Full Text of SB0464 96th General Assembly
SB0464sam001 96TH GENERAL ASSEMBLY
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Sen. Iris Y. Martinez
Filed: 3/25/2009
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| AMENDMENT TO SENATE BILL 464
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| AMENDMENT NO. ______. Amend Senate Bill 464 by replacing | 3 |
| everything after the enacting clause with the following:
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| "Section 1. Short title. This Act may be cited as the | 5 |
| Illinois Economic Leadership Initiative Act. | 6 |
| Section 5. Definitions. For the purpose of this Act, unless | 7 |
| the context otherwise requires: | 8 |
| "Advisory Committee" means the Illinois Economic | 9 |
| Leadership Advisory Committee, which will be replaced by the | 10 |
| Board. | 11 |
| "Board" means the Illinois Economic Leadership Board. | 12 |
| "Corporation" or "ICIC" means the Illinois Capital | 13 |
| Investment Corporation. | 14 |
| "Certified Illinois business" means any qualified Illinois | 15 |
| company, as defined in this Section, that is certified as | 16 |
| defined in subsection (b) of Section 15 for capital investment |
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| under this Act. | 2 |
| "Department" means the Department of Commerce and Economic | 3 |
| Opportunity. | 4 |
| "Illinois Accelerator company" means a private-sector | 5 |
| subsidiary organized in the State of Illinois, owned by the | 6 |
| Illinois Capital Investment Corporation, that is responsible | 7 |
| for assisting businesses to qualify for capital investment | 8 |
| under this Economic Leadership Initiative. | 9 |
| "Initiative" means the Illinois Economic Leadership | 10 |
| Initiative. | 11 |
| "Qualified Illinois company" means businesses licensed and | 12 |
| registered with the Illinois Department of Financial and | 13 |
| Professional Regulation, in good standing with the Illinois | 14 |
| Secretary of State, and current with all Illinois tax | 15 |
| liabilities. | 16 |
| "Qualified Illinois taxpayer" means any person or entity | 17 |
| that pays taxes in the State of Illinois and is current with | 18 |
| all Illinois tax liabilities. | 19 |
| "State" means the State of Illinois. | 20 |
| "Qualified fund managers" means persons or entities | 21 |
| selected by the Corporation in collaboration with its lead | 22 |
| investors in this Initiative, and under contract with the | 23 |
| Corporation to manage investment funds established by the | 24 |
| Corporation. | 25 |
| "Claimant" means a person or entity investor that files a | 26 |
| claim under this Initiative. |
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| Section 10. Illinois Incentive Tax Credits. | 2 |
| (a) Subject to appropriation, this Act creates incentive | 3 |
| income and franchise tax credits for investors in the fund | 4 |
| sectors described in this Act, but only if the investments are | 5 |
| in qualified Illinois companies certified by the Board in | 6 |
| connection with the Department and the Corporation. | 7 |
| (b) In order to maximize the effectiveness of the tax | 8 |
| credits, the tax credits must include the following components | 9 |
| authorized by this Act: | 10 |
| (1) applies only to claimants that are investors in the | 11 |
| Corporation's related investment funds in sectors defined | 12 |
| herein for investment by selected fund managers in | 13 |
| certified Illinois established businesses that are | 14 |
| entitled to the tax credited investment; | 15 |
| (2) the private capital investment tax credit equates | 16 |
| to 9.5% tax credit per year for 6 years and authorizes the | 17 |
| Corporation to negotiate and achieve the optimum tax credit | 18 |
| allocation per investment sector in a manner that aligns | 19 |
| capital investment with market demand and that maximizes | 20 |
| job creation and retention in the State of Illinois with | 21 |
| approval by the Department; | 22 |
| (3) the Illinois Pension System lead investor is | 23 |
| authorized to gain the tax credit benefit through the sale | 24 |
| of the transferable tax credits to one or more qualified | 25 |
| Illinois taxpayer; |
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| (4) transferable to any qualified Illinois taxpayer, | 2 |
| i.e., claimant may sell tax credits under this Act to | 3 |
| another person or entity that is subject to taxes imposed | 4 |
| in Illinois, if the claimant notifies the Board, the | 5 |
| Department, and the Department of Revenue of the sale and | 6 |
| includes with the notification a copy of the transfer | 7 |
| documents; | 8 |
| (5) applicable to all forms of Illinois taxes; | 9 |
| (6) non-recapturable; and | 10 |
| (7) irrevocable. | 11 |
| (c) The Department shall be authorized to approve one-time | 12 |
| broker tax credits of 10% made available per offering per | 13 |
| certified business for funding raised for Illinois businesses. | 14 |
| (d) The one-time broker tax credit is limited up to $50,000 | 15 |
| per offering per certified Illinois business with approval by | 16 |
| the Department. | 17 |
| Section 15. Illinois Economic Leadership Board. | 18 |
| (a) Subject to appropriation, the Illinois Economic | 19 |
| Leadership Board (IELB) is created to assist with legislation, | 20 |
| organization, and promotion of the private-sector, | 21 |
| market-driven Initiative to incentivize major private capital | 22 |
| resources to be immediately available to Illinois businesses | 23 |
| for substantial economic growth. | 24 |
| (b) The Board shall: | 25 |
| (1) promulgate rules establishing a procedure for the |
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| Board to certify businesses eligible for tax-credited | 2 |
| investments as made available by this Act. The Board shall | 3 |
| promulgate such rules in connection with the Department and | 4 |
| the Illinois Capital Investment Corporation (ICIC). The | 5 |
| rules shall require a business that desires to obtain | 6 |
| certification to file an application with the Board. The | 7 |
| rules shall require an applicant for certification to | 8 |
| provide the Board with any information the Board determines | 9 |
| is necessary to ensure eligibility for certification and | 10 |
| compliance with this Act and the rules promulgated under | 11 |
| this Section. The Board shall consult with the Corporation | 12 |
| and the Department in determining whether to certify any | 13 |
| applicant; | 14 |
| (2) review and approve performance data related to the | 15 |
| tax credits made available by this Act as reported by the | 16 |
| ICIC in conjunction with the Department; | 17 |
| (3) certify businesses eligible for tax-credited | 18 |
| investments as made available by this Act, in connection | 19 |
| with the Department and the ICIC; | 20 |
| (4) serve as media spokespersons for the Initiative; | 21 |
| (5) promote the Initiative; | 22 |
| (6) solicit institutional investors; | 23 |
| (7) recruit Illinois companies that are capital | 24 |
| investment candidates; and | 25 |
| (8) select the ICIC no later than the first day of the | 26 |
| second month beginning after the effective date of this |
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| Act. | 2 |
| (c) The Board shall consist of 11 voting members to be | 3 |
| appointed as follows in consultation with the chairperson of | 4 |
| the Advisory Committee and with the chairperson of the ICIC | 5 |
| serving as chairperson of the Board: | 6 |
| (1) two members appointed by the Governor; | 7 |
| (2) one member appointed by the President of the | 8 |
| Senate; | 9 |
| (3) one member appointed by the Minority Leader of the | 10 |
| Senate; | 11 |
| (4) one member appointed by the Speaker of the House; | 12 |
| (5) one member appointed by the Minority Leader of the | 13 |
| House; | 14 |
| (6) one member appointed by the Mayor of the City of | 15 |
| Chicago; | 16 |
| (7) the Director of Commerce and Economic Opportunity | 17 |
| or his or her designee; | 18 |
| (8) the Director of Revenue or his or her designee; | 19 |
| (9) the Executive Director of lead Illinois Pension | 20 |
| System Fund or his or her designee; and | 21 |
| (10) Chairperson of the Illinois Capital Investment | 22 |
| Corporation or his or her designee. | 23 |
| The members of the Board shall serve without compensation | 24 |
| for a term of 2 years, but may be reimbursed for their | 25 |
| expenses. | 26 |
| (d) The Department of Commerce and Economic Opportunity |
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| shall: | 2 |
| (1) Staff and administer, in collaboration with the | 3 |
| Illinois Capital Investment Corporation, the Illinois | 4 |
| Economic Leadership Board. | 5 |
| (2) Recommend job creation standards, in collaboration | 6 |
| with the Illinois Capital Investment Corporation. | 7 |
| (3) Advise the Board in relation to portfolio company | 8 |
| certification for tax-credited capital investment by the | 9 |
| Illinois Capital Investment Corporation. | 10 |
| (4) In conjunction with the recommendations of the | 11 |
| Illinois Capital Investment Corporation, analyze and | 12 |
| recommend to the Board for approval the appropriate tax | 13 |
| credit allocations per capital investment category based | 14 |
| on market analysis of candidate businesses within the State | 15 |
| of Illinois and include analysis of the market of | 16 |
| businesses outside the State that may relocate to Illinois | 17 |
| in connection with capital investment under this | 18 |
| Initiative after certification. | 19 |
| (5) In conjunction with recommendations of the Board | 20 |
| and the Corporation, engage in internal strategic planning | 21 |
| process from time-to-time to enable the Department to most | 22 |
| effectively align its current programs with the Initiative | 23 |
| as necessary. | 24 |
| (6) Assess and collect from applicant businesses that | 25 |
| apply for certification up to $500 per application | 26 |
| submitted to the Board and disseminated to the Department |
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| and the Corporation under this Initiative, and assess and | 2 |
| collect up to $1,500 per million dollars invested in | 3 |
| qualified businesses certified for and that receive | 4 |
| capital investment under this Initiative, which are | 5 |
| intended to cover the Department's program related | 6 |
| expenses incurred in connection with this Initiative | 7 |
| including its expenses, if any, related to staffing the | 8 |
| Board. | 9 |
| (7) Upon approval of an application under this | 10 |
| Initiative, issue a written notice of certification to the | 11 |
| applicable business and provide a copy of the notice to the | 12 |
| Corporation, the Department of Commerce and Economic | 13 |
| Opportunity, and the Illinois Department of Revenue. Each | 14 |
| notice shall include the following statement: "The | 15 |
| Illinois Economic Leadership Board has not recommended or | 16 |
| approved an investment in this entity or assessed the | 17 |
| merits of risks of such an investment. Investors should | 18 |
| rely solely on their own investigation and analysis and | 19 |
| seek investment, financial, legal, and tax advice before | 20 |
| making their own decisions regarding investment in this | 21 |
| entity." The Board shall provide any person a copy of the | 22 |
| notice upon request. | 23 |
| (8) In conjunction with the recommendations of the | 24 |
| Board and the Corporation, enter into certification | 25 |
| agreements between the State and businesses qualified to | 26 |
| receive tax-credited investments from this Initiative. |
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| (9) Submit a report annually no later than September 15 | 2 |
| to the Clerk of the House and the Secretary of the Senate | 3 |
| for distribution to the members of the General Assembly | 4 |
| describing the performance of investments made by fund | 5 |
| managers, the total amount of tax credits claimed with | 6 |
| regard to those investments, and economic impact on the | 7 |
| State of Illinois. The Department of Revenue shall provide | 8 |
| the Board with any information the Board requests for | 9 |
| preparation of the report under this paragraph. | 10 |
| (10) Engage in promotional activities in consultation | 11 |
| with the Corporation and the Department, but not recommend | 12 |
| that any person or entity under this Initiative make a | 13 |
| particular investment. The Board shall solicit | 14 |
| institutional investors to invest in this Initiative, | 15 |
| shall encourage fund managers to invest in qualified | 16 |
| businesses, and shall solicit businesses that may benefit | 17 |
| from investments made by fund managers. | 18 |
| (11) Recommend to the General Assembly any statutory | 19 |
| changes that the Board considers necessary or proper to | 20 |
| carry out the purposes of this Section. | 21 |
| (12) Upon the discontinuance of a certification by the | 22 |
| Board, in consultation with the Corporation and the | 23 |
| Department, the Board shall issue a written notice of | 24 |
| decertification to the applicable business and shall | 25 |
| provide a copy of the notice to the Corporation, the | 26 |
| Department of Commerce and Economic Opportunity, and the |
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| Department of Revenue. Discontinuance of a certification | 2 |
| does not effect any current offering of ownership interests | 3 |
| in the decertified business. | 4 |
| Section 20. Illinois Capital Investment Corporation. | 5 |
| (a) Subject to appropriation, the Illinois Capital | 6 |
| Investment Corporation (ICIC) is created as a private sector | 7 |
| proactive entity to oversee and facilitate the raising and | 8 |
| development of private-sector institutional investment aligned | 9 |
| with and in connection with the Initiative's state income and | 10 |
| franchise tax credit incentives. | 11 |
| (b) The Corporation shall: | 12 |
| (1) Deploy private capital investment in a manner that | 13 |
| provides a continuum of capital in support of Illinois | 14 |
| companies. | 15 |
| (2) Organize an Illinois Accelerator Company within | 16 |
| the Corporation to aggressively and proactively seek out | 17 |
| and prepare Illinois companies and out-of-state companies | 18 |
| that will relocate and become Illinois companies for | 19 |
| capital investment opportunities under the Initiative. | 20 |
| (3) Be authorized, in conjunction with the Department | 21 |
| with approval by the Board, to monitor, analyze, and report | 22 |
| measurable and sustainable economic and fiscal impact | 23 |
| results related to the State's tax credit investments, and | 24 |
| similarly monitor and report on the performance and | 25 |
| accountability of each fund manager and the Initiative's |
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| workforce investment components.
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| (4) Establish investment funds that are managed by | 3 |
| qualified fund managers selected by the Corporation in | 4 |
| collaboration with its lead investors. | 5 |
| (5) Be authorized to establish parameters for specific | 6 |
| private capital investment sectors and related tax credits | 7 |
| defined in this Act and in consultation with the | 8 |
| Department. | 9 |
| (6) Select 2 to 6 qualified fund managers in each | 10 |
| sector to invest incentivized private capital. The fund | 11 |
| sectors include: | 12 |
| (A) Private Equity Funds, Growth Funds, and | 13 |
| Venture Growth Funds for private capital investment in | 14 |
| certified Illinois businesses to create and retain | 15 |
| jobs for the State's workforce and to invest in | 16 |
| businesses that relocate into the State of Illinois. | 17 |
| (B) Seed and Early Stage Funds for investment in | 18 |
| newly formed or emerging businesses with market demand | 19 |
| to help grow qualified Illinois companies. | 20 |
| (C) Angel Investment Funds for investment in | 21 |
| qualified early stage businesses certified eligible | 22 |
| for tax credits. | 23 |
| (D) Women and Minority Owned Business Funds for | 24 |
| investment into certified businesses that are at least | 25 |
| 51% owned and controlled by woman and minorities. | 26 |
| Nothing in this Act shall limit any other investment |
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| fund or vehicle from also investing in woman and | 2 |
| minority-owned businesses as defined in this Section. | 3 |
| (E) Community Development Funds for investment in | 4 |
| businesses certified as eligible for incentive tax | 5 |
| credit investment. | 6 |
| (F) Low-to-Moderate Income (LMI) Financial Access | 7 |
| Funds for investment in businesses that deliver | 8 |
| low-cost financial services that help facilitate | 9 |
| low-to-moderate income consumer-worker economic | 10 |
| mobility, including voluntary micro-banking programs | 11 |
| in participating elementary and high schools. | 12 |
| (G) Low-to-Moderate Income (LMI) Affordable | 13 |
| Housing and Homeownership Funds for investment in | 14 |
| businesses that facilitate housing and homeownership | 15 |
| via quality mortgage finance for LMI consumer workers | 16 |
| in connection with State and municipal housing | 17 |
| authorities and their HUD Section 8 and 8y programs. | 18 |
| (H) Low-to-Moderate Income (LMI) Transportation | 19 |
| Funds for private investment in businesses that | 20 |
| deliver quality low-cost marketplace solutions that | 21 |
| enable workforce participants to acquire new vehicles | 22 |
| that lower their transportation expenses, reduce | 23 |
| emissions, preserve employment, and achieve job | 24 |
| advancement with greater income due to an expanded | 25 |
| geographic area from residence where work can be found. | 26 |
| (I) LMI Workforce Health and Fitness Funds that |
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| invest in companies with low-cost marketplace | 2 |
| solutions that enable workers, including younger | 3 |
| workforce entrants with various levels of education, | 4 |
| to remain engaged as active, productive participants | 5 |
| in the Illinois workforce despite challenges related | 6 |
| to involuntary loss of employment or stress related to | 7 |
| the risk of job loss; includes private investment in | 8 |
| non-profit voluntary fitness programs in elementary | 9 |
| and high schools that choose to participate. | 10 |
| (7) Authorize the State of Illinois Pension System | 11 |
| funds to serve as lead investors to help establish the | 12 |
| Corporation as the private-sector entity that administers | 13 |
| the accountable, private-sector, market-driven continuum | 14 |
| of access-to-capital via qualified fund managers. | 15 |
| (8) Determine a structure for the Corporation to | 16 |
| further enhance the value of State tax credits. | 17 |
| (9) Solicit, interview, and select Fund Managers in | 18 |
| collaboration with lead investors. | 19 |
| (10) Recommend businesses for certification by the | 20 |
| Board in connection with the Department. | 21 |
| (11) Manage and oversee via direct fund management of | 22 |
| the highly specialized workforce-related LMI Financial | 23 |
| Access Funds, LMI Affordable Housing and Homeownership | 24 |
| Funds, the LMI Transportation Funds, and LMI Workforce | 25 |
| Health and Fitness Funds. | 26 |
| (12) Establish, oversee, and direct the Illinois |
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| Accelerator Corporation to seek, identify, prepare, and | 2 |
| assist established and early stage companies as they become | 3 |
| qualified recipients of the Initiative's capital | 4 |
| investments. | 5 |
| (13) Work with portfolio companies and fund managers to | 6 |
| assist in growing the Initiative's portfolio companies and | 7 |
| facilitating follow-on funding from the appropriate | 8 |
| sources that may include the next level of funds from | 9 |
| within the Initiative. | 10 |
| (14) Monitor, analyze, and report to the Board and the | 11 |
| General Assembly measurable and sustainable economic and | 12 |
| fiscal impact results related to tax credit investments. | 13 |
| (15) Establish measurable standards in relation to tax | 14 |
| credited investments and hold the selected fund managers | 15 |
| accountable for meeting the standards. | 16 |
| (16) Coordinate and oversee an Economic Advisory | 17 |
| Board, Fund Manager Advisory Board, Illinois CEO | 18 |
| Leadership Advisory Board, and Institutional Investor | 19 |
| Advisory Board. | 20 |
| (17) Coordinate a Management Information System that | 21 |
| tracks investments, related economic impact, and financial | 22 |
| results. | 23 |
| (18) Coordinate and disseminate a proactive | 24 |
| multi-media communications program and related televised | 25 |
| economic news media message. | 26 |
| (19) Except where designated in this Act in relation to |
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| the highly specialized LMI Fund activities, no owner of the | 2 |
| Corporation has made a certified capital investment or is a | 3 |
| fund manager in any of the Funds to be established by the | 4 |
| Corporation. | 5 |
| (c) The Department of Commerce and Economic Opportunity | 6 |
| shall: | 7 |
| (1) identify candidate businesses for capital | 8 |
| investment for the Initiative and provide support, in | 9 |
| connection with existing and future capital investment | 10 |
| programs and services of the Department, once an investment | 11 |
| is made; and | 12 |
| (2) be authorized under this Act to obtain and preserve | 13 |
| confidential company data not already available to the | 14 |
| Department. | 15 |
| (d) Funding for the Corporation shall be provided by: | 16 |
| (1) an organizational advance from the Illinois | 17 |
| Pension System lead investor; | 18 |
| (2) a combined annual operating management fee and | 19 |
| expense reimbursement of 1% advanced by private or Pension | 20 |
| System investors and repaid to investors from the gain | 21 |
| related to this Initiative's investments, which will be | 22 |
| negotiated and finalized by the Corporation with its | 23 |
| investors; and | 24 |
| (3) performance incentive fees of a 6% carry of the | 25 |
| gain after returns of 100% of private sector principal | 26 |
| investments and reimbursement of management fees and |
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| related expense funding advanced by investors. | 2 |
| (e) Fund manager compensation shall be determined and | 3 |
| negotiated by the ICIC in collaboration with its investors and | 4 |
| provided by: | 5 |
| (1) an annual management fee as described in item (3), | 6 |
| which will be negotiated by the ICIC in collaboration with | 7 |
| selected qualified fund managers, and funded by advances | 8 |
| paid to the Corporation by investors for distribution by | 9 |
| the Corporation to qualified fund managers selected by the | 10 |
| Corporation in collaboration with its investors, 50% of | 11 |
| which will be paid on commitment and 100% will be paid upon | 12 |
| investment; | 13 |
| (2) an incentive fee of a 14% carry of the profit after | 14 |
| returning to investors 100% of their private and Pension | 15 |
| System investment funding, i.e., the principal investment, | 16 |
| and related management fees and other expenses; and | 17 |
| (3) a percentage determined and negotiated by the ICIC | 18 |
| with investors based upon the type of fund as follows: up | 19 |
| to 3% for Angel Investment Funds, Early Stage Seed Funds, | 20 |
| Women and Minority Owned Funds, Community Funds, Financial | 21 |
| Access Funds; up to 3% for Venture Funds; and up to 2% for | 22 |
| Private Equity Funds. | 23 |
| (f) The Corporation shall consist of members as follows: | 24 |
| (1) Illinois Pension System lead investor; | 25 |
| (2) Insurance companies; | 26 |
| (3) Financial institutions; |
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| (4) Corporations; | 2 |
| (5) Native American Tribes; | 3 |
| (6) Utility companies; | 4 |
| (7) Other institutional investors; and | 5 |
| (8) High net worth individuals. | 6 |
| (g) The Corporation shall have a Board of Directors that | 7 |
| shall consist of: | 8 |
| (1) the Chairperson of the Corporation; | 9 |
| (2) major institutional investors; and | 10 |
| (3) appointment by the Illinois Economic Leadership | 11 |
| Board. | 12 |
| Section 99. Effective date. This Act takes effect upon | 13 |
| becoming law.".
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