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Public Act 102-0330


 

Public Act 0330 102ND GENERAL ASSEMBLY

  
  
  

 


 
Public Act 102-0330
 
SB1690 EnrolledLRB102 17107 HLH 22536 b

    AN ACT concerning State government.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Department of Commerce and Economic
Opportunity Law of the Civil Administrative Code of Illinois
is amended by adding Section 605-1055 as follows:
 
    (20 ILCS 605/605-1055 new)
    Sec. 605-1055. The Illinois Small Business Fund. The
Illinois Small Business Fund is created as a nonappropriated
separate and apart trust fund in the State Treasury. The
Department shall use moneys in the Fund to manage proceeds
that result from investments that the Department has
undertaken through economic development programs, including,
but not limited to, the Department's Venture Capital
Investment Program. The Department may use moneys collected to
reinvest in small business and economic development
initiatives through grants or loans. The Fund may receive any
grants or other moneys designated for small business growth
from the State, or any unit of federal or local government, or
any other person, firm, partnership, or corporation. Any
interest earnings that are attributable to moneys in the Fund
must be deposited into the Fund.
 
    (20 ILCS 605/605-320 rep.)
    Section 10. The Department of Commerce and Economic
Opportunity Law of the Civil Administrative Code of Illinois
is amended by repealing Section 605-320.
 
    Section 12. The State Finance Act is amended by adding
Section 5.936 as follows:
 
    (30 ILCS 105/5.936 new)
    Sec. 5.936. Illinois Small Business Fund.
 
    (30 ILCS 750/Art. 11 rep.)
    Section 15. The Build Illinois Act is amended by repealing
Article 11.
 
    Section 20. The Economic Development for a Growing Economy
Tax Credit Act is amended by changing Sections 5-5, 5-10,
5-25, 5-70, and 5-90 as follows:
 
    (35 ILCS 10/5-5)
    Sec. 5-5. Definitions. As used in this Act:
    "Agreement" means the Agreement between a Taxpayer and the
Department under the provisions of Section 5-50 of this Act.
    "Applicant" means a Taxpayer that is operating a business
located or that the Taxpayer plans to locate within the State
of Illinois and that is engaged in interstate or intrastate
commerce for the purpose of manufacturing, processing,
assembling, warehousing, or distributing products, conducting
research and development, providing tourism services, or
providing services in interstate commerce, office industries,
or agricultural processing, but excluding retail, retail food,
health, or professional services. "Applicant" does not include
a Taxpayer who closes or substantially reduces an operation at
one location in the State and relocates substantially the same
operation to another location in the State. This does not
prohibit a Taxpayer from expanding its operations at another
location in the State, provided that existing operations of a
similar nature located within the State are not closed or
substantially reduced. This also does not prohibit a Taxpayer
from moving its operations from one location in the State to
another location in the State for the purpose of expanding the
operation provided that the Department determines that
expansion cannot reasonably be accommodated within the
municipality in which the business is located, or in the case
of a business located in an incorporated area of the county,
within the county in which the business is located, after
conferring with the chief elected official of the municipality
or county and taking into consideration any evidence offered
by the municipality or county regarding the ability to
accommodate expansion within the municipality or county.
    "Committee" means the Illinois Business Investment
Committee created under Section 5-25 of this Act within the
Illinois Economic Development Board.
    "Credit" means the amount agreed to between the Department
and Applicant under this Act, but not to exceed the lesser of:
(1) the sum of (i) 50% of the Incremental Income Tax
attributable to New Employees at the Applicant's project and
(ii) 10% of the training costs of New Employees; or (2) 100% of
the Incremental Income Tax attributable to New Employees at
the Applicant's project. However, if the project is located in
an underserved area, then the amount of the Credit may not
exceed the lesser of: (1) the sum of (i) 75% of the Incremental
Income Tax attributable to New Employees at the Applicant's
project and (ii) 10% of the training costs of New Employees; or
(2) 100% of the Incremental Income Tax attributable to New
Employees at the Applicant's project. If an Applicant agrees
to hire the required number of New Employees, then the maximum
amount of the Credit for that Applicant may be increased by an
amount not to exceed 25% of the Incremental Income Tax
attributable to retained employees at the Applicant's project;
provided that, in order to receive the increase for retained
employees, the Applicant must provide the additional evidence
required under paragraph (3) of subsection (b) of Section
5-25.
    "Department" means the Department of Commerce and Economic
Opportunity.
    "Director" means the Director of Commerce and Economic
Opportunity.
    "Full-time Employee" means an individual who is employed
for consideration for at least 35 hours each week or who
renders any other standard of service generally accepted by
industry custom or practice as full-time employment. An
individual for whom a W-2 is issued by a Professional Employer
Organization (PEO) is a full-time employee if employed in the
service of the Applicant for consideration for at least 35
hours each week or who renders any other standard of service
generally accepted by industry custom or practice as full-time
employment to Applicant.
    "Incremental Income Tax" means the total amount withheld
during the taxable year from the compensation of New Employees
and, if applicable, retained employees under Article 7 of the
Illinois Income Tax Act arising from employment at a project
that is the subject of an Agreement.
    "New Construction EDGE Agreement" means the Agreement
between a Taxpayer and the Department under the provisions of
Section 5-51 of this Act.
    "New Construction EDGE Credit" means an amount agreed to
between the Department and the Applicant under this Act as
part of a New Construction EDGE Agreement that does not exceed
50% of the Incremental Income Tax attributable to New
Construction EDGE Employees at the Applicant's project;
however, if the New Construction EDGE Project is located in an
underserved area, then the amount of the New Construction EDGE
Credit may not exceed 75% of the Incremental Income Tax
attributable to New Construction EDGE Employees at the
Applicant's New Construction EDGE Project.
    "New Construction EDGE Employee" means a laborer or worker
who is employed by an Illinois contractor or subcontractor in
the actual construction work on the site of a New Construction
EDGE Project, pursuant to a New Construction EDGE Agreement.
    "New Construction EDGE Incremental Income Tax" means the
total amount withheld during the taxable year from the
compensation of New Construction EDGE Employees.
    "New Construction EDGE Project" means the building of a
Taxpayer's structure or building, or making improvements of
any kind to real property. "New Construction EDGE Project"
does not include the routine operation, routine repair, or
routine maintenance of existing structures, buildings, or real
property.
    "New Employee" means:
        (a) A Full-time Employee first employed by a Taxpayer
    in the project that is the subject of an Agreement and who
    is hired after the Taxpayer enters into the tax credit
    Agreement.
        (b) The term "New Employee" does not include:
            (1) an employee of the Taxpayer who performs a job
        that was previously performed by another employee, if
        that job existed for at least 6 months before hiring
        the employee;
            (2) an employee of the Taxpayer who was previously
        employed in Illinois by a Related Member of the
        Taxpayer and whose employment was shifted to the
        Taxpayer after the Taxpayer entered into the tax
        credit Agreement; or
            (3) a child, grandchild, parent, or spouse, other
        than a spouse who is legally separated from the
        individual, of any individual who has a direct or an
        indirect ownership interest of at least 5% in the
        profits, capital, or value of the Taxpayer.
        (c) Notwithstanding paragraph (1) of subsection (b),
    an employee may be considered a New Employee under the
    Agreement if the employee performs a job that was
    previously performed by an employee who was:
            (1) treated under the Agreement as a New Employee;
        and
            (2) promoted by the Taxpayer to another job.
        (d) Notwithstanding subsection (a), the Department may
    award Credit to an Applicant with respect to an employee
    hired prior to the date of the Agreement if:
            (1) the Applicant is in receipt of a letter from
        the Department stating an intent to enter into a
        credit Agreement;
            (2) the letter described in paragraph (1) is
        issued by the Department not later than 15 days after
        the effective date of this Act; and
            (3) the employee was hired after the date the
        letter described in paragraph (1) was issued.
    "Noncompliance Date" means, in the case of a Taxpayer that
is not complying with the requirements of the Agreement or the
provisions of this Act, the day following the last date upon
which the Taxpayer was in compliance with the requirements of
the Agreement and the provisions of this Act, as determined by
the Director, pursuant to Section 5-65.
    "Pass Through Entity" means an entity that is exempt from
the tax under subsection (b) or (c) of Section 205 of the
Illinois Income Tax Act.
    "Professional Employer Organization" (PEO) means an
employee leasing company, as defined in Section 206.1(A)(2) of
the Illinois Unemployment Insurance Act.
    "Related Member" means a person that, with respect to the
Taxpayer during any portion of the taxable year, is any one of
the following:
        (1) An individual stockholder, if the stockholder and
    the members of the stockholder's family (as defined in
    Section 318 of the Internal Revenue Code) own directly,
    indirectly, beneficially, or constructively, in the
    aggregate, at least 50% of the value of the Taxpayer's
    outstanding stock.
        (2) A partnership, estate, or trust and any partner or
    beneficiary, if the partnership, estate, or trust, and its
    partners or beneficiaries own directly, indirectly,
    beneficially, or constructively, in the aggregate, at
    least 50% of the profits, capital, stock, or value of the
    Taxpayer.
        (3) A corporation, and any party related to the
    corporation in a manner that would require an attribution
    of stock from the corporation to the party or from the
    party to the corporation under the attribution rules of
    Section 318 of the Internal Revenue Code, if the Taxpayer
    owns directly, indirectly, beneficially, or constructively
    at least 50% of the value of the corporation's outstanding
    stock.
        (4) A corporation and any party related to that
    corporation in a manner that would require an attribution
    of stock from the corporation to the party or from the
    party to the corporation under the attribution rules of
    Section 318 of the Internal Revenue Code, if the
    corporation and all such related parties own in the
    aggregate at least 50% of the profits, capital, stock, or
    value of the Taxpayer.
        (5) A person to or from whom there is attribution of
    stock ownership in accordance with Section 1563(e) of the
    Internal Revenue Code, except, for purposes of determining
    whether a person is a Related Member under this paragraph,
    20% shall be substituted for 5% wherever 5% appears in
    Section 1563(e) of the Internal Revenue Code.
    "Taxpayer" means an individual, corporation, partnership,
or other entity that has any Illinois Income Tax liability.
    "Underserved area" means a geographic area that meets one
or more of the following conditions:
        (1) the area has a poverty rate of at least 20%
    according to the latest federal decennial census;
        (2) 75% or more of the children in the area
    participate in the federal free lunch program according to
    reported statistics from the State Board of Education;
        (3) at least 20% of the households in the area receive
    assistance under the Supplemental Nutrition Assistance
    Program (SNAP); or
        (4) the area has an average unemployment rate, as
    determined by the Illinois Department of Employment
    Security, that is more than 120% of the national
    unemployment average, as determined by the U.S. Department
    of Labor, for a period of at least 2 consecutive calendar
    years preceding the date of the application.
(Source: P.A. 100-511, eff. 9-18-17; 101-9, eff. 6-5-19.)
 
    (35 ILCS 10/5-10)
    Sec. 5-10. Powers of the Department. The Department, in
addition to those powers granted under the Civil
Administrative Code of Illinois, is granted and shall have all
the powers necessary or convenient to carry out and effectuate
the purposes and provisions of this Act, including, but not
limited to, power and authority to:
    (a) Promulgate procedures, rules, or regulations deemed
necessary and appropriate for the administration of the
programs; establish forms for applications, notifications,
contracts, or any other agreements; and accept applications at
any time during the year.
    (b) Provide and assist Taxpayers pursuant to the
provisions of this Act, and cooperate with Taxpayers that are
parties to Agreements to promote, foster, and support economic
development, capital investment, and job creation or retention
within the State.
    (c) Enter into agreements and memoranda of understanding
for participation of and engage in cooperation with agencies
of the federal government, local units of government,
universities, research foundations or institutions, regional
economic development corporations, or other organizations for
the purposes of this Act.
    (d) Gather information and conduct inquiries, in the
manner and by the methods as it deems desirable, including
without limitation, gathering information with respect to
Applicants for the purpose of making any designations or
certifications necessary or desirable or to gather information
to assist the Department Committee with any recommendation or
guidance in the furtherance of the purposes of this Act.
    (e) Establish, negotiate and effectuate any term,
agreement or other document with any person, necessary or
appropriate to accomplish the purposes of this Act; and to
consent, subject to the provisions of any Agreement with
another party, to the modification or restructuring of any
Agreement to which the Department is a party.
    (f) Fix, determine, charge, and collect any premiums,
fees, charges, costs, and expenses from Applicants, including,
without limitation, any application fees, commitment fees,
program fees, financing charges, or publication fees as deemed
appropriate to pay expenses necessary or incident to the
administration, staffing, or operation in connection with the
Department's or Committee's activities under this Act, or for
preparation, implementation, and enforcement of the terms of
the Agreement, or for consultation, advisory and legal fees,
and other costs; however, all fees and expenses incident
thereto shall be the responsibility of the Applicant.
    (g) Provide for sufficient personnel to permit
administration, staffing, operation, and related support
required to adequately discharge its duties and
responsibilities described in this Act from funds made
available through charges to Applicants or from funds as may
be appropriated by the General Assembly for the administration
of this Act.
    (h) Require Applicants, upon written request, to issue any
necessary authorization to the appropriate federal, state, or
local authority for the release of information concerning a
project being considered under the provisions of this Act,
with the information requested to include, but not be limited
to, financial reports, returns, or records relating to the
Taxpayers' or its project.
    (i) Require that a Taxpayer shall at all times keep proper
books of record and account in accordance with generally
accepted accounting principles consistently applied, with the
books, records, or papers related to the Agreement in the
custody or control of the Taxpayer open for reasonable
Department inspection and audits, and including, without
limitation, the making of copies of the books, records, or
papers, and the inspection or appraisal of any of the Taxpayer
or project assets.
    (j) Take whatever actions are necessary or appropriate to
protect the State's interest in the event of bankruptcy,
default, foreclosure, or noncompliance with the terms and
conditions of financial assistance or participation required
under this Act, including the power to sell, dispose, lease,
or rent, upon terms and conditions determined by the Director
to be appropriate, real or personal property that the
Department may receive as a result of these actions.
(Source: P.A. 91-476, eff. 8-11-99.)
 
    (35 ILCS 10/5-25)
    Sec. 5-25. Review of Application.
    (a) (Blank). In addition to those duties granted under the
Illinois Economic Development Board Act, the Illinois Economic
Development Board shall form a Business Investment Committee
for the purpose of making recommendations for applications. At
the request of the Board, the Director of Commerce and
Economic Opportunity or his or her designee, the Director of
the Governor's Office of Management and Budget or his or her
designee, the Director of Revenue or his or her designee, the
Director of Employment Security or his or her designee, and an
elected official of the affected locality, such as the chair
of the county board or the mayor, may serve as members of the
Committee to assist with its analysis and deliberations.
    (b) The Department shall determine which projects will At
the Department's request, the Committee shall convene, make
inquiries, and conduct studies in the manner and by the
methods as it deems desirable, review information with respect
to Applicants, and make recommendations for projects to
benefit the State. In making its recommendation that an
Applicant's application for Credit should or should not be
accepted, which shall occur within a reasonable time frame as
determined by the nature of the application, the Department
Committee shall determine that all the following conditions
exist:
        (1) The Applicant's project intends, as required by
    subsection (b) of Section 5-20 to make the required
    investment in the State and intends to hire the required
    number of New Employees in Illinois as a result of that
    project.
        (2) The Applicant's project is economically sound and
    will benefit the people of the State of Illinois by
    increasing opportunities for employment and strengthen the
    economy of Illinois.
        (3) That, if not for the Credit, the project would not
    occur in Illinois, which may be demonstrated by evidence
    that receipt of the Credit is essential to the Applicant's
    decision to create new jobs in the State, such as the
    magnitude of the cost differential between Illinois and a
    competing State; in addition, if the Applicant is seeking
    an increase in the maximum amount of the Credit for
    retained employees, the Applicant must provide evidence
    the Applicant has multi-state location options and could
    reasonably and efficiently locate outside of the State or
    demonstrate that at least one other state is being
    considered for the project.
        (4) A cost differential is identified, using best
    available data, in the projected costs for the Applicant's
    project compared to the costs in the competing state,
    including the impact of the competing state's incentive
    programs. The competing state's incentive programs shall
    include state, local, private, and federal funds
    available.
        (5) The political subdivisions affected by the project
    have committed local incentives with respect to the
    project, considering local ability to assist.
        (6) Awarding the Credit will result in an overall
    positive fiscal impact to the State, as certified by the
    Department Committee using the best available data.
        (7) The Credit is not prohibited by Section 5-35 of
    this Act.
(Source: P.A. 100-511, eff. 9-18-17.)
 
    (35 ILCS 10/5-70)
    Sec. 5-70. Annual report. On or before July 1 each year,
the Department Committee shall submit a report to the
Department on the tax credit program under this Act to the
Governor and the General Assembly. The report shall include
information on the number of Agreements that were entered into
under this Act during the preceding calendar year, a
description of the project that is the subject of each
Agreement, an update on the status of projects under
Agreements entered into before the preceding calendar year,
and the sum of the Credits awarded under this Act. A copy of
the report shall be delivered to the Governor and to each
member of the General Assembly.
    The report must include, for each Agreement:
        (1) the original estimates of the value of the Credit
    and the number of new jobs to be created and, if
    applicable, the number of retained jobs;
        (2) any relevant modifications to existing Agreements;
        (3) a statement of the progress made by each Taxpayer
    in meeting the terms of the original Agreement;
        (4) a statement of wages paid to New Employees and, if
    applicable, retained employees in the State;
        (5) any information reported under Section 5-57 of
    this Act; and
        (6) a copy of the original Agreement or a link to the
    Agreement on the Department's website.
(Source: P.A. 100-511, eff. 9-18-17.)
 
    (35 ILCS 10/5-90)
    Sec. 5-90. Program Terms and Conditions.
    (a) Any documentary materials or data made available or
received by any member of a Committee or any agent or employee
of the Department shall be deemed confidential and shall not
be deemed public records to the extent that the materials or
data consists of trade secrets, commercial or financial
information regarding the operation of the business conducted
by the Applicant for or recipient of any tax credit under this
Act, or any information regarding the competitive position of
a business in a particular field of endeavor.
    (b) Nothing in this Act shall be construed as creating any
rights in any Applicant to enter into an Agreement or in any
person to challenge the terms of any Agreement.
(Source: P.A. 91-476, eff. 8-11-99.)
 
    (35 ILCS 10/5-40 rep.)
    Section 25. The Economic Development for a Growing Economy
Tax Credit Act is amended by repealing Section 5-40.

Effective Date: 1/1/2022