Rep. Mark L. Walker

Filed: 3/22/2021

 

 


 

 


 
10200HB1868ham001LRB102 14693 HLH 23654 a

1
AMENDMENT TO HOUSE BILL 1868

2    AMENDMENT NO. ______. Amend House Bill 1868 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Economic Development for a Growing Economy
5Tax Credit Act is amended by changing Sections 5-5, 5-15, and
65-20 as follows:
 
7    (35 ILCS 10/5-5)
8    Sec. 5-5. Definitions. As used in this Act:
9    "Agreement" means the Agreement between a Taxpayer and the
10Department under the provisions of Section 5-50 of this Act.
11    "Applicant" means a Taxpayer that is operating a business
12located or that the Taxpayer plans to locate within the State
13of Illinois and that is engaged in interstate or intrastate
14commerce for the purpose of manufacturing, processing,
15assembling, warehousing, or distributing products, conducting
16research and development, providing tourism services, or

 

 

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1providing services in interstate commerce, office industries,
2or agricultural processing, but excluding retail, retail food,
3health, or professional services. "Applicant" does not include
4a Taxpayer who closes or substantially reduces an operation at
5one location in the State and relocates substantially the same
6operation to another location in the State. This does not
7prohibit a Taxpayer from expanding its operations at another
8location in the State, provided that existing operations of a
9similar nature located within the State are not closed or
10substantially reduced. This also does not prohibit a Taxpayer
11from moving its operations from one location in the State to
12another location in the State for the purpose of expanding the
13operation provided that the Department determines that
14expansion cannot reasonably be accommodated within the
15municipality in which the business is located, or in the case
16of a business located in an incorporated area of the county,
17within the county in which the business is located, after
18conferring with the chief elected official of the municipality
19or county and taking into consideration any evidence offered
20by the municipality or county regarding the ability to
21accommodate expansion within the municipality or county.
22    "Committee" means the Illinois Business Investment
23Committee created under Section 5-25 of this Act within the
24Illinois Economic Development Board.
25    "Credit" means the amount agreed to between the Department
26and Applicant under this Act, but not to exceed the lesser of:

 

 

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1(1) the sum of (i) 50% of the Incremental Income Tax
2attributable to New Employees at the Applicant's project and
3(ii) 10% of the training costs of New Employees; or (2) 100% of
4the Incremental Income Tax attributable to New Employees at
5the Applicant's project. However, if the project is located in
6an underserved area, then the amount of the Credit may not
7exceed the lesser of: (1) the sum of (i) 75% of the Incremental
8Income Tax attributable to New Employees at the Applicant's
9project and (ii) 10% of the training costs of New Employees; or
10(2) 100% of the Incremental Income Tax attributable to New
11Employees at the Applicant's project. If an Applicant agrees
12to hire the required number of New Employees, then the maximum
13amount of the Credit for that Applicant may be increased by an
14amount not to exceed 25% of the Incremental Income Tax
15attributable to retained employees at the Applicant's project;
16provided that, in order to receive the increase for retained
17employees, the Applicant must provide the additional evidence
18required under paragraph (3) of subsection (b) of Section
195-25.
20    "Department" means the Department of Commerce and Economic
21Opportunity.
22    "Director" means the Director of Commerce and Economic
23Opportunity.
24    "Full-time Employee" means an individual who is employed
25for consideration for at least 35 hours each week or who
26renders any other standard of service generally accepted by

 

 

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1industry custom or practice as full-time employment. An
2individual for whom a W-2 is issued by a Professional Employer
3Organization (PEO) is a full-time employee if employed in the
4service of the Applicant for consideration for at least 35
5hours each week or who renders any other standard of service
6generally accepted by industry custom or practice as full-time
7employment to Applicant.
8    "Incremental Income Tax" means the total amount withheld
9during the taxable year from the compensation of New Employees
10and, if applicable, retained employees under Article 7 of the
11Illinois Income Tax Act arising from employment at a project
12that is the subject of an Agreement.
13    "New Construction EDGE Agreement" means the Agreement
14between a Taxpayer and the Department under the provisions of
15Section 5-51 of this Act.
16    "New Construction EDGE Credit" means an amount agreed to
17between the Department and the Applicant under this Act as
18part of a New Construction EDGE Agreement that does not exceed
1950% of the Incremental Income Tax attributable to New
20Construction EDGE Employees at the Applicant's project;
21however, if the New Construction EDGE Project is located in an
22underserved area, then the amount of the New Construction EDGE
23Credit may not exceed 75% of the Incremental Income Tax
24attributable to New Construction EDGE Employees at the
25Applicant's New Construction EDGE Project.
26    "New Construction EDGE Employee" means a laborer or worker

 

 

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1who is employed by an Illinois contractor or subcontractor in
2the actual construction work on the site of a New Construction
3EDGE Project, pursuant to a New Construction EDGE Agreement.
4    "New Construction EDGE Incremental Income Tax" means the
5total amount withheld during the taxable year from the
6compensation of New Construction EDGE Employees.
7    "New Construction EDGE Project" means the building of a
8Taxpayer's structure or building, or making improvements of
9any kind to real property. "New Construction EDGE Project"
10does not include the routine operation, routine repair, or
11routine maintenance of existing structures, buildings, or real
12property.
13    "New Employee" means:
14        (a) A Full-time Employee first employed by a Taxpayer
15    in the project that is the subject of an Agreement and who
16    is hired after the Taxpayer enters into the tax credit
17    Agreement.
18        (b) The term "New Employee" does not include:
19            (1) an employee of the Taxpayer who performs a job
20        that was previously performed by another employee, if
21        that job existed for at least 6 months before hiring
22        the employee;
23            (2) an employee of the Taxpayer who was previously
24        employed in Illinois by a Related Member of the
25        Taxpayer and whose employment was shifted to the
26        Taxpayer after the Taxpayer entered into the tax

 

 

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1        credit Agreement; or
2            (3) a child, grandchild, parent, or spouse, other
3        than a spouse who is legally separated from the
4        individual, of any individual who has a direct or an
5        indirect ownership interest of at least 5% in the
6        profits, capital, or value of the Taxpayer.
7        (c) Notwithstanding paragraph (1) of subsection (b),
8    an employee may be considered a New Employee under the
9    Agreement if the employee performs a job that was
10    previously performed by an employee who was:
11            (1) treated under the Agreement as a New Employee;
12        and
13            (2) promoted by the Taxpayer to another job.
14        (d) Notwithstanding subsection (a), the Department may
15    award Credit to an Applicant with respect to an employee
16    hired prior to the date of the Agreement if:
17            (1) the Applicant is in receipt of a letter from
18        the Department stating an intent to enter into a
19        credit Agreement;
20            (2) the letter described in paragraph (1) is
21        issued by the Department not later than 15 days after
22        the effective date of this Act; and
23            (3) the employee was hired after the date the
24        letter described in paragraph (1) was issued.
25    "Noncompliance Date" means, in the case of a Taxpayer that
26is not complying with the requirements of the Agreement or the

 

 

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1provisions of this Act, the day following the last date upon
2which the Taxpayer was in compliance with the requirements of
3the Agreement and the provisions of this Act, as determined by
4the Director, pursuant to Section 5-65.
5    "Pass Through Entity" means an entity that is exempt from
6the tax under subsection (b) or (c) of Section 205 of the
7Illinois Income Tax Act.
8    "Professional Employer Organization" (PEO) means an
9employee leasing company, as defined in Section 206.1(A)(2) of
10the Illinois Unemployment Insurance Act.
11    "Related Member" means a person that, with respect to the
12Taxpayer during any portion of the taxable year, is any one of
13the following:
14        (1) An individual stockholder, if the stockholder and
15    the members of the stockholder's family (as defined in
16    Section 318 of the Internal Revenue Code) own directly,
17    indirectly, beneficially, or constructively, in the
18    aggregate, at least 50% of the value of the Taxpayer's
19    outstanding stock.
20        (2) A partnership, estate, or trust and any partner or
21    beneficiary, if the partnership, estate, or trust, and its
22    partners or beneficiaries own directly, indirectly,
23    beneficially, or constructively, in the aggregate, at
24    least 50% of the profits, capital, stock, or value of the
25    Taxpayer.
26        (3) A corporation, and any party related to the

 

 

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1    corporation in a manner that would require an attribution
2    of stock from the corporation to the party or from the
3    party to the corporation under the attribution rules of
4    Section 318 of the Internal Revenue Code, if the Taxpayer
5    owns directly, indirectly, beneficially, or constructively
6    at least 50% of the value of the corporation's outstanding
7    stock.
8        (4) A corporation and any party related to that
9    corporation in a manner that would require an attribution
10    of stock from the corporation to the party or from the
11    party to the corporation under the attribution rules of
12    Section 318 of the Internal Revenue Code, if the
13    corporation and all such related parties own in the
14    aggregate at least 50% of the profits, capital, stock, or
15    value of the Taxpayer.
16        (5) A person to or from whom there is attribution of
17    stock ownership in accordance with Section 1563(e) of the
18    Internal Revenue Code, except, for purposes of determining
19    whether a person is a Related Member under this paragraph,
20    20% shall be substituted for 5% wherever 5% appears in
21    Section 1563(e) of the Internal Revenue Code.
22    "Startup taxpayer" means a corporation, partnership, or
23other entity incorporated no more than 5 years before the
24filing of an application for an Agreement that has never had
25any Illinois income tax liability, excluding any Illinois
26income tax liability of a Related Member which shall not be

 

 

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1attributed to the startup taxpayer.
2    "Taxpayer" means an individual, corporation, partnership,
3or other entity that has any Illinois Income Tax liability.
4    "Underserved area" means a geographic area that meets one
5or more of the following conditions:
6        (1) the area has a poverty rate of at least 20%
7    according to the latest American Community Survey federal
8    decennial census;
9        (2) 35% or more of the families with children in the
10    area are living below 130% of the poverty line, according
11    to the latest American Community Survey 75% or more of the
12    children in the area participate in the federal free lunch
13    program according to reported statistics from the State
14    Board of Education;
15        (3) at least 20% of the households in the area receive
16    assistance under the Supplemental Nutrition Assistance
17    Program (SNAP); or
18        (4) the area has an average unemployment rate, as
19    determined by the Illinois Department of Employment
20    Security, that is more than 120% of the national
21    unemployment average, as determined by the U.S. Department
22    of Labor, for a period of at least 2 consecutive calendar
23    years preceding the date of the application.
24(Source: P.A. 100-511, eff. 9-18-17; 101-9, eff. 6-5-19.)
 
25    (35 ILCS 10/5-15)

 

 

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1    Sec. 5-15. Tax Credit Awards. Subject to the conditions
2set forth in this Act, a Taxpayer is entitled to a Credit
3against or, as described in subsection (g) of this Section, a
4payment towards taxes imposed pursuant to subsections (a) and
5(b) of Section 201 of the Illinois Income Tax Act that may be
6imposed on the Taxpayer for a taxable year beginning on or
7after January 1, 1999, if the Taxpayer is awarded a Credit by
8the Department under this Act for that taxable year.
9    (a) The Department shall make Credit awards under this Act
10to foster job creation and retention in Illinois.
11    (b) A person that proposes a project to create new jobs in
12Illinois must enter into an Agreement with the Department for
13the Credit under this Act.
14    (c) The Credit shall be claimed for the taxable years
15specified in the Agreement.
16    (d) The Credit shall not exceed the Incremental Income Tax
17attributable to the project that is the subject of the
18Agreement.
19    (e) Nothing herein shall prohibit a Tax Credit Award to an
20Applicant that uses a PEO if all other award criteria are
21satisfied.
22    (f) In lieu of the Credit allowed under this Act against
23the taxes imposed pursuant to subsections (a) and (b) of
24Section 201 of the Illinois Income Tax Act for any taxable year
25ending on or after December 31, 2009, for Taxpayers that
26entered into Agreements prior to January 1, 2015 and otherwise

 

 

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1meet the criteria set forth in this subsection (f), the
2Taxpayer may elect to claim the Credit against its obligation
3to pay over withholding under Section 704A of the Illinois
4Income Tax Act.
5        (1) The election under this subsection (f) may be made
6    only by a Taxpayer that (i) is primarily engaged in one of
7    the following business activities: water purification and
8    treatment, motor vehicle metal stamping, automobile
9    manufacturing, automobile and light duty motor vehicle
10    manufacturing, motor vehicle manufacturing, light truck
11    and utility vehicle manufacturing, heavy duty truck
12    manufacturing, motor vehicle body manufacturing, cable
13    television infrastructure design or manufacturing, or
14    wireless telecommunication or computing terminal device
15    design or manufacturing for use on public networks and
16    (ii) meets the following criteria:
17            (A) the Taxpayer (i) had an Illinois net loss or an
18        Illinois net loss deduction under Section 207 of the
19        Illinois Income Tax Act for the taxable year in which
20        the Credit is awarded, (ii) employed a minimum of
21        1,000 full-time employees in this State during the
22        taxable year in which the Credit is awarded, (iii) has
23        an Agreement under this Act on December 14, 2009 (the
24        effective date of Public Act 96-834), and (iv) is in
25        compliance with all provisions of that Agreement;
26            (B) the Taxpayer (i) had an Illinois net loss or an

 

 

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1        Illinois net loss deduction under Section 207 of the
2        Illinois Income Tax Act for the taxable year in which
3        the Credit is awarded, (ii) employed a minimum of
4        1,000 full-time employees in this State during the
5        taxable year in which the Credit is awarded, and (iii)
6        has applied for an Agreement within 365 days after
7        December 14, 2009 (the effective date of Public Act
8        96-834);
9            (C) the Taxpayer (i) had an Illinois net operating
10        loss carryforward under Section 207 of the Illinois
11        Income Tax Act in a taxable year ending during
12        calendar year 2008, (ii) has applied for an Agreement
13        within 150 days after the effective date of this
14        amendatory Act of the 96th General Assembly, (iii)
15        creates at least 400 new jobs in Illinois, (iv)
16        retains at least 2,000 jobs in Illinois that would
17        have been at risk of relocation out of Illinois over a
18        10-year period, and (v) makes a capital investment of
19        at least $75,000,000;
20            (D) the Taxpayer (i) had an Illinois net operating
21        loss carryforward under Section 207 of the Illinois
22        Income Tax Act in a taxable year ending during
23        calendar year 2009, (ii) has applied for an Agreement
24        within 150 days after the effective date of this
25        amendatory Act of the 96th General Assembly, (iii)
26        creates at least 150 new jobs, (iv) retains at least

 

 

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1        1,000 jobs in Illinois that would have been at risk of
2        relocation out of Illinois over a 10-year period, and
3        (v) makes a capital investment of at least
4        $57,000,000; or
5            (E) the Taxpayer (i) employed at least 2,500
6        full-time employees in the State during the year in
7        which the Credit is awarded, (ii) commits to make at
8        least $500,000,000 in combined capital improvements
9        and project costs under the Agreement, (iii) applies
10        for an Agreement between January 1, 2011 and June 30,
11        2011, (iv) executes an Agreement for the Credit during
12        calendar year 2011, and (v) was incorporated no more
13        than 5 years before the filing of an application for an
14        Agreement.
15        (1.5) The election under this subsection (f) may also
16    be made by a Taxpayer for any Credit awarded pursuant to an
17    agreement that was executed between January 1, 2011 and
18    June 30, 2011, if the Taxpayer (i) is primarily engaged in
19    the manufacture of inner tubes or tires, or both, from
20    natural and synthetic rubber, (ii) employs a minimum of
21    2,400 full-time employees in Illinois at the time of
22    application, (iii) creates at least 350 full-time jobs and
23    retains at least 250 full-time jobs in Illinois that would
24    have been at risk of being created or retained outside of
25    Illinois, and (iv) makes a capital investment of at least
26    $200,000,000 at the project location.

 

 

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1        (1.6) The election under this subsection (f) may also
2    be made by a Taxpayer for any Credit awarded pursuant to an
3    agreement that was executed within 150 days after the
4    effective date of this amendatory Act of the 97th General
5    Assembly, if the Taxpayer (i) is primarily engaged in the
6    operation of a discount department store, (ii) maintains
7    its corporate headquarters in Illinois, (iii) employs a
8    minimum of 4,250 full-time employees at its corporate
9    headquarters in Illinois at the time of application, (iv)
10    retains at least 4,250 full-time jobs in Illinois that
11    would have been at risk of being relocated outside of
12    Illinois, (v) had a minimum of $40,000,000,000 in total
13    revenue in 2010, and (vi) makes a capital investment of at
14    least $300,000,000 at the project location.
15        (1.7) Notwithstanding any other provision of law, the
16    election under this subsection (f) may also be made by a
17    Taxpayer for any Credit awarded pursuant to an agreement
18    that was executed or applied for on or after July 1, 2011
19    and on or before March 31, 2012, if the Taxpayer is
20    primarily engaged in the manufacture of original and
21    aftermarket filtration parts and products for automobiles,
22    motor vehicles, light duty motor vehicles, light trucks
23    and utility vehicles, and heavy duty trucks, (ii) employs
24    a minimum of 1,000 full-time employees in Illinois at the
25    time of application, (iii) creates at least 250 full-time
26    jobs in Illinois, (iv) relocates its corporate

 

 

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1    headquarters to Illinois from another state, and (v) makes
2    a capital investment of at least $4,000,000 at the project
3    location.
4        (1.8) Notwithstanding any other provision of law, the
5    election under this subsection (f) may also be made by a
6    startup taxpayer for any Credit awarded pursuant to an
7    Agreement that was executed or applied for on or after the
8    effective date of this amendatory Act of the 102nd General
9    Assembly, if the startup taxpayer, without considering any
10    Related Member or other investor, (i) has never had any
11    Illinois income tax liability and (ii) was incorporated no
12    more than 5 years before the filing of an application for
13    an Agreement. Any such election under this paragraph (1.8)
14    shall be effective unless and until such startup taxpayer
15    has any Illinois income tax liability. This election under
16    this paragraph (1.8) shall automatically terminate when
17    the startup taxpayer has any Illinois income tax liability
18    at the end of any taxable year during the term of the
19    Agreement. Thereafter, the startup taxpayer may receive a
20    Credit, taking into account any benefits previously
21    enjoyed or received by way of the election under this
22    paragraph (1.8), so long as the startup taxpayer remains
23    in compliance with the terms and conditions of the
24    Agreement.
25        (2) An election under this subsection shall allow the
26    credit to be taken against payments otherwise due under

 

 

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1    Section 704A of the Illinois Income Tax Act during the
2    first calendar year beginning after the end of the taxable
3    year in which the credit is awarded under this Act.
4        (3) The election shall be made in the form and manner
5    required by the Illinois Department of Revenue and, once
6    made, shall be irrevocable.
7        (4) If a Taxpayer who meets the requirements of
8    subparagraph (A) of paragraph (1) of this subsection (f)
9    elects to claim the Credit against its withholdings as
10    provided in this subsection (f), then, on and after the
11    date of the election, the terms of the Agreement between
12    the Taxpayer and the Department may not be further amended
13    during the term of the Agreement.
14    (g) A pass-through entity that has been awarded a credit
15under this Act, its shareholders, or its partners may treat
16some or all of the credit awarded pursuant to this Act as a tax
17payment for purposes of the Illinois Income Tax Act. The term
18"tax payment" means a payment as described in Article 6 or
19Article 8 of the Illinois Income Tax Act or a composite payment
20made by a pass-through entity on behalf of any of its
21shareholders or partners to satisfy such shareholders' or
22partners' taxes imposed pursuant to subsections (a) and (b) of
23Section 201 of the Illinois Income Tax Act. In no event shall
24the amount of the award credited pursuant to this Act exceed
25the Illinois income tax liability of the pass-through entity
26or its shareholders or partners for the taxable year.

 

 

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1(Source: P.A. 100-511, eff. 9-18-17.)
 
2    (35 ILCS 10/5-20)
3    Sec. 5-20. Application for a project to create and retain
4new jobs.
5    (a) Any Taxpayer proposing a project located or planned to
6be located in Illinois may request consideration for
7designation of its project, by formal written letter of
8request or by formal application to the Department, in which
9the Applicant states its intent to make at least a specified
10level of investment and intends to hire or retain a specified
11number of full-time employees at a designated location in
12Illinois. As circumstances require, the Department may require
13a formal application from an Applicant and a formal letter of
14request for assistance.
15    (b) In order to qualify for Credits under this Act, an
16Applicant's project must:
17        (1) if the Applicant has more than 100 employees,
18    involve an investment of at least $2,500,000 in capital
19    improvements to be placed in service within the State as a
20    direct result of the project; if the Applicant has 100 or
21    fewer employees, then there is no capital investment
22    requirement;
23        (1.5) if the Applicant has more than 100 employees,
24    employ a number of new employees in the State equal to the
25    lesser of (A) 10% of the number of full-time employees

 

 

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1    employed by the applicant world-wide on the date the
2    application is filed with the Department or (B) 50 New
3    Employees; and, if the Applicant has 100 or fewer
4    employees, employ a number of new employees in the State
5    equal to the lesser of (A) 5% of the number of full-time
6    employees employed by the applicant world-wide on the date
7    the application is filed with the Department or (B) 50 New
8    Employees;
9        (1.6) if the Applicant is a startup taxpayer, the
10    employees employed by Related Members shall not be
11    attributed to the Applicant for purposes of determining
12    the capital investment or job creation requirements under
13    this subsection (b);
14        (2) (blank);
15        (3) (blank); and
16        (4) include an annual sexual harassment policy report
17    as provided under Section 5-58.
18    (c) After receipt of an application, the Department may
19enter into an Agreement with the Applicant if the application
20is accepted in accordance with Section 5-25.
21(Source: P.A. 100-511, eff. 9-18-17; 100-698, eff. 1-1-19;
22101-81, eff. 7-12-19.)".