Illinois General Assembly - Full Text of HB3437
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Full Text of HB3437  102nd General Assembly

HB3437ham001 102ND GENERAL ASSEMBLY

Rep. Lawrence Walsh, Jr.

Filed: 3/22/2021

 

 


 

 


 
10200HB3437ham001LRB102 14622 CPF 23760 a

1
AMENDMENT TO HOUSE BILL 3437

2    AMENDMENT NO. ______. Amend House Bill 3437 by replacing
3everything after the enacting clause with the following:
 
4
"ARTICLE 1. INVESTING IN ILLINOIS WORKS TAX CREDIT ACT

 
5    Section 1-1. Short title. This Act may be cited as the
6Investing in Illinois Works Tax Credit Act. References in this
7Article to "this Act" mean this Article.
 
8    Section 1-3. Legislative findings. The General Assembly
9finds that:
10    Economic research indicates that registered apprenticeship
11programs have positive economic impacts, and countries with
12more widespread usage of apprenticeship programs have shown to
13be more successful at transitioning young workers into stable
14jobs, resulting in lower youth unemployment rates.
15    The demographics of registered apprenticeship programs in

 

 

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1our State do not mirror the diversity of Illinoisans.
2According to data from the U.S. Department of Labor's Office
3of Apprenticeship, from 2000 through 2016, only 8.8% of all
4construction apprentices were African-American, 17.6% were
5Hispanic or Latino/Latina, while 69.6% were white.
6    In order to work toward a level playing field for all who
7seek the training and economic stability apprenticeships
8provide, Illinois created the Illinois Works Preapprenticeship
9Program, which funds preapprenticeship skills training through
10community-based organizations serving populations that have,
11historically, been met with barriers to entry or advancement
12in the workforce.
13    By targeting historically underutilized communities whose
14members seek to access the upward mobility and career
15advancement apprenticeships bring, the Illinois
16Preapprenticeship Program is one part of many State
17initiatives to increase diversity in apprenticeship programs
18and careers in the construction and building trades.
19    The Investing in Illinois Works Tax Credit expands the
20goals of the Illinois Preapprenticeship Program to private
21construction projects and highly skilled training programs by
22incentivizing contractors to utilize graduates of the Illinois
23Works Preapprenticeship Program or graduates of the U.S.
24Department of Labor's Office of Apprenticeship as part of
25their skilled and trained workforces on projects at
26high-hazard facilities.
 

 

 

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1    Section 1-5. Definitions. As used in this Act:
2    "Department" means the Department of Revenue.
3    "Illinois Works Preapprenticeship Program" means a network
4of community-based, nonprofit organizations throughout
5Illinois that receive grant funding from the Illinois
6Department of Commerce and Economic Opportunity to recruit,
7pre-screen, and provide preapprenticeship skill training to
8create a qualified, diverse pipeline of workers who are
9prepared for careers in the construction and building trades
10as prescribed in Section 20-15 Illinois Works Jobs Program
11Act.
12    "Owner or operator" has the meaning provided in Section 5
13of the Illinois Hazardous Materials Workforce Training Act.
14    "Skilled and trained workforce" has the meaning provided
15in Section 5 of the Illinois Hazardous Materials Workforce
16Training Act.
17    "Qualified wages" means the wages paid or incurred by the
18employer during the taxable year to a qualifying graduate.
19    "Qualifying graduate" means an individual from an
20underrepresented population who has successfully completed a
21preapprenticeship program through the Illinois Works
22Preapprenticeship Program in compliance with the requirements
23of Section 20-15 of the Illinois Works Jobs Programs Act and
24who is a registered apprentice as defined under Section 10-5
25of the Illinois Hazardous Materials Workforce Training Act or

 

 

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1has successfully completed an apprenticeship program approved
2by and registered with the United States Department of Labor's
3Office of Apprenticeship.
4    "Underrepresented population" has the meaning provided in
5Section 20-10 of the Illinois Works Job Program Act.
 
6    Section 1-10. Tax credit. An owner or operator may apply
7for a certificate of eligibility to receive a credit against
8the payment of taxes withheld under Section 704A of the
9Illinois Income Tax Act up to an amount equal to 45% of
10qualified wages paid to each member of its skilled and trained
11workforce who is also a qualifying graduate performing work in
12his or her prevailing wage classification for the duration of
13his or her employment in the calendar year for which the credit
14will be applied.
15    The Department shall award credits under this Act to
16further career advancement of underrepresented populations and
17diversity in private sector skilled construction trades.
 
18    Section 1-15. Application process. The Department shall
19establish an application process for owners and operators to
20certify their eligibility for the credit, in coordination with
21the Department of Labor and the Department of Commerce and
22Economic Opportunity as necessary for implementation.
23    The owner or operator must provide:
24        (1) the name, year, and community-based organization

 

 

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1    or union through which each qualifying graduate completed
2    his or her preapprenticeship program, apprenticeship
3    program, or applicable apprenticeship and training program
4    approved by and registered with the United States
5    Department of Labor's Office of Apprenticeship;
6        (2) the certificate of completion from the Department
7    of Labor that the qualifying graduate has completed the
8    minimum approved safety training required by the Illinois
9    Hazardous Materials Workforce Training Act;
10        (3) the hours worked by the qualifying graduate that
11    go to meeting his or her apprenticeship requirements at
12    the time of the application;
13        (4) a signed affidavit from the principal attesting
14    that: (i) the qualifying graduate will perform work in his
15    or her prevailing wage classification for the duration of
16    his or her employment in the calendar year in which the
17    credit will be applied; (ii) the documents provided in the
18    application are true; and (iii) the owner or operator will
19    comply with all applicable laws; and
20        (5) any other material required by the Department.
 
21    Section 1-20. Credit awards.
22    (a) The credit shall be claimed for the first calendar
23year ending on or after the date on which the certificate is
24issued by the Department. The credit shall not exceed $2,500
25per qualifying graduate annually, increased annually by the

 

 

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1inflation adjustment, nor shall the credit exceed the actual
2taxes withheld under Section 704A of the Illinois Income Tax
3Act. The Department shall limit the monetary amount of credits
4awarded under this Act to no more than $20,000,000, increased
5annually by the inflation adjustment. If applications for a
6greater amount are received, credits shall be allowed on a
7first-come-first-served basis, based on the date on which each
8properly complete application for a certification of
9eligibility is received by the Department. If more than one
10certificate of eligibility is received on the same day, the
11credits shall be awarded based on the time of submission for
12that particular day.
13    (b) In the case of a taxable year beginning on or after
14January 1, 2021, the $2,500 amount and the $20,000,000 amount
15in subsection (a) shall be increased each year by the
16inflation adjustment. For the purposes of this Section, the
17inflation adjustment for any calendar year is the percentage
18(if any) by which the Consumer Price Index for All Urban
19Consumers, as issued by the United States Department of Labor,
20for the preceding calendar year exceeds the Consumer Price
21Index for All Urban Consumers for calendar year 2020.
 
22    Section 1-25. Penalties. False or fraudulent claims for
23credits under this Section may be subject to penalties as
24provided under Section 3-5 or 3-6 of the Uniform Penalty and
25Interest Act, as applicable.

 

 

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1    If the Department determines that an owner or operator who
2has received a credit under this Section is not complying with
3its requirements or the certifications the owner or operator
4made in its application, the Department shall recapture from
5the taxpayer the entire credit amount awarded under its
6certification.
 
7    Section 1-35. Rulemaking. The Department, in coordination
8with the Department of Labor and the Department of Commerce
9and Economic Opportunity, shall adopt rules for the
10implementation and administration of this Act. In order to
11provide for the expeditious and timely implementation of this
12Act, the Department may adopt emergency rules, in consultation
13with the Department of Labor and the Department of Commerce
14and Economic Opportunity. The adoption of emergency rules
15authorized by this Section is deemed to be necessary for the
16public interest, safety, and welfare.
 
17
ARTICLE 5. ACCESS TO APPRENTICESHIP ACT

 
18    Section 5-1. Short title. This Act may be cited as the
19Access to Apprenticeship Act. References in this Article to
20"this Act" mean this Article.
 
21    Section 5-5. Restrictions on application requirements.
22Notwithstanding any law to the contrary, in order to ensure

 

 

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1fair and equal access to apprenticeship programs, no
2application for a preapprenticeship or apprenticeship program,
3whether run by the State, a community-based organization, a
4community college, a public university, a private employer, a
5union, or joint labor-management program, may require a
6recommendation from a union member or any other person as a
7condition of acceptance to the preapprenticeship or
8apprenticeship program. An intent to hire letter from a
9signatory contractor shall not be considered a recommendation
10for purposes of this Act.
 
11    Section 5-97. Severability. The provisions of this Act are
12severable under Section 1.31 of the Statute on Statutes.
 
13
ARTICLE 10. ILLINOIS HAZARDOUS MATERIALS WORKFORCE TRAINING
14
ACT

 
15    Section 10-1. Short title. This Act may be cited as the
16Illinois Hazardous Materials Workforce Training Act.
17References in this Article to "this Act" mean this Article.
 
18    Section 10-5. Definitions. As used in this Act:
19    "Apprenticeable occupation" means an occupation in the
20building and construction trades for which training and
21apprenticeship programs have been approved by and registered
22with the U.S. Department of Labor's Office of Apprenticeship.

 

 

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1    "Apprenticeship program" means an applicable training and
2apprenticeship program approved by and registered with the
3U.S. Department of Labor's Office of Apprenticeship.
4    "Building and construction trades council" means any labor
5organization that represents multiple construction trades and
6monitors or is attentive to compliance with public or workers'
7safety laws, wage and hour requirements, or other statutory
8requirements and negotiates and maintains collective
9bargaining agreements.
10    "Construction" means all work at a stationary source
11involving laborers, workers, or mechanics, including any
12maintenance, repair, assembly, or disassembly work performed
13on equipment whether owned, leased, or rented.
14    "Department" means the Department of Labor.
15    "Director" means the Director of Labor.
16    "Labor agreement" means a form of prehire collective
17bargaining agreement covering all terms and conditions of
18employment.
19    "Labor organization" means an organization that is the
20exclusive representative of an employer's employees recognized
21or certified under the federal National Labor Relations Act of
221935.
23    "Minimum approved safety training for workers at high
24hazard facilities" means a minimum 30-hour OSHA Outreach
25Training Program for the Construction class consisting of a
26curriculum of OSHA-designated training topics with training

 

 

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1performed by an authorized OSHA Outreach Training Program
2Trainer and that is intended to provide workers with
3information about their rights, employer responsibilities,
4safety and health hazards a worker may encounter on a work
5site, as well as how to identify, abate, avoid, and prevent
6job-related hazards by emphasizing hazard identification,
7avoidance, control, and prevention.
8    "OSHA" means the United States Department of Labor's
9Occupational Safety and Health Administration.
10    "Owner or operator" means an owner or operator of a
11stationary source that is engaged in activities described in
12Code 324110, 325110, 325193, or 325199 of the 2017 North
13American Industry Classification System (NAICS), and has one
14or more covered processes that are required to prepare and
15submit a Risk Management Plan. "Owner or operator" does not
16include oil and gas extraction operations.
17    "Prevailing hourly wage rate" has the same meaning as
18"general prevailing rate of hourly wages" as defined in
19Section 2 of the Prevailing Wage Act.
20    "Registered apprentice" means an apprentice registered in
21an applicable apprenticeship program for an apprenticeable
22occupation approved by and registered with the U.S. Department
23of Labor's Office of Apprenticeship.
24    "Shift" means a set standard period of time an employer
25requires its employees to perform his or her work-related
26duties on a daily basis. For purposes of this definition,

 

 

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1there may be multiple shifts per day.
2    "Skilled journeyperson" means a worker who meets all of
3the following criteria:
4        (1) the worker either graduated from an approved
5    apprenticeship and training program approved by and
6    registered with the U.S. Department of Labor's Office of
7    Apprenticeship for the applicable occupation, or has at
8    least as many hours of on-the-job experience in the
9    applicable occupation that would be required to graduate
10    from an apprenticeship program approved by and registered
11    with the U.S. Department of Labor's Office of
12    Apprenticeship for the applicable occupation;
13        (2) the worker is being paid at least a rate
14    equivalent to the prevailing hourly wage rate for a
15    journeyperson in the applicable occupation and locality;
16    and
17        (3) beginning on or after July 1, 2024, the worker has
18    completed, within the prior 3 calendar years, minimum
19    approved safety training for workers at high hazard
20    facilities and has filed a certificate of completion with
21    the Department.
22    "Skilled and trained workforce" means a workforce that
23meets all of the following criteria:
24        (1) all the workers are either registered apprentices
25    or skilled journeypersons;
26        (2) beginning on July 1, 2022, at least 45% of the

 

 

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1    skilled journeypersons are graduates of an apprenticeship
2    program for the applicable occupation;
3        (3) beginning on July 1, 2023, at least 60% of the
4    skilled journeypersons are graduates of an apprenticeship
5    program for the applicable occupation; and
6        (4) beginning on July 1, 2024, at least 80% of the
7    skilled journeypersons are graduates of an apprenticeship
8    program for the applicable occupation.
9    "Stationary source" means that term as it is defined under
10Section 39.5 of the Environmental Protection Act.
 
11    Section 10-10. Minimum approved safety training.
12    (a) A person who has completed minimum approved safety
13training for workers at high hazard facilities shall file his
14or her certificate of completion with the Department in a
15manner prescribed by the Department.
16    (b) The owner or operator, when contracting for the
17performance of construction work at the stationary source,
18shall require that its contractors and any subcontractors use
19a skilled and trained workforce to perform all onsite work
20within an apprenticeable occupation in the building and
21construction trades.
22    (c) The requirements of this Section shall not immediately
23apply to contracts awarded before July 1, 2022, unless the
24contract is extended or renewed after that date. Contracts
25awarded before July 1, 2022 shall meet the requirements of

 

 

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1this Section no later than July 1, 2023.
2    (d) The requirements of this Section shall only apply to
3the skilled and trained workforce, contracted with an owner or
4operator to perform construction work at the stationary source
5site.
6    (e) The skilled and trained workforce requirements under
7this Section shall not apply to:
8        (1) Contractors that have requested qualified workers
9    from the local hiring halls that dispatch workers in the
10    apprenticeable occupation and, due to workforce shortages,
11    the contractor is unable to obtain sufficient qualified
12    workers within 48 hours of the request, Saturdays,
13    Sundays, and holidays excepted. This Act shall not prevent
14    contractors from obtaining workers from any source.
15        (2) An emergency where compliance is impracticable;
16    namely, an emergency requires immediate action to prevent
17    imminent harm to public health or safety or to the
18    environment. Within 14 days of an emergency, the Attorney
19    General's Workers Rights Bureau, in conjunction with the
20    Illinois Department of Labor, must certify that the
21    emergency warranted noncompliance with this Act. The
22    employer must provide necessary documentation of the
23    emergency to the Attorney General's Workers Rights Bureau
24    and the Illinois Department of Labor.
 
25    Section 10-15. Enforcement. Any interested party may file

 

 

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1a complaint with the Department of Labor against an owner,
2operator, or construction contractor covered under this Act if
3there is reasonable belief that the owner, operator, or
4construction contractor is in violation of this Act. Upon
5receiving the complaint, the Department of Labor shall request
6a copy of any contract at issue that was entered into between
7the owner, operator, or construction contractor to ensure that
8training requirements under this Act were included in the
9contract's terms. The Department of Labor shall request from
10the construction contractor a copy of the construction
11contractor's payroll, broken down by any registered apprentice
12and skilled journeyperson on the job site. If the Department
13of Labor finds that an owner, operator, or construction
14contractor has not complied with this Act, the Department
15shall refer the matter to the Attorney General for
16enforcement.
 
17    Section 10-20. Exemptions. This Act does not apply to any
18owner or operator that has an executed national or local labor
19agreement in effect pertaining to the performance of
20construction work at a given facility or site under the terms
21of the agreement. The labor agreement must be negotiated with
22and approved by a local building and construction trades
23council that has geographic jurisdiction over the stationary
24source.
 

 

 

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1    Section 10-21. Reporting.
2    (a) Any applicable apprenticeship and training program
3approved by and registered with the U.S. Department of Labor's
4Office of Apprenticeship providing minimum approved safety
5training for workers in high hazard facilities and any
6contractor who employs workers operating at high hazard
7facilities shall file an annual report with the Department and
8the Illinois Works Review Panel, in the form and manner
9required by the Department, within 6 months after the
10effective date of this Act and on January 31 of each year
11thereafter. The report shall contain the following
12information:
13        (1) A description of the applicable apprenticeship and
14    training program, approved by and registered with the U.S.
15    Department of Labor's Office of Apprenticeship, or the
16    contractor's recruitment efforts, screening efforts, and a
17    general description of training efforts.
18        (2) The applicable apprenticeship and training
19    program, approved by and registered with the U.S.
20    Department of Labor's Office of Apprenticeship, shall
21    provide the number of individuals who apply to,
22    participate in, and complete the minimum approved safety
23    training for workers at high hazard facilities, broken
24    down by race, gender, jurisdiction, age, and veteran
25    status. A contractor under this paragraph shall provide
26    the number of workers who the contractor employs to work

 

 

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1    at high hazard facilities, within the last calendar year,
2    broken down by race, gender, jurisdiction, age, and
3    veteran status.
4        (3) The demographic data of the jurisdiction.
5        (4) For the applicable apprenticeship and training
6    program, approved by and registered with the U.S.
7    Department of Labor's Office of Apprenticeship, a
8    statement of the minimum diversity goal that participation
9    in the minimum approved safety training for workers in
10    high hazard facilities is representative of the
11    demographics of its jurisdiction. For a contractor under
12    this paragraph, a statement of the minimum diversity goal
13    that the workers employed by the contractor to work at
14    high hazard facilities is representative of the
15    demographics of the contractor's jurisdiction.
16        (5) An action plan to increase diversity and meet or
17    exceed the stated minimum diversity goal, inclusive of,
18    but not limited to, the following actions if the diversity
19    goal is not met:
20            (A) Providing information on this Act for all high
21        schools and field offices of the Department of
22        Employment Security in the jurisdiction.
23            (B) Entering into a joint agreement with the
24        Department of Employment Security for outreach and
25        employment.
26            (C) Entering into a joint agreement with

 

 

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1        educational institutions or approved Illinois Works
2        Preapprenticeship Programs established under
3        subsection (a) of Section 20-15 of the Illinois Works
4        Jobs Program Act in the jurisdiction to enhance
5        recruitment efforts.
6            (D) Eliminating experience requirements, when
7        feasible, to permit increased participation by
8        minorities.
9    (b) If the Department and the Illinois Works Review Panel
10conclude that the report submitted under this Section does not
11meet or is unlikely to meet the minimum diversity goal under
12paragraph (4) of subsection (a) within 12 months after filing
13its report, or that the action plan was not followed, the
14Department and the Illinois Works Review Panel shall recommend
15that the action plan be revised to provide additional steps
16and opportunities for minority participation.
17    (c) An applicable apprenticeship and training program,
18approved by and registered with the U.S. Department of Labor's
19Office of Apprenticeship, providing workers in a high hazard
20facility or a contractor operating at high hazard facility
21shall be deemed unfit to provide workers or operate at high
22hazard facilities and may be subject to a penalty of up to one
23year's prohibition from providing workers or operating at high
24hazard facilities. If the Department and the Illinois Works
25Review Panel conclude that the applicable apprenticeship and
26training program, approved by and registered with the U.S.

 

 

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1Department of Labor's Office of Apprenticeship, providing
2workers in a high hazard facility or the contractor operating
3at a high hazard facility failed to follow its action plan
4under paragraph (5) of subsection (a) or the recommendations
5to its action plan provided by the Department and the Illinois
6Works Review Panel under subsection (b) within 12 months after
7filing the entity's report, then the applicable apprenticeship
8and training program or contractor shall be deemed unfit to
9provide workers or operate at high hazard facilities and may
10be subject to a penalty of up to one year's prohibition from
11providing workers or operating at high hazard facilities.
12    (d) For reporting purposes, the jurisdiction is the
13Illinois county where the applicable apprenticeship and
14training program, approved by and registered with the U.S.
15Department of Labor's Office of Apprenticeship, is located.
16For a contractor, the jurisdiction is where the contractor's
17workers perform the majority of work in a high hazard facility
18within the last calendar year.
 
19    Section 10-25. Penalties; noncompliant reporting;
20reinstatement.
21    (a) Except as provided in subsection (b), an owner or
22operator who violates the requirements of this Act shall be
23subject to a minimum civil penalty of $10,000 for each
24violation. Each shift a violation of this Act occurs shall be
25considered a separate violation. The penalty may be recovered

 

 

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1in a civil action brought by the Director in any circuit court.
2In the civil action, the Director shall be represented by the
3Attorney General. All moneys received by the Department as
4fees and civil penalties under this Act shall be deposited
5into the Illinois Works Fund to be used to recruit, prescreen,
6and provide preapprenticeship skills training for which
7participants may attend free of charge and receive a stipend
8to create a qualified, diverse pipeline of workers who are
9prepared to work in high hazard facilities.
10    (b) Notwithstanding subsection (a), if the Department and
11the Illinois Works Review Panel determine that there is a
12violation of Section 10-21, the Department and the Illinois
13Works Review Panel shall provide reasonable notice of
14noncompliance to the violator within 90 days after the
15violation and inform the violator that the violator has 45
16days to comply with Section 10-21 without penalty. If the
17noncompliance is not remedied, the violator may be deemed
18unfit to provide workers or operate at high hazard facilities
19for a period of up to one year. If the Department and the
20Illinois Works Review Panel determine that the violator has
21remedied the violation and is in compliance with Section
2210-21, the Department shall have 45 days to reinstate the
23authorization for the violator to provide workers or operate
24at high hazard facilities. The Department and the Illinois
25Works Review Panel may not unreasonably withhold reinstatement
26under this subsection when the applicable apprenticeship and

 

 

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1training program, approved by and registered with the U.S.
2Department of Labor's Office of Apprenticeship, providing
3workers in high hazard facilities or the contractor operating
4at high hazard facilities is found to be in compliance with
5Section 10-21.
 
6    Section 10-97. Severability. The provisions of this Act
7are severable under Section 1.31 of the Statute on Statutes.
 
8
ARTICLE 15. AMENDATORY PROVISIONS

 
9    Section 15-5. The Illinois Administrative Procedure Act is
10amended by adding Section 5-45.8 as follows:
 
11    (5 ILCS 100/5-45.8 new)
12    Sec. 5-45.8. Emergency rulemaking. To provide for the
13expeditious and timely implementation of the Investing in
14Illinois Works Tax Credit Act, emergency rules implementing
15the Investing in Illinois Works Tax Credit Act may be adopted
16in accordance with Section 5-45 by the Department of Revenue,
17in coordination with the Department of Labor and the
18Department of Commerce and Economic Opportunity. The adoption
19of emergency rules authorized by Section 5-45 and this Section
20is deemed to be necessary for the public interest, safety, and
21welfare.
22    This Section is repealed on January 1, 2026.
 

 

 

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1    Section 15-10. The Illinois Income Tax Act is amended by
2changing Section 704A as follows:
 
3    (35 ILCS 5/704A)
4    Sec. 704A. Employer's return and payment of tax withheld.
5    (a) In general, every employer who deducts and withholds
6or is required to deduct and withhold tax under this Act on or
7after January 1, 2008 shall make those payments and returns as
8provided in this Section.
9    (b) Returns. Every employer shall, in the form and manner
10required by the Department, make returns with respect to taxes
11withheld or required to be withheld under this Article 7 for
12each quarter beginning on or after January 1, 2008, on or
13before the last day of the first month following the close of
14that quarter.
15    (c) Payments. With respect to amounts withheld or required
16to be withheld on or after January 1, 2008:
17        (1) Semi-weekly payments. For each calendar year, each
18    employer who withheld or was required to withhold more
19    than $12,000 during the one-year period ending on June 30
20    of the immediately preceding calendar year, payment must
21    be made:
22            (A) on or before each Friday of the calendar year,
23        for taxes withheld or required to be withheld on the
24        immediately preceding Saturday, Sunday, Monday, or

 

 

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1        Tuesday;
2            (B) on or before each Wednesday of the calendar
3        year, for taxes withheld or required to be withheld on
4        the immediately preceding Wednesday, Thursday, or
5        Friday.
6        Beginning with calendar year 2011, payments made under
7    this paragraph (1) of subsection (c) must be made by
8    electronic funds transfer.
9        (2) Semi-weekly payments. Any employer who withholds
10    or is required to withhold more than $12,000 in any
11    quarter of a calendar year is required to make payments on
12    the dates set forth under item (1) of this subsection (c)
13    for each remaining quarter of that calendar year and for
14    the subsequent calendar year.
15        (3) Monthly payments. Each employer, other than an
16    employer described in items (1) or (2) of this subsection,
17    shall pay to the Department, on or before the 15th day of
18    each month the taxes withheld or required to be withheld
19    during the immediately preceding month.
20        (4) Payments with returns. Each employer shall pay to
21    the Department, on or before the due date for each return
22    required to be filed under this Section, any tax withheld
23    or required to be withheld during the period for which the
24    return is due and not previously paid to the Department.
25    (d) Regulatory authority. The Department may, by rule:
26        (1) Permit employers, in lieu of the requirements of

 

 

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1    subsections (b) and (c), to file annual returns due on or
2    before January 31 of the year for taxes withheld or
3    required to be withheld during the previous calendar year
4    and, if the aggregate amounts required to be withheld by
5    the employer under this Article 7 (other than amounts
6    required to be withheld under Section 709.5) do not exceed
7    $1,000 for the previous calendar year, to pay the taxes
8    required to be shown on each such return no later than the
9    due date for such return.
10        (2) Provide that any payment required to be made under
11    subsection (c)(1) or (c)(2) is deemed to be timely to the
12    extent paid by electronic funds transfer on or before the
13    due date for deposit of federal income taxes withheld
14    from, or federal employment taxes due with respect to, the
15    wages from which the Illinois taxes were withheld.
16        (3) Designate one or more depositories to which
17    payment of taxes required to be withheld under this
18    Article 7 must be paid by some or all employers.
19        (4) Increase the threshold dollar amounts at which
20    employers are required to make semi-weekly payments under
21    subsection (c)(1) or (c)(2).
22    (e) Annual return and payment. Every employer who deducts
23and withholds or is required to deduct and withhold tax from a
24person engaged in domestic service employment, as that term is
25defined in Section 3510 of the Internal Revenue Code, may
26comply with the requirements of this Section with respect to

 

 

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1such employees by filing an annual return and paying the taxes
2required to be deducted and withheld on or before the 15th day
3of the fourth month following the close of the employer's
4taxable year. The Department may allow the employer's return
5to be submitted with the employer's individual income tax
6return or to be submitted with a return due from the employer
7under Section 1400.2 of the Unemployment Insurance Act.
8    (f) Magnetic media and electronic filing. With respect to
9taxes withheld in calendar years prior to 2017, any W-2 Form
10that, under the Internal Revenue Code and regulations
11promulgated thereunder, is required to be submitted to the
12Internal Revenue Service on magnetic media or electronically
13must also be submitted to the Department on magnetic media or
14electronically for Illinois purposes, if required by the
15Department.
16    With respect to taxes withheld in 2017 and subsequent
17calendar years, the Department may, by rule, require that any
18return (including any amended return) under this Section and
19any W-2 Form that is required to be submitted to the Department
20must be submitted on magnetic media or electronically.
21    The due date for submitting W-2 Forms shall be as
22prescribed by the Department by rule.
23    (g) For amounts deducted or withheld after December 31,
242009, a taxpayer who makes an election under subsection (f) of
25Section 5-15 of the Economic Development for a Growing Economy
26Tax Credit Act for a taxable year shall be allowed a credit

 

 

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1against payments due under this Section for amounts withheld
2during the first calendar year beginning after the end of that
3taxable year equal to the amount of the credit for the
4incremental income tax attributable to full-time employees of
5the taxpayer awarded to the taxpayer by the Department of
6Commerce and Economic Opportunity under the Economic
7Development for a Growing Economy Tax Credit Act for the
8taxable year and credits not previously claimed and allowed to
9be carried forward under Section 211(4) of this Act as
10provided in subsection (f) of Section 5-15 of the Economic
11Development for a Growing Economy Tax Credit Act. The credit
12or credits may not reduce the taxpayer's obligation for any
13payment due under this Section to less than zero. If the amount
14of the credit or credits exceeds the total payments due under
15this Section with respect to amounts withheld during the
16calendar year, the excess may be carried forward and applied
17against the taxpayer's liability under this Section in the
18succeeding calendar years as allowed to be carried forward
19under paragraph (4) of Section 211 of this Act. The credit or
20credits shall be applied to the earliest year for which there
21is a tax liability. If there are credits from more than one
22taxable year that are available to offset a liability, the
23earlier credit shall be applied first. Each employer who
24deducts and withholds or is required to deduct and withhold
25tax under this Act and who retains income tax withholdings
26under subsection (f) of Section 5-15 of the Economic

 

 

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1Development for a Growing Economy Tax Credit Act must make a
2return with respect to such taxes and retained amounts in the
3form and manner that the Department, by rule, requires and pay
4to the Department or to a depositary designated by the
5Department those withheld taxes not retained by the taxpayer.
6For purposes of this subsection (g), the term taxpayer shall
7include taxpayer and members of the taxpayer's unitary
8business group as defined under paragraph (27) of subsection
9(a) of Section 1501 of this Act. This Section is exempt from
10the provisions of Section 250 of this Act. No credit awarded
11under the Economic Development for a Growing Economy Tax
12Credit Act for agreements entered into on or after January 1,
132015 may be credited against payments due under this Section.
14    (h) An employer may claim a credit against payments due
15under this Section for amounts withheld during the first
16calendar year ending after the date on which a tax credit
17certificate was issued under Section 35 of the Small Business
18Job Creation Tax Credit Act. The credit shall be equal to the
19amount shown on the certificate, but may not reduce the
20taxpayer's obligation for any payment due under this Section
21to less than zero. If the amount of the credit exceeds the
22total payments due under this Section with respect to amounts
23withheld during the calendar year, the excess may be carried
24forward and applied against the taxpayer's liability under
25this Section in the 5 succeeding calendar years. The credit
26shall be applied to the earliest year for which there is a tax

 

 

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1liability. If there are credits from more than one calendar
2year that are available to offset a liability, the earlier
3credit shall be applied first. This Section is exempt from the
4provisions of Section 250 of this Act.
5    (i) Each employer with 50 or fewer full-time equivalent
6employees during the reporting period may claim a credit
7against the payments due under this Section for each qualified
8employee in an amount equal to the maximum credit allowable.
9The credit may be taken against payments due for reporting
10periods that begin on or after January 1, 2020, and end on or
11before December 31, 2027. An employer may not claim a credit
12for an employee who has worked fewer than 90 consecutive days
13immediately preceding the reporting period; however, such
14credits may accrue during that 90-day period and be claimed
15against payments under this Section for future reporting
16periods after the employee has worked for the employer at
17least 90 consecutive days. In no event may the credit exceed
18the employer's liability for the reporting period. Each
19employer who deducts and withholds or is required to deduct
20and withhold tax under this Act and who retains income tax
21withholdings under this subsection must make a return with
22respect to such taxes and retained amounts in the form and
23manner that the Department, by rule, requires and pay to the
24Department or to a depositary designated by the Department
25those withheld taxes not retained by the employer.
26    For each reporting period, the employer may not claim a

 

 

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1credit or credits for more employees than the number of
2employees making less than the minimum or reduced wage for the
3current calendar year during the last reporting period of the
4preceding calendar year. Notwithstanding any other provision
5of this subsection, an employer shall not be eligible for
6credits for a reporting period unless the average wage paid by
7the employer per employee for all employees making less than
8$55,000 during the reporting period is greater than the
9average wage paid by the employer per employee for all
10employees making less than $55,000 during the same reporting
11period of the prior calendar year.
12    For purposes of this subsection (i):
13    "Compensation paid in Illinois" has the meaning ascribed
14to that term under Section 304(a)(2)(B) of this Act.
15    "Employer" and "employee" have the meaning ascribed to
16those terms in the Minimum Wage Law, except that "employee"
17also includes employees who work for an employer with fewer
18than 4 employees. Employers that operate more than one
19establishment pursuant to a franchise agreement or that
20constitute members of a unitary business group shall aggregate
21their employees for purposes of determining eligibility for
22the credit.
23    "Full-time equivalent employees" means the ratio of the
24number of paid hours during the reporting period and the
25number of working hours in that period.
26    "Maximum credit" means the percentage listed below of the

 

 

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1difference between the amount of compensation paid in Illinois
2to employees who are paid not more than the required minimum
3wage reduced by the amount of compensation paid in Illinois to
4employees who were paid less than the current required minimum
5wage during the reporting period prior to each increase in the
6required minimum wage on January 1. If an employer pays an
7employee more than the required minimum wage and that employee
8previously earned less than the required minimum wage, the
9employer may include the portion that does not exceed the
10required minimum wage as compensation paid in Illinois to
11employees who are paid not more than the required minimum
12wage.
13        (1) 25% for reporting periods beginning on or after
14    January 1, 2022 2020 and ending on or before December 31,
15    2022 2020;
16        (2) 21% for reporting periods beginning on or after
17    January 1, 2023 2021 and ending on or before December 31,
18    2023 2021;
19        (3) 17% for reporting periods beginning on or after
20    January 1, 2024 2022 and ending on or before December 31,
21    2024 2022;
22        (4) 13% for reporting periods beginning on or after
23    January 1, 2025 2023 and ending on or before December 31,
24    2025 2023;
25        (5) 9% for reporting periods beginning on or after
26    January 1, 2026 2024 and ending on or before December 31,

 

 

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1    2026 2024;
2        (6) 5% for reporting periods beginning on or after
3    January 1, 2027 2025 and ending on or before December 31,
4    2027 2025.
5    The amount computed under this subsection may continue to
6be claimed for reporting periods beginning on or after January
71, 2028 2026 and:
8        (A) ending on or before December 31, 2028 2026 for
9    employers with more than 5 employees; or
10        (B) ending on or before December 31, 2029 2027 for
11    employers with no more than 5 employees.
12    "Qualified employee" means an employee who is paid not
13more than the required minimum wage and has an average wage
14paid per hour by the employer during the reporting period
15equal to or greater than his or her average wage paid per hour
16by the employer during each reporting period for the
17immediately preceding 12 months. A new qualified employee is
18deemed to have earned the required minimum wage in the
19preceding reporting period.
20    "Reporting period" means the quarter for which a return is
21required to be filed under subsection (b) of this Section.
22    (j) Each owner or operator, as defined in the Illinois
23Hazardous Materials Workforce Training Act, who receives a tax
24credit under the Investing in Illinois Works Tax Credit Act is
25entitled to a credit against payments due under this Section
26as provided in the Investing in Illinois Works Tax Credit Act.

 

 

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1(Source: P.A. 100-303, eff. 8-24-17; 100-511, eff. 9-18-17;
2100-863, eff. 8-14-18; 101-1, eff. 2-19-19.)
 
3
ARTICLE 99. EFFECTIVE DATE

 
4    Section 99-99. Effective date. This Act takes effect
5January 1, 2022.".