SB2023eng 100TH GENERAL ASSEMBLY

SB2023 Engrossed LRB100 09207 HLH 19363 b

AN ACT concerning State government.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Enterprise Zone Act is amended by changing Sections 4, 4.1, 5.1, 5.2, 5.3, and 8.1 as follows:

(20 ILCS 655/4) (from Ch. 67 1/2, par. 604)

Sec. 4. Qualifications for Enterprise Zones.

(1) An area is qualified to become an enterprise zone which:

(a) is a contiguous area, provided that a zone area may exclude wholly surrounded territory within its boundaries;

(b) comprises a minimum of one-half square mile and not more than 12 square miles, or 15 square miles if the zone is located within the jurisdiction of 4 or more counties or municipalities, in total area, exclusive of lakes and waterways; however, in such cases where the enterprise zone is a joint effort of three or more units of government, or two or more units of government if situated in a township which is divided by a municipality of 1,000,000 or more inhabitants, and where the certification has been in effect at least one year, the total area shall comprise a minimum of one-half square mile and not more than thirteen square miles in total area exclusive of lakes and waterways;

(c) (blank);

(d) (blank);

(e) is (1) entirely within a municipality or (2) entirely within the unincorporated areas of a county, except where reasonable need is established for such zone to cover portions of more than one municipality or county or (3) both comprises (i) all or part of a municipality and (ii) an unincorporated area of a county; and

(f) meets 3 or more of the following criteria:

(1) all or part of the local labor market area has had an annual average unemployment rate of at least 120% of the State's annual average unemployment rate for the most recent calendar year or the most recent fiscal year as reported by the Department of Employment Security;

(2) designation will result in the development of substantial employment opportunities by creating or retaining a minimum aggregate of 1,000 full-time equivalent jobs due to an aggregate investment of $100,000,000 or more, and will help alleviate the effects of poverty and unemployment within the local labor market area;

(3) all or part of the local labor market area has a poverty rate of at least 20% according to the latest federal decennial census, 50% or more of children in the local labor market area participate in the federal free lunch program according to reported statistics from the State Board of Education, or 20% or more households in the local labor market area receive food stamps according to the latest federal decennial census;

(4) an abandoned coal mine or a brownfield (as defined in Section 58.2 of the Environmental Protection Act) is located in the proposed zone area, or all or a portion of the proposed zone was declared a federal disaster area in the 3 years preceding the date of application;

(5) the local labor market area contains a presence of large employers that have downsized over the years, the labor market area has experienced plant closures in the 5 years prior to the date of application affecting more than 50 workers, or the local labor market area has experienced State or federal facility closures in the 5 years prior to the date of application affecting more than 50 workers;

(6) based on data from Multiple Listing Service information or other suitable sources, the local labor market area contains a high floor vacancy rate of industrial or commercial properties, vacant or demolished commercial and industrial structures are prevalent in the local labor market area, or industrial structures in the local labor market area are not used because of age, deterioration, relocation of the former occupants, or cessation of operation;

(7) the applicant demonstrates a substantial plan for using the designation to improve the State and local government tax base, including income, sales, and property taxes, including a plan for disposal of publicly-owned real property by the methods described in Section 10 of this Act;

(8) significant public infrastructure is present in the local labor market area in addition to a plan for infrastructure development and improvement;

(9) high schools or community colleges located within the local labor market area are engaged in ACT Work Keys, Manufacturing Skills Standard Certification, or other industry-based credentials that prepare students for careers; or

(10) the change in equalized assessed valuation of industrial and/or commercial properties in the 5 years prior to the date of application is equal to or less than 50% of the State average change in equalized assessed valuation for industrial and/or commercial properties, as applicable, for the same period of time.

As provided in Section 10-5.3 of the River Edge Redevelopment Zone Act, upon the expiration of the term of each River Edge Redevelopment Zone in existence on the effective date of this amendatory Act of the 97th General Assembly, that River Edge Redevelopment Zone will become available for its previous designee or a new applicant to compete for designation as an enterprise zone. No preference for designation will be given to the previous designee of the zone.

(2) Any criteria established by the Department or by law which utilize the rate of unemployment for a particular area shall provide that all persons who are not presently employed and have exhausted all unemployment benefits shall be considered unemployed, whether or not such persons are actively seeking employment.

(Source: P.A. 97-905, eff. 8-7-12.)

(20 ILCS 655/4.1)

Sec. 4.1. Department recommendations.

(a) For all applications that qualify under Section 4 of this Act, the Department shall issue recommendations by assigning a score to each applicant. The scores will be determined by the Department, based on the extent to which an applicant meets the criteria points under subsection (f) of Section 4 of this Act. Scores will be determined using the following scoring system:

(1) Up to 50 points for the extent to which the applicant meets or exceeds the criteria in item (1) of subsection (f) of Section 4 of this Act, with points awarded according to the severity of the unemployment.

(2) Up to 50 points for the extent to which the applicant meets or exceeds the criteria in item (2) of subsection (f) of Section 4 of this Act, with points awarded in accordance with the number of jobs created and the aggregate amount of investment promised. The Department may award partial points on a pro-rata basis under this paragraph (2) if the applicant demonstrates specific job creation and investment below the thresholds set forth in item (2) of subsection (f) of Section 4.

(3) Up to 40 points for the extent to which the applicant meets or exceeds the criteria in item (3) of subsection (f) of Section 4 of this Act, with points awarded in accordance with the severity of the unemployment rate according to the latest federal decennial census.

(4) Up to 30 points for the extent to which the applicant meets or exceeds the criteria in item (4) of subsection (f) of Section 4 of this Act, with points awarded in accordance with the severity of the environmental impact of the abandoned coal mine, brownfield, or federal disaster area.

(5) Up to 50 points for the extent to which the applicant meets or exceeds the criteria in item (5) of subsection (f) of Section 4 of this Act, with points awarded in accordance with the severity of the applicable facility closures or downsizing.

(6) Up to 40 points for the extent to which the applicant meets or exceeds the criteria in item (6) of subsection (f) of Section 4 of this Act, with points awarded in accordance with the severity and extent of the high floor vacancy or deterioration.

(7) Up to 30 points for the extent to which the applicant meets or exceeds the criteria in item (7) of subsection (f) of Section 4 of this Act, with points awarded in accordance with the extent to which the application addresses a plan to improve the State and local government tax base, including a plan for disposal of publicly-owned real property.

(8) Up to 50 points for the extent to which the applicant meets or exceeds the criteria in item (8) of subsection (f) of Section 4 of this Act, with points awarded in accordance with the existence of significant public infrastructure.

(9) Up to 40 points for the extent to which the applicant meets or exceeds the criteria in item (9) of subsection (f) of Section 4 of this Act, with points awarded in accordance with the extent to which educational programs exist for career preparation.

(10) Up to 40 points for the extent to which the applicant meets or exceeds the criteria in item (10) of subsection (f) of Section 4 of this Act, with points awarded according to the severity of the change in equalized assessed valuation.

(11) In awarding points under paragraphs (1) through (10), the Department may adjust the scoring for applicants that are located entirely within a county with a population of less than 300,000 if the Department finds that the designation will help to alleviate the effects of poverty and unemployment within the proposed enterprise zone.

(b) After assigning a score for each of the individual criteria using the point system as described in subsection (a), the Department shall then take the sum of the scores for each applicant and assign a final score. The Department shall then submit this information to the Board, as required in subsection (c) of Section 5.2, as its recommendation.

(Source: P.A. 97-905, eff. 8-7-12; 98-109, eff. 7-25-13.)

(20 ILCS 655/5.1) (from Ch. 67 1/2, par. 606)

Sec. 5.1. Application to Department.

(a) A county or municipality which has adopted an ordinance designating an area as an enterprise zone shall make written application to the Department to have such proposed enterprise zone certified by the Department as an Enterprise Zone. The application shall include:

(i) a certified copy of the ordinance designating the proposed zone;

(ii) a map of the proposed enterprise zone, showing existing streets and highways;

(iii) an analysis, and any appropriate supporting documents and statistics, demonstrating that the proposed zone area is qualified in accordance with Section 4;

(iv) a statement detailing any tax, grant, and other financial incentives or benefits, and any programs, to be provided by the municipality or county to business enterprises within the zone, other than those provided in the designating ordinance, which are not to be provided throughout the municipality or county;

(v) a statement setting forth the economic development and planning objectives for the zone;

(vi) a statement describing the functions, programs, and services to be performed by designated zone organizations within the zone;

(vii) an estimate of the economic impact of the zone, considering all of the tax incentives, financial benefits and programs contemplated, upon the revenues of the municipality or county;

(viii) a transcript of all public hearings on the zone;

(ix) in the case of a joint application, a statement detailing the need for a zone covering portions of more than one municipality or county and a description of the agreement between joint applicants; and

(x) such additional information as the Department by regulation may require.

(b) The Department may provide for provisional certification of substantially complete applications pending the receipt of any of the items identified in subsection (a) of this Section or any additional information requested by the Department.

(Source: P.A. 82-1019.)

(20 ILCS 655/5.2) (from Ch. 67 1/2, par. 607)

Sec. 5.2. Department Review of Enterprise Zone Applications.

(a) All applications which are to be considered and acted upon by the Department during a calendar year must be received by the Department no later than December 31 of the preceding calendar year.

Any application received after December 31 of any calendar year shall be held by the Department for consideration and action during the following calendar year.

Each enterprise zone application shall include a specific definition of the applicant's local labor market area.

(a-5) The Department shall, no later than July 31, 2013, develop an application process for an enterprise zone application. The Department has emergency rulemaking authority for the purpose of application development only until 12 months after the effective date of this amendatory Act of the 97th General Assembly.

(b) Upon receipt of an application from a county or municipality the Department shall review the application to determine whether the designated area qualifies as an enterprise zone under Section 4 of this Act.

(c) No later than June 30, the Department shall notify all applicant municipalities and counties of the Department's determination of the qualification of their respective designated enterprise zone areas, and shall send qualifying applications, including the applicant's scores for items (1) through (10) of subsection (a) of Section 4.1 and the applicant's final score under that Section, to the Board for the Board's consideration, along with supporting documentation of the basis for the Department's decision.

(d) If any such designated area is found to be qualified to be an enterprise zone by the Department under subsection (c) of this Section, the Department shall, no later than July 15, send a letter of notification to each member of the General Assembly whose legislative district or representative district contains all or part of the designated area and publish a notice in at least one newspaper of general circulation within the proposed zone area to notify the general public of the application and their opportunity to comment. Such notice shall include a description of the area and a brief summary of the application and shall indicate locations where the applicant has provided copies of the application for public inspection. The notice shall also indicate appropriate procedures for the filing of written comments from zone residents, business, civic and other organizations and property owners to the Department. The Department and the Board may consider written comments submitted pursuant to this Section or any other information regarding a pending enterprise zone application submitted after the deadline for enterprise zone application and received prior to the Board's decision on all pending applications.

(e) (Blank).

(f) (Blank).

(g) (Blank).

(h) (Blank).

(Source: P.A. 97-905, eff. 8-7-12; 98-109, eff. 7-25-13.)

(20 ILCS 655/5.3) (from Ch. 67 1/2, par. 608)

Sec. 5.3. Certification of Enterprise Zones; effective date.

(a) Certification of Board-approved designated Enterprise Zones shall be made by the Department by certification of the designating ordinance. The Department shall promptly issue a certificate for each Enterprise Zone upon approval by the Board. The certificate shall be signed by the Director of the Department, shall make specific reference to the designating ordinance, which shall be attached thereto, and shall be filed in the office of the Secretary of State. A certified copy of the Enterprise Zone Certificate, or a duplicate original thereof, shall be recorded in the office of recorder of deeds of the county in which the Enterprise Zone lies.

(b) An Enterprise Zone certified prior to January 1, 2016 or on or after January 1, 2017 shall be effective on January 1 of the first calendar year after Department certification. An Enterprise Zone certified on or after January 1, 2016 and on or before December 31, 2016 shall be effective on the date of the Department's certification. The Department shall transmit a copy of the certification to the Department of Revenue, and to the designating municipality or county.

Upon certification of an Enterprise Zone, the terms and provisions of the designating ordinance shall be in effect, and may not be amended or repealed except in accordance with Section 5.4.

(c) With the exception of Enterprise Zones scheduled to expire before December 31, 2018, an Enterprise Zone designated before the effective date of this amendatory Act of the 97th General Assembly shall be in effect for 30 calendar years, or for a lesser number of years specified in the certified designating ordinance. Notwithstanding the foregoing, any Enterprise Zone in existence on the effective date of this amendatory Act of the 98th General Assembly that has a term of 20 calendar years may be extended for an additional 10 calendar years upon amendment of the designating ordinance by the designating municipality or county and submission of the ordinance to the Department. The amended ordinance must be properly recorded in the Office of Recorder of Deeds of each county in which the Enterprise Zone lies. Each Enterprise Zone in existence on the effective date of this amendatory Act of the 97th General Assembly that is scheduled to expire before July 1, 2016 may have its termination date extended until July 1, 2016 upon amendment of the designating ordinance by the designating municipality or county extending the termination date to July 1, 2016 and submission of the ordinance to the Department. The amended ordinance must be properly recorded in the Office of Recorder of Deeds of each county in which the Enterprise Zone lies. An Enterprise Zone designated on or after the effective date of this amendatory Act of the 97th General Assembly shall be in effect for a term of 15 calendar years, or for a lesser number of years specified in the certified designating ordinance. An enterprise zone designated on or after the effective date of this amendatory Act of the 97th General Assembly shall be subject to review by the Board after 13 years for an additional 10-year designation beginning on the expiration date of the enterprise zone. During the review process, the Board shall consider the costs incurred by the State and units of local government as a result of tax benefits received by the enterprise zone. Enterprise Zones shall terminate at midnight of December 31 of the final calendar year of the certified term, except as provided in Section 5.4.

(d) No more than 12 Enterprise Zones may be certified by the Department in calendar year 1984, no more than 12 Enterprise Zones may be certified by the Department in calendar year 1985, no more than 13 Enterprise Zones may be certified by the Department in calendar year 1986, no more than 15 Enterprise Zones may be certified by the Department in calendar year 1987, and no more than 20 Enterprise Zones may be certified by the Department in calendar year 1990. In other calendar years, no more than 13 Enterprise Zones may be certified by the Department. The Department may also designate up to 8 additional Enterprise Zones outside the regular application cycle if warranted by the extreme economic circumstances as determined by the Department. The Department may also designate one additional Enterprise Zone outside the regular application cycle if an aircraft manufacturer agrees to locate an aircraft manufacturing facility in the proposed Enterprise Zone. Notwithstanding any other provision of this Act, no more than 89 Enterprise Zones may be certified by the Department for the 10 calendar years commencing with 1983. The 7 additional Enterprise Zones authorized by Public Act 86-15 shall not lie within municipalities or unincorporated areas of counties that abut or are contiguous to Enterprise Zones certified pursuant to this Section prior to June 30, 1989. The 7 additional Enterprise Zones (excluding the additional Enterprise Zone which may be designated outside the regular application cycle) authorized by Public Act 86-1030 shall not lie within municipalities or unincorporated areas of counties that abut or are contiguous to Enterprise Zones certified pursuant to this Section prior to February 28, 1990. Beginning in calendar year 2004 and until December 31, 2008, one additional enterprise zone may be certified by the Department. In any calendar year, the Department may not certify more than 3 Zones located within the same municipality. The Department may certify Enterprise Zones in each of the 10 calendar years commencing with 1983. The Department may not certify more than a total of 18 Enterprise Zones located within the same county (whether within municipalities or within unincorporated territory) for the 10 calendar years commencing with 1983. Thereafter, the Department may not certify any additional Enterprise Zones, but may amend and rescind certifications of existing Enterprise Zones in accordance with Section 5.4.

(e) Notwithstanding any other provision of law, if (i) the county board of any county in which a current military base is located, in part or in whole, or in which a military base that has been closed within 20 years of the effective date of this amendatory Act of 1998 is located, in part or in whole, adopts a designating ordinance in accordance with Section 5 of this Act to designate the military base in that county as an enterprise zone and (ii) the property otherwise meets the qualifications for an enterprise zone as prescribed in Section 4 of this Act, then the Department may certify the designating ordinance or ordinances, as the case may be.

(f) Applications for Enterprise Zones that are scheduled to expire in 2016, including Enterprise Zones that have been extended until 2016 by this amendatory Act of the 97th General Assembly, shall be submitted to the Department no later than December 31, 2014. At that time, the Zone becomes available for either the previously designated area or a different area to compete for designation. No preference for designation as a Zone will be given to the previously designated area.

For Enterprise Zones that are scheduled to expire on or after January 1, 2017 and prior to January 1, 2022, an application process shall begin 2 years prior to the year in which the Zone expires. At that time, the Zone becomes available for either the previously designated area or a different area to compete for designation. For Enterprise Zones that are scheduled to expire on or after January 1, 2022, an application process shall begin 5 years prior to the year in which the Zone expires. At that time, the Zone becomes available for either the previously designated area or a different area to compete for designation. No preference for designation as a Zone will be given to the previously designated area.

Each Enterprise Zone that reapplies for certification but does not receive a new certification shall expire on its scheduled termination date.

(Source: P.A. 98-109, eff. 7-25-13; 99-615, eff. 7-22-16.)

(20 ILCS 655/8.1)

Sec. 8.1. Accounting.

(a) Any business receiving tax incentives due to its location within an Enterprise Zone or its designation as a High Impact Business must annually report to the Department of Revenue information reasonably required by the Department of Revenue to enable the Department to verify and calculate the total Enterprise Zone or High Impact Business tax benefits for property taxes and taxes imposed by the State that are received by the business, broken down by incentive category and enterprise zone, if applicable. Reports will be due no later than May 31 of each year and shall cover the previous calendar year. The first report will be for the 2012 calendar year and will be due no later than May 31, 2013. Failure to report data shall may result in ineligibility to receive incentives. To the extent that a business receiving tax incentives has obtained an Enterprise Zone Building Materials Exemption Certificate or a High Impact Business Building Materials Exemption Certificate, that business is required to report those building materials exemption benefits only under subsection (a-5) of this Section. No additional reporting for those building materials exemption benefits is required under this subsection (a). In addition, if the Department determines that 80% or more of the businesses receiving tax incentives because of their location within a particular Enterprise Zone failed to submit the information required under this subsection (a) to the Department in any calendar year, then the Enterprise Zone may be decertified by the Department. The Department, in consultation with the Department of Revenue, is authorized to adopt rules governing ineligibility to receive exemptions, including the length of ineligibility. Factors to be considered in determining whether a business is ineligible shall include, but are not limited to, prior compliance with the reporting requirements, cooperation in discontinuing and correcting violations, the extent of the violation, and whether the violation was willful or inadvertent.

(a-5) Each contractor or other entity that has been issued an Enterprise Zone Building Materials Exemption Certificate under Section 5k of the Retailers' Occupation Tax Act or a High Impact Business Building Materials Exemption Certificate under Section 5l of the Retailers' Occupation Tax Act shall annually report to the Department of Revenue the total value of the Enterprise Zone or High Impact Business building materials exemption from State taxes. Reports shall contain information reasonably required by the Department of Revenue to enable it to verify and calculate the total tax benefits for taxes imposed by the State, and shall be broken down by Enterprise Zone. Reports are due no later than May 31 of each year and shall cover the previous calendar year. The first report will be for the 2013 calendar year and will be due no later than May 31, 2014. Failure to report data may result in revocation of the Enterprise Zone Building Materials Exemption Certificate or High Impact Business Building Materials Exemption Certificate issued to the contractor or other entity.

The Department of Revenue is authorized to adopt rules governing revocation determinations, including the length of revocation. Factors to be considered in revocations shall include, but are not limited to, prior compliance with the reporting requirements, cooperation in discontinuing and correcting violations, and whether the certificate was used unlawfully during the preceding year.

(b) Each person required to file a return under the Gas Revenue Tax Act, the Gas Use Tax Act, the Electricity Excise Tax Act, or the Telecommunications Excise Tax Act shall file, on or before May 31 of each year, a report with the Department of Revenue, in the manner and form required by the Department of Revenue, containing information reasonably required by the Department of Revenue to enable the Department of Revenue to calculate the amount of the deduction for taxes imposed by the State that is taken under each Act, respectively, due to the location of a business in an Enterprise Zone or its designation as a High Impact Business. The report shall be itemized by business and the business location address.

(c) Employers shall report their job creation, retention, and capital investment numbers within the zone annually to the Department of Revenue no later than May 31 of each calendar year. High Impact Businesses shall report their job creation, retention, and capital investment numbers to the Department of Revenue no later than May 31 of each year.

(d) The Department of Revenue will aggregate and collect the tax, job, and capital investment data by Enterprise Zone and High Impact Business and report this information, formatted to exclude company-specific proprietary information, to the Department and the Board by August 1, 2013, and by August 1 of every calendar year thereafter. The Department will include this information in their required reports under Section 6 of this Act. The Board shall consider this information during the reviews required under subsection (d-5) of Section 5.4 of this Act and subsection (c) of Section 5.3 of this Act.

(e) The Department of Revenue, in its discretion, may require that the reports filed under this Section be submitted electronically.

(f) The Department of Revenue shall have the authority to adopt rules as are reasonable and necessary to implement the provisions of this Section.

(Source: P.A. 97-905, eff. 8-7-12; 98-109, eff. 7-25-13.)

Section 99. Effective date. This Act takes effect upon becoming law.