SB0217eng 98TH GENERAL ASSEMBLY

SB0217 Engrossed LRB098 05421 WGH 35455 b

AN ACT concerning State government.

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 Illinois State Training and Employment Program (I-STEP) Act.

Section 5. Definitions. In this Act:

"Agreement" means a written agreement between the Department of Commerce and Economic Opportunity or the Department of Employment Security and an employer or a business association, labor organization, local workforce investment board, community college, or nonprofit corporation concerning a project and any amendments to that agreement.

"Base employment" means the highest number of workers employed by the employer in the last 4 completed quarters preceding the effective date of the agreement establishing the project. The Department of Employment Security shall verify an employer's base employment through means including, but not limited to, wage reports submitted pursuant to the Unemployment Insurance Act.

"Business association" means an organization formed under Section 501(c)(6) of the Internal Revenue Code or a generally recognized entity or organization that represents the interests of multiple businesses in Illinois.

"Community college" means a community college as defined in Section 1-2 of the Public Community College Act.

"Credit" or "I-STEP Credit" means an amount agreed to in an agreement with an employer under this Act that does not exceed the Incremental Income Tax attributable to the employer's project.

"Employer" means a for-profit, legal entity, including, but not limited to, a sole proprietorship, partnership, corporation, joint venture, association, or cooperative, that has in its employ one or more individuals performing services for it.

"Federal minimum wage" means the minimum wage as defined by the federal Fair Labor Standards Act (29 U.S.C. 201 et seq.).

"Full-time, permanent job" means a job in which the employee works for the employer at a rate of at least 35 hours per week.

"I-STEP Fund" means the fund established in Section 20 of this Act.

"Incremental income tax" means the total amount withheld during the taxable year under Article 7 of the Illinois Income Tax Act from the compensation paid to employees in new jobs that are the subject of an agreement.

"Labor organization" means an organization defined as a "labor organization" under the National Labor Relations Act.

"New job" means a full-time, permanent job located in this State that meets all of the following:

(1) The job results in a net increase in the base employment in this State for the employer.

(2) The job is not being filled or refilled as a result of a layoff or to replace an employee who is or has been on strike or locked out by the employer.

(3) The job is not a job that existed in the employer's business within this State within the last 4 completed quarters preceding the effective date of the agreement.

(4) The wage paid for the job is equal to or exceeds 175% of the federal minimum wage on the effective date of the agreement.

(5) The employer has posted the job on the IllinoisJobLink.com System or its successor system for at least 2 weeks preceding the effective date of the agreement and did not locate an individual who has the requisite expertise, experience, and background, except that this requirement does not apply if either (i) the job would be covered by a collective bargaining agreement between the employer and a labor organization that includes provisions concerning hiring or training or (ii) the employer does not have employees performing services in this State as of the effective date of the agreement.

A new job may not be filled by 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 indirect ownership interest of at least 5% in the profits, capital, or value of the employer.

"Program costs" means all necessary and incidental costs of providing program services in connection with a project, including administrative costs.

"Program services" includes, but is not limited to, any of the following items needed to hire or train a worker for a new job:

(1) Training or retraining including, but not limited to, training or retraining provided by apprenticeship and training programs approved by and registered with the United States Department of Labor's Bureau of Apprenticeship and Training.

(2) Adult basic education and job-related instruction.

(3) Developmental, readiness, and remedial education.

(4) Vocational and skill-assessment services and testing.

(5) Training facilities, equipment, materials, and supplies.

"Project" means an arrangement for program services that are the subject of an agreement entered into under this Act.

Section 10. Agreement.

(a) The Director of Commerce and Economic Opportunity and the Director of Employment Security shall each have the power to enter into an agreement to establish a project with an employer. The agreement may be directly with an employer or with a business association, labor organization, local workforce investment board, community college, or nonprofit corporation acting on behalf of an employer. The Directors of Commerce and Economic Opportunity and Employment Security may consult with the I-STEP Panel before entering into an agreement.

(b) An agreement shall, at a minimum:

(1) State the project's total program costs.

(2) State that the employer may use the I-STEP Credit pursuant to Section 15 to reimburse up to 75% of the project's total program costs. If the Department of Employment Security or the Department of Commerce and Economic Opportunity determines that the project will reduce long-term unemployment in the State, the agreement shall state that the employer may use the I-STEP Credit to reimburse up to 100% of the project's total program costs.

(3) Describe the program services to be provided.

(4) Specify the number of new jobs covered by the project.

(5) Include a certification by the employer that it shall (i) offer to assume the collective bargaining obligations of a prior employer, including any existing collective bargaining agreement with the bargaining representative of any existing collective bargaining unit or units performing substantially similar work to the work being performed by any employee in a new job and (ii) offer employment to all employees currently employed in any existing bargaining unit performing substantially similar work to the work being performed by any employee in a new job.

(6) Include a provision that fixes the maximum amount of I-STEP Credit for the reimbursement of program costs for each taxable year.

(7) Specify the duration of the I-STEP Credit and the first taxable year for which the Credit may be claimed.

(8) Require that an employer 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 employer open for reasonable inspection and audits by the Department of Commerce and Economic Opportunity and Department of Employment Security and including, without limitation, the making of copies of the books, records, or papers and the inspection or appraisal of any of the employer or project assets related to the project.

(9) Indicate the amount of administrative costs that the employer will be required to deposit into the I-STEP Fund.

(10) Contain other provisions the Department of Commerce and Economic Opportunity and Department of Employment Security consider appropriate or necessary.

(c) The administrative costs of the Department of Commerce and Economic Opportunity with respect to each project shall not exceed 5% of the program costs. The Department of Employment Security's administrative costs with respect to each project shall not exceed 5% of the program costs. In the case of an agreement between the Department of Commerce and Economic Opportunity or the Department of Employment Security and a business association, labor organization, local workforce investment board, community college, or nonprofit corporation acting on behalf of an employer, the administrative costs of the business association, labor organization, local workforce investment board, community college, or nonprofit corporation shall not exceed 5% of the program costs and shall be in addition to the program costs of the Department of Commerce and Economic Opportunity and the Department of Employment Security.

(d) The Department of Commerce and Economic Opportunity and the Department of Employment Security shall annually report to the General Assembly, no later than December 31, on the new jobs created and amount of credits for which employers have been certified as eligible pursuant to this Act.

(e) A summary of each agreement shall be posted on the website maintained pursuant to the Corporate Accountability for Tax Expenditures Act.

Section 15. I-STEP Credit.

(a) Subject to the conditions set forth in this Act, for any taxable year ending on or after December 31, 2014, an employer is entitled to a credit against its obligation to pay over withholding under Section 704A of the Illinois Income Tax Act, if the employer is awarded a Credit under this Act for that taxable year.

(b) 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 employer's project and shall include a fixed dollar limitation that shall not exceed the amount calculated pursuant to paragraph (2) of subsection (b) of Section 10.

(c) An employer claiming a credit under this Act shall submit to the Department of Revenue a copy of the certificate of verification under this Act for the taxable year. However, failure to submit a copy of the certificate with the employer's tax return shall not invalidate a claim for a credit.

(d) For an employer to be eligible for a certificate of verification, the employer shall provide proof as required by the Department of Commerce and Economic Opportunity or the Department of Employment Security prior to the end of each calendar year including, but not limited to, attestation by the employer:

(1) regarding the number of new jobs specified in its agreement and into which it has hired employees;

(2) that employees received the program services specified in the agreement; and

(3) regarding the amount of program costs incurred by the employer with respect to those new jobs.

(e) For a certificate of verification to be valid, it shall be signed by the Director of Commerce and Economic Opportunity or the Director of Employment Security.

Section 20. I-STEP Fund.

(a) There is established in the State treasury a special fund to be known as the I-STEP Fund.

(b) Money received, earned, or collected pursuant to this Act shall be credited to the I-STEP Fund. All interest earnings on amounts within the I-STEP Fund shall accrue to the I-STEP Fund. The I-STEP Fund may include such funds and accounts as are necessary for the implementation and administration of this Act. All sums recovered for losses sustained by the I-STEP Fund shall be deposited into the I-STEP Fund.

(c) Moneys may be paid or expended from the I-STEP Fund for the payment of administrative costs associated with projects established pursuant to this Act.

(d) Any payments or expenditures from the I-STEP Fund, other than administrative costs associated with projects established pursuant to this Act, shall require the approval of both the Director of Employment Security and the Director of Commerce and Economic Opportunity.

Section 25. I-STEP Panel.

(a) There is created the I-STEP Panel. The I-STEP Panel shall consist of the Director of Commerce and Economic Opportunity and the Director of Employment Security, who shall serve as co-chairpersons, and 11 members who shall be appointed by the Governor with the advice and consent of the Senate.

(b) The members of the I-STEP Panel shall include a representative from each of the following businesses and groups: manufacturing, small business, a local or State business association or chamber of commerce, building and construction trades unions, a labor organization representing workers engaged in manufacturing, a labor organization representing workers engaged in service professions, a not-for-profit corporation providing workforce training, a community college, and a local workforce investment board. There shall be 2 at-large voting members who reside within counties or municipalities that have had an annual average unemployment rate of at least 120% of the State's annual average unemployment rate as reported by Department of Employment Security for the 5 years preceding the date of appointment. All appointments shall be made in a geographically diverse manner.

(c) For the initial appointments to the I-STEP Panel, 5 members shall be appointed to serve a 2-year term and 6 members shall be appointed to serve a 4-year term. Thereafter, all appointments shall be for terms of 4 years. The initial term of appointed members shall commence on July 1, 2014. Thereafter, the terms of appointed members shall commence on July 1, except in the case of an appointment to fill a vacancy. Vacancies occurring among the members shall be filled in the same manner as the original appointment for the remainder of the unexpired term. For a vacancy occurring when the Senate is not in session, the Governor may make a temporary appointment until the next meeting of the Senate when a person shall be nominated to fill the office, and, upon confirmation by the Senate, he or she shall hold office during the remainder of the term. A vacancy in membership does not impair the ability of a quorum to exercise all rights and perform all duties of the I-STEP Panel. A member is eligible for reappointment.

(d) The I-STEP Panel shall advise the Department of Commerce and Economic Opportunity and Department of Employment Security on the implementation and administration of this Act.

(e) Members of the I-STEP Panel shall serve without compensation, but shall be reimbursed for any necessary expenses from funds appropriated for that purpose.

Section 30. Powers of the Departments. In addition to those powers granted under the Civil Administrative Code of Illinois, the Department of Commerce and Economic Opportunity and the Department of Employment Security are granted and shall have all the powers necessary or convenient to carry out and effectuate the purposes and provisions of this Act. These powers shall include, but are not limited to, power and authority to:

(1) Jointly promulgate procedures or rules necessary and appropriate for the administration of this Act, establish forms for applications, notifications, contracts, or any other agreements, and accept applications at any time during the year.

(2) 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 made pursuant to this Act to which the Department of Commerce and Economic Opportunity or the Department of Employment Security is a party.

(3) Fix, determine, charge, and collect any premiums, fees, charges, costs, and expenses from employers, including, without limitation, application fees, commitment fees, program fees, financing charges, or publication fees, deemed appropriate to pay expenses necessary or incident to the (i) administration, staffing, or operation in connection with the Department of Commerce and Economic Opportunity's or the Department of Employment Security's activities under this Act, (ii) preparation, implementation, and enforcement of the terms of the agreement, or (iii) consultation, advisory and legal fees and other costs; however, all fees and expenses incident thereto shall be the responsibility of the employer.

(4) 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 for that purpose.

(5) Gather information and conduct inquiries, in the manner and by methods as deemed desirable including, without limitation, gathering information with respect to employers for the purpose of making any designations or certifications necessary or desirable or to gather information to assist the I-STEP Panel with any recommendation or guidance in the furtherance of the purposes of this Act.

Section 85. The State Finance Act is amended by adding Section 5.855 as follows:

(30 ILCS 105/5.855 new)

Sec. 5.855. The I-STEP Fund.

Section 90. The Unemployment Insurance Act is amended by changing Sections 500 and 2101 as follows:

(820 ILCS 405/500) (from Ch. 48, par. 420)

Sec. 500. Eligibility for benefits. An unemployed individual shall be eligible to receive benefits with respect to any week only if the Director finds that:

A. He has registered for work at and thereafter has continued to report at an employment office in accordance with such regulations as the Director may prescribe, except that the Director may, by regulation, waive or alter either or both of the requirements of this subsection as to individuals attached to regular jobs, and as to such other types of cases or situations with respect to which he finds that compliance with such requirements would be oppressive or inconsistent with the purposes of this Act, provided that no such regulation shall conflict with Section 400 of this Act.

B. He has made a claim for benefits with respect to such week in accordance with such regulations as the Director may prescribe.

C. He is able to work, and is available for work; provided that during the period in question he was actively seeking work and he has certified such. Whenever requested to do so by the Director, the individual shall, in the manner the Director prescribes by regulation, inform the Department of the places at which he has sought work during the period in question. Nothing in this subsection shall limit the Director's approval of alternate methods of demonstrating an active search for work based on regular reporting to a trade union office.

1. If an otherwise eligible individual is unable to work or is unavailable for work on any normal workday of the week, he shall be eligible to receive benefits with respect to such week reduced by one-fifth of his weekly benefit amount for each day of such inability to work or unavailability for work. For the purposes of this paragraph, an individual who reports on a day subsequent to his designated report day shall be deemed unavailable for work on his report day if his failure to report on that day is without good cause, and on each intervening day, if any, on which his failure to report is without good cause. As used in the preceding sentence, "report day" means the day which has been designated for the individual to report to file his claim for benefits with respect to any week. This paragraph shall not be construed so as to effect any change in the status of part-time workers as defined in Section 407.

2. An individual shall be considered to be unavailable for work on days listed as whole holidays in "An Act to revise the law in relation to promissory notes, bonds, due bills and other instruments in writing," approved March 18, 1874, as amended; on days which are holidays in his religion or faith, and on days which are holidays according to the custom of his trade or occupation, if his failure to work on such day is a result of the holiday. In determining the claimant's eligibility for benefits and the amount to be paid him, with respect to the week in which such holiday occurs, he shall have attributed to him as additional earnings for that week an amount equal to one-fifth of his weekly benefit amount for each normal work day on which he does not work because of a holiday of the type above enumerated.

3. An individual shall be deemed unavailable for work if, after his separation from his most recent employing unit, he has removed himself to and remains in a locality where opportunities for work are substantially less favorable than those in the locality he has left.

4. An individual shall be deemed unavailable for work with respect to any week which occurs in a period when his principal occupation is that of a student in attendance at, or on vacation from, a public or private school.

5. Notwithstanding any other provisions of this Act, an individual shall not be deemed unavailable for work or to have failed actively to seek work, nor shall he be ineligible for benefits by reason of the application of the provisions of Section 603, with respect to any week, because he is enrolled in and is in regular attendance at a training course approved for him by the Director:

(a) but only if, with respect to that week, the individual presents, upon request, to the claims adjudicator referred to in Section 702 a statement executed by a responsible person connected with the training course, certifying that the individual was in full-time attendance at such course during the week. The Director may approve such course for an individual only if he finds that (1) reasonable work opportunities for which the individual is fitted by training and experience do not exist in his locality; (2) the training course relates to an occupation or skill for which there are, or are expected to be in the immediate future, reasonable work opportunities in his locality; (3) the training course is offered by a competent and reliable agency, educational institution, or employing unit; (4) the individual has the required qualifications and aptitudes to complete the course successfully; and (5) the individual is not receiving and is not eligible (other than because he has claimed benefits under this Act) for subsistence payments or similar assistance under any public or private retraining program: Provided, that the Director shall not disapprove such course solely by reason of clause (5) if the subsistence payment or similar assistance is subject to reduction by an amount equal to any benefits payable to the individual under this Act in the absence of the clause. In the event that an individual's weekly unemployment compensation benefit is less than his certified training allowance, that person shall be eligible to receive his entire unemployment compensation benefits, plus such supplemental training allowances that would make an applicant's total weekly benefit identical to the original certified training allowance.

(b) The Director shall have the authority to grant approval pursuant to subparagraph (a) above prior to an individual's formal admission into a training course. Requests for approval shall not be made more than 30 days prior to the actual starting date of such course. Requests shall be made at the appropriate unemployment office.

(c) The Director shall for purposes of paragraph C have the authority to issue a blanket approval of training programs implemented pursuant to the federal Workforce Investment Act of 1998 if both the training program and the criteria for an individual's participation in such training meet the requirements of this paragraph C.

(d) Notwithstanding the requirements of subparagraph (a), the Director shall have the authority to issue blanket approval of training programs implemented under the terms of a collective bargaining agreement.

(e) Notwithstanding any other provision of this Act, program services implemented under the Illinois State Training and Employment Program (I-STEP) Act shall constitute training approved pursuant to this paragraph C.

6. Notwithstanding any other provisions of this Act, an individual shall not be deemed unavailable for work or to have failed actively to seek work, nor shall he be ineligible for benefits, by reason of the application of the provisions of Section 603 with respect to any week because he is in training approved under Section 236 (a)(1) of the federal Trade Act of 1974, nor shall an individual be ineligible for benefits under the provisions of Section 601 by reason of leaving work voluntarily to enter such training if the work left is not of a substantially equal or higher skill level than the individual's past adversely affected employment as defined under the federal Trade Act of 1974 and the wages for such work are less than 80% of his average weekly wage as determined under the federal Trade Act of 1974.

D. If his benefit year begins prior to July 6, 1975 or subsequent to January 2, 1982, he has been unemployed for a waiting period of 1 week during such benefit year. If his benefit year begins on or after July 6, l975, but prior to January 3, 1982, and his unemployment continues for more than three weeks during such benefit year, he shall be eligible for benefits with respect to each week of such unemployment, including the first week thereof. An individual shall be deemed to be unemployed within the meaning of this subsection while receiving public assistance as remuneration for services performed on work projects financed from funds made available to governmental agencies for such purpose. No week shall be counted as a week of unemployment for the purposes of this subsection:

1. Unless it occurs within the benefit year which includes the week with respect to which he claims payment of benefits, provided that, for benefit years beginning prior to January 3, 1982, this requirement shall not interrupt the payment of benefits for consecutive weeks of unemployment; and provided further that the week immediately preceding a benefit year, if part of one uninterrupted period of unemployment which continues into such benefit year, shall be deemed (for the purpose of this subsection only and with respect to benefit years beginning prior to January 3, 1982, only) to be within such benefit year, as well as within the preceding benefit year, if the unemployed individual would, except for the provisions of the first paragraph and paragraph 1 of this subsection and of Section 605, be eligible for and entitled to benefits for such week.

2. If benefits have been paid with respect thereto.

3. Unless the individual was eligible for benefits with respect thereto except for the requirements of this subsection and of Section 605.

E. With respect to any benefit year beginning prior to January 3, 1982, he has been paid during his base period wages for insured work not less than the amount specified in Section 500E of this Act as amended and in effect on October 5, 1980. With respect to any benefit year beginning on or after January 3, 1982, he has been paid during his base period wages for insured work equal to not less than $1,600, provided that he has been paid wages for insured work equal to at least $440 during that part of his base period which does not include the calendar quarter in which the wages paid to him were highest.

F. During that week he has participated in reemployment services to which he has been referred, including but not limited to job search assistance services, pursuant to a profiling system established by the Director by rule in conformity with Section 303(j)(1) of the federal Social Security Act, unless the Director determines that:

1. the individual has completed such services; or

2. there is justifiable cause for the claimant's failure to participate in such services.

This subsection F is added by this amendatory Act of 1995 to clarify authority already provided under subsections A and C in connection with the unemployment insurance claimant profiling system required under subsections (a)(10) and (j)(1) of Section 303 of the federal Social Security Act as a condition of federal funding for the administration of the Unemployment Insurance Act.

(Source: P.A. 92-396, eff. 1-1-02.)

(820 ILCS 405/2101) (from Ch. 48, par. 661)

Sec. 2101. Special administrative account. Except as provided in Section 2100, all interest and penalties collected pursuant to this Act shall be deposited in the special administrative account. The amount in this account in excess of $100,000 on the close of business of the last day of each calendar quarter shall be immediately transferred to this State's account in the unemployment trust fund. However, subject to Section 2101.1, such funds shall not be transferred where it is determined by the Director that it is necessary to accumulate funds in the account in order to have sufficient funds to pay interest that may become due under the terms of Section 1202 (b) of the Federal Social Security Act, as amended, upon advances made to the Illinois Unemployment Insurance Trust Fund under Title XII of the Federal Social Security Act or where it is determined by the Director that it is necessary to accumulate funds in the special administrative account in order to have sufficient funds to expend for any other purpose authorized by this Section. The moneys available in the special administrative account shall be expended upon the direction of the Director whenever it appears to him that such expenditure is necessary for:

A. 1. The proper administration of this Act and no Federal funds are available for the specific purpose for which such expenditure is to be made, provided the moneys are not substituted for appropriations from Federal funds, which in the absence of such moneys would be available and provided the monies are appropriated by the General Assembly.

2. The proper administration of this Act for which purpose appropriations from Federal funds have been requested but not yet received, provided the special administrative account will be reimbursed upon receipt of the requested Federal appropriation.

B. To the extent possible, the repayment to the fund established for financing the cost of administration of this Act of moneys found by the Secretary of Labor of the United States of America, or other appropriate Federal agency, to have been lost or expended for purposes other than, or in amounts in excess of, those found necessary by the Secretary of Labor, or other appropriate Federal agency, for the administration of this Act.

C. The payment of refunds or adjustments of interest or penalties, paid pursuant to Sections 901 or 2201.

D. The payment of interest on refunds of erroneously paid contributions, penalties and interest pursuant to Section 2201.1.

E. The payment or transfer of interest or penalties to any Federal or State agency, pursuant to reciprocal arrangements entered into by the Director under the provisions of Section 2700E.

F. The payment of any costs incurred, pursuant to Section 1700.1.

G. Beginning January 1, 1989, for the payment for the legal services authorized by subsection B of Section 802, up to $1,000,000 per year for the representation of the individual claimants and up to $1,000,000 per year for the representation of "small employers".

H. The payment of any fees for collecting past due contributions, payments in lieu of contributions, penalties, and interest shall be paid (without an appropriation) from interest and penalty monies received from collection agents that have contracted with the Department under Section 2206 to collect such amounts, provided however, that the amount of such payment shall not exceed the amount of past due interest and penalty collected.

I. The payment of interest that may become due under the terms of Section 1202 (b) of the Federal Social Security Act, as amended, for advances made to the Illinois Unemployment Insurance Trust Fund.

J. Expenses incurred by the Department in the administration of the Illinois State Training and Employment Program (I-STEP) Act.

The Director shall annually on or before the first day of March report in writing to the Employment Security Advisory Board concerning the expenditures made from the special administrative account and the purposes for which funds are being accumulated.

If Federal legislation is enacted which will permit the use by the Director of some part of the contributions collected or to be collected under this Act, for the financing of expenditures incurred in the proper administration of this Act, then, upon the availability of such contributions for such purpose, the provisions of this Section shall be inoperative and interest and penalties collected pursuant to this Act shall be deposited in and be deemed a part of the clearing account. In the event of the enactment of the foregoing Federal legislation, and within 90 days after the date upon which contributions become available for expenditure for costs of administration, the total amount in the special administrative account shall be transferred to the clearing account, and after clearance thereof shall be deposited with the Secretary of the Treasury of the United States of America to the credit of the account of this State in the unemployment trust fund, established and maintained pursuant to the Federal Social Security Act, as amended.

(Source: P.A. 94-1083, eff. 1-19-07.)

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