101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB3849

 

Introduced 2/14/2020, by Sen. Ann Gillespie

 

SYNOPSIS AS INTRODUCED:
 
20 ILCS 655/5.1  from Ch. 67 1/2, par. 606
20 ILCS 655/5.4  from Ch. 67 1/2, par. 609
20 ILCS 655/8.1

    Amends the Illinois Enterprise Zone Act. Contains provisions concerning provisional certification and provisional decertification of Enterprise Zones. Further provides that if the Department of Commerce and Economic Opportunity determines that 60% or more of the businesses receiving tax incentives because of their location within a particular Enterprise Zone fail to submit specified required information to the Department in any calendar year, then the Enterprise Zone may be decertified by the Department. Makes conforming.


LRB101 19299 RJF 68766 b

 

 

A BILL FOR

 

SB3849LRB101 19299 RJF 68766 b

1    AN ACT concerning State government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Enterprise Zone Act is amended by
5changing Sections 5.1, 5.4, and 8.1 as follows:
 
6    (20 ILCS 655/5.1)  (from Ch. 67 1/2, par. 606)
7    Sec. 5.1. Application to Department.
8    (a) A county or municipality which has adopted an ordinance
9designating an area as an enterprise zone shall make written
10application to the Department to have such proposed enterprise
11zone certified by the Department as an Enterprise Zone. The
12application shall include:
13        (i) a certified copy of the ordinance designating the
14    proposed zone;
15        (ii) a map of the proposed enterprise zone, showing
16    existing streets and highways;
17        (iii) an analysis, and any appropriate supporting
18    documents and statistics, demonstrating that the proposed
19    zone area is qualified in accordance with Section 4;
20        (iv) a statement detailing any tax, grant, and other
21    financial incentives or benefits, and any programs, to be
22    provided by the municipality or county to business
23    enterprises within the zone, other than those provided in

 

 

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1    the designating ordinance, which are not to be provided
2    throughout the municipality or county;
3        (v) a statement setting forth the economic development
4    and planning objectives for the zone;
5        (vi) a statement describing the functions, programs,
6    and services to be performed by designated zone
7    organizations within the zone;
8        (vii) an estimate of the economic impact of the zone,
9    considering all of the tax incentives, financial benefits
10    and programs contemplated, upon the revenues of the
11    municipality or county;
12        (viii) a transcript of all public hearings on the zone;
13        (ix) in the case of a joint application, a statement
14    detailing the need for a zone covering portions of more
15    than one municipality or county and a description of the
16    agreement between joint applicants; and
17        (x) such additional information as the Department by
18    regulation may require.
19    (b) The Department may provide for provisional
20certification of substantially complete applications pending
21the receipt of any of the items identified in subsection (a) of
22this Section or any additional information requested by the
23Department.
24(Source: P.A. 82-1019.)
 
25    (20 ILCS 655/5.4)  (from Ch. 67 1/2, par. 609)

 

 

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1    Sec. 5.4. Amendment and Decertification of Enterprise
2Zones.
3    (a) The terms of a certified enterprise zone designating
4ordinance may be amended to
5        (i) alter the boundaries of the Enterprise Zone, or
6        (ii) expand, limit or repeal tax incentives or benefits
7    provided in the ordinance, or
8        (iii) alter the termination date of the zone, or
9        (iv) make technical corrections in the enterprise zone
10    designating ordinance; but such amendment shall not be
11    effective unless the Department issues an amended
12    certificate for the Enterprise Zone, approving the amended
13    designating ordinance. Upon the adoption of any ordinance
14    amending or repealing the terms of a certified enterprise
15    zone designating ordinance, the municipality or county
16    shall promptly file with the Department an application for
17    approval thereof, containing substantially the same
18    information as required for an application under Section
19    5.1 insofar as material to the proposed changes. The
20    municipality or county must hold a public hearing on the
21    proposed changes as specified in Section 5 and, if the
22    amendment is to effectuate the limitation of tax abatements
23    under Section 5.4.1, then the public notice of the hearing
24    shall state that property that is in both the enterprise
25    zone and a redevelopment project area may not receive tax
26    abatements unless within 60 days after the adoption of the

 

 

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1    amendment to the designating ordinance the municipality
2    has determined that eligibility for tax abatements has been
3    established,
4        (v) include an area within another municipality or
5    county as part of the designated enterprise zone provided
6    the requirements of Section 4 are complied with, or
7        (vi) effectuate the limitation of tax abatements under
8    Section 5.4.1.
9    (b) The Department shall approve or disapprove a proposed
10amendment to a certified enterprise zone within 90 days of its
11receipt of the application from the municipality or county. The
12Department may not approve changes in a Zone which are not in
13conformity with this Act, as now or hereafter amended, or with
14other applicable laws. If the Department issues an amended
15certificate for an Enterprise Zone, the amended certificate,
16together with the amended zone designating ordinance, shall be
17filed, recorded and transmitted as provided in Section 5.3.
18    (c) An Enterprise Zone may be decertified by joint action
19of the Department and the designating county or municipality in
20accordance with this Section. The designating county or
21municipality shall conduct at least one public hearing within
22the zone prior to its adoption of an ordinance of
23de-designation. The mayor of the designating municipality or
24the chairman of the county board of the designating county
25shall execute a joint decertification agreement with the
26Department. A decertification of an Enterprise Zone shall not

 

 

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1become effective until at least 6 months after the execution of
2the decertification agreement, which shall be filed in the
3office of the Secretary of State.
4    (d) An Enterprise Zone may be decertified for cause by the
5Department in accordance with this Section. Prior to
6decertification: (1) the Department shall notify the chief
7elected official of the designating county or municipality in
8writing of the specific deficiencies which provide cause for
9decertification; (2) the Department shall place the
10designating county or municipality on probationary status for
11at least 6 months during which time corrective action may be
12achieved in the enterprise zone by the designating county or
13municipality; and, (3) the Department shall conduct at least
14one public hearing within the zone. If such corrective action
15is not achieved during the probationary period, the Department
16shall issue an amended certificate signed by the Director of
17the Department decertifying the enterprise zone, which
18certificate shall be filed in the office of the Secretary of
19State. A certified copy of the amended enterprise zone
20certificate, or a duplicate original thereof, shall be recorded
21in the office of recorder of the county in which the enterprise
22zone lies, and shall be provided to the chief elected official
23of the designating county or municipality. Decertification of
24an Enterprise Zone shall not become effective until 60 days
25after the date of filing.
26    (d-5) The Department shall provisionally decertify any

 

 

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1Enterprise Zone that fails to report any capital investment,
2job creation or retention, or State tax expenditures for 3
3consecutive calendar years. Prior to provisional
4decertification: (1) the Department shall notify the chief
5elected official of the designating county or municipality in
6writing of the specific deficiencies which provide cause for
7decertification; (2) the Department shall place the
8designating county or municipality on probationary status for
9at least 6 months during which time corrective action may be
10achieved in the Enterprise Zone by the designating county or
11municipality; and (3) the Department shall conduct at least one
12public hearing within the Zone. If such corrective action is
13not achieved during the probationary period, the Department
14shall issue an amended certificate signed by the Director of
15the Department provisionally decertifying the Enterprise Zone
16as of the scheduled termination date of the then-current
17designation. If the provisionally-decertified Zone was
18approved and designated after the 101st General Assembly and
19has been in existence for less than 15 years, such Zone shall
20not be eligible for an additional 10-year designation after the
21expiration date of the original Zone set forth in subsection
22(c) of Section 5.3. Further, if such corrective action is not
23achieved during the probationary period provided for in this
24Section, following such probationary period the Zone becomes
25available for a different area to compete for designation.
26    (e) In the event of a decertification, provisional

 

 

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1decertification, or an amendment reducing the length of the
2term or the area of an Enterprise Zone or the adoption of an
3ordinance reducing or eliminating tax benefits in an Enterprise
4Zone, all benefits previously extended within the Zone pursuant
5to this Act or pursuant to any other Illinois law providing
6benefits specifically to or within Enterprise Zones shall
7remain in effect for the original stated term of the Enterprise
8Zone, with respect to business enterprises within the Zone on
9the effective date of such decertification, provisional
10decertification, or amendment, and with respect to individuals
11participating in urban homestead programs under this Act.
12    (f) Except as otherwise provided in Section 5.4.1, with
13respect to business enterprises (or expansions thereof) which
14are proposed or under development within a Zone at the time of
15a decertification or an amendment reducing the length of the
16term of the Zone, or excluding from the Zone area the site of
17the proposed enterprise, or an ordinance reducing or
18eliminating tax benefits in a Zone, such business enterprise
19shall be entitled to the benefits previously applicable within
20the Zone for the original stated term of the Zone, if the
21business enterprise establishes:
22        (i) that the proposed business enterprise or expansion
23    has been committed to be located within the Zone;
24        (ii) that substantial and binding financial
25    obligations have been made towards the development of such
26    enterprise; and

 

 

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1        (iii) that such commitments have been made in
2    reasonable reliance on the benefits and programs which were
3    to have been applicable to the enterprise by reason of the
4    Zone, including in the case of a reduction in term of a
5    zone, the original length of the term.
6    In declaratory judgment actions under this paragraph, the
7Department and the designating municipality or county shall be
8necessary parties defendant.
9(Source: P.A. 90-258, eff. 7-30-97.)
 
10    (20 ILCS 655/8.1)
11    Sec. 8.1. Accounting.
12    (a) Any business receiving tax incentives due to its
13location within an Enterprise Zone or its designation as a High
14Impact Business must annually report to the Department of
15Revenue information reasonably required by the Department of
16Revenue to enable the Department to verify and calculate the
17total Enterprise Zone or High Impact Business tax benefits for
18property taxes and taxes imposed by the State that are received
19by the business, broken down by incentive category and
20enterprise zone, if applicable. Reports will be due no later
21than May 31 of each year and shall cover the previous calendar
22year. The first report will be for the 2012 calendar year and
23will be due no later than May 31, 2013. Failure to report data
24may result in ineligibility to receive incentives. To the
25extent that a business receiving tax incentives has obtained an

 

 

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1Enterprise Zone Building Materials Exemption Certificate or a
2High Impact Business Building Materials Exemption Certificate,
3that business is required to report those building materials
4exemption benefits only under subsection (a-5) of this Section.
5No additional reporting for those building materials exemption
6benefits is required under this subsection (a). In addition, if
7the Department determines that 60% or more of the businesses
8receiving tax incentives because of their location within a
9particular Enterprise Zone failed to submit the information
10required under this subsection (a) to the Department in any
11calendar year, then the Enterprise Zone may be decertified by
12the Department. The Department, in consultation with the
13Department of Revenue, is authorized to adopt rules governing
14ineligibility to receive exemptions, including the length of
15ineligibility. Factors to be considered in determining whether
16a business is ineligible shall include, but are not limited to,
17prior compliance with the reporting requirements, cooperation
18in discontinuing and correcting violations, the extent of the
19violation, and whether the violation was willful or
20inadvertent.
21    (a-5) Each contractor or other entity that has been issued
22an Enterprise Zone Building Materials Exemption Certificate
23under Section 5k of the Retailers' Occupation Tax Act or a High
24Impact Business Building Materials Exemption Certificate under
25Section 5l of the Retailers' Occupation Tax Act shall annually
26report to the Department of Revenue the total value of the

 

 

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1Enterprise Zone or High Impact Business building materials
2exemption from State taxes. Reports shall contain information
3reasonably required by the Department of Revenue to enable it
4to verify and calculate the total tax benefits for taxes
5imposed by the State, and shall be broken down by Enterprise
6Zone. Reports are due no later than May 31 of each year and
7shall cover the previous calendar year. The first report will
8be for the 2013 calendar year and will be due no later than May
931, 2014. Failure to report data may result in revocation of
10the Enterprise Zone Building Materials Exemption Certificate
11or High Impact Business Building Materials Exemption
12Certificate issued to the contractor or other entity.
13    The Department of Revenue is authorized to adopt rules
14governing revocation determinations, including the length of
15revocation. Factors to be considered in revocations shall
16include, but are not limited to, prior compliance with the
17reporting requirements, cooperation in discontinuing and
18correcting violations, and whether the certificate was used
19unlawfully during the preceding year.
20    (b) Each person required to file a return under the Gas
21Revenue Tax Act, the Gas Use Tax Act, the Electricity Excise
22Tax Act, or the Telecommunications Excise Tax Act shall file,
23on or before May 31 of each year, a report with the Department
24of Revenue, in the manner and form required by the Department
25of Revenue, containing information reasonably required by the
26Department of Revenue to enable the Department of Revenue to

 

 

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1calculate the amount of the deduction for taxes imposed by the
2State that is taken under each Act, respectively, due to the
3location of a business in an Enterprise Zone or its designation
4as a High Impact Business. The report shall be itemized by
5business and the business location address.
6    (c) Employers shall report their job creation, retention,
7and capital investment numbers within the zone annually to the
8Department of Revenue no later than May 31 of each calendar
9year. High Impact Businesses shall report their job creation,
10retention, and capital investment numbers to the Department of
11Revenue no later than May 31 of each year.
12    (d) The Department of Revenue will aggregate and collect
13the tax, job, and capital investment data by Enterprise Zone
14and High Impact Business and report this information, formatted
15to exclude company-specific proprietary information, to the
16Department and the Board by August 1, 2013, and by August 1 of
17every calendar year thereafter. The Department will include
18this information in their required reports under Section 6 of
19this Act. The Board shall consider this information during the
20reviews required under subsection (d-5) of Section 5.4 of this
21Act and subsection (c) of Section 5.3 of this Act.
22    (e) The Department of Revenue, in its discretion, may
23require that the reports filed under this Section be submitted
24electronically.
25    (f) The Department of Revenue shall have the authority to
26adopt rules as are reasonable and necessary to implement the

 

 

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1provisions of this Section.
2(Source: P.A. 97-905, eff. 8-7-12; 98-109, eff. 7-25-13.)