102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB1983

 

Introduced 2/26/2021, by Sen. Scott M. Bennett

 

SYNOPSIS AS INTRODUCED:
 
20 ILCS 715/25
35 ILCS 10/5-55

    Amends the Economic Development for a Growing Economy Tax Credit Act. Provides that the Department of Commerce and Economic Opportunity may issue a certificate of verification for the credit even if the Taxpayer does not meet certain payroll and capital expenditure requirements if that failure is due to financial hardship caused by the COVID-19 pandemic. Amends the Corporate Accountability for Tax Expenditures Act. Provides that credits awarded under the Economic Development for a Growing Economy tax credit program shall not be revoked or suspended as a result of the recipient's failure to meet requirements for new or retained employees if that failure is due to financial hardship caused by the COVID-19 pandemic. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB1983LRB102 16117 HLH 21492 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Corporate Accountability for Tax
5Expenditures Act is amended by changing Section 25 as follows:
 
6    (20 ILCS 715/25)
7    Sec. 25. Recapture.
8    (a) All development assistance agreements shall contain,
9at a minimum, the following recapture provisions:
10        (1) The recipient must (i) make the level of capital
11    investment in the economic development project specified
12    in the development assistance agreement; (ii) create or
13    retain, or both, the requisite number of jobs, paying not
14    less than specified wages for the created and retained
15    jobs, within and for the duration of the time period
16    specified in the legislation authorizing, or the
17    administrative rules implementing, the development
18    assistance programs and the development assistance
19    agreement.
20        (2) If the recipient fails to create or retain the
21    requisite number of jobs within and for the time period
22    specified, in the legislation authorizing, or the
23    administrative rules implementing, the development

 

 

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1    assistance programs and the development assistance
2    agreement, the recipient shall be deemed to no longer
3    qualify for the State economic assistance and the
4    applicable recapture provisions shall take effect.
5        (3) If the recipient receives State economic
6    assistance in the form of a High Impact Business
7    designation pursuant to Section 5.5 of the Illinois
8    Enterprise Zone Act and the business receives the benefit
9    of the exemption authorized under Section 5l of the
10    Retailers' Occupation Tax Act (for the sale of building
11    materials incorporated into a High Impact Business
12    location) or the utility tax exemption authorized under
13    Section 9-222.1A of the Public Utilities Act and the
14    recipient fails to create or retain the requisite number
15    of jobs, as determined by the legislation authorizing the
16    development assistance programs or the administrative
17    rules implementing such legislation, or both, within the
18    requisite period of time, the recipient shall be required
19    to pay to the State the full amount of both the State tax
20    exemption and the utility tax exemption that it received
21    as a result of the High Impact Business designation.
22        (4) If the recipient receives a grant or loan pursuant
23    to the Large Business Development Program, the Business
24    Development Public Infrastructure Program, or the
25    Industrial Training Program and the recipient fails to
26    create or retain the requisite number of jobs for the

 

 

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1    requisite time period, as provided in the legislation
2    authorizing the development assistance programs or the
3    administrative rules implementing such legislation, or
4    both, or in the development assistance agreement, the
5    recipient shall be required to repay to the State a pro
6    rata amount of the grant; that amount shall reflect the
7    percentage of the deficiency between the requisite number
8    of jobs to be created or retained by the recipient and the
9    actual number of such jobs in existence as of the date the
10    Department determines the recipient is in breach of the
11    job creation or retention covenants contained in the
12    development assistance agreement. If the recipient of
13    development assistance under the Large Business
14    Development Program, the Business Development Public
15    Infrastructure Program, or the Industrial Training Program
16    ceases operations at the specific project site, during the
17    5-year period commencing on the date of assistance, the
18    recipient shall be required to repay the entire amount of
19    the grant or to accelerate repayment of the loan back to
20    the State.
21        (5) Except as provided in paragraph (5.1), if If the
22    recipient receives a tax credit under the Economic
23    Development for a Growing Economy tax credit program, the
24    development assistance agreement must provide that (i) if
25    the number of new or retained employees falls below the
26    requisite number set forth in the development assistance

 

 

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1    agreement, the allowance of the credit shall be
2    automatically suspended until the number of new and
3    retained employees equals or exceeds the requisite number
4    in the development assistance agreement; (ii) if the
5    recipient discontinues operations at the specific project
6    site during the 5-year period after the beginning of the
7    first tax year for which the Department issues a tax
8    credit certificate, the recipient shall forfeit all
9    credits taken by the recipient during such 5-year period;
10    and (iii) in the event of a revocation or suspension of the
11    credit, the Department shall contact the Director of
12    Revenue to initiate proceedings against the recipient to
13    recover wrongfully exempted Illinois State income taxes
14    and the recipient shall promptly repay to the Department
15    of Revenue any wrongfully exempted Illinois State income
16    taxes. The forfeited amount of credits shall be deemed
17    assessed on the date the Department contacts the
18    Department of Revenue and the recipient shall promptly
19    repay to the Department of Revenue any wrongfully exempted
20    Illinois State income taxes.
21        (5.1) For taxable years that begin on or after January
22    1, 2020 and begin prior to January 1, 2022, credits
23    awarded under the Economic Development for a Growing
24    Economy tax credit program shall not be revoked or
25    suspended as a result of the recipient's failure to meet
26    requirements for new or retained employees if that failure

 

 

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1    is due to financial hardship caused by the COVID-19
2    pandemic. For the Department to grant relief under this
3    paragraph (5.1), proof of financial hardship caused by the
4    COVID-19 pandemic must be submitted to the Department
5    during the annual EDGE agreement recertification process.
6    (b) The Director may elect to waive enforcement of any
7contractual provision arising out of the development
8assistance agreement required by this Act based on a finding
9that the waiver is necessary to avert an imminent and
10demonstrable hardship to the recipient that may result in such
11recipient's insolvency or discharge of workers. If a waiver is
12granted, the recipient must agree to a contractual
13modification, including recapture provisions, to the
14development assistance agreement. The existence of any waiver
15granted pursuant to this subsection (b), the date of the
16granting of such waiver, and a brief summary of the reasons
17supporting the granting of such waiver shall be disclosed
18consistent with the provisions of Section 25 of this Act.
19    (b-5) The Department shall post, on its website, (i) the
20identity of each recipient from whom amounts were recaptured
21under this Section on or after the effective date of this
22amendatory Act of the 97th General Assembly, (ii) the date of
23the recapture, (iii) a summary of the reasons supporting the
24recapture, and (iv) the amount recaptured from those
25recipients.
26    (c) Beginning June 1, 2004, the Department shall annually

 

 

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1compile a report on the outcomes and effectiveness of
2recapture provisions by program, including but not limited to:
3(i) the total number of companies that receive development
4assistance as defined in this Act; (ii) the total number of
5recipients in violation of development agreements with the
6Department; (iii) the total number of completed recapture
7efforts; (iv) the total number of recapture efforts initiated;
8and (v) the number of waivers granted. This report shall be
9disclosed consistent with the provisions of Section 20 of this
10Act.
11    (d) For the purposes of this Act, recapture provisions do
12not include the Illinois Department of Transportation Economic
13Development Program, any grants under the Industrial Training
14Program that are not given as an incentive to a recipient
15business organization, or any successor programs as described
16in the term "development assistance" in Section 5 of this Act.
17(Source: P.A. 97-2, eff. 5-6-11; 97-721, eff. 6-29-12; 98-109,
18eff. 7-25-13; 98-463, eff. 8-16-13.)
 
19    Section 10. The Economic Development for a Growing Economy
20Tax Credit Act is amended by changing Section 5-55 as follows:
 
21    (35 ILCS 10/5-55)
22    Sec. 5-55. Certificate of verification; submission to the
23Department of Revenue. A Taxpayer claiming a Credit under this
24Act shall submit to the Department of Revenue a copy of the

 

 

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1Director's certificate of verification under this Act for the
2taxable year. However, failure to submit a copy of the
3certificate with the Taxpayer's tax return shall not
4invalidate a claim for a Credit.
5    For a Taxpayer to be eligible for a certificate of
6verification, the Taxpayer shall provide proof as required by
7the Department prior to the end of each calendar year,
8including, but not limited to, attestation by the Taxpayer
9that:
10        (1) The project has substantially achieved the level
11    of new full-time jobs specified in its Agreement.
12        (2) The project has substantially achieved the level
13    of annual payroll in Illinois specified in its Agreement.
14        (3) The project has substantially achieved the level
15    of capital investment in Illinois specified in its
16    Agreement.
17        (4) For taxable years that begin on or after January
18    1, 2020 and begin prior to January 1, 2022, if the Taxpayer
19    does not meet (1), (2), or (3) due to financial hardship
20    caused by the COVID-19 pandemic, this shall not prevent
21    the Department from issuing a certificate of verification.
22    The Department shall require proof of financial hardship.
23(Source: P.A. 91-476, eff. 8-11-99.)
 
24    Section 99. Effective date. This Act takes effect upon
25becoming law.