion of this
2evaluation, the Department shall determine the overall success
3of the program, and may make a recommendation to extend,
4modify, or not extend the program based on this evaluation.
5    (b) At the end of each fiscal quarter, the Department must
6submit to the General Assembly a report that includes, without
7limitation, the following information:
8        (1) the economic impact of the tax credit program,
9    including the number of jobs created and retained,
10    including whether the job positions are entry level,
11    management, talent-related, vendor-related, or
12    production-related;
13        (2) the amount of film production spending brought to
14    Illinois, including the amount of spending and type of
15    Illinois vendors hired in connection with an accredited
16    production; and
17        (3) an overall picture of whether the human
18    infrastructure of the motion picture industry in Illinois
19    reflects the geographical, racial and ethnic, gender, and
20    income-level diversity of the State of Illinois.
21    (c) At the end of each fiscal year, the Department must
22submit to the General Assembly a report that includes, without
23limitation, the following information:
24        (1) an identification of each vendor that provided
25    goods or services that were included in an accredited
26    production's Illinois production spending and a statement

 

 

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1    of whether the vendor is a minority-owned business or a
2    female-owned business, as defined under Section 2 of the
3    Business Enterprise for Minorities, Females, and Persons
4    with Disabilities Act;
5        (2) the aggregate amount paid to all each identified
6    vendors vendor by the accredited production;
7        (3) the aggregate amount paid to all identified vendors
8    that are for each identified vendor, a statement as to
9    whether the vendor is a minority owned businesses business
10    or a female owned businesses business, as defined under
11    Section 2 of the Business Enterprise for Minorities,
12    Females, and Persons with Disabilities Act; and
13        (4) a description of any steps taken by the Department
14    to encourage accredited productions to use vendors who are
15    a minority owned business or a female owned business.
16(Source: P.A. 95-720, eff. 5-27-08.)
 
17    Section 15-10. The Live Theater Production Tax Credit Act
18is amended by changing Sections 10-40 and 10-50 as follows:
 
19    (35 ILCS 17/10-40)
20    Sec. 10-40. Issuance of Tax Credit Award Certificate.
21    (a) In order to qualify for a tax credit award under this
22Act, an applicant must file an application for each accredited
23theater production at each of the applicant's qualified
24production facilities, on forms prescribed by the Department,

 

 

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1providing information necessary to calculate the tax credit
2award and any additional information as reasonably required by
3the Department. As part of the application, the applicant must
4commit to supplying the Department with the following
5information, at a minimum:
6        (1) an identification of each vendor that provides
7    goods or services that were included in the accredited
8    production's Illinois production spending;
9        (2) the amount of Illinois production spending
10    attributable to each vendor; and
11        (3) for each vendor identified under item (1), a
12    statement as to whether the vendor is a minority-owned
13    business or a female-owned business, as defined under
14    Section 2 of the Business Enterprise for Minorities,
15    Females, and Persons with Disabilities Act.
16    (b) Upon satisfactory review of the application, the
17Department shall issue a tax credit award certificate stating
18the amount of the tax credit award to which the applicant is
19entitled for that tax year and shall contemporaneously notify
20the applicant and Illinois Department of Revenue in accordance
21with Section 222 of the Illinois Income Tax Act.
22(Source: P.A. 97-636, eff. 6-1-12.)
 
23    (35 ILCS 17/10-50)
24    Sec. 10-50. Live theater tax credit award program
25evaluation and reports.

 

 

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1    (a) The Department's live theater tax credit award
2evaluation must include:
3        (i) an assessment of the effectiveness of the program
4    in creating and retaining new jobs in Illinois;
5        (ii) an assessment of the revenue impact of the
6    program;
7        (iii) in the discretion of the Department, a review of
8    the practices and experiences of other states or nations
9    with similar programs; and
10        (iv) an assessment of the overall success of the
11    program. The Department may make a recommendation to
12    extend, modify, or not extend the program based on the
13    evaluation.
14    (b) At the end of each fiscal quarter, the Department shall
15submit to the General Assembly a report that includes, without
16limitation:
17        (i) an assessment of the economic impact of the
18    program, including the number of jobs created and retained,
19    and whether the job positions are entry level, management,
20    vendor, or production related;
21        (ii) the amount of accredited theater production
22    spending brought to Illinois, including the amount of
23    spending and type of Illinois vendors hired in connection
24    with an accredited theater production; and
25        (iii) a determination of whether those receiving
26    qualifying Illinois labor expenditure salaries or wages

 

 

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1    reflect the geographical, racial and ethnic, gender, and
2    income level diversity of the State of Illinois.
3    (c) At the end of each fiscal year, the Department shall
4submit to the General Assembly a report that includes, without
5limitation:
6        (i) the identification of each vendor that provided
7    goods or services that were included in an accredited
8    theater production's Illinois production spending and a
9    statement of whether the vendor is a minority-owned
10    business or a female-owned business, as defined under
11    Section 2 of the Business Enterprise for Minorities,
12    Females, and Persons with Disabilities Act;
13        (ii) a statement of (A) the aggregate amount paid to
14    all each identified vendors vendor by the accredited
15    theater production and (B) the aggregate amount paid to all
16    identified vendors that are minority-owned businesses or
17    female-owned businesses, as defined under Section 2 of the
18    Business Enterprise for Minorities, Females, and Persons
19    with Disabilities Act and whether the vendor is a minority
20    or female owned business as defined in Section 2 of the
21    Business Enterprise for Minorities, Females, and Persons
22    with Disabilities Act; and
23        (iii) a description of the steps taken by the
24    Department to encourage accredited theater productions to
25    use vendors who are minority or female owned businesses.
26(Source: P.A. 97-636, eff. 6-1-12.)".