Full Text of HB0162 100th General Assembly
HB0162ham002 100TH GENERAL ASSEMBLY | Rep. Michael J. Zalewski Filed: 6/27/2017
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| 1 | | AMENDMENT TO HOUSE BILL 162
| 2 | | AMENDMENT NO. ______. Amend House Bill 162 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "ARTICLE 3. KEEP ILLINOIS BUSINESSES ACT | 5 | | Section 3-1. Short title. This Act may be cited as the Keep | 6 | | Illinois Businesses Act. | 7 | | Section 3-5. Purpose. The purpose of this Act is to | 8 | | encourage businesses with primary business operations in the | 9 | | State of Illinois to remain in this State by removing and | 10 | | recouping any economic development assistance or benefit | 11 | | provided to those businesses by the State should those | 12 | | businesses decide to relocate jobs out-of-State. | 13 | | Section 3-10. Definitions. As used in this Act:
| 14 | | "Economic development assistance" means (1) tax credits |
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| 1 | | and tax exemptions given as an incentive to a recipient | 2 | | business organization under an initial certification or an | 3 | | initial designation made by the Department of Commerce and | 4 | | Economic Opportunity under the Economic Development for a | 5 | | Growing Economy Tax Credit Act, River Edge Redevelopment Zone | 6 | | Act, and the Illinois Enterprise Zone Act, including the High | 7 | | Impact Business program; (2) grants or loans given to a | 8 | | recipient as an incentive to a business organization under the | 9 | | River Edge Redevelopment Zone Act, Large Business Development | 10 | | Program, the Business Development Public Infrastructure | 11 | | Program, or the Industrial Training Program; (3) the State | 12 | | Treasurer's Economic Program Loans; (4) the Illinois | 13 | | Department of Transportation Economic Development Program; (5) | 14 | | all successor and subsequent programs and tax credits designed | 15 | | to promote business relocations and expansions; (6) any | 16 | | assistance provided by the Illinois Emergency Employment | 17 | | Program under the Illinois Emergency Development Act; and (7) | 18 | | any other economic incentive, benefit, assistance, credit, | 19 | | loan, or grant provided by a State granting agency to a | 20 | | recipient business with primary business operations in this | 21 | | State.
| 22 | | "Recipient business" means any corporation, limited | 23 | | liability company, partnership, joint venture, association, | 24 | | sole proprietorship, or other legally recognized entity with | 25 | | primary business operations in this State that receives | 26 | | economic development assistance.
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| 1 | | "State agency" has the meaning provided in Section 1-7 of | 2 | | the Illinois State Auditing Act. | 3 | | "State granting agency" means any State department or State | 4 | | agency that provides economic development assistance to a | 5 | | recipient business.
| 6 | | Section 3-15. Recovery of economic development assistance.
| 7 | | (a) Subject to the procedures outlined in this Section, any | 8 | | recipient business that chooses to move all or part of its | 9 | | business operations and the jobs created by its business | 10 | | out-of-State shall be deemed to no longer qualify for State | 11 | | economic development assistance, and shall be required to pay | 12 | | to the relevant State granting agency the full amount of any | 13 | | economic development assistance it received.
| 14 | | (b) Whenever a State granting agency believes that the | 15 | | economic development assistance it provided to a recipient | 16 | | business is subject to recovery, the State granting agency | 17 | | shall provide the recipient business the opportunity for at | 18 | | least one informal hearing to determine the facts and issues, | 19 | | and to resolve any conflicts as amicably as possible before | 20 | | taking any formal recovery actions.
| 21 | | (c) If a State granting agency determines that economic | 22 | | development assistance is to be recovered, then, prior to | 23 | | taking any action to recover, the State granting agency shall | 24 | | provide the recipient business with a written notice of the | 25 | | intended recovery. This notice shall identify the funds and the |
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| 1 | | amount to be recovered and the specific facts which permit | 2 | | recovery.
| 3 | | (d) A recipient business shall have 35 days from the | 4 | | receipt of the notice required in subsection (c) of this | 5 | | Section to request a hearing to show why recovery is not | 6 | | justified or proper. If a recipient business requests a hearing | 7 | | under this subsection (d), then:
| 8 | | (1) the State granting agency shall hold a hearing | 9 | | before the Director of that agency, or his or her designee, | 10 | | at which a representative of the recipient business may | 11 | | present an argument for why recovery should not be | 12 | | permitted; and
| 13 | | (2) after the conclusion of the hearing, the Director | 14 | | of the State granting agency, or his or her designee, shall | 15 | | issue a written final recovery order and send a copy of the | 16 | | order to the recipient business.
| 17 | | (e) A recipient business may seek judicial review of any | 18 | | final recovery order under the provisions of the Administrative | 19 | | Review Law.
| 20 | | (f) If a recipient business requests a hearing under | 21 | | subsection (d) of this Section, then the State granting agency | 22 | | may not take any action of recovery until at least 35 days | 23 | | after the State granting agency has issued a final recovery | 24 | | order under the requirements of subsection (d) of this Section. | 25 | | If a recipient business does not request a hearing as permitted | 26 | | in subsection (d) of this Section, then the State granting |
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| 1 | | agency may proceed with recovery of the economic development | 2 | | assistance amount specified in the notice issued under the | 3 | | requirements of subsection (c) of this Section, at any time | 4 | | after the expiration of the 35-day request period established | 5 | | in subsection (d) of this Section.
| 6 | | (g) Any notice or mailing required or permitted by this | 7 | | Section shall be deemed received 5 days after the notice or | 8 | | mailing is deposited in the United States mail, properly | 9 | | addressed with the current business address of the recipient | 10 | | business and with sufficient U.S. postage affixed.
| 11 | | ARTICLE 5. AMENDATORY PROVISIONS | 12 | | Section 5-5. The Illinois Income Tax Act is amended by | 13 | | changing Section 704A as follows: | 14 | | (35 ILCS 5/704A) | 15 | | Sec. 704A. Employer's return and payment of tax withheld. | 16 | | (a) In general, every employer who deducts and withholds or | 17 | | is required to deduct and withhold tax under this Act on or | 18 | | after January 1, 2008 shall make those payments and returns as | 19 | | provided in this Section. | 20 | | (b) Returns. Every employer shall, in the form and manner | 21 | | required by the Department, make returns with respect to taxes | 22 | | withheld or required to be withheld under this Article 7 for | 23 | | each quarter beginning on or after January 1, 2008, on or |
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| 1 | | before the last day of the first month following the close of | 2 | | that quarter. | 3 | | (c) Payments. With respect to amounts withheld or required | 4 | | to be withheld on or after January 1, 2008: | 5 | | (1) Semi-weekly payments. For each calendar year, each | 6 | | employer who withheld or was required to withhold more than | 7 | | $12,000 during the one-year period ending on June 30 of the | 8 | | immediately preceding calendar year, payment must be made: | 9 | | (A) on or before each Friday of the calendar year, | 10 | | for taxes withheld or required to be withheld on the | 11 | | immediately preceding Saturday, Sunday, Monday, or | 12 | | Tuesday; | 13 | | (B) on or before each Wednesday of the calendar | 14 | | year, for taxes withheld or required to be withheld on | 15 | | the immediately preceding Wednesday, Thursday, or | 16 | | Friday. | 17 | | Beginning with calendar year 2011, payments made under | 18 | | this paragraph (1) of subsection (c) must be made by | 19 | | electronic funds transfer. | 20 | | (2) Semi-weekly payments. Any employer who withholds | 21 | | or is required to withhold more than $12,000 in any quarter | 22 | | of a calendar year is required to make payments on the | 23 | | dates set forth under item (1) of this subsection (c) for | 24 | | each remaining quarter of that calendar year and for the | 25 | | subsequent calendar year.
| 26 | | (3) Monthly payments. Each employer, other than an |
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| 1 | | employer described in items (1) or (2) of this subsection, | 2 | | shall pay to the Department, on or before the 15th day of | 3 | | each month the taxes withheld or required to be withheld | 4 | | during the immediately preceding month. | 5 | | (4) Payments with returns. Each employer shall pay to | 6 | | the Department, on or before the due date for each return | 7 | | required to be filed under this Section, any tax withheld | 8 | | or required to be withheld during the period for which the | 9 | | return is due and not previously paid to the Department. | 10 | | (d) Regulatory authority. The Department may, by rule: | 11 | | (1) Permit employers, in lieu of the requirements of | 12 | | subsections (b) and (c), to file annual returns due on or | 13 | | before January 31 of the year for taxes withheld or | 14 | | required to be withheld during the previous calendar year | 15 | | and, if the aggregate amounts required to be withheld by | 16 | | the employer under this Article 7 (other than amounts | 17 | | required to be withheld under Section 709.5) do not exceed | 18 | | $1,000 for the previous calendar year, to pay the taxes | 19 | | required to be shown on each such return no later than the | 20 | | due date for such return. | 21 | | (2) Provide that any payment required to be made under | 22 | | subsection (c)(1) or (c)(2) is deemed to be timely to the | 23 | | extent paid by electronic funds transfer on or before the | 24 | | due date for deposit of federal income taxes withheld from, | 25 | | or federal employment taxes due with respect to, the wages | 26 | | from which the Illinois taxes were withheld. |
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| 1 | | (3) Designate one or more depositories to which payment | 2 | | of taxes required to be withheld under this Article 7 must | 3 | | be paid by some or all employers. | 4 | | (4) Increase the threshold dollar amounts at which | 5 | | employers are required to make semi-weekly payments under | 6 | | subsection (c)(1) or (c)(2). | 7 | | (e) Annual return and payment. Every employer who deducts | 8 | | and withholds or is required to deduct and withhold tax from a | 9 | | person engaged in domestic service employment, as that term is | 10 | | defined in Section 3510 of the Internal Revenue Code, may | 11 | | comply with the requirements of this Section with respect to | 12 | | such employees by filing an annual return and paying the taxes | 13 | | required to be deducted and withheld on or before the 15th day | 14 | | of the fourth month following the close of the employer's | 15 | | taxable year. The Department may allow the employer's return to | 16 | | be submitted with the employer's individual income tax return | 17 | | or to be submitted with a return due from the employer under | 18 | | Section 1400.2 of the Unemployment Insurance Act. | 19 | | (f) Magnetic media and electronic filing. Any W-2 Form | 20 | | that, under the Internal Revenue Code and regulations | 21 | | promulgated thereunder, is required to be submitted to the | 22 | | Internal Revenue Service on magnetic media or electronically | 23 | | must also be submitted to the Department on magnetic media or | 24 | | electronically for Illinois purposes, if required by the | 25 | | Department. | 26 | | (g) For amounts deducted or withheld after December 31, |
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| 1 | | 2009, a taxpayer who makes an election under subsection (f) of | 2 | | Section 5-15 of the Economic Development for a Growing Economy | 3 | | Tax Credit Act for a taxable year shall be allowed a credit | 4 | | against payments due under this Section for amounts withheld | 5 | | during the first calendar year beginning after the end of that | 6 | | taxable year equal to the amount of the credit for the | 7 | | incremental income tax attributable to full-time employees of | 8 | | the taxpayer awarded to the taxpayer by the Department of | 9 | | Commerce and Economic Opportunity under the Economic | 10 | | Development for a Growing Economy Tax Credit Act for the | 11 | | taxable year and credits not previously claimed and allowed to | 12 | | be carried forward under Section 211(4) of this Act as provided | 13 | | in subsection (f) of Section 5-15 of the Economic Development | 14 | | for a Growing Economy Tax Credit Act. The credit or credits may | 15 | | not reduce the taxpayer's obligation for any payment due under | 16 | | this Section to less than zero. If the amount of the credit or | 17 | | credits exceeds the total payments due under this Section with | 18 | | respect to amounts withheld during the calendar year, the | 19 | | excess may be carried forward and applied against the | 20 | | taxpayer's liability under this Section in the succeeding | 21 | | calendar years as allowed to be carried forward under paragraph | 22 | | (4) of Section 211 of this Act. The credit or credits shall be | 23 | | applied to the earliest year for which there is a tax | 24 | | liability. If there are credits from more than one taxable year | 25 | | that are available to offset a liability, the earlier credit | 26 | | shall be applied first. Each employer who deducts and withholds |
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| 1 | | or is required to deduct and withhold tax under this Act and | 2 | | who retains income tax withholdings under subsection (f) of | 3 | | Section 5-15 of the Economic Development for a Growing Economy | 4 | | Tax Credit Act must make a return with respect to such taxes | 5 | | and retained amounts in the form and manner that the | 6 | | Department, by rule, requires and pay to the Department or to a | 7 | | depositary designated by the Department those withheld taxes | 8 | | not retained by the taxpayer. For purposes of this subsection | 9 | | (g), the term taxpayer shall include taxpayer and members of | 10 | | the taxpayer's unitary business group as defined under | 11 | | paragraph (27) of subsection (a) of Section 1501 of this Act. | 12 | | This Section is exempt from the provisions of Section 250 of | 13 | | this Act. No credit awarded under the Economic Development for | 14 | | a Growing Economy Tax Credit Act for agreements entered into on | 15 | | or after January 1, 2015 may be credited against payments due | 16 | | under this Section. | 17 | | (h) An employer may claim a credit against payments due | 18 | | under this Section for amounts withheld during the first | 19 | | calendar year ending after the date on which a tax credit | 20 | | certificate was issued under Section 35 of the Small Business | 21 | | Job Creation Tax Credit Act. The credit shall be equal to the | 22 | | amount shown on the certificate, but may not reduce the | 23 | | taxpayer's obligation for any payment due under this Section to | 24 | | less than zero. If the amount of the credit exceeds the total | 25 | | payments due under this Section with respect to amounts | 26 | | withheld during the calendar year, the excess may be carried |
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| 1 | | forward and applied against the taxpayer's liability under this | 2 | | Section in the 5 succeeding calendar years. The credit shall be | 3 | | applied to the earliest year for which there is a tax | 4 | | liability. If there are credits from more than one calendar | 5 | | year that are available to offset a liability, the earlier | 6 | | credit shall be applied first. This Section is exempt from the | 7 | | provisions of Section 250 of this Act. | 8 | | (Source: P.A. 96-834, eff. 12-14-09; 96-888, eff. 4-13-10; | 9 | | 96-905, eff. 6-4-10; 96-1027, eff. 7-12-10; 97-333, eff. | 10 | | 8-12-11; 97-507, eff. 8-23-11.) | 11 | | Section 5-10. The Economic Development for a Growing | 12 | | Economy Tax Credit Act is amended by changing Sections 5-5, | 13 | | 5-15, 5-20, 5-25, 5-50, 5-65, 5-70 and 5-77 and by adding | 14 | | Section 5-57 as follows:
| 15 | | (35 ILCS 10/5-5)
| 16 | | Sec. 5-5. Definitions. As used in this Act:
| 17 | | "Agreement" means the Agreement between a Taxpayer and the | 18 | | Department under
the provisions of Section 5-50 of this Act.
| 19 | | "Applicant" means a Taxpayer that is operating a business | 20 | | located or that
the Taxpayer plans to locate within the State | 21 | | of Illinois and that is engaged
in interstate or intrastate | 22 | | commerce for the purpose of manufacturing,
processing, | 23 | | assembling, warehousing, or distributing products, conducting
| 24 | | research and development, providing tourism services, or |
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| 1 | | providing services
in interstate commerce, office industries, | 2 | | or agricultural processing, but
excluding retail, retail food, | 3 | | health, or professional services.
"Applicant" does not include | 4 | | a Taxpayer who closes or
substantially reduces an operation at | 5 | | one location in the State and relocates
substantially the same | 6 | | operation to another location in the State. This does
not | 7 | | prohibit a Taxpayer from expanding its operations at another | 8 | | location in
the State, provided that existing operations of a | 9 | | similar nature located within
the State are not closed or | 10 | | substantially reduced. This also does not prohibit
a Taxpayer | 11 | | from moving its operations from one location in the State to | 12 | | another
location in the State for the purpose of expanding the | 13 | | operation provided that
the Department determines that | 14 | | expansion cannot reasonably be accommodated
within the | 15 | | municipality in which the business is located, or in the case | 16 | | of a
business located in an incorporated area of the county, | 17 | | within the county in
which the business is located, after | 18 | | conferring with the chief elected
official of the municipality | 19 | | or county and taking into consideration any
evidence offered by | 20 | | the municipality or county regarding the ability to
accommodate | 21 | | expansion within the municipality or county.
| 22 | | "Committee" means the Illinois Business Investment | 23 | | Committee created under
Section 5-25 of this Act within the | 24 | | Illinois Economic Development Board.
| 25 | | "Credit" means the amount agreed to between the Department | 26 | | and 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 | 2 | | attributable to
New Employees at the Applicant's project and | 3 | | (ii) 10% of the training costs of New Employees; or (2) 100% of | 4 | | the Incremental Income Tax attributable to
New Employees at the | 5 | | Applicant's project. However, if the project is located in an | 6 | | underserved area, then the amount of the Credit may not exceed | 7 | | the lesser of: (1) the sum of (i) 75% of the Incremental Income | 8 | | Tax attributable to
New Employees at the Applicant's project | 9 | | and (ii) 10% of the training costs of New Employees; or (2) | 10 | | 100% of the Incremental Income Tax attributable to
New | 11 | | Employees at the Applicant's project. If an Applicant agrees to | 12 | | hire the required number of New Employees, then the maximum | 13 | | amount of the Credit for that Applicant may be increased by an | 14 | | amount not to exceed 25% of the Incremental Income Tax | 15 | | attributable to retained employees at the Applicant's project; | 16 | | provided that, in order to receive the increase for retained | 17 | | employees, the Applicant must provide the additional evidence | 18 | | required under paragraph (3) of subsection (b) of Section 5-25 .
| 19 | | "Department" means the Department of Commerce and Economic | 20 | | Opportunity.
| 21 | | "Director" means the Director of Commerce and Economic | 22 | | Opportunity.
| 23 | | "Full-time Employee" means an individual who is employed | 24 | | for consideration
for at least 35 hours each week or who | 25 | | renders any other standard of service
generally accepted by | 26 | | industry custom or practice as full-time employment. An |
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| 1 | | individual for whom a W-2 is issued by a Professional Employer | 2 | | Organization (PEO) is a full-time employee if employed in the | 3 | | service of the Applicant for consideration for at least 35 | 4 | | hours each week or who renders any other standard of service | 5 | | generally accepted by industry custom or practice as full-time | 6 | | employment to Applicant.
| 7 | | "Incremental Income Tax" means the total amount withheld | 8 | | during the taxable
year from the compensation of New Employees | 9 | | and, if applicable, retained employees under Article 7 of the | 10 | | Illinois
Income Tax Act arising from employment at a project | 11 | | that is the subject of an
Agreement.
| 12 | | "New Employee" means:
| 13 | | (a) A Full-time Employee first employed by a Taxpayer | 14 | | in the project
that is the subject of an Agreement and who | 15 | | is hired after the Taxpayer
enters into the tax credit | 16 | | Agreement.
| 17 | | (b) The term "New Employee" does not include:
| 18 | | (1) an employee of the Taxpayer who performs a job | 19 | | that was previously
performed by another employee, if | 20 | | that job existed for at least 6
months before hiring | 21 | | the employee;
| 22 | | (2) an employee of the Taxpayer who was previously | 23 | | employed in
Illinois by a Related Member of the | 24 | | Taxpayer and whose employment was
shifted to the | 25 | | Taxpayer after the Taxpayer entered into the tax credit
| 26 | | Agreement; or
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| 1 | | (3) a child, grandchild, parent, or spouse, other | 2 | | than a spouse who
is legally separated from the | 3 | | individual, of any individual who has a direct
or an | 4 | | indirect ownership interest of at least 5% in the | 5 | | profits, capital, or
value of the Taxpayer.
| 6 | | (c) Notwithstanding paragraph (1) of subsection (b), | 7 | | an employee may be
considered a New Employee under the | 8 | | Agreement if the employee performs a job
that was | 9 | | previously performed by an employee who was:
| 10 | | (1) treated under the Agreement as a New Employee; | 11 | | and
| 12 | | (2) promoted by the Taxpayer to another job.
| 13 | | (d) Notwithstanding subsection (a), the Department may | 14 | | award Credit to an
Applicant with respect to an employee | 15 | | hired prior to the date of the Agreement
if:
| 16 | | (1) the Applicant is in receipt of a letter from | 17 | | the Department stating
an
intent to enter into a credit | 18 | | Agreement;
| 19 | | (2) the letter described in paragraph (1) is issued | 20 | | by the
Department not later than 15 days after the | 21 | | effective date of this Act; and
| 22 | | (3) the employee was hired after the date the | 23 | | letter described in
paragraph (1) was issued.
| 24 | | "Noncompliance Date" means, in the case of a Taxpayer that | 25 | | is not complying
with the requirements of the Agreement or the | 26 | | provisions of this Act, the day
following the last date upon |
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| 1 | | which the Taxpayer was in compliance with the
requirements of | 2 | | the Agreement and the provisions of this Act, as determined
by | 3 | | the Director, pursuant to Section 5-65.
| 4 | | "Pass Through Entity" means an entity that is exempt from | 5 | | the tax under
subsection (b) or (c) of Section 205 of the | 6 | | Illinois Income Tax Act.
| 7 | | "Professional Employer Organization" (PEO) means an | 8 | | employee leasing company, as defined in Section 206.1(A)(2) of | 9 | | the Illinois Unemployment Insurance Act.
| 10 | | "Related Member" means a person that, with respect to the | 11 | | Taxpayer during
any portion of the taxable year, is any one of | 12 | | the following:
| 13 | | (1) An individual stockholder, if the stockholder and | 14 | | the members of the
stockholder's family (as defined in | 15 | | Section 318 of the Internal Revenue Code)
own directly, | 16 | | indirectly, beneficially, or constructively, in the | 17 | | aggregate,
at least 50% of the value of the Taxpayer's | 18 | | outstanding stock.
| 19 | | (2) A partnership, estate, or trust and any partner or | 20 | | beneficiary,
if the partnership, estate, or trust, and its | 21 | | partners or beneficiaries own
directly, indirectly, | 22 | | beneficially, or constructively, in the aggregate, at
| 23 | | least 50% of the profits, capital, stock, or value of the
| 24 | | Taxpayer.
| 25 | | (3) A corporation, and any party related to the | 26 | | corporation in a manner
that would require an attribution |
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| 1 | | of stock from the corporation to the
party or from the | 2 | | party to the corporation under the attribution rules
of | 3 | | Section 318 of the Internal Revenue Code, if the Taxpayer | 4 | | owns
directly, indirectly, beneficially, or constructively | 5 | | at least
50% of the value of the corporation's outstanding | 6 | | stock.
| 7 | | (4) A corporation and any party related to that | 8 | | corporation in a manner
that would require an attribution | 9 | | of stock from the corporation to the party or
from the | 10 | | party to the corporation under the attribution rules of | 11 | | Section 318 of
the Internal Revenue Code, if the | 12 | | corporation and all such related parties own
in the | 13 | | aggregate at least 50% of the profits, capital, stock, or | 14 | | value of the
Taxpayer.
| 15 | | (5) A person to or from whom there is attribution of | 16 | | stock ownership
in accordance with Section 1563(e) of the | 17 | | Internal Revenue Code, except,
for purposes of determining | 18 | | whether a person is a Related Member under
this paragraph, | 19 | | 20% shall be substituted for 5% wherever 5% appears in
| 20 | | Section 1563(e) of the Internal Revenue Code.
| 21 | | "Taxpayer" means an individual, corporation, partnership, | 22 | | or other entity
that has any Illinois Income Tax liability.
| 23 | | "Underserved area" means a geographic area that meets one | 24 | | or more of the following conditions: | 25 | | (1) the area has a poverty rate of at least 20% | 26 | | according to the latest federal decennial census; |
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| 1 | | (2) 75% or more of the children in the area participate | 2 | | in the federal free lunch program according to reported | 3 | | statistics from the State Board of Education; | 4 | | (3) at least 20% of the households in the area receive | 5 | | assistance under the Supplemental Nutrition Assistance | 6 | | Program (SNAP); or | 7 | | (4) the area has
an average unemployment rate, as | 8 | | determined by the Illinois Department of
Employment | 9 | | Security, that is more than 120% of the national | 10 | | unemployment average, as
determined by the U.S. Department | 11 | | of Labor, for a period of at least 2 consecutive calendar | 12 | | years preceding the date of the application. | 13 | | (Source: P.A. 94-793, eff. 5-19-06; 95-375, eff. 8-23-07.)
| 14 | | (35 ILCS 10/5-15) | 15 | | Sec. 5-15. Tax Credit Awards. Subject to the conditions set | 16 | | forth in this
Act, a Taxpayer is
entitled to a Credit against | 17 | | or, as described in subsection (g) of this Section, a payment | 18 | | towards taxes imposed pursuant to subsections (a) and (b)
of | 19 | | Section 201 of the Illinois
Income Tax Act that may be imposed | 20 | | on the Taxpayer for a taxable year beginning
on or
after | 21 | | January 1, 1999,
if the Taxpayer is awarded a Credit by the | 22 | | Department under this Act for that
taxable year. | 23 | | (a) The Department shall make Credit awards under this Act | 24 | | to foster job
creation and retention in Illinois. | 25 | | (b) A person that proposes a project to create new jobs in |
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| 1 | | Illinois must
enter into an Agreement with the
Department for | 2 | | the Credit under this Act. | 3 | | (c) The Credit shall be claimed for the taxable years | 4 | | specified in the
Agreement. | 5 | | (d) The Credit shall not exceed the Incremental Income Tax | 6 | | attributable to
the project that is the subject of the | 7 | | Agreement. | 8 | | (e) Nothing herein shall prohibit a Tax Credit Award to an | 9 | | Applicant that uses a PEO if all other award criteria are | 10 | | satisfied.
| 11 | | (f) In lieu of the Credit allowed under this Act against | 12 | | the taxes imposed pursuant to subsections (a) and (b) of | 13 | | Section 201 of the Illinois Income Tax Act for any taxable year | 14 | | ending on or after December 31, 2009, for Taxpayers that | 15 | | entered into Agreements prior to January 1, 2015 and otherwise | 16 | | meet the criteria set forth in this subsection (f), the | 17 | | Taxpayer may elect to claim the Credit against its obligation | 18 | | to pay over withholding under Section 704A of the Illinois | 19 | | Income Tax Act. | 20 | | (1) The election under this subsection (f) may be made | 21 | | only by a Taxpayer that (i) is primarily engaged in one of | 22 | | the following business activities: water purification and | 23 | | treatment, motor vehicle metal stamping, automobile | 24 | | manufacturing, automobile and light duty motor vehicle | 25 | | manufacturing, motor vehicle manufacturing, light truck | 26 | | and utility vehicle manufacturing, heavy duty truck |
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| 1 | | manufacturing, motor vehicle body manufacturing, cable | 2 | | television infrastructure design or manufacturing, or | 3 | | wireless telecommunication or computing terminal device | 4 | | design or manufacturing for use on public networks and (ii) | 5 | | meets the following criteria: | 6 | | (A) the Taxpayer (i) had an Illinois net loss or an | 7 | | Illinois net loss deduction under Section 207 of the | 8 | | Illinois Income Tax Act for the taxable year in which | 9 | | the Credit is awarded, (ii) employed a minimum of 1,000 | 10 | | full-time employees in this State during the taxable | 11 | | year in which the Credit is awarded, (iii) has an | 12 | | Agreement under this Act on December 14, 2009 (the | 13 | | effective date of Public Act 96-834), and (iv) is in | 14 | | compliance with all provisions of that Agreement; | 15 | | (B) the Taxpayer (i) had an Illinois net loss or an | 16 | | Illinois net loss deduction under Section 207 of the | 17 | | Illinois Income Tax Act for the taxable year in which | 18 | | the Credit is awarded, (ii) employed a minimum of 1,000 | 19 | | full-time employees in this State during the taxable | 20 | | year in which the Credit is awarded, and (iii) has | 21 | | applied for an Agreement within 365 days after December | 22 | | 14, 2009 (the effective date of Public Act 96-834); | 23 | | (C) the Taxpayer (i) had an Illinois net operating | 24 | | loss carryforward under Section 207 of the Illinois | 25 | | Income Tax Act in a taxable year ending during calendar | 26 | | year 2008, (ii) has applied for an Agreement within 150 |
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| 1 | | days after the effective date of this amendatory Act of | 2 | | the 96th General Assembly, (iii) creates at least 400 | 3 | | new jobs in Illinois, (iv) retains at least 2,000 jobs | 4 | | in Illinois that would have been at risk of relocation | 5 | | out of Illinois over a 10-year period, and (v) makes a | 6 | | capital investment of at least $75,000,000; | 7 | | (D) the Taxpayer (i) had an Illinois net operating | 8 | | loss carryforward under Section 207 of the Illinois | 9 | | Income Tax Act in a taxable year ending during calendar | 10 | | year 2009, (ii) has applied for an Agreement within 150 | 11 | | days after the effective date of this amendatory Act of | 12 | | the 96th General Assembly, (iii) creates at least 150 | 13 | | new jobs, (iv) retains at least 1,000 jobs in Illinois | 14 | | that would have been at risk of relocation out of | 15 | | Illinois over a 10-year period, and (v) makes a capital | 16 | | investment of at least $57,000,000; or | 17 | | (E) the Taxpayer (i) employed at least 2,500 | 18 | | full-time employees in the State during the year in | 19 | | which the Credit is awarded, (ii) commits to make at | 20 | | least $500,000,000 in combined capital improvements | 21 | | and project costs under the Agreement, (iii) applies | 22 | | for an Agreement between January 1, 2011 and June 30, | 23 | | 2011, (iv) executes an Agreement for the Credit during | 24 | | calendar year 2011, and (v) was incorporated no more | 25 | | than 5 years before the filing of an application for an | 26 | | Agreement. |
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| 1 | | (1.5) 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 between January 1, 2011 and | 4 | | June 30, 2011, if the Taxpayer (i) is primarily engaged in | 5 | | the manufacture of inner tubes or tires, or both, from | 6 | | natural and synthetic rubber, (ii) employs a minimum of | 7 | | 2,400 full-time employees in Illinois at the time of | 8 | | application, (iii) creates at least 350 full-time jobs and | 9 | | retains at least 250 full-time jobs in Illinois that would | 10 | | have been at risk of being created or retained outside of | 11 | | Illinois, and (iv) makes a capital investment of at least | 12 | | $200,000,000 at the project location. | 13 | | (1.6) The election under this subsection (f) may also | 14 | | be made by a Taxpayer for any Credit awarded pursuant to an | 15 | | agreement that was executed within 150 days after the | 16 | | effective date of this amendatory Act of the 97th General | 17 | | Assembly, if the Taxpayer (i) is primarily engaged in the | 18 | | operation of a discount department store, (ii) maintains | 19 | | its corporate headquarters in Illinois, (iii) employs a | 20 | | minimum of 4,250 full-time employees at its corporate | 21 | | headquarters in Illinois at the time of application, (iv) | 22 | | retains at least 4,250 full-time jobs in Illinois that | 23 | | would have been at risk of being relocated outside of | 24 | | Illinois, (v) had a minimum of $40,000,000,000 in total | 25 | | revenue in 2010, and (vi) makes a capital investment of at | 26 | | least $300,000,000 at the project location. |
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| 1 | | (1.7) Notwithstanding any other provision of law, the | 2 | | election under this subsection (f) may also be made by a | 3 | | Taxpayer for any Credit awarded pursuant to an agreement | 4 | | that was executed or applied for on or after July 1, 2011 | 5 | | and on or before March 31, 2012, if the Taxpayer is | 6 | | primarily engaged in the manufacture of original and | 7 | | aftermarket filtration parts and products for automobiles, | 8 | | motor vehicles, light duty motor vehicles, light trucks and | 9 | | utility vehicles, and heavy duty trucks, (ii) employs a | 10 | | minimum of 1,000 full-time employees in Illinois at the | 11 | | time of application, (iii) creates at least 250 full-time | 12 | | jobs in Illinois, (iv) relocates its corporate | 13 | | headquarters to Illinois from another state, and (v) makes | 14 | | a capital investment of at least $4,000,000 at the project | 15 | | location. | 16 | | (2) An election under this subsection shall allow the | 17 | | credit to be taken against payments otherwise due under | 18 | | Section 704A of the Illinois Income Tax Act during the | 19 | | first calendar year beginning after the end of the taxable | 20 | | year in which the credit is awarded under this Act. | 21 | | (3) The election shall be made in the form and manner | 22 | | required by the Illinois Department of Revenue and, once | 23 | | made, shall be irrevocable. | 24 | | (4) If a Taxpayer who meets the requirements of | 25 | | subparagraph (A) of paragraph (1) of this subsection (f) | 26 | | elects to claim the Credit against its withholdings as |
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| 1 | | provided in this subsection (f), then, on and after the | 2 | | date of the election, the terms of the Agreement between | 3 | | the Taxpayer and the Department may not be further amended | 4 | | during the term of the Agreement. | 5 | | (g) A pass-through entity that has been awarded a credit | 6 | | under this Act, its shareholders, or its partners may treat | 7 | | some or all of the credit awarded pursuant to this Act as a tax | 8 | | payment for purposes of the Illinois Income Tax Act. The term | 9 | | "tax payment" means a payment as described in Article 6 or | 10 | | Article 8 of the Illinois Income Tax Act or a composite payment | 11 | | made by a pass-through entity on behalf of any of its | 12 | | shareholders or partners to satisfy such shareholders' or | 13 | | partners' taxes imposed pursuant to subsections (a) and (b) of | 14 | | Section 201 of the Illinois Income Tax Act. In no event shall | 15 | | the amount of the award credited pursuant to this Act exceed | 16 | | the Illinois income tax liability of the pass-through entity or | 17 | | its shareholders or partners for the taxable year. | 18 | | (Source: P.A. 96-834, eff. 12-14-09; 96-836, eff. 12-16-09; | 19 | | 96-905, eff. 6-4-10; 96-1000, eff. 7-2-10; 96-1534, eff. | 20 | | 3-4-11; 97-2, eff. 5-6-11; 97-636, eff. 6-1-12 .)
| 21 | | (35 ILCS 10/5-20)
| 22 | | Sec. 5-20. Application for a project to create and retain | 23 | | new jobs.
| 24 | | (a) Any Taxpayer proposing a project located or planned to | 25 | | be located in
Illinois may request consideration
for |
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| 1 | | designation of its project, by formal written letter of request | 2 | | or by
formal application to the Department,
in which the | 3 | | Applicant states its intent to make at least a specified level | 4 | | of
investment and
intends to hire or retain a
specified number | 5 | | of full-time employees at a designated location in Illinois.
As
| 6 | | circumstances require, the
Department may require a formal | 7 | | application from an Applicant and a formal
letter of request | 8 | | for
assistance.
| 9 | | (b) In order to qualify for Credits under this Act, an | 10 | | Applicant's project
must:
| 11 | | (1) if the Applicant has more than 100 employees, | 12 | | involve an investment of at least $2,500,000 $5,000,000 in | 13 | | capital improvements
to be placed in service and to employ | 14 | | at least 25 New Employees within the
State as a direct | 15 | | result of the project; if the Applicant has 100 or fewer | 16 | | employees, then there is no capital investment | 17 | | requirement; and
| 18 | | (1.5) if the Applicant has more than 100 employees, | 19 | | employ a number of new employees in the State equal to the | 20 | | lesser of (A) 10% of the number of full-time employees | 21 | | employed by the applicant world-wide on the date the | 22 | | application is filed with the Department or (B) 50 New | 23 | | Employees; and, if the Applicant has 100 or fewer | 24 | | employees, employ a number of new employees in the State | 25 | | equal to the lesser of (A) 5% of the number of full-time | 26 | | employees employed by the applicant world-wide on the date |
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| 1 | | the application is filed with the Department or (B) 50 New | 2 | | Employees;
| 3 | | (2) (blank); involve an investment of at least an | 4 | | amount (to be expressly specified
by the Department and the | 5 | | Committee) in capital improvements to be placed in
service | 6 | | and will employ at least an amount (to be expressly | 7 | | specified by the
Department and the Committee) of New | 8 | | Employees
within the State, provided that the Department | 9 | | and the Committee have
determined that the project will | 10 | | provide a substantial economic benefit to the
State; or | 11 | | (3) (blank). if the applicant has 100 or fewer | 12 | | employees, involve an investment of at least $1,000,000 in | 13 | | capital improvements to be placed in service and to employ | 14 | | at least 5 New Employees within the State as a direct | 15 | | result of the project.
| 16 | | (c) After receipt of an application, the Department may | 17 | | enter into an
Agreement with the Applicant if the
application | 18 | | is accepted in accordance with Section 5-25.
| 19 | | (Source: P.A. 93-882, eff. 1-1-05.)
| 20 | | (35 ILCS 10/5-25)
| 21 | | Sec. 5-25. Review of Application.
| 22 | | (a) In addition to those duties granted under the Illinois | 23 | | Economic
Development Board Act, the Illinois
Economic | 24 | | Development Board shall form a Business Investment Committee | 25 | | for the
purpose of making
recommendations for applications. At |
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| 1 | | the request of the Board, the Director of
Commerce and
Economic | 2 | | Opportunity or his or her designee, the Director of the
| 3 | | Governor's Office of Management and Budget or
his or her | 4 | | designee, the
Director of Revenue or his or her designee, the | 5 | | Director of Employment
Security or his or her designee,
and an | 6 | | elected official of the affected locality, such as the chair of | 7 | | the
county board or the mayor, may
serve as members of the | 8 | | Committee to assist with its analysis and
deliberations.
| 9 | | (b) At the Department's request, the Committee
shall
| 10 | | convene, make inquiries,
and conduct studies in the manner and | 11 | | by the methods as it deems desirable,
review information with
| 12 | | respect to Applicants, and make recommendations for
projects to | 13 | | benefit the State. In making its recommendation that
an | 14 | | Applicant's application for Credit should or should not be | 15 | | accepted, which
shall occur
within a reasonable time frame
as | 16 | | determined by the nature of the application, the Committee | 17 | | shall determine
that
all the following conditions
exist:
| 18 | | (1) The Applicant's project intends, as required by | 19 | | subsection (b) of
Section 5-20 to make
the required | 20 | | investment in the State and intends to hire the required
| 21 | | number of
New Employees in Illinois as a result of that | 22 | | project.
| 23 | | (2) The Applicant's project is economically sound and | 24 | | will benefit the
people of the State of
Illinois by | 25 | | increasing opportunities for employment and strengthen the | 26 | | economy
of Illinois.
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| 1 | | (3) That, if not for the Credit, the project would not | 2 | | occur in Illinois,
which may be demonstrated
by evidence | 3 | | that receipt of the Credit is essential to the Applicant's | 4 | | decision to create new jobs in the State, such as the | 5 | | magnitude of the cost differential between Illinois and a | 6 | | competing State; in addition, if the Applicant is seeking | 7 | | an increase in the maximum amount of the Credit for | 8 | | retained employees, the Applicant must provide any means | 9 | | including, but not limited to, evidence the Applicant has
| 10 | | multi-state
location options and
could reasonably and | 11 | | efficiently locate outside of the State , or demonstrate | 12 | | demonstration
that at least one other
state is being | 13 | | considered for the project , or evidence the receipt of the
| 14 | | Credit is a major factor in
the Applicant's decision and | 15 | | that without the Credit,
the Applicant likely would not
| 16 | | create new jobs in Illinois, or demonstration that | 17 | | receiving the Credit is
essential to the Applicant's
| 18 | | decision to create or retain new jobs in the State .
| 19 | | (4) A cost differential is identified, using best | 20 | | available
data, in the projected costs for the Applicant's | 21 | | project compared to
the costs in the competing state, | 22 | | including the impact of the competing
state's incentive | 23 | | programs. The competing state's incentive
programs shall | 24 | | include state, local, private, and federal funds
| 25 | | available.
| 26 | | (5) The political subdivisions affected by the project |
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| 1 | | have
committed local incentives with respect to the | 2 | | project, considering local
ability to assist.
| 3 | | (6) Awarding the Credit will result in an overall | 4 | | positive fiscal
impact to the State, as certified by the | 5 | | Committee using
the best
available data.
| 6 | | (7) The Credit is not prohibited by Section 5-35 of | 7 | | this Act.
| 8 | | (Source: P.A. 94-793, eff. 5-19-06.)
| 9 | | (35 ILCS 10/5-50)
| 10 | | Sec. 5-50. Contents of Agreements with Applicants. The | 11 | | Department shall
enter into an Agreement with an
Applicant that | 12 | | is awarded a Credit under this Act. The Agreement
must include | 13 | | all of the following:
| 14 | | (1) A detailed description of the project that is the | 15 | | subject of the
Agreement, including the location and amount | 16 | | of the investment and jobs created
or retained.
| 17 | | (2) The duration of the Credit and the first taxable | 18 | | year for which
the Credit may be claimed.
| 19 | | (3) The Credit amount that will be allowed for each | 20 | | taxable year.
| 21 | | (4) A requirement that the Taxpayer shall maintain | 22 | | operations at the
project location that shall be stated as | 23 | | a minimum number of years not to
exceed 10.
| 24 | | (5) A specific method for determining the number of New | 25 | | Employees
employed during a taxable year.
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| 1 | | (6) A requirement that the Taxpayer shall annually | 2 | | report to the
Department the number of New Employees,
the | 3 | | Incremental Income Tax
withheld in connection with the New | 4 | | Employees, and any other
information the Director needs to | 5 | | perform the Director's duties under
this Act.
| 6 | | (7) A requirement that the Director is authorized to | 7 | | verify with the
appropriate State agencies the amounts | 8 | | reported under paragraph
(6), and after doing so shall | 9 | | issue a certificate to the Taxpayer
stating that the | 10 | | amounts have been verified.
| 11 | | (8) A requirement that the Taxpayer shall provide | 12 | | written
notification to the Director not more than 30
days | 13 | | after the Taxpayer makes or receives a proposal that would
| 14 | | transfer the Taxpayer's State tax liability obligations to | 15 | | a
successor Taxpayer.
| 16 | | (9) A detailed description of the number of New | 17 | | Employees to be
hired, and the occupation and
payroll of | 18 | | the full-time jobs to be created or retained as a result of | 19 | | the
project.
| 20 | | (10) The minimum investment the business enterprise | 21 | | will make in
capital improvements, the time period
for | 22 | | placing the property in service, and the designated | 23 | | location in Illinois
for the investment.
| 24 | | (11) A requirement that the Taxpayer shall provide | 25 | | written
notification to the Director and
the Committee not | 26 | | more than 30 days after the Taxpayer determines
that the |
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| 1 | | minimum
job creation or retention, employment payroll, or | 2 | | investment no longer is being
or will be achieved or
| 3 | | maintained as set forth in the terms and conditions of the
| 4 | | Agreement.
| 5 | | (12) A provision that, if the total number of New | 6 | | Employees falls
below a specified level, the
allowance of | 7 | | Credit shall be suspended until the number of New
Employees | 8 | | equals or exceeds
the Agreement amount.
| 9 | | (13) A detailed description of the items for which the | 10 | | costs incurred by
the Taxpayer will be included
in the | 11 | | limitation on the Credit provided in Section 5-30.
| 12 | | (13.5) A provision that, if the Taxpayer never meets | 13 | | either the investment or job creation and retention | 14 | | requirements specified in the Agreement during the entire | 15 | | 5-year period beginning on the first day of the first | 16 | | taxable year in which the Agreement is executed and ending | 17 | | on the last day of the fifth taxable year after the | 18 | | Agreement is executed, then the Agreement is automatically | 19 | | terminated on the last day of the fifth taxable year after | 20 | | the Agreement is executed and the Taxpayer is not entitled | 21 | | to the award of any credits for any of that 5-year period. | 22 | | (13.7) A provision specifying that, if the Taxpayer | 23 | | ceases principal operations with the intent to shut down | 24 | | the project in the State permanently, then the Taxpayer | 25 | | shall be subject to the provisions of the Keep Illinois | 26 | | Businesses Act, and the recaptured Credit amounts shall be |
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| 1 | | reallocated to the local workforce investment area in which | 2 | | the project was located.
| 3 | | (14) Any other performance conditions or contract | 4 | | provisions as the
Department determines are
appropriate.
| 5 | | The Department shall post on its website the terms of each | 6 | | Agreement entered into under this Act on or after the effective | 7 | | date of this amendatory Act of the 97th General Assembly. Such | 8 | | information shall be posted within 10 days after entering into | 9 | | the Agreement and must include the following: | 10 | | (1) the name of the recipient business; | 11 | | (2) the location of the project; | 12 | | (3) the estimated value of the credit; | 13 | | (4) the number of new jobs and, if applicable, retained | 14 | | jobs pledged as a result of the project; and | 15 | | (5) whether or not the project is located in an | 16 | | underserved area. | 17 | | (Source: P.A. 97-2, eff. 5-6-11; 97-749, eff. 7-6-12.)
| 18 | | (35 ILCS 10/5-57 new) | 19 | | Sec. 5-57. Supplier diversity goals; reports. Each | 20 | | taxpayer claiming a credit under this Act shall, no later than | 21 | | April 15 of each taxable year for which the taxpayer claims a | 22 | | credit under this Act, submit to the Department of Commerce and | 23 | | Economic Opportunity an annual report containing the | 24 | | information described in subsections (b), (c), (d), and (e) of | 25 | | Section 5-117 of the Public Utilities Act. Those reports shall |
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| 1 | | be submitted in the form and manner required by the Department | 2 | | of Commerce and Economic Opportunity.
| 3 | | (35 ILCS 10/5-65)
| 4 | | Sec. 5-65. Noncompliance; notice; assessment. If the | 5 | | Director determines
that a Taxpayer who
has received a Credit | 6 | | under this Act is not complying with the
requirements of the | 7 | | Agreement or all of the provisions of
this Act, the Director | 8 | | shall provide notice to the Taxpayer of the alleged
| 9 | | noncompliance, and allow the
Taxpayer a hearing under the | 10 | | provisions of the Illinois Administrative
Procedure Act. If, | 11 | | after
such notice and any hearing, the Director determines that | 12 | | a
noncompliance exists, the Director shall issue to the | 13 | | Department of Revenue
notice to that effect, stating the | 14 | | Noncompliance Date. If the Taxpayer ceases operations at a | 15 | | project location that is the subject of an Agreement with the | 16 | | intent to terminate operations in the State, then the | 17 | | Department and the Department of Revenue shall recapture the | 18 | | amount of economic development assistance received under the | 19 | | Agreement in accordance with the Keep Illinois Businesses Act. | 20 | | Notwithstanding the provisions of the Keep Illinois Businesses | 21 | | Act, the Department shall, subject to appropriation, | 22 | | reallocate the recaptured amounts that are subject to the | 23 | | Agreement to the local workforce investment area in which the | 24 | | project was located for the purposes of workforce development, | 25 | | expanded opportunities for unemployed persons, and expanded |
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| 1 | | opportunities for women and minorities in the workforce.
| 2 | | (Source: P.A. 91-476, eff. 8-11-99.)
| 3 | | (35 ILCS 10/5-70)
| 4 | | Sec. 5-70. Annual report. On or before July 1 each year, | 5 | | the Committee
shall submit a report to the Department on the | 6 | | tax credit program under this
Act to the Governor and the | 7 | | General Assembly. The report shall include
information on the | 8 | | number of
Agreements that were entered into under this Act | 9 | | during the
preceding calendar year, a description of the | 10 | | project that is the
subject of each Agreement, an update on the | 11 | | status of projects under
Agreements entered into before the | 12 | | preceding calendar year, and the
sum of the Credits awarded | 13 | | under this Act. A copy of the report shall
be delivered to the | 14 | | Governor and to each
member of the General Assembly.
| 15 | | The report must include, for each Agreement: | 16 | | (1) the original estimates of the value of the Credit | 17 | | and the number of new jobs to be created and, if | 18 | | applicable, the number of retained jobs; | 19 | | (2) any relevant modifications to existing Agreements; | 20 | | (3) a statement of the progress made by each Taxpayer | 21 | | in meeting the terms of the original Agreement; | 22 | | (4) a statement of wages paid to New Employees and, if | 23 | | applicable, retained employees in the State; | 24 | | (5) any information reported under Section 5-57 of this | 25 | | Act; and |
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| 1 | | (6) a copy of the original Agreement. | 2 | | (Source: P.A. 91-476, eff. 8-11-99.)
| 3 | | (35 ILCS 10/5-77) | 4 | | Sec. 5-77. Sunset of new Agreements. The Department shall | 5 | | not enter into any new Agreements under the provisions of | 6 | | Section 5-50 of this Act after June 30, 2022 April 30, 2017 .
| 7 | | (Source: P.A. 99-925, eff. 1-20-17.)".
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