HB5479 102ND GENERAL ASSEMBLY

LRB102 25059 HLH 34319 b

102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB5479

Introduced 1/31/2022, by Rep. David A. Welter

SYNOPSIS AS INTRODUCED:

New Act
35 ILCS 5/232 new

Creates the Grocery Store New Construction Tax Credit Act. Creates a tax credit for taxpayers who undertake a project to construct a new grocery store in the State, subject to certain capital investment and employment requirements. Amends the Illinois Income Tax Act to make conforming changes. Effective immediately.

A BILL FOR

AN ACT concerning revenue.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Grocery Store New Construction Tax Credit Act.

Section 5. Definitions. As used in this Act:

"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.

"Department" means the Department 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 the applicant.

"Grocery store" means a retail establishment located in this State that primarily sells food and beverages for consumption off the premises of the establishment.

"Incremental income tax" means the total amount withheld during the taxable year from the compensation of new employees arising from employment at a project that is the subject of an Agreement.

"New employee" means:

(1) a full-time employee first employed by a taxpayer in the project that is the subject of an agreement who is hired after the taxpayer enters into the tax credit agreement.

(2) The term "new employee" does not include:

(A) 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;

(B) 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

(C) 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.

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.

"Project" means the construction of a new grocery store in the State.

"Related member" has the meaning given to that term in Section 5-5 of the Economic Development for a Growing Economy Tax Credit Act.

"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.

Section 10. Tax credit awards.

(a) Subject to the conditions set forth in this Act, a taxpayer is entitled to a credit against taxes imposed pursuant to subsections (a), (b), and (p) of Section 201 of the Illinois Income Tax Act for taxable years beginning on or after January 1, 2023 if the taxpayer is awarded a credit by the Department under this Act for that taxable year.

(b) The Department shall make credit awards under this Act to encourage job creation and to facilitate the construction of new grocery stores in the State.

(c) A person that proposes a project to construct a new grocery store in Illinois must enter into an agreement with the Department for the credit under this Act.

(d) The credit shall be claimed for the taxable years specified in the agreement.

(e) The credit shall not exceed the incremental income tax attributable to the project that is the subject of the agreement.

(f) Nothing in this Act shall prohibit a tax credit award to an applicant that uses a PEO if all other award criteria are satisfied.

Section 15. Application for a project to create and retain new jobs.

(a) Any taxpayer proposing a project located or planned to be located in Illinois may request consideration for designation of its project, by formal written letter of request or by formal application to the Department, in which the applicant states its intent to make at least a specified level of investment and intends to hire or retain a specified number of full-time employees at a designated location in Illinois. As circumstances require, the Department may require a formal application from an applicant and a formal letter of request for assistance.

(b) In order to qualify for credits under this Act, an applicant's project must conform to each of the following:

(1) If the applicant has more than 100 employees, the applicant's project must involve an investment of at least $2,500,000 in capital improvements to be placed in service within the State as a direct result of the project. If the applicant has 100 or fewer employees, then there is no capital investment requirement.

(2) If the applicant has more than 100 employees, the applicant's project must employ a number of new employees in the State equal to the lesser of: (A) 10% of the number of full-time employees employed by the applicant world-wide on the date the application is filed with the Department; or (B) 50 new employees. If the applicant has 100 or fewer employees, the applicant's project must employ a number of new employees in the State equal to the lesser of: (A) 5% of the number of full-time employees employed by the applicant world-wide on the date the application is filed with the Department; or (B) 50 new employees.

(c) The Department shall determine which projects will 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.

(d) After receipt of an application, the Department may enter into an agreement with the applicant if the application is accepted.

Section 20. Amount and duration of the credit.

(a) The Department shall determine the amount and duration of the credit awarded under this Act. The duration of the credit may not exceed 10 taxable years. The credit may be stated as a percentage of the incremental income tax attributable to the applicant's project and may include a fixed dollar limitation.

(b) Notwithstanding subsection (a), and except as the credit may be applied in a carryover year, the credit may be applied against the State income tax liability in more than 10 taxable years but not in more than 15 taxable years for an eligible business that (i) qualifies under this Act and the Corporate Headquarters Relocation Act and has in fact undertaken a qualifying project within the time frame specified by the Department of Commerce and Economic Opportunity under that Act, and (ii) applies against its State income tax liability, during the entire 15-year period, no more than 60% of the maximum credit per year that would otherwise be available under this Act.

(c) Nothing in this Section shall prevent the Department, in consultation with the Department of Revenue, from adopting rules to extend the sunset of any earned, existing, and unused tax credit or credits.

(d) The credit under this Act is exempt from the provisions of Section 250 of the Illinois Income Tax Act.

Section 25. Relocation of jobs in Illinois. A taxpayer is not entitled to claim the credit provided by this Act with respect to any jobs that the taxpayer relocates from one site in Illinois to another site in Illinois. A taxpayer with respect to a qualifying project certified under the Corporate Headquarters Relocation Act, however, is not subject to the requirements of this Section but is nevertheless considered an applicant for purposes of this Act. Moreover, any full-time employee of an eligible business relocated to Illinois in connection with that qualifying project is deemed to be a new employee for purposes of this Act. Determinations under this Section shall be made by the Department.

Section 30. Powers of the Department. In addition to those powers granted under the Civil Administrative Code of Illinois, the Department 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, the power to adopt rules and the powers set forth in Section 5-10 of the Economic Development for a Growing Economy Tax Credit Act, provided that those powers are not inconsistent with this Act.

Section 35. Sexual harassment policy report. Each taxpayer claiming a credit under this Act shall, no later than April 15 of each taxable year for which the taxpayer claims a credit under this Act, submit to the Department of Commerce and Economic Opportunity a report detailing that taxpayer's sexual harassment policy, which contains, at a minimum, the following information: (i) the illegality of sexual harassment; (ii) the definition of sexual harassment under State law; (iii) a description of sexual harassment, utilizing examples; (iv) the vendor's internal complaint process, including penalties; (v) the legal recourse, and investigative and complaint processes available through the Department; (vi) directions on how to contact the Department; and (vii) protection against retaliation as provided by Section 6-101 of the Illinois Human Rights Act. A copy of the policy shall be provided to the Department upon request. The reports required under this Section shall be submitted in a form and manner determined by the Department of Commerce and Economic Opportunity.

Section 50. The Illinois Income Tax Act is amended by adding Section 232 as follows:

(35 ILCS 5/232 new)

Sec. 232. Grocery Store New Construction Tax Credit Act. A taxpayer who is awarded a credit under the Grocery Store New Construction Tax Credit Act is entitled to a credit against the taxes imposed by subsections (a), (b), and (p) of Section 201 as provided in that Act.

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