Full Text of SB1391 97th General Assembly
SB1391 97TH GENERAL ASSEMBLY |
| | 97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012 SB1391 Introduced 2/9/2011, by Sen. Dale A. Righter SYNOPSIS AS INTRODUCED: |
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Amends the Corporate Accountability for Tax Expenditures Act. Provides that, for certain programs based on job creation or retention, beginning in 2007 and through 2011, a recipient shall be deemed in compliance with those job creation or job retention requirements by establishing that it has created or maintained the requisite number of jobs based on a 3-year average, including the current reporting year and the 2 immediately preceding reporting years. Effective immediately.
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| | | FISCAL NOTE ACT MAY APPLY | |
| | A BILL FOR |
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| 1 | | AN ACT concerning revenue.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Corporate Accountability for Tax | 5 | | Expenditures 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, | 9 | | at 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 | | Beginning January 1, 2007 through December 31, 2011, a | 6 | | recipient shall be deemed in compliance with all such job | 7 | | creation or job retention requirements by establishing | 8 | | that the recipient has created or maintained the requisite | 9 | | number of jobs based on a 3-year average, including the | 10 | | current reporting year and the 2 immediately preceding | 11 | | reporting years.
| 12 | | (3) If the recipient receives State economic | 13 | | assistance in the form of a
High
Impact Business | 14 | | designation pursuant to Section 5.5 of the Illinois | 15 | | Enterprise
Zone Act
and the business receives the benefit | 16 | | of the exemption authorized under Section
5l of the
| 17 | | Retailers' Occupation Tax Act (for the sale of building | 18 | | materials incorporated
into a High
Impact Business | 19 | | location) and the recipient fails to create or retain the
| 20 | | requisite number
of jobs, as determined by the legislation | 21 | | authorizing the development
assistance
programs
or the | 22 | | administrative rules implementing such legislation, or | 23 | | both, within the
requisite
period of time, the recipient | 24 | | shall be required to pay to the State the full
amount of | 25 | | the
State tax exemption that it received as a result of the | 26 | | High Impact Business
designation. Beginning January 1, |
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| 1 | | 2007 through December 31, 2011, a recipient shall be deemed | 2 | | in compliance with all such job creation or job retention | 3 | | requirements by establishing that the recipient has | 4 | | created or maintained the requisite number of jobs based on | 5 | | a 3-year average, including the current reporting year and | 6 | | the 2 immediately preceding reporting years.
| 7 | | (4) If the recipient receives a grant or loan pursuant | 8 | | to the Large
Business
Development Program, the Business | 9 | | Development Public Infrastructure Program, or
the
| 10 | | Industrial Training Program and the recipient fails to | 11 | | create or retain the
requisite number
of jobs for the | 12 | | requisite time period, as provided in the legislation
| 13 | | authorizing the
development assistance programs or the | 14 | | administrative rules implementing such
legislation, or | 15 | | both, or in the development assistance agreement, the | 16 | | recipient
shall be
required to repay to the State a pro | 17 | | rata amount of the grant; that amount
shall
reflect
the | 18 | | percentage of the deficiency between the requisite number | 19 | | of jobs to be
created or
retained by the recipient and the | 20 | | actual number of such jobs in existence as of
the date the
| 21 | | Department determines the recipient is in breach of the job | 22 | | creation or
retention
covenants contained in the | 23 | | development assistance agreement. If the recipient
of
| 24 | | development assistance under the Large Business | 25 | | Development Program, the
Business
Development Public | 26 | | Infrastructure Program, or the Industrial Training Program
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| 1 | | ceases
operations at the specific project site, during the | 2 | | 5-year period commencing on
the date of
assistance, the | 3 | | recipient shall be required to repay the entire amount of | 4 | | the
grant or to
accelerate repayment of the loan back to | 5 | | the State.
| 6 | | (5) If the recipient receives a tax credit under the | 7 | | Economic
Development for a
Growing Economy tax credit | 8 | | program, the development assistance agreement must
provide | 9 | | that (i) if the number of new or retained employees falls | 10 | | below the
requisite
number set forth in the development | 11 | | assistance agreement, the allowance of the
credit
shall be | 12 | | automatically suspended until the number of new and | 13 | | retained employees
equals
or exceeds the requisite number | 14 | | in the development assistance agreement; (ii)
if
the
| 15 | | recipient discontinues operations at the specific project | 16 | | site during the first
5 years of the
10-year term of the | 17 | | development assistance agreement, the recipient shall
| 18 | | forfeit all
credits taken by the recipient during such | 19 | | 5-year period; and (iii) in the
event
of a
revocation or | 20 | | suspension of the credit, the Department shall contact the
| 21 | | Director
of Revenue to initiate proceedings against the | 22 | | recipient to recover
wrongfully
exempted Illinois State | 23 | | income taxes and the recipient shall promptly repay to
the
| 24 | | Department of Revenue any wrongfully exempted Illinois | 25 | | State income taxes.
The forfeited amount of credits shall | 26 | | be deemed assessed on the date the
Department
contacts the |
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| 1 | | Department of Revenue and the recipient shall promptly | 2 | | repay to
the
Department of Revenue any wrongfully exempted | 3 | | Illinois State income taxes.
| 4 | | (b) The Director may elect to waive enforcement of any | 5 | | contractual provision
arising out of
the development | 6 | | assistance agreement required by this Act based on a finding
| 7 | | that the waiver is
necessary to avert an imminent and | 8 | | demonstrable hardship to the
recipient that may
result in such | 9 | | recipient's insolvency or discharge of workers.
If a waiver is
| 10 | | granted, the recipient must agree to a contractual | 11 | | modification, including
recapture provisions,
to the
| 12 | | development assistance
agreement.
The existence of
any waiver
| 13 | | granted pursuant to this subsection (c), the date of the | 14 | | granting of such
waiver, and a brief
summary of the reasons | 15 | | supporting the granting of such waiver shall be
disclosed
| 16 | | consistent with
the provisions of Section 25 of this Act.
| 17 | | (c) Beginning June 1, 2004, the Department shall annually | 18 | | compile a report
on the
outcomes and effectiveness of recapture | 19 | | provisions by program, including but
not limited
to: (i) the | 20 | | total number of companies that receive development assistance | 21 | | as
defined in
this Act; (ii) the total number of recipients in | 22 | | violation of development
agreements with
the Department; (iii) | 23 | | the total number of completed recapture efforts; (iv) the
total
| 24 | | number of recapture efforts initiated; and (v) the number of | 25 | | waivers granted.
This report
shall be disclosed consistent with | 26 | | the provisions of Section 20 of this Act.
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| 1 | | (d) For the purposes of this Act, recapture provisions do | 2 | | not include the
Illinois
Department of Transportation Economic | 3 | | Development Program, any grants under the
Industrial Training | 4 | | Program that are not given as an incentive to a
recipient | 5 | | business organization,
or any successor programs as described | 6 | | in the term "development assistance" in
Section 5
of this Act.
| 7 | | (Source: P.A. 93-552, eff. 8-20-03.)
| 8 | | Section 99. Effective date. This Act takes effect upon | 9 | | becoming law.
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