HB2212 98TH GENERAL ASSEMBLY

LRB098 10066 OMW 40225 b

98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB2212

Introduced , by Rep. William Davis

SYNOPSIS AS INTRODUCED:

New Act
30 ILCS 105/5.827 new

Creates the Brownfields Redevelopment and Intermodal Promotion Act. Identifies boundaries of the South Suburban Cook County Brownfield Redevelopment Zone. Provides that the incremental income tax attributable to a new employee on property that has been redeveloped within the South Suburban Brownfields Redevelopment Zone pursuant to a South Suburban Cook County Redevelopment Project shall be deposited into the South Suburban Brownfields Redevelopment Fund. Provides that moneys in the South Suburban Brownfields Redevelopment Fund shall be used to cover the costs of acquisition and assembly of brownfield properties and their remediation and re-use as part of a South Suburban Cook County Redevelopment Zone, and for improvements of public infrastructure servicing those properties. Sets forth limits on expenditures from the South Suburban Brownfields Redevelopment Fund. Contains other provisions. Amends the State Finance Act to create the South Suburban Brownfields Redevelopment Fund as a special fund. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning brownfields.

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 Brownfields Redevelopment and Intermodal Promotion Act.

Section 5. The General Assembly has determined that it is in the interest of the State of Illinois to facilitate remediation and productive re-use of brownfield sites located within specified areas and communities in Illinois; to capitalize on current trends in international trade routes by encouraging the redevelopment of brownfield sites located near existing freight assets into scattered site logistics parks and related facilities and businesses; and furthermore that it is in the interest of the State to encourage the hiring of minority and other historically disadvantaged individuals in new businesses or facilities developed with State assistance, and especially to encourage the hiring of individuals who reside in high-unemployment communities where such businesses or facilities are developed.

Section 10. Definitions. As used in this Act:

"Affected Municipality" means a municipality whose boundaries are partially or completely within the Brownfields Redevelopment Zone and where an Eligible Project will take place.

"Developer Agreement" means the agreement between an eligible developer or eligible employer and the Department under this Act.

"Brownfield" means real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant; for the purposes of this Act, a property will be considered a brownfield if a prospective purchaser seeking financing from a private financial institution is required by that institution to conduct a Phase I Environmental Site Assessment (ESA), as defined by ASTM Standard E-1527-05 ("Standard Practice for Environmental Site Assessments: Phase 1 Environmental Site Assessment Process").

"Department" means the Department of Commerce and Economic Opportunity.

"Director" means the Director of the Department of Commerce and Economic Opportunity.

"Eligible Developer" means an individual, partnership, corporation, or other entity, currently and actively engaged in the development of logistics, warehousing, distribution, or light manufacturing facilities in North America, including the Managing Partner of the South Suburban Brownfields Redevelopment Zone, that owns, options, or otherwise directly controls a parcel of land that is included in a South Suburban Brownfields Redevelopment Zone Project.

"Eligible employer" means an individual, partnership, corporation, or other entity that employs or will employ full-time employees at finished facilities on property that is within the South Suburban Brownfields Redevelopment Zone.

"Employment goal" means the goal of achieving a minimum percentage of labor hours to be performed by employees who are a member of a minority group and who reside in one of the municipalities containing property that is part of the South Suburban Brownfields Redevelopment Zone.

"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 is a full-time employee if employed in the service of the eligible employer 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.

"Eligible Project" means those projects described in Section 35 of this Act.

"Incremental income tax" means the total amount withheld from the compensation of new employees under Article 7 of the Illinois Income Tax Act arising from employment by an eligible employer.

"Infrastructure" means roads and streets, bridges, sidewalks, street lights, water and sewer line extensions or improvements, storm water drainage and retention facilities, gas and electric utility line extensions or improvements, and rail improvements including signalization and siding construction or repair, on publicly owned land or other public improvements that are essential to the development of a Redevelopment Zone Project.

"Intermodal" means a type of international freight system that permits transshipping among sea, highway, rail and air modes of transportation through use of ANSI/International Organization for Standardization containers, line haul assets, and handling equipment.

"Intermodal terminal" means an integrated facility where trailers and containers are transferred between intermodal railcars and highway carriers, including domestic and international container shipments; or an integrated facility where dry or liquid bulk and packaged commodities are transferred between conventional railroad freight cars and highway carriers.

"Managing Partner" means a representative of Cook County appointed by the President of the Board of Commissioners of Cook County or a duly created instrumentality of the County which enters into an agreement with the Department as described in subsection (c) of Section 30 of this Act regarding the overall management and use of Increment Funds and which is authorized by the County to undertake, or to enter into Development agreements with third parties to undertake, activities necessary for the redevelopment of parcels designated under this Act as part of a South Suburban Brownfields Redevelopment Zone.

"Minority" means a person who is a citizen or lawful permanent resident of the United States and who is:

(i) African American, meaning a person whose origins are in any of the Black racial groups of Africa, and who has historically and consistently identified himself or herself as being such a person;

(ii) Hispanic American or Latino American, meaning a person whose origins are in Mexico, Central or South America, or any of the Spanish speaking islands of the Caribbean (for example Cuba and Puerto Rico), regardless of race, and who has historically and consistently identified himself or herself as being such a person;

(iii) Asian or Pacific Islander American, meaning a person whose origins are in any of the original peoples of the Far East, Southeast Asia, the islands of the Pacific or the Northern Marianas, or the Indian Subcontinent, and who has historically and consistently identified himself or herself as being such a person; or

(iv) Native American, meaning a person having origins in any of the original peoples of North America, and who maintain tribal affiliation or demonstrate at least one-quarter descent from such groups, and who has historically and consistently identified himself or herself as being such a person.

"New employee" means a full-time employee first employed by an eligible employer for a project that is the subject of an agreement between the Managing Partner and an eligible developer or eligible employer and who is hired after the eligible developer enters into the agreement, but does not include:

(1) an employee of the eligible employer who performs a job that (i) existed for at least 6 months before the employee was hired and (ii) was previously performed by another employee;

(2) an employee of the eligible employer who was previously employed in Illinois by a related member of the eligible employer and whose employment was shifted to the eligible employer after the eligible employer entered into the 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 eligible employer.

Notwithstanding item (2) of this definition, 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: (i) treated under the agreement as a new employee and (ii) promoted by the eligible employer to another job.

"Professional Employer Organization" means an employee leasing company, as defined in Section 206.1(A)(2) of the Unemployment Insurance Act.

"Related member" means a person or entity that, with respect to the eligible employer 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 eligible employer'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 eligible employer;

(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 eligible employer; or

(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 definition, 20% shall be substituted for 5% wherever 5% appears in Section 1563(e) of the Internal Revenue Code.

"South Suburban Brownfields Advisory Council" or "Advisory Council" means a body comprised of representatives of Affected Municipalities, along with experts appointed by the President of the Cook County Board of Commissioners and the Governor of Illinois, created to guide development within the South Suburban Brownfields Redevelopment Zone.

"South Suburban Brownfields Redevelopment Zone Project" or "Project" means an Eligible Project, as described in Section 30, to coordinate the redevelopment and re-use of industrial sites within the South Suburban Brownfields Redevelopment Zone in southern Cook County.

"South Suburban Brownfields Redevelopment Zone", "Brownfields Redevelopment Zone" or "Zone" means the area fully encompassing all properties, acreage and structures, including sites that conform to the Environmental Protection Agency definition of Brownfield Sites, that are zoned for industrial uses by the applicable local zoning agency and which are located within the following South Suburban Cook County municipalities that surround the Canadian National and Union Pacific intermodal freight terminals in Harvey and Dolton, Illinois respectively: Dixmoor, Dolton, East Hazelcrest, Harvey, Hazelcrest, Homewood, Markham, Phoenix, Posen, Riverdale, South Holland and Thornton. The South Suburban Brownfields Advisory Council shall advise the Managing Partner in regard to the selection of Projects. The composition of the Advisory Council is determined as set forth in subsection (a) of Section 30 of this Act.

Section 15. South Suburban Brownfields Redevelopment Zone Fund. The South Suburban Brownfields Redevelopment Zone Fund is created as a special fund in the State treasury. Upon certification of the Department of Revenue following review of the amounts contained in the quarter-annual report required under paragraph 4 of Section 50 of this Act and subject to the limits set forth in Section 25 of this Act, the Comptroller shall order transferred and the Treasurer shall transfer from the General Revenue Fund to the South Suburban Brownfields Redevelopment Fund an amount equal to the incremental income tax for the previous month attributable to new employees at finished facilities on property that was redeveloped as part of the South Suburban Brownfields Redevelopment Zone. These revenues may be used to pay the Managing Partner for its administrative expenses pursuant to Section 45 of this Act or to reimburse Eligible Developers or Eligible Employers for the cost of the activities detailed under Section 45 of this Act for Projects being undertaken within the South Suburban Brownfields Redevelopment Zone.

Section 20. South Suburban Brownfields Redevelopment Fund; eligible projects. In State fiscal years 2014 through 2026, all moneys in the South Suburban Brownfields Redevelopment Zone Fund shall be held solely to fund eligible projects undertaken pursuant to the provisions of Section 35 of this Act and performed either directly by the Cook County through a development agreement with the Department, by an entity designated by Cook County through a development agreement with the Department to perform specific tasks, or by an Eligible Developer or an Eligible Employer through a development agreement. All Eligible Projects are subject to review and approval by the Managing Partner and by the Department. The life span of the Fund may be extended past 2026 by law.

Section 25. Limitation on amounts for eligible projects.

The total amount of tax increment to be transferred to the South Suburban Increment Fund shall not exceed $6,000,000 in each State fiscal year. Any increment generated in a given State fiscal year in excess of $6,000,000 shall be retained by the State. Any revenues in the South Suburban Brownfields Redevelopment Fund not used in a given fiscal year may be rolled over into subsequent fiscal years. Use of the Fund to pay or reimburse eligible expenses shall not preclude the receipt of benefits from any Enterprise Zone, Tax Increment Finance District, property tax abatement program, or other business development program of a federal, State, or local economic development program that may be available to the project, and any brownfield site included in an agreement with an eligible developer or eligible employer shall remain fully eligible for all State and Federal tax incentives and grants specifically related to brownfield remediation.

Section 30. Managing Partner; Advisory Council; responsibilities.

(a) The Managing Partner shall report its recommendations to the Advisory Council. The Advisory Council consists of two members appointed by the Governor of the State of Illinois, two members appointed by the President of the Cook County Board of Commissioners and five members selected by the Affected Municipalities to represent them. All members shall serve for a term of 3 years. Upon expiration of each member's term, a successor shall be appointed for a term of 3 years. Vacancies on the Advisory Council shall be filled in the same manner as the original appointments and any members so appointed shall serve during the remainder of the term for which the vacancy occurred. The appointments shall be made within 90 days of the effective date of this Act. Five members shall constitute a quorum. The Council shall elect a Chairperson amongst its members by simple majority vote. Members shall serve without compensation and accurate minutes shall be kept of all meetings of the Advisory Council. The Advisory Council shall meet no less frequently than quarterly and a meeting may be called by the Chairperson or any four members of the Board. The relationship between the Managing Partner and the Advisory Council shall be set forth in an agreement among the parties.

(b) The Managing Partner is responsible for ensuring that, in consultation with the Advisory Board, the acreage designated as part of the Zone is redeveloped to simultaneously maximize the following:

(1) Protection and improvement of the natural environment and the remediation of brownfield industrial property within the Brownfield Redevelopment Zone.

(2) Restoration of industrially zoned land to its best and highest use, defined here as the highest possible number of new jobs in logistics or manufacturing operations and the highest levels of new business revenues.

(3) Employment of local low and moderate income residents of the Zone and minority residents of the Zone and contracting with local minority-owned firms, to the extent consistent with Cook County policies and existing law.

(c) In order to fulfill the responsibilities set forth in subsection (b) of this Section, the Managing Partner has the following powers and duties, which shall collectively comprise its program administration tasks:

(1) Create, gain approval from the Director for, and regularly update, a master plan for the redevelopment of properties and the use of the Fund, for review by the Advisory Board and the Director, including the following elements:

(A) An explanation of how the features of the master plan allow the Managing Partner to fulfill the broad responsibility outlined in this Section.

(B) The tasks that the Managing Partner will undertake, directly or through assistance in the negotiation of development agreements with eligible developers or eligible employers, to acquire, assemble, remediate, prepare for development, redevelop, or market parcels that are part of the Zone.

(C) The criteria by which the Managing Partner will evaluate and select from among potential eligible projects to carry out its basic responsibilities as outlined in this Section, including criteria that will fulfill the following programmatic goals: (i) at least 30% of labor hours must be performed by members of minority groups who reside in the municipalities where the Zone operates, and (ii) at least 20% of the dollar value of contracts and subcontracts must be held by minority-owned firms that are based in the municipalities where the Zone operates.

(D) Methods the Managing Partner employed to receive and incorporate input on the master plan from a broad range of residents and stakeholders within the municipalities where the Zone operates, and methods it will employ to publicize the master plan so that it is constantly available for public review.

(E) Documentation of the master plan's consistency with the applicable metropolitan planning organization's current regional comprehensive plan and regional Transportation Improvement Plan (TIP), and with the current State Transportation Improvement Plan (STIP).

(2) Develop and maintain a current database or set of databases with detailed information including:

(A) All industrially zoned real estate properties that are part of the Zone, including information concerning each property's ownership; current or delinquent tax status; proximity to major elements of freight infrastructure; status as a potential or designated brownfield; and any other information to support the marketing and redevelopment of properties that are part of the Zone.

(B) All major elements of infrastructure that serve the properties that are part of the Zone, including the capacity and state of repair of rail lines and spurs, roadways, water, sewage, and power systems.

(C) Names of minority-owned contracting firms that are based in municipalities containing property that is included in the Zone and wish to be hired by eligible developers or eligible employers, including the qualifications and contact information for these contractors.

(D) Names of individuals who are residents of municipalities containing property that is part of the Zone and are members of a minority group, who wish to be employed by eligible developers or eligible employers, including the qualifications and contact information for these residents.

(3) Execute its master plan through a series of eligible activities as outlined in Section 45 of this Act, governed by agreements.

(4) Evaluate project proposals to determine their appropriateness and priority for funding based on the evaluation criteria defined in the master plan.

(5) Negotiate and monitor agreements with Affected Municipalities, eligible developers and eligible employers.

(6) Maintain records of activities and financial transactions including regular reports to the Department and an annual certified public audit.

(7) Publish and make publicly available an annual report detailing local minority hiring and contracting that has resulted from the use of revenues in the Fund, to include the following: (A) the total number of labor hours performed by new employees who work at finished facilities located on property that is part of the Zone and who (i) are members of a minority group, and (ii) reside in one of the municipalities containing property that is part of the Zone; (B) the total number of labor hours performed by all new employees who work at finished facilities located on property that is part of the Zone; (C) the total dollar value of contracted or subcontracted services reimbursed with revenues from the Fund and that were performed by firms that are (i) minority-owned, and (ii) based in one of the municipalities containing property that is part of the Zone; (D) the total dollar value of contracted or subcontracted services reimbursed with revenues from the Fund; and (E) an explanation of concrete steps that will be taken if these values do not meet the programmatic goals that (i) at least 30% of labor hours must be performed by members of local minority groups, and (ii) at least 20% of the dollar value of contracts and subcontracts must be held by local minority-owned firms.

(8) Report to the Director quarterly on the progress of executing the master plan and eligible activities.

(d) The Department shall manage and allocate all South Suburban Brownfields Redevelopment Fund revenues subject to the Director's finding that funds are being used to execute the master plan for redevelopment of properties that are part of the Zone.

The Managing Partner may, at its discretion, contract with an entity of its choosing to support these program administration tasks.

Section 35. Eligible projects. Funds may be used only for projects that are necessary for the establishment of a facility classified under the current edition of the Urban Land Institute's "Guide to Classifying Industrial Property" in one of the following primary categories: warehouse distribution, manufacturing (light or metal fabrication), or freight forwarding; where the secondary categories under warehouse distribution include regional, bulk, and rack-supported warehouses as well as both heavy and refrigerated distribution facilities; and where the secondary categories under manufacturing include parts assembly or packaging plants, food processing plants, and metal working plants that fashion complete products or components of machinery, transportation equipment, appliances, or construction elements and where the secondary category under freight forwarding includes truck terminals. Projects must adhere to applicable local and regional zoning regulations. Projects may consist of new construction or expansion of existing facilities so long as the expansion results in the creation of new jobs. Projects must consist of a set of activities undertaken as part of an agreement to bring back into productive use a brownfield property that is part of the Zone, including activities defined as eligible purposes of funds in Section 45 of this Act.

Section 40. Prohibited projects. Funds shall not be used to support projects that create the following types of permanent facilities and structures:

(i) any type or kind of processing, handing, or sorting facility for any kind of municipal or private liquid or solid waste;

(ii) any type or kind of intermodal or multimodal transfer station for any kind of municipal or private liquid or solid waste; or

(iii) container storage yards that are not part of a larger facility whose primary function is the maintenance, repair, and rebuilding of transportation equipment including intermodal containers and trailers, container chassis, mechanical lift equipment, hosting tractors, and over-the-road tractors.

Temporary or short-term processing or transfer facilities specifically used as part of an approved environmental remediation plan for a specific site or parcel under an agreement are permitted.

Section 45. Eligible activities. Funds held in the South Suburban Brownfields Redevelopment Fund may be expended for the following purposes:

(1) Payment of costs undertaken directly by the Managing Partner or reimbursement of costs incurred by an eligible developer or eligible employer as part of the execution of an agreement, any of which services may be subcontracted out to third parties for the following activities:

(A) environmental site assessments, site investigations, remediation action plans, and remediation of brownfield sites located on property where any portion of an eligible project is taking place;

(B) land acquisition and site assembly, site development plans; and demolition of derelict or outdated structures.

(C) recruiting and training of individuals who are both (i) members of a minority group, and (ii) residing in one of the municipalities containing property that is part of the Zone, for employment in logistics or light manufacturing, such as through pre-employment services, pre-apprenticeship training, apprenticeship training, and skills training.

(2) Payment of the costs of repairing or upgrading public infrastructure on publicly owned land within the Zone, including rights of way, provided such infrastructure is on public property that is either included within the Brownfields Redevelopment Zone or which is essential to the development of a Project.

In agreements with for-profit eligible developers and employers governing redevelopment of privately held land, reimbursements must first and foremost prioritize the activities described in item (A).

(3) Program administration costs. The Managing Partner may request up to a total of 15% of amounts in the Fund over the course of the fiscal year to support its responsibilities in that fiscal year as detailed in Section 30 of this Act. The Managing Partner must find additional funds for any program administration costs not covered by the 15%. Subject to the Department's approval, the Managing Partner may impose a reasonable application processing fee from eligible developers and eligible employers who submit proposals, and may use these fees to support program administration.

Section 50. Agreements with Eligible Developers and Affected Municipalities. Prior to the expenditure of any amounts from the Fund (except for administration costs of the Managing Partner which may be requested periodically), the Department and the Affected Municipality shall enter into an agreement which has been recommended by the Managing Partner with an Eligible Developer or Eligible Employer who is seeking reimbursement under this Act. The agreement must contain all of the following:

(1) A detailed description of the project that is the subject of the agreement, including the location of the project, the expected number of jobs to be created by the project, and a list of the costs incurred or to be incurred by the eligible developer or employer for eligible activities, excluding any amounts that are to be funded through other public sources.

(2) A requirement that the eligible developer or eligible employer maintain operations at the project location, stated as a minimum number of years not to exceed 10 years.

(3) A specific method for determining the number of new employees attributable to the project.

(4) A requirement that the eligible developer or eligible employer report on a quarterly basis to the Managing Partner, the Department, and the Department of Revenue the number of new employees and the incremental income tax withheld in connection with the new employees.

(5) A provision authorizing the Department to verify with the Department of Revenue the amounts reported under paragraph (4) and to report this information to the Managing Partner.

(6) A provision authorizing the Department of Revenue to audit the information reported under paragraph (4).

(7) A plan for how the eligible developer or eligible employer will encourage local low and moderate income and minority hiring and minority contracting, including specific employment and contracting goals; plans for recruiting, training, and retaining local minority employees; plans for identifying and soliciting bids from local minority-owned firms for contracted or subcontracted services; a list of two or more community organizations that it plans to work with to achieve those goals and plans; and a specific method for determining and reporting on the fulfillment of local minority and low and moderate income hiring and minority contracting goals.

(8) A commitment from the eligible developer or eligible employer to work with the City-County Office of Workforce Employment and to consider referrals of trained workers from such Office on a timely and non-discriminatory basis.

(9) Documentation that any road improvements that are part of the agreement are consistent with the current regional Transportation Improvement Plan (TIP) and the State Transportation Improvement Plan (STIP).

(10) Evidence of approval of the Eligible Project by the Affected Municipality or Municipalities following such public hearings and public notice as may be required by Illinois law in regard to such Eligible Projects.

Section 55. Rules. The Department and the Department of Revenue may promulgate rules necessary to implement this Act.

Section 60. The State Finance Act is amended by adding Section 5.827 as follows:

(30 ILCS 105/5.827 new)

Sec. 5.827. The South Suburban Brownfields Redevelopment Fund.

Section 97. Severability. The provisions of this Act are severable under Section 1.31 of the Statute on Statutes.

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