97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB1391

 

Introduced 2/9/2011, by Sen. Dale A. Righter

 

SYNOPSIS AS INTRODUCED:
 
20 ILCS 715/25

    Amends the Corporate Accountability for Tax Expenditures Act. Provides that, for certain programs based on job creation or retention, beginning in 2007 and through 2011, a recipient shall be deemed in compliance with those job creation or job retention requirements by establishing that it has created or maintained the requisite number of jobs based on a 3-year average, including the current reporting year and the 2 immediately preceding reporting years. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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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 Corporate Accountability for Tax
5Expenditures Act is amended by changing Section 25 as follows:
 
6    (20 ILCS 715/25)
7    Sec. 25. Recapture.
8    (a) All development assistance agreements shall contain,
9at a minimum, the following recapture provisions:
10        (1) The recipient must (i) make the level of capital
11    investment in the economic development project specified
12    in the development assistance agreement; (ii) create or
13    retain, or both, the requisite number of jobs, paying not
14    less than specified wages for the created and retained
15    jobs, within and for the duration of the time period
16    specified in the legislation authorizing, or the
17    administrative rules implementing, the development
18    assistance programs and the development assistance
19    agreement.
20        (2) If the recipient fails to create or retain the
21    requisite number of jobs within and for the time period
22    specified, in the legislation authorizing, or the
23    administrative rules implementing, the development

 

 

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1    assistance programs and the development assistance
2    agreement, the recipient shall be deemed to no longer
3    qualify for the State economic assistance and the
4    applicable recapture provisions shall take effect.
5    Beginning January 1, 2007 through December 31, 2011, a
6    recipient shall be deemed in compliance with all such job
7    creation or job retention requirements by establishing
8    that the recipient has created or maintained the requisite
9    number of jobs based on a 3-year average, including the
10    current reporting year and the 2 immediately preceding
11    reporting years.
12        (3) If the recipient receives State economic
13    assistance in the form of a High Impact Business
14    designation pursuant to Section 5.5 of the Illinois
15    Enterprise Zone Act and the business receives the benefit
16    of the exemption authorized under Section 5l of the
17    Retailers' Occupation Tax Act (for the sale of building
18    materials incorporated into a High Impact Business
19    location) and the recipient fails to create or retain the
20    requisite number of jobs, as determined by the legislation
21    authorizing the development assistance programs or the
22    administrative rules implementing such legislation, or
23    both, within the requisite period of time, the recipient
24    shall be required to pay to the State the full amount of
25    the State tax exemption that it received as a result of the
26    High Impact Business designation. Beginning January 1,

 

 

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1    2007 through December 31, 2011, a recipient shall be deemed
2    in compliance with all such job creation or job retention
3    requirements by establishing that the recipient has
4    created or maintained the requisite number of jobs based on
5    a 3-year average, including the current reporting year and
6    the 2 immediately preceding reporting years.
7        (4) If the recipient receives a grant or loan pursuant
8    to the Large Business Development Program, the Business
9    Development Public Infrastructure Program, or the
10    Industrial Training Program and the recipient fails to
11    create or retain the requisite number of jobs for the
12    requisite time period, as provided in the legislation
13    authorizing the development assistance programs or the
14    administrative rules implementing such legislation, or
15    both, or in the development assistance agreement, the
16    recipient shall be required to repay to the State a pro
17    rata amount of the grant; that amount shall reflect the
18    percentage of the deficiency between the requisite number
19    of jobs to be created or retained by the recipient and the
20    actual number of such jobs in existence as of the date the
21    Department determines the recipient is in breach of the job
22    creation or retention covenants contained in the
23    development assistance agreement. If the recipient of
24    development assistance under the Large Business
25    Development Program, the Business Development Public
26    Infrastructure Program, or the Industrial Training Program

 

 

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1    ceases operations at the specific project site, during the
2    5-year period commencing on the date of assistance, the
3    recipient shall be required to repay the entire amount of
4    the grant or to accelerate repayment of the loan back to
5    the State.
6        (5) If the recipient receives a tax credit under the
7    Economic Development for a Growing Economy tax credit
8    program, the development assistance agreement must provide
9    that (i) if the number of new or retained employees falls
10    below the requisite number set forth in the development
11    assistance agreement, the allowance of the credit shall be
12    automatically suspended until the number of new and
13    retained employees equals or exceeds the requisite number
14    in the development assistance agreement; (ii) if the
15    recipient discontinues operations at the specific project
16    site during the first 5 years of the 10-year term of the
17    development assistance agreement, the recipient shall
18    forfeit all credits taken by the recipient during such
19    5-year period; and (iii) in the event of a revocation or
20    suspension of the credit, the Department shall contact the
21    Director of Revenue to initiate proceedings against the
22    recipient to recover wrongfully exempted Illinois State
23    income taxes and the recipient shall promptly repay to the
24    Department of Revenue any wrongfully exempted Illinois
25    State income taxes. The forfeited amount of credits shall
26    be deemed assessed on the date the Department contacts the

 

 

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1    Department of Revenue and the recipient shall promptly
2    repay to the Department of Revenue any wrongfully exempted
3    Illinois State income taxes.
4    (b) The Director may elect to waive enforcement of any
5contractual provision arising out of the development
6assistance agreement required by this Act based on a finding
7that the waiver is necessary to avert an imminent and
8demonstrable hardship to the recipient that may result in such
9recipient's insolvency or discharge of workers. If a waiver is
10granted, the recipient must agree to a contractual
11modification, including recapture provisions, to the
12development assistance agreement. The existence of any waiver
13granted pursuant to this subsection (c), the date of the
14granting of such waiver, and a brief summary of the reasons
15supporting the granting of such waiver shall be disclosed
16consistent with the provisions of Section 25 of this Act.
17    (c) Beginning June 1, 2004, the Department shall annually
18compile a report on the outcomes and effectiveness of recapture
19provisions by program, including but not limited to: (i) the
20total number of companies that receive development assistance
21as defined in this Act; (ii) the total number of recipients in
22violation of development agreements with the Department; (iii)
23the total number of completed recapture efforts; (iv) the total
24number of recapture efforts initiated; and (v) the number of
25waivers granted. This report shall be disclosed consistent with
26the provisions of Section 20 of this Act.

 

 

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1    (d) For the purposes of this Act, recapture provisions do
2not include the Illinois Department of Transportation Economic
3Development Program, any grants under the Industrial Training
4Program that are not given as an incentive to a recipient
5business organization, or any successor programs as described
6in the term "development assistance" in Section 5 of this Act.
7(Source: P.A. 93-552, eff. 8-20-03.)
 
8    Section 99. Effective date. This Act takes effect upon
9becoming law.