SB1409eng 98TH GENERAL ASSEMBLY

SB1409 Engrossed LRB098 09872 OMW 40030 b

AN ACT concerning local government.

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

Section 5. The River Edge Redevelopment Zone Act is amended by adding Section 10-15 as follows:

(65 ILCS 115/10-15 new)

Sec. 10-15. Riverfront Development Fund.

(a) Purpose. The General Assembly has determined that it is in the interest of the State of Illinois to promote development that will protect, promote, and improve the riverfront areas of a financially distressed city designated under the Financially Distressed City Law.

(b) Definitions. As used in this Section:

"Agreement" means the agreement between an eligible employer and the Department under the provisions of subsection (f) of this Section.

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

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

"Eligible developer" means an individual, partnership, corporation, or other entity that develops within a river edge redevelopment zone that is located within a municipality designated as a financially distressed city.

"Eligible employer" means an individual, partnership, corporation, or other entity that employs full-time employees within a river edge redevelopment zone that is located within a municipality designated as a financially distressed city.

"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 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.

"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, access roads, streets, bridges, sidewalks, water and sewer line extensions, water distribution and purification facilities, waste disposal systems, sewage treatment facilities, stormwater drainage and retention facilities, gas and electric utility line extensions, or other improvements that are essential to the development of the project that is the subject of an agreement.

"New employee" means a full-time employee first employed by an eligible employer in the project that is the subject of an agreement between the Department and an eligible developer 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:

(A) treated under the agreement as a new employee; and

(B) promoted by the eligible employer to another job.

"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 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, or 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.

(c) The Riverfront Development Fund. The Riverfront Development Fund is created as a special fund in the State treasury. As soon as possible after the first day of each month, upon certification of the Department of Revenue, the Comptroller shall order transferred and the Treasurer shall transfer from the General Revenue Fund to the Riverfront Development Fund an amount equal to the incremental income tax for the previous month attributable to a project that is the subject of an agreement.

(d) Grants from the Riverfront Development Fund. In State fiscal years 2012 through 2021, all moneys in the Riverfront Development Fund, held solely for the benefit of eligible developers, shall be appropriated to the Department to make infrastructure grants to eligible developers pursuant to agreements.

(e) Limitation on grant amounts. The total amount of a grant to an eligible developer shall not exceed the lesser of:

(1) $3,000,000 in each State fiscal year; or

(2) the total amount of infrastructure costs incurred by the eligible developer with respect to a project that is the subject of an agreement.

No eligible developer shall receive moneys that are attributable to a project that is not the subject of the developer's agreement with the Department.

(f) Agreements with applicants. The Department shall enter into an agreement with an eligible developer who is entitled to grants under this Section. The agreement must include 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 number of jobs created by the project, and project costs. For purposes of this subsection, "project costs" includes the costs of the project incurred or to be incurred by the eligible developer, including infrastructure costs, but excludes the value of State or local incentives, including tax increment financing and deductions, credits, or exemptions afforded to an employer located in an enterprise zone.

(2) A requirement that the eligible developer shall 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 shall report monthly to 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 requirement that the Department is authorized to verify with the Department of Revenue the amounts reported under paragraph (4).

Section 10. The State Finance Act is amended by adding Section 5.829 as follows:

(30 ILCS 105/5.829 new)

Sec. 5.829. The Riverfront Development Fund.

Section 15. The Prevailing Wage Act is amended by changing Section 2 as follows:

(820 ILCS 130/2) (from Ch. 48, par. 39s-2)

Sec. 2. This Act applies to the wages of laborers, mechanics and other workers employed in any public works, as hereinafter defined, by any public body and to anyone under contracts for public works. This includes any maintenance, repair, assembly, or disassembly work performed on equipment whether owned, leased, or rented.

As used in this Act, unless the context indicates otherwise:

"Public works" means all fixed works constructed or demolished by any public body, or paid for wholly or in part out of public funds. "Public works" as defined herein includes all projects financed in whole or in part with bonds, grants, loans, or other funds made available by or through the State or any of its political subdivisions, including but not limited to: bonds issued under the Industrial Project Revenue Bond Act (Article 11, Division 74 of the Illinois Municipal Code), the Industrial Building Revenue Bond Act, the Illinois Finance Authority Act, the Illinois Sports Facilities Authority Act, or the Build Illinois Bond Act; loans or other funds made available pursuant to the Build Illinois Act; loans or other funds made available pursuant to the Riverfront Development Fund under Section 10-15 of the River Edge Redevelopment Zone Act; or funds from the Fund for Illinois' Future under Section 6z-47 of the State Finance Act, funds for school construction under Section 5 of the General Obligation Bond Act, funds authorized under Section 3 of the School Construction Bond Act, funds for school infrastructure under Section 6z-45 of the State Finance Act, and funds for transportation purposes under Section 4 of the General Obligation Bond Act. "Public works" also includes (i) all projects financed in whole or in part with funds from the Department of Commerce and Economic Opportunity under the Illinois Renewable Fuels Development Program Act for which there is no project labor agreement; (ii) all work performed pursuant to a public private agreement under the Public Private Agreements for the Illiana Expressway Act; and (iii) all projects undertaken under a public-private agreement under the Public-Private Partnerships for Transportation Act. "Public works" also includes all projects at leased facility property used for airport purposes under Section 35 of the Local Government Facility Lease Act. "Public works" also includes the construction of a new wind power facility by a business designated as a High Impact Business under Section 5.5(a)(3)(E) of the Illinois Enterprise Zone Act. "Public works" does not include work done directly by any public utility company, whether or not done under public supervision or direction, or paid for wholly or in part out of public funds. "Public works" does not include projects undertaken by the owner at an owner-occupied single-family residence or at an owner-occupied unit of a multi-family residence.

"Construction" means all work on public works involving laborers, workers or mechanics. This includes any maintenance, repair, assembly, or disassembly work performed on equipment whether owned, leased, or rented.

"Locality" means the county where the physical work upon public works is performed, except (1) that if there is not available in the county a sufficient number of competent skilled laborers, workers and mechanics to construct the public works efficiently and properly, "locality" includes any other county nearest the one in which the work or construction is to be performed and from which such persons may be obtained in sufficient numbers to perform the work and (2) that, with respect to contracts for highway work with the Department of Transportation of this State, "locality" may at the discretion of the Secretary of the Department of Transportation be construed to include two or more adjacent counties from which workers may be accessible for work on such construction.

"Public body" means the State or any officer, board or commission of the State or any political subdivision or department thereof, or any institution supported in whole or in part by public funds, and includes every county, city, town, village, township, school district, irrigation, utility, reclamation improvement or other district and every other political subdivision, district or municipality of the state whether such political subdivision, municipality or district operates under a special charter or not.

The terms "general prevailing rate of hourly wages", "general prevailing rate of wages" or "prevailing rate of wages" when used in this Act mean the hourly cash wages plus fringe benefits for training and apprenticeship programs approved by the U.S. Department of Labor, Bureau of Apprenticeship and Training, health and welfare, insurance, vacations and pensions paid generally, in the locality in which the work is being performed, to employees engaged in work of a similar character on public works.

(Source: P.A. 96-28, eff. 7-1-09; 96-58, eff. 1-1-10; 96-186, eff. 1-1-10; 96-913, eff. 6-9-10; 96-1000, eff. 7-2-10; 97-502, eff. 8-23-11.)

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